Sitting of 16 March 2000

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

  PRIVATE BUSINESS
  LONDON LOCAL AUTHORITIES BILL [LORDS] (BY ORDER)
  Order for consideration read.
  To be considered on Thursday 23 March.
  KENT COUNTY COUNCIL BILL [LORDS] (BY ORDER)
  MEDWAY COUNCIL BILL [LORDS] (BY ORDER)
  MERSEY TUNNELS BILL (BY ORDER)
  Orders for Second Reading read.
  To be read a Second Time on Thursday 23 March.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD
  The Minister was asked—
  AGRICULTURE, FISHERIES AND FOOD

    Farm Incomes
    Mr. Michael Fabricant: If he will make a statement on the change in farm incomes over the past three years. [113368]
    The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): From 1996 to 1999, total income from farming fell by 56 per cent. in real terms. Total income from farming increased by 100 per cent. in real terms between 1990 and 1995, before dropping 60 per cent. between 1995 and 1999.
    Mr. Fabricant: I am grateful for that honest answer, at least. However, does the Minister yet realise that, in the past three years, farmgate milk prices have fallen by a third, more than 5,000 dairy farmers have given up work, the cost of milk production is 11p per pint and the farmgate price paid is less than 10p a pint? Mr. Micawber would tell the right hon. Gentleman what that means. How long can he remain complacent? Will he be satisfied when the only milk that we can buy in the United Kingdom is frozen milk from France?
    Mr. Brown: I am not complacent about the difficulties in the dairy sector. The Government are examining what they can do to help. As the House will know, the remedy lies in the supply chain and in the marketplace.
    Mr. David Taylor: As my right hon. Friend knows, agriculture receives more
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    subsidy than the rest of British industry put together, and it has the lowest incomes for a long time. Is he confident that we are taking genuine and radical steps to move farming away from its dependence on subsidies and transform the common agricultural policy into something that resembles more closely a rural development policy?
    Mr. Brown: My hon. Friend makes a good point. The supply side of the CAP, although it is extraordinarily expensive, does not serve United Kingdom agriculture well. That is why, last December, I announced the new direction for agriculture and our making much more use—something that is a departure for the UK Government—of the new second pillar of the CAP, which provides support for farm businesses that is decoupled from production and directed much more to the marketplace than to the CAP's traditional structure.
    Mr. David Heath: With dairy farm incomes continuing to fall, with milk prices the lowest in Europe and with supermarkets pushing their three-for-two offer—they buy three litres of milk and pay farmers for only two—is it not time for more action? Will the Minister look again at agrimonetary compensation before it is too late? Will he think about the over-30-months scheme and will he talk some sense into his colleagues at the Department of Trade and Industry on milk co-operatives and on concerted efforts to increase milk prices?
    Mr. Brown: As the hon. Gentleman knows, I have been a strong advocate of farmer co-operation working through the supply chain. I believe that real benefits accrue to farmers if they are able to exercise some influence further down the supply chain. As for the over-30-months scheme, surely the Government's real objective should be to work towards an unwinding of the scheme. That is clearly obtainable in the medium term. As my right hon. Friend the Prime Minister made clear at the National Farmers Union conference, the door is not closed on agrimoney.
    Mr. Lindsay Hoyle: Following the comments of my hon. Friend the Member for North-West Leicestershire (Mr. Taylor), I am sure that the House has recognised that more money has gone into farming through this Government than through any previous Government. However, I am sure that my hon. Friend is aware of the plight of dairy farmers in Lancashire, who are being paid the lowest prices. Will he have discussions with supermarkets and other middle men paying low and unjustified prices? All that they are doing is putting our poor farmers out of business. I am sure that, with my right hon. Friend's good offices, we can improve the plight of farmers.
    Mr. Brown: My hon. Friend is right. The answer to the problem lies in the supply chain and ultimately in the marketplace. There are not sufficient sums available under the agrimonetary compensation regime, for example, to compensate farmers for the difficulties that they are going through. Of course there are measures at the margin that the Government could take to help. However, we must focus on the real problem, which is the marketplace.
    Mr. Tim Yeo: Given that many dairy farmers are selling their milk at a price below the cost of

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    production, does the Minister support the plan announced today by Safeway and Waitrose to increase the price of milk—yes or no?
    Mr. Brown: I have made it absolutely clear in all my answers that the difficulties can be resolved only through the supply chain and in the marketplace. That is why I support the initiatives of retailers that are designed to help their own producers. They have my support and encouragement, but these are private sector arrangements. The hon. Gentleman has listened carefully to my answers, and I notice that those on the Opposition Front Bench are not coming forward with a remedy of their own.

    Environmentally Sensitive Areas
    Mr. Phil Woolas: What recent assessment he has made of the benefits of the environmentally sensitive areas scheme for wildlife in rural areas. [113369]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): Detailed monitoring has taken place since the scheme was introduced in 1987. The results have been used to adapt and refine the scheme to increase environmental benefits.
    Mr. Woolas: I thank my hon. Friend for that reply. The environmentally sensitive area scheme has been welcomed in my constituency. Baroness Young, the chair of English Nature, has described it as the most important decision on the countryside for 20 years. However, can my hon. Friend help my constituent, Mr. Graham Tibbot of Belle Vue farm in Delph, who faces an apparent contradiction over stock density between the ESA scheme and the proposed hill farm allowance scheme? Will my hon. Friend examine that case?
    Mr. Morley: I support my hon. Friend's comments on ESAs, which are valuable and provide genuine benefits. The scheme involves some restrictions on stock density, and I appreciate that that can cause anomalies in payments such as hill livestock compensatory allowances. I assure my hon. Friend that we are only too pleased to examine the matter in detail. I shall write to him.
    Mr. Desmond Swayne: However beneficial the scheme may be, might it not be thoroughly undermined if hedgerows were grubbed up? Will the Minister put on record the remarks that he made earlier when I tackled him in the water closet, where he said that there is some prospect of seeing off the European directive?
    Mr. Morley: I need to be careful about giving the hon. Gentleman privileged access.
    I want to make a serious point about the recent directives from the Court of Auditors on field boundaries. There is some logic to them, because the European Union pays a subsidy on the cropped area, which may not always extend right up to the field boundary. However, that is a traditional method of farming in this country. That was acknowledged when we agreed the scheme, which was based on Ordnance Survey maps, with the European Commission. There are risks to the environmental benefits of hedgerows and uncropped edges of fields. We are
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    discussing that with the European Commission, and we hope that we can reach a workable and reasonable compromise.

    Wild Birds
    Mr. Hilary Benn: What action he is taking to halt the decline in the number of wild birds in rural areas. [113370]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): The Government's strategy for sustainable development includes a headline indicator on the populations of farmland and woodland birds, which have declined significantly in the past 25 years. Halting and reversing the decline will take time, but our recently announced switch of funding from production support to environmental measures is evidence of our determination to improve that important indicator.
    Mr. Benn: I am grateful for my hon. Friend's reply. Does he know that the Royal Society for the Protection of Birds has recently bought a lowland arable farm, aptly named Hope farm, to develop agricultural methods that are economic and good for farmland birds and other wildlife? I welcome the increased investment in countryside stewardship in its broadest sense, but will my hon. Friend tell the House his plans for drawing on the lessons of that important research?
    Mr. Morley: I agree that that is important research. The RSPB should be congratulated because we must consider the most appropriate changes in agricultural practice to tackle the decline in many farmland species. Those changes can be supported through schemes such as countryside stewardship. I am glad to say that we are increasing the number of schemes that we intend to accept from 1,600 last year to 3,000 this year.
    Mr. Tony Baldry: Is not the policy of ripping up English hedgerows and destroying field margins crazy? It is especially crazy given the Bill on access to the countryside that we will consider on Monday. When I was a Minister of State in the Ministry of Agriculture, the Commission endorsed the use of Ordnance Survey maps and satellite monitoring. We should not be considering finding a fair and reasonable compromise, but seeing off the Commission, and pointing out that it agreed to something several years ago and asking how it can accept ripping up English hedgerows. The present policy simply gives ammunition to some of my Euro-sceptic colleagues. Will the Minister tell the Commission that that policy is crazy?
    Mr. Morley: It should be remembered that the root of the problem is subsidies to the CAP regime and the way in which they work. However, we believe that the Commission should take into account the practices that have been established in our country. It has agreed to a tolerance of 2 m either side of OS boundaries. That effectively creates a 4 m boundary.
    We do not want to over-estimate the impact of the policy because many farms will not be affected by the changes. However, there should be a more flexible approach towards

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    farms that might be caught by the policy. It is not beyond the realms of possibility to agree that approach with the Commission. We are trying to do that.
    Dr. Brian Iddon: In reading the tea leaves, may I take it that my hon. Friend believes that there are alternatives to the pesticides tax, or is it still under consideration?
    Mr. Morley: The Prime Minister announced at the National Farmers Union conference that the pesticides tax is not under consideration. There is an argument for various forms of financial instrument, but we must consider the impact that applying them would have on the sector and balance that with the potential benefits. A pesticides tax could have detrimental effects; in addition, more advanced and more environmentally friendly pesticides could be introduced.
    Mr. Malcolm Moss: Now that the Government are preparing to compromise on section 28 in the teaching of the birds and bees, will they do another U-turn on an issue affecting the real birds and bees? Given the 15 May deadline for the integrated administration and control system applications, does the Minister appreciate the urgent need to reverse the recent rule change that is forcing farmers to destroy hedgerows and their habitats, on which wild birds depend for food and cover?
    Mr. Morley: Let me make it perfectly clear that this is not a rule change, but an interpretation following a visit from the Commission and the auditors in relation to the application of arable area payments through the IACS scheme. It is not a change in respect of the area that is cropped and the area that is paid and we believe that any change or interpretation that could have a detrimental environmental effect on hedges and field boundaries is to be deplored. We are working with the Commission and my right hon. Friend the Minister has had a meeting with Franz Fischler. We were encouraged by the Commissioner's sympathetic response.

    Agricultural Development Scheme
    Mr. Jim Cunningham: How many applications he has received for grants under the agricultural development scheme to date; and how many were successful. [113371]
    The Minister of State, Ministry of Agriculture, Fisheries and Food(Ms Joyce Quin): The scheme was designed to support farmers and growers to improve marketing and 161 projects were put forward. We were pleased to make 47 awards of grant totalling £2 million to the best of them. Partly because of the interest shown, we intend to make new marketing awards available later this year under the rural development plan.
    Mr. Cunningham: I thank my right hon. Friend for that answer. The scheme is imaginative and makes a big difference. That contrasts with the Opposition, who
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    presided over a crisis when they were in government. What are her proposals for taking the scheme forward in other farming sectors?
    Ms Quin: We are keen to take the scheme forward and believe that the rural development plan is by far the best way to do so. The scheme has provided support to sectors that are ineligible for other assistance and, for that reason, I am glad that the pig industry has received a substantial proportion of the awards that have been made. I am also glad that awards in the dairy sector go hand in hand with other initiatives that we are taking, such as facilitating the generic promotion and advertising of milk.
    Mr. Ian Bruce: I am sure that the House welcomes any help with marketing that farmers can receive, but is not the biggest problem with all these schemes the fact that, having invested their money in marketing excellent British products, farmers often cannot label them to show where they are from? The Government made sure that the Food Labelling Bill promoted by my hon. Friend the Member for Eddisbury (Mr. O'Brien) was talked out on Friday last. Having established excellent schemes, surely the Bill represents a way of ensuring that farmers can use such labelling.
    Ms Quin: I contest strongly the allegation that we talked out a Bill—given that the promoter, the hon. Member for Eddisbury (Mr. O'Brien), spoke for one and a quarter hours but I was allowed only 12 minutes to respond to the huge number of points that were raised. The Government had already made clear their view of the Bill. The Bill's substance was incompatible with European law. As the promoter was arguing for European Union aid, it seemed foolish to pass a Bill in clear contravention of EU law. This Government have been much more active on labelling issues than the previous Government. The action that we have taken domestically in MAFF and with trading standards officers and our initiatives to change the labelling regime within the European Union bear ample testimony to that claim.

    Organic Farming
    Ms Julia Drown: What recent assessment he has made of the environmental advantages of organic farming. [113372]
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food(Mr. Elliot Morley): Evaluation of the environmental impact of organic farming is one of the three main objectives of the Ministry's organic research and development programme. For example, studies on biodiversity, soil fertility and nutrient cycling are in progress. Earlier work has indicated that organic farming has a positive effect on biodiversity.
    Ms Drown: Given that the demand for organic food continues to rise rapidly and we are still importing 70 per cent. of the organic produce sold, will the Minister further increase the amount of Government support for farmers who wish to convert to organic farming methods, and set clear targets for the proportion of land that could be farmed organically, to reflect consumer demand,

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    the environmental advantages of organic farming and the Government's desire to promote sustainable farming methods?
    Mr. Morley: I can certainly give my hon. Friend an assurance that the Government are committed to providing more support for organic conversion. We are committing £149 million in the rural development programme over the next seven years to assist farmers who want to convert. I understand my hon. Friend's points about targets. I was pleased to meet the promoter of a private Member's Bill on this matter, the hon. Member for North Cornwall (Mr. Tyler), and my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock). Although the Government have concerns about the potential effects of targets, which can be negative as well as positive, there is no doubt that the Government and the Bill's sponsors have in common the objective of promoting and increasing organic conversion.
    Mr. Nigel Evans (Ribble Valley): Organic farming may have some environmental advantages and be a great talking point for Labour luvvies round Islington dinner tables, but it is not the answer to the deepest crisis that has hit British farming for 60 years. We need long-term solutions but also short-term solutions for farmers such as those who lobbied Ministers yesterday, and those at a dairy farm in my constituency that I visited on Sunday. If all farmers transferred to organics, the price depression that has hit regular farming would also hit organics. May we have some decent and honest answers to the crisis hitting farmers now?
    Mr. Morley: When one hears comments such as that, one can understand why organic farming got virtually nowhere under the previous Government. No one is pretending that organic farming is the answer to all aspects of agriculture. However, we want our farmers to have a share of the huge demand for organic products. To refer to the many farmers who have converted and the many more who are queueing up to convert as Islington Labour luvvies is an insult to the people who are trying to maximise their business.

    Hill Farmers
    Helen Jackson: What assistance he has provided to hill farmers in the past two years. [113373]
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): Hill farms received £600 million to £700 million in total in livestock headage payments last year. A significant proportion of the £235 million purchase costs under the over-30-months scheme and various sums under other schemes, including for environmentally sensitive areas, also went to hill farmers.
    Helen Jackson: I repeat the welcome that I gave to the Government policy of putting environmental schemes at the heart of their grant programmes for hill farming and other purposes, because that will improve the countryside in hilly areas. Does my hon. Friend acknowledge that, often, hill farming is not big business? Do not small businesses need greater simplicity built into
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    countryside stewardship schemes so that smaller applications, as well as larger integrated projects, are also given favourable treatment?
    Ms Quin: I know that my hon. Friend takes a keen interest in hill areas, especially those in her part of the country. I accept the validity of what she said about the size of hill farms and their present circumstances, but we believe that our approach is right. In particular, the review of red tape that we have undertaken, and our keenness to simplify the advice system, will help to meet her requests.
    Mr. Patrick McLoughlin: What, in the Minister's view, is the future for hill farmers—bright or gloomy?
    Ms Quin: The Government recognise the role that hill farmers play in agriculture, and the economic, environmental and social aspects of hill farming. We believe that our rural development plan, and developing the second pillar of the common agricultural policy, will help hill farmers, because those measures recognise their multi-functional role. Hill farmers have an environmental role, and are also an important part of the social fabric of the countryside.
    Mr. Dennis Skinner: One of the things that sicken me about the whole question of subsidies from the Common Market is that, according to research and calculations over the past 12 months, 80 per cent. of subsidies went to 20 per cent. of farms—the conglomerates—whereas only 20 per cent. ended up with the hill farmers and the rest. We never hear the Tories talk about subsidies of that kind. I propose that we start dividing the subsidies more equally, and stop the fat cats from getting them.
    Mr. Dale Campbell-Savours (Workington): Such as Livingstone.
    Mr. Skinner: Yes, including him.
    We should have a pesticide tax on the millionaire conglomerates that are getting the subsidies. Once we start the process, we shall manage to solve some of the problems.
    Ms Quin: I firmly believe that the existing common agricultural policy provides support in an inefficient way—a way that distorts markets, helps some sectors but not others and is backward-looking rather than forward-looking. That is why the Government have adopted a rural development approach rather than the backward-looking traditional common agricultural policy approach.

    Pig Farming
    Miss Anne McIntosh: What recent representations he has received on the state of pig farming; and if he will make a statement. [113374]
    The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): Ministers have received a number of representations. I am pleased to see a strengthening of the producer price for pigs over recent weeks, although I realise that it is not yet at the level that many producers

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    require. I attribute the rise, at least in part, to measures taken by the Government and the Meat and Livestock Commission. Nevertheless, we continue to examine possible ways of helping the sector.
    Miss McIntosh: When will the Government stop telling porkies to the pig farmers? Will the Minister tell us what progress, if any, the Government have made in regard to an application for state aid for those farmers? Does he accept that there is a BSE-equivalent tax of £5.26 per pig on each pig farm, and will he make good the promise given by the Prime Minister both at the NFU conference and on his west country tour that compensation for the tax would be paid?
    Mr. Brown: As I have said, the Government are exploring what more we can do to help the industry. I have been as up-front and candid as any Minister has ever been in tackling the problems. Every suggestion that has been made to me—by Members in all parts of the House—has been considered and, where we have been able to help, we have helped. We have taken a number of steps, such as writing to public sector purchasing bodies, writing to local authorities, and reviewing the labelling regime—a subject that Conservative Members raised earlier. If it was deficient, they had 18 years in which to remedy it, but they did absolutely nothing.
    The Opposition are calling for a state aid that they know cannot be paid. We are exploring what can be done, but the request for the European Union to buy out the offal disposal costs that were imposed on the industry by the last Conservative Government in 1996 is not a runner.
    Mr. Dale Campbell-Savours (Workington): When I met farmers from Cumbria yesterday, they were discussing the problems in the pig, meat and milk industries in the county. I told them that my view was that, when we join the euro, many of the problems will be resolved. If my right hon. Friend had been sitting at the meeting with me, would he have been shaking his head or nodding in agreement?
    Mr. Brown: It is true that the current exchange rate between sterling and the euro exacerbates the problem of supply and demand in the single market.
    Mr. William Thompson: Has the Minister had the opportunity to study the report from the Select Committee on Northern Ireland Affairs on the livestock industry in Northern Ireland, which highlights the tremendous problems that farmers have there, especially pig farmers? More than half of them have gone out of business and the rest are up to their ears in debt. Will he consider not only that report, but the fact that the pig breeding herd has gone down by more than 40 per cent? Will he examine the document carefully, take it to heart and, above all, expeditiously accept and act on its recommendations?
    Mr. BrownM: I congratulate the hon. Gentleman on his efforts in this place to raise the problems of pig farmers in Northern Ireland with UK Ministers. There is a crisis in the sector throughout the European Union. It is particularly severe in the UK. Within the UK, it is particularly severe in Northern Ireland. He is right to
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    remind us of that. I will study the report and see what more I can do to help farmers in the UK and especially in Northern Ireland.
    Mr. Tim Yeo: Why does Labour care so little about Britain's pig farmers that it talked out the Bill that would have let consumers know whether the bacon that they were buying was British or not? Why does Labour care so little that it took the Minister four months and much Conservative prompting even to send letters to public authorities asking them to buy from suppliers who meet British standards? Why does Labour care so little that it will not even ask the European Commission about helping Britain's pig farmers to pay for public health measures, as Belgian farmers were helped last summer? Commissioner Fischler has confirmed to many Conservatives that that could be done for Britain.
    Mr. Brown: You have had to listen to that offensive nonsense from Conservative Front Benchers at a number of Agriculture questions, Madam Speaker. Each and every one of the hon. Gentleman's questions has been answered before. If he cared so much about the labelling regime, he would have done something about it in the 18 years that he was in government. The present Government care so much that we have addressed the issue by issuing new guidelines to trading standards officers, who enforce the law. It is not a polite request from the Government. It is a requirement. That law is to be enforced.
    Mr. Yeo: If the Minister were a little more honest about his analysis of what has happened—
    Madam Speaker: Order. The hon. Gentleman must withdraw that remark. We cannot have that.
    Mr. Yeo: I withdraw the implication that the Minister has not been honest.
    Madam Speaker: Order. I asked the hon. Gentleman to withdraw the remark.
    Mr. Yeo: I withdraw my remark about the Minister's honesty.
    Madam Speaker: Good, now begin again.
    Mr. Yeo: If the Minister analysed what happened in the 18 years before he took office, he would know that at no stage were British pig farmers losing money by as much and going out of business as rapidly as they are now. I asked him three simple questions. The fact is that, unfortunately, we know the answer. Two Fridays ago, the Minister of State talked out the Food Labelling Bill. It took four months and a lot of prompting from me and my colleagues for the Minister even to send the letters, when he told the House that they were ready to go at the beginning of July last year. We have confirmation in writing from Commissioner Fischler that he would be willing to find a way in which to make payments to meet the public health costs that are crippling Britain's pig farmers, and the Minister will not even go to Brussels and discuss it.
    Mr. Brown: The hon. Gentleman's remarks are both offensive and disingenuous. The Commission is not

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    willing to support a subsidy scheme for offal disposal costs. It might be willing to consider a restructuring scheme similar to the one that it agreed for Belgium, but that would not keep the industry going. It would effectively downsize it.

    Organic Farming
    Mr. Peter Bradley (The Wrekin): If he will make a statement on the rate of growth in organic production in the last three years. [113375]
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): Organic farming has undergone a rapid expansion in the past three years. The area of land in the United Kingdom, both in conversion and fully organic, has increased from just under 50,000 hectares in December 1996, just before the Government came to office, to an estimated 540,000 hectares in November 1999.
    Mr. Bradley: I am grateful to my right hon. Friend for that answer and for the action that the Government are taking to support organic farming. That action is in stark contrast to the gratuitous insults offered by Conservative Members to consumers of organic products—whose money is as good as anyone else's, particularly when it is going into the pockets of British farmers. I should have thought that point would not be lost on Conservative Members, but apparently it is.
    Does my right hon. Friend agree that support is necessary for conversion to organic farming, as it is for new research into food products, for helping farmers to exercise greater control over the food-processing chain and for marketing? Does she agree that, if the Government's objectives are to be met, it is very important that when innovative projects arise, as they have in my constituency, the Government and their agencies, including the regional development agencies, should do all that they can to move as quickly as possible to ensure that ideas get off the drawing board and on to farms as quickly as possible, to offer the relief to farmers that we all want to get to them?
    Ms Quin: I thank my hon. Friend for his comments. We are very keen to work with farmers who wish to go organic. I certainly recognise the interest that my hon. Friend has taken in schemes launched in his own constituency. He also makes a good point when he speaks of the need to link our priorities for organic farming and those for the future of agriculture with regional development initiatives. We are very keen to ensure that regional development agencies, when they are examining the economic potential of their region, take full account of the agricultural and rural sector. That must include growth and expansion in organic farming.
    Mrs. Ann Winterton (Congleton): I welcome the growth in organic production in the United Kingdom, especially in milk. However, does the right hon. Lady recognise that, although grant aid is extremely welcome, it is limited, and that many milk producers, particularly in Cheshire, who might like to convert to organic milk production to obtain the premium price, will not be able to do so? They cannot convert not least because the
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    industry is in crisis—and to convert, farmers have to be sound financially. What advice can she give to those farmers?
    Ms Quin: My hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has already spoken of the huge increase—a tenfold increase—in financial support to the organic sector that has occurred under this Government. I note that although Conservative Members keep calling for an increase in that money, there seems to be a lot of amnesia on their part, given the very small sums that they provided and the very little interest that they took in the organic sector when they were in office. I encourage the farmers in the hon. Lady's constituency and others who are interested in these schemes to consider aspects of the rural development plan. Although money is specifically earmarked for organics, farmers should also be considering other relevant schemes.
    Joan Ruddock: People in my inner-city constituency want to eat organic foods because of its quality. She will be aware that in 1998, on the advice of the chief medical officer, the Ministry of Agriculture, Fisheries and Food gave advice to the public on peeling and cleaning fruit and vegetables that had been conventionally grown, because of variable levels of pesticide residue. Will she confirm that advice is still in force? Has she had any reason whatever to refer to the chief medical officer any consideration of problems with human health caused by the consumption of organic food, or to seek advice from him on any such problem?
    Ms Quin: First, I pay tribute to my hon. Friend's work in promoting the benefits of organic food. She has consistently drawn attention to the potential of the organic sector. There is increasing recognition of the health benefits of organic food. I am not aware of any substantial change in the advice, but I shall write to my hon. Friend about the current situation and place a copy of the letter in the Library. I assure her that the Government take her general concerns about the organic sector very much to heart.
    Mr. John Bercow: What assessment has the right hon. Lady made of the impact of the backlog in applications for organic conversion grants on Britain's balance of trade in organic products, notwithstanding the important and worthwhile points that she has just made? Does she accept that one of the inevitable effects of the cessation of grants for 18 months is to enable foreign producers and competitors to strengthen their stranglehold on the British market?
    Ms Quin: We allocated £10 million specifically to tackle the backlog that the hon. Gentleman mentions. We were motivated not just by the importance of expanding the organic sector for its own sake and its economic potential, but because we were aware of how much organic produce was imported and how beneficial it would be to UK agriculture if our producers were able to replace much of that imported produce. That is one of the factors behind the dramatic expansion of organics that has taken place under this Government.

    Livestock Farmers
    Mr. Huw Edwards: What plans he has to apply for agrimonetary compensation for livestock farmers. [113377]
    The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): A total of £397 million in agrimonetary compensation has already been paid over the past 3 years, of which £227 million has gone to beef and sheep farmers. Up to £132 million will be paid this year and next, of which £93 million will be to beef and sheep farmers. No decision has yet been made on whether to pay further compensation.
    Mr. Edwards: I am grateful to my right hon. Friend for that answer. Does he agree that the high level of sterling partly reflects the Government's sound management of the economy, but that it is greatly disadvantaging the farming community, for whom agrimonetary compensation is one of the key measures that could help in the present crisis? Will my right hon. Friend work with the Prime Minister and Ministers at the Treasury and do all that he can to maximise the amount of agrimonetary compensation that can be paid to UK farmers?
    Mr. Brown: My hon. Friend is right to point to the reasons why the policy instruments are in place. His remarks highlight why the Government have already made such extensive use of them. I cannot announce any further extension today of the use that the Government are making of the agrimonetary regime. My right hon. Friend the Prime Minister has made it clear that we are keeping the issue under review.
    Mr. Nicholas Winterton: I fully support the request made by the hon. Member for Monmouth (Mr. Edwards). I met the Macclesfield and district branch of the National Farmers Union on Saturday morning in an extremely well-attended but very sober three-hour meeting. Throughout my time in the House, I have never known livestock farmers to be more depressed. Will the Minister take seriously his hon. Friend's request, which is endorsed in all parties, that agrimonetary compensation should be used to the maximum to help British farmers to overcome a uniquely serious crisis? I make a special plea from the Conservative Benches. Will he and the Prime Minister please respond?
    Mr. Brown: The Prime Minister has very carefully not closed the door on making further use of that instrument, of which we have already made extensive use. My meetings with farmers, particularly livestock farmers, have exactly the character that the hon. Gentleman described. He is right to say that the livestock sector is going through difficult times. There are particular problems in the dairy sector, but the agrimonetary regime alone does not provide sufficient money to deal with those current difficulties.
    Mr. Simon Thomas: Notwithstanding those comments, does the Minister accept that his Government have made less use of the agrimonetary compensation scheme than have other European Governments, and that there is an opportunity to make
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    greater use of it? If the problem is the Fontainebleau agreement, negotiated by the previous Government, does he accept that that should not stand in the way of helping some of the most deprived rural areas, such as my constituency where farm incomes have fallen by nearly 140 per cent. in the last year?
    Mr. Brown: The hon. Gentleman is right to make the case for his constituency, but I do not accept what he says about the relative use of the agrimonetary regime. As he correctly points out, we are constrained by the Fontainebleau agreement, negotiated by the last Conservative Government. I can say confidently to the House that we are making more use of the compensatory regime for farmers than the last Government did, because they did not draw down a single penny.

  The Solicitor-General was asked—
  SOLICITOR-GENERAL

    Ministerial Meetings
    Dr. Brian Iddon: How often the Law Officers meet their counterparts from other countries. [113398]
    The Solicitor-General (Mr. Ross Cranston): The Attorney-General and I frequently meet our counterparts from other countries, on a bilateral basis and at meetings and conferences. Attorneys-General and Solicitors-General from countries in the Commonwealth and beyond regularly call on us when they are in the UK.
    In addition, the Attorney-General and I from time to time represent Her Majesty's Government at meetings and conferences in the UK and elsewhere. In May, the Attorney-General will host a conference in London of presidents of the Supreme Courts and Attorneys-General of the member states of the EU. Later this month, the Attorney-General will attend a conference of Attorneys of the UK overseas territories.
    Dr. Iddon: It seems that as the borders come down, we make it much easier for criminals to ply their trades—for example, trafficking drugs. Is it not important that we stay one step ahead of the criminals? Does my hon. and learned Friend agree that there is room for more co-operation between the criminal justice and criminal intelligence systems across Europe?
    The Solicitor-General: I know that the trade in hard drugs has had serious ramifications in my hon. Friend's constituency. There is always scope for more co-operation, and the Government are dedicated to improving that. At an operational level, the co-operation involves mainly the police and Customs and Excise. As regards the Crown Prosecution Service and the Serious Fraud Office, co-operation is crucial and occurs at the level of mutual legal assistance and the provision of evidence. The SFO plays an important role in respect of international fraud.
    Mr. Patrick McLoughlin: When the Law Officers meet their counterparts from other countries, do they talk about the administration of local justice? Is the Minister aware of the growing concern about the closure of magistrates courts in rural areas? What will the Government do about it?
    The Solicitor-General: It is a bold move from international matters to magistrates courts. Certainly, we can learn from other countries about local justice and how it is administered. That matter has featured from time to time on the agendas of those meetings.
    Mr. David Kidney: Given highly mobile capital flows and sophisticated information and communications technology, does my hon. and learned Friend agree that it is essential for law enforcement agencies to work together internationally to detect and deter serious financial crime, such as money laundering, market manipulation and scams?
    The Solicitor-General: My hon. Friend is absolutely right. The SFO is concerned about international fraud. These days, in such centres as London, fraud is almost by definition international, and the SFO is active in this regard. Money laundering is on the agenda for improvement of the law. The SFO pursues international fraud in other ways, and sometimes comes up against barriers in other countries. Sometimes we find it difficult to get the necessary evidence to prosecute in this country. However, I agree with my hon. Friend.

    EU Law
    Miss Anne McIntosh: What discussions he has held with the European Commission on matters relating to European Community law. [113401]
    The Solicitor-General: I have held no discussions with the European Commission on matters relating to European Community law. However, Government Departments have regular discussions with the Commission on such matters, and I am aware of those discussions. In particular cases, I am asked for legal advice in relation to them. I have also been involved in litigation before the European Court of Justice in Luxembourg.
    Miss McIntosh: I thank the Solicitor-General for that reply. In the context of the intergovernmental conference negotiations, can he give the House an undertaking that criminal law will not form part of the competence of the EU and will remain the jurisdiction and preserve of the national legal systems of England, Wales and Scotland?
    The Solicitor-General: Criminal law falls within the competence of member states and will continue to do so. There is scope for co-operation between prosecuting agencies and we have said that we will further that. However, in relation to the wider issue, criminal law remains—as far as we are concerned—a matter for individual states.
    Mr. John Burnett: Does the Solicitor-General have discussions with the European Commission on matters such as legal procedure? Does he believe that cases such as the European Commission v. France, on the ban on British beef, take far too long to resolve? Does he believe that any damages from such proceedings should accrue to those who have suffered—in that case, the hard-pressed British farmer?
    The Solicitor-General: There is a case for the procedure of the European Court of Justice to be more flexible and, at present, there is a considerable backlog. On the particular issue of beef, the approach of my right hon. and hon. Friends in the Ministry of Agriculture, Fisheries and Food was right, and I would have thought that the hon. Gentleman would know from experience that it is better to try to effect a non-legal solution than a legal solution. However, the non-legal solution failed, so the Commission began proceedings. We believe that it has a watertight case because freedom of movement is a fundamental aspect of the treaty, and in that sphere member states have no competence because the European Union has taken measures that pre-empt that competence. I assure the hon. Gentleman that my right hon. and hon. Friends acted impeccably in the matter.
    Mr. Nick Hawkins: Does the Solicitor-General recognise that his answer to my hon. Friend the Member for Vale of York (Miss McIntosh), in which he said that he had no such meetings or discussions, will be greeted with astonishment well beyond the House? Does he recognise that that is indicative of the supine attitude that the Government have adopted to every pronouncement of Mr. Prodi, Commissioner Kinnock and their ilk? If the Government will not stand up for British sovereignty in beating off the attempt to impose Napoleonic law and corpus iuris, the Opposition must do it, and we shall wish to put pressure on the Commission. I hope that the Solicitor-General will recognise that we will continue to press him and his colleagues and ensure that they are encouraged to fight for Britain.
    The Solicitor-General: I am sure that the European Commission will be quaking in its boots after that. I have set out the position clearly. Discussions continue day to day, but they are the responsibility of the policy departments to which we provide legal advice.

    Crown Prosecution Service
    Mr. Tom Levitt: What steps he is taking to make the operation of the Crown Prosecution Service more accessible to people with hearing impairments. [113403]
    The Solicitor-General: The CPS is committed to equality of access to justice, and that includes equality in its day-to-day dealings with others in the criminal justice system, including defendants, victims and witnesses. Together with others from other criminal justice agencies, the CPS works closely with representatives of associations

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    involved with deaf people or those who are hard of hearing to ensure that their needs are addressed. The CPS is aware of its responsibilities under the Disability Discrimination Act 1995 and is a user of the Employment Service's "Positive About Disabled People" symbol. It has a programme of action on disability and has a network of equal opportunities officers.
    Mr. Levitt: I greatly welcome that reply. I speak as someone who, some five years ago, wrote a book on how deaf people can better access public services. When I heard that the CPS was interested, I sent it a copy, so it has the book to help it.
    Is my hon. and learned Friend aware that there are essentially four ways in which deaf people can be helped to have better access to those services—text telephones, sound enhancement, sign language where appropriate and, above all, through the general awareness of front-line staff of the communication needs of people with hearing impairments? Which measures does he contemplate using in the CPS to enhance that access to services?
    The Solicitor-General: I take this opportunity to congratulate my hon. Friend on his book "Sound Practice", which has been used widely in Government agencies, including the CPS.
    The CPS subscribes to TypeTalk, which provides a link between hearing or speech-impaired telephone users and hearing persons. My hon. Friend mentioned awareness, and training is one aspect of that. The CPS official responsible for interpreter issues is at present undergoing training in British sign language, stage 2. In addition, training on the victims pilots, about which I have spoken in the past, includes disability awareness training. That training includes awareness of the problems faced by the deaf and hard of hearing.
    Mr. Nicholas Winterton: How can the CPS facilities be made more available to people with hearing impairment? Local CPS offices are being closed, and their facilities moved further away from people. The same is happening with magistrates courts and their administrative offices. Is that the way to make the operations of the CPS more accessible to people with disabilities, especially those with hearing impairment?
    The Solicitor-General: I am surprised by those comments. To my knowledge, no CPS offices have been closed. The CPS is getting out into the community, through the criminal justice units, and CPS officials now attend regularly at police stations.
    We accept that deaf and hard of hearing people face problems. For example, the design of courts can render lip-reading difficult. We must be much more aware of the problems faced by defendants, victims and witnesses, but there is no substance to the main thrust of the hon. Gentleman's question.

    Charities Litigation
    Mrs. Linda Gilroy: If he will make a statement on the grounds on which Law Officers intervene in charities litigation. [113404]
    The Solicitor-General: The Attorney-General's function in relation to charities is to represent the Crown and so to act as protector, both of charity in general and of particular charities.
    It falls to the Attorney-General and to me to institute legal proceedings to protect a charity and to represent the charitable interest. The Attorney-General is also a necessary party to any litigation in which the objects of a charity need to be separately represented—for example, where the interest of the trustees do not coincide with the object of the charity.
    Mrs. Gilroy: Will my hon. and learned Friend explain what happens if a gift is willed to a charity called Cancer Research, when no charity exists under that name?
    The Solicitor-General: There is a provision under which the sovereign, acting under the sign manual, can allocate moneys in such a case as that. That power has now been delegated to the Attorney-General and to me. If there is a general charitable interest such as cancer research, the Attorney-General or I can assign the moneys to charities with that interest. That is a very valuable power, and it is used regularly. People often will money to a general charitable interest such as cancer research, or to charities that no longer exist. If a general charitable intent can be found, we will allocate the money to an interest close to the original interest of the testator.
    Mr. John Bercow: Is the Solicitor-General aware that his initial answer and his answer to the supplementary question from the hon. Member for Plymouth, Sutton (Mrs. Gilroy) were both very self-contained and intelligible only to a tiny minority of persons with a particular interest in a given case? For the general enlightenment of right hon. and hon. Members, would the hon. and learned Gentleman care to tell us in how many cases, either specifically or roughly, during the period in which he has held office Law Officers have had reason to intervene in charities litigation matters?
    The Solicitor-General: I am sorry that the answer went over the hon. Gentleman's head. We intervene on a regular basis. For example, last week I appeared in the Court of Appeal in an important charitable case which will, I think, set the law for the future. It is a regular aspect of our work, involving, for instance, telling my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy) how the testator's intention can be affected. It also involves, in some cases, important and large charities.

Business of the House
12.30 pm
Sir George Young: Could I ask the Leader of the House to give us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 20 MARCH—Second Reading of the Countryside and Rights of Way Bill.
TUESDAY 21 MARCH—My right hon. Friend the Chancellor of the Exchequer will open his Budget Statement.
WEDNESDAY 22 MARCH—Continuation of the Budget debate.
THURSDAY 23 MARCH—Continuation of the Budget debate.
FRIDAY 24 MARCH—Private Members' Bills.
The provisional business for the following week will be as follows:
MONDAY 27 MARcH—Conclusion of the Budget debate.
TUESDAY 28 MARCH—Second Reading of the Criminal Justice and Court Services Bill.
WEDNESDAY 29 MARCH—Remaining stages of the Child Support, Pensions and Social Security Bill.
THURSDAY 30 MARCH—Second Reading of the Learning and Skills Bill [Lords].
FRIDAY 31 MARCH—The House will not be sitting.
The House will wish to know that on Wednesday 29 March, there will be a debate on the aid system for flax and hemp in European Standing Committee A.
Sir George Young: The House is grateful for next week's business and an indication of the business for the following week. Will the Leader of the House reflect on the amount of time that she has allocated to the Child Support, Pensions and Social Security Bill? There will be some important Government amendments on the state second pension, following some confusion in Committee. Any changes in the Child Support Agency are of interest to a large number of right hon. and hon. Members, as are the controversial benefit changes in the Bill, not to mention the Prime Minister's announcement today of a new agency that will impact on the Benefits Agency. It seems that just one day to deal with all that is inadequate unless it is to be a very long day.
The Upper House has debated the Wakeham report, but there is still no sign of progress down this end of the building. Last week, the right hon. Lady said that she was giving priority to Government Bills. However, Members of Parliament need a balanced diet, with light debates on Wakeham, the intergovernmental conference and the Liaison Committee between her heavy, indigestible Bills.
On Rover, can the right hon. Lady undertake that the House will be kept in the picture next week if there are any important developments? Can we have a statement next week on the precise role in the Government of Lord Levy, as it is shrouded in mystery?
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Finally, can the right hon. Lady deny what was reported in The Times on Monday about her plans to curtail debate in the Chamber? The article says:
Ministers are threatening an unprecedented curb on Commons debating time amid fears that they may fail to force all their Bills through before the end of the parliamentary session.
The proposal to timetable all business on the floor of the chamber has been raised by the Government's business managers.
I hope that the right hon. Lady will be able to deny that. Last night, not only Conservative but Labour and Liberal Democrat Members resented the inadequate time available on the remaining stages of the Terrorism Bill. Will the right hon. Lady admit that the programme is too large to be manageable and that some of the Bills, such as the Criminal Justice (Mode of Trial Bill), should be dropped?
Mrs. Beckett: First, the right hon. Gentleman asks me to reflect on the time allotted for the Child Support, Pensions and Social Security Bill, and of course I will do so, although the business for the second week is always provisional. If, as he says, a number of issues need to be aired, there may be much to be said for having proper programme motions so that we can be confident of having time to air the issues in which right hon. and hon. Members are particularly interested. On Monday and Tuesday, the right hon. Gentleman's side took a sensible approach, for which we were grateful, and we got through our business efficiently and effectively with all hon. Members feeling that they had had an opportunity to air their concerns.
Mr. Eric Forth: Really?
Mrs. Beckett: We cannot take two days for everything.
Mr. Forth: Why not?
Mrs. Beckett: Because there is not enough parliamentary time.
The right hon. Member for North-West Hampshire (Sir G. Young) asked next about a debate on the Lords. I understand his wish for a balanced diet, but he must appreciate that every Government's priority is their legislative programme. Since we have not been having programme motions, several Bills have taken more time than was allotted—or, indeed, originally asked for. Consequently, we are anxious to ensure that our Bills have proper priority.
I give the right hon. Gentleman the undertaking that he sought on the House being kept informed about Rover. On Lord Levy, I understand that the Prime Minister has answered questions about that matter. The right hon. Gentleman asked finally about a newspaper report—I cannot recall whether he said what paper it appeared in—
Sir George Young: The Times.
Mrs. Beckett: I beg the right hon. Gentleman's pardon. The report was about Government business managers having discussions. It is completely untrue to say that there is not enough time for the Government's programme. Our programme is challenging, but there is certainly enough time, provided that the House deals with its business efficiently and effectively.

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The right hon. Gentleman will find the fact increasingly appearing in biographies of me, I am pleased to say, that I am not one of those politicians who make their way through cultivating the press. I do not leak stories to the press. Anything that has appeared under any byline about my intentions or discussions with business managers has no authority behind it. It comes neither from my right hon. Friend the Parliamentary Secretary to the Treasury, nor from me.
Mr. Michael Clapham: My right hon. Friend may have read early-day motion 439 on deaths from asbestos-related diseases:
[That this House regrets to learn of the death of Sidney Dalton due to mesothelioma caused by exposure to asbestos whilst working at the former Blackburn Meadows Power Station; calls for a public inquiry into the high incidence of asbestos-related disease amongst former power industry workers; deplores the conduct of his employers Powergen plc in forcing former employees or their widows to take their cases for compensation to the High Court; and reminds the company that under the Electricity Act 1989 they were required to take over liabilities and not just the assets of the former Electricity Generating Board, and that accordingly they have a duty to compensate former workers who have suffered asbestos-related disease.]
She may also have read early-day motion 440, which draws attention to international repetitive strain injury awareness day. She will be aware of the report of the Select Committee on the Environment, Transport and Regional Affairs on the Health and Safety Executive, and she may be aware that the Health and Safety Commission will reply, over the next week or so, to the consultation exercise carried out last year. Following that publication, will she endeavour to make time for a debate on health and safety, an important matter in a changing world, and an issue badly neglected by the Opposition during their 18-year Administration?
Mrs. Beckett: I have some sympathy with my hon. Friend's point, and I understand concern across the House about health and safety matters. As I have just said to the right hon. Member for North-West Hampshire, I cannot undertake to find time in the near future for a special debate, particularly as my hon. Friend has identified a wide range of issues. I recommend to him the debates in Westminster Hall.
Mr. Paul Tyler: In his answer to my hon. Friend the Member for St. Ives (Mr. George) yesterday, the Prime Minister laid great stress on the importance of the farming summit that he is convening at 10 Downing street on 30 March. Can the Leader of the House give an absolute assurance that there will, as soon as possible after that event—we are getting close to it—be a statement by the Prime Minister or a debate in Government time on the crisis in agriculture?
The shadow Leader of the House referred to the huge amount of business to be undertaken on Wednesday 29 March. May I suggest a means by which we could relieve the pressure? If, instead of trailing announcements about the proposed merger of the Benefits Agency and the Employment Service on the "Today" programme or sneaking out a written answer at the end of Thursday, the Government made a proper statement in the House,
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we could have a proper discussion and hold Ministers to account. Given that the Prime Minister himself—according to the "Today" programme—thought the matter so important that he had to make the announcement himself, why is he not making it to the House?
Mr. Dennis Skinner: You don't have to believe everything John Humphrys says.
Mrs. Beckett: My hon. Friend is entirely right. One does not have to believe all that John Humphrys says. [HON. MEMBERS: "Don't you?"] That is no criticism, but a statement of fact which, I am sure, John Humphrys would be the first to endorse.
I undertake that the House will be kept informed about the outcome of the farming summit. The Government recognise its great importance to the industry and to many hon. Members on both sides. I cannot undertake that the statement will be made by the Prime Minister, but the House will be kept informed.
The hon. Gentleman referred to matters being trailed on the "Today" programme and asked for a statement in the House. There is always a balance to be struck on how the public and the House are informed. He will be aware that, as Madam Speaker has pointed out in the past, the Government can make announcements to the House through written parliamentary answers. There is nothing unparliamentary about that. Of course, I understand the pressure and the desire for more statements, but the hon. Gentleman will be aware that the Government have already made far more statements than did our predecessors over a similar period. If we continue to have demands for statements on everything, there will not be time for the debates that hon. Members are calling for.
Mrs. Ann Cryer: Would my right hon. Friend consider a debate on residential care for people with a mental handicap and the problems raised for devoted relatives by the complete lack of choice in many areas? The matter is set out in my early-day motion 517 on residential village communities:
[That this House welcomes the strengthened guidance given to health and local authorities last July (HSC 1999/162: LAC (99)28) confirming the rights of people with a mental handicap and their families to make informed choices about residential and other placements, but is concerned that evidence presented to an NHS conference on 28th January indicated that by a ratio of over two to one families claimed they were not being allowed the choice to which this Government is committed; and therefore urges the Government to adopt effective measures quickly to ensure that family choices, including the choice of village-type residential communities, preferred by many families are properly respected by local health and social service authorities and that more serious consideration is given to the evolution of such village communities, as argued for in, Made to Care, by the noble Baroness, Baroness Cox, and the noble Lord, Lord Pearson of Rannoch.]
Mrs. Beckett: I take heed of the concern aired by my hon. Friend. There are local complaints procedures, if there is unhappiness. However, I take my hon. Friend's point that there is not the range of choice for people with

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such disabilities that one might want. I shall certainly draw her remarks to the attention of my right hon. Friend the Secretary of State for Health.
Mr. Christopher Gill: I know that you, Madam Speaker, are aware of the real anger in the livestock industry about the failure of the Government to pay agrimonetary compensation up to the maximum allowed. However, you may not be aware that the Agriculture Commissioner, Franz Fischler, has recently stated that the UK is the only country in the European Union that is not paying up to the maximum allowed under the legislation. May we have an early debate so that the Minister of Agriculture can come to the House and explain why the Government are so resolute in refusing to increase those amounts to the maximum allowed? Instead of giving us excuses for his failure, can he give us some reasons for continuing to sell the farmers short?
Mrs. Beckett: I am confident that if the hon. Gentleman casts his mind back he will understand the reasons very well. As I understand the matter—from memory—it was part of the package negotiated at Fontainebleau by the former Prime Minister, now Lady Thatcher, when she decided not to participate in that scheme.
Mr. Andrew Mackinlay: Would the Leader of the House consider giving us an early full-day debate on the Select Committee on Liaison report, "Shifting the Balance: Select Committees and the Executive"? There is a carrot for my right hon. Friend in granting the debate, because if that report is implemented by the Government, it will be her enduring legacy to Parliament. It will be much more important than the botch of the House of Lords reform, the introduction of the parallel Chamber, or Thursday sittings that end at 7 o'clock. Shifting the balance away from the Executive back to this place so that Back Benchers can control the Executive will be an enduring legacy. To hold such a debate would be a huge step forward. Will my right hon. Friend do all she can to advance that major constitutional reform?
Mrs. Beckett: I am touched by my hon. Friend's regard for my place in history. However, I fear that I am much more interested in what works effectively for better governance of the country than I am in my own track record or in how I am perceived.
Mr. Charles Wardle: The Leader of the House will be familiar with the draft strategy, "A way with waste", produced by the Department of the Environment, Transport and the Regions. Ministers suggested that it would emerge in its final form early this year. Will she tell the House when that strategy will be finalised? Will she arrange a debate so that public concern about pollution and contamination from incineration plants, such as might affect the residents of Mountfield in my constituency, can be fully explored?
Mrs. Beckett: I fear that I cannot undertake to find time for a debate on the subject in the near future, although I remind the hon. Gentleman of the 200 extra
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opportunities for debate that are offered by the proceedings in Westminster Hall. He will also have observed that Environment questions are scheduled soon and he might like to use that opportunity.
Mr. David Winnick: A statement will no doubt be made next week, but does my right hon. Friend agree that the report of the Standards and Privileges Committee on the hon. Member for Billericay (Mrs. Gorman), which has been debated in the House, and yesterday's report on the hon. Member for Brent, East (Mr. Livingstone) demonstrate that, at long last, Members' outside financial interests are being properly investigated? I emphasise the words "at long last", and I speak as a Member with 25 years' experience in the House.
Is there any reason at all why the annual tax returns of Members are not given to the Parliamentary Commissioner for Standards? If we have nothing to hide—I know that Conservative Members will object to the suggestion—why should the Parliamentary Commissioner not see our annual tax returns?
Mrs. Beckett: My hon. Friend raises an interesting point about the proper handling of our financial interests. The whole House has agreed to the way in which we handle such matters so as to make it clear that we pay high regard to our reputation and standing with the public. He made an interesting suggestion about tax returns, but I freely confess to him that, although he has made a serious point that should be carefully considered, many Members struggle to meet the new arrangements that have been made for the declaration of tax and the early filling in of forms. Certainly, I have never found it easy to make sure that I get all the information together in time to meet the deadlines, so the idea of having to meet the Parliamentary Commissioner's deadline as well is something to which I would wish to give a little careful thought.
Mr. Michael Jack: I was disappointed with the response of the Leader of the House to the hon. Member for North Cornwall (Mr. Tyler), who raised with her the handling of this morning's lead news item on the amalgamation of the Benefits Agency and the Employment Service. The Leader of the House has a crucial job in protecting Parliament's interest in discussing important business. Will she tell us specifically why that business does not merit a statement today or a statement or debate next week? We have been told that the change is one of the most significant to the way in which benefits will be dealt with in future, yet so far she has offered the House no chance to discuss it.
Mrs. Beckett: The right hon. Gentleman is wrong, I am afraid. I did not hear the report to which he referred, so I genuinely do not know whether I have sympathy for his complaint or whether I think that—and this is a sort of compliment—it is one of the bogus points frequently made by Conservative Members in pursuit of advancement of their political cause. [HON. MEMBERS: "Unfair."' That is not a criticism, because they obviously think that that is their job.
The right hon. Gentleman said that there should be a special statement. He will have observed that there is the opportunity for debate. When Members have had a chance

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to consider whatever is being said, no doubt they will know whether the issue is one that they can legitimately raise in the debate and will seek opportunities to do so. However, we cannot make statements on everything that comes to mind.
Angela Smith: My right hon. Friend may recall a lengthy and fascinating debate that we had in the House on 19 January on the Representation of the People Act 2000, including a rivetting discussion of about an hour on the meaning of the word "and" in legislation. Because of that, we could not, on that occasion, debate on the Floor of the House the Fur Farming (Prohibition) Bill. My right hon. Friend made a statement and promised that she would bring the Bill back to the House as soon as possible. When is that likely to be and what plans has she to bring the Bill back to the House as soon as possible?
Mrs. Beckett: I am grateful to my hon. Friend. Although she may be completely right, I must admit that I do not recall using the precise words "as soon as possible". I am always a little cautious, knowing that sometimes other things intervene in the scheduling of business. However, her underlying point is absolutely right and was strongly made. The procedures of the House were used to make sure that we did not reach the Fur Farming (Prohibition) Bill. I gave the House the undertaking that we expected the Bill to come before the House and, I hope, pass into law. That remains my view, although I cannot give my hon. Friend a date for that at present.
Rev. Martin Smyth: We understand that the Government have to get their business through and we know from experience that Governments of both persuasions have made many blunders in trying to push business through the House and wasted more time later on. When we ask to debate certain subjects, it is a ploy of those on the Government Front Bench to tell the Opposition parties that they can use their Supply days. May I therefore plead with the Leader of the House to use her influence with the usual channels to grant a half-day Supply day to the Ulster Unionist party? It is four years since we had one, we are trying to get one and I trust that it will not be towards the end of the Session before that happens.
Mrs. Beckett: I am sorry to learn of the hon. Gentleman's concerns. He clearly appreciates that this is not a matter for me directly, but I am confident that his observations will have been heard on the Opposition Benches.
Mr. Phil Hope: May I ask my right hon. Friend for an early debate on the future of the BBC World Service? It has now achieved a record 151 million listeners worldwide, reaching more than 100 cities across the globe, and its information and education work reaches some of the poorest communities in the world. I would welcome an early debate on its future.
Mrs. Beckett: I entirely agree with my hon. Friend. One of the more unfortunate features of the Conservatives' record in government was that they cut the funding for the World Service, which has always seemed
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to me to be not only a huge cultural but a huge economic asset to the country, so I thought that the cut in funding was an act of extraordinary folly. I entirely agree that the House should welcome, as I think it does, the improvement in the World Service and the additional funding that the Government have made available. I fear that I cannot undertake to find time for an early debate on the Floor of the House, but I recommend to him the attractions of Westminster Hall.
Dr. Julian Lewis: According to one of the many best-selling biographies of the Leader of the House, she was a distinguished member of the Labour common market safeguards committee. She will therefore appreciate the significance of yesterday's statement by the European Commissioner in charge of economic and monetary union, Mr. Pedro Solbes, who stated:
In the longer term it's not possible to be in the Union and outside EMU.
Will she find time for an early statement by the Foreign Secretary about those blackmailing tactics by unelected Commission officials, particularly in the light of the statement last October by the President of the Commission, Mr. Prodi, that the European Commission is in reality the Government of Europe?
Mrs. Beckett: I thank the hon. Gentleman, but I must slightly correct him: I do not think that there have been any biographies of me, but there are various biographical summaries of varying accuracy. They are correct in identifying that I was a member of the common market safeguards campaign. I understand the hon. Gentleman's point about the commissioner's remarks, but I would simply say to him that, not only do I not regard that as blackmail, but I do not even regard it as new. EMU has been a clear potential consequence of our involvement in the European Union from the very beginning, as those of us who urged caution at the time pointed out to the British people. I recognise that many Conservative Members were putting a different point of view at the time, and I hope that they are sorry, but it is too late.
Mr. John Cryer: When will my right hon. Friend be able to find time for the annual debate on the police? She will know that in the Met, resources are being taken from divisions and concentrated in murder investigations. Havering, the division that I represent, will be undermined by that move.
When the Tories and Liberals whinge about not having enough time, will my right hon. Friend bear it in mind that plenty of Labour Members would happily sit through Easter and August and other holidays? Perhaps if she suggested that on the Floor of the House, she might see Opposition Members taking a different outlook.
Mrs. Beckett: I am grateful to my hon. Friend for the first half of his remarks. I recognise the interest in and concern about policing in London. He will know that the Government have always tried to find time, on a suitable occasion, to focus on those matters, and we shall certainly bear his remarks in mind.
With regard to sitting through Easter and August and so on, I am of course well aware that my hon. Friend and other colleagues, including my hon. Friend the Member for Bolsover (Mr. Skinner), are always willing to be here,

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and that is a useful cautionary reminder to the Conservative party. However, I have to tell him that the Government's policy is for a good work-life balance, and in that light I cannot necessarily undertake to accede to his request.
Mr. Graham Brady: The Leader of the House is doubtless aware that next week the Commissioner for Public Appointments will publish her long-awaited report on Government appointments to NHS trusts and health authorities. Will the right hon. Lady make representations to her colleagues in the Department of Health and the Cabinet Office to ensure that Ministers from both Departments make early statements to the House, setting out the action that the Government intend to take to clean up the process of public appointments and to ensure that the political bias that has been evident to date is brought to a stop?
Mrs. Beckett: Of course, I know that the report is to be published, but I do not know what it contains and I do not know that the hon. Gentleman does. I cannot undertake that my right hon. Friend the Secretary of State will come to the House to make a statement. There may or may not be any need for him to do so. It is right that the Commissioner for Public Appointments should look into such matters, as the Government intended and support, but I do not accept the notion that there is a process to clean up and that that lies at the door of this Government.
I say to the hon. Gentleman, not for the first time, that Conservative Members have very short memories. We remember that under the previous Government, anyone with remotely Labour sympathies was kicked off the board of every health authority and trust, as were many loyal Tories who were not thought to be sufficiently toeing the line of the policies of the then Government. It is no good the hon. Gentleman shaking his head. He knows that what I say is true.
Mr. Jonathan Shaw: Is my right hon. Friend aware of the M2 widening that is taking place throughout my constituency? Drivers and freight will enjoy the benefits of driving through Kent to the ports, but is it not right that people who must lose their homes to accommodate the widening are fairly compensated? Mr. and Mrs. Russell of Bluebell Hill have lived in their home for 30 years and received an offer far below the market price from the Highways Agency. Will my right hon. Friend see to it that the Deputy Prime Minister makes a statement to the House about the guidelines that the Department of the Environment, Transport and the Regions gives to the Highways Agency for providing fair compensation to people such as my constituents?
Mrs. Beckett: I understand my hon. Friend's concern and the matter that he raises, correctly, on behalf of his constituents. I am aware that such matters always cause great anxiety and sometimes considerable resentment. I fear that I cannot undertake to find time or to ask my right hon. Friend to come and make a special statement
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to the House, but I undertake to draw my hon. Friend's remarks to his attention, and I am sure that he will look into the matter.
Mr. John Bercow: May we please have an urgent statement from the Secretary of State for Trade and Industry on the Part-Time Employees (Prevention of Less Favourable Treatment) Regulations 2000, which have so far been issued only in draft form? Given that the Government agreed in April 1998—probably during the tenure of the right hon. Lady at the DTI—to the incorporation in British law of the European directive on the rights of part-time workers, does the Leader of the House agree that it is shameful and appalling for British business that the Government have taken almost two years to produce the proposed directive, and that they have issued consultation proposals allowing only six weeks—
Madam Speaker: Order. The hon. Gentleman knows that a number of hon. Members want to put business questions. Will he now come to his point, and will all other hon. Members who are called please put their questions briskly? It happens to be an Opposition Day.
Mr. Bercow: Thank you, Madam Speaker. I apologise profusely to you and to the House.
Is it not a disgrace that businesses have had only six weeks to comment on the highly unsatisfactory proposals that have only belatedly emerged from the Government?
Mrs. Beckett: Although I understand the hon. Gentleman's concern that it has taken so long to bring the directive forward, the Conservative party resisted doing any of that. However, I shall draw to the attention of my right hon. Friend the Secretary of State for Trade and Industry the hon. Gentleman's remarks about the length of time for consultation, although from memory, I believe that that is not the first or only opportunity for consultation.
Kali Mountford: Has my right hon. Friend had an opportunity to see early-day motion 515:
[That this House, noting that it is a breach of international law and a defiance of mandatory United Nations sanctions to supply arms, fuel, equipment and goods to, or to purchase diamonds from, Jonas Savimbi's UNITA rebel force in Angola, calls for the public identification and, where possible, prosecution of all individuals, private companies and public officials involved; in particular calls upon the Governments of the Ukraine and Belarus to stop arms and munitions exports to UNITA, on Ukrainian pilots to stop flying weapons and diesel to UNITA, on the Government of Zambia to stop convoys of lorries and planes from crossing the border into UNITA-controlled areas with the occasional paid assistance of Zambian Ministers and public officials, on the Government of Uganda to sack senior officials implicated, including President Museveni's half brother, General Salim Saleh, on the Government of Cote d' Ivoire, Togo and Burkina Faso to act immediately to halt their longstanding supplies to UNITA, on the Government of Rwanda to stop their almost daily supply flights from Kigali and other airports to UNITA, on the Government of South Africa to crack down on the dozens of individual business people and arms suppliers who continue to supply UNITA, on the Government of Israel to act against

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those of its citizens involved in supply operations and those buying diamonds for sale via the Tel Aviv trading centre, on the Government of the United Arab Emirates to prevent arms being transited from eastern Europe via Dubai to UNITA, on the Government of Switzerland and banking authorities across the world to track down the millions of pounds of Savimbi's assets, secured through illegal sales of diamonds, and without which he cannot pay for the arms and fuel he needs to continue the dreadfully destructive war which has gone on for decades and which is now engulfing the whole region; supports the efforts of De Beers and the Governments of Belgium and the United Kingdom to block illegal sale of UNITA diamonds through Antwerp; welcomes the work of Canada's Ambassador Fowler in leading United Nations efforts to identify and block UNITA sanctions busters; and calls on the entire international community to act decisively to end the war by rigorously imposing sanctions on UNITA and preventing the making of money and private profit out of the misery of the Angolan people.]?
The early-day motion, which is in the name of my hon. Friend the Member for Stevenage (Barbara Follett), is an excellent resume of sanctions-busting in the region. On Tuesday, in Foreign and Commonwealth Office questions, the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Neath (Mr. Hain), told the House that he was going to New York this week to discuss the flagrant breach of international law. When he returns, will there be an opportunity for the House to debate the matter?
Mrs. Beckett: My hon. Friend is right. There is great concern, and the motion tabled by my hon. Friend the Member for Stevenage (Barbara Follett) is important. The Government sympathise, but I cannot necessarily undertake to find time for a full debate in the House. I recommend to my hon. Friend, as to others, the attractions of Westminster Hall. One of the reasons for proposing it was so that there would be more time for more specific debates on issues such as foreign affairs.
Mr. Patrick McLoughlin: Can we have a debate on the administration of local justice? Is the Leader of the House aware that the proposals to close Ashbourne, Bakewell and Matlock magistrates courts have been brought forward without the alternative arrangements that were promised at the time of the original closures? Will the right hon. Lady arrange for a debate on this important issue?
Mrs. Beckett: No, I was not aware that the proposals had been brought forward without the alternatives being in place. I cannot undertake to arrange a debate, but I can undertake to draw attention to the hon. Gentleman's remarks.
Mr. Tom Levitt: Can my right hon. Friend find time for a debate on the funding of health care? I was inspired to ask the question because I understand that the hon. Member for Woodspring (Dr. Fox) has made the somewhat bizarre claim that the Tories
would revolutionise private insurance in the way that they revolutionised pensions in the 1980s.
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Given that my memory of insurance and pensions in the 1980s is one of rip off and chaos, is it not time that we took an opportunity to lance the boil at an early stage?
Mrs. Beckett: My hon. Friend makes an important point. As he says, the way in which the Tories revolutionised private pension insurance is well within everybody's memory. That is precisely why everybody is afraid of the Tory proposals for health care. I fear, however, that I cannot on those grounds undertake to find time for a special debate on the matter. When the Opposition next try to exploit health matters, my hon. Friend will no doubt bear in mind the points that he has raised.
Mr. Christopher Chope: Will the Leader of the House find time for an early debate on the growing scandal of the £92 million which the Government spend on their own advertising? Will we have an opportunity during that debate to ascertain how it came about that Mr. Ray Porter was chosen to star in the new deal advertisements? Was it because he had been a subscriber to Labour party funds or because he was an example of a particularly bad and inappropriate employer?
Mrs. Beckett: I do not know anything about Mr. Ray Porter, but I do know about the Government's advertising. I am well aware that much of that advertising has been directed to ensuring that people are aware of the opportunities that are available under programmes such as the new deal. It is perfectly legitimate for the Government to do that and it is something that every Government have done. Unlike the previous, Conservative Government, whom the hon. Gentleman supported, we are making sure that our advertising covers the entire country and is not confined, as under the previous Government, to constituencies where there might be concern about unemployment without there being many unemployed people within them.
Mr. John Hayes: Further to the point made by my right hon. Friend the Member for North-West Hampshire (Sir G. Young) about the status of Lord Levy, will the Leader of the House give the House the opportunity to hear, in the form of a statement, clarification of the specific responsibilities and duties of Lord Levy, who is described as the Prime Minister's personal envoy in the middle east? That would put an end to the speculation about his shadowy dealings in funding political parties in this country and in the middle east. It would be fairer to him, to the House and to the wider public, because the House needs to know to whom Lord Levy is accountable.
Mrs. Beckett: As I have already said, a written answer is a statement to the House. I refer the hon. Gentleman to yesterday's Hansard, column 221W. He says that a statement would put an end to speculation; I doubt that very much.
Mr. Tony Baldry: May we have a debate in Government time on the work of the immigration and nationality directorate? I am sure that everybody at Croydon works extremely hard, and I know that the Minister and her private office who have a responsibility for immigration matters are always extremely courteous, but there is chaos.

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I quote two cases that have arisen in the past 24 hours in my constituency. A company in Banbury wants a key person with a work permit. It has been given three different answers: first, it has been told that the case has been filed and put in the archives; secondly, it has been told that the individual can come; and, thirdly, it has been told to consult the British Consulate in the country concerned. The second case involves a lady who married and came to the United Kingdom perfectly properly last July. She applied for entry clearance to Croydon in July and is still waiting.
Those cases have arisen within 24 hours. I am sure that every colleague in the House is aware of numerous cases of this sort. Please may we have a debate? Our staff are spending a disproportionate amount of time on the telephone to Croydon and are chasing one another's tails. It must be possible to do things in a better way.
Mrs. Beckett: I understand the anxieties that the hon. Gentleman properly identified. I am sure that many hon. Members have similar anxieties and experiences. I have had them for the past 20 years; I hope that a Labour Government will finally sort out the problems.
Mr. Nicholas Winterton: The Leader of the House does a wonderful job, and I congratulate her. Will she agree to the request of the hon. Member for Thurrock (Mr. Mackinlay) for an early debate on the Liaison Committee report entitled "Shifting the Balance"? That important Select Committee is dominated by Labour Members of long service and experience, and the report received unanimous support.
Secondly, will the Leader of the House make arrangements for a statement on what was apparently the Prime Minister's decision to locate Diamond Synchrotron in Oxford rather than Daresbury in the north-west? That decision to locate more jobs in the home counties and the south-east rather than the north-west has caused serious anxiety and disappointment across the political spectrum, including in Labour councils.
Mrs. Beckett: I am grateful to the hon. Gentleman for his kind remarks. The Liaison Committee report is a major, substantial document, which requires careful consideration. However, I cannot undertake to find time for an early debate.
I understand completely the concern that has been expressed throughout the north-west about the Daresbury project. Many of my hon. Friends have also raised the matter. The Office of Science and Technology and the Wellcome Trust recommended the site that has been chosen to the two Governments involved. However, I understand the anxiety in the north-west and the Government are endeavouring to respond to it.
Mr. Andrew Stunell: May I press the Leader of the House on the amalgamation of the Employment Service and the Benefits Agency? When she returns to her office, she will discover that it is not a gimmick that my hon. Friend the Member for North Cornwall (Mr. Tyler) or the right hon. Member for Fylde (Mr. Jack) dreamt up. Will she undertake to make a
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statement and give us the opportunity for a debate on a fundamental matter of Government policy and administration?
Mrs. Beckett: I accept the hon. Gentleman's point that an indication, to which he and other hon. Members referred, has been given. I cannot undertake to find time for a specific statement, but I shall draw his remarks to the attention of my right hon. Friend.
Miss Anne McIntosh: Given that Back Benchers have few opportunities to speak on proposed legislation if they are not members of a Standing Committee, does the Leader of the House agree that producing timetabling motions for more Bills restricts Back Benchers' ability to represent their constituents' interests? Will she consider the rights of Back Benchers and their obligation to their constituents, and keep such timetabling to an absolute minimum? I agree with the hon. Member for Hornchurch (Mr. Cryer), who called for shorter recesses to allow more time for us to examine Bills adequately and ensure that proper legislation reaches the statute book.
Mrs. Beckett: Under this Government, there have been shorter recesses. I know that Conservative Members deny that, but if the hon. Lady checks, she will find that that is true.
I could not disagree with the hon. Lady more. Proper timetabled debates are in the interests of Back Benchers. [HON. MEMBERS: "No."] I can tell the hon. Lady that I have been a Member of Parliament for substantially longer than her. During that time, when I have been involved with legislation, I have always made sure that the time was properly apportioned. That ensured that there was time to discuss the important issues.
None of our constituents understand or have sympathy for Members of Parliament wasting hours on trivial debates—[Interruption.] I know that the hon. Lady does not waste time, but I simply point out that our constituents do not understand it when we waste time on trivial debates and complain that there is no time for important issues. A proper agreement to tackle important issues avoids that. I believed that when I was a member of the Opposition—we were a good Opposition—and it remains my view.
Mr. Forth: At the risk of being accused of being political in this of all places, may I tentatively suggest to the Leader of the House that it is time for a proper and, if necessary, lengthy debate on the role of so-called "envoys" of the Prime Minister? It would be in the interest of any such envoys, and certainly in the public interest, for us to know with much greater clarity what relationship they have with the Government and the ministerial code of practice, and exactly where they stand in terms of Government policy at home and abroad. They also lack accountability to either House of Parliament. This matter of great importance is worrying more and more people. In the interests of good governance, surely we must have it out in the open and clear beyond all possible doubt.
Mrs. Beckett: Perhaps the right hon. Gentleman is again pursuing the issue of Lord Levy. My right hon. Friend the Prime Minister has answered questions about that, but what is quite plain and what has not been

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disputed by anybody is that Lord Levy has engaged in talks and conversations, which one hopes will promote the cause of middle east peace. Most people will think that more important than such nit-picking.
Mr. Michael Fabricant: During her busy day, has the right hon. Lady had a chance to read the report entitled "EU Membership—What's the Bottom Line?", which was published this morning by the Institute of Directors? It says that, taking into account the free market in the European Union and the inward investment that results from our membership, that membership costs each British family £1,000 a year. As we want to remain in the EU, but do not want to be run by it, may we have an urgent debate on how the EU needs to be restructured so that Britain benefits from it?
Mrs. Beckett: I do not think that there is any need for an urgent debate because the Government report assiduously to the House and spend a great deal of time on their efforts to achieve restructuring of the EU and more efficient spending of the public moneys that it uses, which the Conservative party singularly failed to do in government.
Mr. Nigel Evans: Will the Leader of the House arrange for an early debate on the crisis of democracy in local government? She may not be aware that the Labour leader of Cardiff council has had his pay for his three-day week increased to £58,000. He is the highest-paid councillor in Britain, and Cardiff council tax payers face increases of 10.2 per cent. this year. Seven Labour councillors voted against the increase and one abstained. They were immediately suspended from the Labour Whip. I fear that, unless we can stop the rot in Cardiff, it will spread to every other Labour authority in Britain and council tax payers will have to foot the bill for the greed of Labour councillors.
Mrs. Beckett: I have only two things to say to the hon. Gentleman. First, his party abolished the controls on those allowances in 1995. Secondly, if I were a Conservative Member I would not make a lot of fuss about people who get thousands of pounds for a few days' work.
Sir Patrick Cormack: The right hon. Lady will have noted the widespread demand for a proper debate—not merely one subsumed in the debate a week on Wednesday—on the statement that the Prime Minister is apparently making today. She will have noted also the considerable unease in the House about the precise role of Lord Levy. She has referred to the Prime
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Minister's answers, which I have before me. They say merely that, from time to time, Lord Levy has passed on oral messages. Will she be a real sport and pass an oral message from me to the Prime Minister? We expect changes in Government policy to be announced on the Floor of the House and we should like a little more detail as to the precise role of this extraordinary plenipotentiary.
Mrs. Beckett: I am always willing to pass on messages, but I can think of no circumstances in which it is likely that time will be found for a debate. The people of this country are much more interested in the prospect of peace in the middle east than in the preoccupation of Opposition Members. If any changes are announced, no doubt in the fullness of time those matters will come before the House. At first hearing, they do not sound to me so urgent that they need to be dealt with in five minutes. It does not sound the kind of matter that would take a short time to consider.

Personal Statement
Mr. James Gray: Madam Speaker, may I make a personal statement? During Prime Minister's questions yesterday afternoon, it was I who—from a sedentary position—accused the Prime Minister of being a liar. I recognise that that was unparliamentary language and happily withdraw the remark. When you asked who was the culprit, I fear that I remained silent. In retrospect, I realise that that was inexcusable. I apologise to you and to the House for my remark and my silence after it.
Madam Speaker: Thank you.
Mr. Stephen Pound: In light of that full statement, Madam Speaker, it is clear to me that my suggestion to the House yesterday that it may have been the hon. and gallant Member for Blaby (Mr. Robathan) who called the Prime Minister a liar was wholly unfounded. I wish to express my unreserved apologies to him and to the House.
Madam Speaker: Thank you.

WELSH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order No. 107 (Welsh Grand Committee),
That the matter of the Budget Statement and its implications for Wales be referred to the Welsh Grand Committee for its consideration—[Mr. Clelland.]
Question agreed to.

Opposition Day
[8TH ALLOTTED DAY]
Opposition Day

  Mozambique
  [Relevant document: Minutes of Evidence taken before the International Development Committee on 14th March, HC 326-i.]
  Madam Speaker: I have selected the amendment that stands in the name of the Prime Minister.
  1.16 pm
  Mr. Gary Streeter: I beg to move,
  That this House notes with concern that the Government's response to the humanitarian crisis in Mozambique was hampered by indecision and delay, and that infighting between Ministers in the Department for International Development and the Ministry of Defence contributed to the delay in sending helicopters and boats to assist in the rescue of the people of Mozambique; deeply regrets that lives were lost as a result; deplores the absence of 'joined up government' and the failure by the Prime Minister to intervene until Her Majesty's Opposition and the media exposed the Government's failings; calls upon Ministers to accept responsibility for such delays; and seeks assurance that the response to any future disasters will be more immediate and co-ordinated.
  Something went wrong with the British relief effort in Mozambique. In seven critical days when thousands of people were hanging in trees, there were not enough helicopters flying to rescue them. We will never know how many lives were lost. It was the failings of many, not just of our Government. The purpose of this debate is to examine what went wrong and to learn the lessons, so that next time a natural disaster on this scale strikes—as sadly it will—the British Government can respond more effectively.
  Mr. Tony Worthington: Is the hon. Gentleman aware that 14 helicopters were flying in Mozambique on 1 March? There were seven South African helicopters fuelled and paid for by the British Government and seven provided by the British Government. All 14 helicopters flying in Mozambique were funded by the Department for International Development. Is he saying that Britain failed? What was the rest of the world doing?
  Mr. Streeter: I will come to that. I am sure that the hon. Gentleman agrees that for most of the time, people were hanging in trees and clinging to rooftops in Mozambique and there were not enough helicopters flying to rescue them. That is irrefutable and the British people feel strongly about it. Most of the time, there were five helicopters in the air.
  The House should judge the Government's handling of the Mozambique crisis not by the standards of tabloid headlines or unrealistic counsel of perfection but by the words and promises of the Secretary of State. In February 1998, the right hon. Lady said:
  As for my Department's response to emergencies, it is true that the capacity of the British Government to respond rapidly sits within my Department. It works very smoothly and very fast. When there is a need to move, Ministers are not consulted. We have delegated powers and resources available to us, and we move immediately.
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  We can move over a weekend. There is no need to consult lots of Departments and delay our response.—[Official Report, 11 February 1998; Vol. 306, c. 375.]
  Unfortunately, we all know from agonising recent experience that the Secretary of State's words were not translated into action. There was delay. Her Department did not move immediately. There was no rapid response mechanism involving the Ministry of Defence or any other Department. It did not work smoothly. Mistakes were made—mistakes that cost lives. Whatever else happens as a consequence of today's debate, the delay, indecision and infighting that undermined the British Government's response must never occur again.
  Fiona Mactaggart: In view of the seriousness of the delay that the hon. Gentleman is describing, will he tell us which helicopters arrived on the scene first after those from Mozambique and South Africa? From which country did they come?
  Mr. Streeter: Perhaps the hon. Lady is a little out of touch. Helicopters were flown from this country on 3 March; I think that they should have been flown during the weekend before that, at the latest.
  Before I consider the Government's response in detail, let me deal with two other matters that should concern us all. The first is the response of the United Nations and the European Union. Yet again, it has been inadequate. In the medium term, it will be important for the House to debate the failure of the international community's multilateral agencies to respond to the crisis in Mozambique, and to others. Although our Government's response fell well short of the expectations of the British people, the truth is that nation states responded more quickly and more effectively than multilateral organisations.
  It is often said that nothing happens in the United Nations until a matter reaches the 38th floor, and by then it is too late. We shall need to explore whether these are the right vehicles to be in the front line when natural disasters strike. No official stands before a committee in the United Nations today to be examined on how the UN responded, yet this is the second time that the Secretary of State has been called to account this week. She is being held to account for decisions that she made, or did not make. That is democracy in action, and it works.
  Of course it is also true that the response of other nations was patchy. Some countries, both in the region and further afield, should certainly give thought to their own responses, and learn their own lessons. The British people, however, have shown how they feel about the plight of the people of Mozambique with—yet again—their magnificent generosity. They have now given more than £20 million. They expect their Government to match their sacrifice, and to be in the front line when terrible disasters of this kind occur.
  Mr. Worthington: Will the hon. Gentleman give way?
  Mr. Streeter: The hon. Gentleman has already had one go, and he made a mess of that. I will not give way to him again.
  As I was saying, the British people expect our Government to be in the front line when terrible disasters occur, especially in instances such as this. Mozambique is a Commonwealth country, and we have a special responsibility.

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  I am not saying that the British Government have done nothing; they have done much that the Conservative party welcomes. We will continue to support the Government over the next few months and years, as the painstaking task of helping the people of Mozambique to rebuild their lives continues. Those people now need food, water, medicine and seed to plant. They need help with the clearance of land mines dislodged by the floods and scattered everywhere. For many years, they will need help with the reconstruction of their homes, and the country's economic and physical infrastructure is in trouble. We will support the Government's efforts throughout that long process, but they must answer serious questions about their handling of the crisis. The people of this country are concerned about the infighting and delay that characterised the Government during the critical seven days while people were stranded, and it is my job to ask those questions on their behalf. They are straight questions, and they deserve straight answers.
  Mr. Worthington: Will the hon. Gentleman give way?
  Mr. Streeter: The hon. Gentleman can make his own speech later.
  Let me ask the Secretary of State three sets of questions. First, where were the helicopters? On 10 February, the Mozambique Government were asking for help. On 11 February, Oxfam highlighted the need for helicopters and boats, and South African Government helicopters began flying in the region. On 14 February, South African experts predicted more heavy rain. On 18 February, UNICEF confirmed fears about the impending cyclone. All the warning signs were there. Why did it take a further two weeks—until Saturday 26 February—for the Department even to investigate with the Ministry of Defence the availability of British helicopters? Why was it only on Tuesday 29 February that the Department asked the MOD for helicopters? If it was right to send helicopters from Britain on 3 March, why was it not right to send them straight away?
  It was obvious that, in the critical seven days from Friday 25 February to 3 March, helicopters to rescue people were the overwhelming priority. That was something that aid agencies and charities could not do. It requires Governments and armed forces to undertake such major logistical exercises. Providing helicopters to rescue people was the one thing that they were looking to us to do. The Government failed to deliver.
  The Secretary of State's strategy was to locate helicopters in the region, but that strategy largely failed because, she says, she could not find enough. However, there is mystery here, too. Recently, in reply to a written question, she said:
  We have received many offers for the hire of helicopters both from the region and also further afield.—[Official Report, 7 March 2000; Vol. 345, c. 622W.]
  If that was the case, why were so few of them taken up? There was a window of opportunity of just a few days to get people to safety before they drowned. It was a now-or-never situation. Why did she turn helicopters away? It cannot have been money because she told the House that money was not the issue. Does she now accept that she could have done more?
  Does the Secretary of State now accept that, as soon as the situation over the weekend of 25 February arose, the right strategy was to mobilise helicopters from Europe?
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  Does she accept that she should have explored the availability of Ministry of Defence helicopters well before then? The RAF was ready to go. It was well known that heavy-lift aircraft were available to hire and could get to Mozambique within 24 hours. The needs were obvious. The assets were available. Why did she not act?
  Why did the Secretary of State delay so long before sending the Royal Fleet Auxiliary Fort George, which was finally instructed to go on 3 March? She told the House of Commons on Monday 28 February that the situation would get worse before it got better. How could she justify not sending Fort George when she knew that the ship would take a week to get to Mozambique? If it was right to send it on 3 March, why was it not right to send it on 1 March or on the weekend of 26 February? Given that the ship was later dispatched, does she accept that that, too, was an error of judgment?
  Where was the joined-up government? The Secretary of State said that she had put in place a system that was very fast, worked very smoothly, could move immediately and could move over a weekend, but, when tested, no such system existed.
  In recent years, it has almost always been the case that British aid in a disaster situation has involved the deployment of British forces. Surely, the Secretary of State had built a team approach that included the MOD. It would have been foolish not to, but, when a rapid reaction was necessary, there was no such system or team in place, so her Department and the MOD were at loggerheads for three days over money. That is what the British people find so utterly unacceptable. While people were dying in trees, the Government were wrangling over the price tag for four helicopters.
  Having failed to put in place a rapid reaction team that worked, when the Secretary of State first heard that the MOD required £2.2 million for the four Puma helicopters, at the very least she should have picked up the telephone, called the Minister for the Armed Forces and negotiated a satisfactory deal there and then. Given that the Pumas went three days later, the failure to strike an immediate deal with her colleagues was shameful. Is it not true that she turned her back on the best solution because she failed to telephone one of her ministerial colleagues?
  Was it because the Secretary of State has had a personal feud with that Minister for several years? Was it because she is in a permanent state of war with many of her Cabinet colleagues? What is the point of giving international development a Cabinet position and then giving it no clout? Where is the joined-up government that we were promised?
  Does the Secretary of State think that the MOD should make a separate response to disaster emergencies? The lack of communication between the two Departments was so evident that, when the hon. Member for Chorley (Mr. Hoyle) put it to her on Wednesday 1 March that the RAF had hired an Antonov and was sending helicopters, she did not even know.
  Whatever happened to collective responsibility? When I ask her about debt relief, she says that that is a matter for the Treasury. When I tackle her about export credit, she refers me to the Department of Trade and Industry. In the midst of a humanitarian crisis for which she has lead ministerial responsibility, she tells the House that it is up to the Ministry of Defence whether it sends helicopters. She tells the Select Committee that it is not her job to tell

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  the MOD how much to charge for helicopters. But surely it is her job to co-ordinate the British relief effort. A key part of that is getting all Departments to work together. On that front, she has completely and utterly failed.
  Whenever the Secretary of State is in difficulty, she blames someone else; it was the MOD's fault for charging too much; it was United Nations officials who left too early. Is it not time for her to accept responsibility for the choices and decisions that she has made?
  Why does the Secretary of State tell the House of Commons one thing, but the outside world another? Why did the Secretary of State tell the House—on Monday 28 February and Wednesday 1 March—that money was not the issue, when it clearly was? She said:
  The problem is not shortage of money, either, but getting resources deployed in theatre quickly.
  If the problem was not shortage of money, why did she fail to charter more helicopters locally when they were offered?
  On Wednesday 1 March, why did she tell the House that there was absolutely no problem in co-operation between her Department and the Ministry of Defence, when that was clearly not the case? She told me:
  I am sorry, but the hon. Gentleman is misinformed. There is absolutely no problem about co-operation with the Ministry of Defence.—[Official Report, 1 March 2000; Vol. 345, c. 409.]
  That was not true, was it?
  The Secretary of State herself said, on the "Today" programme, that the MOD had asked for too much money. She said that the MOD is
  charging very high prices and coming in very slow.
  Was she telling the truth on the "Today" programme or in the House of Commons?
  Next came the most cynical act of all—it was so cynical and so typical of the Government. After a weekend of negative press, the Secretary of State decided to try to hide her Department's shame by announcing, via The Observer, an aid package of £70 million for Mozambique over the next two years. The announcement was clearly intended to give the impression of new money. I quote from The Observer—my favourite Sunday newspaper—of 5 March, which said:
  The British Government was last night accused of cynically attempting to manipulate public opinionm
  surely not—
  over its humanitarian response to the Mozambique crisis after announcing an extra £70 million in aid—only to be forced to admit the figure was less than the amount it had already announced would be spent on aid to the country prior to the recent flooding.
  After a week of chaos over the Government's response to the tragedy in Mozambique, International Development Secretary Clare Short pledged to spend £70 m over the next two years in an aid package. The Government had hoped to offset criticism over Whitehall haggling and lack of financial assistance to the victims by announcing this "new" aid package.
  In a statement released to The Observer, Short said: "We are also planning to increase our programme of support to Mozambique to £70 m over the next two years and will take a lead role with the World Bank and the EC in assessing the implications of these floods for Mozambique's future needs."
  Department for International Development officials claimed the extra money had been agreed with senior civil servants at a meeting only last Tuesday.
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  But, following inquiries from The Observer the DFID was forced to admit that its annual report, published last March, had projected spending on Mozambique of £38.5 m in 2000–01 and £38 m in the following year—a total of £76.5 m.
  Embarrassed DFID officials, confronted by the apparent cut in aid to Mozambique, then quickly increased the aid package to £76.5 m.
  How cynical to re-announce money already announced, and how incompetent then to get it wrong! The headline perhaps says it all: "Clare Short's £70 million 'boost' for stricken Mozambique is actually a cut in planned spending". What a cheap and cynical publicity stunt. How typical of the Government.
  Dr. Jenny Tonge: As the hon. Gentleman probably knows, I was also involved in the incident with The Observer over that weekend. Is he ready to admit that the journalists have admitted that they had got the message wrong initially and misinterpreted it?
  Mr. Streeter: It is typical of the hon. Lady to come to the rescue of the Government. We are used to that from the Liberal Democrats these days. I do not accept what she says. I am delighted to accept the story in The Observer at face value.
  Mr. Michael Jabez Foster: Whatever the truth of that story, which seems unclear, would there have been an extra £70 million if the hon. Gentleman had been in charge?
  Mr. Streeter: I do not know who the hon. Gentleman is, but he does not know a lot about development or aid. Surely he does not condone his Government cynically re-announcing money that they had already announced and then getting the amount wrong. That is hypocrisy combined with incompetence.
  There is not a single person in Britain who does not believe that in the crucial seven days when the lives of thousands of people in Mozambique were hanging by a thread, the British relief effort was paralysed by infighting and incompetence, which led to critical delays in getting more helicopters flying in Mozambique. There is not a single person in Britain who does not believe that lives were lost as a result. They want to hear that the Government have learned the lessons.
  This is not the first time that the Secretary of State has been found wanting in a crisis. Her handling of the Montserrat crisis gave widespread offence and caused the Foreign Secretary to take the management of the dependent territories away from her Department. Her disparaging comments about the people of this country giving to the people of Sudan are still remembered with alarm. Her description of calls for debt relief after the devastating hurricane in central America as silly and irrelevant was a massive error of judgment that had to be overruled by the Chancellor. No one doubts that her heart is in the right place, but Ministers are paid to make good decisions. Is it not a vital part of her job to co-ordinate the relief effort across Whitehall? If not, what is her Department for?
  The Secretary of State for Defence (Mr. Geoffrey Hoon): The hon. Gentleman has twice suggested that lives were lost as a result of the delay, but he has failed

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  to say precisely when the delay happened. So that we can answer the debate properly, will he say precisely when the alleged delay occurred?
  Mr. Streeter: I am staggered that the Secretary of State for Defence does not know. The delay, for which he was partly responsible, took place between Saturday 26 February and Friday 3 March, when helicopters were ultimately dispatched. Between those dates, there was ministerial incompetence, a lack of communication and infighting. Several days were lost. Everyone in the House and in the country knows that.
  Is it not a vital part of the job of the Secretary of State for International Development to co-ordinate the relief effort across Whitehall? Is not a pattern emerging of a Cabinet Minister in a permanent state of war with her colleagues? She is a Minister building an empire who cannot build a team. She is fond of signing up for 20-year poverty targets, for which she can never be held accountable, but she could not meet a 48-hour target to get helicopters to desperate people hanging in trees.
  The Secretary of State will blame others for what went wrong—she always does. She will say that there was no delay and that the Government did all that they could, but no one will believe her. The British people want to know that the Secretary of State, who, by her own admission, has direct responsibility for the Government's relief effort, has sufficient humility to recognise that mistakes were made. They want to know that the Government have learned the lessons. They want to hear that new systems and a cross-departmental rapid reaction force will now be put in place so that next time, the British response will be better; next time, more lives will be saved; and next time, the Government will respond in a way that we can all support.
  1.40 pm
  The Secretary of State for International Development (Clare Short): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
  commends the Government for its speedy and effective response to the humanitarian crisis in Mozambique.
  The House understands that it is the job of the Opposition to oppose, but it is sad when an Opposition spokesman on such important matters has no respect for accuracy; no concern for the merits of the case; little concern, clearly, for the people of Mozambique; and no respect for the large numbers of UK personnel who are in Mozambique, making a contribution that is respected across the world. Ours is the biggest contribution of any country, and it arrived more rapidly than that of any other country. Those are the facts, and the facts do matter.
  If the hon. Member for South-West Devon (Mr. Streeter) is capable of learning anything, he might want to study the performance of his predecessor, who cared about these matters, addressed the merits of each case and did not play cheap games.
  Mozambique is the newest member of the Commonwealth, and the only member not colonised by the UK. It is one of the poorest countries in the world. At least 70 per cent. of the people live on less than $1 a day—the World Bank measure of absolute poverty. Of course that measure is what $1 a day would buy in the US, not in Mozambique. That demonstrates how poor the country is.
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  Only 40 per cent. of the population have access to basic health services, and only 28 per cent. access to safe water. Chronic malnutrition—when a disaster has not occurred—affects 30 to 40 per cent. of children. Some 60 per cent. of the population are illiterate; 77 per cent. of women are illiterate.
  Mozambique has had a very hard hand from history. It was colonised by Portugal, and that meant that there was little investment in the country and no investment in education. Like the other Portuguese territories, it had to fight for its independence. Incidentally, that fight brought down the fascist Salazar regime and helped to bring democracy to Portugal—and thus more democracy to Europe. We should be grateful for that.
  Following independence—because the Soviet Union had been its only ally in the struggle—Mozambique tried the disastrous Soviet economic model. This caused the neighbouring apartheid regime in South Africa to interfere and stoke up conflict, leading, in turn, to a vicious civil war, with all the loss and bitterness to which such a war leads.
  Dr. Julian Lewis: Will the Secretary of State give way?
  Clare Short: No, I will not give way at the moment. It is important for the House—especially those who do not concern themselves with the country in question and just want to make cheap points—to know a little about the country we are discussing. [Interruption.] Sadly, that applies to many Opposition Members.
  Nine years ago, Mozambique made peace and established democracy. The two sides in the conflict, Renamo and Frelimo, are now Opposition and Government. Mozambique also embarked on major reform—the economy has since then grown well—and the Government began the process of clearing mines and improving services for people.
  The UK has a large and growing development programme. We inherited a £20 million-a-year development programme after the election, and it has been growing steadily ever since.
  Mr. Michael Fabricant: Was that money announced twice?
  Clare Short: I will come to that. That is also untrue, as everything the hon. Member for South-West Devon said seems to be.
  Mr. Menzies Campbell: The Secretary of State mentioned mines, and there have been extensive reports that, since the flooding, a lot of mines which were underground may have been dislodged. Does she have any up-to-date information about that, the risk that it presents and the efforts that have been made to try to deal with that risk?
  Clare Short: The right hon. and learned Gentleman is right; it has been suggested that mines have been dislodged and are now more dangerous. The UN has a specialist mine-surveillance unit which has been called in. We do not yet have a report, but we are trying to attend to the problem. However, we do not know at the moment how much of a problem it is compared with all the other problems.

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  Before I turn to some of the specific issues surrounding Mozambique, I wish briefly to remind the House of some of the major emergencies across the world over the past two years to which my Department has made a significant contribution. Since June 1998, there have been 78 natural disasters to which we have responded and on which we have spent £41 million. Those disasters are quickly forgotten, but since December 1998, we have contributed assistance after floods in Vietnam; a cyclone in Fiji; and an earthquake in Colombia; in March 1999, after a famine in North Korea and floods in Bolivia; in April 1999, after a volcano in Cameroon—
  Mr. Streeter: This is not relevant.
  Clare Short: It is relevant, because the debate is about the competence of my Department in responding to emergencies and the false allegations made by the hon. Gentleman. We assisted after a cyclone in Pakistan in May 1999—[Interruption.] We are part of an international system that responds to emergencies, not to Opposition Members. We provided help after floods in China in August 1999; after the earthquake in Turkey, which the House might remember; after the earthquake in Taiwan in September 1999; after a hurricane in the Bahamas; after a cyclone in India in November 1999; after more floods in Vietnam; after another earthquake in Turkey; after a hurricane in Anguilla; after an earthquake in Vanuatu in December 1999; after floods in Venezuela; after storms in France, because it needed people to get the electricity system working; after storms in Mongolia in March; and after cyclones in Madagascar, also this month.
  We are organised as a Department to respond very quickly. The Department maintains a round-the-clock, round-the-year, 24-hour, in-house emergency response capability in its—
  Mr. John Hayes: Will the Secretary of State give way?
  Clare Short: No, but I will give in to the hon. Member for New Forest, East (Dr. Lewis) at the end of my paragraph. I mean that I will give way—I certainly will not give in. [Interruption.] If the House is concerned about the capacity of the UK to respond, it should listen to what I am saying.
  The emergency response capability is provided by the conflict and humanitarian affairs department—CHAD—which includes emergency response teams equipped with vehicles and communications equipment, which can be deployed immediately with specialist staff covering a wide range of disciplines. We maintain stockpiles of essential equipment and relief items such as tents, water equipment, household items and so on, which we can also deploy if required.
  Dr. Julian Lewis: Will the right hon. Lady accept that some Opposition Members do know a little about the history of that tragic country, and that some of us know that in other crises her Department has performed more adequately than it has in Mozambique? Will she accept
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  that we are having a debate about that crisis? Does she deny that she said on the "Today" programme that the problem was the Ministry of Defence
  charging very high prices and coming in too slow?
  If that is the case, will she say which of the two Defence Ministers who are sitting flanking her on the Front Bench like jailers she holds responsible?
  Clare Short: I shall come on to the specific question the hon. Gentleman asks in a moment. I accept that some Opposition Members care about countries such as Mozambique, but I am sad to say that I do not believe that the hon. Member for South-West Devon cares about affairs in a country such as Mozambique.
  Mrs. Cheryl Gillan: That is a gratuitous insult.
  Clare Short: The hon. Lady can hardly talk about gratuitous insults, given that she is sitting next to the hon. Member for South-West Devon.
  In addition, my Department has established arrangements to call in resources from other Government Departments—[Interruption.] Opposition Members claim that they want to hear the answer to their questions. We also have arrangements to call in resources from companies and non-governmental organisations, including search and rescue teams from UK fire services, military assets from the Ministry of Defence, engineers from the Northern Ireland Electricity Company and from Registered Engineers for Disaster Relief, health care professionals from the NHS through the International Health Exchange
  Mr. Desmond Swayne: Will the Secretary of State give way?
  Clare Short: No, I will not.
  We also have partnerships with Sweden, Norway, Denmark and Finland, so that resources and capabilities can be shared.
  Mr. Iain Duncan Smith: Will the Secretary of State give way?
  Clare Short: No, not at the moment. We have—
  Mr. Duncan Smith: Will the Secretary of State give way on that point?
  Clare Short: No, I will not.
  It has been alleged by Opposition Members that we have frequently responded slowly. I am simply explaining to the House that the UK has capacities that are admired across the world and that it deploys quickly in emergencies all over the world. On this side of the House, we are proud of the people of our country who respond in that way, but clearly Opposition Members are not.
  Mr. Duncan Smith: Will the Secretary of State give way?
  Clare Short: Not just now, but I will in a moment.

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  We have a reputation across the world as one of the quickest, most effective and most generous countries in the world when responding to such emergencies.
  Briefly, I should like to correct some of the misleading stories that appeared yesterday, as Lobby correspondents struggled to find a new row story, rather than simply report the truth.
  Mr. Duncan Smith: Will the Minister give way?
  Clare Short: No.
  Mr. Duncan Smith: The Secretary of State said that she would give way.
  Clare Short: I have made it clear to the hon. Gentleman that I am not giving way at the moment. I should be grateful if you, Mr. Deputy Speaker, would ask him to honour the normal rules of the House.
  I certainly did not criticise officials from my Department when I gave evidence to the International Development Committee. The Chairman of that Committee, the hon. Member for Hertford and Stortford (Mr. Wells), is present, and I am sure that he will confirm that. My officials—
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Michael Lord): Order. I shall indeed use my authority to decide on these matters, but it is for the right hon. Lady to decide whether she is giving way in the debate. This is a very serious matter. I hope that the House can debate it in a calmer atmosphere, with fewer sedentary interventions.
  Clare Short: As I was saying, my officials are some of the best in the world and are widely admired. I made no criticism of them, nor did I blame the United Nations for the emergency.
  The emergency was what insurance companies call an act of God. Perhaps a story will now appear with the headline "Clare Short Shifts Blame to God". After each emergency we try to learn lessons and, as I told the Select Committee, once the UN arrived—in the person of Ross Mountain of the UN Office for the Co-ordination of Humanitarian Affairs—the UN co-ordination was superb.
  The UN response was a little slow in arriving, and we would have done better if it had come earlier, but that is a lesson for the future. I have discussed the matter with Kofi Annan, and we have agreed to try and tighten systems to ensure that the response is swifter in future.
  Mr. Duncan Smith: I am grateful to the Secretary of State for giving way. In an earlier intervention, my hon. Friend the Member for New Forest, East (Dr. Lewis) asked whether she had gone on the "Today" programme to blame the Ministry of Defence for the price that it had quoted and the delay in delivering items to Mozambique. Will she answer that question with a simple yes or no?
  Clare Short: I shall come to that. [Interruption.] It is clear that Conservative Members care nothing about Mozambique, the emergency there or our response to it. They want to play cheap political games. I shall come to the matter raised by the hon. Member for Chingford and
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  Woodford Green (Mr. Duncan Smith), but the context is the emergency in Mozambique. The hon. Gentleman might at least pretend to be concerned about that.
  The problem that we frequently experience is that a rush of press interest follows the rapid onset of an emergency. A paradox therefore arises: there is no doubt that press coverage moves the people of the world, and that that helps bring help, but it also usually leads to screaming headlines about who is at fault and why the disaster was not prevented or dealt with more efficiently.
  Such discussion is, of course, valuable and legitimate, particularly after the event, as it helps us to learn from each disaster and strengthen international systems. However, during the emergency, it very often distorts discussion of what needs to be done and what is being done, and adds to the pressures on those dealing with the emergency—often, indeed, pressurising them to take inappropriate action.
  We have seen a clear example of such distorted comment in the case of the UK response to Mozambique. Those distortions have been parroted by the hon. Member for South-West Devon today. All who are informed about events on the ground agree that the UK response has been the fastest and largest of any country in the world. President Chissano of Mozambique has sent a message to that effect. Moreover, Kofi Annan was in London yesterday, and made the same thing clear in all the meetings that he had during his visit.
  As I made clear to the Select Committee on International Development on Tuesday—I understand that the record of that evidence has been made available to all hon. Members—there was no row of any kind between Ministers from the Ministry of Defence and my Department.
  Mr. Hayes: Will the Secretary of State give way?
  Clare Short: No, of course not.
  Mr. Hayes:Why not?
  Clare Short: Because you have been interrupting this very important discussion about the situation in Mozambique to try to talk about four helicopters. I am trying to give you the answer, but again you try and interrupt.
  Mr. Deputy Speaker: Order. The right hon. Lady has used the word "you" on two occasions now. That is not the correct parliamentary language, and I should be grateful if she would observe the correct usage. When hon. Members try to intervene, she need do no more than indicate whether or not she will accept an intervention.
  Clare Short: I would, Mr. Deputy Speaker, but Conservative Members keep shouting rather than merely asking whether they may intervene.
  The decision not to commission four Puma helicopters from the Ministry of Defence at £2.2 million but to commission less costly helicopters from southern Africa caused no delay of any kind in getting helicopters to Mozambique. Even Conservative Members can understand that helicopters from the United Kingdom would take

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  longer to arrive in Mozambique than helicopters from southern Africa. Perhaps even they can cope with that concept, or that understanding of geography.
  Mr. Fabricant: Will the right hon. Lady give way?
  Clare Short: No, I will not give way. May I proceed?
  Mr. Streeter: Will the right hon. Lady give way?
  Clare Short: No, I certainly will not.
  The reality is that during such an emergency, and every time, staff from our conflict and humanitarian affairs department commission emergency help on a daily basis from when the crisis begins. As we always do, we ask the Ministry of Defence as well as other providers what it has available. We then commission what is closest at the best price. I cannot see anyone advocating anything different—anyone with any sense, that is.
  There was no financial ceiling on our available help. Indeed, the Treasury made it clear at ministerial and official levels that extra money was available if needed. In the early stages of such an emergency—for people in the mud in central America or on the top of trees or houses in Mozambique—it is the speed of response that saves lives.
  Mr. Fabricant: Will the right hon. Lady give way on that point?
  Clare Short: No, I will not give way.
  In fact, 13,000 to 15,000 people were rescued in the early days from trees and roofs. Without the helicopters, perhaps half of them would have perished. The best thing that we did in this phase was to provide the money to keep the South African helicopters in the air, saving lives. The helicopters that came later have helped move supplies around and have been very valuable in the second stage of the emergency, but they were too late to help with search and rescue.
  On 29 February, four days after the cyclone struck, we commissioned five further helicopters from southern Africa—they were the closest, so they could get there the fastest. Even they were too late to help with search and rescue, although of course they provided major help with the distribution of relief supplies. Those are the facts about saving lives and getting helicopters to Mozambique.
  Mr. Hayes rose—
  Mr. Graham Brady rose—
  Clare Short: On 29 February, we also sent two large aircraft containing 69 inflatable boats, 39 rafts, 20 Land Rovers, shelter material and 30 volunteer experts from our fire services and our life boat services. I have heard no one praise them. They are working there still today, and we should be proud of them.
  We should be very proud that my Department has on standby firefighters, life boat experts, logisticians, health workers and other experts who will overnight drop
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  everything and respond to an emergency anywhere in the world. We are entitled to be very proud of the generosity and expertise that is available in the United Kingdom and of the effectiveness of Department for International Development staff, who keep all such capacity up to date and on standby so that we can provide the help that is needed as emergencies arise.
  Mr. Swayne: Will the right hon. Lady give way?
  Clare Short: I will give way to the hon. Gentleman, who asked a sensible question during International Development questions.
  Mr. Swayne: I hope that the right hon. Lady will consider this a sensible question. While we are rightly proud of the contribution of those volunteers, we are concerned about the issue with the MOD. Why did she complain about the price that the MOD was charging for the helicopters?
  Clare Short: Perhaps I should speak very, very slowly, in capital letters. When asked why we had not commissioned MOD helicopters, I explained that they were very expensive and would take quite a long time to get to Mozambique because they had to get from the UK down to southern Africa. We had alternatives that were closer and cheaper, so we commissioned those. That is the answer; that is what we did, and it was clearly the right thing to do.
  Mr. Nick St. Aubyn: Will the right hon. Lady give way?
  Clare Short: No, I am not giving way—the answer is clear. [Interruption.] There seems to be an awful lot of noise, Mr. Deputy Speaker.
  A list is available of all the emergency help that has been provided to Mozambique, and it is being added to continuously. The House will see that my officials had been commissioning and sending help long before there was any media interest in the crisis in Mozambique, and that we will remain engaged after the media has moved on.
  I should like to deal with the "someone ought to do something" criticism. Various people have produced articles suggesting that the disaster could or should have been prevented. Mozambique is used to floods and cyclones—they are regular events for the country. But the two events have not come at the same time, as in this emergency, since records began 50 years ago.
  The first phase of the emergency began on 10 January with heavy rains in Mozambique, Botswana, South Africa and Swaziland, which caused flooding. Because of local topography, the flooding returns to Mozambique in a second stage, raising the water level. Flooding accelerated in early February when a number of rivers in Maputo and Gaza provinces burst their banks. By 10 February, 200,000 people were estimated to be affected, many of whom moved to emergency accommodation. During this phase the relief effort focused on delivering tents, sanitation facilities, shelters and basic survival items. From 11 to 16 February, we provided £1.1 million worth of such help through United Nations agencies and non-governmental organisations who were on the ground and able to help immediately.

