Sitting of 27 March 2000

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

    Subtitling
    Mr. Paul Burstow: What his Department's policy is for increasing the proportion of television programmes that are subtitled. [114851]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The Government's aim is to ensure the provision of the maximum practicable amount of subtitling of television programmes. We are encouraging all broadcasters to respond positively to the Royal National Institute for Deaf People's initiative for a voluntary charter on broadcast subtitling, the foreword for which was provided by my right hon. Friend the Secretary of State.
    Mr. Burstow: I am grateful to the Minister for reconfirming the Government's commitment to extending subtitling and other means of improving access to broadcasting for deaf people. I have two requests of the
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    Government. First, will the Minister explore further ways of improving the publicity for subtitling with the Independent Television Commission and the BBC? As well as advertisements for "EastEnders" and other programmes, there should be advertisements for this valuable service. Secondly, will she discuss with the Director General of the BBC the fact that the BBC has a lower percentage of subtitled broadcasts than Channel 4 and ITV? That is not acceptable for our public service broadcaster, which should be taking the lead. Will she encourage the BBC to do so?
    Janet Anderson: I assure the hon. Gentleman that the BBC's policy is at least to match the targets set for any other broadcaster. The BBC has recently increased its targets for the subtitling of new digital services to 50 per cent. within five years and 100 per cent. within 10 years. In the early summer, we shall begin a review of the statutory target for the subtitling of digital terrestrial television services. My right hon. Friend the Secretary of State and I will continue a dialogue with the RNID on these important issues.
    Miss Anne Begg: There is a generation of deaf people for whom signing is their only language. They find reading difficult. Will my hon. Friend encourage broadcasters to put out more programmes with signing as an integral part, particularly current affairs programmes?
    Janet Anderson: I assure my hon. Friend that we will take every opportunity to raise that with the appropriate bodies. My right hon. Friend and I are very concerned to ensure that access to those services should be as wide as possible.

    Swimming
    Mr. Nigel Evans: What steps he is taking to encourage greater participation in swimming throughout the country. [114852]
    The Minister for Sport (Kate Hoey): The Government attach great importance to swimming. It is a fun and healthy sport in which youngsters can aspire to excellence. Swimming is a statutory part of the primary national curriculum, giving all young people the opportunity to participate.
    Mr. Evans: I am grateful to the Minister for that response. Will she come to the Ribble valley and take a swimming lesson with me—she could even give me a swimming lesson—and youngsters from local schools? I promise not to leave her languishing in the deep end. That happened to too many parents in the Ribble valley when the county council cut the money for swimming provision, which meant that parents had to pay. That in turn resulted in a halving of the number of swimming lessons. The county council is offering more money this year, but it is still a real-terms cut on two years ago. Will the Minister use her influence with her colleagues at the Department for Education and Employment to ensure that all our youngsters throughout the country have free access to swimming lessons and that no child will be denied those life-saving skills simply because their parents cannot afford to pay?
    Kate Hoey: I remind the hon. Gentleman that we have already swum together in Botswana. I thank him for his question and for his commitment to swimming, which I share. It is important that youngsters get that opportunity at an early age and that swimming should be a compulsory part of the curriculum. Local authorities must bear that in mind when considering how to use their facilities.
    Mr. Nick Hawkins: Does the Minister recognise that there are grave problems with the number of primary school pupils who are not getting the amount of swimming that they need? In particular, will she comment on the fact that Labour-controlled Walsall council has engendered a funding crisis, resulting in swimming pools being closed? Will she ensure that school children and other swimmers in Walsall are properly provided for? Will she reinforce her concerns about the need for all primary school pupils to have proper swimming lessons?
    Kate Hoey: As a result of the concern throughout the country that not all primary school children were getting their full entitlement to swimming, my Department and the Department for Education and Employment asked Ofsted to investigate the issue. That is now happening. I do not know the details of the situation in Walsall, but I shall make a point of finding out. I shall write to the hon. Gentleman if I think it necessary.
    Mr. Andrew Reed: Will my hon. Friend recognise Loughborough's contribution to this country's excellent swimming reputation? It is the home of the Amateur Swimming Association and its outspoken spokesperson, David Sparkes. We need integration between primary schools, medium-term facilities and the excellent facilities that will be required as part of the UK sports institute. Will my hon. Friend ensure that Loughborough's swimming pool is built as soon as possible, to ensure such integration?
    Kate Hoey: My hon. Friend is quite right. Loughborough has been chosen as one of the sites for
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    a new 50 m pool. Sport England has given its support in principle, and I hope that the first ground work will be done soon. He mentioned David Sparkes, the chief executive of the Amateur Swimming Association. He is a forthright person who has stood up for his sport, and he has done an enormous amount to make sure that sport is available not just to our highly talented swimmers, but to all. He has done an enormous amount of work on the swimming for life campaign too, and I pay tribute to him.

    Seaside Resorts
    Mr. Ivan Henderson: What steps his Department is taking to encourage the regeneration of British seaside resorts; and if he will make a statement. [114853]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): Many resorts have been included in the UK's proposals for the new objective 2 structural funds and assisted areas maps. We have also ensured that the chairmen of the new regional development agencies are aware of the importance of resort regeneration. The English Tourism Council has set up a resorts task force, which is due to report in December with a programme of action to assist resorts with their regeneration strategies.
    Mr. Henderson: Does my hon. Friend agree that high-quality bathing water is a major factor in encouraging people to visit our seaside resorts? Does she agree that local authorities and water companies should work together closely to make sure that there is an increase in the number of European blue flags flying over this country's bathing beaches?
    Janet Anderson: My hon. Friend is right, and the Government will do all we can to encourage co-operation between local bodies to achieve as many blue flags as possible. I congratulate my hon. Friend on the fact that his constituency is featured in the tier 3 assisted areas map, and on the fact that Dovercourt—which falls within his constituency—has just received a resort award from the Tidy Britain group.
    Mr. Dafydd Wigley: The quality of water and beaches is central to regenerating our coastline. Will the Minister join me in welcoming last week's figures, which indicated that no fewer than 97 beaches in Wales had been awarded the star award—over a third of the total number of beaches to be granted that status? To ensure that we maximise the number of tourists coming to the UK, will the Minister put pressure on the Treasury to achieve a more realistic value for the pound, so that we can get the benefit of those beaches?
    Janet Anderson: I am sure that the right hon. Gentleman would not wish to advocate any policy which would return us to the policies of the Conservative party. As he knows, there is no going back to boom and bust. I congratulate all those concerned on achieving that status, and I hope that that encourages other resorts around the country to do the same.
    Miss Geraldine Smith: Will my hon. Friend join me in congratulating my right hon. Friend the Chancellor on his decision to remove the

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    annual licence duty on small amusement-with-prizes machines, as that will provide a huge boost to the operators of seaside arcades? Is not that another example of the Government's commitment to seaside resorts, along with assisted area status and the other measures taken by the Government? After years of neglect by the Conservative Administration, these measures are certainly welcomed in seaside resorts.
    Janet Anderson: I thank my hon. Friend for that timely question. She is quite right to say that my right hon. Friend the Chancellor has shown, by his action, that he understands some of the problems facing our seaside resorts. As my hon. Friend rightly says, that is in stark contrast to the record of the Conservative party, which did nothing whatever to help to regenerate our important seaside resorts.
    Mr. John Greenway: The seaside resorts are fighting hard to strengthen their appeal, but the Minister will be aware of the understandable concern at the number of asylum seekers being placed in many seaside towns, often in large numbers and without notice. The complete mess that the Government have made of the issue means that asylum seekers already in Britain will remain the responsibility of local authorities this summer.
    This is a sensitive issue, and seaside resorts, like all communities, are happy to take their fair share of asylum seekers. Does the Minister, however, agree that local authorities have the right to be consulted? On behalf of seaside tourism, will she press the Home Secretary to ensure that there is always prior consultation, so that the number of asylum seekers placed in seaside towns can be kept to realistic numbers and be fair to all concerned?
    Janet Anderson: The hon. Gentleman will be aware that this is a matter for my right hon. Friend the Home Secretary and not for me, but I can assure him that we are concerned that there should not be an adverse impact on seaside towns, and the Home Office is in continual discussion with the Local Government Association and local authorities about the particular problems that they might be facing.
    In recognition of the importance of the matter to the tourist industry, I recently had a meeting with the immigration Minister, my hon. Friend the Member for Hornsey and Wood Green (Mrs. Roche), together with Labour Members representing seaside towns, and she gave us reassurances that we found most welcome.

    Coalfield Communities
    Mr. David Watts: What action he is taking to ensure that former coalfield areas benefit from the national lottery. [114854]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The Government are committed to ensuring that all areas, and especially those in which there are high levels of economic and social deprivation, benefit from lottery funding. My Department and the distributors have therefore jointly commissioned research into the impact of the national lottery on former coalfield areas.
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    The results, which are due shortly, are likely to shed further light on the situation and to suggest recommendations for improving it.
    Mr. Watts: I thank my right hon. Friend for that reply, but is he aware that many poor communities lack the expertise to put in an initial bid; and will he consider providing resources for such communities, so that they can prepare good-quality bids?
    Mr. Smith: I take my hon. Friend's point absolutely. We have already put in place several measures to help by changing the way in which lottery money is distributed. We have issued an instruction to the distributors that they must pay particular attention to areas of social deprivation, and enabled them, through the National Lottery Act 1998, to solicit applications and delegate decisions. We have encouraged the introduction of the small grants scheme, and the distributors now have schemes and programmes—such as Sport England's sport action zones policy—that target funding on areas of particular need.
    In addition, my hon. Friend's point is being taken on board through the introduction of a two-stage process in the lottery decision-making procedures, so that an applicant can submit an initial in principle application, get a steer from the distributing body on whether it is likely to attract support, and then embark on the task of working it up further, if it is indeed likely to be accepted in due course.
    Mr. John Bercow: Is it not possible that former coalfield areas have suffered from a lack of lottery proceeds as a direct consequence of the fact that the Secretary of State's constituency, Islington, South and Finsbury, as of 3 March this year, was the seventh largest recipient of lottery funds? Does he intend speedily to address the problem, for fear that if he does not, the hon. Member for Bolsover (Mr. Skinner) will jump out of his pram?
    Mr. Smith: I am pleased to be able to tell the hon. Gentleman that his constituency has received £8.8 million from the national lottery, which is just below the national average—it has not done especially badly. There has been variation across the country, which is a matter of concern. It is of particular concern in the coalfield areas, which is precisely why we have embarked on detailed research to establish why applications have not been coming in from those areas. That is what we want to rectify.
    Mr. Dennis Skinner: Does my right hon. Friend recall that, when the lottery was set up and the Tories were in power, my right hon. Friend the Member for Chesterfield (Mr. Benn), my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) and I asked questions on behalf of the Derbyshire coalfield, because the Tories were so embittered by our politics that they put the lottery applications from our constituencies down among the lowest 10 per cent? In the past few months, we have managed to get a few bob back: not yet as much as has been spent on the millennium dome, but we expect to get that much. I do not expect the hon. Member for

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    Buckingham (Mr. Bercow) to know about that, because at the time I was raising those questions, little Noddy was still in his pram.
    Mr. Smith: It is always a pleasure to be able to agree with my hon. Friend. He has rightly identified that we are making progress on that issue. He has also rightly identified that when the lottery was first established it was an application-driven process, with no strategy or provision—as we now have in the directions that are in place for the lottery distributors—for particular attention to be paid to the needs of areas of deprivation. Those factors are now in place and the lottery is working better as a result. I am pleased that my hon. Friend's constituency is now beginning to benefit.

    Regional Television
    Mr. Eric Martlew: If he will make a statement on his powers to intervene in proposed takeovers of regional television stations. [114855]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): My powers in this area are laid down in the Broadcasting Acts 1990 and 1996. They are limited to order-making powers to amend detailed provisions within the Acts. I therefore have no direct power to intervene in a proposed takeover of regional television stations, which is a matter for the Independent Television Commission and the Office of Fair Trading. However, the importance of regional content, regional programme making and the regional flavour of programmes, which were an integral part of the franchises initially awarded to the ITV companies, must remain firmly in place.
    Mr. Martlew: I thank my right hon. Friend for that reply. He is well aware of my opposition to the possible takeover of Border Television. Does he agree that Border Television's licence is unique, in that it covers the full length of the Anglo-Scottish border, and that it would be very difficult for a company based in Glasgow, Manchester or London to replicate the excellent provision that we get on the border at the moment? Does he also agree that takeovers such as the one proposed should be discouraged? If it goes ahead, will he give a guarantee that local content of programmes will continue as now and that some job security will be given to my constituents?
    Mr. Smith: My hon. Friend is absolutely right to identify the particular character of Border Television. It covers both the southern part of Scotland and the northern part of England, and operates in a genuinely cross-border manner. That was the nature of the franchise that was awarded in the first place. Whoever takes the franchise over and whatever happens in the current negotiations, that character must remain clearly in place. I shall expect the ITC to uphold that firmly. I do not want to see identikit programming across the world of ITV, because we must have a proper, regional character to the programmes that we receive on that popular channel.
    Mr. William Ross: Will the Secretary of State see to it that regional television stations are not taken over by interests outwith the United Kingdom, but remain firmly in local hands?
    Mr. Smith: That is ultimately a matter for the ITC, the Office of Fair Trading and the competition authorities, and not for me. However, I am sure that those bodies will take careful note of the hon. Gentleman's point.
    Miss Anne McIntosh: Will the Secretary of State join me in paying tribute to Tyne Tees Television and Yorkshire Television, which cover my constituency? When I was Noddy in my pram, I was brought up on Tyne Tees Television and, like the hon. Member for Carlisle (Mr. Martlew), I am concerned by the proposed takeover and the impact that it might have on local and regional coverage. Can he give a commitment to the House that he will make representations to the decision takers to ensure that the franchise is respected?
    Mr. Smith: The franchises must be respected: the hon. Lady is right. For example, Yorkshire Television makes "Emmerdale", Carlton, which used to be Central, makes "Peak Practice", and Granada makes "Coronation Street". All those programmes have a strong regional character, they are part of the wealth of the fabric of television in this country, and we must protect that.

    Lottery Funding
    Mr. Andrew Love: What steps he is taking to increase the share of national lottery funding for community projects in outer London. [114857]
    The Minister for Sport (Kate Hoey): The Government are committed to the fair distribution of lottery money across all groups and areas of the country and have provided a framework, by means of the National Lottery Act 1998 and policy directions, to ensure that that happens. This framework is already ensuring that a greater number of grants are being given to benefit communities right across the country. Lottery distributors now have schemes in place to focus funding on areas of need, including those in outer London.
    Mr. Love: I thank my hon. Friend for that reply. I congratulate her and my right hon. Friend the Secretary of State on their foresight in choosing Pickett' s Lock in my constituency as the site for the new national athletics stadium. I wish them good luck in their negotiations with the International Amateur Athletic Federation in Paris next week.
    For national and international sport to thrive, however, we need good-quality local and community facilities. I welcome the recent changes introduced by the Government, but local sports men and women in my constituency, which is a deprived area, are still missing out. What further steps can be taken to redress the balance?

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    Additionally—
    Hon. Members: Oh no.
    Madam Speaker: Order. It is Question Time. The hon. Gentleman has had a long preamble. He must put a question to the Minister.
    Kate Hoey: I am delighted that my hon. Friend welcomes the decision by UK Athletics, supported by all bodies in sport, that Pickett's Lock in the Lea Valley in his constituency should be proposed as the site for the world athletics championship in 2005. The championship will leave a legacy for the sport of athletics, and we look forward to the negotiations and to the work that must be done to ensure that the event takes place here.
    I agree with my hon. Friend that we must get all our community groups involved and that they should get support from the lottery. We can do more by getting the lottery bodies to be more proactive. I hope that Sport England will go out and talk to the community groups when it first devises its application, so that time is not wasted gathering support and information. That will also save money: consultants often spend a lot of money that belongs to community groups devising applications that could have been compiled if the right support from the statutory organisations had been available to start with.
    Sir Sydney Chapman: I recognise that successful lottery applications must be of good quality and that they must be effective in regenerating local areas. However, when the Minister makes her regional assessment, will she disentangle from the rather large amount that goes to London the pretty considerable element that goes to national institutions, as opposed to the amounts that go towards more local requirements? There is a feeling in outer London, and it is not confined to the hon. Member for Edmonton (Mr. Love), that we do not get a proper share of the cake devoted to our great capital city.
    Kate Hoey: I think that the hon. Gentleman speaks for the many people who feel that their areas do not get a fair share of the national lottery. However, it is true that a lot of money went to very large, high-prestige projects in the first few years of the national lottery, but that is probably only natural. I hope that we can now turn our attention to getting the money down to the grass roots, where it can make a real difference. My right hon. Friend the Secretary of State and I will certainly do all we can to ensure that that happens.
    Mr. Nick St. Aubyn: If he will make a statement on the distribution of unallocated national lottery funds. [114858]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): I am pleased to be able to answer this question, as there has been much erroneous press reporting on the matter in recent days. All the funds in the national lottery distribution fund available for distribution have been allocated to the national lottery distributing bodies, and all but £200 million of this money—just 6 per cent. of the overall amount—has already been committed
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    by them. Where money remains in the fund, it earns tax-free interest that goes to the good causes, not to the Government.
    Mr. St. Aubyn: Will the Secretary of State confirm that the amount of unspent lottery charity money is now in the region of £3.5 billion, and that the amount being spent on good causes is only one sixth of the amount people spend on lottery tickets? That is less than half the proportion of lottery proceeds that it was intended would go to good causes. Does not the right hon. Gentleman realise that as long as the money stays in the Government's hands, it will be regarded—quite rightly—as yet another example of a Labour stealth tax? Does he accept that that stealth tax will damage the success of the lottery, just as the Government's other stealth taxes are damaging the British economy?
    Mr. Smith: No, the hon. Gentleman is wrong. For a start, the money is not in the hands of the Government. Secondly, although there is £3.5 billion in the national lottery distribution fund, 94 per cent. of that—more than £3 billion—has been committed by the distributing bodies to particular applications. If the hon. Gentleman thinks—as he seems to—that all normal public accountancy rules should be jettisoned and that, when a project is approved, the entire sum should immediately be given to the project rather being properly fed out as the project is built or developed, I suspect that his right hon. Friend the Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, might have a thing or two to say to him.
    Mr. Lindsay Hoyle: Will my right hon. Friend consider allocating some of that unallocated money to Chorley Little theatre, which has applied on several occasions? The theatre would benefit greatly from the money, if my right hon. Friend would consider helping it.
    Mr. Smith: I hear what my hon. Friend says. I am sure that a properly submitted application to the Arts Council of England would receive proper consideration. It is not for me to decide such things.
    Mr. David Faber: As we heard a moment ago, the Secretary of State has personally pledged £60 million towards the building of a new national athletics stadium. Can he give the House a single previous example of a Minister making such a pledge, at any time since the introduction of the lottery, before an application was received or, indeed, considered by the lottery distribution body? Can he tell us what personal representations he has received from Sport England as to the legality of how that figure of £60 million was arrived at? Most importantly, will he tell us where the estimated extra £70 million needed to build such a stadium will come from?
    Mr. Smith: No money has yet been committed, because there must be a proper application before that can happen. However, £40 million that would have had to be spent by Sport England to create temporary athletics facilities at Wembley has been saved from the exercise. That money and the £20 million that is being returned to

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    the pot by the world of football will—it is hoped—be used for the benefit of athletics. That is a sensible proposal.
    Ms Rosie Winterton: Will my right hon. Friend consider making representations to the distribution body about allocating funds to pigeon fanciers in my constituency? They cannot currently benefit from national lottery money because pigeon fancying is not considered a sport. Were my constituents to keep clay pigeons and shoot them, they would be eligible for the money. Will my right hon. Friend take action to show his support for the pigeon fanciers' campaign?
    Mr. Smith: My hon. Friend is right to point out the—perhaps anomalous—fact that pigeon fancying is not statutorily regarded as a sport. Consequently, it cannot, unfortunately, qualify for Sports Council lottery funding. However, if, for example, it was taking place on a piece of derelict ground, it might be eligible for funding under the green spaces initiative of the new opportunities fund. My hon. Friend may want to hold discussions with pigeon fanciers in her area on how to identify ingenious ways of using the lottery system to their benefit.
    Mr. Peter Ainsworth: With regard to Wembley, the right hon. Gentleman should know that the £40 million to which he referred is disputed by Sport England, and that there is no guarantee of the £20 million from the Football Association. It would be nice to have a little more clarity and less spin on the issue.
    Does not the right hon. Gentleman's response to the question of my hon. Friend the Member for Guildford (Mr. St. Aubyn) betray the fact that, yet again, the biggest lottery winner of all is the Chancellor of the Exchequer? Not content with taking 12 per cent. in tax for every pound spent, the Government have ensured that a full third of the good causes lottery money will be syphoned off and used to support core Government spending programmes. The Government are now presiding over a mounting pile of lottery cash, which—as far as most of us can see—is being used primarily to offset the public sector borrowing requirement. With interest rates at 6 per cent., what rate of return is that cash earning? Is it 3 per cent—or 3.5 per cent?
    What does the right hon. Gentleman plan to do to unlock the lottery logjam? Will he be having a word with his right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), the Labour candidate for mayor of London, who seems to have some curious views on the lottery?
    Mr. Smith: The hon. Gentleman is wrong about Wembley, as he has been throughout the discussion about it. He is wrong also about the national lottery distribution fund. As I have said, there is only £200 million of uncommitted funds within the NLDF. To ensure that there is no doubt in future about what is happening, I have asked that there should be quarterly reports from each of the lottery distributors, detailing exactly how much they have in the NLDF, what proportion of the funds is committed and what proportion is uncommitted, and their proposals for the spending of that money.
    It is clear that the hon. Gentleman does not think that the creation of the new opportunities fund, with projects being supported related to health, education and the
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    environment, is something that the lottery should be supporting. That is the line that he took at the Tory party conference. Does he want to see under, God help us, a future Conservative Government a complete abandonment of the new opportunities fund and an abandonment of the after-school clubs, of the healthy living centres, the cancer initiative and the green spaces initiative? That is precisely what he seems to be telling the House.

    Lottery Funds (Allocation)
    Angela Smith: If he will take steps to consult national lottery players on a regional basis on how the proceeds of the lottery are allocated. [114859]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Under the National Lottery Act 1998, I instructed lottery distributors to produce and consult on strategic plans, which proposed their priorities for funding. Distributors now have plans in place on which there has been broad consultation. Distributors also take account of public opinion through open meetings, polls and other research.
    The National Lottery Charities Board selects two committee members in each region by lot, using the lottery draw numbers to identify potential members from the electoral roll. The Arts Council has now delegated a substantial proportion of lottery decision making to the regional arts boards. I welcome these moves by the distributors.
    Angela Smith: I welcome that answer from my right hon. Friend. He will be aware that I do not think that my constituents get a fair deal from the lottery. They have spent £60 million on tickets and received back only £1.5 million. I greatly welcome the changes that are being made, but will my right hon. Friend look into the matter to ensure that they come into force quickly? I accept that it is not possible to allocate funds and to link money and expenditure on a constituency basis, but it can be done on a regional basis. I ask for greater consultation with my constituents, given the amount of money that they spend on tickets, on how the money is being spent in their region.
    Mr. Smith: My hon. Friend raises an entirely understandable point. The changes that we brought in with the 1998 Act have enabled the distributors for the first time—this was not put in place by the previous Government—to delegate decision making to a regional level. I believe that to be extremely important. Regional cultural consortiums have a specific remit to advise the lottery distributors on the regional priorities for spending. That will be an added way of ensuring that the voice of the regions in this process is firmly heard.
    Mr. Nicholas Soames: Will the right hon. Gentleman acknowledge that the regional voice, because of the substantial size of some of the regions, is not always nearly sharp enough on constituency applications. I endorse entirely what the hon. Member for Basildon (Angela Smith) has said. Sussex has not done well under the national lottery distribution. Will the right hon. Gentleman see what he can do to refine the structure

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    that is there already to ascertain whether he could take up the hon. Lady's suggestion to take the advise-giving process lower than regional level?
    Mr. Smith: I am sure that it will be possible for regional cultural consortiums, regional arts boards, regional committees of the National Lottery Charities Board and other regional elements in the structures now being put in place to consult widely, deep down within the regions, as to the people's priorities for the spending of lottery money. We now have in place—again for the first time ever—an instruction to all the distributing bodies to ensure a fairer geographical spread of national lottery funds. That is beginning to take place, especially as the smaller grants programmes begin to roll out. That contrasts with what happened at the outset when there was a concentration on very large capital projects.

    NESTA Projects
    Dr. Ian Gibson: What assessment he has made of the effectiveness of the projects funded by the National Endowment for Science, Technology and the Arts programme. [114860]
    The Minister for the Arts (Mr. Alan Howarth): NESTA is currently funding a series of pilot projects, prior to going live with its full programmes in the very near future, and I can confirm that it is undertaking detailed assessments of the value and effectiveness of each of these projects. I expect NESTA to make a real difference in tapping the creative potential of the country.
    Dr. Gibson: My hon. Friend will be aware that last week was science and technology week, when many young scientists went into schools and deprived areas to teach the wonders of the science. They took their equipment with them and showed young people how to use it. When grants are given, will my hon. Friend guarantee that science and technology are not, as opposed to the arts, the Cinderella groups and that the wonders of science are brought, and money given, to deprived schools?
    Mr. Howarth: As a distinguished scientist himself, my hon. Friend speaks with authority on this subject and I very much take his point. He will be reassured by the fact that, among the trustees of NESTA, are Sir Martin Rees and Dame Bridget Ogilvie, who have great authority in the scientific field. I entirely agree with my hon. Friend that it is extremely important that we do all that we can to encourage young people to commit themselves to the creative opportunities that scientific study and the pursuit of scientific careers offer. He may agree that one of the unfortunate features of British life has been that, however brilliant our basic science, we seem to have had a national difficulty in getting the benefits of that science out of the laboratory and into the showroom.

    Film Industry
    Mr. Geoffrey Clifton-Brown: What measures he is taking to increase investment in the British film industry. [114861]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The Government have set up a strategic body, the Film Council, which will be in place on 1 April under the able chairmanship of Alan Parker, with the specific task of helping to develop a sustainable UK film industry. Over the next three years, the council will have about £150 million in grant in aid and lottery funding to support film.
    Mr. Clifton-Brown: I am sure that the whole House would wish to congratulate last night's British Oscar winners, Michael Caine and Mike Leigh and, in particular, Sam Mendes on his film "American Beauty". Will the Minister therefore examine how it is that more than £100 million of lottery money has been spent on 60 films that virtually no one will ever see let alone go on general release? Would it not be better for lottery funds in the future to go towards seedcorn money producing the Oscar-winning films, such as "American Beauty", of the future?
    Janet Anderson: The hon. Gentleman will be aware that, in future, this will be a matter for the Film Council. The total level of lottery support for film in England is £97 million to date. Perhaps more importantly, the total cost of films supported was £378 million, so the gearing is about three to one. It is important to highlight that, under this Government, investment in film production in the United Kingdom last year was £570 million, up £93 million on the previous year. It is clear that the interests of the British film industry are very dear to the Government's heart.
    Mr. Tom Clarke: Does my hon. Friend agree that she and my right hon. Friend the Secretary of State should be beaming with pride at last night's brilliant British successes in the Oscars? Does she further agree that my right hon. Friend the Chancellor's tax concessions and the Government's strategy for film as a creative industry suggests that the success of British film is there? Not only have the Brits arrived, but we are saying to the world that they ain't seen nothing yet.
    Janet Anderson: My right hon. Friend is right. I take this opportunity to pay tribute to him, because when he was the Minister with responsibility for film, he was responsible for the film policy action group, which produced the document, "A Bigger Picture", and for securing the tax concession that has done so much to regenerate the film industry. He is right to say that the Brits have arrived, and we are very proud of the success of all our people in the Oscars last night. That just goes to show that we have a pool of excellent skills and talent here, and it is no wonder that more and more people want to make their films in Britain.
    Mr. Peter Ainsworth: May I associate myself with the tributes that have been paid to our talented people who have again done well in Hollywood, and who include Phil Collins, who has not yet been mentioned? However, those people did not get very much out of the national lottery. Is the Minister happy that hardly any of the 60 films that have so far been funded by the lottery have earned anything like enough money to cover their

    15
    costs? Is she proud of the fact that of the £97 million of lottery money that has gone into those projects, less than £6 million has so far been paid back?
    I suggest that the hon. Lady and the Secretary of State nominate themselves for a golden raspberry award because the criteria for that award correspond exactly with their achievements. As the president of the Golden Raspberry Foundation said, they
    spend too much, entertain no one and fall flat on their face.
    Janet Anderson: The hon. Gentleman's attempts at humour get more and more pathetic with every Question Time. May I give him a little advice? If he is to continue with this portfolio, he ought to read a little more about the subject and make sure that he is better informed when he comes to the House. "Topsy Turvy", which won two awards last night, for best make-up and best costume and design, is a British film and was made with the help of £2 million of lottery funding from the Arts Council.
    Moreover, is the hon. Gentleman saying that films that we have all enjoyed, such as "Hilary and Jackie", "Ratcatcher", "My Name is Joe", "Shooting Fish" and "An Ideal Husband"—which is the most successful lottery film—should not have been made? If so, the British film industry will be listening carefully to his remarks.

    Museums and Galleries
    Mrs. Ann Cryer: How many children have benefited from his measures allowing free entry to national museums and galleries. [114864]
    The Minister for the Arts (Mr. Alan Howarth): Since additional funds were provided at the start of April last year to enable free entry to those national museums and galleries sponsored by my Department which charge for admission, 4,275,951 children are estimated to have benefited up to the end of January. That figure represents an increase of some 18 per cent. on the same period in the previous 12 months.
    Mrs. Cryer: I have a twofold financial interest in the measures because I have six grandchildren under eight and I am 60, so we will all benefit. Does my hon. Friend agree that the railway operating companies could offer cheap fares to school parties, which would be helpful because more children would go to national galleries and museums in term time, alleviating some of the pressures at weekends and in school holidays? I took three of my grandchildren to the science museum last August on three occasions, and each time the queues were so long that they missed many opportunities to participate in activities that I know they would have enjoyed.
    Does my hon. Friend agree also that the onus is now on the Conservative party to make clear its policy on reintroducing charges for entry to our museums?
    Mr. Howarth: I think that there must be an error on my hon. Friend's birth certificate. However, I would not accuse her of misleading the House, so clearly when she takes her grandchildren to any of our national museums and galleries from the beginning of April she will, like them, benefit from free entry. Those places are popular and, as she says, sometimes the queues are long, and those problems certainly need to be managed. I take her point
    16
    about the desirability of finding ways to enable people to have cheap or even free public transport to national museums and galleries. There is a fund available: the museums and galleries access fund, funded and administered by the heritage lottery fund, which has ring-fenced £7 million to enable museums to run projects that will increase access to their collections. Subject to the discretion of trustees, it would be in order for railway operators to work with museums to take advantage of that funding.
    Several hon. Members rose—
    Madam Speaker: Order. Time is up. The last question took three minutes—we are taking far too long over questions and answers.

  The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—
  CHURCH COMMISSIONERS

    Church Repairs (VAT)
    Miss Anne McIntosh: When he will meet a Minister of the Crown to discuss reduced rates of VAT for church repairs. [114843]
    Mr. Stuart Bell(Second Church Estates Commissioner, representing the Church Commissioners): The hon. Lady will be pleased to learn that I led a delegation to meet the Minister for the Arts on 23 March. The delegation included the hon. Member for South Staffordshire (Sir P. Cormack) and my hon. Friend the Member for Blackpool, South (Mr. Marsden). I thank the Minister, who is still in the Chamber, for his courtesy and his time, as well as for the manner in which he conducted the meeting. I am pleased to say that the meeting was constructive. Although the Church was disappointed not to obtain any relief in the Budget by way of reduced rates of VAT on church repairs, we continue to journey in hope.
    Miss McIntosh: I am grateful to the hon. Gentleman for that answer. Will he join me in renewing our campaign, based on the understanding that other member states of the European Union treat churches as heritage buildings and apply a reduced rate of VAT? Following his meeting with the Minister for the Arts, does the hon. Gentleman think that there is some chance of churches in this country being treated similarly?
    Mr. Bell: I am glad to take the opportunity to thank the hon. Lady and other hon. Members on both sides of the House who have taken an interest in this important subject. It cannot be right that a tax that falls hardest on individual parishes and faith communities also works against the widely accepted view that repair and maintenance play a key role in the conservation and reuse of buildings. We are considering every avenue of discussion with the Treasury, and I shall be glad to examine the point that the hon. Lady raises.
    Mr. Gordon Marsden: Does my hon. Friend agree that it is nonsense that new build in this country attracts no VAT, whereas repairs to historic buildings and churches attract VAT at the full rate? Does he also agree that the importance of church renewal to the rural economy should be presented to colleagues at the Department of the Environment, Transport and the Regions, to be taken into account in the forthcoming rural White Paper?
    Mr. Bell: I am grateful to my hon. Friend for tabling an early-day motion on the subject. He has forcefully pointed out the contradictions between a Government policy that favours conservation and a tax regime that penalises repair and maintenance but zero rates inappropriate alterations and new build, and disadvantages brownfield development in relation to greenfield development. It cannot be right for the Treasury each year to cream off in VAT far more than it gives to English Heritage in grants to help our precious inheritance. My hon. Friend's support and that of hon. Members on both sides of the House will help our efforts to persuade the Treasury, the Department of the Environment, Transport and the Regions and the Department for Culture, Media and Sport to accept our proposals.

    Consultation
    Mr. Simon Hughes: What processes they use for consulting Church members on their proposals. [114844]
    Mr. Stuart Bell(Second Church Estates Commissioner, representing the Church Commissioners): The Commissioners send copies of draft schemes under the Pastoral Measure 1983 by post to parochial church councils and other interested parties. If the scheme is to declare a church redundant, or to deal with the future of a redundant church, they also publish a notice in a local newspaper. Anyone may make representations to the commissioners within the period of at least 28 days prescribed in the notice. On the matter of finances, the commissioners' annual report and accounts will be published shortly and will be widely disseminated within the Church and to the general public.
    Mr. Hughes: On the issue of Church finances, the Church Commissioners are the equivalent of the Chancellor of the Exchequer. Can we ensure that every Church member at diocese, deanery and parish level is annually consulted about the Church's financial policy—for example, on questions of ethical investment and where money should be spent? We must establish a democratic process by which to decide how the Church raises money and how it spends it.
    Mr. Bell: The Church Commissioners will spend their money in accordance with the statute, to pay the stipends of the parish priests and also the pensions. That is our statutory responsibility. In relation to the annual report and accounts, we will seek to disseminate that information as widely as we can. While we welcome suggestions about how we should spend our money, we are nevertheless bound by statute and our statutory obligations.
    Mr. Andrew Reed: Although I welcome the attempts to make the process as open and accountable as possible, does my hon. Friend agree that ordinary church members in the constituencies, like ourselves, feel a long way away from the decision-making process, particularly on questions of ethical investment? Will my hon. Friend give the matter further consideration to see whether there could be greater involvement for ordinary church members, like many of those in the House, who have little say over the present arrangements?
    Mr. Bell: I am grateful for my hon. Friend's question. He will be pleased to know, as the House will be pleased to know, that the unaudited results of the Commissioners for 1999 show that their assets fully committed to the support of the Church's ministry were valued at more than £4.4 billion at the end of last year. I am sure that every churchgoer in the land will be happy to see that, if I may say so, under my stewardship the assets of the Church Commissioners has risen from £3 billion to £4.4 billion.

  The Chairman of the Public Accounts Commission was asked—
  PUBLIC ACCOUNTS COMMISSION

    National Audit Office
    Mr. David Heath: What recent discussions he has had with the Chancellor of the Exchequer on the implications for the National Audit Office of proposals within the Government Resources and Accounts Bill. [114845]
    Mr. Robert Sheldon: Together with the Chairman of the Public Accounts Committee, I met the Chief Secretary to the Treasury in December to put our concern that the Government Resources and Accounts Bill represented a wasted opportunity to bring the powers of the Comptroller and Auditor General and the National Audit Office in line with modern government. That concern was most recently set out in the Public Accounts Committee's ninth report of this Session. Since then, the Bill has addressed some of our concerns and the Chief Secretary has announced a study to recommend suitable audit and accountability arrangements for central Government in the 21st century. I hope that during the remainder of the Bill's passage, the Government will add appropriate enabling clauses to ensure that the review's recommendations can have statutory force.
    Mr. Heath: I am sure that I speak for the entire House in warmly welcoming the right hon. Gentleman back to his place.
    Does the right hon. Gentleman welcome the announcement by Ministers that they were prepared to continue to talk about bringing executive non-departmental public bodies into the remit of the National Audit Office, or is he disappointed that the necessary

    19
    provisions have not already been put into the Bill? Will he take part in those discussions over the next few weeks?
    Mr. Sheldon: Clearly, there is much to be done. Parliamentary accountability must go hand in hand with Government accountability. Many Treasury Ministers in the past have been allies of the ideas of the Public Accounts Committee in bringing these matters to the front, so that we could follow public money where it goes. That is the important aspect. We must be able to follow that public money, in most cases—not necessarily all, but in most cases—so that we can show that the money has been properly spent. That is the only way in which we can achieve such accountability, which both the Public Accounts Committee and the Public Accounts Commission dearly want.
    Mr. Dale Campbell-Savours: On the behalf of the staff of the National Audit Office, may I express their thanks to Mr. Duncan Goodhew for ensuring that my right hon. Friend is here today to represent the National Audit Office in the dispute with the Treasury?
    Mr. Sheldon: I am overwhelmed by the generosity of so many friends.
    Mr. Geoffrey Clifton-Brown: May I, too, offer the right hon. Gentleman a warm welcome on his return to the House? Does he recall that during the passage of the Government Resources and Accounts Bill, we had a long discussion about the fact that the European Court of Auditors in many instances has greater access than our own Comptroller and Auditor General? Does he think that that is right?
    Mr. Sheldon: Clearly, that is wrong. Not only that, but the Audit Commission has power to seek information, which the National Audit Office does not. There are obviously a number of gaps, which must be closed.