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  Phase 2 started after 25 February and was the consequence of Cyclone Eline, which led to a massive tide of water, flooding rivers and bursting dams. Warnings went out to people to get to higher ground, but communications are poor in Mozambique, and a major flood crest surged down the Limpopo, Save, Buze and Inkomati rivers overnight on 25 February. Many people lost their lives, and large numbers of very poor people have lost everything—their homes, possessions, crops and animals—and are scattered in 87 formal and informal centres.
  Mr. Fabricant: Will the right hon. Lady give way?
  Mr. St. Aubyn rose—
  Mr. Hayes rose—
  Clare Short: No.
  The waters are going down. It looks increasingly as though there will not be flooding in the north, although that may be proved wrong as a danger remains that the Caborra Bassa will flood, and rain is still falling heavily even though the cyclone coming from the Indian ocean has turned and departed. We shall not be sure whether the north is safe from equally savage floods for another two or three weeks. We are now in the phase of the emergency in which we need to ensure that people have food, medical care, seeds and tools so that we can avoid more loss of life from hunger and disease. In many emergencies, more lives are lost in that second phase than in the first. We must help people to get back to their lands and rebuild their homes.
  Obviously, rehabilitation will take time. At the weekend I announced a further £12 million worth of emergency assistance. The details of that help are outlined in the memorandum that we provided to the Select Committee, and it is available in the House.
  Mr. Hayes: Will the right hon. Lady give way?
  Clare Short: I will. I hope that it is for the last time, but I realise that the hon. Gentleman has been trying to intervene.
  Mr. Hayes: I am grateful to the right hon. Lady. We do not seek to challenge her good intentions. The debate is about her competence. Given the criticisms made of the co-ordination of our reaction after Hurricane Mitch, what plans did she make for disaster recovery, a rapid reaction force, and a strategy for crisis management? If such plans were in place, can we be made aware of it? Could the plans be laid before us so that we might study and debate them intelligently?
  Clare Short: The hon. Gentleman and his hon. Friends have made so much noise during the debate that they have not heard the answer to that question. I have been telling the House what we have done, and I have outlined it in a memorandum to the Select Committee. UK performance and speed of response are honoured and respected across the world. It seems that the only people who do not respect it are the Opposition in the House of Commons, and that is very sad.
  Mr. St. Aubyn: Will the right hon. Lady give way?
  Mr. Fabricant rose—
  Clare Short: No, I will not.
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  As soon as possible, we must get back to development. Large numbers of lives are lost week in and week out in Mozambique as a result of the terrible poverty of that country. Life expectancy in Mozambique is 47 years. Between 30 and 40 per cent. of children are chronically malnourished.
  We have already allocated £70 million to our development programme for the next two 2 years. The hon. Member for South-West Devon read out an article from The Observer. I know nothing of the supposed quotes in it. On Saturday, I authorised a statement to the Press Association, which simply described all that we had done and said—I amended it to say this, so there is no doubt about it—that we had already committed about £70 million for development efforts over the next two years. That remains the case.
  Under pressure from the Select Committee, I am publishing our plans ahead of time in a way no previous Government have done. That does not mean that precisely that sum will be spent; obviously, funds are moved depending on effectiveness. The £70 million commitment, which I had already made public, as no previous Government ever would have done, remains, but funding can be increased if Mozambique can spend more over the next two years. As it is a very poor country with weak capacity, Mozambique has considerable reserves from debt relief that it has been unable to spend. We are committed to at least £70 million, but it will be more if the country needs more help.
  Mr. Andrew Robathan: Will the right hon. Lady give way?
  Mr. Fabricant rose—
  Clare Short: No.—[Interruption.] Hurricane Mitch has been referred to. The current fashion seems to be that when people are under the mud in Central America, we are asked for debt relief. That will not save lives. Debt relief is, however, important for reconstruction; that was the reference to central America.
  On debt forgiveness, because Mozambique has been a star reformer, it received debt relief of £1.7 billion under the heavily indebted poor countries scheme—HIPC 1. Under HIPC2, it will receive a further £250 million. The UK has made it clear that we will have a moratorium on payments in the meantime—just as we did in central America—before Mozambique qualifies for HIPC2; we shall then move to 100 per cent. debt relief. Under a UK initiative in the Paris Club yesterday, all countries have agreed to a moratorium on debt relief. Mozambique will not be required to pay debt relief anywhere in the world until it qualifies for enhanced HIPC. At that time, we hope that most countries will join us in moving to 100 per cent. debt relief.
  Many people believe that the recent spate of disasters is the result of environmental degradation. The advice that I have received is that so far there is no evidence for that, but that, because larger numbers of people are living on more marginal lands or in inappropriate places, the human suffering resulting from natural disasters is growing exponentially. However, there is no doubt that global warming is taking place; it is predicted that that will cause more turbulence, so we can expect an increasing number of such disasters in the years to come.

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  We must, therefore, get the world's systems better prepared. For example, Bangladesh recently suffered its worst floods in 50 years, but there was little loss of life, because that country is now so well organised in coping with such disasters. However, floods in central America led to much greater loss of life because local organisations were not in place.
  We have been working to improve the capacity of poor, disaster-prone countries to prepare and respond to disasters. For example, through a three-year programme with the International Federation of Red Cross and Red Crescent Societies, help is being given to national Red Cross and Red Crescent societies throughout the world to prepare countries to respond quickly to rapid-onset disasters. I have a copy of the document produced by the international federation if hon. Members are interested in the matter.
  We are also working to strengthen international systems. Until about three years ago, the world's response to disasters was ad hoc. The unfortunate country suffering from a flood or an earthquake took its chances on whether its pleas for help were heard. It was pot luck whether countries received relief that suited their needs.
  Lessons have been learned. Through my Department's partnership programme with UN agencies, such as the UN Office for the Co-ordination of Humanitarian Affairs—I have a publication on the work of that organisation—the World Food Programme, UNICEF and especially the Red Cross, we have helped to set up much more systematic arrangements whereby information from a disaster is quickly assessed to produce a clear list of priorities to which donors can contribute. Contingency stocks of relief supplies and a worldwide network of experts can be made available at an e-mail's notice.
  The UK is a major contributor to the UN disaster assessment and co-ordination system.
  Mr. St. Aubyn: Will the right hon. Lady give way?
  Clare Short: No, I shall not.
  That work needs to be strengthened and taken forward more rapidly. However, the House should know that the UK has been a leading country in work over the past three years—hon. Members should note the time scale—to strengthen disaster preparedness throughout the world.
  In conclusion, the UK response to the floods in Mozambique was one of the speediest and most generous in the world. There was—
  Mr. St. Aubyn: Will the right hon. Lady give way?
  Clare Short: No, I shall not, as I have made clear.
  I repeat that there was no delay whatever in sending help to Mozambique because of our decision not to commission MOD helicopters. They came in expensively; they were far away; and we had cheaper and closer alternatives. There was no delay whatever. The thesis put by the hon. Member for South-West Devon is false.
  Of course, much remains to be done to help Mozambique to recover from the disaster and to support the country's development. We have a large and growing programme in Mozambique and we shall be there for the
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  long term. We need to redouble our efforts and those of the whole international system to improve disaster preparedness throughout the world—especially in countries subject to rapid-onset natural disasters.
  I conclude by thanking the staff of my Department in London and in Maputo for their magnificent and continuing effort. I also thank—I hope on behalf of all of us—all the UK volunteers: the firefighters, the lifeboat experts, logisticians and members of our armed forces, who are working to help cope with the emergency.
  Last but not least, I thank the British public for their generosity in responding to the appeal for Mozambique. We are entitled to feel proud of the spirit of generosity and concern that exists throughout our country. I am sure that the whole House will want to express its thanks to all who have worked so hard on our behalf to provide so much help to people in such desperate need in Mozambique.
  Mr. Stephen Day: On a point of order, Mr. Deputy Speaker. I have listened to all the Secretary of State's speech because I thought that she might correct what was perhaps an inadvertent inaccuracy. In her brief history lesson on Mozambique, she told the House that it was the only non-British former colony to join the Commonwealth. In fact, on the same day that Mozambique joined the Commonwealth, the former French colony of Cameroon also joined. I would like the right hon. Lady to have the opportunity to correct—
  Mr. Deputy Speaker: Order. That is not a point of order for the Chair.
  2.10 pm
  Dr. Jenny Tonge: The Liberal Democrats will not support the official Opposition's motion. In fact, in the course of the debate, my regard for the Conservatives has sunk to a new low.
  Mozambique is one of the poorest countries in the world, but it has done well over recent years. It has been hit by a catastrophe in which 250,000 people have lost their homes, an unknown number are dead and children have been orphaned and in which malaria, diarrhoea and cholera are rampant. All that Her Majesty's official Opposition can do is seek to score cheap political points with this motion.
  Mrs. Eleanor Laing rose—
  Dr. Julian Lewis rose—
  Dr. Tonge: I will not give way yet. Conservative Members have clearly missed the point. [Interruption.] If they stay in the Chamber, I shall explain why. When I was younger, I had methods for dealing with temper tantrums.
  The official Opposition's approach has been destructive—business as usual, in other words.
  Mrs. Laing: Will the hon. Lady give way?
  Dr. Tonge: No, I will not give way until I am further into my speech.
  The purpose of the debate should be to take a cool look at what happened, to see whether we can learn any lessons. I listened to the Secretary of State at a meeting

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  of the Select Committee on International Development on Tuesday. She admitted that the United Nations assessment team, which included two people from the Department for International Development, withdrew from Mozambique too early. That was a failure on its part. That was well reported on the website of Independent News World, and we read the report on the net.
  Why did the United Nations quick response unit, along with two of our officials, withdraw too early? That is an issue that I would like to address. It must never happen again.
  Clare Short: The press reports about our officials were inaccurate. British officials did not withdraw with the United Nations team, and my officials are upset by the report that they did. I did not like the way the reports suggested that the whole thing was the United Nations fault. We have a strengthening and improving UN system, and we need to learn from this experience so that we can strengthen it further. We should not just turn around and attack the UN when it is getting better at co-ordinating responses to such emergencies.
  Dr. Tonge: I thank the Secretary of State for that response, but it is an issue that we need to consider carefully. We all remember poor Mr. Fish, the weather forecaster, denying that a hurricane was going to happen. Although the hurricane did a lot of damage, fortunately for us it did not do damage on the scale that has occurred in Mozambique. We must find ways to strengthen the forecasting of emergencies and to make sure that we know in advance what is going to happen.
  Mrs. Laing: I thank the hon. Lady for her courtesy in giving way because, after all, this is a debate not a monologue. Does she accept that her opening remarks were not correct? Her Majesty's Opposition are seeking to do their job in holding the Government to account and making sure that the House and the Government learn from some of the mistakes that have been made. That will help to ensure that things are done better in future.
  Dr. Tonge: If the hon. Lady listens carefully to my speech, I will teach her how best that can be done.
  Mr. Robathan: Come on matron.
  Mr. Deputy Speaker: Order. I think that we should get on to the main content of the debate. It is a very serious matter.
  Dr. Tonge: Before we do that, I want to point out how easy it is in a disaster for people to do the wrong thing. That is a common human failing. Many years ago, I was a casualty officer in a London teaching hospital. I know that to be able to respond correctly to emergencies, one has to be extremely well trained and to have had lots of practice. Whether it is a small disaster or a large one, that is required. If I had a cardiac arrest here and now, most of you would rush around panicking and not know what to do. That might be a very good thing from your point of view and you might enjoy that very much—
  Mr. Deputy Speaker: Order. The hon. Lady is not even using correct parliamentary language. I am sure that she will soon relate her remarks to what has happened in Mozambique.
  Dr. Tonge: I will indeed, Mr. Deputy Speaker, but, if anything dreadful happened to me, I am sure that the
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  Conservatives would blame it on the fact that the Secretary of State for Health was not sitting on the Front Bench.
  From the evidence that I have heard, once DFID and the Secretary of State realised the full extent of the disaster, not even the Ministry of Defence's pricing policy, about which we have heard a great deal, slowed down the response. In fact, it speeded it up because the Secretary of State immediately looked for helicopters that were nearer. As we have heard, we had a much quicker and more efficient response, with helicopters funded by us but procured in South Africa.
  The United Kingdom was in the forefront of the relief effort, at one stage funding nine out of 11 helicopters—and they were commissioned locally. We have prepared for the second stage of rebuilding shelters and distributing foods and medicines with our own equipment, which has started to go to Mozambique.
  Mr. Crispin Blunt: Will the hon. Lady give way?
  Dr. Tonge: No, I will not.
  There are problems for us and for the world. We must look to the future. There is no question but that the United Kingdom and the international community must be able to respond to natural disasters more effectively. The pundits tell us that, with global warming, disasters will be more frequent. Many articles in the newspapers in recent weeks have been on that subject. Therefore, it is imperative that we establish not just a DFID rapid reaction force, but an international rapid response disaster task force.
  Mr. Hayes: Will the hon. Lady give way?
  Dr. Tonge: No, I wish to make a little progress.
  That task force would ideally be based at the United Nations, but the European Union might be able to make a start.
  Mr. Bowen Wells: Where was the European Union?
  Dr. Tonge: Indeed. A rapid response task force would not mean having equipment standing by doing nothing while it waited for something to happen. It would mean that future Secretaries of State would know the location of the helicopters nearest to the disaster area and would know whether they could be commissioned. The Ministry of Defence would not take two days, as I believe it did, to discover that there were no usable UK helicopters less than 3,000 miles away. There would be no problem with funding, because that would be set according to a pre-determined formula.
  Mr. Hayes: I was going to make a point in support of the hon. Lady, but perhaps she will answer the question that the Secretary of State failed to answer when I asked it. Following the criticisms of the co-ordination and the response to hurricane Mitch, what plans did the Secretary of State have to establish the sort of rapid reaction force that the hon. Lady has mentioned? She will know that a

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  good response is about good planning. Our challenge to the Government is about their competence in emergency, disaster and recovery planning.
  Dr. Tonge: I thank the hon. Gentleman for that intervention, because I was about to come to that point. Paragraph 52 of the strategic defence review, which is entitled "Peace Support and Humanitarian Operations", sets out the position clearly. It says:
  In a less stable world, we have seen more international operations of this type. The trends identified earlier suggest that this will continue. Britain will play its full part in such international efforts. At one end of the spectrum, this might involve logistic or medical support to a disaster relief operation.
  In "Modernising Defence", the response to hurricane Mitch, to which the hon. Member for South Holland and The Deepings (Mr. Hayes) referred, is talked about in glowing terms. The Ministry of Defence describes its action in central America, where
  following the devastation wrought by Hurricane Mitch in October and November 1998 in some of the world's poorest countries, a Royal Navy task group led by NHS Ocean and with Royal Marines embarked, gave emergency life-saving assistance to Nicaragua and Honduras. We helped to search for and rescue people.
  Mr. Blunt: One of the major issues in the debate is the MOD's involvement, and it is here that the Secretary of State's customary candour has got her into difficulty. Her Department made a decision about the £2.2 million cost, and then said that cost was not an issue when plainly it was an issue in making the decision about MOD helicopters. That may then have provoked her to look for other helicopters elsewhere, or she may already have been doing that, but that is an issue, as it was in the dispatch of the Fort George, a decision that was not made until 3 March.
  Dr. Tonge: I am not here to answer for the Secretary of State for Defence; he will answer for himself. I have made the point that whatever occurred between the DFID and the MOD caused no delay whatsoever, and that is the important point.
  Mr. Duncan Smith: Will the hon. Lady give way?
  Dr. Tonge: No, I will not give way again. I want to make progress.
  Funding is a difficult issue between Departments, and I hope, as I am sure all hon. Members do, that Departments would always protect their budgets. However, there is no time in an emergency to sort out budgets, and a formula must be worked out in advance.
  There are other problems, such as that of heavy-lift equipment. The Conservatives seem to think that one can put helicopters in a box and send them out to Mozambique to arrive the next day. That is complete nonsense. We have a problem in moving heavy equipment, which the strategic defence review addressed, which delayed matters even further. I wish that the Conservatives would recognise that.
  Such issues must be worked out as part of a plan. Why do we not consult our European partners now that the major crisis is over? A European defence review is
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  taking place. Let us do an inventory of all the equipment in Europe and find out whether it can be used in an emergency, or is that too simple?
  Mr. David Heath: I agree with what my hon. Friend has said so far. Does she agree that there is a particular problem in the Indian ocean region, in that it is not easily accessible by most European navies and air forces or by the Americans? Access is slightly different from the mediterranean, the Caribbean or west Africa. Should international action be taken to deal with the specific problems of the Indian ocean, east Africa and the Indian subcontinent?
  Dr. Tonge: My hon. Friend makes a good point. The Indian ocean area is very isolated in terms of military equipment and help for disaster relief. If my memory serves me correctly, many parts of that area will be subject to flooding in future because of global warming. My hon. Friend is right to say that we need to consider that area in particular and ensure that help is available when it is needed.
  Mr. Duncan Smith: Will the hon. Lady give way?
  Dr. Tonge: No, I will not. I have given way many times and I have almost finished.
  I would have thought that, without any international structures in place, the Ministry of Defence should have made an offer of help for Mozambique, rather than waiting to be asked.
  Mr. Duncan Smith: Will the hon. Lady give way on that point?
  Dr. Tonge: Just once, as the hon. Gentleman is so persistent.
  Mr. Duncan Smith: The hon. Lady has now twice alleged that no delay was incurred and therefore no lives were lost, and then she said twice that the MOD was guilty of not responding in time. She said earlier that the MOD was asked for help on the Saturday but did not respond until the Monday. Does she know for certain that the answer to the question asked by DFID was not given on the Sunday?
  Dr. Tonge: The hon. Gentleman had a very late night, and I will have to read his question in Hansard tomorrow to make head or tail of it. [Interruption.]
  Mr. Deputy Speaker: Order. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has just intervened on the hon. Lady, and he ought not then to start making comments from a sedentary position.
  Dr. Tonge: Let us make sure that a United Nations or European Union rapid response disaster task force is in place the next time that a country needs us.
  The third stage of the disaster in Mozambique is the country's reconstruction. In three weeks, the country has been set back 10 or more years. It has an estimated public debt of $6.4 billion. To its credit, our country has already announced total debt relief on all bilateral debt and export credit guarantees. There was good news from the Paris

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  Club yesterday that France and Italy are to reduce Mozambique's debt commitment to them by two thirds, which means that, in total, 40 per cent. of the country's debt will be wiped out. The remaining 60 per cent. is with the USA, the International Monetary Fund and the World Bank. In the medium and long term, can the Government assure us that they will do all in their power to ensure that Mozambique's debt commitment is wiped out?
  When will the UK achieve the target of devoting 0.7 per cent. of gross national product to development? That figure fell under the Conservatives. They seem to have forgotten that in all the kerfuffle today, but it is another thing that they must be very proud of. Despite our economic success, progress is still too slow.
  The British public have been as generous as ever in their response to the disaster in Mozambique. While the TV cameras are there, the money pours in, but once they have gone, people no longer see the need to contribute some of their income to people who have nothing. Who now remembers the famine in the Sudan? Hurricane Mitch has been mentioned, but it is rarely talked about. Who remembers the Turkish earthquake or Montserrat? It is no good our snatching new-born babies from trees in front of TV cameras if they are then left to suffer a slow and painful death from disease and starvation. We must do more for the developing world.
  2.28 pm
  Ann Clwyd: I was there. I was one of four hon. Members, including a Conservative Member, from the Select Committee, who visited Mozambique during the crucial period that we are discussing. I am sorry that Opposition bovver boys have left the Chamber in droves, because I should like them to hear the truth about what went on in Mozambique at that time.
  We were supposed to go into Mozambique from Swaziland by road. We were unable to go in on Sunday 20 February because the weather was too bad and the road was already flooded, so we had to fly in over a vast area of the country, which looked like a great sea. It was impossible to say what was land and what was water.
  I have listened to the criticisms made of my right hon. Friends the Secretaries of State for International Development and for Defence, and I do not recognise the picture being painted by Conservative Members.
  People in Mozambique were congratulating the British Government on their quick action and on the fact that they had tents and other emergency equipment on the ground during the time that we were there. We saw those supplies being taken off the ground by two helicopters that were working in rapid rotation, carrying the food and tents that had come from the United Kingdom to people who had been without food and shelter for four days.
  While we were there, we met representatives of the aid agencies who were working on the ground, members of the Government of Mozambique, and the Prime Minister of Mozambique, who thanked the British Government for their rapid action and for the assistance that they were giving to the country.
  I heard no criticism at all while I was in Mozambique. Everyone knows that I am not an apologist for the Government. If I have criticisms to make, I will make them. That is the honest truth: I did not hear any criticism while I was there.
  Mr. Streeter: I thank the hon. Lady for giving way on an important point. Can she confirm that she left
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  Mozambique on 24 or 25 February, and that the period that we have been discussing is primarily from Friday 25 and Saturday 26 February? That was when people were stranded up trees. What does she make of the comment by the spokesman for President Thabo Mbeki of South Africa, who said:
  In any case, the British have responded very late and almost grudgingly.
  Was he wrong?
  Ann Clwyd: I used a different quote in the Select Committee meeting the other day. I certainly did not see that comment in the speech. Given the knowledge that we gained while we were in Mozambique, I cannot believe that that criticism was made.
  The aid agencies were obviously working under a great deal of stress, even during the period 20 to 24 February. There had already been extensive flooding in the country. When we arrived in Maputo, we were taken immediately by one of the aid agencies to see the damage to roads and houses and the flooded areas where poorer people lived in the city. People were already queueing at stand-pipes for water and living under extremely difficult conditions. That was before the period to which the hon. Gentleman refers. Flooding was already a problem in Mozambique when we were there.
  We went to one of the briefing meetings held by the UN Office for the Co-ordination of Humanitarian Affairs, which is an umbrella organisation responsible for co-ordination with Governments of host countries in disaster situations. We heard the representative from the Department for International Development, who at that time seemed to be co-ordinating the aid agencies. We also heard someone from South Africa, who was responsible for running the helicopters, speak about his situation. I came away from that meeting feeling that OCHA was extremely laid back. No sense of urgency was transmitted to me or to the hon. Member for Blaby (Mr. Robathan), who was also there.
  If blame is to be apportioned, we must bear in mind that we all have the same aim—to bring relief to people who are hit by a crisis—and we want to do that better next time. We should look carefully at the role of OCHA.
  We as a Committee visited OCHA in Geneva in December. We have our own view of how it operates. OCHA has been continually monitoring and reporting the situation in Mozambique since the rains started on 26 January 2000. Since that date, it has issued about 16 situation reports on the emergency.
  Following the very heavy rains from 4 to 7 February, OCHA organised the five-member UN disaster and co-ordination team to Mozambique. One of the questions that I asked on the Select Committee and which I hope we will ask the OCHA representative next week is why OCHA withdrew its team at a particular moment. The first team's tour of duty ended, apparently, on 24 February. A second team was not dispatched to Mozambique until 29 February. That was a crucial period in the operation.
  The Department for International Development was being told by people on the ground what was needed at a particular time. I believe that the Department was presented with a rather confused picture. It was not clear at various times what assets were needed, so DFID sent tents, clean drinking water and basic survival items. That is what was being requested at the time.

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  Watching the two helicopters working, it was clear to us that they could not get the food and tents off the ground fast enough. They were working in rapid rotation, with 10 to 15 minutes between taking off and landing. They were not switching off the engines, but getting the food and tents stuffed into the helicopters straight away.
  Why were not more helicopters taking part in the operation at that time? Why was the UN telling us that it was worried about the funding of the five helicopters that apparently were in Mozambique then? I believe that those five helicopters were funded by the Nordic countries. When DFID realised that there was a problem with the funding, it stepped in and agreed to fuel more aircraft the following week.
  As soon as DFID knew what the problem was, it responded rapidly. It was OCHA that underestimated the gravity of the situation and left as the new cyclone came, at the key moment between 25 and 29 February, when people were at their most desperate, when people on roofs and up trees were being shown on film. That was when there was a gap in OCHA's coverage of Mozambique.
  There were obviously failures in communication and in responsibility, but it is not fair to blame the British Government, who have done more than any other country to assist during the crisis in Mozambique. People on the ground said that. Oxfam, Christian Aid and the Save the Children Fund said so. We were there and we heard them say it, then we came home and heard my right hon. Friends the Secretaries of State heavily criticised, despite the fact that they had already responded as they thought appropriate at the time. That is grossly unfair.
  I agree that the international response was slow. It was hesitant and unco-ordinated. However, the responsibility for co-ordination lay not with my right hon. Friends, but elsewhere. It is easy to say that the Government of Mozambique did not do enough. They were elected in December and started work in January, in one of the poorest countries in the world. It is not surprising that they did not respond in the way that some critics think they should have responded.
  I pay tribute to the Red Cross and to Medecins sans Frontiers, which as usual were at the forefront of the response. To blame the Government of Mozambique is unfair. The infrastructure of the country was severely damaged and roads were cut off. We went 30 miles outside Maputo, and the road was not there any more. It was just a huge current and a vast expanse of water. People were coming out of the area with their possessions on their heads. I remember a man who came to me with a packet of biscuits which he had carried while trudging through half a mile of water. On the roadside, he offered me a biscuit. When I refused, he said, "Why not?" I said, "Because you have not eaten and I have."
  Within a very short time I became aware of the great resilience and dignity of the Mozambique people. They are exceptional people to have pulled themselves up so rapidly after such a long civil war. They have played by all the rules and they saw their economy growing by 10 per cent. in the space of two years. I think that it was the only country in the world to see its economy grow in such a way. These are people of determination and resilience, who, I believe, can overcome the terrible tragedy that has hit them.
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  I am a great supporter of the United Nations, but as the members of the Select Committee on International Development will know, we have criticised the UN High Commissioner for Refugees in respect of Macedonia and Albania, whereas we congratulated the World Food Programme, which planned for and responded adequately to the crisis. As a result of our criticism of the UNHCR, some things have improved. When we see an agency not doing what it should do, it is useful to put some questions to those who represent it, and we shall be able to do so here next week.
  The cyclone has destroyed roads, rails, schoos and health centres. Thousands of people have no homes, thousands are in reception centres and thousands will be without food for a long time. Many people are looking for their relatives because they do not know whether they were lost in the floods or whether they are at a reception centre. There is much that will have to be done for Mozambique. The scale of immediate need is immense, with about 1 million people having left their homes and lost their livelihoods. Their food has gone, as has their crop of maize. Seeds and tools will be immediate needs once the land has dried out.
  We must provide reconstruction aid swiftly to help rebuild Mozambique's infrastructure. The World Bank told us on the spot that it was prepared to give money for that purpose. I hope that all countries acknowledge the United Kingdom's lead in cancelling Mozambique's debt, which some other countries have followed.
  In such circumstances, there are always many lessons to be learned. The international community must be able to give humanitarian assistance on time. That must be provided on the basis of need and not in the interests of media coverage. Similarly, political or economic interests should not be involved.
  My right hon. Friend the Secretary of State for Defence has heard me say that I think that the military has an important role to play in these disasters. When I saw the military at work in Macedonia and Albania, I recognised that it soon brought order to considerable chaos. When we are talking about disaster preparedness, there is a need for institutions and response mechanisms that can adequately address the likelihood of an increasing number of similar emergencies in the coming decades.
  The Government deserve a great deal of credit for assisting Mozambique. Perhaps things might have been done better in some instances and faster in others, but the UK was the lead country in bringing help to people faced with devastation and loss of life. Credit must be given where it is due.
  2.44 pm
  Mr. Bowen Wells: I am delighted to take up the remarks of my colleague on the Select Committee on International Development, the hon. Member for Cynon Valley (Ann Clwyd), who speaks with the knowledge that she gained from the Committee's visit to Mozambique, Malawi, Zambia and South Africa. She knows what was going on. If matters had been left to my Committee, I am sure that we would have been able to advise the Secretary of State for International Development when we were in the area in the week of 20 to 24 February that helicopters were already needed and that there was a need for more.
  Nobody can be happy about the loss of life in Mozambique. We do not know exactly what the figure is because we were not able to deploy sufficient helicopters

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  to get people to safety in the middle of an exceptionally large flood in the week of 26 February. Certainly the number of dead must run well into thousands. We must contrast that with the number of people who died in the equally exceptional flood that overtook Bangladesh only a year ago. There, we believe that only three lives were sacrificed. That is because Bangladesh has built up capacity both in its Government and non-governmental organisations, as has the international community, to anticipate floods and to get the right equipment into the right places at the right time to save people from the disasters that flooding can bring. That is not the position in Mozambique, and that is why there has been great loss of life.
  We must turn to the calendar to address these matters sensibly and to recognise the problems to. which the hon. Member for Cynon Valley has drawn attention. The rain began exceptionally late in the season in Africa. However, it started with exceptional severity. It must be remembered that it began between 10 and 26 January. That led inevitably to flooding in the Limpopo and Zambezi valleys in the central provinces of Mozambique.
  We should have appreciated—I do not think that we did—that that rain flowing down the rivers after an exceptionally dry and hot period would lead inevitably to serious difficulties in and around Maputo in the Limpopo estuary. However, the Department for International Development understood the position. It knew that some homes would be flooded and got into position with tents, blankets and food so as to be ready to help people inundated by floodwater. The supplies were in place and being distributed when the Select Committee visited.
  During the week of 20 February, helicopters had already been deployed by the South African Government. They were fuelled by Norway and the Netherlands because President Mbeki said that he did not have enough fuel. Only two of the helicopters had winches to take people off the top of trees and out of the floods. We heard that there was not enough fuel for the following week. The Secretary of State for International Development stepped in and provided the fuel to keep the five helicopters flying.
  My only criticism is of the UN Office for the Co-ordination of Humanitarian Affairs, which on 12 February deployed to Maputo. It wrongly assessed the situation and severely underestimated it. It should have asked the international community—I am sure that the Department for International Development would have responded quickly that week—for further helicopter reinforcements to stand by for the possibility of additional flooding.
  I am speaking with hindsight, which is easy, but I think that OCHA made a wrong assessment, and certainly a miscalculation, when the main team left. After launching an appeal on 23 February, it went home on 24 February. The difficulties were therefore underestimated, and we could have got more helicopters in place and saved more lives if that assessment had been more accurate. That is not easy to do, but the criticism has to be made.
  For a fortnight, five helicopters were working. They were reinforced in the following week by five more helicopters, which the Department for International Development chartered. Three had winches to help remove people from flooded areas where their lives were at risk.
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  We were a bit late, but we were there, and DFID was very supportive. Only South Africa put more into the disaster than the Department. That remains the case. The Department's financial contribution has well overtaken that of South Africa. That was the position until the floods began to abate and we needed to get more helicopters in place to save more lives.
  Let us consider the Ministry of Defence, which was late in assessing the position. If I understood the evidence that the Secretary of State for Defence gave the Select Committee on International Development correctly, planning started as late as 28 February and then accelerated fast. As the Secretary of State for International Development said, the Department did not have helicopters that could have reached the crisis area in Mozambique in time to save lives in the last week in February.
  The helicopters arrived in the Antonov on 5 March, and RFA Fort George reached Beira on 11 March. Those helicopters and that support will help with the third phase of reconstruction and avoiding the serious threat of death through disease such as cholera, and lack of shelter.
  Mr. Hoon: The hon. Gentleman is making a careful and thoughtful case. I query only one point. When should the Ministry of Defence have begun the planning to which he referred?
  Mr. Wells: The answer partly depended on the assessment of the United Nations Office for the Co-ordination of Humanitarian Affairs, but I would have hoped that, after the Ministry of Defence had realised that South African helicopters were deployed in the second week of February and that the South African armed forces knew that there was a crisis, it would have started planning. The Secretary of State sent out a recce party on his own initiative on 29 February. I should have liked it to have been sent a couple of weeks earlier.
  Mr. Hoon: The hon. Gentleman is Chairman of the responsible Select Committee. Did he raise the matter with the Ministry of Defence, or any Minister?
  Mr. Wells: No, at the time, I was visiting Mozambique, Zambia and Malawi with the hon. Member for Cynon Valley. I was therefore not in a position to raise those matters personally. It should have occurred to someone in the Ministry of Defence to consider ways of supporting the Department for International Development.
  Mr. Duncan Smith: If that is my hon. Friend's view, does he believe that the Ministry's action depends on it being requested to make that calculation and devising a plan? In his opinion, at what stage was the Ministry asked to do that?
  Mr. Wells: That question goes to the heart of the problem that I would like to consider so that we can react better next time. The Ministry of Defence should fulfil the second objective to which the hon. Member for Richmond Park (Dr. Tonge) referred and support the Department for International Development in deploying military equipment when a humanitarian disaster has occurred. Rightly, the MOD is being built up and has an

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  impressive helicopter capacity. However, that capacity is expensive and not tuned to working in difficult circumstances that require an immediate response.
  Clare Short: Getting to the truth of the matter is important, and I respect the hon. Gentleman's attempt to do that. However, there were two stages of the emergency. The big floods did not happen until 25 February. People might have sent helicopters, but they were not needed in the early stages. They are expensive and when people had simply gone to higher ground, they needed help but not through helicopters. When the massive flood occurred, and people were trapped up trees and on roofs, helicopters were essential to rescue them. That necessity did not arise until after the big flood and cyclone Eline on 25 February.
  Mr. Wells: As the right hon. Lady said, the highly dangerous period was between 25 February and the following week. As she knows, the helicopters, albeit only two with winches, from South Africa were working in the previous week to rescue people. We should have deployed earlier. However, that depended on the assessment that had been made. That assessment was not available to the Secretary of State for International Development, or the Secretary of State for Defence.
  Mr. Blunt: We have military and air attaches in South Africa. In that period, they must have reported the deployment of the South African air force. That should have triggered some form of planning in the Ministry of Defence. Perhaps the Secretary of State can outline the telegram traffic from South Africa and say whether the defence attaché reported on it and what action the Ministry took.
  Mr. Wells: That is the point that I am trying to make. The South Africans deployed their helicopters in the previous week and, as the hon. Member for Cynon Valley described, were beginning to rescue people because the floods were continually rising. The crisis happened the following week. The Secretary of State for International Development was right to say that we had to get the helicopters there in a hurry and that we hired five additional helicopters as well as fuelling the South African helicopters.
  The Ministry of Defence must be in a position to carry out its military and humanitarian tasks. There is a difference. The operation must be cost-effective. The MOD cannot make a military deployment and ask DFID to pay for it. As I understood the evidence that was given to the Select Committee, the military deployment involves a huge amount of support staff. The figure was 100, but the original suggestion was that 140 people would service two or three helicopters. The South African deployment had 10 support staff. As the Secretary of State for International Development told the Committee, all those people get in the way and need to be accommodated. They also need to have jabs before their departure from the United Kingdom to fulfil Ministry of Defence rules and regulations about deployment of personnel. All those matters delay deployment and add to the cost.
  A problem has haunted the Ministry of Defence for 20 years. At base, it is a Treasury problem. When there is no emergency, officials and Ministers need to agree a
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  price for deploying military equipment in a humanitarian emergency. The calculations suggested to the Select Committee were absurd in a time of crisis. The Department for International Development needs to know where it stands and how much a helicopter costs before it asks the Ministry of Defence to intervene. We need to establish, both in this country and worldwide, a rapid reaction force to tackle humanitarian disasters and I support the suggestions of the hon. Member for Richmond Park.
  In giving evidence to the Select Committee, the Secretary of State for International Development also said that we are too slow to organise ourselves internationally, and that OCHA is too slow to react. We have to put money in place to enable those agencies to take command because things can change when people take command. When the OCHA representative arrived on 29 February, he began to sort things out and made what was required clear to Ministry officials, who could then react much more quickly. That is now happening.
  De-mining, and the reconstruction of roads, schools and hospitals, all of which have been lost, need to take place as rapidly as possible as the floods recede. I pay great compliment to the military personnel and the non-governmental organisations undertaking that difficult work. People have been displaced from their farms in their hundreds of thousands and they have to be helped back to plant their crops. They must be given seed, fertiliser and every assistance with planting so that they do not starve in the coming year. All the personnel of the RFA Fort George—who are well equipped to help with that in the Beira area and are, I understand, moving south to the River Save—will add hugely to Mozambique's ability to recover from this terrible disaster. They should be thoroughly congratulated and thanked for keeping Britain's name at the forefront of those who are willing and able to assist in these terrible tragedies.
  3.1 pm
  Mr. Tony Worthington: It is a pleasure to follow the previous three speakers, who work from the basis of knowledge. They have respect for the people of Mozambique and have considered how the crisis developed. It is an enormous tribute to the Secretary of State and the Department for International Development that we expect it to be a world leader and top of the class in a former Portuguese colony more than 5,000 miles away.
  Let us consider the chronology—I shall try to omit issues that have already been covered—which is of course easy to do with hindsight. However, no one has told me what will happen in Mozambique next week, which is what we need to know. The problem has not gone away and the rumours are that more rains are to follow. Remember, this is not a Mozambique problem, but a regional problem for southern Africa. When I was there with the hon. Member for Hertford and Stortford (Mr. Wells)—the Chairman of the International Development Committee—and my hon. Friend the Member for Cynon Valley (Ann Clwyd), the concerns were the floods in South Africa and the suffering in Botswana. When we came back, we found out about the events in Madagascar. We did not know that the situation would be as it is in Mozambique, but we had to try to prepare for it.

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  Everyone is obsessed with helicopters, but they are not the issue. People on the ground who died from cholera or malaria or from starvation are just as dead as people who drowned in the trees. Far more people were in danger on the ground than up trees and we had to respond to that. Remember, the press went to Mozambique not because of the catastrophe, but because of the pictures that they could take. They had never had to photograph people in danger in trees before, so that was news, but the danger for the people of Mozambique—malaria, dysentery, cholera and diarrhoea—was on the ground. That was the crisis to which we had to respond and we did so.
  The problem occurred on about 10 February. UNICEF appealed for $1.2 million. What did we do? Immediately, we were there with $400,000. Switzerland provided $65,000 and Norway $100,000. The Government wanted $2.7 million and we were in there with clean water, materials for schools, cooking utensils and tents. There was no call for more helicopters at that time. The UN Office for the Co-ordination of Humanitarian Affairs and the UN Disaster Assistance Committee said that the problem was fuel—the South African helicopters would run out by 20 February. What did we do? We provided the fuel, which was the right thing to do.
  UNDAC wanted boats. What did we do? DFID sponsored a team of 38 people and 100 boats and life rafts from the Royal National Lifeboat Institution, United Kingdom fire and rescue services and the International Rescue Corps. We were asked for boats and we provided them because that was right at the time. Those were the first groups to go in from the outside world. By 18 February, responding to the assessed need on the ground, the United Kingdom and DFID had given and delivered twice as much as any other country to meet the threats of starvation and dysentery. That is financially and statistically correct, and that was our early reaction.
  As my right hon. Friend the Secretary of State said, on about 25 February the receding threat increased as flooding reoccurred. According to OCHA, the priority need from about 25 to 26 February was to rescue stranded people by air. That is when OCHA said that helicopters were the priority. I would like the hon. Member for South-West Devon (Mr. Streeter) to tell me whether I am wrong: according to the World Food Programme, three days later—after 26 and 27 February—there were 14 helicopters flying in Mozambique. Seven were from South Africa, fuelled by us, and seven, provided from local sources, were hired by OCHA. Is that correct?
  Mr. Streeter: How many helicopters had winch capacity and the ability to lift people off trees?
  Mr. Worthington: I do not know the answer, but it was given earlier by others. There were 14 helicopters, some with winches, flying and delivering food. Food can be delivered without winches and every one of those helicopters was supported by DFID. I shall resume my seat to allow the hon. Gentleman to tell me whether that is correct.
  Mr. Robathan rose—
  Mr. Deputy Speaker: Order. Has the hon. Member for Clydebank and Milngavie (Mr. Worthington) finished his speech?
  Mr. Worthington: No, Mr. Deputy Speaker. I take it that I am correct. One country—the United Kingdom—
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  was responsible for every helicopter flying in Mozambique at that time. The rest of the world community failed to find or fund helicopters, which is extraordinary, and we funded the 14 in the air. That number rose to 50, and we have added four Puma and four Sea King helicopters to what we provided earlier. We are now responsible for the funding of 22 helicopters, because of DFID.
  We intimated that we would make available substantial money for the poverty reduction programme in Mozambique and gave the lead on bilateral debt cancellation. I should like to hear from the Conservatives again. Does the hon. Member for South-West Devon agree that the leadership on cancellation of bilateral debt came from the United Kingdom?
  Mr. Robathan rose—
  Mr. Deputy Speaker: I call Mr. Robathan.
  Mr. Worthington rose—
  Mr. Deputy Speaker: Order. The hon. Member for Clydebank and Milngavie must not keep jumping up and down. If nobody is seeking to intervene on him, the Chair is entitled to assume that he has finished his speech and call another speaker.
  Mr. Worthington: Thank you for that guidance, Mr. Deputy Speaker. I like to give hon. Members the chance to contradict what I am saying, but I note that they have not done so. We have given, and other countries are following us on bilateral debt cancellation.
  The response by other organisations was not as good as it should have been, and two of them in particular should examine their performance. No one says that it is an easy job. Since October 1999 there have been 30 natural disasters world wide, many of which hon. Members will not have heard about, and with which OCHA dealt in an unspectacular way. For example, not many people know about the snowstorms in Mongolia, but that was a natural disaster with which OCHA dealt. Its job is to play the leading role in the co-ordination of international emergency assistance following natural disasters. One can see from the early OCHA press releases and bulletins that it did not play that role in the early stages of the Mozambique emergency. It was only when Mr. Ross Mountain visited the area on 29 February that the quality of the response started improving. OCHA should have played a leading role in identifying the need for helicopters and getting them to the area.
  There was a need also for heavy-lift planes—which has been shown in emergency after emergency—but the western world again failed miserably. Why did the MOD have to go to a Russian commercial concern to hire an Antonov to transport helicopters? Where were NATO and the Americans with their heavy-lift facilities? After all the fuss, suddenly six C130 aircraft have been made available. The key aircraft is the C17, which can move anything, but none has been operating. We should ask the

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  Americans and NATO why facilities to transport helicopters and other goods cannot automatically be made available.
  Mr. Streeter: I can now tell the hon. Gentleman that, of the 14 helicopters flying in the second week, only five had winch facilities. Does the hon. Gentleman think that was enough?
  Mr. Worthington: Of course not. The ideal would be 14 helicopters with 14 winches—but while the UK found 14 helicopters, the rest of the world found none. As in Macedonia and Albania, a UN organisation failed to lead in the initial stage of a crisis. In the case of Macedonia and Albania, UNHCR failed to provide leadership at an early stage and it has accepted our criticism. Authoritative leadership was not evident either in OCHA.
  ECHO is the European Union's alleged emergency response body in respect of humanitarian affairs. I say, as a supporter of the EU, that ECHO has to sharpen its act. ECHO did not feature, as a co-ordinating body, in any of the bulletins and statements about who was doing what in Mozambique. At an early stage, ECHO gave 1 million euros in an unspecified way—just cash, which was not a sensible thing to do. It should have worked with OCHA and other bodies to get the money to where it was needed immediately, for a specific purpose.
  At the end of February and beginning of March, European Commissioner Poul Nielson visited the area; suddenly, aid of 25 million euros was to be made available. That response was inadequate because the money would not have gone to Mozambique. It may only arrive there months after the crisis began. Those two organisations ought to examine their performance.
  I am proud of the role that DFID played and of the UK's improved response to emergencies. I remember the promise of aid to Somalia by the Minister at the time. Eight months later, that aid had not turned up. It was alleged that it had reached Somalia but it was stuck in a warehouse in Mombassa. Throughout the whole of 1995, no Government Minister made a statement about Ruanda. We stood on the sidelines during the worst humanitarian disaster of recent times. The then Government's response was to turn their back on Ruanda and pretend that disaster was not happening.
  We have now a first-rate Department, brilliantly led, with a co-ordinated response that is leading the world. I am proud of that.
  3.15 pm
  Mr. Andrew Robathan: Thank you, Mr. Deputy Speaker, for calling me a second time. I do not agree with everything that the hon. Member for Clydebank and Milngavie (Mr. Worthington) said, but I am the fourth member in a row of the Select Committee to speak. It is a dreadful Committee because there is a depressing amount of consensus among its members. We all get on well together. When everybody agrees in politics, usually something is terribly the matter.
  I first visited Mozambique in 1974, before the Portuguese revolution. The Government of Mozambique are doing a good job but it is patronising to say, "Poor things. They went to the Soviet Union and returned with a
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  Marxist-Leninist policy that they pursued to terrible effect from 1974 until the mid-1980s." Those concerned must share responsibility. They are adults. We must not patronise them. Machel and his Government were dreadful, whatever was done by Renamo—who was equally dreadful.
  I visited Mozambique with the hon. Member for Cynon Valley (Ann Clwyd) in the first phase of the floods, which were described as the worst for at least 50 years. We saw terrible devastation, including the only proper road north completely taken away. The railway lines—the lifeblood for moving goods around the country—were covered in sand or had been washed away, but we also saw astonishing resilience among the people of Mozambique. They are used to flooding, which is part of the natural scheme of things for them. When the land floods, it becomes much more fertile. This time, the inhabitants had lost their homes and roads but there was still remarkable resilience, to which I pay tribute.
  After we left, the situation grew very much worse. We have all seen the dreadful pictures and I will not dwell on them. I agree with the Secretary of State that there is anecdotal evidence of global warming. El Nino—or the girl child, as they call it—has brought terrible devastation. There have been droughts in Zimbabwe and Kenya; now there is flooding worse than in living memory or on record. That matter should be debated at length at a later date.
  We met the Prime Minister and Foreign Minister of Mozambique, who were both, in my opinion, good people; but when we interviewed the Secretary of State it was depressing to learn that medium-lift helicopters were already available for charter in-country. I blame the Government for much but not for failing to know about that before the Government of Mozambique did. The capacity in Mozambique is limited and the necessary structures do not exist. Nevertheless, the Government of Mozambique must take responsibility. There has been much criticism of that country's president for flying over the disaster area and not doing anything but, in general, I will be onside with the Government of Mozambique.
  Zimbabwe, next door to Mozambique, has a large helicopter fleet in its armed forces. I am not sure how many helicopters it has but I understand they number at least 24, of which three were available for dealing with flooding in Zimbabwe and two for ferrying the press and the president around—while the remainder were engaged in fighting a particularly unpleasant war in the Congo. Again, I deplore cross-party consensus, but there is clearly a problem—a problem that needs to be sorted out—when a Government with such a tragedy on their doorstep can waste money and lives by causing disruption in another country.
  Mr. Wells: Malawi, which has two helicopters, gave 50 per cent. of its helicopter force to help in the emergency.
  Mr. Robathan: I did not know that, but it is a good point.
  South Africa was doing well in this regard—it was South African helicopters that we saw initially—although it threatened to stop flying them because it did not have the necessary funds. South Africa is a poor country, although not everyone there is poor, especially gold miners—at least, Anglo-American gold miners.

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  The Secretary of State will be astonished to learn that I support the Department's long-term contribution to combating poverty in Mozambique. I admire the work that we saw there—although we could not see it all because we could not fly north. I welcome the support given to the HALO trust. At the risk of destroying the trust's standing with the Secretary of State, I must tell her that I am a trustee. I hope that that will not influence her decisions when she is allocating money. The trust is the largest de-mining organisation in the world, and is doing enormously good work in Mozambique and elsewhere.
  Mr. Roger Gale: Like my hon. Friend, I visited Mozambique fairly recently—just before Christmas. The problem of mines is impressed graphically on anyone who goes there: evidence of maiming and death is all around. I agree with my hon. Friend that the Secretary of State has done very well, but when I questioned her a couple of weeks ago and suggested that the floods would have moved the remaining land mines, making agriculture dangerous, she appeared to dismiss my suggestion.
  Does my hon. Friend agree that there is a role for our sappers in the aftermath of the floods? Could they not speed up the process of de-mining and establish where the mines are now?
  Mr. Robathan: I raised that issue with the Secretary of State for Defence on Tuesday. I think there is a role for the sappers, and I suspect that they would enjoy the training, if they did not all catch malaria.
  Clare Short: I hope that I did not dismiss the question asked by the hon. Member for North Thanet (Mr. Gale). 1 said that we had been asked by the Mozambique Government to clear Zambesia province, and that it was virtually clear and unaffected. HALO, in fact, led on that. A United Nations team is currently trying to identify the areas to which the mines have moved. We tend to use the trust because it contains a number of former military personnel, and we can use it more flexibly and more cheaply than we could use our armed forces.
  Mr. Robathan: I think everyone would agree that there is a problem with mines, which has been exacerbated by the floods. Those of us who have seen pictures know that huge chunks of land have been washed away, and on the land were some anti-personnel mines.
  I also support—this is awful—the Department's work with institutions, particularly its work with customs out there. I thought that that was very positive.
  We met two former Army officers, Gilbert Greenall and someone called, I believe, Howard-Williams. They were working for OCHA; they were civilians, but had been drafted in as replacements by the Department. Notwithstanding what was said by the hon. Member for Clydebank and Milngavie, they seemed to be doing very well and to be creating some co-ordination in the face of what might otherwise have been chaos. The work of the Department's personnel based in Maputo also struck me as positive and sensible. I congratulate those personnel—it would be too easy to allow them to be blamed when others are accused.
  I pay a depressingly traditional but nevertheless heartfelt tribute to the military personnel—particularly those in the RAF—who are doing what certainly appears
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  to be a very good job. Having served in the forces, I know that most of the personnel would have been longing to get out there. They are very keen to help, like the South African airmen we saw. I am delighted that helicopters and boats are now in the regions.
  Helicopters, however, will remain an issue for some time—weeks, perhaps months—until the infrastructure is repaired. Although we may not be rescuing people from trees, there are no roads, so stuff cannot be shifted by lorry; any movement of goods must be by air. Mozambique will need a great deal of help in rebuilding its infrastructure, its economy and its agriculture.
  There is a problem in the Government's reaction to the crisis—a problem relating to joined-up government. The Secretary of State is a genial and well-meaning person, but those of us who were in the Chamber to hear her speech detected a definite problem between her and the Minister for the Armed Forces. I understand that the problem goes back a long way; there may be some personal antipathy.
  Clare Short: I saw the reports in the press as well. They are entirely untrue. I said in my speech that we had been in touch with the MOD, and that it had said that it had no assets within 3,000 miles. I think that my hon. Friend the Minister for the Armed Forces expressed surprise at that, but there was no difference between us. We would have discussed the matter, but my hon. Friend had to speak in the Chamber.
  The fact that reports appear in the press does not mean that they are correct. There has been no argument of any kind between my hon. Friend and me—that is the truth.
  Mr. Robathan: I understand that on the streets of Birmingham people say that there has always been antipathy between the Secretary of State and her hon. Friend, going back to left-wing problems in the days when the right hon. Lady may have been of a slightly different political hue. However, the right hon. Lady has denied the reports and I do not question her integrity—although I note that she was quoted in a newspaper a couple of weeks ago as saying, "I can speak out in Cabinet, but the penalty is that I am not allowed to speak out in public as a result."
  Clare Short: That is my ministerial responsibility.
  Mr. Robathan: Indeed, but—
  Mr. Deputy Speaker: Order. I have already had words with hon. Members about sedentary comments.
  Mr. Robathan: I was intending to make a point about one or two of the things the Secretary of State said earlier.
  As my hon. Friend the Member for South-West Devon (Mr. Streeter) pointed out, the amount of aid appears to be falling. I hope that the Secretary of State will be able to tell us that it is not falling from a proposed £76.5 million to £70 million over the next two years.
  The real crisis in Mozambique has nothing to do with flooding; it is to do with HIV and AIDS. The black death is stalking Africa, at least sub-Saharan Africa. I know that the Secretary of State is aware of that, because her Department does a great deal.

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  Thousands have been killed in the floods. Mozambique has a population of more than 18 million, of whom probably 4 million are infected with HIV, although it is difficult to tell.
  Dr. Tonge: The black death was, in fact, the bubonic plague, which stalked Europe in mediaeval times. If the hon. Gentleman was referring to the colour of the skins of people who suffer from AIDS, let me remind him that the disease affects those of all colours.
  Mr. Robathan: I am rather surprised by that intervention. I think the analogy with the black death is very valuable, because this disease is likely to have the same impact on sub-Saharan Africa as the black death had in Europe in the 14th century. As the hon. Lady must know, Africans, regrettably, have been particularly susceptible for a number of reasons. That is well known. If she does not want to call it the black death she can call it something else, but I think that "black death" is an emotive and analogous description.
  Approximately 4 million people in Mozambique will probably die of HIV/-AIDS in the next five or six years, and the rate is increasing. We have inadequate data, but the infection rate is horrendous. We do have data for 1994 and 1996. In Maputo and Chimoio, both rates doubled—to nearly 20 per cent. in Chimoio. If that can happen in two years, God knows what the situation is now. As the Government know, the position is similar in Mozambique.
  Why is the rate rising to such an extent? Access to health care in inadequate. It is hopeless as there is no infrastructure to convey it to people. The provision of drugs is not the main problem, although such supplies would be helpful. The main problems are ignorance, resistance to condom use for a number of reasons and astonishing promiscuity, linked with poor hygiene and a high rate of sexually transmitted disease. It is behaviour that needs to change. Education is desperately needed in that regard.
  Elsewhere in Africa, the situation is also extremely bad. I shall not go into all the details, but this is a problem that the world must face. It is so enormous, however, that the world is turning its back on it.
  The impact has a disproportionate effect on key members of society, such as teachers and doctors who have travelled more. The result is schools without teachers and hospitals without doctors. [Interruption.] I notice that there is certain amount of pressure on me to sit down. It is a responsibility of the indigenous Governments, but it is important that we direct our response more towards that enormous crisis than towards anything else. Millions there will be affected by that, whereas the flooding crisis is, proportionately, affecting very few.
  Mr. Deputy Speaker (Mr. Michael J. Martin): I call Mr. Iain Duncan Smith—[Interruption.]
  3.30 pm
  Mr. Iain Duncan Smith: I apologise, Mr. Deputy Speaker, for not being ready to rise. I was expecting you to call someone else.
  I pay fulsome tribute to the volunteers and members of the armed forces whom the Secretary of State mentioned. Conservative Members pay tribute to them for their hard
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  work and the physical risk that they run. They are saving lives and no one is shooting at them, but that does not mean that, during those dangerous activities, they may not lose their own life.
  This is not a witch-hunt. I wish to make it clear—the speech of my hon. Friend the Member for South-West Devon (Mr. Streeter) seems to have been taken wrongly by the Secretary of State—that the objective is to figure out what went wrong, so that lessons can be learned and so that, next time, it is possible that things can go right.
  The hon. Member for Cynon Valley (Ann Clwyd) made a typically knowledgeable speech and raised some important points. She said that, in almost all these circumstances, the military has a big role to play. I agree. With operations of that scale, it is almost inconceivable that a national effort will not at some stage involve the military, at least discussing with it how to run the operation.
  The lesson that the hon. Lady mentioned is that some things could have been done better. She said that Britain had taken the lead. If we look at the figures on the amount of aid, there is no question but that Britain is the most significant player in Mozambique. No one criticises that. We are all saying that that badge of honour should be worn by this country. Had the whole operation stopped in the early stages, there is no question but that it would rightfully have been worn by the Government, but that is not the whole question.
  My hon. Friend the Member for Hertford and Stortford (Mr. Wells), the Chairman of the Select Committee on International Development, made a good speech. He said "We were a bit late, but we were there." That is not a bad comment, but some of the real criticism stems from the fact that we were a bit late, certainly in the second half of the operation.
  My hon. Friend maintains—I am interested in the matter—that helicopters were needed at least from 20 February. The Secretary of State for International Development probably agreed with that, although I did not hear her say it. My hon. Friend said that the early response was good. Again, I believe that that is important. The question is about the second half of the whole project: how good was that? He was right to say that OCHA should be criticised for leaving the area early, given what happened after it went.
  My hon. Friend said that it was a Treasury problem. There is something in that. He was critical of the MOD. I am not entirely in agreement. I do not fully agree that it bears even 50 per cent. of the blame; I think that it bears far less, if any.
  The hon. Member for Clydebank and Milngavie (Mr. Worthington)—I think that that is how the constituency is pronounced. [Interruption.] My apologies, I did not know how to pronounce it. It is not as bad as the pronunciation of my hon. Friend the Member for Grantham and Stamford (Mr. Davies), who persists in mispronouncing Scots names.
  Mr. Worthington: Will the hon. Gentleman give way?
  Mr. Duncan Smith: I will not.
  The hon. Gentleman dealt with the early part and glossed over the later critical period. He dealt with the early aid in detail and said that it was well done but,

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  when he got to the critical bit about the MOD's involvement and what happened, he quickly glossed over that. I do not criticise him for doing that—I would if I were sitting on the Back Benches—but that is not the whole answer.
  My hon. Friend the Member for Blaby (Mr. Robathan) talked about communication problems and said that there should have been better communication between the Departments. I agree. He is fundamentally right. I was in the area at the time that Samora Machel was—I am tempted to say it—on the throne in Mozambique. As we all know, the running of the country at that stage was a complete and unmitigated disaster. Obviously, a number of parties bear responsibility for that.
  Much of what we see is a result of that, but we also need to ask what happened to those from Zimbabwe. Where were they? The answer is that they were fighting a war somewhere, probably protecting their president's investments in another country. The shame that they carry is the shame that happens when people get their priorities wrong. I hope that they sort that out in due course.
  Questions arise; that is the key point. The Secretary of State for Defence should answer some specific questions. The problem is that the impression is that the Secretary of State for International Development and the Defence Secretary did not engage in conversation or discussion about the matter at an early enough stage.
  I place most of the blame for that on the Secretary of State for International Development, because I do not think that she grasped the significance of the MOD from the outset. It behoves her to contact the MOD and to say that it is required. If she had said after the Thursday Cabinet meeting just before the weekend in question, "Come over here. What can we do? What can you do for me? What options are there on the table?", I have no doubt that the MOD would have responded immediately with a range of options. That is the nature of the MOD, but it was not asked those questions. That is the key issue.
  For example, we have the wonderful mess over exactly when the Department for International Development was meant to have contacted the MOD. I read with great interest the verbatim account of the Select Committee proceedings. Mr. Holden, the official, was asked when the contact happened. He said:
  I think it was 25/26th at about 8 o'clock at night.
  There is the problem, because we are not certain even when the MOD was contacted. The MOD's version was different. It said that it was
  On Saturday 26 February at around 2 o'clock,
  so we have a difference of a day. No one seems to have a record of exactly when the Department contacted the MOD.
  The other important point is that the Department asked the wrong question. It seems that the only question that it asked the MOD was: "What have you got in the area?", to which the answer came, "What we have is 3,000 miles away and is on board a ship." That is a straight answer to a straight question. I have no criticism of that. Surely the question should have been, "What could you do to project helicopters down to Mozambique to put in some support?" Had the Department asked that question, it might have got a responsible answer, but it did not.
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  Another question is, exactly when was the Secretary of State informed about the answer from the MOD? She said:
  that was my understanding from advice that I received from the Ministry this morning—[Official Report, 28 February 2000; Vol. 345, c. 23.]
  However, she told the Select Committee:
  The answer on the Saturday was that they—
  the MOD—
  had nothing within 3,000 miles.
  If the Department knew on the Saturday that the ship, which may have been available, was 3,000 miles away, why did it not decide, there and then, whether it required it to be moved? Had it taken the decision then, the ship would have been on station pretty close to the time that the Department finally had to ship the helicopters down for the following weekend. That is the key point. Early information was there, but nothing was done.
  Then we got into the unseemly dispute about money. Again, it is unseemly for the MOD to have to go into a bidding war with the Department for International Development over how much the operation could cost, but we have to be slightly fair to the MOD—I know that the Secretary of State will be worried by that comment: such operations cost money. What the figures are is a secondary issue. The MOD said that it would cost so much. The Secretary of State simply noted that and walked away.
  A decision should have been made at that point—if money was not available, why did not Ministers immediately get on the telephone to the Prime Minister or to the Chancellor and say, "This is the problem. This is what it will cost to deal with it, but the Department cannot afford it. Can we cover that cost?"? Perhaps the Secretary of State for Defence himself could have done that. The point is that DFID Ministers knew that they could do that. The Ministry of Defence offered them an option, but they did not take it. That is the reality, as shown by the evidence.
  The Prime Minister must have known about the situation the week before the problems became apparent. Although I appreciate that Thursday Cabinet meetings now last for only about 20 minutes—the Prime Minister does not need to know what everyone in Cabinet thinks, because he thinks it for them—the Prime Minister must have already known about the situation. He must also have approved plans for Britain to start taking serious action in Mozambique.
  The Prime Minister was supposed to be taking a direct interest in the matter, but where was he in dealing with the subsequent problems? Why did he not say, "Pack up the arguments. Here's the solution—send the helicopters. That is what you're going to do." I suspect, however, that no one even bothered to contact him about that, and his advisers did not want him involved in it because it was looking a bit nasty and shabby. There was no Executive decision-making.
  I believe that the MOD was more sinned against than sinning in the matter. Eventually, the Department was asked for information. The Department provided that information, but there was no response to it until it was too late. DFID bears very much of the blame for that delay. Let us not beat around the bush: for three to four days, there was delay in which no decisions were taken on what to do.

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  I should also like to know from the Defence Secretary—as the Minister for the Armed Forces is sitting on the Treasury Bench next to him—whether the spat between the Minister and the Secretary of State for International Development that occurred during the statement by the Secretary of State for International Development on Monday 28 February was caused by the fact that DFID had probably already received a list of options from the MOD, although DFID had not directly requested those options? On Monday 28 February, was not DFID provided with those options, which were developed by the Minister for the Armed Forces? DFID must have received the options. If it had not received them, it could not possibly have asked questions, on Tuesday 29 February, about the figures.
  Mr. Robathan: My hon. Friend may be right in his analysis of events, but I think that the delay occurred partly because of the personal antipathy—which has been denied—between the Minister for the Armed Forces, the hon. Member for Warley (Mr. Spellar) and the Secretary of State for International Development, and partly because of the Labour party's history in Birmingham. Although the Minister for the Armed Forces says that such an antipathy is rubbish, in the Birmingham Labour party, they talk of little else.
  Mr. Duncan Smith: My hon. Friend has made that point absolutely clear.
  As my hon. Friend the Member for South-West Devon and hon. Members on both sides of the House have said, if the Secretary of State for International Development wants to think of this inquiry into the matter as a witch hunt and to take it personally, she may do as she pleases. However, we have to know what went wrong. The buck must stop with her if the Government had decided that Mozambique was a priority; if DFID chose not to tell the Secretary of State the answers that it received from the MOD; and if the MOD provided requested information, but that information was not acted on. She can delegate as much as she likes, but, ultimately, delegation is only an extension of the responsibility of the person at the top—she is the person who makes the final decision.
  Far too often, the Secretary of State for International Development was kept out of the loop. Therefore, far too often she failed to take a timely decision. Surely she could have asked the MOD earlier for a range of options, and it would have provided it. I do not believe that the MOD should automatically present such options. If she really thought that she needed some options, she should have asked for them earlier, so that she could have acted more quickly.
  As my hon. Friend the Member for South-West Devon said, DFID tried to get out of the situation by spin, counter-spin and re-presenting the sums that it would pump into Mozambique. Again, however, it was only a silly game in which DFID tried to gain credit, whereas the Department was without credit in the matter.
  Today, all we heard from the Secretary of State was a history lesson, followed by an appalling geography lesson, yet we want to know the real lessons to be learned. Had those lessons been learned earlier, it could have saved the lives that were lost because of delay.
  3.45 pm
  The Secretary of State for Defence (Mr. Geoffrey Hoon): I should like to start by making some straightforward, but fundamental points which are relevant to the debate, not least because there has been a complete contrast between the two speeches by the Opposition Front Benchers and every other speech in the debate.
  The hon. Members for South-West Devon (Mr. Streeter) and for Chingford and Woodford Green (Mr. Duncan Smith) have failed to get any hon. Member, even any other Conservative Member, to speak in support of their motion. Neither the hon. Member for Hertford and Stortford (Mr. Wells) nor the hon. Member for Blaby (Mr. Robathan) spoke to the motion, but I leave that to the internal management of the Conservative party to resolve.
  The fundamental points are these. First, the United Kingdom's contribution to the relief effort in Mozambique has been, and continues to be, a success. Both military and civilian personnel are making a real difference there.
  Secondly, there has been no dispute between the Department for International Development and the Ministry of Defence in putting that contribution together. The two Departments have worked together to ensure that, as the crisis developed, the United Kingdom's response was, at each stage, the most appropriate and most effective available.
  Thirdly—despite much media excitement, and the forlorn efforts of the hon. Member for South-West Devon to generate some excitement in this debate—there was no question of haggling over costs at the expense of delivering the assistance required. It is entirely right and completely consistent with the practice of previous Governments that the Department with the policy lead should make the judgment about how best to allocate the available resources.
  Given the nature of the debate, I shall try to set out the sequence of events in some detail. The House has heard from my right hon. Friend the Secretary of State for International Development that her Department was involved in the flood relief efforts in January, from the moment that they began. That has been confirmed by my hon. Friend the Member for Cynon Valley (Ann Clwyd) in an excellent, thoughtful and well-considered speech. I thank her particularly for her comments on the contribution made by the armed forces.
  A massive surge of water, over the weekend of Saturday 26 February, caused the situation to deteriorate still further. Although further flooding had been anticipated, its sheer scale took everyone by surprise, including, of course, the people of Mozambique. It would also have taken the hon. Member for Hertford and Stortford by surprise. I was a little surprised that he criticised the Ministry of Defence for failing to plan before that date, because at no stage when I gave evidence to the International Development Committee did he raise that matter with me. Moreover, the criticism that he made dealt with a completely different time frame from the one complained about by the Opposition spokesmen.
  Mr. Blunt: What advice was the right hon. Gentleman receiving from the defence attaché at the British high commission in South Africa and from the high commission in South Africa on the course of the crisis and on the involvement of the South African air force,

  563
  which by that stage was already flying in Mozambique, supported and paid for by the Nordic countries? At some point, we took over the responsibility of paying for that.
  Mr. Hoon: The point that I shall be making, in response to the criticism by the Opposition spokesmen, is that the acute need for helicopters followed on from the flood surge that occurred over that weekend. Therefore, although we were receiving advice about the general situation, it confirmed the type of advice that we heard about today from my hon. Friend the Member for Cynon Valley. As I said, the judgment on the type of response was necessary was made by my right hon. Friend the Secretary of State for International Development.
  Mr. Wells: Of course the flood was greater than any of us foresaw. However, the fact is that surges of water down rivers such as the Limpopo do not happen overnight. The surge was caused by the very considerable rainfall inland. As the hon. Member for Cynon Valley (Ann Clwyd) said, the Committee was in the middle of that, and we knew that the surge was coming down. It should have been anticipated.
  Mr. Hoon: I could have given the hon. Gentleman a fuller answer if he had made that criticism when I appeared before the Select Committee the other day. I feel bound to point out that he did not raise it when he had that opportunity.
  I was trying to set out the sequence of events. The Department for International Development approached the Ministry of Defence and others to ask whether the United Kingdom had any people or equipment in the region that could be of assistance. Unfortunately, we did not. The Department was told that the nearest appropriate people and equipment were 3,000 miles away in the Persian gulf. As a result, the Department for International Development continued to look locally for assistance. It successfully guaranteed the funding to ensure that South African air force helicopters could continue saving people, as well as hiring other helicopters nearby that could commence operations immediately.
  At the same time as the Department for International Development was searching southern Africa for more practical assistance, the Ministry of Defence looked at whether there was anything that could be done from further afield. On Monday 28 February, my hon. Friend the Minister for the Armed Forces asked officials to look into the possible options to help further the effort already being made by the Department for International Development.
  Officials were able to identify three suitable options: first, four Puma helicopters with support personnel and equipment; secondly, a detachment of Royal Marines with hovercraft and boats; and, thirdly, the RFA Fort George, which was part of a naval task group operating in the Gulf. At the earliest opportunity, Ministry of Defence officials held discussions with their colleagues in the Department for International Development to establish whether the deployment of any of those assets might be of assistance.
  Mr. David Heath: The right hon. Gentleman knows the value that I put on the Royal Fleet Auxiliary ships.
  564
  Does he agree that the enhanced role that the RFA could play in humanitarian relief should be considered? Will he look in particular at the future role of RFA Fort Grange?
  Mr. Hoon: I agree that we can use those ships in that role, but one of the dilemmas that we faced on the deployment of Fort George—it would have been the same for the deployment of any ship—is that it would take nine days to get where it was needed. A certain amount of clairvoyance is needed to determine whether the problem will be the same after nine days. That has to be taken into account.
  Work on those options was carried forward urgently. Contingency plans were drawn up, personnel were placed on standby, equipment was prepared, an Antonov aircraft was reserved and a reconnaissance team was deployed to Mozambique in advance of a final decision. Those are all standard military procedures, designed to maximise readiness and avoid delay.
  Given the comments of my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington), it might be helpful if I explain why we decided to hire a commercially chartered aircraft to transport the helicopters to the region. It was the only aircraft big enough and readily available to do the job as quickly as we wanted. We decided that the use of the RAF's C130 aircraft, which was mentioned during the debate, was not appropriate, because it would have taken longer to dismantle the helicopters, longer to fly them to Mozambique and longer to reassemble them at the other end. It would also have required a fleet of aircraft—one for each Puma helicopter and another one for additional equipment. That answers my hon. Friend's point. I look forward to his vigorous support in ensuring that the United Kingdom has its own heavy lift capacity in due course.
  Despite the lack of suitable heavy lift aircraft, it is important to emphasise that the British Government were the first from outside the immediate region to have military helicopters operational and contributing to the relief effort. Where, therefore, was the delay that people are complaining about?
  Mr. Duncan Smith: The answer to that lies in an earlier point that the Secretary of State made. Will he confirm that the Department for International Development knew the location of the nearest Ministry of Defence resources by Saturday and that the Secretary of State for International Development should have known that the Minister for the Armed Forces was already working on alternative proposals, including flying out helicopters?
  Mr. Hoon: I have set out the sequence of events clearly. My right hon. Friend the Secretary of State for International Development rightly wanted to ensure that helicopters were available locally as quickly as possible. That inevitably meant that she was going to look for helicopters in the immediate vicinity. When the problem became clearly more serious than was initially anticipated and no further helicopters were available locally, it was appropriate to look further afield. The hon. Gentleman knows the enormous effort involved in transporting helicopters from the United Kingdom to Mozambique. That was the sequence of events and that is why the decisions taken at each stage were right.

  565
  Once the Department for International Development had satisfied the requirement for immediate assistance in the region, it was then important to consider other, longer-term actions. The decision to deploy the RFA Fort George was made on Thursday 2 March, in the knowledge that it would take around 9 days—3,000 miles of sailing—to get there. However, in advance of a final decision, the captain of the Fort George had undertaken preparatory work to ensure that the ship would be properly equipped in the event of a deployment. The ship was already heading south. It is a specialist supply vessel with five Sea King helicopters on board. It was decided that their greater radius of operations and their mobile operating platform would give the ship an advantage over ground-based helicopters, particularly in the event of serious flooding in northern Mozambique. That and the ship's load of 1.5 million litres of aviation fuel give it a vital role in the longer-term relief effort. I am sure that hon. Members on both sides of the House agree that that was an example of forward thinking and planning for the likely situation in Mozambique once the waters had receded. Conservative Members should congratulate my right hon. Friend the Secretary of State for International Development on anticipating the problems that were likely to arise.
  Mr. Robathan: Would not HMS Illustrious have been faster and a better platform for helicopters?
  Mr. Hoon: Fort George is part of the task group that also has the aircraft carrier involved with it. It is a supply vessel and was packed with food, fuel and water and was able to call in to take on extra medicines. That is the equipment that my right hon. Friend judged would be vital once the flood waters began to recede.
  There has been a great deal of comment about costs, but also a great deal of wilful misunderstanding of the reality. Hon. Members understand that the Department for International Development takes the lead on the Government's response to any overseas natural disaster and its budget reflects that. The defence budget is approved by the House for carrying out defence tasks. It does not contain provision for overseas disaster relief. It is therefore entirely appropriate for the Department for International Development to make a judgment about the best use of its funds for disaster relief at an appropriate stage in any disaster.
  To enable the Department for International Development to make an informed decision, the Ministry of Defence had to provide an outline of the estimated costs. The Chairman of the International Development Committee accepted that point when I gave evidence. It is accepted practice for any Department to charge the Department with the funding and the policy lead the additional no-loss costs of providing equipment and personnel for disaster relief operations.
  There is no doubt that the armed forces can make a significant contribution to disaster relief operations. It is clear that the public expect well trained, well organised military personnel to be able to deploy quickly and effectively to assist in such situations. However, the fact remains that substantial costs are involved in deploying personnel and equipment over distances of several
  566
  thousand miles. In many cases it will be quicker and cheaper for the Department for International Development to locate and fund sources of assistance from nearby countries. It is for my right hon. Friend the Secretary of State for International Development to consider all the options and judge which offers the most timely and effective response.
  The UK has deployed more military helicopters and got them from further afield into the region more quickly than any other nation. That is clear testimony to the determination and self-discipline of the crew and support personnel in preparing the aircraft, the equipment and themselves for deployment at the earliest opportunity.
  I should also mention the excellent work of the South African air force. During the initial rescue effort, its air crews worked flat out for days on end and saved many thousands of lives. They are a great credit to their country. We have particular reason to be grateful to the South Africans. Without their assistance on the ground and their permission to use their base for maintenance, we would not have been able to participate in the international relief effort as quickly or as effectively.
  In conclusion, the facts are that the UK has delivered the largest bilateral contribution of support on the ground, that the Department for International Development responded immediately once the scale of the catastrophe had become apparent and that only South Africa and Malawi had helicopters operating there before those from the UK. We have provided more military, and funded more civilian, helicopters than anyone else. We have people here and in Mozambique who have worked and who continue to work around the clock to provide assistance to people in real need under very challenging circumstances.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 125, Noes 310.

  Division No.115]

  [4 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Duncan Smith, Iain

  Amess, David

  Evans, Nigel

  Arbuthnot, Rt Hon James

  Faber, David

  Atkinson, David (Bour'mth E)

  Fabricant, Michael

  Baldry, Tony

  Fallon, Michael

  Bercow, John

  Flight, Howard

  Beresford, Sir Paul

  Forth, Rt Hon Eric

  Blunt, Crispin

  Fowler, Rt Hon Sir Norman

  Brady, Graham

  Fox, Dr Liam

  Brooke, Rt Hon Peter

  Fraser, Christopher

  Browning, Mrs Angela

  Gale, Roger

  Bruce, Ian (S Dorset)

  Gibb, Nick

  Butterfill, John

  Gill, Christopher

  Cash, William

  Gillan, Mrs Cheryl

  Chapman, Sir Sydney (Chipping Barnet)

  Gray, James

  Green, Damian

  Chope, Christopher

  Grieve, Dominic

  Clark, Dr Michael (Rayleigh)

  Hamilton, Rt Hon Sir Archie

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Hammond, Philip

  Hawkins, Nick

  Collins, Tim

  Hayes, John

  Cormack, Sir Patrick

  Heald, Oliver

  Cran, James

  Hogg, Rt Hon Douglas

  Curry, Rt Hon David

  Horam, John

  Davis, Rt Hon David (Haltemprice)

  Howard, Rt Hon Michael

  Day, Stephen

  Howarth, Gerald (Aldershot)

  Dorrell, Rt Hon Stephen

  Hunter, Andrew

  Duncan, Alan

  Jack, Rt Hon Michael

  567

  Jackson, Robert (Wantage)

  Redwood, Rt Hon John

  Jenkin, Bernard

  Robathan, Andrew

  Johnson Smith, Rt Hon Sir Geoffrey

  Roe, Mrs Marion (Broxbourne)

  Ruffley, David

  Key, Robert

  St Aubyn, Nick

  King, Rt Hon Tom (Bridgwater)

  Shepherd, Richard

  Kirkbride, Miss Julie

  Simpson, Keith (Mid-Norfolk)

  Laing, Mrs Eleanor

  Soames, Nicholas

  Lait, Mrs Jacqui

  Spelman, Mrs Caroline

  Lansley, Andrew

  Steen, Anthony

  Letwin, Oliver

  Streeter, Gary

  Lewis, Dr Julian (New Forest E)

  Swayne, Desmond

  Lidington, David

  Syms, Robert

  Lilley, Rt Hon Peter

  Tapsell, Sir Peter

  Lloyd, Rt Hon Sir Peter (Fareham)

  Taylor, Ian (Esher & Walton)

  Loughton, Tim

  Taylor, John M (Solihull)

  Luff, Peter

  Townend, John

  Lyell, Rt Hon Sir Nicholas

  Tredinnick, David

  MacGregor, Rt Hon John

  Trend, Michael

  McIntosh, Miss Anne

  Tyrie, Andrew

  MacKay, Rt Hon Andrew

  Viggers, Peter

  Maclean, Rt Hon David

  Walter, Robert

  McLoughlin, Patrick

  Wardle, Charles

  Madel, Sir David

  Waterson, Nigel

  Major, Rt Hon John

  Wells, Bowen

  Malins, Humfrey

  Whittingdale, John

  Maples, John

  Widdecombe, Rt Hon Miss Ann

  Maude, Rt Hon Francis

  Wilkinson, John

  Mawhinney, Rt Hon Sir Brian

  Willetts, David

  Moss, Malcolm

  Wilshire, David

  Nicholls, Patrick

  Winterton, Mrs Ann (Congleton)

  Norman, Archie

  Winterton, Nicholas (Macclesfield)

  O'Brien, Stephen (Eddisbury)

  Yeo, Tim

  Ottaway, Richard

  Young, Rt Hon Sir George

  Page, Richard

  Pickles, Eric

  Tellers for the Ayes:

  Portillo, Rt Hon Michael

  Mr. John Randall and

  Prior, David

  Mr. Geoffrey Clifton-Brown

  NOES

  Abbott, Ms Diane

  Brinton, Mrs Helen

  Ainger, Nick

  Bruce, Malcolm (Gordon)

  Ainsworth, Robert (Cov'try NE)

  Buck, Ms Karen

  Alexander, Douglas

  Burden, Richard

  Allan, Richard

  Burgon, Colin

  Anderson, Donald (Swansea E)

  Butler, Mrs Christine

  Anderson, Janet (Rossendale)

  Byers, Rt Hon Stephen

  Ashton, Joe

  Cable, Dr Vincent

  Atkins, Charlotte

  Caborn, Rt Hon Richard

  Austin, John

  Campbell, Alan (Tynemouth)

  Baker, Norman

  Campbell, Mrs Anne (C'bridge)

  Ballard, Jackie

  Campbell, Rt Hon Menzies (NE Fife)

  Banks, Tony

  Barnes, Harry

  Campbell, Ronnie (Blyth V)

  Battle, John

  Cann, Jamie

  Bayley, Hugh

  Caplin, Ivor

  Beard, Nigel

  Casale, Roger

  Beckett, Rt Hon Mrs Margaret

  Cawsey, Ian

  Beith, Rt Hon A J

  Chapman, Ben (Wirral S)

  Bell, Martin (Tatton)

  Chidgey, David

  Bell, Stuart (Middlesbrough)

  Clapham, Michael

  Benn, Hilary (Leeds C)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Benn, Rt Hon Tony (Chesterfield)

  Bennett, Andrew F

  Clark Paul (Gillingham)

  Benton, Joe

  Clarke, Charles (Norwich S)

  Bermingham, Gerald

  Clelland, David

  Berry, Roger

  Clwyd, Ann

  Best, Harold

  Coaker, Vernon

  Betts, Clive

  Coffey, Ms Ann

  Blair, Rt Hon Tony

  Coleman, Iain

  Blears, Ms Hazel

  Colman, Tony

  Blunkett, Rt Hon David

  Connarty, Michael

  Boateng, Rt Hon Paul

  Cook, Frank (Stockton N)

  Bradley, Keith (Withington)

  Cook, Rt Hon Robin (Livingston)

  Bradley, Peter (The Wrekin)

  Cooper, Yvette

  Brake, Tom

  Corbett, Robin

  568

  Corbyn, Jeremy

  Illsley, Eric

  Corston, Jean

  Jackson, Helen (Hillsborough)

  Cotter, Brian

  Jamieson, David

  Cousins, Jim

  Jenkins, Brian

  Cox, Tom

  Johnson, Alan (Hull W & Hessle)

  Cranston, Ross

  Johnson, Miss Melanie (Welwyn Hatfield)

  Crausby, David

  Cryer, Mrs Ann (Keighley)

  Jones, Rt Hon Barry (Alyn)

  Cryer, John (Hornchurch)

  Jones, Helen (Warrington N)

  Cummings, John

  Jones, Ms Jenny (Wolverh'ton SW)

  Cunningham, Jim (Cov'try S)

  Curtis-Thomas, Mrs Claire

  Jones, Jon Owen (Cardiff C)

  Darvill, Keith

  Jones, Dr Lynne (Selly Oak)

  Davey, Edward (Kingston)

  Jowell, Rt Hon Ms Tessa

  Davey, Valerie (Bristol W)

  Kaufman, Rt Hon Gerald

  Davies, Rt Hon Denzil (Llanelli)

  Keeble, Ms Sally

  Davies, Geraint (Croydon C)

  Keen, Alan (Feltham & Heston)

  Davis, Rt Hon Terry (B'ham Hodge H)

  Keen, Ann (Brentford & Isleworth)

  Kelly, Ms Ruth

  Dawson, Hilton

  Kennedy, Jane (Wavertree)

  Denham, John

  Khabra, Piara S

  Dowd, Jim

  Kidney, David

  Dunwoody, Mrs Gwyneth

  Kilfoyle, Peter

  Eagle, Angela (Wallasey)

  King, Ms Oona (Bethnal Green)

  Eagle, Maria (L'pool Garston)

  Ladyman, Dr Stephen

  Ellman, Mrs Louise

  Laxton, Bob

  Ennis, Jeff

  Lepper, David

  Etherington, Bill

  Leslie, Christopher

  Fearn, Ronnie

  Levitt, Tom

  Field, Rt Hon Frank

  Lewis, Ivan (Bury S)

  Fisher, Mark

  Linton, Martin

  Fitzpatrick, Jim

  Lloyd, Tony (Manchester C)

  Flint, Caroline

  Lock, David

  Flynn, Paul

  Love, Andrew

  Foster, Don (Bath)

  McAvoy, Thomas

  Foster, Michael Jabez (Hastings)

  McCabe, Steve

  Foster, Michael J (Worcester)

  McCafferty, Ms Chris

  Gapes, Mike

  McDonagh, Siobhain

  Gardiner, Barry

  McDonnell, John

  George, Bruce (Walsall S)

  McIsaac, Shona

  Gerrard, Neil

  Mackinlay, Andrew

  Gibson, Dr Ian

  McNamara, Kevin

  Gilroy, Mrs Linda

  McNulty, Tony

  Godman, Dr Norman A

  Mactaggart, Fiona

  Godsiff, Roger

  McWalter, Tony

  Goggins, Paul

  McWilliam, John

  Gordon, Mrs Eileen

  Mahon, Mrs Alice

  Griffiths, Jane (Reading E)

  Marsden, Gordon (Blackpool S)

  Griffiths, Win (Bridgend)

  Marsden, Paul (Shrewsbury)

  Grocott, Bruce

  Marshall, Jim (Leicester S)

  Grogan, John

  Marshall-Andrews, Robert

  Hain, Peter

  Maxton, John

  Hall, Patrick (Bedford)

  Meacher, Rt Hon Michael

  Hamilton, Fabian (Leeds NE)

  Merron, Gillian

  Hancock, Mike

  Michie, Bill (Shef'ld Heeley)

  Hanson, David

  Michie, Mrs Ray (Argyll & Bute)

  Harman, Rt Hon Ms Harriet

  Miller, Andrew

  Harris, Dr Evan

  Moffatt, Laura

  Heal, Mrs Sylvia

  Moonie, Dr Lewis

  Healey, John

  Moore, Michael

  Heath, David (Somerton & Frome)

  Moran, Ms Margaret

  Hepburn, Stephen

  Morris, Rt Hon Sir John (Aberavon)

  Heppell, John

  Hill, Keith

  Mowlam, Rt Hon Marjorie

  Hinchliffe, David

  Mullin, Chris

  Hodge, Ms Margaret

  Murphy, Denis (Wansbeck)

  Hood, Jimmy

  Murphy, Rt Hon Paul (Torfaen)

  Hoon, Rt Hon Geoffrey

  Naysmith, Dr Doug

  Hope, Phil

  O'Brien, Bill (Normanton)

  Hopkins, Kelvin

  O'Brien, Mike (N Warks)

  Howells, Dr Kim

  O'Hara, Eddie

  Hughes, Ms Beverley (Stretford)

  Olner, Bill

  Hughes, Kevin (Doncaster N)

  Organ, Mrs Diana

  Hurst, Alan

  Palmer, Dr Nick

  Hutton, John

  Pearson, Ian

  Iddon, Dr Brian

  Pendry, Tom

  569

  Perham, Ms Linda

  Southworth, Ms Helen

  Pickthall, Colin

  Spellar, John

  Pike, Peter L

  Squire, Ms Rachel

  Plaskitt, James

  Steinberg, Gerry

  Pollard, Kerry

  Stevenson, George

  Pond, Chris

  Stewart, David (Inverness E)

  Pope, Greg

  Stinchcombe, Paul

  Pound, Stephen

  Stoate, Dr Howard

  Prentice, Ms Bridget (Lewisham E)

  Strang, Rt Hon Dr Gavin

  Prosser, Gwyn

  Stringer, Graham

  Purchase, Ken

  Stuart, Ms Gisela

  Quin, Rt Hon Ms Joyce

  Stunell, Andrew

  Quinn, Lawrie

  Sutcliffe, Gerry

  Radice, Rt Hon Giles

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Rammell, Bill

  Rapson Syd

  Taylor, Ms Dari (Stockton S)

  Raynsford, Nick

  Taylor, David (NW Leics)

  Reed, Andrew (Loughborough)

  Thomas, Gareth R (Harrow W)

  Rendel, David

  Timms, Stephen

  Robinson, Geoffrey (Cov'try NW)

  Tipping, Paddy

  Roche, Mrs Barbara

  Todd, Mark

  Rogers, Allan

  Tonge, Dr Jenny

  Rooker, Rt Hon Jeff

  Touhig, Don

  Rooney, Terry

  Trickett, Jon

  Ross, Emie (Dundee W)

  Turner, Dennis (Wolverh'ton SE)

  Rowlands, Ted

  Turner, Dr Desmond (Kemptown)

  Ruddock, Joan

  Turner, Neil (Wigan)

  Russell, Bob (Colchester)

  Twigg, Stephen (Enfield)

  Tynan, Bill

  Russell, Ms Christine (Chester)

  Vis, Dr Rudi

  Ryan, Ms Joan

  Walley, Ms Joan

  Salter, Martin

  Watts, David

  Sanders, Adrian

  White, Brian

  Sawford, Phil

  Whitehead, Dr Alan

  Sedgemore, Brian

  Williams, Rt Hon Alan (Swansea W)

  Shaw, Jonathan

  Sheerman, Barry

  Williams, Alan W (E Carmarthen)

  Shipley, Ms Debra

  Willis, Phil

  Short, Rt Hon Clare

  Winterton, Ms Rosie (Doncaster C)

  Singh, Marsha

  Wise, Audrey

  Skinner, Dennis

  Wood, Mike

  Smith, Rt Hon Andrew (Oxford E)

  Woodward, Shaun

  Smith, Angela (Basildon)

  Woolas, Phil

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Worthington, Tony

  Wright, Dr Tony (Cannock)

  Smith, Jacqui (Redditch)

  Wyatt, Derek

  Smith, Llew (Blaenau Gwent)

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

  Tellers for the Noes:

  Snape, Peter

  Mr. Mike Hall and

  Soley, Clive

  Mr. Graham Allen.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments) and agreed to.
  MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House commends the Government for its speedy and effective response to the humanitarian crisis in Mozambique.

Future of Rover
Mr. Deputy Speaker (Sir Alan Haselhurst): Madam Speaker has selected the amendment standing in the name of the Prime Minister.
4.13 pm
Mrs. Angela Browning: I beg to move,
That this House calls upon the Government to report to the House the terms under which they brokered a rescue package for BMW/Rover in June 1999; further calls upon the Secretary of State for Trade and Industry to confirm that the application for Regional Selective Assistance will be sanctioned as a matter of urgency and that he will respond to the Competition Commission Report on Car Pricing as a priority; regrets that the future of Rover has been undermined by recent announcements by BMW; and urges the Government to clarify its future strategy in respect of Rover.
The Opposition decided, in light of the developments this week on the future of Rover, that it was important that the House had an opportunity to debate the issue and to seek answers from the Secretary of State. The House will know that in 1994, when BMW purchased Rover, it was a profit-making company. It was remarked at the time by BMW that the United Kingdom was a good place to manufacture and produce motor cars.
Today's announcement, and the run-up to it, has meant that there is now a significant question mark hanging over the future of Rover and particular concern about the Longbridge factory and the many tens of thousands of people who work for Rover itself, for subsidiary companies and for those that supply Rover. The whole House recognises the importance of that company and that sector to the midlands in particular and to the whole economy of this country.
Last June, the Secretary of State for Trade and Industry stepped off a plane, held a photocall and press conference, and announced a new deal that he had brokered with BMW for the future of Rover at Longbridge. We were not favoured with a statement in the House on the subject. Indeed, the Government have not brought the subject of Rover to the Floor of the House since the Secretary of State held his press conference. It was left to my hon. Friend the Member for Bromsgrove (Miss Kirkbride) to raise the matter in an Adjournment debate in Westminster Hall in January.
To set the scene of the Secretary of State's announcement last June—to which we gave our public support—I remind the House of what he said at the time. The matter involved the first such application for state aid that he had dealt with since becoming Secretary of State—as the press reported—and he said:
I was not prepared to deal with this in the traditional way by simply making a substantial payment to BMW. Instead, I wanted the Longbridge agreement to be one which heralded a new approach to Government assistance to industry, which reflected a long-term commitment and not a quick fix. That is why I sought guarantees on productivity targets, raising skills and substantial investment from the company itself. Guarantees have been given in all these key areas.
The Secretary of State said that because new ground was being broken, the negotiations were complex and detailed, but they are now a matter of public record. The details include the £2 billion of investment put in by BMW and the £129 million of regional selective assistance and the

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local grants, which amounted to some £152 million of public money and which the Secretary of State put on the table in the deal that he brokered with BMW in June.
Had we had the opportunity to question the Secretary of State at the time, we would have asked many questions. Indeed, together with colleagues in this House and in the other place—and other Members of Parliament, including Labour Members—I have tabled a series of questions in the months that have followed to seek clarification of the nature of the deal that the Secretary of State brokered.
Mr. Barry Sheerman: I have been looking at the questions tabled in the past few months and I cannot find the hon. Lady's name or those of her colleagues on questions mentioning Rover or BMW. Can she give us chapter and verse, or should we conclude that hers is a very late enthusiasm?
Mrs. Browning: I am about to read those questions out, including correspondence that I have exchanged with the Secretary of State on the subject. As the hon. Gentleman will know, it was the Conservatives who initiated the only debate that has been held, in which I made a substantive contribution from the Front Bench. I have yet to see a Secretary of State from any Department contributing to any debate in Westminster Hall, but that is not the approach that we take. If a debate is important, and Rover is important, I do not delegate the matter to a junior—I put my views and those of my party on the record. The hon. Gentleman should go on a PDVN course and learn to access information a little more accurately. However, I shall not be diverted by such trivial interventions, because this is a serious issue.
Many jobs are at stake in an important sector of the economy, and we demand information and answers from the Secretary of State about his own role in the deal that he brokered, what has happened since and why—just eight months later—the deal has not lasted a year, let alone the century that the Prime Minister claimed it would.
Mr. John Redwood: Will my hon. Friend confirm that it was the Secretary of State's attempt to gerrymander the regional aid map that delayed and prevented any agreement coming from Brussels for the important aid package to help investment? Would she confirm that the Secretary of State thought he could waive the rules, only to discover that the EU had strong rules that it did not like having ignored? Is not that why, when it comes to shares in the Secretary of State, it is all sellers and no buyers?
Mrs. Browning: My right hon. Friend makes a pertinent point about where to draw the line on the map of delay. It is a matter of grave concern that the £152 million—a key component of the deal—has been delayed. Even today, there has been no assurance that the money will be on the table.
I remind the Secretary of State of the words of the Minister for Small Business and E-Commerce, who answered the debate in Westminster Hall:
I am in no doubt that without the offer of support, BMW would have taken its investment elsewhere. It needed to go ahead with the investment for strategic reasons, but it did not need to come to the UK. The prime consideration for BMW was the impact of the
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additional investment on the company's overall financial position.— [ Official Report, Westminster Hall, 26 January 2000; Vol. 343, c. 89WH.]
When the Secretary of State announced the £152 million, there had been some brief contact between the Department and the EU's Competition Commissioner, Mr. van Miert, and his officials. However, it soon became apparent that the Secretary of State had not done his homework. He had not taken the trouble to make sure that what he was putting on the table in the negotiations would be in compliance with EU regulations. That is why, after many months of difficulty and uncertainty for Rover, that money has not been forthcoming.
Within a week of the Secretary of State's announcement, Mr. van Miert told my office that he was not inclined to think that the money would be approved automatically. He thought that it would take time and investigation before he would be convinced that the Secretary of State's bid for the money complied with EU regulations.
Mr. Richard Burden: With the group of Labour MEPs representing the west midlands, I met Commissioner Monti, who is responsible for the EU's competition policy. I do not know whether the hon. Lady has met him. We asked him whether the British Government had not answered any questions, and he said that there were no questions that had not been answered.
Articles in the Official Journal of the European Communities have made it clear that the problem with the deal was not the delays that it suffered, but the alleged haste with which it was put together. How does that fit with the right hon. Lady's argument? Does she—
Mr. Deputy Speaker: Order. That is a long intervention, and I know that the hon. Gentleman is seeking to catch my eye.
Mrs. Browning: It is not the pace of the deal that matters, but whether it will hold together. Surely the Secretary of State should have done his preparation and homework, given the importance of the £152 million in the negotiation that he brokered with BMW.
The Secretary of State for Trade and Industry(Mr. Stephen Byers): I am grateful to the hon. Lady for giving way on what is an important point. She seems to imply that I should have received European Commission approval before I put the deal to BMW. Will she give me just one example from the Conservative Government's period in office when a regional selective assistance deal was agreed between the European Commission and the Government before the deal was struck with the company involved?
Mrs. Browning: No, and the reason is that the Secretary of State raised expectations on what was a false prospectus. Given how he described his role in brokering the deal, he should have been much more sure of his ground in terms of compliance. The important thing was not that the deal had been made, but his ability to deliver a watertight guarantee that he would get the money, which was a contingent element in the BMW deal. If the

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company has reneged on its part of the deal today, it must be because of deep disappointment that what the Secretary of State announced last June has not been delivered.
Miss Julie Kirkbride: I attended the debate in Westminster Hall at the end of January, as did my hon. Friend. Not only did the Secretary of State not check the rules before he announced his bid, but does she recall that the Minister for Small Business and E-Commerce could not tell hon. Members who attended the debate when she or her officials had last spoken to the Commission about the bid's progress?
Mrs. Browning: My hon. Friend is right. There seems to have been general complacency with regard to the matter over the summer months. I tabled some questions to the Secretary of State, as I wanted to know the details and conditions of the package that he had negotiated. He had put £152 million of public money on the table, but we wanted to know what he had got in return. We received the answer that the conditions of the aid package were "commercially confidential". It is therefore a question of whether the Secretary of State secured a good deal, or whether BMW have reneged on that deal. The relevant information has not been made available.
Mr. Byers: The hon. Lady says that I answered her questions by saying that the details were commercially confidential. Will she give one example of details of regional selective assistance being made available to the House under the previous Government?
Mrs. Browning: The Secretary of State must be used to batches of questions from me by now, but he failed to answer one in the batch about the BMW deal. He told me on 28 June that he would write to me with the answer, but he has failed to do so. In August, I was so worried at the lack of information about the deal that I wrote to the right hon. Gentleman and reminded him that he had not written to me as he had promised a month earlier.
That is indicative of the Secretary of State's laissez-faire attitude. He had his photocall and announced the good news, and then the matter was put in the pending tray. That is where Rover sat for most of last summer. When he eventually wrote to me on 2 September, he said:
You may be assured that I and my officials will be maintaining close contact with DGD4, and we will be seeking every opportunity to press for an early and successful outcome to the case.
That was nearly six months ago, and the money is still not forthcoming.
Mr. Jim Cunningham: Will the hon. Lady give way?
Mrs. Browning: I will give way just once more, as this is a short debate. Many hon. Members of all parties have a local constituency interest in the matter, which is why I shall give way to the hon. Gentleman. I shall make some progress after his intervention.
Mr. Cunningham: The hon. Member for Christchurch (Mr. Chope) is, like me, a member of the Select Committee on Trade and Industry. Has the hon. Lady not
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consulted him? We were in Europe three weeks ago, and were told by officials that there was no problem with the aid package.
Mrs. Browning: If there is really no problem, the Secretary of State should announce today that it has been secured. According to the announcement made today, a company called Alchemy is to take responsibility for Rover. That company must know whether the money is still on the table. I hope that the Secretary of State will tell the House.
If the money is still on the table, what will it be used for? In the past, Ministers have indicated that £150 million of public money was to help the development of the R30 car. I have studied the BMW press statement and it is not clear that the R30 will be developed by Alchemy. Indeed, there is very little reference to it at all. If that is what the money was targeted on, clearly there is a question mark over whether the Commission will release that money if, for example, the R30 will not be developed in this country after all.
Mr. Byers: If the grant to BMW is so important in terms of its decision today, can the hon. Lady confirm that BMW's announcement and the comprehensive press release that followed it do not mention the grant as one of the reasons for this decision?
Mrs. Browning: I can only quote the Minister for Small Business and E-Commerce, who said at the end of January how important that grant was. [Interruption.]
Mr. Deputy Speaker: I am sorry to interrupt the hon. Lady, but I think that the House will gain more respect outside if this debate is conducted without sedentary barracking.
Mrs. Browning: The Secretary of State and the Minister for Small Business and E-Commerce have assured not only the House but the country that the deal they brokered and the £152 million on the table were going to secure the future of Rover. That was endorsed by the Prime Minister. Before the Secretary of State intervenes on me again and asks me questions, let me say that we are looking not for questions from the right hon. Gentleman, but for answers that we could rightfully have expected eight months ago when he made his first announcement.
The Government have carried out a go-slow policy with regard to the expedition of the grant. Furthermore, in the ensuing months, Government intervention has had an impact on all manufacturers, including car manufacturers and Rover in particular. Since 1994, when BMW stated that this was a good country in which to build motor cars, taxation on business has increased and it faces an additional £10 billion of regulatory costs. [Interruption.] We have seen the Secretary of State heading the "Rip Off Britain" campaign, which has stifled the retail sales of cars for more months than the car industry deserves.
The Secretary of State will recall that several months ago, during Trade and Industry questions, I urged him to make his views known on the Competition Commission report on car sales before the W registration mark came in, because retail sales are down by 12 per cent. this March compared with last year.
Mr. Sheerman: As they are in France and Germany.
Mrs. Browning: The market has been affected by a Government soundbite in which the Secretary of State and

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his friends in the Cabinet thought that they could be the consumer's friend by persuading everybody that they were being ripped off. There may be a case for examining car pricing and the way in which cars are retailed in this country. I have no quarrel with that, as I have said before. However, it is totally indefensible for the Secretary of State, or any Minister, to set up an inquiry, pre-empt the outcome before the analysis has been made and then, as they have done with the retail and supermarket sectors, damage, for the sake of a quick-fix soundbite, an industry that is already under pressure because of the Government's running of the economy. [Interruption.]
Mr. Deputy Speaker: Order. The hon. Member for Huddersfield (Mr. Sheerman) is a senior and respected Member of this House. He should conduct himself accordingly.
Mrs. Browning: In December, Rover announced that 2,500 jobs were to go. I believe that it was as a result of that that my hon. Friend the Member for Bromsgrove initiated her debate.
The Government deny the House the opportunity to ask pertinent questions on matters of great importance to an industry such as this and to the overall good of the United Kingdom economy. I believe that this Secretary of State, in particular, would do well to recognise that it is his duty to share information with the House. It is no good coming eight months later and saying, "Nothing to do with me, guv" when, in front of the television cameras, he took credit for what he thought at the time was a bit of good news, only to sidle off into the shadows when the news is not so good. Were it not for the fact that the Conservative party changed the subject of the Opposition day debate this afternoon, I suspect that he would be giving out yet another press release to deal with this, rather than standing at the Dispatch Box, telling the House what he believes the future of Rover will be and answering many of our questions.
BMW has said this afternoon that it will retain Land Rover, but has the right hon. Gentleman any concerns that it might be doing so simply to sell it on to another third-party purchaser? Is it his understanding that Alchemy intends to develop any further models under the Rover brand, or does he believe that when the existing models have been exhausted, it will revert to the MG brand, and the name Rover will disappear from British cars altogether? Will BMW retain the development of the R30 and, if so, where will it be developed? Will it be in this country or in Germany?
The Secretary of State presides over a Department that is in an absolute shambles. What we see today adds to the belief that nobody on the Treasury Bench understands business, let alone is capable of brokering a deal on behalf of business. The Secretary of State must make up his mind. Will he be a Secretary of State who, as he claimed on television only a couple of weeks ago, does not believe that the Government should pick winners or losers? With regard to his competition policy, will he intervene or not?
The Secretary of State seems all over the place, as is his Department. He is all over the place when it comes to competition policy and when it comes to saving British industry, in which he believes he can intervene successfully. He is all over the place in bringing legislation before the House. The Utilities Bill is a
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shambles and the Committee considering the Postal Services Bill has been suspended because the Government have not marshalled their amendments. This is all indicative of a Government who could not even run a whelk stall.
4.37 pm
The Secretary of State for Trade and Industry(Mr. Stephen Byers): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
welcomes the actions of the Government that support the car industry, including delivering stable inflation and low interest rates, boosting support for supply chain activities and acting on the Foresight Vehicle Programme; welcomes the Government support for the Longbridge plant given through the offer of Regional Selective Assistance; understands that the major losses that BMW have suffered on Rover have put great pressure on BMW with respect to Rover; and congratulates the Government for playing its role in working closely with the company and the workforce to try to ensure there is a future for Rover.
This has been a very important day for Rover and for the Government's relationships with major multinational companies such as BMW. I want to report to the House on the decisions that the supervisory board of BMW has taken today, and I want to explain the circumstances surrounding our offer of grant aid in June of last year.
First, it is important to inform the House of the decisions that have been taken by the BMW supervisory board today. I also want to share with the House some additional information that I have received from Professor Milberg, the chairman of BMW, following the supervisory board meeting that was held earlier today.
The supervisory board has decided that production of the new Mini, which originally was to be based at the Longbridge site, will go ahead but will be developed at the Cowley plant in Oxford. The new Mini will be launched, as originally planned, in the early summer of 2001. Production of the Rover 75 will continue at the Cowley plant in Oxford, but it will be produced on behalf of Alchemy Partners, the new company to which BMW has decided to dispose the Rover and MG brands. Sales and distribution of the car will also be handled by Alchemy Partners.
The body pressing facility at Swindon will be retained as part of BMW. The Hams Hall engine facility in Birmingham, which is a very important project, will be completed and will enter operation as planned, as part of BMW.
Today's major announcement affects the future of the Longbridge plant in Birmingham. BMW's decision to dispose of the Rover and MG brands to Alchemy Partners will have clear implications for Longbridge. I have spoken today with Jon Moulton, one of the new owner's principal directors. I pointed out the importance of Longbridge and the belief of many people that it has a viable long-term future as a car production facility. I stressed the importance of Longbridge and the way in which the work force have responded over some months to changed circumstances by improving productivity and raising skills. I stressed the plant's strategic importance for Birmingham and the west midlands as a whole.
Mr. John M. Taylor: I thank the Secretary of State for recognising the great importance of Longbridge, but he has not yet mentioned the destiny of

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Land Rover, which is in my constituency. Will the Secretary of State comment on rumours currently circulating that it will be sold to Ford Motor Company?
Mr. Byers: I shall when I come to the discussions that I had with Professor Milberg after the supervisory board meeting. He specifically addressed Land Rover's position, and I hope to answer the hon. Gentleman's point a little later.
On Longbridge, Mr. Moulton said that he wanted to retain car production, and that Alchemy Partners was not in the business of asset stripping. He said that the company intended to develop the MG brand at Longbridge. Clearly, however, many questions remain to be answered for the people who work at Longbridge and for the whole west midlands. I shall meet Mr. Moulton later today to discuss further Alchemy's detailed intentions. I shall stress both the important part that Longbridge can play and that car production should be retained. I hope that Alchemy Partners will recognise its responsibility as the new owners of Longbridge to a work force who have been flexible, who have improved productivity and who believe, as the Government and I do, that Longbridge has a viable long-term future.
Mr. Redwood: Does the Secretary of State agree that his mishandling of the whole regional aid map discussions with Brussels has left him powerless to intervene and caused endless delay? Does that not show that the warranty he offered to Rover workers was time-expired on the day that he gave it? He must have known that he had filed an illegal map and that there would be endless delay. When will he sit down with the Commission to reach agreement?
Mr. Byers: The right hon. Gentleman tries to divert us to an issue not related to BMW's announcement today. I spoke to Professor Milberg yesterday, asking whether, given the difficulties faced by BMW—a loss of £740 million this year on top of the loss in 1998 of £550 million—our grant of £152 million over five years would make a great difference. He said that in the context of the difficult decisions that BMW had to take today, the grant was not an issue. Opposition Members may want to make an issue of that, but it is a red herring. [Interruption.] I shall come on to grant aid shortly.
The right hon. Gentleman likes to say that he understands business. He should realise that losses of £1.3 billion over two years are far more significant than a grant of £152 million over five years.
Mr. Redwood: At the time the Secretary of State tried to negotiate grant aid, he and his colleagues thought that it was important; so did BMW, and so did the people of the west midlands. We knew that we could lose the whole transaction because of the delays created by the Secretary of State. Is he saying that he will not bother to sort out his row with Brussels, and that if a future owner of any part of our motor industry wants aid he will not care less and none will be available?
Mr. Byers: The right hon. Gentleman cannot resist talking about rows with Brussels. They are the entire raison d'etre of his political life. [HON. MEMBERS: "Answer seriously."] It was not a serious question.
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The issues surrounding the grant did not affect the decision taken today by the BMW supervisory board. The House is concerned with the consequences of that decision. We have had discussions today with Alchemy, and during my discussion with the new owner this evening I will ask whether the grant is significant as far as it is concerned. The situation is clear. The grant related to a deal struck with BMW for investment at Longbridge. If that investment does not go ahead, the grant will go by default.
Mr. John Butterfill: When the Secretary of State met the director from Alchemy earlier, did he ask how Alchemy imagines it may be able to cope with losses of the scale that have been sustained by Rover? If he did not, will he discuss that point with the director later?
Mr. Byers: I spoke to Jon Moulton earlier, and will meet him later. I shall wish to raise that point with Mr. Moulton. We do not want the new owner to give false hopes to those who work at Longbridge if it will be unable to develop a viable car production facility there.
The hon. Member for Solihull (Mr. Taylor) made an important point about the direct effects on his constituents. Land Rover has been a highly successful car production facility in Solihull, and BMW is seeking an alternative owner. Land Rover will be a desirable car production facility, and other car manufacturers will be interested in acquiring it. Professor Milberg did not mention any particular company when I spoke with him about an hour and a half ago, and there is some speculation about who the new owner might be. We shall discuss this whole matter with a number of manufacturers over the coming hours and days. That will clearly include any particular interest in Land Rover.
Mr. John M. Taylor: I am grateful to the Secretary of State, but he has given me a certain sense of deja vu. When I first came to the House, I was involved in stopping the sale of Land Rover to General Motors. I shall have to look out my papers, as we seem to be in the same position all over again.
Mr. Byers: I hope that, whatever happens, people will realise that Land Rover is an excellent facility, manufacturing a product that is profitable and desirable. As Secretary of State, I intend to make that case.
The events that occurred at the supervisory board today are a great disappointment to the Government. We had an understanding—an agreement—with BMW, to which the work force had signed up. It was that there would be changes in working practices, that productivity would be improved, and that investment would be made—especially in the Longbridge facility. BMW accepted that, until 2002, a loss would be incurred by the Rover group in the UK, but that it could live with that. The company intended to break even by 2002.
Today's decision by BMW goes against the understanding that was reached last year.
Mr. Michael Jack: Towards the end of last year, in some of the more authoritative parts of the British automotive press, stories were circulating that BMW had lost interest in Rover and had been in discussions with

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Volkswagen about carving up the various plants. Was the Secretary of State aware of those reports? If he was advised of them by his officials, what action did he take to check them out with BMW to find out whether the company was already preparing an exit strategy?
Mr. Byers: My Department and I have close links with BMW and have been in dialogue with the company about many issues. Over the past few days, it has become clear that a small number of BMW's directors have adopted a new business strategy—that was revealed today.
The business strategy towards which BMW was working was the one that was agreed during last year: to retain Rover—in its totality—in the UK, and to invest in areas such as Longbridge in the future. As a result of the escalating losses incurred by BMW, which today declared losses of about £140 million last year, the company felt that in order to protect its total viability, radical decisions had to be taken. We are seeing the effect of those today.
Several hon. Members rose—
Mr. Byers: I cannot give way because I need to make some progress. The hon. Member for Tiverton and Honiton (Mrs. Browning) raised some important issues about grant aid that I want to address. It will take me a little time to do so and I want to enable many hon. Members to take part in the debate.
Since 1994, BMW has made a significant investment in Rover. At Solihull, new lines have been developed for Land Rover's Freelander and Discovery models. BMW has put £400 million into a new line at Cowley, incorporating state-of-the-art technology and new working practices. That has enabled the introduction of the Rover 75. The new engine facility at Hams Hall has received an investment of £400 million to produce engines for Rover and BMW.
Changes have been introduced, and a large investment has been made by BMW. However, even with that investment, the losses incurred by BMW have escalated year after year. Over the past two years, they amounted to £1.3 billion. BMW informed me that it was the scale of those losses that led to today's decision.
Mr. Tony Baldry rose—
Dr. Vincent Cable rose—
Mr. Byers: I want to make some more points.
The Government are disappointed that BMW has decided to adopt a different business strategy to the one that was agreed with us last year. We regret that.
Specific points were made about grant aid applications.
Mr. Tom King: The Secretary of State pointed out that BMW found it necessary to change its strategy. Given the scale of the losses, any board would consider doing that. On what assumptions about exchange rates was the original strategy based? Does the Secretary of State know about that?
Mr. Byers: The right hon. Gentleman will have to raise that issue with BMW. The company makes decisions based on its own estimates.
Dr. Cable: Will the Secretary of State confirm that the exchange rate assumption used by BMW—not only for
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its private affairs, but as the basis for the Government grant application—was DM2.40? Was the DTI aware of that detail when the application was approved?
Mr. Byers: It would be better for BMW to confirm figures that may be regarded as commercially confidential. [Interruption.] It is an important point. Opposition Members will be aware that when regional selective assistance applications are made, and the Government and companies enter into deals, that is confidential. I should be happy to reveal the information if BMW gave me approval. However, I shall not put at risk the relationship between the Government and those companies which approach us, in confidence, for RSA by disclosing that information to the House. That would be wrong; I do not intend to do it.
I want to move on to the important points on grant aid—the subject of most of the comments made by the hon. Member for Tiverton and Honiton. She raised a number of important issues about the way in which we have dealt with grant aid to BMW. I want to address them each specifically, and I shall compare how a grant application from Rover-BMW was dealt with under her Government, when she was a Minister, with how we have dealt with this particular application about which she has been so critical.
Mr. Bernard Jenkin: What is the right hon. Gentleman going to do?
Mr. Byers: I know that the hon. Gentleman does not like to face the facts, but, on this occasion, he will have to, because I am going to go through them.
The hon. Member for Tiverton and Honiton would not answer my intervention about the number of occasions on which the Conservative Government had disclosed commercially confidential information. On no occasion was commercially confidential information revealed—not once. On how many occasions were discussions held with the European Commission before an offer was made to a company, and on how many occasions were the principles agreed in advance with the European Commission? Not on one occasion—that is the reality of the situation.
Today's serious announcement from BMW about the future made no reference to the grant aid being made available. No reference was made because for BMW it is not the big issue.
Let us consider two grant applications: the £152 million on which the hon. Lady has concentrated and the regional selective application for £22.5 million for the Hams Hall engine facility, which was also for Rover-BMW and was dealt with under the previous Conservative Government. On the £152 million grant that we intended to make available to Longbridge, the deal was struck with BMW on 23 June last year. We notified the European Commission on 20 August, which was just under two months later.
The application for Hams Hall was far smaller.
Mr. Nick Gibb: Will the Secretary of State give way?
Mr. Byers: I will give way in a second, but I want to go through the facts.

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The application for Hams Hall was a lot smaller—£22.5 million. The deal was struck by the Conservative Government on 15 November 1996, but it was notified by this Labour Government because the Conservatives did nothing about it while they were in office. It was not until 7 May 1997 that notification was given to the European Commission, and it was not until 22 January 1998 that approval was finally given. There were 14 months between the deal being struck and the grant being approved.
On Longbridge, the deal was made on 23 June 1998; on 20 August, notification was given to Europe; and Commissioner Monti agreed on 20 December that a decision would be taken within six months. Within a year, we would have learned the outcome—a year compared to the 14 months for the application for Hams Hall. We were moving far more quickly on the grant aid for Longbridge than had ever happened before.
Mr. John Bercow: The Secretary of State is certainly putting a brave face on his own crass ineptitude in this matter. Is he seeking to play down the significance of the grant aid package because he recognises what was stated in The Economist this week by an unnamed official? It reports that, when the Secretary of State spoke in Brussels on 7 March this year, the response from Mr. Monti was, as the unnamed official said, a polite two fingers.
Mr. Byers: I know that the hon. Gentleman has a remarkable memory, but I think that he will find that the 7 March reference was to a conversation that the Prime Minister was supposed to have had with the Commission. He did not speak to Commissioner Monti about this particular issue. I think that the hon. Gentleman will find that that is the case.
Commissioner Monti has agreed to put this application on a fast track, and that is exactly what he is doing. We have maintained a close relationship with BMW over this period and we have put suitable pressure on the European Commission. As a result, it is dealing with this application far more quickly than it has dealt with similar applications. That is the position.
Mr. Gibb: Will the right hon. Gentleman confirm again that the formal notification to the Commission took place in August, and not in December, because the Commission and all the press coverage indicate that the Commission received formal notification of the state aid in December?
Mr. Byers: That is wrong. The Commission was formally notified in August. On 22 December, the Commission decided to launch an investigation into whether the grant should be made available. Between August and December, we were providing the Commission with information, and in the light of that it decided that an investigation was needed. That is the policy that Commissioner Monti has adopted with every grant aid application for cars that has landed on his desk.
Mr. Geoffrey Robinson: I support my right hon. Friend in rebutting the Opposition's attempts to turn the matter into a party political issue. There is no question—[Interruption.]
Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman. He has been given the opportunity to intervene, and he should be heard.
Mr. Robinson: I am grateful, Mr. Deputy Speaker. There is no question but that the Government, and my right hon. Friend himself, have given the maximum support to a normal application for aid under the EU treaty. That is not an issue. The issue today for a major part of British industry and for those who can put this matter ahead of party political matters is surely that BMW has reneged on its undertaking to the Government and the British motor manufacturing industry and all its workers. It may be beyond the point of recall, but it still has to be stated that BMW came in, cherry picked what it wanted and walked out when things got too expensive. Although my right hon. Friend tried very hard, does not this hold the lesson for all of us that, even in a global economy, ownership is terribly important?
Mr. Byers: I am sure that my hon. Friend is correct. There is a real sense of disappointment at BMW's decision.
Serious issues have been raised about grant aid being dealt with slowly. A comparable case concerned Volkswagen's application for aid. It notified the Commission last July, a month before we notified the Commission about Longbridge. The Commission opened proceedings last November, as opposed to December for Longbridge. We have already had notification in the Official Journal of the EC of the Longbridge proceedings being started, whereas the Commission has not, as yet, even notified the Official Journal about the Volkswagen case. That clearly demonstrates that the Commission is dealing quickly with the Longbridge application.
On grant aid, the position is that commercial confidentiality has applied to every application for regional selective assistance under this Government and the previous Government. In no case has approval been given by the European Commission before a deal was struck with the company concerned. Longbridge is being dealt with under a fast-track procedure because of the pressure that the Government have put on the European Commission. That is the reality.
It is worth comparing that with the record of the Conservatives when Rover was privatised. Under the previous Administration, illegal aid was paid to Rover on privatisation, and it had to be repaid with interest. The Conservative Government had to repay a total of £84 million because they had got their aid procedures wrong. It was as simple as that. That is the Conservatives' record on securing European approval for aid.
Mr. John Butterfill: Will the right hon. Gentleman give way?
Mr. Byers: No, I will not. I have given way plenty of times. Members with a constituency interest want to take part in the debate—
Mr. Butterfill rose—
Mr. Deputy Speaker: Order. The Secretary of State has made it clear that he is not giving way.
Mr. Byers: I have given way on many issues to Conservative Members.
Mr. Butterfill: On a point of order, Mr. Deputy Speaker. I had to run out of the Chamber to get some important information about Alchemy—
Mr. Deputy Speaker: Order. The hon. Gentleman is an experienced Member of the House. He knows, even from those few words, that that is not a point of order for the Chair; it is a point of debate.
Mr. Byers: I am grateful, Mr. Deputy Speaker.
BMW has been content with the way in which we dealt with the state aid application. That was not mentioned once in the statement with regard to the reasons behind the decision that has been taken today. The matter is a red herring, which has been introduced by the Conservative party.
Mr. Butterfill rose—
Mr. Byers: I am not giving way. I want to make progress. There are important issues still to be addressed.
It would be wrong for people to think that because of the difficulties being experienced by BMW, the car industry in the United Kingdom is facing similar problems. Since the Government took office, more than £2.4 billion of new investment has been made in the UK car industry, creating 8,750 new jobs.
Earlier this month, Audi announced a £45 million investment in its engineering subsidiary, Cosworth Technology, to expand its sites at Northampton, Wellingborough and Worcester, doubling its work force as a result.
Increasing capital expenditure is going into the industry—£128 million since April last year. That capital expenditure has brought 1,700 new jobs and safeguarded 4,700 jobs, many of them in the west midlands.
Today's announcement by BMW is regrettable. It is a great disappointment. It creates uncertainty for workers at Rover, their suppliers and their families. We must ensure that those people have opportunities and are given some hope for the future.
Miss Kirkbride rose—
Mr. Byers: That is why, later tonight, I am meeting Alchemy Partners, the new owners of the Longbridge site. We need to find out from Alchemy what its proposals are with respect to Longbridge. We will be asking difficult questions, to which Alchemy will need to give answers.
Miss Kirkbride rose—
Mr. Byers: Today, our thoughts must be with the workers at Longbridge, their families and their community. In Government, we face many difficult
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questions, but we must never lose sight of the fact that those are human questions, the answers to which will affect individuals, their families and their communities.
Miss Kirkbride rose—
Mr. Byers: The Government will discharge their responsibilities to the people of Longbridge and the west midlands. We will do so, even though the Conservative party will criticise us and introduce diversions.
Miss Kirkbride: Will the Secretary of State give way?
Mr. Byers: We recognise that the interests of the workers of Longbridge and the west midlands will be served by the Government. We will not return to the days when tens of thousands of manufacturing jobs in the west midlands were lost because of the Conservative Government's policy. We will continue to campaign for Longbridge. We believe that it has a viable long-term future. We will not be diverted by the Opposition, and we will discharge our responsibilities.
5.8 pm
Dr. Vincent Cable: I start by echoing the Secretary of State's closing words. All our hearts should go out to the thousands of men and women, many of whom have highly specialised skills, who must be in a state of high anxiety. That is probably common ground among all of us.
I sincerely hope that those workers will be well looked after by their new employer, Alchemy. I hope that they fare a little better than the outstandingly able secretary who works in my constituency office. Until a year ago, she worked in an operation that was subject to an Alchemy buy-out. She was made redundant and now works for me. That may be an unfortunate personal example.
Mr. Butterfill: I am grateful to the hon. Gentleman. Is he aware—and is the Secretary of State aware, before he meets Alchemy tonight—that Alchemy's investment preferences, as stated in its entry in the "British Venture Capital Association Handbook", is a maximum investment of £50 million? Its average current investment size is £15 million. Its total funds invested to date at cost are £304 million, and the total funds that it manages or advises are £255 million. In the light of that, one must ask how Alchemy will manage an operation of the size of Longbridge.
Dr. Cable: I am sure that the hon. Gentleman is asking the right question. It is clear that there is no experience of volume car making. The enterprise for which my secretary worked was a German brewery. The synergy between that and the car industry is not immediately obvious.
The motion is rather innocuous. I doubt whether any of us is opposed to clarifying the future. The Opposition are probably attacking the wrong Minister for the wrong reasons. I read the comments of the Conservative spokesman, the hon. Member for Tiverton and Honiton (Mrs. Browning), in the press this morning. She said that

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today there would be cross-party demand to guarantee the future of Longbridge. I think that the hon. Lady knows—[Interruption.] She wants to clarify the matter.
Mrs. Browning: I do not know where the hon. Gentleman read that, but they are certainly not words that I said yesterday.
Dr. Cable: I am delighted to hear that. Perhaps the Financial Times should take down the hon. Lady's comments rather more carefully in future.
I shall move on. There is a crucial area of policy and it is not that the Government are responsible for guaranteeing the future of Longbridge. No Minister can do that. We are discussing a competitive industry and a company that is in a difficult set of circumstances. However, the Government can guarantee macro-economic stability, and that is what they should be doing. The Labour amendment accepts that implicitly. It begins by saying that the Government have created low inflation and low interest rates. The first point is certainly true. The second is true only if we disregard what is happening in the euro zone, where interest rates are 2 per cent. lower than in the UK. That is rather important in this context because Rover is competing with European car manufacturers, which have the benefit of these conditions.
The real problem is the exchange rate, which neither the Conservative spokesman nor the Secretary of State mentioned. It is a serious issue that cuts across party boundaries. The hon. Member for Ochil (Mr. O'Neill) is not in his place, but only yesterday the Select Committee on Trade and Industry, which he chairs, produced a devastating report about the impact that an appreciating exchange rate is having on manufacturing industry. That includes not only the car industry, but Harland and Wolf, which was in trouble earlier this week, the coal industry, the steel industry and agriculture. All those sectors have been affected in precisely the same way.
Mr. Ian Bruce: I am sure that the hon. Gentleman agrees that the problem is not an appreciating pound but a depreciating euro. It is clearly the job of the European central bank and our partners to do something about that.
Dr. Cable: That is entirely incorrect. I received a fax today from the Organisation for Economic Co-operation and Development, which has calculated what it calls, in economic jargon, the real effective exchange rate. That is, Britain's exchange rate against the exchange rates of the rest of the world, and not only the euro, allowing for changes in inflation. Since the low point in 1996, the pound has appreciated against allcomers. It has not done so against the dollar, but it has risen against currencies in general by more than 30 per cent. Since the Government came into office, it has appreciated by 15 per cent. That matters enormously in the context of the debate. BMW has argued that, for every pfennig by which the pound appreciates against the German currency and against the euro zone, it has been losing £8 million.
Mr. Geoffrey Robinson: Why is it that BMW, through the 1960s, the 1970s and the 1980s, lived with an
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appreciating deutschmark? The answer is that it increased productivity and quality. Why could it not have done that in the UK? It is a simple question.
Dr. Cable: The answer to the hon. Gentleman's question, which is a perfectly fair one, is that BMW has inherited a plant that, because of its low productivity and history, is exceptionally dependent on price competitiveness. Commodity production depends on price competitiveness. BMW says openly that one of the major sources of its losses is the exchange rate.
Mr. Robinson: BMW lived with that for three decades, from the 1960s to the 1980s. Indeed, it built up a company that was a glittering success, with productivity and quality to match it. All we asked is that it did that at Rover. It failed to do so because it did not put in the necessary effort.
Dr. Cable: I think that the right hon. Gentleman is failing entirely to grasp that the conditions in the car industry now are wholly different from those that applied in the 1960s, when there was rapid growth and a need for new investment in the industry. The crucial feature of the European car industry in which BMW and, on this side of the channel, Rover are having to compete is excess capacity. Price competitiveness is severe and losses are sustained because of the exchange rate. BMW has said that it is losing £200 million or £300 million because of the exchange rate. It is passing some of that back to its suppliers, many of whom have been forced to move on to euro contracts so that small manufacturers around the west midlands have absorbed the losses. That has been a key factor in BMW's decisions.
As I said in an earlier intervention, much of the optimism about proposed investments at Longbridge and in the Rover group was based on a wholly unreal assumption about the exchange rate. At some point, BMW would have to decide that conditions had changed and that it would have to respond to that.
Mr. Tony Baldry: Is not the hon. Gentleman concerned by the Government's complete inability to realise that the exchange rate and the strength of the pound constitute a problem? Not only the car industry, but all United Kingdom manufacturing industry and farming are haemorrhaging. If the Government talked to dairy farmers as often as they talked to the automotive industry, they would receive the same message.
Dr. Cable: The hon. Gentleman is right, but the problem also applies to the Conservative party. The Leader of the Opposition is travelling around the marketplaces of England and talking about poor, unfortunate Europeans who are suffering from a weak currency, apparently unaware that most of their manufacturers are laughing their way to the bank. That is a problem for both sides of the House. However, it is important to tackle that complex difficulty.
Macro-economic management, trying to achieve stable inflation and a lower exchange rate, is not easy. It is linked to our entry strategy for the euro. Until we get the policy right, not only the car industry, but many other traded-goods industries in agriculture and manufacturing will suffer the same torment. That is the main point, and why I say that the wrong Minister has been targeted.
Dr. Lynne Jones: Some Labour Members accept that the strength of sterling is a

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problem. However, it is mainly a problem in relation to the weakness of the euro. Will the hon. Gentleman explain his perception of the cause of the strength of sterling and how he would reduce it?
Dr. Cable: Statistics suggest that the difficulty is not only caused by the euro, although it constitutes a large part of the problem. We are considering a European market, and the euro-sterling exchange rate matters in that context. The hon. Lady asked what we could do about that. I had already begun to develop the argument—[Interruption.] The Liberal Democrats, perhaps uniquely, because we have a commitment to entering the euro zone, believe—
Mr. Geoffrey Robinson rose—
Dr. Cable: Let me finish the answer to the previous question. We have a commitment to the euro zone and we believe that it is the Government's responsibility to define a competitive exchange rate for the British economy at an early stage. They should do that by building on evidence from the International Monetary Fund and other organisations in recent months, and beginning to work towards their objective as quickly as possible through the Bank of England.
Mr. Robinson: If we accepted the hon. Gentleman's prescription for our problem—it is unique for a Labour Government to have an exchange rate that is too high—and we entered the euro and reduced our interest rates and our pound accordingly, the consequences for inflation would be catastrophic. Surely the hon. Gentleman appreciates that.
Dr. Cable: The Government missed the boat two years ago and our discussion is slightly academic. [Interruption.] The hon. Gentleman knows perfectly well that the consequences for inflation of a realistic exchange rate will have to be paced through monetary policy. The Government could and should do many other things to tackle inflation, for example, acting through the property market—stamp duty and property taxation—to deal with the inflated asset market. That supplementary policy should be adopted.
The hon. Member for Coventry, North-West (Mr. Robinson) seems to be totally blind to the fact that there is a real problem. I am not pretending for a minute that there is a simple solution, but there is a solution—or a complex of solutions—that would put the economy on a more stable basis in relation to its external exchange rate. However, simply pretending that the problem does not exist is myopic in the extreme and very damaging. He may think that that is a joke, but a large number of his constituents and many British manufacturers think that the Government have severely neglected their undertakings.
The Chancellor has told the House on many occasions that having a stable and competitive exchange rate is a Government commitment. It is not remotely competitive. If it is not competitive, why have they committed themselves to that policy objective? If they have no idea of how to realise it, why promulgate it as an aim?
Mr. Robinson: What would the hon. Gentleman do?
Dr. Cable: I have already explained to the hon. Gentleman what I would do about that.
Mr. Michael Howard: The hon. Gentleman is making an extremely interesting point,
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but does he recognise that the inescapable inference is that early entry to the euro, which is the policy advocated by his party and which would inevitably build in permanently the disadvantage that we are suffering from the present exchange rate, would be a disaster for this country?
Dr. Cable: The early exchange rate with the euro would have been based on the average of the two years previous to 1997, which would have been relatively competitive. We now have a problem. We have to navigate our way back to that point, but it will be some years before the British exchange rate reaches a level at which we can once again contemplate entry. That is the challenge that we have to face. Labour Members who pretend that that is not an issue and Conservatives who believe that we can have a floating exchange rate against the euro zone indefinitely are dodging a fundamental issue of national importance.
Dr. Evan Harris: Will my hon. Friend give way?
Dr. Cable: I am happy to debate this matter indefinitely and my hon. Friend wants to do so as well.
Dr. Harris: Will my hon. Friend accept from me that my constituents who work at the Oxford Cowley plant feel tremendous solidarity with, and concern for, the people who work at Longbridge? They will be anxious that the Conservative party wants to play politics with the exchange rate and that Ministers have refused to answer the point about the effect of the high exchange rate consequent on their policy of appeasing the tabloid press over the euro, rather than putting the interests of British manufacturing first.
Dr. Cable: That is an effective coda to this part of the debate and I shall leave it at that. May I move on to two areas that are specific responsibilities of the Department of Trade and Industry?
Mr. Peter Snape: Will the hon. Gentleman give way before he moves on?
Dr. Cable: Happily.
Mr. Snape: Does the hon. Gentleman accept that, for 30 years until the mid-1990s, Britain's exchange rate—compared with those of virtually the rest of the world—continued to decline, yet this country's manufacturing industry also sadly continued to decline? He is long on problems, like most of his party. Has he any solutions?
Dr. Cable: The hon. Gentleman has totally missed the point about history. Of course the exchange rate declined, but British inflation was relatively high. The real exchange rate, which is what matters for competitiveness, was uncompetitive for much of that time, as he knows perfectly well.
Let me move on to the two issues that concern the DTI. One is the European Commission. The Government have argued that the apparent or prospective failure of the bid was not central to BMW's decision, but there are important issues here. This country has been remarkably conceited about European policy on state aids. There is a

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widespread belief, which has been echoed in interventions from around the Chamber, that our manufacturers observe the rules and the rest of the European Union does not. Over the years, Governments of both parties have clamoured for a state aids regime that is honest and tough, and a Commissioner who reflects those values. In this context, it is abundantly clear that Mr. Monti is both and he is exercising his toughness by casting a beady eye over the application.
I draw that point out again because in an Adjournment debate two months ago I was censured by a Minister for questioning the validity of the argument about the Hungarian migration. I was told that that was scaremongering and a dangerous line of argument that would imperil this crucial state aid application. We need to register clearly that whatever comes out of this, the European Commission has handled the episode entirely correctly and in the way that any British Government would expect of a commission concerned with stamping out damaging state aids.
The hon. Member for Tiverton and Honiton raised, in a partially correct way, the issue of DTI responsibility and the relationship with the Competition Commission inquiry into car prices. She was correct that there is a problem of joined-up government. The Government, for good reasons, embarked on an exercise to protect consumers. It is becoming clearer, as time passes and prices are more transparent, that car prices in Britain are significantly higher than in Europe, which is wrong, and that monopoly profit has been earned somewhere along the chain.
It may or may not be true that that depressed car sales last year. It is true that, when a competitive market for cars is introduced, a substantial profit margin will be taken from somewhere else. Some of that profit margin will be taken from many British companies that purchase company vehicles on the cheap, but a large part will be taken from the profit margins of the car industry, which has benefited from that regime.
I do not criticise the Government for embarking on that exercise. They were absolutely right to place emphasis on consumer protection. However, they should have been aware that the inquiry would significantly undermine the profit forecasts of many British manufacturers, including Rover.
Our primary concern should be for people in the west midlands, whose future is placed in peril by imminent decisions. I hope that we will quickly move on from the debate about who lost Longbridge to a more forward-looking debate about how we provide structural help to a region that has become overdependent—as Clydeside and the coal-mining areas did before—on an industry whose prospects in the current European economic environment are not good.
5.27 pm
Mr. Richard Burden: Yesterday in Prime Minister's questions, I said that the entire midlands area was holding its breath, waiting on the BMW board meeting that was to take place today. We now know the result. The responsibility for what looks like befalling Longbridge and other large parts of the Rover group is that of BMW. The day after the announcement in 1994 about BMW taking over Rover,
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I met its then chairman, Bernd Pischetsrieder. He assured me that BMW was in for the long haul, knew the investment requirements of Rover and would make the company a success. I believe that Bernd Pischetsrieder was being straight with me but I know also that, from that day on, every time there was speculation about the future of Rover and BMW not being in it for the long haul, BMW assured me personally, the Government and—most important of all—the people who worked for Rover and its suppliers that BMW was in for the long haul and had a long-term commitment to Rover and to Longbridge in particular.
We know that BMW faced difficulties, but in negotiations over two years, it struck me that there were three essential elements in Rover having a bright future—and BMW did not disagree. First, workers at Longbridge and the other Rover plants needed to change their working practices and adopt greater flexibility. The workers delivered ground-breaking agreements on working practices. They have done everything that BMW asked of them and more.
Secondly, the whole process had to receive the backing of government at all levels in the UK. That has been delivered as well. Local partners—from Birmingham city council to the chamber of commerce and the training and enterprise council—got behind Longbridge and put together a package negotiated with BMW to deliver their side of the bargain. Despite what has been said by Opposition Members, my right hon. Friend the Secretary of State has behaved impeccably and has shown commitment on behalf of the Government by delivering the f152 million package and showing faith in the Rover group and BMW.
The third element was BMW itself. It is true that, in the first years of its involvement, it made a major investment in the Rover Group: about £500 million a year. It is also true that BMW committed itself to a further £1.5 billion of investment at the Longbridge plant. That commitment, however, has not been honoured, and the responsibility lies with BMW and with BMW alone.
I do not think that we should allow any evasion, and I was disappointed that Conservative Members tried to shift the responsibility. Let me take up some of the issues that they raised. First, let me deal with the European Commission, and the reference to the grant.
It is regrettable that the European Commission takes such time over applications—I have a less sanguine view in that regard than the hon. Member for Twickenham (Dr. Cable)—although it must be said that it has taken less time over this application than over others. We should remember, however, that the European Commission agreed and announced in December that it would embark on a formal inquiry. At that stage, we wanted to know what time scales were involved. There was speculation; it could take up to 18 months. The Commission said that it would take up to six months. That was clearly regrettable, but there was no suggestion then, and there is no suggestion now, that it constituted a fundamental barrier to BMW's continuing its investment and standing by Longbridge. In implying something else, Conservative Members are being disingenuous, or else they have lost the plot in regard to what is going on with BMW and Longbridge.
The strength of sterling was also raised. Anyone who represents a manufacturing area—anyone who knows companies involved in exports, particularly to Europe—

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is aware of the difficulty that that is causing to our manufacturers, but it is no excuse for what BMW has done. The losses announced at the BMW board meeting were not a bolt from the blue; they had been predicted for months.
If BMW or anyone else argues that the strength of sterling was the make or break element for BMW, it should be remembered that BMW prides itself on being a pan-European company. That means that it produces in Germany as well as in the United Kingdom, and that it benefits from the weakness of the euro when importing its vehicles to the United Kingdom and when exporting them to the United States. Perhaps BMW could have been more aggressive and dynamic in exporting classic cars such as the Rover 75 to the United States: if it had done that earlier, the cars would have sold very well.
It grieves me to say this, because I have been supportive of BMW for years, but it has a responsibility for what has happened, and that needs to be recorded.
Mr. Geoffrey Robinson: Does my hon. Friend agree that production of cars in the United Kingdom is some 40 per cent. lower than it is in Germany? Does that not more than negate the exchange-rate argument?
Mr. Burden: My hon. Friend makes a good point.
I hoped that we would be able to secure a degree of cross-party agreement on the important issue of how we could get behind Longbridge and plan for the future, but if Conservative Members are going to criticise the way in which my right hon. Friend the Secretary of State has handled the grant application, or the way in which he has handled the matter overall, they will be sitting in some rather fragile glass houses. It was they who sold off the Rover Group to British Aerospace for a song. It was they who, when the company had an asset base worth in excess of £250 million, wrote off debts totalling £800 million. The company was declaring a pre-tax profit of £65 million, and how much did they sell it for? They sold it for £150 million. That was crass incompetence and against European rules; the previous Government were found out about that.
Mr. Butterfill: Were the previous Government trodden down in a rush by alternative buyers prepared to pay more?
Mr. Burden: The hon. Gentleman would perhaps do well to read—I hope that it is still in print because it is a classic document—the National Audit Office report entitled "Department of Trade and Industry sale of Rover Group plc to British Aerospace plc". One of the issues mentioned in the report is that the previous Government went straight to British Aerospace and did not look around for other potential partners.
The impact of today's decisions is real enough. As the Secretary of State said, the impact is not on a theoretical plant, or theoretical people, but on real people and real livelihoods in the west midlands and elsewhere. It has been estimated that, just in the midlands, about 50,000 jobs depend on the Longbridge plant. Birmingham city council estimates that, if Longbridge were to close, the total cost to the public purse would be about £317 million. If there were a major slimming down of Longbridge, the cost would be £178 million. Total jobs lost from a
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complete closure in the Birmingham area would be 19,370 and from a slimming down 10,850, so we are dealing with a very serious issue for the west midlands and for motor manufacturing in this country as a whole.
Today, we have heard the news that Alchemy Partners is in negotiations with BMW and that BMW has said that it wishes to dispose of the majority of Rover Cars to Alchemy. We do not know much about Alchemy at this stage, but we must say clearly that, if it ended up as an exercise in asset-stripping, that would not be acceptable to my constituents or to the west midlands as a whole.
Statements have been coming out of Alchemy today about its launch of the MG car company. It says that it wants to retain motor manufacturing at Longbridge and that it is committed to motor manufacturing in the west midlands. I am pleased that it is saying that, but, as the Secretary of State said, we must ask it some serious questions.
We have to examine exactly what model range Alchemy anticipates producing and how all that will be financed. We need to examine whether other partners are involved. Production and design of new models involve considerable financial firepower. If Alchemy is to take over Rover Cars, we have to be assured about what it will do with it and of its commitment.
I hope that my fears about Alchemy are unfounded. If it is committed to the west midlands and can bring the firepower to bear not just to save Longbridge, but to ensure that the commitment of the work force to the plant continues and that the potential of the plant is realised, no one will be happier than me. For that to happen, it will need a critical mass behind it. It has to explain how it will put that critical mass together.
There is a longer-term issue that goes well beyond Longbridge and the Rover Group. Throughout Europe and, indeed, elsewhere, there is over-capacity in the motor industry. We have known about that for some time. The consequences are beginning to be felt. We need a long-term strategy for the motor industry. We know of the devastation that was inflicted on coalfield communities as a result of the acts of industrial vandalism by the previous Government. There have been integrated strategies to regenerate those areas. We need similar—in fact, greater—creativity in our industrial areas.
We need to look 10 and 20 years hence, think about where the motor industry and manufacturing will be, and get ahead of the game in working with components' suppliers and manufacturers, so that we can decide the strategies necessary to make the best use of our great powers of innovation and great industrial base and to meet the challenges of the future.
Some examples are available, such as the British motor sport industry. Although that is a hobby-horse of mine, it is a relevant example. Everyone knows about motor sport, but not many people know about the multi-million pound motor sport industry. The industry is essentially composed of quite small firms, but they are clustered, bringing together communities of knowledge that, although highly competitive, are highly co-operative. The arrangement has been a success story not only for the industry, but for Britain.
I do not claim that the lessons of the motor sport industry can simply be picked up and dropped into mainstream motor manufacturing—they cannot—but some lessons can be learned from it. I hope—I am sure

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that it will happen—that my right hon. Friends and other Ministers will get together with partners in the regions, such as the regional development agencies and local authorities, to implement a strategy to ensure not only that Longbridge survives next year and the year after, but that British motor manufacturing lasts well into this century and beyond. It has the potential to do so.
Although it is no excuse for BMW to blame the exchange rate for its decision today—the responsibility for the decision is with BMW, and BMW alone—the exchange rate is an issue for manufacturing industry. I do not dispute the Bank of England's right to set interest rates. As far as I know, under their current policy, even Conservative Members do not dispute the Bank of England's right to set interest rates—[Interruption.]s They have done another U-turn. I cannot keep up with their policy shifts.
The Bank has a responsibility to consider the long-term health and stability of the British economy, but a healthy manufacturing base is both a short-term issue and a long-term issue. Although the Bank has the right to set interest rates, it perhaps needs to examine more closely its responsibility for ensuring the long-term health of manufacturing industry.
The lessons of the past 24 hours will be remembered in the west midlands for a long time to come. Now, however, is the time for us not only to lay the responsibility at BMW's door, but to move on—to work with Alchemy to ensure that it can deliver what it says it can deliver, and to ensure that we develop and implement the strategies that can revive our industrial areas and allow British motor manufacturing to achieve its potential.
5.43 pm
Sir Norman Fowler: I should like to speak briefly, like the hon. Member for Birmingham, Northfield (Mr. Burden), and I shall come back to one or two of the points that he made.
The first thing to be said is that this is potentially a vast tragedy. The decisions now being taken are vastly important to the west midlands and to constituencies such as mine. Literally thousands of jobs are at stake, and I approach the debate in that spirit.
Although many newspapers lovingly remember "Red Robbo" and the days of industrial anarchy at Longbridge, those days are long over. They were 30 years ago. It is as absurd to judge Rover in that light as it would be to judge national newspapers on the basis of the old Spanish practices that used to go on there. In Rover, there has been a transformation of industrial relations. The vast majority of the work force are dedicated men and women. As someone who will not be standing at the next general election, I say that there are few better people in this country than those living and working in the midlands.
Over the years, one of the things that we have suffered from is the way in which some London-based commentators and, sometimes, politicians have written off Rover and the midlands. There has been all too little recognition of the recovery efforts that have been made and little recognition that, by 1994, the company was progressing well, particularly in its partnership with Honda. That partnership may well have offered the best
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chance of success. Honda was certainly deeply offended by the manner in which the partnership was broken up and the sale to BMW took place, but that is history.
When BMW took over Rover, I am sure that it wanted to develop the whole company. I do not subscribe to the theory that it was always interested just in taking Land Rover. BMW deserves credit for its management effort and the vast resources that it has invested. However, I find it strange that in such a professional organisation, some very strange steps have been taken in the past 12 months. No one doubted that the launch of the Rover 75 was vital to the success of the company. I cannot understand why the launch ceremony was accompanied by a public lecture on poor productivity in the company by the then chairman. That overshadowed the launch, which is exactly what should not have happened.
A climate of uncertainty has plagued Rover over the years. It does not need a marketing genius to work out that if there is uncertainty over the future of a company, it will have an effect on the sales and the products. That is what has happened.
The most amazing U-turn is now being executed. Only a few weeks ago, the new chairman of BMW was talking of his commitment to Rover and its development. I reiterate the point made by the hon. Member for Northfield—that the people of the west midlands took that commitment at face value. The Government amendment refers to the major losses that BMW has suffered and the great pressure put on the company. I agree that it has suffered heavy losses, but it always said that that would be the case. There is no surprise in that. The strategy was to move through that period and bring the company to profitability. The Government should not be too timid in pointing out that the strategy has altered out of all recognition.
However, I have some sympathy for BMW. It offered to invest £1.5 billion in modernising Longbridge. The Government offered another £150 million, doubtless after some negotiation. I am not sure that the Secretary of State can say that that £150 million was of no particular relevance and not a crucial amount. On 23 July, when announcing the agreement to provide £152 million of aid, he said:
This is great news for Longbridge, the West Midlands and the country as a whole. The future is an exciting one and I look forward to Longbridge taking on its competitors, winning and becoming a world leader.
We cannot renege on that important decision.
My concern relates to the process of examination. The hon. Member for Northfield made the point. There has been a nine-month delay and a six-month delay. The Secretary of State said on the radio this morning that six months is speedy—I think that I quote him correctly—by European Commission standards. He may well be right, but that prompts the question of whether it should be the case.
It is unacceptable that such an investigation at such a crucial moment should take so much time. I do not agree with the Secretary of State's contention that it was not a factor in the BMW decision simply because it was not mentioned in the press release. That is not my information. I fear and suspect that it had a disproportionate impact on the change of strategy in Munich. BMW saw a company sustaining losses of £700 million a year, but it was prepared to invest a further

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£1.5 billion. The company saw that £150 million was offered by the British Government, but that the Commission could not make up its mind in six months—or, to be frank, much longer. That does not seem a particularly sound process by which these matters are decided.
I do not take an extreme view on Europe, but the Government—and, perhaps, everyone—should take note that middle England is becoming more and more disillusioned with the bureaucracy, delay and regulation that seem to characterise the EU as it is presently constituted.
We can all seek to diagnose what has gone wrong, and acres of newsprint have been devoted to that this morning. However, the real issue is what now can be done. Part of Rover, self-evidently, has a future inside BMW. We are unclear about where Land Rover will go or what its parent will be, but we can foresee that it will have a good future, wherever that may be. We may want to come back to debate the details of that.
The press today has written off the prospects of the other part of Rover—the car-making part, which makes the Rover 75 and the other Rover vehicles and which now, we understand, includes MG. I suggest that that should not necessarily be written off, and that there could be a future—although there is a big pit to climb out of. However, it is not mission impossible, and I shall draw an analogy to prove it.
In the mid-1980s, the van business of Leyland was to be sold off to General Motors; one or two colleagues might remember our debates then. The DTI argued at the time that this was the only course open to be taken with the company, although the plan envisaged the closure of the Birmingham plant. One or two of us did not agree with that diagnosis and the sale did not take place. The company was given its management independence; the company survives, and it prospers.
I cannot say whether that will be the outcome on this occasion, but I plead not for more and more money from the Treasury, but for public support and media understanding for any efforts that are made to turn the car-making part into a viable business. That is what we want. We are good in this country at dismissing effort and writing obituaries. We need support for any efforts that are made to achieve recovery.
5.52 pm
Mr. Steve McCabe: I take no pleasure in participating in this debate; this is a sad day for the west midlands. We have heard that if Longbridge closes or substantially cuts back, that would cost about 9,000 jobs, and the multiplier effect might result in a further 40,000 jobs being lost across the west midlands. Some 20,000 of those will be in Birmingham, many in my constituency. We could see unemployment in Birmingham rising to 15 per cent. if the worst scenario is played out. Over 2,000 companies in the west midlands in the automotive supply chain are vulnerable to a substantial shutdown at Longbridge, and it is estimated that they could lose about 30 per cent. of their business as a result.
It is true that Birmingham has been able to diversify following the earlier job shocks of the 1980s recessions, and that financial, professional and business services are rapidly emerging as Birmingham's main earners. None
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the less, Longbridge continues to play a vital role in the life and livelihoods of Birmingham people. I agree with the policy director of the Birmingham chamber of commerce, who said only yesterday that
it could be a huge disaster for the region, particularly if it goes to a buyer from outside the automotive industry.
Consequently, like many other hon. Members, I think that we need urgent information about Alchemy Partners. We have had some information from the hon. Member for Bournemouth, West (Mr. Butterfill), but that only added to my worries. We need to know what the company's plans are and whether another car company is waiting in the wings.
We also need to know whether Alchemy Partners intends to run Rover production at about 250,000 units, as suggested in today's Financial Times, which is about a quarter of present capacity. I notice that Jon Moulton is quoted as saying that he looks to exit as quickly as possible, within at least three years. That is hardly an encouraging signal for the workers at Longbridge. After all, he is the man who sacked 120,000 workers within days of taking over Parker Pens.
Mr. Ian Bruce: Is it not strange that BMW effectively gave 48 hours' notice of its intention to get rid of the plants? Does the hon. Gentleman think that BMW wants Rover cars to be in competition with it in the future, or does it simply want a fire sale to close Rover down as quickly as possible?
Mr. McCabe: None of BMW's recent announcements have been well timed or helpful. Since BMW's acquisition of Rover, there have been persistent rumours about BMW's real intentions, and it has specifically been suggested that it wanted to get its hands on the Land Rover four-wheel drive technology and the other profitable parts of the company. I wanted to believe that BMW was telling the truth when it denied those rumours and I initially interpreted its investment at Longbridge and the development of the new Mini assembly, as well as the promise of £1.7 billion of investment, as evidence that it was acting in good faith. However, it appears today that that trust was misplaced.
I do not deny that BMW has experienced problems at Longbridge. It is an old plant, as everybody acknowledges. However, the treatment of the people who work for Rover has been a disgrace. The workers have given all that they can. They accepted BMW's new and much less favourable working conditions, they have come to terms with huge job losses and they have put their faith in the promises and assurances of the BMW executives. However, the workers have been let down.
Unfortunately, the recent experience is not new. It is part of a much longer trend for which the Opposition have to take some of the responsibility. In 1988, when they were in Government, they sold Rover to British Aerospace for £150 million, in clear breach of EU rules. That was just the start of what has proved to be a succession of shoddy deals at the workers' expense, especially those at Longbridge. Although BAe was later forced to pay back a large part of the sweeteners that it received, it still made a profit of £400 million on a company that it had held on to for only five years.
In fact, as part of the initial giveaway by the Conservative Government, BAe was not allowed to relinquish control of Rover for five years on pain of

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incurring financial penalties. BAe waited five years and six months before selling Rover to BMW, and it is clear that BAe never had any commitment to Rover. The Conservative Government must have known that, even when they were going out of their way to flog the company on the cheap. [Interruption.] I am not quite sure what the hon. Member for South Dorset (Mr. Bruce) said, but the point is that Rover was flogged on the cheap in breach of European rules. As my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) said, if one reads the NAO report, the criticisms are clear. Indeed, the report from the Select Committee on Trade and Industry contains damning criticisms. There is no doubt about what was intended.
Mr. Ian Bruce: The hon. Gentleman did not hear what I said, which was that the Secretary of State has just given £500 million to British Aerospace, the company that the hon. Gentleman has been criticising. Is he saying the right hon. Gentleman has got that wrong as well?
Mr. McCabe: The problem with the hon. Gentleman's position is that my right hon. Friend made money available as part of a negotiated deal. I am talking about a deal on the cheap that was in breach of European rules, over which the previous Government were criticised by the National Audit Office and by a Select Committee of this House. The two sets of circumstances are pretty different.
The matter did not end with the fiasco of the sale to British Aerospace. When that company then decided to offload Rover to BMW, the right hon. Member for Henley (Mr. Heseltine), the then President of the Board of Trade, said that it was part of a strategy to help British industry win. Some strategy, some win: I do not think that people at Longbridge feel that they have won today.
There have been several comments about BMW's suggestion that the problems stem from the strength of the pound. Yet that ignores the facts—that BMW's sales in the UK benefit from the strong pound, that the company has already screwed down its UK suppliers to the tightest possible margins, and that it has even proposed paying them in euros. I therefore do not know how much weight should be placed on that argument.
The strength of the pound has contributed to Rover's problems, but UK car output last year reached its highest level for 27 years. That was largely due to increased export sales, with two out of three cars going to the overseas market. During the same period, Rover car sales fell by nearly 25 per cent. That must in part be due, as the right hon. Member for Sutton Coldfield (Sir N. Fowler) said, to the persistent sabotaging of the product by BMW's untimely speculations.
Sadly, BMW is pulling the plug at the very time when sales have stabilised and even begun to rise, especially in mainland Europe. It is difficult to understand the company's strategy.
The Opposition have tried to blame the Government for the recent turn of events. Perhaps they should reflect on the fact that the previous Conservative Government initiated the chain of events that have finally done for Rover. Moreover, while the Government were negotiating grant aid for BMW last year, the former shadow trade and
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industry spokesman, the right hon. Member for Wokingham (Mr. Redwood), who is no longer present, opposed the Government's offer of grant aid to Longbridge. He is on record as saying that he is opposed to large public investment to help regions hit by job losses. I think that the people in Longbridge know whom they would rather have to depend on in a crisis such as this.
I have some sympathy for BMW in one respect—I agree with the right hon. Member for Sutton Coldfield about this—and that is with regard to the actions of the European Commission in dealing with the grant inquiries. I do not accept that the European Commission's investigation was vital to BMW's announcement, but we are entitled to wonder what its true purpose was.
Commissioner Monti said originally that the Commission merely wanted to look at the proposals. It may be that BMW always intended to undertake the asset stripping in which it has now indulged, and that the company's earlier pronouncements were merely a blind. We shall probably never know, but the Commission's actions have not exactly helped matters.
I want to know what Commissioner Monti really meant when he talked about transparency. Was he simply ensuring that, having announced investigations into two very different grant proposals involving Volkswagen and Fiat, Britain's proposals also had to be investigated so as not to upset other member states? I think that it is reasonable to know what exactly was intended. As others have said, the Commission has not exactly endeared itself to the Longbridge work force by its actions.
We are left to deal with the legacy that BMW has bequeathed. We need to know urgently what Alchemy's real intentions are. We need to know exactly what BMW has agreed, and if we can trust its word this time. Above all, we must do all that we can to rescue the economy of the west midlands and the livelihood of its people, and to secure a strategy for long-term, modern automotive production in the west midlands, particularly in fields such as the telematics industry.
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. My understanding is that the wind-up speeches will begin at 20 minutes to the hour. It will therefore probably be possible to have two Back-Bench speeches on either side if hon. Members speak for less than 10 minutes apiece.
6.6 pm
Miss Julie Kirkbride: I begin by paying tribute to my Front-Bench colleagues, who rightly changed the subject of today's Supply day debate so that we might discuss the serious events at Rover. I doubt whether Ministers would have been prepared to make a statement tonight. We are not used to Ministers being forthcoming about important information that affects our constituents. Therefore, I want to say how right I think it is that the Conservative party believed it appropriate to discuss today's extremely important announcement.
It is a shame that the Secretary of State has left the Chamber because, although I have a personal regard for the right hon. Gentleman, I thought it discourteous of him not to accept an intervention from someone whose constituency includes part of the Longbridge plant—the plant's location is shared between my constituency and that of the hon. Member for Birmingham, Northfield (Mr. Burden). I would not have expected such a discourtesy from the right hon. Gentleman.

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Perhaps the Minister who is replying to the debate will pay due heed to what I wanted to ask the Secretary of State. I listened very carefully to BMW's announcement today and the right hon. Gentleman's interpretation of it. His remarks contained no guarantees about the level of employment that would continue at the Longbridge factory. There was not even a guarantee that the Longbridge factory would continue to produce cars. In fact, when the right hon. Gentleman said that he would be speaking to Alchemy this evening about the plant's prospects and future, he said that cars "should" continue to be produced there. I find that a worrying use of language.
I would be grateful if the Minister could shed any light on what guarantees there are for employment at the factory. As the hon. Member for Northfield and others have said, many people are facing the potential loss of their job at the factory. [Interruption.] I am not taking any interventions, because of the discourtesy shown to me and also because of the limit on time.
I want to talk about the 9,000 jobs that are at stake—we hope that they will not be lost—as well as the wider midlands perspective that takes in 50,000 jobs, and the suppliers that face the loss of their contracts. There is no doubt that, despite the barracking of Labour Members, this is a very sad day for the midlands. It is a sad day for my constituents and for many others who have had a rollercoaster ride over the future of the Longbridge factory ever since I became the local Member of Parliament in 1997, and before that. They must have spent the night worrying about today's announcement, and I feel sorry for them. Despite today's announcement, their worries will not have ceased, because we simply do not know what the future is, irrespective of what has been announced. We know some details, including, sadly, the fact that Longbridge will lose the exciting prospect of production of the Mini to Cowley.
Alchemy, and, one presumes, Longbridge, will continue to make the MG. That is exciting, and a piece of good news, but anyone who knows anything about car production knows that the MG is an exciting niche car, not a mass-produced one, which makes it unlikely that its production at Longbridge, or anywhere else, would employ the number of people currently employed at Longbridge.
If I understood the statement correctly, the R30—the smaller version of the Rover 75, which will continue on licence at Cowley—which would have succeeded the soon-to-be outdated Rovers 25 and 35, will not be sold to Alchemy along with the Rover name. BMW will produce it in some form somewhere else under a name we do not know. But that car is extremely important to the Rover range's place in the volume car market. The fact that the brand does not go with the sale worries me.
It is hard not to be gloomy. Indeed, my gloom is shared by the unions—an unlikely alliance, perhaps—and every midlands Member must be feeling the gloom at present. The Longbridge work force do not deserve it. They had a reputation in the 1970s and before for being somewhat difficult, but they are experienced and their willingness to accept changes in practices in the past few years has been exemplary. They have done all they can to show good faith in the production of cars at Longbridge and have tried to maintain their jobs by showing the flexibility required of a modern car production factory. After all that willingness to change and to accept the new world of car
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manufacturing, today's announcement is a kick in the teeth. Their good will has been resoundingly rejected by the BMW board, and we wait to see what Alchemy will bring.
I was extremely alarmed when my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) described Alchemy's investment profile. We all know what venture capitalists are. They go in and out on property speculations of different sorts.
Mr. Butterfill indicated dissent.
Miss Kirkbride: Perhaps my words are a little over-anxious.
Mr. Peter Luff: Venture capitalists can be like that.
Miss Kirkbride: My hon. Friend the Member for Mid-Worcestershire (Mr. Luff) comes to my rescue. Venture capitalists can be like that.
Clearly, Alchemy's track record to date makes it hard to see how it can take on responsibility for Longbridge. Earlier this week, the plant was considering investment of £1.7 billion in new car production facilities for the smaller range of the Rover 75. It is hard to see how Alchemy can begin to harness the optimism that we had just a few days ago. The record is worrying and we must wait for more information.
I wanted to put those remarks on the record. We must consider the feelings and thoughts of the work force and their families. How will they pay their mortgages if things go pear-shaped at the plant?
Political flak has come at us from Labour Members, but it was outrageous for the hon. Member for Birmingham, Hall Green (Mr. McCabe) to claim that all the problems arose from decisions taken by the previous Conservative Government. His statement has no credibility. The problem is huge; many people have been involved. There are demand difficulties in the international car market; we realise that. Larger issues are at stake.
However, Labour Members, including the hon. Member for Northfield—who has left the Chamber—must accept that at least a scintilla of blame attaches to the Government. BMW has had to contend with the exchange rate during the past few years. Any Member who represents a midlands constituency, or has dealings with BMW, is only too aware that the company regards the exchange rate as one of its principal problems.
We also know that Rover is not the only company to suffer—although it seems to have taken the fall. There is a problem with the exchange rate, and there have been problems with the grant in aid and with the European investigation. Those matters have been raised by other hon. Members, so it would not be fair to go into them further.
Labour Members must grow up. They must realise that the situation is difficult, but that they have responsibility for their actions—it is not always the fault of somebody else. It would be nice to hear a little more reality in the subsequent contributions of Labour Members.
6.16 pm
Mr. Terry Davis: Unlike the hon. Member for Bromsgrove (Miss Kirkbride), I not only represent people who work at Land Rover and Longbridge, but I drive a Rover car.
What was significant about the speech made by the hon. Member for Tiverton and Honiton (Mrs. Browning) was not her attempt to blame the Government for the crisis at Rover, but what she did not say. Only a few years ago, Conservative Members would have blamed all the troubles at the Rover group on the people who work there. It is significant that we have not heard that today. Indeed, the right hon. Member for Sutton Coldfield (Sir N. Fowler) paid tribute to the people who work for Rover. For the first time in my political life, I agree with him. He is right; the people who work at Rover have transformed industrial relations there. The present crisis at Rover cannot be blamed on those who produce the cars.
Fifteen years ago, the Rover group was making a profit. What has gone wrong? My hon. Friends are right to criticise the sale of Rover to British Aerospace at a giveaway price, and to draw attention to reports from the National Audit Office, the Select Committee on Trade and Industry and the Public Accounts Committee. However, those reports were produced several years ago.
It is true that British Aerospace treated the Rover group as a milk cow to get over its short-term cash-flow problem, but that was also some years ago. Then, British Aerospace sold the Rover group and split it up. Jaguar was sold to one company. The van company, mentioned by the right hon. Member for Sutton Coldfield, and Leyland Trucks were sold to DAF. We were told that was a good thing. The rest of the group was sold in a package to BMW. What happened then? DAF pulled the plug on the van factory and the truck factory. The van factory has been revived—thanks to all-party support and with help from the previous Tory Government during their dying days. That company is now a success, but when it was owned by DAF, the decisions taken in the boardroom were to protect jobs in the Netherlands at the expense of jobs in Birmingham. That was inevitable because ownership had been transferred abroad. The same thing is now happening at Longbridge.
My hon. Friends and Opposition Members are correct to point out that the exchange rate is part of the problem. It is not only in the motor industry that jobs are disappearing; there have been tremendous job losses at the Dunlop factory in Birmingham—attributed by the owners directly to the exchange rate, resulting in the transfer of much tyre production to Germany.
It is not as simple as that, however, because there is another problem. The exchange rate influences our exports, but it does not account for the slump in Rover's sales in this country. The big problem affecting the Rover group is sales and marketing. I wish my right hon. Friend the Secretary of State well at his discussions with representatives of Alchemy tonight, but the big question that he should put to the new owners of Long bridge is not how they will produce more cars, but how they will sell more of them. That is a management responsibility, and that is the question that should be put to the new managers who will take over the Longbridge factory.
6.20 pm
Mr. John Butterfill: I shall be very brief, but I want to clarify some of the remarks that I made about Alchemy in an intervention on the hon. Member for Twickenham (Dr. Cable).
Alchemy is certainly smaller than the company that one would expect to take over a plant such as Longbridge. The deal that it is doing for Longbridge dwarfs anything that it has taken on to date. However, I do not want it to be thought that I was in way criticising the company. It has a good reputation and has been involved in several successful investments. According to the British Venture Capital Association's handbook, it has invested in
ESP, Goldsmiths plc, Instem plc, Paramount Hotels, Ushers of Trowbridge plc.
The hon. Member for Twickenham referred, I think, to the final company in that list.
Alchemy specialises in rescues, turnarounds and management buy outs, so it is possible that it is in serious discussions with some of the senior management at Longbridge. However, it is equally true that it does not of itself possess the resources that would take a plant, such as Longbridge, forward for the future. When the Secretary of State meets John Moulton of Alchemy Partners this evening—I am sorry that the right hon. Gentleman is not here now—I hope that he will, as a priority, discuss exactly how Alchemy intends to obtain the long-term funds to secure the future of the company.
We all hope that the deal with Alchemy is successful and that it will give the workers at Longbridge the success that they deserve following all the changes in which they have participated in recent years. However, it is important that we receive a little more detail on how that will be achieved. There is hope, because one of the main sources of funding for Alchemy's existing investments is United States and middle east investors. Perhaps, the company has a secure source of long-term funding, but it is a priority for the Secretary of State to establish that fact this evening if possible.
6.23 pm
Mr. Geoffrey Robinson: Possibly, this has been a more significant debate than the Opposition anticipated when they tabled their motion. In seeking to gain party political advantage from it, they have unwittingly raised a major issue about British industry and British manufacturing industry in particular. They would do well to address that issue in opposition, and they will have plenty of time to do that.
The history of the motor industry and other manufacturing industries in this country is one of continual decline. Under successive Governments and successive managements, we have seen nothing but the United Kingdom losing out to European and international manufacturers in terms of market share, product development and all the things that go towards a successful manufacturing industry. It ill behoves the Opposition to try to gain party political advantage from the debate, because that is not what it is about. Arrangements were entered into with BMW in good faith.
Mrs. Browning: The hon. Gentleman talks about the arrangements that were entered into, but we do not know what deal the Government brokered. The Secretary of

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State said that these deals are subject to commercial confidentiality. How can we make a judgment when we do not know the details of the negotiations?
Mr. Robinson: The hon. Lady understands nothing. It was her Government who entered into the arrangements and allowed BMW to gazump the existing arrangements. It all started some five years ago, when the Government allowed BMW to gazump Honda, much to the disgust of the Japanese, and buy Rover. Her Government were absolutely responsible for the arrangements that governed that deal. If she did not know about that, it was up to her to find out about it.
I shall tell the hon. Lady what those arrangements were. BMW committed itself to reserving the marque of Rover and to reserving Rover as a manufacturing entity in the UK. BMW said that it would continue all the arrangements that were already in train between Rover and Honda. Those were the arrangements that the hon. Lady's Government entered into.
That deal came to my attention when I was at the Treasury, when out of the blue we heard that BMW wanted to close down Longbridge. BMW did not want to know about the arrangements. It does not care about workers in Longbridge; it is concerned about workers in Munich. The hon. Lady looks distressed, but we must understand the basic fact that despite all the so-called multinational and global investment and industry, each major national company looks after its own people first, and others afterwards.
In that sense, I do not blame the Germans for pulling the plug on Longbridge, which is what they are doing. BMW says that it has made losses, but I say to BMW, "You have had this company for five years. You said that you would make a success of it. I did not doubt your word." I did not doubt BMW's word because one could look at the company's glittering success in Munich. Now decisions about the British motor industry are being made in Munich by Frau Quandt and her family. On another date in the historical calendar the situation could have been quite different.
That situation is not the fault of this Government or this Secretary of State, or indeed any of his predecessors. If any fault is to be found, it is with the British failure in manufacturing industry. The hon. Lady, who in her great wisdom initiated the debate, does not want to consider that. She says that we did not do well enough with the aid application to the European Commission, but everybody knows that everything possible was done by this Government and previous Governments to get the necessary aid. Everybody knows also that European aid has not had the slightest influence on BMW's decision today to dump Rover.
BMW has dumped Rover because it does not suit interests any more. That is fine for BMW, but what about us? What about our employers and employees? [Interruption.] I beg the hon. Member for Tiverton and Honiton (Mrs. Browning) to listen for a moment. In the City and everywhere else one sees that global activities are taking place and global entities are being formed, but within those entities the national interest prevails. I beg hon. Members to think about that for a moment. Let us consider the City of London—the citadel of British power where our people prevail. We are increasingly being subsumed into other, bigger entities, which are seemingly global but in reality are nationally oriented.
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Returning to the car industry, one sees the motorcycle industry and machine tool industry as subsidiary, but in all those industries this country is losing out and we are not as strong as we ought to be. Obviously, it is too late for BMW even to reconsider its decision. Why has BMW taken that decision? Because it is in its interests. The national interest there is predominant. Had it been a factory in southern Germany—in Munich—that was at stake, such a clear-cut, brutal decision would not have been taken.
Who should we blame for that? We can look back to five years ago. It is not as though the decision had to be taken overnight, or the facts were not already known. It is not as though there has not been a magnificent increase in productivity and quality of product. For one reason or another, BMW chose not to manufacture it in the UK.
Fair enough. That is BMW's decision, but is it good enough? Do we, a great nation in our own right, accept that decisions are taken irrespective of our Government's views on the matter, and irrespective of what that company in Germany said when it bought into and took control of our industry? Is all that unconditionally acceptable to us?
We have nothing to be ashamed of with regard to labour productivity. The costs of production in the UK are 30 to 40 per cent. less—I am pleased to see my right hon. Friend the Member for Chesterfield (Mr. Benn) listening to this—than they are in Germany, so what is the problem?
The hon. Member for Tiverton and Honiton smirks, and I find that offensive.
Mrs. Browning: I was not smirking.
Mr. Robinson: Indeed, she was. Our jobs, our people—[Interruption.] Now the hon. Lady laughs. That is even better. It becomes her well, but we care about British industry and the British motor industry. We care about what we still have of our manufacturing industry—while it lasts.
The issue transcends party politics. It does not offend any party political dogma, or rather, it should not. It is an issue that affects us all as citizens of the United Kingdom. Unless we realise that in the case of global industry, the globally competitive aspects pertain most of all with regard to the management of it, we shall lose out. If we are happy to lose out—to sit back and see it all happen, and imagine that we will be saved by the internet or some other marvellous new technology where the English language prevails—fine. However, I say to hon. Members that that will not do. This country, and any mature democracy such as ours, must have as its basis some major industries and activities under its own ownership and managerial control.
I am delighted that the Opposition initiated the debate tonight. It allows us to highlight matters that go beyond party political issues. The Opposition will regret having raised the issue this evening. We know the issues that really matter—[Interruption.] Yes, jobs—very much so. Who did nothing in that regard? We have done all we can to protect jobs.
I wish Alchemy well. We must give it every support. I am sure that the Government will do so, as we did for BMW, and I hope that Alchemy will respond more positively and constructively to the support that it gets from the Government than BMW has done.
6.34 pm
Mr. Tony Baldry: It was a little difficult to follow the comments of the hon. Member for Coventry, North-West (Mr. Robinson). Can the House agree that it is pointless for everyone to try to find someone to blame—the Germans, the family, and so on? For many of us, there are large numbers of jobs, families and households at stake—in Oxford, East, in Banbury and in the whole of Birmingham.
My hon. Friends on the Front Bench are to be congratulated on initiating the debate, without which hon. Members on both sides of the House would not have had the opportunity of speaking on this matter today. We all have a bad feeling in the pit of our stomach about what is happening. When the Secretary of State said in his closing comments that our thoughts were with the families at Longbridge, he was right, but it was a rather funereal peroration. Perhaps we can all move away from trying to find somebody to blame and, instead, think about what we can do to improve the situation for the future.
It seems that we all agree that the people at Longbridge have done their very best to deliver. Productivity is high and anything that has been asked of the company has come across. So where do we find the problems and what can we do to improve matters?
I have two requests of the Minister for Competition and Consumer Affairs and the Secretary of State. First, I ask the Government to give an undertaking that if need be they will return to this matter in Government time in the not-too-distant future. It should not be only for the Opposition to initiate debates on the subject.
We know nothing about Alchemy, as my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) said. I am sure that it is a perfectly respectable company, but it has no proven track record in such a large enterprise. I hope that the Secretary of State will give an undertaking that he will return to the House to debate these matters. He says that he wants to obtain a great deal of information about Alchemy, and I hope that, perhaps on Monday, he will make a statement so that we can be kept up to date with what is happening.
I agree with the hon. Member for Twickenham (Dr. Cable) and others that we must recognise the impact that the strength of the pound is having on manufacturing industry throughout the country, and not only in the west midlands. There have been a number of comments from BMW spokesmen. I will not go through them because they have been listed in The Independent and other newspapers recently. They have said that they have been watching the exchange rate on almost a daily basis. It seems that, as much as anything, the exchange rate and the strength of the pound caused BMW to abandon its £1 billion investment in Longbridge.
This is not an issue that we can duck. If the strength of the pound is damaging UK manufacturing capability and capacity, the Bank of England Monetary Policy Committee must take account of that when setting and determining interest rates.
Dr. Lynne Jones: What would the Conservatives do about the high value of the pound? If we want a loosening of monetary policy, it is hardly appropriate that the Tories should be calling for tax cuts and a loosening of fiscal policy as well.
Mr. Baldry: I hoped for better from the hon. Lady. To engage in point scoring in this debate is pointless. If the
606
strength of the pound is damaging UK manufacturing industry, we are entitled to say to the Bank of England that, when determining its policy, it should not focus only on inflation rates but should have regard to what is happening to the core of our manufacturing base.
The hon. Member for Coventry, North-West (Mr. Robinson) talked about what is happening in terms of the UK—
Mr. Deputy Speaker: Order. The hon. Member for Meriden (Mrs. Spelman) should not be reading a newspaper in the Chamber.
Mrs. Caroline Spelman: I am sorry, Mr. Deputy Speaker.
Mr. Baldry: The hon. Member for Coventry, North-West talked about what was happening in terms of UK competitiveness and the UK manufacturing base moving overseas. Those matters should be of concern to every Member of this place and should not be used for the scoring of political points. We are talking of jobs that, once lost, will not return. I urge the Secretary of State and the Minister to accept that we must all consider, in the absence of the blame culture, how we can turn the situation round.
I am sure that there are macro-economic issues that require consideration. The Secretary of State told us frequently what had not influenced BMW in its decision. He said that it had not been influenced by a lack of grant. However, he did not tell us what had influenced the company in deciding to move away from Longbridge. I suspect that one factor was the exchange rate and the fact that it could see itself continuing to make substantial losses while the pound stayed as strong as it did. If this House continues to be totally myopic about that, we cannot be surprised if the UK manufacturing base continues to be eroded.
6.39 pm
Mr. Nick Gibb: We have had an important debate on an issue that is crucial to the British economy and vital to the jobs and prospects of 50,000 people. The Secretary of State has presided over a catalogue of incompetence. Incompetence characterised his handling of the Post Office network, the computerisation programme, and the level of the Post Office monopoly: is it £1 or 50p? He handled the Utilities Bill incompetently—it required 400 Government amendments, and the telecom and water sectors were removed from it halfway through Committee stage.
The Government's original approach to the Electronic Communications Bill was incompetent. There is confusion about competition policy and the Secretary of State made errors of judgment in his rip-off Britain campaign. I wonder how much damage that campaign has done to the sale of Rover cars in Britain and world wide? The Secretary of State now displays incompetence in his dealings with the European Commission on state aid to Rover.
The Government originally announced state aid with a flourish in March 1999 and the details were announced in June. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, between those two dates, only one meeting with the Commission took place.

607
The Commission was not formally notified until August 1999; the EU began its inquiry four months after that. Why did the Secretary of State take so long—six months after the first announcement in March 1999—to make the formal application? We have to wait until June this year for a formal EU decision. That is too late. Industry has to work at a different pace from that to which the Secretary of State is accustomed. However, the writing is on the wall for the right hon. Gentleman. In the row between the Secretary of State and his junior Minister over the site for the Synchrotron research facility, the Prime Minister backed Lord Sainsbury rather than the Secretary of State—another incompetent judgment.
When he opened the debate, the Secretary of State simply read out the BMW press release and the results of hours of research into previous aid notifications by the Conservative Government. His dismissal of the delay in achieving EU approval of the grant is astonishing. He now claims that the grant is irrelevant. When Rover achieves new investment, the grant is crucial and the success is a triumph for the Government, but when Rover is in difficulty, the grant is irrelevant and the problems have nothing to do with the Government.
Mr. Ian Bruce: I have just returned from watching the Chief Secretary and his constituents in Oxford on television. They were celebrating BMW's actions, yet the mood on the Floor of the House is completely different. Do we know whether the £140 million will go to Oxford rather than being lost to BMW?
Mr. Gibb: I am grateful for that intervention. It is good news for Oxford. Perhaps the Secretary of State is more concerned about that than the difficulties at Longbridge.
Mr. Burden: Will the hon. Gentleman give way?
Mr. Gibb: I shall not give way because we are running out of time. The hon. Member for Twickenham (Dr. Cable) blamed the problem on the exchange rate; that is also BMW's view. He acknowledged that nothing could be done about the exchange rate, but he agreed with us about the damage that the rip-off Britain campaign causes.
The hon. Member for Birmingham, Northfield (Mr. Burden) denied that the exchange rate had any effect in view of successful exports of BMWs, even when the Deutschmark was strong.
In an informed and balanced speech, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) made the important point that a period of six months to investigate the £152 million grant by the Commission is unacceptable in this day and age.
The hon. Member for Birmingham, Hall Green (Mr. McCabe) pointed out that 2,000 companies could lose up to 30 per cent. of their business if Longbridge closes.
My hon. Friend the Member for Bromsgrove (Miss Kirkbride) rightly pointed out that, but for the Conservative Opposition, the Secretary of State would not even have made a statement. She raised the important concern about jobs at Longbridge, on which the Secretary of State was so coy.
A bigger issue is at stake. There has been incompetence, delay and dither, and the Secretary of State incompetently failed to examine the aid issue in detail.
608
Had he done so, he would have worked out that the Commission would not accept that there was any realistic possibility of the Longbridge operation being transferred to Hungary. On the radio this morning, he also made the extraordinary statement, which he repeated in the debate, that—
Mr. Burden: Will the hon. Gentleman give way on that point?
Mr. Gibb: I will not. There is very little time left.
The Secretary of State said that the grant was irrelevant, despite boasting wildly about it when it was announced. For Conservative Members, the bigger issue is what has happened to the United Kingdom economy that has meant that, in the past month, we have faced the possible loss of Harland and Wolff shipyard and of one of our major indigenous car industries. What has happened since August 1996, when the chief executive of Siemens said:
Our decision to build the new semi-conductor plant here in the UK is a recognition of the pro-business environment which exists?
What has happened since October 1995, when the chairman of BMW said:
Great Britain is currently the most attractive country among all European locations for producing cars?
BMW does not think that now, so what has happened?
I can tell the House. There has been a new, damaging approach to manufacturing and to business since the Government came to power, the consequences of which we are beginning to see: £5 billion a year in extra regulatory costs on British business as a result of measures introduced by the Government; a proliferation of red tape, and new and more powerful interventionist regulations; £35 billion of extra taxes on business over this Parliament; more corporation tax; more stamp duty on business transactions; more duty on diesel; a new pension funds tax that puts up business' pension costs as well as its capital costs; the climate change levy; and IR35. All those measures are damaging to the British economy, to businesses that are trying to survive in a fiercely competitive world, to businesses large and small and to businesses that are trying to turn themselves around, as Rover was.
Damage cannot be undone by sending out an army of spin doctors to spread a different message or to manipulate media coverage. Government is about policy decisions and their effects on people's lives and prospects, not rhetoric or media handling. We need Ministers who concentrate their time and intellectual effort on getting those decisions right, rather than on worrying about the backdrop for the next press conference and the next photo opportunity. If Longbridge goes, the blame for the huge damage that will be done to the west midlands economy will lie with incompetent Ministers and an economic policy that is costly and damaging to British business.
6.48 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): This issue is vital. Thousands of people face an uncertain future and thousands of families in the midlands will be extremely concerned about today's announcements. To be fair, many Opposition Members acknowledged that this is a complex matter, but it is a shame that the official Opposition—instead of coming to the House in the proper spirit and

609
seeking a mature debate—launched a shoddy personal attack on my right hon. Friend the Secretary of State, which missed entirely. They also used today's sombre news to try to score a few petty political points, but failed dismally in that objective. They have demeaned the issue before us.
The hon. Member for Tiverton and Honiton (Mrs. Browning) made a convoluted point about grant aid. We negotiated that aid quickly because there was the threat that BMW might move to Hungary, and then sought clearance. As my right hon. Friend the Secretary of State said, there is no other example of negotiating grant aid and regional selective assistance where the deal is not done first, before seeking approval. The proposal was referred by the European Commission to a full investigation; nothing unusual there. In fact, the Government recently supported that measure in relation to Volkswagen. We went through the normal process. The actual deal was commercially confidential, as are all such deals. Opposition Members know that full well.
Apart from a couple of other spurious points, that amounted to the total contribution by Opposition Members to this important debate. There is no telling whether we would have come to the House to initiate a debate but I give the Opposition one point out of 10 for initiating a debate on an important issue. It is a shame that members of the Opposition Front Bench did not contribute more constructively.
The hon. Member for Twickenham (Dr. Cable), in a thoughtful seminar on the single European currency, referred to the strength of sterling—not a point raised by the hon. Member for Tiverton and Honiton. I remind the House that the biggest rise in the value of the deutschmark against sterling was in the seven months leading up to the general election in May 1997. There were many interventions and contributions from this side of the House about the strength of sterling, which was cited also by the hon. Member for Twickenham in a balanced speech, but no one offered a solution. The remedy that he offered—joining the single European currency—was spurious, given current circumstances.
My hon. Friend the Member for Birmingham, Northfield (Mr. Burden) displayed as always his commitment to his constituents and community, together with his expertise. He rightly paid tribute to the work force. The hon. Member for Tiverton and Honiton did not refer once to the work force or the community in Longbridge and their concerns. It was left to my hon. Friend to do so. He pointed out that BMW has received help and assistance from government—particularly from my right hon. Friend the Secretary of State. He made the important point, in relation to the strength of sterling, that BMW is a pan-European operator.
I was extremely pleased that my hon. Friend mentioned the success of motor sport in this country. Any debate about taking forward the British automotive industry needs to emphasise its success stories. Motor sport is certainly among them and is a benchmark against which most automotive companies should measure themselves.
The right hon. Member for Sutton Coldfield (Sir N. Fowler) made from the Conservative Back Benches the eloquent speech that should have come from the Conservative Front Bench. He spoke of the media's
610
obsession with the days of Red Robbo, flares, tank tops and T.Rex. He spoke of how much Longbridge has changed since those days but said there was a strange tendency among the media constantly to hark back to them. I do not agree with everything that he said—he was kind enough to send me a note saying that he could not be here for my reply—but he struck the right note and made an important contribution.
My hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) emphasised the vital role of Longbridge in the region and highlighted the uncertainty surrounding the move to new owners, to which I will refer in a moment. I completely understand the concerns of the hon. Member for Bromsgrove (Miss Kirkbride), as one of the two hon. Members with responsibility for Longbridge constituents. She asked whether there were guarantees about employment and the future. We are working on the basis of an announcement just made; discussions have yet to take place involving my right hon. Friend. I remind her that, during an Adjournment debate in January, she said:
We should credit BMW for investing in the Rover group when it took over the company. At the time, it was widely speculated that BMW was interested only in Land Rover and having a four-wheel-drive product in their vehicle range, and that it might not show the same commitment to the Rover car itself. It is hard to pin that accusation on BMW.—[Official Report, Westminster Hall, 26 January 2000; Vol. 343, c. 70WH.]
In terms of the way in which the situation develops—
Mr. Deputy Speaker: Order. Far too many conversations are taking place.
Mr. Johnson: It is impossible to read the future, but I assure the hon. Member for Bromsgrove that my right hon. Friend the Secretary of State will make the points about employment opportunities at the meeting that is to be held with Alchemy Partners this evening.
My right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) made an important point about sales and marketing. Rover's sales slumped by 26 per cent. in 1999. That is to do with the way in which the product is marketed, to do with the sales, and to do with the whole management approach to promoting and selling these important products.
The hon. Member for Bournemouth, West (Mr. Butterfill) mentioned the long-term success of Longbridge, which is obviously relevant to the debate. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) demonstrated his long experience of the industry. The hon. Member for Banbury (Mr. Baldry) said that we should not have a culture of blame, and that it was entirely wrong to apportion blame in this instance. It is a shame that he did not mention that to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb).
BMW has not entirely removed itself from the picture. It will retain a manufacturing presence in Oxford, where the Cowley plant is producing the Rover 75, which is increasingly successful in the marketplace. It will also continue with plans for the new Mini. The forecasts for that new model are very optimistic, given that it builds on the heritage of the existing car. BMW has decided to continue with the engineering and design function in the United Kingdom, which constitutes a tremendous vote of confidence in the UK's engineering and design capability.

611
We will work constructively with the new owners to understand their future plans for the business, and to provide any support that may be justified and appropriate. The existing aid package cannot simply be transferred to new owners; any package will depend on the specific circumstances and plans of those new owners, and on whether they meet the proper conditions for support. I can, however, assure the House that we will do everything possible to ensure that Rover has a future in this country.
Rover is a name with which the British public strongly identifies. In the past, its fortunes and troubles have mirrored the economic and social issues of the day. It needs to get through the difficult times, not least because of the enormous effort and wholehearted co-operation of its work force over many years, but particularly since the BMW takeover in 1994.
In 1998, BMW-Rover undertook a wide-ranging review of Rover Group's activities. As part of that, BMW shared with Rover's employees its plans for the future, and explained that their success depended on the achievement of significant cost reductions and—importantly—new agreements on competitive working practices. It is to the credit of the Rover employees that they rose to the challenge, and consented to more flexible working practices and productivity agreements.
Let me tell the House what is about to happen. The Secretary of State will meet Alchemy Partners later this evening. We shall want to clarify BMW's intentions in relation to Land Rover. The Secretary of State will visit Rover sites in the west midlands tomorrow. A key issue in relation to Longbridge is whether transfer of ownership to Alchemy Partners is concerned, and what the plans for the business are. The Government will be anxious to work closely with new owners to maximise the chances of success for the Rover business, and to consider what support might be justified and appropriate. Rover wants to be part of the success story of the British car industry.
Mr. Patrick McLoughlin rose in his place and claimed to move, That the Question be now put.
Mr. Deputy Speaker: Order. I believe that the Minister has ended his speech anyway.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 149, Noes 275.

Division No. 116]

[7 pm

AYES

Ainsworth, Peter (E Surrey)

Bottomley, Rt Hon Mrs Virginia

Allan, Richard

Brady, Graham

Amess, David

Brake, Tom

Arbuthnot, Rt Hon James

Brooke, Rt Hon Peter

Ashdown, Rt Hon Paddy

Browning, Mrs Angela

Atkinson, David (Bour'mth E)

Bruce, Ian (S Dorset)

Baker, Norman

Bruce, Malcolm (Gordon)

Baldry, Tony

Burns, Simon

Beith, Rt Hon A J

Butterfill, John

Bercow, John

Cable, Dr Vincent

Beresford, Sir Paul

Campbell, Rt Hon Menzies (NE Fife)

Blunt, Crispin

Body, Sir Richard

Chapman, Sir Sydney (Chipping Barnet)

Boswell, Tim

Bottomley, Peter (Worthing W)

Chidgey, David

612

Chope, Christopher

MacKay, Rt Hon Andrew

Clappison, James

Maclean, Rt Hon David

Clarke, Rt Hon Kenneth (Rushcliffe)

McLoughlin, Patrick

Madel, Sir David

Collins, Tim

Major, Rt Hon John

Cormack, Sir Patrick

Malins, Humfrey

Cotter, Brian

Maples, John

Cran, James

Maude, Rt Hon Francis

Curry, Rt Hon David

Mawhinney, Rt Hon Sir Brian

Davey, Edward (Kingston)

Moore, Michael

Davis, Rt Hon David (Haltemprice)

Moss, Malcolm

Day, Stephen

Nicholls, Patrick

Dorrell, Rt Hon Stephen

Norman, Archie

Duncan, Alan

O'Brien, Stephen (Eddisbury)

Duncan Smith, Iain

Ottaway, Richard

Evans, Nigel

Page, Richard

Faber, David

Paice, James

Fabricant, Michael

Pickles, Eric

Fallon, Michael

Portillo, Rt Hon Michael

Feam, Ronnie

Prior, David

Flight, Howard

Redwood, Rt Hon John

Forth, Rt Hon Eric

Robathan, Andrew

Foster, Don (Bath)

Roe, Mrs Marion (Broxbourne)

Fox, Dr Liam

Ruffley, David

Fraser, Christopher

Russell, Bob (Colchester)

Gale, Roger

St Aubyn, Nick

Gibb, Nick

Sanders, Adrian

Gill, Christopher

Shepherd, Richard

Gillan, Mrs Cheryl

Simpson, Keith (Mid-Norfolk)

Gray, James

Soames, Nicholas

Green, Damian

Spelman, Mrs Caroline

Grieve, Dominic

Steen, Anthony

Gummer, Rt Hon John

Streeter, Gary

Hamilton, Rt Hon Sir Archie

Stunell, Andrew

Hammond, Philip

Swayne, Desmond

Hancock, Mike

Syms, Robert

Harris, Dr Evan

Tapsell, Sir Peter

Hawkins, Nick

Taylor, Ian (Esher & Walton)

Hayes, John

Taylor, John M (Solihull)

Heald, Oliver

Taylor, Sir Teddy

Heathcoat—Amory, Rt Hon David

Tonge, Dr Jenny

Hogg, Rt Hon Douglas

Townend, John

Horam, John

Tredinnick, David

Howard, Rt Hon Michael

Trend, Michael

Howarth, Gerald (Aldershot)

Tyrie, Andrew

Hunter, Andrew

Viggers, Peter

Jackson, Robert (Wantage)

Walter, Robert

Jenkin, Bernard

Wardle, Charles

Key, Robert

Waterson, Nigel

King, Rt Hon Tom (Bridgwater)

Wells, Bowen

Kirkbride, Miss Julie

Whittingdale, John

Laing, Mrs Eleanor

Wigley, Rt Hon Dafydd

Lait, Mrs Jacqui

Wilkinson, John

Lansley, Andrew

Willetts, David

Letwin, Oliver

Willis, Phil

Lewis, Dr Julian (New Forest E)

Wilshire, David

Lidington, David

Winterton, Mrs Ann (Congleton)

Lilley, Rt Hon Peter

Winterton, Nicholas (Macclesfield)

Lloyd, Rt Hon Sir Peter (Fareham)

Yeo, Tim

Loughton, Tim

Luff, Peter

Tellers for the Ayes:

MacGregor, Rt Hon John

Mr. John Randall and

McIntosh, Miss Anne

Mr. Geoffrey Clifton-Brown.

NOES

Abbott, Ms Diane

Banks, Tony

Ainger, Nick

Barnes, Harry

Ainsworth, Robert (Cov'try NE)

Battle, John

Alexander, Douglas

Bayley, Hugh

Allen, Graham

Beard, Nigel

Anderson, Donald (Swansea E)

Beckett, Rt Hon Mrs Margaret

Anderson, Janet (Rossendale)

Bell, Martin (Tatton)

Armstrong, Rt Hon Ms Hilary

Bell, Stuart (Middlesbrough)

Ashton, Joe

Benn, Hilary (Leeds C)

Atkins, Charlotte

Benn, Rt Hon Tony (Chesterfield)

Austin, John

Bennett, Andrew F

613

Benton, Joe

Godman, Dr Norman A

Bermingham, Gerald

Godsiff, Roger

Best, Harold

Goggins, Paul

Betts, Clive

Griffiths, Jane (Reading E)

Blair, Rt Hon Tony

Griffiths, Win (Bridgend)

Blears, Ms Hazel

Grocott, Bruce

Blunkett, Rt Hon David

Grogan, John

Boateng, Rt Hon Paul

Hain, Peter

Bradley, Keith (Withington)

Hall, Mike (Weaver Vale)

Bradley, Peter (The Wrekin)

Hall, Patrick (Bedford)

Brinton, Mrs Helen

Hamilton, Fabian (Leeds NE)

Burden, Richard

Hanson, David

Burgon, Colin

Heal, Mrs Sylvia

Butler, Mrs Christine

Healey, John

Byers, Rt Hon Stephen

Hepburn, Stephen

Caborn, Rt Hon Richard

Heppell, John

Campbell, Mrs Anne (C'bridge)

Hill, Keith

Campbell, Ronnie (Blyth V)

Hinchliffe, David

Cann, Jamie

Hodge, Ms Margaret

Caplin, Ivor

Hoey, Kate

Casale, Roger

Hood, Jimmy

Cawsey, Ian

Hoon, Rt Hon Geoffrey

Chapman, Ben (Wirral S)

Hope, Phil

Clapham, Michael

Hopkins, Kelvin

Clark, Dr Lynda (Edinburgh Pentlands)

Howells, Dr Kim

Hughes, Ms Beverley (Stretford)

Clark, Paul (Gillingham)

Hurst, Alan

Clarke, Charles (Norwich S)

Hutton, John

Clelland, David

Iddon, Dr Brian

Clwyd, Ann

Illsley, Eric

Coaker, Vernon

Jackson, Ms Glenda (Hampstead)

Coffey, Ms Ann

Jackson, Helen (Hillsborough)

Cohen, Harry

Jamieson, David

Coleman, Iain

Jenkins, Brian

Colman, Tony

Johnson, Alan (Hull W & Hessle)

Connarty, Michael

Jones, Rt Hon Barry (Alyn)

Cook, Frank (Stockton N)

Jones, Helen (Warrington N)

Cooper, Yvette

Jones, Ms Jenny (Wolverh'ton SW)

Corbett, Robin

Corbyn, Jeremy

Jones, Jon Owen (Cardiff C)

Corston, Jean

Jones, Dr Lynne (Selly Oak)

Cousins, Jim

Jowell, Rt Hon Ms Tessa

Cox, Tom

Kaufman, Rt Hon Gerald

Cranston, Ross

Keeble, Ms Sally

Crausby, David

Keen, Alan (Feltham & Heston)

Cryer, Mrs Ann (Keighley)

Keen, Ann (Brentford & Isleworth)

Cryer, John (Hornchurch)

Kelly, Ms Ruth

Cummings, John

Kennedy, Jane (Wavertree)

Cunningham, Jim (Cov'try S)

Khabra, Piara S

Curtis-Thomas, Mrs Claire

Kidney, David

Darvill, Keith

Kilfoyle, Peter

Davey, Valerie (Bristol W)

King, Ms Oona (Bethnal Green)

Davies, Rt Hon Denzil (Llanelli)

Ladyman, Dr Stephen

Davies, Geraint (Croydon C)

Laxton, Bob

Davis, Rt Hon Terry (B'ham Hodge H)

Lepper, David

Leslie, Christopher

Dawson, Hilton

Levitt, Tom

Denham, John

Lewis, Ivan (Bury S)

Dunwoody, Mrs Gwyneth

Linton, Martin

Eagle, Angela (Wallasey)

Lloyd, Tony (Manchester C)

Eagle, Maria (L'pool Garston)

Lock, David

Ellman, Mrs Louise

McAvoy, Thomas

Ennis, Jeff

McCabe, Steve

Etherington, Bill

McCafferty, Ms Chris

Field, Rt Hon Frank

McDonagh, Siobhain

Fisher, Mark

McDonnell, John

Fitzpatrick, Jim

McIsaac, Shona

Flint, Caroline

Mackinlay, Andrew

Flynn, Paul

McNamara, Kevin

Foster, Michael Jabez (Hastings)

McNulty, Tony

Foster, Michael J (Worcester)

Mactaggart, Fiona

Gapes, Mike

McWalter, Tony

Gardiner, Barry

McWilliam, John

George, Bruce (Walsall S)

Mahon, Mrs Alice

Gibson, Dr Ian

Marsden, Gordon (Blackpool S)

Gilroy, Mrs Linda

Marsden, Paul (Shrewsbury)

614

Marshall, Jim (Leicester S)

Simpson, Alan (Nottingham S)

Marshall-Andrews, Robert

Singh, Marsha

Maxton, John

Skinner, Dennis

Meacher, Rt Hon Michael

Smith, Rt Hon Andrew (Oxford E)

Merron, Gillian

Smith, Angela (Basildon)

Michie, Bill (Shef'ld Heeley)

Smith, Rt Hon Chris (Islington S)

Milburn, Rt Hon Alan

Smith, Jacqui (Redditch)

Miller, Andrew

Smith, Llew (Blaenau Gwent)

Moffatt, Laura

Snape, Peter

Moonie, Dr Lewis

Soley, Clive

Moran, Ms Margaret

Southworth, Ms Helen

Morley, Elliot

Spellar, John

Morris, Rt Hon Sir John (Aberavon)

Squire, Ms Rachel

Steinberg, Gerry

Mowlam, Rt Hon Marjorie

Stevenson, George

Mullin, Chris

Stewart, David (Inverness E)

Murphy, Rt Hon Paul (Torfaen)

Stinchcombe, Paul

Naysmith, Dr Doug

Stoate, Dr Howard

O'Brien, Bill (Normanton)

Strang, Rt Hon Dr Gavin

O'Brien, Mike (N Warks)

Straw, Rt Hon Jack

O'Hara, Eddie

Stringer, Graham

Olner, Bill

Stuart, Ms Gisela

Palmer, Dr Nick

Sutcliffe, Gerry

Pearson, Ian

Taylor, Rt Hon Mrs Ann (Dewsbury)

Pendry, Tom

Perham, Ms Linda

Taylor, David (NW Leics)

Pickthall, Colin

Thomas, Gareth R (Harrow W)

Pike, Peter L

Timms, Stephen

Plaskitt, James

Tipping, Paddy

Pond, Chris

Todd, Mark

Pope, Greg

Tounig, Don

Pound, Stephen

Trickett, Jon

Prentice, Ms Bridget (Lewisham E)

Turner, Dennis (Wolverh'ton SE)

Turner, Dr Desmond (Kemptown)

Purchase, Ken

Turner, Neil (Wigan)

Quin, Rt Hon Ms Joyce

Twigg, Stephen (Enfield)

Radice, Rt Hon Giles

Tynan, Bill

Rammell, Bill

Vis, Dr Rudi

Rapson, Syd

Walley, Ms Joan

Raynsford, Nick

Ward, Ms Claire

Reed, Andrew (Loughborough)

Watts, David

Robinson, Geoffrey (Cov'try NW)

Whitehead, Dr Alan

Roche, Mrs Barbara

Williams, Rt Hon Alan (Swansea W)

Rogers, Allan

Rooker, Rt Hon Jeff

Williams, Alan W (E Carmarthen)

Rooney, Terry

Winterton, Ms Rosie (Doncaster C)

Rowlands, Ted

Wood, Mike

Ruddock, Joan

Woodward, Shaun

Ryan, Ms Joan

Woolas, Phil

Salter, Martin

Worthington, Tony

Sawford, Phil

Wright, Dr Tony (Cannock)

Sedgemore, Brian

Wyatt, Derek

Shaw, Jonathan

Sheerman, Barry

Tellers for the Noes:

Shipley, Ms Debra

Mr. Kevin Hughes and

Short, Rt Hon Clare

Mr. Jim Dowd.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the actions of the Government that support the car industry, including delivering stable inflation and low interest rates, boosting support for supply chain activities and acting on the Foresight Vehicle Programme; welcomes the Government support for the Longbridge plant given through the offer of Regional Selective Assistance; understands that the major losses that BMW have suffered on Rover have put great pressure on BMW with respect to Rover; and congratulates the Government for playing its role in working closely with the company and the workforce to try to ensure there is a future for Rover.

WELSH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order No. 107 (Welsh Grand Committee),
That the Welsh Grand Committee shall meet on Tuesday 4th April at half-past ten o'clock and between four o'clock and six o'clock at Westminster to take questions under Standing Order No. 103 (Welsh Grand Committee (questions for oral answer)), and to consider the matter of the Budget Statement and its implications for Wales, under Standing Order No. 107 (Welsh Grand Committee (matters relating exclusively to Wales))—[Mr. Clelland.]
Question agreed to.

DELEGATED LEGISLATION
Motion made and Question proposed,
That the Competition Act 1998 (Director's Rules) Order 2000 be referred to a Standing Committee on Delegated Legislation.
Hon. Members: Object.

PETITIONS

  Gareth and Richard Perrett
  7.12 pm
  Mrs. Alice Mahon: Some 700 residents of Halifax have given me this petition—[Interruption.]
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Will hon. Members who are not staying to hear the petition please leave quickly and quietly?
  Mrs. Mahon: The petition of 700 residents of Halifax declares
  that Inspector Gareth Perrett and PC Richard Perrett were found not guilty at Manchester Crown Court in February 1999 over an alleged incident on an aircraft in February 1998. They have since faced an internal discipline tribunal which has found them guilty, and required them to resign, therefore losing their careers and livelihoods. This is unfair. The petitioners therefore request the House of Commons to urge the Home Secretary to revisit their case.
  And the Petitioners remain etc.
  To lie upon the Table.

Benefit Payments
7.14 pm
Mr. David Curry (Skipton and Ripon): I wish to present a petition on behalf of my constituents and other residents of North Yorkshire. There are more than 37,000 signatories, almost 9,000 of whom come from Skipton and Ripon. The petitioners declare:
We are concerned at the Government's plans to pay benefits directly into bank accounts instead of over the counter at post offices as this will have a serious impact on local post offices and endanger a mainstay of village life.
The petitioners therefore request that the House of Commons urges the Secretary of State for Trade and Industry to rethink these proposals.
And the petitioners remain, yours faithfully, County Councillor Mrs. Shelagh Marshall and others.
To lie upon the Table.

Mentally Ill People
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kevin Hughes.]
7.14 pm
Mr. Mike Wood (Batley and Spen): I thank you, Mr. Deputy Speaker, for the opportunity to initiate the debate this evening.
Estimates vary about the prevalence of mental health problems in our society, but something of the order of between one in four and one in six adults will suffer from mental illness at some time in their lives; that is illness ranging from so-called mild depression through to schizophrenia. That means that in a constituency such as mine, for instance, between 11,000 and 16,000 people are directly affected by at least one bout of such illnesses during their lifetime.
A recent survey conducted by MIND found that 90 per cent. of respondents had household incomes of less than £10,000 a year. Most people who use mental health services live in poverty, with over 80 per cent. being economically inactive. The Government's own national service framework for mental health states that unemployed people are twice as likely to suffer depression as those who work. It could just as easily have highlighted how much more predisposed they are to self-harm, up to and including taking their own lives. For that group, loss of benefits—and, often, just the threat of that loss—can have disproportionate consequences.
The issues thrown up by such illness and poverty are wide-ranging and profound, and they pose some of the most difficult problems which I and, I suspect, most other right hon. and hon. Members become involved in through constituency casework or surgeries.
In my area of north Kirklees, we are fortunate to have a mental health service that is as good as anywhere in the country's. Last year, for instance, it received from the Prime Minister the first NHS Nye Bevan award for joint working between mental health and social services. However, even here, mistakes occur, and people fall through the net.
In the belief that care is not just about health, but about all aspects of a person's life—including housing, employment and, crucially, income—I want to draw on the experiences of three of my constituents and how they, as mentally ill people, fared in the very specific area of accessing and sustaining a claim for benefits. Those people were entitled to the benefits, just like any other citizen, but were denied them because, I would contend, our benefits system is far too inflexible, and is often inadequate, especially when confronted by the myriad problems that the mentally ill present.
I would like an assurance from my hon. Friend the Minister that the matter is being treated seriously within the Department. I would like also a possible outline of the practical steps that are being taken to improve the kinds of situation that I am about to describe, and I would like to know that the Department is doing this work in liaison with other relevant agencies.
Constituent H is a paranoid man, living alone, who lost his job due to his illness. He quickly became so ill that he could not or would not leave the house, and therefore could not make a claim for benefits. The Benefits Agency

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was eventually convinced by his family to send a home visitor whom, of course, the man would not admit to his home. Having gone to those lengths, the Department contended that there was nothing more it could do.
In the end, after months of keeping him, the man's extended family could afford to do so no longer and, essentially, had to abduct him from his own home, frogmarch him to the benefit office and guide his hand as he applied for the benefit for which he was so obviously eligible and which he now receives. Surely in such a case—where there was ample medical evidence of the man's condition and its prognosis—it should not have been necessary for the family to have to act in that way to access resources that were needed to care for him.
The second of my constituents, Miss C, suffers from depression. Her benefit was ended owing to a periodic review of the so-called all-work test. She received an initial letter that baldly stated that her benefit was under review, which had a profoundly adverse effect on her already frail mental health. As I said earlier, MIND found that just the threat of loss of benefit does harm, but at one of MIND's day centres close to my constituency some 80 per cent. of the people who attend have had that experience.
Miss C was eventually convinced to undertake the required medical or review. However, like many people suffering from mental illness, she cannot articulate well the problems that her illness poses for her in her daily life. So-called medicals or reviews that exclude carers and that are conducted quickly and brusquely—so quickly and brusquely that the claimants cannot do justice to themselves—would, I am sure, be condemned by the Minister, but they happen, and often to the mentally ill. That exacerbates the fact that the tests are designed more for those suffering a physical illness than a mental one. The answer to the standard questions, "Can you dress yourself? Can you feed yourself?", might well be yes for a mentally ill person, but the person asking the questions would not necessarily understand the amount of supervision that might he needed to get the mentally ill person to eat, or how much motivation might have to be generated to ensure that the person gets dressed.
I realise that the Government intend to replace the all-work test, but whatever comes next must be run by people who have a much greater insight into, and much more training in, the problems of the mentally ill if we are to see the real improvement in service that is needed. I would like to make a bid for the process to be predicated much more on helping people, some of whom have very profound problems, than on cutting corners or saving money.
Sadly, each year in England alone, some 4,000 people commit suicide. My third constituency example is just such a case and shows how mental illness plays a part in many of those—often preventable—deaths. My constituent, Mr. T, died in tragic circumstances and his death and the inquest featured extensively in the local and national media. At this point, I wish to place on record my thanks for the intelligent and sensitive way in which my local papers, not least the Batley News, dealt with those sad and harrowing circumstances. That was of enormous comfort to his family, most of whom now live in New Zealand, who still suffer from the shock of their relative's death and have many unanswered questions
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about how and why their loved one died in such circumstances. In passing, I realise that it is not the responsibility of the Minister, but their shock was compounded when they were required to pay more than £235 for a transcript of the inquest, which they wanted to learn what lessons had been learned from his death.
Mr. T was an honours graduate in his forties who had suffered from schizophrenia for some years. He was hospitalised late in 1998 under the mental health legislation for reasons of self-harm. He was starving himself, and his weight had dropped from 16 stone to under 10 stone. During his period in hospital, his benefit was stopped and it was either not restarted on discharge or stopped again soon after. Because we have no access to the transcript, we cannot know for sure.
Within a matter of months, the man had starved himself to death with 9p in his pocket. When his body was discovered some weeks later, a scribbled note that lay nearby suggested that he believed that the authorities had killed him. If the hospital had notified the Benefits Agency of his discharge, or if there had been sufficient liaison between the two about the severity of his illness, my constituent would at least have had available to him the cash that was his due. It is stating the obvious to say that care in the community failed that man.
I believe that the policy introduced by the previous Government was developed for the wrong reasons, and then not properly resourced. However, the failings in what is fundamentally the right policy for mentally ill people have to be remedied quickly if more lives are not to be lost so needlessly.
At the inquest, the coroner was appalled by Mr. T's death, and suggested that there should be special DSS rules for those suffering from mental illness. I am sure that all hon. Members would welcome that, but in the meantime it might be possible to encourage relatively minor changes in staff attitudes, and to alter departmental procedures. Both could happen much more quickly, and have some effect.
We certainly need the introduction—perhaps I mean the reintroduction—of much greater discretion for staff in local DSS offices. Ministers in the Department, too, would have to have greater discretion, as too often they seem unable to intervene to right an obvious wrong in individual cases.
Not before time, society is beginning to accept the need for extra provision to improve access for citizens with physical disabilities. At most benefit offices these days, a ramp to the front door is a standard feature, but where are the ramps for people suffering mental illness? That illness is just as debilitating and life-limiting as the more obvious—and possibly more acceptable—physical illness.
Finally, I should like to place on record my thanks to organisations such as the Mental After Care Association. MIND, and my local authority welfare benefits office—especially to that office's first-rate staff members Lisa Drake and Robert Finnegan—for the help that has been extended to me in presenting this debate.
7.27 pm
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): I should like to thank my hon. Friend the Member for Batley and Spen (Mr. Wood) for the opportunity to respond to the very

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important issues that he has raised this evening. He will know that not all the matters that he raised lie within the remit of my Department, but I shall make sure that I pass on the important observations that he has made.
My hon. Friend referred to three cases in his speech. One was especially tragic as it resulted in a death. I should like to begin by expressing my sorrow at the case and offering my sincere condolences to the family of my hon. Friend's constituent who died. It is clear that his constituent suffered because of a failure by the Department of Social Security and other agencies to provide the support that any of us would expect to be available for a person in the circumstances that my hon. Friend described. It is my intention to see that the necessary steps are taken and the relevant loopholes closed to ensure that that tragic circumstance will not be repeated, and that the lessons will be learned.
I know that my hon. Friend has been corresponding with the chief executive of the Benefits Agency and Her Majesty's coroner about this case. I am pleased that, as a direct result of that tragedy, new procedures have been created and adopted locally. They will shortly be adopted nationally by the Benefits Agency when it deals with people who have a history of mental illness. I will come to those new procedures in a moment.
However, I do not think it appropriate for me to discuss on the Floor of the House the details of an individual's claim for benefit. My hon. Friend raised the matter in a very proper way, and I should be more than happy to talk to him outside the Chamber about the specific people and events mentioned in his speech. In addition, there are some general comments that I can usefully make with regard to the issues raised in the debate.
It goes without saying that those who suffer any form of mental illness require special help when dealing with large, complex organisations—for example, when they want to establish their entitlement to benefit with the DSS. As my hon. Friend has pointed out, it is sometimes difficult to identify those who have a severe mental illness. Such illnesses can fluctuate and it is not always obvious who requires extra help, so I would like to explain some of the measures that the Department has undertaken to address the problems that this vulnerable group faces when claiming benefits.
The DSS and the Benefits Agency recognise that people with mental health problems must be treated sensitively. We are working closely with voluntary groups at a national and local level to address this issue in a practical and effective way. The Department tries to take into account the specific needs of people with mental illness.
Many of the measures that are in place to deal with these people have been developed in conjunction with the mental health lobby and make use of its experience and expertise. As a result of consultations with such organisations, many arrangements are in place to make the claims process easier. For example, people can request assistance from a third party to help complete claim forms for benefit or for support when being visited by Benefits Agency staff. The Department has worked with the Royal College of Psychiatrists and welfare groups on the design of the all-work test questionnaire and the format of the test for people with mental health problems.
Specialist training is given to staff who visit people receiving disability living allowance as part of the periodic inquiry process. The aim of the inquiry is to
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ensure that all clients are receiving the correct amount of benefit. This can be particularly helpful to those who have a mental illness and, because of their difficulties and the complex nature of our benefits system, may not have explained their complete circumstances when making the original claim. In addition, we have appointed Pauline Thompson from the Disablement Income Group to help us deliver the training for Benefits Agency staff who visit these clients.
We try to identify those with severe mental illness early on in the claims process. Whenever appropriate, we will exempt people with a severe mental illness from having to undergo a medical examination to establish whether benefits are payable.
At a local level, we have developed close links with local authorities, welfare groups and voluntary organisations. These are valuable in helping us to assist many of the vulnerable groups to which we pay benefits. My hon. Friend has referred to cases in which such arrangements do not yet exist or have broken down. Despite this, there are many instances of good local liaison between the DSS or the Benefits Agency and non-governmental organisations, helping people to receive all the benefits and support to which they are entitled.
Audrey Wise: I am grateful to my hon. Friend the Member for Batley and Spen (Mr. Wood) for initiating the debate. His presentation concentrated on adults with mental health problems. May I draw the Minister's attention to issues relating to children and young people? Most people working in the field worry that problems among children and young people are increasing. Their families can be plunged into poverty because of the extra tasks and problems involved. Has she considered any special problems that might arise in relation to children and adolescents?
Angela Eagle: Obviously, I am prepared to do so and to take on board my hon. Friend's comments. If she has more specific instances that she wants to discuss with me—again, not on the Floor of the House—I will be happy to listen to her and see what lessons can be learned.
As a direct result of the awful circumstances described by my hon. Friend the Member for Batley and Spen, Calderdale and Kirklees district Benefits Agency has adopted some new procedures. It encourages people to seek advice and advocacy support if they receive letters of requests that they do not understand. It has established a close liaison with the social services department. Where Benefits Agency staff know that a social worker has been assigned to a claimant, they are encouraged to keep in contact with that social worker. It has appointed a liaison officer to improve connections between the Benefits Agency and the psychiatric unit at the local hospital. It has instigated a new procedure to ensure that no decision will be made to withdraw benefit without the case being referred to a manager. I am pleased to say that new procedures will be adopted nationally by the Benefits Agency.
My hon. Friend may also be aware of the ONE service that is currently being piloted. All personal advisers involved in ONE have been given disability awareness training, including on mental illness issues, to help them provide an appropriate service to people who come into

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contact with the ONE service, including those who have particular mental health problems. Many of the key disability organisations, such as MIND and the National Schizophrenic Fellowship, were consulted when the training programme was being developed. Those groups have also helped to draw up guidance for personal advisers.
I believe that many benefit recipients with mental health problems will welcome that new personalised help, which is being piloted in 12 areas. We can create a system that will be less daunting for many people who can find the current system frightening, confusing or a source of anxiety. The personalised service will also be central to the new agency announced earlier today by my right hon. Friend the Prime Minister.
The Department of Social Security provides incapacity benefits to a large number of people with mental health problems. Procedures for doing so have been well developed and are generally regarded as successful. There is no room for complacency, of course. The issues raised by my hon. Friend demonstrate that work remains to be done in dealing with particular difficulties that people with mental illness may present to the DSS and other systems, such as social services departments, local help and health services. We must go further to ensure that people with mental health problems receive the service to which they are entitled. They must not fall into gaps between provision, being handed on from one institution to another with no one taking responsibility.
I believe that we can work to reduce the chances of another tragedy of the sort that befell my hon. Friend's constituent. The Benefits Agency's decision to ensure that the changes made in Calderdale and Kirklees are
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established nationally will go some way to achieve that end. We shall continue working until we close all the loopholes.
Mr. Andrew Mackinlay: On a point of order, Mr. Deputy Speaker. I apologise for troubling the House so late, but I seek your assistance. I was this evening due to receive a battery of replies to written questions on the conduct of the Metropolitan police, the security services and a gun runner to Sierra Leone. The answers were not available for me in the Members' Lobby. I have since discovered that they are available for journalists in the Press Gallery, and that, although I had telephoned the Minister's private office for them, they are in the Library. I have access to them, but the person most entitled to them would have been denied them had I not ferreted around, and, indeed, trespassed in the Press Gallery where I am not supposed to go. Could the matter be looked into? All hon. Members are disadvantaged when Ministers' offices are tardy in this way.
Mr. Deputy Speaker (Sir Alan Haselhurst): The hon. Gentleman must know that the Chair cannot control the answering of parliamentary questions. He will be aware, however, that Madam Speaker has made plain her strong view that Members should receive good service, and that it needs to be improved following some recent instances. I am sure that what the hon. Gentleman has said will have been heard by those on the Treasury Bench. We must hope that the matter will be rectified. I am grateful to the hon. Gentleman for drawing it to the attention of the House.
Question put and agreed to.
Adjourned accordingly at twenty-one minutes to Eight o'clock.