  The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—
  CHURCH COMMISSIONERS

    Church Revenues
    Mr. Paul Flynn: What is his estimate of the proportion of Church revenues that will be donated by congregations in 2020. [114846]
    Mr. Stuart Bell(Second Church Estates Commissioner, representing the Church Commissioners): In 1997, congregations provided approximately 62 per cent. of the Church of England's income. It is the hope and aspiration of the Church that giving by individuals will increase and that they might, on average, give 5 per cent. of their net income by 2020.
    Mr. Flynn: Did my hon. Friend read a rather bleak forecast in a recent edition of the Church Times, which said that if current trends in the decline of congregations continued, they would reach nil by 2020? While I congratulate my hon. Friend on the great improvement in the finances of the Church under his stewardship, does he accept that a problem was created by the clergy of the Church of England opting out of the state earnings-related pension scheme, and thus not benefiting from the marvellous far-sighted initiative of a previous Labour Government that is enjoyed by retired clergy of the Church in Wales?
    Mr. Bell: My hon. Friend will be interested to know that more people attend church on a Sunday than go to football matches on a Saturday. The Church has been around for 2,000 years; I therefore surmise that it will survive the next 20.

European Council (Lisbon)
3.30 pm
The Prime Minister (Mr. Tony Blair): With your permission, Madam Speaker, I should like to make a statement.
With my right hon. Friends the Foreign and Commonwealth Secretary and the Chancellor of the Exchequer, I attended a special meeting of the European Council in Lisbon on 23 and 24 March.
Ever since the Government took office, we have consistently advocated the need for comprehensive economic reform in the European Union. From the first European Council that I attended at Noordwijck, to the launch of the British presidency and since, we have made clear that the central European economic issue for Britain in this Parliament is reform: how we modernise the European social model and how Europe embraces the enterprise agenda and seeks to match the dynamism of the United States, while preserving our commitment to social justice.
The idea of holding a special summit at Lisbon on economic reform was originally put forward as a joint British-Spanish initiative. The Portuguese presidency has been rightly praised for the energetic and thorough way in which it took the issue forward.
The challenge that faces Europe today is fundamental. In many aspects of the new knowledge economy, the United States has established a clear lead. Seventy per cent. of all electronic commerce business in the world is conducted in the US; less than 20 per cent. in Europe. Despite the gathering strength of Europe's economic recovery and the advances that we have made in some key areas—for example, mobile telephones—15 million European men and women are without jobs.
The Council marks a sea change in European economic thinking. It points Europe in a new direction—away from heavy-handed intervention and regulation, towards a new approach based on enterprise, innovation and competition. As part of that fundamental reorientation of economic policy, the Council agreed a series of concrete measures with clear deadlines, including: rapid agreement this year on an effective legal framework for e-commerce in the EU; a fully liberalised and competitive telecoms market by the end of the next year; access to the internet for all schools by 2001; electronic access to the main basic public services by 2003; the introduction of a European diploma for basic information technology skills; a Community-wide patent by the end of 2001, making European patent protection as simple, inexpensive and comprehensive as it is anywhere in the world; and Government and Community procurement to be done fully online by 2003.
The need for reform is not confined to the so-called new economy. We agreed at Lisbon on the need for urgent measures to make the European economy as a whole more competitive, flexible and dynamic.
To support that objective, the Council reached the following conclusions: there must be faster liberalisation of previously protected sectors like gas, electricity and transport; there should be further support for European research and development, with the European investment bank making an additional 1 billion euro available for venture capital to support small businesses over the next
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three years; there should be a general reduction in the level of state aids throughout the Union; the financial services action plan should be implemented in full by 2005, with earlier progress in priority areas—for example, the introduction of a single prospectus for companies raising capital across the EU and the elimination of barriers to investment in pension funds. The Council also agreed that a European charter for small firms should be developed to clear the obstacles to the growth of small businesses.
On those and other matters, we agreed to benchmark each member state's performance and progress not only against other countries in Europe but, when appropriate, against the best in the world.
We also agreed that EU social policy must be modernised to respond to changing employment patterns, increasing life expectancy and deepening social exclusion.
Again, the European Council agreed on a number of specific measures to take the new agenda forward. We agreed action to combat social exclusion, with member states setting targets on specific matters such as unemployment, youth unemployment, overall employment and child poverty. We agreed to halve by 2010 the number of 18-to-24-year-olds excluded from the labour market because of low educational qualifications. We finally opened up the issue of the long-term sustainability of member states' pension systems and the need to reform them across the European Union. We agreed to establish a new Europe wide database on jobs and learning opportunities. We agreed to put lifelong learning at the centre of job creation and to monitor each member state's progress against a series of agreed aims. We also agreed to improve equal opportunities, to increase the provision of childcare and to promote greater flexibility in the management of working time.
Each year, the European Council will now meet to examine progress and agree further action specifically on economic reform.
The Lisbon European Council represents a turning point in Europe's approach to economic and social policy. With a sound macro-economic framework in place and the euro safely introduced, the concrete actions agreed at the Council should help to deliver an increase in the European Union employment rate over the next 10 years, from an average of some 61 per cent. today to something close to 70 per cent. I have no doubt that that is achievable. In the last three years, we have created more than 800,000 jobs in Britain. In Spain, there have been more than 1 million new jobs. In France, too, employment has risen by over 800,000 in the last three years, which, in part, reflects new measures to cut the cost of labour.
Above all, the European Council agreed that, once again in Europe, we can seriously contemplate a return to full employment. That post-war goal, achieved 30 or 40 years ago but then abandoned, is back on the agenda, and quite right too—each citizen unemployed is a resource wasted. We have had the courage to recognise that the aspiration cannot be met unless we are prepared to make the fundamental reforms that are necessary to equip our countries for the modern age—for a 21st century economy. The true significance of Lisbon lies in the combining of traditional aims and values with modern means and reforms.
We also had a full discussion of the situation in the Balkans, including the continuing problems in Kosovo and Montenegro. We agreed that the countries of the

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region needed to be brought more into the European mainstream, and committed us to enhancing economic assistance through, among other things, early trade liberalisation. The Lisbon Council recognised the immense progress made since the Kosovo conflict began a year ago, but agreed that a more coherent approach on the part of the international community was needed. We asked the Council's Secretary-General, Javier Solana, and the European Commission to present early recommendations on how to strengthen the impact of the European contribution, and enhance co-ordination of the overall international effort. We believe that that will enable Mr. Solana and Chris Patten to promote a more coherent international strategy for Kosovo and the region.
Finally, we discussed relations with Russia on the eve of the presidential elections, agreeing on the need for a full partnership between the European Union and Russia and emphasising again our concerns about the situation in Chechnya. I spoke to President Putin this morning to congratulate him on his emphatic election victory. He was very conscious of the weight of responsibility on his shoulders, both to restore order and democracy in Chechnya and to rebuild the Russian economy.
The Lisbon summit was highly successful. By getting our way in Europe, we are indeed standing up for Britain's economic interests. Making Europe more dynamic benefits Britain. More competition in Europe means new markets for British business; more enterprise in Europe means more jobs in Britain; more electronic commerce means more opportunities for British companies; more jobs, cheaper goods and better access to the internet are good for Britain.
Once again, constructive engagement has been shown to be the right policy for Britain and for Europe.
Mr. William Hague: I join the Prime Minister in welcoming the completion of another democratic election in Russia. Hon. Members in all parts of the House wish Vladimir Putin well in the difficult responsibility that he has taken, and fervently want him to succeed in promoting prosperity and bringing order and stability to his country, while always remembering the value of liberty and freedom.
The whole House will also endorse what the Prime Minister said about the importance of peace and stability in the Balkans. One year after the start of the NATO action, I know that he recognises that serious problems remain in Kosovo. As the Lisbon conclusions state, Europe and the international community need to provide support in a
much more co-ordinated, coherent fashion.
Will the Governments in Europe now ensure that our service men, operating in extremely difficult circumstances, receive the political back-up that they deserve at all times?
Following the discussions at Lisbon, can the Prime Minister categorically deny stories on the front pages of today's newspapers claiming that the Government intend to opt into the full Schengen arrangements, which would mean abandoning our own immigration and border controls? That would cause great alarm and be a very serious policy mistake.
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We welcome the fact that the central topic for discussion at Lisbon was economic and social reform. It is obviously sensible for the Heads of Government to discuss what can be done to promote the creation of more jobs and sustainable economic growth. However, it is notable that there was a great deal more adoption of targets—benchmarking exercises, reports and studies, strategic goals, co-ordination exercises, commonly agreed indicators, reflections on Commission communications, exchanges of experience on information networks, "a European innovation scoreboard" and "a European award for particularly progressive firms"—than of actions. Many or all may be sensible in themselves, but is not the real challenge to turn them into action?
Is it not the case that, alongside all those targets, a major shift in the direction of policy is needed if the European Union is to overcome the problem of high unemployment and catch up with America in the development of the new economy? Is it not time for everyone to recognise that businesses, not Governments, create real jobs? Should not Governments cut down on red tape and regulation and get out of business's way? Unless all that happens, the setting of targets and empty gestures will be all that is remembered in future years. All those Air Force meals will have been eaten in vain, even by the Chancellor and the Foreign Secretary. It is vital to remember that such rhetoric will not create a single job. If the object—[Interruption.] We are all entitled to have a little dig at Ministers now and again.
If the object is to create jobs, as we all agree that it should be, why did the Prime Minister do the following in the summit communiqué? Why did he commit himself to the so-called pending tax package—tax harmonisation by another name? Will that not lead to higher taxes in countries such as Britain? Why did he commit himself to renewing the European social model—the very thing that has led to such high unemployment in Europe in the first place? Is he aware of Lionel Jospin's comment that
People tell us to take inspiration from Anglo Saxon countries. That isn't our approach at all?
Why was President Chirac able to conclude after the summit that the
European social model was recognised by all?
What, exactly, gave him that idea? Why did the Prime Minister give the green light to the forthcoming French presidency on proposing a new five-year European social agenda at the Nice summit, about which the Confederation of British Industry, for example, has expressed great concern? As the International Herald Tribune noted:
Some reports said that France had been isolated at the summit meeting in opposing the…views championed by Mr. Blair and Mr. Aznar, but these reports emanated mostly from the British Prime Minister's spokesman. Alastair Campbell.
Surely not! Whoever could imagine such a thing?
Although we welcome any genuine commitment to updating the public procurement rules and completing the financial services internal market, if adapting the economy for global competition is a priority—again, we agree that it should be—why did the Prime Minister agree to drop the target dates for the liberalisation of transport and energy markets? Last year, at the CBI conference, he described some of the working time directive as "over the top". In a speech to business leaders in Bristol, he said:
A lot of these different regulations that have come about from a slightly different era can be revisited again.

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Was not Lisbon a unique opportunity to put his money where his mouth is, reform such things as the working time directive and say precisely which regulations will be revisited? If he does not do those things, he will be accused of saying one thing to the CBI and another in Europe. Of course he would not want to be accused of that. Was not Lisbon a chance to turn those words into action?
Although we welcome the holding of the summit and the subjects that it discussed and believe that it is time to set Europe on the path of free enterprise and increased prosperity and to shorten some scandalously long dole queues, is it not also time to recognise that soundbites, pious pledges and rhetoric will have to be backed up by action to cut the burdens of tax and regulation, which still stand in the way of job creation?
The Prime Minister: I am glad that the right hon. Gentleman at least welcomed the fact that the summit took place, and that it was on this topic. The trouble is that, if we pursued the policy that he outlines, no such summit would ever take place under a British initiative. He is dedicated to attending his first European Council to renegotiate the treaty of Rome. [Interruption.] That may come as a shock to Conservative Members, but that is their party's policy.
The other day, the Bruges group of MPs—to which 120 Conservative Members are signed up—told the right hon. Gentleman that the option of withdrawal should be clearly contemplated if the treaty renegotiation was not agreed. He has never been able to name a single country in favour of a treaty renegotiation—not one. [HON. MEMBERS: "Norway."] We will glide over that small misunderstanding. As he cannot name one such country, it is highly unlikely that he would be able to initiate such a summit. Anyway, I shall leave that aside and come to the points that he made—[HON. MEMBERS: "Oh!"]—out of generosity to the right hon. Gentleman.
I shall deal first with the issue of the Balkans and Kosovo. Of course our service men and women have our strong political back up—they have had that all the way through. However, the real issue is how we better co-ordinate European and international action. The purpose of highlighting the roles of Javier Solana and Chris Patten is to have at the right level people with the authority and weight to carry through the decisions that the international community is making. Following the Lisbon summit, I hope that there will be greater clarity and co-ordination, and therefore a greater push given to our efforts in Kosovo.
It is barely a year since the conflict ended. Even though there are still enormous problems in Kosovo, let us never forget that it is better that those people are back in Kosovo than still being shut out of their homeland. We need to ensure that, having won the conflict, we also win the peaceful resolution following it.
On the Schengen arrangements, there is no question of us giving up border controls. That story was wrong, as could have been discovered had the Conservative party asked us. We have made it clear that we will work more closely under the Schengen arrangements on police co-operation, judicial co-operation, tackling organised crime and drug trafficking. That is perfectly sensible. However, I remind the right hon. Gentleman that, at Amsterdam, this Government won the legal protection of our border controls, and we do not intend to give that up.
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The right hon. Gentleman said that the summit was all targets and no action. That is unfair: it was both targets and action. It is important to have targets on key issues to do with education and employment, but we also agreed measures on gas, electricity and telecommunications liberalisation. Specific measures were agreed by the European investment bank on the help that it will give small businesses. A directive on electronic commerce was agreed, and there were agreements on information technology skills to make them portable across Europe. There was a set of deadlines and agreements on Government procurement of services, which is immensely important. It would not be right to say that the Council was all targets and no specific action: it was a mixture of both targets and action, and rightly so.
On the tax package, we are committed to finding agreement, and I believe that we can do so on our terms. We are not against everything in the tax package. Indeed, we are strongly in favour of some parts of it. We want tax laws that are used as a hidden state subsidy to be removed, and that is a major part of the tax package. We must resolve the issue of the withholding tax, but we are making progress on that, and it is sensible that we continue to be engaged in discussion. It is always better to win the argument, and I believe that we can.
The right hon. Gentleman asked me why I agreed to the European social model. Let me make it clear, because he has misunderstood our position. I fully support the notion of a European social model—I am 100 per cent. in favour of it—but it should be updated, reformed and modernised for today's world. In case the right hon. Gentleman thinks that that is an extraordinary thing to say, let me quote to him from the Single European Act 1985, to which Margaret Thatcher, no less, signed up—that should instil calm and discipline in Conservative Members. An article, to which she agreed, states:
Member states shall pay particular attention to encouraging improvements, especially in the working environment, as regards the health and safety of workers, and shall set as their objective the harmonisation of conditions in this area, while maintaining the improvements made.
It is not so long ago that even those whom Conservative Members worship was prepared to take a slightly more open-minded view towards the social agenda. Margaret Thatcher also recognised, rightly, that Europe should have a social dimension, but that it should be sensible and improve employment and job opportunities for people.
In relation to the working time directive, I said that I believed that some parts of it were "over the top" because I thought that some of it was an unnecessary interference with the way in which employers run their business. For that very reason, we revisited it and have issued new guidance and made it more flexible, but the directive was agreed in 1990 under the previous Conservative Government.
In relation to the issue of dole queues and how we shorten them, one of the great points about the summit was that it recognised that there will be pockets of high unemployment and social exclusion that traditional policies of macro-economic demand management will simply not cure. It is for that very reason that, in this country, we have the new deal. I would have hoped that, if the right hon. Gentleman believed in cutting the dole queues, he would support a measure that has cut them here by 200,000. A total of 200,000 young people have

27
jobs in this country today as a result of precisely the same type of measure that the rest of Europe is now willing to follow.
This summit has been highly successful not simply for Britain, but, most important of all, for Europe. It set a new direction for European economic policy. It has set very clear policy and targets for how we are going to achieve it. It is a very straightforward, clear example of how a positive, constructive engagement, rather than destructive negativism, yields results not just for Europe but, far more important, for Britain.
Mr. Charles Kennedy: On the last part of the Prime Minister's statement, may we echo the sentiments expressed in congratulating and wishing President Putin well? As the Prime Minister took the opportunity a couple of weeks ago to visit him, perhaps he might be able to flesh out whether there is some early possibility of the new president visiting this country. While we all wish him well in all parties, equally, in all parties there will be those of us who will want to express direct concern to him—appreciating the difficulties that he faces domestically—over some of the military engagements that he was, apparently, willing to sanction in Chechnya, which must be a great humanitarian concern.
In regard to the Balkans in general and to Kosovo in particular, the Prime Minister speaks about the need for "enhanced economic assistance". Will he clarify whether there has been further more detailed discussion about that? On television yesterday, Chris Patten said, for example, that the issue is either greater contributions from member states, or a rearrangement of existing budgets within the European Union. Can the Prime Minister give us some further flesh on those bones?
There is much to welcome in the Lisbon summit conclusions, but, at the end of the day, the communiqués must be judged in terms of not just their words, but actions. Will the Prime Minister acknowledge that liberalisation and greater deregulation are welcome, but that the truth is that, over the past five years, the burden of bureaucracy emanating from Whitehall has been significantly in excess of that emanating from Brussels? Therefore, if we wish to see more liberalisation and deregulation within the single market, we must tackle some of the problems at home, as well as some of those at a European level.
Can the Prime Minister clarify the French position in respect of liberalisation? What is their position in respect of energy and utilities in particular? A date has been specified on the liberalisation of telecoms, but not on those two other sectors. Can he clarify what the position is and whether the French are proving a particular obstacle?
The Prime Minister is right to say that, where Britain takes a lead, we can benefit in Britain and Europe benefits with that. Where the Government is still not taking a sufficient lead is on the issue of the euro. Given the generally positive response that he had at the weekend, will he and his colleagues redouble their efforts so that we make continuing constructive progress in Europe, and do not disappear up the cul de sac that the Conservative party is offering?
The Prime Minister: I think that I can promise at least not to do the latter, I hope.
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President Putin has a standing invitation to visit this country. Of course we continually express our concerns about the action in Chechnya. Nevertheless, I believe that the European Union was right to emphasise the importance of engaging with Russia.
On the Balkans, at least currently, it is more a case of ensuring that the economic aid that we have already agreed gets through and is used properly in Kosovo and in the wider Balkan strategy. I think that, if that were happening, people would look far more favourably on any fresh applications. In my view, it is essential that we co-ordinate the different aspects of that policy. I and other European leaders have been concerned at the recent lack of co-ordination. Our efforts will therefore be directed at improving that.
On liberalisation, the important thing is the combination of liberalisation in the internal market plus measures that improve social justice. Traditionally, there has been at least as much regulation coming out of Whitehall as out of Brussels. I hope that the right hon. Gentleman will therefore support us in the measure that we wish to introduce to make it easier to get rid of unnecessary regulation. It is important that Governments are doing that themselves nationally, as well as at a European level.
The most important aspect of this economic summit is that the focal point was on measures to reduce unemployment and to improve educational qualifications and skills—whereas, if this type of economic summit had been held a few years ago and discussed social policy, the focal point would have been on regulation. I think that that is a big difference.
We have agreed to open up the energy and utilities market in each individual country as quickly as possible. Some countries have a different position on the matter—France has been mentioned. On the other hand, as we all know, French utilities have quite a significant part of the British utilities market. Obviously, we point that out to our French colleagues as well. It is important to realise that that process of liberalisation will go on, and that it is the right process for the future of Europe.
Our position on the euro remains as it is.
Mr. Ian Pearson: I welcome the Lisbon summit's progress on market liberalisation and the prominence that it has given to electronic commerce. However, does my right hon. Friend agree that we must aim at providing internet access for all, and that particularly the elderly stand to benefit enormously from being able to buy goods on-line? Will he therefore consider providing free internet training courses for pensioners and letting our grannies go Windows shopping?
The Prime Minister: That bit came a little late for the Budget. Certainly one of the principal purposes of the summit was to improve access to the internet, and we agreed a series of measures to do that, including measures on access to learning centres as well as access to the internet in schools. We are in the process of setting up 1,000 learning centres across the United Kingdom, so that people should be able to get access to decent information technology literally wherever they live. We are also giving help—both tax breaks and a subsidy—for information technology courses. That action will help our

29
elderly as much as people in the work force, who will need increasing access to internet skills to be able to do their job.
Sir Peter Tapsell: After what has happened to Rover and the west midlands, did the Prime Minister, at Lisbon, repeat his wish at the earliest practicable moment to place the British pound under German management by joining the euro?
The Prime Minister: I did not. Our position on the euro remains unchanged. That was a fairly bizarre intervention, in the light of the comments that have been made about the matter. Our concern is to ensure that we do everything that we possibly can for the workers who have been displaced by the news. It is important that we do so. The difference between this Government and the Government whom we replaced is that we recognise that we have a responsibility and an obligation to develop job opportunities and, particularly where restructuring occurs, to help people to find new employment.
Mr. David Winnick: Is my right hon. Friend aware that—both before the elections, and in their immediate aftermath—a number of Russians have expressed fears about the possibility of an authoritarian regime being restored to Russia? Is not the position of the European Union and of the British Government that we do not want any type of repression—military or otherwise—in Russia, but we want a fully law-based state with justice and protection for ordinary people in Russia?
The Prime Minister: I agree entirely. That has to be the purpose of the European Union's engagement with Russia.
Sir Raymond Whitney: Is it not surprising, but nonetheless welcome, that the Prime Minister's statement made no reference to the third way? Was the third way discussed at Lisbon, or does the Prime Minister now accept that the concept is dead and that, as a collection of empty clichés, it deserved to die?
The Prime Minister: No, I do not. Perhaps I shall send the hon. Gentleman cuttings from the various foreign media that have paid tribute to the influence of the third way on the summit.
Mr. Bill Rammell: Does my right hon. Friend share my view that, when the European Union talks of pursuing structural reform to increase competitiveness and modernising the European social model, it shows that Europe is working to this country's agenda? Does that not show that we can and do win the debate in Europe, as was reflected throughout the quality press in Europe at the weekend? Should that not be contrasted with the view of the Conservatives, who increasingly want to renegotiate the past and join the North American Free Trade Agreement at the expense of our position in Europe, in the process putting 3.2 million British jobs at risk?
The Prime Minister: I do not know whether the initiative on NAFTA has the blessing of those on the Conservative Front Bench but, if we joined NAFTA, we would have to leave the European Union. That is probably
30
why it has been proposed by those who have proposed it. My hon. Friend is right to say that we are modernising the European social model and combining policies for enterprise with policies that tackle social exclusion. That answers the question from the hon. Member for Wycombe (Sir R. Whitney).
Mr. Dafydd Wigley: I warmly welcome the full employment targets, particularly the gender balance targets that have been accepted. Does the Prime Minister accept that, to take those targets forward in the UK, we need action plans for employment on a UK level and within the nations and regions? Do we not need to look at the guidelines for the Bank of England to make the maintenance of full employment one of its targets, alongside inflation?
The Prime Minister: Of course it is important that activity to stimulate jobs and tackle social exclusion happens in every part of the UK. I think that the Bank of England's remit is the right one. We have long since moved beyond the notion that, by taking a responsible view of inflation, we are somehow acting in a way contrary to the interests of employment. The balance between the Bank of England remit and the Government remit is the right one.
Mr. Denzil Davies: Given that 13 of the official languages of the member states of the European Union are not English and that the language of the internet is English—or perhaps American—is there not a strong likelihood that, in the age of the internet, the European Union may never catch up with America?
The Prime Minister: That is a slightly limited view of how people can develop in the modern world. Some Scandinavian countries that are at the forefront in developments of new technology and the internet use English perfectly easily. That is the world in which we live. A better way of putting it is that the fact that English is the internet language gives us a huge opportunity, which we should use.
Mr. Ian Taylor: The Prime Minister is at his best when he follows a positive Conservative agenda, which the previous Government set on opening up Europe for e-commerce, on telecoms liberalisation, the first stage of which was reached in 1997, and on movements towards a European patent. I congratulate the Prime Minister on those issues. Will he ensure that the target dates are met? The Commission has real power and must exercise its responsibility. There are always ways to throw obstacles in the course of progress on such issues at Council of Ministers meetings. I hope that the Commission will be given the authority to ensure that all member states, including those which are less likely to be enthusiastic, are obliged to carry out the commitments that they made at Lisbon.
The Prime Minister: Of course, where there is European legislation, the Commission will have a power to enforce it. It will be able to take an active role on issues such as the European patent, when we develop it. There will be a European Council every year on economic reform, which will also provide impetus.

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The Conservatives used to take a sensible view of Europe. In the first six or seven years even of Margaret Thatcher's time as Prime Minister, whatever some of the rhetoric, a constructive attitude was taken. The single European market was a British Government initiative. Conservative Front Benchers express their horror at what the Labour party's policy used to be; it is precisely for that reason that we changed it. What a shame it is that, as we left our extremism behind, the Conservatives took it up.
Dr. Phyllis Starkey: I very much welcome the positive role that the UK Government played in persuading our European partners to address the issue of promoting employment and enterprise. Was the UK-Swedish joint statement before the Council on promoting female entrepreneurship discussed by the Council? Did the Council take up some of its positive suggestions about removing barriers to women entrepreneurs?
The Prime Minister: It is for precisely that reason that the Council's conclusions contained passages on the better balance of work and family life and on more flexible time. We recognise that specific groups of people have had difficulty gaining access to such things as venture capital, which are necessary to start businesses. The UK tabled a number of papers with other countries, and the contents of the Swedish paper were well reflected in the Council's conclusions.
Mr. Patrick McLoughlin: Did the Prime Minister have time to discuss the future of Sellafield with either the Irish or Danish Governments?
The Prime Minister: I did discuss that with the Irish Taoiseach, who expressed concern on environmental grounds—a traditional Irish concern. I gave him the traditional British answer, which is that we are sure that the procedures are entirely safe.
Mr. Piara S. Khabra: The Prime Minister is considering participating in the Schengen agreement. I hope that he will not open this country's borders to facilitate the entry of racists into this country to stir up racial trouble.
The Prime Minister: Of course we will not do that. As I said, the border controls of the UK remain in place. The purpose of our further engagement with Schengen is to tackle some cross-border issues that we really need to tackle.
Mr. David Curry: It was bad luck that Lionel Jospin arrived at the summit hotfoot from a total retreat on pensions reform, a failure to reform the Finance Ministry and yet another capitulation to France's extremely greedy public sector unions. Does the Prime Minister understand why it is that, however much we want the agenda that he has outlined to succeed, and we have genuine concerns about the willingness and ability of the continent's socialist Governments to deliver it? Would he take them aside and explain to them that socialism does not work?
The Prime Minister: I shall make two points in response to the right hon. Gentleman. First, real reform is
32
going on in the rest of Europe. A FF40 billion tax cut has been proposed by the French Government in various areas to encourage business, and liberalisation is being pursued also in certain areas. In Germany, there is a comprehensive corporate tax reform package. In Denmark and Holland, for example, major welfare reform is taking place. All those countries have centre-left Governments.
Secondly, it would be true to say that some people take a different position in terms of their enthusiasm for economic reform. That would be entirely natural. What is different now is that they are in the minority, not the majority. It is also different because this country, by engaging in the process and in the summit, has been able to get a result. That is surely the right way to approach the matter. There will be people with different views on different aspects of economic reform. The important thing is that a summit such as this, dedicated to economic reform and with the specifics that it contained, would have been unthinkable a few years ago. It would be instructive for the right hon. Gentleman and some of his Conservative colleagues to read the French press if they want to see where the balance of argument lies.
Mr. Dale Campbell-Savours: Does not the raft of highly important initiatives that my right hon. Friend led the discussions on in Lisbon point the way to an early decision on entry into the euro? May I suggest that the five conditions should be met as soon as possible, because business men in my constituency now totally reject the Tory approach and want entry into the euro?
The Prime Minister: Of course the Conservatives' approach would be a disaster. To rule out the euro irrespective of the economic circumstances for a certain period or forever—whatever is their latest policy—would be a disaster, sending a terrible signal right across Europe about Britain and British industry. It would put at risk the 800,000 jobs linked to inward investment. Surely the policy of keeping the option open, making the economic tests clear and saying that the final decision should be with the British people in a referendum is the right decision.
I emphasise to those who want me to commit myself to going in without regard to the economic circumstances that it is an economic and monetary union, so the intelligent way forward is to set down the economic conditions and pursue them, with the final choice left to the British people. We should neither stay out nor join without having proper regard to the economic circumstances.
Mr. John Swinney: I welcome the direction of the Prime Minister's statement. Does he recognise the genuine challenge of e-commerce for the small and medium-sized enterprise community, as it is estimated that only about 7 per cent. of SMEs are equipped to trade on the internet? What was agreed at the summit specifically to intensify preparedness to trade on the internet, and does he believe that it would be strengthened by a swifter time scale for joining the single currency?
The Prime Minister: The most important measures for small businesses are telecoms liberalisation, the charter for small businesses that was agreed and the programme of the European investment bank. For the United

33
Kingdom, the measures announced by my right hon. Friend the Chancellor in the Budget—in particular, the tax relief for small businesses in relation to investment in technology—will have a big impact. Perhaps the most important thing that we can do is to keep emphasising to our business community that the whole question of the internet and electronic commerce is not only about businesses specifically engaged in that business: every business will be affected by the new technology, so they should all look into how they can use it. It has been interesting to see the number of not only multinational but UK companies that have recognised within the past 12 months that that has to be their No. 1 business priority.
Mr. Tam Dalyell: Was anybody in Lisbon the least bit surprised that it was deemed unsafe for George Robertson to go to Mitrovica? If the Prime Minister talks about winning the peace, does he not have to address the subject of Serbia—a wounded and deeply resentful animal—and may it not mean spending a great deal of money and talking, however unpalatable it may be, to Mr. Milosevic?
The Prime Minister: Of course we discussed the Balkans and Serbia in detail. Money is reserved for Serbia, but there has to be the democratic transition. We are not prepared to put money in the pockets of Milosevic. It is important for us to keep up the pressure for change there, to engage properly with the democratic opposition in Serbia and to recognise that it is in the interests of a wider Balkan strategy for Serbia to become a proper democratic state. We are working to that end, and that is really the best thing that we can do.
Mr. Tim Collins: Does the Prime Minister have any message from Lisbon for the hon. Member for Liverpool, Walton (Mr. Kilfoyle), who is about to give him a message?
The Prime Minister: I have not the faintest idea what the hon. Gentleman is talking about.
Mrs. Alice Mahon: On the Balkans, does the Prime Minister agree that it is equally important to get back home the 800,000 refugees who are now living in Serbia, a quarter of a million of whom have been ethnically cleansed from Kosovo? During a recent visit to a camp there, my hon. and learned Friend the Member for Medway (Mr. Marshall-Andrews) and I witnessed at first hand just how miserable the conditions are, and we were informed by the Red Cross and the United Nations High Commissioner for Refugees that sanctions are really hurting refugees, some of whom have been there for eight years. Did the European Council discuss what could be done to relieve the plight of those 800,000 people, or do we have undeserving and deserving refugees?
The Prime Minister: No, we certainly do not have those two categories. We have agreed already that humanitarian aid can go to those refugees, and that is not the principal problem. The principal problem is how one reconstructs Serbia while a highly dictatorial, undemocratic regime is in place there. That we cannot allow. My hon. Friend is right to say that there were refugees from Kosovo into Serbia. but think how much worse the situation would be if we had allowed Kosovo
34
to be ethnically cleansed and we had a million Kosovo Albanian refugees going around Europe. The only way forward was to right the wrong that was done and work constructively to win the peace, but that cannot be done—or at least, it is far more difficult—while Milosevic remains in power in Serbia.
Mr. Julian Brazier: While the Prime Minister was having discussions with colleagues on the sustainability of pensions, did he tell his European colleagues that when he took office, this country had as much saved in its pension funds as the whole of the rest of Europe put together? Did he advise them to do what he has done, which is to tax £5 billion a year out of pension funds, and to tax even very small amounts of dividend income held by pensioners, while at the same time providing a minimum income guarantee to those who have not been able to provide for their pensions?
The Prime Minister: That is a slightly different topic. First, the single most important aspect is the value of the money in people's pension funds. As a result of what has happened in this country over the past two or three years and the strength of the economy, that value is high and has risen enormously. Secondly, the lop tax rate on savings has been very helpful and, thirdly, we have agreed a series of measures—such as lifting the savings rate on capital and ensuring that all pensioners get a proper tax-free winter allowance—that help not just the poorest pensioners. I make no apologies, as I have said before to the hon. Gentleman and his colleagues, for taking the necessary measures in the first two years of office to ensure that we eliminated the huge financial deficit that we inherited. The worst thing that we could possibly have for pensioners is a return to the high inflation and the boom-and-bust days that were presided over by his party's Government.
Mr. Dennis Skinner: Is my right hon. Friend the Prime Minister aware that, when all the glitz and the glamour of the Common Market and the summits and the rosy-eyed views have been removed, bosses still have power to sack workers? Did he bump into any of the Germans across there, and tell them that the British people are disgusted by the way in which BMW tore up all the so-called agreements that were started when the Tories were in power when they negotiated the Rover deal in the first place? Whatever happened to the social chapter and the mountain of legislation that is supposed to protect workers inside the Common Market? Will he tell BMW, if he has not told it already, that it is time that it operated in a totally different fashion? If it believes in togetherness, it should not have sacked those workers like it did, leaving us to try to pick up the pieces. If he did not do that, I hope that he will get on the blower immediately.
The Prime Minister: We certainly did, and we have repeated our concern about BMW management's handling of this situation and our strong disagreement with the way in which the announcement was made. We have made that clear all the way through. It is worth pointing out that the German Chancellor also made clear on Saturday his disagreement with the way in which BMW handled the issue. We are living in a European market in which changes will be made, but the very

35
reason that we want to be part of the social chapter is to ensure that basic minimum standards in the workplace apply to people.
Mr. John Wilkinson: Are not the bland words in section 3 of the communiqué on the western Balkans belied by the dire report of Secretary-General Solana and Commissioner Patten on the situation in Kosovo? Will not the Government and their European partners have to make up their minds whether to get more deeply involved in the military task of containing the growing insecurity in Kosovo or to get out?
The Prime Minister: The conclusions welcomed the paper by Solana and the European Commission, so I do not believe that they were bland. The very purpose of raising the issue in that way was to ensure that Europe co-ordinates its assistance better.
There will inevitably be problems sorting out an issue such as Kosovo, especially given the wider problems in the Balkans. However, the alternative—a policy of disengagement—would be disastrous. It would destabilise the entire region, and lead to renewed bouts not just of ethnic conflict, but also of ethnic war, into which we would inevitably be drawn back. That is why I took the view from the very beginning that we had to become engaged with the conflict. We shall see the peace through in the same way that we saw the conflict through.
Mr. Ben Bradshaw: Is my right hon. Friend aware of the other comments made by the German Chancellor at the weekend, when he said that the
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liberalisation and deregulation achieved at Lisbon would not have been possible without the leadership shown by the British Government? Does my right hon. Friend agree that the best proof that Lisbon was a success is the deafening silence about the summit among the anti-European British newspapers?
The Prime Minister: The summit showed that, with a positive attitude in Europe, Britain can be successful. I hope that we carry on learning that lesson.
Mr. David Chidgey: In the Prime Minister's discussions about security and stability in the Balkans, did he touch on the acute problem of the shortage of law-enforcement officers in Kosovo? Was he made aware of the high regard in which British police officers working on secondment there are held? British officers lack of firearms training means that there is a great shortage of them, although the authorities in Kosovo say that they would be more than happy to provide that training because they value the officers' skills so highly. Will the Prime Minister revisit the matter and make more British police officers available to restore peace in Kosovo?
The Prime Minister: We are doing what we can, and we have already doubled the contingent of British police officers in Kosovo. I understand what the hon. Gentleman says about firearms training, although I think that the matter is a little more complicated. However, we are also providing additional help to crack organised crime. We are giving a range of help and we stand ready to do more, but that help has to be given in conjunction with the authorities in Kosovo.