Preamble
[SIR ALAN HASELHURST in the Chair]

Quangos
[Relevant documents: Sixth Report of the Select Committee on Public Administration Session 1998–99 HC 209 and the Government's response thereto Session 1999–2000 HC 317.]
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Kevin Hughes.]
2.30 pm
Dr. Tony Wright: It is a great pleasure to kick off the debate on quangos, which arises from the report of the Select Committee on Public Administration.
One would have thought that, with all the attention focused on quangos in recent years, there would be queues at the door for our debate this afternoon with people wanting to weigh in with their views on something that has been a running theme in our political life for a long time. It is distressing and revealing that that is not yet the case.
I shall start by remembering some of the contexts. Even as a word, quangos is pejorative. It has a bad name, rather like call centres, theme parks and breakfast television. It is the sort of word that makes one want to dive under the bedclothes, but it has been at the centre of political debate in Britain for 20 or 30 years. We refer to quangocrats and quangocracy and when we wanted to attack plans for the second Chamber, we said that the intention was to create the biggest quango in the land. It has entered the language, but it seems unfriendly. In fact, it is a neutral term that came into existence in an attempt to describe the way in which whole stretches of government have been organised in recent times. Governments here and elsewhere have required new kinds of machinery to develop and deliver services. We have had to invent new sorts of bodies for a new range of activities: to distribute money, to provide a range of services, to provide advice to Government, to regulate, to inspect, to investigate, to adjudicate and so on. Whenever a Government want to do any or all those activities, they set up bodies that have tended to become known as quangos.
The word had a respectable academic origin 20 years ago, before politicians got hold of it. It was simply a word to describe the new bodies, but politicians were suspicious of unelected bodies that did not fit into the normal pattern of elected politics. However, quangos are hugely important. The core quangos—executive non-departmental public bodies—were accounting for around £24 billion of public money a couple of years ago. The current spread of quangos accounts for more than 70,000 public appointments. That is a lot of people being appointed to public bodies and half of them are appointed by Ministers, sometimes by Ministers alone.
We cannot avoid entangling ourselves in description and classification as we struggle to find a term for the curious beast that we are trying to get our minds around.
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These are appointed bodies performing public functions, using public money. They come in all shapes and sizes and have a variety of purposes. The original core quangos, the executive non-departmental public bodies—NDPBs—have been added to in the past 10 years or so by many more bodies. Through the 1980s in particular there was the development of what the Nolan Committee and then the Neill Committee started to call local public spending bodies. These bodies arose out of the Government's desire in the 1980s to displace local authorities over a range of functions in education, health, training, urban regeneration and elsewhere and replace them with appointed bodies. Therefore, we saw the development of local public spending bodies which are not, in Government terms, officially quangos; yet in any common-sense meaning they clearly are, because they come under the broad definition of appointed bodies performing public functions with public money. More latterly, particularly since 1997, people have looked at the development of task forces, pointing to the large number and wanting to bring them under the quango rubric too. I am sure that hon. Members will want to say something about that as we go on.
Whatever the variety or history of the bodies that we seek to identify, it is clear that they are a fixture of British government—a fixture of all Governments. Many of us have had considerable fun with this debate over the years. It is normal for the Opposition to attack the Government because they like setting up quangos and it is normal for the Government to defend themselves by saying that all Governments do those things. We certainly attacked the Conservative Government for having invented so many quangos and when Mrs. Thatcher came to power in 1979, she had been attacking the Labour party for inventing quangos. Indeed, in 1980 she set up a review under Leo Pliatsky to review quangos. Apart from producing some new definitions, it did not get far in terms of the cull that had been promised. We directed much of our energy to attacking the development of quangos during the long Conservative years, yet in office we have presided over their continuation, if not their extension.
That seems to tell a story, which is that quangos are a fixture. They are part of modern government and they perform a variety of functions that all Governments find useful. It is not helpful—this is perhaps the burden of my remarks and also the burden of what the Select Committee said in its report—to conduct the discussion about quangos in terms of a numbers game, saying, "How many are there? How many did you set up? How many did we set up? Have you set up more than we did? Are there more or fewer now?" The consistent evidence is that all Governments do it, but it does not go to the heart of the issue. In fact, it is a distraction from the central issue, which I shall define in a moment.
It is fairly well known now that quangos exist for a variety of reasons. They exist because it is useful to have bodies that operate at arm's length from Ministers and the Government to carry out the activities to which I have referred. It is useful to have bodies with that flexibility of operation and with a concerted focus on a particular task. It is not difficult to find a range of arguments why the quango model has developed and been found useful; at the same time it is not difficult to find arguments why it creates difficulties too.

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Quangos can be fragmenting. When we want services to be integrated, a model that deliberately fragments can cause difficulties. When we are talking about joining up government, the quango model, which disaggregates government, could be a source of difficulty. "Reaching Out: The Role of Central Government At Regional And Local Level", the recent report of the Cabinet Office's performance and innovation unit, shows the difficulties of joined-up government at a regional level. There are issues about delivery forms and quangos that might make joined-up government more difficult.
Legitimacy is a key issue. People rightly ask what the quangos are, who they speak for, where they get their money and why they are entitled to do what they do, as they do not arise from the elective process and cannot be booted out. Also, there are questions of accountability. To whom and how are they accountable? I pay tribute to the Government for struggling with those issues since 1997, as they promised that they would. The Cabinet Office produced a report, "Quangos: Opening Doors", which sought on a variety of fronts to make quangos more open and accountable. It disappointed those who thought that a great quango cull would happen. Such culls do not take place. At best, one can try to control quangos' growth.
The Cabinet Office has a difficulty with that. It would like a quango cull to take place, as it deals with the questions about whether there are more or fewer of them. It would be nice if it could say that there were fewer, but Ministers have always had a terrible natural propensity to want to create more of them within their programmes and initiatives. That is a permanent tension within Government.
The issue is not whether quangos should exist, as they do, but their accountability and transparency. Only through asking about that can we get answers to the big question, which is about legitimacy. I shall touch on some of the issues referred to in the report of the Select Committee on Liaison. I am a member of the Committee, and our key suggestion was the need for a map that would bring together the mess of public bodies. It should deal with how and why they are formed, under what legal framework they exist, what public money they receive, who appoints them and other issues of that kind.
We drew attention to some inaccuracies in the annual public bodies publication. The information needs to be collected in a more comprehensible form, as that document is inadequate at giving a broad picture of the range of public bodies inside Government. We need to start bringing together all the information that we have about executive agencies, the advisory agencies, the regulators, the local public spending bodies, the task forces and so on.
The Government have cautiously welcomed our proposal, but I hope that they can act on it, as the present situation is not satisfactory. The classifications do not work; some are bewildering. Our evidence raised questions such as why, until devolution, Historic Scotland was an executive agency, but English Heritage was a non-departmental public body. What is the explanation for that? Why is the Royal Parks agency an executive agency, but the Countryside Commission a
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non-departmental public body? There may be good reasons for such distinctions, but they are not apparent to anyone who receives the reports of those organisations. Why is the British Potato Council classified as a non-departmental public body, but the British Wool Marketing Board is not? Such mysteries defy explanation. The present classification system does not work. It is so confusing.
Mr. Andrew Lansley: I am enjoying listening to the hon. Gentleman, but does he agree that it is difficult to work out why classification occurred in the first place? Looking at the matter from a different angle and at the consequences that flow from classification of a particular type of public body and the extent to which Ministers are held directly accountable for the activity of certain bodies, it becomes more explicable. However, that is not a desirable way in which to allocate a public body to a specific classification.
Dr. Wright: I agree with the hon. Gentleman. That is why a map is necessary. There must then be justification for why particular bodies are placed in particular categories and the accountability requirements can be matched with particular bodies. That would enable us to get to grips with such an issue that is growing like Topsy. I am not sure whether the hon. Gentleman was suggesting Machiavellian reasons for such action. I am attributing it to ordinary decent British chaos. The time has now come for a system. We must have a map. It would not just be a paper exercise; it would genuinely help with accountability and legitimacy.
I pay tribute to the way in which the Government have grappled with the issue. They require the executive quangos to fulfil a range of requirements in relation to openness, publication of reports, access to meetings and registers of interest. That is essential. It should have been in place already. Public confidence is crucial in such matters and that will not exist in such bodies unless such basic reporting requirements are in place.
It is not yet clear how far we have got with some of the requirements. The fact that we do not know the answer is revealing. A quick analysis of the replies from Departments that were received by the Select Committee on Liaison showed enormous variability. As for the executive quangos—the NDPBs—95 per cent. of them said that they were under a requirement to publish an annual report. When asked whether they were obliged to release reports of meetings, the answer was that 9.5 per cent. were, although a further 19 per cent. said that they did so voluntarily. In answer to whether there was a public right to inspect the agenda of meetings, 4.5 per cent. of them said that there was, while another 8 per cent. said that they undertook that voluntarily. On whether there was a public right to see the minutes of meetings, 12 per cent. said that there was and another 16 per cent. said that they undertook that voluntarily.
The figures for advisory quangos are even more alarming. Asked whether they were obliged to release reports of meetings, just 1.8 per cent. said yes, with up to another 10 per cent. doing so voluntarily. On whether there was a public right to inspect meetings and agendas, only 5 per cent. said that there was, with another 8 per cent. undertaking that voluntarily, and on whether there

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was a public right to the minutes of meetings, only 4 per cent. said yes, with another 13 per cent. undertaking that voluntarily.
These figures are necessarily imprecise, but they make the point that there is still no comprehensive system. Although there is guidance on and injunctions to do those things, there is enormous variability between bodies on whether they are done. The figures on openness were particularly dismal for advisory quangos and it is worth saying that such quangos have a central role in a range of issues, not least science, biotechnology and food safety.
I believe that, as a result of the BSE crisis and other problems, there has been a collapse of public confidence in the expert advice that Governments take and on which they rely in crucial matters. Therefore, quangos that give advice to the Government are very important. They may not seem important in executive terms—I understand why the Government view them as they do—but they are hugely important in terms of people's trust in the advice that the Government receive.
Ensuring that those bodies operate as openly as possible is therefore not a marginal or tangential matter. Indeed, it is now crucial that they do so. I urge the Government and the Cabinet Office to make sure that we make serious progress on openness. That necessity is buttressed by the House of Lords report on science and society which was issued a few days ago. It talks about the need to engage the public far more in scientific decision making and to open up some of those scientific and expert bodies to far more public scrutiny.
Another area to which the Select Committee drew attention and on which it made suggestions is that of quangos' accountability to Parliament. Several improvements can be made in that regard. We made specific suggestions, for example, that minutes of meetings between Ministers and the chairs or chief executives of major quangos should be reported routinely to Select Committees, so that Select Committees can keep an eye on what is going on. I acknowledge, and am grateful for, the cautious welcome that the Government gave to some of our proposals, but that proposal was not one that they felt able to accept. I apologise if I seem to be riding a hobby-horse, but I was struck by the terms in which they rejected it. The Government prayed in aid the Freedom of Information Bill in their argument that such reporting was unnecessary. They stated:
The Government recognises the importance of openness and transparency, and has introduced a Freedom of Information Bill with the aim of opening up Government generally. That Bill not only provides a general right of access to information held by public authorities, but also requires public authorities to adopt a scheme for the publication of information as a matter of course. It is expected that under the Bill a great deal more information will be readily available, including for example minutes of meetings generally.
The problem is that the Bill does not say that. It provides exactly the grounds upon which that kind of information can be withheld. That is the formulation and development of Government policy and it is prejudicial to the effective conduct of public affairs. It is precisely those blanket exemptions in the current Freedom of Information Bill that make it impossible to take seriously the protestations of openness. I hope that those points can be remedied at some stage.
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The sky has not fallen in because we have the minutes of the Monetary Policy Committee of the Bank of England and it is possible to have routine reporting of major meetings between Ministers and quango chiefs to Select Committees. It is possible also to develop something akin to confirmation hearings, so that Select Committees can look at those whom Ministers are intending to appoint to some of these major positions. These bodies are exercising extraordinarily important public functions on our behalf and on behalf of Parliament, and Parliament should at least be entitled to have a look at these people, nothing more. It should not be involved in the appointment process, but should simply have a chance to look at the people, invite them to a meeting, give them a bit of a going over and make sure that they are acceptable. That would be a huge infusion of parliamentary accountability into the land of quangocrats. It is something that we should develop and I am disappointed that the Government were not more responsive to the suggestion. It has been suggested also in the recent report from the Liaison Committee, representing all the Chairs of Select Committees, as something that the Select Committees should now be developing. The Government will need to think again.
The Select Committees should also he informed that the so-called prior options reviews that explore whether quangos should be established and the quinquennial reviews that explore whether quangos should continue to exist, or in what form they should exist, are taking place so that they have a chance to have an input.
Mr. Lansley: I should like to ask a question about the Committee's proposals on confirmation hearings. There is an argument that there would be some prejudice to the proposal that those whom Ministers are minded to appoint to the head of an executive NDPB should appear before Select Committees because, at that stage, they could not speak for the policy of the organisation or what they would do for it. The Committees would focus on that person's past and suitability. It is, therefore, not a policy issue so much as a personality issue. Is it really the job of a Select Committee to be second-guessing the Minister on the personality? It might be better to bring the head of an NDPB before the Committee at a fairly early moment to examine the intentions in terms of policy.
Dr. Wright: I was not sure whether I agreed with the hon. Gentleman's earlier point, but I know that I do not agree with him on this. The Committee would be seeking to explore whether a prospective appointee seems well equipped for the task. It is as simple as that. It is not a judgment about personal characteristics, but a judgment about whether someone has got the background, the expertise and the approach to undertake the public task that he is being asked to perform. It does not conflict at all with the idea that inpost this person will come back and be regularly interrogated by a Select Committee, but it is a chance to ensure that at the time of the appointment, the individual has to run the gauntlet of Parliament. If we are serious about parliamentary accountability, we must be serious about exploring the mechanisms to strengthen it. It is easy to talk about it in a rhetorical way; we do so all the time. The problem arises when we try to make something of it. We now have a series of

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proposals designed to strengthen Parliament in relation to the Executive, and we are talking about one of them. If we believe that Parliament is an important enterprise, we should explore the various suggestions with interest.
Another aspect is accountability of quangos to the general stakeholders, including local communities. Some quangos are trying harder to be more accountable and responsive to their general stakeholders than others and I pay tribute to them. I was struck some years ago by a study that sought to establish whether members of elected or non-elected bodies were more responsive to their users or consumers. It assessed accountability in both types of bodies. What alarmed me about this reputable academic study of around 20 years ago was that in many respects the non-elected people took accountability far more seriously than the elected ones, who simply assumed that there were no issues of legitimacy or accountability about their role—after all, they had been elected. That was the end of the argument. People who had not been elected took greater steps to prove their legitimacy by activity.
An interesting issue emerges from that study. The task is to make both elected and non-elected bodies have a sense of continuing accountability. As I said, some quangos are doing well and others less well. We have to encourage those who are doing less well to do better for their community of stakeholders. For local public spending bodies, an annual scrutiny meeting with the local authorities in their areas should be regarded as a fundamental part of their activity. We need to build in those connections.
Appointment is my final subject. It is important, even though I shall not say much about it. Whatever else is true of quangos, the fact that they are appointed bodies is their raison d'etre: they are not elected, but appointed. People ask who these people are, who appoints them, what sort of people are appointed and whether the system is fair. As the hon. Member for South Cambridgeshire (Mr. Lansley) will know, that was explored by the Nolan committee in its first inquiry because of allegations made in the previous Parliament about the impropriety of many quango appointments. We now have the Nolan rules. For executive quangos, the Nolan rules are supplied to appointments, particularly in the health service, which was the scene of much of the earlier controversy.
How we appoint people to appointed bodies poses huge issues. I argued in the Nolan committee that we should take as many appointments as possible away from Ministers and establish an appointments commission. I could not see the reason why, if civil servants were appointed through a civil service commission route, we could not appoint people who preside over quangos through a similarly independent appointments commission route. I did not persuade the Nolan committee of that. It did not recommend a public appointments commission, but it did recommend a public appointments commissioner. The point was to enable Ministers to retain the power of appointment, but to have a monitor—the public appointments commissioner—who would stalk the system to ensure that it worked properly. There were to be independent members of appointments panels, and the public appointments commissioner would make sure that the system was working properly.
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Ministers in the previous Government were accused of putting their cronies on public bodies and Nolan had to explore that accusation, but if Ministers now are charged with doing that, they can claim to be doing it under the Nolan rules. That will be a good defence; it will provide Ministers with an answer to those rather difficult questions about who they are appointing and why. It is important, however, that the Nolan rules are known to be working properly.
A report is about to be published by Dame Rennie Fritchie. She is the most admirable public appointments commissioner, and she has been making inquiries on the subject. We should be genuinely troubled if she finds that the Nolan rules are not working sufficiently well. If Ministers can still appoint people for reasons other than merit, it would be an extremely serious development that should cause us to revise our view of how effective the rules are. We look forward with some concern and a great deal of interest to Dame Rennie's report, which will be published next week.
I would simply say—it is what the Select Committee says in its report—that it is time to revisit the argument on whether an independent appointments commission should do many of those jobs. I do not understand why Ministers have to make a raft of public appointments, although I realise that they can nominate people. However, if the Prime Minister can set up an independent appointments commission to appoint Cross-Bench members of the House of Lords, and if the Wakeham commission says that a wholly independent appointments commission should appoint all members of the House of Lords, apart from the small number of elected members, I see no reason why we cannot have an appointments commission to appoint those who sit on quangos. That question will surface again next week, and I urge the Government to consider it.
I commend the Select Committee's report. It contains some meaty provisions that will ensure that the system works better than it does now. I believe that quangos are here to stay. We should build on their virtues and try to overcome their vices. That will need better co-ordination, less fragmentation, and more accountability and transparency. That is where the Committee's report will lead.
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Mr. Norman Baker: I congratulate the hon. Member for Cannock Chase (Dr. Wright), Chairman of the Public Administration Committee, on the Committee's report, which is good, and on the clear way in which he presented its conclusions to the Chamber this afternoon.
I agree with much of what the hon. Gentleman said. He began by talking about the word "quango" which, he rightly says, is a household word. It became a dirty word in the 1980s and early 1990s, which led to the sudden, overnight introduction of the non-departmental public body—the NDPB, which is an unattractive acronym. At least the word "quango" rolled off the tongue; NDPB does not. It may have been no coincidence that that collection of letters was chosen to replace quango. We have a long tradition of changing names. For instance, Windscale became Sellafield.
The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer): Liberals became Liberal Democrats.
Mr. Baker: That was an improvement.

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As I said, quangos became NDPBs. I hope that I can delve into the history of quangos as it is relevant to the present. Their title became a dirty word because they were overtly used as a way of bypassing local government. When I was a local council leader, as other hon. Members who are present may have been, councils were predominantly controlled by Labour and the Liberal Democrats, but the Conservative Government had a big majority. Local councillors wanted to do things that did not find favour with that centralising Government, for whom the answer was not to respect the tradition of local government and to leave such matters to be dealt with locally, but to try to bypass councils through the removal of powers and their transfer to non-elected bodies.
It was not only the transfer of power that was offensive, although power was removed from some councils, which carried on with fewer functions. For example, the function of checking abattoirs was transferred from environmental health officers to the Meat Hygiene Service. We all know that that led to a diminished, more expensive and less credible service, at least in the short term. Some councils, including the Greater London council and the metropolitan councils, were abolished altogether. The most insidious element of the quangos, which explains why they have acquired their bad name and retain it with the public, was their use for the overt bypassing of councils and the appointment to them of people who were to a large degree sympathetic to the Government of the day. In other words, quango members were place people appointed on behalf of the then Conservative Government. Interestingly, quangos were usually strongest where the then Government were weakest, and the place men and women—they were mostly men—were present in force.
In 1994, before I entered the House, I conducted a study on the matter as leader of a district council. I discovered that in Wales, which is not the Conservatives' strongest area, 34 per cent. of Welsh Office expenditure was made through quangos. A huge percentage of public money was spent in that way on functions that, in many cases, could and should have been of local councils. I mentioned place men: 37 per cent. of people appointed to quangos dealing with Welsh issues were clearly identified as Tory supporters—there may have been more—and 16 of them did not live in Wales but felt able to deal with Welsh issues. In 1994, 14 of the 38 largest quangos had chairmen or chief executives with senior roles in businesses that donated funds to the Conservative party. At that time, 44 Members of the House of Lords popped up on quangos. Of those appointees, 31 were Conservatives, 10 were Labour supporters, three were cross-Benchers and none was a Liberal Democrat. That hardly reflected the popular vote or even the composition of the flawed House of Lords. It is clear why quangos acquired a bad name: they were used to bypass local councils, reflect Tory policy and deliver that policy where the Tories could not win local elections.
At a time when local councillors were not given the financial support that is now rightly awarded to them, it became increasingly disturbing that people employed on quangos were not subject to similar restrictions. Indeed, such restrictions still do not apply. In 1994, the part-time
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chairman of the Horserace Totalisator Board received £92,000 a year and the part-time chairman of the parole board received £45,000. However, councillors received £600 to £700 a year in allowances, in many cases for doing a job that involved managing a multi-million pound budget, albeit a budget that was diminishing.
That leads me to accountability, which was mentioned by the Chairman of the Select Committee. The rules did not apply equally. One would have thought that successive Governments would have ensured that unelected bodies established to deliver public functions and spending public money were subject to closer scrutiny than local councils, which—whatever their faults—can at least be turfed out every four years if they fail to deliver the electorate's wishes. The rules that apply to councils do not apply to quangos. For example, there is no surcharge on quango members as there is on local councillors if they misuse public money. That seems wrong to me.
I have not carried out an analysis, but I have anecdotal evidence that the Conservative place men and women on quangos are to some extent being replaced by Labour place men and women. That is happening in Sussex. That serious point brings the system into disrepute. I entirely agree with the Committee's sensible recommendation calling for an independent appointments commission. That must be followed through if we are to have confidence in the quango system.
The Government say that this is a subject ultimately of ministerial accountability. There are some wonderful Ministers in the Government, who work hard, are dedicated, do their best for the public and are in general superhuman beings, but how can any Minister of whatever party possibly know at any one time what is going on in all those thousands of quangos that exist across the country? How can she or he possibly be in control? How can she or he have any real accountability for those issues except in name only? The only way they can have accountability frankly is by issuing general guidance or by firefighting when a problem arises and they have to deal with it. That is the only accountability there is; there can be no other. Is a body—spending in some cases millions of pounds—to be accountable only through a single elected person? London mayors will have budgets which may or may not be substantial, but at least they will be subject to quite a lot of external scrutiny.
Individual Ministers have numerous other functions and constituency duties, and they cannot possibly have anything other than the most cursory oversight of all those quangos. Local councils are subject to a set of tight rules in terms of surcharging, the use of public money and statutory duties. The same rules of accountability are not applied to quangos and consequently there are differences in terms of legitimacy.
How does this impact on the ground? What is at issue is how this affects individuals in our constituencies. I thought of three examples on my way to this Chamber. Local councils have always taken an interest in economic development and have powers to undertake certain functions to help the economic prosperity of their areas. We have created training and enterprise councils, such as Sussex Enterprise in my region, which

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are not accountable and are based solely on business representation. When Sussex Enterprise was set up, only two representatives were allowed from the local councils, one from West Sussex and one from East Sussex, but under a rule made by the previous Government those two representatives could not be councillors. That is the irony of it. The only people specifically excluded by law from being on that board were elected councillors. If that is not bizarre, I do not know what is. Of course, that body met and conducted its business in private. More to the point, the decisions that it reached were often at variance with the democratic decisions reached by the local councils. I do not want to criticise Sussex Enterprise, which in many ways does a good job, but it has a particular perception about what the economy of Sussex needs. Its perception is based on the A23 corridor, which it feels is the appropriate mechanism for economic development. As it is a Sussex-wide body it looks at East and West Sussex together whereas East and West Sussex county councils believe that the economies of the two halves are very different, as indeed they are. All the Government's figures demonstrate that West Sussex is much richer than East Sussex, therefore the approach needed is different. However, that is not the approach of Sussex Enterprise, so it is in some ways subverting the democratic wish of the elected county councils and district councils in that area.
That was brought home to many of my constituents a few years ago when the Victoria hospital in Lewes, which was run by an NHS trust, and a local library, which was the responsibility of the county council, were threatened with closure. When people heard that the library in Ringmer was to close, petitions were organised and letters were written to councillors. The county council meeting was packed with constituents who said, "If you shut this library, we're going to vote you out at the next election." The county councillors said, "Okay. We can't take this. Look at the number of people here." The council backed off in the face of opposition and the library remains open.
When the closure of Victoria hospital was suggested, people ran around asking, "Who is responsible? Where are they?" We had to crowbar trust representatives into talking to the press. They did not want to know. The decision was taken behind closed doors. The trust has much improved, but those two incidents displayed the stark difference between the council and the NHS trust. In the council, there was clear, public accountability and the decision was easy to reverse, but in the NHS trust, the decision, which would affect a key public service, was taken by a shadowy group of people, without public knowledge, behind closed doors.
Will that continue? The proposed national park for the south downs has a great deal of public support. We all want the south downs to receive the best possible protection, but local people both those in favour of and those against the national park—are worried that decisions about planning matters, which are taken by democratically elected councillors in open session, will be taken by the new body. The people who are not councillors will be more remote from the sites to which their decisions relate. That is a genuine concern. The clear principle is that any person or persons who spend
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public money should be clearly and openly accountable for their actions. The Select Committee appears to share that view, but the principle does not apply now.
Instead of being elected, let us suppose that we were appointed by the great and the good—perhaps by the Queen's representatives who would choose us according to our good deeds on the basis of grace and favour. Suppose we were reappointed if we behaved ourselves for five years and said the right things to those who made the appointments; suppose we met in secret without members of the public or press; suppose there was no Hansard to record what was said; suppose there were no agendas or published minutes; suppose the press and the media could not find out what Parliament was doing with public money, but had to write to the Secretary of State who might, or might not, answer questions. That would be intolerable and we would not put up with it. Yet, that is the situation with many quangos that spend our money in the public interest.
Why can we not have openness and accountability? The Select Committee's Chairman rightly said that freedom of information legislation will not deliver on that. I am afraid that it will provide little freedom and even less information. The Government do many good things, but Home Office Bills are not very liberal, as we saw last night. We are worried that information will not be available. The Freedom of Information Bill has been roundly criticised on all sides. Since the former Chancellor of the Duchy of Lancaster, the right hon. Member for South Shields (Dr. Clark), did a fantastic job in producing the White Paper, the Bill has been filleted out. As soon as he produced the White Paper, he was sacked for being too radical. He is the first Minister that I know of to have been sacked for delivering a Government manifesto pledge. We have a pale shadow of that White Paper. It will not open up quangos. The Bill is flawed.
If we want to act quickly, why not see whether the legislation that applies to councils can be applied to quangos? Let us have the same rules and a level playing field. In 1960, Baroness Thatcher introduced her first Bill, which opened up councils effectively. Why do we not apply that principle straight away to quangos? I see no reason for bodies that spend public money not to be accountable in an open and democratic way. At present they are not.
I hope that the Government will take the issues that I have discussed seriously. I do not want to be entirely negative, although I feel strongly about the matter. The Government have listened and some of their responses are sensible and seem to go in the right direction. Nevertheless, they must deal with some key issues if they are serious about the matter, and one is the independent appointments commission. We cannot have patronage in the hands of Ministers, whether for appointments to the House of Lords or for appointments to quangos. We must remove patronage and the Prime Minister is right to want to do so with respect to the House of Lords.
Mr. Lansley: The Select Committee is not specific about the desirable extent of the remit of the independent appointments commission that it proposes. It has left that for further consideration. The hon. Gentleman seems to suggest that all public bodies—all

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quangos, so called—should be subject to an independent appointments commission. Is that his party's view?
Mr. Baker: It is certainly our view that the independent appointments commission should go a long way towards being responsible for appointments. Whether it should make every relevant appointment may be a matter for debate, but it should certainly appoint those who would appoint individual members. Ministers should not have the right to pick and choose people who have given their party good service, as often happens now.
The issue is a serious one relating to freedom of information, public accountability and the proper use of public money. I congratulate the Select Committee on a useful report and hope that the Government, who have shown signs of progress in the right direction, will treat the recommendations seriously—particularly those on accountability.
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Mr. Jon Trickett: I join the hon. Member for Lewes (Mr. Baker) in congratulating the Select Committee on Public Administration on a fascinating and comprehensive report. I am slightly disappointed that, although the House of Commons authorities have found time for this important debate, hon. Members are, in the event, preoccupied with other matters. Notwithstanding that, I hope that we shall still be able to air many of the issues that would have been debated had more hon. Members attended.
I want to draw on my experience of local quangos to find some general lessons. The Chairman of the Select Committee may well be right in describing quangos as to some degree an inevitable product of the modern political process, but I am reluctant to accept that. As has been noted, many were the result of deliberate political action, particularly by the previous Administration, especially for local provision.
The debate is timely, because we are more than half way through a Parliament past the fulcrum point—and no doubt beginning to think about the next election and beyond. The Government are committed to modernising the country. It does not surprise me that tasks other than tackling the proliferation of quangos have been given priority. I hope that more time will be found, perhaps after the next general election, to tackle them more seriously and comprehensively.
I have, for my sins, been a member of two quangos. When I was a councillor and leader of Leeds city council, I served on the health authority. That was a very large body and was in the process of reviewing all the health services that were provided to 800,000 or so people. I sat on the review body, which became known as the Leeds review. When I moved to an adjacent authority, I discovered that many of our actions in Leeds were affecting health provision in my area in a way that I would not now welcome. We planned the future of health services for many people in West Yorkshire.
I also sat for two or three years on the Leeds development corporation, which was allegedly designed to bring regeneration to part of the city. It had the most swingeing powers, including the power legally to
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expropriate land. When the development corporations were set up, land, buildings and other assets were transferred without compensation from public bodies that operated within the boundaries of the development corporations. Leeds development corporation also had swingeing powers to conduct compulsory purchases of private sector land. It did not hesitate to use either its powers to transfer land that it felt it might want to use from public bodies, especially the council, or its powers for compulsory purchase—it took away properties from on-going, profitable businesses.
I have described the background of the two bodies on which I served in order to suggest the scope of their acitivities. I sat on both bodies for about two and a half years, but it has always been a mystery to me why I was appointed. There had been a tussle between the then Government and the council about my original nomination—the Government refused to agree to my appointment to the development corporation.Although I was subsequently appointed, no one has explained to me why I was refused in the first place or subsequently appointed. A similarly mysterious process was involved with the health authority.
During those two and a half years, we spent millions of pounds, changed the lives of many people in the city and expropriated land. As hon. Members might imagine, I dissented from many of those decisions. Only two or three recipients of the services that the organisations provided contacted me. As an elected councillor, I was responsible for 15,000 people, and two or three people at least contacted me daily. As an elected representative, I was under continual and consistent pressure in relation to the services that the council provided, and every four years we had to submit ourselves for re-election. Those who served on the quangos did not have to do so. I was well known in the area and people knew that I was on the bodies, but no one contacted me in that regard. Pressures were put on me and other members of the board—I assume that that applies to members of quangos throughout the country—by practitioners, the providers of services, bureaucrats, clinicians, planners and experts in economic regeneration, but not by citizens, recipients of services, patients, ill people or their relatives.
Inevitably, that coloured the nature of the decision-making process. Decisions were taken on the advice of professional officers, who were employed by agencies. I did not feel that I had an active relationship with the communities to which we were meant to provide services, which was profoundly unsatisfactory. I do not doubt that that is the nature of quangos and remains so today, notwithstanding the sea change in attitudes towards quangos that has taken place since the election.
I was elected in a by-election and subsequently moved to Wakefield, when I discovered another face of quangos. Two local health trusts took a decision to unify and eventually close one of the two local hospitals, which would lead to services deteriorating. Many people contacted me and, as their Member of Parliament, I had the privilege of presenting a 60,000-name petition to the House. The quangos, the health authority and the health trusts resisted dialogue and interaction with citizens and Members of Parliament. The merger went ahead even though 60,000-odd people had signed a petition and many had written individually, so we are now facing the consequences of the possible closure of one of our hospitals.

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The merger of the two health trusts and the subsequent decison to close a hospital was not an act of citizenry, as I have never heard an ordinary citizen or patient say that we need fewer doctors, nurses, hospitals, beds and so on. However, many clinicians and others argue that case, especially those who are health service officials. Professional pressure and expertise largely determine the pattern of service offered by quangos to communities. I do not wish to dismiss that, as it is an important aspect of the decision-making process. Pressure from the citizenry is far less significant in determining such patterns. That position prevents a proper strategic approach to service provision and is to be lamented.
Mr. Lansley: The hon. Gentleman and the hon. Member for Lewes (Mr. Baker) gave examples relating to health service decisions—particularly trust decisions—in their own areas. They stressed the benefits of accountability through local government as distinct from accountability exercised through Ministers, who would ultimately take such decisions. Is the hon. Gentleman criticising ministerial accountability within the health service and does he want local government accountability for local health services?
Mr. Trickett: I shall attempt to address that as I develop my argument.
There is a case for a structural review of many of the services that I am discussing. It may be necessary to introduce local accountability through councils, and regional and national government structures to bring quangos under control.
Mr. Baker: Does the hon. Gentleman think that it is inconsistent that social services departments should be run by local authorities when closely linked health issues are handled by central Government?
Mr. Trickett: I accept that entirely. There is ethical and philosophical pressure, as well as pressure from citizens, for the seamless provision of care services, especially for the elderly. Social services departments under close democratic control are increasingly being encouraged to integrate with health service provision. Different patterns of managerial structure and accountability are creating an imbalance in service provision that must be corrected. It would be sensible to bring those parts of the health service dealing with that matter closer to local authorities and under democractic control.
I shall discuss the position in Wakefield and the quangos providing services there as the spending of such relatively unaccountable bodies is startling. I have not looked at all the quangos, but have selected two or three for reasons that will become clear. Wakefield health authority spends £218 million a year, which is then disbursed in various ways. Health care used to be provided by local communities and I see no reason why that cannot be the case in future. Indeed, parts of health provision are already under democractic local control through local councils.
The Police Authority, which nowadays is a quango, spends £301 million in West Yorkshire. Wakefield TEC spends £8 million. Sadly, it is to go, but it will not be
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brought under council control. The council has an economic regeneration function. It will be subsumed into a larger body, a skills and learning council, and will be based in Bradford. With no disrespect to my hon. Friend the Member for Shipley (Mr. Leslie)—his constituency is part of the Bradford metropolitan area—I find that a ludicrous decision. What a former coal-mining area such as Hemsworth has in common with a wool textile area such as Bradford I do not know. I regret the decision to set up a larger quango that is even more remote from the people.
It is not always apparent how the £8 million a year that Wakefield TEC spends is directed towards improving regeneration. Wakefield college spends £17.5 million a year. They are large providers of services. It is true that some of the board members are appointed in a transparent, although not very accountable, way, but in some cases it is difficult to find out how they are appointed. The bodies appear to be self-renewing public bodies, with no accountability. The college appears able to appoint members of the board of governors in an ongoing way. To some extent, the TEC is a mystery. I do not wish to single out Wakefield TEC or other Wakefield institutions as being better or worse than others anywhere else; I am simply trying to exemplify my point.
I have approached each of those bodies in the past few days and asked them to give the names and locations—not specific addresses—of their board members, who provide services to all the citizens in my constituency. As hon. Members may expect—they may be surprised or may even deplore it—I have met with reluctance to provide my office with background information about each of the members. That is in stark contrast to democratically elected members, whether members of the House of Commons or members of the local council, who are accessible to local communities through the democratic process, because, by virtue of being an elected member, one is accountable and accessible.
The regional development agency, Yorkshire Forward, is spending £100 million a year in Yorkshire and the Humber region, as we are obliged to call the area where we live. I have never met anybody who said that they were a Yorkshire and Humber man or woman, whether they be Yorkshiremen or people from Lincolnshire. That is a side issue, although it is not to be totally dismissed and smiled at, because we live in real rather than imaginary communities that have been created to suit boundaries that somebody somewhere has decided to impose on us.
No doubt Yorkshire Forward is excellently led. I know many of the people on the board, whom I know to be of high repute, as are all those that I have encountered on the boards of the organisations that I mentioned earlier. However, they are accountable and inaccessible. It is very difficult to get hold of the chair of Yorkshire Forward.
Yorkshire Forward is a regional development agency and has decided that Yorkshire and the Humber region should be rebranded. A marketing exercise is being carried out, which may be useful because we are all competing in a global market for inward investment. Evidence suggests that some capital is footloose and may be attracted to one region rather than another, but that is debateable. The marketing exercise will cost just over £300,000 and a questionnaire has been sent out. As

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a true-born Yorkshireman, I have never noticed a crisis of identity in Yorkshire. Characters such as Denis Healey, Dickie Bird, Fred Truman—
Mr. Lansley: The Leader of the Opposition.
Mr. Trickett: The Leader of the Opposition.
Mr. Baker: Geoffrey Boycott.
Mr. Trickett: One could go on. They are not people who suffer from identity crises. Yorkshire people have a strong sense of identity.
Dr. Tony Wright: Has my hon. Friend heard it said that one can always tell a Yorkshireman, but one cannot tell him very much?
Mr. Trickett: That is a valid comment and it might apply to some of those just mentioned. Bernard Ingham is another. He is a sterling Yorkshireman, but did not always listen when points were being made to him.
Rebranding Yorkshire is an extraordinary idea. If the regional development agency was under democratic control and had to submit itself to election, I wonder whether it would set about the bizarre process of rebranding. I understand the argument for marketing and branding Yorkshire, but giving it a new brand is a surprising exercise.
As an interested Yorkshireman, I read the questionnaire carefully and thought about filling it in. Question nine, which may be the most extraordinary part of the exercise, asks the people of Yorkshire to identify any personality who might become a good ambassador for Yorkshire and the Humber region today. We are supposed to think of a name, fill it in and send it off. It is important to have regional structures, but I doubt whether an elected assembly for the region would ask the public, through a questionnaire that is sent out randomly and which can be accessed on the internet, to identify someone who could be Mr. Ms or Mrs. Yorkshire. If the board of the regional assembly were democratically elected, whoever was elected as the first minister would be the ambassador and advocate for the region and we would not be spending a substantial sum of money—£300,000—to rebrand Yorkshire, which is strange, or to find an ambassador for Yorkshire, which is bizarre.
Yorkshire Forward is falling into the trap that I described earlier. Board members are not in an active relationship with the communities for which they are providing services. They are in an active relationship only with the other members of the board and, more importantly, the professional officers serving the board, and someone has said that we need to market Yorkshire.
Many of the services that I have described, such as organisations for economic regeneration, the police force and health services, could be restructured and brought under democratic control, especially if we could establish a new democratic tier of regional government. I imagine that, in a second term, we would begin to tackle the quango state rigorously and comprehensively, to disassemble or deconstruct—whatever the jargon is—those elements that could be deconstructed. They could then be put back together under democratic control.
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I hope that the Minister will say that the Government are prepared to examine the quangos, case by case, to decide whether they could be placed back in local government. That would reinvigorate local democracy more than anything else. Instead of tinkering with the structure of councils and setting up cabinets and elected mayors, we should give local government back some of its functions, because that would encourage more people to vote for local government.
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Mr. Andrew Lansley: I am grateful for the opportunity to contribute to the debate, which I have enjoyed. As other hon. Members have said, it was particularly enjoyable to hear the Chairman of the Public Administration Committee introduce the subject, as that helped to set the scene and to explain the Committee's recommendations. Happily, they were not too many or too detailed, unlike those in many Select Committee reports. A Select Committee should hit some key notes, and the Public Administration Committee did that well.
The hon. Members for Cannock Chase (Dr. Wright) and for Lewes (Mr. Baker) partly set the scene, but there is a context to the debate that has not been dealt with. I suspect that I may fall foul of the hon. Member for Cannock Chase, but there is a numbers game behind this issue. It is not irrelevant, because it provides context, and people focus on it because it has been a way to get a handle on what goes on inside the quangocracy, which is otherwise impenetrable.
The numbers game is important because we need to understand what has happened. From 1979 to 1997, the Conservatives reduced the number of non-departmental public bodies from 2,167 to 1,128. The hon. Member for Cannock Chase made an oblique reference to the fact that many bodies that had been under local elected control were given appointed status during that time. Schools that are grant-maintained rather than maintained by local education authorities are a principal example of that. I will not engage in the pros and cons of that argument, but it is reasonable.
Examining the quangocracy is rather like trying to get hold of mercury. We all know the phenomenon whereby one examines something to quantify it and targets a number, only to find that the target has moved. The thing that one was looking for will take on a different shape, and I am afraid that that has occurred since the May 1997 election. The difficulty in the past was associated with the larger number of local public spending bodies, but now the Government have reduced the number of advisory non-departmental public bodies. Admittedly the reduction has not been large—the figure is 70 or thereabouts. At the same time, however, many task forces have been created.
The hon. Member for Cannock Chase prefaced the debate by saying that it might touch on task forces, and I will follow up that point. Two aspects worry me. The Government moved away from the process that had emerged for scrutinising NDPBs. That may or may not have been adequate, but at least it was established that a significant number of NDPBs were subject to the Nolan rules for appointment and fell under a scrutiny system that worked through the public bodies report and other means—but the task forces do not fall under the framework to the same extent.

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The second difficulty was that, because the Government sought to target NDPBs as a definition—if only one definition—of quangos, it was in their interest for people not to know too much about the number of review bodies and task forces that had been created. The Neill committee was explicit in the review of its first report that on the basis of written answers in the House of Lords between February 1998 to November 1999, it was impossible to determine how many review groups and task forces existed. At that point, the Minister of State, Cabinet Office came clean about how many there were—although only in response to, rather than in anticipation of, a democratic audit. That created a real source of concern, which is relevant to our debate.
As we are trying to improve the scrutiny, accountability and openness in the formal structure of NDPBs, it would be damaging if a separate set of bodies could come into the orbit of government without being subject even to the scrutiny that has been applied to the quango state up to now. The Government are, of course, keen to diminish the difficulties associated with the task forces by referring to them simply as a means of expanding sources of advice to Ministers. Expressed in those terms, why should Ministers not have the sources of advice that they want? But there are many underlying problems.
The first is that they are narrowly not just politically—chosen. Of course Ministers must have a degree of freedom to choose advisers who have an understanding of the political perspective from which Ministers operate: but appointments are often more narrowly chosen than that. There is often partisan partiality. Secondly, the process is exclusive. Bringing people into task forces may expand the sources of advice, but the people on those bodies attain an exclusive position in providing advice to Ministers. By definition, influence accumulated by one group of people over policy decisions is to the detriment of another group.
What other groups are losing influence over the process? I fear that the representational bodies—those with a genuine and legitimate representational role as interest groups, pressure groups or elected people—are losing out in providing advice to Ministers. With representational bodies, the process is more open. More material is published as responses to White Papers, Green Papers and so forth than when the issues are taken up through advisory memorandums from task forces to Ministers.
Dr. Tony Wright: I was right to say that the hon. Gentleman would talk about task forces, but there is a problem with his argument. If he read the democratic audit report, which is the only comprehensive account of the full range of task forces, he would see that the initial criticism ended up as praise. It was seen as a far more open way for Governments to take advice than a closed policy process—precisely the opposite of what the hon. Gentleman said. Perhaps the hon. Gentleman should be arguing strongly to ensure the publication of
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the reports of task forces. The better regulation task force insisted on that from the beginning, which takes us back to transparency and accountability.
Mr. Lansley: I am grateful to the hon. Gentleman, but he will not be surprised that my purpose in paying tribute to the democratic audit report was not to endorse its arguments and conclusions. That work, most importantly, exposed the extent of the issue. I do not endorse the conclusions that were reached and I am surprised that the hon. Gentleman takes the line that he does. The merit of a task force does not lie in the fact that it is a better system than the private closed policy-making system, without reference to openness and scrutiny.
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Sitting suspended for a Division in the House.
4.15 pm
On resuming—
Mr. Lansley: Before the Division, I was responding to the hon. Member for Cannock Chase about task forces and disputing whether they were desirable because they were more inclusive of external advice than a process that was entirely internal to Government Departments. However, we should test them not by that measure, but against their lack of openness and scrutiny because of the Government making so little information available, the potential for conflict of interest, the potential for partiality in appointments and the lack of scrutiny of those appointments under the Nolan rules. There are better ways in which to undertake such matters. Indeed, in some respects the conventional process by which Ministers seek advice from representational bodies in open consultation through Green Papers and White Papers is preferable to a system in which some decisions are not exposed to the same extent or are prejudiced in the policy—making process by the exclusive opportunities for people to act as advisers.
There is a potential accountability issue concerning Ministers relying on the advice of advisory bodies and distancing themselves from the consequences of the decisions. Accountability issues should track back simply and directly to elected persons. As for reaching different conclusions about what remedies should be used, illustrative of that argument is that the public regard the accountability with which they hold councillors as more simple and direct than that in respect of decisions made by NHS trusts, especially on closures. We all know that closure decisions are surrounded with mechanisms to try to make them accountable to the community, such as health councils, Ministers and so on, but that does not mean that they are undertstandable. The confusion and lack of transparency admittedly, a jargon word—that suffuses the task forces and review bodies set up by the Government since 1997 is highly regrettable and I hope that the Government will move away from taking such action.
I refer now to the growth of the quango state since 1997. The numbers game is significant because, as the hon. Member for Cannock Chase said, we should not target it. There has been limited success in the past, in

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that such targeting allowed some of the characteristics of the quango state to re-emerge in other ways and to reconstitute itself like a chameleon to avoid that. The underlying issues concern the extent to which executive or policy-making activities are required. One mechanism by which a quango state could be reduced would be to limit the extent to which it could execute, tax and spend. If we cut that back over time as a proportion of the total activity of our nation, we shall reduce the opportunities for the quango state to assert itself.
The second issue is whether the functions are conducted nationally or locally. There is a tension between the operation of quangos at local level, and local democracy. However, it is a somewhat creative tension. It is one of the things that best constrains quangos and drives us, if we are responsive, towards having fewer appointed bodies and being more responsive to elected bodies. If activity is undertaken at local rather than national level and if Ministers exercise powers and control more and local government control less, the temptation to use appointed bodies will grow. The temptation to use their regional and local offshoots will follow. Therefore, there is an underlying political debate, which was clearly in the minds of hon. Members who spoke earlier. If one goes down the path of devolving responsibilities to local government, rather than retaining them for central Government, one will, by extension, limit the opportunity for quangos to emerge.
Now we come to the third issue. If things are managed substantially by central Government or its agencies, or by quangos, how is the process to work better? My purpose is not so much to offer a series of solutions as to comment on those in the Committee's report, which helps us think about the problems.
At the risk of offending the Chairman of the Select Committee, I will start with some points with which I do not agree. First, I do not agree that regionalism and regional structures present a good mechanism for scrutinising quangos. I understand that the argument was that 410 local authorities would find it extraordinarily difficult to make each quango accountable to them. The response to that should not be, "Let's draw the responsibility for holding all those functions to account away from local authorities. Let's take away the responsiveness to local conditions. We shall not let people who understand what is going on apply that understanding to quangos. Let's do it all regionally." If one follows that path, one ends up with a regional tier of government with a more distant set of institutions, and local authorities that feel that they have not only a limited function, but virtually no control over many of the decisions being made.
A good example is planning legislation. It is important that the regional structures are created by local authorities and that those structures have a derivative function, rather than superseding the responsibilities of local authorities. Within planning policy making, we should devolve those responsibilities as far as possible to local authorities, so that they can make genuine decisions. In the final analysis, regional bodies, Government offices, planning inspectors and the Secretary of State are more likely than local authorities to make decisions. Without dwelling on individual planning decisions, it is only too obvious to most of us that that fact has made it increasingly easy for local
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authorities to play a political game in relation to planning decisions, rather than exercise the responsibility of deciding what developments should take place and where. It is damaging to local democracy that councillors feel that they are not taking the ultimate decisions, and that they are simply making a populist response locally, rather than balancing the long-term needs of their area. I am afraid that taking decisions away from local authorities and setting up regional structures will only exacerbate that undesirable trend.
The second respect in which I disagree with the Select Committee's report relates to joined-up government. That is not a term with which I am ever comfortable. In any case, I thought that it had been superseded. The hon. Member for Cannock Chase seemed to have a term, although I could not bring myself to use it. Was it "joined-up-ness"? I thought that, because the phrase "joined-up" did not work exactly, "wiring it up" had superseded it, and that the performance and innovation unit at the Cabinet Office had decided the time had come to tell people how to do it. As ever with the current Administration, if at first something does not succeed, give it a different name and try again. "Wiring it up" seems to be the thing.
In his evidence, Professor Marquand quite rightly pointed to the difficulties of trying to connect decisions inside Government if one disaggregates responsibilities out to quangos. The proper response to that is not necessarily to say that all these decisions should be held at the centre, but is to recognise how policy is interconnected. This brings one back to the issue of localisation, because at a local level the interaction of these decisions can be seen more readily.Therefore that points once again to trying to avoid wherever possible quangos having local arms that are not responsive to local needs.
Even at national level, the responsibility for connecting these policies together lies with Ministers. It does not lie with superseding the role of quangos. If a quango is established for a valid purpose—the hon. Gentleman set out what some of those purposes might be—the point of it is set against a specific framework of policy and, indeed, of supply for public expenditure purposes, for specific purposes. If those purposes do not connect or properly co-ordinate with other bodies, the fault lies not in the quangos or the structures themselves, but in the adequacy and understanding of Ministers of the policy and instructions—the executive responsibilities—that they give to those bodies. Too often one of the problems of quangos is that we tend to focus on their effectiveness or otherwise, in managerial terms. We focus too little on the underlying responsibility, which delegation to quangos does not absolve, of identifying what the purpose of a quango is, giving it policy, giving it supply and being accountable for the outcome of that activity.
Another point on which I do not agree, particularly with the hon. Member for Lewes, is the extent to which independent appointments should be made to quangos. Just as Ministers are fundamentally responsible for the policy and the public spending which flows into non-departmental public bodies, so Ministers are responsible for the quality of the appointments they make to deliver that in those bodies.
Mr. Baker: Would the hon. Gentlemen be in favour, then, at least in the interim period until it is revised, of

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appointments to the House of Lords being made on the Prime Minister's recommendation or by an independent body?
Madam Deputy Speaker (Mrs Gwyneth Dunwoody): Order. Briefly.
Mr. Lansley: The hon. Gentleman tempts me.
For these purposes, I will simply make a distinction. It is not the responsibility of Ministers to determine the output of the House; it is the responsibility of Ministers to secure policy and effectiveness in public spending through non-departmental public bodies. Any view I might take about appointments in quangos is not transferable to a view about appointments in the House of Lords.
To revert to non-departmental public bodies and appointments, for that reason I would be very careful about the independent element in appointments. The independent element is about propriety and securing impartiality, not about securing the characteristics of a person who is appointed chairman, chief executive or board member of a quango. It is more important for Select Committees, if they are considering going down the path of confirmation hearings, as it were, for them genuinely to be confirmation hearings, involving confirmation of a decision made by a Minister, not necessarily when the Minister is minded to make it, but perhaps at the point at which the Minister has made a decision, and then perhaps scrutinising the Minister and the appointee to learn what are the instructions, the policy and the purposes for which the Minister has made this appointment. At a subsequent point, in terms of policy and outcome, intention can be compared against result, rather than going into the question of whether the Select Committee should have a role in second guessing the decision of a Minister on the personal characteristics of the person to be appointed.
Happily, that takes me through those things where I specifically want to disagree with the Select Committee. There are other points on which I agree. First, the hon. Gentleman made it clear that a map of Government as recommended is important to secure definitions and to understand and create, perhaps over time, consistency and coherence in the structure of quangos. That is highly desirable. Secondly, I endorse the Select Committee's view that the results of prior options reviews should be more accessible and that the review team should contain an independent element. I do not wish to speak at length on the third point, the parliamentary accountability of quangos, because a commission under the chairmanship of Lord Norton of Louth is considering that. However, I shall draw to the attention of my noble Friend the Select Committee report—which he will no doubt have seen—and our discussion today. I hope that that is another area in which he and his colleagues can make recommendations to Government for policy purposes—which I hope will, in turn, inform a wider debate on the strengthening of Parliament's role in scrutinising and holding the Executive to account.
Fourthly, the auditing of local spending bodies, on which the hon. Gentleman did not dwell—its
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technicality is beyond me—is important. It has arisen in regard to training and enterprise councils, for example, in a way that has left concern. It is important to understand why the audit trail is going into local spending bodies and how many bodies are asking local spending bodies to account for themselves and expose all their financial activity. If the reason for an audit is one of simple propriety, it is perfectly acceptable for the National Audit Office to undertake it. However, such audits need not occur routinely. They should occur for a specific reason, because of an allegation, for example, or on a more random basis to ensure that a body is not acting in a way that involves impropriety or financial loss. However, if the reason were one concerned with management, it is probably better for the Audit Commission to secure effectiveness. The relationship that the Audit Commission has with different local spending bodies, including local government and the national health service—which it has worked hard to achieve—might create mutual understanding.
One must bear in mind some of the problems that have occurred with quangos—I would include TECs in that—because of the degree to which interference, not so much in terms of audit as in terms of but of Treasury controls and, under the present Government, public service agreements and so on, second-guesses the objectives for which arm's-length distance from Ministers was created in the first place.
I made some general remarks about appointments to which I should like to add some specific points. There is a concern about appointments. In a sense, there is a discontinuity between our debate and the work of the Commissioner for Public Appointments because, as the hon. Gentleman made clear, the commissioner has another report to make. We must recognise that lack of confidence in Government and concerns about the lack of accountability of quangos are greatly increased if appointments to such bodies are seen as impartial, biased or ineffective.
Members of the Committee will be aware of the fourth report of the Commissioner for Public Appointments and the number of politically active appointments in the NHS to which it refers. The commissioner states in that report that the number of local councillors appointed has more than doubled and that Labour councillors represented 80 per cent. of the then most recent figure. He commented:
This trend raises a concern that the emphasis on representation may lead to the bodies in question losing the wider management and professional skills and competencies which those holding office need to fulfil the responsibilities that they are required to discharge.
That highlights the issue. One may want the body to achieve local representation, in which case, as the hon. Member for Lewes would argue, responsibility should be with local rather than national Government. Alternatively, as was the case under the previous Administration, one can recognise that the purpose of appointments is to give NHS trusts and bodies—in this case—the skills that they need. If one no longer makes appointments on the basis of the skills that are required for the management of trusts and one includes skewed

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local representation that does not evenly reflect the political balance of the area, one brings the entire process into disrepute.
Mr. Baker rose—
Mr. Lansley: I am about to conclude, but I will happily give way to the hon. Gentleman, so as not to frustrate his desire to intervene.
Mr. Baker: I am hoping to move the debate along. Does the hon. Gentleman not agree that there are local council specialists, for example, planning and environmental health officers, who have particular skills, but who are subject to decisions by elected councillors? Those councillors give them directions, but do not intrude on the exercise of their skills. In the same way, civil servants in each Department undertake valuable work that does not interfere with the political process. So it is possible to combine democratic accountability with individuals' skills.
Mr. Lansley: Transparently, it is possible to combine those things, but it is a question of what one sets out to do. In the context of the NHS, if one seeks to achieve a national service without postcode rationing, in which there is no local discretion about choices between priorities—
Madam Deputy Speaker: Order. I know that the hon. Gentleman was tempted in that direction, but we should perhaps come back to the report. Postcode rationing is a tiny bit off the subject of quangos.
Mr. Lansley: I am grateful to you, Madam Deputy Speaker. You may know that I can resist almost anything except temptation.
If the structure is brought into disrepute, we end up with the situation that Martin McElwee graphically described in a report entitled "The Great and Good?". He said—unfortunately, it is true that all Governments tend to give increasing numbers of appointments to their natural supporters and allow appointments to reflect their political priorities. He said that this Government were "quantitively different" from other recent Governments in the extent to which they had brought in their supporters to make a new political class. They have created that class not so much through election as through the exercise of appointments.
Although there may be advantages to managing government through appointed bodies, there is an inherent danger that that structure may not be based on openness and accountability. The structure must inspire confidence through its impartiality and by making appointments based on merit. That is the basis on which the Commissioner for Public Appointments will, rightly, examine the whole structure.
In conclusion, I commend the Committee for its report and for giving us the opportunity to have this debate. With the exceptions to which I have referred, the report helps us a great deal in trying to increase the transparency, openness and accountability of quangos. I hope that the Government will take it further by considering sympathetically some of the recommendations that have been made.
4.38 pm
The Parliamentary Secretary, Cabinet Office (Mr. Graham Stringer): First, like my hon. Friend the Member for Hemsworth (Mr. Trickett), I declare not a current interest, but a former activity—as a member of two quangos. I was a member of Central Manchester development corporation for seven years and a member of North Manchester health authority for one year, in the early 1980s. So I have experience of quangos and of local authorities, which I must say added to my interest in the Committee's report. I read not all, but most of the evidence in the two volumes. I, like everyone else in the debate, want to congratulate my hon. Friend the Member for Cannock Chase (Dr. Wright) on producing a comprehensive overview of quangos, non-departmental public bodies, local public bodies, advisory bodies, task forces and all the groups going under different names. My one disappointment today is that only five of us have participated in the debate, which relates to principles of accountability, public expenditure and democracy and many activities that affect our constituents. I am surprised that so few hon. Members have turned up.
The Government examined the report's recommendations carefully and broadly agreed with 12 of the 25. They disagreed with eight and are considering five more, which I shall come to shortly. I do not intend to dwell on those with which we agree. It is possible in debates such as this for the Minister to make a speech of the Government's position and read that out. I prefer to listen to the debate and respond to it on behalf of the Government. If I miss out answers to anything that hon. Members have asked, I shall answer in writing.
The eight recommendations with which the Government could not wholly agree were characterised by a search for consistency on the part of the Committee. It wanted consistency about how different public bodies should be accountable. The Government's response was that perfectly good structures exist and it is not necessary to alter them for the sake of consistency. Those are not the words that were used, but that is the essential response. I shall come back to two recommendations from the end of the report, about how appointments are made and the Select Committee's role.
The Committee took evidence from right and left-wing academics, local government, two Commissioners for Public Appointments, a Minister and several other experts, and it was striking that the debate that has been going on for a quarter of a century about whether quangos should exist has disappeared. There is complete consensus—but not on the exact size of, or methods of appointment to, quangos—that in a modern society there will always be groups of bodies that do not fit straight into national or local government. I do not know whether that development of consensus is the reason there are not more people here today. Of course, the witnesses differed in the emphasis that they placed on the need for change.
I shall begin by dealing with the last part of the debate—the end of the contribution of the hon. Member for South Cambridgeshire (Mr. Lansley). Quangos have had a bad name and change is happening now, not because people do not recognise that an expert panel or arm's-length organisation is sometimes needed, but largely because of what happened during 18 years of a Conservative Government, in which quangos were used

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ruthlessly to give positions to active Conservatives as well as to ex-Members of Parliament and ex-Ministers. However, this debate has not been adversarial and I shall not list the 20 names to which my right hon. Friend the Minister of State, Cabinet Office, referred during a debate in the House on 18 January. He listed a considerable number of people who had been thrown out of government, had chaired Conservative associations or were married to active Conservatives or Conservative Ministers who had been given appointments. Such appointments undermined the confidence of the public and members of other parties in NDPBs. As elected local councillors in Manchester in the 1980s and 1990s, my colleagues and I got fed up with seeing the electorate throwing Conservative councillors out of office but then finding them being given increased responsibility running health authorities and trusts, as well as being appointed to residuary bodies, development corporations and other quangos. As I said, we were fed up with such appointments, which gave quangos a bad name.
The hon. Gentleman referred to the fourth report of the Nolan committee on the change in appointments to NHS bodies.
Mr. Lansley: Just for accuracy, I remind the Minister that I referred to the fourth report of the Commissioner for Public Appointments.
Mr. Stringer: I shall quote from a statement made in July 1999 by the chief executive of the NHS, when the debate was happening. He said:
"The new criteria that the Government have introduced to reflect more the interests of patients, people who use the service, carers and people from voluntary organisations are important. The make-up of boards has changed a little. Pre-1997, about 70 per cent. of people on boards had management experience in other organisations. That figure is now 50 per cent.
There has not been a huge change. In 1993, The Observer claimed that 40 per cent. of executive non-departmental bodies were in the control of known and explicit Conservative appointments and produced facts to show that that was the case.
My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) also changed the criteria so that local people were appointed to NHS bodies. That was an important change. Many people in different areas were extremely annoyed when they listened to consultations given by development corporations or health bodies in the late 1980s and early 1990s, as they often found people who had had to look at an A-to-Z guide to reach the location that they were going to administer. That was completely unsatisfactory and the Government have put it right. As I have said on a number of occasions, we have achieved that by changing the right of Ministers to appoint people but by accepting the recommendations of the first Nolan committee that people should be appointed on merit and through a clear and transparent process. We have supported that throughout.
As other hon. Members have mentioned, appointments continue to be a matter for debate and discussion. We look forward to the publication next Wednesday of the inquiry conducted by the
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Commissioner for Public Appointments into the NHS appointments process. We have debated who should be appointed to those positions and how, so I suggest that we spend a couple of minutes thinking about the Select Committee's recommendations on how people are appointed and the role of councillors. I shall do no more than go through the arguments and tell the Committee a little about the history of elected representatives on health authorities.
Prior to 1982, all health authorities assumed it to be a good thing that a third of an authority's membership should consist of local councillors appointed by the local authority. Between 1982 and 1992, that proportion changed to 25 per cent., and the right of local authorities was largely lost in 1992. After that, it became difficult for Liberal, Social Democrat or Labour councillors to be made members of an NHS body. The figures bear that out. Although there are three times as many Liberal, Social Democrat and Labour councillors combined as there are Conservative councillors, there were twice as many Conservatives on these bodies then.
As the rules of appointment have changed, that balance has changed. The Government are still committed to appointing on merit from the local community and, just as important, trying to improve the diversity of the people who serve on those bodies. At present, 50 per cent. of new appointments on NHS bodies are women. It will be some time before that is the complexion of all NHS bodies, because the membership changes only once every four years—or longer if people are reappointed. The same is true of the number of people from ethnic minorities—the number has doubled on those bodies. That is part of the Government's objective of improving the composition of those bodies.
All that is background to a debate that will take place next week. About 17 per cent. of elected councillors are members of NHS bodies.
Madam Deputy Speaker: Order. The Minister is being very kind in giving us the background for next week's debate. Perhaps we can return to today's debate.
Mr. Stringer: I thank you for that advice, Madam Deputy Speaker. I shall bear it in mind. Appointments were mentioned in the report, but I appreciate that I went too far in the subject.
I move on to the points raised by my hon. Friend the Member for Cannock Chase. I agree with my hon. Friend that this is not a numbers game. Numbers have been mentioned, but the Government would not have failed even if the numbers had changed in the other direction. About 140 NDBPs have been abolished and about 70 new ones have been created. However, that is not the main question. Many of those NDBPs are there to deliver a service. It is important that they carry out their functions properly and that they do it in a transparent and accountable manner.
I know that the Select Committee and the Government more or less agree on the next point. The Committee wants more information, and we shall give it more information; we intend to be as transparent and open as possible. Public bodies will be the executive non-departmental bodies mentioned in the executive agency report. We are attempting to make things as clear as possible, leading to the production of a map of the public sector.

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My hon. Friend then considered what should be an executive NDPB and what should be in the democratic sector. He mentioned a good academic study. It showed that appointed bodies, which do not have the confidence or arrogance of being elected, sometimes make the effort find out what people want. They can respond—I am mindful of the contribution made by my hon. Friend the Member for Hemsworth—better to public demand than locally elected bodies.
From the point of view of a modernising Government, the public want services to be available. The public can get more out of a harmonious partnership between an NDPB that produces a service and the local authority. Not many of us who were involved in local authorities 20 years ago would have thought that possible. It has happened, and we must respect it. Although we are rightly concerned about democracy—it is central to what we do—what many people want from a hospital or a housing service is good quality. Joined-up government is not about putting everything into one place or keeping everything separate, but about ensuring that people get the service that they want and recognising the best bodies to provide it.
My hon. Friend mentioned openness. It is difficult to make the case that the Freedom of Information Bill does not go far enough. His report acknowledges that the Government are more open with information on NDPB membership and their annual reports, objectives and business plans, and that the Bill will help. We are committed, as the White Paper "Quangos: Opening the doors" explained, to an open, accountable and effective public sector.
Dr. Tony Wright: I hope that I am not straying, but my hon. Friend has provoked me—and I was doing so well in agreeing with him. Had he read an earlier Select Committee report on the draft Freedom of Information Bill, he would have seen that it made a careful distinction between open government and freedom of information. Open government is a gift from Government. It reflects the Government's desire to be more open, and the Government have been admirably more open. Freedom of information is about the rights of citizens. They are two different concepts.
Mr. Stringer: I understand my hon. Friend's point. I was simply saying that we are improving the ability of members of the public to receive information, either by exercising their rights in the Freedom of Information Bill or as a result of the Government's decision to be more open. Given that, it is hard to criticise the Government further as we appear to share the same objectives on this issue.
The other principal difference the Government have with the report—in this respect, I agree with the hon. Member for South Cambridgeshire—relates to the scrutiny of people who are about to become chairmen of executive non-departmental bodies. I understand the desire for more parliamentary scrutiny, but the course that is recommeded would lead to confusion and possibly ineffectiveness. Taking an example at random, imagine somebody whom the Government were minded to appoint to the Environment Agency for England and Wales appearing before the appropriate Select Committee, which decided that the person was not right
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for the job. The Committee might think that there was a mismatch between the person's skills and those required in the job description. I am a great respecter of Select Committees, but they can make mistakes as much as they can be right. The result would be a complete lack of public confidence in that person. The Select Committee would effectively have a veto, there would be a slowing down in the process and it may—I am speculating, but I think reasonably—lead to fewer people applying to become chairmen of the different executive non-departmental bodies.
Mr. Baker: I understand the Minister's point. However, if he takes the example of the Environment Agency, the previous Government appointed as the chairman a person who was a leading Conservative supporter and who lived in the constituency of Huntingdon. Surely there is a problem with the existing arrangements.
Mr. Stringer: I knew that if I mentioned a real example I would become involved in a debate on an appointment about which I know nothing in any detail. The Government's position on appointments is that the best person for the job should be appointed on merit. Clearly that was not always the position under the previous Government.
If a process is implemented whereby Select Committees can express a view on somebody the Minister is minded to approve, those Committees have a veto, undermining the appointment process. If that happens, applicants might dry up. There would be a blurring of the lines of responsibility because, although that person was appointed by the Minister, he would feel that he had needed the support of the Select Committee which considered the case. That is why the Government have rejected that proposal. I know that the Committee visited the United States and examined the process there. I am not going to go any further down this path, but the balance within the American constitution is very different from the balance within our constitution.
Dr. Tony Wright: I do not want to respond to points as the Minister makes them, but he is right in saying that this is important territory and that there is an issue of principle involved. I ask him to look carefully at the words that we use. We talk not about second guessing, but about a candidate elect being invited to appear before the Committee—if it chooses to do so before an appointment is finally confirmed. Leaving aside individuals, the prospective chairman of the Strategic Rail Authority, for example, might be invited to come before the Transport Committee to discuss issues concerning the rail system. When a person is taken on, that is a normal requirement—I was about to say that it does not appear to be a huge disincentive to candidates, but I need to be careful in this context. The Select Committee would gainsay the decision only in the most exceptional circumstances. It is entirely normal for a prospective appointee to discuss his role within the Select Committee.
Mr. Stringer: I cannot believe that many prospective appointees in the transport industry genuinely look forward to being interrogated by the Transport Committee. I have participated in its interrogations, and I know that they are carried out thoroughly.
Although we are discussing one example, our conclusions could apply to any Select Committee. Select Committees are a question-and-answer forum and do not involve dialogue—that is not their nature. Committee members can be aggressive in their questioning and someone who appears before a Select Committee but who does not have answers to all the questions does not look too good on television. If he or she took up the appointment after such a performance, his or her position would be undermined. The Government rejected the proposal for that reason, among others. Of course, the day after his or her appointment, the new chair or chief executive of an important executive agency or non-departmental body could go along to a Select Committee and discuss what will be done. There is a fundamental disagreement about the responsibilities of Government and of Select Committees.
On ministerial responsibility for appointments, the hon. Members for Lewes (Mr. Baker) said that a Minister cannot know every person who is appointed, and that he or she should therefore appoint no one or very few people. That cuts the line of ministerial responsibility, but the hon. Gentleman's argument is worth examining. In business, local and central Government and other walks of life, chief executives, chairs of companies and Ministers cannot know every detail of the business or Department that they control. They rely on advice on numerous occasions, but that does not mean that when they take such advice, they are not responsible for it. The hon. Gentleman's logic was incomplete. The appointments process is no different from that which applies to many other executive decision-making processes. The process involves knowledge, advice and decision.
We should consider the alternative. I advise hon. Members to read a history of the appointments of the Doges in Venice. For some reason, politicians are not the flavour of the month—we are the second least popular group of people in the country after journalists. If we found someone else to take our responsibilities away from us, that would be an abdication of responsibility, and it would blur the lines. If we gave away responsibilities by creating committees, what basis would their decisions have? The Government have clearly accepted the first Nolan report, there is an independent external assessor and appointments are made on merit and can be challenged. However, the final decision rests with the Minister. What is the point of giving away responsibilities and setting up another committee to undertake such matters? We come back to the question of who appoints the committee. Indeed, to do that, another committee that is even more independent may be appointed, which results in the loss of a direct line of accountability.
Mr. Baker: I agree and am in favour of political accountability.However, the huge number of quangos and Ministers' many responsibilities mean that, with the best will in the world, Ministers cannot do the job to the degree that they would like. The alternative is a dramatic reduction in the number of quangos and, whenever possible, the return of duties to local government or even regional government, so that they become democratically accountable through elected local politicians.
Mr. Stringer: The hon. Gentleman made two separate points, one about local democracy—which I covered earlier—the other about ministerial responsibility for appointments. It would be wrong for a Minister to delegate or give responsibility for appointments to local bodies in cases in which national bodies exercise such a function.
I accept concerns about what should be considered in the local democratic process and what should be outside it. Indeed, I listened with interest and sympathy to the local experiences of the hon. Gentleman and my hon. Friend the Member for Hemsworth.
We are coming to the end of a full, if poorly attended, debate. We have touched on most of the issues at the heart of the excellent report. I have not really dealt with task forces, which were mentioned by the hon. Member for South Cambridgeshire. The report entitled "Ruling by Task Force: Politico's Guide to Labour's New Elite", as well as "The Great and Good?", which deals with some of the people invited into government, put an emphasis on the matter that is different from that of the hon. Gentleman.
A new Government clearly need advice from new sources. However good the civil service, it is not the repository of all the wisdom in the world. Indeed, that is impossible. Pertinent to the appointment of task forces are remarks made by my noble Friend Lord Falconer of Thoroton in a debate in the House of Lords on 23 February. He said:
What are the problems which need to be addressed? First, transparency. We should name the people on the task forces. We do. We should state their focus and remit. We do. We should keep that information up to date. We update it every six months. We should publish the reports of task forces. Twenty-one have already reported, and many others will be published or are in the process of being published. I cannot say that there will not be good reasons why advice should not be published.—[Official Report, House of Lords, 23 February 2000; Vol. 609, c. 268.]
Some of those reasons are self-evident. The hon. Gentleman therefore overstated his case.
In conclusion, I thank the Select Committee members for producing such a good report. I should also thank my hon. Friend the Member for Cardiff, West (Mr. Morgan), the previous Chairman of the Committee, as I understand that the report is not all the work of the current Chairman, my hon. Friend the Member for Cannock Chase.
Question put and agreed to.
Adjourned accordingly at fourteen minutes past Five o'clock.

PRIME MINISTER

  Welfare Reform
  Mr. Peter Bradley
  To ask the Prime Minister what further progress the Government have made in their welfare reform programme; and if he will make a statement. [115348]

  The Prime Minister
  Welfare reform is central to this government's agenda of modernisation, and to our goals of tackling poverty and social exclusion. Today I am announcing plans for the next stage of welfare reform which will radically change the way the Government provides support for people of working age. The aim is to accelerate the move from a welfare system that primarily provide passive support to one that provides active support to help people become more independent, based on work for those who can and security for those who cannot.

  During 2001 a brand new, modern agency will be established with a clear focus on work. This will draw together the Employment Service and the parts of the Benefits Agency which support people of working age. It will deliver a single, integrated service to benefit claimants of working age and to employers. The agency will continue and develop the partnership approach to working with local authorities and the private and voluntary sectors which the Government have adopted in implementing their welfare to work policies.

  Already the New Deal has helped around 260,000 people back into work. The national minimum wage and tax credits are helping work pay. And the ONE pilots are showing how, working together, the Benefits Agency and the Employment Service can provide a radically improved service to clients and employers alike. The new agency will have a new culture, and will be firmly focused on helping people to become independent. It will help further to embed a culture of rights and responsibilities within the welfare system. Personal advisers will steer clients towards work or training, help them claim the benefits they need, and provide additional support tailored to their needs. Help will be directed to those that need it, while fraud will be squeezed out of the system.

  The agency will provide a proactive and responsive service to employers—helping people to find jobs and helping employers to fill their vacancies with the right people.

  The agency will also help and support working age people who are out of the labour market for whatever reason. A single agency will provide a better and more responsive benefits service to all people of working age, tailored to individual needs and asking the question "what can we do to help you become independent".
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  The agency will provide a single point of contact for all working age people to access the following benefits: Jobseeker's Allowance, Income Support, Incapacity Benefit, Severe Disablement Allowance, Maternity Allowance, Widows' Benefit, Industrial Injury Disablement Benefits and Invalid Care Allowance. The administration of the Social Fund is under review.

  The new agency will be in the front line of the drive to modernise government. It will have the technology to provide the most up-to-date service to more than 10 million customers each year. Job vacancies, information about services and benefits and availability of child care will all be on hand at the press of a button. Located in high streets and town centres across the country this new service will represent the face of 21st century government. Over time the new agency will produce efficiency savings compared with the current arrangements.

  Design and development of the new agency will be carried out jointly by the Secretaries of State for Education and Employment and for Social Security. I am asking them to establish the agency as soon as possible in 2001 so that, alongside the new service for pensioners announced yesterday, it can start to deliver our vision of a modern welfare state and contribute to reducing poverty and expanding opportunity.

  Local Elections
  Mr. Darvill
  To ask the Prime Minister what advice has been given to civil servants on the conduct of Government business during the forthcoming elections to the Greater London Authority and to local councils on 4 May. [115349]

  The Prime Minister
  The Government have issued guidance to civil servants on the principles which they should observe in relation to the conduct of Government business in the period before the forthcoming elections.

  The guidance stresses that civil servants should conduct themselves in accordance with the Civil Service Code and is based on the need to maintain political impartiality of the Civil Service and the need to ensure that public resources are not used for party political purposes.

  The guidance will come into force on 13 April.

  Copies of the guidance have been placed in the Libraries of the House, and are also available from the Vote Office.

HOME DEPARTMENT

  Criminal Justice (Mode of Trial) Bill
  Miss Widdecombe
  To ask the Secretary of State for the Home Department what estimate he has made of the annual number of convicted offenders who would receive a shorter custodial sentence than at present if the Criminal Justice (Mode of Trial) (No. 2) Bill became law; how many offenders convicted of each type of offence would receive shorter sentences; what estimate he has made of the average reduction in the length of sentence(a) received and (b) served; and if he will make a statement. [112532]
  259W
  Mr. Charles Clarke
  [holding answer 2 March 2000]: It is estimated that 5,400 convicted offenders would receive shorter custodial sentences because their cases would be dealt with in the magistrates courts. This covers all categories of either-way offences. It is also assumed that the average reduction in the length of sentence (a) received would be 4.6 months and (b) served would be 2.3 months.

  Senator Pinochet
  Mr. Hammond
  To ask the Secretary of State for the Home Department what estimate he has made of the cost to the Metropolitan police of the presence of Senator Augusto Pinochet in Surrey for 17 months; what discussions he has had with the Chief Constable of Surrey relating to such costs incurred by his force; and what payments have been made by his Department to each force in reimbursement of those costs. [113559]

  Mr. Charles Clarke
  The information as regards the estimated cost to the Metropolitan police of the presence of Senator Augusto Pinochet in the United Kingdom cannot be provided for security reasons.

  In relation to the costs incurred by Surrey Constabulary, the Chief Constable asked for additional financial assistance in January. My right hon. Friend the Home Secretary approved a special payment in the financial years 1998–99 of £200,000 for Surrey police. There was no commitment to provide any further assistance.

  No special payment was provided to the Metropolitan police for their involvement with the policing of Senator Pinochet.

  Beggars
  Mr. Ottaway
  To ask the Secretary of State for the Home Department what steps he is taking to deal with beggars and squeegee merchants on the streets of Croydon. [114259]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis informs me that there have been a number of operations during the past year in the Croydon area to address these problems and that his officers will continue to respond appropriately to any complaints.

  The Commissioner has also advised me that he proposes next month to launch a drive to reduce street crime. Under the new initiative, specialist task forces will be introduced to assist boroughs with particular problems. Aggressive begging, which is intimidatory and often uses force, will be part of the focus of this initiative.

  Crime and Disorder Act 1998
  Mr. Coaker
  To ask the Secretary of State for the Home Department (1) what response he has had to his letter to local authorities and chief constables asking for comment on the operation of the Crime and Disorder Act 1998 with respect to(a) child curfews and (b) anti-social behaviour orders; [114532]

  (2) how many child curfews have been agreed using powers given by the Crime and Disorder Act 1998; [114531]
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  (3) what assessment he has made of the effectiveness of the child curfew powers; and if he will make a statement. [114533]

  Mr. Charles Clarke
  No applications have been received from local authorities to establish child curfew schemes under section 14 of the Crime and Disorder Act 1998. My right hon. Friend the Home Secretary wrote on 15 October 1999 to local authority chief executives and chief officers of police about the provisions in the 1998 Act to tackle problems caused by unruly and anti-social behaviour.

  Responses have been received from a number of local authorities and police forces and from professional and staff associations. They are being studied with a view in the operation of the Crime and Disorder Act provisions. An action group has also been established, involving local authority representatives and others, to consider issues relating to the use of anti-social behaviour orders. Regional seminars arranged by the group are currently being held and provide an opportunity to share good practice.

  Kerb Crawlers
  Mr. Fabian Hamilton
  To ask the Secretary of State for the Home Department (1) what assessment he has made of the impact on re-offending of the kerb crawlers re-education programme in West Yorkshire; [114563]

  (2) if he will introduce a nationwide kerb crawlers re-education programme. [114562]

  Mr. Charles Clarke
  The Home Office have not been involved in the Kerb Crawlers Rehabilitation Programme in West Yorkshire. We have, however, received a copy of the evaluation of the programme carried out by West Yorkshire Police.

  We hope to discuss the programme with interested parties to see what lessons can be learned but we have no current plans to introduce such a programme nationwide.

  Harmondsworth Detention Centre
  Mr. McDonnell
  To ask the Secretary of State for the Home Department what disciplinary action has been taken against staff at Harmondsworth Detention Centre as a result of incidents involving injuries to detainees over the period 1 March 1999 and 29 February 2000. [114432]

  Mrs. Roche
  No disciplinary action has been taken against staff at Harmondsworth Detention Centre between 1 March 1999 and 29 February 2000, as a result of any incidents involving injuries to detainees.

  Mr. McDonnell
  To ask the Secretary of State for the Home Department if he will publish the staffing structure of the Harmondsworth Detention Centre, including the ratio of staff on duty to detainees. [114433]

  Mrs. Roche
  The staffing structure and ratio of staff to detainees employed by the contractor at Harmondsworth is commercially sensitive information and it would not be appropriate to publish it.

  The contractor was appointed after a competitive tendering exercise and one of the factors taken into account during the evaluation was the proposal for staff coverage.

  City Status
  Jane Griffiths
  To ask the Secretary of State for the Home Department if he will list the criteria, including those related to population, for a town to be eligible to receive city status; and if he will make a statement. [114711]

  Mr. Mike O'Brien
  City status is an honour conferred by the Sovereign by Letters Patent. Population size is among the matters taken into account in submitting advice to Her Majesty, there are no specific eligibility criteria.

  Baboons
  Mr. Baker
  To ask the Secretary of State for the Home Department (1) how long the journey time was on each occasion wild-caught baboons were imported into the UK in(a) 1998 and (b) 1999; and if he will make a statement; [114106]

  (2) if he will make it his policy to end the importation of wild-caught baboons for research; and if he will make a statement; [114107]

  (3) when approval was last given for baboons to be imported into the UK; and if he will make a statement; [114104]

  (4) when an inspector from his Department last visited Mr. Richard Mann's wildlife trading premises near Nairobi, Kenya; and if he will make a statement; [114108]

  (5) how many wild-caught baboons from Kenya have been imported into the UK for research during (a) 1998 and (b) 1999; and if he will make a statement. [114105]

  Mr. Mike O'Brien
  [holding answer 14 March]: All but a small number of primates used in scientific procedures in the United Kingdom are captive-bred and not taken from the wild. Under measures introduced in 1996, authority to use wild-caught primates will be given only if the applicant can establish exceptional and specific justification. Such cases are very rare. We must also be satisfied that the applicant has made (and continues to make) appropriate efforts to find suitable captive-bred primates. All applications to use wild-caught primates are referred to the Animal Procedures Committee for its advice.

  The last authorisation was given in 1998 for up to 40 wild-caught baboons to be imported into the United Kingdom for use in scientific research into aspects of xenotransplantation. The first part of this consignment—28 animals—arrived from Kenya in May 1999. No more have been imported since then and none were imported in 1998.

  The work with these baboons is to improve transplant procedures. Xenotransplantation includes the transplantation of organs such as hearts and kidneys between different animal species and from animals into humans. Organ transplantation is a hugely successful medical procedure—one that has transformed the lives of tens of thousands of people across the world. The critical shortage of human donor organs has led scientists to investigate xenotransplantation as an alternative potential source of organs. This is policy on which the Department of Health leads. Baboons are used in heart xenotransplantation procedures because of the need to use primates of suitable body weight to sustain the size of the heart. They are extremely difficult to breed in captivity.
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  Captive-bred animals are therefore available on the world market only in very limited numbers, and United Kingdom researchers have been unable to become "preferred clients" of the captive-bred sources.

  The total journey time for the May 1999 consignment was 34 hours from placing the animals in transport crates at the supplier's premises in Kenya to their receipt at the designated establishment in the United Kingdom. All of the animals arrived in good condition.

  The Inspectorate last visited Richard Mann's premises in Kenya in November 1995. This visit revealed that standards were not satisfactory and the Secretary of State was advised that approval of this establishment would be withheld unless and until substantial improvements were made to the accommodation and care offered to wild-caught baboons destined for supply to the United Kingdom.

  By February 1997 documentary evidence confirmed that the necessary improvements had been made and the establishments "approved status" was restored. Animals destined for the United Kingdom are group-housed in large, modern outdoor enclosures. The Home Office is aware that the "sub-standard" areas remain in use for animals for supply to non-United Kingdom customers. We cannot regulate premises in Kenya used to accommodate animals that will never be shipped to the United Kingdom. Confirmation has been obtained that all animals destined for shipment to the United Kingdom have been held in the improved accommodation.

  Crown Dependencies (Financial Regulation)
  Maria Eagle
  To ask the Secretary of State for the Home Department if he will make a statement on the implementation by the Channel Islands and the Isle of Man of the Edwards report on Financial Regulation in the Crown Dependencies. [115188]

  Mr. Straw
  Jersey, Guernsey and the Isle of Man have produced reports setting out the steps that they have taken and are continuing to take to give effect to the conclusions of the Edwards Report. I have today placed copies of the Islands' reports in the Library.

  I am encouraged by the positive and constructive way in which the authorities in the Channel Islands and the Isle of Man have responded to the challenge of the Edwards Report. Although the Report placed them in the top division of offshore centres, the authorities in all three jurisdictions have been implementing programmes of further improvement in their systems of financial regulation which had begun even before the publication of the Report in November 1998. These programmes are still being taken forward; the islands recognise that the process of improving financial regulation must be a continuing one that works for the benefits of their economies and will strengthen the integrity of offshore financial centres.

  Asylum Seekers
  Mr. Pike
  To ask the Secretary of State for the Home Department how many appeals against refusal to grant asylum are waiting to be heard; and how many of them were lodged in the last six months and in each preceding six month period. [114682]
  263W
  Mrs. Roche
  At the end of February 2000, a total of 5,615 asylum appeals were outstanding at the Immigration Appellate Authority. This figure includes 3,580 Adjudicator appeals, 310 applications for leave to appeal to the Tribunal and 1,725 appeals to the Tribunal.

  Information on the number of appeals against asylum decisions on a quarterly basis, in 1998 and 1997, is given in Table 8.1 of Home Office Statistical Bulletin "Asylum Statistics United Kingdom, 1998", a copy of which is available in the Library. Information covering earlier years can be found in previous editions of the Statistical Bulletin.

  It is planned that quarterly figures for the calendar year 1999 will be included in the next Asylum Bulletin which is due to be published in June of this year.

  Mr. Gordon Marsden
  To ask the Secretary of State for the Home Department if he will make a statement on the criteria for detention of asylum seekers at Oakington Reception Centre. [115345]

  Mrs. Roche
  Oakington Reception Centre will strengthen our ability to deal quickly with asylum applications, many of which prove to be unfounded. In addition to the existing detention criteria, applicants will be detained at Oakington where it appears that their application can be decided quickly, including those which may be certified as manifestly unfounded. Oakington will consider applications from adults and families with children, for whom separate accommodation is being provided, but not from unaccompanied minors. Detention will initially be for a period of about seven days to enable applicants to be interviewed and an initial decision to be made. Legal advice will be available on site.

  If the claim cannot be decided in that period, the applicant will be granted temporary admission or, if necessary in line with existing criteria, moved to another place of detention. If the claim is refused, a decision about further detention will similarly be made in accordance with existing criteria. Thus, detention in this latter category of cases will normally be to effect removal or where it has become apparent that the person will fail to keep in contact with the Immigration Service.

  Mr. Darvill
  To ask the Secretary of State for the Home Department what support arrangements exist for asylum seekers to submit material in support of their claim for asylum. [115346]

  Mrs. Roche
  The White paper 'Fairer, Faster and Firmer—A Modern Approach to Immigration and Asylum' published in July 1998, standardised the period allowed for asylum seekers to submit further material after a substantive interview at five days. We have decided that some adjustment to this policy is needed to deliver faster asylum decisions, while at the same time ensuring that asylum seekers have a proper opportunity to establish their claim.

  In the case of applications considered at Oakington Reception Centre, we are arranging for the Refugee Legal Centre and Immigration Advisory Service to provide legal advice on-site. It has been agreed with those organisations that the consideration process should operate so that such advice may be provided both before and after the substantive interview. Other than in very exceptional circumstances, the substantive interview will take place
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  on the third day at the centre and so there will normally be two more days after the interview in which to submit additional representations. The five day period for submission of supporting material will in these cases therefore commence as soon as the asylum application has been made, rather than from the date of the substantive interview.

  We have also decided that the five day period for submission of further supporting evidence will not apply to asylum claims where no substantive interview is conducted at the time the claim is made. In those cases, applicants are issued a Statement of Evidence form which they are required to submit to the Immigration and Nationality Directorate within 14 days. We think this gives applicants a reasonable period to set out their claim, and time to seek legal representation if they wish. Where an application is not granted on the basis of the evidence in the Statement of Evidence form, applicants are interviewed and in these cases a decision will be made immediately after this substantive interview.

  The five day standard period for applicants to submit further material after substantive interview, as set out in the White Paper, will continue to apply in all other cases.

  Discretion will be exercised to permit an extension of the applicable period for the making of post interview representations where exceptional circumstances require—for example, where possible torture victims are identified.

  Mr. Gerrard
  To ask the Secretary of State for the Home Department what plans he has to review the policy of considering applications for permission to work by asylum seekers who have been in the UK for six months or more; and if he will make a statement. [114566]

  Mrs. Roche
  As we announced in the information document "Asylum Seekers Support", which we published in March last year, we intend to end, with effect from 3 April 2000, that element of the employment concession whereby asylum seekers who are appealing against the refusal of asylum are, on application, granted permission to work. However, we have no plans at present to withdraw the remainder of the employment concession whereby asylum seekers who have not received a first determination of their case within six months are, on application, given permission to work. We will, however, be keeping this under review, particularly with regard to whether, in the light of progress in processing all asylum claims within an average of six months, such a concession can continue to be justified.

  Prison Service
  Mr. Hope
  To ask the Secretary of State for the Home Department if Prison Service areas are to be reorganised so as to improve alignment of criminal justice boundaries. [115347]

  Mr. Boateng
  The response to a consultation document issued in December 1999 was overwhelmingly supportive of Prison Service proposals to continue its predominantly geographic structure but to re-align its boundaries so that they match those of police areas and planned probation areas, the English regions and Wales. From April 2000, 12 area managers will manage establishments grouped by police areas within the boundaries of the nine English regions. Three regions—the South-East, the North-West
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  and the East Midlands—will have two area managers each. There will be a further, thirteenth, manager for Wales. Two functional managers will continue to manage the higher security estate and the women's estate.

  These arrangements will improve alignment of criminal justice boundaries around the nine Government Offices for the Regions and Wales and provide the Prison Service with a platform for further joint working regionally and locally with other agencies. The move to a criminal justice focus on the 42 police areas is accelerating. The Crown Prosecution Service is organised on that basis already. Crown Courts Circuits are being organised on the basis of groups of police areas, and 42 criminal justice strategy committees and trial issues groups are being established this year. Forty-two magistrates courts' committees and probation areas are planned from April 2001.

  Essex Constabulary
  Mr. Burns
  To ask the Secretary of State for the Home Department how many police officers and constables there were in the Chelmsford Division of the Essex Constabulary(a) on 1 May 1997 and (b) at the latest available date; and what reports he has received from the Chief Constable about the number of (i) officers and (ii) constables there will be in that division in the next three years. [114784]

  Mr. Charles Clarke
  The information requested has been provided by the Chief Constable of Essex and is set out in the table. I have not received any reports on the Chief Constable's future plans for the policing of Chelmsford. Ministers have no direct control over police numbers. Under legislation passed by the previous Government in 1994 it is for individual chief constables to determine the number of police officers in their force within the resources that are available. It will also be for the Chief Constable to consider how he wishes to deploy the 103 police recruits that have been allocated to the Essex police under the Crime Fighting Fund over the next three years.

  Chelmsford Division

  Year

  Total number of officers

  Constables

  1 May 1997

  207.5

  162.5

  1 March 2000

  195.5

  153

  Correspondence
  Mr. Gibb
  To ask the Secretary of State for the Home Department when the hon. Member for Bognor Regis and Littlehampton will receive a reply to his letter of 27 January regarding Mrs. Janet Kirkwood, a constituent. [114970]

  Mrs. Roche
  I apologise to the hon. Member for the fact that he has not yet received a reply to his letter of 27 January. I shall write shortly with a substantive response to the queries his constituent has raised.

  Mrs. Dunwoody
  To ask the Secretary of State for the Home Department when he will reply to the correspondence from the hon. Member for Crewe and Nantwich relating to Mr. Gugaueshau and the loss of passports by the Passport Office. [115031]

  Mrs. Roche
  I replied to my hon. Friend on 16 March. I am sorry for the delay.

  Official Secrets Act
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what assessment he has made of the compatibility of current legislation relating to official secrets with the European Convention on Human Rights; and if he will make a statement. [114975]

  Mr. Straw
  Reviewing legislation in the light of the Convention is a continuous process. I am aware that the issue of the compatibility of section 1(1) of the Official Secrets Act 1989 with the European Convention on Human Rights has recently been before the Judicial Committee of the House of Lords in the case of Blake v. Attorney-General and judgment is awaited.

  Immigration Detainees (Health Needs)
  Mr. McDonnell
  To ask the Secretary of State for the Home Department if he will publish the report of Dr. Geraint Thomas into the health needs of immigration detainees. [114450]

  Mrs. Roche
  I have no objection in principle to the publication of this report. However, we will need to consult with Dr. Thomas. I will provide a substantive reply after we have consulted with him.

  Metropolitan Police Officers (Suspension from Duty)
  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women officers of the Metropolitan police were under suspension from duty for alleged misconduct on 1 February. [114993]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that 98 men and four women officers were under suspension from duty on 1 February 2000.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what the cost, including salary, was of the suspension of each Metropolitan police officer suspended in the past 10 years, the period of each officer's suspension, and the date of determination of each case, indicating in each case the results of suspension broken down into(a) reinstatement, (b) retirement, (c) dismissal and (d) successful criminal prosecution. [114952]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that the information requested is not held centrally.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department how long(a) Detective Inspector John Redgrave and (b) Detective Constable Charman of the Metropolitan police have been suspended from duty and for what reasons; when he expects their futures to be determined; and if he will make a statement. [114969]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that Detective Inspector Redgrave was suspended on 6 February 1997 and Detective Constable Charman on 4 February 1997. The inquiries into the allegations that led to their suspension are ongoing and it would not be appropriate for him to comment further at this stage.

  Kosovo
  Mr. Dalyell
  To ask the Secretary of State for the Home Department if he will make a statement on his Department's representations made at the recent conference in Sweden on drug trafficking in Kosovo. [114927]

  Mr. Charles Clarke
  My Department has not been invited to participate in any recent conferences in Sweden to discuss drug trafficking in Kosovo and has not made any representations.

  Police Complaints
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what arrangements exist to ensure that the allocation of papers for consideration by Treasury Counsel, which have been received consequent upon a complaint having been investigated in relation to the conduct of police officers, is handled by counsel removed from any relationship either with earlier related cases, or those with police officers who are the subject of complaint; and if he will make a statement. [114966]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me the Metropolitan Police Solicitors Department forward papers to Treasury Counsel for advice. It is for the individual appointed to undertake the case to declare whether he or she would be professionally disqualified from dealing with the matter.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department (1) when the results of the Metropolitan police inquiries relating to the referral by the Police Complaints Authority of the complaint by Mr. Keith Green was passed to Treasury Counsel; and if he will make a statement; [114965]

  (2) for what reason on 16 December 1997 Mr. Keith Green was taken from the hospital wing of Brixton Prison for interview by two police officers; for what reasons (a) the interview was not recorded or notes taken; (b) no solicitor was present; and (c) the Prison Doctor was not informed; and if he will make a statement. [114967]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that detailed information about Mr. Green's case is not readily available. I will write to my hon. Friend when I have received it.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what disciplinary action has been taken in relation to the joint CIB/Kent Police investigation; and if he will make a statement. [114960]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that no disciplinary action has been taken in relation to this investigation.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department how many complaints made over the last five years by(a) serving police officers, (b) retired police officers and (c) other members of the public against the conduct of (i) CIB and (ii) the Serious Crime Squad have been investigated by (1) current and (2) former officers of CIB or the Serious Crime Squad; and if he will make a statement. [114963]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that the information requested is not readily available. I will write to my hon. Friend when I have received it.

  Operation Nightshade
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what details of arms shipments to, and via, West Africa were revealed by Operation Nightshade; and if he will make a statement. [114957]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that no such details were revealed as a result of Operation Nightshade.

  Rachel Nickell
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what action has been taken to prevent retired police officers publishing criticism of the conduct and stewardship into the investigation of the murder of Rachel Nickell in 1992; and under what powers such action was taken. [114958]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that no such action has been taken.

  Detective Keith Pedder
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department when the investigation into the complaint made by former Detective Keith Pedder will be completed; and if he will make a statement. [114955]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that the inquiry is expected to be completed by May 2000.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department if manuscripts and other documents belongings to former Detective Keith Pedder have been returned to him following their seizure by the Metropolitan police; and if he will make a statement. [114956]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that the documentation forms part of any ongoing investigation and that it would not be appropriate for him to comment further at this stage.

  Mr. Roger Crooks
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department on what dates in 1993 and 1994 Roger Crooks was interviewed by the Anti-Terrorist Squad. [114953]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that officers of S013, known as the Anti-Terrorist Branch, interviewed Roger Crooks on 24 June 1994.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department for what purpose in 1993 and 1994 Metropolitan police officers serving under the direction of Detective Inspector John Redgrave met Mr. Geoffrey Brennan to discuss arms sales and shipments; at which of these discussions Mr. Roger Crooks and other representatives of the prospective vendor and importer were present; and if he will make a statement. [114959]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that he is unaware of any such meeting.

  Mr. Keith Green
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department when the Metropolitan police received from the Police Complaints Authority its referral of the complaint of Mr. Keith Green; for what reason it was passed for investigation to an officer due to retire; when the results of the Metropolitan Police Complaints Department inquiries into this matter were completed; what were the reasons for the length of time for the inquiries' completion; and if he will make a statement. [114964]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that the Police Complaints Authority authorises the appointment of investigating officers for individual cases, based on their ability to conduct the inquiry. Detailed information about Mr. Green's case is not readily available. I will write to my hon. Friend when I have received it.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department for what reason(a) on 9 December 1997 Mr. Keith Green was offered accommodation in a safe house, (b) this offer was made in the absence of a solicitor, (c) no tape recording of the interview was made and (d) no caution was given; and if he will make a statement. [114961]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis informs me that no such offer was made. The purpose of the interview on 9 December was to obtain intelligence and not evidence and, therefore, did not have to be carried out in accordance with Code C of the Police and Criminal Evidence Act 1984.

  Mr. Mackinlay
  To ask the Secretary of State for the Home Department for what reason the Police Complaints Authority passed the complaint of Mr. Keith Green of 16 February 1999, against CIB to the Metropolitan Police Complaints Department for investigation; and if he will make a statement. [114962]

  Mr. Charles Clarke
  The appropriate authority for the investigation of a complaint in relation to the Metropolitan police is the Commissioner of Police of the Metropolis. As a matter of course, the Police Complaints Authority passes any such complaint that it receives to the Commissioner. It is for the Commissioner to decide the manner in which the complaint is to be investigated. I am advised that in this instance, the then Commissioner directed that the complaint be investigated by an independent officer attached to a Metropolitan police area different from that where the respondents were based.

  Operation Cornwall
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department what was the cost of Operation Cornwall. [114954]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis tells me that Operation Cornwall is ongoing.

TRADE AND INDUSTRY

  National Minimum Wage
  Mr. Ashdown
  To ask the Secretary of State for Trade and Industry how many employers have been prosecuted(a) successfully and (b) unsuccessfully for noncompliance with minimum wage legislation over the last two years; and if he will make a statement. [113144]

  Mr. Byers
  [holding answer 8 March 2000]: There have been no criminal prosecutions under Section 31 of the National Minimum Wage Act 1999 since it came into force 11 months ago.

  This is because the Act also contains a number of provisions empowering enforcement offices to take civil action against non-paying employers and the enforcement body will always use these in the first instance. However, there will be criminal prosecutions where the enforcement body considers them necessary.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Trade and Industry what plans he has to revise the present level of the accommodation offset within the National Minimum Wage Regulations. [114974]

  Mr. Alan Johnson
  I have no plans to change the level of the accommodation offset. The Low Pay Commission has recommended that it should be retained at its present rate and the level considered again when the national minimum wage is next reviewed. The Government have accepted this recommendation.