Points of Order
4.22 pm
Mrs. Angela Browning: On a point of order, Madam Speaker. Have you received a request from the Secretary of State for Trade and Industry to come to the House and report the progress made in the various meetings that he has held over the past 10 days on the subject of Rover? You will know that the right hon. Gentleman was due to open this afternoon's debate on the Budget but, because the Government has withdrawn him, there will now be no Budget debate dedicated to business and industry. Are you able to use your influence to ensure that the House is kept apprised of this matter, which is very important, especially in the midlands?
Madam Speaker: I am not aware that the Secretary of State for Trade and Industry is seeking to make a statement on the subject to which the hon. Lady referred. However, those on the Treasury Bench will have heard the plea of the hon. Lady, who speaks officially on these matters for the Opposition, and perhaps we shall be hearing something soon.
Mr. Bob Russell: On a point of order, Madam Speaker. I seek your guidance and protection for Back-Bench Members in respect of oral questions. Two weeks ago, I drew Question 7 for this afternoon, but my question was subsequently removed from the Order Paper. The question had to do with Wembley stadium, so who should answer it if not the Secretary of State for Culture, Media and Sport or the Minister for Sport? I understand that the question was transferred to another Department. Do you not agree that in such cases the matter should be discussed with the hon. Member concerned?
Madam Speaker: I cannot agree that there should be discussion with the hon. Member concerned. I believe that the question was not only about Wembley, but also about rail links to the stadium. It is for the Minister involved to determine whether a question should be transferred. I understand that the hon. Gentleman tabled his question on 13 March, and that it was transferred on 15 March. I accept his word as an hon. Member that he was not informed of the transfer until this very day, and I very much deprecate that. I have sympathy with the hon. Gentleman's position, and I hope that he will take my remarks this afternoon from the Official Report and use them to make the strongest possible representations to the Secretary of State concerned.

Residential Care Homes and Nursing Homes (Medical Records)
4.24 pm
Mr. Paul Flynn: I beg to move,
That leave be given to bring in a Bill to require persons registered to carry on residential care homes or nursing homes to keep records concerning medicines and their use; to provide for inspection of such records by medical practitioners; and for connected purposes.
The whole House will have been shocked at the level of abuse in homes for young people that have been revealed in the past few years. However, at least a similar level of abuse exists in homes for the elderly, and it remains hidden. The majority of residential homes are run in an exemplary manner by kind, dedicated staff that receives poor wages for their thankless and trying work. However, a recent television programme, secretly filmed in a residential home, revealed a degree of physical and verbal violence against residents that would shock us all.
The purpose of the Bill is to counter another form of abuse—the use of medicinal drugs in such homes. Many families tell a similar story of relatives who, although frail, were active and lively, but, within a short period of entering a home were reduced to inactivity, their behaviour being similar to that of zombies. That is usually explained as being the result of the declining faculties of the residents concerned. However, there is a wealth of evidence to suggest that over-medication is the major factor.
All independent studies have found vast over-prescription of powerful, anti-psychotic drugs. In Glasgow, 28 nursing homes were visited to examine the prescribing of the "chemical cosh" to 217 residents. The study found that 190—88 per cent. —of those residents did not need the drugs. At the end of the day, some nursing homes routinely switch off their patients with the lights. An elderly person living in a nursing home receives four times as many prescription items as elderly people living in their own home. On average, elderly people in nursing homes are given between six and seven medicines—some take as many as 19—many of which are inappropriate and unnecessary.
The use of neuroleptic drugs is of special concern. Such drugs are meant for the deeply psychotic—for the treatment of senility, mania and dementia. The two main drugs are Melleril and Largactil; those drugs and several others reproduce, as a side-effect, the symptoms of dementia. It is often impossible to tell whether the dementia is from natural causes or from the drugs. Another survey found that although 10 per cent. of nursing home residents suffer from serious psychiatric disorders, 50 per cent. rather than 10 per cent. of them receive those powerful drugs.
I am grateful for help in preparing the Bill from several groups, including Action on Elder Abuse and Age Concern, which have given me some recent examples of what is happening. I was told of one nursing home where all the residents are woken up at
6 am and made to go to bed at 6.30 pm.
Age Concern said:
It has been suggested that the residents are drugged in the evening to go to sleep early, as this would not happen naturally.
Elderly people are put to bed at 6.30 pm; when they wake up they are drugged again and hauled out of bed at 6.30 am because that suits the shifts of the staff.

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The organisation gave another typical example in which groups of elderly people were being sedated without prescription. Age Concern stated:
A relative believed the owner was in financial difficulties. Sedated elderly required less attention and less staff. The home went broke. The health of one lady improved when she was removed from the home.
That woman went on to a milder drug, although she is addicted for life to the drug that was illegally prescribed to her in that home. Age Concern noted that a prosecution is possible.
Those are not isolated examples. Every independent investigation of such homes undertaken in the United States and in this country reports gross over-use. The most devastating conclusion of such reports is that when the use of those powerful drugs has been reduced or stopped, there has been little, if any, deterioration in the patient's health. The drugs were being needlessly prescribed.
There are possible remedies. Today, I heard about a trial carried out in the Ceredigion area by a local health group. I cannot give the final conclusions because they have yet to be presented to the National Assembly for Wales, which will report on them. However, the trial was a great success. A pharmacist visited 111 individuals; it was found that 194 of the drugs that had been prescribed were unnecessary for a variety of reasons. Many of them were withdrawn. The report stated that the health of those individuals has been improved, and a saving of £15,000 has been made on the drugs bill. That sum can now be given to the homes so that they might provide real help in the form of extra staff and extra care. It is far better for those in residential care to have a helping hand or an attentive ear rather than to be driven into oblivion by a drug.
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Manchester school of old age psychiatry ran similar pilot schemes, sending groups of pharmacists into residential homes. In every instance that resulted in fewer drugs being used.
I hope that the Bill will be incorporated in the Care Standards Bill. I am grateful to a new group named Action on Elder Abuse centre for ageing, the Alzheimer's Disease Society and Age Concern for the help that they have given me in preparing the Bill. Residential homes are a reality of life for an increasing number of elderly people. In too many cases we are failing to provide the safety, comfort and peace of mind that we all hope to enjoy in our final years.
As politicians, we often agonise over problems for which there are no realistic remedies. The Bill will provide a practical, safe and affordable remedy that can rescue tens of thousands of defenceless, frail and elderly people from the lives of misery and confusion that are now being imposed on them by others out of ignorance, neglect or greed.
Question put and agreed to.
Bill ordered to be brought in by Mr. Paul Flynn, Mr. Eddie O'Hara, Mr. Gordon Prentice, Dr. Doug Naysmith, Dr. Brian Iddon, Mr. Paul Burstow, Mr. Mike Hancock, Mr. Andrew George, Dr. Evan Harris and Mr. Dafydd Wigley.

Residential Care Homes and Nursing Homes (Medical Records)
  RESIDENTIAL CARE HOMES AND NURSING HOMES (MEDICAL RECORDS)
  Mr. Paul Flynn accordingly presented a Bill to require persons registered to carry on residential care homes or nursing homes to keep records concerning medicines and their use; to provide for inspection of such records by medical practitioners; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 9 June, and to be printed [Bill 98].
Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [21 March].

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting a supply, acquisition or importation;

  (b) for refunding an amount of tax;

  (c) for varying any rate at which that tax is at any time chargeable; or

  (d) for any relief, other than a relief which—

  (i) so far as it is applicable to goods, applies to goods of every description, and

  (ii) so far as it is applicable to services, applies to services of every description. —[Mr. Gordon Brown.]

  Question again proposed.

  Budget Resolutions and Economic Situation
  Mr. Deputy Speaker (Mr. Michael Lord): Before I call the Minister, I remind the House that Madam Speaker has put a limit of 10 minutes on all Back-Bench Members' speeches during the debate.
  4.33 pm
  The Secretary of State for Social Security (Mr. Alistair Darling): This is the last day of this year's Budget debate. The debate has shown the clear dividing lines between the Government and the Opposition. We are building a strong economy that allows us to build strong public service, whereas Conservative policies would return us to the boom-and-bust economy of the past. If we want to know what the Opposition think about public services, we have only to look at their plans to dismantle the national health service.
  We have strong public finances because we took tough decisions during the first two years of this Parliament. We cut the huge debts that we inherited and we gave the Bank of England independence, something that was opposed by the Conservatives at the time. Our public finances are strong. We are in surplus, not deficit. By getting people back to work and by cutting the costs of social and economic failure, my right hon. Friend the Chancellor of the Exchequer found that he had about £3 billion more available to spend than he would have done but for the change of Government.
  For the first time in a generation, social security spending is under control. The rate of growth in this Parliament is less than half the rate under the Conservative Government. Spending will remain under control provided that we continue to reform the welfare state and get more people into work, tighten the gateways to benefit and take tougher action on fraud. By keeping
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  spending under control we can spend more on our priorities, such as helping families with children and supporting pensioners.
  Tightening the gateways is important. Because of the action that we have taken, we are already on course to save £1 billion over this Parliament by cutting down on fraud and error in income support alone. We have also called time on the hidden economy which thrived during the Tory years. I can announce that, from next year, there will be 400 more specialist investigators across government to crack down on fraud. Specialist teams throughout the country will check the identities of people claiming benefits and suspected of making fraudulent claims. Following Lord Grabiner's report, the Government will introduce proposals to deal with persistent offenders who work and claim benefits at the same time. There is no excuse for benefit fraud; we will not tolerate it.
  Social security spending almost doubled under the previous Government because of their economic and political failure. They spent more and more while the number of households with no one in work doubled and child poverty trebled. It is a scandal that, at the beginning of the 21st century, it falls to this Government to eradicate child poverty, which grew so much under the Conservative Government. They spent more and more as a result of their failure, and their response was simply to leave things to the market. That remains their response today, whereas our response is fundamental reform, and we are now beginning to see the results of those reforms.
  The key to cutting the bills of economic failure is getting people back to work. Work provides opportunity and helps to remove children from poverty; and a lifetime in employment makes for a good pension. That is why this Government are determined to help people find work and to make work pay—helping people to help themselves. There is more help now available, with the working families tax credit, the new deals and the minimum wage. Long-term unemployment has more than halved, youth unemployment is down by 70 per cent. and there are more vacancies in the economy. We believe that welfare reform and getting people into work is the key not just to cutting the bills of economic failure, but to making sure that individuals can prosper and do well.
  There are 1 million vacancies in the economy. We therefore believe that a new approach—a new culture—is needed by Government to help people fill those job vacancies. That is why, this month, we announced a new agency for work, bringing together the Benefits Agency and the Employment Service. From next year, there will be a single gateway for everyone of working age. We are ending a system that is designed simply to hand out benefits. Instead, we are designing one that is geared to getting people into work and helping them to become independent.
  We have active help backed by measures to help work pay, such as the working families tax credit. Some 1.4 million families are gaining about £24 a week, and all of that would be put at risk were there ever to be the return of a Tory Government.
  Mr. Chris Pond: Will my right hon. Friend seek an intervention from Conservative Members? The Conservative party has performed one or two U-turns

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  on these issues, but will he seek a categoric statement as to whether it would retain or scrap the working families tax credit?
  Mr. Darling: One only has to read what Conservatives have said about the working families tax credit to see their hostility towards it. I know that they have performed one or two U-turns, such as that on the minimum wage. However, it is hard to believe a party that was so vehemently against the minimum wage, when it now tells us that it is in favour of it. Who knows? The Tories will be calling for an increase in it next.
  The Conservative party is still against the new deal, but I suspect that it is quiet now because of its embarrassment. After nearly 20 years in government, and despite all the rhetoric and all the promises to cut social security spending, it managed to double the amount of social security spending. That was not because people were better off as a result of more generous benefits or anything like that: it was simply that the Conservative Government needed to spend more and more because of mass unemployment. What was worse, it presided over a situation in which one generation of the unemployed led to a second generation of people who were unemployed.
  Mr. John Bercow: Will the right hon. Gentleman give way?
  Mr. Darling: I shall certainly give way; it did not take long to provoke at least one Conservative Member. The hon. Gentleman must be deeply embarrassed by the fact that, whatever else the Conservatives did in the past 20 years, they manifestly failed to control social security spending. We have done that, and we shall continue to do so.
  Mr. Bercow: That was a very long-winded apologia. Is the Secretary of State aware that, on the Government's own statistics for the new deal for lone parents, only 4.5 per cent. of lone parents who were sent invitation letters have secured employment as a result? More than 434,000 have failed to do so. Does the right hon. Gentleman not recognise that, if the new deal for lone parents were a school, it would have been closed by the Secretary of State for Education and Employment?
  Mr. Darling: I shall come on to lone parents shortly, but I can tell the hon. Gentleman that nearly 90 per cent. of lone parents who come in for interview under the new deal join the scheme, and a growing number go on to work. A recent report showed that once lone parents are in work, they are more likely than other people to stay in work, and the survey found that nearly half of those who went into work were still in work five years later. Lone parents have a motivation that people without children do not have—the motivation to look after their children. The new deal for lone parents has been a success, and as I shall tell the House shortly, we intend to build on that.
  I was saying that not only will we help people into work through the new agency, which will make sure that everyone of working age comes through that single gateway, but we are easing the transition to work. The Budget introduces a new simple job grant, with a benefit
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  run-on for housing costs, which makes it easier for people receiving mortgage support to try out a job: if the job does not work out, they will not lose that benefit.
  We are helping people to get work, and 260,000 people have found a job while on a new deal programme. Yet it is worth noting that the Tories were against every aspect of the new deal. We are extending and improving those programmes because so many people have found work. We are reducing unemployment, but there are many people who are not in work who could work and want to work. That is why we introduced the new deals for disabled people and for lone parents.
  As I said, 90 per cent. of lone parents who come in for interview join the new deal, and one in three of those go on to find work. Starting this October, and going nationwide from April next year, we intend to roll out national work-focused interviews for lone parents on income support with children of school age. People have a right to expect support, but in turn they have a responsibility to find out what help is available. By 2004, every lone parent whose youngest child is over five will have to come in for an interview as a condition of receiving benefit. We shall begin to implement that next year. We are providing the help and advice that people need, but they should be made aware of what help is available to get them into work.
  The Tory alternative, which is simply to cut off all income support the minute the youngest child reaches 11, as well as to remove all help and advice and scrap the new deal and the working families tax credit, will not help; it will only increase poverty. Helping lone parents and, importantly, their 1.7 million children, is an essential part of our drive to eradicate child poverty. We are the first Government ever to commit themselves to halving child poverty within 10 years and eradicating it in a generation. After all their U-turns and policy changes, it will be interesting to find out whether the Tories are prepared to support us in that commitment. No decent society and modern economy such as ours should tolerate so many children living in poverty.
  We are determined to tackle poverty and its causes, including the poverty of opportunity and expectation that has blighted the lives of too many children. In this Parliament alone, as a result of all the measures that have been announced in the Budgets since we took office, more than 1 million children will be taken out of poverty. By any reckoning, that achievement should make people proud of what this Government have done.
  We are tackling the causes of poverty, not only through education and housing policies, but through extra help such as the sure start maternity grant for mothers with new babies, which rises to £300 from October. We are also helping those children whose parents cannot work with an increase of £4.35 for children under 16 in families who are receiving income support and the working families tax credit.
  Mr. John Townend: Is not one of the greatest causes of the increase in child poverty the breakdown of the institution of marriage? What have the Government done in the Budget to encourage marriage?
  Mr. Darling: In fact, the biggest single cause of child poverty is parents not being in work for long periods. I would take the hon. Gentleman's remarks more

  45
  seriously if he had ever paid any attention to, or expressed any concern about, the mass unemployment over which the Conservative Government presided during the 1980s and early 1990s. If he wants to see the problems of poverty at their most acute, he should visit those areas where employment was decimated in the early 1980s, and where parents were given no help to get back into work.
  Mr. Darling: The hon. Gentleman can shake his head if he likes. In my 13 years as a Member of Parliament, I have never heard him express an interest in poverty, but if he is now taking such an interest, he should look at what is being done to help children who live in poverty. I commend the report that the Government produced last year, and which we will produce every year; it will enable people to judge our performance on eradicating child poverty within a generation. We are determined to ensure that every child in this country has the best possible start in life.
  Mr. David Davis: The Secretary of State picks his statistics carefully. According to his definition, the highest cause of child poverty is families without a working parent, but the second highest is single-parent families. Therefore, will the right hon. Gentleman answer the question asked by my hon. Friend the Member for East Yorkshire (Mr. Townend): does the right hon. Gentleman think that encouraging marriage is an appropriate objective for Government policy?
  Mr. Darling: The right hon. Gentleman has inadvertently made my case: for most families, lack of work is the problem. He mentions lone parents, and too many children living in poverty are the children of lone parents who are not in work. About 800,000 lone parents are not in work, and we want to ensure that those who can work do so.
  Mr. Townend: What children need is fathers.
  Mr. Darling: The hon. Gentleman is quite right to emphasise the role of fathers. The Tories set up a system that collapsed under its own weight, so we are reforming the Child Support Agency—in fact, the Bill to achieve that reform returns to the House of Commons later this week. The result of our reforms will be that nearly 1 million children will get more money than they do at present; in some cases, they will get money for the first time.
  We are tackling child poverty on several fronts, including ensuring that absent parents—usually fathers—pay what is due and making it easier for them to do so. We are also helping lone parents into work—giving them help that was never available in the past. Essential to eradicating child poverty is running a stable economy—something that eluded the Conservatives for almost 20 years—creating an environment in which work can flourish, and establishing conditions in which there are more jobs in the economy than ever before. The parents of some children cannot work, so we are helping them, as well as providing an extra £26 a week for children who are severely disabled in early life.
  46
  All that help was never available in the past, and most of the measures introducing it were opposed by the Tories. Many of the measures are still opposed by them and would be threatened by the return of a Conservative Government.
  Mr. Malcolm Bruce: Will the Secretary of State give way?
  Mr. Darling: We have not heard from the Liberal Democrats yet, and since there is only one here—[HON. MEMBERS: "Three."] —I shall give way.
  Mr. Bruce: Will the Secretary of State consider the irritation caused to disabled people by the fact that they have to demonstrate how disabled they are and how much their disability costs them in order to claim disability living allowance? Many find that both demeaning and difficult. It goes against the grain of encouraging people to be independent to force them to advertise the extent of their dependency to qualify for a benefit that many of them need.
  Mr. Darling: The hon. Gentleman will accept that there has to be a test to determine eligibility for DLA, but he should be aware that we are changing the assessment to determine not what people cannot do, but what they can do. The new personal capability assessment will be introduced from next year; it is currently being piloted to ensure that it is effective. We should always ask of anyone of working age what that individual can do, because many people of working age want to and can do something that will enable them to become more independent. In the past, the test has been too negative. We want to change that.
  Mr. Dafydd Wigley: In that spirit, is it the Secretary of State's intention to examine the rules of the independent living fund and the way in which that operates as a disincentive for people to remain in work? Glaring cases have been reported in the press and drawn to the right hon. Gentleman's attention. The matter needs to be looked into.
  Mr. Darling: We have increased the disregard in relation to the ILF. We are examining the rules for all such benefits and keeping them under review. Our objective is to make it as easy as possible for people who want to work—even to do a little bit of work—to do so.
  With regard to children, one of our reforms will make the system supporting children much more effective than it is at present, with the introduction from 2003 of the integrated child credit, which will draw together all the help that we give for children across the benefits and tax system into a single, simple credit paid to the main carer. There will thus be a single source of income to support the poorest families, which they can take with them as they move into work.
  If it is right to tackle child poverty, it must also be right to tackle another Tory legacy—pensioner poverty. Later this week I shall publish figures showing that too many pensioners have lost out in the past. We are making reforms to the pension system for the future so that we avoid the situation that we now face. If it had not been for the changes that we have introduced, almost a third of the working population would be heading towards retirement on income support from day one.

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  We are making long-term reforms, increasing access to pensions and reforming the state earnings-related pension so that the state second pension is more effective. However, there are still too many pensioners who are poor now. Pensioner income as a whole has increased faster than average earnings, but the problem is that too many pensioners have lost out. That is why we introduced the minimum income guarantee, which from this April will be worth £78 for a single pensioner.
  We want to reward thrift. Time and again in the House, right hon. and hon. Members have asked us to look at the capital limits that determine whether someone is entitled to the minimum income guarantee. Capital limits had not been increased since 1988. Clearly, that situation could not be allowed to continue, so from April next year the lower capital limit on savings for the minimum income guarantee will be doubled from £3,000 to £6,000, and the upper limit will rise to £12,000 before anyone loses entitlement to the minimum income guarantee.
  Mr. John Swinney: I am grateful to the Secretary of State. He said that he would announce the figures later this week showing how pensioners have lost out in the past. We will be interested to see those figures. On the assumption that that is because many pensioners are unaware of their entitlements and in some cases are afraid to take up their entitlements, how confident is the right hon. Gentleman that the minimum income guarantee will he accessed by pensioners any more than the previous devices that were put in place to protect pensioners from poverty?
  Mr. Darling: The hon. Gentleman may be interested to know that the paper that I intend to publish shows a number of reasons why there are pensioners with less income than they should have. Pensioner incomes have been rising faster on average than earnings because the generation now retiring built up occupational pensions in the 1950s, 1960s, 1970s and so on. Part of the problem is that too many people of working age did not have access to an occupational pension. That is why we are introducing stakeholder pensions, which will benefit about 5 million people.
  The second problem facing people now retiring is that because too many people have been on low incomes, or in some cases no incomes at all—people who were carers, people with disabilities, and people with broken work records and so on—SERPS did not help them. They did not earn very much, so they did not get very much. The reforms that we are making to the state second pension, which in some cases will double the amount that the low-paid get, will ensure that more and more people are retiring on a higher pension.
  Thirdly, many people who are already retired, and for whom it is therefore too late to save, are losing out.
  I return to the point about the minimum income guarantee. When the capital limits applicable to the minimum income guarantee are extended, the support received by a pensioner with savings of £6,000 could rise by £12 a week. Half a million pensioners will gain overall.
  We want to make sure that everyone who is entitled to the minimum income guarantee gets it. On Wednesday, I shall launch the biggest campaign of any Government
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  for a take-up of the minimum income guarantee. We are determined to ensure that all pensioners get the money to which they are entitled. They should claim it if they are entitled to it.
  Kali Mountford: I congratulate the Government on making such an effort to ensure that money goes to the poorest pensioners and not necessarily to all pensioners. Is it not the case that the new winter fuel payment, which was not available under any previous Government, helps that group the most, because it is not deducted from the minimum income guarantee?
  Mr. Darling: My hon. Friend is right. The winter fuel payment is extremely popular and provided a great deal of help not only to pensioners on low incomes but to all pensioners. It is perhaps a measure of its popularity that when we announced that we would extend it to households with members who were over 60, we received thousands of calls every week asking about it. It is very useful; it comes in a lump sum before Christmas and thus helps pensioners to pay the sometimes substantial bills that they incur at that time of year. The winter fuel payment benefits all pensioners, but perhaps it has greater value for those on low incomes.
  Mr. Gordon Prentice: Before my right hon. Friend leaves that point—
  Mr. Darling: I was not going to leave it; it is such a good point that I might stay with it a little longer. However, I shall give way to my hon. Friend.
  Mr. Prentice: It worries me that so many pensioners do not benefit from the minimum income guarantee. It would be a simple matter to include a few pages of large type in the pension book. Every pensioner has a pension book, and including those pages would encourage people to claim what was theirs.
  Mr. Darling: My hon. Friend will realise later this week that the Government have made several proposals that draw attention to the minimum income guarantee. I do not share his optimism about everyone reading their pension books from cover to cover, and many pensioners receive payments by other means than an order book. We must ensure that they, too, know about the minimum income guarantee.
  The Government are determined to do more to lift many more pensioners out of the low income bracket. That is why I shall launch a consultation document on the way in which we can best develop a new pensioners credit for the next Parliament. It will take account of and help those pensioners who have not only modest savings, but modest occupational pensions.
  For the poorest pensioners, the scope of the minimum income guarantee will be extended; the pensioners credit on which we launch a consultation document will show how we are helping pensioners who have modest occupational pensions.
  We are helping all pensioner households—some 10 million pensioners—through this year's winter fuel payment increase to £150. We should also remember that we cut VAT on fuel whereas the Tories doubled it. We have reintroduced the free eye tests that the Conservatives

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  ended when they were in government. From November, free television licences will be available for pensioners who are over 75. That group comprises some of the poorest pensioners.
  We are spending an additional £6.5 billion on new help for pensioners during the Parliament.
  Mr. David Ruffley: Will the right hon. Gentleman confirm that the pensioners credit will not be scored as negative income tax in future Red Books?
  Mr. Darling: Why does not the hon. Gentleman wait until he reads the consultation document on the pensioner credit? I would have thought that he would be more interested in its proposals for helping pensioners. Most pensioners will want to know about that. Perhaps the hon. Gentleman's question shows the Conservative party's disregard for the welfare of pensioners in this country.
  The Budget drives forward our reforms—
  Mr. William Ross: Will the right hon. Gentleman give way?
  Mr. Darling: I am conscious of the 10-minute rule, and that it is not fair to Back Benchers if I speak indefinitely, but I shall give way for the last time.
  Mr. Ross: I am curious about the way in which the right hon. Gentleman arrived at the figure of £6,000 savings. Has he simply applied indexation to take account of the inflation rate or earnings since 1988?
  Mr. Darling: We simply doubled the figure. Time and again, I have stood at the Dispatch Box and rightly been asked by hon. Members—even Conservative Members, who did nothing about it in their last 12 years of government—to increase capital limits. I wanted to ensure that they were increased significantly. I believed that doubling the figure would make a useful start. The system is relatively easy to understand. The figure starts at £6,000, and goes all the way up to £12,000. I think most pensioners will welcome that, and I am glad to be Secretary of State at the time of its introduction. The pensioners credit will take the policy one step further.
  As I was saying, this is a Budget that drives forward our reforms to make the welfare state fit for the 21st century. By controlling expenditure, we are able to do more for the people whom we want to help, including pensioners and families with children. We are helping people into work; we are making work pay; we are eradicating child poverty; we are making pension reforms for the future. We are a reforming Government, and this is a reforming Budget. It is building a strong economy, and we are building strong public services. This is a Budget for all our people.
  5 pm
  Mr. David Willetts: Let me deal first with the figures relating to public spending, which must be at the heart of the Budget judgment and the statement that we heard last week. It is also at the heart of new Labour's
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  claims on social security spending. I remind the Secretary of State that in 1996 the Prime Minister, in order to get elected, said:
  Our priorities should be to re-order public spending so that we're spending less on welfare and more on areas like education.
  That is the promise that the Government made in order to get elected, but what is the reality?
  The reality—if we use the Chancellor's preferred, although admittedly now notorious, method involving cumulative increases from the 1998–99 cash base—is as follows. Social security spending is up by £32.4 billion, way ahead of education spending, which is up by £19.7 billion, and even ahead of health spending, which is up by £26.8 billion. Far from saving money on social security in order to put more into education and health, the Government are putting more into social security than they are putting into either education or health.
  Mr. Darling: As the hon. Gentleman wants to make something of this point, may I ask him a question? Does he not accept that most of the increases to which he refers are discretionary—that we are spending more on pensions and on families with children? That is good spending; what we cut was the bad spending on high unemployment and economic waste.
  Mr. Willetts: The Secretary of State is quite right. The biggest single item in the Budget measures comprises increases in means-tested benefits—benefits which, according to any normal person's reading of the Prime Minister's reference to welfare, are exactly what he was talking about. One cannot pledge to spend less on welfare and then claim credit for putting more into means-tested benefits.
  The Government have no coherent agenda for saving money on social security. To be honest, I do not think that they even have a coherent agenda for spending money on social security. That certainly seems to be the view of two previous Social Security Ministers, both of whom have helpfully contributed their views on the Secretary of State and his strategy only today. In a book published today, the right hon. Member for Birkenhead (Mr. Field) says:
  New Labour came to power committed to transform welfare. That revolutionary intent has fractured.
  He also says:
  Welfare changes, masquerading as reform, have undermined the principle of work, mocked the idea of saving, and weighted public policy against people who tell the truth.
  That is the judgment of a former Minister responsible for welfare reform on the Secretary of State's strategy, if we can call it that.
  Mr. Frank Field: Does not the weakness of the hon. Gentleman's attack lie in the fact that his Government implemented the very same strategy?
  Mr. Willetts: I shall turn shortly to the figures relating to means-tested benefits, which the right hon. Gentleman has a long and distinguished record of criticising.

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  The right hon. Gentleman is well known as a critic of the Government's approach to welfare reform. What is perhaps more striking is what the former Secretary of State, the right hon. Member for Camberwell and Peckham (Ms Harman), said today. She said:
  There are too many departmental fingers in the pie, but no clear lead, no effective co-ordination and culture clashes between different departments. It can't go on like this. Government policy on the family is incoherent and ineffective.
  Two previous Ministers who do not agree on much do at least agree on what they think of the present Secretary of State and his approach to social security reform. To have alienated one predecessor may be regarded as a misfortune; to have alienated both of them is distinctly careless.
  Let us discuss pensions, to which the Secretary of State referred. The absence of a clear strategy is obvious as soon as we put together the different policy announcements and statements that he has made to the House in the past year. Less than six months ago, his reluctant hon. Friends were whipped through the Lobby to means-test disabled people with modest occupational pensions. How did he justify that policy? He did so on this ground:
  The first thing that our reforms will achieve is to do more for people who need help most.—[Official Report, 3 November 1999; Vol. 337, c. 306.]
  He argued for more means testing in other words, but up pops the Chancellor and now we have a universal heating addition to help with winter fuel costs, regardless of circumstances, and a universal free television licence for over-75s, regardless of circumstances. One moment the Government pop up to defend means tests when they hit people with modest occupational pensions; the next moment, the same people are suddenly to receive new universal benefits.
  Mr. Pond: Does the hon. Gentleman understand that one role of means tests is to pull some of those people out of the wreckage created by the Conservative party in government? Does he not accept that the figure referred to by my right hon. Friend the Secretary of State—we are giving £6.4 billion back to pensioners during this Parliament—represents a good record, given that that sum is two thirds of the amount that his party took from pensioners over 18 years?
  Mr. Willetts: I am afraid that that figure is a typical new Labour spin statistic that takes no account of, for example, the attack on occupational pensions represented by the taxation of the dividends that pension funds receive.
  I would accept a strategy that was at least consistent. If the Secretary of State regularly told the House that he believed in more means testing, we could understand that, although we might disagree. If he told the House that, above all, we need more universal benefits, we could understand that. However, we and pensioners up and down the country cannot understand how one week they all have to be means-tested and targeted, but the next they are to receive new universal benefits. Those are the same people. One moment they are being deprived of the dividend credit, which pensioners with modest savings
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  below the full value of the personal tax allowance used to receive, but the next he pops up and proudly announces that he is introducing a pensioners credit. To do what? To help pensioners with modest savings, he says. No wonder this country's pensioners are totally confused by the Government's approach to social security. The previous Secretary of State and the previous Minister of State are right to say that there is no coherent and consistent strategy.
  Mr. Jim Cunningham: The hon. Gentleman accuses my right hon. Friend the Secretary of State of confusing people on pensions, but would he like to tell us his policy?
  Mr. Willetts: What we have said is perfectly clear: we support the increase in the capital limits for pensions, although I have to say that this is the first time that there has ever been a special capital limit for pensioners that does not apply to other income support recipients. We believe that pensioners should become more affluent as a result of a combination of personal and occupational savings, as well as the receipt of state benefits. We criticise the Secretary of State above all because, through his changes in the tax treatment of pensions, he has attacked future pensions and the value of the savings provision of people in funded pensions.
  Mr. David Watts (St. Helens, North): Can we clarify the position? Is the hon. Gentleman saying that he would like the pensions budget to be cut? If so, will he be specific about which parts would be cut?
  Mr. Willetts: I shall not go through individual items of the Budget. Before the next general election, we shall set out a Conservative policy for pensions that will ensure that people enjoy rising living standards because of a combination of occupational pensions and savings, which the Government are attacking, and social security benefits.
  Mr. Darling: I want to question the hon. Gentleman on one point, as he has made so much of it. Can I take it from his remarks that the Conservatives would get rid of the winter fuel payment?
  Mr. Willetts: Before the next election, we shall announce the Conservative approach to pensions, which will ensure that pensioners enjoy rising living standards through a combination of funded savings and assistance from benefits.
  I shall now deal with welfare to work and the new deal for lone parents. We want families as well as pensioners to be better off. We particularly appreciate the importance of ensuring that families are better off in work than out of work. That is why the late Lord Joseph introduced family income supplement almost 30 years ago. Baroness Thatcher and my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) introduced family credit 15 years ago to boost the incomes of low-income working families, but that is written out of the history books of new Labour.
  We believe in ensuring that people are better off in work than out of work. I therefore welcome the important, if unglamorous, measures in the Budget that the Secretary of State has introduced to improve the run-ons for housing benefit and for people on income support, especially those

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  with mortgages. We accept those practical measures to ensure that people move from unemployment into work and are not caught out by administrative hoops and hurdles. In fact, those proposals may be the Secretary of State's last sensible decision before he relinquishes that area of policy entirely to another Minister. We recognise that those measures make sense.
  However, our doubts about the effectiveness of the new deal are confirmed by figures in the Treasury's own document, which was published only last month. Chart 3 in that document is revealing, because it shows long-term youth unemployment falling steadily from 1994. I challenge the Secretary of State to get out a magnifying glass and identify any change in the downward trend of youth unemployment since the introduction of the new deal. Anyone surveying that chart would not be able to identify the point at which the new deal for young people came in. The fact is that the downward trend in youth unemployment was established long before the new deal was introduced, and it has continued at the same rate. The new deal has had no effect whatever.
  The Secretary of State referred to the new deal for lone parents, for which he is directly responsible. The Government are supposed to believe in evidence-based policy, but their presentation of the statistics on the new deal for lone parents is nothing short of a disgrace. The findings from their evaluation of the new deal are presented in a deeply misleading way.
  Let me take the Secretary of State through some of the tricks that he plays, and which I am afraid he played again today. It is extremely difficult to extract information from the Government. We know from parliamentary answers that of the 450,000 single parents sent invitation letters under the new deal for lone parents, only 4.5 per cent.—20,000—have gone into employment.
  However, the Secretary of State and his Ministers quote much larger figures. The Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), gave a figure of more than 28,000, and the Minister in the other place quoted almost 41,000. How do they reach those larger figures? Single parents who apply to join the gateway and come knocking on the door of the jobcentre because they are so keen to get into work are not part of the new deal and do not receive an invitation letter. But those lone parents who turn up at a jobcentre are counted as a success for the new deal, even though they are not part of the target group for the new deal and have never received an invitation letter. They have nothing to do with the invitation letters that the Secretary of State sends out. To start with a figure of 450,000 letters and then say that 40,000 lone parents have got work as a result of the new deal is to present the statistics in a misleading way.
  That is not the end of the fiddle. Only the other day, in his press release about the evaluation of the new deal for lone parents, the Secretary of State said:
  the number of lone parents on income support was 3.3 per cent. lower than it would have been without NDLP—
  the new deal for lone parents. One might feel that it is a rather modest figure, but at least it is a step in the right direction. The evaluation compares the new deal for lone parent pilot areas with areas where there was no new deal for lone parents. When we studied the evaluation, we found that 17 per cent. of lone parents in the new deal pilot areas had moved into work, but that, in the
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  comparison areas, where there was no new deal, 18 per cent. had done so. In other words, more moved into work in areas where there was no new deal, so what it actually did was zero.
  The Secretary of State was strictly correct when he said that 3 per cent. fewer lone parents were on income support. Why? In areas with the new deal for lone parents, more lone parents repartnered, to use the language of his evaluation report. More ended up married or cohabiting. He may claim credit for quite a lot of things, but he cannot claim credit for ensuring that lone parents get married as a result of the new deal.
  Mr. Pond rose—
  Mr. Willetts: I hope that the hon. Gentleman will explain and justify the misleading presentation of the statistics for which the Secretary of State is responsible.
  Mr. Pond: The hon. Gentleman is sharing his confusion over the matter with the rest of the House, but perhaps the Secretary of State will explain the matter to him later.
  Once the lone parents in my constituency have waded through the statistics that the hon. Gentleman has thrown them, they will know one thing: presumably, the Conservative party would scrap the help and advice that they get through the new deal for lone parents. They will also be anxious—I am sorry to return to the matter, but I have not had an answer—about whether it would scrap the working families tax credit, too. Please can they have an answer to that?
  Mr. Willetts: We believe in helping people into work. At the next election, we will have policies that are a jolly sight more effective at doing that than the new deal for lone parents and some of the other measures that the Secretary of State has introduced. I will now turn to the working families tax credit because it is an important part of the Government's claimed agenda on welfare reform.
  The Chancellor says that this is a Budget for hard-working families. Let us look at how it affects such families. What about the 100,000 hard-working families who are brought into higher rate tax as a result of the abolition of the married couples allowance? What about the millions of families who are losing that allowance, with compensation from the children's tax credit coming in a year later? What about the 300,000 hard-working families who will find that they have been brought into a marginal tax rate of 47 per cent. as the children's tax credit is withdrawn? Those families are not rich. They will be earning perhaps £30,000. They would not regard themselves as massively rich. There are 300,000 of them. They face a 47 per cent. marginal rate as the children's tax credit is withdrawn.
  What about the 950,000 families—a figure in the Red Book; again, strangely, the Secretary of State did not refer to it—who we know from page 79 of the Red Book will face marginal deduction rates of 60 per cent. or more as a result of Budget 2000? The figure is up by 200,000 from that before the Budget of 1998. What about the 800,000