  Inward Investment (South Humberside)
  Shona McIsaac
  To ask the Secretary of State for Trade and Industry what action his Department is taking to attract inward investment into the former South Humberside area. [113903]

  Mr. Caborn
  Promotion of Inward Investment in the regions is undertaken by Regional Development Agencies (RDAs) which were established by this Government in April 1999. My Department funds Yorkshire Forward (the Yorkshire and Humber's RDA) Inward Investment activities to the tune of £1.4 million. The Government and Yorkshire Forward are keen to attract Inward Investment to the former South Humberside area. Yorkshire Forward is actively developing a Sub-Regional Action Plan for the Humber area in conjunction with national and regional partners including the Government Office and DTI's Invest In Britain Bureau. The action plan is scheduled for completion in June 2000.

  One of Yorkshire Forward's key objectives is to attract and retain more investment. An important feature of the Humber Sub-Regional Action Plan will be the development of a Humber Trade Zone. This should help exploit the significant advantages of the estuary's deep water ports and provide the foundation for attracting new industry. In addition, the Humber Chemical Forum, with an active DTI contribution, is playing an increasingly important role in helping the development of the chemical industry along the South Bank.

  Yorkshire Forward statistics indicate that, since May 1997, there have been 11 Inward Investment projects in the former South Humberside area. These projects are expected to lead to the creation/safeguarding of around 1,000 jobs.

  GDP Statistics (West Cumbria)
  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry if he will review the reliability of statistics on gross domestic product per capita in respect of West Cumbria. [114074]

  Mr. Caborn
  Statisticians from my Department are in regular contact with the Office for National Statistics on a range of outputs, including regional GDP. Methodology is regularly reviewed to ensure the best possible estimates.

  Regional Selective Assistance
  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry what assessment he has made of the implications for West Cumbria of the current review of assisted area status levels of regional assistance. [114073]

  Mr. Caborn
  During the review process, the Commission notified the Government that Cumbria was one of 19 areas that have unemployment below and GDP above the EU average. The regional aid guidelines stipulate that, if approved for Assisted Area status, such areas may not benefit from aid to enterprises of more than 10 per cent. eligible costs.

  Mr. Campbell-Savours
  To ask the Secretary of State for Trade and Industry what discussions are taking place between the Government and the European Commission on the eligibility of areas of the United Kingdom for regional selective assistance; and if he will make a statement. [114072]

  Mr. Caborn
  My officials have met officials from the Commission on a number of occasions to discuss the proposals which we submitted for new Assisted Areas. In addition, my right hon. Friend the Secretary of State for Trade and Industry, has held discussions with Commissioner Monti. In all of our discussions, we have sought to obtain early approval of our proposals.

  Hawley Group
  Mrs. Browning
  To ask the Secretary of State for Trade and Industry (1) if he will make a statement about the establishment of the Review of the Engineering Council by the Hawley Group; [114130]

  (2) what representations he has received from outside bodies concerning the Hawley Group Review of the Engineering Council; [114129]

  (3) what representations he has received from other Government departments following the first report of the Hawley Group; [114127]

  (4) what criteria he used in deciding which representative bodies of the engineering industry were included in the Working Group of the Hawley Group; [114125]

  (5) what representations he has received from other Government departments on the establishment of the Hawley Group; [114128]

  (6) if he will list the representative bodies of the engineering industry included in the Hawley Group. [114126]
  272W
  Mr. Alan Johnson
  [holding answer 10 March 2000]: I refer to the written answer I gave on 21 December 1999, Official Report, columns 463–66W. The first stage of the review was completed at the end of January with the publication of the Hawley Group Stage I Report. My noble Friend Lord Sainsbury and the Minister with responsibility for lifelong learning, my hon. Friend the Member for Croydon, North (Mr. Wicks) have welcomed the report and congratulated Dr. Hawley on the progress of the review. A copy of the report has been placed in the Library of the House.

  The proposition for the review was endorsed at a meeting in November between Lord Sainsbury and a wide range of senior representatives of the engineering community. Although some of those present expressed a wish to see more industrial representation in the membership of the Group, the large majority supported Lord Sainsbury' s view that for the Group to be effective there should be a minimum number of members. It was also recognised that Dr. Hawley's experience as a leading industrialist would be highly valuable in leading the Group.

  My noble Friend Lord Sainsbury has received a small number of representations from individuals and bodies on various issues relating to the review and some of those who have responded to Dr. Hawley have copied their replies to him. He has also had discussions with his counterpart in DfEE. Other Government Departments have contributed to the review process at official level. I understand also that following the extensive first stage consultation exercise Dr. Hawley has received nearly 100 detailed responses from a range of individuals and organisations. These are providing helpful contributions towards the Group's continuing work.

  Social Enterprise
  Mr. Love
  To ask the Secretary of State for Trade and Industry what assessment he has made of the role of social enterprises in overcoming social exclusion; and if he will make a statement. [114635]

  Mr. Byers
  The Government recognise the important contribution role that social enterprises have to play in the nation's economy, including helping to overcome problems of social exclusion. They can be effective at developing services which the private and public sectors may be unable or unwilling to provide. Social enterprises can also be valuable in engaging local communities in economic activities that they would otherwise not have undertaken. Some estimates put the number of people employed in the not for profit sector nationally as high as 2.6 million.

  The Social Exclusion Unit's Policy Action Team's (PAT 3) Report "Enterprise and Social Exclusion" which was published on 2 November 1999, included recommendations on the role of social enterprises in encouraging enterprise in disadvantaged groups and communities. The Small Business Service (SBS) is taking forward the Report's recommendations about support for social enterprises and about enhancing the potential of these businesses.

  The SBS' s Social Inclusion Unit is working with the British Bankers Association and Social Enterprise London to produce guidance about the sector for banks as well as

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  Business Links and other support organisations. The Unit will also be participating in a study visit to Spain in April to examine approaches to supporting social enterprises in that country.

  On 10 November 1999 I announced the establishment of a national Phoenix Fund, with a budget of £30 million over three years. The Phoenix Fund will support entrepreneurship in deprived areas and respond to issues raised in the PAT 3 Report. It will be open to social enterprises as well as other businesses. The Phoenix Fund will provide funding for:

  piloting of the Business Volunteers Mentoring Association;

  support for new and existing Community Finance Initiatives;

  a development fund for innovative ways of supporting enterprise in deprived areas.

  My Department is currently considering ways of developing the Fund for the benefit of businesses.

  Business Volunteer Mentoring Association
  Mr. Chope
  To ask the Secretary of State for Trade and Industry (1) how much money has been paid in the current financial year to the Business Volunteer Mentoring Association; and to what use it has been put; [114391]

  (2) how much money his Department has paid to the Business Volunteer Mentoring Association; and to what use the funds have been put. [114388]

  Mr. Byers
  [holding answer 13 March 2000]: The Business Volunteer Mentoring Association initiative is being piloted by the National Federation of Enterprise Agencies, supported by this Department. The aim is to attract 1,000 volunteers, drawn from all sections of the business community to provide mentoring support to pre and early start-up businesses.

  For this financial year, the NFEA and local partnerships have been paid £100K to cover their costs in setting up and developing the initiative on the ground.

  Telecommunications
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry what plans he has to introduce a Communications Bill covering telecommunications; and what the nature and timetable of the consultation process will be, following the revision of the Utilities Bill. [114473]

  Mr. Byers
  My right hon. Friend the Secretary of State for Culture, Media and Sport and I propose to publish a White Paper later this year setting out the Government's proposals for reform of the framework of communications legislation. This will include proposals for changing both the Telecommunications and Broadcasting Acts as a basis for legislation when parliamentary time allows. We expect to consult on proposed changes both before and after publication of the White Paper.

  Adoption
  Mr. Oaten
  To ask the Secretary of State for Trade and Industry what(a) leave and (b) payment entitlements employers are required to give male and female employees after they have adopted a child. [114841]
  274W
  Mr. Alan Johnson
  The Maternity and Parental Leave Regulations 1999 confer a right for employees who adopt a child on or after 15 December 1999 to take parental leave from work to care for the child. The right applies to any employee who has completed one year's qualifying service with his or her employer; the amount of leave provided for is thirteen weeks' leave for each parent. This has to be taken over the first five years after the child is placed with the parents for adoption.

  Employees can take the leave in accordance with arrangements agreed with the employer through a workforce or collective agreement. If there is no agreement in place, the fallback scheme provided for in the Regulations applies. That provides for an employee to take up to four weeks' leave in a year. This leave can be taken at the time of the placement provided the notice provisions are followed.

  The leave is unpaid. We will be encouraging employers to build on the minimum standard as part of the Government's commitment to help employees achieve a better balance between their work and the rest of their lives.

  KONVER Programme
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with his EU counterparts concerning the KONVER programme. [114781]

  Mr. Alan Johnson
  The KONVER Programme II Initiative is aimed to accelerate the diversification of economic activity in areas heavily dependent on the defence industry. It was operated from 1994–99 and was preceded by the KONVER I initiative which operated during 1993. The programme will not be renewed and there have been no recent ministerial discussions concerning it.

  Postal Services Commission
  Mr. Quinn
  To ask the Secretary of State for Trade and Industry if he will make a statement about the membership of the Postal Services Commission. [115479]

  Mr. Byers
  Mr. Graham Corbett is being appointed as the Chairman of the Postal Services Commission (PSC). He will start work on 1 April when the PSC takes up its functions and duties under the Postal Services Regulations 1999. It is anticipated that he will be appointed as Chairman of the statutory body of the same name that is expected to be created following the passing of the Postal Services Bill currently before Parliament.

CULTURE, MEDIA AND SPORT

  Museums and Galleries Commission
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement on the future of the Museums and Galleries Commission's Conservation Register. [114467]

  Mr. Chris Smith
  [holding answer 14 March 2000]: The Museums and Galleries Commission (MGC) will be replaced by the Museums, Libraries and Archives Council (MLAC) on 3 April 2000. Options for the future of

  275W
  functions currently carried out by the MGC were presented in a consultation document issued by MLAC in January this year.

  In that document, MLAC suggests that the maintenance of the MGC Conservation Register should not be carried out by MLAC. The MGC is currently exploring the options for a future alternative home for the Conservation Register where its potential as a public information resource and as an endorsement of high quality conservation practice can be further realised.

  Ministerial Meetings
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport when he last met representatives of(a) the film company Alchymie and (b) the finance company Flashpoint; and if he will make a statement. [114973]

  Mr. Chris Smith
  I met directors of Flashpoint in May 1999 and attended the launch of Alchymie in October 1999.

  As Secretary of State for the Department with responsibility for film policy, I frequently have meetings with representatives of the film industry and attend industry events. Given that our policy, as set out in the 1998 report of the Film Policy Review Group, is to encourage the growth of a self-sustaining, commercial film sector, I welcome efforts by the industry to establish new initiatives, such as Alchymie, which combine the production and commercial exploitation of British films. The success of such initiatives, however, depends not on any Government involvement, but on their commercial performance in a competitive and volatile market.

  National Minimum Wage
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport what representations he has received from the British Activity Holiday Association regarding the impact of the level of accommodation offset within the National Minimum Wage Regulations. [114972]

  Mr. Chris Smith
  We received a copy of the British Activity Holiday Association (BAHA) comments in late 1998 on the accommodation offset during consultation on the then draft National Minimum Wage Regulations. These comments were also copied to the Department of Trade and Industry.

  Number of staff and their category

  Reason for terminations

  Period of notice

  Total cost

  11 aged 60+ who are being compulsorily retired

  Museum reorganisation

  6 to 9 months

  48,529

  9 aged between 50 and 60 who are taking early retirement but on a compulsory basis

  Museum reorganisation

  6 months

  1190,470

  22 persons under 50 who are taking compulsory early severance

  Museum reorganisation

  6 months

  1,035,510

  3 others

  Performance or health grounds

  2—no notice

  Nil

  1—13 weeks

  1 Additionally these staff will be paid an annual compensation cost until they reach age 60. The total cost in the current year is £89,838. Over the next few years this annual sum will reduce as people reach age 60. The overall present value of this payment, at current money values, is estimated to be £555,343. There will also be other one-off costs estimated at £253,989 relating to pension preservation and the bringing forward of lump sums.

  Notes:

  1. All the compensating amounts shown above derive from Civil Service Pension Scheme standard terms and conditions.

  2. The above table does not include staff whose fixed-term contracts have not been renewed. These terminations do not carry a cost to the Museum.
  276W
  More recently, I am aware that the BAHA gave written and oral evidence to the Low Pay Commission on the offset as part of the review which the Government asked the Commission to carry out to evaluate the introduction of the minimum wage.

  Nautical Archaeology
  Mr. Dalyell
  To ask the Secretary of State for Culture, Media and Sport what progress he has made in promoting nautical archaeology. [114930]

  Mr. Alan Howarth
  The Department for Culture, Media and Sport is currently engaged in providing additional wreck marker buoys and interpretative signs at a number of sites designated under the Protection of Wrecks Act 1973.

  In 2000–01 we will continue to support, through the Heritage Grant Fund administered by English Heritage, two nautical archaeological projects: the activities of the Hampshire and Wight Trust and the Nautical Archaeological Society's course programme.

  Film Funding
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 8 March 2000,Official Report, column 736W, on film funding, how much National Lottery funding was recouped in each case where repayments have been made. [114976]

  Mr. Chris Smith
  The publication of information on amounts of National Lottery funding recouped from individual films could damage the prospects of films which had not been fully exploited in all territories and media. The information could also make it possible to deduce the terms of the contract between the Lottery distributor and the other backers of the film, which are confidential.

  The total amount recouped by date by the Arts Council of England is £5,974,018.

  British Museum
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his reply of 3 March 2000, column 432W, how many British Museum staff have been dismissed over the past 12 months; at what cost; and with what period of notice, in each case. [112380]

  Mr. Alan Howarth
  I regret that the figures in my original answer were incorrect. The correct figures are in the table:

NORTHERN IRELAND

  Parades Commission
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what kind of protection has been afforded to the members of the Parades Commission since its establishment; and what has been the cost of providing protection to members of the Commission over the past 12 months. [113831]

  Mr. Ingram
  It is the long standing policy both of this Government and previous Governments that we do not discuss the security measures provided to individuals or groups. The cost of installing and maintaining security measures for members of the Parades Commission over the period in question was £74,004.96.

  Departmental Expenditure Limit
  Mr. McCabe
  To ask the Secretary of State for Northern Ireland what plans he has to amend the Northern Ireland Departments' Departmental Expenditure Limit for 1999–2000. [115343]

  Mr. Ingram
  The Northern Ireland Departments' Departmental Expenditure Limit for 1999–2000 has been increased by £94,327,000 from £4,856,247,000 to £4,950,574,000. The increase is the net effect of:

  the take up of end-year flexibility entitlement of £98,341,000;

  net transfers to other Government Departments of £18,134,000 as detailed;

  an increase in the provision for Hill Livestock Compensatory Allowances of £8,500,000;

  increases resulting from additions to "The Giving Age" and Health of £4,293,000;

  an increase in Housing Loan Charges of £1,147,000; and

  an increase in the Capital Modernisation Fund of £180,000.

  There is also a decrease in the provision for Welfare to Work of £31,144,000.

  The net transfers to other Government Departments are made up as follows:

  net transfers to the Northern Ireland Office of £8,144,000;

  a transfer to the Inland Revenue of £6,689,000;

  transfers to the Scottish Executive of £1,788,000;

  transfers to the Department of Health of £1,098,000;

  a transfer to the Department for Education and Employment of £653,000;

  transfers to the Ministry of Agriculture, Fisheries and Food of £257,000;

  a transfer to the Privy Council Office of £10,000;

  a transfer from the Department of Trade and Industry of £500,000; and

  a transfer from the National Assembly for Wales of £5,000.

  The net increase in the Northern Ireland Departments' Departmental Expenditure Limit is a charge on the Departmental Expenditure Limit Reserve and will not, therefore, add to the planned total of public expenditure.

  Forensic Science Agency
  Mr. McCabe
  To ask the Secretary of State for Northern Ireland what key targets are set for the Forensic Science Agency of Northern Ireland in 1999–2000; what 278W
  forward plans have been prepared by the Agency; and what arrangements have been made for the publication of this year's plans. [115344]

  Mr. Ingram
  The following key targets are set for the Forensic Science Agency of Northern Ireland in 1999–2000.

  Quality of Service
  To turnaround 85 per cent. of those cases in which a file is required to be submitted to the DPP within 85 days of notification or final submissions whichever is later for cases received from 1 April 1999.

  Quality of Science
  Maintain UKAS accreditation for those scientific processes identified by the Ministerial Advisory Board.
  Achieve supplier status for the National DNA database by 31 December 1999.

  Service Provision
  To have obtained the agreement of the User Board that the Agency is effectively meeting the needs of the RUC as defined in the Service Level Agreement for the year ending 31 March 2000.

  Financial Performance
  To recover from Customers the full cash costs of the services to them.
  To reduce by 2 per cent. the Unit Cost of the Agency.

  Achievement against these key targets will be recorded in the Agency's Annual Report for 1999–2000 which will be published in July 2000.

  The Agency has published a summary of its Corporate Plan 1999–2002 and Annual Business Plan 1999–2000 which explains its business and organisation, describes its key targets for 1999–2000 and sets out the assumptions about workloads and resources which support its planned activities. Publication has been held back pending the resolution of technical issues concerning the Agency's cost recovery key target. Copies of the summary plans have been placed in the Library. Copies will be available to the public from the Agency.

INTERNATIONAL DEVELOPMENT

  Universal Primary Education
  Mr. Lidington
  To ask the Secretary of State for International Development what response she has made to Oxfam's campaign for universal primary education; and if she will make a statement. [114190]

  Clare Short
  I welcome the focus that Oxfam—and The Guardian "Read the World" campaign—have placed on raising awareness of the plight of the 125 million children who are not in school. Educational opportunity for all, especially at the primary level, is both a fundamental human right and a precondition for progress in development and the reduction of poverty. Our White Paper on International Development, published in 1997, committed us to seek to mobilise the international community to meet the international development targets which include universal primary education by 2015 and gender equity in primary and secondary education by 2005. In our bilateral programmes substantial resources are allocated to education for the achievement of these targets.
  279W
  Four things need to be done if these targets are to be met. First, we need a real and sustained commitment by the Governments of developing countries to securing universal primary education. Secondly, we need to address the issue of resourcing for education. There is a clear need to increase the level of resources that developing country Governments commit to primary and basic education. And development agencies should allocate significant additional resources where Governments have developed well-focused education strategies. Thirdly, we need to shift from a projects-based approach to a sector-wide approach to basic and primary education, and we need to pull together the work of all the different development donors around a focused, agreed strategy drawn up by the Government of the country concerned.

  The fourth thing we need to do is link education policy with the wider development strategy of the country, including policies on health, sanitation, livelihoods and rural transport.

  This is the agenda that I will be taking to the World Education Forum in Dakar next month, which I will attend on behalf of the British Government. The Dakar meeting provides an important opportunity for Governments, development agencies and nongovernmental organisations—from North and South—to recommit themselves to Education for All (including the achievement of universal primary education by 2015, and gender equality in primary and secondary education by 2005).

SOLICITOR-GENERAL

  McKenzie Friends
  Mr. Ruffley
  To ask the Solicitor-General what recent discussions he has had regarding McKenzie Friends with other Government Departments. [113402]

  The Solicitor-General
  As hon. Members may know, a McKenzie Friend is someone who attends a court hearing with a litigant in person. The friend can assist that litigant in person in conducting their case but is not formally representing them and is not entitled to address the court on their behalf. The use of McKenzie Friends is part of the operation of the Court Service and therefore primarily the concern of the Lord Chancellor's Department. I personally have not had any recent discussions with other Government Departments on this subject.

  Justice System (Reform)
  Mr. Geraint Davies
  To ask the Solicitor-General if he will make a statement on the progress of joint working by the CPS, police and courts to reduce the average time taken between suspects being charged to being convicted or found not guilty. [113407]

  The Solicitor-General
  The CPS is continuing to work closely with the police and courts to improve performance. Measures include: advance disclosure in every early hearing case; a reduction in the number of adjournments after first hearings; more lawyer time spent on preparing for trials through the deployment of designated caseworkers to deal with straightforward guilty 280W
  pleas; a reduction in duplication and delay by co-locating CPS lawyers in police criminal justice file preparation units.

  Government Legal Service
  Mr. Marshall-Andrews
  To ask the Solicitor-General what proportion of lawyers in the Government Legal Service are women. [113400]

  The Solicitor-General
  The proportion of women lawyers in the Government Legal Service is around 49 per cent.

DEFENCE

  Naval Recruiting and Training Agency
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence if he will list(a) those targets of the Naval Recruiting and Training agency for 1998–99 which (i) were and (ii) were not achieved, giving the factors affecting the outcome in each case and (b) action taken by the agency to improve target achievement performance in 1999–2000; and if he will make a statement. [111760]

  Dr. Moonie
  [holding answer 6 March 2000]: This is a matter for the Chief Executive of the Defence Naval Recruiting and Training Agency. I have asked the Chief Executive to write to the right hon. and learned Member.

  Letter from John Chadwick to Mr. Menzies Campbell, dated 1 March 2000:
  I am replying to your question to the Secretary of State for Defence, concerning Key Targets of the Naval Recruiting and Training Agency, as this matter falls within my area of responsibility as the Chief Executive of the Agency.
  I am pleased to report that the NRTA achieved 6 of the 8 Key Targets set against it in 1998–99. Details of the outcomes, the principal factors affecting them, and measures taken to improve performance further in the current financial year, are at Annex A.

  FY98–99 NRTA Key Targets

  Targets Achieved

  KT2—To obtain a Customer Satisfaction Rating of a least 90%.
  94% of feedback forms received from employers of ex-NRTA trainees indicated that the training received had satisfactorily fitted the trainee for his or her subsequent employment.
  The principal factor behind this achievement is the fact that the RN Systems Approach to Training produces training courses which focus accurately on the skills and knowledge required by the trainee to be effective in his or her operational role.
  The target was raised to 95% for 99–00. At Min(AF)'s office's request, it is now described as "Fitness for Purpose" rather than "Customer Satisfaction".

  KT3—To maintain success rates of 95% in Career Training and 97% in examined Pre joining Training.
  Achieved with success rates of 97% and 99% respectively.
  The principal factors are the generally strong motivation of the trainees to succeed in their RN careers, and the fact that, wherever appropriate, training is delivered by uniformed staff who have themselves carried out, at sea, the tasks towards which the training is directed.
  To seek further improvement in these success rates would not be cost-effective as some residual failure due to trainee attitude or aptitude is inevitable. Nonetheless, the target remains key as a drop in the success rate is likely to be the first indicator of any loss in training quality.
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  KT5—To retain tasked capacity while operating NRTA within its 1998–99 cash allocation of £233M, a reduction of £7M (3%) from 1997–98 figures.
  Assessment of achievement against this target is complicated by in-year adjustments to the programme and the cash allocation and in-year requirements for additional savings. After adjustment for these factors, the final outturn was 0.6% over the final allocation of £238M, within the Department's ± 1% tolerance.
  It remains the Agency's intention to replace this target with a more focused measurement of efficiency in due course.

  KT6—To break even over the year in respect of the partnering arrangement with Flagship Training Ltd.
  The final figure showed a net benefit of £2.3M.
  The break-even target anticipated significant startup costs and contingencies linked with the transfer of the first tranche of Service Provision activities, which were expected to cancel out the gains from Income Generation. In the event, these costs did not arise and the target was achieved quite easily.
  In the light of the increasing momentum of this Public Private Partnering arrangement, a very challenging target of £8.1M net benefit was set for 99–00.

  KT7—To review the NRTA's Corporate Information Systems Strategy and produce a supporting Action Plan for its implementation, by 31 March 1999.
  The March Agency Management Board meeting endorsed the conclusions, recommendations and action plan produced by the review of the Corporate Information Systems Strategy. The review aligned the Information Systems strategy to the business needs of the Agency, encompassing the changes brought about by the transfer of the management of Administration Information Systems to Flagship and aligning it with the Information Systems strategies of the wider naval and MOD community.
  No follow-on target was set for 99–00.

  KT8—To include satisfactory dummy auditable accounts in the Agency Annual Report for Financial Year 97–98, in preparation for meeting the Treasury Accounts Direction by including fully audited accounts for FY 98–99 in the following year's Report.
  Achieved on publication of the Report.
  The Treasury Accounts Direction was not received in respect of FY 98–99. Min(AF)'s Office directed that this target should not be rolled forward for 99–00.

  98–99 Targets not Achieved

  KT1—To deliver personnel to the trained strength (or to other training organisations) within 10% variance from the tasked requirement.
  The final variance figure was –12%.
  Although this target was narrowly missed performance against it was again improved compared with outcomes of –16% in 97–98, and –26% in 96–97.
  The principal factors contributing to the outcome were the high requirement against which the variance is calculated, which has increased fourfold since 1994, a difficult recruiting climate, and the wastage of personnel from training pipelines which are running at full capacity.
  In 99–00, recruiting performance has improved substantially, including the particularly difficult area of Engineer Officers where a number of initiatives are showing signs of success. However, the length of some of the training pipelines means that this improvement will not be fully reflected in the 99–00 delivery figures.
  Wastage remains a difficult area. Failures during training are being reduced by backclassing and remedial training with many trainees achieving the required standards. However, although allowed for when setting the recruiting targets, other forms of wastage (medical, administrative and voluntary) are unpredictable.
  The target has been tightened to 5% for 99–00.
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  KT4—To increase the strength of the RNR to at least 3100.
  The strength of the RNR on 31 March 1999 was 2,962, up from 2,862 on 31 March 1998.
  The principal factor in this shortfall was a downturn in recruiting following the good results in the previous year, which probably resulted in an over-optimistic target. In 98–99 an initiative to improve RNR recruiting was agreed whereby new satellite training units would be set up in areas previously without an RNR presence. To date, 2 are in operation (Dundee and Oxford) and further sites are being investigated.
  The target for 99–00 has been redefined to measure the more critical indicator of the variance of the RNR Trained Strength from the Total Requirement.

  Serle's House, Winchester
  Mr. Hancock
  To ask the Secretary of State for Defence (1) if he will make a statement on the sale of Serle's House, Winchester; [113961]

  (2) what plans he has to protect the Garden of Remembrance at Serle's House, Winchester, in the event of the sale of Serle's House; [113901]

  (3) if he will review his plans for the sale of Serle's House, Winchester to take account of its use as a dedicated garden of remembrance; [114169]

  (4) if he will offer the purchase of Serle's House, Winchester to Hampshire County Council at a price below the market level in order to protect the museum and garden; and if he will make a statement. [114191]

  Dr. Moonie
  The decision to sell Serle's House was taken following a review which examined a number of sites upon which MOD has Museums and Regimental Headquarters in Winchester. It was concluded that all the Museums and Regimental Headquarters should be co-located in the Upper Barracks. The MOD is well aware of Serle's House status as a Grade II listed property and of its associated memorial garden and will consider disposal options that best preserve its future. Defence Estates, who are responsible for managing this disposal, are consulting with the Trustees of the Regimental Museum over the level of access required and intend to impose a restrictive covenant on the purchaser which would ensure the retention and upkeep of the memorial garden and continued access to it.

  Serle's House has already attracted interest from a number of potential purchasers including Hampshire County Council. In taking forward its disposal, Defence Estates will expose the property to the open market, while seeking to ensure that the historic building and its memorial garden are protected.

  Reservists
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what measures are being taken to protect reservists in the armed forces from dismissal by their civilian employers; and if he will make a statement. [114916]

  Mr. Spellar
  Reservists are afforded protection under the terms of the Reserve Forces (Safeguard of Employment) Act 1985, which is sponsored by the Department of Trade and Industry. This Act makes dismissal between notification of call-out and actual mobilisation a criminal offence. After demobilisation, the Act requires the employer to reinstate the reservist on
  283W
  application, or to offer him or her the most favourable alternative work available. The Act provides for a Reinstatement Committee to consider applications for reinstatement which are rejected by employers, and to make orders for reinstatement or the payment of compensation, or both. Over 5,000 reservists have been called out for service since NATO operations commenced in the former Yugoslavia. We are aware of only one application to a Reinstatement Committee in that time. It is our policy to seek the employer's agreement before any reservist is mobilised.

  The National Employers' Liaison Committee (NELC) works hard to win and retain the support of employers for the Reserve Forces. NELC can also act in an advisory capacity where difficulties related to Reserve liability arise in the employer/employee relationship. Over 6,000 companies, employing around 70 per cent. of the nation's workforce, have now affirmed their support. These companies have recognised that they get a good deal from employing reservists. Reserve service teaches skills that can be used in the civilian workplace, such as teamwork, leadership, and the ability to take sound decisions quickly.

  The Reserve Forces Act 1996 and subsequent legislation introduced new safeguards for employers. The Act enables employers to apply for their employees to be exempted from call-out or for that call-out to be deferred. The Reserve Forces (Call-out and Recall) (Financial Assistance) Regulations 1997 (SI 1997/309), enable employers to claim financial assistance to cover the costs associated with the loss of a member of staff who is mobilised for reserve service, and for any necessary retraining for that individual on his or her return to the workplace.

  Live Firing Exercises
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what plans his Department has for(a) the suspension and (b) the termination of live firing exercises for the Royal Navy; for what reasons he has made these plans; what plans his Department has to review live firing exercises for the Royal Navy; and if he will make a statement. [114545]

  Mr. Spellar
  There are no plans to suspend or terminate live firing exercises for the Royal Navy, although the balance between simulation and live firing is kept under review to ensure an appropriate and cost-effective mix.

  Spacie Report
  Mr. Keetch
  To ask the Secretary of State for Defence if he will place a copy of Major-General (Retired) Spacie's report "Welfare in the Army" in the Library; and if he will make a statement. [114914]

  Mr. Spellar
  Major-General (Retired) Spacie was commissioned to examine the area of Welfare provision across the Army and to help formulate a conceptual framework for that provision. This work will inform the Army's personnel management policies. There are currently no plans to publish the report externally.

  Naval Aircraft Repair Organisation
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence if he will list(a) those targets of the Naval
  284W
  Aircraft Repair Organisation for 1998–99 which (i) were and (ii) were not achieved, giving the factors affecting the outcome in each case and (b) action taken by the agency to improve target achievement performance in 1999–2000; and if he will make a statement. [111762]

  Dr. Moonie
  Pursuant to the reply I gave on 8 March 2000,Official Report, column 708W, the Naval Repair Aircraft Organisation (NARO) was subsumed by the Defence Aviation Repair Agency (DARA) with effect from 1 April 1999. I have therefore asked the Chief Executive of DARA to write to the right hon. and learned Member.

  Letter from Steve Hill to Mr. Menzies Campbell, dated 16 March 2000:
  Naval Aircraft Repair Organisation—1998–99 Performance
  1. I am replying to your Question to the Secretary of State for Defence about the performance of the Naval Aircraft Repair Organisation (NARO) as this matter falls within my area of responsibility as Chief Executive of the Defence Aviation Repair Agency (DARA). As you may know, the DARA subsumed the NARO with effect from 1 April 1999.
  2. The NARO's Annual Report for 1998–99 was placed in the House of Commons Library and gives full details of the Agency's performance. The NARO had five performance targets in the year 1998–99. These are listed, along with a description of the actual performance, below:
  a. Cost—Target: To achieve a full operating cost of £117.5M by 1 April 1999, assuming Constant Output.

  Performance: Target achieved
  b. Quantity—Target: To achieve 98% of the scheduled quantity of MoD sales orders in year and thereby achieve the Master Schedule.

  Performance: Target achieved
  c. Timeliness—Target: To achieve 93% of the delivery dates agreed with the MoD customer
  Performance: 73% achieved. Factors affecting this outcome included the Agency's lack of control over external input dependencies and difficulties in recruiting and retaining staff.
  d. Customer Satisfaction—Target: To achieve no more than 56 customer complaints.

  Performance: Target achieved
  e. Volume—Target: To utilise 100% of the available capacity by ensuring existing, and when required, additional customers furnish the programmes of work against which resources have been allocated.
  Performance: 95% achieved. Factors affecting this outcome included delays in the migration from legacy systems to the new NARO Business System (NBS) and a shortfall in the timely arisings of repairable assets.
  As I mentioned, the NARO no longer exists. However, I can assure you that the DARA is working very hard to deliver the most flexible and cost effective support to the front line.

WALES

  Central Government Expenditure
  Mr. Rowlands
  To ask the Secretary of State for Wales (1) what was the actual total contribution from central funds to the cost of local authority expenditure in Wales in(a) 1997–98, (b) 1998–99 and (c) 1999–2000; and what his estimate is of the contribution in 2000–01; [111616]

  (2) what is the percentage contribution of central Government funding towards local authority expenditure in Wales in (a) 1997–98, (b)1998–99 and (c) 1999–2000; and if he will estimate the percentage in 2000–01. [111614]
  285W
  Mr. Paul Murphy
  The contribution from central Government towards the funding of local authority expenditure (county/county borough councils and police authorities) for 1997–98, 1998–99 and 1999–2000 is as shown. Figures for 2000–01 will be available from the National Assembly for Wales from 1 April 2000.

  Central Government support (£ million)1

  Percentage of local authority expenditure2

  1997–98

  3,078

  85.8

  1998–99

  3,176

  84.7

  1999–2000

  3,276

  84.2

  1 Central Government support includes revenue support grant, share of non-domestic rates, council tax reduction scheme grant and specific grants

  2 Local authority expenditure is the total revenue expenditure excluding interest receipts (and includes specific grants)

CABINET OFFICE

  GM Technology
  Mr. Ruffley
  To ask the Minister for the Cabinet Office what recent meetings the Government have held with representatives of the US Government on the subject of genetically modified technology. [113390]

  Mr. Stringer
  The Government have met representatives of the US Government on a number of occasions in order to discuss genetically modified technology as well as other issues. This forms part of the Government's ongoing dialogue with the US Government. The UK's commitment to a science-based approach to biotechnology which protects public health and the environment is made clear in all such discussions.

  IT Projects
  Mr. Ennis
  To ask the Minister for the Cabinet Office when the Government will respond to the Public Accounts Committee report entitled "Improving the Delivery of Government: IT Projects"; and if she will make a statement. [115507]

  Mr. Ian McCartney
  The Government's formal response to the report was laid before the House today, as Command Paper 4656.

  Earlier this year we announced a range of recommendations to drive up performance with major IT projects. The recommendations are already tackling many of the issues raised in the report.

  These recommendations were set out in detail in my reply to my hon. Friend the Member for Basildon (Angela Smith) of 21 February 2000, Official Report, column 739W. They include measures to address the role of Ministers in IT projects and to improve our management of IT suppliers.

  These recommendations are the first of a series to implement best practice across Government and to ensure that the pillars that support successful IT projects are in place in the future.

FOREIGN AND COMMONWEALTH AFFAIRS

  GCHQ
  Mr. Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs what percentage of costs of the construction of the new GCHQ building and contents at Cheltenham are being met from non-UK Government sources. [114110]

  Mr. Robin Cook
  [holding answer 14 March 2000]: The cost of GCHQ's new accommodation falls to the UK Government. However, the provision of the new building will be met under a private finance initiative which means that the finance for the construction costs will be raised by the private sector.

  Kashmir
  Mr. McCabe
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current situation in Kashmir. [114702]

  Mr. Hain
  We are deeply concerned by the situation in Kashmir, including violent clashes across the line of control and denial of human rights, and we regularly raise this with the Indian and Pakistani authorities. In January the Foreign Secretary raised Kashmir with his Indian counterpart during talks in London. We have also condemned in the strongest terms externally sponsored terrorism. We hope that India and Pakistan will return to bilateral dialogue to find a solution to this and the other issues that divide them.

  Pakistan
  Mr. Gardiner
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the evidence of HC 541-i, 3 November 1999 to the Defence and other Committees, what discussions he has had with the United Kingdom's European Union partners about an arms embargo on Pakistan. [114730]

  Mr. Hain
  I refer my hon. Friend to the answer I gave in reply to my hon. Friend the Member for Leyton and Wanstead (Mr. Cohen) on 24 January 2000,Official Report, column 36W.

  Kosovo
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) if he will list the main families in Kosovo dealing in heroin; [114923]

  (2) how many persons have been apprehended in Kosovo for trafficking in heroin since police from NATO countries arrived; [114925]

  Mr. Battle
  We have no information about the number of persons apprehended in Kosovo for trafficking in heroin since police from NATO countries arrived. The UN have asked us to help set up a Criminal Intelligence Unit in Kosovo to provide information which can be used by law enforcement agencies to attack organised criminal activity, including drug trafficking.

  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, announced on 15 March that the UK would contribute 20 police and Customs officers to this Central Intelligence Unit.
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  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many international policemen were promised by NATO countries for service in Kosovo; and how many have arrived. [114924]

  Mr. Hain
  As of 1 March, figures provided by the United Nations Secretariat show that NATO member states have pledged 1,617 civilian police officers (49 per cent. of the total number pledged) to the United Nations International Police force in Kosovo. Of these, 1,184 have been deployed (50 per cent. of the total number deployed).

  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reasons NATO expelled the 4 Unit of the Narcotics Squad of the Serb Army from Kosovo. [114922]

  Mr. Vaz
  In accordance with the Military Technical Agreement between NATO and the Federal Republic of Yugoslavia (FRY) all FRY forces were required to withdraw from Kosovo to locations in Serbia outside Kosovo.

  Mr. Roger Crooks
  Mr. Mackinlay
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what occasions since 1993 his(a) Department's officials, (b) Ministry of Defence personnel and (c) Ministers met Mr. Roger Crooks to discuss (i) the security situation in Sierra Leone and West Africa, (ii) the political situation in Sierra Leone and West Africa, (iii) the supplying of arms in Sierra Leone and West Africa, (iv) the supplying of military assistance and advisers in Sierra Leone and West Africa, (v) logistical support in Sierra Leone and West Africa; and if he will make a statement. [114968]

  Mr. Hain
  Mr. Crooks, a US citizen with interests in Sierra Leone, has been known to various members of the High Commission for some time. He assisted in the evacuation of UK, US and other foreign nationals in 1997. He is refurbishing one of the main hotels in Freetown, to be used as the Headquarters of UNAMSIL. FCO and MOD personnel have had occasional contacts with him over the last few years. Discussions have focused on the general situation in Sierra Leone, not arms or military matters.

  World Education Forum
  Mr. Oaten
  To ask the Secretary of State for Foreign and Commonwealth Affairs which Ministers will be attending the World Education Forum in Dakar. [114915]

  Mr. Hain
  I refer the hon. Member to the answer given by my right hon. Friend the Prime Minister on 7 March 2000,Official Report, column 563W.

  British Overseas Territories
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 14 January 2000,Official Report, column 221W, on British Overseas Territories, what plans his Department has to introduce an order in council to ensure that the British Virgin Islands, Cayman Islands and the Turks and Caicos Islands change their existing legislation on homosexual acts. [114774]
  288W
  Mr. Battle
  In keeping with the new relationship based on partnership, Britain preferred that the Overseas Territories should enact the necessary human right reforms themselves. The relevant territories were forewarned that progress would be reviewed by the end of the year and if necessary the changes, including the de-criminalisation of homosexual acts by consenting adults in private, would be imposed by Orders in Council. The deadline having passed we are reviewing the situation.

  Sudan
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what presentations he has made to British companies involved in the extraction of oil in Sudan in connection with the recommendations made in the document, "Human Security in Sudan: The report of a Canadian Assessment Mission". [114780]

  Mr. Hain
  We shall continue to offer full and frank advice to British companies which inquire about the oil industry in the Sudan. We have of course studied the Canadian report and take it into account in framing our advice to British companies.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports his Department has received on the use of revenues received by the Government of Sudan from the exploration of oil and development projects. [114783]

  Mr. Hain
  We have pressed for oil revenues to be used for development projects and for transparency in the oil account. The Government of Sudan have made a public assurance that this will happen.

  Exports of oil began only in August 1999 and they do not yet have reports on expenditure. We will remain focused on this issue as reports become available and we shall look to the Government of Sudan to honour the assurances they have made.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 3 February 2000,Official Report, column 738W, on Sudan, what discussions he has had with his Canadian counterpart concerning the recommendations made in the study, "Human Security in Sudan: The report of a Canadian Assessment Mission"; and if he will make a statement. [114773]

  Mr. Hain
  My right hon. Friend the Foreign Secretary has not had the opportunity to meet his Canadian counterpart since the beginning of February. We have however studied the report that I referred to in my previous answer.

  Raul Reyes
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with his EU counterparts concerning the European tour of Raul Reyes, the senior Colombian FARC commander. [114777]

  Mr. Battle
  In February, the Colombian Government's High Commissioner for Peace, Victor G. Ricardo, together with Raul Reyes, the FARC's leading spokesperson, visited some European capitals (none in the UK) to seek support for the peace process. The aim of the trip was also to study the economic models in a variety of countries.
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  They visited Sweden, Norway, Switzerland, Italy, Holy See, Spain and France. We have obtained reports of the visits from Italy, Spain and France. Sweden have undertaken to report on the visit shortly.

  In addition, we have had discussions on the visit with our EU Partners in the context of the regular EU/Latin America Working Groups (COLAT) in Brussels.

  Congo
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received concerning violence in the Ituri region of north-eastern Congo. [114776]

  Mr. Hain
  We are concerned at recent reports of massacres. We condemn all such incidents and have called on all parties to exercise restraint. During my meeting with President Museveni on 22 February I noted that Ugandan forces currently control the area and urged him to do all he could to stop such events. Along with our EU partners we also raised this issue with the Ugandan Government. With our UN partners we have called for an international investigation into all such events with a view to bringing all those responsible to justice.

  UN Reform
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proposals for reform of the United Nations, Her Majesty's Government will be putting forward at the Millennium Assembly and Summit in September this year. [114779]

  Mr. Hain
  The Government, along with our EU partners, are pressing for a high-level discussion on strengthening the United Nations at the Millennium Summit. At the Millennium Assembly, we will work for further modernisation of the UN along the lines of the Secretary-General's 1997 "Track II" package of reform recommendations in order to make the UN more efficient and effective and better able to meet the needs of all its members.

  Latvia
  Mr. Winnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Latvian authorities regarding the prosecution for war crimes of a Latvian citizen who had fought against the Nazis. [114938]

  Mr. Vaz
  We are aware of the case of Vassily Kononov, which is currently the subject of an appeal at the Supreme Court of Latvia. The matter is still sub judice.

  Mr. Winnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Latvian authorities regarding the non-prosecution of Nazi war criminals. [114939]

  Mr. Vaz
  We take our international obligation to bring to account those responsible for war crimes very seriously and have been in the forefront of international efforts to achieve restitution for victims of Nazi persecution. While the UK has no jurisdiction in the case, we have been assisting the Latvian authorities with their inquiries into Konrad Kalejs. A team of three Metropolitan police 290W
  officers attended a meeting in Riga on 16–17 January to discuss this case with officers from Australia, Canada and the United States. Latvian police officials have been invited to London to examine material on war crimes in Latvia held by the Metropolitan police.

  Ministerial Visits
  Mr. Loughton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the estimated cost of his visit to Brazil; and how many staff will travel with him. [115019]

  Mr. Battle
  I understand that the hon. Member is referring to the visit of my right hon. Friend the Deputy Prime Minister.

  My right hon. Friend the Deputy Prime Minister is in Brazil at the request of my right hon. Friend the Prime Minister to build on the close relationship between the UK and Brazil established during President Cardoso's state visit to the UK in December 1997, and to expand trade and investment links with the UK's largest trading partner in Latin America.

  My right hon. Friend the Deputy Prime Minister is visiting Sao Paulo, Brasilia and Rio de Janeiro and will meet with President Cardoso, Vice President Maciel, Foreign Minister Lampreia and other Ministers, businessmen and business organisations.

  Mr. Loughton
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the purpose of his visit to Brazil; and if he will publish his itinerary. [115018]

  Mr. Battle
  I understand the hon. Member is referring to the visit of my right hon. Friend the Deputy Prime Minister.

  My right hon. Friend the Deputy Prime Minister is in Brazil at the request of my right hon. Friend the Prime Minister to build on the close relationship between the UK and Brazil established during President Cardoso's state visit to the UK in December 1997, and to expand trade and investment links with the UK's largest trading partner in Latin America.

  My right hon. Friend the Deputy Prime Minister is visiting Sao Paulo, Brasilia and Rio de Janeiro and I will meet with President Cardoso, Vice President Maciel, Foreign Minister Lampreia and other Ministers, businessmen and business organisations.

TREASURY

  Global Cultural Diversity Congress
  Mr. Lidington
  To ask the Chancellor of the Exchequer when he was informed of the cancellation of the Global Cultural Diversity Congress and the collapse of Global Cultural Diversity Congress 2000 Ltd., and by whom; and if he will make a statement. [112792]

  Mr. Andrew Smith
  [holding answer 3 March 2000]: The Treasury became aware of the cancellation of the Global Cultural Diversity Congress on 21 February.

  Micro-credit
  Mr. Love
  To ask the Chancellor of the Exchequer what assessment he has made of the role of micro-credit in assisting the growth of enterprise in deprived communities; and if he will make a statement. [114636]

  Mr. Timms
  The role of micro-credit was considered at length by the Policy Action Team 3 in their report, "Enterprise and Social Exclusion". People in deprived communities often find it difficult to find capital to start or grow businesses, for several reasons:they are themselves capital poor, and lack collateral to support small firm lending;
  a more fragile local economy increases the risk to lenders of business failure;
  the high unit cost of making small firm loans makes them less profitable to lenders; and
  accessibility to lenders, where banks can appear to be unapproachable.

  While UK commercial banks are the major formal suppliers of external finance, new intermediaries such as Community Finance Initiatives (CFIs) can play a valuable role by acting as additional sources of credit in the community, including micro-credit facilities. The launch of the £30 million Phoenix Fund, which will be implemented in 2000–01, will include a challenge fund to help resource CFIs and provide loan guarantees to help co-finance commercial lending to CFIs.

  New Deal (Hospitality Industry)
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer how many jobs have been created in the hospitality industry by the New Deal; and if he will indicate the methods by which he calculated this figure. [111118]

  Ms Jowell
  I have been asked to reply.

  The New Deal is not a job-creation programme; rather it is designed to help unemployed people improve their skills and compete effectively for vacancies.

  The latest figures to the end of December 1999 show that this policy is working; nationally, 185,250 young people have found jobs under the New Deal. We do not hold detailed figures for the jobs taken in the hospitality sector. However, the Employment Service is working closely with 15 companies who are members of the British Hospitality Association to address ways of enhancing the sector's image to increase the number of New Deal participants. This work includes development of a sector specific gateway that will tap into the many vacancies that will arise this year. In the last year there were some 385,000 vacancies notified in this sector.

  Kosovo
  Mr. Dalyell
  To ask the Chancellor of the Exchequer (1) if he will estimate the amount of heroin which was sent via Kosovo in each of the last 12 months; and if he will make a statement; [114929]

  (2) how much heroin sourced from Kosovo has been surrendered at UK ports by HM Customs and Excise in the past 12 months; [114926]

  (3) what is his estimate of the percentage of heroin sold in the (a) UK and (b) EEC which came from smuggling through Kosovo in the last 12 months. [114928]
  292W
  Mr. Timms
  There is no evidence that any heroin detected in the United Kingdom in the last 12 months has originated from, or transited through, any area of the former Yugoslavia.

  HM Customs and Excise hold no data on heroin seizures in the EU either sourced from or transiting through Kosovo or any area of the former Yugoslavia.

EDUCATION AND EMPLOYMENT

  New Deal
  Mr. Alasdair Morgan
  To ask the Secretary of State for Education and Employment if he will state the percentage of participants in the New Deal for 18 to 24-year-olds in(a) Great Britain, (b) Scotland and (c) Wales who have left the gateway to unsubsidised employment; and if he will list the areas in Scotland where a smaller percentage then the (i) Great Britain and (ii) Scottish average figures have entered unsubsidised employment at the gateway stage, including the number and percentage for each of these areas. [111279]

  Ms Jowell
  [holding answer 22 February 2000]: The information requested is shown in the tables.

  New Deal (18 to 24-year-olds) gaining unsubsidised employment from the Gateway

  Percentage

  Scotland

  20

  Wales

  22

  GB

  22

  Scottish units of delivery with a smaller percentage of participants (New Deal 25+) entering unsubsidized employment from the Gateway stage, than the GB average

  Unsubsidised jobs from the Gateway

  As a percentage of New Deal starts

  Tayside

  797

  19

  Ayrshire

  841

  19

  Dumfries and Galloway

  214

  18

  Edinburgh, East and Mid Lothian

  744

  21

  Fife

  700

  20

  Glasgow

  1,376

  16

  Renfrewshire

  595

  21

  Caithness and Sutherland

  49

  19

  Western Isles

  36

  17

  Scottish units of delivery with a smaller percentage of participants (New Deal 25+) entering unsubsidised employment from the Gateway stage, than the Scotland average

  Unsubsidised jobs from the Gateway

  As a percentage of New Deal starts

  Tayside

  797

  19

  Ayrshire

  841

  19

  Dumfries and Galloway

  214

  18

  Glasgow

  1,376

  16

  Caithness and Sutherland

  49

  19

  Western Isles

  36

  17

  293W
  A recent survey has shown that 57 per cent. of young people leaving the New Deal for unknown destinations had found a job.

  Sex Education
  Ms Kelly
  To ask the Secretary of State for Education and Employment when he will publish his proposed guidelines on the teaching of sex and relationship education in schools. [112914]

  Jacqui Smith
  My right hon. Friend the Secretary of State is today issuing for consultation new draft sex and relationship education (SRE) guidance. The text of the guidance will today be placed on the Department's website. Copies will also be placed in the Libraries.

  Peat Compost
  Mr. Paul Marsden
  To ask the Secretary of State for Education and Employment, pursuant to his answer of 2 March 2000,Official Report, column 391W, on peat compost, what percentage of the compost used in his Department's estate gardens is peat; when use of peat compost will be phased out on his Department's estates; and if he will make a statement. [114142]

  Mr. Wills
  [holding answer 10 March 2000]: Peat compost is no longer purchased by my Department, or used in the Department's estate gardens. A small amount

  Allocations to North Tyneside 1997–98 to 1999–2000

  £

  Initiative

  1997–98

  1998–99

  1999–2000

  (a) Reduction of infant class sizes:

  (i) revenue

  1—

  —

  192,000

  (ii) capital

  1—

  352,000

  241,000

  (b) National grid for learning (Standards Fund)

  1—

  563,533

  669,000

  (c) Literacy programmes (Standards Fund)

  20,900

  276,073

  347,283

  (d) Numeracy programmes (Standards Fund)

  1—

  9,845

  247,910

  (e) Books for schools

  87,500

  94,781

  189,562

  (f) Truancy (Standards Fund)

  288,400

  350,607

  634,440

  (g) School security (Standards Fund)

  85,600

  85,842

  87,173

  (h) School effectiveness (Standards Fund)

  550,700

  615,917

  935,253

  (i) Excellence in cities (Standards Fund)

  1—

  1—

  1—

  (j) New Deal for Schools

  406,000

  613,000

  1,363,628

  (k) Voluntary Aided Schools Capital

  348,000

  87,000

  109,000

  (l) Energy efficiency

  1—

  —

  1—

  (m) Music programmes

  1—

  1—

  78,289

  (n) Year 6 booster classes

  1—

  50,140

  170,539

  (o) Education standard spending assessment2

  67,840,000

  74,460,000

  77,620,000

  1 Not applicable

  2 In 1997–98 £527 million was removed from Education Standard Spending at national level for the Nursery Voucher Scheme.

  Class Sizes (Taunton)
  Jackie Ballard
  To ask the Secretary of State for Education and Employment what is his estimate of the average class sizes for(a) five, (b) six, (c) seven, (d) eight, (e) nine, (f) 10, (g) 11, (h) 12, (i) 13, (j) 14, (k) 15, (l) 16 and (m) 17-year-olds, for schools within the Taunton constituency, for (i) 1995–96, (ii) 1996–97, (iii) 1997–98, (iv) 1998–99 and (v) 1999–2000; and if he will make a statement. [114685]

  Ms Estelle Morris
  The available information on average class sizes collected in January for the
  294W
  of peat remains in some planted areas. This will dissipate with the use of organic peat substitutes which are now used at all of our sites.

  Education Funding (North Tyneside)
  Mr. Alan Campbell
  To ask the Secretary of State for Education and Employment how much funding was awarded to North Tyneside Local Education Authority in each year from 1997–98 to 1999–2000 in respect of(a) reduction in infant class sizes, broken down by (i) revenue and (ii) capital, (b) the national grid for learning, (c) literacy programmes, (d) numeracy programmes, (e) books for schools, (f) truancy initiatives, (g) school security, (h) standards fund, school effectiveness, (i) excellence in cities, (j) new deal for schools, (k) voluntary aided school capital grant, (l) energy efficiency, (m) music programmes, (n) year 6 booster classes and (o) education SSA. [114535]

  Ms Estelle Morris
  The figures requested are shown in the table. For Standards Fund grants, the figures include both the Government's and the local education authority's contributions where appropriate. The figures shown for Education Standard Spending Assessment also include provision for the Authority's contribution to the Standards Fund.

  Parliamentary constituency of Taunton is shown in the tables. The class size count for January 2000 is currently being undertaken, and provisional national estimates are expected to be published in April.

  The Government are well on course to deliver their pledge to limit infant classes for 5, 6 and 7-year-olds to 30 or below by September 2001. In Taunton Parliamentary constituency, the latest infant class size count carried out in September 1999 showed the average size of class to be 26.2 pupils per class.
  295W

  Average size of classes taught by one teacher by year group in maintained primary schools in the Parliamentary constituency of Taunton: 1996–99

  Year groups

  Position as at January

  Reception

  1

  2

  3

  4

  5

  6

  7

  Mixed

  Overall1

  1999

  Average class size

  26.2

  28.1

  28.6

  29.1

  29.5

  28.8

  28.1

  2—

  29.2

  28.9

  Pupils

  1,020

  451

  522

  571

  517

  471

  463

  2—

  4,144

  8,212

  Classes

  39

  16

  18

  19

  17

  15

  15

  2—

  142

  284

  1998

  Average class size

  25.6

  28.7

  29.6

  30.9

  31.1

  30.8

  33.1

  3—

  28.7

  28.8

  Pupils

  920

  516

  533

  433

  436

  370

  397

  3—

  4,340

  8,004

  Classes

  36

  18

  18

  14

  14

  12

  12

  3—

  151

  278

  1997

  Average class size

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  28.4

  Pupils

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  7,773

  Classes

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  274

  1996

  Average class size

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  28.0

  Pupils

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  7,481

  Classes

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  3—

  267

  1 Includes all year groups and nursery classes

  2 Not applicable (no classes of this type)

  3 Not available

  Average size of classes taught by one teacher by age band in maintained secondary schools in the Parliamentary constituency of Taunton: 1996–99

  Ages1

  Position as at January

  Middle classes

  Mainly under 14s

  Mainly 14 and 15

  16 or older

  Overall

  1999

  Average class size

  29.0

  26.0

  21.8

  2—

  24.3

  Pupils

  29

  3,281

  1,965

  2—

  —

  Classes

  1

  126

  90

  2—

  —

  1998

  Average class size

  22.3

  25.5

  22.9

  2—

  24.4

  Pupils

  89

  3,188

  2,018

  2—

  —

  Classes

  4

  125

  88

  2—

  —

  1997

  Average class size

  18.1

  24.2

  22.7

  2—

  23.4

  Pupils

  127

  3,071

  2,041

  2—

  —

  Classes

  7

  127

  90

  2—

  —

  1996

  Average class size

  17.8

  24.9

  22.3

  2—

  23.5

  Pupils

  142

  2,767

  1,982

  2—

  —

  Classes

  8

  111

  89

  2—

  —

  1 Ages at the start of the academic year (August 31)

  2 Not applicable (no classes of this type)

  Performance-related Pay
  Mr. Clappison
  To ask the Secretary of State for Education and Employment what is his most recent estimate of the total cost of administering the assessment scheme in respect of performance-related pay. [114438]

  Ms Estelle Morris
  Headteachers will be responsible for assessing teachers against national standards at a Performance Threshold to move to the new upper pay spine proposed by the Government. DfEE has contracted Cambridge Education Associates Limited (CEA) to manage the appointment, deployment and quality assurance of external assessors who will verify, through sampling, headteachers' assessments.
  296W
  The payment of external assessors is a matter for CEA, but it will be made on a pro rata basis dependent upon the number of applicants in each school.

  The number of external assessors to be deployed will be dependent upon the number and distribution of teachers who apply to cross the Performance Threshold. This number will not be known until summer 2000. The total cost of administering the scheme will be dependent upon the number of assessments carried out and again this will not be known until later in 2000.

  Departmental Buildings
  Mr. Welsh
  To ask the Secretary of State for Education and Employment if he will list(a) the offices (i) owned and (ii) rented by his Department and its agencies in

  297W
  Scotland and (b) the number of staff (i) employed and (ii) that can be accommodated (1) in total and (2) at each site. [114241]

  Mr. Wills
  The Department has no offices in Scotland. Details of Employment Service offices in Scotland and numbers of staff employed have been placed in the Library. The Employment Service is unable to provide details of the maximum number of staff that could be accommodated at each site.

  Loans (Part-time Students)
  Mr. Boswell
  To ask the Secretary of State for Education and Employment if the proposed loan for part-time students will be(a) confined to hardship cases and (b) made available to Open University students. [115000]

  Mr. Wicks
  Loans for part-time students, which are being introduced later this year, will provide financial support to students on low incomes. It is our intention to make loans available to Open University students.

HEALTH

  Public Consultation
  Dr. Tony Wright
  To ask the Secretary of State for Health if he will list the public consultation exercises on policy matters carried out by his Department and its agencies in each of the last five years; who was consulted and by what means; how responses were analysed; how and in what form the results were transmitted to those responsible for the consultation; how the results of the consultation were published; and what analysis has been carried out of the extent and nature of policy changes resulting from the consultation. [106299]

  Yvette Cooper
  The Department is fully committed to public consultation, and a great many consultative exercises are carried out by the Department and throughout the NHS. However, I regret that the information sought is not collated centrally on a regular basis and an answer could be provided only at disproportionate cost.

  Viagra
  Dr. Harris
  To ask the Secretary of State for Health if people without pituitary glands qualify to receive Viagra on the NHS without referral to a consultant; and what is the basis for this approach. [111572]

  Yvette Cooper
  No. We consulted widely before introducing regulations on 1 July 1999 restricting the prescribing by general practitioners of treatments for impotence, including Viagra. No representations were made suggesting that men without pituitary glands should be included in the groups of patients for whom such treatments can be prescribed. We shall be reviewing the operation of the regulations after a year.

  Breast Cancer Screening (Greater London)
  Mr. Love
  To ask the Secretary of State for Health what changes he plans to make to the breast cancer screening service in Greater London; and if he will make a statement. [111980]
  298W
  Yvette Cooper
  The national National Health Service Breast Screening Programme constantly reviews standards in all breast screening units, including those in Greater London. The NHS Executive, London Regional Office is currently reviewing breast screening services in the north of Greater London.

  Departmental Plant Buying
  Mr. Harvey
  To ask the Secretary of State for Health if he will list his Department's expenditure on plants in its(a) Richmond House, (b) Wellington House and (c) Skipton House buildings for each of the last two financial years. [112943]

  Yvette Cooper
  The cost of the provision and maintenance of internal and external plants is included as part of the overall contract cost for the provision of cleaning services to the Department's central London buildings. It is not budgeted for separately. However, our best estimate is an annual cost to the Department of about £4,000 for Wellington House and £2,000 for Skipton House.

  Mr. Harvey
  To ask the Secretary of State for Health what expenditure his Department has incurred on the renewal or replacement since 1 January of plants at Wellington House. [112944]

  Yvette Cooper
  The cost of the renewal and replacement of internal and external plants forms an integral part of a lease maintenance agreement which is included in an overall contract to provide cleaning services to the Department's central London buildings. The costs of the provision and maintenance of plants are not identified separately. However, our best estimate for the cost of plant provision, maintenance and replacement since 1 January is £700.

  Pilot Schemes
  Mrs. Spelman
  To ask the Secretary of State for Health how many pilot schemes with end dates his Department has created in each of the last three years; what the end dates were; and if the pilot schemes have been rolled out by their end dates. [112803]

  Ms Stuart
  The Department regularly instigates a large number of pilot projects across a wide range of policy areas to assess their feasibility for possible national application, generally on a three year basis. The main areas covered in the last three years, with the number of projects involved, are:

  Personal Medical Services
  Phase 1—with effect from April 1998: 85
  Phase 2—with effect from October 1999: 106

  General Practitioner Commissioning Groups
  with effect from April 1998 for one year only: 39

  Walk-in Centres
  with effect from March 2000: 07; to be followed by December by a further 29

  NHS Direct
  Phase 1—with effect from March 1998: 3
  Phase 2—with effect from January 1999: 10 new schemes
  Phase 3—with effect from November 1999: 04 new schemes
  Phase 4—with effect from October 2000: 5 new schemes to follow
  299W
  National Booked Admission
  Phase 1—with effect from November 1998: 24
  Phase 2—with effect from September 1999: 60
  9 Cancer networks—with effect from September 1999: covering 43 projects

  Personal Dental Services
  Phase 1—with effect from October 1998: 15
  Phase 2—with effect from October 1999: 23.

  In addition a small number of more focused studies into more discrete, but limited, topics are also proceeding.

  Details of the end dates and roll-out dates of each individual scheme could be obtained only at disproportionate cost, particularly as there is no universally agreed definition of a pilot scheme in this context. However, if the hon. Member would like specific information on any individual scheme and would let me have appropriate details, I will ensure that this information is provided.

  NHS Staff
  Mr. Ruane
  To ask the Secretary of State for Health what is the current average starting pay for(a) hospital cleaners, (b) hospital porters and (c) trainee medical laboratory science officers in the NHS. [113195]

  Mr. Denham
  [holding answer 6 March 2000]: It is not possible to identify separately the average starting pay for hospital porters or cleaners on national terms and conditions. It is a matter for individual employers to determine the appropriate pay scales for each occupational group within the ancillary pay structure, based upon the grading definitions contained within the Ancillary Staffs Handbook.

  The current pay scale for Trainee Medical Laboratory Scientific Officers (MLSOs) is:

  Pay scale

  £

  00

  7,476

  01

  7,726

  02

  7,988

  03

  8,260

  04

  8,544

  05

  8,839

  06

  9,146

  07

  9,463

  08

  9,796

  Pay is negotiated in the Professional and Technical Staffs B Whitley Council. The NHS Management Side has offered to improve the pay of Trainee MLSOs. If accepted this offer would produce a new pay scale for Trainee MLSOs, effective from 1 April 1999, of:

  Pay scale

  £

  00

  9,420

  01

  9,747

  02

  10,090

  03

  10,443

  NHS Trusts
  Mr. Tony Clarke
  To ask the Secretary of State for Health how much money is currently owed to NHS trusts by(a) health care insurers and (b) independent providers for the care of private patients in the NHS; and for how long these debts have been outstanding. [113640]

  Ms Stuart
  Information on the amount of money currently owed to National Health Service trusts by healthcare insurers and independent providers cannot be separately identified.

  Mobile Phones
  Mr. Breed
  To ask the Secretary of State for Health (1) what plans he has to publish the findings of the investigations of the National Radiological Protection Board; [113866]

  (2) what plans he has to fund further research into the health effects of emissions from mobile telecommunications masts. [113865]

  Yvette Cooper
  The National Radiological Protection Board was asked last year to set up an independent expert group on mobile phones. The group, chaired by Sir William Stewart FRS FRSE, is currently considering the possible health effects from the use of mobile phones, base stations and transmitters and is conducting a comprehensive assessment of existing research. The group is expected to finalise its report in April for publication in May. Detailed research plans are currently being developed and will take into account the expert group's report.

  Methadone
  Mr. Lilley
  To ask the Secretary of State for Health how many people are involved in methadone treatment programmes in England and Wales. [113964]

  Yvette Cooper
  The information requested is not available centrally. Information is available from the Regional Drug Misuse Databases on the number of users presenting to services for treatment and the drugs misused. Reliable information is not available centrally on the treatment given.

  Patient Referrals
  Mr. Lilley
  To ask the Secretary of State for Health (1) on how many occasions since April 1999 general practitioners have exercised their legal right to refer patients to a hospital other than that selected by their primary care group(a) in England and (b) in primary care groups in Hitchen or Harpenden; [113851]

  (2) what plans he has to alter the legal right of general practitioners to refer patients to the NHS hospital of their choice; and what legislative change would be required to remove that right; [113856]

  (3) if information is collected about the number of patients asking to be referred to a hospital other than that selected by their primary care group; and if he will give the outcome of such requests; [113853]

  (4) if he proposes to inform (a) general practitioners and (b) patients of the legal right of general practitioners to refer their patients to a hospital other than those selected by their primary care group. [113859]
  301W
  Mr. Denham
  Information about individual general practitioners' referral of patients to specific hospitals or the number of patients asking to be referred to a hospital, other than the one selected by the primary care group, is not collected.

  Primary care groups do not alter the general practitioner's ability to refer patients for health care services that they consider appropriate and it is for the individual general practitioner to assess their patients' health needs.

  We have no plans to alter any legislation that would alter general practitioners ability to refer patients for appropriate health care services. Changes could be made only by amending the terms and conditions of services of general practitioners within the National Health Service (General Medical Services) Regulations 1992.

  Creutzfeldt Jakob Disease
  Mr. Harvey
  To ask the Secretary of State for Health (1) what steps his Department takes to monitor the way coroners and pathologists(a) handle issues of contact between grieving relatives and deceased victims of CJD and (b) implement relevant Government guidelines; [114317]

  (2) what assessment his Department has made as to whether new variant CJD can be contracted by means other than ingestion; [114315]

  (3) what guidelines his Department has issued to coroners and pathologists concerning superficial contact between (a) grieving relatives and (b) bodies of deceased victims of CJD. [114316]

  Yvette Cooper
  The Department gets feedback from patient groups. The Human Bovine Spongiform Encephalopathy Foundation, a voluntary organisation run by families of variant Creutzfeldt Jakob Disease (vCJD) patients and funded by the Department, brought to our attention that some families had been caused unnecessary distress by inappropriate restrictions placed on them regarding funeral arrangements.

  The Department has recently reminded coroners, pathologists and others of the extant guidance from the Advisory Committee on Dangerous Pathogens (ACDP) and the Spongiform Encephalopathy Advisory Committee (SEAC) (published in April 1998) in relation to contact with those who have died from CJD.

  The guidance states that there is no need for special precautions to be taken for either burial or cremation (where the risk is described as likely to be negligible), and that superficial contact, such as touching the face, need not be discouraged. The reminder was sent to:

  Pathologists

  The Coroners Association

  Consultants in Communicable Disease Control

  Local Authorities

  Funeral Directors' professional associations

  Morticians.

  SEAC's view is that the most likely explanation of vCJD cases to date is exposure to Bovine Spongiform Encephalopathy (BSE). However, we do not know the route of infection.
  302W
  The ACDP/SEAC guidance states that available epidemiological evidence suggests that normal social or routine clinical contact with a CJD patient does not represent a risk to healthcare workers, relatives and the community. The National Creutzfeldt Jakob Disease Surveillance Unit continues to gather and analyse data on dietary, occupational and medical history on vCJD cases to identify any common risk factors. So far none have emerged.

  Gammahydroxybutyrate
  Mr. Ben Chapman
  To ask the Secretary of State for Health what assessment he has made of the health problems caused by the misuse of gammahydroxybutyrate. [114160]

  Ms Stuart
  We are aware that gammahydroxybutyrate can present acute health problems for some misusers. The effects are exacerbated when mixed with alcohol or other drugs and can include collapse, coma and death. Information on the dangers of gammahydroxybutyrate is included in many of the resources produced by the Health Education Authority on behalf of the Department as part of a campaign to educate 11 to 25-year-olds and parents about substance misuse.

  The Government look to the Advisory Council on the Misuse of Drugs for advice on whether a substance should be controlled under the Misuse of Drugs Act 1971. ACMD last considered gammahydroxybutyrate in May 1998 and concluded that misuse did not present a sufficient social problem to be controlled under this Act.

  Mr. Ben Chapman
  To ask the Secretary of State for Health what research his Department has(a) commissioned and (b) evaluated on the side effects from gammahydroxybutyrate misuse in the last five years. [114247]

  Ms Stuart
  The Department has not commissioned any research into gammahydroxybutyrate but are aware that side effects and acute health problems including collapse, coma and death can arise from misuse. The Department has access to the research findings of the Advisory Council on the Misuse of Drugs which last considered gammahydroxybutyrate in May 1998. ACMD looked at a range of evidence including data from the National Poisons Information Service, publications in scientific journals and press reports.

  Mr. Ben Chapman
  To ask the Secretary of State for Health what guidance he has given on the prosecution of illicit manufacturers of gammahydroxybutyrate. [114161]

  Ms Stuart
  Gammahydroxybutyrate (GHB) is a medicinal product and is controlled under the Medicines for Human Use (Marketing Authorisations etc.) Regulations 1994 and the Medicines Act 1968. The manufacture and supply of GHB without a licence is a criminal offence under the legislation and where there is sufficient evidence the Medicines Control Agency (MCA) will prosecute.

  Briefings on GHB have been given by the MCA to:

  Heads of Police Force Intelligence Bureaux

  Trading Standards Officers

  Environmental Health Officers.

  303W
  Mr. Ben Chapman
  To ask the Secretary of State for Health what assessment he has made of the use of the internet as a vehicle for the purchase of gammahydroxybutyrate. [114163]

  Ms Stuart
  Gammahydroxybutyrate (GHB) is a medicinal product and is controlled under the Medicines for Human Use (Marketing Authorisations etc.) Regulations 1994 and the Medicines Act 1968. The Medicines Control Agency (MCA) investigates all referrals of breaches of medicines legislation.

  In 1999 discussions were held with law enforcement bodies that deal with pharmaceutical crime including the use of the Internet in the United States of America and European Union member states. The result was the information of an International security forum on pharmaceutical Intelligence service, Interpol and the Forum.

  A special Inquiry Unit has been established by the MCA to investigate alleged breaches of medicines regulations on the internet.

  Public Health
  Mr. Simon Hughes
  To ask the Secretary of State for Health (1) how many residents he estimates were suffering from(a) sexually transmitted diseases and (b) AIDS/HIV infections in the NHS London region in the current financial year, and in each of the last 10 financial years; [113810]

  (2) how many people were being treated by the NHS for (a) sexually transmitted diseases and (b) AIDS/HIV, in the London Region in (i) the current financial year and (ii) each of the last 10 financial years; [113811]

  (3) how much has been allocated by the NHS to care for and treat (a) sexually transmitted diseases and (b) AIDS/HIV in the NHS London region for (i) the next financial year, (ii) the current financial year and (iii) each of the last 10 financial years. [113812]

  Yvette Cooper
  [holding answer 10 March 2000]: We are unable to provide an estimate as data from Genito Urinary Medicine clinics, where most sexually transmitted diseases are treated, do not include residence information.

  Diagnosed HIV infected people resident in London form 60 per cent. of the total country-wide and, assuming this applies to the undiagnosed fraction as well, would result in 17,500 London residents who are HIV infected, about one third of whom have not yet had their infection diagnosed.

  Using data from the annual survey of prevalent HIV infection and the unlinked anonymous surveys the following estimates have been produced from 1995 onwards. Approximately one third of these infections will be undiagnosed. These figures are based on annual surveys.

  Number

  At end of:

  1998

  17,500

  1997

  16,000

  1996

  15,500

  Source:

  PHLS (earlier data are not available and data by financial year are not available)
  304W
  As statistical returns from genitourinary medicine clinics provide information on new diagnoses rather than the number of individuals treated we are unable to answer this specific question. However, readily available data on diagnoses are as follows and provide an indication of patient numbers but individuals may have more than one infection. Data for 1999 are not available yet.

  Diagnoses of sexually transmitted diseases in the NHS London Region

  Calendar year

  Number of STD diagnoses (excluding HIV/AIDS)

  1995

  143,207

  1996

  143,654

  1997

  154,305

  1998

  157,324

  Source:

  PHLS

  There are no current HIV prevalence data collected regionally or nationally for financial years. The Annual Survey of Prevalent HIV infections that are diagnosed will be able to give data for 1999 calendar year but this will not be available until later in the summer of 2000.

  This annual prevalence survey of HIV infected people receiving care began to collect data nationally in 1995 and the estimated figures for London adjusted for under reporting give the following totals.

  HIV infected people treated calendar year in London

  Number

  1995

  10,600

  1996

  10,600

  1997

  11,500

  1998

  13,000

  Separate allocations are not made for sexually transmitted diseases. The HIV/AIDS treatment and care allocation to London health authorities for 1996–97 to 1999–2000 is as shown. Prior to 1996–97 allocations were made to regional health authorities and information on London HAs is not held centrally. Allocations for 2000–01 have not yet been determined.

  £ million

  Allocations to London HAs

  1996–97

  134.8

  1997–98

  144.4

  1998–99

  163.6

  1999–2000

  164.3

  The movement between years reflects adjustments to the baseline allocations in year as well as the annual cash increase.

  Broomfield Hospital
  Mr. Burns
  To ask the Secretary of State for Health if he will order the three closed wards at Broomfield Hospital to be reopened until he has reached a decision on the appeal against closure being brought by the Mid Essex community health councils. [114212]
  305W
  Mr. Denham
  [holding answer 13 March 2000]: Consultation has been carried out on these proposals, and as yet, no appeal has been received from Mid Essex Community Health Council regarding the beds at Broomfield Hospital. The community health council's appeal will be considered in line with due process, if and when it is received.

  Natal Intensive Care Unit
  Mr. Gardiner
  To ask the Secretary of State for Health what annual number of obstetric deliveries is deemed to be the threshold for a trust to be able to support a natal intensive care unit. [114571]

  Yvette Cooper
  There are no specific thresholds. Health authorities are required to commission health care services to serve the needs of their resident populations according to local demand and circumstances.

  Overseas Doctors
  Mr. McDonnell
  To ask the Secretary of State for Health if he will make a statement on the future of the Professional and Linguistic Assessment Board test for overseas doctors. [114447]

  Ms Stuart
  The administration of the Professional and Linguistic Assessment Board test, including both content and standards required to pass, are entirely a matter for the General Medical Council to determine.

  Cancer Deaths
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on the Government's proposals for reducing cancer deaths among people living in poverty in the UK. [114174]

  Yvette Cooper
  [holding answer 13 March 2000]: The "Saving Lives—Our Healthier Nation" White Paper has a central aim to improve the health of the worst off in society and narrow the health gap. It set a target to reduce death rates from cancer by 20 per cent. in those under 75 by 2010. This will involve dealing with the broader determinants of health (eg poverty, social exclusion etc.), addressing risk factors (eg by providing smoking cessation clinics in Health Action Zones), encouraging early detection and uptake of screening (especially in deprived groups and ethnic minorities), and by ensuring equity of access to high quality cancer treatment across the country as part of our national strategy to improve cancer services.

  Schoolchildren (Weight Bearing)
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on the health risks of schoolchildren carrying excessive weight in unsuitable school bags. [114382]

  Yvette Cooper
  [holding answer 13 March 2000]: Weight bearing exercise is an important contributor to health. However, carrying excessive and unbalanced weights has the potential to contribute to musculo-skeletal injury. The risk is likely to be increased in the young, those with pre-existing skeletal problems and those who are overweight.
  306W
  Through the National Healthy Schools Standards we are asking schools to consider all the factors that impact on the health of the school community. Safety is one of the specific themes of the standard and this includes the need for regular risk assessments by an identified Health and Safety representative.

  Pathology
  Mr. Austin
  To ask the Secretary of State for Health how much was spent on Agency staff in Pathology in each NHS region in the last year for which figures are available. [114746]

  Mr. Denham
  The information requested is not centrally available.

  Equal Opportunities
  Mr. Austin
  To ask the Secretary of State for Health if he will list the membership of the boards of Primary Care Groups broken down by(a) ethnic origin and (b) gender. [114747]

  Mr. Denham
  [holding answer 15 March 2000]: Primary Care Group board members were asked to complete equal opportunities forms when they became accepted to a PCG board. This is not a mandatory requirement but where volunteered the information is in the table.

  Primary Care Group boards

  Number of board members

  Ethnicity

  Unspecified

  Male

  Female

  Unspecified

  1,535

  722

  428

  Other

  2

  56

  14

  White

  53

  1,378

  958

  Pakistani

  —

  23

  2

  Indian

  3

  174

  28

  Chinese

  —

  9

  4

  Black Caribbean

  —

  7

  11

  Black African

  —

  14

  7

  Bangladeshi

  1

  31

  4

  Total

  1,594

  2,414

  1,456

  Overall total

  5,464

  Mr. Austin
  To ask the Secretary of State for Health how many nurses, midwives and health visitors have received discretionary increments in the last three financial years, broken down by gender and ethnic origin. [114749]

  Mr. Denham
  [holding answer 15 March 2000]: Responsibility for payment of discretionary points to nurses, midwives and health visitors is for local NHS employers. The information requested is not available centrally.

  Hospital Waiting Lists (Essex)
  Mr. Burns
  To ask the Secretary of State for Health what is the total number of people waiting for hospital treatment in the Mid-Essex Hospital Trust area; and how many have waited 12 months or more. [114724]
  307W
  Mr. Denham
  [holding answer 15 March 2000]: The information requested is given in the table.

  Total number of patients waiting and the number of patients waiting over 12 months for hospital treatment at Mid Essex Hospital Services National Health Service Trust in January 2000

  Month

  Total waiting

  Number waiting over 12 months

  January 2000

  10,233

  1,118

  Source:

  Monthly waiting list return

  Correspondence
  Mr. Winnick
  To ask the Secretary of State for Health when the hon. Member for Walsall, North will receive a reply to his letter of 18 January concerning an MRI scanner, ref: POH(3) 5608/38. [114808]

  Yvette Cooper
  I will let my hon. Friend have a reply to his letter as soon as possible.

AGRICULTURE, FISHERIES AND FOOD

  Common Agricultural Policy
  Mr. Tynan
  To ask the Minister of Agriculture, Fisheries and Food what recent estimate he has made of the savings for consumers from the Agenda 2000 reform of the common agriculture policy. [113378]

  Ms Quin
  The Agenda 2000 reforms should result in savings of around £1 billion a year for UK consumers when all the changes have worked through. This will equate to a saving of around £65 per year for the average family of four.

  Mr. Cox
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the overall benefit to the UK economy of the Agenda 2000 reforms of the CAP. [113382]

  Ms Quin
  Once fully implemented the economic benefit to the UK is estimated to be worth around £0.5 billion per year.

  Mr. Borrow
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the savings to consumers that will arise from the Agenda 2000 reform of the common agricultural policy over the next three years. [113385]

  Ms Quin
  If price reductions are passed to retail, UK consumers will save around £250 million in 2001, £450 million in 2002 and £600 million in 2003 as a result of the Agenda 2000 reform.

  Forestry Commission
  Mr. Chope
  To ask the Minister of Agriculture, Fisheries and Food when he will next meet the chairman of the Forestry Commission to discuss the Commission's licensing responsibilities. [113380]

  Mr. Morley
  I often meet the Forestry Commission's Chairman and other senior staff to discuss current forestry issues and the Commission's responsibilities.

  Animal Welfare Standards
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food if he will take steps to ensure that farmers receive prices for animal products which reward better welfare standards. [113381]

  Mr. Nick Brown
  The Government have always maintained that UK welfare standards offer the domestic livestock industry, particularly the pig industry, a strong marketing advantage. That is one reason why the Government have agreed to fund half of the £4.6 million welfare linked pork promotion campaign developed by the Meat and Livestock Commission.

  Mr. St. Aubyn
  To ask the Minister of Agriculture, Fisheries and Food what recent representations he has made to the European Commission concerning animal welfare standards in the agriculture sectors of member states. [113391]

  Mr. Morley
  My right hon. Friend the Minister wrote to Commissioner Byrne on 9 February pressing him to take action to ensure proper enforcement across the EU of the rules on welfare in transit and at slaughter.

  Live Animal Exports
  Mr. Loughton
  To ask the Minister of Agriculture, Fisheries and Food what progress has been achieved since May 1997 in improving conditions for live animals exported from the UK and transported around the continent. [113383]

  Mr. Morley
  We introduced the overdue EU rules on animal welfare in transit immediately after coming into office, and tighter pre-export inspection procedures for livestock in May 1999. We ensure the rules are enforced strictly while live export consignments are on our territory: we have pressed the Commission to ensure the same standards throughout the EU, and welcome the review they are now carrying out.

  Antibiotics (Animal Feed)
  Mr. Blunt
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the use of antibiotics in animal feed. [113384]

  Ms Quin
  Certain antibiotic feed additives authorised by the EU may be used as growth promoters in animals. They may be used only if they satisfy stringent statutory criteria including a requirement that, at the level permitted, they do not adversely affect human or animal health or the environment.

  Genetically Modified Crops
  Mr. Webb
  To ask the Minister of Agriculture, Fisheries and Food if it is his policy that genetically modified crops should not be exploited for commercial purposes. [113386]

  Ms Quin
  Our policy is that UK industry should not be denied access to GM technology, provided that valid concerns are addressed. The GM industry has agreed that no GM crops will be grown on a commercial basis before the farm scale evaluation programme has been completed.
  309W
  Dr. Gibson
  To ask the Minister of Agriculture, Fisheries and Food what conclusions he has drawn from the recent OECD conference on genetically modified crops. [113392]

  Ms Quin
  The OECD conference held last week in Edinburgh was extremely useful in bringing together scientific experts, policy regulators and other parties interested in GM crops and food from around the world. The conference allowed a balanced debate, scrutinising the safety assessment systems for GM foods and considering whether and how GM foods and crops could serve the needs of society. It is too early to draw any firm conclusions but we await the chairman's final report with interest.

  Mr. Swayne
  To ask the Minister of Agriculture, Fisheries and Food what procedure he will follow when licensing genetically modified crop varieties. [113395]

  Ms Quin
  Genetically modified crops are not licensed. Releases of Genetically Modified Organisms are regulated by the Environmental Protection Act 1990 and secondary legislation made under it. The National Listing of plant varieties (which could include genetically modified varieties) is regulated by the Seeds (National Lists of Varieties) Regulations 1982. The relevant procedures are set out in the legislation.

  Dr. Naysmith
  To ask the Minister of Agriculture, Fisheries and Food what action he has taken to provide information to the public concerning the safety of genetically modified foods. [113396]

  Ms Quin
  The Advisory Committee on Novel Foods and Processes (ACNFP) is responsible for assessing the safety of genetically modified foods in the UK. The ACNFP already publishes agendas, reports and minutes of its meetings, committee papers and detailed assessment reports on individual GM food applications as well as an Annual Report. In addition the Committee has held a number of open meetings on issues such as postmarket surveillance.

  Those seeking novel food approvals have been encouraged for many years to deposit data supporting their applications in the British Library. All new applications will however be made available electronically on the ACNFP website from now on and public comments invited, which the ACNFP can then take into account in reaching its preliminary conclusions. These conclusions will be made available for comment in turn before they are forwarded to the European Commission. The UK is encouraging other European member states to follow a similar approach.

  General information about the safety of genetically modified foods is also contained on the Government GM website at www.gm-info.gov.uk. This has been widely publicised.

  Mr. David Heath
  To ask the Minister of Agriculture, Fisheries and Food what restriction is placed on feeding chickens with unprocessed GM maize containing antibiotic-resistant marker genes in(a) the UK and (b) the EU. [113762]

  Ms Quin
  [holding answer 13 March 2000]: There are no restrictions on feeding GM maize to chickens, provided that the maize concerned has received a
  310W
  marketing consent under Council Directive 90/220 on the deliberate release of genetically modified organisms in the environment.

  Mr. David Heath
  To ask the Minister of Agriculture, Fisheries and Food what controls are in place to prevent varieties of GM crops not approved for sale for planting in the EU being imported into the UK as animal feed. [113763]

  Ms Quin
  [holding answer 13 March 2000]: Under Council Directive 90–220, on the Deliberate Release of Genetically Modified Organisms into the Environment, no viable GM material can either be grown or imported into the EU without a marketing consent.

  Mr. David Heath
  To ask the Minister of Agriculture, Fisheries and Food what research he has commissioned into the implications for safety or welfare of animals of being fed on GM crops. [113768]

  Ms Quin
  [holding answer 13 March 2000]: Research to date has concentrated on the effects of processing on animal feed materials and the ability of DNA to survive processing and passage through an animal's gut. No incidental ill-effects have been detected in animals, nor have any been reported in countries where GM crops have been grown and fed to animals for a number of years.

  Mr. David Heath
  To ask the Minister of Agriculture, Fisheries and Food what progress has been made on the proposed European Novel Feeds Regulation to ensure the labelling of GM animal feed. [113766]

  Ms Quin
  [holding answer 13 March 2000]: We have been pressing the Commission for some time to bring forward its proposed Novel Feeds Regulation which will contain labelling rules. Commissioner Byrne has given an undertaking to do this as soon as possible, and we expect a formal proposal to be submitted to Council later this year.

  Joan Ruddock
  To ask the Minister of Agriculture, Fisheries and Food when a decision will be taken on placing Avantis GM maize seeds on the national seed list. [114352]

  Ms Quin
  [holding answer 13 March 2000]: Ministers are presently considering whether or not to propose a GM forage maize variety (CHARDON LL) for addition to the National List. When this decision is taken it will be published in the Plant Varieties and Seeds Gazette, and persons affected by the proposed decision may then make representations and/or be heard by a person appointed by Ministers for that purpose.

  Beef Farming
  Mr. Flight
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the economic prospects for the beef farming sector in the next twelve months. [113388]

  Ms Quin
  Assessment of the economic prospects for the beef farming sector is an ongoing exercise and the profitability of the sector is monitored by officials on a regular basis.

  Exchange Rate
  Sir Robert Smith
  To ask the Minister of Agriculture, Fisheries and Food what recent assessment he has made of the impact of the value of the pound on the UK's agricultural sector. [113389]

  Ms Quin
  There is no doubt that the strength of sterling has contributed toward the present depressed state of farm incomes. Oversupply and weak prices in world commodity markets have also been important factors.

  Bee Diseases
  Mr. Dalyell
  To ask the Minister of Agriculture, Fisheries and Food pursuant to his answer of 29 November 1999,Official Report, column 20W, on bee diseases, what progress he has made in containing bee diseases, with special reference to the area next to the Scottish border. [113393]

  Ms Quin
  Measures to control bee diseases in areas close to the Scottish border are no different from elsewhere in England. The incidence of foulbrood in the border counties is low, with only one case in 1999. An advisory programme is in place to help beekeepers minimise the impact of varroosis.

  Farm Incomes
  Mr. Llwyd
  To ask the Minister of Agriculture, Fisheries and Food when he last met the farming unions to discuss the current levels of income in each sector of agriculture; and if he will make a statement. [113394]

  Ms Quin
  My right hon. Friend, the Minister's most recent meeting with the President of the NFU was on 22 February. My right hon. Friend and other MAFF Ministers are in frequent contact with the farming unions to discuss farming issues.

  £ million

  MAFF objective

  Total cost

  Administration cost

  Percentage

  To protect public health in relation to food and animal diseases transmissible to humans

  275.3

  226

  82.1

  To sustain and enhance the rural and marine environments and public enjoyment of the amenities they provide and to promote forestry

  101.3

  39.9

  39.4

  To secure a more economically rational CAP which gives a better deal to consumers and taxpayers and pays due regard to the needs of the environment

  72.6

  2.7

  3.7

  To assist the development of efficient markets in which internationally competitive food, fish and agricultural industries can thrive

  215.1

  93.3

  43.4

  To enhance economic opportunity and social development in rural and coastal communities in a manner consistent with public enjoyment of the amenities which they offer

  9.8

  2.8

  28.6

  To administer payments under the CAP fairly and in full accordance with EU requirements

  11,690.6

  70.5

  42.

  To conserve fish stocks for future generations and secure a sustainable future for the sea fishing industry

  37.1

  20.2

  54.4

  To ensure that farmed animals and fish are protected by high welfare standards and do not suffer unnecessary pain or distress

  15.8

  8

  50.6

  To reduce risk to people and the developed and natural environment from flooding and coastal erosion

  73.6

  5.1

  6.9

  To safeguard the continuing availability to the consumer of adequate supplies of wholesome, varied and reasonably priced food and drink

  3.5

  1.5

  42.9

  1 Includes receipts from the EU

  Organic Farming
  Mr. Kidney
  To ask the Minister of Agriculture, Fisheries and Food what recent representations he has received supporting the setting of targets to increase the level of conversions to organic farming. [113397]

  Mr. Morley
  I have received about 60 letters in support of the setting of targets. I have met my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) and the hon. Member for North Cornwall (Mr. Tyler), with representatives of "Sustain", to discuss the Organic Food and Farming Targets Bill.

  Pork
  Mr. Hope
  To ask the Minister of Agriculture, Fisheries and Food what recent assistance the Government have provided to the Meat and Livestock Commission for the promotion of pork. [113379]

  Mr. Morley
  The Government have agreed to fund half of a £4.6 million welfare linked pork promotion campaign developed by the Meat and Livestock Commission.

  Funding Schemes
  Mr. Andrew George
  To ask the Minister of Agriculture, Fisheries and Food if he will list the funding schemes administered by his Department, indicating the total funds of each scheme and the administration costs of each scheme as a percentage of the total funds. [112495]

  Mr. Morley
  [holding answer 2 March 2000]: Information relating administration costs to expenditure by scheme is not available from existing cash-based systems. However, using information drawn from the 1998–99 Shadow Resource Accounts for the Department, the total cost of departmental objectives and the percentage that relates to administration costs are as follows:

  Pig Farmers
  Mr. Cox
  To ask the Minister of Agriculture, Fisheries and Food how much was paid in subsidies to pig farmers in the UK for the year 1999. [113082]

  Ms Quin
  The CAP pigmeat regime contains no provision for paying subsidies direct to pig farmers. However, the European Commission spent over £200 million in 1999 supporting the pigmeat market, by the use of export refunds and aids to private storage.

  Lindane
  Joan Ruddock
  To ask the Minister of Agriculture, Fisheries and Food what advice he has received regarding use of Lindane since the meeting of the Advisory Committee on Pesticides in York on 24 February; and when he expects a decision to be announced. [113616]

  Ms Quin
  [holding answer 9 March 2000]: At its meeting on 24 February the Advisory Committee on Pesticides considered an evaluation of scientific data concerning the exposure to lindane of members of the public using lindane products in their gardens for controlling garden pests. The Committee concluded that these pose no unacceptable risk and have recommended that approvals for this particular use should continue. The Committee also suggested a number of steps that might be taken to improve the packaging of such products to minimise any potential risks in their usage. The Committee's recommendations are currently being considered by Ministers who will announce their conclusions shortly.

  Farm Subsidies (Shropshire)
  Mr. Paul Marsden
  To ask the Minister of Agriculture, Fisheries and Food how many farmers in(a) Shrewsbury and Atcham and (b) Shropshire received subsidy payments in each £10,000 band up to £100,000 in the last year for which information is available; and if he will make a statement. [114687]

  Ms Quin
  [holding answer 14 March 2000]: The figures for Shrewsbury and Atcham could be provided only at disproportionate cost.

  The figures for 1998 subsidy payments (UK and EU contributions) in Shropshire are as follows:

  Number

  Up to £10,000

  1,990

  £10,001–£20,000

  443

  £20,001–£30,000

  248

  £30,001–£40,000

  115

  £40,001–£50,000

  46

  £50,001–£60,000

  29

  £60,001–£70,000

  24

  £70,001–£80,000

  12

  £80,001–£90,000

  7

  £90,001–£100,000

  5

  Agri-environmental Schemes
  Mrs. Dean
  To ask the Minister of Agriculture, Fisheries and Food how much his Department has spent on agri-environmental schemes in the financial year to date; and how much was spent in 1996–97. [113376]
  314W
  Mr. Nick Brown
  Payments to farmers under agri-environmental schemes in England were £44.4 million in the 1996–97 financial year and are expected to be £87.4 million in 1999–2000. This is an increase of 97 per cent. over the three year period. Our target this year for the Countryside Stewardship Scheme is to enter into around 3,000 new agreements compared to around 1,300 in 1999.

  "Agriculture in the United Kingdom"
  Mr. Ben Chapman
  To ask the Minister of Agriculture, Fisheries and Food when he expects the latest volume of "Agriculture in the United Kingdom" to be published. [115480]

  Mr. Nick Brown
  "Agriculture in the United Kingdom 1999" was published today and copies have been placed in the Library of the House.

  Flood Defence
  Mr. Ben Chapman
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on his response to the Flood Defence Emergency Response Project, established by the Environment Agency. [115481]

  Mr. Morley
  The Flood Defence Emergency Response (FDER) Project was established by the Environment Agency as part of its response to the Easter 1998 floods. Membership of the Project Team comprised representatives of the Environment Agency, the Local Government Association, the Association of Chief Police Officers, the Chief and Assistant Chief Fire Officers Association and the Association of Inland Navigation Authorities, represented by British Waterways.

  The Project's general remit was to review existing local arrangements for responding to and exercising major flooding emergencies; to make recommendations for improvement; and to define the roles of the organisations involved.

  I have seen the FDER Project Report and the Project team is to be congratulated on its positive contribution in helping to bring about improvements to the arrangements for flood emergency response. It is important that its recommendations are implemented at local level by the organisations involved in emergency response. I am not, however, persuaded that it is appropriate to establish a standing National Joint Strategic Flood Group in the terms described.

  Bovine TB
  Charlotte Atkins
  To ask the Minister of Agriculture, Fisheries and Food when he expects to bring further areas into the badger culling trial recommended by Professor Krebs to address questions about the incidence of tuberculosis in cattle. [115516]

  Ms Quin
  The next two sets of badger culling trial areas have now been identified. One will be located in Staffordshire/Derbyshire, and the other in Devon/ Somerset. These are the seventh and eighth areas to be enrolled in the trial, and we expect to announce the remaining areas later this year. The Government are committed to a wide-ranging research and control strategy
  315W
  to find a science-based solution to TB in cattle. The badger culling trial is an important element of that strategy.

LORD CHANCELLOR'S DEPARTMENT

  Public Trust Office
  Mr. Love
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will report on the progress of the reform of the Public Trust Office; and if he will make a statement. [114698]

  Jane Kennedy
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Bethnal Green and Bow (Ms King) on 8 February 2000,Official Report, column 132W.

  Starrs Case
  Mr. Stephen O'Brien
  To ask the Parliamentary Secretary, Lord Chancellor's Department what progress the Government are making in considering the implications of the Starrs case in Scotland for the judicial system in England and Wales. [113405]

  Mr. Lock
  The Lord Chancellor announced on 29 November that he was considering the implications which the judgment in Scotland may have for the part-time judiciary in England and Wales. He is considering all part-time appointments, their terms and conditions and tenure with a view to considering whether any changes need to be made. That review is being undertaken with all deliberate speed and a statement will be made as soon as possible.

  Cheshire Magistrates Courts Committee
  Mrs. Dunwoody
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the membership of the County Committee for Cheshire indicating the home towns of the members and the bench on which they sit, and if he will list the county and magistrates' courts that the Committee is considering for closure. [115030]

  Jane Kennedy
  There are five members on the Cheshire Magistrates Courts Committee. Miss Baines and Mr. Darby, who sit on the Ellesmere Port & Neston Bench, reside in Neston; Mr. Fletcher, who sits on the Chester Bench, resides in Chester; Mrs. Mackenzie, who sits on the South Cheshire Bench, resides in Holmes Chapel; and Mr. Robinson, who sits on the Macclesfield Bench, resides in Altrincham.

  Decisions on the future of magistrates courts are for the Cheshire Magistrates Courts Committee to determine, after consultation with the paying authority.

  At present, no formal determination has been made by the Cheshire Magistrates Courts Committee to close any of its magistrates courts. However, the Committee recently consulted on proposals for the closure of the Park Green Court in Macclesfield and the Patten Hall Court in Warrington. The closing date for representations was 29 February 2000. The Committee proposes to make a final decision at its meeting scheduled for 17 March.
  316W
  Proposals for the closure of a county court are not the responsibility of the Magistrates Courts Committee. They are dealt with by the Court Service.

SOCIAL SECURITY

  Benefits Agency (Scotland)
  Mr. Browne
  To ask the Secretary of State for Social Security how many(a) inquiries and (b) requests for assistance about constituency problems have been received from members of the Scottish Parliament by the Benefits Agency Scottish Parliamentary Relations Unit since it was established; and if he will list the numbers according to (a) constituency and (b) originating MSP. [113648]

  Angela Eagle
  The information is not available in the format requested as correspondence between Members of the Scottish Parliament and this Department is treated as confidential. Such information as is available is as follows.

  The Benefits Agency, Scottish Parliamentary Relations Unit (SPRU) deals with correspondence received by the Chief Executive and Departmental Ministers. Since it was established in October 1999 SPRU has dealt with seven inquiries and five requests for assistance with customers' problems from MSPs. In addition 31 pieces of correspondence have been received from MPs who are also MSPs.

  Staff Posts (Risk Assessments)
  Mr. Field
  To ask the Secretary of State for Social Security what were the main results of the risk assessment of staff posts conducted by his Department last year; and if he will place a copy in the Library. [113782]

  Mr. Rooker
  [holding answer 9 March 2000]: The risk assessment concluded that there are no additional posts that can be regarded as especially sensitive and that the most effective way of managing the risk of internal security breaches is through robust management controls and checks. Such controls are constantly reviewed and were recently strengthened. We are actively considering the introduction of criminal record checks for new recruits.

  A copy of the document has been placed in the Library.

  Child Poverty
  Mr. Hilary Benn
  To ask the Secretary of State for Social Security what measure he will use to assess progress towards the achievement of the Government's objective of eliminating child poverty. [114203]

  Mr. Bayley
  On 21 September 1999, we published the document "Opportunity for All" which sets out our strategy for tackling the causes of poverty and social exclusion. The report includes a range of indicators against which we can monitor our progress in tackling these causes and overcoming the problems of people living in poverty.

  Further details on all the indicators in the "Opportunity for All" report have been placed in the Library.

  Housing Benefit
  Mr. Love
  To ask the Secretary of State for Social Security how many private renting tenants were in receipt of Housing Benefit in(a) Greater London and (b) Enfield for each year since 1990; what was the average Housing Benefit paid in each of those years; and if he will make a statement. [114637]

  Angela Eagle
  The information is not available in the format requested. Such information as is available is in the table.

  February

  Total private renting tenants

  Average Housing Benefit (£ per week)

  Greater London

  1993

  279,000

  52.90

  1994

  325,000

  60.30

  1995

  351,000

  66.60

  1996

  365,000

  70.00

  1997

  353,000

  72.40

  1998

  335,000

  73.70

  1999

  318,000

  75.30

  Enfield

  1993

  6,010

  53.00

  1994

  7,080

  60.70

  1995

  7,480

  68.90

  1996

  8,530

  75.10

  1997

  9,360

  78.20

  1998

  8,920

  79.40

  1999

  8,620

  79.70

  Notes:

  1. The figures supplied are for February of each financial year.

  2. The figures for caseload have been rounded to the nearest thousand for Great Britain and to the nearest 10 for the Local Authority,

  3. The figures for average Housing Benefit have been rounded to the nearest 10 pence.

  4. Data for any authority that did not supply information will have been estimated.

  Source:

  Housing Benefit Management Information System, Quarterly 100 per cent. caseload inquiries taken in February of each year since 1993.

  Mr. Love
  To ask the Secretary of State for Social Security what progress has been made on the standardisation of Housing Benefit administration and delivery by local authorities; and if he will make a statement. [114697]

  Angela Eagle
  We aim to transform the delivery of Housing Benefit so that local authorities provide a faster, more accurate service which is more secure against fraud, and which provides value for money and takes account of the views and needs of residents and taxpayers.

  We are using the Benefit Fraud Inspectorate to help drive up standards of administration through its programme of inspections, working in partnership with local authorities to identify both areas for improvement and good practices. In February 1999 the Benefit Fraud Inspectorate published a good practice guide that was sent to all local authorities which was followed by a programmed series of seminars for local authority managers. An updated version of the good practice guide will be published later this year.
  318W
  In appropriate cases my right hon. Friend will be prepared to exercise powers under section 139D of the Social Security Administration Act 1992 to direct an authority to attain improved standards of administration following a report from the Benefit Fraud Inspectorate.

  In addition, we are setting Best Value performance indicators from next month, which target key areas such as speed of delivery, accuracy and security. Local authorities will be required to set and meet challenging targets against these indicators and demonstrate that they are achieving continuous improvements in the standards of service they provide.

  Disability Living Allowance
  Dr. Lynne Jones
  To ask the Secretary of State for Social Security what action he is taking to improve the uptake of Disability Living Allowance. [114726]

  Mr. Bayley
  The number of people receiving Disability Living Allowance and total expenditure on this benefit are continuing to increase. However, around 40 per cent. of claims are unsuccessful, because the claimant does not satisfy the qualifying conditions. Against this background, our priorities are to look at ways of improving the information we provide about these benefits and to make it easier for people to supply us with the details we need to decide entitlement. We are also trying to develop clearer and more secure gateways, so that it is easier for people to know whether they may be entitled. These initiatives have involved extensive and continuing discussions with disabled people and their representatives, and with disability experts.

  Widows' SERPS
  Mr. Willetts
  To ask the Secretary of State for Social Security when he will make a decision on the future of widows' SERPS. [114971]

  Mr. Rooker
  As my right hon. Friend, the Secretary of State announced on 15 March, if a person dies before 6 October 2002, their spouse can continue to inherit a maximum of 100 per cent. of their SERPS entitlement. The spouse of a person dying on or after that date will be able to inherit a maximum of 50 per cent. An Inherited SERPS Scheme will be established for people who may have relied on misleading information about SERPS inheritance provisions and who would otherwise have acted differently.

  Leaflet Costs
  Mr. Ashdown
  To ask the Secretary of State for Social Security what is his estimate of the cost to his Department of re-printing the leaflet, "You have a Choice", on the payment of benefits and pensions through post offices; and if he will make a statement. [114183]

  Mr. Rooker
  This was a joint DSS and Post Office exercise. The cost of re-printing the leaflet was split between the Post Office and the Department. Our contribution was £10,000.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Light Dues
  Mr. Blizzard
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on light dues. [115342]

  Mr. Hill
  I am pleased to announce that there will be no changes to the light dues for 2000–01. Current rates were set in 1997, when charges were reduced by an average of 4.6 per cent., following four years of stability. The ability to maintain light dues at current levels is an indication of the General Lighthouse Authorities' continuing efforts to achieve greater efficiency.

  Housing Transfers
  Maria Eagle
  To ask the Secretary of State for the Environment, Transport and the Regions when he will announce the 2000–01 housing transfers programme. [115220]

  Mr. Raynsford
  I am today announcing the names of the 22 local authorities which will be able to proceed, on a voluntary basis and subject to the approval of their tenants, with proposals to carry out 23 transfers of all or part of their housing stock to Registered Social Landlords in 2000–01. The programme will involve over 160,000 dwellings in large scale voluntary transfers, generating capital receipts of over £940 million.

  Transfers can offer benefits for tenants. The new landlord must plan for proper maintenance and future repairs. Increased investment means that any backlog of repairs can be carried out more quickly than if the properties had remained in local authority ownership. Rent increases are normally limited by a guarantee that rents will not rise by more than 1 per cent. above inflation for the first five years.

  But housing transfers are voluntary and may only take place if tenants are in favour. The consent of the Secretary of State is also required before a transfer can proceed and will not be granted if it appears that a majority of tenants do not wish the transfer to proceed.

  The 2000–01 programme reflects the Government's commitment to support a continuing programme of transfers as a means of generating private finance to repair and improve the condition of social housing.

  Sunderland City Council and Birmingham City Council have applied for a place on this year's programme but I have given them more time to develop their transfer proposals.