  55
  families who will lose the married couples allowance and do not receive any compensation whatever for that? What are the Government doing to help them?
  Kali Mountford rose—
  Mr. Willetts: Perhaps the hon. Lady will enlighten us.
  Kali Mountford: Perhaps the hon. Gentleman will tell the House whether it is true that family credit reached only half as many people as the working families tax credit and child credit. While he is on about the married couples allowance, is it not true that the child care tax credit is worth more than that allowance ever was?
  Mr. Willetts: To be honest—again, we had to extract the information through parliamentary answers—the answer is that the working families tax credit gets to nothing like twice the number of recipients of family credit. Ministers hope that it will, but it has not reached anything like double the number of recipients of that credit yet.
  What about a matter to which the Secretary of State did not refer at all in his Budget speech? In fact, I am not aware that he has ever referred to it in any speech on social security or welfare reform—namely, the tax credit-child credit agenda that the Chancellor launched in his November 1999 pre-Budget statement and that was further carried forward in the Budget statement last week. We have child benefit, working families tax credit, child care credit, children's tax credit, the integrated child credit and the employment tax credit, a set of measures, allowances, credits and tax credits through which, across the country, our constituents will have to wade simply to make any sense of the tax and benefit regime facing them. I do not think that 20 people in the United Kingdom will understand the tax credit regime that the Government are creating. Decent working people—whom we all want to be better off in work than out of work—will not be assisted by that set of measures, but will be totally perplexed and confused by them.
  The Chancellor is so restless. Although the working families tax credit has not yet been delivered in the pay packet—that will happen in April 2000—we have already had the reform after the reform after the change that has not yet happened. An integrated child credit will be introduced, in 2003, to replace a children's tax credit that has not yet been implemented—it will be implemented in 2001—which, in turn, reverses payment of the working families tax credit in the pay packet, which has not yet happened but happens next month. Talk about a Government jumping over themselves in their eagerness to reform the tax and benefit system!
  I remind Ministers of what they have said about the issue. In a written answer, the Paymaster General said:
  Payment of WFTC through the pay packet is central to demonstrating the rewards of work and making work pay for families on low incomes.—[Official Report, 15 March 2000; Vol. 346, c. 183W.]
  If it is so essential, why are Ministers taking all the child support elements in the working families tax credit and reverting to paying them as a benefit to the carer in 2003? If it was so essential when the Paymaster General
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  delivered that parliamentary answer, on 15 March 2000, why is she now taking half of the working families credit tax credit and—lo and behold—delivering it once more as a benefit to the carer?
  I think that there is a reason for the sheer perplexity and confusion of the Chancellor's policy: to disguise a humiliating U-turn. Having whipped his troops through the House on the argument that it is essential that those benefits are delivered through the pay packet, he is doing a rapid volte-face, after suddenly discovering that a significant proportion of those benefits should be paid instead as benefits to the carer.
  The Financial Times reported the Chancellor's launch of the working families tax credit as follows:
  The chancellor, who was joined at the launch by Dennis the Menace, Postman Pat and a Womble, said that linking payment to work through the pay packet meant there is "enormous scope to increase take-up".
  What the report does not say is that the Chancellor invited them back to the Treasury to write his policies, which is what they have done.
  The Chancellor will go into the next general election with a pledge to take £50 a week out of the pay packet of people on working families tax credit and pay it instead as a benefit. It is not my job to tell the Secretary of State for Social Security about the Labour party's history, but I should tell him that many people in his party may have longer memories than he has and may remember the reasons why Labour believes it lost in 1970 and 1979. One of the reasons—the right hon. Member for Birkenhead will remember this—was messing around with wallet and purse, getting into the minefield of which allowances people should receive through the pay packet and which benefits should be paid instead to the mother.
  The Chancellor, with almost cavalier disregard for either logic or the history of his own party, is entering that minefield again, and he will come to regret it. The fact is that there is no clear strategy. It may be wrong to say that there is no clear strategy, because there is one strategy.
  Dr. Stephen Ladyman: My constituents may well be as confused as the hon. Gentleman suggests about the credit system that the Government have introduced. However, the message that I am receiving is that they are consoling themselves rather well by counting their money and spending it on their children.
  Mr. Willetts: The hon. Gentleman can take the view, if he likes, that it does not matter how we help families, provided that overall family income is higher. That would be a consistent point of view. However, in that case, the argument for taking some of the money out of the working families tax credit and paying it instead as an integrated child credit completely falls. Conversely, he could take the view that it does matter whether the money is paid to the husband or the wife. If he takes the view that it matters, he cannot go into the Lobby in favour of the working families tax credit, as it will be next month, and then go through the Lobby—as he will have to—to justify a completely different system. I leave it to him to choose which position he adopts.
  Mr. Jim Cunningham: The House would have more respect for the hon. Gentleman if he explained the confusion that his Government created with the 22 tax increases.
  Mr. Willetts: On any measure of tax increases, this Government's record is outrageous.
  I should give the Government credit—if I may use that word in this context—for perhaps having a strategy. If there is an underlying strategy, it is one of means testing. They criticised the situation that they inherited, in which approximately one quarter—6.5 million—of Britain's 27 million families were on one or more means-tested benefits. They said that that figure was too high. Let us look at what the Government are doing about that.
  The working families tax credit adds another 500,000 to the total number of people receiving means-tested benefits. An estimate from the House of Commons Library says that the integrated child credit will add another 3.5 million. The Treasury suggests that the employment tax credit could reach another 300,000 to 400,000 households. We do not yet know how many people will be covered by the pensioner credit, but it extends means testing to the income range in which many pensioners are concentrated. There could well be at least another 2 million pensioners on means-tested benefits.
  Taken together, those measures will bring at least 6.5 million more families into means testing, thus doubling the amount of means testing in the system. Not a quarter but a half of all families will be means-tested by the time the Government have finished their business, yet the Chancellor told a Labour party conference:
  I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved—the end of the means test for our elderly people.
  He is not ending the means test—he is doubling it. The Government should be ashamed of what they are doing in the Budget.
  Mr. Darling: Can I take it from what the hon. Gentleman is saying that a future Conservative Government would remove all those benefits that have been extended during this Parliament?
  Mr. Willetts: In this debate, we are dissecting the Chancellor's Budget judgment. It is clear that the Government have no coherent strategy for welfare reform.
  5.27 pm
  Mr. Tom Pendry: I intend to be brief. I join others who have congratulated my right hon. Friend the Chancellor on the presentation of the Budget and on its content. It was a generous and imaginative Budget that struck a chord with the majority of people in this country. It commands support from the Institute of Directors, the Trades Union Congress, the British Medical Association and many others across the political divide. That must be good news for my right hon. Friend.
  I particularly commend the resources going to the national health service, which have been widely welcomed by hon. Members on both sides and by people throughout the national health service. Before entering the House, I had the privilege of being a trade union official in the national health service, dealing with the wages and
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  conditions of NHS workers. I know how low their morale has been over the years. I believe that it will be much higher as a result of the Budget, because of the expectation that the Government will carry out their promises, as I am sure that they will.
  The education service in my deprived constituency is also looking forward to the extra resources. My right hon. Friend the Chancellor has committed £4.5 billion extra for education in the coming year alone—an 8.5 per cent. real-terms increase in England. I know that that will be welcomed throughout the teaching profession and by parents across the country.
  The education service in my constituency will be anxious to acquire a good deal of the new money that is available because of the state of our schools, which have been crumbling over the years as a result of the actions of previous Conservative Governments.
  There is inevitably an "however" in any Budget, and I come to my "however". As good as the Budget is, there are one or two areas of concern, and I appeal to my right hon. Friend the Chief Secretary to the Treasury not to close the door on what I am about to say concerning what I believe to be an injustice to my local authority in Tameside, and perhaps one or two other councils, when set against a good and positive move for many other local authorities. I refer to the effect caused by the Royal Assent to the Finance Bill in terms of stamp duty reliefs. Stamp duty reliefs are being introduced for transfers and leases of land and buildings to registered social landlords.
  My local authority, believing in Government policy, set about transferring its housing stock. The transfer to a new chartered housing trust is scheduled to take place today. Royal Assent, of course, is not expected until July. Tameside council is likely to lose out on the exemption, as the proposals stand. The decision to delay stamp duty relief until Royal Assent of the Bill was made, I understand, by the Treasury alone, and the Department of the Environment, Transport and the Regions was not consulted. DETR officials may be in the process of trying to obtain an understanding from the Treasury as to why the decision was taken without consultation.
  Whether or not DETR officials are taking this matter up with the Treasury, I would like my right hon. Friend not to close his mind to my plea on behalf of my council, and to state that the Government are prepared to receive representations from me and my parliamentary colleagues from the area in order that some assistance can be given to the council.
  This is not a question of sour grapes by the council. I am pleased that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) is in his place, and I am sure that he would agree with me. The council is pleased that the Government have accepted the argument that stamp duty should no longer be applied to transfers of housing stock to registered social landlords. However, the way in which it has been applied does not meet Tameside's position, as it was in the vanguard of all large councils in pursuing this option. Indeed, it was the first metropolitan district council to do so.
  The council's transfer brings in from the private sector some £230 million of investment to deal with much-needed repair to houses in my constituency and those of my colleagues. I request that the Minister take this matter on board and give me and my colleagues from Tameside the opportunity to present the case to him for backdating this change which arises out of the Budget.

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  It would be grossly unfair if the council—which was so brave and robust in its approach to the Government's initiative—did not benefit from the changes. I recognise that such a change may well be difficult, but certainly it is technically possible. I am sure that the Minister would not wish my council to be treated unjustly. I am sure that, if possible, he would seek ways of getting around this problem.
  I conclude as I began by saying that this is a good Budget, one which will command the support of the vast majority of people in this country. Those of my constituents to whom I have spoken since the Budget consider it to be a far-sighted Budget, and the Chancellor should be congratulated on his achievement.
  5.34 pm
  Mr. Steve Webb: It is disappointing to see the Secretary of State leaving, as my party has some policies on social security from which he might like to learn.
  I want to make a brief contribution on what the Budget does for pensioners: it has to be brief, because there was so little for them. Among the measures for pensioners with savings and small occupational pensions, there was a lift in the capital limits. We pressed for that, and the Government have given a little ground. Six weeks ago, we had a debate on the uprating order for capital limits for this April. We said that £3,000 was too low, but the Government forced their troops to vote for that limit. A few weeks later, they changed their mind.
  Pensioners will have to wait not until this April, but until April 2001 for the capital limits to be raised. Assuming that we get the predicted May 2001 election, the capital limit will have stayed at £3,000 for the entire Parliament. How dare the Secretary of State criticise the Conservatives for freezing a limit that he, too, has frozen for an entire Parliament? Even with the changes, from £6,000 onwards pensioners will still be assumed to get 20 per cent. interest on their savings: £1 per week per £250 of capital. How can the Government continue to assume that crazy rate?
  It gets worse. There were supposed to be measures for pensioners with small occupational pensions. When will we get action on that? Who knows? We are to have a review, with action in the next Parliament, so an elderly pensioner who voted for Labour in 1997 may get action in 2003 or 2004. Why are Britain's pensioners having to wait so long? The Department of Social Security is once again a Department of dither and delay.
  The problem is not only with savings. Last April, we were promised a take-up campaign for the minimum income guarantee—the Government's flagship policy. The Minister of State, Department of Social Security, said:
  we will certainly make the announcement before the end of this month.—[Official Report, 7 February 2000; Vol. 344, c. 77.]
  He gave himself three weeks. The Secretary of State has just promised an announcement some time this week. How does the Department manage to lose three weeks in three weeks? How can it not tell what it will do a few weeks hence? What goes on in the Department when promises are made only to be followed by dither and delay? What do people do there all day?
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  There is a fundamental point about the winter fuel money. Yes, there is to be an extra £50 per household, but that is less than £1 a week, shared between a couple. The men aged from 60 to 64, who were brought in by court cases, were first told that there would be an announcement soon, and now Baroness Hollis tells them that they will not have the money soon: it will not even be a summer fuel payment, and they will have to wait for Christmas. They were entitled to it three years ago, but the Government messed up, and they may finally get their backdated payments next Christmas. Why cannot the Government get things sorted out?
  The fundamental point is that there was extra money for pensioners in the Budget, and it went on winter fuel payments: it did not go on the basic state pension. In a few weeks' time, pensioners will again get 75p. If a Government with hundreds of millions of pounds for pensioners cannot spend it on the basic state pension this year, will they ever do so?
  The Chancellor, incredibly, was reduced to announcing what he guessed next year's retail prices index-linked rise for pensions was likely to be. He knew that this year's rise was so embarrassing that he did not want to mention it, so he said that he thought there would be a rise of £2 or so next April. The best that he could promise pensioners was that, if they were lucky, they would get an inflation-based rise next April. That proves that there is no future under this Government for the basic state pension. When there is money for pensioners, it does not go on the pension. What is wrong with the basic state pension?
  5.38 pm
  Mr. Peter Kilfoyle: I congratulate the Chancellor on a well-presented Budget. There is little doubt that it has been received well by commentators, the public and, not least, the Opposition. It sets out a clear emphasis on the renewal of public services and will be welcomed by those who are heavily reliant on those services. The extra resources for the national health service, in particular, will be welcomed by ordinary people throughout the country, although in my region, the north-west, we will look carefully at how the resources are allocated, given the poverty in the service in the region relative to the south-east of England—at least, in many specialties.
  The Chancellor will recognise that, within regions, social class remains a key determinant of good health. He will recall the comments of Lord Patel, who said:
  Infant mortality rate for social class V births was 70 per cent higher than social class I births.
  Lord Patel also read part of the report of a recent inquiry. He said:
  the research interviewers encountered examples of poverty and deprivation of a degree which they could hardly believe was possible in late 20th-century Britain.—[Official Report, House of Lords, 16 February 2000; Vol. 609, c. 1282-3.]
  The distortions of class appear in health provision as much as in the wider economy, and influence access to many services. Thus, the infusion of resources into the NHS, together with the Government's pledge to eradicate child poverty and their commitment to education, has the potential to transform the lives of a whole new generation. That must be applauded.
  However, what of an existing generation, many of whose votes elected the Attlee Government, and whose work and taxes were the key to the founding and financing

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  of the welfare state? Many pensioners hold the view that the failure to link average earnings and pensions has cost them dearly. More importantly, they believe that winter fuel payments and concessionary television licences are a diversion, welcome though they are. What pensioners want is an increase, week on week, in the basic pension.
  That is not just a matter of economics: it is a question too of pensioners' dignity. After all, a lifetime of paying tax and national insurance contributions was their part of a bargain with the state to maintain the welfare state. They believe that it is hardly their fault if the state is having difficulty meeting its side of the bargain. They look to a Labour Government to right that wrong, with specific commitments on the basic pension, rather than consultations and aspirations.
  I hope that this does not sound churlish, as I believe that I am merely reflecting the views of the pensioners who speak and write to me. I know that the Government have done many good things, for which they seem, at times, to get little credit. The Government have said that they will not pass by on the other side of the road and, generally, they do not. However, I do not recall that the good samaritan extended his hand to the man who fell among thieves only to remonstrate with him that he was the author of his own demise.
  I can reel off the official statistics relating to my constituency that show how many more people are in some sort of work or another, the level of investment in schools, and many other things. However, my constituents often feel that they are being chastised for being unemployed. The reality for many of them—we must look at the matter from their perspective—is that the training on offer is often for non-existent jobs.
  That should be of no surprise, given the generational, long-term unemployment that exists in many parts of the country, but a claimant count rather than an International Labour Organisation figure does not make the gap between reality and wishful thinking magically disappear. Perhaps if the Government felt able to be less stridently moralising towards so many of our fellow citizens, they would be surprised at the immense good will felt in the country towards their positive policies.
  For example, my right hon. Friend the Chancellor promised to crack down on fraud. Virtually everyone agrees that it is right to do so, but many fear that there is a Calvinist mindset in Government that associates poverty and deprivation with blaming the victim. We know that areas with no jobs exist, that many people are genuinely disabled, and that some people are too ill to work. To know the truth, all that we need to do is listen.
  The sense of injustice might be minimised if we could be harsher with those at the other end of the socio-economic scale who defraud the country and who use lawyers and accountants to cover their tracks. A few determined prosecutions with deterrent sentences for such people might lessen the cynicism felt by easier targets, who increasingly believe that no one speaks for them.
  When I resigned as a Minister, I did so because I believed that what are known as heartland issues would gain increased salience, as would matters relating to the regions of England. In many people's eyes, those matters are interchangeable, but I have never claimed that. There is merit in the Prime Minister's argument that there are wide economic disparities. From a political perspective, there are heartlands everywhere.
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  The present Government have taken a radical view of their role, and they rightly pride themselves on the devolution of powers to Scotland, Wales and—next—to London. The rest of us ponder on what that means for England outside the metropolis. We wonder when we will be afforded the flexibility that a degree of regional autonomy would bring. That would require a change in the colonial Raj mentality epitomised by the Government offices implementing decisions in the regions. It will certainly require a new financial settlement with the English regions.
  The current view from the provinces is that key decisions are taken by a very small number of people sitting in Whitehall at the apex of a highly centralised Government. They operate through a civil service machine that mirrors that rigid hierarchy, which stamps its will on the regions, and whose practice is based on what many believe are highly discriminatory financial arrangements.
  Why, I am asked, should Scotland and Wales be advantaged by the Barnett formula? Why does the area cost adjustment favour south-east England? How do the changes in derelict land grants and Housing Corporation allocations, taking money to the over-developed south-east, help to alleviate the problems of the north? I cannot answer such questions. That is why I looked to the Budget for some hope of economic relief for English regions that are sometimes hard-pressed, especially in their manufacturing base.
  I was disappointed. The Chancellor's reference to regional policy was remarkably brief. Given the agenda he outlined in the Budget, I was surprised that there was no sign of a new deal for the regions of England. Historically, such regions have driven the national economy, but, over the past 20 years, far too many of them have suffered from downsizing or relocation. They still have an economic life, but it is subject to the vagaries and prejudices of decisions taken in London.
  Is not it time that we looked again at the different economies of the United Kingdom? After all, wage and house price inflation are more symptomatic of conditions in the south-east than elsewhere. The costs are borne elsewhere in the country through the loss of jobs—"A price worth paying", as the seemingly unaccountable Governor of the Bank of England once said.
  Instead of a recognisable economic policy in the regions, we have venture capital, with a target of £120 million for a venture capital fund for the north-west. Having announced that modest target, the Chancellor referred to a regional fund for
  the formation of local clusters in high-tech industries.—[Official Report, 21 March 2000; Vol. 346, c. 863.]
  Within an hour of his speech, MPs representing north-west constituencies were told that the Government would not yield on the transfer of the Diamond project—a high-tech synchrotron investment of £500 million—to Oxford. If ever there was a mixed message to a region, the north-west received one on Budget day.
  Furthermore, an increasing number of regions are looking to European structural funds to create investment opportunities. Such funding depends on a three-way partnership between national Government, the European Union and the private sector. It is designed to focus studied intervention on the poorest parts of Europe. However, ultimately, it depends on the British

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  Government making a commitment on match funding to draw down money from the private sector and from Europe. I waited in vain for some reference in the Budget to that vital element of regional regeneration—it did not come.
  Perhaps there will be announcements before, and at the next stage of, the comprehensive spending review. I certainly hope so. The Prime Minister referred to the differences between north and south, and to the differences within those regions. He should have looked at the work of Anne Power, the deputy director of the Centre for Analysis of Social Exclusion. She found that there is a poverty cluster of 40,000 in Tower Hamlets; in Hackney, the figure is 25,000. Those figures are terrible and they need to be addressed. However, in north Liverpool, the number is no fewer than 250,000; in Manchester, there are 170,000 souls in the poverty cluster. The sheer scale of the problem in regions such as mine gives urgency to the case. The problems cannot and will not be sorted out from Whitehall alone.
  That is why I ask the Chancellor—monarch of all he surveys after his Budget—urgently to reconsider regional economic policy and European structural funds. I remind him that political praise is extremely ephemeral—sic transit gloria mundi. I know that these are difficult matters for him to cope with; they will take up much time and effort. However, he has the wherewithal to deal with them. The rewards for success will be great—politically and economically. Failure cannot be contemplated.
  5.48 pm
  Sir Peter Tapsell: I am sure that the hon. Member for Liverpool, Walton (Mr. Kilfoyle) will understand that, because of the 10-minute limit on Back-Bench speeches, I cannot debate with him the many interesting points that he made. However, I agree with much of what he said. The points that he made on regional matters are true and valid. There are geographical difficulties of course. Middle England is found only in the south-east, but the core vote—if by that is meant the people who are suffering—can be found in large numbers in my constituency of farmers in north-east Lincolnshire.
  The hon. Gentleman ended his speech with a famous Latin quotation. As the Chancellor drives along in his Treasury chariot, behind him should be the little dwarf who used to say to triumphalists, "remember that you are mortal."
  I hope that the House will forgive me if I try to talk about the Budget as a whole—obviously it is impossible to do so adequately in the few minutes available for my speech. The Government managers do their best to dumb down the Budget debate by having the Prime Minister make a great statement on health on the first day of the debates, and then sending him back to make another not-so-great statement about his visit to Lisbon on the day when we wind up the debates.
  I have discussed the Budget with a few friends who I have known over many years and who have taken an interest in financial and accountancy matters. They tell me that in recent years they find Budgets more and more difficult to understand. It is only when they hear them discussed on television after the Budget speech that they
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  can begin to make head or tail of them. I have managed to scrape a living in the City for 40 years, paying 83 per cent. in tax on my meagre earnings under a Labour Government, but I share my friends' problem.
  I have heard rumours that the Chancellor has got rid of the portrait in his room of Mr. Gladstone and has replaced it with a drawing of Little Jack Horner. I can well understand why he has done that. The right hon. Gentleman is not interested in making money fructify in the pockets of the people. He likes to sit in the corner and pull out occasional plums from what will prove to be an enormous Finance Bill.
  It is difficult even for the so-called experts to understand the present Chancellor's Budgets because he has withdrawn many of the old familiar guidelines and building blocks of the past. He no longer includes key elements of information. However, distant and always golden horizons are confidently scanned.
  For instance, what is the Chancellor's overall Budget judgment? That used to be the central point of Budgets. Previous Chancellors talked about "a touch on the tiller", "Steady as you go" and "too much port and overripe pheasant", for example. We do not have an overall Budget judgment from the Chancellor. He has not told us whether this is an expansionary, a neutral or a restraining Budget. Is it a redistributive Budget? If so, from whom to whom?
  The Chancellor concentrates almost entirely on indirect taxation, which is generally regarded as being regressive. That is to say, it hurts the poor. In relying on indirect taxation, he heaps as much of it as he can on business. That is a perfectly respectable socialist thing to do. Sir Stafford Cripps, when he did the same sort of thing, was honest about it. If the Chancellor is to put big new taxes on business—the most dramatic and the most often mentioned was the £5 billion raid on pension funds, which has caused many of my constituents to complain to me that they will have either lower pensions or will have to pay higher premiums than they previously thought—at least he should explain that it is happening, and why. It may be economically justifiable, but it should be explained.
  I was a stern critic of the excessive monetarism, as I saw it, of Margaret Thatcher from 1979 to 1981. I even called for the Conservative Chancellor's resignation on the day of the 1981 Budget. But at least I have always recognised, as a Keynesian, that the money supply is an important component of economic policy. As far as I know—I have not re-read the Chancellor's speech because it was bad enough having to listen to it in the first place—the right hon. Gentleman never mentioned money supply or the trend of it. That is another key factor that we have not heard about.
  The state of the reserves was not mentioned. There are many who think that with our enormous trading pattern our present reserves are inadequate and should be built up. Selling gold and using 40 per cent. of the proceeds to buy euros, which have fallen against the value of gold by 18 per cent. since the sale started, does not seem to be a very good way of building up reserves.
  Savings used to be a very important part of Budget speeches. There was always a special section in previous Budgets in which great tributes were paid to Lord Mackintosh and the savings movement and in which reference was made to the enormous importance of

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  personal savings. There was no reference to savings in the Budget speech. In fact, savings are falling catastrophically.
  There was no mention of the balance of trade. Who would have guessed that in the latest quarter the trade deficit was the worst for 25 years? It is extraordinary that the Chancellor thinks that he can hurry through a Budget speech while omitting fundamentals. The right hon. Gentleman is fond of saying that we will get away from boom and bust, but the truth is that we are in the middle of a boom and that if we are not careful we shall go into another bust situation.
  At the moment, when fiscal tightening is required, the Chancellor has loosened the reins. The Budget, as the chief economist of Saloman's has said, will increase public expenditure by 5 per cent., which will be the biggest stimulus for many years. What will the effect of that be on interest rates and on the strength of sterling, which is extremely relevant to what the hon. Member for Walton was saying? Farmers in my constituency, people in the north-west and exporters generally are suffering because of the high level of sterling. It is amazing that the Budget does not address the central threat to the Government's entire economic and European strategy, which is the over-priced pound.
  To boast about national health service expenditure three years ahead is complete pie in the sky. I invite all right hon. and hon. Members to re-read Churchill's Budget speech of 1929, and then read Philip Snowden's Budget speech of 1932. That was a three-year gap. The country was at the peak of a boom in 1929, and only three years later there was the most extreme depression, when pensions had to be cut. The Royal Navy even mutinied because of cuts in pay. That is what can happen in three years. I am not saying that it will happen again, but any Chancellor who confidently says that he will have huge sums to spend three years ahead is talking nonsense.
  Finally, I direct my remarks to my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo), the shadow Chancellor, who with his first-class honours degree in modern history, albeit from Cambridge, will understand them. Apropos the volte face on our attitude to an independent central bank and the Monetary Policy Committee, I do not have time to develop my theme as I would like. However, I remind my right hon. Friend that when Pope Pius IX, having lost his temporal constituency, hit back by announcing the dogma of papal infallibility in 1870, the great Roman Catholic historian, Lord Acton, said:
  I have no intention of changing my religion because the Pope has changed his.
  That is exactly my attitude on an independent central bank.
  5.58 pm
  Mr. Robert Sheldon: First, I join my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) in hoping that sympathetic consideration will be given to the transfer of housing stock in Tameside.
  We see in the Budget a large and unanticipated increase in revenue. For the year 2000–01, the surplus on the current budget was estimated at £4 billion at the time of the previous Budget. It is now estimated at £14 billion. It is likely that there is still more to come because omitted
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  from the Red Book is the result of the auctioning of telephone licences, which will add £7 billion to £10 billion to the revenue. If my right hon. Friend the Chancellor had accepted that much of that money could be spent, he could have increased spending even more in his prudent and cautious proposals.
  My right hon. Friend wants to see not only the spending of money but the effect that it will have on actual outcomes. One of the consequences of that is performance measures. That is something to which we must have regard in the national health service, which will take so much of the extra spending. The unusual feature of the Budget is that levels of tax and tax changes are not the only important announcements. The centrepiece was the large additional sums that will be going into the NHS.
  The question that we have to ask ourselves was why that and other expenditure measures did not wait for the spending review due to take place this summer. That announcement, and my right hon. Friend the Prime Minister's unprecedented statement the following day, made the impact that was clearly intended. Due to my right hon. Friend the Chancellor's management of the economy, Budget priorities have been changed to allow for essential expenditure, particularly in the national health service.
  The reason for that spending announcement was that, at the heart of this operation of the new financing of the NHS, is the need to ensure that money is spent properly. Secretary of State after Secretary of State has tried to get decisions implemented. There are two extreme scenarios—we could leave it to the health authorities and use cajolery, or we could try get some form of direct control. Given the size and complexity of the NHS, direct control is not possible. Another possibility is a form of halfway house, which in the past has never been properly effective. My right hon. Friend the Prime Minister is now throwing his authority behind the Department of Health, and I believe that that is worth doing.
  The Public Accounts Committee has made regular criticisms, and chief executive after chief executive has appeared before us. Only a few years ago, the chief executive of the NHS sent a question to the 191 health authorities, and, after six months, only 133 replied. Almost 60 did not even bother to reply to the chief executive. What sort of NHS is that?
  Clearly, the knowledge that the full power of the state is to be put behind the way in which the large increases in expenditure are spent must have some effect. It will not be easy. How that will work out in practice is yet to be determined, but I am sure that, if the money had just been forthcoming without the change in the administration of it, we would have seen, as we have so often seen, it disappearing into expenditures that were only distantly related to the ends that the Government quite rightly seek.
  In the debate last Wednesday, the right hon. and learned Member for Rushcliffe (Mr. Clarke) said:
  I think that our monetary authorities are too hawkish. We need a better and a more genuinely independent Monetary Policy Committee, with a membership drawn from a wider range of people.—[Official Report, 22 March 2000; Vol. 346, c. 1023]
  The right hon. Gentleman has got something; the MPC needs someone from outside. It does not just fix the interest rates, it determines the parameters of the Chancellor of the Exchequer's room for manoeuvre. All his decisions on fixing tax rates, coming to his Budget

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  judgment and deciding expenditures are constricted by his anticipation of the consequent actions of the MPC and they way that they will impinge on his decisions. The Chancellor of the Exchequer has a joint decision on the economy and the financing of our country with, in important particulars, the MPC having the last word.
  Interest rates are influenced particularly by inflation—especially in house prices—in the south and not by industry in the north. Membership of the MPC needs to be more open and its arguments must be more publicly accountable. Who puts the case for manufacturing industry is another question that we must consider.
  I also agree with my right hon. Friend the Member for North Durham (Mr. Radice). The rate of exchange with the euro—not that with the dollar, because it has not changed much—is the key. I hope that the euro rises, and I had dearly hoped that one of the early actions after the general election in 1997 would have been to decide to enter the euro at the same date as other member countries. When that did not happen, I urged that we should announce our definite intention to join even though, for economic reasons, the date for that might not be given. That could have affected the euro-pound exchange rate.
  We seem not to have taken fully into account the fact that, over the past three years, the pound has risen from 2.50 to 3.15 against the deutschmark—an increase of 26 per cent. One cannot run many businesses with such a relationship, and the increase has taken place over a relatively short time. Few manufacturers are able to overcome such a hurdle—whether in maintaining their exports or in competing with imports. We often forget that manufacturers have the double problem of exporting and competing with much cheaper imports. That is why I consider that the MPC, with its powerful effect on the entire UK economy, needs members with a wider understanding than it has at present. I argue that for reasons of economic judgment and on the much lower level that the ability to justify decisions depends on a much wider outlook.
  The expectation in the November pre-Budget report was that the balance of payments deficit in 2000 would be £10.25 million. Only a few months later, that figure is now £20.5 billion. Why has the balance of payments deteriorated so rapidly? We need answers on that. Manufacturing industry is not the size that it was, but it is still important.
  My right hon. Friend the Chancellor has quite rightly referred to prudence with a purpose. I agree with him wholeheartedly on that, because 1997 represented the best possibility for the Labour party to show itself as the party of responsibility. Next year, money GDP will be more than £1 trillion. If there were any uncertainty about the firm control of the economy, the trillion-pound economy could have been represented as an inflationary surge. It has been the character of my right hon. Friend to stand ready to refute such an interpretation.
  However, 1997 was the first time ever that the incoming Labour Government had a working majority and the absence of an economic crisis. That meant two things. First, we did not have to take desperate measures to deal with a crisis, and secondly, we could take the long view because of our parliamentary majority. That, indeed, was the basis of prudence, but, as my right hon. Friend
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  reminds us, prudence must have a purpose. Caution is sensible only if it leads to using the fruits of that caution in due course.
  In due course, that caution has yielded us low inflation, lower unemployment and a stable-growth economy. That is a great achievement. If we had had a lower pound, the management of the economy would have represented the greatest economic success this century. We have to hope that such a level of success awaits us yet.
  In the Budget, my right hon. Friend has made use of his new-found freedom of action. He has had the space to defer the fruits of a Labour Government until they have been earned. He has done what all past Labour Chancellors have wished to do. In that, he has helped to bring about a reconciliation between traditional Labour and new Labour. To his many achievements, this valuable one must be added.
  6.7 pm
  Mr. John Townend: As could be expected from this Chancellor, we have had a Budget with a high degree of spin. He naturally claimed how well the economy was doing and, on that, he has been supported by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). However, as my hon. Friend the Member for Havant (Mr. Willetts) pointed out, the Chancellor did not highlight the balance of payments deficit, which is forecast to rise to no less than £28.25 billion, that growth in business investment is set to fall from 7.75 to 2.5 per cent., that growth in productivity is slowing, that manufacturing industry is struggling because of high interest rates and the high pound, that savings are falling and that the tax burden is rising.
  The Prime Minister and the Chancellor have told us on numerous occasions that this is a pro-business Government. In the short time that I have available, I want to deal with that myth and to identify the areas in the Budget that are bad for business. The benefits for business, once one calculates what they are worth, do not add up to a row of beans.
  First, I wish to refer to the increased tax on DERV. Despite this country having the highest taxes on DERV in the European Union and pump prices being forced up by rising oil prices, the Chancellor has increased the tax by an extra 1.89p per litre. Therefore, the differential between what French hauliers pay in Calais and British hauliers pay here has become even greater. The burden of transport costs hits all industries, but it particularly hits struggling manufacturers and it forces up costs. The small reduction in vehicle excise duty still leaves a massive gap between British and French rates—Britain's rates are no fewer than eight times greater than those in France. Is it any wonder that the British haulage industry is in the doldrums?
  Despite the fact that, before the Budget, petrol tax was the highest in Europe, the Government have increased the duty, which will affect all businesses, large and small. It will particularly affect workers who live in country areas such as my constituency of East Yorkshire and who have no alternative but to use a car to get to work and to take their children to school. Is it not incredible that 80 per cent. of every pound that one pays the garage owner goes to the Government?
  The increase in taxation on company cars is also bad for business, and will hit representatives who do a high mileage. I find it incredible that the people who will

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  benefit from these changes are those who do a low mileage and who have a company car as a perk. If the Government think that representatives can do an efficient job using public transport, that confirms how ignorant are the vast majority of Labour Members about running a business.
  The Budget considerably increased the burden of taxation on business, and mainly did so stealthily. The climate change levy is in a mess, and it would not have been necessary to impose any burden on business at all if the Government had not prevented the building of new gas-fired power stations, which would have enabled us easily to meet the worldwide regulations on emissions.
  New tax rules will cost multinational companies billions of pounds and could well drive some company head offices overseas. The Government do not seem to know how much that will cost industry. Their estimate and that of PricewaterhouseCoopers are very different. We learn that insurance companies will have to pay billions more in tax due to changing rules for that industry. That follows the Revenue losing a case before the tax commissioners. That fact has had to be dug out of the papers; it was not mentioned in the House.
  The oil industry is annoyed that it will have to pay an extra penny a litre in tax because last year's tax was based not on inflation but on estimated inflation. The change in stamp duty will probably affect businesses more than it will affect householders because most commercial and industrial property sales are for properties costing over £500,000 and will now incur 4 per cent. tax. A small point, but one that demonstrates the Government's attitude to business, is that they have increased airport tax for business travellers, specifically to hit business men.
  The Government have talked a lot about the additional tax allowance to help the computer industry, but that is more than offset by the stealth tax of IR35, which is already causing a brain drain and will undermine the e-commerce enterprise culture.
  One would have thought that, with the decline in manufacturing industry and the rise in income from service industries, the Government would do everything possible to keep the City competitive. Yet stamp duty on share transfers is higher here than in many of our competitor countries. I know that many people were hoping for a reduction, but they did not get one.
  I have been in the brewing industry all my life, and I have declared that interest. Despite the enormous amount of smuggling, instead of beginning to reduce the differential between duty rates in the UK and France, the Government have increased beer duty again by a penny a pint. That will only make smuggling more profitable.
  The Chancellor did not put up the duties on spirits, but he did not reduce the differential. He said in his Budget speech that duty on wine will rise only by inflation—by 4p a bottle. I checked at the beginning of his speech, and he said that
  inflation is 2.2 per cent.—[Official Report, 21 March 2000; Vol. 346, c. 858.]
  I must assume that he is not very good at mathematics or that he is telling porkies because a rise of 4p a bottle is an increase of 3.4 per cent., which is 50 per cent. more than inflation. However, it gets worse because when one studies the figures one realises that the increase per bottle is not 4p but 4.4p.
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  The Chancellor has done nothing to reduce the differential between wine and sparkling wine, and there is absolutely no justification for that differential. Sparkling wine is smuggled more than ordinary wine. He will never deal with smuggling unless he reduces the duty differential by about 50 per cent., as Denmark had to do.
  A 25p increase in the price of cigarettes will also be a tremendous boost to the profits of smugglers, who now make more money from smuggling tobacco than from smuggling drugs, and will encourage under-age smoking. I find that policy incredible because it hits poor people, who spend more on cigarettes and who cannot go over to the continent in a large car every three or four months and fill up with supplies of cigarettes at a knockdown price.
  Agriculture is on its knees, and the Government have done nothing for the industry in the Budget. They have only imposed more burdens in the form of fuel duties, the climate change levy and stamp duty on the sale of farms. What help does the Budget give to the fishing industry? None at all. What help is there for small businesses? Very little. What progress has been made in reducing the burden of regulations? Virtually none.
  Every month, more and more regulations are imposed on small businesses by the EU and the Government. They include the working time directive, packaging waste regulations, the social chapter, trade union rights, maternity rights and paternity rights, all of which are causing chaos for small businesses. Now we hear that the Government are considering allowing people who have had a baby to tell their employer that they will return not to their full-time job but to a part-time job. How will a small firm with one accountant get two people to do one job? That is a nonsense, as is paternity pay. If the Government introduce paternity pay, how can a small business let one of its key people go for 13 weeks? That is ridiculous.
  One other aspect of the Budget that I find reprehensible is that it confirms that the Government do not believe in supporting the institution of marriage. They are more concerned with the rights of unmarried mothers and homosexuals. That is confirmed by the abolition of the married person's tax allowance and the Government's intention to repeal section 28 of the Local Government Act 1988. Other attacks on the taxpayer which particularly affect the family are the repeal of mortgage tax relief and the increase in stamp duty.
  6.18 pm
  Mr. Tom Clarke: In my constituency, as in most, jobs are of the utmost importance. In the short time available, I shall concentrate on the Budget's impact on the objective of full employment, the need for effective training and the importance of small businesses.
  I was delighted to hear the Chancellor use the term "full employment", which was endorsed again by the Prime Minister today. Full employment, designed as opportunity for all, is an objective that I very much welcome. I want to look at what has been happening to my constituency since the new Government were elected. The picture is impressive, although I do not urge complacency; my constituents would not allow me to do so, and they would be right.
  Since the election, unemployment in Coatbridge and Chryston has fallen by 21 per cent. to 6.1 per cent., which is the lowest level that anybody of my generation can