  Four of the authorities on the 2000–01 programme—Blackburn with Darwen Borough Council, Calderdale Metropolitan Council, Coventry City Council and Walsall Metropolitan Council—expect to have housing debt remaining in their Housing Revenue Account (HRA) after their stock is transferred. This is because the capital receipt will not be sufficient to clear all of the debt in their HRA. Under the new arrangements, announced on 16 December 1999, the Government are prepared to use a one-off payment to assist those authorities repay their overhanging debt. A guidance note setting out the detailed arrangements has been issued to all local authorities and a copy is available on the DETR website.
  320W
  The authorities who have successfully gained a place on the programme, together with the intended recipient RSL, are as follows:

  (a) a disposal by Barnsley Metropolitan Borough Council of not more than 606 dwelling-houses to a new subsidiary of Chantry Housing Association;

  (b) a disposal by Blackburn with Darwen Borough Council of not more than 10,126 dwelling-houses to a registered social landlord;

  (c) a disposal by Calderdale Metropolitan Borough Council of not more than 13,494 dwelling-houses to a registered social landlord;

  (d) a disposal by Chester City Council of not more than 7,100 dwelling-houses to Chester and District Housing Trust;

  (e) a disposal by Chichester District Council of not more than 5,510 dwelling-houses to Chichester District Community Housing;

  (f) a disposal by Coventry City Council of not more than 22,104 dwelling-houses jointly to Whitefriars Homes North and Whitefriars Homes South;

  (g) a disposal by East Northamptonshire District Council of not more than 3,540 dwelling-houses to East Northamptonshire Housing;

  (h) a disposal by East Staffordshire Borough Council of not more than 6,015 dwelling-houses to Trent and Dove Housing;

  (i) a disposal by Fylde Borough Council of not more than 1,964 dwelling-houses to New Fylde Housing;

  (j) a disposal by Horsham District Council of not more than 4,807 dwelling-houses to Saxon Weald Homes Ltd.;

  (k) disposals by Manchester City Council of not more than 468 dwelling-houses on the Knutsford estate to Manchester Methodist Housing Association, and not more than 669 dwelling-houses on the Handforth estate to a registered social landlord;

  (l) a disposal by Mendip District Council of not more than 4,799 dwelling-houses to a registered social landlord;

  (m) a disposal by the London Borough of Richmond of not more than 8,780 dwelling-houses to Richmond Housing Partnership;

  (n) a disposal by South Bedfordshire District Council of not more than 6,282 dwelling-houses to a registered social landlord;

  (o) a disposal by Staffordshire Moorlands District Council of not more than 3,274 dwelling-houses to a registered social landlord;

  (p) a disposal by Torbay Council of not more than 3,127 dwelling-houses to Riviera Housing Trust Ltd.;

  (q) five disposals by Walsall Metropolitan Borough Council of not more than 28,785 dwelling-houses to five registered social landlords which are part of Walsall Housing Group;

  (r) a disposal by Waverley Borough Council of not more than 5,715 dwelling-house to a registered social landlord;

  (s) a disposal by West Lancashire District Council of not more than 8,530 dwelling-houses to a registered social landlord;

  (t) a disposal by West Oxfordshire District Council of not more than 3,884 dwelling-houses to a registered social landlord;

  (u) a disposal by West Wiltshire District Council of not more than 3,438 dwelling-houses to West Wiltshire Housing Society;

  (v) a disposal by Wycombe District Council of not more than 7,659 dwelling-houses to Wycombe 2000 Housing.

  Water Pollution
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions how many aquifers in England have been polluted to the extent that the water was unfit for human consumption in each year since 1995. [112816]
  321W
  Mr. Mullin
  The Environment Agency does not have evidence that pollution events have led to any major aquifer becoming unsuitable for the supply of water for human consumption since 1995. Water from aquifers is, however, treated by water companies before being put into public supply using disinfection and such other processes as are necessary to comply with the standards for drinking water quality.

  London Underground Escalators
  Mr. Sheerman
  To ask the Secretary of State for the Environment, Transport and the Regions what the arrangements are for assisting(a) disabled and (b) elderly passengers when London Underground escalators are taken out of service. [113078]

  Mr. Hill
  These are operational matters for the London Underground who have informed me that regular announcements are being made at the affected stations and there is a comprehensive poster campaign to keep customers informed. London Transport's Unit for Disabled Passengers provides a comprehensive advice and information service for disabled people and is providing guidance on other routes to specified destinations. In addition Customer Care Assistants are trained to help people who need orientation or special assistance.

  Sites of Special Scientific Interest
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many of the schemes to protect sites of special scientific interest from the impact of(a) abstraction and (b) sewage effluent allowed for in Ofwat's final determination of water prices are due for completion in (a) 2001–02, (b) 2002–03, (c) 2003–04, (d) 2004–05 and (e) 2005–06; [114152]

  (2) how many schemes have been allowed for in Ofwat's final determination on water and sewerage charges to protect sites of special scientific interest from (a) abstraction and (b) sewage effluent. [114151]

  Mr. Mullin
  Price limits set by the Director General of Water Services include provision for the financing of 53 schemes to protect SSSIs in England and Wales from over-abstraction and 104 schemes aimed wholly or partially at protecting SSSIs from the effects of sewage effluent. The phasing of these schemes in relation to others being carried out as part of the total programme of environmental investment is still under discussion. The Environment Agency will publish the final programme, with completion dates for individual schemes, shortly. I will ensure that the hon. Gentleman receives a copy of the final programme.

  Renewable Energy
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions if it is his policy to regard energy from waste schemes as renewable energy; and if he will make a statement. [114149]

  Mr. Mullin
  I refer the hon. Member to the reply given by my hon. Friend the Minister for Competitiveness on 15 March 2000,Official Report, columns 198–99W.

  London Underground
  Mr. Cohen
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list those stations and length of line which are currently the responsibility of London Underground Limited which under his PPP proposals would become the responsibility of(a) London Underground's proposed supervisory subsidiary companies and (b) the PPP contracting companies and their sub-contractors; and if he will make a statement. [114192]

  Mr. Hill
  London Underground Limited will retain responsibility for the operation of services and for safety at all those stations and on all those lines for which it is currently responsible. Under the PPP proposals an infrastructure company will enter into a long term service contract with London Underground for the provision of infrastructure services—primarily, maintenance and renewal—for each of three groupings of lines:

  (i) "sub-surface", comprising the Circle, District, East London, Hammersmith and City and Metropolitan lines;

  (ii) "BCV", comprising the Bakerloo, Central, Victoria and Waterloo and City lines; and

  (iii) "JNP", comprising the Jubilee, Northern and Piccadilly lines.

  In each case, the contractor will be responsible for the maintenance, and where appropriate enhancement and renewal, of the infrastructure that London Underground uses to deliver its passenger services, including rolling stock, track, signalling, stations and other civil structures such as tunnels and bridges.

  Mr. Cohen
  To ask the Secretary of State for the Environment, Transport and the Regions what is the latest date by which decisions will be taken about the two deep-level tube PPP contracts; and what residual powers the Mayor of London will have on this matter once the contracts have been allocated. [114193]

  Mr. Hill
  Bids for the two deep tube infrastructure contracts are due to be returned at the end of this month. No timetable has been set for the completion of contract negotiations. The Mayor will be responsible from July for a range of transport services in London excluding the London Underground, and will take over full responsibility for the Underground after the PPP is established.

  Mr. Cohen
  To ask the Secretary of State for the Environment, Transport and the Regions if he will place in the Library the evidence which underlay his conclusion in respect of the value for money provided by(a) the PPP for the London Underground and (b) the letting of separate contracts for the same work by London Underground; and if he will make a statement. [114194]

  Mr. Hill
  The Government are confident that the PPP for London Underground will deliver better value for money than a wholly public sector option. We shall approve the contracts only if the private sector bids demonstrate best value when compared with a rigorously constructed public sector comparator benchmark.

  The comparator will be published once the PPP negotiations are complete. To publish the results any earlier would expose the taxpayer's negotiating position, and so jeopardise our chances of getting best value.
  323W
  To let a series of separate contracts could be expected to create serious scale diseconomies when compared with the PPP approach.

  Mr. Cohen
  To ask the Secretary of State for the Environment, Transport and the Regions what was his Department's role in the authorisation of London Underground Ltd.'s expenditure, between 20 March 1998 and 13 November 1999, on consultancy work in respect of the PPP and restructuring of London Underground; what estimate he has made of the final cost of the consultancy for this purpose; and if he will list(a) the consultants concerned, and the amount paid to each, and (b) summarise the work each of them has been asked to do. [114197]

  Mr. Hill
  London Transport's expenditure on external consultants for the public-private partnership for the London Underground is regularly monitored by the Department of the Environment, Transport and the Regions. London Transport will not know the overall requirements or costs for external advice until the PPP transactions have been completed, but the Government are working with LT to ensure that we receive the best advice while minimising the overall costs of implementing the PPP.

  The main consultants employed by London Transport, and the areas on which they provide professional advice, are:

  PriceWaterhouseCoopers (financial)

  Freshfields (legal)

  Ove Arup and Partners (engineering)

  Arthur Andersen (operations entity design)

  PA Consulting (infrastructure entities design and financial modelling)

  Hornagold and Hills (project management)

  Insignia Richard Ellis (property)

  Marsh (insurance)

  Bacon & Woodrow (pensions).

  For reasons of commercial confidentiality, it is not possible to give a figure for the value of individual contracts, though we will continue to publish updated aggregate figures periodically in line with the commitment given by the then Under-Secretary, my hon. Friend the Member for Hampstead and Highgate (Ms Jackson) on 13 January last year.

  Vehicle Operating Licences
  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions what provision there is(a) for prescribing in which newspapers public notices of applications for vehicle operating licences must be posted, and (b) of stipulating whether these should be (i) local and (ii) regional newspapers. [114319]

  Mr. Hill
  The Goods Vehicles (Licensing of Operators) Act 1995 requires a goods vehicle operator to arrange for notice of his application for an operator's license to be published in one or more local newspapers circulating in the locality.

  If a Traffic Commissioner believes that the application has not been correctly advertised in this way he may refuse the application.
  324W
  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions if he will amend the regulations and processes involved in granting vehicle operating licences for premises to bring them within the process for determining planning applications. [114320]

  Mr. Hill
  We have no immediate plans to amend legislation. Local authority planning powers are entirely separate from those of Traffic Commissioners. The two systems are designed to complement each other.

  Mr. Harvey
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make an assessment of the effectiveness of the process of posting public notices of applications for vehicle operating licences in a newspaper circulating in the place where the premises to be licensed are situated. [114318]

  Mr. Hill
  The practice of advertising applications for goods vehicle operator licences in local newspapers has been considered in past reviews of the operators licensing systems, but no changes were made. In 1996, a pilot project was carried out whereby staff at two Traffic Area Offices placed the advertisements in newspapers, rather than the operator. There was found to be no significant increase in the number of representations received during the trial period. We keep the process under review but have no immediate plans to change it.

  Areas of Outstanding Natural Beauty
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions if he will take steps to afford the landscape in areas of outstanding natural beauty the same degree of protection as that which applies in the national parks. [114340]

  Mr. Meacher
  Current planning policy provides Areas of Outstanding Natural Beauty (AONBs) with a high degree of protection similar to that applicable in National Parks. Planning Policy Guidance (PPG 7: The Countryside—Environmental Quality and Economic and Social Development) requires policies and development control decisions affecting AONBs to favour conservation of the natural beauty of the landscape. The environmental effects of new proposals will be a major consideration, although it will also be appropriate to have regard to the economic and social well-being of the areas. It would normally be inconsistent with the aims of designation to permit the siting of major industrial or commercial development in these areas and only proven national interest and lack of alternative sites can justify an exception. Applications for mineral workings or new roads must also be subject to the most rigorous examination.

  We expect to make an announcement soon about measures to conserve and enhance designated Areas of Outstanding Natural Beauty.

  Council Tax
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list in rank order the 20 local authorities with the highest percentage of their area's housing falling in Band A of the council tax, indicating in each case the percentage of the total housing stock that is(a) unfit and (b) vacant. [114341]
  325W
  Ms Beverley Hughes
  The table lists in rank order the 20 authorities with the highest percentage of dwellings in Band A, showing in each case the percentage of the total housing stock for that area that is unfit and vacant.

  The 20 local authorities with the highest percentage of dwellings in Band A

  Percentage of housing stock1

  Local authority

  Percentage falling in Band A

  (a) Unfit

  (b) Vacant

  Easington

  83.7

  14.3

  5.3

  Kingston upon Hull

  73.7

  3.7

  6.2

  Wansbeck

  73.3

  9.2

  5.3

  Derwentside

  73.1

  4.1

  4.5

  Sedgefield

  71.1

  2.8

  2.4

  Manchester

  70.1

  7.0

  5.7

  Nottingham City

  68.0

  6.0

  2.4

  South Tyneside

  67.9

  2.8

  3.5

  Wear Valley

  67.7

  15.5

  16.7

  Sunderland

  67.6

  6.9

  3.5

  Liverpool

  67.6

  113.7

  8.1

  Gateshead

  66.3

  5.8

  3.0

  Bolsover

  65.8

  7.7

  5.4

  Barnsley

  65.3

  6.2

  4.2

  Pendle

  64.8

  14.5

  5.5

  Burnley

  64.5

  23.0

  9.9

  Stoke on Trent

  64.3

  117.7

  4.1

  Hartlepool

  64.0

  6.2

  3.7

  Blyth Valley

  63.8

  11.8

  2.6

  Leicester

  63.6

  112.6

  15.2

  1 Figures for unfit and vacant housing of the Other Public Sector stock, which includes housing owned by Government Agencies, Regional, Health, Police and Fire authorities, were unavailable for these authorities from the 1999 HIP returns. This sector covers a very small percentage of the overall total housing stock.

  Source:

  DETR annual Housing Investment Programme (HIP) (Operational Information) returns) 1999

  Planning
  Mr. Ruffley
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his oral statement of 7 March 2000,Official Report, columns 863–65, on planning, what assessment he has made of the predicted need for new houses in Suffolk by (a) 2005 and (b) 2020. [114343]

  Ms Beverley Hughes
  The Secretary of State will shortly announce his response to the recommendations of the Panel, which conducted a public examination into draft regional planning guidance for East Anglia. There will be full public consultation before the final guidance is issued.

  Car Mileage
  Mr. Cox
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to require information about car mileage to be notified to the DVLA when the car is sold; and if he will make a statement. [114495]

  Mr. Hill
  DVLA already has a voluntary mileage recording scheme in place and there are plans to extend this once equipment becomes available. A mandatory mileage declaration scheme will be introduced as soon as the necessary primary legislation is in place.

  Lifejackets
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the efficiency of the safety tests carried out by classification societies related to lifejackets; and on what date the approval was rescinded. [114529]

  Mr. Hill
  The Maritime and Coastguard Agency (MCA) regularly monitors the performance of the Classification Societies which carry out test and approval for lifejackets and other equipment. The MSA certificate of type approval for the lifejackets carried by the Sleipner, issued by Bureau Veritas, was withdrawn on 24 January 2000.

  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what was the result of the Maritime and Coastguard Agency investigation into the safety of lifejackets following the loss of the Sleipner ferry. [114528]

  Mr. Hill
  Following the loss of the Sleipner, the Maritime and Coastguard Agency (MCA) worked in close liaison with the Norwegian and Italian authorities to test the lifejackets used on board the vessel at the time of the accident.

  MCA contracted the Robert Gordon Institute of Technology in Aberdeen to carry out comprehensive tests of the performance of the lifejacket. These tests were witnessed by the manufacturers, the Classification Societies Bureau Veritas and RINa, as well as the MCA. The tests demonstrated that the lifejacket was unable to meet the International Maritime Organization (IMO) requirements.

  As a result of the tests, Bureau Veritas withdrew the approval of the lifejacket. MCA issued a Press Release drawing attention to UK ship owners that this lifejacket should be replaced on all UK ships.

  Safe Manning Certificates
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions how many prosecutions for breaches of safe manning certificates have taken place in the last 12 months. [114526]

  Mr. Hill
  There have been no prosecutions in the United Kingdom for breaches of regulations relating to Safe Manning documents in the last 12 months and there are no such prosecutions currently pending.

  Voyage Data Recorders
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions if he will introduce legislation to ensure that all UK vessels carry voyage data recorders. [114524]

  Mr. Hill
  The International Maritime Organisation (IMO) is actively considering international regulations for the carriage of Voyage Data Recorders (VDR), which will next be discussed at the IMO Maritime Safety Committee (MSC) in May 2000. At the European level, Council Directive 1999/35/EC, which was adopted on 29 April 1999, provides for the fitting of voyage data recorders to roll-on/roll-off ferries and high-speed passenger craft. Implementation is to be no later than 30 months after the publication of IEC standard No. 61996 or by 1 January
  327W
  2001, whichever of these dates comes later. UK legislation will apply the international requirements to UK vessels.

  Inspection of Vessels
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions how many random inspections of vessels in UK ports have taken place in the last 12 months, and how many prosecutions resulted from these inspections. [114527]

  Mr. Hill
  5,303 inspections of vessels by officers of the Maritime and Coastguard Agency took place in the United Kingdom in the period 1 March 1999 to 29 February 2000.

  Three prosecutions resulted from these inspections.

  Road Hauliers (Incentive Payments)
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions what steps he is taking to eliminate risks posed by the practice of payment by incentive by road hauliers. [114519]

  Mr. Hill
  All road hauliers, freight operators and drivers must abide by the road traffic regulations on, for example, the fitting and use of speed limiters and drivers' hours. Within the context of these and other regulations governing the way in which the industry is operated, payment schemes are a matter for industry itself. The Vehicle Inspectorate collates intelligence on vehicle operators and, where there is a suggestion that the payment of incentives is encouraging malpractice, they will investigate.

  Multi-agency Stops
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions how many multi-agency stops were carried out by his Department with other agencies in the last 12 months; where they took place; and how many multi-agency stops were carried out in 1997–98. [114534]

  Mr. Hill
  The police organised seven national, co-ordinated multi-agency enforcement exercises in 1999–2000, which were supported by Vehicle Inspectorate and other enforcement agencies. Each exercise consisted of checks on vehicles carried out at between 70 and 100 sites throughout Great Britain, including Motorway Service Areas, Weighbridge Sites, Goods Vehicle Test Stations and other roadside locations.

  Seven similar exercises were organised by the police in 1998–99; an additional check was also arranged to inspect vehicles travelling to and from ports serving the Irish Sea. Six exercises were organised in 1997–98.

  Unseaworthy Vessels
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions how many prosecutions of companies owning unseaworthy vessels took place in(a) 1997–98, (b) 1998–99 and (c) 1999–2000. [114523]

  Mr. Hill
  There have been no prosecutions of companies owning unseaworthy vessel in(a) 1997–98, (b) 1998–99 and (c) 1999–2000
  328W
  However the owner and operator, as individuals, were convicted in 1999 of unsafe operation of a ship of the Belize registered ROYAL 1.

  Shipping Safety Regulations
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment, Transport and the Regions (1) if he will take steps to introduce higher penalties for the evasion of safety regulations on(a) United Kingdom ships and (b) foreign ships using United Kingdom ports; [114522]

  (2) if he will take steps to introduce higher penalties for the evasion of safety regulations on (a) UK ships and (b) foreign ships using UK ports. [114701]

  Mr. Hill
  It is Government policy to follow up all significant breaches of the safety aspects of Merchant Shipping legislation to determine the appropriate action in particular cases, up to and including prosecution. There is no evidence that the available sanctions, which include detention of ships, fines and, in one recent case, imprisonment, are inappropriate.

  Jubilee Line
  Mr. Kaufman
  To ask the Secretary of State for the Environment, Transport and the Regions if he will direct London Underground to conduct an inquiry into continuing delays on the Jubilee Line, the operation and use of doors on the westbound platform at Westminster station, the operation of doors on the eastbound platform at Westminster station on the evening of 7 March and the delay to a southbound train at Baker Street station on the morning of 8 March. [114324]

  Mr. Hill
  [holding answer 13 March 2000]: I note my right hon. Friend's request for an inquiry. However, problems are not unusual when bedding in a new railway, and LUL have informed me that they are doing all they can to identify and resolve recurring faults.

  The incidents referred to are operational matters for London Underground Ltd. Platform edge doors are new technology for London Underground and, despite driver training, there were some initial problems, not only at Westminster, with operating procedures. This situation has improved as drivers have become more expert at handling the new equipment. There are however occasional faults. I understand that on 7 March the doors on the eastbound train failed to close at Westminster station. The train was taken out of passenger service and replaced. The initial delay was 18 minutes and the whole of the Jubilee Line was delayed as a consequence. A number of trains were cancelled as a result of the delay. New software to eliminate faults is currently under test.

  I am advised that on 8 March southbound delays resulted from traction current problems between Baker Street and Finchley Road.

  Tenant Participation Compact
  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate he has made of the number of local authorities which will not be in a position to introduce a tenant participation compact by 1 April; what action is being taken to ensure that authorities enter into a compact at the earliest opportunity; and if he will make a statement. [114699]
  329W
  Mr. Mullin
  Research commissioned by my Department between April and September 1999 showed that, one year ahead of implementing best value and tenant participation compacts, 10 per cent. of authorities were proactive in preparing for implementation, 70 per cent. were planning for implementation but not at an advanced stage, and the remaining 20 per cent. were reluctant to implement. We expect preparations to have progressed since then and will be looking at whether local authorities have introduced compacts through this year's annual Housing Investment Programme (HIP) process.

  Local authority performance on tenant participation will continue to feed into the HIP assessment process through which Government allocate housing capital resources. Under Best Value, local authority delivery of what is agreed in compacts will also be subject to scrutiny by the new Housing Inspectorate.

  Registered Social Landlords
  Mr. Love
  To ask the Secretary of State for the Environment, Transport and the Regions what proposals he has to encourage the rehabilitation of run-down property by registered social landlords; and if he will make a statement. [114695]

  Mr. Mullin
  Each year the Housing Corporation invites registered social landlords to bid for grants to build new properties and to rehabilitate existing ones. 25.3 per cent. of the 2000–01 programme for rent, amounting to £147.48 million, has been allocated for the rehabilitation of properties.

  Home Improvement Grants
  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions if he will introduce measures to allow properties that have received home improvement grants over 25 years ago to receive grants for updating those improvements; if he will make funds available to local authorities for such purposes; and if he will make a statement. [114766]

  Mr. Mullin
  Local authorities have broad discretion over how they give grants for home improvement, for which funding is made available each year by my Department. There are no restrictions on how often they give grants for any one property.

  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what grants are available from central Government for home improvements in owner occupier and private rented accommodation. [115013]

  Mr. Mullin
  My Department provides a specific grant, Private Sector Renewal Grant, in support of local authorities to assist home owners with the renovation of their properties. From 1 April 2000 Exchequer support for private sector renewal will be through the single capital allocation for housing.

  Seat Belts
  Miss McIntosh
  To ask the Secretary of State for the Environment, Transport and the Regions what action he is taking to enforce the wearing of seat belts by motorists and their passengers. [114950]
  330W
  Mr. Hill
  Enforcement of road traffic regulations is a matter for the police. In 1997, the latest year for which figures are available, 175,334 fixed penalty notices and 14,300 written warnings were issued in seat belt cases. The magistrates courts also dealt with 8,180 cases, of which 6,411 were found guilty.

  We are concerned about the number of rear seat passengers, in particular adults, who do not wear seat belts. The latest, unpublished, biannual survey, carried out by the Transport Research Laboratory (TRL) on the Department's behalf in October 1999, showed that 76 per cent. of all rear seat passengers, 54 per cent. of adults, in all cars were wearing seat belts. The "Julie" rear seat belt television campaign was repeated during February.

  The Government's forward plans for seat belt fitting and wearing are set out in pages 57 and 58 of "Tomorrow's roads—safer for everyone", the Government's road safety strategy, which was launched on 1 March. Copies of the strategy are available in the Library of the House.

  The Department's leaflet "Seat Belts and Child Restraints" which provides advice on the law is widely available. Copies of the leaflet are also in the Library of the House.

  Housebuilding (Chelmsford)
  Mr. Burns
  To ask the Secretary of State for the Environment, Transport and the Regions if he will assess the impact his statement of 7 March 2000 on housebuilding will have on the Chelmsford Local Authority area; and, as a result of his statement, how many houses will have to be built in Chelmsford,(a) over the next five years and (b) over the next 16 years. [114782]

  Ms Beverley Hughes
  I would refer the hon. Member to the reply which my hon. Friend the Minister for Housing and Planning gave on 13 March 2000,Official Report, column 35W. On 20 March we will be publishing the full details of our proposed changes to regional planning guidance in the South East. These will include an illustrative breakdown of housing within the region to county level, including an annual rate of provision for Essex. We will be seeking the views of the local authorities in the region, through SERPLAN, and those of other interested parties on that distribution.

  Genetically Modified Crops
  Mr. Collins
  To ask the Secretary of State for the Environment, Transport and the Regions how many genetically modified crop trials are currently taking place in the United Kingdom; and if he will make a statement. [114424]

  Mr. Nicholas Winterton
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the current progress of genetically modified crop trials in the United Kingdom. [113387]

  Mr. Meacher
  I will release details of this year's Farm Scale Evaluations programme tomorrow morning. This will include information about all the proposed locations of sites already notified to my Department. Details will be placed in the Library of the House.

  Dormer Windows
  Mr. Jim Cunningham
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to amend planning law in respect of the siting of dormer windows. [114919]

  Ms Beverley Hughes
  The Town and Country Planning (General Permitted Development) Order 1995 grants a general planning permission for a range of minor works of development to dwelling houses. This includes the insertion of dormer windows, subject to certain limits on size and except where it would alter a roof slope facing a highway. In granting permitted development rights, we have to strike a balance between giving freedoms to individual householders to improve their homes, and protecting the amenity of neighbouring properties. We are not aware of any significant problems in the exercise of permitted development rights relating to dormer windows and therefore have no plans to change these at the present time. We will, however, continue to monitor any representations received on this issue.

  Bypasses
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions how many bypasses have been removed from the trunk road and motorway improvements programme since May 1997. [114977]

  Mr. Hill
  Our 1997–98 review of the programme resulted in the outright cancellation of two bypass proposals because of their impact on environmentally sensitive areas: the A36 Salisbury bypass and the A49 Hereford bypass. Three bypass schemes dropped before May 1997 were reinstated in our targeted programme of improvements, which includes a total of 19 schemes that will provide bypasses for local communities. A number of other bypass schemes were remitted to studies, regional planning bodies and, in the case of schemes on routes proposed for de-trunking, to local highway authorities for consideration as part of their local transport plans. Full details of all our review decisions are given in "A New Deal for Trunk Roads in England".

  McKinsey Report
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if the Commission for Integrated Transport took into account in drawing up its recent report on 44-tonne lorries for the Government, the evidence in McKinsey's report of 10 February produced for Railtrack. [114979]

  Mr. Hill
  McKinsey's study for Railtrack of potential demand for rail freight, using a sectoral analysis of existing business and opportunities, did not report until 12 March. I understand that in preparing its report the Commission for Integrated Transport was aware of McKinsey's work in progress but took the view that it did not add to the analysis of the impact of 44 tonne lorries already available from other sources. The shadow Strategic Rail Authority will have access to McKinsey's model in developing its forthcoming freight strategy.

  Press Officers
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions how many of 332W
  his Department's press officers have access to the PA Newsfeed via their desk-top PCs; and at what cost to public funds. [114918]

  Ms Beverley Hughes
  The Department of the Environment, Transport and the Regions current subscription to the PA Newsfeed allows for a maximum of two simultaneous connections to the PA service. These two connections are available to all press officers via their desk-top PCs. The cost is £7,453.44 per annum.

  Opencast Mines
  Ms Kelly
  To ask the Secretary of State for the Environment, Transport and the Regions how many applications for opencast mines in greenbelt areas have(a) been approved, (b) been sent to public inquiry and await determination, (c) been sent to public inquiry and are subject to further evidence having been requested by him following the issue of the minerals planning guidance and (d) have been rejected; and of these, how many in each category have had costs awarded against those opposing the application since May 1997. [114775]

  Ms Beverley Hughes
  The information is not available in the form requested.

  However, according to the latest statistics produced by the Planning Officers' Society, between 1 April 1997 and 31 March 1998, 14 applications for opencast coal mining were approved by mineral planning authorities and 13 applications were refused (including three appeal decisions refused by the Secretary of State).

  Since May 1997, two appeals have been allowed and nine appeals have been dismissed by the Secretary of State.

  At present six appeals await determination, of which five have been to public inquiry. Three of those appeals, which have been to public inquiry, are subject to consideration of further evidence requested by my right hon. Friend the Secretary of State for the Environment, Transport and the Regions.

  Information on how many of these applications were for sites in greenbelt areas is not readily available and cannot be obtained except at disproportionate cost.

  Costs have not been awarded against those opposing the application in any case since May 1997.

  Brownfield Development
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what distinction his Department makes between brownfield sites and usable brownfield sites when identifying the amount of developed land available for redevelopment. [115011]

  Ms Beverley Hughes
  Annexe C of Planning Policy Guidance Note 3: Housing gives a definition of previously developed land. This definition excludes previously developed land which has blended into the landscape; land where provision has been made for restoration to its natural state; and land which has been put to amenity use and cannot be regarded as requiring development. Using this definition of previously developed land, phase 1 of the National Land Use Database (NLUD) collected information from local authorities on previously developed vacant and derelict sites, whether or not they were available
  333W
  for redevelopment. NLUD also included vacant buildings and sites in use which were allocated for a specific use in the local plan, had planning permission for housing, or with known development potential. In order to estimate how much of the land reported was available for redevelopment, local authorities recorded for each site whether it was allocated in the local plan, the type of any planning permission and the suitability for housing.

  Liquid Petroleum Gas
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many(a) private cars, (b) commercial vehicles and (c) public transport vehicles have been converted to run on liquid petroleum gas since May 1997; [115026]

  (2) how many (a) private cars, (b) commercial vehicles and (c) public transport vehicles can run on liquid petroleum gas in the United Kingdom. [115025]

  Mr. Hill
  The table shows the number of vehicles which can run on gas (either liquid petroleum gas or compressed natural gas) in the United Kingdom, according to DVLA statistics. The latest data available are for the end of June 1999, and the number of vehicles converted to gas now is expected to have continued to increase. More recent data will be available in due course. (The nearest available data for May 1997 are for the end of 1996).

  Vehicle type

  Number of vehicles registered to run on gas as of 30 June 1999

  Increase in the number of vehicles registered to run on gas since 31 December 1996

  Cars

  12,357

  8,272

  HGVs

  68

  24

  Buses

  36

  15

  Others

  2,922

  245

  Redevelopment Funding
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish a list of those areas to be designated as urban priority areas for redevelopment funding. [115017]

  Ms Beverley Hughes
  The Urban Taskforce report—"Towards an Urban Renaissance"—published in June 1999 recommended the introduction of urban priority areas as one of a wide-ranging series of proposals for the renewal of towns and cities. The report was welcomed by the Government as an important contribution to the urban renaissance debate. Many of the recommendations have already been taken forward. Others, including those on urban priority areas and the measures that might be applied within them, are being considered as part of our preparations for the White Paper on urban policy, due to be published later this year.

  Regional Chambers
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what has been 334W
  the cost of each of the regional chambers in each of the years since their inception; and what is the projected cost for the next five years. [115015]

  Ms Beverley Hughes
  The costs of the voluntary regional chambers are entirely a matter for their members.

  Humberside Airport
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what public funding has been made available for Hull airport in the last three years. [115023]

  Mr. Mullin
  In the last three years we have issued the following amounts in supplementary credit approvals for investment at Humberside Airport:

  1997–98—£1.27 million

  1998–99—£0.42 million

  1999–2000—nil.

  Following the purchase by Manchester Airport of a majority shareholding in the company owning the airport, Humberside Airport was removed from borrowing controls in August 1999.

  Rent Controls
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what plans his Department has for legislation relating to the control of rents. [115021]

  Mr. Mullin
  I share the dismay and concern of many thousands of tenants that the Rent Acts (Maximum Fair Rent) Order has been quashed by the Court of Appeal. We have petitioned another place for leave to appeal the decision. If leave is not granted, we will give urgent consideration to the matter of legislation.

  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what recent representations he has received regarding the reform of controlled rents. [115022]

  Mr. Mullin
  To date the Government have received some 30 representations from hon. and right hon. Members and some 260 representations from members of the public about the effects of the Court of Appeal's decision to quash the Rent Acts (Maximum Fair Rent) Order 1999.

  Departmental Staff
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions how many staff are employed in his Department; and how many were employed in each of the last four years, including the component departments which were merged into his Department after May 1997. [115020]

  Ms Beverley Hughes
  On 1 January 2000, there were 16,397 staff in the Department of the Environment, Transport and the Regions, including its Agencies. These figures include 824 staff for the Rent Service, which became operational on 1 October 1999, most of whom were originally employed by Local Authorities; only 15 were transferred from another part of this Department.
  335W
  Information for previous years is available for 1 April. The following table shows employees of the Department of the Environment, Transport and the Regions in 1999 and 1998 and of the Department of Environment and the Department of Transport for 1997 and 1996.

  Date

  Staff in post

  1 April 1999

  15,516

  1 April 1998

  15,595

  1 April 1997

  15,844

  1 April 1996

  16,206

  Regional Development Agencies
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list each of the regional development projects funded by the regional development agencies to date; and what funds have been committed. [115016]

  RDA expenditure: 1999–2000 to 2001–02

  £000

  Administration

  Project funding

  Total

  1999–2000

  One North East

  9,771

  139,039

  148,810

  North West Development Agency

  12,131

  212,595

  224,726

  Yorkshire Forward

  8,036

  152,203

  160,239

  East Midlands Development Agency

  7,155

  60,193

  67,348

  Advantage West Midlands

  7,678

  114,764

  122,442

  East of England Development Agency

  4,803

  28,957

  33,760

  South East of England Development Agency

  5,486

  82,850

  88,336

  South West Development Agency

  7,488

  46,509

  53,997

  All RDAs

  62,548

  837,110

  899,658

  2000–01

  One North East

  9,899

  138,659

  148,558

  North West Development Agency

  12,628

  221,743

  234,371

  Yorkshire Forward

  8,525

  170,700

  179,225

  East Midlands Development Agency

  7,373

  70,378

  77,751

  Advantage West Midlands

  7,989

  115,406

  123,395

  East of England Development Agency

  5,038

  35,482

  40,520

  South East of England Development Agency

  6,027

  73,672

  79,699

  South West Development Agency

  7,819

  66,400

  74,219

  All RDAs

  65,298

  892,440

  957,738

  2001–02

  One North East

  9,899

  143,179

  153,078

  North West Development Agency

  12,628

  224,678

  237,306

  Yorkshire Forward

  8,525

  190,413

  198,938

  East Midlands Development Agency

  7,372

  71,335

  78,707

  Advantage West Midlands

  7,989

  123,955

  131,944

  East of England Development Agency

  5,038

  40,282

  45,320

  South East of England Development Agency

  6,027

  85,508

  91,535

  South West Development Agency

  7,819

  65,459

  73,278

  All RDAs

  65,298

  944,809

  1,010,106

  Notes:

  1. Includes figures for the Partnership Investment Programme.

  2. 1999–2000 figures are budgets at the start of the financial year

  3. 2000–01 figures are allocations, except for Competitiveness Development Fund and Inward Investment which are indicative

  4. 2001–02 figures are indicative

  Ministerial Meetings (RMT)
  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions how many meetings he has had with officials of the Rail, Maritime and Transport Union since May 1997. [115024]
  336W
  Ms Beverley Hughes
  At present there are approximately 5,000 projects administered by the Regional Development Agencies (RDAs). Collating and publishing this information could be completed only at disproportionate cost.

  The budget for expenditure on projects by RDAs during 1999–2000—including the Partnership Investment Programme—is £837 million.

  Mr. Loughton
  To ask the Secretary of State for the Environment, Transport and the Regions what has been the cost of each of the regional development agencies in each of the years since their inception; and what is projected for future years as to(a) administration and running costs and (b) project funding costs. [115014]

  Ms Beverley Hughes
  The Regional Development Agencies assumed their full responsibilities in April 1999. Information for 1999-2000 and the remainder of the current Comprehensive Spending Review period is shown in the table.

  Mr. Hill
  Ministers have extensive dealings with organisations in both the Public and Private Sectors as part of their official duties.

  It would be impracticable to maintain a central record of such meetings.

  Rail Vehicle Accessibility Regulations
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the exemptions granted to date under the Rail Vehicle Accessibility Regulations 1998; and if he will make a statement. [114813]

  Mr. Hill
  The following exemptions from the Rail Vehicle Accessibility Regulations 1998 (RVAR), have been authorised by the Secretary of State in accordance with Section 47 of the Disability Discrimination Act 1995:

  The Rail Vehicle Accessibility (Midland Metro T69 Vehicles) Exemption Order 1999, SI 520/1999;

  The Rail Vehicle Accessibility (Midland Metro T69 Vehicles) (Exemption No.2) Exemption Order 1999, SI 1256/1999;

  The Rail Vehicle Accessibility (LTS Rail Class 357 Vehicles) Exemption Order 1999, SI 1448/1999;

  The Rail Vehicle Accessibility (Anglia Railways Class 170/2 Vehicles) Exemption Order 1999, SI 1931/1999;

  The Rail Vehicle Accessibility (Central Trains Class 170/5 Vehicles) Exemption Order 1999, SI 1932/1999;

  The Rail Vehicle Accessibility (South West Trains Class 458 Vehicles) Exemption Order 1999, SI 2404/1999;

  The Rail Vehicle Accessibility (ScotRail Class 170/4 Vehicles) Exemption Order 1999, SI 2547/1999;

  The Rail Vehicle Accessibility (Serco Metrolink T68A Vehicles) Exemption Order 1999, SI 2932/1999;

  The Rail Vehicle Accessibility (Croydon Tramlink Class CR400 Vehicles) Exemption Order 2000, SI 6/2000;

  The Rail Vehicle Accessibility (LTS Rail Class 357 Vehicles) Exemption Order 2000, SI No. 182/2000;

  The Rail Vehicle Accessibility (North Western Trains Class 175/0 and Class 175/1 Vehicles) Exemption Order 2000, SI 524/2000.

  Before authorising any exemptions we consult our statutory advisers, the Disabled Persons Transport Advisory Committee (DPTAC). Many of the exemptions are for relatively minor non compliances and most have been time limited and we expect vehicles to eventually be modified to bring them to full compliance. All exemptions authorised to date have arisen due to the vehicles being designed before the RVAR where finalised.

  We are working closely with operators and manufacturers to ensure that all new vehicles ordered since the RVAR came into force fully comply with the Regulations. However, there is likely to be a requirement for a small number of exemptions to continue to be authorised to cover exceptional circumstances, for example, on railways where the infrastructure limits the physical size of vehicles.

  Paddington Station
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions when safety modifications to the tracks outside Paddington station to eliminate cancellations of trains in the evening peak period will be completed. [114809]

  Mr. Hill
  This is a matter for Railtrack. Any changes or alterations to increase the service into Paddington have to be initiated by Railtrack and then be subject to approval by Her Majesty's Railways Inspectorate (HMRI). An exploratory meeting was held between Railtrack and HMRI on 8 March to discuss progress. However HMRI are still awaiting formal proposals from Railtrack.

  Public Transport Gender Audit
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will place a copy in the Library of his Department's gender audit to assist transport planners and operators in meeting women's transport requirements. [114806]

  Mr. Hill
  The audit of women's public transport requirements was completed last year. We have continued to test the findings and will now launch "Women and Public Transport—The Checklist" on March 29, 2000 at a conference in London. A copy of this and of the research report "The Public Transport Gender Audit" will be placed in the Library.

  Home Zones
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will estimate the average costs of establishing a home zone. [114812]

  Mr. Hill
  It is not possible to make a meaningful estimate at present. Costs may vary greatly, according to the size of the designated area and the environmental and traffic calming measures employed. We have established a programme to monitor nine pilot home zones, and will have a clearer idea of the costs associated with different approaches when these schemes have been implemented.

  Rail Safety
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions how many trains carrying radioactive materials have passed signals at danger in each of the last five years for which figures are available. [114811]

  Mr. Hill
  The Department does not hold such information.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Hereford): The LORD CHANCELLOR on the Woolsack.

Home Office: Press Officers
Lord Cope of Berkeley Lord Cope of Berkeley asked Her Majesty's Government:
What is the expected cost of the new team of press officers being set up to react to breaking news stories involving the Home Office.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, the major cost to the Home Office will be the recruitment of up to 10 press officers. The majority are likely to be employed at Information Officer grade, for which the salary band is £17,000 to £28,000 per annum. As with all Civil Service posts, there will be employment costs of superannuation and national insurance amounting to approximately 20 per cent of salary. We estimate that the total cost of staff will be up to £400,000 per annum. There will be some accommodation and information technology costs which are not yet finalised.
Lord Cope of Berkeley: My Lords, I am grateful to the noble Lord for that full Answer. Can he confirm, as the Home Secretary suggested in another place earlier this month, that at present there are still 11 press officers and three trainees in the Home Office press office? Can the Minister confirm that the extra 10 press officers—to be appointed specifically, as the advertisement said, "to react to breaking news", of which, admittedly, there is plenty at the Home Office—are to be paid at least up to half as much again as a London police constable? Can he further confirm that these press officers will be in addition to 10 extra internal communications advisers in the Home Office, who are to be paid twice as much as a London police constable?
Lord Bassam of Brighton: My Lords, I am happy to confirm the figures and statistics upon which the noble Lord has based his interesting point. To try to compare the pay of police officers with that of press officers working in the Home Office rather misses the point. Perhaps I may remind the noble Lord that when he was in another place as a Minister at the Department of Employment, his departmental advertising budget shot up between 1985–86 and 1986–87—I draw attention to that year in particular—from £100,000 to £12.7 million. No doubt the noble Lord thought that was very good value for money and a good investment.
In another place on 13th March 1989, in reply to my right honourable friend Frank Dobson, the noble Lord, while still a Minister, said that his department
1676
(the Department of Employment) employed 68 members of staff in the press and public relations office.
Lord Marsh: My Lords, many of us on these Benches fully understand that both sides are as bad as each other. Can the Minister say why we need these new people?
Lord Bassam of Brighton: My Lords, the noble Lord makes a very interesting contribution. It is most important to focus on the real issue behind this. When the external consultants looked at press and communications within the Home Office they found that we received 150,000 calls per annum; that we were missing 20 per cent of those calls; that the number of incoming calls to the Home Office had increased by 50 per cent over a period of five years; and that the service was designed for a time when very few news outlets and communications demands were being made on the Home Office. That situation has changed and we have to respond. There are now 24-hour news broadcasts, sometimes at hourly intervals; there is a fifth channel; there is Sky Digital; there is On-Line; there is the Internet; and the media is growing exponentially. For that reason we need an effective service to offer to those journalists who, quite frankly, have been complaining that they cannot get through and make contact with the Home Office press office.
Lord Lipsey: My Lords, I speak as a former working journalist who has spent many of the most fruitless hours of his life trying to get a reply from the Home Office press office. Does my noble friend agree that this increase in staff will be justified if it brings about a proper response rate—although I do not think that my former colleagues will be any more satisfied with the answers that they receive more quickly than they were with the ones that they failed before to get at all?
Lord Bassam of Brighton: My Lords, the noble Lord makes his point well, with his customary wit and charm.
Lord Glenarthur: My Lords, can the noble Lord say why it was necessary to employ external consultants to look into this matter and what was the cost?
Lord Bassam of Brighton: My Lords, I am more than happy to confirm that the cost of the external consultants was £50,000, paid for from the Home Office budget. I should remind the noble Lord that during his party's time in government, the bill for consultants' work grew massively. I have the figures in front of me which demonstrate the full value of that work. We believe that we should make effective use of consultants in advising the Government how best to manage their business. I thought that the noble Lord and his party colleagues opposite shared that view.
Lord Mayhew of Twysden: My Lords, how many of the extra staff will be needed to identify Ministers' jokes?
Lord Bassam of Brighton: My Lords, I was going to speculate on the number of jokes that Ministers tell, but that would be unfair to the House.
Lord Campbell of Alloway: My Lords, will this new team—with its specialist services, access to the media and so on—be restrained from the knee-jerk reaction of saying that, whenever this House decides something, it will be reversed?
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for his advice. No doubt the press officers will seek to advise their masters and their officials wisely on all occasions.
Baroness Knight of Collingtree: My Lords, is the Minister aware that part of the answer he gave earlier will cause considerable concern? He seemed to imply that more than twice as many press officers are to be employed because there are so many news items these days? Is he not aware that many of them repeat the same things over and over again? It should not be necessary to double the number of press officers to deal with repetition.
Lord Bassam of Brighton: My Lords, the Home Office is an extremely busy department as regards news. Many Members of your Lordships' House try very hard to put us on the front pages of newspapers and in broadcasts. Business coming into the Home Office is increasing, as it is in many other departments. We want to offer a first-rate service in the Home Office and in all government departments.
The Countess of Mar: My Lords, in his role as spokesman for the Government, will the Minister kindly ask his colleagues in this House and in another place to ensure that, when documents are sent out for public consultation, these press officers—no doubt his department is not the only one to have an increase in staff—use some of their time to publicise the issue of them? For instance, the review of the Mental Health Act was issued in November and it has only now become public knowledge when consultation ceases at the end of this month. It is most important, not only in his department but right across the board, that consultation documents are made public.
Lord Bassam of Brighton: My Lords, I agree with the noble Baroness. It is important that such documents should remain in the public domain and that people have full and proper access to them.

European Parliament: Voting System
3.9 p.m.
Lord Lamont of Lerwick Lord Lamont of Lerwick asked Her Majesty's Government:
What is their attitude to the proposal by the European Commission that some Members of the European Parliament should be elected on European lists, presented to all voters throughout the European Union.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, the Government see little merit in this proposal, which would only lead to a decrease in the number of MEPs representing local, regional and national interests in the European Parliament. Nor is it an idea which has so far attracted any serious support from other member states in the IGC.
Lord Lamont of Lerwick: My Lords, I thank the Minister for that surprisingly welcome reply regarding a suggestion that was put forward by the Commission. Does she agree that, given the deep gulf between the man and woman in the street and European institutions, it would further increase alienation were we to have European-wide lists of candidates unrelated to countries or constituencies—Greeks standing in Italy, Fins in Luxembourg, Portuguese in Spain, Swedes in France? While it is utterly unobjectionable if an individual decides to stand, as the noble Lord, Lord Steel, did, in another country, it is wholly different if that is forced upon the European public by treaty and by European-wide parties financed by Brussels. Does the Minister agree that that idea is wholly incompatible with a Europe of nation states and that it is designed simply to further the idea of a European political entity?
Baroness Scotland of Asthal: My Lords, I do not agree with all that the noble Lord says. So far as we are concerned, this idea is wholly unworkable. It is not something that we would promote or agree with, and we do not believe that it would be endorsed by other member states. This issue is a matter for the member states to decide. Of course, it is always useful and interesting to hear ideas promoted by the Commission.
Lord Bruce of Donington: My Lords, will my noble friend make it quite clear to the Commission that the member states are not yet ready for any further self-initiated proposals from the Commission; and that it is high time that, before making any proposals to anyone, it starts putting its own house in order?
Baroness Scotland of Asthal: My Lords, the Commission is of course in the process of putting its own house in order. It is right and proper that the Commission should make its recommendations, and that those recommendations should be listened to. Only when member states feel that they are pertinent and cogent should they be given any due weight.
Lord Mackay of Ardbrecknish: My Lords, is the Minister aware that her Answer will bring a great deal of satisfaction to many of us who thought that this was quite the craziest idea we had heard? Does she recollect that we changed our voting system, because we were forced to do so by our European partners, to a list system, indeed to a closed list system—which must be about the most iniquitous method of allowing the electorate to elect representatives? Does she further recollect that that caused a drastic decline in turnout at the European elections, contrary to what the

1679
Government and our friends on the Liberal Democrat Benches said? Will the Minister give an absolute guarantee that the Government will stick by the Answer that she has just given and will not back down in the face of pressure from our continental friends?
Baroness Scotland of Asthal: My Lords, first, I do not agree with the noble Lord's analysis as to why there was a low turn-out. That is still a matter of some dispute. I have just outlined the Government's stance. That is our position; it will not change. This IGC will concentrate, as it properly should, on the institutional reforms necessary for enlargement, and this proposal is not central to that process.

Nuclear Waste: Consultation Date
3.13 p.m.
Lord Tombs Lord Tombs asked Her Majesty's Government:
When they will publish the consultation paper on nuclear waste which was promised in their response to the report of the Select Committee on Science and Technology on Management of Nuclear Waste (3rd Report, Session 1998–99, HL Paper 41).
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, we aim to publish the consultation paper on the management of radioactive waste during the spring of this year. Copies will be placed in the Library, and copies will also be sent to the noble Lord and to members of the Select Committee on Science and Technology.
Lord Tombs: My Lords, I thank the Minister for that reply, which is a repetition of his closing speech in the debate last October. I seek an undertaking that the promise made, the undertaking then given, will in fact be met. I should be grateful if the Minister could be more specific about the expected date of publication.
Lord Whitty: My Lords, in this House we always have some difficulty defining the seasons. I am afraid that I cannot be more precise than "spring". Spring comes before summer.
Lord Winston: My Lords, does my noble friend agree that the Select Committee report carries matters of great importance which have frequently been shelved by previous governments and that it is in the country's interest to receive a proper answer to the report as soon as possible?
Lord Whitty: Yes, my Lords, I agree that there are some profound and long-term issues involved in the treatment of nuclear waste. It is also important, as the Select Committee underlined, that some of the mistakes made in earlier phases as regards not taking the public along with the decisions are also addressed in our approach to deciding these matters. That is why
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the basis for the consultation paper must be carefully thought through and the consultation process itself very thorough.
Lord Jenkin of Roding: My Lords, will the Minister confirm that at the consensus conference held shortly after publication of the Select Committee report, Mr Meacher said that the Government hoped to have the consultation paper by the end of last year. During the debate mentioned by the noble Lord, Lord Tombs, it was stated that publication had been put off until the spring. Is the Minister aware that my consultations with the industry have evoked the response that the date is becoming increasingly hazy? Does he agree that the request for more specific information is justified by a growing feeling that the Government will kick the issue into the long grass before the next election?
Lord Whitty: My Lords, I entirely refute the noble Lord's last point. It is important that we get the basis of the consultation right. I am indicating today the same timescale as that indicated in the debate mentioned by the noble Lord, Lord Tombs. It is true that, at an earlier stage, we thought we might be able to get the consultations started by the end of last year. But now we are talking about the spring, and spring it will be.
Lord Jenkins of Putney: My Lords, does my noble friend agree that the difficulty with the management of nuclear waste is that it is almost impossible to get rid of it? In those circumstances, does he accept that the right solution is to produce as little nuclear waste as possible—and eventually none at all?
Lord Whitty: My Lords, my noble friend tempts me into a discussion of the long-term future use of nuclear power, on which I am sure varying views are held within this House, as they are outside. The future contribution of nuclear power to our energy mix is an emotive as well as a technical issue. However, were we from now not to have any more nuclear power, there is already a significant waste disposal issue. That is what the Select Committee addressed and it will be the subject of the consultation paper, irrespective of any future positive decisions or otherwise on the use of nuclear fuel.
Lord Jopling: My Lords, in view of the recent lamentable events at Sellafield and the implications for employment in Cumbria, will the Minister say that, regardless of a response to the Select Committee report, the Government will take urgent steps, do their best to retrieve the situation and install more competent management at Sellafield?
Lord Whitty: My Lords, it is true that the recent identification of falsification of records in BNFL has been very unfortunate in relation to the credibility of the operation of Sellafield and BNFL more generally. The reports from the Nuclear Inspectorate have identified very serious problems. BNFL has a couple of months to put those right. Thereafter, it is

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important that BNFL works hard to restore the confidence of its customers and potential customers, and the Government will support it in doing so. As the House will know, a number of changes have already taken place in BNFL's management structure.
Lord Craig of Radley: My Lords, may I tempt the Minister to reveal part of the report's contents? Will the Government's position be that they rule out indefinite surface storage as one way of managing nuclear waste over the longer term?
Lord Whitty: My Lords, "indefinite" is perhaps an inappropriate word here. Clearly, long-term decisions must be taken. It is probable that the high level waste will be surface stored for 50 years. As to what happens to it thereafter, at present it appears that deep level storage is appropriate but other technologies may be developed in that period. The important point is what we do now and, in particular, what we commit ourselves to doing with the high level waste thereafter.
Lord Mackay of Ardbrecknish: My Lords, does the Minister agree that if we are to meet, and in future do better than, the Kyoto emission standards, we must have a nuclear industry? If so, does the Minister agree that we must deal with the question of the management of waste? Does the noble Lord also agree that one of the real problems that faces the present Government, as it did the previous one, is that the pressure groups which oppose nuclear energy will put out all kinds of scare stories that can be countered only by government and industry being open and frank about what they are doing?
Lord Whitty: My Lords, I do not believe that the noble Lord is correct to say that we need additional nuclear capacity in order to meet the target for 2010. In a sense, the question is what happens beyond 2010 and whether nuclear power or alternative non-fossil fuel-based energy sources can be developed. Those are very serious long-term issues both for our own energy mix and that of the world. It is certainly the position of the Government that nuclear technology should remain available for those medium and long-term decisions. It is also the Government's position that one of the problems with nuclear power has been misinformation by both its opponents and, unfortunately, those who have had responsibility for managing it. That distorts the debate, but the Government are determined that BNFL will put the matter right.
Lord Elton: My Lords, further to the Minister's response to my noble friend Lord Jopling, can he say whether the falsification of the safety records of the items which were attempted to be exported represented a danger only to the importing countries or to the citizens of this country? Does the noble Lord
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agree that this is a matter of considerable concern and another reason why the report should be published very soon?
Lord Whitty: My Lords, I believe that the findings of the Nuclear Inspectorate are that the falsification did not of itself present a danger to safety. The problem is the credibility and robustness of the safety regime within Sellafield and the transport of nuclear fuel both here and, potentially, within the customer countries to which the fuel may be returned. Understandably, those customer countries are alarmed. We must reassure them that in future the safety regime will be robust and that there will be no further falsification.

NHS Trusts: Appointments
3.23 p.m.
Lord Clement-Jones Lord Clement-Jones asked Her Majesty's Government:
What steps they take to involve Members of Parliament in the appointments procedure for members of National Health Service trusts and similar bodies within the health service.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, all Members of Parliament are invited to nominate candidates for appointment to those NHS bodies which serve their constituents. The people they nominate are expected to complete application forms and, if considered suitable, are interviewed in the same way as all other applicants. In addition, for chair appointments local MPs are invited by NHS Executive regional chairs to comment on the candidates that they recommend to Ministers.
Lord Clement-Jones: My Lords, I thank the Minister for that reply. We all look forward to the report next week by Dame Rennie Fritchie on appointments to NHS trusts. From earlier reports it appears that that paints a rather different picture from that presented today by the Minister. If those reports are true they suggest massive hypocrisy on the part of this Government, particularly when they were so vociferous in their opposition to the previous government for doing exactly the same thing. Can the noble Lord categorically deny that Labour MPs have no influence over the appointment of those trust members? Furthermore, can he give a definitive answer as to whether it is political affiliation or skill and experience which determines a person's appointment to an NHS trust?
Lord Hunt of Kings Heath: My Lords, I am unable to comment on the report of the Commissioner for Public Appointments before it has been published. However, I can tell the House that we have adopted a vigorous approach to the appointment of non-executive directors and chairs of NHS bodies. These are very

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important positions which must be filled by the best quality people, and we believe that the procedures that we have adopted enable us to do that.
Baroness Hanham: My Lords, can the Minister inform the House what percentage of such appointments arises from applications in response to advertisements placed in newspapers and whether that approach brings in a sufficient number of suitable candidates?
Lord Hunt of Kings Heath: My Lords, I do not believe that an exact breakdown of the numbers in the different categories is available, but I am happy to see whether I can provide that information. We believe that national advertisement is an important part of the process of receiving nominations. But all nominations, whether they come from MPs or through national advertisements, are dealt with in the same way; namely, through a sifting process and panel interview where an independent person is always present.
Lord Davies of Oldham: My Lords, is my noble friend aware that in Oldham the Government reappointed as chairman of the NHS trust a prominent member of the local Conservative Party who, in my experience, is one of the few people from the party opposite with any real commitment to or knowledge of the health service?
Lord Hunt of Kings Heath: My Lords, even I have appointed Conservatives to positions in health authorities and trusts, because at the end of the day we are concerned to appoint the best possible people. We appoint people who have affiliations to all political parties and to none. The key is to get high quality people.
Baroness Gardner of Parkes: My Lords, is the Minister aware that about six months after the present Government came to power I asked a Question and was informed that about 15 Conservative and well over 100 Labour councillors had been appointed? As to the appointments procedure, can the Minister say whether there is still an obligation to interview all those who certify themselves as disabled? Is he aware that I sat on an interviewing panel which came to the unanimous view that some of those who had certified themselves as disabled were not disabled? How does the Minister suggest that a more objective assessment can be made of those who are entitled to claim an interview as of right because of a supposed disability?
Lord Hunt of Kings Heath: My Lords, my understanding is that the procedure is as the noble Baroness describes. However, we need to be very cautious before we change it. Although I accept that there may be instances in which the system is abused, nevertheless it enables people, particularly those with disabilities, to be considered for appointment, which is very important. As to the appointment of councillors, I suspect the answer is that there are very few who belong to the Conservative Party.
Baroness Cumberlege: My Lords, does the Minister share the reported concern of the Commissioner for
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Public Appointments that political criteria should not take precedence over other experience? If the noble Lord shares that view, is it merely a coincidence that 546 Labour activists compared with 149 Conservatives have been appointed?
Lord Hunt of Kings Heath: My Lords, I cannot agree with the noble Baroness. I have already said that we make the appointment on the basis of the quality of the applicant without regard to political affiliation. I pray in aid that in 1999, 76 per cent of the people we appointed declared no political activity.
Lord Goodhart: My Lords, does the Minister agree that the figures make it fairly clear that both the present Government and the previous one have been stuffing NHS trusts with their own supporters?
Lord Hunt of Kings Heath: My Lords, the noble Lord is certainly right about the previous government. One can only describe the approach of the previous government as the packing of boards with Conservative supporters and so-called independents who, none the less, could always be called upon to vote with the Conservatives.
Lord Hardy of Wath: My Lords, is the Minister aware that in my area the balance is reasonable and proper? However, a few years ago, I was so horrified by the multitude of Conservative appointments and scarcity of Labour appointments that when I discovered that the Wentworth constituency Conservative Party had not shared in that loot I offered a strong protest at its being disregarded by its own government.
Lord Hunt of Kings Heath: My Lords, the Nolan Committee, which considered these matters early in the decade, received more complaints about the process of appointments to NHS bodies by the party opposite than on any other issue.

Consolidated Fund (No. 2) Bill
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a Money Bill, and read a first time.
Political Parties, Elections and Referendums Bill
Brought from the Commons; read a first time, and to be printed.

Financial Services and Markets Bill
3.32 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 agreed to.
Schedule 1 [The Financial Services Authority]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page 216, line 15, leave out paragraph (b).
The noble Lord said: In moving the amendment, I speak also to Amendments Nos. 2 to 6.
Schedule 1 deals with, among other things, the constitution of the Financial Services Authority. Paragraph 1(2) sets out for the purposes of Schedule 1 the authority's legislative functions. These include making rules, issuing statements of principle or policy, issuing codes and so on. These amendments rationalise and update the description of the legislative functions.
Amendment No. 1 deletes paragraph 1(2)(b) devoted to Section 63 on conduct, statements and codes. Amendments Nos. 2 and 4 reallocate the code element of Section 63 to paragraph 1(2)(e) and the statement element to paragraph 1(2)(d). A consequence of this last amendment is the need to broaden by Amendment No. 3 the description of the statements to capture Clauses 69 (on statement of policy with regard to imposition and amount of penalties for misconduct), Clause 114 (on statement of policy with respect to imposition and amount of penalties for market abuse), and Clause 204 (on statements of policy in respect to imposition and amount of penalties for contribution of a requirement imposed on an authorised person) which refer to a statement of policy, and Clause 63 which refers to statements of principle. The amendment also uses the language used elsewhere in the Bill: that is, that statements are "issued" and not "published".
Amendment No. 5 adds directions under Clause 319: directions in relation to the general prohibition in respect of members of the professions to paragraph 1(2)(e) which provides that directions are one of the FSA'S legislative functions.
Finally, Amendment No. 6 deletes Clause 69 and the reference to general guidance since that clause refers throughout to statements of policy and hence is captured in paragraph 1(2)(d) which refers to statements. I beg to move.
Lord Kingsland: Does the Minister know whether the concept of a legislative function is used in an Act establishing any other public authority in this country?
Lord McIntosh of Haringey: I am sure that it is not an original concept since many regulatory bodies have
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to work via rules, statements of principle or policy, and issuing codes. I shall write to the noble Lord about the detail of which other legislative examples occur.
Lord Kingsland: I ask because it seems strange that we have a non-parliamentary body with a legislative function but with no obligation to lay its legislative rules before the legislature.
Lord McIntosh of Haringey: "Legislative function" is perhaps shorthand. We are talking here about functions which are laid on the Financial Services Authority by statute.
Lord Elton: Shorthand is not the language for legislation. If the Minister means that he is referring to the authority's rule-making or regulation-making powers, the Bill should say so. To call them "legislative powers" calls into question the function of this Chamber.
Lord McIntosh of Haringey: I used the phrase "legislative powers" in introducing them in order to provide a collective description of those functions described in the legislation as rules, statements of principle or policy, codes of conduct, codes of practice and so on. I attempted to help the Committee by giving a collective noun to describe them all. "Legislative functions" does not appear in the Bill.
Lord Elton: It does. At lines 12 and 13 on page 216, the Bill states:
"For the purposes of this Schedule, the following are the Authority's legislative functions".
I am happy for the noble Lord to be free with his language. I am not happy for the statute to be free with its language if it does not mean what it says. It is a fairly important matter as to whether Parliament is the only authority in this country which can make legislation.
Lord McIntosh of Haringey: I am happy to accept the noble Lord's correction about what appears in the Bill. The Bill is trying to be helpful, as I am. But it is not new; it is not an innovation. I can respond to the noble Lord, Lord Kingsland, that the phrase "legislative functions", used in the same way, occurs in the Financial Services Act 1986.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 2 to 6:
Page 216, line 16, after ("section") insert ("63 or").
Page 216, line 17, leave out ("publishing statements of policy") and insert ("issuing statements").
Page 216, line 17, after ("section") insert ("63,").
Page 216, line 18, leave out ("or 311") and insert (", 311 or 319").
Page 216, line 19, leave out ("guidance under section 69 or").
On Question, amendments agreed to.
Lord Newby Lord Newby moved Amendment No. 7:
Page 216, line 24, after ("chairman;") insert—
("() a chief executive:").
The noble Lord said: In moving the amendment, I speak also to Amendments Nos. 8 to 11. These are the first of the amendments dealing with the governance of the FSA. It is one of the most contentious issues facing us during the passage of the Bill. The amendments propose explicitly that the roles of the chairman and the chief executive should be split.
At Second Reading, virtually everyone who spoke on the issue agreed that there was merit in separating the role of the chairman and chief executive. In doing so, they echoed the view of the Joint Select Committee. Why was that so? The concerns about the current situation centre on a core worry that a combined chairman and chief executive would be too powerful a creature. The powers of the FSA in making and enforcing rules and levying fines are vast. The scope of the FSA which has been enhanced during the passage of the Bill to include listings and mortgages—we hope that it may be extended further to deal with long-term care—is also vast. We believe that one person solely in charge is too great a concentration of power. We believe that there is a separate job to be done by having a strong, independent voice at the top to ensure that the power of the FSA executive is handled in a careful and appropriate manner. We believe that the way to achieve that is by having a separate chairman.
In looking at the structure at the top of the FSA and more generally, two models have been considered. The model that is enshrined in the Bill is essentially that which we find at the Bank of England where, broadly speaking, the Court exercises the role which the Bill envisages being exercised by the FSA non-executive directors. We do not believe that that model is appropriate.
The Court of the Bank is not a hugely powerful body. When the Select Committee on the Monetary Policy Committee examined its workings, we found that it had not always been active in monitoring certain aspects of the work of the MPC. We believe that to have a non-executive body or group of directors sitting to the side of the executives is not a sensible way forward. My noble colleague Lord Sharman will deal with the issue in greater detail when we consider it later. However, it is relevant to the chairman and chief executive because the Government have taken the whole Bank of England management, in the shape of a governor and a court, and transposed it into the FSA.
The alternative, which we prefer, is to have a single board with a separation of powers between the chairman and chief executive. We believe that via that mechanism, good rules of corporate governance should apply here as they do elsewhere.
It has been argued by the Government and the FSA that the model is incorrect; that it is a bad model because there are no shareholders in the FSA and therefore different rules apply. Clearly, in a technical sense, there are no shareholders, but there are certainly stakeholders in the work of the FSA, whether practitioners, customers or Parliament, and they all
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rightly expect the FSA to follow the highest possible standards. We believe that in this respect the highest possible standards are best achieved by following the normal rules of corporate governance.
What arguments have been used against the model? The issue has generated considerable heat, not least within the FSA. We are fortunate in that we have a detailed explanation by the non-executive directors of the FSA as to why, in their view, the model in the Bill is appropriate. I hope that your Lordships will forgive me if I go through it because it demonstrates the paucity of their case.
First, they argue that,
"fears of an over-mighty executive are best addressed by a board that is fully integrated into the decision taking of the organisation, with their Chairman in a full time executive role".
The first part relating to the fears of an over-mighty executive does not hold water. Under the model in the Bill, the non-executives are not fully integrated. The scope of their powers—the areas which they are allowed to examine in their committee—do not cover the whole of the work of the FSA. Therefore, that argument is not borne out by the Bill. The argument that having a chairman in a full-time executive role somehow curtails an over-mighty executive is a straightforward non sequitur. By simply stating that, they are not making a case.
They then turn to a number of detailed points. First, they state that the number and significance of the decisions, some of which must be taken at the highest level, require a single person at the top. Again, that seems to be a complete non sequitur. I do not know how one can reach that view. Secondly, they state:
"there is a strong benefit in a single individual providing a recognisable public face".
Clearly, there are many circumstances in which the FSA will want to have a recognisable public face. But many organisations have recognisable public faces, which are just that; public faces. One thinks of the BBC—and I see the noble Lord, Lord Birt, in his place. Unless I am mistaken, it has more than one public face, as does the CBI. The fact that an organisation might have two public faces rather than one seems to be an advantage rather than a disadvantage.
Thirdly, they state:
"the Standing Committee structure established by the Treasury/Bank of England/FSA … would be unbalanced if the FSA chairman were non-executive".
I believe the argument is that if there were in a room Eddie George, Gordon Brown and the chairman of the FSA, in some sense the chairman would be a weak creature. There are several ways around that, one of which is that both the chairman and the chief executive could attend the meeting and the other two could take seconds, too. In my view, that is not an argument of great substance.
Fourthly, they state:
"accountability is enhanced by a single individual taking responsibility for the performance of the organisation as a whole … and he is the person with whom the buck stops".

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The FSA is not unique in that situation. Unless I am much mistaken, the same considerations apply equally to every company in the country. No one argues that individual chief executives and chairmen in companies are not accountable to their shareholders or that no one knows where the buck stops. Again, that is not a strong argument.
The next argument is almost my favourite. It is that if there were a split,
"the UK would risk losing authority in international discussions if the FSA were represented by a non-Executive Chairman, or a Chief Executive reporting to one".
Perhaps Members of the Committee will picture the scene at a meeting in, say, Brussels attended by Howard Davies. He could be the chairman or the chief executive of the FSA and when he entered the room all his colleagues and counterparts would be there. Does anyone seriously believe that they will tut-tut and say, "Poor old Howard Davies. He has no powers or authority. He is only the chief executive"? I find that extremely difficult to believe. The argument that someone who would have the authority of either the chief executive or the chairman of the FSA in the UK would suddenly be put down by his counterparts from other regulatory authorities because he did not share those roles is, in my view, unsupportable.
Lord Faulkner of Worcester: I thank the noble Lord for giving way. In the case of other countries, how many international regulatory organisations are represented by more than one individual? Is it not the case that, for example, the international, European and world bodies are represented by full-time executive chairmen in exactly the same way as is ours?
Lord Newby: I believe that that is the case. However, the FSA is a unique creature and has greater powers and scope than virtually any other similar regulatory body. That is at the heart of our reason for proposing the amendment.
The non-executive directors argue that the model that we are proposing is inappropriate because it is different from that of the Director-General of Fair Trading and various other regulatory bodies. However, the core of what we are saying is that this body has greater and broader powers. Therefore, again we do not believe that that is a strong argument.
The non-executives also argue that the essence of the role is to lead the organisation as a whole; if the role were split, there would be a lack of leadership. Again, I simply do not believe that. Therefore, having given considerable consideration to the arguments that they have made, I do not find those arguments compelling.
The final argument which they make—it is often made in the corridors, as it were, but rarely made formally—is that Howard Davies would vehemently oppose a move to a different model, and that that in itself is a strong argument for not doing so. I believe that on these Benches we share the view of everyone who has spoken at all stages of the discussions on this issue; namely, that so far Howard Davies has done an
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extraordinary job with the FSA and that he is a highly impressive chief executive and chairman. Many of the doubts that people, including ourselves, express about these powers do not flow from a view about how Howard Davies would exercise them. However, this is not a piece of ad hominem legislation. It is a piece of legislation that must last for a considerable period and see through a number of generations of leading members of the FSA executive. Again, I do not find that a convincing argument against the model which we propose. Having considered all the models, we are not persuaded by those arguments. Therefore, we retain our belief that a body with the powers and role of the FSA, as proposed in the Bill, requires both a chairman and a chief executive. I beg to move.
Lord Borrie: Perhaps I may ask a question on this matter. It seems rather curious that the noble Lord. Lord Newby, did not refer to the governing body. The governing body of the authority is provided for in Schedule 1, which states that the majority of members will be non-executive members. It follows logically that the minority will be executive members. Presumably, if we take that as the plural, one of them could be regarded as the chief executive.
In other words, I suggest that the provision in Schedule 1, which at the moment provides for a governing body as well as for a chairman, is sufficiently flexible to take into account all kinds of possibilities that might develop in the future, to which the noble Lord, Lord Newby, referred. In years to come, it may be desirable for there to be a chairman and, separately, a chief executive. Another possibility is that one person should hold both roles. That is provided for in Schedule 1. Therefore, why do we need this amendment?
Lord Newby: Because we believe that there should be a chairman and a chief executive and because, as is evidently the case, the Bill as drafted does not envisage that that will happen, although that may change at some point in the future. That has been made clear throughout the discussions on this matter by the Government and by the FSA. Therefore, we believe that if it is wished that the two roles remain separate, that should be specified in the legislation. Unless it is, it simply will not happen, in the short term at least.
Lord Kingsland: I rise not to respond to this group of amendments on behalf of the Opposition—that will be the task of my noble friend Lord Saatchi—but to speak to my own amendment in this group, Amendment No. 9A. That I can do very briefly.
Amendment No. 9A requires that the appointments of the chairman, the chief executive and the non-executive deputy chairman shall not take effect until they are confirmed by the House of Commons Treasury Select Committee following a public hearing. The reasons for tabling this amendment flow from my earlier intervention in this debate. As the Minister conceded, the authority will have legislative powers to make rules which are binding on certain persons. Your Lordships' House and another place will not have the

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opportunity to be consulted on these rules. Therefore, the leaders of the FSA will be in an extremely powerful position. In those circumstances, I believe it only right that their appointment should be confirmed by your Lordships' House and another place.
Lord Stewartby: When the noble Lord, Lord Newby, introduced his amendment, he said that he believed that everyone at Second Reading had been in support of the proposition which he was putting forward. I must say that I clearly recall having expressed some reservations about this matter myself. I should like to explain again why I believe that it is not at all self-evident that his proposed solution is the right one. I do not believe that one can necessarily transfer the format of corporate governance from the private sector to a public sector body of this most unusual kind.
The Financial Services Authority will have huge powers which will impact not only on a very large number of practitioners and professionals in the markets which are regulated, but also in relation to consumer interests over a wide front. Under those circumstances, I believe that the authority must have the structure which is most suitable to it. Equally, I do not believe that that is necessarily to be determined by reference to the Bank of England. I agree with the noble Lord, Lord Newby, about that. It seems to me that the functions and powers of the two bodies are so different that one cannot suggest automatically transferring from one to the other.
I believe that a large part of the problem has arisen because of the sloppy use of the term "chief executive" in the private sector. Many public companies and other large organisations have a chairman and a chief executive. However, in many of them from time to time the role of the chairman will undoubtedly impinge on executive matters. In my view, the implication is that there is no higher executive authority within a body than the person who is described as "chief executive".
Therefore, let us suppose that in the statute in relation to a particular organisation such as this authority, one says that "A" will be the chairman and "B" the chief executive. I am not a lawyer so I cannot judge what the legal force would be. However, the natural interpretation of the language would be that there would be at least an implication that the executive authority stops with "B" and that "A" is not authorised to determine matters of policy, strategy or other executive decisions and certainly would not be the best person to answer for them in the wider forum in which the head of this body must perform.
Therefore, I am doubtful about the proposal of the noble Lord, Lord Newby. I do not know whether he is considering pressing it to a Division, but I would have considerable reservations about whether or not to support him. I believe that there is an essential truth in what he says, which is that those who are chairmen of bodies—whether they are companies or public bodies of this kind—and those who are the principal executives have separate functions. However, normally those functions are worked out between the
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two individuals concerned in the light of the structure, role and functions of that body. There is no hard and fast dividing line between the two. There is likely to be an overlap, and therefore it would be misleading to have someone described as chief executive, with the implication that the chairman was not able to become involved in executive matters.
There is another aspect whereby the functioning of the board could be affected by a decision of this kind. It points rather in the other direction. It is difficult for the chairman of any board, particularly of a public body of such importance, to have to chair it as well as being the principal proponent of its policies. It is always easier for the chairman to be more detached from direct involvement in managerial decisions.
When my noble friend, Lord Alexander, and I were members of the board, mostly in its previous guise as the Securities and Investments Board, the non-executive directors, I am glad to say, were robust in their comments. We often questioned and challenged the executives. Occasionally, that might cause them discomfort, as it might the chairman, the person most fully responsible for the board's actions. However, it is not an insuperable problem.
We must look at the problem pragmatically. We are to establish one of the most powerful bodies in the land outside the system of government. It will have a very important influence internally, within our economy, markets and society, and it will have an important role internationally.
I do not see—here I am perhaps picking up something that the non-executive directors of the authority have said—that the chairman could act effectively as chairman, bearing in mind his accountability for that body's overall presentation and performance, in a completely non-executive role. Therefore, although I think this goes back to a problem of language, I have some reservations about the amendment.
4 p.m.
Baroness O'Cathain: I feel quite confused after the intervention of my noble friend Lord Stewartby. On the one hand, he said that the chairman and chief executive were as one and that—to put it in my own words—in normal corporate parlance, this was the way it was and it was extremely difficult for them to be separate. On the other hand, he said that the chairman was the person who had to monitor the role of the chief executive. How can the chairman monitor himself if he is chairman and chief executive combined?
I have no experience at all of public bodies, but my experience within public limited companies has been that the separation of roles gives a great deal of confidence to the shareholders. They can be confident that the chairman is really looking after their interests in so far as he or she can and does, together with the board, appoint the chief executive, monitor the chief executive and make sure that everything the chief executive does is in accordance with the policies of the company as a whole.

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I have examined, in anticipation of this set of amendments, what I would call semi-public bodies. I reiterate that I have no experience of dealing with public bodies. I was going through the last annual report of the Personal Investment Authority ombudsman council. I see the noble Baroness, Lady Turner, in her place. She used to be the non-executive chairman of that body. It had a deputy chairman, a council of five members and a clerk. The ombudsman—that is, the person who ran the ombudsman function—reported in, as I understand it. I should have thought that that gave the ombudsman some feeling of security, knowing that if he or she made a bit of a mistake about something there was a strong non-executive chairman with a strong council to say "Do you really think this is the way to do this?".
The real purpose of setting up the Financial Services Authority is to try to make the general public confident about the workings of their investments and enable them to feel assured that they will not be sold a bad bill of goods on investments and pensions where there was all the mis-selling. And now we are talking about mortgages.
Most of the population is pretty financially illiterate. A great deal of confidence would be built up if the public knew that all the power in running this body was not vested in one man. If there are on the board a chairman and chief executive in combined roles, plus other, non-executive, directors, one can bet one's bottom dollar that the power will be vested in one man, and the people around him will not spend a lot of time trying to second-guess or query him. I am afraid that that is the way life works.
Therefore, I have grave doubts. My doubts are not at all about Howard Davies. He is a spectacularly brilliant person. I have been very impressed by the presentations he has given. We are not talking about Howard Davies; we are talking about the future of the Financial Services Authority. God forbid that he should ever fall under the proverbial No. 11 bus. There might be a real problem if we then had someone who was nothing like as brilliant, and perhaps did not have the same level of integrity, if the roles were combined. Therefore, we must give the matter a great deal more thought.
Lord Phillips of Sudbury: I should like to say a few words in support of the amendment moved by my noble friend Lord Newby, particularly in relation to public confidence, a matter touched on by the noble Baroness, Lady O'Cathain. Public confidence will be absolutely crucial to the Financial Services Authority. Even more important than general public confidence is the confidence of the sector over which it will have total—some might say totalitarian—powers under the Bill. That confidence is more likely to be achieved by having a chairman and chief executive. If the chief executive's title is director general, I do not mind.
One can only speculate about these things, but I am sure that there will be much more likelihood of general confidence in the carrying out of the FSA's difficult
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tasks if the roles are split. It is a quasi-judicial body. It is not one that requires the supreme brilliance to which the noble Baroness referred; it needs steadiness, fairness, balance and prudence. I believe that they will all be better delivered if the amendment is passed, together with the amendment in the name of the noble Lord, Lord Kingsland.
Lord Boardman: I have some sympathy with the amendment. I am reminded from time to time that what we are discussing is outside the Cadbury rules which apply to commercial companies. I believe it appropriate that the rules that guided Cadbury should also guide this body, which will be a very significant organisation.
It is very important that there should be a separation between the chief executive and the chairman. I like the suggestion in a later amendment, Amendment No. 12, that the chief executive should be called the director general, which would be fitting.
The chairman's role is quite distinct from that of the chief executive in any organisation. The chief executive is the hands-on man, and the chairman, whether or not he is called non-executive—I imagine it will be a whole-time job in any case—has to deal with other issues: shareholders, the public purse, which is paying, and so on. It would be most unfortunate if these two roles were combined. There is also the position of the non-executive directors, who have to form the majority of the board. Under the Bill, it is rightly intended that they should have very considerable powers in looking after things, seeing what is happening and eventually giving guidance. The non-executive directors would be able from time to time to discuss with the chairman their satisfaction or any worries they might have about the running of the business. That would be a very difficult task for them to fulfil if the chairman was also the active chief executive.
When the noble Lord, Lord Newby, read out the views of the independent directors to a combination role, I found his criticism of them quite valid. A very weak case was put forward for combining the two roles. I know that there is concern about the position of the chairman/chief executive, Howard Davies, who has done brilliantly. It is generally acknowledged that he has done a first-class job. However, I believe that he would be helped if there were a chairman to deal with external matters while he continued his magnificent job with a title, however it may be described. Therefore, this amendment has some attractions to.
Baroness Turner of Camden: The noble Baroness opposite referred to my role as chairman of the PIA Ombudsman Council. That was a very different sort of body from the FSA and I do not believe that one can make a relevant or appropriate comparison.
One must take on board the fact that the present FSA non-executive directors feel very strongly—and I have met them and had discussions with them—that the present arrangements work extremely well. If the set-up is working well, particularly if arrangements are made so that the structure is flexible enough to be

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amended in the future if it needs to be, it would be very disturbing and not a good idea at all to alter the structure now in the way that is proposed this afternoon. There is a need to look very carefully before one starts disturbing a structure where everybody is happy with it and feels that it is working extremely well.
The non-executive directors say—and I agree with them—that the analogy with company governance is not appropriate. There the objective is to represent the interests of shareholders, as the noble Baroness said, rather than, as here, accountability through government to Parliament in the public interest. We must bear that in mind. Therefore, I am not in favour of the amendment which has been moved this afternoon.
4.15 p.m.
Lord Alexander of Weedon: I share the view of the noble Baroness that, so far, the Financial Services Authority has done a remarkable job, not least because it has done it without any statutory underpinning whatever. But I feel that when we are giving it statutory underpinning which should last well into the future, we should address the matter not merely as a matter of whether it has worked under a remarkable chairman but we should consider also what is the right form of governance as it goes ahead.
What concerns me about this issue principally is that it is a very strong body. It has a rule-making power which is not to be subject to control by Parliament. As has been said, it is the financial services authority with the most wide-ranging responsibility and powers of any such body in any country in the world. As such, I believe that it should have both a chairman and chief executive in normal circumstances.
I accept entirely that there should be flexibility for situations when the roles are held by the same person. With my noble friend Lord Stewartby, I sat on the board of the Securities and Investments Board, and for three years I was its deputy chairman. The Securities and Investments Board then had a chairman and a chief executive. The chairman was responsible for strategy, its external role, key on-going issues and overseeing the activities of the chief executive. I totally share the view that the role of the chairman of a financial services authority cannot sensibly be non-executive. Such a chairman, if non-executive, would not be in a position to have enough influence within, nor, indeed, knowledge of the working of, the authority. Nor, in my view, would such a chairman have the ability to represent the organisation in international organisations with effective standing.
I know that it is easy to jest about the issue of the precise standing of a person in those international gatherings, but in those gatherings people accumulate, almost osmotically, a particular influence which goes with, to a considerable extent, the power of their role in their organisation. I have no doubt that the chairman of the FSA should be executive and should have the authority to represent the FSA abroad.
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But at the SIB I saw two things. First, undoubtedly a chief executive was necessary to carry out those functions which even the most tireless chairman could not sensibly carry out across the board—as my noble friend Lord Boardman said, to be responsible principally for operational issues within the organisation itself. I believe that it is somewhat esoteric to suggest that where one has a combined chairman and chief executive, the non-executives can easily act as a total counterpoise to a strong person holding that authority.
I believe also that the organisation should have, among the non-executives, a vice-chairman. I have no doubt that those organisations which have pressures on them in relation to their standing and authority need, as well as their fully internal officers, outside non-executives with the stature and the clout to stand back from the issues in order to avoid the organisation being in too much danger of internalising or looking to its own position. He can stand somewhat at a distance to comment on what the organisation does. That is not in any sense to multiply employment. I believe that the FSA, as such a powerful body, should have what many large companies have—a separate executive chairman, chief executive (called "director-general", if you will, if there is some semantic reason for doing so) and an independent vice-chairman leading the non-executives. I really should like to see a combination along those lines in the Bill.
On Second Reading, the Minister said that the Bill did not preclude the appointment of a separate chief executive. The noble Lord, Lord Borrie, in his intervention, somewhat teased—I hope I know him well enough to put it that way—the noble Lord, Lord Newby, along those lines. He said that this is an unnecessary amendment. I do not believe that that is right. It is not enough to say that the Bill does not preclude the appointment of a separate chief executive. The need for a separate chief executive, granted that the posts may occasionally be held by the same person, should be made explicit so that it should be seen as the norm. I strongly support a package of amendments which would, as the noble Lord, Lord Phillips, said, give very considerable confidence and comfort to the balance of powers in this very important organisation.
Lord Eatwell: The noble Lords, Lord Newby and Lord Alexander, have made speeches which I found very convincing. They convinced me that they were both wrong.
I want to leave aside the issues of the particular characteristics of corporate governance and even the issue of the significant powers which the Financial Services Authority will have because the main issue is the characteristics of this organisation as a financial regulator.
The key role of financial regulation is the management of risk—risk which can escalate in a matter of minutes or hours, not over days or weeks. Such risks can pose great dangers to the financial system of this country and, therefore, to the economy

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as a whole. In those circumstances, there is a peculiar need for extreme clarity in the positions taken by the leadership of the financial regulator.
The noble Lord, Lord Newby, referred to a committee meeting; the committee consisting of the Chancellor of the Exchequer, the Governor of the Bank of England and someone representing the Financial Services Authority. One presumes that he had in mind the memorandum of understanding between the three organisations which establishes the relationship between them for the management of the economy when it is in extreme peril. But the noble Lord, Lord Newby, would not leave our three leading figures to manage the economy in a period of extreme difficulty. He would happily dilute that committee. He would include the chairman and the chief executive. He would have the Chancellor of the Exchequer bring along someone else to back him up.
It is in precisely those circumstances that a decision-making body needs to be clearly defined as having the real authority to make crucial decisions at the time. That cannot be a chairman who has only a strategic role; nor a chief executive who has only an operational role. It must be someone who has strategic and operational roles at the same time and who can make decisions in times of extreme difficulty; the decisions which the committee comprising the Chancellor, the Governor of the Bank of England and the chairman or chief executive of the FSA will have to make.
Lord Newby: I hope that the noble Lord will excuse me for intervening. Is he really saying that in a time of extreme difficulty, the Chancellor will take a political decision and execute it, without the Permanent Secretary of the Treasury being in the room? Is he saying that decisions—including those relating to how decisions may be executed—will be taken literally by the three people he mentioned and that no one else with expertise in how such decisions are carried out will be present when the decisions are taken?
Lord Eatwell: The noble Lord should take a lesson from a statement made by the noble Baroness, Lady Thatcher, when she was Prime Minister. She pointed out that advisers advise and politicians decide. At such times, it is vital that the leaders make the decisions. They may have people around them with the skill to advise them, but that is not the point. We need someone who understands the strategy and the operating characteristics of the FSA to be making decisions in times of financial turbulence.
I have been extremely puzzled by the reluctance of the noble Lords advancing the amendment to apply it to the current regime. They have said that they do not want the Bill to be ad hominem, but in fact they do wish it to be ad hominem, because it is not to apply to Mr Davies. If they really believe in what they are arguing, they should argue that there should be a separation now of the chairman and chief executive roles. It is clear that they do not believe in their argument. They are putting forward the amendment as a general attempt to make mischief with the Bill. If
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they really believed in what they were saying, they would present the argument in relation to the current circumstances.
Lord Alexander of Weedon: Is the noble Lord aware of the situation which exists within corporate governance, where it is the norm in the majority of cases for a company to have a chairman and a chief executive, but in some cases, those roles can be held by the same person? If he is aware of that situation, why does he believe that those who take the view that it should apply to the FSA are simply making mischief?
Lord Eatwell: If he really wishes to persist in the position which he has taken so far, the noble Lord will have to answer the following question: can he identify a major financial regulator in the world which is organised in the way he proposes?
Baroness O'Cathain: Those of us who have experience of operating at a fairly high level in corporate governance would find the situation extraordinary. The FSA is now in a strange position. It is actually operating although it has not been given the power to operate. That has been agreed to try to ensure that there is a safeguard for investors and that there is financial regulation. The reality is that the FSA is up and running, despite the fact that it does not have the power to be up and running. Therefore, to cause a problem now may not necessarily be the best thing. I do not believe for one moment that the combined roles should be operating now. I said that there could perhaps be a problem in the future. I believe that I used the phrase, "The spectacular success of Howard Davies". It is quite wrong to keep those roles together.
Lord Jenkin of Roding: The noble Lord, Lord Eatwell, has taken part in many previous proceedings of this House. It is perhaps a little unfortunate that he should describe simply as "making mischief" an idea which has been debated at great length in another place and put forward here with considerable force from the Liberal Democrat Benches. I hope that he may perhaps feel able to withdraw that comment.
Lord Eatwell: Yes, I shall gladly withdraw that comment. It was just a frivolous comment at the end of what I hoped was a series of serious remarks. I hope that it does not devalue the serious remarks I made earlier. I thank the noble Lord for giving me the opportunity to withdraw the comment.
Lord Jenkin of Roding: I am sure that your Lordships will forgive the noble Lord his frivolity.
I find this a quite difficult issue. I have read a number of the papers written on the subject by the authority itself and by others and some of the comments in the newspapers. I have listened with great care to the speeches so far. It seems to me that one begins from the proposition that, although this is a private company, in the sense that it is not a statutory corporation, it is in fact a hybrid. It is that curious hybrid: a private

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company exercising public functions. There are other examples, but nothing with the power, scope and authority that the FSA will have.
The FSA will be the most powerful institution created in peacetime Britain. It is in many respects legislator, investigator, prosecutor, judge, jury and executioner. If one begins with that proposition, one must then examine how one can hold such a body accountable for its actions. How can it operate effectively? I accept the case which has been made that there will be times when that body will have to act swiftly and perhaps quite condignly, if it is to maintain stability. We shall debate later the issue of how to maintain stability in the financial system. I begin from the proposition that one cannot consider the head of the body in isolation. That is only one aspect.
There are a number of later amendments on the Marshalled List relating to the question of a deputy chairman, as my noble friend Lord Alexander mentioned; and to the question of a strong non-executive committee. In my early days, when I moved from politics into one or two commercial posts, I was brought up to believe that the phrase "non-executive" was not liked. One was either a full-time director or a part-time director. Nevertheless, I accept that it has become so much a part of the language of the Bill that I shall use the phrase "non-executive directors". I must say that I like the phrase "director-general"; there is an amendment which deals with that point. It is not just semantics, as we shall see. I like the idea of a powerful committee of non-executive directors, headed by someone—call him the "deputy chairman" if you like—as a body whose authority must oversee the whole of the activities of the FSA. That is not provided for in the Bill as it is worded at present. They are the housekeeping committee, if I may put it bluntly. With the greatest respect to the Front Bench opposite, I do not think we can let that pass. What is the point of having an authoritative, powerful body of non-executive directors if it looks only to see whether it is getting value for money and at matters of that sort? It must have a responsibility across all the functional roles of the authority. We shall come to that. My point is that the chairman and chief executive argument must be fitted into that; it is not a separate, single issue on its own.
I shall listen to my noble friends on the Front Bench and the Minister. However, in looking at the Bill I had come to the provisional view that in the end this must be a split responsibility. Like other noble Lords, I heard with great interest the demolition by the noble Lord, Lord Newby, of the case made by the existing non-executive directors. When a body has such a wide sweep of authority and power to ruin individuals and destroy companies, it must be held firmly to account.
To my mind, splitting the function of chief executive (or director-general) and having perhaps a part-time or "most time" chairman who reports to the hoard seems the best solution. However, having said that, I side with those who say, "It will be sufficient if the Bill makes that possible". I could not take part in the Second Reading debate but I have read it. I understand the noble Lord on the Front Bench said that the Bill
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does just that. Perhaps I may say that it does so silently, by implication. It is not express. There should in my view be an amendment which makes express the fact that that will be an option.
Another factor is the question of review. When one sets up a body with such a huge scope of powers—it is not only the Bill which is immense but the powers—it should be subject to fairly early review. I believe an amendment on the Marshalled List states that that should be considered externally after three years. Whether three years is right, I do not know. One could embark on one form of governance; that is a single chairman and chief executive. I yield to none in my admiration of Mr Davies; I know his personal view on the matter. One has to take account of that. With the greatest respect to the noble Lord, Lord Eatwell, we are not legislating ad hominem; we are dealing with a body in medias res. I am told that the legal opinions to justify setting up the FSA using existing legislation—the 1986 Acts and others—stand as a high pile indeed. Clearly, a great deal of legal confidence was required before that could be done. However, the FSA is doing its job and working. It has an outstanding leader in Mr Davies.
I therefore tend to the view that the right answer is for the combined post to be allowed to continue. It should be subject to review. Whether that is after three, four, or five years is obviously a matter for argument. The Bill should make express provision that the job can later be split. We shall need to look carefully at the powers of the non-executive directors. As I indicated, I believe they are much too circumscribed as they stand in the Bill. We need to consider also the question of procedures for enforcement and the independent investigator. One of the problems of the present structure is that although there may be an investigator, he is still far too much under the thumb of the authority. The whole range of institutions and the features of this institution need to be balanced.
I shall reserve my position until I have heard further speeches. In the end I shall probably come down in favour of keeping Mr Davies as chairman and chief executive, having a much stronger executive board, separating out the investigative function and having a full review by an independent reviewing body, whether or not that is the Comptroller and Auditor General. I believe and support my noble friend in the idea that appointments should be subject to more parliamentary scrutiny, and we shall consider that. The Bill should have an express provision that the function should be split later. One cannot write into a Bill—or it would be difficult—the presumption that it would be split later. We simply cannot guarantee that we would have somebody with the remarkable talents of Mr Davies to take his place.
That would be a balanced package which I would support. I hope that that may commend itself to the Committee.
4.30 p.m.
Lord Grabiner: There are those who subscribe to the view that there is no such thing as a free lunch. I should, perhaps, disclose the fact that I was entertained to lunch by the FSA in February. As far as I was concerned, it was a free lunch.
This is a classic debate about form versus substance. I believe that substance is invariably the more important of the two. In relation to the question of form, I make five bullet points. I intend to be brief. First, the Cadbury approach would no doubt be more appropriate if the FSA was a public company with a body of shareholders. It is not a company but a statutory corporate body. It has no shareholders. The Cadbury analogy is completely irrelevant.
Secondly, the FSA is structured in a way which will ensure a clear line of responsibility and accountability from the FSA chairman to the Treasury. That is unlike any public or private company structure that we ordinarily find in our law. The mischief aimed at by the Cadbury code is simply not appropriate in these circumstances.
Thirdly, Schedule 1 to the Bill provides that the majority of the members of the governing body must be non-executive. The schedule also provides for a committee of non-executives. They will have a chairman appointed by the Treasury. My understanding is that the chairman of the non-executive group will be the vice-chairman of the FSA; and, indeed, he is a distinguished Queen's Counsel experienced in commercial matters. It goes without saying that the chairman and his vice-chairman will inevitably consult together on a regular basis. The idea that this whole enterprise will be run by Mr Howard Davies as some sort of private fiefdom is ridiculous.
Lord Elton: I thank the noble Lord for giving way. It is wholly unfortunate that an individual should be constantly named in this debate. We are trying to build something to last possibly 50 years. We should look at the problem and not the people.
Lord Grabiner: I entirely agree, although why I should be picked on as the target for that point I do not know. I agree with the noble Lord and I shall refrain from mentioning the gentleman's name again.
The non-executive committee will have wide ranging statutory functions and duties which are also provided for in the first schedule. These arrangements are novel and substantial. As I said, they render the debate about Cadbury irrelevant.
Fourthly, there is nothing in the Bill, still less in Schedule 1, which would prevent the authority at some future time adopting a split function of chairman and chief executive if, in the light of developing experience, it were thought necessary to do that. In my view, that is the short answer to a great deal of the formalistic debate which arises on these proposed amendments.
Lord Jenkin of Roding: I thank the noble Lord for giving way. Is it his impression that that paragraph of the schedule was drafted with that in mind, or is it only
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that the words used happen to be able to be relied on to answer the arguments? If it was intended, why was it not stated explicitly?
Lord Grabiner: One thing I have learnt over many years as a lawyer is never to speculate over what was in the mind of the draftsman of a document. He probably would not know the answer himself. However, I suggest that the language of the schedule is sufficiently flexible to permit the structure which, in effect, these amendments are seeking. Nothing in the schedule would inhibit or prevent that structure from being introduced at some time in the future without the need for primary legislation.
My next point is that, under the proposed structure, it is important to appreciate that the executive chairman, whoever he may be, will have no role to perform in the disposal of enforcement cases. There will be a separate enforcement committee which will be chaired by a legally qualified person. The committee will decide the key questions, such as the charges to be laid and, in due course, the penalties to be imposed and other matters of that kind. Noble Lords must not assume that the executive chairman will be bogged down with all kinds of detailed matters which, if that were the case, would inevitably impede his ability to exercise his judgment in relation to strategic matters and leadership issues, which noble Lords on both sides of the debate regard as being of overriding importance.
I have said a few words about the form of these arrangements. However, as I have already indicated, what really matters is their substance. What really matters is the calibre of the people who will run and staff the FSA. Since everyone agrees that the chief executive is the right person for the job, I suggest that we should let him get on with it without more ado.
Lord Fraser of Carmyllie: Like other noble Lords, I was somewhat taken aback by the black-and-white terms in which the noble Lord, Lord Eatwell, addressed this difficult issue. It certainly does not reflect either the evidence or the debates that we had in the Joint Committee under the noble Lord, Lord Burns, either in public or in private. I believe that this is a difficult issue and one that needs to be understood in relation to the variety of models about which we have heard. On the one hand, we have had the Cadbury proposal. I am bound to say that, given the structure that is required for the FSA as a company under the Companies Act, to dismiss Cadbury out of hand seems to me to verge on the cavalier.
On the other hand, we appreciate the arrangements within the Bank of England. I do not believe that there is anyone on this side of the argument—and not necessarily only those on this side of the House—who does not want to see those at the head of the FSA enjoying powerful responsibilities and positions in the country. I would trust that in the future they would be more than confident that they could take on the Chancellor of the Exchequer or the Governor of the Bank of England. For that reason, I believe that we need to look at this very carefully indeed.

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Furthermore, I do not believe that there is a good argument for saying that, if we were persuaded of the desirability of separation, we should be arguing the case in relation to Howard Davies himself. I hold him in very high regard, but that is not any part of my argument. As I recollect our discussions and what is contained in our report, we had an objectively valid reason to advance for retaining Howard Davies in a combined role at this time. Indeed, as the Explanatory Notes to the Bill dictate, no fewer than six bodies are to be drawn together into this one authority, setting aside a number of SROs that are also to be included within it. It seems to me that there is a different function to be performed when such bodies are to be melded together into a single organisation. For anyone who knows anything about the FSA at the present time, it must be clearly recognised that that has indeed proved to be a difficult task and one that I hope is now being accomplished successfully. I do not believe that it can be said that we are being inconsistent in our approach.
Without inviting the Minister to respond to me immediately, I should like to pursue one separate line of inquiry because it would tip my personal opinion one way or the other. As I understand it, it would be either a matter of expectation or requirement on the part of the FSA, as it looked at the recognised investment authorities in the City, that that separation between chairman and chief executive should be maintained. If it is the expectation or requirement that such a division is to be pursued, because such RIAs have responsibility for much of the regulatory functions of the FSA in a devolved fashion, it strikes me as rather startling that the "super-regulator" would not have such a separation of responsibilities, but would require all those at the second level to maintain such a distinction, whether they were mutualised or demutualised organisations. If I am wrong about that, I hope that the Minister will either say so now; alternatively, perhaps he will write to me. That would be helpful because if there is such an expectation or requirement, that would seem to me to be a compelling reason for requiring the same kind of separation within the FSA itself.
4.45 p.m.
Lord Burns: I find myself in considerable agreement with what has been said by the noble Lord, Lord Jenkin of Roding. As the noble and learned Lord, Lord Fraser of Carmyllie, has pointed out, this is not a black-and-white issue; rather, it is quite a difficult issue. We spent a good deal of time debating it in the Joint Committee.
As a number of noble Lords have pointed out, the FSA is a big and powerful organisation. I happen to believe that that is right and appropriate, given its responsibilities. Furthermore, I believe that it is right that we should have a single regulator. However, it means that we must think carefully about the governance arrangements. The noble Lord, Lord Fraser, also pointed out that the Joint Committee came to the view—although many different opinions were expressed in the course of our debates—that, on
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balance, it understood why the roles of chairman and chief executive had been combined in the early stages of the existence of the FSA. Indeed, that was helped by the appointment of a senior non-executive director as deputy chairman. However, in the end we decided that, in the longer term, it would probably be sensible for the posts to be separated so that there would be both a chairman and a chief executive.
It was a difficult balancing act and we were concerned that we did not wish to do anything to undermine the position of Howard Davies. In this case I make no apology for mentioning his name because we were in the early stages of setting up an important organisation and it was vital that nothing was done to destabilise that position. However, we also accepted the argument that it was right not to limit the power and focus on a single individual and that, if possible, moves should be made to enhance the position of the non-executive directors.
For various reasons the Government did not accept that recommendation—it was one of the few recommendations that they did not accept. They stated that they were happy with the present arrangements and did not wish to change them. They also put forward their argument on the importance of establishing a direct line of accountability to Treasury Ministers from the senior executive of the regulator. I can understand their concerns here, because even it' in the longer term they do see the merits of splitting the post, it would be highly disruptive to make an issue of it at the moment. It would then hang over the organisation at the point when we are trying to specify what the position should be, either after Howard Davies or at some later stage. I would be worried, not only in terms of the individual concerned but also because of the danger of giving the impression that we now have in place an organisation which is in some sense wrong, inappropriate or deficient. That would not broadcast a good message to the world.
So, while I continue to come down on the side that in the longer term a different organisation would be sensible, I question whether we need to include this in the legislation and to be quite so specific at this stage. Perhaps the situation could be left as one where a variety of different organisational structures might be possible.
Apart from the conventional corporate governance arguments, it is also a question of the type of individuals available to do the job. Although I am a great admirer of Howard Davies, I do not want to fall into the trap of concluding that he is irreplaceable. Nevertheless it is important to recognise that sometimes one must design organisations in terms of the responsibilities to be placed on the people who are available.
My preference remains, in the longer term, for the job to be split. But I do not want to create a situation where the present arrangements are deemed inadequate or flawed. That leads me to feel that we should not legislate in the detail being put forward for the alternative model. We should have a situation where the Bill leaves open whether or not the chairman

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should also be the chief executive. The noble Lord, Lord Borrie, pointed out that the Bill does that. The noble Lord, Lord Jenkin, pointed out that it may need to be slightly tailored to give a clearer indication that other arrangements are possible. One can then look at this in the longer term, both in relation to the responsibilities and how the organisation develops, to see what is the right organisation.
This has been an interesting debate on a difficult issue. I have come to the view that we do not need the detail of the organisational structure contained within the legislation. I should prefer the Government to indicate that they feel other arrangements can work and that they are not wedded to this model for all time; that they are willing to look at changing the way it is run according to the circumstances. Perhaps they can give an indication that over the longer term we shall have something which involves more of a division of responsibilities. However, we could get ourselves into a great deal of trouble if we try to design in detail an organisational structure which may have to face circumstances we cannot envisage at this point.
Lord Faulkner of Worcester: I am grateful to the noble Lord for giving way. Perhaps I can ask him this. The non-executives on the FSA board published a response to the excellent report of his Joint Committee. Would the view of the Joint Committee have been different, given that he described how finely balanced the debate was on whether or not the two posts should be split, if it had had the benefit of the non-executives' advice during its consideration of this issue?
Lord Burns: My view would not have changed. The response might have been, "They would say that, wouldn't they?" I am not sure that that is necessarily the group of people from whom at this stage one would be wanting to take advice in relation to the organisation in the longer term. I do not want to give the impression that the debate was that finely balanced. We came down clearly on the side that in the longer term this was probably not the right organisation. Moreover, I have some doubts, as the noble Lord, Lord Newby, pointed out, in relation to the specific response we had from the non-executives.
Lord Peston: I did not speak at Second Reading on this matter, not for my usual reason—namely, that there was an important football match to be watched—but simply because I felt that this was a Bill that was substantially correct in all its forms and I did not see the point of wasting 15 minutes of your Lordships' time in saying that. However, I intervene now because we are getting down to the detail.
I too admonish my noble friend Lord Eatwell for suggesting that these amendments are mischief-making. He dealt with the matter admirably by pointing out that the immense benefit of the amendments is to demonstrate without any doubt how right the Bill is as drafted and how wrong the amendments are. It is not mischief-making; it is
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immensely helpful for these amendments to be tabled so that they can be demolished in the excellent way that they have been so far.
My noble friend Lord Borrie called into question certain issues—it sounded more like a demolition of the amendments—but said that the Bill is very clear. A majority of non-executives will meet as a committee. Unless they meet as your Lordships' House meets, they will have a chairman. I should have thought my noble friend would pursue the role that several Members of the Committee said they would like to see.
I am not as enamoured with modern theories of corporate governance as are many other Members of the Committee. Having been the kind of chairman whose main role was to act as psychiatric adviser to the chief executive or to organise dinner parties, I am not persuaded that chairmen have such a marvellous role. I am also a good deal less enamoured, having been one on more than one occasion, of the merits of the non-executives. That thinking is out of fashion these days and people emphasise that what we need in running firms is someone to actually run them.
But as this will be an enormously powerful body—it is right, as my noble friend said, that it should be powerful—we need at the top a powerful executive figure with full responsibility; one who shows leadership and does exactly the job set out in the Bill. The benefit of the amendments is that we are able to elucidate that. The noble Baroness, Lady O'Cathain, raised the matter and for once I am puzzled by what she said. Normally in these areas she says things with which I totally agree. However, she said, "Suppose we appoint the wrong person". That is always a problem. The answer is, first, do not appoint the wrong person; secondly, have a mechanism for getting rid of the wrong person, but do not have two posts solely because one of them might be filled by the wrong person.
Baroness O'Cathain: I thank the noble Lord for giving way. That is not the sole reason for having two posts. He knows that perfectly well. He is just trying to goad me, as is his normal role. Perhaps I can add, as an aside, that I happen to serve in an organisation of which he is chairman, and he does not act as a psychiatrist; he acts as an autocrat. I know that he will take that in the best possible way.
The reality is that one of the roles of a chairman is to appoint the chief executive and to make sure that the chief executive carries out the wishes of the board. The chief executive is, of course, on the board, but it is a useful stopgap for the board to have on it somebody who is appointed by the board for the benefit of all the stakeholders. I take this brief opportunity to say that I am not saying that company boards—corporate governance is the in-thing at the moment—are there solely to look after the interests of shareholders; they have a lot of other "stakeholders", such as the staff, the general public and the good of the country. The noble Lord is trying to simplify what I said and perhaps I used too much shorthand.
Lord Peston: I apologise to the noble Baroness. I should never have provoked her; her intervention has been longer than the whole of my speech.

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I believe that the Bill is right. I remind the Committee also that my noble friend Lord Eatwell emphasised what no other speaker emphasised; that is, that the FSA exists for a reason. That reason involves the serious problems of management of risk and fundamental underlying economic problems. We are not discussing an academic issue of corporate governance; we are discussing a body which must have the power to deal with—we hope that it will not happen—a potentially major, catastrophic, risk-like event hitting our economy.
Finally, I turn to the amendment of the noble Lord, Lord Kingsland—
Lord Phillips of Sudbury: I am grateful to the noble Lord for giving way. I simply wanted to ask: is it not the basic duty of a board to decide how it will deal with those emergencies? Boards decide that every day of every week of every year. Why does the noble Lord feel that if we have a chairman and a director-general, they will be incapable of arriving at a clear line of authority to deal with emergencies?
Lord Peston: I know of no organisation in this country, particularly within the private sector, that will remotely face a potential catastrophe, which we hope will not happen, such as that which the FSA may have to face. We require a single person at the top to show the leadership, the control, and of course to have the organisation organised to cope with such an event. But we are dealing with a specialist issue, which is why I quoted my noble friend.
Perhaps I may now turn to the amendment of the noble Lord, Lord Kingsland, unless he has decided that he does not want it debated with this group.
5 p.m.
Lord Kingsland: Before the noble Lord turns to me, I want to turn to him with respect to the remark that he just made about the FSA facing a "catastrophe". It is very interesting that the one responsibility that does not feature in the objectives of the FSA is that of dealing with systemic risk. So if the authority were faced with the catastrophe that the noble Lord talked about, it would not be entitled to deal with it.
Lord Peston: As I understand it, this is a matter that will emerge during the course of this Committee stage precisely in terms of an amendment. That is why it is there. I know that it is incredibly boring of the one or two of us who are economists to raise economic matters when the rest of the Committee would much rather discuss things like corporate governance and non-executive directors, but the organisation exists for an economic purpose, not for its own sake. That is the point I am trying to make.
Finally, I hope that it is still in order for me to turn to Amendment No. 9A. I shall simply say that I disagree with it. My disagreement starts with the problem that the noble Lord, Lord Kingsland, obviously had. The noble Lord referred to the House of Commons Treasury Select Committee and your
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Lordships' House, but the amendment does not mention the latter. It does not do so for a very good reason; namely, that we do not have a committee—though some of us hope one day we will—that could do the job in the first place.
However, that is not my main objection. I accept the remarks made by many noble Lords—certainly those speaking from the Opposition Front Benches—about the problem of parliamentary accountability. Indeed, I am very concerned about that. But, in my judgment, the amendment is not about parliamentary accountability; it is about how to make a mess of the process of appointment. If we consider, not ad hominem but purely hypothetically, the sort of people about whom we are talking and do so entirely within the context of how we normally make such appointments in our country, the notion that those people of standing who we hope will come forward would not merely be sent for by the Commons Select Committee to be queried and interrogated but would also have their appointments confirmed by such a committee seems to me preposterous in the highest degree.
I am able to think of other possible heads of this body; indeed, it is not a case of only one entering into my mind. The sort of people of the standing I have in mind would, of course, be honoured to come before your Lordships' House, but that is another matter. However, to go before the Commons Select Committee with a view to one's appointment being confirmed—meaning, of course, that it may not be confirmed if members of that committee decided that the person was not good enough—seems to me a completely mistaken idea.
I am not for one moment suggesting that the noble Lord is wrong to raise the question of accountability of this body, as his noble friend did on Second Reading. Indeed, that does intrigue me. However, I do not believe that this proposal would give us accountability; it would just mess up the whole question of how we can get first-class people to work in quasi-judicial bodies. You just do not do it in this way.
Lord Desai: I do not have a hymn sheet, so I shall disagree with many of my noble friends. I had intended to speak only on Amendment No. 9A because I very much welcome the proposal. It is a profound defect of the constitution that it is very undemocratic. Whenever one tries to introduce democratic accountability, everyone says, "Nobody who is any good would appear to be scrutinised by a public body because it is simply beneath his dignity to do so". But it happens in the United States all the time. Alan Greenspan, who probably has more to do with "financial catastrophe" than anyone else, has to appear in order to be confirmed in his appointment.
I am sure that the whole debate on this point will be absolutely fantastic. Clearly, as there is only one Howard Davies, it will be difficult to clone him. Indeed, whoever appears the next time will be equally "unclonable" and will be too valuable to lose just by rude questioning from MPs, or even from members of a committee of this place.

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If this is an important issue, it will touch the lives of many people. In that case, it is very important that the person occupying that office should be publicly scrutinised. Everything that people say about the importance of the FSA and its head convinces me that we now have a chance to make a real constitutional innovation. I wish that happened on every appointment, including that of the Governor of the Bank of England, and so on. The noble Lord, Lord Kingsland, and I have had other democratic outbreaks like this, but they have been firmly put down, as no doubt this proposal will be. Indeed, we shall probably be "sent off" and put into a corner.
As regards the big question, I do not see why we cannot, in principle, give the person concerned two titles. The transition problem would therefore be solved. We could call Mr Howard Davies "chairman and chief executive". I do not know what he is called at present, but that title means that it would be possible in the future for those two offices to be occupied either by two separate people or by one person. It would depend upon whom we get.
Lord Haskel: That is what the Bill does.
Lord Desai: It does not say so explicitly; otherwise we would not be having this discussion.
I am aware of the "Borrie" solution, which I believe to be very subtle. However, as I read Schedule 1, I do not see why we cannot put this in writing and make our law slightly more readable and understandable by normally intelligent people, like myself, rather than leaving it obscure. I am sure that the answer will be, "It is all there, if you only look for it"—just as accountability is there, if one looks for it. Some people may say, "You are just ignorant; you are not part of the club. If you were on the inside you would know this, but you are outside. Therefore, you should not be here". I very much dislike that. Let us be explicit; let us be open and flexible. If it is necessary to have one person occupying two offices, that is fine, but it is possible that we will have to have two people occupying them. I do not really understand the problem.
Lord Elton: I believe it is my lack of qualification that qualifies me to speak in this debate. I have less experience of the financial industry than almost anyone else in this Chamber. Therefore, as a member of the public, I think that I should remind the Committee that we ought to be considering the nature of the animal that we are creating and trying to control. It is hugely important and powerful. It is subsuming large parts of the power both of Parliament and, I have to say, of the judiciary. It can extinguish the financial lives not just of individuals but also of large companies. Moreover, it can pry into the most intimate affairs of any organisation under its purview. Indeed, we shall discuss later the powers with which it can follow up what it has discovered—
Lord Jenkin of Roding: It is my recollection that, for a brief and somewhat turbulent period in its life, my
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noble friend was chairman of FIMBRA. I cannot remember what those initials stand for, but my noble friend has actually had personal experience in this matter upon which he should be able to draw.
Lord Elton: I shall be able to draw on that small experience a little later. However, from the outside, this leviathan is a fearsome creature. While controlling the whole of our financial industry, which is responsible for a great deal of the wealth and well-being of this country, it will also be capable of changing the circumstances under which the rest of us will live as a result of the decisions that it makes. So the decisions that we are now making are not unimportant. The concern of the average man and of the average—dare I say it?—voter is that it should not be an uncontrolled power unto itself and that it should not have duties that are beyond its ability to discharge.
I now turn to my brief and "turbulent" time as the chair of the Financial Intermediaries, Managers and Brokers Regulatory Association. I am not at all surprised that my noble friend could not remember the full name. I recall being a chairman with a chief executive. It seemed to me then that my experience as a Minister of the Crown was being duplicated and that anyone working under the pressures that will apply to those people whom we are now considering will, to some extent, be polarised. Those concerned will either be looking down at the regulated or out at the affected; in other words, they will either be looking at the enforcement of policy or at the effects of policy. If the policy is not properly enforced, the system will break down, the public will be let down, and the administration will have no result.
It seems to me that from a human point of view one normally needs to have two people to occupy those two positions and to hold them in tension with each other on the same board and with mutual regard. That works. It is not a recipe for disaster when catastrophe threatens. No Secretary of State is shy of having his Permanent Secretary with him in a moment of crisis, and no chairman need be shy of having his director-general with him in a crisis. But those outside need to see something which they believe can work, and not merely something that the Committee has been persuaded can work. The institution provided for giving public reassurance is Parliament itself.
Like the noble Lord, Lord Desai, whom I shall hasten to pick up if he is put down, or bring from his corner if he is put into it, I feel that Amendment No. 9A is an important one. I am not quite sure that my noble friend has it right, but I do not want to see Parliament push this great "Titanic" out with the danger that we shall all sink in it because we then have no control whatsoever over where it goes. The noble Lord who has introduced the amendment we are discussing has done us a service in drawing attention to where the true stresses lie. I was encouraged to hear that the noble Lord, Lord Burns, was, on the whole, of the same mind, until he answered a hypothetical question. That was a lesson in not answering hypothetical questions in debate! However, until that point he appeared to be on the side of those who favour

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these amendments. He introduced the idea of a change at a later date. I think that the noble Lord, Lord Desai, has put his finger on the matter. There is no reason why there should not be a change now and yet the present circumstances be left undisturbed. The Committee is anxious that the transitional body should not be fatally disturbed. All we are doing is asking one person to carry two names; that should not result in schizophrenia.
Lord Richard: I had not intended to say anything and I shall be extremely brief. I have listened to the whole of this argument but, the longer it has gone on, the less I have understood it. I thought that I understood it when the noble Lord, Lord Newby, started it. I thought that I understood it when one or two people opposed it. However, having listened to the noble Lords, Lord Jenkin and Lord Burns, and then having listened to what the noble Lord, Lord Elton, has just said, I find myself totally confused. The proposition seems to be that the post ought to be split and that there ought to be a chairman and a chief executive, except for now when it is important that the two posts should be operated by one individual. If I think about that for a moment, that seems to me to be saying that the ideal structure when things really matter is the existing one, where the post comprises one person, but that for normal working, the posts should be separated. I do not understand that.
Viscount Bledisloe: I ask the proposers of these amendments two questions. First, does the noble Lord, Lord Newby, accept that if his amendment is passed, it will not be possible to do what the noble Lords, Lord Alexander and Lord Elton, suggest; namely, sometimes having the post comprising one person and sometimes having two separate posts comprising two people? Secondly, if his amendment is passed, it will be necessary always to have a separate chairman and a separate chief executive, except at such times as there is a temporary vacancy. However, one could not say that for the next five years "X" is to be chairman and chief executive. I suggest to the noble Lord, Lord Newby, that that is the true position and that the compromise of the noble Lord, Lord Alexander, may be a wonderful one, but it is not an argument in favour of this amendment.
I now address the noble Lord, Lord Kingsland, and ask him the question that he asked the Minister earlier. Is there any precedent—and, if so, what—for the idea that posts of this kind will be subject to the appalling American practice of confirmation by the legislature, which has meant that in America only third-rate people are prepared to take jobs of this kind?
5.15 p.m.
Lord Hambro: If I may say so, in the FSA we are creating a kind of monster. As has been reiterated many times, it has powers far beyond anything which we have seen before in the financial services industry. Most of the powers of the Bank of England, the Department of Trade and Industry, and other units of enforcement, have been removed and directed to the
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FSA. When the crisis arises—as it inevitably will—in the years ahead, how will the FSA maintain the greatest credibility? The FSA will be a new instrument, a new body, in the eyes of people in this country. It will also be watched carefully internationally. My noble friend Lord Kingsland mentioned the word "systemic". If there is a systemic breakdown, it is important that everyone should consider that the FSA has the power and the wisdom to control the situation. I should have thought therefore that initially it is important that the position of the chief executive and that of the chairman—whoever they may be in the future—should be separated.
Lord Saatchi: The Committee owes a debt of gratitude to the noble Lord, Lord Newby, because he has introduced what is obviously an important issue on which many Members of the Committee have expressed important thoughts. It is, after all, an issue on which the committee of the noble Lord, Lord Burns, spent many hours and on which it made a specific recommendation which the noble Lord, Lord Newby, has tried to address in his group of amendments.
I hope that I may explain why many of my noble friends have concerns about this aspect of the Bill. The issue that those outside the Chamber have brought to my attention and on which they have expressed concern is the very issue that we are discussing. Many practitioners in the City are deeply concerned that the first step that is being taken is to create a powerful body and that the second step will be to create a powerful executive at the head of that body. I hope that my noble friend Lord Elton will allow me to mention the name of the present incumbent again. As the noble Baroness, Lady Turner, said, it is no part of our aim to create disruption in a body which has worked well. Some of us have said that it has worked spectacularly well. It is a minor miracle that the FSA has been able to operate without the underpinning of this legislation. That is a great tribute to its board and to its present chairman. As I say, we believe that it is important not to cause disruption.
However, I reiterate what many of my noble friends have said; namely, that it must be the object of this Chamber to look ahead and to prepare legislation to underpin the working of the FSA for 15, 20 or 50 years. If Howard Davies is listening to, or watching, the debate, or will read the debate in Hansard, I should like him to know that I and all my noble friends have great respect for him. We do not fear him, but rather his potential heirs and successors.
I had difficulty with some of the Government's arguments—many of which the noble Lord, Lord Newby, reiterated—against splitting the two jobs. The first argument that the Government put forward was that having a separate chairman and chief executive would create confusion as regards who would attend certain meetings. It has been raised as an issue that it would not be clear who would attend the tripartite committee on financial stability, a very important body on which the FSA is represented along with the Bank of England and the Chancellor of the Exchequer.

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The Government have also said that there would be other uncertainty about who would attend certain meetings. There are apparently regular meetings of regulators from different countries and the Government are concerned that people would not know who to send. I must agree with the noble Lord, Lord Newby, that it ought to be possible for sensible people to decide who would attend such a meeting. For example, it may be possible to agree that the chief executive in a split role would be the appropriate person to attend these meetings. He is obviously the executive with operational control. Certainly that would be the case in a private company. The chief executive would attend those types of meetings.
That brings us to the heart of the Government objections to splitting these roles. The Government say that the FSA is not a private company. That is why the Government say it is not appropriate to apply the Cadbury or combined code guidelines of corporate governance to the FSA. That is the heart of their argument. I quote the Government in saying they are,
"mindful of the fact that parallels with other models of corporate governance are not exact".
What they mean by that is that the FSA is not a private company. It does not have shareholders.
It is certainly true that the FSA is odd in form, as the noble Lords, Lord Grabiner and Lord Jenkin, have said. Despite the fact that it exercises public power on behalf of these Houses of Parliament, it takes the form of a private company limited by guarantee. Tim Herrington of the City law firm Clifford Chance explained to the committee of the noble Lord, Lord Burns, that:
"The legal structure chosen for the FSA creates challenges in establishing clear accountability arrangements. It is a hybrid; a private body exercising public functions".
It is true that in any normal private company accountability of those in power—in other words, the executive directors—is achieved because the board of directors reports to shareholders who can remove them. The FSA, as the Government say in this argument, has no shareholders. Therefore, how is accountability of the executives to be achieved, and to whom?
This question has led to the wide and consistent calls, which the noble Lord, Lord Newby, has reflected with this group of amendments, for the role to be split in order that an independent chairman can provide a dispassionate view of the performance of the executives. What the critics of the present set-up are driving at is what they see as the advantage in principle in any organisation of having a chief executive, however good he is, who also has a chairman to whom he must answer. They say that the advantage of having the two is a general advantage of good governance and would apply to any type of organisation, especially so when setting up a very large and complex organisation such as the FSA.
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The City—those regulated by it and those outside it—would then have in the chairman, as they see it, someone whom they can approach with their anxieties but who, if he is not instantly responsible for the issues, can take them up with the chief executive in order that the whole system can be seen to work better. Those noble Lords who have expressed anxiety about what this would mean in terms of the running of the FSA might consider this point.
A good example of how this works in practice is the BBC. I am sorry to see that the noble Lord, Lord Birt, is not in the Chamber. However, I think I know his views. This is exactly the type of situation that the critics of the present set-up are concerned about. If, for example, the BBC were accused of political bias of a serious nature, or if it were accused of some gross invasion of privacy, or if it were accused of not meeting its programming obligations in a major way, then it would be clear that someone other than the executive responsible for the allegedly offending decisions would become the court of appeal. That person is the chairman of the BBC. The structure works perfectly well and we all believe that the BBC is an icon of how organisations should be run with the public interest in mind.
Lord Haskel: Is it not the task of the practitioner panel to bring it to the attention of the chairman or the directors of the FSA if the City has concerns about some of its activities?
Lord Saatchi: Yes, it is. Unfortunately—and we shall come to this in other amendments—the status of a practitioner panel is nowhere near adequate for the type of issue that I am describing here. It would only be able to make representations and that would be all, whereas the position of chairman is that of the person who is in command of the board and therefore can take responsible decisions.
It is also worth bearing in mind that IMRO, the SIB and the SFA, which were three of the FSA's regulatory predecessors, and three very important ones, all operated on a system which split the functions of the chairman and the chief executive.
I shall close by saying, only half seriously, that one of my honourable friends in another place researched quangos to see how many of them operated on a similar basis to what is proposed in this Bill. He found only two: the Central Laboratory for Research Councils and the Trinity Lighthouse Service.
Lord Faulkner of Worcester: Before the noble Lord sits down, did that research also include regulators? The FSA is a regulatory body. For example, the Director-General of Fair Trading is a single individual and the railway regulator is a single individual. Is that not a rather closer parallel than the kind of organisation to which the noble Lord has referred, including the BBC?
Lord Saatchi: I am glad to deal with that point. One of the arguments that the Minister, if I have learnt to anticipate his arguments at all well, will reflect is what has just been said. Why are we complaining about this

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when other regulators in other countries and other regulators in Britain too are single individuals—they are usually called "director-general"? I think the Minister reacted enthusiastically when it was said that other financial regulators in other countries have a single individual at the top. I am sure he will deploy that argument. I am pleased to be able to respond to that in advance. The point is that it is not necessarily the case that because all one's friends decide to build their house on a frozen lake in winter that one is obliged to do the same. To take another example which comes to mind, if 11 countries decide that they want to merge their currencies into one, it is not necessarily the case that Britain has to do the same.
I reiterate that one of the points that underpins our great concern about this Bill in so many key areas is that the financial services industry is unique in Britain. Britain has a miraculous thing in the financial services industry, an industry which is a world leader. Our share of the sectors of the financial services industry is much, much bigger than we would deserve on any pro rata basis of our share of world GDP. There are particular reasons for not wanting to disturb what is an extraordinary success story.
Lord Peston: The noble Lord has put his finger on something which I realise now is central. I take it that his argument in reply to my noble friend Lord Faulkner is that the industry being regulated is different from all other industries in this country. That is the essence of the position as he sees it. I must admit that, until he said it, I had not heard any other argument as to why this industry is different from all other industries. It seems a little late, if I may say so, since he has only just raised it, that we should now be having to think about it. None of us has had a chance to say that we are not convinced. I take it that he is going to say yes; that is the essence of his position. This industry is completely different from the whole of the rest of the British economy.
Lord Saatchi: Yes, I am going to put that argument very clearly. It is a unique situation in that the industry itself is a jewel. The reason that the question of the chairman and chief executive is so puzzling to practitioners in the industry is that the FSA is the body that supervises the very companies which themselves are obliged to supervise the application of the combined code to their clients. Reasonable people are mystified as to why the rules of governance that they are expected to apply to their clients should not be applied to the body which regulates them.
5.30 p.m.
Lord McIntosh of Haringey: A long time ago the noble Lord, Lord Newby, said that this is the most contentious issue that will be considered in the Committee stage of the Bill. I hope that the noble Lord is right. It would be very agreeable if we could be amicable about all other matters.
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I have to say—I am sure that I will be misunderstood in saying it—that my starting point here is that of Pope:
"For forms of government let fools contest"—
oh, no, your Lordships are not fools—
"Whate'er is best administered is best".
Frankly, as far as I am concerned, the sooner we get on to the content of what the Financial Services Agency does rather than what it is, the better for the debate.
I recognise that this is an issue on which strong views are held and the Government recognise the sincerity and force with which those have been expressed. I have to say that those view have been expressed from all sides of the Committee with considerably less unanimity on the side of the amendment than might have been expected from the trailers to these debates which have been conducted in the broadsheet newspapers over the past few days. So it is necessary that I should restate the Government's position.
Like all those who have spoken, we want the governance structure which best enables the FSA to achieve its objectives. In our considered view, the arrangements we have—a single person as chairman and chief executive with a non-executive deputy chairman—are the best way of meeting the objectives. My speaking notes say that I know that all noble Lords agree that Howard Davies has been doing a very good job indeed. But I am not allowed to say that, so I have not said it! The present arrangements have been working well, and we see no need to change them.
There are a number of reasons for that. First, there is the question of accountability. This point will be dealt with in many later amendments. We believe that there is great advantage in having a single public face of the FSA; a single chief point of contact who is accountable to the Treasury and who can be called before parliamentary committees; a single person with whom the buck stops within the FSA. Separating the roles would risk confusing that very clear chain of accountability, blurring the lines as to who is responsible for what, and creating doubt as to the authority of any one person to represent the FSA, and, ultimately, to carry the can. The earlier remarks of the noble Lord, Lord Stewartby, were pertinent to that point.
Secondly, we need to ensure that there is a person with the authority to lead the FSA both in its daily business and in the international arena. My noble friend Lord Eatwell referred to daily business. Daily business may well be urgent business. My noble friend said that it is something where there has to be a quick reaction to a crisis, but it could be to any event which requires top-level decision making. In those circumstances, a single person is more fit to do that. In the international arena—what I am going to say has been anticipated so many times that I am almost afraid to say it, but it is my duty—we are anticipating that the FSA will continue to be a major player on the international regulatory stage. Virtually all other major international financial regulators are represented by full-time executive board chairmen. They are the public representatives of those

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organisations, and it is important that the FSA is represented by a person of appropriate, and equivalent, stature.
Thirdly, the nature of the authority and its business means that there is a very real need for an executive office holder to have the full authority to take difficult decisions and to commit the FSA. If, for example—I refer again to the point made by my noble friend Lord Eatwell—the FSA needed to take urgent action to deal with a systemic issue, that decision would need to be taken by a person at the very highest level, with a full-time commitment and a real involvement in the issues. For more everyday matters, there is undoubtedly benefit in having a single individual providing a recognisable public face for the organisation.
It has been suggested by some that the roles of chairman and chief executive should be split in order to reflect the current thinking on corporate governance best practice. The noble Lord, Lord Boardman, made that point about the Cadbury rules, although I doubt whether they are the most recent thinking on current good practice. My noble friend Lord Grabiner answered that point anyway. Although we understand that line of thinking, the parallels with ordinary companies are not exact. The combined code is designed for companies with shareholders, and who do not benefit from the various accountability checks and balances provided for by the Bill. The spirit of the combined code is that there should be a strong non-executive element on the board.
We have more than provided for this. There will be a majority of non-executives. The non-executives will form a committee to keep under review whether the FSA is discharging its functions in the most efficient and economic way; to review the FSA's financial controls; and to determine remuneration. The committee will be chaired by the non-executive deputy chairman. We intend that the deputy chairman should be a key and influential member of the board, leading the non-executive majority in board discussions, in providing an independent perspective to the overall running of the FSA, scrutinising the approach of the executives, and the FSA's overall performance. The noble Lord, Lord Jenkin, described this as "housekeeping". It is a good deal more than that and it covers all of the points raised by the noble Lord, Lord Boardman, and more.
On top of that there are a range of other accountability measures which a "normal" company will not have. The board will be appointed by the Treasury and be subject to transparent appointment procedures. There will be an annual report to Parliament, the contents of which have been agreed with the Treasury. There will be an annual open meeting where stakeholders can air their concerns. Practitioner and consumer panels will be consulted on the FSA's general policies and practices and will make their own annual reports; and of course there are the principles and objectives, guiding the way in which the FSA—and hence its governing body—acts. Those are on the face of the Bill and will be debated later. So the FSA is not really a company of the kind to which the
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main corporate governance reports apply. To the extent that it is, the functions of the board are the fiduciary responsibility of all members. I have to say to the noble Baroness, Lady O'Cathain, that this means that all power is not invested in one person, as I think she was suggesting.
Having said that, we recognise that there is room for more than one view on these matters. It is in recognition of this that the Bill has not been drafted in a way that sets the current arrangements in stone. I shall not become involved in the discussion between the noble Lord, Lord Jenkin, and my noble friend Lord Grabiner, as to whether is was intended that way. I am simply recording it as a matter of fact. The Bill allows flexibility for future administrations to review whether a different governance structure may be appropriate when different individuals are in charge—for example, a non-executive chairman with a chief executive; or indeed, as the noble Lord, Lord Alexander, wants, an executive chairman, although it is not at all clear to me whether that is provided for in the amendments under discussion. Indeed, it is not at all clear to me whether the amendments under discussion are clear as to whether, under certain circumstances, the roles of chairman and of chief executive could be combined in one person, as some noble Lords seem to want.
We do not therefore believe that any amendments need to be made. We think that amendments might make the current position, which I believe has general support, more difficult to sustain. We would risk losing authority in international discussions; for example, Howard Davies is the UK representative on the governing bodies of IOSCO and FESCO, the global and European organisations of securities regulation. As the noble Lord, Lord Haskel, pointed out, all his international colleagues on these bodies are full-time executive chairmen.
Many analogies have been made with other bodies. I do not have time to go into them all. But the FSA is not the only regulator with such a structure. This is the model used with many UK regulators—the Director-General of Fair Trading, the Director-General of Telecommunications and the rail regulator. Incidentally, I should say to the noble and learned Lord, Lord Fraser of Carmyllie, that the Bill does not require investment exchanges to have a separate chairman and chief executive.
Lord Fraser of Carmyllie: I did not suggest that it did or, indeed, that it should. I am trying to ascertain from the Minister, now or at some future point, whether there will be an expectation on RIEs that they should in future have that separation. It would seem anomalous if, as the noble Lord is advancing, there should be only one chairman for the FSA.
Lord McIntosh of Haringey: That is a hypothetical situation. The Bill does not say so and the Government are not proposing to introduce amendments which would make the Bill say so.
The FSA has made clear that it will have a separate enforcement committee, which will not include executive board members, which will decide both on

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bringing charges and on appropriate sanctions. The FSA structure does not envisage a role for the chairman in the disposal of enforcement cases.
I shall not go over the views of the non-executives; they have been roundly criticised. The noble Lord, Lord Newby, spoke of the paucity of their case. Without going over the arguments, they did point out that the Government's model for the FSA is based on the model put in place for the Bank of England in the Bank of England Act, which we approved here in 1998. As the Minister who took the Bill through this House, I do not recall any objection to this element of its governance.
I turn now to Amendment No. 9A, which is grouped with this amendment, to which the noble Lord, Lord Kingsland, and others have spoken. As we have indicated in our response to the Joint Committee report, we do not consider that an extended role for Parliament would sit comfortably with the principle of ministerial accountability for appointments endorsed by the Nolan Committee for Standards in Public Life in its first report.
The appointments of the chairman and chief executive, like the appointments of all members of the governing body, are made by the Treasury, and therefore will be an issue on which Treasury Ministers will be accountable to Parliament. It is important that a clear line of accountability is maintained. If the appointments were subject to the approval of a Select Committee, we believe that that would interfere with ministerial responsibility. As my noble friend Lord Peston said, the prospect of a public hearing and the possibility of being turned down may deter suitable candidates from coming forward. These are non-remunerative posts which are enormously important because they represent the financial community. We want the very best people to do those jobs.
I should say to my noble friend Lord Desai that I am not against constitutional innovation, but it would seem rather strange to introduce this one constitutional innovation—confirmation by a legislative committee—when we are dealing with the FSA. If we are going to take a major step in constitutional innovation, surely we should do it in a deliberate and considered way rather than almost accidentally in one amendment to this Bill.
I have made it clear that we do not believe the amendments are necessary or desirable. It is up to the noble Lord, Lord Newby, what he does with them, but if he decides to divide the Committee I shall advise my noble friends to vote against them.
Lord Alexander of Weedon: Before the Minister sits down, perhaps I may ask a question about Amendment No. 9A. Sharing, as I do, his doubts as to whether an amendment of this kind should be introduced in regard to one particular body, is it right that if we had to consider the issue of principle, we would have to consider it across the board? We would have to consider it as applying to a whole range of prospective posts, such as Chairman of the BBC and
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even possibly to the appointment of judges. The issue would have somewhat wide-ranging implications that we would need to look at very carefully as a whole.
Does the Minister also agree that, if we were considering this issue, we would have to look at whether the control mechanism should be simply a committee of the House Commons or a committee of both Houses of Parliament?
Lord McIntosh of Haringey: The noble Lord has said much more ably what I said rather falteringly and briefly. I am sure that he is right.
5.45 p.m.
Lord Newby: I do not know whether this will be the most contentious debate on the Bill, but I certainly hope that it is the longest. I am extremely grateful to all noble Lords who have taken part. I hope that they will forgive me if I do not go through all their contributions and comment on them. I want to make only two brief, specific comments in regard to questions that have been asked.
My first point relates to a question which was asked initially by the noble Viscount, Lord Bledisloe, and which was followed up by the noble Lord, Lord McIntosh. The noble Lord asked whether the amendment would mean that one would necessarily have a separate chairman and chief executive. On first reading, that is what it means. That was in our minds when we tabled the amendment; as we have discovered, how it may be interpreted in the future is a different matter. On a straight reading of it, there would be two people with two distinctive roles. That was in our minds when we drafted the amendment and is what I tried to say when I opened the debate.
My second point is in response to the noble Lord, Lord Peston, who asked whether we on this side of the debate were arguing that there was something different about the financial services industry from the other regulated industries. It was a lacuna in my argument that I did not make the point that there clearly is. The circumstances are completely different. A 300 year-old industry which has been in the private sector throughout—which is fiercely competitive and which has many, many practitioners—is completely different from a privatised public body. In terms of the regulatory tasks faced by a regulator, it is almost self-evident that the financial services sector is of a different order to the railways, the water, the gas and the electricity industries.
Lord Peston: I am pleased that the noble Lord has been forthright in his statement. I do not want to try and influence what he now decides to do about voting or not voting, but, on reflection, does he not think that as we have not debated precisely what I certainly regard, and what I think other noble Lords regard, as the essence of the subject—it may be that the industry is different—it would be rather foolish to divide on the

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issue? I do not want to stop him dividing the Committee; I merely want him to reflect on it for 10 seconds.
Lord Newby: Let me proceed and all will become clear.
This has been an extremely thoughtful debate. As a number of noble Lords have said, the matter is not completely black and white. I set out the arguments as forcefully as I could because I thought they needed to be put at the start of the debate. A reason for such a degree of greyness about some of these matters is that the FSA is up and running. If it were not, there would be even wider support than there has been for the arguments we have advanced. I accept that.
As to what we intend to do next, we on these Benches have always—perhaps not always, but during my time in your Lordships' House—as a matter of principle chosen not to divide at Committee stage, specifically because we like to grapple with issues. We like to hear what people say and to decide whether our mind has been changed. We shall return to this matter at Report stage. We never intended to force a vote at this stage and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment Nos. 8 and 9 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 9A:
Page 216, line 28, at end insert—
("() The appointments of the chairman, the chief executive and the non-executive deputy chairman shall not take effect until they are confirmed by the House of Commons Treasury Select Committee following a public hearing.").
The noble Lord said: I should like to respond to the kind comments made by certain of your Lordships about my introduction of Amendment No. 9A, but, in particular, to try to deflect the enfilading fire from my noble friend Lord Alexander of Weedon and the noble Viscount, Lord Bledisloe.
I entirely accept that this amendment would introduce, if it were accepted, an unprecedented procedure into our constitution. I make no apologies for taking this initiative. In my submission, the powers that will be exercised by the SFA will be unprecedented for an authority which is, after all, framed in the context of a private company set up under the Companies Act 1985, albeit limited by guarantee.
It appears that even the benefits of that structure as a form of discipline are not to be allowed to your Lordships: by definition, there are no shareholders in this company and therefore the management will not be disciplined by a shareholders' meeting; there is to be no separation of powers between the chairman and the chief executive, so that the latest advice that we have on proper governance is ignored; moreover, the powers of the non-executive directors are to be derisory. So there are no checks and balances whatsoever within the framework of the organisation in which the new authority is to have its being.
What other controls are there? There is no parliamentary control. We see from the Bill that the authority is to have substantial legislative functions; but none of the draft legislation will be laid before either your Lordships' House or another place. Moreover, the organisation will not be subject to the discipline of the Comptroller and Auditor General. So there is no parliamentary control whatsoever on the FSA. Moreover, it is to enjoy—except for acts of bad faith—statutory immunity.
I think I am entitled to say that here is an organisation which has been defined in a Bill, by the Government, who seek not to maximise, but to minimise, control over it. In those circumstances, I believe that the constitutional initiative contained in my amendment is wholly justified.
Lord Alexander of Weedon: Before my noble friend—
The Deputy Chairman of Committees (Lord Ampthill): The noble Lord has spoken to the amendment and I must therefore assume that he meant to say that he moved it. Amendment proposed—
Lord Kingsland: I am giving way to the noble Lord, Lord Alexander.
The Deputy Chairman of Committees: The noble Lord cannot give way to the noble Lord, Lord Alexander; he must give way to me, unfortunately. As the noble Lord has spoken at some length to his amendment, an opportunity must be given for others to respond to it. The amendment proposed is at page 216, line 28, insert the words as printed in the supplementary Marshalled List.
Lord Alexander of Weedon: My Lords, after that exchange, I rise with a certain amount of diffidence. Having heard—this has happened to me before—the persuasive way in which my noble friend Lord Kingsland has moved his amendment, I find the arguments, if they could be addressed in a general context as to which authorities should be subject (in the context of appointments to senior positions) to parliamentary control, highly understandable. If any were to be subject to parliamentary control, the noble Lord makes a very strong case that the FSA should be.
Perhaps I may ask the noble Lord, at whatever would be the appropriate stage for him to deal with this, to indicate whether he thinks it would be more appropriate for an appointment of such importance to be considered by a Joint Committee of both Houses of Parliament.
Lord McIntosh of Haringey: The noble Lord, Lord Kingsland, used his opportunity to move the amendment. It had to be moved, and it was moved—even if only by the words of the Deputy Chairman.
Lord Peston: Perhaps I may interrupt my noble friend. I could have sworn that I heard the noble Lord,

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Lord Kingsland, move his amendment two hours ago. I understood that he had withdrawn it. I am totally at a loss to know why we are debating it now.
Lord McIntosh of Haringey: It could not have been moved two hours ago. There can only be one amendment before the Committee at a time.
Perhaps the Committee will excuse my brevity if I say that I think the arguments against this amendment in particular were made most effectively by the noble Lord, Lord Alexander, in considering Amendment No. 7. I shall be glad to address the extraneous points raised by the noble Lord, Lord Kingsland, about accountability and parliamentary scrutiny when we come to the appropriate amendments in due course.
Lord Elton: As the opportunity has been provided, will the noble Lord explain to me a little more clearly the status of the body that we are creating? It is described on page 16 of the Explanatory Notes as,
"an existing company limited by guarantee".
As it was rather differently described in our debate and no one was corrected in so doing, I thought, therefore, that it had lost that status. Then I see, in paragraph 14 of Schedule 1, that,
"The Authority is to continue to be exempt from the requirements of the 1985 Act relating to the use of 'limited' as part of its name"—
which seems to mean that it is indeed a limited company. I should like to know which view is correct.
Lord McIntosh of Haringey: The Explanatory Notes are correct. It is a company limited by guarantee which is not required to use the word "limited" in its name.
Lord Kingsland: It was my intention in speaking after the noble Lord, Lord Newby, to respond, as the noble Lord did in respect of his amendments, to those noble Lords who spoke to my amendment, and then to withdraw it. The reason I did not complete the procedure was that I felt a frosty wind from behind me and my noble friend Lord Alexander got to his feet. Therefore, before I could say the fatal words, he was up and I was down. I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Lord Saatchi Lord Saatchi moved Amendment No. 12:
Page 216, line 32, at end insert—
("Director General of the Authority
. The person holding the office of Chief Executive shall be called the "Director General of the Financial Services Authority".").
The noble Lord said: This amendment deals with the concept of renaming the chief executive of the FSA "the director-general of the Financial Services Authority". I need not rehearse the background, as so much has already been said about this. As I said earlier, the Government have argued that a separate chief executive and non-executive chairman would complicate relationships with other bodies and other
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regulators. The amendment would leave no one in any doubt. It proposes to give the chief executive—if there were to be one—a suitable title to deal with this very point. It would make the status of the top man in charge crystal clear.
Surely the Government cannot have it both ways. If the FSA is a private company, as the Minister has just said it is, it should be subject to normal corporate governance rules. If it is not a private company and is simply a regulator, the man at the top should have the same title as those at the top of all the other regulatory bodies. It really has to be one way or the other. I beg to move.
Lord Borrie: In the light of the withdrawal of the amendment moved by the noble Lord, Lord Newby, this amendment seems quite inappropriate. I should have thought that the noble Lord, Lord Saatchi, would have chosen not to move it. What we have now is the position as described in Schedule 1; namely, a chairman and a governing body where there will be executive and non-executive members who can be called whatever the authority wishes to call them, and I should have thought that it was best left to them. I say that despite the fact that I have a certain affection for the title "director-general". However, I do not think that it is appropriate or necessary to have this amendment in the Bill as it now stands.
Lord Saatchi: If I felt the same way, I should certainly seek to withdraw the amendment right away, but first perhaps I may hear what views there are.
Lord Stewartby: I shall speak only briefly to the amendment because the arguments have been deployed in relation to the previous group. My particular concern regarding the amendment of the noble Lord, Lord Newby, was the introduction of the term "chief executive", because it carries with it the implication that there can be no higher executive authority. If there were to be a director-general, I should be much happier. My main concern is that we should not introduce the term "chief executive". If the roles are separated, I hope that the authority will not use the term "chief executive", with its implication that there is a chairman who is not executive in any sense.
Lord McIntosh of Haringey: I honestly do not see the point of this amendment. It does not imply a splitting of the roles of the chairman and chief executive, which is what we debated for two hours—quite properly and quite rightly. But the question of the actual title, whether it is "chairman" or "director-general", seems to me irrelevant. If there is no implication for the nature of the role, I would say that Pope is doubly right:
"For forms of government let fools contest;
Whate'er is best administered is best"
I hope that the noble Lord will not pursue his amendment. There is no evidence of any dissatisfaction with the existing title. I believe that the amendment would be change for change's sake.
Lord Saatchi: I moved the amendment in the context of seeking to deal with the general structure at the top of the FSA. I am sure that this is an issue to which we shall return on Report. At this stage, I beg leave to withdraw the moment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Sharman Lord Sharman moved Amendment No. 13:
Page 216, line 32, at end insert—
("Functions of the chairman
.—(1) In this paragraph "the chairman" means the chairman of the Authority appointed under paragraph 2(1)(a) above.
(2) The chairman shall at least twice in every calendar year consult the Governor of the Bank of England in relation to those matters affecting the general duties of the Authority under this Act.").
The noble Lord said: I must first declare an interest as a paid adviser to a firm which would be regarded as a practitioner under the Bill. In moving Amendment No. 13 I should like to speak also to Amendments Nos. 52 to 57. All the amendments deal with systemic risk. I have been encouraged by a number of references to the need for the Financial Services Authority to deal with catastrophe. I have in mind the observation of the noble Lord, Lord Kingsland, that at the moment the authority would not have that power. The amendment seeks to address the issue.
The migration of supervisory powers from the Bank of England to the FSA poses a number of questions regarding the role and powers of the authority to deal with systemic risk to the financial sector as defined in the Bill. Systemic risk to the financial system could be caused by the failure of a single institution, triggering subsequent failures by domino effect, or through a problem of infrastructure—perhaps the failure of a major clearing bank which affects the UK payments system as a whole.
The issue is whether under the Bill the FSA should have the power to deal with systemic risk. There is at present a lack of clarity. One sees the Bank of England as lender of first resort in that it alone can provide liquidity to the system. But it also remains the lender of last resort in the case of systemic risk since, as the central bank, it is the only institution able to issue money or put value into the system. In the past the Bank's powers of intervention to bale out failing institutions have been used sparingly, the prevailing rule being that a private sector solution is to be preferred in all cases involving individual institutions. But the standard to which that power is deployed also varies over time, as does the definition of "systemic risk".
If we look back awhile, in the case of Johnson Matthey the Bank of England baled it out because, as one of the five gold banks at the time, it was felt that there was a systemic risk. In the case of Barings, the failure was considered more a risk to reputation than a systemic risk and there was no intervention. It is also true that the Bank will intervene only when solvent institutions are in difficulties because of lack of asset
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liquidity. It is unlikely that it will intervene or commit public funds to rescue an institution which is also insolvent.
There is an issue with regard to the interaction between the Bank of England, the FSA and overseas authorities in that each body seeks to protect its own constituency or consumers in the event of failure. Regulators have regularly used the college system as a means of communication between regulatory institutions. BCCI is an example of where that arrangement worked reasonably well. However, each failure is different and the circumstances which led to the rescue of one institution at a particular moment may not necessarily be appropriate or repeated subsequently. At the moment, the Bank of England retains certain powers of intervention in the case of systemic risk, but its management functions have been transferred to the Debt Management Office, a government agency under the Bank of England Act 1998, to which reference has already been made.
As I understand it, under the Bill the powers available to the FSA include the power to compel the provision of information, the power to intervene, the power to participate in insolvency, and the general application of moral pressure on institutions. But it is necessary to raise the game, as it were, and increase awareness of the responsibility for systemic risk. I believe that it is wise to add a general duty under Clause 2 to have regard to the circumstances and risks of individual authorised institutions and the impact of circumstances on the financial system as a whole.
The other amendments deal with the process of regular communication between the Governor of the Bank of England and the chairman and chief executive of the FSA to ensure tighter co-ordination of their respective roles. I believe that it is desirable to clarify the position on the face of the Bill. I beg to move.
Lord Jenkin of Roding: I listened to the noble Lord, Lord Sharman, with much interest. I believe that there should be a much clearer duty placed on the FSA, together with the Governor of the Bank of England, and so on, to have regard to the problem of systemic risk. My interest stems from the fact that at about three o'clock on a Friday afternoon in 1970, not long after my appointment as Financial Secretary to the Treasury, I was beginning to think of travelling to my constituency for my weekly surgery when officials told me that there was a problem. They said that the Mersey Docks and Harbour Board would be unable to pay the wages that weekend. I asked them why the board could not appoint a receiver and they replied that under its Act of Parliament it was a statutory port authority and had no power to do so. From the point of view of Merseyside, in particular a large number of widows and orphans, it was a very serious matter and became something of a cause célêbre.
It was perfectly clear to me that in that case the Treasury was unable to give advice. Obviously, the bank was involved. Clearly, we did not intend to bale out the board; we had come into office on the clear understanding that we would not assist companies in that way. We had turned our back on what our

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predecessors had done. It was an isolated matter. However, the following week I had lunch in the City as a guest of Samuel Montagu where the reaction of the large number of bankers around the table was one of total horror. How on earth could we have allowed an organisation of that kind to go into liquidation? After some discussion my reaction was to say that what they needed was a spectacular bankruptcy to understand the philosophy of the new government. A few weeks later we were greeted by the problems of Rolls-Royce.
The lesson I draw is that there must be a clear responsibility. Obviously, a trust port is nothing like BCCI or the failure of the German bank where there was a risk of a domino effect. However, this is an issue of considerable importance. Although my experience of some 30 years ago may not be entirely relevant, it left the searing memory in my mind that there was nothing we could do except shell out large sums of public money, which was not what we were about.
I support the amendment in this group proposed by my Front Bench. We need to ensure that the Bill is clearer on this issue.
Lord Eatwell: I speak with some trepidation having been generally admonished on the last occasion I spoke. I promise noble Lords that from now on my speeches will contain no colourful language, will be irredeemably dull and will concentrate on technical matters.
I speak to Amendment No. 54, which stands in my name and is grouped with Amendment No. 13 relating to the definition of market confidence and systemic risk. At Second Reading I argued that one of the most important tasks of the FSA is the management of systemic risks; that is, the risks that the actions of individual firms may create for the stability of the financial system as a whole. I argued then that this task is even more important than the protection of the consumer. What is the point of protecting consumers' rights if at the end of the day the consumers' savings are consumed in a general financial crisis?
In managing risk and ensuring stability, the role of the regulator is paramount. In the face of a general collapse, the central bank—in our case the Bank of England—may step in as lender of last resort to prop up the markets. But by the time things have gone that far the financial system will already be in extreme jeopardy. Just as important—in many ways more important—are the day-to-day activities of the regulator which seek to limit the risk to which society is exposed: for example, by requiring firms to maintain prudential capital; promotion of effective risk management practices; ensuring that participants in the market are fit and proper; identifying and enforcing best practice, and so on, through the wide range of regulatory procedures. There can surely be little doubt that a core objective of the FSA is the management of systemic risk; that is, the maintenance of stability and—it is crucial in financial markets—the expectation of future stability.
The Joint Committee, chaired by the noble Lord, Lord Burns, recommended that the Government acknowledge on the face of the Bill that a fundamental
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objective of the FSA must be the control of systemic risk. In one of the most puzzling actions of the Government to date, they rejected that recommendation of the Joint Committee. The Government's argument, which was paraphrased by my noble friend Lord McIntosh at Second Reading, was that to define the objective of market confidence—that was the committee's proposal—as,
"maintaining confidence in the soundness of the financial system",
would somehow throw doubt on the role of the FSA in (I quote the Government's response),
"maintaining confidence in the effective prudential supervision of individual institutions".
They seem to be contrasting the soundness of the system as a whole with individual institutions.
This is a peculiar argument. In fact it is an argument that, in politest terms, contains very little sense. (Your Lordships will note that I am maintaining polite language.) How could the Government maintain confidence in the soundness of the financial system other than by "effective prudential supervision of individual institutions"? That is how it is done; there is no other way. The first goal must embody the second. I do not believe that my noble friend could give me even one example of effective prudential supervision of an individual institution that does not contribute to the maintenance of confidence in the soundness of the financial system as a whole.
Why is the issue of systemic risk so important? Why am I so concerned about spelling out the management of systemic risk as an objective of the FSA? It is because in doing so we would establish beyond all reasonable doubt the central role of the FSA in this area. That is essential for two reasons. First the tripartite agreement between the FSA, the Bank of England and the Treasury—it has been referred to today—clearly establishes the responsibilities of the three bodies in securing the stability of the financial system, and acknowledges the overall role of the Bank of England. Clearly defining the role of the FSA in maintaining stability would add significantly to the clarity of that document.
Secondly, clarifying the role of the regulator is vital for the FSA's international relationships. In the modern world, many of the threats to this country's financial stability derive from international financial markets. It is, therefore, in the international arena that risks must be managed as a co-operative venture between national regulators. The FSA is our national regulator. It should be crystal clear that the British Government have full confidence in the FSA to do that job. My amendment would make crystal clear the Government's commitment and confidence.
In Committee in another place, my honourable friend Ms Patricia Hewitt acknowledged that the term market confidence did mean the regulation of systemic risk, but also stated that it went wider. I have searched for a definition that would capture what Ms Hewitt said. I think that I have managed to find one; help was at hand. My amendment is taken word for word from the FSA's document, A New Regulator for the Nets' Millennium. In other words, my amendment contains

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the words of Mr Howard Davies. On page 5 of that document, the FSA states that the objective of maintaining confidence,
"involves, in our view, preserving both actual stability in the financial system and the reasonable expectation that it will remain stable. This is achieved through … preventing material damage to the soundness of the UK financial system"—
that sounds like the Joint Committee—
"caused by the conduct of, or collapse of, firms, markets or financial infrastructures".
They are the individual institutions that the Treasury wanted to have referred to. It is achieved also by,
"explaining on what basis confidence in the UK financial system is justified: this includes stating explicitly what the regulator can and cannot achieve".
I cannot imagine a better characterisation of that wider approach to the definition of systemic risk that Ms Hewitt sought. That is why I have used the FSA's own words in my amendment. I am sure that my noble friend would not want to repudiate Mr Davies's own document and will accordingly be happy to accept the FSA's definition of market confidence as a welcome clarification to the Bill.
6.15 p.m.
Lord Fraser of Carmyllie: The noble Lord, Lord Eatwell, indicated that he was much chastened by some earlier remarks. I hope that it does not upset him more if I say how much I agree with him on the amendment. I am sure that the noble Lord is right. That is not just because I agreed with him in the Joint Committee: we should have some indication of the importance of dealing with systemic risk on the face of the Bill. I like the wording that he has lifted from the FSA report.
The other publication which seemed to back much of what he said was the Treasury's own paper, the Draft Recognition Requirements for Investment Exchanges and Clearing Houses, published in February of last year. Page 3 explains that the requirements for these bodies are expressed at a fairly high level. It continues:
"The additional requirements concerning default rules are more detailed in nature. This is because if the high degree of systemic risk that can arise from a default on market contracts".
It seems to me desirable to have that on the face of the Bill. The draft statutory instrument which accompanied that 1999 document indicated the extent to which there would be requirements for greater information to be provided from RIEs and others.
That series of requests for further information tends to be regarded by practitioners as the most excessive and intrusive. If there is to be greater understanding of the relationship between the FSA and individual practitioners as regards requests for further information, the City should understand that they arise because of concern about the control of systemic risk. In all the circumstances, it seems desirable to expand the definition in the Bill along the lines the
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noble Lord indicated. If that were done, I believe that there would be a greater understanding of what the FSA will be required to do.
Lord Kingsland: Everything I wanted to say in relation to my amendment in the group has been said by the noble Lords, Lord Sharman and Lord Eatwell. They will be relieved to know that I have no intention of repeating it.
I understand that the FSA believes that the memorandum of understanding between the Chancellor of the Exchequer, the Governor of the Bank of England and the head of the FSA is the appropriate vehicle for considering questions of systemic risk. However, as the noble Lord, Lord Eatwell, indicated, unless the FSA has power to react in relation to the institutions for which it is responsible, it will not make a constructive contribution to the work of that meeting. As Members of the Committee are aware, the Bank of England no longer has responsibility for the management of the financial sector.
I want to draw the Committee's attention to Amendment No. 57, which is purely technical and relates to page 2, line 37, of the Bill. Its purpose is simply to make it clear that "financial system", referred to in Clause 3(2), is not just the activity of taking deposits. That is a regulated activity. It refers also to the institutions which carry on that activity: that is to say, the banks themselves.
Lord Alexander of Weedon: I am pleased to support the amendment tabled by my noble friend Lord Kingsland and the spirit of the amendment tabled by the noble Lord, Lord Eatwell. It is an important matter. It is crucial that the FSA should seek to preserve market confidence and have that as an objective. But it cannot do so in any spin-doctoring sense in regard to financial stability. If it is truly to be able to do that in a substantive sense, it must have a greater responsibility for the preservation of financial stability.
I also share the view expressed by my noble friend Lord Kingsland about the memorandum of understanding. That is no doubt an admirable division of responsibilities between the Treasury, the Bank of England and the FSA. However, in this regard, the duties of the Financial Services Authority should be spelt out in statute so that it may be able to play its role to the full and so that there may be no doubt as to true accountability.
Lord McIntosh of Haringey: These are important amendments. They raise the important issue of the extent to which the FSA's market confidence objective gives it responsibility to deal with threats to the stability of the UK financial system. For reasons referred to by the noble Lord, Lord Alexander, that is closely linked to the relationships between the FSA, the Treasury and in particular the Bank of England.

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It is an important part of the FSA's responsibility. Sound and prudent regulation lies at the heart of maintaining financial stability and it is already covered by the objective of maintaining confidence in the financial system. For that matter, it is also an important part of the consumer protection objective. This wide interpretation of the interests of consumers is critical to the way in which the FSA's various powers under the Bill work; for example, the power to vary permissions under Part IV.
During the hearings of the Burns committee, my noble friend Lord Eatwell drew attention to the desirability of giving the FSA the explicit task of managing systemic risk. The point that he made was picked up in the final recommendations of the committee, which stated:
"We recommend that the market confidence objective should refer to 'maintaining confidence in the soundness of the financial system', and should be expanded to include a reference to the management of systemic risk, in collaboration with the Treasury and the Bank of England".
In responding to that recommendation, the Government noted,
"that public and market confidence in the financial system clearly requires confidence in the soundness of the system as a whole".
They went on to state, in words quoted by my noble friend Lord Eatwell;
"other aspects arc also relevant, notably maintaining confidence in the effective prudential supervision of individual institutions. Singling out one aspect could throw doubt on the FSA's role in this area and narrow its remit".
My noble friend Lord Eatwell, in the politest possible way, poured scorn on that response. He asked me specifically whether I could give an example of the prudential supervision of an individual institution not affecting confidence in the soundness of the financial system. The collapse of an insurance company could undermine confidence in the insurance market and discourage foreign customers from insuring in the London market, but that would not necessarily amount to a lack of confidence in the financial system. There is a distinction still to be made between effective prudential supervision of individual institutions and confidence in the soundness of the whole system. It is applicable to these amendments.
However, I have not had an opportunity to speak to my noble friend about the issue in detail. Between now and Report stage, I should like to meet him, with officials and any other Members who want to be involved, in order to go through what I concede to be difficult and potentially contentious areas. An issue is not solved by naming it on the face of the Bill. Good intentions are fine—and, clearly, we all have good intentions—but we shall not resolve them with forms of words. We shall resolve them only with powers that are effectively used.
With those comments, I turn to the way in which the Government believe that systemic risk is covered and that the maintenance of confidence in the financial system is covered in a way that is not reflected in the Bill. It is not the responsibility of the FSA alone. As the Government pointed out in response to the Joint
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Committee, the Treasury and the Bank of England also have essential roles to play. There must be cooperation between them and the FSA.
That is the subject of the Memorandum of Understanding between the Treasury, the Bank and the FSA, which the Government published on October 1997. It sets out the respective responsibilities of each institution for maintaining financial stability.
The problem with these amendments is that they lose the focus on the fact that the FSA's role, while important, is not the end of the story. They appear to give the FSA the sole responsibility in this area and to the exclusion of the Treasury and the Bank of England. That cannot be right. The Memorandum of Understanding also sets out the details of standing arrangements for ensuring that there is full and effective co-operation between the Treasury, the Bank and the FSA.
With that, I return to Amendment No. 13 to Schedule 1. It seeks to impose inappropriate and unnecessary rigidity on those arrangements, with biannual meetings between the FSA chairman and the governor. The standing arrangements envisage information exchange between the Bank and the FSA on a number of levels; through cross-membership of the court of the Bank and the FSA board, through secondments and through the ongoing sharing of information.
The standing arrangements also provide for monthly meetings between the Treasury, the Bank and the FSA in the standing committee. That can meet more frequently and at short notice where circumstances warrant it. Therefore, the rigid requirement that is provided for in Amendment No. 13 would not add to those flexible and effective arrangements. Of course, if it makes sense for the chairman and the governor to have regular bilateral meetings as well, there is nothing to prevent that.
I turn to Amendment No. 57. I can assure the noble Lord, Lord Kingsland, that, where the Bill states that the "financial system" includes regulated activities, that includes regulated activities carried out by authorised persons. But I cannot see the value of saying so. The important point is that the concept of what constitutes the "financial system" is not restricted to the activities of authorised persons, but includes the activities of those who do not need to be authorised by virtue of various exemptions, or those who should be authorised but are not, but who may still have an influence on overall financial stability.
In conclusion, I agree that the FSA has a very important role in, although not the sole responsibility for, seeking to maintain the stability of the UK's financial system. That role is already encompassed within the scope of Clauses 3 and 5. The standing arrangements for co-operation between the Treasury, the Bank and the FSA under the tripartite memorandum of understanding are a robust, flexible and effective mechanism for ensuring that each of those institutions plays its important role in achieving the overall objective of a sound economy and a healthy and stable financial system.
6.30 p.m.
Lord Sharman: I am grateful to the Minister for his remarks. In response, perhaps I may say that I was fascinated to hear the noble Lord, Lord Jenkin, talk of the Mersey Docks and Harbour Board, and Rolls-Royce. They are deeply ingrained on my mind from the time that I spent working on them.
I very much look forward to meeting the Minister on this issue because I believe, and feel very strongly, that it is not in any way a substitutive matter. I am not seeking to substitute one thing for another, but to add to and clarify the Bill in order to make it clear. With that remark, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Saatchi Lord Saatchi moved Amendment No. 14:
Page 216, line 34, leave out sub-paragraph 1) and insert—
("(1) The Treasury must secure, after consulting the Authority, that the majority of the members of the Authority's governing body are non-executive members.
(1A) The Authority must secure that a committee of its governing body, consisting solely of the non-executive members, is set up and maintained for the purposes of discharging the functions conferred by paragraph 4.").
The noble Lord said: In moving Amendment No. 14, I shall speak also to Amendments Nos. 16 to 21, which are included in this grouping. My noble friend Lord Kingsland will address Amendments Nos. 22 to 24.
Amendment No. 14 splits into two sub-paragraphs what is currently paragraph 3(1) of Schedule 1. Although the Treasury has the power to appoint and remove members of the FSA's governing body, paragraph 3(1) requires the FSA itself to secure that a majority of the members of its governing body are non-executive members. Given that the Treasury has the power of appointment to the FSA's governing body, it seems to us more appropriate that the Treasury should secure the non-executive majority. That would be achieved by our new paragraph 3(1)(a). Clearly, the Treasury should consult the FSA about those appointments. Hence, Amendment No. 14 provides that the Treasury's obligation is to be performed "after consulting the authority".
Proposed paragraph 3(1)(b) in effect repeats the current provisions of paragraph 3(1)(b), except that the functions of the non-executive committee of the governing body are spelled out by referring to the functions conferred in paragraph 4, rather than the current wording which refers only to the functions conferred "by this schedule".
Amendments Nos. 16 and 17 later in this group are intended to emphasise that the particular committee of non-executive members established by paragraph 3(1)(b) is that particular committee set up to discharge the functions described in paragraph 4. New subparagraph (4) to paragraph 3 set out in Amendment No. 18 is intended to emphasise that the governing body of the FSA may set up and maintain other committees of the governing body for purposes other than those referred to in paragraph 3(1)(b).
Proposed sub-paragraph (5) to paragraph 3 is a further measure to provide checks and balances in the operation of the FSA's governing body. It provides for the FSA to make arrangements at its own cost for the non-executive members of its governing body to obtain independent legal advice in relation to their responsibilities and the performance of their duties. Such an arrangement for non-executive directors to obtain independent legal advice is a standard feature of publicly listed companies.
Amendments Nos. 19, 20 and 21 are ancillary to Amendment No. 18 and, again, are intended to make clear that the particular committee of the non-executive members of the FSA's governing body referred to in paragraph 3(1)(b) is a specific committee established for the particular purposes set out in paragraph 4. As I said, my noble friend Lord Kingsland will refer to Amendments Nos. 22, 23 and 24.
Perhaps I may quote the combined code of the Committee on Corporate Governance. It states that:
"The board should include a balance of executive and non-executive directors … such that no individual or small group of individuals can dominate the board's decision-taking".
Our amendments and our arguments reflect that because we want to give the non-executive members of the governing body additional and stronger functions, such as reviewing and approving the annual budget, and scrutinising and monitoring the performance of the executive management.
Without Amendment No. 14, the role of the non-executive members of the governing body of the FSA will be restricted to examining matters of efficiency, auditing and remuneration. We want to see this kind of definition of the role of the non-executive directors of the FSA, which, if I may, I shall read to the Committee:
"Assisting their colleagues within the firm's governing body in setting, and monitoring, the firm's strategy, providing an independent perspective to the overall running of the business, scrutinising the approach of executive management and the firm's standards of conduct".
I did not write that description. It comes from the FSA consultation paper No. 35 on the way that the role of the non-executives should be defined in the companies that the FSA regulates. Therefore, surely it cannot be that what the FSA believes is right for the description of the role of the non-executives in the firms which it supervises is wrong for itself. I beg to move.
Lord Sharman: I rise to support the amendments as set out and to speak briefly to Amendment No. 15. As the noble Lord, Lord Saatchi, said, these amendments aim to clarify on the face of the Bill the functions already performed by the non-executive members of the putative FSA. I feel that the authority should be required to meet the principles of good corporate governance.
I am much troubled by the way in which some Members of the Committee have waived the application of corporate governance. I have spent a career trying to persuade people to exercise that. It would be helpful to have some support. All we have are

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the Cadbury recommendations; there is nothing else. This has been arrived at through a considerable body of opinion, a considerable amount of work, and through much time spent looking at what goes on around the world and deciding what is best. I feel that we should take it into account.
As non-executive members of the corporate body, they should be responsible for advising the FSA executive regarding the management of the authority. More importantly, if they are properly to discharge their functions as directors of a company, they must be involved in establishing policy and reviewing its application.
At present, the executive restricts the role largely to budgetary items and efficiency. Although my professional background would lead Members of the Committee to believe that I consider this to be very important, I recognise that the issues of strategy and of overall supervision are equally important. It is interesting to compare this with the model of the responsibilities for the Bank of England's Court of Directors. The Bank of England Act 1998 provides for a sub-committee of directors of the Bank. It provides for them to keep under review the Bank's performance in relation to the objectives and strategy determined by the Court of Directors of the Bank. That is what we propose in these amendments.
Lord Borrie: There seems to me to be considerable merit in the amendments tabled by both the noble Lords, Lord Saatchi and Lord Sharman. In particular, I believed that there was considerable logic in the amendment of the noble Lord, Lord Saatchi. Bearing in mind that the Treasury will appoint, the Treasury should secure that the majority of the members of the governing board are non-executive members. Indeed, I believe that it would be impossible for the Treasury to do its appointing job without ensuring that. It is impossible for the authority to do so on its own. Therefore, I believe that the Treasury must do so through its appointment.
I say that there is considerable merit in relation to the amendments as a whole, but I am less certain as to whether the other amendments should be embodied in legislation. After all, the company governance rules which are, in a sense, followed here are not themselves embodied in companies legislation. I do not believe that the Government intend that they should be embodied in the companies Bill which they will bring forward in due course. That remains to be seen. However, the fact is that they are not in legislation at the moment. There are certain difficulties in having them embodied in legislation for a public authority. Some provisions of the Fair Trading Act 1973, to which the Office of Fair Trading is subject, were very dated after a number of years. They are still there, because they have never been amended, and I suppose there is never parliamentary time to amend them.
There are serious risks in putting into primary legislation detail relating to current mantras of what is desirable—in this instance, in corporate governance. However we may think the legislation is amendable, in practice it is not easily amendable. The fact that we
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have a Financial Services and Markets Bill in 2000, 14 years after the last one, is not bad; it usually takes 20 years or more to have substantial legislation changed again. It might be undesirable to put all this precise wording about the functions of non-executive members rigidly into the legislation before us.
Lord Stewartby: I hope that the Minister can make it plain when he responds whether the fact that some non-executive functions are listed in the schedule is meant to imply that they are the only non-executive functions. I am very sympathetic to what my noble friend Lord Saatchi and the noble Lord, Lord Sharman, said. Clearly, one would expect the non-executive directors to perform much the same kind of role as good, efficient, active, energetic non-executive directors of any public corporation or body in the private sector would. But the wording of paragraph 4 is such that it could be read to imply that what is expected of them is only what is defined there. If that is so, it is not satisfactory. I hope that the noble Lord can assure us otherwise.
Lord Fraser of Carmyllie: I wish to tell the noble Lord, Lord Borrie, that it seems to me that the point in question has been picked up and that Amendment No. 14 is correct. I am at a loss to understand how the authority can secure that a majority of the members are non-executive. What happens if the Treasury fails to appoint a sufficient number of non-executive members, or if it decides to dismiss some of those non-executive members, so that the non-executives are in a minority, even though the authority has understood that? I see no provision in the schedule that enables it to return to a majority. I do not think it can even sack the executive members of the governing body, because they are also appointed by the Treasury.
My other point concerns the matter raised by my noble friend Lord Stewartby. The functions of the non-executive committee—essentially housekeeping operations—are spelt out in some detail in paragraph 4, because that is the one committee that is to be wholly non-executive in character. The rest of the schedule indicates that the non-executives are to be in a majority on the body, and we see in paragraph 5 that any of its functions—other than those in relation to legislation, so described—may be,
"discharged by a committee, sub-committee, officer or member of staff of the Authority",
and doubtless it could have a committee of any character doing that.
That would seem to me to follow, but I should be grateful if the Minister would confirm it.
There seems to be a rather curious imbalance here, in that so much detail is spelt out as to what the non-executive committee is to do, with so little indication of what the majority of non-executive members might do in discharge otherwise of the authority's functions.
Lord Elton: The detail is disturbing, because there is a well established principle in law expressed as inclusio unius est exclusio alterius. If we mention various members' tasks but not others, the assumption is that

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only those mentioned are to be referred to. Therefore, if the schedule is to be as prescriptive as it is, there should be a paragraph saying "Such further functions as may be", and so on, to permit other things to be done, because clearly there are other things to be done by the non-executive directors that are not mentioned in the Bill.
I hope that the Minister will enlighten us further about the policy on appointments. Whatever its demerits, one of the merits of the self-regulation system was that it brought out of the industry people who were very well steeped in its practices and understood it well. That process has now been interrupted. I wonder what steps the Government intend to take, through the Treasury, to see that those appointed to the board between them cover the very wide range of expertise that the very wide range of the powers of the board require it to have.
6.45 p.m.
Lord Kingsland: I rise to speak to my Amendments Nos. 22 to 24. They are precisely on the point raised by my noble and learned friend Lord Fraser of Carmyllie and my noble friend Lord Stewartby.
Sub-paragraphs (a), (b) and (c) of paragraph 4(3) all stipulate rather minor activities of the committee. They are important to certain individuals, but in terms of the overall responsibilities they are in a minor key. That is why Amendment No. 22 stipulates that an additional sub-paragraph (d) should be added, requiring the non-executive directors to keep
"under review the question of whether in discharging its general functions the Authority is acting in the way required by sections 2(l) and 2(3)",
which define the FSA's broad statutory duties. That would remove any doubt that the non-executive directors were indeed able to range over the authority's full responsibilities.
Furthermore, with regard to my noble and learned friend's observations about paragraph 5, Amendments Nos. 23 and 24 seek to remove any doubt. They make it clear, I hope, that the FSA may discharge all its functions acting through its governing body. However, it is recognised that the FSA will want to make arrangements for many of its functions to be discharged by committees, sub-committees, officers and members of staff of the FSA. Although arguably it is implied that the FSA can discharge all its functions by acting through its governing body, the amendments make the position absolutely clear.
Lord McIntosh of Haringey: I am grateful to noble Lords for the way in which they have introduced the amendments. Perhaps I may say a few words in general about the non-executive members of the FSA's board before I turn to the specific amendments.
First, I apologise to the Committee for having said in response to an earlier amendment that the non-executive directors are not paid. They are in fact paid a fee. That fits in with my being able to say that in the Government's view the non-executives have a key role to play in the governance of the FSA.
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The fundamental point here is that the role of the non-executive committee is set out in paragraph 4. The non-executive committee is made up of the non-executive directors and not the executive directors. They review whether the FSA is using its resources in the most efficient and economic way; review its internal financial controls; and determine the remuneration of the chairman and executive members of the board. In that case I acknowledge that they are largely housekeeping functions.
But, of course, the role of the non-executive directors is not confined to their role as members of the non-executive committee. They are also members of the board and they have all the functions of full members of the board, which do not need to be provided for in the Bill, because one does not specify every single thing. We believe that the amendments specify a little too much. For example, making rules, which is one of the fundamental legislative activities of the FSA, is the responsibility of the whole board, including the executive and non-executive directors.
Before I turn to the individual amendments, a further general point is the need for the FSA to decide for itself how it should organise itself to meet its objectives. Schedule 1 sets out a framework. We do not believe that it is for the Bill to prescribe the FSA's governance too precisely beyond ensuring that proper structures and procedures are in place to ensure accountability.
These amendments are intended to and would achieve a number of differences from the Bill as currently drafted so I want to explain why, in our view, these amendments would either be too prescriptive, which is the normal case, or would make little difference to the Bill as currently drafted.
I turn first to Amendment No. 15, which was spoken to by the noble Lord, Lord Sharman. The two main effects of Amendment No. 15 would be, first, to limit the term of the non-executive members of the board to four years. That is a good illustration of my point about not being over-prescriptive. The existence and duration of such limits is for the Treasury to decide. The power of the Treasury to decide removes the temptation, however unlikely, that the executive members might weaken the non-executives by offering only short-term contracts.
The second effect would be to make a function of the non-executives,
"the question of whether the Authority is discharging its functions in accordance with the general duties under this Act".
That should be the responsibility of the board as a whole, executives and non-executives, and not just the non-executives.
The main effect of Amendment No. 14 would be that the Treasury, rather than the FSA, would have to secure that a majority of the members of the FSA's governing body were non-executive. I appreciate the thinking behind it but I do not believe, with respect, that it would add very much. The Bill is quite clear in specifying that the FSA must have a majority of non-executive members of its governing body. The

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suggestion that the Treasury would somehow inhibit that and make it impossible to do that is a little fanciful.
Lord Elton: The Bill as drafted is telling the authority to do something that it does not have the power to do.
Lord McIntosh of Haringey: I concede that it could be interpreted in that way, and if it could be interpreted in that way it ought not to be because it is certainly the intention of the Bill to ensure that that happens.
Lord Elton: Will the noble Lord think a little further about that because I believe that there is only one way of interpreting it, in fact?
Lord McIntosh of Haringey: I thought that I had indicated that I would think about it further. I shall come back to the noble Lord on that. If amendments are required, then we must make those amendments. But I am sure that there is some devilishly clever reason why the authority has the ability to do what the Bill says it is going to do.
As I said, the Bill is quite clear in specifying that the authority must have a majority and, indeed, it has a majority of non-executives at the moment.
A further effect of Amendment No. 14 would be to specify that the non-executive committee, specified in paragraph 3(b) of Schedule 1, would discharge the functions of the non-executive committee specified in paragraph 4. Paragraph 3(1)(b) refers to functions conferred on the non-executive committee under Schedule 1 and paragraph 4 is, of course, part of Schedule I and is therefore covered.
The next point of difference would be to specify, as Amendment No. 18 does, that the FSA board may also set up and maintain a committee comprised mainly or solely of non-executive members for purposes other than those specified in paragraph 4. Again, there is nothing in the Bill to make that impossible. We do not see any reason to change it. As has been said, paragraph 5(1) allows the FSA's functions to be discharged inter alia by a committee. There is nothing to stop such a committee comprising non-executives and, indeed, only non-executives.
Another impact of Amendment No. 18 would be for the authority to be required to make arrangements, at its cost, for non-executive members to obtain independent legal advice in relation to their responsibilities and the performance of their duties. I appreciate that that is a recommendation both of the Cadbury report—and it is all we have—and of the Combined Code, Principles of Good Governance and Code of Best Practice.
We have no objection to that principle but we believe that it is something for the non-executives to decide between themselves rather than it being prescribed in legislation. I should add that the FSA is quite content in principle to finance independent legal
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advice to the non-executive members of the FSA board. Indeed, I can go further and report that the FSA board resolved on 15th April 1999 that:
"Any director who requires professional advice on a matter relating exclusively to the duties of a director may … have direct access to the Authority's professional advisers; and, if the director considers it essential to receive independent professional advice on such a matter, this may be obtained at the Authority's expense within reasonable financial limits after reference to the Chairman or the Deputy Chairman".
Lord Jenkin of Roding: I apologise for not being here at the beginning of the debate. What the Minister has read out seem to me to be fairly limited circumstances. Let us suppose—and I hasten to say that I do not believe that it has ever arisen in relation to anything in which I have been involved—that a director says to his colleagues, "Look, I do not think we have power to do that. I do not think that the authority has power to do that", and that is then challenged by the executives who produce their legal advice, and the non-executive director then says, "Well, I believe that we should have independent legal advice". That is nothing to do with his functions as a director. He is challenging the legal advice that has been given to the authority.
I had always understood that that recommendation of the Cadbury committee sought to address the problem where one or more directors of the board felt that they were being asked to do something which is not proper and who felt that they should have independent advice on the matter. That is much wider than the phrase the Minister read out.
Lord McIntosh of Haringey: My immediate response is that I do not think so. I believe that if a director is challenging the legal advice that has been given, he is challenging it as a director and that the resolution of the board on 15th April which says that he may receive independent professional advice at the authority's expense is a full answer to that challenge. If I am wrong, I shall write to the noble Lord and to other noble Lords who have taken part.
Lord Boardman: I support my noble friend on this matter. It needs to be looked at. At the moment, it is incomplete and leaves the non-executive directors very exposed.
Lord McIntosh of Haringey: I must include the noble Lord, Lord Boardman, on the list of recipients of any such letter. But my immediate understanding is that the example which the noble Lord, Lord Jenkin, gave of a non-executive director challenging the legal advice would be a proper exercise of his functions as a director and would therefore come within the scope of the resolution I quoted.
Amendment No. 22 would require the non-executives to keep under review adherence to the board's general duties in Clause 2(1) and the principles of efficiency, competitiveness and so on to which it must have regard. Again, I suggest that those are duties of the whole board and not just the non-executives.

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Amendment No. 23 would specify that the governing body, as well as those below the level of the governing body, may discharge the FSA's functions. That is not ruled out by the Bill as currently drafted and the amendment is not necessary.
I should say to my noble friend Lord Borrie that he is right that the Treasury has a role because it determines who is appointed as a non-executive director but the authority has a role because it could, in the absence of a provision such as paragraph 3 of Schedule 1, assign roles to the directors which were incompatible with their being non-executive. That is why we have that provision in the Bill.
I repeat as a general argument on what I consider to be these well-intentioned amendments that there is no reason why the role of non-executive directors, quite apart from their responsibilities as a non-executive committee, should not be as wide as those of any other directors of the FSA. That is provided in Schedule 1. We expect the non-executives, led by the deputy chairman, to play a full role in the board, providing an independent perspective on the scrutiny of the executives and the FSA's overall performance.
Lord Fraser of Carmyllie: I am grateful to the Minister. I noticed that he did not reach Amendment No. 24, which concerns the word "but". I was going to say to the Minister that it would not be the most radical act of revision in your Lordships' House were that "but" to be deleted, but it seems a quite redundant word in that context. Its excision would have a marginal effect in reducing the length of the Bill.
7 p.m.
Lord McIntosh of Haringey: Allow me to defend parliamentary counsel. The "but" is absolutely essential. It is critical to the whole understanding of this part of the Bill. Paragraph 5(1) states that,
"The Authority may make arrangements for",
the discharge of its functions,
"by a committee, sub-committee, officer or member of staff … But"—
it must be said—
"in exercising its legislative functions, the Authority must act through its governing body";
otherwise, the authority could delegate without reference to the governing body and the governing body would be entirely bypassed. If the word "but" was not used, there would not be that protection.
Lord Jenkin of Roding: I greatly protest. I find that a thoroughly mischievous argument. Of course I understand the sense of what the Minister is saying, but the "but" would be appropriate if the two subparagraphs were one and ran straight into one another; then it would make sense. Otherwise, through the way in which they have been drafted, they are two paratactic sub-paragraphs. With the greatest respect
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to the Minister—I have a huge respect for his learning on such matters—"but" is not good English in that context.
Lord McIntosh of Haringey: It means what it is intended to mean. If the noble Lord can find in Fowler or Sir Ernest Gowers a prohibition on the use of the word "but" at the beginning of a sentence, I shall gladly talk to him about it afterwards. But certainly, the Bill as drafted means what it means.
Lord Stewartby: However—may I ask the Minister one more question? I am grateful for his assurance that there is nothing here which implies that non-executive directors' functions are limited, but will he reconsider the phrase, "the non-executive functions"? They are not defined in Clause 392 and therefore they do not have a special meaning within the Bill. The normal English language meaning of "the non-executive functions" in such a context would be all the non-executive functions. It is not a major point, but it implies that what is listed thereafter is the full list of what non-executives may do. If the phrase "the non-executive committee functions" was used instead, it would put the matter beyond doubt, because the whole paragraph relates to the committee. The way in which the phrase is used implies that the full range of non-executive functions are thereafter listed.
Lord McIntosh of Haringey: I do not see that. Paragraph 4(1) states that,
"'the committee' means the non-executive committee".
Paragraph 4(2) states that,
"The non-executive functions are functions of the Authority",
which—
"but must be discharged by the committee".
Paragraph 4(3) lists the non-executive functions. It is a finite list; it is intended to be. It is what was rudely called "housekeeping". It does not restrict the role of non-executive directors in their capacity as members of the board. It restricts their functions only as members of the non-executive committee.
Lord Elton: The Minister's slip of the tongue opens the door for me to be a broker between my noble friend and him. He said, "functions of the Authority which", but then corrected it to "but". If there is to be a definition in that sub-paragraph of the functions only of the committee and not of the non-executive members of the board, the substitution of that word would have that effect. I do not want to detain your Lordships on the matter. The Minister apparently is not going to use this opportunity to tell us how the Treasury, in trawling for members of the non-executive committee, will bring a sufficient range of practitioner experience on to the board. But will he be able to do so at some later stage?
Lord McIntosh of Haringey: I am sorry to have neglected that point. If I inadvertently paraphrased the Bill rather than reading it out, the Bill is right and I am wrong.

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On the more substantive issue of how the non-executive directors can be expected to embody the wide range of disciplines regulated by the Financial Services Authority, the answer is clearly that, with 11 non-executive directors, it would be impossible to secure that every single part of financial markets' existence and development should be covered within the personal experience of the members of the non-executive committee. They are people who have a wisdom in financial markets in general and who cover a wide range of financial markets, but they cannot be expected to cover every nook and cranny. That is why there is a practitioner panel as well.
Lord Saatchi: Yet again, I find that I must agree with the amendments tabled by the noble Lord, Lord Sharman. I should like to ask the Minister to clarify a point. If the FSA itself feels it necessary to spell out the functions of non-executive directors as it sees them, why would the Government not feel it necessary to spell out the functions of the non-executive members of the FSA, which is what Amendment No. 15 seeks to do?
Lord McIntosh of Haringey: The Government feel that it is unnecessary to spell out all the functions of non-executive directors, but it is necessary to spell out the functions of the non-executive committee, which is a subset of the board of the FSA as a whole and which is charged with certain housekeeping functions necessary as a control on the executives. In all other respects, non-executive directors have equal weight and equal fiduciary responsibilities with the executive directors and they act as members of the board as a whole. I do not see the difficulty with that.
Lord Saatchi: Would it then be acceptable to the Government if the words used in FSA consultation paper No. 35 were used to describe the general role of non-executive directors of the FSA?
Lord McIntosh of Haringey: Without having the consultation paper in front of me, I am not able to answer that question with the precision that I should like. I shall write to the noble Lord about the matter.
Lord Elton: I should know the answer to this question, but the Minister said that the number of non-executive directors was limited to 11—
Lord McIntosh of Haringey: I said that it is 11 at present.
Lord Elton: One answer to my question could be a vast, and probably too large, expansion of the number of non-executive directors. That is not an area of policy. Does the answer to my question lie in the practitioner panel and not in the constitution of the non-executive members of the executive? It is an important question when it comes to how the body will actually work.
Lord McIntosh of Haringey: Without giving an unequivocal undertaking that the practitioner panel
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will include every single sector within the broad range of financial markets—I do not want to be trapped into doing that—the answer is that the representative function is the responsibility of the practitioner panel. The non-executive directors of the FSA are not there as representatives of individual disciplines within financial markets, but as wise persons with knowledge of a wide range of financial markets, able to contribute to the work of the authority.
Lord Saatchi: As I understand the Minister I grow more uncomfortable; more so than when I first entered the Chamber. I must explain the thrust of our amendments and why this is such an important point. The Minister tells us that a restricted description of the role of the non-executive directors of the FSA is contained in the Bill—
Lord McIntosh of Haringey: I am sorry, but I am not saying that at all. I am saying that there is a finite description in paragraph 4 of Schedule 1 of the responsibilities of non-executive directors in their capacity as members of the non-executive committee and only in their capacity as members of the non-executive committee, which is set up as a counterbalance, deliberately excluding the executive directors. There is no such limitation on the role of non-executive directors in their capacity as members of the board.
Lord Saatchi: Except that that leaves open and unstated the role of the non-executive directors. This is causing difficulty to me and, I believe, some of my noble friends and the Liberal Democrat Front Bench. I am sure that the thrust of our amendments is becoming clear to the Government. Our basic concern is that this unique body is very powerful indeed. The question to which we are trying to obtain a better answer is: who guards the guardians?
We had a long debate about whether or not a key guardian figure might be the chairman. The Minister said no. We are now asking whether the guardian role might be performed by the non-executive directors. The Minister is again saying no. He is stating that he does not want to define the role, even though the FSA wants definition. That is the problem.
Lord McIntosh of Haringey: I thought that what I said was that the responsibilities of the non-executive directors encompass all the responsibilities of the members of the board, including the executive directors. If I failed to say that, I apologise to the Committee. Any attempt, as in these amendments, to be prescriptive about those functions can only restrict the functions of the non-executive directors rather than add to them.
Lord Donaldson of Lymington: I do not want to detain the Committee. However, perhaps it is possible for a total outsider, in the most helpful spirit, to join in what appears to be a private fight. If one inserts inverted commas in paragraph 4(2) around the words "non-executive functions", I believe the functions

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would then be confined to those which have to be performed by the committee. That would cast no doubt upon other functions of non-executive directors, but one need not turn it into a term of art.
Lord McIntosh of Haringey: I shall, with great trepidation, put that matter, through legal advisers, to parliamentary counsel.
Lord Saatchi: I thank the noble Lord for that intervention. We are unhappy with the outcome of this discussion and shall want to return to it on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Strabolgi): I must inform the Committee that if Amendment No. 15 is agreed to, I cannot call Amendments Nos. 16 to 22.
[Amendments Nos. 15 to 24 not moved.]
7.15 p.m.
Lord Kingsland Lord Kingsland moved Amendment No. 25:
Page 218, line 40, leave out ("Authority") and insert ("investigator").
The noble Lord said: This group of amendments concerns the role of the investigator. The amendments that we have tabled deal with two issues. The first concerns to whom the complaints should be made.
Under the Bill, the complaints against the authority are to be made to the authority. If the authority then considers a complaint to be serious, it passes it on to the investigator. Our amendments question the wisdom of that procedure for two reasons. The most obvious is that the complaints are likely to be against the authority. It seems odd to have the authority performing the act of filtering complaints against itself. Secondly, it seems to us a complete waste of time to filter the complaints through the authority when they could go directly to the investigator. Moreover, that would add independence and credibility to the investigator's role.
The second group of amendments concerns the obligation of the investigator to report the result of its investigation to the authority. I understand that the authority has said, unofficially, that there will be circumstances in which it is prepared to make an ex gratia payment to a complainant where the complaint is held to be justified. Indeed, I believe that an internal memorandum exists in the authority setting down the criteria that it would apply in order to come to a conclusion as to whether or not an ex gratia payment should be made.
The intention of our second group of amendments is to require the Bill to say on its face that there will be circumstances in which the investigator will recommend an ex gratia payment. I should add that if we do not succeed later on in our amendments to remove the statutory immunity of the authority with respect to negligence, we shall then, at Report stage, reconsider our amendments on ex gratia payments,
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probably moving to convert them into an obligation to pay a complainant whose complaint turns out to be justified.
Lord Borrie: I am doubtful of the value of the amendments. It seems to me clear that the investigator is independent. The Bill not only states specifically that he is independent, but, most important, if the authority decides not to investigate a complaint, it must notify the investigator. Schedule 1, paragraph 8(4), states:
"If the investigator considers that a complaint of which he has been notified … ought to be investigated, he may proceed as if the complaint had been referred to him under the complaints scheme".
He has complete independence and freedom to investigate even if the authority has not submitted the complaint to him under the complaints scheme. Therefore, I do not see that there is any doubt about the reality of the independence of the investigator.
Baroness O'Cathain: I can see the reason for the remarks of the noble Lord, Lord Borrie. However, the reality would be a rather tortuous procedure. Would it not be better for all complaints to go to the investigator in the first place rather than having them looked at by the authority and passed to the investigator? It seems that there should be two bites of the cherry. In the interests of complaints being dealt with and finalised to the satisfaction of the FSA or the complainant, as soon as possible, I believe that that is how it should be done.
Lord Borrie: Perhaps I may respond briefly. I took it for granted that the complaints should go to the authority. It is surely in everyone's interest that the authority should be told that a complaint has been made against it. It may need to respond. In any case, it may determine the matter rapidly and favourably towards the complainant without the matter needing to go further.
Baroness O'Cathain: Perhaps I may pursue the matter. If someone makes a complaint about the Financial Services Authority, it might be easier for that person to go through an independent investigator. I take the point that if it was a silly complaint, the authority could say, "Sorry, there has been a misunderstanding. This is the way it should be done". However, I believe the complainant would have more confidence if he or she went straight to the investigator rather than just to the authority. Experience shows that if the complaint goes to the people who are supposed to have done wrong, it is better to have an independent investigator. A complainant would feel better about that.
Lord Donaldson of Lymington: Perhaps I may refer to the banking ombudsman scheme which I used to know quite a lot about. In that scheme, as in the insurance ombudsman scheme and no doubt other schemes, the complainant is first required to exhaust his remedies with the authority. There is good reason for that. As has been said, there may be a misunderstanding or a "slip-up" by somebody down

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the chain. The matter can then be speedily put right, perhaps by ex gratia compensation or by recantation on a ruling. It would not do any harm and, as the noble Lord, Lord Borrie, pointed out, the complainant must be kept informed.
I believe that there are respectable precedents for suggesting, indeed requiring, that complaints go first to those being complained against.
Lord McIntosh of Haringey: Of course that is right. I can think of no example of a complaints procedure which does not require the complaint to go first to the people complained against in order that it can be put right. As the noble Lord, Lord Donaldson, has said, it may simply be a mistake which can be dealt with quickly, or it could be a serious matter which may affect their procedures or policies and which has to be taken very seriously. The quickest way to ensure that that happens is for the complaint initially to go, in this case, to the authority. That is what always happens with complaints procedures and I cannot think of any exceptions.
Take, for example, the notice from the London Transport Passenger Committee on a London bus. It states that complaints should first be addressed to London Transport. If a passenger is not satisfied, he should then go to the London Transport committee, whose address and telephone number is given on the notice.
The independent investigator forms only a part of the protection provided for consumers by this Bill. Later, we shall debate the financial services and markets tribunal and the ombudsman schemes. I can assure the noble Baroness that protection is stacked up line behind line in the Bill. The effect of the Opposition amendments would be to prevent the FSA from having the first opportunity to deal with complaints made against it. It would not be sensible or in accordance with practice to take the FSA out of the process in this way.
Furthermore, what would be the implications for the time and resources of the independent investigator if he were to investigate all complaints in the first instance? Here, we are trying to set up a mechanism for cases which the FSA cannot resolve with complainants rather than every single case that might arise. Nevertheless, the scheme ensures transparency. If, as my noble friend Lord Borrie said, the FSA decides not to investigate a complaint, the investigator has to know about it. At that point, the investigator can take up a complaint if he sees fit. Of course, if the FSA does not settle a complaint and decides that there should be an investigation, that also is where the independent investigator comes in. However, taking the FSA out of the picture in the first instance would be neither right nor efficient.
Two government amendments have been included in this group; namely, Amendments Nos. 30 and 31. Schedule 1(7) to the Bill specifies that the complaints investigator set up by the FSA must be independent of it. We believe that that independence will be reinforced if the investigator is not allowed to employ FSA staff
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to investigate complaints against the FSA. At the moment the Bill would permit FSA staff to be used, which we do not believe is compatible with the level of independence that we seek. These government amendments would prevent the investigator from using FSA staff. I hope that I shall be allowed to move the amendments formally when we come to them.
Lord Jenkin of Roding: I have listened to what the Minister has said about where the complainant should first go with his complaint. However, those of us who have had experience of dealing with constituents may recognise certain problems that can arise. I always used to say that I had no difficulty in dealing with a nutter who had what was clearly a silly problem. I also had no difficulty in dealing with a sensible constituent who was talking nonsense, because he could be persuaded otherwise. But occasionally one saw a nutter who was not talking nonsense.
I can envisage the temptation for someone working down the line in the Financial Services Authority, when encountering a person who does not put his case well, is a little unreasonable, but has in fact touched on a point of some substance, to say to his superiors, "I don't think we need to pay. This chap's barmy. We should write him or. That is the message that would reach the investigator. However, if the complainant had had the opportunity to go to the investigator in the first instance, while the investigator might be subject to the same temptation to write him off, at least he would not have had someone from the FSA saying to him beforehand, "Don't waste your time on this chap". That kind of circumstance lies behind the unhappiness with the provision as it is structured at the moment.
7.45 p.m.
Lord Grabiner: I do not know whether all noble Lords have had access to a paper dated 2nd March issued by the FSA. I am entitled to assume that it was not sent only to me because it states that copies have been distributed to all noble Lords who spoke in the debate on Second Reading.
What the document says in terms on the point before us is that, if the FSA decides in any particular case to decline to meet the complaint by accepting responsibility for that complaint, then the FSA will be under a duty to notify the matter immediately to the independent investigator. The problem will not be shuffled under the carpet. It must be passed immediately across to the investigator.
Lord McIntosh of Haringey: I agree with my noble friend. What must be sent immediately to the investigator is the substance of the complaint rather than any form of word picture of the complainant himself.
Lord Faulkner of Worcester: Further to the point made by my noble friend Lord Grabiner, I shall quote from the same document, where it states that,
"The FSA's complaints scheme will make provision for the Investigator to be notified of all complaints which it receives, whether or not it decides to investigate them itself. Complainants

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will not necessarily have to await the conclusion of the FSA investigation before requesting that the matter be pursued by the Investigator. Complainants will be informed at the outset of these arrangements".
I am not sure whether all noble Lords have received a copy of this document. Apparently it has been sent to all noble Lords who spoke in the debate on Second Reading. However, it seems to me that this goes a long way towards satisfying the points made by the noble Lord, Lord Kingsland, when moving his amendment. Furthermore, it also picks up on the point made by the Government in their amendments. This seems to be a remarkably detailed attempt to provide an independent investigatory machinery which perhaps other organisations would be interested in following.
If all noble Lords concerned do not have a copy of this document, I think that it would be most helpful if it were made more widely available.
Lord Elton: Can the noble Lord inform the Committee of the status of the document which we have not seen?
Lord Faulkner of Worcester: The document was sent to me as a Member of your Lordships' House who spoke in the debate on Second Reading. It is entitled Independent Investigation of Complaints Against the FSA, "Note by the Financial Services Authority". My copy is dated 9th March, which may mean that it has been sent out at different times.
Lord Jenkin of Roding: I did not speak in the debate on Second Reading. I have not received a copy of the FSA document. Clearly, once I have had an opportunity to read it, we may be able to decide what we shall do about this matter on Report.
Lord Grabiner: Perhaps I may add, first, in response to the question of the noble Lord, Lord Elton, that the opening paragraph of the document states that,
"This paper summarises the arrangements which the FSA envisages maintaining for the investigation of complaints against itself".
Secondly, it also deals with the point raised by the noble Lord, Lord Kingsland, on the question of ex gratia payments and sets out in some detail an acknowledgement of the concept that it will be responsible for the making of ex gratia payments. The circumstances in which ex gratia payments will be made are identified in some detail, along with the principles to be taken into account when deciding whether and how much should be paid.
Noble Lords may feel that this document is rather critical to our debate. I suspect that it answers most, if not all, of the points raised by these amendments.
Lord Elton: I am most grateful to the noble Lord, Lord Grabiner, for that explanation. It raises the interesting point of what weight should be given to a declaration of intent which is in no way binding on the
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body giving such a declaration. I do not say this in any pejorative sense, merely in a legalistic sense. However, we must consider its weight.
Lord McIntosh of Haringey: That is exactly why I have not relied on that document in my response to these amendments.
Lord Kingsland: In my opening remarks, I referred to that document—I described it as a "memorandum of understanding"—when I talked about the criteria that the FSA said it would apply when making ex gratia payments. Perhaps the Minister would be kind enough to respond to the points I made in that regard. This is not a criticism of the Minister; it is simply an observation. I do not remember him responding to my amendment on ex gratia payments.
Lord McIntosh of Haringey: I did not; it is not included in this group of amendments. Amendment No. 29 is tabled alone. Since the noble Lord, Lord Kingsland, spoke to it, I shall gladly respond and then we can avoid taking it afterwards.
Lord Kingsland: The Minister expressed the view that he hoped that we would move with increasing momentum after the first amendment. I have been happy to oblige.
Lord McIntosh of Haringey: I am happy to oblige the obliging noble Lord. The main thrust of Amendment No. 29 would be to allow the complaints investigator to recommend ex gratia payments by the FSA when complaints are well-founded. In that regard I refer to the document to which the noble Lord referred in his opening speech.
The FSA recently circulated details of the circumstances in which it would make ex gratia payments and will be consulting further. I shall ensure that copies of the memorandum are available in the Library of the House and to all Members of the Committee who took part in this debate, even if they did not take part at Second Reading. We can certainly consider this in more detail with the assurance that we all have the same information behind us. It would be entirely legitimate for the noble Lord, Lord Kingsland, to raise the matter again on Report. Meanwhile, I hope he will withdraw his amendment.
Lord Kingsland: I am obliged to the Minister. I shall now respond briefly to both groups.
On the question of the independence of the investigator and the appropriate route for complaints to take, the proper context in which to look at that question is the statutory immunity granted to the authority at a later stage in the schedule. As the noble Lord is aware, excluding bad faith and the effect of the Convention on Human Rights, the authority enjoys statutory immunity, in particular against reckless or negligent behaviour by any of its employees. Therefore, if I am a regulated body and I am a victim

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of reckless or negligent behaviour which ruins my business and my reputation, I need to have some form of recourse in the Bill, since I cannot sue in the courts.
To have, simply, provisions in the Bill which say, "Before you do anything else you must go and talk to the authority about it", seems to me to be wholly inadequate, if I may say so with the utmost respect to the noble Lord the Minister. Even if there are circumstances in which that is a satisfactory solution, it would not be seen to be a satisfactory solution by the regulated bodies. That is why I say to the Minister that the absolute minimum required, so that individuals who are victims of this kind of conduct for which they have no redress in the courts, is an investigator with real, perceived credibility and total independence of the FSA. That is why I believe the responses from the Minister and the Benches behind him are not adequate to the scale of the problem.
Nevertheless, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 26 to 29 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 219, line 19, leave out from ("person") to ("to") in line 20.
The noble Lord said: I have already spoken to Amendments Nos. 30 and 31. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 31:
Page 219, line 21, at end insert—
("() Neither an officer nor an employee of the Authority may be appointed under sub-paragraph (7).").
On Question, amendment agreed to.
[Amendment No. 32 not moved.]
Lord Bach: I beg to move that the House be now resumed. In moving this Motion, I suggest that the Committee stage on this Bill be resumed not before 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Lone Parents
7.35 p.m.
Baroness Ashton of Upholland Baroness Ashton of Upholland rose to ask Her Majesty's Government what has been the impact of their policies since May 1997 on the prospects for lone parents.
The noble Baroness said: My Lords, in opening this debate I thank my noble friend Lady Hollis of Heigham for her time, and that of other noble Lords who share an interest in this area of policy.
It is against the backdrop of the Government's commitment to the eradication of child poverty that this debate takes place. The policies to support lone parents must, in my view, be at the heart of that commitment. There are 2.8 million children living in lone-parent households and two-thirds of them are poor. Or, put another way, 43 per cent of all poor children live in one-parent families.
In preparing for this debate I am grateful to the Library and also to the National Council for One Parent Families and Business in the Community. Each provided me with valuable information, and each provided me with information which changed my perceptions.
As it is some time since this area of policy was debated in your Lordships' House, by way of introduction I should like to do a little myth exploding. Lone parents are not new. In the 19th century there were as many families headed by a lone parent as now. What is new is the reasons. Death was the major factor then. Now, three in five lone parents are "ex-married" (a new term)—-divorced, separated or widowed. The fastest growing group is the never-married. But before we read too much into that, we should recognise that most of those—77 per cent—registered their children to two parents living at the same address. Only 15 per cent of lone parents have never married or lived with the child's father. Within that 15 per cent lies an important group of teenage mothers.
I do not underestimate the importance of teenage pregnancy. From the research I have done, it is clear that we need to do more to understand and tackle the relationship between teenage pregnancy and low expectations of young people, ignorance and the mixed message for some that somehow sex is compulsory but contraception illegal.
The average age of a lone mother is 34; a lone father is most likely to be in his 40s. There is no evidence of teenage lone parents having a child to obtain housing benefit. Most have no idea of the system; what information they do have almost invariably turns out to be wrong. Never-married lone parents tend to be younger and are more likely to be on benefit. But they also tend to have smaller families, take paid work and "re-partner"—my second new word of the night—sooner.
Eleven per cent of lone parents come from black or ethnic minority communities. Compared with 22 per cent of white families, 9 per cent of Indian, 17 per cent of Bangladeshi and 55 per cent of black families are headed by a lone parent. Finally, one quarter of all families with dependent children are headed by a lone parent, according to the last general household survey. That means that nearly half of all children may find themselves at some point or another living in a one-parent family.
I said at the beginning of this debate that two-thirds of the children living with lone parents are poor. I want to turn to the reasons for this poverty. I can say with feeling that children are expensive. Women are most likely to be the lone parent. They are most likely to earn significantly less than men; most likely to be in

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low paid work; and more likely to be employed in the non-standard or flexible economy. They have no independent source of income and are consequentially reliant on benefit. And of course they have no second earner.
There is no doubt that, where possible, the practical route out of poverty is through work—and I emphasise the word "possible". Indeed, 44 per cent of lone parents are in work, compared to 68 per cent of women in couples with dependent children. But 90 per cent of lone parents indicate that they would like to work, not necessarily immediately but when circumstances allow.
In my view, the New Deal for Lone Parents offers valuable support and encouragement. It has been criticised for low take-up rates—the last figures I saw were around 33,500—but I would argue that this is a classic case of a policy needing time to demonstrate its effectiveness. It should not become a victim of short-termism. This group of parents faces enormous barriers to work: attitudes of employers and the organisation of work; lack of transport; existing financial hardship and the constraints that it imposes; childcare needs; lack of skills; low pay, scarce and insecure jobs; concern about meeting housing costs; and the complexity of the benefit system.
The introduction of small but practical measures—such as the two-week run-on of income support for lone parents moving into work and the introduction of back-to-work grants for those who have been unemployed for a long time—have had an impact on the ability of lone parents to take up employment. I hope, too, that my noble friend the Minister will look at the help that might be given to those lone parents who own their own homes. Of course, the introduction of the working families' tax credit and the accompanying childcare tax credit are important, particularly the latter.
However, I also want to mention the importance of the role of employers in helping lone parents back to work. Noble Lords may recall that I have spent most of my working life involved in partnerships between the public, private and voluntary sectors to regenerate communities and develop new policies to support people into work, or back into work. Employers can, and should, play a role in supporting families of whatever kind, especially those who rely on one parent. I wish to draw the attention of the House to a few examples that I believe illustrate this, partly pour encourager les autres.
The Bank of Ireland has introduced flexible working options—98 per cent of those taking up the options are women. Moreover, to support take-up and compensate for any reduction of income through flexible working, the bank offers to reschedule employees' loans or mortgage repayments. The main benefits identified to the bank are increased morale, better retention rates, and improved productivity measured by cost savings and customer satisfaction.
BT has piloted projects involving home working, combinations of long and short days, full-time working over four days and "banking time" to take
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during the school holidays. These are now being considered for integration into mainstream policy. As a result, three employees have remained who would have left; an employee was able to support his disabled children more effectively, allowing his partner to take on part-time work; and line managers report improvements in productivity. Staff turnover has fallen to 5 per cent in the trial centre, compared to 15 per cent in equivalent centres. These are examples of how the best employment practice is also the best business practice.
However, not all lone parents wish to, or can, take up employment. For some, educational opportunities are the way forward. Revising or learning new skills may provide the means to employment of a higher standard and greater income. Financing education can be difficult. For some, the loss of free school meals and the imposition of prescription charges, because student loans are regarded as income, may be problematic.
The ability to take on employment or education depends on adequate childcare. Research carried out some years ago indicated that between the hours of three and four o'clock in the afternoon the productivity of women changed as their thoughts turned to their children leaving school. For some children that would have been a journey to an empty home, for others a journey to childminders or elsewhere.
This is a classic joined-up thinking issue. I look forward to the days when we will be able to provide sufficient after-school provision for children. I have in mind sport, art, drama, homework clubs and fun. These are of benefit to both the children and the parents. Better use would also be made of school facilities. I commend the efforts of the New Opportunities Fund in funding and supporting a range of after-school facilities. Speaking from personal experience, I can say that after-school childcare is most difficult to find. We should embrace all the opportunities that we can. Again, employers can also help.
As an employer, the Benefits Agency has invested in child care champions to provide information on childcare, spread best practice and raise awareness. It has set up 12 new holiday schemes and plans up to 50 by next year. Some staff have already indicated that they are staying specifically because of the policies introduced.
Bishop Auckland College now operates a 100-place nursery for its students, staff and local community. Since its opening, staff turnover is close to zero and the percentage of women managers has risen by 20 per cent. The number of women accessing higher education has grown by 30 per cent. Some women who had children before they were 14 are now training at the college and the number of women returning to education has increased by 51 per cent.
It is because good childcare is important that I believe parents entitled to claim support for it should be freer to use it as they see fit. I am thinking especially of the army of grandmothers who regularly support

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their children by looking after the grandchildren. We should consider allowing parents greater flexibility to decide what works best for their children and, with safeguards, contribute to the income of those who do.
For some lone parents the most important role that they can perform at this point in their and their children's lives is to be a full-time parent. Whether the children are young, the break-up traumatic, or for whatever reason, it may be best for the parent to be with the children as much as is possible. That may rule out paid work or education for the time being. I believe that we also need to recognise this and be cautious in our push for employment as the only solution for poverty in every case.
Finally, we will in this House debate many times the question of marriage and family. Let us be aware of the importance of the one-parent family and ensure that no child believes as a consequence of our action that somehow the love and care that he gets from his family is inferior to anyone else's. For some, being in a one-parent family marks freedom from physical or mental abuse; it means control of the finances for the benefit of the children; and it means the beginning of a new life. For some children a one-parent family is infinitely preferable to the alternative. Let us celebrate our successful one-parent families, cherish them and support them in every possible way.
7.46 p.m.
Lord Brett: My Lords, I should like to begin by thanking my noble friend Lady Aston of Upholland for giving us what is really the first opportunity to debate and review the raft of policies that have been put in place by the new Labour Government to improve the lot of lone parents. I share with my noble friend the belief that much good has been done. However, like her, I also recognise that not all lone parents have benefited equally—or, indeed, at all—despite the Government's best intentions. It is a number of those anomalies that I should like to raise in my contribution this evening.
The cut in the lone parent rate of child benefit and the elimination of the lone parent premium in income support is the most obvious anomaly. This has significantly reduced income to a group of people who are demonstrably at the greatest risk of poverty. It is often the individual case that most graphically illustrates how unintended disbenefit can arise even with improved and, it is to be hoped, beneficial policies.
A particularly difficult case has come to my attention—that of a young lone parent mother who suffers from a debilitating disease, Crohn's disease. I trust that noble Lords are aware of the symptoms of this disease and its effect, because in the six minutes at my disposal tonight there is little time to describe it. It is a condition with no known cause and, therefore, no known cure. Treatment is by continuous use of medication or, where appropriate, surgery. While this young lady was on income support she qualified for free prescriptions and, indeed, free school meals for
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her child. However, courtesy of the efforts of the Child Support Agency, her income now exceeds—but only just—the moneys previously paid in income support. Of course, this has now been withdrawn, together with the entitlement to free prescriptions, which this young lady needs if she is to lead anything approaching a normal life.
Unfortunately, although Crohn's Disease is lifelong, it is not considered to be life threatening. Thus it does not qualify for inclusion in the list of those diseases which, in turn, qualify for free prescriptions. With medicines, dressings, and so on, this young lady's prescriptions could cost £25 to £30 a month, or perhaps more. Of course, all this far exceeds any additional income that she receives, courtesy of the CSA, over her previous income support. The only advice that she has received from those who can advise her in this respect is that she could consider purchasing a pre-payment certificate costing, I believe, around £70 a year. This would obviously be a better option than paying prescriptions at £5.90 or £6 a time. Although £70 per annum may not seem an enormous amount of money to a Member of this House, it is an enormous amount of money to a young women who is bringing up a child with absolutely no spare income.
A broader anomaly, which was referred to by my noble friend Lady Ashton, is that of lone parents who are, or who wish to be, full-time students. Such parents are now penalised by the removal from income support of an element equal to the student loan, whether or not such a loan is taken, together with the loss of free school meals and prescriptions. Is it possible that this can be sensible? Should we not consider disregarding the student loan when calculating income for the purpose of income support? After all, a loan has to be repaid; it is therefore a debt, and a debt is not income, however one looks at it.
In summary, lone-parent families, who represent 25 per cent of all families in Britain, have much for which to be grateful to the Government. I refer to the working families' tax credit, the National Childcare Strategy, real increases in child benefit, and increases in income support. That adds up to a good record and a good overall policy. However, can the Minister offer any encouragement that these lesser but important anomalies to which I have referred will receive the attention of her department with a view to making a good policy better by dealing with these anomalies, which I am sure are not intended? Will the department consider how those who slip through whatever net we create can be offered advice which is rather more sympathetic than that of, "Go away and spend money you do not have"?
7.50 p.m.
Baroness Crawley: My Lords, I welcome the chance to take part in this important debate. I thank my noble friend Lady Ashton for giving us the opportunity to focus briefly on a group of people who have had more than their fair share of vilification over the years.
Most lone parents are mothers. Over the past couple of decades there has been an increase in lone mother families. According to the 2000 edition of Social

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Trends, in 1971 7 per cent of families with dependent children were lone mother families. By 1998 the figure had risen to 22 per cent; it had trebled. Before the mid-1980s much of the rise in lone parenthood was due to divorce; since then, single lone motherhood has grown at a faster rate.
As my noble friend Lady Ashton said, lone parenthood is not a recent phenomenon. There is evidence that lone parent families were just as numerous in the 16th and 17th centuries although they declined somewhat in the later 19th and early 20th centuries. Lone parents comprise young or older women with young, teenage or older children. They may be divorced, separated or widowed, or they may never have married. Their profile is far from the stereotypical description that was once guaranteed to earn a cheer at the Conservative annual conference.
Some lone parents have professional jobs; some are on benefits; some work full time; and some work part time. For many, childcare is a real problem; for others, it is more manageable. Many lone parents form part of the poorest group of people in this country. However, as the noble Baroness, Lady Hollis, said recently in a debate in this House on poverty:
"Indeed, one-third of all children are poor. The face of poverty in this country is the face of a child".—[Official Report, 16/2/00; col. 1300.]
The number of children living in poverty has soared over the past 30 years, despite the fact that family size and the number of families with children has fallen. By 1995–96 over 4.3 million children—one-third of all children in Britain—were living in households below the poverty line, up from just one in 10 in 1968. Therefore it is imperative not only for the social inclusion of poorer lone parents themselves, but also for the future of their children, that the Government's commitment to halving child poverty by 2010 is realised. As my noble friend the Minister said in that recent debate, poverty is not a birthright.
Breaking the cycle of deprivation and low esteem and even lower expectations from parents to child so that children can get the best start in life has to be one of the driving motivations behind the Government's New Deal for lone parents. The New Deal is a major weapon in the Government's armoury of making work pay and tackling child poverty. It recognises that improving the income of lone parents is the surest way out of that cycle of deprivation. However, we know that it is not the only way. Access to good health, good education and good housing are also enormously important in finding sure routes out of poverty.
The Government's New Deal for lone parents deserves our support precisely because it is attempting to break down the barriers faced by all those lone parents who are presently locked out of the labour market. Obstacles such as little or no experience of work, demoralisation, demotivation, the need for reskilling, an abandonment of confidence in one's own social skills, as well as poor qualifications and, indeed, no qualifications, are all prevalent.
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I believe that the New Deal is a practical, comprehensive package of back-to-work help designed to assist and encourage lone parents on income support to take up paid work. I quote the comments of some lone parents on the New Deal. Dawn from Weston-Super-Mare has three children between the ages of 18 and seven. She states of her introduction to the New Deal:
"At our first meeting I explained that whatever happened I could not afford to be any worse off financially. Nicky explained how the benefits would be affected by the increase in hours. She helped me by doing a calculation to show how much family credit and housing benefit I would receive working full time".
Nicky was Dawn's personal adviser.
Carrie from Burnham-on-Sea has a small child of three. She stated of her personal adviser:
"It was a two-way relationship; a real joint effort. Carol wanted to help me into a job and I wanted to work. The fact that the scheme is voluntary means you feel you've made a personal effort".
David from Kent had children for whom he had given up his teaching job. He stated:
"Initially I was very sceptical about the prospect of working again. However, I found that I was reassured when I was not put under pressure. It was always made clear that if I felt the kids weren't ready for me to go back to work, I wouldn't lose anything by backing out".
Those are some of the comments of lone parents on their experience of the New Deal.
I conclude by asking the Minister whether she will take up the point that my noble friend Lady Ashton made as regards how relatives—my noble friend gave the example of grandparents—can be assisted financially and in other ways to take on some childcare responsibilities.
7.57 p.m.
Lord Warner: My Lords, I too am grateful to my noble friend for giving us the opportunity to discuss the subject of lone parents this evening. I want to place lone parents in the broader context of family policy. In doing so, I draw the House's attention to the Government's consultative document, Supporting Families, which focuses on the care, welfare and upbringing of children.
The document recognises that families come in all shapes and sizes and that it is not for the Government to preach to people. Instead the policy emphasis of the Government—rightly, in my view—has been to provide practical help to parents rather than harangue them about the nature of their adult relationships.
Too often in the past lone parents have been regarded as though they had single-handedly sought their status. There has been too little recognition that large numbers of single mothers have demonstrated huge resilience and have brought up their children successfully despite difficult circumstances. I am glad that this Government have seen lone parents as a group who should be able to benefit from broader improvements in family policy as well as having some targeted help that relates to their particular circumstances.