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  remember. That is still too high, and I continue to make the plea for a reduction. Long-term unemployment has fallen by 59 per cent. Youth unemployment, which I thought so important that I made it the main subject of my maiden speech in 1982, is down by 65 per cent.
  As I listen to criticisms of the Government, I am reminded of the fall of the Callaghan Government, when, throughout the country, there were huge posters saying "Labour isn't working". I do not blame the shadow Chancellor for that influential poster, because he was probably advertising Ribena at the time, but we are entitled to compare today's figures for my constituency with the figures that the Government inherited. Under the Conservatives, our oil revenues were squandered on propping up 3 million unemployed people. The huge dissatisfaction that accompanied such levels of unemployment tore our society apart. I am glad that we are improving our employment figures. Judging by the comments of my right hon. Friend the Prime Minister today, we are inspiring other European countries to do the same.
  Training is of vital importance. I accept that the definition of a job has changed. Some people argue that the excellent figures we are now seeing hide certain facts, and I concede that not everyone who leaves the dole queue goes into work. However, that argument misses the point. Many people have entered training and education schemes, but such training is essential in the globalised society in which Great Britain is attempting to function. Foreign investors tell us repeatedly that our skills base is utterly inadequate. The most recent "Regional Trends" survey tells us about our skills stocks, and two statistics stand out: only 13 per cent. of the population in any given region of the UK have a university degree, and 18 per cent. have no formal qualifications whatever. Many firms do not take training seriously enough. I cannot believe that people in constituencies such as mine, which once boasted huge skills in engineering, shipbuilding and metallurgy, are incapable of responding to the challenge of training. We must recognise that the lack of commitment displayed by some employers—not all—represents the tightest possible bottleneck around employment growth in Britain.
  Opposition Members have spoken of the crucial importance of small businesses and the vital role that they play in job creation. As my right hon. Friend the Chancellor rightly pointed out, the burden of future job creation will fall on small businesses, which now account for nearly 40 per cent. of national turnover, compared with less than 20 per cent. less than a generation ago. That does not sound like complacency. In the past two years, a further 100,000 small businesses have registered in the United Kingdom, which is a tribute both to the general culture of entrepreneurship fostered by the Government and to the Microsoft revolution, which has given companies the capability easily to use modern software to enter markets at minimal cost. The boost given to internet firms by my right hon. Friend, whom history will probably acknowledge as the first e-Chancellor, is extremely welcome in a modern, competitive society.
  However, we cannot be complacent. Although we are increasing the number of technology-based dot.com companies, we still have too many "Dot Cotton" companies: well-meaning old things that are poorly
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  equipped to adjust to the challenges of cyberspace and globalisation. Sometimes, I think that too many people who run businesses think that Intel Pentium is a Romanian footballer. We have to change that. It is vital to future employment that we do not shirk the challenges of globalisation, but that we shape and mould the future for the benefit of all of our people.
  My great concern, which is reflected in the main thrust of the Budget, is that an economy in which a significant proportion of the population is unable to fulfil its potential is far poorer and far less productive than others. Real hope lies in providing real opportunities through training schemes such as the new deal to all who want—indeed, need—to work. In that spirit, I believe that the Budget truly helps those who have been left out of too many Budgets for far too long, especially families who seek, but who have been unable to find, work and the children of the poorest families—not least in my constituency—who represent the future. I have examined the Budget and I welcome this comprehensive debate. One day, the Opposition might apologise for that long-gone poster, because, after a little less than three years in government, the evidence suggests that Labour is working.
  6.27 pm
  Mr. David Davis: I would normally have spent a little time dealing with the welcome parts of the Budget, such as the Cruickshank bank reforms; however, given the time constraints, I shall have to focus on the rest of it instead.
  I hope to refer to several of the comments raised by the right hon. Member for Coatbridge and Chryston (Mr. Clarke), especially his interesting points about small businesses. I welcome back the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I believe that this is his first outing since he has been away, and it is good to see him back on form, punching as hard as ever. He will forgive me if I turn his illustration of a glass half full into one of a glass half empty.
  The Budget is dominated by short-termism and flawed foundations. The Chancellor likes to charge business with being short-termist, yet he, too, is guilty of that charge. It is difficult to think how else to describe a Budget which, on the basis of rosy economic forecasts, projects a £25 billion adverse change in the fiscal balance on the presumption that the business cycle will not really bite. If it does bite, that will add about £50 billion to that adverse figure. That adds up to a burden with which the country cannot cope, and that will lead to cuts such as those that we have seen under previous Labour Governments.
  Laying aside the aggregate fiscal position—because others have already spoken about it—I turn to the overall strategy set out in this and the last three Labour Budgets. Between 1945 and 1979, the Budgets of both Labour and Conservative Governments were highly interventionist. They piled on to the British economy large quantities of regulations, great complexity, and a very high tax burden. The initial effect of that meddling was relatively benign—it took time to bite; but the process continued through the 1940s, 1950s and 1960s and its effects grew until, in the 1970s, it became apparent that they were disastrous. Politicians do such things because the early effects of regulation and of tax and spend are apparently positive. They have explicit benefits, for which politicians get the credit. The simple fact is, however, that the significant

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  harm that is done by over-regulation and over-taxation is both diffuse and delayed. That is what led to the slow-motion crippling of the British economy through the pre-Thatcher years.
  I am afraid that this Budget and its two predecessors fall into a similar trap. The Budget contains a wide range of over-burdensome, over-meddlesome and wholly ineffective measures, as several hon. Members have mentioned.
  The right hon. Member for Coatbridge and Chryston spoke about the growth in e-commerce and in small businesses. The measures on e-commerce in the Budget are irrelevant to most e-commerce entrepreneurs. The idea that the dot.com companies will somehow change their tactics because of the minor and rather complex proposals in the Budget is laughable.
  Furthermore, those measures will do nothing to reverse the effect of the disastrous IR35 measures that are already in place. They will merely add to the complexity of the system and add to the £10 billion of extra regulation that has been piled on British business in the past few years.
  The problem of complexity—often to no end—is the real harm of the stealth tax tactic, in which it is used as a way to conceal taxes from the public. Such complexity is harmful in itself. It creates jobs for tax accountants, but destroys jobs for everyone else.
  The commitment to high regulation, high complexity and high spend and tax may create short-term political advantage—no doubt that is the intent of the Budget—but it does long-term economic harm. It is exacerbated by other regulations from Europe—perhaps not as many as some of my hon. Friends may assert, but certainly plenty.
  Listening to the Prime Minister's comments on the Lisbon summit today, one had to conclude—particularly given what is happening in France, where the French Prime Minister is signing up to the documents about which we heard today—that if the Government believed what they were told there, they do not understand how free enterprise works,
  A more accurate view of the regulatory burden from Europe would perhaps be achieved if hon. Members read the comments and the article by Otmar Issing, the German nominee on the board of the European central bank, who stated in the German papers this week that the entire anti-regulation strategy of the European Union was flawed and would fail. It would serve to increase regulation, rather than reducing it.
  As well as the risks of short-termism, the Budget contains other fundamental flaws in its underpinning assumptions. The Chancellor advertised the Budget in advance as a crackdown on the black economy. A survey last week showed that only about one in 10 people believed that it would work, and they are probably right.
  So far, all the initiatives, of which there have been many, and all the announcements, of which there have been even more, have led to no real change. Fraud levels have not gone down by a penny. The Government are not alone in that, but if they put the crackdown on the black economy at the centre of the Budget strategy, one would hope for better than that.
  The introduction of the working families tax credit is likely to make matters worse, because its complexity will make fraud easier. Its predecessor in the United States, the EITB—the earned income tax benefit—is renowned for being subject to both fraud and administrative failure.
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  Many of us on both sides of the House want poverty reduced, but the Government have chosen a complex and probably ineffective way of doing that. Moreover, when the Department of Social Security was doing the preliminary work on the working families tax credit, it cancelled a programme that would have allowed that benefit to be better designed to avoid fraud. We all support the aim, but the mechanism will prove to be flawed.
  There are similar weaknesses in other mechanisms. The strategic defence review and the funding in the Budget for the Ministry of Defence is dependent on the so-called smart procurement process. Having observed smart procurement, I have not yet seen an improvement in purchase price or purchase quality achieved by the Ministry of Defence. This weekend's papers mentioned selling off Aldershot to fund the SDR—an extraordinary proposal demonstrating the failure of another underpinning assumption in the Budget.
  That brings me briefly to the most high-profile aspect of the Budget—the spending proposals for the national health service. The increases there are made necessary by the failure of the Government to meet their own promises—a failure arising from weaknesses of policy, organisation and management, as well as funding, but exacerbated by the cash starvation over the past two years.
  The Prime Minister recognised last week that the NHS could not use the extra £2 billion without sharp changes in its effectiveness. We all agree with that. Let us look at the size of the problem. Suppose that the £2 billion was divided among three possible uses. First, there are those areas that simply need extra money and can be dealt with quickly. The most obvious is the marginal cost of matters such as drugs. We could dramatically improve the drugs policy to make drugs to treat cancer, multiple sclerosis and other conditions available to all patients throughout Britain, so that we could have a truly national health service, rather than the fractured one described by the right hon. Member for Ashton-under-Lyne. It would cost hundreds of millions to put that right, not billions.
  Secondly, the money could be used to increase the utilisation of existing capacity. Again, that would cost hundreds of millions of pounds, not billions. That would leave significantly more than £1 billion to spend, with only one possible aim: to increase the capacity of the health service. As the Minister said, we cannot do that through the Government's mechanisms.
  When the extra money is spent, it will be interesting to see whether the Government use their new private finance initiative mechanism to bring much more private sector skill and entrepreneurialism into the health service to provide new hospitals and new capacity, and to make their promises on funding amount to something.
  All these undertakings and others guarantee an increase in the public service inflation rate. That is one of the effects of increasing expenditure. For a Chancellor who is wedded to the concept of prudence, the Budget is incredibly fragile. Aggregate expenditure—
  Mr. Deputy Speaker: Order. The right hon. Gentleman's time is up.
  6.37 pm
  Miss Geraldine Smith: The priorities of my right hon. Friend the Chancellor's Budget are also the priorities of the people of Morecambe

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  and Lunesdale. I warmly welcome the extra money for the national health service and schools, and the additional help for families and pensioners.
  The Chancellor has delivered a massive boost for the NHS. The immediate cash injection of £2 billion is part of the largest ever package of spending on our health service. Over the next four years, spending on the NHS in real terms, over and above inflation, will increase by 6 per cent. —double the average of 2.9 per cent. achieved by the Tories.
  Whereas last year we spent just over £1,850 per household on the NHS, by 2004 that will have increased to £2,800 per household—a cash injection of 50 per cent. That should be compared with the shabby Tory policy on health, which would provide a two-tier health service in which ability to pay would determine the quality of treatment and care received.
  I welcome the additional income for schools in my constituency. The extra £1 billion announced in the Budget will help schools to recruit more teachers and purchase more books and equipment. The money will go directly to head teachers and help them to improve standards in our schools. I know that they have been asking for that for some time.
  I am pleased to see measures in the Budget to help pensioners. The further increase in the winter fuel payment from £100 to £150 to be paid to all households where someone is over 60 is most welcome. That will benefit almost 21,000 pensioners in Morecambe and Lunesdale. From 1 November, pensioners over 75 will benefit from free television licences, which will help 8,000 pensioners in my constituency, who will save £104 a year on the licence fee.
  I am delighted that the Chancellor is to increase the capital limits on the minimum income guarantee. Everyone will welcome the Government's commitment to developing the minimum income guarantee for pensioners who have made some provision for their retirement. After a lifetime of work, those pensioners' financial position has been steadily eroded. That is unjust and unacceptable. I therefore look forward to the proposals of my right hon. Friend the Secretary of State for Social Security to assist those pensioners who have small second pensions and whose income is just above the minimum income guarantee.
  I represent a seaside resort and I am pleased about the decision to remove the annual licence charge of £645 on small amusement-with-prizes machines which cost 10p or less to play. The British Amusement Catering Trades Association, along with the seaside group of Labour Members, has campaigned hard on that. I should like in particular to thank a local BACTA representative in Morecambe, Mrs. Norah Slater. Norah and I spent a sunny afternoon in Morecambe visiting all the amusement arcades on the promenade. It made me realise what a wonderful job I had. I could spend my time mixing with holidaymakers and playing in amusement arcades. It was time well spent because I, like many other Labour Members, made representations to Treasury Ministers. I am glad that the Government listened. Their policy will mean that amusement arcades can expand; it will help seaside resorts and give operators a huge boost. It is further proof of the Government's commitment to seaside resorts.
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  Many seaside towns have been given assisted area status. Morecambe has been successful in gaining that. That will give an impetus to our resorts, which were so badly let down by the previous Administration.
  The increases in the working families tax credit and in child benefit are good news. The 1p cut in the basic rate of income tax next month means that next year, the tax burden on working families in my constituency will be the lowest since 1972.
  The Tories bang on about tax having risen as a proportion of gross domestic product in the past two years. Although that is true, they neglect to say that that is largely due to the billions of pounds that the previous Tory Government borrowed. The Government are steadily repaying that. The overall tax position has now stabilised and figures are set to fall. My right hon. Friend the Chancellor was able to announce more for our public services, our pensioners and families because we have strengthened the economy.
  Today in my constituency we have stability and low inflation. Thanks to the new deal, youth unemployment has decreased by 77 per cent. and long-term unemployment is down by 58 per cent. since the last election. I believe that the Budget will help to provide security and opportunity for all. It is a Budget for the hard-working people of Morecambe and Lunesdale and I commend it to the House.
  6.43 pm
  Mr. Dafydd Wigley: I shall not follow the hon. Member for Morecambe and Lunesdale (Miss Smith) into the intricacies of the one-armed-bandit Budget that she described. I am conscious that this may be the last time I address the House during a Budget debate, because I am standing down at the next election. The 10-minute contribution that I shall make contrasts with the speech that a predecessor of mine in Caernarfon made in 1909: Lloyd George spoke for four and a half hours, which would constitute the whole of our debate.
  Mr. David Davis: Go on, beat it!
  Mr. Wigley: No, I shall resist the temptation.
  We are considering what appears to be an election Budget. We must welcome aspects of it—for example, its recognition of the need to help children in the poorest families, as well as the much-needed increased spending on health and education.
  Mr. John Hayes: Will the right hon. Gentleman give way?
  Mr. Wigley: I am sorry, but it is difficult to give way under the circumstances.
  I should have liked the Budget to include more spending on specific social programmes, especially housing. In my constituency—and I suspect in many others—there is a massive backlog in house renovation. People have to wait years for work to be done. That backlog is at the heart of many difficult social problems. For that reason, it would have been better if the income tax rate had not dropped from 23p to 22p in the pound, and for the £2,000 million to be available for spending on housing programmes and perhaps for doing a little more for state pensioners. If resources are to be used to reduce

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  the effect of income tax, I should prefer them to take those on the lowest incomes out of the taxation system altogether.
  The 9p per gallon increase in the price of petrol will devastate rural areas at an immensely difficult time. People in rural Wales pay the highest cost for petrol anywhere in the world, at a time when our economy is suffering great difficulties. That should be considered.
  I want to refer in greater detail to increases in resources for the health service. The Secretary of State for Wales estimates that it will mean an increase of £99 million for health in Wales in 2000–01, and £153 million in the following year. However, that will depend on the way in which the National Assembly for Wales decides to share out the block money that is passed to it. A problem arises with that. I want to consider the way in which the Barnett formula interacts with the Chancellor's intentions in the Budget.
  The Barnett formula dictates that the money that goes to Wales and Scotland depends on the size of the population. Expenditure on health in Wales is 9 per cent. higher than in the United Kingdom in general. That is because we have an older population. Many people retire to Wales. That is understandable; it is a lovely place. However, a large proportion of health costs are incurred in the last six months of a person's life. There is therefore a greater demand for health expenditure in Wales. If the increase through the Barnett block is based on population, that means that there is relative convergence and less money to fulfil the needs of the population. The simplistic approach of such a per capita share-out causes difficulties.
  Over the next three years, there will be a drop in the proportion of expenditure on health in Wales as compared with the rest of the United Kingdom—from 5.5 per cent. this year, to 5.2 per cent. next year, to 5.1 per cent. in the subsequent year. The Government's correct and laudable Budget objectives of trying to ensure that more money goes to the sharp end of health care will thus not be achieved in Wales because of the workings of the Barnett formula. I hope that we can move towards a more sophisticated approach to the distribution of money by developing need indicators so that resources can be distributed in a way that corresponds to need.
  Mr. Hayes: Will the right hon. Gentleman give way?
  Mr. Wigley: I am sorry, but I cannot give way because of the 10-minute rule. I am trying to squeeze in what I have to say.
  Mr. Hayes: On a point of order, Mr. Deputy Speaker. For the benefit of all hon. Members, could you confirm my belief that Madam Speaker has ruled that interventions add to an hon. Member's time and do not subtract from it?
  Mr. Deputy Speaker: The general principle is that the clock stops for an initial intervention and restarts when the hon. Member who is addressing the House responds.
  Mr. Wigley: I hope that points of order come into the same category.
  Mr. Hayes: The right hon. Gentleman is renowned for his generosity and courtesy. He will be glad to know that I wanted to support him by saying that his points apply
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  not only to health but to education. It is all very well saying that extra money is to be given, but funding should be granted according to need. The Budget announcements did not make allowance for that. The smallest, least fashionable schools in rural Wales and in rural Lincolnshire will benefit least from the extra money, while the big, popular schools will benefit most. The right hon. Gentleman's points on health apply to education.
  Mr. Wigley: Restart the clock, Mr. Deputy Speaker! I rapidly move on from that valid point to the effects of the Barnett formula and the way in which it interplays with European objective 1 money for Wales. We looked for that in the Budget, but it was not forthcoming.
  Two years ago, before Wales got objective 1 status from the European Union—I congratulate the Government on achieving that—we had a total control budget for the Welsh block of £7,908 million. The basic budget for the National Assembly for Wales remains at that level this year. The original budget that was published in November was £7,909 million. The figures are almost identical. No additional money was available to enable us to provide match funding, or even public expenditure survey cover for the European element.
  Wales is supposed to receive £360 million a year from objective 1 spending in areas of acute poverty in the coming financial year, but owing to the operation of the Barnett rules we shall not receive an extra brass farthing. For every £10 million paid by Europe to meet Wales's needs, the Treasury will knock £10 million from the Barnett block. We are no better off than we would have been if we had not been given objective 1 status. I can identify with what was said by the hon. Member for Liverpool, Walton (Mr. Kilfoyle), and the same applies to South Yorkshire and Cornwall.
  The Budget has done nothing to deal with that central dilemma. If we are to find match funding and PES cover from within the Welsh block, we shall have to do it at the expense of health and education—the very priorities that the Chancellor tried to promote in the Budget.
  That brings me to the central weakness of the Budget. I refer to the problem caused to the economy of Wales and, indeed, other parts of the United Kingdom by the overvalued pound, to which others have referred. It undermines manufacturing industry. We have seen what it is doing to Rover now, and there will be knock-on effects in Wales. We have also seen what it is doing to the steel industry. I do not accept the Government's line that the steel crisis is being whipped up by the media; I know of companies in my constituency whose margins are being hit by up to 30 per cent. because of the level of the pound. They are finding it difficult to compete in export markets, and are being undermined at home by the sucking in of imports. The same applies to farming and tourism. The three bases of the Welsh economy—manufacturing, farming and tourism—are all being hit.
  The right hon. Member for Haltemprice and Howden (Mr. Davis) spoke of the danger of inflation. Any inflationary pressure will tempt the Bank of England to raise interest rates again. That will put the pound up again, which will undermine manufacturing, farming and tourism. All the gains that we hope to secure from the strategy of the Budget will then be undermined, and we will be back where we started.
  6.52 pm
  Mr. John Grogan: The right hon. Member for Haltemprice and Howden (Mr. Davis) was right to try to characterise the three Budgets presented by the current Chancellor. Although I disagree with the right hon. Gentleman's conclusions, I think that the Budgets have a common theme. Rather than re-establishing the principle of meddling, they have re-established the principles of European democratic socialism and made them popular for a new generation in Britain.
  It is not meddling to provide decently funded public services of a certain quality. It is not meddling to re-establish, once and for all, the goal of full employment as a central element of our policies. Nor do I consider it meddling to make the alleviation of poverty another such goal. One of the things that make me proudest of the Budget is the conclusion by the Institute for Fiscal Studies that those who have benefited most from the three Labour Budgets, taken together, are the poorest 10 per cent.
  I want to explore the impact of the Budget on three traditional industries. I shall conclude with references to coal mining and agriculture, but I shall concentrate on a traditional British industry, albeit one that occupies only a small part of the Budget. I refer to betting and bookmaking. Buried in the Budget papers, and given even less publicity initially than the welcome reduction in VAT on women's sanitary products, was a press release headed "Reform of Betting Duty". That was a very definite title: it referred not to a review of betting duty, but to a clear commitment by the Government to reform it according to a tight timetable. Customs and Excise must present its proposals to the Chancellor by July, and he has promised to make his own definite proposals in the pre-Budget statement in November.
  Why does the betting industry matter? It is a traditional industry and a traditional British success story, but like many other such industries it is having to adapt to a new age of increased international competition and to the challenges of e-commerce. In the press release to which I referred, the Chancellor has set out his objectives, which are
  a fair basis for UK bookmakers to compete internationally; a fair opportunity for horse racing to secure financial support; and a fair contribution from the industry towards general tax revenues.
  I would have added a fourth criterion: a fair deal for the British punter.
  I have a bit of an interest in this. One of the first things that I did after being elected was collect my winnings from William Hill in Selby. In an entirely legal form of insider trading, I had obtained odds of 3:1 against myself. Nine per cent. of my bet went to a levy; 6.75 per cent. of that went towards general betting duty. In the case of a bet on horse racing, the extra money goes to the horse racing industry, but in the case of a general bet such as the one I made, it goes to the bookmakers.
  There are tremendous opportunities for the British betting industry to expand in the coming years. We lead the world in that respect. Ladbrokes is the biggest bookmaker in the world, and gambling is cross-cultural—that is one of its attractions. An American writer, Heywood Hale Brown, commented:
  The urge to gamble is so universal and its practice so pleasurable that I assume it must be evil.
  I would not go as far as that, but gambling must be well regulated, it must be honest, it must protect minors and it must be innovative—and that characterises much of the British betting industry.
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  Many hon. Members may not be particularly interested in sports betting, but I draw their attention to a column in the New Statesman by Charlie Whelan, who has had comments to make about previous Budgets. Each week, he highlights particularly interesting bets that people can make on politics and other issues. A few weeks ago, he asked which national newspaper Piers Morgan would be editing on 1 October 2000, offering odds of 6:4 on The Mirror, 7:4 on The Express and 50:1 on The Sun. In February, following the resignation of my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle), he asked which Labour Minister would be the next to resign. I shall leave hon. Members to look at the odds, given such an unlikely event.
  In another column, Charlie Whelan asked whether the Leader of the Opposition was likely to become a father in the millennium year. He offered 6:4 against that, 6:4 against the Chancellor's marrying, and 8:1 against a certain baby's being called Tony.
  Many innovative bets are available, but they face two challenges. One is international competition. Not too long ago, in May 1991, Victor Chandler International set up business in Gibraltar offering telephone bets to the British public, with a levy of not 9 per cent.—which I had to pay on my bet in Selby—but 3 per cent. That posed a big challenge to the British betting industry, to which all three major bookmakers have responded by setting up their own offshore operations. The Irish Government have responded by cutting betting duty from 10 to 5 per cent. Perhaps not unconnected with that is the fact that the Irish Prime Minister, Finance Minister and Agriculture Minister are often to be seen at the Curragh and at Cheltenham—they clearly have a particular interest in the industry. However, the lower levy in Gibraltar is plainly having an impact on the competitiveness of British bookmaking.
  On the other hand, there is expansion in e-betting—betting on the internet. At present the figures are quite small, but MMD, a London research agency, predicts that by the end of next year internet betting—on sports alone—could account for £9 billion. Britain has a competitive advantage in sports betting. In America, it is all but outlawed. A Bill presented by Senator Jon Kyl of Arizona, who wants to kill off e-betting, is currently going through Congress.
  British bookmakers have a tremendous opportunity to gain that competitive advantage. What should we do? I think the Chancellor was right not to reduce betting duty in the Budget. At present the revenues are holding up— £490 million will be raised in betting duty this year, as opposed to £480 million last year. Nevertheless, I think that he should do what the press release promises he will do, and consider radical solutions such as abolishing betting duty altogether and replacing it with a tax on the profits of the bookmakers. That might be a very effective way of maintaining the revenue, while allowing the industry to compete. At a stroke, it would also abolish any form of illegal gambling, as there would no longer be any incentive to engage in it, and the anomaly in the levy, which means that some of the 9 per cent. levy on non-horse racing bets goes direct to the bookmakers, as with my bet in Selby. I would welcome that small but important measure.
  I want to use my final couple of minutes to refer to agriculture and coal mining in Selby. Both those traditional industries are exchange rate sensitive, both are

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  going through difficult times and both are looking for a restatement of that other traditional principle of European social democracy: that we are not afraid, when necessary, to intervene in the market—not to prop up failing industries but to aid transition from one phase to another.
  This is an extremely important week for the coal mining industry. My right hon. Friends in the Cabinet have before them a paper that talks of modest state aid—perhaps £60 million to £70 million—compared with the £3 billion of state aid that subsidised the French, Spanish and Italian coal industries last year. That money would allow the most efficient deep-mined coal industry in Europe to bridge the gap between the price that it can offer and the price of internationally traded coal, which is on the increase. The subsidy would last for only two years, until the relevant European treaty runs out in 2003. Although pits will close under Labour and industries will contract, I urge the Government to come to a quick decision on the coal subsidy and to reaffirm the principle that, unlike the Conservatives, we will not allow industries to contract overnight in the completely uncivilised and uncaring manner that characterised the 1980s and 1990s.
  7.2 pm
  Mr. John Swinney: The right hon. Member for Coatbridge and Chryston (Mr. Clarke) called the Chancellor the first e-Chancellor. I wondered whether that was a casual remark that reflected the internal politics of the Labour party. Perhaps it was a suggestion that he might be a virtual Chancellor or virtually a Chancellor, but it was certainly an interesting assessment of what the Budget has produced.
  My first reaction to the Budget was that never has a Chancellor had so much and given away so little. As the days have passed, my view has not changed. The Budget represents a missed opportunity, and that will become more apparent to members of the public as the issues are debated. If I judge the public mood in Scotland just now, voters want substantial investment in key policy areas—health, education and poverty—and they have made it clear that they want substantial new resources to be invested to counter 20 years of under-investment.
  I do not judge the public mood to be enthusiasm for income tax cuts at the expense of valuable investment in our public services, and I want briefly to consider the tax structure. The Government are stretching and moving the balance of taxation so that it is much more in favour of indirect taxation. The Institute for Fiscal Studies says that the Chancellor has made about 40 per cent. of the changes to indirect taxation, which is regressive as it hits those on lower incomes disproportionately harder. What he gives with one hand, such as child benefit increases, he takes away with the other in indirect taxation.
  I ask the Chancellor to consider reversing that trend in future Budgets and to make the structure of taxation fairer and more transparent. The grudging way in which the Government have at last confirmed that the tax burden has increased—they were forced to do so—makes a compelling case for greater transparency in the system. With a £60 billion war chest at his disposal over the next five years, he could have achieved so much more investment in our public infrastructure, but has failed to do so.
  Aspects of the Budget are to be welcomed, particularly any measures to improve the living standards of those on lower incomes who have children. Measures that make
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  people better off in work rather than on benefits are to be encouraged. We recognise that encouraging work is one the best routes out of poverty and have argued that case, but unemployment is still a major factor. It increased in Scotland in the last quarter, and rates of more than 10 per cent. are common in several Scottish constituencies. The Government's economic strategy must address the issue of getting people into work before they can take advantage of initiatives such as the working families tax credit.
  The fact that the Chancellor has left the Scottish economy in a sterling straitjacket is one reason for those pockets of higher unemployment in Scotland. Since the Government came to power, 22,000 manufacturing jobs have been lost in Scotland and a further 600 losses were announced only last Thursday. The pound has appreciated against the euro by a massive 35 per cent. since 1996, crippling manufacturing industry and exporters in Scotland. I was struck by the powerful speech of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who argued for Monetary Policy Committee decisions to take much greater account of the economic conditions in areas of the United Kingdom outwith the south-east of England. They are increasingly putting home-grown businesses in Scotland at a competitive disadvantage in relation to a number of our European competitors.
  The Chancellor has to be asked, what was in the Budget for jobs in Scotland and for high-quality, sustainable employment? We need investment. Where were the initiatives to encourage growth in manufacturing? Where was the encouragement for research and development in our traditional industries? Although we appreciate and support interest in encouraging e-commerce, a sea change in telecoms pricing, regulation and infrastructure—much more than the package of measures announced in the Budget—is needed to make that possible.
  I have commented on low-income families and the measures taken to support people in those circumstances, but we must also address the challenges facing pensioners, who are among the poorest in our society. Measures to reduce fuel poverty through the winter allowance are welcome, but other measures such as the minimum income guarantee for pensioners are unproven in respect of securing the type of income that pensioners truly require. The hon. Member for Northavon (Mr. Webb) amply showed why the Government have failed to get across the importance of the minimum income guarantee and what it does to compensate pensioners, who have been given a wholly unsatisfactory 73p increase in their pension.
  I want to comment on the public spending commitments announced in the Budget. The Chancellor is good at using headline-grabbing numbers in his Budget statements, but I want to examine some of the detail of the figures, beginning with health spending. All hon. Members will welcome any increase in investment in the national health service, which is required after 20 years of neglect, but the increase will not deliver health spending on a par with the European average, as the Prime Minister promised on 16 January. The Institute for Fiscal Studies has calculated that UK health spending must increase by 8.5 per cent. to reach the European average in five years. There is still some way to go.
  I want to consider the additional £2 billion available next year and how that will translate into health spending in Scotland. According to a statement from the Secretary

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  of State for Scotland, the Scottish public will benefit to the tune of £173.3 million. That should be considered against the reality that Scottish hospitals are expected to be £50 million in deficit by the end of this financial year and all trusts are expected to miss their waiting list targets for next year. Furthermore, above inflation and well-deserved pay increases are already stretching NHS budgets. That suggests that the additional resources provided by the Chancellor could allow the health service in Scotland to stand still rather than take any stride forward.
  The 6.1 per cent. increase in health expenditure in the United Kingdom as a whole will not translate into a 6.1 per cent. increase in Scotland because of the Barnett squeeze. Scotland will have slower growth in health expenditure than the rest of the United Kingdom. However, the health of the Scottish public is not improving at a faster rate than that of people in the rest of the United Kingdom. Recent research by the university of Bristol shows the incidence of cancer among men in Scotland to be higher than among men in England. It is also higher among women in Scotland. The Barnett mechanism represents a loss of hundreds of millions of pounds to the NHS in Scotland over the coming five years.
  On education spending, Scotland will receive £86.6 million from the additional £1 billion announced by the Chancellor, according to the Secretary of State. Putting that into the context of the cuts made at local authority level by the Labour party shows the damage that has been done to our core educational services. Next year, local authority education funding will be £540 million lower in real terms than it was in the last year of the Conservative Government, when none of us believed that we could go any closer to the bottom. The Chancellor did not mention the long-term position of education funding beyond this financial year.
  A number of hon. Members across the political spectrum referred to petrol prices. I have had to make this point in every Budget debate since I was elected to the House to represent a large rural constituency in Scotland. The price of petrol has risen by 25 per cent. since the Labour party came to office in 1997. In our rural communities, car transport is the fundamental brick on which every aspect of activity is built, so is it any wonder that people are feeling the strain of the punitive taxation being applied to the economy of rural areas? That is made even more surreal and nonsensical by the fact that Scotland is the largest oil-producing country in Europe.
  The Chancellor will argue that any larger increases in spending would not be in line with fiscal and monetary policy, and would put pressure on the Bank of England to raise interest rates further. That is yet another example of economic policy being led by the overheating of the economy in the south of England and the issues connected with house price inflation. For too long, the Treasury orthodoxy has been high interest rates and a high pound due to overheating in the south of England. The price for that is being paid in the economy of Scotland, where enormous damage has been done to the competitiveness of our key industries—our exporters, who trade on our behalf. Unless we have economic conditions that are in tune and in line with the circumstances that are required
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  in Scotland, and not those that pervade in the south of England, continued damage will be done to the economy of the people of Scotland.
  7.12 pm
  Mr. Colin Burgon: Over the past few days, hon. Members will have listened to their constituents' views on the Budget. It is good that those views are reflected in the Chamber. The first subject that I should like to cover has probably not had much of a mention in the Budget debate so far. It is the Government's decision to introduce an aggregates levy of £1.60 per tonne, which will come into effect in April 2002—not soon enough for many of us.
  The Government have made it clear that the extraction and transportation of aggregates impose real costs on local communities, in the form of noise and vibration, dust, loss of biodiversity and amenity and visual intrusion. My constituency boundary is made up of the river Wharfe to the north and the river Aire to the south. Both rivers have extensive mineral workings in the proximity. The Aire valley in particular has suffered from decades of mineral extraction, and many local people in such places as Methley and Allerton Bywater now want environmental regeneration of the area.
  I sincerely hope that the new levy will help in that process. By ensuring that the environmental impact of sand and gravel extraction is more fully reflected in prices, I hope that we will encourage a shift in demand away from virgin aggregates towards alternative materials, such as recycled aggregate.
  I am delighted to praise Leeds city council on the recent demolition of its civic hall annexe, which was a vivid illustration of how building materials can be recycled and our environment protected. In my inquiries about the work done by the council, I was told:
  If normal demolition practices were followed the site would have needed a substantial amount of fill material to raise the ground levels to make the site safe.
  The hard materials would have been removed to a land fill site for disposal, both of which have a considerable cost implication—
  and I would add an environmental implication:
  The process of crushing the hard material on site and using it as fill material to raise the levels, saved on the purchase of fill materials and the costs of tipping …
  The project started by hand stripping and salvaging as much materials as possible, this included all timber, the roof covering, glazing and non structural metal work. The structural metal frames were then removed for recycling and the remaining concrete structure crushed to be used as fill materials over the site.
  The Government's stance in the Budget will encourage such an enterprising approach. I hope that where Leeds leads, others will follow.
  The second item I want to address is education. In discussions that I had with head teachers in my constituency last week, the Chancellor's policy of extra payments of between £3,000 and £9,000 for primary schools and between £30,000 and £50,000 for secondary schools met with universal support. The heads were doubly delighted that the money will go straight to them. Projects that they were looking to fund from this additional money included general refurbishment work in the schools, expansion of information and communication technology, extra help for special needs children, extra

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  help to develop reading skills, and staff training and development, which is vital given all the changes taking place in education.
  Head teachers also told me that they hoped that they would be allowed a fair degree of discretion on spending this extra money. As I cannot envisage many of them either buying a new car or going on an exotic holiday with this money, I hope that we can allow these hard-working professionals to spend that money wisely and effectively. There was also a plaintiff plea that this money should be paid every year. I promised to pass that request on to the Chancellor.
  In Wetherby over the weekend I met people involved in Church Action for Poverty. They gave a general welcome to the Budget, but cautioned me that much more remains to be done to achieve the Government's goal of eradicating child poverty within 20 years. They welcomed the fact that the Budget will lift 1.2 million children out of poverty by the end of 2001, but more than 2.5 million children remain trapped in poverty. That is a sobering thought, and shows what a huge task the Government have set themselves.
  Those people also welcomed further measures to tackle fuel poverty among the elderly, with the boost in the winter fuel allowance to £150 a year. The minimum income guarantee was also welcomed. I share the general concern that, as last year, almost 1 million pensioners are not claiming their entitlement. I was hoping that the Government would soon launch an effective, high-profile benefits take-up campaign targeted at that group. Hon. Members can imagine my delight when I heard the Secretary of State say that that would start this Wednesday, and I look forward to that.
  I am aware that the Government are spending an additional £6.5 billion on our pensioners over the lifetime of this Parliament. However, many of us believe that we still have some distance to travel to address all the concerns of our pensioners, who never lose an opportunity to let us know their thoughts on this subject, and long many they continue to do so.
  I was pleased to hear from pensioners and others that there has been widespread welcome for the extra £2 billion for the NHS. It is clear that that step, combined with organisational reform of the health service, commands tremendous support among the electorate.
  There is also a recognition that the Labour Government are delivering a platform of stability and steady growth, with low inflation and sound public finances. Their aim of delivering security and opportunity for all commands the support that will enable the Chancellor to continue as the great helmsman of the economy. I commend the Chancellor and all his excellent work.
  7.18 pm
  Mr. David Ruffley(Bury St. Edmunds): I detected that the Chancellor's Budget statement last week was received less well outside this place than his previous Budgets. I venture to suggest three main reasons for that.
  First, on the macro-economic side, the Chancellor paints a rosy picture in the Red Book, but it contains some flaws. He claims that next year and the year after he is locking in a fiscal tightening. That is not quite what it appears. The Budget contains a 0.6 per cent. of GDP fiscal loosening. If we take the outturn on the fiscal side for the
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  fiscal year we are in, rather than the pre-Budget report numbers and the March 1999 forecast, it shows a 0.6 per cent. fiscal loosening.
  Why is that significant and problematical? The answer is that the fiscal boost has meant that GDP numbers will have to be upgraded, and the Monetary Policy Committee will, as a result, have to tighten policy. There has been a significant fiscal stimulus. Total managed expenditure is running at a 5 per cent. real terms increase in the coming year. It is clear that the City is looking at GDP forecast upgrades. As a result of the Budget, there will probably be a 0.25 per cent. increase in base rates.
  The second concern on the macro side is that the Chancellor seems to think that he has abolished the business cycle—that he has ended boom and bust for ever. That is his view of the planning horizon in the next Parliament, as stated in the Red Book, but the problem is that he has not abolished the business cycle.
  We must remember that, in previous Budget statements, the Chancellor mentioned what was happening in the major economies—Japan and the United States, the two biggest in the world—and what the outlook was. He did not say it in the statement, but, burrowed away on page 25 of the Red Book, he says something revealing: there are downside risks to economic growth, on which the whole Budget is predicated. The Red Book says:
  the risk remains of a sharp slowdown in the US and continued weakness in Japan with adverse effects on UK prospects.
  Let us remember that, in the second half of last year, Japan went into recession.
  That is important to remember. The Budget should have come with a health warning. Other straws in the wind concern City analysts. House prices went up by 15 per cent. last year. Equity withdrawal is at 3.5 per cent.—not 5 per cent. as in the 1980s, but it is rising. There was a trade deficit of more than 5 per cent. in the last quarter of last year. The Chancellor inherited a 0.5 per cent. of GDP trade deficit at the beginning of 1997. It is now bigger than at any time in the boom in the 1980s. These concerns are not flagged up. If the GDP numbers are not delivered in the next three to five years, all the wonderful suggestions that he puts forward on public spending will not come to pass.
  My second reason for being concerned about the Budget, and why there has been a relatively tepid response to it, is that the Chancellor uses the rhetoric of being pro-business and business friendly, but the reality is otherwise. Christopher Humphries, director general of the British Chambers of Commerce, said after the Budget:
  Businesses have learnt not to be fooled by the Chancellor's headline announcements. Brown has not done enough to ease the increasing tax and administrative burden on business.
  Of course he has not. He has done nothing to sort out IR35, which is driving entrepreneurs out of this country, or to tackle the national insurance contribution liability on employees who exercise share options in non-IR approved share option schemes. He has done nothing to cut the 3,000 new regulations that have been imposed on business since the 1997 general election—nor the £5 billion a year increase on business that the CBI has described in relation to the Chancellor's three previous Budgets.
  What does the Budget amount to? It amounts to much gimmickry, instead of tough action on the things that I have listed. There are gimmicks on research and development. There is R and D for small businesses when

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  everyone knows that the lion's share of decent and proper R and D is by bigger players, who are not catered for in the Budget. The R and D fiddly tax credits are ill targeted and add complexity to the system, as the Institute for Fiscal Studies has demonstrated in the past few days. Small businesses that have to administer the working families tax credit are being turned into unpaid tax collectors for the Government. According to the Inland Revenue, one case of working families tax credit will cost a small business £135 in manual administration. What are the Government doing about that? Nothing.
  We would have liked to see more emphasis on non-hi-tech small businesses. Constituencies such as mine would have liked simple measures to cut business rates for small businesses: village pubs and small independent retailers in the market towns of East Anglia and rural Britain. It could have been done in a tax-neutral way, increasing the poundage for out-of-town superstores and giving relief at the bottom end for small shops. There is nothing for the small business man in the Budget—the type of business that I represent.
  The third reason why it is a problematical Budget is that it contains the same old nonsense and deception on taxation. It is a redistributive Budget. There is nothing wrong with that in and of itself, so why does the Chancellor not tell the people that the benefit is going to unemployed couples with children and to single parents, as the IFS distribution tables clearly demonstrate?
  The reason why the Chancellor does not talk about that is because middle Britain has been clobbered to pay for that. It is the 9p up, 1p down Budget. It is true that a typical family is some £600 a year worse off. It is £100 a year worse off because of average council tax increases. It is £200 a year worse off because of the personal pension tax. Cuts in the married couple's allowance and MIRAS increase the cost of living for the typical family. Following the Budget measures on increasing petrol duty, people will pay £175 a year more on average.
  I remind hon. Members that the Red Book demonstrates that the tax burden will be higher at the end of the current Parliament than the burden that Labour inherited at the beginning of the Parliament. We know that Alastair Campbell coughed to that truth. It is about time that the Labour party owned up to it in the House in this debate.
  We have the problem further down the track of the tax burden in the next Parliament. The Labour party will doubtless observe that it flattens out a bit. Why? Because borrowing will take the strain. In this fiscal year, public sector net borrowing is £11.9 billion in surplus. Fair enough, but what happens in 2004–05? Lo and behold, there is a public sector net borrowing deficit of some £13 billion.
  What is going on? Is it true that the Government are letting borrowing take the strain, rather than see the tax burden rise ever higher in the next Parliament? The evidence shows that that is exactly what the Government are up to, so sensitive are they to the charges of increasing taxation under their Administration and on their watch.
  The Budget paints a rosy picture on the macro side. It should come with a health warning. It comes with promises about cutting tax. It gives nothing back to middle England. It comes with the news that there is little
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  here for small businesses in rural Britain. It is a sign that it is not a Budget for hard-working people of middle Britain, let alone its rural areas.
  7.26 pm
  Mr. Jim Cunningham: I start my Budget speech, perhaps, a little unusually. In the midlands, the Rover situation predominates. I am sure that hon. Members on both sides of the House are concerned about that and would not try to make any political capital out of it.
  I want to focus on regional funds. I hope that my right hon. Friend the Chief Secretary will talk about those in his winding-up speech, or talk to his colleagues about it. I understand that about £500 million is available in what is known as the umbrella fund—the national and regional fund. I hope that my right hon. Friend will take that on board and look at it, given the Rover situation. Admittedly, it is too early to say what rescue package can be put together—I recognise that—but we should be a little more vigilant with regard to the fund.
  Equally, I should like my right hon. Friend to take on board the surrounding clusters. For the House's information, clusters take on board regional development agencies, which could play a significant part in rejuvenating Longbridge and in what happens after Longbridge. Clusters and RDAs could also encourage the development of business incubators and infrastructure for small business.
  All those issues are interrelated and they can be a little complex, but it is useful highlighting some of them—especially given that many hon. Members will have constituents who could be affected by Rover: not only jobs at Rover's distribution centres will be affected, but—one can pluck a figure out of mid air—between 20,000 and 50,000 other jobs could be affected, depending on how the situation develops. It is a serious issue which is well worth raising right at the beginning of a Budget speech. If my right hon. Friend does not want to address the issue now, he could discuss it with his ministerial colleagues when considering possible action.
  I welcome the Budget, particularly the extra spending on education. Over the years, certainly under the previous Government, education and health provision suffered. After the previous Government's 18 years in power, we are still trying to pick up the pieces. It is not always possible, in three years, to pick up the pieces and end the predicament in services that have been damaged over 18 years. I also welcome the vital help for small business, which has created 3 million jobs, and possibly 3.5 million jobs. It is not always generally appreciated that, these days, small businesses are the engine of the economy. They are certainly the engine of the west midlands economy.
  I welcome the fact that more money is being provided to fight crime. We often debate crime in the House, and we all have our own views on how it should be fought, but it is vital that the public, police and drug traffickers see that we are prepared to provide more money to tackle crime. I am sure that the parts of Coventry that I represent will welcome any additional expenditure on fighting crime.
  The Opposition have made great play today about the Government omitting something from the Budget or trying to hide something in it. However, when they talk

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  to us about new taxes or tax increases, it is well worth reminding them who introduced 22 new taxes. They also mentioned the abolition of mortgage interest relief at source and the married couple's allowance. However, who but the previous Conservative Government started attacking MIRAS and the married couple's allowance? The Opposition have double standards.
  Mr. Webb: Using the same method to calculate that Conservative Members introduced 22 tax increases, how many tax increases have the current Government introduced?
  Mr. Cunningham: It is not for me, but my right hon. Friend the Chancellor to answer that. If the hon. Gentleman asks him, I am sure that he will tell him.
  It ill-behoves Conservative Members to attack the Government on those issues. Opposition Members suggested that we have hidden the extent of our borrowing—what about the £28 billion that the previous Government borrowed, or the £40 billion that they borrowed just to fund unemployment? How do they answer those questions? Ultimately, the British people have had to pick up the tab for that borrowing. The Labour Government have not only reduced borrowing, but delivered public services—including the new expenditure on the health service and on education that I mentioned.
  The Opposition should reflect further on their comments. I noticed that the Opposition spokesmen were very good on the attack, but very poor on policy and suggesting alternatives. One or two of my hon. Friends tried to elicit from Opposition spokesmen what they would do in the same circumstances, but we are still waiting for an answer. They gave us the usual reply, "Wait and see what we put in our general election manifesto." It will be very interesting to see what they include in their manifesto.
  Opposition Members also mentioned agriculture and fishing. Need I say more than "BSE"? Who made a mess of that? Who made it very difficult for Britain to export beef? The previous Government were certainly not forthcoming either in reporting on or dealing with that matter. A couple of weeks ago, we had a debate on the fishing industry. As hon. Members pointed out in that debate, who—more than 18 years ago—agreed the quotas that have created problems for our fishermen? Not Labour Members, but Conservative Members agreed those quotas, and they should be reminded of it.
  The issue of the state earnings-related pension scheme has crept into the debate. It has been debated in the House on very many occasions. However, who caused the confusion with SERPS? We still do not know what Conservative Members would do to remedy the situation. The Government have cleared up the SERPS issue. Although the SERPS and general pensions mis-selling issues have been around since 1986, I do not hear Conservative Members saying very much about them.
  An issue on which we should reflect—it is too late to do it in this Budget, but it should be food for thought for the next Budget—is an increase in the basic state pension. The Chancellor will have to have a look at that. In the next Budget, we must also address the issue of links or produce an alternative to them that will convince the United Kingdom's many pensioners. Although it is not the Chancellor's fault, after 18 years of the previous
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  Government many pensioners feel hard done by. We have to clear up those issues as soon as possible and say what will replace SERPS.
  Conservative Members were also complaining about the increase in the social security budget. I do not mind real terms increases in the social security budget if those who need help receive it. Previously, the Tories made cuts in the social security budget—they thought that it was more about cutting public expenditure than about helping the needy.
  This Budget is a good and a balanced Budget. Although all Budgets are very difficult, I hope that this one is another step down the road of addressing the grievances that people have felt because of the previous Government's 18 years in office.
  7.37 pm
  Mr. William Ross: I listened today to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who said that the Government were in a very happy position because they have had a surge in revenue. I think that he was referring, at least partly, to the fact that we are now repaying debt, rather than having to borrow. I remember the roars of joy from Conservative Members—and even from Ulster Unionist Members—when, a good many years ago, we first had a public sector repayment situation. However, that disappeared. It also did not arise for quite the same reasons that the current one has arisen: because of a surge in revenue.
  The Chancellor expects that revenue surge to continue. His projections show that, for the next few years, public expenditure as a proportion of gross domestic product will decrease. That makes it clear that he expects revenues to continue to increase. I just hope that his hopes are realised. However, I should not be so confident about it. As has already been said in the debate, even at the best of times we cannot forecast very far ahead.
  Mr. Owen Paterson: I am grateful to the hon. Gentleman for giving away some of his limited time. Has he seen table C4 on page 196, which shows that by 2004–05 borrowing will increase to £13 billion?
  Mr. Ross: That is exactly what I mean. I remember that, one year, there was a £50 billion overdraft that no one had really expected. I therefore do not think that any party should crow too much about the level of future danger. Those dangers are real, and it takes only a relatively small percentage change to put a Government into surplus or deficit.
  I am looking for a Chancellor and a Government who will establish a programme that will, so far as is humanly possible, lead to a steady reduction in the nation's public debt. If we could get rid of that debt, even if it took 20 or 30 years, what a wonderful benefit it would be to the community and to the country generally.
  Mr. Andrew Tyrie: Will the hon. Gentleman give way?
  Mr. Ross: No. I am sorry, but we each have only 10 minutes to speak. The hon. Gentleman may get a chance to make his own speech.
  Hon. Members have referred to the fuel allowance for the over-60s. No doubt the £150 is welcome, as are the concessions on television licences that were announced

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  some time ago, but I do not favour that way of supporting pensioners. It would be much better if we lumped together the £150 for the fuel allowance and the £70 or £80 for the television licence and gave pensioners an extra fiver a week throughout the year. It would be much better to allow people to decide how to spend their entire pension income rather than giving them money for a specific purpose. It is not the right way to do it—it smacks of grandmother looking after the children and doling out so much money for sweeties and so on. People should be allowed to make up their own minds. They do not suddenly lose the capacity to manage their affairs when they reach 65.
  I welcome the increase in the savings limit from £3,000 to £6,000 before income support is affected. When, earlier, I asked the Secretary of State for Social Security how he had arrived at the figure of £6,000, he told me that he had just doubled the previous figure; he had just plucked a figure out of the air. If I told my bank manager that I needed £20,000 and, when asked why I wanted it, said "I just thought of the figure", I do not think that I would get an overdraft. The House deserves a better explanation than the laughter that I got when I questioned the Secretary of State. I asked whether the figure was indexed, and if so whether it was linked to earnings or inflation. I do not think that he knew.
  I went to the Library and picked up one of its excellent booklets, which shows the value of the pound from 1750 to 1998. I noticed that from 1988 to 1998, which is the period that we are interested in, there was a 52 per cent. increase. We can take it that 160 per cent. or 165 per cent. would have been sufficient indexation for that period. On what basis will the Government increase the savings limit before entitlement to income support will be affected next year and the year after? Can we be told? Has anyone thought that far ahead? If not, it is time that someone did, because the answer that I received was not good enough.
  The costs of care for the elderly in nursing homes has not been addressed. A Committee of this House produced an excellent report some years ago; action on it is long overdue. When will it happen? When will something be done for British pensioners overseas, some of whom live in penury for many years? It is time that that was addressed if we are really trying to do something for our pensioners.
  I am also concerned about road fuel. The right hon. Member for Caernarfon (Mr. Wigley) and the hon. Member for North Tayside (Mr. Swinney) referred to the cost of petrol in Scotland and Wales. Lucky fellows—they do not know how lucky they are. I am sorry that they are not here to hear me say this. They do not have a land frontier. A friend of mine happened to be in Londonderry one day and his medium-sized car was nearly empty of diesel. He drove across the frontier and saved £13 in one fill. The savings on filling up a lorry would run to a lot more. The practical result of that is the destruction of the fuel retailers within 20 miles of the border. They have gone or are existing on a small income from groceries, praying that something will happen to improve their position. The Government have to take action. I heard of one firm that drives its lorries across the border once a week and saves £11,000 a month. That is in addition to
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  the smuggling that helps the terrorist organisations that control the trade. When will the Government do something about that dreadfully serious situation?
  The other related issue that concerns me is the 25p increase in tax on a packet of cigarettes. That does no good and we have argued against such increases for years. The cigarettes go out of Gallaghers in Ballymena today and are on the market stalls in two weeks. It is time that this counter-productive tax was stopped and the Government reached a common-sense arrangement.
  I am also concerned about the reduction in air passenger duty for economy flights in Europe. That is all well and good, but those of us in Northern Ireland who want to get to Great Britain in a day have to fly. I cannot get from my constituency to Westminster by ferry and car in a single day, yet we are not given the concession that the Government have found for the highlands and islands. The Chancellor's excuse for that concession was that it would reflect the importance of air transport to the daily life of that remote region. Twenty miles of water makes Northern Ireland a remote region. It is time that the Government recognised that we have a problem that cannot be resolved except by a reduction in that tax. It is a nasty discrimination against the people of Northern Ireland.
  I welcome the money that is being made available for schools and roads, but I should like to know what sums are involved. I should also like to know whether the funding is a one-off or will be repeated. We need to be told. I want to know how much money is available for roads. Are we still expecting to sell Belfast city harbour? It is time that we were given that information.
  No mention has so far been made of the fact that landfill tax is going up by 10 per cent.—far more than the level of inflation—from £10 to £11 a tonne. That is another of those little figures plucked out of thin air with no explanation. We all know the problems that the landfill tax has caused in some rural areas, with illegal dumping right, left and centre. I am not sure that it is the best way to raise revenue.
  7.47 pm
  Dr. Stephen Ladyman: As I have only 10 minutes, I shall not deal in detail with the speech of the hon. Member for East Londonderry (Mr. Ross). However, he made a plea for the winter fuel allowance and the free television licence for the over-75s to be scrapped and the money added to the basic weekly state retirement pension. If we did that, poorer pensioners would lose the benefit of that money from their income support. We would have to change the rules for income support as well. In the mean time, at least the Government's proposals are a convenient and simple way of channelling resources to poorer pensioners and giving a boost to other pensioners.
  We have heard a variety of pleas from the Conservatives. I have heard a plea to spend money on gold rather than schools. I have heard a plea to support oil companies rather than the British coal industry. I have heard a plea that we should give favourable treatment to the tobacco industry almost in preference to the health service. However, I have not heard a justification for the tax guarantee.
  One or two Conservatives have touched on one of the major flaws in that policy by talking about the economic cycle. The Conservatives appear to have forgotten—or not

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  to have worked out yet—that for every 1 per cent. below trend growth in the economy, £10 billion will be wiped out from receipts, which means that £10 billion of savings must be found. If the Conservatives believe that we have not got rid of boom and bust and that one day the economy will slow, they must also accept that they are going to go into an election promising that, even in those years, they will cut further the money available for public spending. A 1 per cent. cut in the tax burden means a further £10 billion of cuts.
  Mr. William Ross rose—
  Mr. Hayes rose—
  Dr. Ladyman: I shall give way later. I should like to make some progress first. It would take £10 billion of cuts to make 1 per cent. of savings, and £10 billion to deal with the fact that the economy was growing at a 1 per cent. slower rate than expected. Suddenly, they would have to find £20 billion of cuts.
  We have heard this week that the Conservatives now think that our spending on the health service is a good thing, and Conservative spokesmen outside this House have, I believe, said that they believe that our spending on education is a good thing. Their savings must therefore come from the social services budget, as it is the only significant pot of money left for public spending.
  When the Secretary of State was speaking, Conservatives laughed at his comment that there was good spending in the social services budget and bad spending. Bad spending, he said, was money spent on keeping people out of work. Good spending was the money that we were spending to encourage people back into work and making work pay.
  Mr. Paterson: Will the hon. Gentleman give way?
  Dr. Ladyman: Later.
  Mr. Paterson: Will he give way on that point?
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman is not giving way.
  Dr. Ladyman: Bad spending is something over which the Government have no control. It is money that must go to those people who are out of work. At a time when the economy is slowing down, unemployment will either be steady or will rise, so that the spending of bad money will be increasing. Therefore, the savings that the Conservatives would have to find to honour their tax guarantee would be from the good spending in the social services budget, such as the working families tax credit and the child care benefit.
  Mr. Paterson: The hon. Gentleman talks about good and bad spending. The Red Book shows that spending on social security benefits is increasing from £93.3 billion to £104.5 billion in 2001–02. Is that good or bad spending, according to his definition?
  Dr. Ladyman: The position was set out clearly by the Secretary of State, who defined the measures that the Government have taken to make work pay as good
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  spending. I believe that to be good spending. The Tories' tax guarantee would force them to cut that money at a time when the economy was slowing down—when that money could do the most good.
  Mr. Nick St. Aubyn: Will the hon. Gentleman give way?
  Dr. Ladyman: No, not with the 10-minutes rule.
  Mr. St. Aubyn: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: I hope that this will not be a point of order about interventions.
  Mr. St. Aubyn: It is a serious point of order. The hon. Member for South Thanet (Dr. Ladyman) said that his time was limited. Would you confirm that time spent on interventions—
  Mr. Deputy Speaker: Order. The hon. Gentleman knows the rules as well as I do. I am not here to run O-level classes in interventions.
  Dr. Ladyman: I am grateful, Mr. Deputy Speaker. The time limit would allow the hon. Member for North Shropshire (Mr. Paterson) to intervene, but I would then have to answer him, and lose more time.
  Another criticism of the Budget has concerned exchange rates. One of the easiest ways of dealing with the problem would be to join the euro—something that the Conservatives have made clear they do not want. I share their view that the time is not right to join the euro.
  Those hon. Members who have made a plea to join the euro should answer this point. They come from regions of this country where manufacturing is being hardest hit. To convince me that the time is right to join the euro, they must show that they have a robust way of sharing out the public spending that must be provided within euroland in such a way that we in this country would not have to cut our public spending to control the inflation caused by increased public spending in some of the less-developed regions of Europe. Until they can answer that question, they cannot offer a convincing argument to their own constituents as to why joining the euro would benefit their regions.
  I wish to refer to the effect of this and previous Budgets since we came to power. By April 2001, the average household will be £460 better off; on average, families with children will be £850 better off; a single-earner family with two children on £25,000 a year will see a 10 per cent. rise in living standards; a single-earner family with two children on £12,500 a year will see their real living standards increased by around 20 per cent; the poorest two-child families on income support will be £1,500 better off; 1.2 million children are to be lifted out of poverty; a 75-year-old on the minimum pensioner income guarantee will have an annual income that is £950 a year higher.
  These are the achievements of this Budget, taken in the round with previous Budgets. Conservative Members can scoff as much as they like, but these are the facts. They can try to confuse the issue as much as they like,

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  but my constituents are counting the extra money in their pockets, and they will take that into account at the next election.
  I do not often use the words of Baroness Thatcher to support my case, but she once said that the Good Samaritan was able to help only because he had the money to do so. One thing that has annoyed me about the response to the Budget has been people saying that it is a redistributive Budget for the Labour heartlands. They forget that the previous two Budgets from the Government prepared the way for this Budget. In effect, they were equally redistributive, because they allowed us to earn the money that we are using in this Budget to make this a fairer and more prosperous country.
  I congratulate the Chancellor on the cut in amusement machine licence duty. My hon. Friend the Member for Morecambe and Lunesdale (Miss Smith) referred to that earlier, and said that it would boost the seaside arcades in her constituency. It will be a boost to arcades in my constituency also, but, more importantly, the world's two leading companies manufacturing these machines are in my constituency. I can tell the House that there are several hundred workers in my constituency breathing a huge sigh of relief that, thanks to the Budget, they know that their jobs are safe.
  I thank the Chancellor for the extra resources that he is giving to combating smuggling. We have a real problem in east Kent as a result of the build-up of smuggling and the fact that organised crime is becoming involved. I am delighted to see that the Government have started to address that.
  This is a Budget for fairness and to increase prosperity. It is a Budget for the health service and for schools. It is a redistributive Budget that I am proud to support.
  7.57 pm
  Mr. Andrew Tyrie: I would like to say a few words about the Red Book, which very few people seem to talk about. That is not surprising, since it is virtually impossible to understand. I am not sure that anybody knows the relationship between all the numbers in the Red Book. Maybe some of my right hon. and hon. Friends will help me out. I wish to say a few words about the affordability of public spending in general, and health spending in particular.
  Everybody welcomes increases in public spending, but they are only worth having provided that they are affordable over the cycle and that the higher spending in the long run does not end up lowering the long-run growth rate. That can happen either because of the disincentive effect of the taxation that has to be brought in to pay for the spending, or because that taxation is distortive, which itself will reduce the growth rate.
  I see virtually no understanding of the possible relationship between higher spending and poorer long-run economic performance in the Red Book, and we heard virtually nothing from the Chancellor about that. It is back to the old days of taking growth for granted, and that is a dangerous road to go down. Control of public spending is very difficult to manage and easy to lose. It takes only a small flicker over the business cycle—a downturn in overall economic performance—and public spending becomes extremely difficult to control.
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  The problem is that Labour is in a state of complete denial about the existence of cycles. The Government say that they have put an end to boom and bust and that somehow they are not in a business cycle. The Red Book says that everything will return to trend; that could be above trend for a period and then suddenly get straight back to trend.
  Hidden in the Red Book are some interesting spending figures. Over the next couple of years, spending will increase from 38 per cent. to 40 per cent. of gross domestic product, although the outer years are not given and there is no explanation of how that will be paid for, except perhaps if one looks closely at the borrowing line. There is a table showing an increase in borrowing in the outer years to £13 billion.
  What will the Bank of England say when it has had a good go at trying to understand the Red Book? It will not just sit there and watch spending, taxation and borrowing rise. It will take these facts into account in taking its decisions. Overall, it is likely to conclude that the Budget will require interest rates to be raised, perhaps not immediately, but soon. That will mean a higher exchange rate, which will bring more problems for manufacturers.
  Part of the price of higher spending—including health spending—will be an exacerbation of some of the problems that have already been caused by the strong pound. That will not be the only factor that the Monetary Policy Committee takes into account. It will ask why we should have above-trend growth for a while and never need to go below trend, and why the Government believe that they have abolished a swing around the average, when all other Governments and economies worldwide have always been vulnerable to it. That will make it cautious in its judgment on the Budget.
  The MPC will also consider several of the accounting fiddles in the Red Book, the biggest of which is how the private finance initiative is treated. If PH did not exist, each year's capital spending implied by it would be added back in the first year to the budget lines of the individual spending Departments, and spending would look several billion pounds higher for each year in the Red Book. The MPC will do its internal accounting on that basis, not on the basis of PFI pushing liabilities back to future years.
  Will we get anything for the extra spending? My hon. Friend the Member for Havant (Mr. Willetts) gave an excellent explanation of why it is unlikely that we will get much in social security. We will have a lot of extra spending without any clarity on how better to allocate it.
  The massive announcement of 6 per cent. per annum growth in health spending for the next four years has been accompanied by the biggest load of waffle that I have ever heard from a Prime Minister to explain the reforms that are supposed to make effective use of the money. There is a great danger that a high proportion of it will be swallowed up in higher pay. I do not necessarily begrudge health workers higher pay, but there is no point in raising public spending if that is where it all ends up. I am very concerned that the increase in health spending may in any case prove undeliverable if there is a downturn in the cycle. We should have had greater clarity on what the spending was designed to achieve.
  It has often been said over the past few days that the increase in health spending is unprecedented, which is true over the four years, but the Conservative Government increased health spending by 6 per cent. for a run of two

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  years, between 1991 and 1993, and that increase was a spectacular success because it was accompanied by the introduction of the internal market, which generated a huge increase in productivity.
  Generally agreed tables have been published for productivity in the health service, derived from Department of Health statistics, and they show that increase very clearly. The figures have been published since about 1985. I predict that, when the figures are published for the outturn from the latest increases, we will find that productivity has fallen dramatically. I would not mind betting that productivity could be negative for a time.
  Mr. St. Aubyn: I know from my constituents, as I am sure that my hon. Friend knows from his, that fundholding general practitioners are horrified at how money that they used to spend wisely and effectively in delivering good health care is being wasted in the system. I even know of patients who have had their lives put at risk—in one case, a life was lost—because the treatment that they would have had under the fundholding system was denied them under the more bureaucratic system that the Government introduced.
  Mr. Tyrie: The evidence is overwhelming that primary care groups are less efficient in delivering health care than GP fundholding. I believe that evidence from King's Fund research shows fairly conclusively that the introduction of GP fundholding increased productivity and reduced waiting times. Indeed, one of the reasons for the increase in waiting times has been the Government's ideological decision to get rid of GP fundholding, which was a profound mistake.
  The Government should have delayed the announcement of all their spending increases until they had worked out a package of reforms to accompany them. They should have awaited the July spending review, but they did not, because pressure from No. 10 Downing street to spend the money became overwhelming. We have heard that the Prime Minister was receiving an almost daily note on how big the fiscal adjustment would be, so that he could make up his mind how much of it to spend.
  The plain fact—although these things are covered up—is that the Prime Minister won the battle with the Chancellor on making a huge political gesture. Partly as a result, we now have a Chancellor who has taken some risks with the public finances and is spending money without knowing exactly what he can buy with it. He is not being prudent and he does not have a clear purpose: exactly the opposite of "Prudent for a Purpose", as it says on the cover of the Red Book.
  Why has the Chancellor done this? It is because of the coming general election. It is obvious to the public that that is what is going on. They will know that there will be a price to be paid, no matter who wins the election, in higher taxes or worse.
  8.7 pm
  Mr. Nigel Beard: If the new Labour Government had started spending in 1997 to remedy the state of decline and neglect of our public services, they would have compounded the huge deficit in public finances that they inherited. Today, the
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  Government would not have been discussing the future of the International Monetary Fund: the IMF would have been discussing the future of the Government.
  When the first Labour Government for 18 years took office, they faced a world of globalised financial markets that could pass judgment on them instantaneously at the flick of a switch. A financiers' veto would have been far from democratic, but it could, nevertheless, have negated the Government's authority for the rest of the Parliament. There would have been no glad, confident progress on education and health and all the other public services, and the air would have been filled with denunciation, recrimination and righteous anger. None of that would have done Britain any good at all.
  The decisive way in which control of monetary policy was passed to the Bank of England signalled to the financial community that the Government would not play political games with economic policy. By creating confidence, the new Labour Government sustained the authority and opportunity that they had gained at the polls to deal with deep-seated and long-neglected problems of our society and our economy.
  First and predominant among the problems was that of the economy itself, with poor productivity derived from a lack of investment and innovation. The previous Government thought that Britain should find its way in the world as a low-cost economy, not using the inherent skills of an ingenious people but vying with the cheap labour economies of Asia and becoming the below-stairs society of western Europe. Their conduct of economic policy amplified the trade cycle to create two of the most severe recessions of the century. A cocktail of divisive ideology and incompetence has for ever characterised the Conservative party as the party of boom and bust.
  That strategic weakness of economic policy has been the origin of many of the difficulties facing businesses in Britain: they could not be sure of market demand even three or four years ahead, so they were reluctant to invest either in expansion or in new technology. The long-term pay-off of research and development was considered too risky, so our innovation record and international competitiveness weakened.
  The first and greatest economic achievement of this Government, which is in danger of being taken for granted, has been to create a climate of economic stability and an expectation of that continuing. With that foundation much else becomes possible, for both businesses and Government.
  Having achieved that foundation, the Government have made another profound break with the past. They have not said that economic strength must dominate and overshadow every other aspect of life, but neither have they said that social policy should predominate, whatever the state of the economy. The Government have recognised that economic strength depends on social justice and a fair society, and that those factors in turn depend on the creation of wealth. That is why the minimum wage, the working families tax credit and fairness at work, to name but a few policies, have had a high priority, alongside reducing corporation tax, encouraging investment, encouraging research and development, and helping small businesses.
  Another break with the past is pursued further in this Budget. It is the knowledge-based economy—the determination to build this country's economic strength by

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  cultivating and applying the talents and skills of our people. It is an economic policy that works with the grain of individual fulfilment and ambition. Gone is the hopelessness of the low-wage economy, with competitiveness based on low cost and minimal safeguards at work.
  The Government's vision is of a British economy based on people as its most precious asset. That is the meaning of the new deal, now expanded to all the long-term unemployed, which trains them for work and brings them in from the wilderness of poverty and rejection. That is the meaning of the emphasis on education, from infant schools to universities, and the meaning of lifelong learning. It puts an end to the doors of educational opportunity being slammed shut too early in people's lives.
  The economic power to which our policies have given rise must clearly be directed at one of the top priorities recognised by people of all incomes and all backgrounds—the national health service. It has been clear for at least 20 years that the health service has been underfunded. For many years we told ourselves that although many countries, such as America, spent more on health, their services were not as good. Our NHS was better value for money, we told ourselves. Up to a point that was true, but it lulled us into a complacency that lingered long after the alarm bells should have been ringing.
  The Tory Government's response to gathering problems was to move as near to privatisation as they thought that they could get away with. Far from being regenerated, the national health service declined. The principles on which it was founded were eroded, and despite the dedicated selflessness of its staff, improvisation to maintain the service predominated over modernisation. In that barren period, the NHS put out few new growth shoots, despite immense advances in medical thinking and techniques.
  Mr. Hayes: Will the hon. Gentleman give way?
  Mr. Beard: No, as I have only a short time in which to speak.
  The Government's strategy, in which increased resources are considered to be the key to modernising a public service, is the right one, and the vast majority of Britain knows that. That is why the Opposition, after denouncing previous plans for increased spending as reckless, have now endorsed plans for spending even more. It is a death-bed repentance, but they should remember that death-bed repentances never avoid death. The British public know that to trust the Tory party with the national health service would be like Red Riding Hood trusting the wolf.
  This Budget's strength lies in it completing the foundations of a stable and expanding economy, and providing the resources and priorities for reform and modernisation of our public services. It has rightly been widely acclaimed, but there is a ghost at the feast—European economic and monetary union, and Britain's relationship with it.
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  The present strength of the pound against the euro is damaging the prospects for manufacturing industry and is indirectly opening up a gap between the economic prospects of south-east England and those of other regions.
  Mr. Hayes: Will the hon. Gentleman give way?
  Mr. Beard: No, I will not.
  The pound's strength does not reflect the relative strength of the British and continental economies, even allowing for their being at different points in the trade cycle. There could, therefore, be a sudden fall in the value of the pound which, though desirable for several reasons, would have a shock inflationary effect that would need to be counteracted.
  The value of the pound is therefore a rogue element in the Budget calculations. Short of the Government losing the confidence of the financial markets—which is not likely, given their splendid record of economic management—there is little that they can do to influence the rate of exchange. The only means of remedying that impotence is membership of EMU.
  Whatever else may be said, if the United Kingdom had joined in the beginning, the pound would not have surged to its present height; manufacturing would have been protected; and interest rates would be half their current level. The arguments against our reaping those benefits by joining EMU, when the convergence criteria are met, have to be much stronger than a denunciation of Johnny Foreigner and his devious ways.
  There is a danger in viewing the Budget piecemeal.
  Mr. Paterson: Will the hon. Gentleman give way?
  Mr. Beard: No.
  If we consider the Budget on a piecemeal basis, there is a danger that we will miss the wood and only see the trees. Taken as a whole, this Budget gives concrete expression to Labour's vision of a modernised Britain of the 21st century. It moves the process of modernisation into a higher gear. Its appeal goes beyond the self-interested analysis of gainers and losers from individual tax changes. In giving practical force to a vision of Britain in the 21st century, its appeal is to the latent idealism of Britain today.
  Mr. Deputy Speaker: Order. Time is up. I call Mr. Nigel Waterson.
  8.18 pm
  Mr. Nigel Waterson: I am very pleased indeed to have the opportunity to contribute to this Budget debate, even though time is limited.
  A couple of days before the Budget, I was reading the obituary of Bombardier Ferrebee. Who was he, and why did he rate an obituary in The Times? He was, of course, the bomb aimer who dropped the bomb on Hiroshima.
  As I sat listening to the Budget, the thought came into my head that it reminded me of that famous radio broadcast that Emperor Hirohito made after the bombs were dropped. That was the first time that the Japanese public had heard the voice of their emperor. The broadcast