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The real disgrace of the family policy that this Government inherited is the huge increase in child poverty that took place in the 1980s and 1990s, to which my noble friend Lady Crawley drew attention. The previous government liked to describe themselves as concerned with the family but they allowed this increase in child poverty to take place through their failure to provide adequate financial support to millions of families with children. The benefit and tax measures introduced by this Government will now start to remove children from poverty in both one- and two-parent families. The huge increases in child benefit, the working families' tax credit and the childcare tax credit will all help lone parents and will take hundreds of thousands of children out of poverty during the lifetime of this Parliament.
The new childcare places will also benefit 1 million children by 2003, many from lone parent households. The Sure Start programmes, with expenditure of about £0.5 billion, will provide more integrated services in early years for many parents in areas where incomes are low. Guaranteed nursery places for every four year-old and improved maternity leave, pay and grants are all measures of a general kind that will help and benefit lone parents.
On top of this, the New Deal has provided targeted help specifically for lone parents on income support. This does help to overcome the barriers to work for many low income lone parents. Despite a perhaps slow start, these new arrangements have helped several thousand lone parents into work in the pilot areas. I am sure my noble friend Lady Ashton is right to argue for patience in letting this new policy initiative take root.
I believe lone parents will also benefit from the greater help that is being made available to parents generally. There is increased funding for Parentline so that parents who are struggling, have difficulties or have problems can telephone for help. There has been expanded funding for local parenting groups that provide information and mutual support. That is again something that will help some lone parents. Much greater funding has been given to voluntary organisations such as HomeStart, with its befriending services. Again, that will help socially isolated mothers with young children, among whom are many lone parents. These are the kinds of practical projects that will help lone parents as well as families with two parents.
I draw attention finally to an area where the Minister has been very active. This is the work that she has done on reforming the shambles of the Child Support Agency. Producing more realistic and practical arrangements for ensuring that non-resident parents support their children will be a major help for many lone parents. My noble friend the Minister deserves great credit for the reforms that she has driven through in this very difficult area.
In conclusion, in developing an inclusive, coherent and non-judgmental family policy, this Government have helped all parents, whether they are single parents or in households with two parents.
8.2 p.m.
Baroness Kennedy of The Shaws: My Lords, I too wish to thank the noble Baroness, Lady Ashton, for introducing this debate. Child poverty and the position of lone parents have long been two of my own preoccupations. Indeed, I remember very well that one of my first speeches in this House two-and-a-half years ago was with regard to my worry about the effect of benefit cuts on lone parents. I am happy to say that, since then, the Government have shown that they are committed to lone parents and have introduced many policy changes to address their special needs.
As the noble Baroness, Lady Ashton, has said, there is nothing new about the lone parent, particularly lone mothers. Ninety per cent of lone parents are women. Women have often been forced by circumstances to bring up children alone. Indeed, many people in this House were brought up in that way. As the noble Baroness, Lady Ashton, described, the circumstances themselves may have changed. Less lone parenthood may be brought about by effects of war or by death and more as a result of relationship breakdown. However, as my noble friend Lady Crawley described, there is a great deal of mythology—mythology about lone parents selecting their status and doing so to secure housing and other state benefits. All this is a travesty of the truth.
I, too, wish to congratulate the Government on the New Deal initiatives. Working is invariably the way out of the poverty trap. The best way for women to find self-esteem and to recover their confidence is to take that step back to work, especially as often they are recovering from the demoralisation of rejection and the failure of a relationship. However, I am concerned that, in asserting, as the Government properly do, the importance of parents being able to stay at home when their children are very young, we also recognise that, immediately after breakdown, particularly in circumstances where there has been domestic violence and a woman has left because of abuse, there has to be a serious period of time before she is encouraged into work. The children of such families are so emotionally needy as regards the parent who remains.
My main area of interest and concern is the route into work through education. As many noble Lords will know, I have been involved in the field of further education and have produced a report on the subject. One concern we still have in the further education field relates to the difficulties encountered by mothers seeking to acquire an education—often because it was not readily available to them when they were younger—have in affording childcare, even where it is available within the colleges. Often, childcare facilities are available in the college but they are still too costly for a lone parent.
I understand that the Government are bringing in bursaries in higher education to help with the cost of childcare. I ask the Government to consider whether similar provision can be made available in further education. So often, that will be the starting point for single mothers in acquiring education they failed to get the first time round.

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A complaint that is often made regarding the problems in further education is that because women with children who are trying to study have so much pressure upon them, the lecturer in the college becomes the counsellor and supporter. We need to see a development of access funds to include more money for childcare. At the moment, access funds for further education are being used by lone parents for childcare rather than for buying books, computers or other items that they really do need.
Gordon Brown, the Chancellor of the Exchequer, announced in a pre-Budget report that £50 million will go into further education in September. It is welcome that this money is going to this area of education, which has always been neglected. I would be very grateful if it were possible for the Government to give a steer by saying that a significant part of that money should go towards childcare, an area which will be most beneficial for women.
Those are the matters that I wish to raise in this debate. I want to thank again those who have participated in the debate and the noble Baroness, Lady Ashton, for introducing it. In addition, the Minister has played a great role in seeking to promote and improve the position of lone parents. I know that she shares my view that one of the routes off welfare and into work for many women is education. I should be grateful if she could give an indication as to how that might be shaped up in the months and years to come. I am happy that the message coming from this House tonight is that families come in many shapes and sizes and that it is not helpful if there is moralising about people who are left to bring up children on their own.
8.8 p.m.
Earl Russell: My Lords, I, too, should like to thank the noble Baroness, Lady Ashton of Upholland, for introducing this debate. In particular, I welcome her remarks about the importance of childcare, in which I hope the Minister will assume that she has spoken for us all.
I should also, I am afraid slightly backhandedly, like to welcome the introduction of this Unstarred Question because it has freed me from a self-denying ordinance. The Minister may have noticed that in the debate on 16th February I mentioned neither single parent benefits nor incapacity benefit. I thought the House knew what I thought about those things. I do not want my silence to be taken for consent, and this debate gives me an occasion to say that we on these Benches are by no means reconciled to those changes.
I should also like to say to the noble Lord, Lord Brett, that he may be pleased to know that when the Child Support Act was brought forward in 1991, the noble Lord, Lord Carter, divided the House on precisely the point about passported benefits which he has now made. He did so with my enthusiastic support. The noble Lord, Lord Brett, raises it tonight also with my enthusiastic support.
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I know that since the 1997 cuts the Government have introduced a number of welcome measures which, in the words of the National Council for One Parent Families, have gone some way to restoring the losses of lone parents. But since the working families' tax credit, by definition, applies to those in work, those who are not in work have gone less far than others towards recovering the lost ground. The argument the Minister and I had about whether separate costs are attached to being a single parent was inconclusive, interesting and of a high level. I was interested to note that the Acheson report agreed with me on that. It does not, of course, make me right, but it does suggest that the view is one which can be seriously entertained.
However, the biggest problem obviously is poverty. I am interested to notice that research shows that in lone parent families which do not suffer from poverty, the children do no less well than they do in any other family. That is a point to which we might return on 23rd March when we discuss guidelines. I shall throw the Minister a statistic for a present in a debate in which I am not generally being entirely kind to her. At present, 62 per cent of lone parents have an income which is below half the average income. In 1979, the figure was 19 per cent. I imagine that the Minister may want to repeat that figure on occasion.
The Government have only one answer here. It is work. It is a good answer for many people. Work is a right. I believe in helping people to uphold their rights. But where one has young children to care for, not working, equally, is a right. We on these Benches believe in upholding both those rights. The Government tilt the scales a little. Tomorrow we have the work-focused interviews which single parents are being required to attend for the first time. We have single parents suffering a good deal of fear where disentitlement to benefit is concerned, afraid of the stigma to which many speakers have referred, afraid of the threat of losing benefit before appeal, suffering problems with childcare and transport, of which we have heard. On 16th February the Minister expressed surprise at transport coming into a debate on poverty. It will not be the last time.
Above all, this is an issue of human rights, an issue of subsidiarity—the state does not know what is going on in a family—and an issue of the state's competence, therefore, to assess what is happening. I have not forgotten the speech on this subject of the noble Lord, Lord Evans of Parkside, when the cuts in single parent benefit were before the House. I have also been spending a good deal of today reading the DSS research report 110, The Evaluation of the New Deal for Lone Parents. In the light of that, I wonder whether the Government's faith in that is entirely justified. If one wants to calculate the effect of the New Deal, one has to calculate two things: dead weight—that is, those who would have found jobs anyway; and substitution—that is, how many of those off the programme who find jobs thereby displace other people who would have found those jobs if the others had not. The report makes a great effort to calculate additionality. The researchers calculate that, out of

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8,107 people on the programme, 3,393 found jobs, and 645 would not have found them without the programme.
I have as much confidence in those figures as the researchers, which is to say that I cannot think of any better ones, but I do not know whether they are right. On the question of substitution, they say that they have made an assumption that for each person off the programme who found a job, one other person remained one month longer on benefit. They say, "This is a bold assumption". Yes, it is, especially with no evidence in favour of it. It seems to me that where the programmes have created no additional jobs, there is a rebuttable presumption that dead weight plus substitution add up to 100 per cent. If the Minister can rebut that presumption, I shall be very interested indeed to hear her do so.
8.15 p.m.
Baroness Buscombe: My Lords, I should first like to thank the noble Baroness, Lady Ashton of Upholland, for providing us with the opportunity to speak on this important subject, although it is impossible to do it justice in six minutes.
It is important to focus upon the 1.7 million people who are single parents bringing up our next generation—nearly 3 million children. There is no doubt that we need policies which provide positive, sensible, realistic and workable support systems for lone parenting, not just for the sake of the children, but also for the parents, most of whom do not choose to be single parents.
Lone parenting carries with it a huge burden of responsibility. As a working mother with three young children, while I have an extremely supportive husband and reliable help with childcare, I nevertheless sometimes find it tough to juggle and tough to cope. I frankly admire all those men and women often struggling but managing to bring up children on their own.
We have heard much this evening about what the Government have been doing to help lone parents since 1997. I am bound to say that I do not agree that they have had much success. The fact is that the Government are evading the key question: what is the right balance between tough and responsible unpaid work looking after a child and breadwinning paid work to avoid dependency on benefit?
While this is a dilemma that most partnered mothers face, it is much more acute for single parents where all the responsibilities of breadwinning and carer come together. For new Labour, the focus is entirely upon paid work. By talking in terms of only valuing the role of bringing up children if you leave them to go out to work and pay someone else to look after them, the Government have caused huge offence. In addition, they have introduced programmes such as the New Deal for Lone Parents and the ONE programme. It is all rather confusing. Both schemes are supposed to get single parents into work. The ONE programme entails all single parents turning up for an interview, but after that nothing is required of them.
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As for the New Deal, figures from the Government show the initiative to have been an expensive failure. A £190 million scheme has secured jobs for only 4.5 per cent of the lone parents invited to join. This percentage means that fewer than 20,590 people out of a total of 454,920 are now in work. Eighty-six per cent of the single parents invited to join the scheme have not even attended an interview with an adviser. This figure is unlikely to improve as the monthly participation rate is now falling fast. In October 1999, 5,760 of those invited to join the scheme attended an initial interview. The latest figures show that less than half that number did so in December.
Ministers have often claimed that the New Deal for Lone Parents is a success. However, they have, so far, neglected to admit that the published figures are distorted as they add in the single parents with children younger than five who were not invited to meet a jobs adviser but who found work anyway. This is not right because only those in the target group are invited or expected to join.
It is my hope that the Minister will give us the true figures and also respond to articles such as that by Alasdair Palmer in this week's Sunday Telegraph, entitled "The Deceit of Brown's War on Benefit Fraud". Alasdair Palmer states that research carried out by the Department of Social Security which involved comparing an area in which the New Deal for lone parents operated with one in which it did not produced a surprising discovery. It showed that while the two areas chosen were as alike as possible in every respect, more lone parents found jobs in the area where there was no New Deal than in the other. That tells us that lone parents do better when the deal is not offered to them. With a budget of nearly £200 million, I believe that it is right now seriously to question whether the scheme is worth it.
We question the drive to push lone parents of young children into work. We do not believe it is in the best interests of the children, particularly when childcare options and facilities remain woefully inadequate. The evidence is that children, especially when they are very young, derive significant long-term advantages through having a parent stay at home and look after them. However, when children get older, the position is reversed, especially for daughters. Let me quickly offer some statistics about the chances of the child of parents in different circumstances securing either no academic qualification or an advanced academic qualification.
For sons brought up in a two-parent family, there is a 50 per cent chance of achieving an advanced education qualification, regardless of whether their mother worked or did not work during their teens. In contrast, if they are brought up by a lone parent they have only a 29 per cent chance of achieving an advanced qualification if their mother worked during their teens and a 30 per cent chance if their mother did not. Interestingly, for daughters the picture is rather different. Brought up in a two-parent family, their chances of achieving an advanced educational qualification is 38 per cent whether the mother worked or not. However, a daughter brought up by a lone

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parent has a depressingly low chance—7 per cent—of achieving an advanced educational qualification if that lone parent does not work while the daughter is in her teens. The figure rises to 24 per cent for the daughter of a working lone parent—still too far behind a daughter from a two-parent family but much better than in the case of a non-working lone parent. That tells us that the daughter's chances of achieving good results, and therefore real opportunities and a chance to succeed in a life away from dependency, away from poverty, are much greater if her lone parent works during her teens.
One reason is, of course, economic since a boost in income will help. However, there is no doubt that children, once they reach their teens, benefit from the experience and role model of a parent going out to work. That is why we on these Benches believe it right to expect lone parents actively to seek work when their children reach secondary school age.
Baroness Amos: My Lords, I hesitate to interrupt the noble Baroness but she has been speaking for eight minutes. That means that the Minister will not have sufficient time to reply.
Baroness Buscombe: I apologise, my Lords. I shall bring my speech to a close.
There is no doubt that reforms to the job market implemented when we were in government mean that the British economy has a wealth of opportunities for part-time jobs which help single parents in fulfilling their role as carers. We need practical, workable measures, not bureaucracy, interviews and more initiatives and programmes that sound good but cost the taxpayer more and which, more importantly, do not deliver real help to lone parent families.
8.23 p.m.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, first, as other noble Lords have done, I should like to thank my noble friend Lady Ashton for so eloquently introducing the debate. Both she and my noble friend Lady Crawley have emphasised that the poor in this country are children and, indeed, that one-third of all children are poor.
The number of lone parents has grown—up 50 per cent in 10 years—so that now one family in four is headed by a lone parent. They are bringing up 3 million children. One million of those lone parents are on income support. They are poor. Half of all lone parents are in the bottom income quintile whereas only one-fifth of couples are. Even more importantly, lone parents and their children are also more likely to be persistently poor than other people, remaining in the bottom quintile for years—and, if moving up, falling back again within a couple of years. It is this persistent poverty that scars.
There are many children in low income couple families, but their low income is less likely to be persistent. It is the children of lone parents, where the child's family is not only workless but fractured, that
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the poverty scars. We know that their poverty is accompanied by poor health, poor education, poor life chances. That is the problem that the Government's cross-ministry Sure Start programme seeks to tackle.
So how are we seeking to help lone parents and their children? The Government do not underestimate the need for direct financial support. The combined effect of the financial measures introduced in the Budgets of 1998 and 1999 will raise the incomes of the poorest fifth of families with children by £1,000 a year—that is £1,000 in two years; some £6 billion extra spent on children by 2001. That is a significant achievement by any standards. For example, for children under 11 in workless families the value of their income support has risen in two years by 50 per cent.
None the less, as your Lordships have acknowledged, we believe that the only reliable path out of poverty is for the parent to move into work. Lone parents share that culture. They tell us that they want to work, and most of them want to work now or in the near future. As your Lordships have recognised, it is harder for them than if they were in a couple. Married women are far more likely to work because they have the childcare within their family. They are more likely to be older and better educated—51 per cent of all lone parents have no educational qualifications at all—and they can share childcare with their family.
That is why your Lordships were right to dwell on the New Deal, which is the second part of our strategy. Financial support, yes, but also help into work. I am grateful for the remarks made by my noble friends on this matter. We are spending £190 million on the programme and personal advisers, who support lone parents through training, job search, childcare arrangements, better-buy calculations and benefit roll-on.
This programme is already a success, even though it is in its early days. More than 120,000 lone parents have voluntarily joined the New Deal; that represents 90 per cent of those who came to an interview. Some 41,000 of them have found jobs and more than 14,000 are in training since the programme began in July 1997. For many it has turned their lives around.
Both the noble Earl, Lord Russell, and the noble Baroness, Lady Buscombe, criticised the New Deal. I wonder whether they have read the three evaluation reports. Have they read, for example, the calculation of the cost effectiveness of the programme, which shows that the average cost for a lone parent on the New Deal is £640 and that 20 per cent of them have made a clear gain? The lone parents themselves say that it is 28 per cent, but the researchers have taken 20 per cent as the figure. At 23 per cent—which is lower than the figures given by lone parents—that programme breaks even.
If there is no substitution—and the report suggests that there is no evidence of substitution—that programme makes a profit for the community and is a rich resource for the lone parents.
Earl Russell: My Lords, I rise only to say that the report—
Baroness Hollis of Heigham: My Lords, I do not wish to give way. I have only 12 minutes to speak and I am trying to answer many of the points made by noble Lords. I very happy to take up points in correspondence with the noble Earl.
If there is no substitution, unless there is additionally a wage premium—the research shows that one of 6 per cent almost certainly exists—then again that programme is in profit. It is already clear that the total gain of people coming off benefit is exceeding the cost of the programme when these other factors, substitution and wage premium, are put into effect. If we strip out the differing labour markets of the comparator areas, it is already clear that the New Deal is having a significant and valuable effect. It is early days but the programme is a success for those who are reaching it. Given those assumptions, it is already breaking even.
The problem—a legitimate problem—lies with those lone parents we are not reaching—almost three-quarters—who, despite letters, are not coming to a New Deal interview. That is the problem. They are often those who have been lone parents for many years. Half of those tell us that they would have come on to the New Deal with further encouragement. It is clear that we must work with that group. None the less, we face a problem in regard to those parents who inherit many years off work, who may have poor health, whose children may have poor health, who have low skills and qualifications, and who live on rundown estates. It will take time to build up their skills and confidence, but we must reach them—and we are determined to do so.
That is why, through the new ONE pilot schemes, we seek to interview all lone parents when they first come on to benefit so that they do not join the stock of those lone parents who have remained socially isolated and beyond our reach. Following the interview, they are not, of course, required to go into work or take training if they do not wish to. But I believe that a lone parent is the best person to judge what is in the best interests of herself and her child. I am sure, also, that that lone parent needs to be empowered to make that judgment. If she does not know about the options, which will be explained to her in the setting of a supportive ONE interview, she cannot take up the opportunities. If she does not know the choices, she cannot choose.
So I repeat: the New Deal is already a success. It is turning around the lives not just of one generation, but of two. But we need to ensure that when people become lone parents they are fully aware of all the opportunities available to them so that, when they judge that the time is right, they too will be able to make that springboard leap into work which alone will guarantee them relative prosperity.
But we need to do more than provide financial support; we need to offer more than the New Deal. We need also to adapt the benefits system in order to
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ensure that work pays. Understandably, lone parents will not take jobs that do not pay. The new WFTC and its generous childcare tax allowance will improve incentives to work. As a result, the financial benefit for someone with two children moving into work and receiving a typical entry wage has increased from £30 a week to a £54 a week gain. Half of those claiming WFTC are lone parents; half the rest are in families where women are the main wage earner. WFTC is a woman worker's benefit. It will raise women's wages and will help those working in traditionally female, low-paid sectors such as catering and retailing.
But, in turn, the WFTC must be underpinned by a minimum wage, so that WFTC does not subsidise the exploitative employer. That point has not been mentioned in the debate. Beneficiaries of the minimum wage too are women, young people, part-time and casual workers and, above all, lone parents. One effect which again was not mentioned during the debate and is little noticed, but in which I take a great deal of pleasure, is that the minimum wage takes a further one-quarter of a million women over the lower earnings limit, allowing them to build up contributory benefits, including incapacity benefit and stakeholder pensions, in their own right.
Research suggests that, put together, the lower rate of tax, the national insurance changes, the minimum wage, and the WFTC mean that a quarter of a million extra people will enter the labour market and relative prosperity; and that, overwhelmingly, the beneficiaries will be women, among them lone parents.
If the perception of low and insecure wages has been one major barrier to re-entering the labour market, the cost and availability of decent childcare has been a second. It was mentioned by several speakers. The more generous childcare credit, which unlike the arrangements under family credit actually aids the poorest, will fund up to £70 of a £100 weekly childcare bill for one child, and up to £105 of £150 for two or more. And we are improving the supply of childcare: we are investing nearly £500 million in England alone.
A number of my noble friends, including my noble friend Lady Crawley, asked whether there should be a role for grandparents. We know that informal care by grandparents is the childcare choice of many lone parents. It is obviously an issue on which the Government must reflect.
The third problem that lone parents tell us they encounter is surviving the transition from income support to work, surviving that first month without money—and hence the housing benefit roll-on and the income support roll-on. I am glad that those have been welcomed by my noble friends.
A final problem, mentioned by my noble friends Lord Brett and Lady Kennedy, has been the question of support for lone parents when they enter further and higher education. Those who enter HE come within the student support system, but they remain eligible for income support and housing benefit if their income permits them to claim it. As for lone parents entering FE, I am sure that my noble friend will be aware that the ring-fenced budget for childcare access funds will

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be increased to £25 million in the year 2001—nearly three times the amount in 1999–2000. That will help some 37,000 students, particularly those on low incomes and including, above all, lone parents.
If one reason that a child is poor is because her parent with care is not in work, the other reason is that the non-resident parent is failing to support her. Children of lone parents are doubly disadvantaged. Too often, they are in a workless family; invariably they are in a fractured family. So I am grateful for the kind words of my noble friend Lord Warner welcoming our child support measures.
We inherited a CSA in which 70 per cent of mothers and 70 per cent of fathers failed to co-operate with the CSA and, as a result, some 1 million children were denied the maintenance that they should have received. We hope that as the result of our reforms he will co-operate under a simple system and that she will help us, because she will stand to gain £5 if he is on benefit, £10 a week if he is in work and she is on benefit; and if she is on working families' tax credit, the lone parent will keep every penny of the maintenance that she will receive. Her children will not only gain from the extra cash; they will see their father contributing to their keep and will, I hope, learn how decent dads behave.
Finally, we shall seek to introduce the integrated child credit: a sort of basic citizen's income for children which will move seamlessly from out-of-work benefits to in-work provision, thus ensuring the well-being of children.
We value all families, but we know that lone parent families are not only poor, but persistently poor and find it very hard to spring the trap of that poverty. That is why, together, our financial support for those lone parents who remain on income support, our New Deal, the minimum wage, the WFTC, the national childcare strategy, and our work for supporting families and children have shown such significant progress over the past two to three years. We have more to do, but we are getting there. If we succeed, we shall not only springboard one generation, but two, into a secure and prosperous life.

Financial Services and Markets Bill
8.36 p.m.
House again in Committee on Schedule 1.
Lord Saatchi Lord Saatchi moved Amendment No. 33:
Page 219, line 34, after ("2(3);") insert—
("() the costs and expenses incurred by the Authority in the period covered by the report, a break-down of those costs and expenses and a comparison with the corresponding costs and expenses incurred in the previous year;
() the fees paid to the Authority under rules made under paragraph 17 in the period covered by the report and a comparison with the fees paid in the previous year;
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() a review of the costs incurred by the Authority in the period covered by the report in comparison with the costs incurred by regulators in other jurisdictions;
() the work of the investigator and any action taken by the Authority in response to criticisms of the Authority's conduct made by the investigator;
() the operation of the penalties scheme referred to in paragraph 16 in the period covered by the report and a comparison with the operation of the penalties scheme in the previous year;").
The noble Lord said: At present, under paragraph 10(1) of Schedule 1, the FSA must at least once a year make a report to the Treasury on the matters set out in headings (a) to (c) of paragraph 10(1). There is also a provision for the Treasury from time to time to direct on other matters on which it wishes to receive a report.
The purpose of the amendment is to spell out specific further items which we should like to see included in the FSA's report to ensure full accountability in its activities. The first section of the amendment would ensure that a breakdown of costs and expenses incurred by the FSA in the period covered by the report would be included and that a comparison would also be provided with the corresponding costs and expenses of the previous year. It is one of the most basic of the generally accepted accounting principles that readers of a financial report are provided with a comparison of performance with the previous accounting period.
The second section of the amendment states that the fees paid to the FSA under rules made under paragraph 17—these are fees paid to the FSA by authorised persons to cover the FSA's expenses—should be detailed and that a comparison with the fees paid in the previous year should also be included in the report. The purpose is to make more transparent the amount of fees paid to the FSA by the community that it is regulating and to be able to disclose how those fees have increased from one year to another.
The third additional section that we should like to see in the report is a calculation of the costs of regulation in the UK as against those incurred by regulators in other jurisdictions. The regulated community itself and many others will want to see this level of transparency and comparability.
Under the fourth section of the amendment we aim to see a description of the work of the independent complaints investigator as referred to in paragraph 8. In addition, we should like to see described the action taken by the FSA in response to any criticisms of the FSA's conduct made by the investigator following the investigation by him of complaints against the authority.
The final part of the amendment details the operation of the penalties scheme and the provision of a comparison with the previous year. We believe that these are reasonable minimum requirements for the disclosure of performance indicators by any body that performs a public duty. Certainly, they are not sufficient for the purposes of a full review of the FSA's

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actions, for which we must look to our later Amendments Nos. 84 and 86, but we believe that they are necessary. I beg to move.
Lord Newby: The amendments standing in our name in the Marshalled List in this and the next group deal with two matters. The first is that the report of the FSA to Parliament should be as full as possible. Our model for the kind of report that we believe is required is that produced by the Securities and Exchange Commission to Congress as part of its annual appropriation process. We believe that that covers all the relevant information that is required in a considered and detailed manner.
Amendment No. 34, like Amendments Nos. 37 and 37A, seeks to remove the Treasury filter within the framework of the Bill in terms of the relationship between the FSA's reporting function and Parliament.
Amendment No. 36 deals with another matter which was raised briefly in an earlier debate; namely, the extent to which the practitioner and consumer panels are taken seriously. It is all very well to have such panels, the establishment of which we strongly support, but it is more important that their recommendations are taken seriously by the FSA and that everybody can see when the authority does not follow them, rather than that the panels submit proposals which simply disappear into a black hole. Amendment No. 36 would give effect to the suggestion of the Joint Committee that in its annual report the FSA should be required to state the recommendations made by the practitioner and consumer panels appointed under Clause 8 of the Bill and whether the authority has implemented them.
8.45 p.m.
Lord Jenkin of Roding: I was not a member of the Burns committee but I have read a good deal of its two reports in a pre-legislative context. There appears to be widespread acceptance that with a Bill of this kind that has been a most invaluable innovation. One wishes that perhaps the Government had adopted more of the committee's recommendations. We have debated some of them during the course of this afternoon and we shall come to others later. There is no doubt that, faced with a highly complex and technical Bill of this kind, the Joint Committee of the two Houses did an amazing job in an astonishingly short time. It demonstrates the value of that piece of machinery.
I believe that in part the accountability of the FSA must be to Parliament. Perhaps a report to both Houses would be very cumbrous. I do not see how the FSA could report only to this House. No doubt the other place should have an opportunity to question the chairman and others about the activities of the FSA, but the idea that there should be a Joint Committee (on the lines of the Burns committee) which has an opportunity to receive the annual report and have a session with the chairman, and no doubt one or two others, is extremely valuable. Although I do not necessarily agree with the specific amendment that is before the Committee, something along these lines is justified on the grounds that the FSA is a very large,
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powerful and unique body with an extraordinary range of powers and severe penalties that can be applied to individuals. I do not believe it is enough that the FSA should be accountable to the Treasury and that Treasury Ministers should then be accountable to Parliament as now. I believe that we should adopt this proposal as part of the general stiffening up of the accountability of the authority, and, therefore, I very much support it.
I should be interested to hear the reply of the Minister to the question of what should go into the report. I believe that it is very reasonable to ask for statistics which enable comparisons to be made not only with previous years but also with comparable bodies; and that there should be a separate report by the non-executive directors' committee on their view of the cost-effectiveness of the whole operation. They appear to be very valuable provisions, and I hope that the Minister is able to accept them.
Baroness O'Cathain: I am utterly confused by the contribution of my noble friend. I thought that the Committee was considering the first group of amendments. We have not yet reached the later group. I strongly support Amendment No. 33, except that I have a slight concern about one of its proposals. If we proceeded along these lines, the general public would have greater confidence in the transparency of the authority, which is important. More importantly, it would encourage the authority to improve its performance year on year in the management of its costs. I am aware that having to produce two lines of figures giving year-on-year comparisons which enable people to see whether they are doing better or worse is a good incentive to raise the level of the game. Another encouragement is that it would be a document in the public domain and the media would crawl all over it with a fine-tooth comb, which would not be a bad idea.
One comes to the,
"review of the costs incurred by the Authority in the period covered by the report in comparison with the costs incurred by the regulators in other jurisdictions".
I am slightly concerned that the actual costs and time incurred in making a true comparison may outweigh the benefits. The comment is always made that one must take account of exchange rate movements; that perhaps one is comparing apples with pears and so on. Although it may be of great interest, one must be very careful about balancing the advantage against the cost. However, I believe that the whole of Amendment No. 33 is a great improvement on what is now in the Bill.
Lord Haskel: I believe that of far greater importance than the working methods of the consumer and practitioner panels and their reporting procedures is their independence. If they are not independent, whatever they do does not have much value. I was a member of the Joint Committee. We were careful to ensure that the two panels should be independent so that they could make whatever reports they wanted to make. We went as far as to say that the consumer panel should be financially independent and have a separate

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budget. Therefore, I am not sure that these amendments are important. As long as the panels are independent, they can do virtually whatever they think is necessary.
Lord Kingsland: I should like to deal with Amendment No. 35 which is another amendment in the group that the Committee is considering. That amendment seeks to add two further categories to paragraph 10(2) of Schedule 1.
The first category would be reports by the practitioner panel and the consumer panel. The value of those reports would be greatly enhanced if the Minister were to accept some later amendments connected with the powers of both those panels to express their views on the various codes and guidelines to be produced by the FSA. Having a summary every year of the views of those two panels about the quality of legislation produced by the FSA would have enormous advantages for whichever parliamentary committee will consider the annual report.
The second category relates to a report from the independent complaints investigator. I place, as the noble Lord is already aware, great importance on the work of the independent complaints investigator in view of the absence of any recourse of a regulated party to the courts.
Lord McIntosh of Haringey: I am grateful to noble Lords for what they said about the amendments. The annual report is an important part of the FSA's accountability to consumers, practitioners and the Treasury.
Paragraph 10 of Schedule 1 already requires wide-ranging information to be in the report: the discharge by the FSA of its functions; the extent to which the regulatory objectives have been met; following amendment in another place, consideration of the principles—proportionality, the UK's competitive position, and so on—to which the FSA must have regard; and other matters as directed by the Treasury. Moreover, the annual report must be accompanied by the report of the non-executive committee and other reports or information as directed by the Treasury. So paragraph 10 is already quite prescriptive.
Amendments Nos. 33 and 35—the latter has been spoken to by the noble Lord, Lord Kingsland—would require the FSA to produce the following in its annual report: the costs and expenses incurred by the FSA; the fees paid to the FSA under paragraph 17 of Schedule 1; a review of costs incurred by the FSA compared with costs of regulators in other jurisdictions; compliance costs both compared with previous years and with other jurisdictions; the work of the complaints investigator; a report by the investigator, and any action taken by the FSA in response to criticisms by the investigator; the operation of the penalties scheme; and any report which the practitioner and consumer panel wish to include. Amendment No. 36 would require a response by the FSA to recommendations by the consumer and practitioner panels. The noble Lord,
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Lord Jenkin, will recognise that the amendments he supports provide the comparative statistics which he, quite rightly I think, seeks.
The last annual report of the FSA, in July 1999, already included some of this information: for example, on costs and reports by the equivalents of the complaints investigator. In its press release of 6th July 1999 which accompanied the annual report, the FSA has already committed itself to providing substantial information in its future annual report, taking account of the Joint Committee's recommendations. This includes fees and expenditure for the current and prior year, and responses to reports by the complaints investigator and the practitioner and consumer panels, meeting, I hope, the aim of Amendment No. 36.
I have the press release in front of me. The main contents proposed for annual reports in the future are under the headings: statutory objectives, policy, rule making, consultation, cost benefit analysis, regulatory issues, and accounts of authorisation of firms and approval of individuals, supervision and monitoring, enforcement action including policing the perimeter of regulated activities, cases settled or determined by the tribunal, fines and costs, significant judgments by the tribunal, work with customers to include initiatives and criteria used to assess the public awareness objective, international work and implementation of EC directives, work with other authorities, including overseas regulators, the Treasury/ Bank of England/FSA standing committee, and investigation of enforcement agencies, complaints, responses to reports by the independent complaints commissioner, the ombudsman scheme, the compensation scheme, the consumer panel, the practitioner panel, and any value for money reports produced by the Treasury, publications, information on major publications during the year, statutory accounts, of course, the report of the non-executive committee of the FSA, an assessment of regulatory burdens and compliance costs of UK markets compared with overseas jurisdictions, and changes over the year in question, operations (including human resources), and IT issues. That is quite a list. It encompasses everything included in the amendment, and quite a lot more. It will be a very hefty annual report.
For that reason, I have no objection whatsoever to the detail of the amendments proposed. They are generally well founded. But we said in response to the Joint Committee that we do not want to prescribe in legislation too much of the report's contents in case other priorities emerge in the future, and, if anything were by any chance left out and they were a few pages short of the 1,000 pages to which I imagine the report will run, since the Treasury can in any case direct the content of the report should it fail to meet users' requirements, I hope that the amendment will not be pressed. I think that we have more than met the objectives underlying the amendments.
Amendment No. 34 would have the effect of removing the Treasury's power to direct the FSA on the contents of its annual report. I do not think that that would be desirable. It would restrict Ministers' rights over what information was in the FSA's main

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annual public statement. I do not think it necessary to have an amendment which would allow the FSA to add material beyond that specified in paragraph 10 of Schedule 1. There is nothing to restrain the FSA from publishing separately any information which cannot be incorporated in its annual report.
It is clear that I support the objectives of the amendments. However, I believe that we have more than accomplished the objectives which noble Lords have in moving them.
Lord Donaldson of Lymington: Perhaps I may use the opportunity of Amendment No. 33 to make a point which I shall try to make on every possible occasion.
The amendment calls for a report on the operations of the penalty scheme referred to in paragraph 16. When I first began to read this monumental work, I had thought that with the statutory base to the FSA we should find that most market misconduct and the like was dealt with by the FSA under the terms of paragraph 16. It is a perfectly splendid paragraph; I am thoroughly in favour of it. However, it has now come to my notice that that will not happen. Only in cases where recognised investment exchanges have no jurisdiction will the FSA come in. The real question will be the extent to which the FSA, in one way or another, can require those bodies to comply with the standards imposed by Parliament on the FSA itself.
If we were to go down that route, I should want to see a report on the regulations that the FSA was imposing upon other subordinate regulatory authorities.
Lord McIntosh of Haringey: That is one of the reasons why we do not wish to be too prescriptive about the annual report of the FSA.
Lord Saatchi: The Minister responded warmly to the proposed amendments. I am grateful. However, have I understood correctly that he thinks it too prescriptive to put in the Bill that the revenue and the costs of the FSA should be detailed in its annual report?
9 p.m.
Lord McIntosh of Haringey: I have indicated my support for the FSA's proposals set out in its press release of 6th July 1999 and I have indicated my opposition to any attempt to take away from the Treasury its power to prescribe what shall be in the annual report.
If anything which was in the July press release, including the matters to which the noble Lord referred, were to be excluded, the Treasury would use its powers to ensure that it was included. I think that we win on that both coming and going. We provided a reserve power for the Treasury to insist on the inclusion of all issues which Members of the Committee and I want to have included, yet we have left it without too much prescription.
Baroness O'Caithain: What would happen if the Treasury did not want to include such information and
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decided to obfuscate? The Treasury has occasionally obfuscated. I know that we are living in times of transparent government, but there could come a time when it might say, "We don't want those costs put in because they were pretty horrific".
Lord McIntosh of Haringey: I believe that the noble Baroness and I should discuss that away from the ears of officials. In such circumstances, the electorate would be entitled to vote the Government out of office.
Lord Saatchi: The Minister said that the Treasury "may" direct this and that. We are saying that we want Parliament to decide and to say which items should be contained in the annual report.
I shall not go on any longer in case I bore the Committee on this point, but a strong theme is emerging in our discussions. I am happy to leave the matter to the Report stage and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 33A to 36 not moved.]
Lord Newby Lord Newby moved Amendment No. 37:
Page 219, line 39, leave out ("the Treasury") and insert ("Parliament").
The noble Lord said: I wanted to speak to my Amendment No. 39 in the group, but having heard the intervention of the noble Lord, Lord Jenkin, there is nothing more I need to say in support of it. He expressed our views most admirably.
I understand that Amendment No. 37 falls foul of parliamentary niceties, in that it is not the role of a Bill to dictate to both Houses how they might deal with an issue. Therefore, I shall not be surprised if in response the Minister points that out. However, it would be helpful if this House could send as strong a signal as possible about the way it wants the report of the FSA, once it arrives in Parliament, to be dealt with. Parliament has a mixed track record in fulfilling its function to examine reports.
In this area, the work of the Burns committee has shown how both Houses of Parliament working together can achieve more than the two Houses working separately. Therefore, I am keen that the substance of the amendment is carried into effect. I shall be delighted if the Minister tells me that my fears about the proprieties are misguided and that he agrees with me. In any event, it is important that the message should come out from this House that this is a sensible way to deal with a report from the FSA and, in future, similar bodies. I beg to move.
Lord Kingsland: On reflection, I think that our Amendment No. 38, which is also in the group, is not as good as that tabled by the noble Lord, Lord Newby. Therefore, I am happy to associate us with everything that he said.

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In a sense, these are probing amendments, because I suspect that the Minister will tell the Committee that he is not in a position to commit your Lordships' House one way or the other on a matter which is not in the Government's jurisdiction but in that of your Lordships' House.
Nevertheless, perhaps, if the Minister looks on the amendments as being probing, he will be disposed to indicate the view that the Government Benches may take to the establishment of a committee of your Lordships' House to consider the annual report. In particular, dare he say whether he would be more inclined to favour a joint committee rather than a committee either of your Lordships' House or of another place, or both sitting simultaneously?
Lord Jenkin of Roding: I thank the noble Lord, Lord Newby, for his kind remarks. Perhaps my next remark is addressed to Hansard: copy and paste. I apologise for having made my speech in the wrong place.
Lord McIntosh of Haringey: It happens. I am grateful to Members of the Committee for the way in which they have introduced these amendments. Accountability to Parliament is a very important aspect of the FSA's responsibilities. The FSA will be more effective if it is accountable for its actions. It is a single regulator and its lines of accountability will be clearer than they were under the previous regime of multiple regulators. The general support that has been expressed throughout the passage of the Bill for the single regulator principle never becomes clearer than it has in the demands for parliamentary accountability.
The Bill makes several provisions to ensure effective transparency and accountability. The FSA is accountable to Treasury Ministers who have various rights and sanctions. They have the right to appoint and dismiss members of the FSA's board (Schedule 1); to require independent inquiries into regulatory matters of serious concern (Clause 12); and to require independent reviews of the FSA's use of resources (Clause 10).
Ministers, in turn, are accountable to Parliament. As Members of the Committee have recognised, that, of course, is not something for the Bill to specify. However, it is an important principle which underlies the provisions of the Bill. We are more than happy for Parliament to scrutinise what the FSA does, as, indeed, the Joint Committee recommended. Executive powers in relation to the FSA should rest with Ministers, who in the normal way will be accountable to Parliament for what they do in the exercise of those powers.
It is certainly not for me to say whether any committee of either House or, indeed, of both Houses should be set up. However, I believe that it is permissible for me to say that the work of the Joint Committee, with the membership and chairmanship that it had and using the procedures that it did, was enormously helpful in developing this Bill and in ensuring that it will have an easy passage through your
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Lordships' House, which I am sure that it will. If I am asked what the usual channels will think, I believe I can assure your Lordships that I shall speak severely to the Deputy Chief Whip and urge him that the usual channels should consider this matter very seriously!
The difficulty with Amendments Nos. 37 and 37A is that they go fundamentally against the grain of the accountability structure that I have described. The ability to give directions on the contents of the FSA annual report is an executive act which is properly exercised by Ministers, who can be held to account by Parliament for any exercise of it or failure to exercise it.
The principle which underlies Amendment No. 38 would require the Treasury to have regard to representations, reports and resolutions by either House on any report made by the authority. Although that may seem unobjectionable, it suggests that, in the absence of such a provision, the Treasury would be free to act in disregard of the views expressed by Parliament or any committee. However, that is not our position under our constitution and it would be wrong to suggest that it is.
As I said, Ministers are accountable to Parliament and they can be held to account if they fail to behave in the manner described in this amendment. They can be asked by Parliament to explain why they have not followed a recommendation and, as I hope that the Government's response to the Burns committee shows, that system is effective. We should not cast doubt on its operation here or, as inevitably would be the case if the amendment were accepted, in other areas of governmental responsibility.
As I made clear, Amendment No. 39 is less a matter for me and more one for the House and Members of another place. As I said, Treasury Ministers warmly welcome parliamentary scrutiny, whether by a Joint Committee or by other means. If the Houses so decide, we shall co-operate fully with any such scrutiny. Under those circumstances, I urge noble Lords not to press the amendment.
Lord Newby: I take the cautious words with which the noble Lord welcomed the spirit of Amendment No. 39 as being a ringing endorsement, in spirit, on his part. We understand the form of constraints under which he operates. However, we hope that in his role as Deputy Chief Whip he will ensure that as and when this Bill becomes an Act and this matter comes before the House—
Lord McIntosh of Haringey: I said that I would speak severely to the Deputy Chief Whip. I did not say that he would pay any attention to what I said!
Lord Newby: I realise that the noble Lord has a peculiar problem in this regard, and it is one that only he can resolve with his conscience. However, as I said,

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we hope that the half of the personage who receives the message will respond as favourably as the half who is passing it on. With that—
Lord Jenkin of Roding: Before the noble Lord withdraws his amendment, perhaps I may say to the Minister that I detected more than an echo of "The Gondoliers":
"United we speak as one individual".
Lord McIntosh of Haringey: I believe that the noble Lord has his Gilbert and Sullivan wrong. I believe that it was Pooh-Bah in "The Mikado" to which I referred.
Lord Newby: Certainly the Minister had "a little list" a moment or two ago when he read out the contents of the annual report. However, before we descend completely into "Gilbert and Sullivanalia", I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 37A to 39 not moved.]
Lord Kingsland Lord Kingsland moved Amendment No. 40:
Page 221, line 43, leave out ("incidental purpose") and insert ("purpose which is necessary or desirable for carrying out its functions").
The noble Lord said: This amendment seeks at page 221, line 43 to leave out the expression "incidental purpose" and insert "purpose which is necessary or desirable for carrying out its functions".
As the Committee is no doubt aware, under paragraph 17(1)
"The Authority may make rules providing for the payment to it of such fees"
by the regulated community
"as it considers will … enable it—
(a) to meet expenses incurred in carrying out its functions or for any incidental purpose".
The amendment is intended simply to cut down the wide "for any incidental purpose" wording by stipulating that it must be a
"purpose which is necessary or desirable for carrying out its functions".
I beg to move.
9.15 p.m.
Lord Jenkin of Roding: I am sure that other noble Lords have found themselves, as I have, chairing the board committee of a regulated insurance company—in my case—or of a bank or whatever. One reaches a point on the accounts where the management says "There is nothing we can do about this. The fees have gone up 20 per cent from last year, and it was 20 per cent the year before". The board fumes and says that a stiff letter must be sent to the regulator and that this must not be allowed to continue year after year, as the company's profits have not gone up by anything like as much.
Regulated bodies feel very strongly that the regulators have not exercised sufficient self-discipline in the past. There is the feeling that the fees can be put
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up almost without concern simply to meet what seem to be inexorably rising costs. It is right to voice that concern here.
This is a small amendment, but it is perhaps indicative of an attitude. We really should make sure that regulators can pass on only that which is necessary and desirable, and not just any incidental expense.
The wider point is that this is of considerable importance to the regulated community. I hope that the FSA will take that on board. It was apparently not always heeded by its predecessors.
Lord McIntosh of Haringey: I understand the concern expressed by the noble Lord, Lord Jenkin, and I sympathise. But I do not think that the amendment achieves what he wants.
As the Bill stands, the FSA is able to raise fees to meet expenditure which it incurs in the discharge of its functions and in doing things which are incidental to the performance of those functions. This imposes an important check on the FSA's ability to raise fees, while enabling it to raise fees to cover expenditure which it incurs, for example, in connection with or in consequence of the functions conferred on it under the Bill, but which is not strictly expenditure incurred in the discharge of those functions. If the FSA is to do its job properly, it obviously needs flexibility to expend money on activities which are incidental to its central job of performing the functions conferred on it. In the FSA's case this includes international work, such as the Basle Committee and IOSCO.
The provisions of the Bill as they stand give the FSA that flexibility, and they are no different from the provisions of the Financial Services Act 1986, which was enacted by the previous government. The test imposed is essentially an objective one, which has been shown to work over the years. The amendment would introduce an undesirable element of uncertainty into the question for what purposes fees may be raised. If it is necessary for the FSA to incur expenses in carrying out its functions, that is already covered, since the expenses will be incurred in the carrying out of those functions.
I am not sure what the objective limits are if we move from a test which limits the FSA's ability to raise fees to meet expenses incurred on incidental matters to one which instead confers on it an ability to raise fees to meet expenses incurred in doing things which were desirable for carrying out its functions. What does "desirable" mean? Who is to determine what is desirable? There is an element of subjectivity here which seems inappropriate with regard to a statutory fee-raising power.
Of course, the FSA will have to justify its expenditure. Its annual report will contain a statement of its budget, and that will be subject to scrutiny by Ministers, Parliament and the annual open meeting which the Bill requires it to hold. If the directors of the FSA were to travel everywhere by private jet, if like the EBRD in its early days they were to coat the ceiling of their entrance hall in the finest Carrara marble, that

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would inevitably appear in due course and there would be a comeback, a rejection, because it would be evident in the annual report.
Although I respect the motives for the amendment, I do not seriously think that it would improve the wording of the Bill.
Baroness O'Cathain: While I agree with the Minister that the word "desirable" probably opens up a problem, the phrase
"purpose which is necessary for carrying out its functions"
is a neater way of saying "incidental purpose". I think that there are stronger parameters in it. That would cover the point which my noble friend Lord Jenkin made. Perception is all. People who are regulated feel very strongly that they must keep their costs to a minimum and they are constantly being regulated. But they want to know who looks after the regulator and whether he is getting away with it.
I am sure that the Minister will agree that "incidental purpose" could mean anything whereas,
"purpose which is necessary … for carrying out its functions",
is a tighter phrase.
Lord McIntosh of Haringey: I am sorry; I do not agree. "Incidental" has worked for 14 years. I am not aware of any complaints since the passage of the Financial Services Act 1986.
Lord Kingsland: I am not as satisfied as I should like to be with the Minister's reply, but I believe that he has indicated some sympathy with the views expressed by my noble friend Lord Jenkin. In view of that, I know that he will be leaving your Lordships' House determined to look very carefully at the amendment which we have tabled to make absolutely sure that he has not got it wrong. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sharman Lord Sharman moved Amendment No. 41:
Page 222, line 19, after ("Authority") insert ("or any person acting in the capacity of an agent of the Authority under any provision of this Act").
The noble Lord said: These four amendments deal with the issue of statutory immunity. In moving Amendment No. 41, I should like to speak also to Amendment No. 42.
Amendment No. 41 deals with the issue of an agent of the competent authority. As the Bill stands at present,
"any person who is, or is acting as, a member, officer or member of staff"
of the competent authority is exempt from being liable,
"in damages for anything being done or omitted in the discharge, or purported discharge, of the Authority's functions".
Paragraph 6(1) of Schedule 1 provides that:
"Those arrangements may provide for functions to be performed on behalf of the Authority by any body or person who, in its opinion, is competent to perform them".
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Amendment No. 41 seeks to extend that immunity to the agent of the authority so appointed, acting on behalf of the authority.
Amendment No. 42 deals with the issue of recklessness. As the Bill stands, the statutory exemption from damages is removed only in the case of bad faith. It seems to me that that exclusion from damages enjoyed by the FSA, the manager and all the other entities covered by it, should be extended beyond just bad faith into reckless behaviour.
Recklessness would need to be proven in any action for damages against the authority or any of its agents and it may well be that the authority would be required to establish whether or not its actions constituted recklessness on the facts as they stand. I beg to move.
Lord Donaldson of Lymington: Perhaps I may say a few words about Amendment No. 42. I raised this question at Second Reading. I strongly support the idea of immunity.
Perhaps I may expand on that. The reason that the courts of law have a statutory and, indeed, common law immunity is that, otherwise, there would be no end to litigation. As soon as a litigant lost his case, he would sue his counsel. When he lost that case, he would sue the solicitor who had advised him in that case; and so it would go on and on.
I believe that a considerable element of the same could be said about the FSA. It will be making judgmental decisions which may be right or wrong, with which people may agree or disagree. But disgruntled regulated or unregulated persons will be able to go to the courts and say that the FSA has been reckless, whether or not they have any justification. There will be considerable expenditure of money and a considerable diversion of management effort and the like on the part of the FSA.
Having lost in the courts, as I have no doubt they would in most cases, they will then, with the assistance of the Government's conditional fee agreement or something—or perhaps that is an irrelevance—go on to the Court of Appeal. Having failed there, they will start on the human rights ladder. The noble Lord, Lord Kingsland, is about to point out that, whereas originally I sensibly opposed the Human Rights Bill, when it came around again I supported it, but only because I believed it was the only way of controlling the press. But that is beside the point.
With regard to this point, I believe that the FSA needs immunity. The courts, of course, have immunity. Nevertheless, apart from what happens in court, if one's case is not listed or is listed wrongly or anything like that, that is a judicial function, even if it is a delegated function. Therefore, it is covered by the immunity. If one goes to the Lord Chancellor's Department, it will, in suitable cases, pay compensation. The same approach should be adopted by the FSA.
Lord Bagri: The question of immunity has been examined at length by the Joint Committee under the noble Lord, Lord Burns. It made some valuable

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suggestions which have been incorporated into the Bill, so far as I can read it. It is important for the good of the financial services industry, as well as for good regulation, that regulators are not deterred from taking regulatory action by the mere risk of ending up with all kinds of challenges in court. The balance in the Bill is right. It is correctly drawn.
Lord Phillips of Sudbury: Far be it from me to presume to question the opinion recently expressed by the noble and learned Lord, Lord Donaldson—
Lord Donaldson of Lymington: No one else refrains from disagreeing with me!
Lord Phillips of Sudbury:—but I believe it is fair to say that the immunity which he described is an immunity in terms of the trial process and not in terms of work which may be carried out by barristers in the privacy of their chambers. That is an important distinction, because most of the work that will be carried out by the new authority will, of course, not be in a tribunal—so to speak—but will be carried out in the course of a normal working day, applying the vast regulatory framework with which it is endowed under the Bill.
On these Benches, we are absolutely at one with the Government in wanting to create a forceful regulatory body which can carry out an extremely difficult task in an extremely naughty world. There is no question but that the powers given are commensurate with the power of some of the financial bodies and agencies which operate in the global financial market. Having said that, we return to the question of balance and public confidence. It would not be in the long-term interests of the authority and its staff to have the extent of the immunity granted by the Bill as it now stands because, as I suspect all of us—certainly the lawyers among us—know only too well, proving bad faith is an extremely difficult test to establish. We are well aware also of the current extremely ineffectual provisions in the City which do not do their job satisfactorily.
I suggest that the addition of those words will not open the floodgates to a vast amount of speculative legal action. If one considers the purview of the old Monopolies and Mergers Commission, which had no immunity whatever—it was open to the full extent of the common law—I am not aware that it was the subject of much, if any, litigation. I believe that by adding those words we are widening in a sensible way the prospect of commencing and succeeding in an action against the authority.
During the supper break I looked up the definition of "recklessness" in Halsbury's Law. Definitions vary according to the context in which they arise. Broadly, recklessness is acting in a manner,
"which creates an obvious and serious risk"
of damage to the other person. An obvious and serious risk seems to be fair, not just plain common or garden negligence.
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I am sure that Members of the Committee know that bad faith is dishonesty. As I said, that is extremely difficult to establish, particularly within a bureaucracy. I suggest, therefore, that the amendment proposed, far from weakening the Bill, will strengthen it. It will give the financial community a good deal of reassurance.
9.30 p.m.
Lord Grabiner: The thrust of the proposed amendments is that although the claimant can sue for damages if he is the victim of bad faith behaviour and infringements of the Human Rights Act, and although in addition he is free to sue for judicial review, those remedies are insufficient. It is said that claimants should, in addition, be allowed to sue variously for negligence and recklessness, and that on that footing the FSA and its officers and staff should not be immune from liability. I respectfully agree with the observations of the noble and learned Lord, Lord Donaldson, and the noble Lord, Lord Bagri. Perhaps I may refer to the points and develop them briefly.
First, if the matters complained of by an individual complainant reveal conduct that is so unreasonable to the extent that no reasonable regulator could have acted in such a way, that is behaviour which will, by definition, be caught by the judicial review principles which are now well established and, indeed, for which many government Ministers over the years have had to pay, to the greater or more efficient performance of their statutory and other responsibilities.
There will, therefore, be a remedy which will be sufficient to ensure that the FSA will behave itself. If in the exceedingly improbable event that the FSA finds itself confronted with numerous successful applications for judicial review, it will be obvious that something has gone fundamentally wrong. I believe that the existence of a remedy of judicial review will be a sufficient control over the improbability of that sort of behaviour developing.
My second point particularly supports the observations of the noble and learned Lord, Lord Donaldson. In my view we would do a great public disservice if we agreed an amendment which turned this legislation into a paradise for lawyers. Contrary to popular belief among some lawyers, it is not the function of legislation to satisfy the hunger of lawyers. It is tolerably clear what is meant by "bad faith". It is also clear what is meant by "judicial review" and the circumstances when judicial review arises.
The problem is that once the concept of negligence is introduced into legislation of this kind, it will be—I speak from bitter experience—impossible to restrain clients who are told that they can simply complain about unreasonable behaviour as a basis for starting litigation against the FSA. There would be no end to litigation and much of that litigation would be nothing short of nonsense.

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I turn to "recklessness". In my view, if that word was to be introduced, it would inevitably lead to endless litigation. In English law, notwithstanding whatever the noble Lord may have discovered in the dictionary, this is an exceedingly elusive concept.
Lord Phillips of Sudbury: I thank the noble Lord for allowing me to intervene. I did not consult a dictionary, but Halsbury's Laws, to which even he may defer.
Lord Grabiner: That would depend on who was the editor of the particular volume, so I should like to reserve my position.
"Recklessness" is a very elusive word. Without wearying noble Lords with the detail, it has, first, given rise to enormous difficulty in the criminal law. Secondly, in the context of the civil law, it is usually found in discussion about what is meant by fraudulent, reckless or deceitful misrepresentations, as in making reckless statements at the point of a bargain where the provider or seller is anxious to do the deal and goes much too far in making exaggerated claims for the product. That kind of exercise is no doubt interesting, but inevitably it would involve a great deal of litigation and much activity for lawyers.
I believe that the provision would waste valuable court time; it would result in a waste of time for FSA officials; and there would be a corresponding waste of money. Finally, and most importantly of all, it would distract the attention of FSA officials who ought to be concerned with the functions and furtherance of the interests of the FSA in carrying out its statutory responsibilities.
Perhaps I may also say that I am not suggesting for a moment that the proposed amendments are not well motivated because they do have a certain superficial attraction. However, I believe that they are quite unnecessary and that it would be more appropriate for them to be withdrawn.
Lord Fraser of Carmyllie: At this stage, I do not think that it is necessary for me to elaborate on any of the arguments that have been advanced by the noble Lord, Lord Grabiner, the noble and learned Lord, Lord Donaldson, or my noble friend Lord Bagri.
The line I should like to suggest to the Government—here I hope that I am kicking at an open door—is this. As I understand the scheme of the Bill, the "super regulator" should be the Financial Services Authority. In many respects, it wants the responsibilities imposed on it by statute to be discharged by lesser or devolved bodies; that is to say, the recognised investment exchanges. Then, when it comes to matters such as market abuse or whatever it may be, the FSA would expect those bodies to take up the investigation and the approach before the FSA itself took on those tasks. If that is the case and if I have understood it correctly, it seems to me to be entirely right that if a degree of immunity is to be granted to the
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FSA, it follows that the same degree of immunity should be given to the RIEs or other bodies required to discharge such responsibilities.
I hope that that is a self-evident proposition and that I have understood what the FSA and others have told me. However, if I am wrong about that, it would be helpful if the Deputy Chief Whip could explain the position. While I am not in any way threatening the Government, if he cannot do so, we shall need to explore these matters in much greater depth on Report.
I believe that the short and simple answer to this problem is that there should be an equivalence of treatment in terms of immunity. Whatever degree of immunity is conferred on the FSA, exactly the same degree of immunity should be conferred on those who might be required, under the terms of this statute, to discharge their responsibilities to ensure that the markets are properly regulated.
Lord Burns: I too support the remarks of the noble and learned Lord, Lord Donaldson of Lymington, and the noble Lord, Lord Bagri. During the course of the Joint Committee's investigation I was fully persuaded of the case for statutory immunity on the grounds of the dangers of over-regulation.
Financial supervision requires a lot of difficult judgments and if everything the regulator does is to be subject to threats of legal action, over-regulation and excessive caution will ensue. It is already the case that, if anyone loses money because a bank or security house goes down, the first thing he does is go to the regulator for compensation. That already happens even though statutory immunity exists in relation to banking supervision.
Regulators will become enormously cautious. They will want everything checked. They will want copies and written confirmation of everything that is done. They will regulate and regulate. There is always going to be risk. The only way to avoid risk to a regulator is by pushing up the costs and making life extremely difficult. So, although the idea of statutory immunity is difficult for many of us to live with, the alternative is considerably worse.
Lord Jenkin of Roding: I should like to add a few brief words. I am not sure that I go along with the noble Lord, Lord Grabiner, on the question of recklessness. I find myself nearer to the views expressed by the noble Lord, Lord Phillips of Sudbury. I did not recognise his definition of "recklessness", though it is a long time since I have had to look into a law book. The phrase that comes to my mind is that recklessness is not caring whether something is true or false.
The situation that I fear may arise is where a keen, enthusiastic regulator—a member of the staff of the regulatory body—goes into a firm, be it an insurance broker or an investment manager and his suspicions are aroused that the business is not being run properly. In that suspicious frame of mind he feels he is being obstructed because personal antagonism has arisen between him and the head of the office. He then realizes

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that he has not got all the documents he needs to be able to conduct his investigation. He storms out and as he goes he points and says, "Make no mistake, we are going to get you".
Events continue on and finally he goes for an Anton Piller order; the bailiffs go in and all the documents have to be frozen. But it all turns out to be a mare's nest. The business was being perfectly properly run and the situation simply fell foul of human relations. That is not bad faith, but it could be recklessness. He could have got himself into the frame of mind whereby he said, "I am going to get him and hang the consequences". Is there to be no remedy for that?
That is the sort of situation which I can envisage and where, without the word "recklessness" appearing in the schedule, the wronged head of the office would only be able to throw himself on the mercy of the ombudsman. That was one of the points Mr. Herrington made when he gave evidence to the Joint Select Committee of the noble Lord, Lord Burns. If the ombudsman finds that there has been malpractice, then he can now order that there shall be compensation paid. As Mr. Herrington reminded us, that is what happened in the Barlow Clowes case. That was the other way round, of course; The regulator should have recognised that he was dealing with a fraud and failed to. A lot of people lost a lot of money as a result, so compensation was ordered and the DTI had to pay.
That would be the only other remedy available. The noble and learned Lord, Lord Donaldson, shakes his head and my noble friend Lord Bagri says no, so perhaps I had better sit down. But I envisage that kind of case, where extreme damage could be done to a firm and to its reputation and there may be no redress at all.
Lord Donaldson of Lymington: At the risk of trespassing on the Committee's time, perhaps I can briefly answer that if the FSA goes to the courts and asks for Anton Piller orders or Mareva injunctions or anything of that sort, it will be liable in costs. Its immunity would not extend to it then. I entirely support the point of the noble and learned Lord, Lord Fraser, in relation to devolution.
9.45 p.m.
Lord Goldsmith: Perhaps I may add a few words on this important topic. I do so not on the question of what this would do for lawyers. Indeed, I entirely agree with the noble and learned Lord, Lord Donaldson, and my noble friend Lord Grabiner. Lawyers will be the greatest losers if this amendment is not passed. Neither my noble friend Lord Grabiner nor I will be able to show our faces in the Temple and Lincoln's Inn for weeks to come.
I do not wish to speak on that point and I do not speak as a lawyer; I speak as someone who, for a period of about three years, was chairman of a regulatory body. I wish to support, and perhaps slightly elaborate, the point made by the noble Lord, Lord Bagri. I refer to the risk of distortion of the regulatory process as a result of imposing on
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regulators a duty of care towards others, which is what the negligence amendment would do. But who is likely to be in their sights? The people who are most likely to sue for negligence are those who would be regulated. So this amounts to saying that the regulators owe a duty of care to avoid loss to the regulated.
As a matter of pragmatism and as a matter of theory, that seems to me to be wrong. It is wrong that the FSA should be looking at those who are to be regulated and worrying about what the consequences will be. It is wrong both in practice and in theory. It is wrong in theory because the duty—and this is the substantial point—that the authority ought to be following is not a duty to avoid loss to those who are regulated, it is a duty to support the regulatory objectives under Clause 2; namely, market confidence, public awareness, the protection of consumers and the reduction of financial crime. Anything which takes the eyes of the regulators off those objectives would be wrong. Of course, there must be limits—no bad faith and no breach of fundamental rights, such as those in the Human Rights Act. But, beyond that, those objectives should remain clear and focused. These amendments would distort and paralyse that process.
Lord Bagri: There is already a provision for judicial review. Perhaps Members of the Committee can imagine themselves in a regulatory body that lost two or three judicial reviews in a row: no one would have any confidence in you, no one would trade in your market and, indeed, no one would believe you. I believe that there is an automatic remedy in this respect. If we go in for subjective judgment about recklessness or negligence, it will open up a Pandora's box.
Lord Kingsland: In view of what many noble Lords have said about these amendments—three out of four of which are tabled in my name—I feel that I ought to be making my contribution from the Opposition Front Bench under an assumed name, or at least wearing a false beard.
I should like to start by saying how profoundly I disagree with the contribution of the noble Lord, Lord Burns. He has made such a distinguished contribution to everything connected with this Bill that I find this very hard to say. All my amendments ask the FSA to do is to behave reasonably. The noble Lord said that, if the FSA was saddled with the obligations set out in these amendments, it would be immobilised. However, doctors are not immobilised just because they face an action for negligence if they commit a mistake in an act of surgery. Soldiers are not immobilised because they know that if they pull the trigger and get it wrong they may be tried for murder. Policemen are not immobilised when they rush to make an arrest. Those three professions face big liabilities if they get it wrong.
The FSA has months to plan what it is going to do—months to consider each step that it takes. Why should it have immunity in circumstances where those other bodies do not? I quite understand the concern of the noble Lord, Lord Burns, and that of the noble and learned Lord, Lord Donaldson, about endless

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litigation. But what about the regulated party who has been negligently or recklessly ruined by a decision of the FSA? What recourse does he have—particularly when one looks at the wholly inadequate provisions of the investigator? I think, with great respect, that there is a different context in which these amendments ought to be looked at. I hope that I may take the Committee through the three amendments.
Lord Burns: I did not go into the issue of the complaints procedure and looking at this from the side of the party that was regulated. My comments concerned depositors and the people who carry out business with the financial institutions and the relationship they have with them. If, at any stage, anything were to go wrong with one of the financial institutions that was being regulated, there would immediately be a great outcry on the part of everyone who had lost money. They would try to use these provisions to recover their money, possibly even where they had taken a risk which they should have taken into account but which they would subsequently try to lay off on the regulator. That was the burden of my remarks. I was not so much considering the matter from the point of view of the regulated firm—which, I have argued in the past, should be dealt with by the complaints procedure—but rather from the point of view of depositors. An awful lot of depositors become evident when a financial institution gets into difficulty.
Lord Kingsland: I thank the noble Lord, Lord Burns, for that clarification which raises a series of issues which I believe will be dealt with later in the Bill. My amendments focus on the position of the regulated party.
These amendments amount to three changes to paragraph 19(3) of Part IV of Schedule I to the Bill. The first seeks to introduce the concept of recklessness into paragraph 19(3)(a), which is, at the moment, limited to bad faith. The second seeks to add acts or omissions in breach of European Community law to paragraph 19(3)(b). The third seeks to include the provision where, in the case of the authority but not its employees, acts or omissions are shown to have been negligent.
I shall discuss the amendments in turn. In paragraph 19(3)(a) it is clear that the authority is not exempt from liability for damages if it acts in bad faith. There is some uncertainty about what the term "bad faith" means. Some have argued that bad faith here ought to be defined in the way that it is in administrative law; that is to say, someone who acts wholly unreasonably, or takes into account issues that he ought not to have taken into account, or in some other way contravenes the rules of fairness which exist in judicial review. I suspect that that is not the sense in which the courts would interpret bad faith in this context.
It seems to me that they are most likely to interpret bad faith along the lines of the tort of malfeasance in public office. As many Members of the Committee are aware, there is at present some uncertainty about the scope of that tort. But on one interpretation that tort
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could include reckless behaviour if by reckless behaviour is meant not caring whether or not some consequence flows from an act. Recklessness may therefore already be contained in the concept of bad faith. But in any event, in my submission there ought not to be immunity from recklessness. If the authority acts, not caring what the consequences are, I believe that that is grossly wrong and so irresponsible of an official that the authority for whom he works ought not to be protected.
Then we come to the question of the scope of the Human Rights Act. Again, I know that a number of noble and noble and learned Lords will be all too well aware of the recent case of Osman in the Strasbourg court, reversing an important decision in our courts in the case of Hill v. Chief Constable of West Yorkshire, which essentially stated that police engaged in the activities of investigating and controlling crime are not immune from actions of negligence, or, at least, that any attempt to make them immune from actions of negligence is in breach of Article 6(1) of the human rights convention.
We do not know how that decision will play in our own courts because, under the Human Rights Act, our courts are obliged only to have regard to the jurisprudence of the court in Strasbourg. They are not bound by it. I am not saying that the consequence of what is already in the Act will, in effect, make decisions by the FSA, which are negligently made, liable for actions for damages. I am saying that the scope of that provision—heading(b) of paragraph 19(3) of the schedule—is now really quite uncertain and may in fact mean that the FSA is liable for negligence.
The third part of the amendment, I say with great respect to the Minister, is surely one that he can accept. If acts or omissions are in breach of European Community law, in circumstances where European Community law under the doctrine of a case like Francovich requires damages to be paid, the FSA will have to pay damages. There can be no question one way or the other. I put it to the Minister that that is something that should, irrespective of value judgments he might reach regarding recklessness or negligence, be fairly and squarely in the Bill.
The noble Lord, Lord Grabiner, who, like the noble Lord, Lord Goldsmith, is a lion at the commercial Bar and is very familiar with the application of judicial review to commercial matters, pointed out that judicial review is available as a remedy. He is quite right about that. As he well knows, for the particular remedies that are specific to judicial review itself, you cannot get damages. You can get an injunction—although I suspect that the remedy of an injunction will not be much use to a regulated authority because, by the time it wakes up to what has happened to it, the damage will have already been done by the authority. But damages are not open to it unless it has an independent, self-standing remedy deriving from another part of English law. With great respect to the noble Lord, Lord Grabiner, he might think that judicial review helps him. However, I am not sure that it does help me in trying to achieve what I am seeking to achieve.

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In sum, I would feel less evangelical about these amendments if the Minister could find his way, between now and Report stage, substantially to reinforce the role of the independent investigator. Although of course it is important that the Minister takes into account the interests of the FSA in being able to take decisions that are final, it is very important that the Minister also takes into account the interests of those who are regulated. After all, they are the individuals who have made the City of London the enormous success it is today. They need certainty and they need to be treated decently, just as much as the FSA requires them to behave decently. In my submission, the Bill does not get this balance right. Either the balance has to be right in the area we are debating now; or the Minister has to go back to the earlier part of the debate we had today and reconsider what he said regarding the complaints investigator.
10 p.m.
Lord McIntosh of Haringey: I am very well aware of the importance that noble Lords opposite attach to these amendments. There have been ferocious articles in the press in the past few days inspired, or written, by the noble Lord, Lord Saatchi, which have made it clear that statutory immunity is one of the principal areas in which they think the Bill is defective. I do not deny the importance of this issue. It is a topic which was considered in detail by the Joint Committee, which broadly approved the level of immunity proposed by the Bill, subject to certain proposals to strengthen the complaints arrangements, which we have broadly followed.
Statutory immunity is not new. We are not introducing it for the first time. The Financial Services Act 1986 provided for it; the Banking Act provided for it; and the Companies Act 1989 provided for it in relation to the regulation of company auditors. The Pensions Act 1995 gives the Occupational Pensions Regulatory Authority the same statutory immunity as the FSA will have under the Bill. Indeed, the Opposition, as the Conservative government, were instrumental in introducing the immunity into the existing legislation. The immunity was supported not only by the noble and learned Lord, Lord Donaldson, but also by the late Lord Denning, among many other distinguished lawyers. The immunity which is enacted here is limited. It does not prevent action for damages where the FSA has acted in bad faith. Developments since the Financial Services Act, the Banking Act, and the Pensions Act will serve to narrow the extent of the FSA's immunity.
Under the Human Rights Act, actions for damages are permitted in respect of an act or omission unlawful under Section 6(1) of that Act. I have signed a statement saying that the Bill is compatible with the European Convention on Human Rights. Conformity with the Human Rights Act is specified in paragraph 19(3)(b) of Schedule 1. The amendment on that point is simply not necessary.
In addition, of course, the FSA will not be immune from judicial review. It is essential that we have a structure which allows the FSA to get on with its work
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efficiently and effectively. A strong but accountable regulator is in the interests of the industry and consumers alike. I simply do not recognise the description which has been given in the press by the noble Lord, Lord Saatchi, and journalists, of this monster which is a succubus on the financial services community. I think that I have used the word "succubus" wrongly.
Noble Lords: Yes!
Lord McIntosh of Haringey: I am allowed to get away with it, okay!
The success of the financial services industry in this country is dependent on effective regulation. Members of the Committee have referred to the interests of depositors. This Government are on the side of the punters. That is what we have sought to achieve in this part of the Bill. Immunity of the kind that is provided in the Bill is essential in delivering that. Without it, the FSA could be frustrated by law suits and red tape.
Frivolous litigation could be an easy ploy to distract or hinder the regulator. We have had a good deal of discussion about the definition of "recklessness". What about negligence? I noticed that the noble Lord, Lord Kingsland, did not attempt to defend the amendment which seeks to extend the protection from immunity to negligence, which is a much wider concept than recklessness or bad faith.
Lord Kingsland: I obviously did not explain myself as clearly as I thought I had done. In my opening remarks I said to the noble Lord, Lord Burns, how much I regretted the fact that he felt that the FSA would be inhibited by having to face actions for negligence. I pointed out a number of examples where others who face those actions for negligence do not appear to suffer the same inhibitions. I meant to say—if I did not, I apologise—that I back 100 per cent my amendment on negligence.
Lord McIntosh of Haringey: I am delighted to know that the noble Lord, being in a hole, insists on continuing to dig. Earlier I used the word "succubus". I realise that I should not have done. It is a female demon believed to have sexual intercourse with sleeping men. I do not think that I quite meant that.
In an attempt to remove my own levity from the debate, I have said that we are on the side of the punters, of the depositors. But of course we are on the side of the financial services industry as well. The noble Lord, Lord Burns, made very clear at the time of his committee and a few minutes ago, that the absence of immunity could make the FSA more averse to risk; it could engender a more formalistic regulatory environment; it could lead to the FSA seeking to collect too much information, setting tougher minimum standards, avoiding giving guidance and taking longer to reach decisions than it otherwise would.
It is important that the FSA has the ability to implement the objectives and principles—especially those rehating to competition and competitiveness. We

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want the FSA to be a dynamic regulator. That might mean taking difficult or finely balanced decisions in cases where the answers are not black and white. In those cases, the authority should not have to run the risk of being sued as well. That is why core principle No. 1 of the Basel principles concerning banking regulators recognises the need for immunity of banking supervisors. We fully support that principle, and it is enacted here.
Consumers could also suffer if immunity were cut back. They too will benefit from the FSA applying the right touch—which is occasionally the light touch—to regulated firms.
The Bill provides checks and balances on the FSA's powers. Look at the disciplinary provisions, for example. Before the FSA takes disciplinary action, it is required to issue a warning notice, to receive representations from the recipient of the warning notice and then to issue a decision notice. The person in question can then refer the matter to the independent tribunal to be considered afresh.
There are also international comparators. There are, for example, the Basel core principles, as I have said, and other jurisdictions, such as the United States and Canada, where there is immunity from suit to varying degrees.
Amendment No. 41 would extend immunity to those acting as an agent of the authority. But the Bill does not contemplate the concept of an agent of the authority. It is difficult to see why, if the authority chooses to use an agent, the Bill should confer immunity on the agent if he renders himself open to actions in damages because he fails to fulfil some duty which he owes independently. If the authority wishes itself to indemnify an agent, that is a matter for the authority.
Amendment No. 42 seeks to cut back the immunity to exclude cases where the FSA has been reckless. Distinguished lawyers on all sides of the Committee have been arguing about what is meant by "recklessness". It is a term with different shades of meaning in different contexts, but it is primarily a concept, I think, in the criminal law. I am not therefore persuaded that the amendment is appropriate.
I should not want to introduce doubt into the scope of the immunity, since it is a vital element in ensuring that the FSA is able to take difficult decisions and to make prompt and effective responses to fast moving situations. But I do not want it to be thought that the FSA has been given a licence to act recklessly by the immunity as it stands.
Amendment No. 43 draws attention to the possibility of the FSA breaching European Community law in the context of statutory immunity. But the responsibility for ensuring that proper effect is given to the UK's Community obligations is one which rests on the Government, not on the authority. For example, directives are addressed to member states and it is for the Government to ensure that proper effect is given to them. Where it is necessary for the authority to take action in order to implement a
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directive, the Government must ensure that the relevant action is taken. If they fail to ensure that the action is taken, then it is the United Kingdom which will be in breach of Community obligations and the Government will be the proper respondent in infraction proceedings. That is why, although the Treasury has no general power of direction over the FSA, it will have such a power in respect of international obligations. Clause 389 refers expressly to Community obligations in this context.
I hope that this persuades Members opposite that this amendment, while highlighting an important issue, is unnecessary.
Amendment No. 44—I apologise to the noble Lord, Lord Kingsland. for coming back to this—would lift statutory immunity for negligence. We believe that the FSA should be able to operate in a fast-moving environment without fear of being sued for negligence; otherwise, we believe that the balance between freedom to regulate and over-caution would be tipped too far.
The noble and learned Lord, Lord Fraser, asked specific questions about regulated investment exchanges. In line with the recommendations of the Burns committee, Clause 284 provides for such immunity in relation to actions by both non-members and members. The Bill has always provided immunity for recognised investment exchanges in relation to actions by members of the exchange. The Burns Committee recommended that the provision should be extended to actions by non-members and the Bill was amended accordingly in Committee.
In conclusion, I realise the importance that those on the Opposition Front Bench attach to these amendments. But they have been soundly thrashed from all sides of the Committee: from the Cross-Benches by the noble and learned Lord, Lord Donaldson, and the noble Lord, Lord Burns; and on their own Benches by the noble Lord, Lord Bagri. They have no friends. I recommend that they withdraw the amendments.
Lord Sharman: I found the Minister's response to the amendment totally unsatisfactory. If the arguments that have been arraigned on his side of the House and by others in this debate have any validity at all, they apply to anyone carrying out the functions of the authority. All the amendment seeks is to extend that immunity to people properly appointed by the authority to carry out its functions on its behalf. If one follows the logical extension of the arguments advanced, that must be right and proper. I give notice that we find the government response totally unsatisfactory and that we shall be returning to this point on Report.
As regards Amendment No. 42, I find my experience is somewhat intimidating and unique. I have the big guns of noble Lords who are learned in the law arrayed against me on what I thought was a sensible extension of the provision. While I do not have a great deal of experience in this matter, not being a lawyer, I probably have more experience than anyone in this

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Chamber of being sued. In fact, I would put money on it. The prospect and the experience are generally good for the soul. I have yet to come across a lawyer who has advised me not to take legal action.
I believe that there is a valid concern in regard to standards and behaviour, and the whole concept of the behaviour of staff in an authority. If an authority is totally immune—and it is clear that the authority will not be totally immune from damages—the young, aggressive men who go around the market-place seeking to fix problems are totally without control. There needs to be a sensible hand on the budget. Again, it would be sensible to return to this matter on Report. In the interim, I seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 42 to 44 not moved.]
On Question, Whether Schedule 1, as amended, be agreed to.
Lord Jenkin of Roding: Perhaps I may ask one small question on the schedule. I apologise to the Minister for not giving him notice of it. I return to the subject of fees, and my question arises in relation to paragraph 17(2):
"In fixing the amount of any fee which is to be payable to the Authority, no account is to be taken of any sums which the Authority receives, or expects to receive, by way of penalties imposed by it under this Act".
It appears that if penalties have been exacted—and I have some corporate experience of that happening—the fees which the authority then fixes take no account of what it will receive from those who suffer penalties. What happens to those amounts?
When the insurance company with which I was concerned was subject to a penalty, there was widespread comment in the press that that was not unfair; it meant that everybody else's fees would be reduced and those who had to pay penalties paid the penalties. But this particular paragraph of the schedule appears to preclude any reduction in fees to anybody else to take account of the fact that the authority may have received penalties from some of its erring customers, as it were. Is that right, or have I totally misunderstood the paragraph?
10.15 p.m.
Lord McIntosh of Haringey: I do not believe that the noble Lord has totally misunderstood it; rather, he has read only half of it. Paragraphs 16 and 17 are a symmetrical provision. Paragraph 16(1) provides:
"In determining its policy with respect to the amounts of penalties to be imposed [on] it under this Act, the Authority must take no account of the expenses which it incurs, or expects to incur, in discharging its functions".
Paragraph 17(2) provides:
"In fixing the amount of any fee which is to be payable to the Authority, no account is to be taken of any sums which the Authority receives, or expects to receive, by way of penalties imposed [on] it under this Act".
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This is a symmetrical provision which applies both ways. It is intended to ensure that the fees and penalties are related to the offence involved and the authority's expenses in running its business rather than being punitive, which would otherwise be the case.
Lord Jenkin of Roding: I believe that the noble Lord misquoted the sub-paragraph. He said "penalties imposed on it", whereas the last line reads "penalties imposed by it". If the noble Lord suggests that in relation to a particular regulated person or firm the fees take no account of any penalties that it may have to pay, that is one thing. However, that is not what the sub-paragraph says. The sub-paragraph provides that in fixing the level of fees no account is taken of whatever may be received by way of penalties, which presumably is available to the authority as a source of income. I understand the Minister's point about reciprocity with paragraph 16(1), but I do not believe that that is what paragraph 17(2) says. Perhaps the Minister will look at it again or consider whether I have misunderstood it. I read the provision as meaning that the fees are fixed and no account is to be taken of the fact that there is another slug of income arising from the generality of fined firms.
Lord Donaldson of Lymington: The problem is that, whereas in a court of law the prosecution will never specify the penalty but merely allege that the offence is serious or otherwise, in disciplinary tribunals of this kind it is not unknown for the prosecuting authority to say that it does not believe the offence is worth more than, say, £5 or £6 million. That produces an extremely embarrassing situation for the tribunal, particularly if one visualises a suggestion that if another £1 million is added a dividend can be declared. That is a thoroughly unhelpful atmosphere. While I agree that there is a problem over what to do with the fines—above all, they must not go to the Treasury—certainly they should be divorced from the fees which are paid by the members. Perhaps a benevolent fund should be set up for that purpose. All kinds of possibilities exist. But one must not have a situation in which an authority that prosecutes its members tries to hot up the penalties in order to reduce its fees.
Lord McIntosh of Haringey: I believe that the noble and learned Lord confirms what I said. Incidentally, if when I quoted the sub-paragraph I was heard to say anything different from the words of the Bill the fault was my articulation. Perhaps the fault was the noble Lord's hearing, but I prefer to blame it on my articulation. The point the noble and learned Lord makes is critical. The FSA does not take account of penalty income because it has to operate a scheme to rebate penalties under paragraph 16(2) of the schedule. That was a recommendation of the Joint Committee and the Bill reflects it.
Schedule 1, as amended, agreed to.
Clause 2 [The Authority's general duties]:
Lord Kingsland Lord Kingsland moved Amendment No. 45:
Page 1, line 19, at end insert ("; and
() which does not unnecessarily impair the competitive position of the United Kingdom").
The noble Lord said: The amendment seeks to add a paragraph to Clause 2(1). The wording of the amendment is similar to that of Clause 2(3)(e), referring to,
"the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom".
Essentially the Opposition seek to lift paragraph (e) of Clause 2(3) and add it to Clause 1 as a new paragraph (c).
Why do we seek to do so? In its present position, that provision is a factor to which the FSA must have regard. That means that it is a relevant factor, but the weight given to it is up to the FSA. For example, as the Bill is currently drafted, the FSA can take into account the desirability of maintaining the competitive position of the United Kingdom but give that factor zero weight. We believe that the issue is central to the way the FSA goes about its work. The desirability of keeping in mind the importance of the international competitive position of the City should infect every decision the FSA takes.
In the proposed new position, that is precisely what would happen. Under Clause 2(1) the Bill would read:
"In discharging its general functions the Authority must, so far as is reasonably possible, act in a way which does not unnecessarily impair the competitive position of the United Kingdom".
The Minister will recall that, at Second Reading, your Lordships' House touched on the competition provisions in the Bill. Many noble Lords may recall that competition is defined in three different ways in Clause 3: first, in the way I have just described; secondly, in terms of the importance of the FSA having regard to the desirability of facilitating competition; and, thirdly, the importance of minimising the effects on competition that might arise from the general function.
The Opposition are content to leave the question of initiating competition and fighting cartels in the clauses as drafted. Indeed, as regards fighting cartels, a new chapter in the Bill deals with the relationship between the FSA and the Director-General of Fair Trading.
But the competitive position of the City is central, because if we over-regulate we quickly lose the wealth that the City has created. In those circumstances, the benefits that consumers of financial services have gleaned from additional probity would be completely undermined by the loss of inventiveness and the inclination to take initiatives that characterised the City before the Bill came on the statute book. I beg to move.
Lord Borrie: I find this an odd amendment. Surely no Member of the Committee would dispute the importance of London, or the UK, being globally
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competitive in financial services. The noble Lord, Lord Kingsland, must be right in suggesting that a balance must be kept between regulation and over-regulation.
I believe that effective financial regulation is a plus, a positive, in making Britain more rather than less competitive in financial services. Of course I agree that we must avoid over-regulation. However, in his amendment the noble Lord has "lifted"—that is his word, but I should say "elevated"—the promotion of competitiveness to a position which is wrong in the context of the Bill. He has moved it to a place above and beyond the four statutory objectives of the authority. He has raised it above the objectives of ensuring market confidence, consumer protection and so forth, but surely it is already in its proper place as one of a number of factors which it is wholly desirable for the authority to take into account.
Lord Kingsland: I am most grateful to the noble Lord for giving way. He will see that the regulatory objectives have their initial status under subsection (1). Therefore, competitiveness is not raised above the regulatory objectives, but is given equal status.
Lord Borrie: Most Members of the Committee will have noticed that I listed (or began to list) the regulatory objectives, and they come after the place where the noble Lord wants to insert the phrase in his amendment. However, I understand his point and I hope that he understands mine; that he is seeking to raise the matter to a position of significance which is wrong in the context of the Bill where the main objectives of the FSA are the four listed. The Opposition have no objection to them and they accept them as being perfectly proper. I believe that competitiveness, as one of the factors to avoid overregulation which the authority should take into account, is listed in the proper place.
Lord Fraser of Carmyllie: The noble Lord, Lord Borrie, has advanced what I would describe as a "reckless" argument. When we discussed the matter in the Joint Committee, I attempted—I must admit that I failed—to persuade the other members that the issue of the international competitiveness of the United Kingdom, rather than simply of the City of London—I stress that to my noble friend—should be included among the regulatory objectives.
As everyone seems to agree, we are attempting to achieve a "balance". Indeed, the noble Lord, Lord Borrie, used that word in addressing the Committee. If the issue of the desirability of maintaining the competitive position of the United Kingdom were to be found only in subsection (3), that would relegate it to too low a status. I say to my noble friends Lord Kingsland and Lord Saatchi that the positioning of their amendment in Clause 2 meets exactly the objective of securing a balance. I shall surrender, albeit reluctantly, my initial argument that it should be among the objectives. For my purpose, I should be content to see it fit where my noble friends have suggested that it should be placed. That seems to me to achieve exactly what we are trying to do. The last thing

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I want to see is the United Kingdom as a kind of "Wild West" of financial services competitiveness, like some unnamed Caribbean island where anything goes. We are not in the least bit interested in that.
The noble Lord, Lord Borrie, is absolutely right: good regulation is good for business. I have no doubt that that is correct. Although I believe that the present administration in the Financial Services Authority is well seized of the desirability of ensuring the international competitiveness of the United Kingdom, nevertheless we are putting down in statute what should be its responsibilities beyond the immediate administration. It seems to me that this is the correct place in which to put that.
In advancing the argument—I make no bones about it—it is something of a concession from the position I originally wanted to see, as the noble Lord, Lord Burns, will know from hearing me state it endlessly while we conducted our deliberations. It would achieve the desirable balance. I hope very much that the Government will appreciate that we are not trying to cause serious damage to the scheme of the first clauses of the Bill; nor are we criticising the existing approach of the Financial Services Authority. I believe that it is desirable to encapsulate in statute the balanced approach that would be best for the United Kingdom in the future.
I hope that in the fullness of time—I doubt that we shall do so tonight—we shall achieve the agreement of the Government. It must be desirable that we do not do anything that damages the international competitiveness of the United Kingdom. The noble Lord, Lord Newby, believed that the issue of the chairman and the chief executive was the most important change to be achieved in the Bill. I must say to the Committee that by a long, long way, I regard as quite the most important feature that we ensure at all times the international competitiveness of the United Kingdom.
It surprises me that the importance of this is not better understood. At the moment, not only the City of London but, dare I say it, Scotland, which perhaps commands approximately 25 per cent of financial services in the United Kingdom, are in a position of extraordinary pre-eminence and one that we cannot afford to risk losing. My hope is that if the Financial Services Authority will grasp this as being the correct basis on which to approach its general duties, the preeminence that we enjoy at present will not be damaged. I hope that the noble Lord, Lord Burns, and my other colleagues on the Joint Committee will recognise that, because of the elegance of the solution that my noble friends have put forward, with a degree of reluctance I depart from the original approach that I once suggested.
Lord Jenkin of Roding: My noble and learned friend Lord Fraser of Carmyllie has painted a picture of himself as a lone fighter battling against vast forces, championing his cause and hoping that one day it will come right. With the greatest respect to my noble and learned friend, I believe that he under-estimates his allies. I am sure that the noble Lord, Lord Burns, will
1800
recognise that many people have voiced concern that the competitiveness objective has been downgraded in the way that it now appears in the Bill.
I turn to the Interim Report into Competition and Regulation in the Banking Sector produced by Don Cruickshank. He noted that in effect other regulators have an additional regulatory objective to promote competition, stemming from their role in relation to competition in a particular authority. However, here we are talking about competitiveness overseas—with other markets. It is in that respect that the practitioners are really worried.
A survey of practitioners by the FSA's Practitioner Forum found that a large majority believed that
"enabling the UK to remain competitive"
was an essential criterion for a regulator. A large number have insisted that it is imperative that these dual considerations of competition and competitiveness be elevated to principles to make the Bill more balanced.
The National Consumer Council, the British Bankers' Association and the Association of British Insurers all made it clear to the Burns committee that an objective relating to competitiveness and competition was required urgently. The Cruickshank banking review also favoured it, summarising well the bigger issue, as follows:
"Our priority should be to develop a strategy for striking the optimal balance between competition and necessary regulation. In the search for a higher sustainable growth rate in the UK beyond a stable low inflation macro-economic climate, there is in my view nothing more worthwhile for government to do than to get this balance right."
Downgrading the competition clause so that it appears where it does in the Bill now, rather than among the principles seems to me to be doing precisely the opposite.
Apparently the Government gave a pledge to reconsider the matter were Cruickshank to take a position on the issue. I am told that there has been no response. The Treasury Select Committee in another place also agreed that there was a good case for its inclusion, and called on the Government to consider it. That is in its third report of 1998–99. It should be noted that the SEC in the United States, with which many comparisons were drawn on Second Reading and the only body with comparably large powers, is now under a duty to consider, not just to have regard to,
"whether the action will promote efficiency, competition and capital formation".
Therefore, I strongly support the amendment. My noble friend is not a voice crying in the wilderness; he is voicing the concerns of a very large part of the financial community, a voice that the Government so far do not seem to have listened to. I hope that they will listen to it tonight.
Lord Eatwell: The noble and learned Lord, Lord Fraser, was quite right in arguing that he has consistently put forward this point, including to the Joint Committee, but he was a little coy as to why the Joint Committee rejected it.

1801
The point that was made then, and is important here, was that in so many situations today the regulatory strength of the Financial Services Authority will be defined by its relationship and joint action with other regulatory authorities. This is because of the general internationalisation of financial markets today and the need for regulators to act in cooperation with one another to secure the objectives set out in Clause 2(2).
The problem with the amendment is that if it were seen that it was an objective, or indeed one of the prime responsibilities, of the FSA to promote the competitive position of the United Kingdom, the FSA's ability to persuade other regulators to act in the interests of the UK would be impaired, since they would have a reasonable suspicion that the FSA was acting to promote the UK's interests against the interests of their national markets.
Lord Fraser of Carmyllie: I think that we are getting into a Clause 28 argument. The amendment reads:
"which does not unnecessarily impair the competitive position of the United Kingdom".
There is a distinction to be drawn.
Lord Eatwell: I believe that the noble and learned Lord is taking his argument too far. For example, I refer to the point made by the noble Lord, Lord Jenkin. The SEC rule gives it a duty to promote competition but not a duty to promote the competitive position of the United States, which would be a quite different requirement.
I believe that this amendment switches the balance much too far. The competitive position of the UK is dealt with in the right part of the Bill. If this provision is placed as required by the amendment, it will weaken the voice of Britain in international regulatory fora.
Lord McIntosh of Haringey: I wonder whether some Members of the Committee fully appreciate the full hierarchical beauty of the way in which this part of the Bill is constructed. The Burns Committee appreciated that beauty and was extremely supportive of the approach which we have adopted and, in particular, was very supportive of the role which is given in the hierarchy to the competitiveness objective.
Lord Kingsland: The noble Lord must accept that appreciating the beauty on the one hand and being very supportive on the other are not necessarily the same.
Lord McIntosh of Haringey: That is why I mentioned one after the other. You can appreciate the beauty and disagree with it. But the Burns Committee appreciated the beauty and agreed with it. I did not say that they were necessarily connected. I said that those two did follow in the Joint Committee report.
Clause 2 sets out the FSA's general duties. Subsection (1) makes it clear that the FSA must, so far as reasonably possible, act in a way which is
1802
compatible with its regulatory objectives and which is appropriate to meet those objectives. Subsection (2) then lists those objectives, while subsection (3) sets out a number of matters, sometimes referred to as principles—that is, principles of good regulation; I do not mean legal principles—to which the FSA must have regard in carrying out the objectives. That is the hierarchy.
The purpose of the first six clauses of the Bill is simple. We want the FSA to regulate at the right level: neither to over-regulate nor to under-regulate. The objectives and principles work together towards that end, backed by the accountability and transparency arrangements which the Bill puts in place.
The purpose of the noble Lord's amendment is to bring competitiveness as an objective higher up the hierarchy. In answering that, I can do no better than to refer to the Joint Committee report. First, the Joint Committee supported the principle that the Bill should set statutory objectives and principles to inform its behaviour as it seeks to ensure markets of integrity and to provide a yardstick for accountability. It states:
"We agree that these should be set at a high level of generality, so as to be adaptable to changing circumstances. We agree that they should apply at the level of general policy and principles, rather than applying directly to every single act and decision of the FSA. We agree that they should not be ranked".
That is in paragraph 24. Then it goes on to deal specifically with competitiveness and competition:
"We agree with the importance of maintaining and seeking the competitiveness of UK financial markets. Some of us",
and presumably that is the noble and learned Lord, Lord Fraser,
"would prefer competition and competitiveness to feature among the FSA's statutory objectives".
That is the noble and learned Lord. Lord Fraser, mark 1 rather than mark 2. It goes on:
"However, the Committee is content that competition and competitiveness should remain among the principles, rather than being turned into objectives. Making competition an objective would confuse the roles of the FSA and the OFT; making the competitiveness of UK financial services an objective could damage the FSA's relations with overseas regulators",
as my noble friend Lord Eatwell pointed out.
Those arguments are absolutely decisive. Nothing in what we are saying suggests that we do not have positive competitiveness objectives nor does it suggest that the Government are opposed to competitiveness. This is an area where the primary responsibility does not lie with the FSA. The international competitive position of the UK financial services industry will be maintained by the people who built it up; that is, our financial services businesses themselves.
10.45 p.m.
Lord Bagri: With due respect, I do not believe that that is only in the hands of the practitioners. If one over-regulates—there is little downside for regulators in over-regulating—that adds to the burden of regulation, which adds to the cost. There is nothing the practitioners can do to reduce that cost. I do not see

1803
why we are bashful about saying that we shall improve the competitiveness of UK industry and making that an objective.
Lord McIntosh of Haringey: I agree entirely with that. The effect of bringing competitiveness up the hierarchy in the way that the amendments propose would be to increase the regulatory burden rather than to reduce it. I do not know whether he wishes to, but the noble Lord, Lord Bagri, is in effect supporting the point I am making.
Lord Fraser of Carmyllie: Perhaps I may briefly make my final point. I wish the Minister would recognise the enormity of the concession I was making. Both the noble Lord, Lord Eatwell, and the noble Lord, Lord Burns, know how vehemently I argued for the international competitiveness of the United Kingdom to be placed fairly and squarely among the objectives and not to be relegated to subsection (3). What I did not recognise at the time—I wish that I had; I am quite open about that—is that I would have argued for the solution now being proposed because, dare I say it, it provides a third way. Had I known that the situation might be approached in such a way, that would have seemed to provide me with the opportunity possibly to reconcile the differing views within the Joint Committee.
Lord McIntosh of Haringey: I have huge sympathy and admiration for the noble and learned Lord's odyssey. But I must be concerned with the destination of the journey rather than the way in which it has been achieved. The amendments proposed would upset the delicate balance currently contained in the first six clauses of the Bill. Changing the nature of the competitiveness principle in that way would induce a positively dangerous lack of clarity as to how the duty which noble Lords propose be placed on the FSA would interact with the objectives on the one hand and the principles on the other. It would be neither an objective nor a principle.
As the Bill stands, subsection (1) places a positive requirement on the FSA to take action. That is appropriate when discussing objectives; that is, the aims of regulation. In contrast, the need to take account of international competitiveness is something which should condition the way in which the FSA goes about meeting the objectives. That is as true for competitiveness as it is for the other matters dealt with in Clause 2(3). Competitiveness is not something
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which stands alone. While it is important—that is why we have included it as a regulatory principle—it is not more important than, say, the need to ensure that the FSA is inhibited from over-regulating; something which is dealt with also in the principles. In fact, overregulation in itself can be a barrier to competitiveness. That is, I believe, the point made by the noble Lord, Lord Bagri. That illustrates that competitiveness is not something which can or should be viewed in isolation. It needs to be considered alongside all the other matters dealt with in Clause 2(3).
I have made clear the importance we attach to maintaining the international competitiveness of the United Kingdom. The UK financial services industry contributes around 7 per cent of our gross domestic product; it employs over 1 million people. UK markets are world leaders with a substantial and well-deserved international reputation. That is why we have been so careful in the Bill to give the FSA the right objectives and principles and why we put in place an impressive array of accountability arrangements. I appreciate and support the outcome that the amendment seeks, but I believe that the Bill as drafted already achieves it in the right way.
Lord Kingsland: I have not heard the Minister make a speech today where charm and content were more sharply contrasted. The Opposition are extremely unhappy with what the Minister has said and will return to the matter on Report.
Lord McIntosh of Haringey: Is the noble Lord seeking to insult me over my charm or the content of my speech?
Lord Kingsland: From the sentence that followed the sentence to which he refers, I should have thought the Minister could see exactly what I was saying.
Oh, by the way, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 46 not moved.]
Lord Carter: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at ten minutes before eleven o'clock.

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