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  contained the immortal piece of understatement, "There has been a development in the war that is not necessarily to Japan's advantage."
  I thought of that phrase when I listened to the Chancellor's speech. The spirit of that long-dead Japanese speech writer seems to live on in the modern Treasury. Whoever wrote the Chancellor's speech was a master of the same sort of understatement—the best recent example of which was the Chancellor's comment in his 1997 Budget speech. In effect, he was staging a raid worth £5 billion on pension funds, but he said he was making other tax changes to "encourage" companies to invest profits in the future—an example of the Hirohito school of speech writing, if ever I saw one.
  As time is limited, I shall touch briefly on some of the ways in which my constituents are disadvantaged by the Budget; in particular, I shall show how the Budget speech differs from reality. The best example is the national health service. Naturally, the Opposition welcome the new money for investment in the NHS, but we are concerned whether it will be put to the best use.
  It is clear that the Government have panicked. A winter of pressures—problems with waiting lists and so on—has caused them to throw money at the problem rather than to think rationally about it. However, as we approach the winding up of the Budget debate, it has emerged—only a few days after the Budget speech—that the boast of 10,000 new nurses was really a repackaging of a previous announcement. That figure had been included previously. Furthermore, the boast about the percentage of gross domestic product to be devoted to health included the figure spent on private health care. That is complete hypocrisy—not only are the Government against private health care on principle, but one of their first acts was to abolish tax relief for private medical insurance for people over retirement age.
  Mr. Hayes: As my hon. Friend has thoroughly studied the Red Book, he will be aware that even that inflated figure does not take the proportion spent on health to the amount that would be necessary to bring it in line with European averages. At one time, the Prime Minister said that was a pledge; then he said it was an aspiration. The Budget total is about 6.1 per cent. of GDP; but we need to spend 7.5 per cent. of GDP in order to reach that aspiration.
  Mr. Waterson: My hon. Friend makes an excellent point.
  In my local hospital, Eastbourne district general, there have been many problems during recent months. We have seen the resignation of the chairman and the chief executive, and there is still a shortage of nurses. Recently, the new chief executive told me that it was not really a matter of money, but of finding nurses to recruit. About 15 Filipino nurses were due to arrive last week to try to help plug the gap.
  When I visited the hospital recently, I saw the dedication and hard work of everyone there, but I also noticed that almost none of the wards had an unoccupied bed. That was after the flu epidemic that caused so many problems. I also understand that we are now about 1,000 behind the waiting list target for operations. Politicians should not make silly, simplistic election promises about waiting lists—those who do so should go down with the ship.
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  Another important matter is the effect on transport. We have standstill Britain; a pitiful amount of new money is to be spent on transport. In my area, there is the shambles of the Polegate bypass. That scheme was all set to go ahead when we left office in 1997; it was postponed, although it is likely to start later this year. In the meantime, the Government have paid £5 million on account to the contractors not to build the road that they were supposed to build.
  Another road, the new A22, is known as the road to nowhere; although it is almost finished, it cannot be joined up because of the bypass problem. The sum of £100,000 is being spent simply to guard it from vandals and others. If that is how that relatively small amount of extra money is to be spent, we cannot expect any great changes in standstill Britain.
  The Budget will have an effect on older people—especially pensioners—in my constituency and elsewhere. Of course, we welcome the increase in the savings and earnings limits and in the higher winter fuel allowance. However, why is there only to be consultation over the new credit for pensioners? Surely the Government realise that there is a growing feeling of unfairness among pensioners—those who have made the effort to provide for their retirement are seen as second-class citizens under the Government's policies. As co-chairman of the all-party group on older people, I am constantly made aware of that sense of unfairness on the part of many of our pensioners.
  Pensioners have already seen the abolition of the married couples allowance, of the widows allowance, of tax relief on private health care insurance and of tax credits on dividends. They have experienced the £5 billion raid on pension funds. On top of all that, they have seen a plethora of stealth taxes, for example on petrol. Council tax is going up by 8 per cent. in my constituency—nobody's pension is increasing by 8 per cent. How are pensioners to pay that increased tax?
  Furthermore, pensioners in my constituency are receiving less in services, largely because of a Liberal Democrat-controlled borough council and a Lib-Lab pact at county level. They will pay an 8 per cent. increase when inflation is about 2 per cent. That is a stealth tax. Some older people in my constituency and elsewhere may have to dip into their winter fuel allowance simply to be able to pay the extra council tax.
  Some of the Budget's small print was about basic banking services; the Chancellor mentioned that about 1.5 million people do not have bank accounts. However, in my constituency, we have the absurd situation that the Meads branch of Barclays bank is to close on 7 April—with no consultation with local residents or customers—merely because of a contraction in the banking network. Our Order Papers are awash with early-day motions about similar closures; Barclays alone is closing about 170 branches throughout the country.
  The Meads branch is used by older people; they will not be able easily to go to the town centre to the remaining Barclays branch. If elderly people do not have bank accounts, they are dependent on their local post office. At the same time as bank branches are closing, the Government are introducing policies that will close many local post office throughout the country.
  In conclusion, this Budget—like all the Chancellor's previous Budgets—exists on two levels. On the surface, it is all spin and good news, but when we consider the

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  detail—even only 24 hours after the speech—we see that it is full of hidden traps; there are stealth taxes and disadvantages for people in my constituency and elsewhere. I have described how it will affect the health service, transport and older people—especially pensioners—in my constituency and in other parts of the country. Those are the realities, which will become increasingly apparent as the months roll on, of yet another Budget from a Chancellor who taxes more but delivers less.
  8.28 pm
  Mr. John Home Robertson: There is something wonderfully implausible about listening to Tory Members, such as the hon. Member for Eastbourne (Mr. Waterson), calling for more public expenditure after all their years of talking a completely different language. It is even more implausible when the hon. Gentleman does so during the Budget debate after my right hon. Friend the Chancellor's announcement of massive increases in public expenditure—on the national health service and on education, to name but two.
  This year was the first time for many years that I was unable to be in the Chamber to hear the Budget speech. When my right hon. Friend made his statement last week, I was in Stornoway in connection with my new duties as a junior Minister in the Scottish Parliament. However, my right hon. Friend might be interested to know that people in Stornoway were happy to hear reports of the cut in air passenger tax for people living in the Scottish islands. That was well received.
  I welcome this opportunity to commend the Chancellor's skilful management of the economy, and to assure the House that the overwhelming majority of Scots do not subscribe to the peculiar brand of Scottish nationalist economics that we heard again from the hon. Member for North Tayside (Mr. Swinney). He called for more public expenditure and less taxation. That defies logic and invites ridicule. I hope he is aware that we are keeping a careful tally of nationalist spending commitments as they add up over the years. The Scottish school of economics is rather more realistic and rather less reckless. Indeed, we have had the best of Scottish economics from a Scottish Chancellor. I can say with absolute confidence that the Budget will command great respect in Scotland, not least because it provides for such substantial investment in the national health service and in education.
  Unemployment in my constituency is lower than it has ever been in my 22 years as a Member of this place. Living standards are improving as both public and private investment grows. My right hon. Friend's stewardship of the economy is succeeding spectacularly to the benefit of all our constituents. However, as a Back-Bench Member here, if not in the other Parliament north of the border, I hope that my right hon. and hon. Friends on the Government Front Bench will not mind if I express a couple of mild anxieties. After all, that is our job.
  First, important primary and manufacturing industries are suffering to a degree from the weakness of other currencies in relation to sterling. Obviously, that is the consequence of the Government's good management of
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  the economy. However, there is legitimate anxiety about advantages enjoyed by importers and the disadvantages endured by exporters from the United Kingdom.
  Mr. Hayes: Will the hon. Gentleman give way?
  Mr. Home Robertson: No. I hope that the hon. Gentleman will forgive me, but I do not have much time.
  The present situation tends to confirm my strong personal belief that it will be in the best interests of the United Kingdom to join the single European currency as soon as circumstances permit. Clearly they do not permit at present, for the reasons that I have illustrated. It will be to the benefit of our exporters especially and our economy in general, especially the manufacturing economy and our primary industries, if we are linked with the European single currency. I hope that it will be possible to make rapid progress in that direction.
  My second concern is about the rights—I think that we should talk about the rights as much as the needs—of pensioners and older people generally. We owe a great deal to those who endured the second world war and the hardships of the post-war years. The extra £50 winter payment in addition to the £200 that my right hon. Friend the Chancellor has already made to those people, together with other measures, is a huge help and an appropriate acknowledgement of our debt of gratitude to them. Unfortunately, the baseline increase of 73p appears inadequate when it is considered in isolation.
  I know that my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) will understand my point, especially in relation to former miners who are suffering from respiratory diseases. I welcome the fact that the Government have been able to provide funds to compensate these people. I wish only that we could move rather more quickly to pay out the money that has been made available for that purpose.
  Thirdly, I hope that the Under-Secretary of State for Social Security, my hon. Friend the Member for Wallasey (Angela Eagle), will forgive the Scottish Minister with responsibility for fisheries for taking the liberty as a Back-Bench Member in this place of saying something about the peculiar predicament of share fishermen that has arisen recently. Share fishermen have always been able to claim benefit when their boats have not been able to put to sea for a period of days. That can happen as a result of bad weather, mechanical breakdown, the skipper having a hangover or for a multitude of other reasons. It is not the fault of the crew if their boat cannot go to sea. Hitherto it has been possible for people to claim benefit in those circumstances. It is vital that they should be able to do so at such times to support their families
  It appears that there has been a recent change in the paying of benefit to share fishermen in the form of the jobseeker's allowance. A number of my constituents have drawn this matter to my attention. The system has changed and it has become a great deal more difficult for such claims to be dealt with. I have written to my hon. Friend the Under-Secretary of State for Social Security and I am grateful to her for her reply, but I reiterate that share fishermen have paid a high rate of national insurance contributions over the years and that they have a unique form of employment. They are not jobseekers in the strict interpretation of the term. From time to time they are prevented, by a range of circumstances beyond

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  their control, from going to work. Their families should have the benefit of the support that they have paid for through their contributions. I hope that we shall be able to overcome this local or national difficulty, which has recently come to light in my constituency.
  I am delighted to congratulate my right hon. Friend the Chancellor on a characteristic display of prudence combined with generosity, those two best Scottish qualities. He has made massive investments in the NHS and in education. It is essential that these investments should be translated into real improvement in those services. That is the task facing Ministers, NHS trusts and local authorities. I am sure that it will be picked up with great enthusiasm south of the border, as it will by my ministerial colleagues, Susan Deacon and my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), north of the border. The Budget presents great opportunities for investment and for improving services in our country. It is exactly what the people voted for in 1997.
  8.38 pm
  Mrs. Eleanor Laing: It is truly a pleasure to be able to take up the remarks of the hon. Member for East Lothian (Mr. Home Robertson). I mean that, because it is good to see him in this place. It is encouraging to know that he, unlike many of his colleagues, still considers it worth attending the Chamber, despite his membership of the other place north of the border.
  Having paid the hon. Gentleman a compliment which he probably does not welcome, I must immediately criticise one of the first things he mentioned, namely, his theory that the Chancellor is the best Scottish economist. I must disagree with him. The best Scottish economist by a long way was, and always will be, Adam Smith, whose belief was that the country would prosper by having peace and low taxes. How right he was, and how right he still is.
  It is a great pity that the Chancellor of the Exchequer does not appreciate the value of low taxation. By his actions, and from examination of the detail of the Budget, it is obvious that he wants the British people to believe that he believes in low taxation when what he delivers to them is far from that.
  It had not been my intention to speak in the debate. However, because I spent the weekend in my constituency listening to what people were saying about the Budget, I feel an obligation to express their annoyance and anger about how the Budget will affect them. I shall mention two particular matters. The first is the dishonesty of the Chancellor's stealth taxes, and the second is the Government's obvious and complete lack of understanding of small businesses and how they work.
  The stealth tax on which I shall concentrate is stamp duty. Many Labour Members may honestly believe that it affects only a small proportion of the population. In my constituency, that is not the case. The Chancellor has introduced an enormous increase in stamp duty for properties worth more than £250,000. In my constituency—this may genuinely surprise some Labour Members—£250,000 buys a modest, three-bedroomed family house. It is easy to understand who is being victimised by the Chancellor and about whom he simply does not care. The first problem that my constituents have with the Budget, and especially with stamp duty as a stealth tax, is that it is vindictive towards ordinary families.
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  The second problem is that the increase in stamp duty will obviously fuel an increase in house prices in the south-east. Of course it will; that is so obvious it is hardly worth mentioning. However, it seems that the Government have not noticed that fact—or perhaps they do not care.
  Like all taxes, stamp duty—which does so in such a sneaky way—takes spending power away from the individual and gives it to the Government. They have estimated that the increase in stamp duty will produce £365 million for the Exchequer by 2003. That is £365 million that people throughout the country will not be able to spend in the way that they would have wished.
  I come now to the affect that stamp duty will have on small businesses. They need flexibility and confidence, not more red tape and extra burdens. However, they constantly receive the latter from this Government and this Chancellor. Stamp duty affects not only domestic but commercial properties. If a small business's ability to invest and expand is burdened by extra stamp duty, it is obvious that the business itself is also burdened.
  Stamp duty has another effect on small businesses. People who buy houses would, in normal circumstances, employ people to work on those houses. However, those people will now be less able to employ others—they will have less money to spend because they will give so much to the Chancellor in stamp duty. That leads to one obvious conclusion: the Government simply do not understand and do not try to understand small businesses.
  I appreciate that the Chancellor pays lip service to small business. However, neither he, nor members of his Treasury team, nor most Labour Members have ever worked as small business people. [HON. MEMBERS: "Not so.''] If Labour Members have done so, I am willing to take interventions from them. Can they tell me that they know from personal experience what it is like not to know how much money one will earn by the end of the month, whether one can attract sufficient orders and how the business will go over the next few months? Do they know about the stress involved? Have they faced the risk of the family home being mortgaged to raise money to expand the business and to employ people?
  In this debate, Labour Members have said that small businesses fuel the economy. That is true. The hon. Member for Coventry, South (Mr. Cunningham) said that. His words were correct, but the arguments that he used to back his case were wrong. The Government clearly do not understand small business. If they did, they would surely not, for example, have increased stamp duty or be pursuing IR35, which entirely undermines small entrepreneurs who are doing their very best to work for themselves and their families and to use the skills that the education system has given them for the good of their communities, their businesses and the country as a whole. The Government pay lip service to those entrepreneurs—but they say one thing and do another.
  Another aspect of the Budget and the Prime Minister's statement the following day angered the constituents to whom I spoke over the weekend. They listened to the Chancellor and read Wednesday's newspaper reports of what he said, but they know that they did not discover what he will do and what the Budget's real effect will be on them. Several of them told me, "Listening to the Budget statement might be entertaining, but it is what the Chancellor does not say that counts." Conservatives

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  Members know that it is only a week or 10 days after the Budget that the people of Britain begin to understand what it will mean for them. They understand not because of what Treasury Ministers say, but because of the analysis carried out by Conservative Members.
  What annoyed my constituents most of all was that the Prime Minister gave the wrong figures on how much the Government intend to spend on the health service in the coming years. The Prime Minister stood at the Dispatch Box and gave the wrong figures, and nobody on the Benches behind him helped or corrected him.
  I would never suggest that the Prime Minister would deliberately mislead the House, but I suggest that it is even more worrying that he did not realise that he was misleading the House. He cannot have it both ways. I cannot suggest that he knowingly misled the House, so it is obvious that he unknowingly did so. That has considerably worried my constituents because although the vast majority of them disagree with the Chancellor and the Prime Minister, they should at least be confident that when the Prime Minister gives a figure, it is the truth. How sad that that is not the case.
  8.46 pm
  Mr. Tony Colman: After the rather mealy-mouthed comments of the hon. Member for Epping Forest (Mrs. Laing), may I say that on the streets of Putney and Roehampton there was a great welcome for the Budget, particularly for the new money for education and the health service, and we are seen to be delivering on our election promises.
  My constituents want us to be elected for a second term, and they want to ensure that, unlike the Tories, who appear to be committed to reducing spending on the NHS with their so-called guarantee of tax cuts, we are committed to increasing health service spending. Indeed, we are the only party with that commitment. Money for the health service is particularly important to my constituents, who want to ensure that the new community hospital at Queen Mary's university hospital in Roehampton is completed. That will happen only if there is a Labour Government.
  I want to draw to the attention of the House the Budget's strengths in wealth creation. I support the measures that will encourage enterprise in the British economy; this is very much a Budget for enterprise. I state an interest in that I am chair of the Share Issues Group—I hasten to add that the position is unpaid—which has met the Financial Secretary to the Treasury several times to discuss issues concerning share options. I am particularly drawn to those matters because in my time as a managing director I took great advantage of the available share options schemes. It is important to reward people at all levels within a business, and the initiatives in the Budget are excellent ways to ensure that we will do so.
  Mr. Hayes: Will the hon. Gentleman give way?
  Mr. Colman: No, I am afraid that I do not have time.
  I draw the attention of the House to the new enterprise management incentives scheme, and the increase from 10 to 15 in the number of employees in small companies
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  who are eligible to join the scheme. That will help in the recruitment and retention of key employees by small higher risk companies.
  Mr. Hayes rose—
  Mr. Colman: I shall not take interventions because we are very short of time.
  The access to tax advantage share options of up to £100,000 is obviously important to ensure that those who take the risk of getting involved in start-ups are able to benefit.
  Warming to my theme, I am particularly concerned about the all-employee share plan schemes, which the Budget has made attractive to companies of all sizes and much easier to operate. I was particularly pleased that the save-as-you-earn share save scheme remains in the armoury of available options. That has been the bedrock of saving by employees because it ensures that they are all able to save in a building society on a failsafe basis and purchase shares at a pre-agreed price. More than 1,200 companies currently have an SAYE share save scheme and 1.75 million employees are in those schemes. A second scheme that will continue under the Budget is the company share option scheme. Currently, 3,570 companies are part of the scheme, covering 450,000 employees.
  Most important is the confirmation provided in the Budget that we are going ahead with the new all employee share plan, the details of which are set out in Inland Revenue REV3. I shall outline the advantages of the new scheme. Employers can give employees shares worth up to £3,000 each year, free of tax and national insurance. Out of their pre-tax salary, employees can buy partnership shares up to a maximum value of £1,500 a year, again free of tax and national insurance. Employers can match those partnership shares by giving employees up to two free shares for each partnership share that they buy. That is an extremely important means of encouraging share ownership.
  Initial indications are that 350 employers in the United Kingdom are expected to set up such a scheme in the coming months, as it comes into operation. The result will be that an additional 500,000 employees in the UK will, for the first time, own shares in the company for which they work. That number is expected to grow to about 2.5 million over the next three years. I hope that hon. Members on both sides of the House applaud such an increase in employee share ownership—in fact, I see the Opposition spokesman, the hon. Member for Arundel and South Downs (Mr. Flight), nod in agreement. It is nice to see Opposition support for the Budget.
  A cause of concern that has been the subject of a meeting I had with Treasury representatives is national insurance charges and unapproved share option gains. It should cause the whole House concern, as it does the Government. I remind the House that the concern centres on dot.com companies, which often encourage employees who have scarce skills to join them, not by paying high wages, which they cannot afford, but by offering large unapproved share option gains. I applaud such a means of tackling the scarcity of skilled individuals, for if we do not solve that problem, such companies will move abroad, especially to the United States.

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  The Government have proposed a consultation on three options to resolve the problems. The proposals would allow
  a voluntary agreement between employer and employee that:
  All the employer's NICs liability on unapproved share option gains will be met by the employee, or
  Part of the employer's liability on these gains, or the excess above a predetermined amount, will be met by the employee, or
  The employer's NICs liability is to be met by the employee but, by mutual agreement, the employer could take on the statutory liability at the time it is incurred.
  It is extremely important that we resolve that issue. My hon. Friend the Financial Secretary to the Treasury tells me that the timetable for the consultation is extremely limited and that he looks forward to introducing measures—perhaps in the other place—to deal with the problem.
  Labour Members might be surprised by my paean of praise for share options, but it is important to realise that share options can spread wealth to everyone who works in industry and commerce. In California, even those who have played only a modest role in a dot.com start-up—perhaps as a cleaner or a secretary—can become dollar millionaires through the success of the company in which they have invested their time and effort. It is not enough to own shares in a pension fund, at arm's length; we need the hands-on experience of share ownership in the company for which we work, so that we get behind it.
  One of the great problems of capitalism is that there are not enough capitalists. I was in Atlanta recently and picked up a book by one Jeff Gates, called "The Ownership Solution—Towards a Shared Capitalism for the Twenty-First Century". I recommend it to the House. The author argues that we need to ensure that there is more share ownership across the entire community.
  James Wolfensohn, the president of the World bank, has said:
  "Ownership is the sine qua non of sustainable development.
  Bob Swann, who is president of the Schumacher Society, has stated:
  "The community we all long for can't be realised with only 6 per cent. of the population owning shares. This has to change.
  The Budget is a first move to ensure that we are re-engineering capitalism for inclusion. I recommend it to the House.
  8.55 pm
  Mr. Tim Collins: The hon. Member for Putney (Mr. Colman) will forgive me if I do not follow his interesting remarks on share ownership, given the lack of time available. I entirely agree with him as to objective, although there will inevitably be some differences between us about the method of achieving that objective.
  I shall make some general observations about the Budget, before turning to specific constituency points. The hon. Member for Bexleyheath and Crayford (Mr. Beard) said earlier that he would speak about a ghost at the feast. There seem to me to be three or four ghosts at this feast, of which the first and perhaps most worrying is the collapse in the savings ratio.
  The Chancellor and the Prime Minister are fond of speaking about the fact that the Budget and their economic management have laid the ground for strength
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  and economic stability in the future, but nothing could more clearly indicate the way in which they are storing up trouble for the future than the fact that the savings ration has halved since 1997.
  That was in direct response to the outright declaration of war against the pension funds, which the Government launched in their first Budget, with the £5 billion a year raid on pension funds; the abolition of PEPs and TESSAs—working systems—and their replacement with what can generously be described as an imperfect and untried ISA system, which is much less generous in its tax treatment; and a reform of the social security system, if it can be graced with that noun, which has resulted in a situation in which, I am told, unless one can be sure to retire with a pension fund worth £100,000, it is not worth saving at all through one's working life. That is the situation that the Government have produced.
  The second ghost at the feast is the issue of economic growth. Why is it that as far ahead as the Red Book can project, economic growth under the Blair-Brown economic miracle is not expected to return to the level at which it was in the last year of the previous Conservative Government? Not for as far ahead as the Government can foresee do they foresee economic growth getting up to the level at which it was when there was a Conservative Administration in charge.
  The third ghost at the feast is the Government's projection of a doubling of the balance of payments deficit—hardly an indication of a strong economy, soundly based for the future. In that context, I refer to the remarks that a Downing street spokesman—no doubt Mr. Alastair Campbell—is supposed to have made today about Sellafield in Cumbria. Whatever one's views about nuclear processing, that happens to be the single greatest generator of foreign exchange, bar none, in this country.
  The spokesman said that it was now up to Sellafield to make its own case. That was an abdication of responsibility, an insult to more than 10,000 extremely skilled workers in Cumbria and an indication of a somewhat flippant attitude towards a very important generator of foreign exchange.
  A filling station owner in my constituency told me recently that he takes in £1.8 million a year at his filling station, of which £1.7 million a year goes straight off to the tax man. He says that he might as well take down the BP sign and put up a sign reading "HM Inland Revenue".
  The Budget contained yet another increase in petrol prices. We see an urban-based Government who have no recognition of the impact on my constituents and those of some of my hon. Friends, for whom the car is not a luxury or an option, but a necessity. In my constituency, some of the poorest people are two-car families. Both cars may be ramshackle, but that is the only way in which those families can access even the modicum of public services available in rural areas. In that respect, the Budget was extremely disappointing for people in south Cumbria.
  Before I deal with other constituency points, I shall take up the charge that has been made by several Labour Members, that Conservatives can never advocate greater spending in their own constituencies because there is no such thing as waste under the Government. It is impossible to reallocate priorities and inconceivable that one could identify savings. Perhaps I can give the odd example of possibly being able to find a penny or two to spend more wisely elsewhere.

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  Let us consider the £1 billion a year extra that is being spent simply on administering government. The Chief Secretary, who is present, is the guardian of the public purse. Why not establish a rule that if three Cabinet Ministers travel from this country to the same meeting, they must travel on the same aeroplane rather than having one aeroplane each? That might save some money for more worthy causes.
  What about the hundreds of millions of pounds that are wasted through the Government's mismanagement of asylum seekers? Huge amounts of public money are spent unnecessarily because the Home Secretary has lost his grip on his Department.
  Police officers in my constituency, to whom I spoke on Friday, are greatly worried about the reports that the cost of the inquiry into the events on Bloody Sunday 28 years ago could escalate to £100 million. For 2 per cent. of that sum, Cumbria constabulary could be removed from its current predicament of having to sack police officers, shut police stations and withdraw services from people across that rural county. I do not believe that a historical inquiry needs to spend 50 times more than the amount of money that would relieve the policing problems of my constituents and the county of Cumbria.
  It is a question of priorities. My hon. Friend the Member for Eastbourne (Mr. Waterson) referred to the saga of a bypass in his constituency. It was postponed by the Government, although it was ready to roll when they came to office. He said that £5 million had been paid to a contractor so that he would not build the bypass. The bypass will fortunately be built.
  However, in my constituency, we still await the completion of the A590 High Newton and Low Newton bypass. Sadly, that bypass, which is the Barrow-in-Furness industrial area's only link to the rest of the country and passes through two stone farm buildings, despite being a dual carriageway for the remainder of its length, is needed to avoid a death trap. Only 10 days ago, someone was again killed on that stretch of road because the Government postponed the construction of a bypass that is desperately needed. Yet again, the Government make false economies, and believe that they save money while they rack up costs in lives and public expenditure by not spending wisely.
  Let us consider the national health service. The tentacles of the Inland Revenue reach Cumbria, and plenty of money is siphoned out of south Cumbria. Sadly, less of it is recycled. The Westmorland Gazette has run an excellent campaign called Heart Line, which draws attention to the fact that the number of people who wait for more than a year for heart bypass operations has more than doubled in south Cumbria since the Government were elected. One gentleman, Mr. Gordon Graham, who fortunately had his operation last week, had to wait almost 18 months for a life-saving operation, yet the Government boast about the billions of pounds that they announced last week for the NHS.
  Six months ago, £50 million was announced for heart care, but none has yet been allocated to the north-west, even though the region has the worst heart problems in the country. We do not want announcements; we want to know that the money will be transferred from the sticky fingers of the Whitehall bureaucrats to the people who need to spend it.
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  I want to quote from a copy of a constituent's letter to the Prime Minister. The Chancellor is present, and he ought to hear it. My constituent lives in Grange over Sands. Her letter to me states:
  Find enclosed photocopies of my tax forms and pay slips. The most recent tax forms show that I will be thousands of pounds down in the taxable allowances I would normally get, starting in the tax year April 2000.
  This is … a result of decisions made by your government.
  She explains that she is a teacher at a comprehensive school, where she works five days a week. She is a care worker on Friday evenings, Saturdays and Sundays. How on earth, she asks, can she be expected to manage on a cut of £70 a month?
  The Chancellor should note these words:
  I voted for a Labour Government for all the years the Conservatives were in power and so far I have never been poorer … I will never vote Labour again. You are simply a bunch of liars.
  Millions of others will never vote Labour again.
  9.5 pm
  Mr. Ivan Henderson: I can tell Ministers that the head teacher of Clacton County high school, whom I met today, was very pleased with the £50,000 that the Budget has given his school.
  My constituency contains a mixture of leisure industries, small businesses, large businesses and resorts. It also contains all the problems that resorts bring with them—for instance, areas of severe deprivation. The fact that the Government are working with a task force to examine some of the problems of seaside resorts has been welcomed by those living in what could be described as pockets of deprivation.
  The Chief Secretary to the Treasury, my right hon. Friend the Member for Oxford, East (Mr. Smith), will know of the problems in my area. We launched the new deal there because unemployment was so high—owing, I might add, to the shipping policy of the Conservative party. It decimated the British shipping industry. The Government have introduced a tonnage tax in an attempt to repair the damage.
  Let me return to the subject of education, and point out that the £50,000 provided for the head teacher in Clacton was in addition to the provision of an education action zone covering 23 schools in my area, £3 million for the next three years and the promise of a language status college for the Harwich school. Pupils there are looking forward to working with those in other countries, learning Dutch, Chinese languages and Spanish.
  Mr. Hayes: Will the hon. Gentleman give way?
  Mr. Henderson: No, because I do not have much time.
  Seaside resorts contain many retired people. More than 30,000 pensioners in my constituency welcome the minimum income guarantee, and 12,300 welcome the Government's introduction of free television licences. Those pensioners also welcome the winter payment of not £20, not £50, not £100 but £150 that they will receive. The other day, a pensioner in my constituency reminded me that pensioners had to wait for seven days and freeze before they got £10 out of the last Government. Now they have £150 automatically, irrespective of weather conditions.

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  Pensioners in my constituency also welcome the additional funds for rural transport. The links between Harwich and Clacton were withdrawn under the Conservative Government because of their deregulation of bus services. Now pensioners can benefit from bus services in seven villages, following their previous isolation; moreover, from next April they can benefit from bus services with no charge for bus passes and half-price bus fares. More than 30,000 pensioners will benefit.
  Mr. Russell Brown: Free bus passes for pensioners are a godsend. Does this not open up avenues to which pensioners have never had access before? Pensioners who have felt trapped in the past will now be able to travel thousands of miles.
  Mr. Henderson: My hon. Friend is dead right. Pensioners in my constituency lost that choice under the last Government. Indeed, pensioners in the constituency of the hon. Member for North Essex (Mr. Jenkin) have gained from the establishment of transport links in several villages, from Manningtree to Clacton. They have written to me to congratulate the Government on restoring those rural transport links.
  My pensioners know that the previous Government, not this Government, withdrew the wages link with pensions. My pensioners know who abolished free eye tests—not this Government, who restored them. My pensioners know which party put value added tax on fuel—not the Labour Government, who made it as low as they possibly could. The Conservative party deregulated bus services and left my pensioners without services, but this Government have put more money into rural transport to make it much easier for them to get to towns around my constituency.
  9.11 pm
  Mr. Matthew Taylor: Over four days of debate the parties have set out their election platforms, and none more clearly than the Conservatives, who have responded to the Budget and will seek to fight the election with claims of a tax-cutting agenda. However, those claims have been revealed to be entirely incredible on four grounds. First, when presented with health and education increases, for which they did not ask, they merely rolled over and accepted. There is no argument that health and education need that money, but equally no Conservative Members argued for those increases before the Budget—they argued for tax cuts. There is no credibility there. Their credibility falls further away if we read their policy documents, which argue for extra money for roads, police, prisons and the Army. The list goes on.
  The Conservatives also have no credibility because we are about to hear from a shadow Chancellor who argues against the very tax increases that he started to implement when he was a Treasury Minister—cutting mortgage interest relief at source and the married couples allowance and introducing the fuel tax escalator. There is no credibility there.
  The fourth reason why the Conservatives have no credibility is also the very reason why the British public have remained mystified for three years about why they have not seen the improvements in public sector services such as health and education that they might have expected. In fact, the Government have got rid of the Tory
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  deficit—£28 billion in one year—which they inherited. It was a record deficit when the shadow Chancellor was at the Treasury.
  The tax increases which have been imposed—the Government made a nonsense of themselves by pretending they had not happened—have closed the deficit gap—as, indeed, the Conservative Government planned to close it through tax rises as well. It has been closed, but as a result the extra money has not gone into public services in substantial amounts. The tax increases have paid for the deferred taxation to which the previous Conservative Chancellor frequently refers, the deficit run up by the shadow Chancellor and his hon. Friends.
  Only now, with the deficit closed, are the Government starting to put serious money into some public services. However, the problem is that they have deceived the public by claiming increased funding that did not really take place. That is Labour's credibility problem. If there is any startling element in the Budget, it must be the fact that Ministers keep a straight face when they talk about "massive improvements" and increases of £2 billion for health and £1 billion for education, when only a week ago they were telling us that they had put £21 billion into health and £19 billion into education. One or the other is not true, and we all know that those earlier huge increases were not true. They never existed—they were funny money, which is why the public services did not receive them. If they were true, Labour Members could not boast of the £2 billion for health today.
  Having said that, at last we are talking real money. Now the health money is real, not funny money. It happens to be the money that we advocated for the Budget—what we proposed, to the penny. We shall not criticise that proposal. During debates in the past few weeks some Labour Members have said that our comments on health were carping, but I do not know what more we can say. We acknowledge that the Government are right, it is the right amount, it is being put in now and it will make a difference. We think that the money should have been provided earlier, but when we argued for that we were told that we were being unrealistic. What was unrealistic one week is prudent this week, but we welcome it none the less.
  Labour Members must understand that sticking to Conservative Budget proposals in the early years of this Parliament for longer than was needed, stacking up an election war chest, has resulted in the problems in health of which we are all too well aware. People have not had treatment when they needed it, and some people have lost their lives as a result. It has been bust and boom in the public services, even if the Chancellor can rightly say that he has avoided that in the economy.
  We are also starting to see real money for education, but it is not sufficient for the changes that Liberal Democrats would like. It will not guarantee average class sizes of no more than 25 in primary schools. It is certainly not sufficient to abolish tuition fees in England and Wales, as they will be in Scotland thanks to the Liberal Democrat influence in government there. It will not be sufficient to increase higher education funding as a proportion of national wealth, which has been slashed since Labour came to office.
  Most significantly, the money will not be sufficient to reach the proportion of our national wealth spent on education under the Tories. That is the extraordinary thing

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  about the Labour record on education. Labour pledged to raise the proportion of wealth spent on education, but in fact it has been cut.
  In the Budget debate last week, the Secretary of State for Education and Employment claimed that next year the proportion of national wealth spent on education would reach 5 per cent. compared with the 4.9 per cent. inherited from the Conservatives. That sounds rather good, but when we look at the figures it turns out not to be true. We asked the House of Commons Library if it could come up with that figure, but the answer was no. We phoned the Department for Education and Employment and asked it how it had come up with that figure, but it did not know. It suggested various possibilities, but when we said that none of them seemed to work, it said that we were right. We asked the Library to ask the Department for Education and Employment, and it could not come up with a figure either. It seems that an apology is due to the House.
  The Secretary of State for Education and Employment has given a figure that not one official or the House of Commons Library can substantiate. The Government will not meet the 5 per cent. figure next year. Indeed, they will be at least a couple of points short. Over the Parliament, on average they will be short of what the Conservatives spent. Not one single year so far have the Labour Government given an increase of the size provided each year under the previous Prime Minister.
  Education has certainly not been the Government's priority. Why is that, and why have pensioners been short-changed? The Government talk about an increase in pensioners thresholds, but that will not come in for a year. They talk about a review of the amount of savings that pensioners are allowed, but any proposals will not come in for several years. If pensioners are lucky enough they will get 75p on their basic pension, but a woman with a low record of payments will get less than that.
  The Chancellor likes to include the £50 extra winter fuel payment, but we should not forget that it is not on the terms suggested in the briefings: it is a household payment, not an individual payment, so it does not add anything like £1 a week on top of the 75p. Why have the Government done that? There are two possible answers. First, they did not mean it when they said in their manifesto that they wanted pensioners to share in the growing wealth of the economy. Even allowing for the heating allowance—the one payment that pensioners will get in the coming year as well as the 75p—pensioners will share in only half the growth in the economy and a third of the growth in average earnings. That is not pensioners sharing in the growing wealth of the economy.
  Secondly, the Chancellor has attempted to put money into health at the same time as making a 1p cut in tax. Therefore, he could not give the amount that is actually needed in education and, even more important, had to raid the social security surplus, giving £2 billion to health, which meant that it was not available for pensioners, who lose out. Labour Members know that that is true and how angry pensioners are. I hope that they are making that message clear to the Chancellor. They have time to try to retrieve the situation and to show that the Government believe in the state pension.
  A great unspoken element of the Budget is the high pound. There are the problems at Rover. There were 120,000 job losses last year. Exports are down 9 per cent.
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  Imports are up 10 per cent. From November to now, the predicted trade deficit has doubled from £10 billion to £20 billion—a record. The Chancellor had nothing to say about any of that. He is willing to let jobs go in farming and manufacturing. He has forgotten that he has a task beyond tax and spend: to look after those in real jobs in those areas.
  9.20 pm
  Mr. Michael Portillo: I begin by welcoming the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) back to the House.
  I congratulate the Chancellor of the Exchequer. There is no denying that he is a clever fellow, but I congratulate him in particular on his luck: he is a lucky Chancellor. He did not invent the British recovery. The economy has been growing since 1992. Unemployment has been falling since 1993. He did not invent either the fantastic performance of the American economy. Nor did he invent the recovery in Europe.
  When we listen to the Chancellor deliver any Budget, we see that he is well aware that he is clever, but it is not apparent that he is aware that he is lucky. He repeats the phrase "boom and bust" so often that I am afraid that he believes that he has abolished the economic cycle. Hubris comes before nemesis. Pride comes before a fall. Any Chancellor who thinks that he has abolished economic cycles has lost touch with the real world. That is when Chancellors make mistakes. No Labour Chancellor's career has ended in success. I do not suppose that his will end in success, either. Perhaps the Budget is the beginning of the end for the reasons that my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) and my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley) gave.
  The Chancellor is never too old to perform new tricks. This year, he raised tax allowances and duties by the rate of inflation. That sounded even-handed, but it turns out that tax allowances that reduce the tax that we pay rose by a measure of inflation that was calculated as 1.1 per cent. The duty on petrol was raised by a different measure of inflation that came out at 3.2 per cent. The difference between the two raised £500 million in extra taxes for the Chancellor. Anyone watching, or any taxpayer who used such a trick when filling out a tax return, would receive a visit from the Inland Revenue before he could say, "Geoffrey Robinson."
  When the Chancellor describes the Budget as "Prudent for a Purpose", people will have every right to ask what he means by that: how prudent is it and what is the purpose? This is the Chancellor who has attacked prudence whenever the British people have shown prudence. He attacks people who save. He has scrapped the married couples allowance and so attacked people who marry. Starting next month, couples will lose £200 a year. By scrapping mortgage interest relief, he has attacked those people who wanted to own their own homes and is costing them £225 a year.
  Then the Chancellor attacked people who wanted to make provision for themselves in pensions. The average 30-year-old will have to invest £200 extra a year to make up just for the tax that the Chancellor has taken out of people's pension funds.
  The Chancellor said that this would be a Budget for hard-working families. However, new figures—independent figures—from the Library released today

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  show that a typical working family is already paying £670 extra a year under Labour. As the hon. Member for North Tayside (Mr. Swinney) said, that includes the punitive tax on petrol. Yet, Labour Members still have the gall to pretend that working families are paying less tax than at any time since the Government of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), who is in the Chamber.
  The Chancellor repeated that ludicrous claim on Sunday, on the "Breakfast with Frost" programme. The only family that is like that—the mythical Brown family—is a family that does not smoke, does not drink, is not married, does not drive a car and does not even have a local council. The Chancellor's claim to be cutting tax on families is pathetic. No one believes it, and he should at least come clean and admit that it is absolutely bogus.
  If the Chancellor is out of touch with families, he is out of touch with the new economy, too. In the global economy, highly mobile individuals and highly skilled people will seek out the low-tax environment and the low-tax Finance Ministers wherever they can find them on the face of this globe.
  Mr. Derek Twigg: Will the right hon. Gentleman give way?
  Mr. Portillo: Not on this point; sit down.
  The Chancellor has become wholly insular.
  Mr. Twigg: Will the right hon. Gentleman give way?
  Mr. Deputy Speaker: Order. The right hon. Gentleman has stated that he is not giving way, and that should be enough.
  Mr. Portillo: The Chancellor has become a Canute-type figure, wishing away the tide of global competition and closing his eyes to the threat to the London stock exchange that is posed by the lower rates of stamp duty in other markets. He ignored the threat to gambling revenue from internet gaming. He failed to see that higher tobacco might reduce revenue and boost smuggling, but he has pressed on regardless.
  Now we come to the infamous IR35. In this Budget, the Chancellor doubled his estimate of how much that tax would raise—and so we must now double our estimate of how bad will be the brain drain and how bad will be the damage to Britain. IR35 is one of the taxes that this Chancellor of the Exchequer never even announced in the House of Commons. This year, he showed at least some consistency by not announcing another stealth tax that also is aimed at the new economy and that also sounds like a character from "Star Wars". This year's IR35 is called BN2J. BN2J is the Chancellor's stealth tax on British world-beating companies and an attack on double taxation relief.
  The world's largest accountancy firm said that BN2J will make the United Kingdom one of the least attractive locations for international companies. [Interruption.] All that Labour Members can do is to jeer at the world's largest accountancy firm. They jeer because the Government do not realise that, in the new economy, the choice will not be between lower taxes and better public services. In the long run, taxes must be low enough to
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  attract investment from all around the world, so that we can fund better public services. The Government are taxing more and regulating more, and Britain is headed in the wrong direction.
  As for the Budget speech, I say, as my hon. Friend the Member for Louth and Horncastle (Sir P. Tapsell) said: the Chancellor devoted so much work to the things that did not appear in his speech. If he had announced the taxes clearly in his Budget speech, he would have been forced to admit that taxes have increased by a net 8p under this Government—a 9p up, 1p down Budget. We know that this is a Chancellor who dispenses with tradition. However, now he has dispensed with the ultimate tradition of announcing Budget tax rises in his Budget speech. Moreover, all those tax rises have been introduced by a party whose Prime Minister promised not to increase taxes "at all".
  Mr. Barry Gardiner: I am grateful to the right hon. Gentleman for giving way, particularly on that point about not increasing taxes. He and his leader have guaranteed that they would give away £15 billion in tax cuts to the richest members of society. What effect would that have on public services?
  Mr. Portillo: We have made no such pledge. I do not know what the hon. Gentleman is talking about.
  The tax rises were introduced despite the fact that we had been promised no tax rises. Labour Members now like to claim that the Prime Minister never said that, but they should reflect on the fact that they would not even be in the House today if he had not told the British people that. He has not fulfilled his promise.
  There are many other prime ministerial promises that he has not fulfilled either. He said that class sizes would be smaller, but they are larger today. He said that waiting lists would fall, but the waiting list to get on the waiting list is double today. He said that he would be tough on crime but, for the first time in six years, crime is rising again in this country. [Interruption.]
  Mr. Deputy Speaker: Order. I must plead with the House to come to order. The right hon. Gentleman is addressing the House and there should be no private conversations. [Interruption.] Order. That goes for Mr. Bercow as well.
  Mr. Portillo: We have heard promises, promises, promises from the Government. For three years they have been a promising Government, but those promises look pretty pale and washed out today.
  It turns out that the Chancellor is not so much clever as too clever by half. The press and the public now do not believe a word of his Budget. Even the BBC chose to advertise their Budget coverage by saying that it would be
  an analysis of everything the Chancellor won't be saying.
  The Sun newspaper said that it was a Budget that would need the seven-day test before judgment could be passed. It has indeed been a seven-day wonder. Today, on the seventh day, let us review where we have got to: day 1, the CBI said that this was not the Budget that they had been hoping for; day 2, a double taxation measure in the Budget's small print was exposed as costing British business billions of pounds; day 3, more small print was exposed, with a massive hike in company car tax; day 4,

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  contrary to what the Chancellor said in his Budget speech, figures showed that the net increase in the Budget was £1.4 billion of extra taxation; day 5, we had the revelation that different rates of inflation had been used for computing allowances that benefit people from those used for duties that people have to pay; day 6, the Health Secretary admitted that the 10,000 new nurses announced by the Chancellor were not 10,000 new nurses at all, but a reannouncement; day 7, which is today, new figures have shown that the average burden of taxation on a typical family is £670 extra a year under Labour. The Budget has unravelled. It is not so much a seven-day wonder as another demonstration that a week is a long time in politics.
  Mr. Beard: When my right hon. Friend the Chancellor has proposed increases in spending on the health service in previous Budgets, the Conservatives have denounced it as reckless. Now the Government propose to spend even more, the Conservatives endorse that spending.
  Mr. Portillo: Another Member who cannot get his facts right. We never denounced the increases in health spending.
  I am coming to the issue of health. The Prime Minister came here on Wednesday and delivered a mass of gobbledegook about the health service. It was the most embarrassing performance from a Prime Minister in the House of Commons in living memory. It was extraordinary. The Prime Minister who had announced enormous increases in health service spending gave us a demonstration of how to snatch defeat from the jaws of victory.
  Mr. Ivan Henderson rose—
  Mr. Portillo: The hon. Gentleman might learn something if he keeps his seat for a moment.
  We welcome the extra money for health and education and we are committed to good public services, but we want good value for money.
  We have been promised so much by the Government. We were promised huge results from the first comprehensive spending review, and it turned out to be a comprehensive spending failure. Now, at least if the national health service turns out not to improve at all, we will know who is to blame. The Prime Minister has taken responsibility personally for this. The Prime Minister is running things—just as he did with welfare reform, and he ran that straight into the sands.
  I re-emphasise that we support the extra money on health and education. [HON. MEMBERS: "Oh!"] Oh yes. However, we do not support all the Government's record on public spending. We do not support the tens of millions of pounds that the Government are spending on scrapping the pound sterling when the moderate majority of people in this country want to keep the pound. We do not support the hundreds of millions of pounds incurred by the Government by making Britain into a soft touch for asylum seekers. We do not support the £1,000 million pounds extra that the Government are spending on running Whitehall Departments.
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  We do not support a £32 billion increase in social security spending, which comes from a party which said that it would not have to increase taxes because it would take all the money from reducing welfare bills.
  Several hon. Members rose—
  Mr. Deputy Speaker: Order. The right hon. Gentleman does not want to give way. A lot of noise is coming from those on the Government Benches. I do not want to hear them again.
  Mr. Portillo: This was the Chancellor's fourth Budget. Over the previous three Budgets, the Chancellor has built for himself a reputation for slipperiness and for obfuscation. [Interruption.]
  Mr. Deputy Speaker: Order.
  Mr. Portillo: The Chancellor has become famous for his fine delivery on the day and his non-delivery after that.
  For those who were on the look-out in the Budget for more tricks than treats, it entirely lives up to those perverted expectations. The Chancellor talked of prudence, but he has flouted his own rules for developing responsible public spending plans. He has committed Britain to returning to borrowing even if the economy continues to grow without interruption. He has talked of helping pensioners, but he has abolished their married couple's allowance and the additional age allowance that applied to older people.
  The Chancellor claimed to be helping single parents, but he abolished the personal allowance on which single parents rely. He boasted of helping families, but he has swept away their tax allowances and he has loaded duties on to families' essential weekly spending. He posed as the friend of business while managing to increase problems for the old economy, and he has piled on extra taxes to make sure that we keep the new economy at bay. His slogan was "Prudent for a Purpose", but he has cut the ground from all those people who have been prudent with the purpose of providing for their future.
  After so much twisting and spinning, the public are awake to the Chancellor's tricks. After so many launches and relaunches for the NHS, nobody expects anything now beyond political grandstanding and jobs for the boys. This is indeed a Chancellor who taxes more and delivers less.
  9.39 pm
  The Chief Secretary to the Treasury (Mr. Andrew Smith): Before I start, Mr. Deputy Speaker, I have to draw the attention of the House to the fact that there have been two minor amendments to the original Budget resolutions as they now appear on the Order Paper. These are to take account of representations to widen the scope of the provisions affected.
  First, on resolution 28—concerning the gift of shares to charities—the original proposal, announced in the pre-Budget report, was to allow only gifts of listed shares to charities. Following representations on the proposal, an extension to a wider range of shares and securities was announced in the Budget, and that is what is in the Order Paper.

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  The provision on the tax treatment of acquisition, disposal or revaluation of certain rights in resolution 41 has been widened to allow tax relief for all indefeasible rights to use a telecommunications cable system and not only the international submarine ones mentioned in the original wording. Both changes are designed to widen the scope of the new tax reliefs, and should be welcomed by all hon. Members.
  Unlike the shadow Chancellor, it will not take me 13 minutes to get to the health service. Nothing could have been clearer from the right hon. Gentleman's speech than that the Tories are the party of privatisation of the health service.
  What is the Tory reaction to the Budget? For most of the week, the Tories put their faith in Mr. Wyman of PricewaterhouseCoopers. Mr. Wyman claims that billions of pounds—£8 billion to £10 billion, even—will be lost if we impose measures to tackle tax avoidance. The Opposition jumped on the tax avoidance bandwagon, claiming that Mr. Wyman right, yet when he came to the Treasury, he could not produce the name of one company, one piece of analysis or one figure to make his claims stand up. He promised to bring us the name of a company affected, but could not. Then we find that Mr. Wyman is no ordinary adviser: he was the former tax adviser to Neil Hamilton when he was the Minister for Corporate Affairs. That is the shadow Chancellor and the Conservative party: the tax avoider's friend.
  In opening the debate, my right hon. Friend the Secretary of State for Social Security set out eloquently how we are building on the platform of stability that we have been creating over the past three years. We are able to meet our rules of fiscal prudence while at the same time releasing significant new resources for the nation's priorities: tackling child poverty, providing extra support for pensioners and encouraging work and enterprise. That was all widely welcomed by my hon. Friends.
  We had an extraordinary reply from the hon. Member for Havant (Mr. Willetts), who said that he could understand a totally means-tested system or a totally universal system; what he plainly could not understand was a pragmatic mix of universal entitlement and targeted help to ensure that we help all pensioners while getting the most help to the poorest. Let us remember that by 2001 we will be spending an extra £6.5 billion on pensioners, and as a direct result the average pensioner household will get an extra £400 a year and the 1 million poorest pensioners will be £1,000 a year better off.
  Of course there is more to do, as we have said, but there could not be a clearer contrast between Labour in government, tackling pensioner poverty, and the Tories in government, who allowed pensioner poverty to grow to obscene levels.
  Now the shadow Social Security Secretary threatens to take away the winter fuel payment. When directly challenged by my right hon. Friend, he refused to say that the Tories would keep it. There could be no clearer illustration of the fact that the Tories cannot square their so-called tax guarantee with civilised levels of public provision. We heard nothing whatever from the shadow Social Security Secretary or from other Conservative Members about what the Tories would do—two brains, no policy seemed to be the message.
  My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) welcomed the Budget's health and education commitments in particular, and asked a specific question
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  about the transfer of land for social housing that his local authority, Tameside, was completing ahead of Royal Assent to the Finance Bill. He sought the opportunity to present Tameside's case for exemption from stamp duty. I assure my hon. Friend that I shall look into the matter, and I will be pleased to give the council the opportunity to make that case.
  The hon. Member for Northavon (Mr. Webb) asked why we had not put the extra money for the winter fuel allowance on the basic pension. The answer is very simple, and it was given by my hon. Friend the Member for South Thanet (Dr. Ladyman). It is that to do so would have no benefits whatever for the poorest pensioners. What is more, the course suggested by the hon. Member for Northavon would be subject to tax. It seems that the Liberal Democrats are as usual engaged in striking postures way beyond anything that they promised in their election manifesto. In reality, they do nothing to help those in greatest need.
  I welcome the positive things about the Budget that my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) said. I thank him for his recognition of the good things that we are doing to improve the health service and schools in his constituency. This was a Budget for the whole country, and it is right for the Government to take positive action to ensure that the benefits are shared across all regions and nations of the United Kingdom.
  In my hon. Friend's region alone, the new regional venture capital funds will help create £210 million in funding for investment. The north-west employment zone will provide tailored help for 6,500 long-term unemployed people. The three action teams for the region, each receiving funding of £1.5 million, will help match the unemployed to vacancies in a further three areas in the north-west.
  The new deal has already helped 57,000 young people in the region where the constituency of my hon. Friend the Member for Walton lies. Moreover, 170,000 families in the region will benefit from the working families tax credit, and 200,000 families benefit from the minimum wage. I hope that the whole House will welcome the actions taken in a Budget that is a Budget for the whole country.
  My hon. Friend the Member for Walton also asked about the structural funds and match funding. The right hon. Member for Caernarfon (Mr. Wigley) made the same inquiries in relation to objective 1 funding. I assure the House that those matters are being considered as part of the spending review. We fully appreciate their importance for regional regeneration, and we are committed to making them a success. However, we must not forget that we only got objective 1 status—for west Wales, the valleys and all the other regions—because people elected a Labour Government.
  The hon. Member for Louth and Horncastle (Sir P. Tapsell) questioned the overall fiscal stance of the Budget. Not only does the Budget represent fiscal tightening as compared to the plans announced last year—to the tune of 0.3 per cent. of gross domestic product next year, and 0.2 per cent. of GDP the year after—but it keeps the public finances sound. This year's projected current

  123
  surplus is £17 billion, while the projected figures for subsequent years are £14 billion, £16 billion, £13 billion, £8 billion, and £8 billion.
  Sir Peter Tapsell: How is it possible to argue that this Budget is tightening the fiscal position and, simultaneously, to announce huge extra expenditure?
  Mr. Smith: The answer is that we cut the debt interest payments that were costing this country £4 billion a year under the Conservative Government' s incompetent and profligate management. Conservative Members might like to contrast what we are doing with the public finances in surplus, with the debt of £50 billion that the previous Conservative Government ran up. That allowed debt as a share of national income to rise to 44 per cent. of GDP. We have cut it to 37 per cent., and the Red Book shows that it will fall further, to one third.
  I turn to the contribution from my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), whom I too am very pleased to see back in the Chamber in such good health. My right hon. Friend praised the Budget's provisions for the national health service, as did all Labour Members and a number of Opposition Members.
  My right hon. Friend also raised the needs of manufacturing, as did several other hon. Members. Our measures on capital allowances, on capital gains tax and on research and development credit; the £1 billion venture capital fund; and the small business and clusters measures that were welcomed by my hon. Friend the Member for Coventry, South (Mr. Cunningham) will all help manufacturing. However, the most important thing that we can do is to continue to deliver the essential foundation for lasting success and macro-economic stability so that manufacturers—like other businesses—can plan ahead against a backdrop of low and stable inflation, sound public finances and steady growth. That is the way to continue prosperity in this country.
  I now turn to the comments of the shadow Chancellor. One might have thought that, in his first speech to the House as shadow Chancellor, we would have heard from him a vision of how the economy, or Britain, would have fared under a Conservative Government—perhaps that is optimistic, but some people would have expected it. Instead, we heard the usual mix of contradiction, confusion and extremism that is the current Tory party.
  We heard a lecture on honesty from the man who drove through the 22 Tory tax increases that broke all their promises. We heard demands for a recognition of marriage in the tax system from the man who, when in office, made the deepest cuts in the married couples allowance. We heard a homily on low taxation from the man who, as Chief Secretary, increased the tax burden by the largest amount in history.
  The truth is that the right hon. Gentleman and his hon. Friends would return us to the dismal days of the previous Tory Government, in which he played a part. All would be driven by their only economic policy: the irresponsible, incredible, uncosted and unfair tax cuts for the few to which they are committed through their so-called tax guarantee.
  By contrast, we are building economic stability, with 800,000 more people in work, and take-home pay up by 10 per cent. during this Parliament. Their irresponsible
  124
  guarantee to cut taxes irrespective of economic circumstances would, as the shadow Chancellor must know, risk driving up the deficit and returning us to the Tory boom and bust of the Major years. That was when 1 million businesses went under and tens of thousands of families were in negative equity, or losing their homes. By contrast, we are cutting taxes for hard-working families; we are introducing the 10p rate; the 22p basic rate; the working families tax credit, which the Tories would scrap; and the children's tax credit.
  The Tories' tax guarantee would mean tax cuts only for the privileged few. We know that from the shadow Chancellor's own words in his list of commitments. This month, he confirmed the Tory policy of transferable tax allowances. That would cost about—[Interruption.] Does the right hon. Gentleman deny that is his policy? It seems that he does. I shall go on to the next commitment.
  The right hon. Gentleman said that he wants tax relief for private medical insurance at a cost of at least—[Interruption.] Does he deny that that is his policy? I am tempted to ask him which of our policies he disagrees with, but I shall carry on with my list.
  The right hon. Gentleman also said that he supported the abolition of capital gains tax. Does he still do so? [Interruption.] The Tory document of last October offers top tax rate cuts—[Interruption.]
  Mr. Portillo: As the Chief Secretary has made three outrageous claims, will he please produce the sources for all of them?
  Mr. Smith: If the right hon. Gentleman is now saying that he does not believe what he was previously on record as saying, we accept that he has done a U-turn and has changed his mind.
  Mr. Portillo: Why will the right hon. Gentleman not give us the sources?
  Mr. Smith: I cited the Tory document of October 1999 offering top tax rate cuts—£600 million for every 1p off.
  Mr. Portillo: No, that will not do. The right hon. Gentleman quoted me. Give me the sources.
  Mr. Smith: They are the 1997 manifesto, the right hon. Gentleman's personal manifesto the year before last and the Tory document of last October. I shall send him chapter and verse on every one of these claims. He cannot seek so easily to resile from the pledges that he has made.
  The right hon. Gentleman and the Conservative party are committed to the few and not the many in this country. The Opposition's tax commitments would deprive the national health service of the resources that the Government have committed over the next four years. The Tory commitments mean that they cannot match the four years of funding that we have announced. The right hon. Gentleman—I suppose that he will challenge this—said:
  Gordon Brown can either reduce taxes or he can increase public spending. What I would recommend is that he use that money to reduce taxes.
  He is not challenging that one. He is making it crystal clear that he cannot fund the spending increases in health, education and other public services that the Government are bringing forward.

  125
  It is clear what the Opposition's policies would mean for the NHS. In place of a publicly funded NHS, they would have a privatised system where the care received would depend on the amount of money that the individual pays. Whereas Labour is investing to build a modern NHS, the Tories would reduce the NHS to a second-rate safety net.
  Only last week the shadow Chancellor said:
  I do believe that in the long term you've got to create some new sources of finance, you know, may be companies can help with insurance schemes.
  Mr. Portillo: What is the source?
  Mr. Smith: The right hon. Gentleman asks for the source, and it is his interview on 19 March during GMTV's "The Sunday Programme".
  It is as a result of our sound stewardship of the economy and public finances that we are securing rising living standards, reduced borrowing, lower taxes for hard-working families, extra support for pensioners and substantial investment in health, education and other public services. The increasingly clear choice before the British people is between a Government who are delivering a strong economy and a strong society and an Opposition who are wedded to irresponsible pledges and plans which simply do not add up. In contrast, our priority has been to cut taxes for hard-working families and ensure strong public services for the many, whereas Conservative Members peddle reckless tax cuts for the few.
  It is a choice between a Government who keep our promises and an Opposition who could not keep theirs. In this debate Conservative Members have confirmed themselves as the incoherent in pursuit of the undeliverable. Our Budget is indeed prudence for a purpose. It is a Budget for the whole country. It is the Budget that people voted for when they voted Labour and a Budget of which we can all be proud. I commend it to the House.
  Question put and agreed to.
  Resolved,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  (a) for zero-rating or exempting a supply, acquisition or importation;

  (b) for refunding an amount of tax;

  (c) for varying any rate at which that tax is at any time chargeable; or

  (d) for any relief, other than a relief which—

  (i) so far as it is applicable to goods, applies to goods of every description, and

  (ii) so far as it is applicable to services, applies to services of every description.

  MADAM SPEAKER then, pursuant to paragraph (3) of Standing Order No. 51 (Ways and Means Motions), put forthwith the Questions necessary to dispose of the further motions.

  2. BEER (RATE OF DUTY)
  Motion made, and Question put,
  That—

  (1) In section 36(1) of the Alcoholic Liquor Duties Act 1979 for "£11.50" there shall be substituted "£11.89".

  (2) This Resolution shall have effect on and after 1st April 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 370, Noes 142.

  Division No. 120]

  [10.1 pm

  AYES

  Abbott, Ms Diane

  Casale, Roger

  Ainger, Nick

  Cawsey, Ian

  Ainsworth, Robert (Cov'try NE)

  Chaytor, David

  Alexander, Douglas

  Chidgey, David

  Allan, Richard

  Clapham, Michael

  Anderson, Donald (Swansea E)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Anderson, Janet (Rossendale)

  Ashdown, Rt Hon Paddy

  Clark, Paul (Gillingham)

  Ashton, Joe

  Clarke, Charles (Norwich S)

  Atherton, Ms Candy

  Clarke, Eric (Midlothian)

  Atkins, Charlotte

  Clarke, Rt Hon Tom (Coatbridge)

  Austin, John

  Clarke, Tony (Northampton S)

  Baker, Norman

  Clelland, David

  Ballard, Jackie

  Clwyd, Ann

  Banks, Tony

  Coaker, Vernon

  Barnes, Harry

  Coffey, Ms Ann

  Barron, Kevin

  Cohen, Harry

  Battle, John

  Coleman, Iain

  Bayley, Hugh

  Colman, Tony

  Beard, Nigel

  Cook, Rt Hon Robin (Livingston)

  Beckett, Rt Hon Mrs Margaret

  Cooper, Yvette

  Begg, Miss Anne

  Corbett, Robin

  Beith, Rt Hon A J

  Corbyn, Jeremy

  Bell, Stuart (Middlesbrough)

  Corston, Jean

  Benn, Hilary (Leeds C)

  Cotter, Brian

  Benn, Rt Hon Tony (Chesterfield)

  Cousins, Jim

  Bennett, Andrew F

  Cranston, Ross

  Benton, Joe

  Crausby, David

  Berry, Roger

  Cryer, Mrs Ann (Keighley)

  Betts, Clive

  Cryer, John (Hornchurch)

  Blackman, Liz

  Cunningham, Rt Hon Dr Jack (Copeland)

  Blair, Rt Hon Tony

  Blears, Ms Hazel

  Cunningham, Jim (Cov'try S)

  Blizzard, Bob

  Cunningham, Ms Roseanna (Perth)

  Blunkett, Rt Hon David

  Boateng, Rt Hon Paul

  Curtis-Thomas, Mrs Claire

  Borrow, David

  Dalyell, Tam

  Bradley, Keith (Withington)

  Darling, Rt Hon Alistair

  Bradley, Peter (The Wrekin)

  Darvill, Keith

  Bradshaw, Ben

  Davey, Edward (Kingston)

  Brake, Tom

  Davies, Rt Hon Denzil (Llanelli)

  Brand, Dr Peter

  Davies, Geraint (Croydon C)

  Breed, Colin

  Dean, Mrs Janet

  Brinton, Mrs Helen

  Denham, John

  Brown, Rt Hon Gordon (Dunfermline E)

  Dismore, Andrew

  Dobbin, Jim

  Brown, Rt Hon Nick (Newcastle E)

  Donohoe, Brian H

  Brown, Russell (Dumfries)

  Doran, Frank

  Browne, Desmond

  Dowd, Jim

  Bruce, Malcolm (Gordon)

  Drew, David

  Buck, Ms Karen

  Dunwoody, Mrs Gwyneth

  Burden, Richard

  Eagle, Angela (Wallasey)

  Burgon, Colin

  Eagle, Maria (L'pool Garston)

  Burnett, John

  Edwards, Huw

  Burstow, Paul

  Efford, Clive

  Butler, Mrs Christine

  Ellman, Mrs Louise

  Byers, Rt Hon Stephen

  Ennis, Jeff

  Cable, Dr Vincent

  Etherington, Bill

  Campbell, Mrs Anne (C'bridge)

  Ewing, Mrs Margaret

  Campbell, Rt Hon Menzies (NE Fife)

  Field, Rt Hon Frank

  Fisher, Mark

  Campbell-Savours, Dale

  Fitzsimons, Lorna

  Cann, Jamie

  Flint, Caroline

  127

  Flynn, Paul

  King, Ms Oona (Bethnal Green)

  Follett, Barbara

  Kirkwood, Archy

  Foster, Rt Hon Derek

  Ladyman, Dr Stephen

  Foster, Don (Bath)

  Laxton, Bob

  Foster, Michael Jabez (Hastings)

  Lepper, David

  Foster, Michael J (Worcester)

  Leslie, Christopher

  Fyfe, Maria

  Levitt, Tom

  Galloway, George

  Lewis, Ivan (Bury S)

  Gapes, Mike

  Lewis, Terry (Worsley)

  Gardiner, Barry

  Liddell, Rt Hon Mrs Helen

  George, Andrew (St Ives)

  Linton, Martin

  George, Bruce (Walsall S)

  Livsey, Richard

  Gerrard, Neil

  Lloyd, Tony (Manchester C)

  Gibson, Dr Ian

  Llwyd, Elfyn

  Gilroy, Mrs Linda

  Lock, David

  Godman, Dr Norman A

  Love, Andrew

  Godsiff, Roger

  McAvoy, Thomas

  Goggins, Paul

  McCabe, Steve

  Gordon, Mrs Eileen

  McCafferty, Ms Chris

  Gorrie, Donald

  McCartney, Rt Hon Ian (Makerfield)

  Griffiths, Jane (Reading E)

  Griffiths, Nigel (Edinburgh S)

  McDonagh, Siobhain

  Grocott, Bruce

  Macdonald, Calum

  Grogan, John

  McDonnell, John

  Gunnell, John

  McIsaac, Shona

  Hall, Mike (Weaver Vale)

  McKenna, Mrs Rosemary

  Hall, Patrick (Bedford)

  Mackinlay, Andrew

  Hancock, Mike

  Maclennan, Rt Hon Robert

  Hanson, David

  McNamara, Kevin

  Harman, Rt Hon Ms Harriet

  McNulty, Tony

  Harris, Dr Evan

  MacShane, Denis

  Heal, Mrs Sylvia

  Mactaggart, Fiona

  Healey, John

  McWalter, Tony

  Heath, David (Somerton & Frome)

  Mahon, Mrs Alice

  Henderson, Doug (Newcastle N)

  Marsden, Gordon (Blackpool S)

  Henderson, Ivan (Harwich)

  Marshall, David (Shettleston)

  Heppell, John

  Marshall, Jim (Leicester S)

  Hesford, Stephen

  Martlew, Eric

  Hewitt, Ms Patricia

  Meacher, Rt Hon Michael

  Hill, Keith

  Meale, Alan

  Hinchliffe, David

  Merron, Gillian

  Hodge, Ms Margaret

  Michael, Rt Hon Alun

  Hoey, Kate

  Michie, Bill (Shef'ld Heeley)

  Home Robertson, John

  Michie, Mrs Ray (Argyll & Bute)

  Hood, Jimmy

  Milburn, Rt Hon Alan

  Hoon, Rt Hon Geoffrey

  Miller, Andrew

  Hope, Phil

  Mitchell, Austin

  Hopkins, Kelvin

  Moffatt, Laura

  Howarth, Alan (Newport E)

  Moonie, Dr Lewis

  Howells, Dr Kim

  Moore, Michael

  Hoyle, Lindsay

  Morgan, Alasdair (Galloway)

  Hughes, Ms Beverley (Stretford)

  Morley, Elliot

  Hughes, Kevin (Doncaster N)

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Hughes, Simon (Southwark N)

  Humble, Mrs Joan

  Morris, Rt Hon Sir John (Aberavon)

  Hurst, Alan

  Mountford, Kali

  Hutton, John

  Mullin, Chris

  Iddon, Dr Brian

  Naysmith, Dr Doug

  Illsley, Eric

  Norris, Dan

  Jackson, Ms Glenda (Hampstead)

  Oaten, Mark

  Jackson, Helen (Hillsborough)

  O'Brien, Mike (N Warks)

  Jenkins, Brian

  O'Hara, Eddie

  Johnson, Alan (Hull W & Hessle)

  O'Neill, Martin

  Johnson, Miss Melanie (Welwyn Hatfield)

  Palmer, Dr Nick

  Pearson, Ian

  Jones, Rt Hon Barry (Alyn)

  Pendry, Tom

  Jones, Helen (Warrington N)

  Perham, Ms Linda

  Jones, Ieuan Wyn (Ynys Môn)

  Pickthall, Colin

  Jones, Ms Jenny (Wolverh'ton SW)

  Plaskitt, James

  Pollard, Kerry

  Jones, Dr Lynne (Selly Oak)

  Pond, Chris

  Jowell, Rt Hon Ms Tessa

  Pope, Greg

  Keeble, Ms Sally

  Powell, Sir Raymond

  Keetch, Paul

  Prentice, Ms Bridget (Lewisham E)

  Kemp, Fraser

  Prentice, Gordon (Pendle)

  Kennedy, Jane (Wavertree)

  Prescott, Rt Hon John

  Khabra, Piara S

  Primarolo, Dawn

  Kidney, David

  Prosser, Gwyn

  Kilfoyle, Peter

  Purchase, Ken

  King, Andy (Rugby & Kenilworth)

  Quinn, Lawrie

  128

  Radice, Rt Hon Giles

  Stunell, Andrew

  Rammell, Bill

  Sutcliffe, Gerry

  Raynsford, Nick

  Swinney, John

  Reed, Andrew (Loughborough)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Reid, Rt Hon Dr John (Hamilton N)

  Rendel, David

  Taylor, Ms Dari (Stockton S)

  Robinson, Geoffrey (Cov'try NW)

  Taylor, David (NW Leics)

  Rogers, Allan

  Taylor, Matthew (Truro)

  Rooker, Rt Hon Jeff

  Temple-Morris, Peter

  Rooney, Terry

  Thomas, Gareth (Clwyd W)

  Ross, Ernie (Dundee W)

  Thomas, Gareth R (Harrow W)

  Rowlands, Ted

  Thomas, Simon (Ceredigion)

  Roy, Frank

  Timms, Stephen

  Ruddock, Joan

  Tipping, Paddy

  Russell, Bob (Colchester)

  Todd, Mark

  Ryan, Ms Joan

  Tonge, Dr Jenny

  Salmond, Alex

  Touhig, Don

  Salter, Martin

  Trickett, Jon

  Sanders, Adrian

  Turner, Dennis (Wolverh'ton SE)

  Sarwar, Mohammad

  Turner, Dr Desmond (Kemptown)

  Savidge, Malcolm

  Turner, Dr George (NW Norfolk)

  Sawford, Phil

  Turner, Neil (Wigan)

  Sedgemore, Brian

  Twigg, Derek (Halton)

  Sheerman, Barry

  Tyler, Paul

  Sheldon, Rt Hon Robert

  Tynan, Bill

  Simpson, Alan (Nottingham S)

  Vis, Dr Rudi

  Singh, Marsha

  Wallace, James

  Skinner, Dennis

  Walley, Ms Joan

  Smith, Rt Hon Andrew (Oxford E)

  Watts, David

  Smith, Angela (Basildon)

  Webb, Steve

  Smith, Rt Hon Chris (Islington S)

  White, Brian

  Smith, Miss Geraldine w(Morecambe & Lunesdale)

  Whitehead, Dr Alan

  Wicks, Malcolm

  Smith, John (Glamorgan)

  Wigley, Rt Hon Dafydd

  Smith, Llew (Blaenau Gwent)

  Williams, Rt Hon Alan (Swansea W)

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

  Snape, Peter

  Williams, Alan W (E Carmarthen)

  Soley, Clive

  Williams, Mrs Betty (Conwy)

  Southworth, Ms Helen

  Willis, Phil

  Spellar, John

  Winnick, David

  Starkey, Dr Phyllis

  Winterton, Ms Rosie (Doncaster C)

  Steinberg, Gerry

  Wood, Mike

  Stevenson, George

  Woodward, Shaun

  Stewart, David (Inverness E)

  Worthington, Tony

  Stewart, Ian (Eccles)

  Wray, James

  Stinchcombe, Paul

  Wright, Anthony D (Gt Yarmouth)

  Stoate, Dr Howard

  Strang, Rt Hon Dr Gavin

  Tellers for the Ayes:

  Stringer, Graham

  Mr. Graham Allen and

  Stuart, Ms Gisela

  Mr. David Jamieson.

  NOES

  Amess, David

  Curry, Rt Hon David

  Ancram, Rt Hon Michael

  Davies, Quentin (Grantham)

  Arbuthnot, Rt Hon James

  Davis, Rt Hon David (Haltemprice)

  Atkinson, David (Bour'mth E)

  Day, Stephen

  Atkinson, Peter (Hexham)

  Donaldson, Jeffrey

  Baldry, Tony

  Dorrell, Rt Hon Stephen

  Beggs, Roy

  Duncan, Alan

  Bercow, John

  Duncan Smith, Iain

  Beresford, Sir Paul

  Evans, Nigel

  Blunt, Crispin

  Faber, David

  Body, Sir Richard

  Fabricant, Michael

  Boswell, Tim

  Fallon, Michael

  Bottomley, Peter (Worthing W)

  Flight, Howard

  Bottomley, Rt Hon Mrs Virginia

  Forth, Rt Hon Eric

  Brady, Graham

  Fox, Dr Liam

  Brazier, Julian

  Gale, Roger

  Browning, Mrs Angela

  Garnier, Edward

  Burns, Simon

  Gibb, Nick

  Butterfill, John

  Gill, Christopher

  Cash, William

  Gillan, Mrs Cheryl

  Chapman, Sir Sydney (Chipping Barnet)

  Gray, James

  Green, Damian

  Chope, Christopher

  Greenway, John

  Clark, Dr Michael (Rayleigh)

  Grieve, Dominic

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Hague, Rt Hon William

  Hamilton, Rt Hon Sir Archie

  Collins, Tim

  Hammond, Philip

  Cran, James

  Hawkins, Nick

  129

  Hayes, John

  Randall, John

  Heald, Oliver

  Redwood, Rt Hon John

  Heath, Rt Hon Sir Edward

  Robathan, Andrew

  Heathcoat-Amory, Rt Hon David

  Robertson, Laurence

  Hogg, Rt Hon Douglas

  Roe, Mrs Marion (Broxbourne)

  Horam, John

  Ross, William (E Lond'y)

  Howarth, Gerald (Aldershot)

  Ruffley, David

  Hunter, Andrew

  St Aubyn, Nick

  Jack, Rt Hon Michael

  Sayeed, Jonathan

  Jackson, Robert (Wantage)

  Shephard, Rt Hon Mrs Gillian

  Jenkin, Bernard

  Shepherd, Richard

  Key, Robert

  Simpson, Keith (Mid-Norfolk)

  King, Rt Hon Tom (Bridgwater)

  Smyth, Rev Martin (Belfast S)

  Laing, Mrs Eleanor

  Soames, Nicholas

  Lait, Mrs Jacqui

  Spelman, Mrs Caroline

  Lansley, Andrew

  Spicer, Sir Michael

  Leigh, Edward

  Spring, Richard

  Letwin, Oliver

  Steen, Anthony

  Lewis, Dr Julian (New Forest E)

  Streeter, Gary

  Lidington, David

  Swayne, Desmond

  Lilley, Rt Hon Peter

  Syms, Robert

  Lloyd, Rt Hon Sir Peter (Fareham)

  Tapsell, Sir Peter

  Loughton, Tim

  Taylor, Ian (Esher & Walton)

  MacGregor, Rt Hon John

  Taylor, John M (Solihull)

  McIntosh, Miss Anne

  Thompson, William

  Maclean, Rt Hon David

  Townend, John

  McLoughlin, Patrick

  Tredinnick, David

  Madel, Sir David

  Tyrie, Andrew

  Major, Rt Hon John

  Walter, Robert

  Malins, Humfrey

  Wardle, Charles

  Maples, John

  Waterson, Nigel

  Mates, Michael

  Wells, Bowen

  Maude, Rt Hon Francis

  Whitney, Sir Raymond

  Mawhinney, Rt Hon Sir Brian

  Whittingdale, John

  May, Mrs Theresa

  Widdecombe, Rt Hon Miss Ann

  Moss, Malcolm

  Wilkinson, John

  Nicholls, Patrick

  Willetts, David

  Norman, Archie

  Wilshire, David

  O'Brien, Stephen (Eddisbury)

  Winterton, Mrs Ann (Congleton)

  Ottaway, Richard

  Winterton, Nicholas (Macclesfield)

  Page, Richard

  Yeo, Tim

  Paice, James

  Young, Rt Hon Sir George

  Paterson, Owen

  Tellers for the Noes:

  Pickles, Eric

  Mr. Geoffrey Clifton-Brown

  Portillo, Rt Hon Michael

  and

  Prior, David

  Mr. Peter Luff.

  PART I

  WINE OR MADE-WINE OF A STRENGTH NOT EXCEEDING 22 PER CENT.

  Description of wine or made-wine

  Rates of duty per hectolitre

  £

  Wine or made-wine of a strength not exceeding 4 per cent.

  47.58

  Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5.5 per cent.

  65.42

  Wine or made-wine of a strength exceeding 5.5 per cent. but not exceeding 15 per cent. and not being sparkling

  154.37

  Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent. but less than 8.5 per cent.

  166.70

  Sparkling wine or sparkling made-wine of a strength of 8.5 per cent. or of a strength exceeding 8.5 per cent. but not exceeding 15 per cent.

  220.54

  Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent.

  205.82

  (2) This Resolution shall have effect on and after 1st April 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  Question accordingly agreed to.

  3. CIDER (RATES OF DUTY)
  Resolved,
  That—

  (1) In section 62(1A) of the Alcoholic Liquor Duties Act 1979—

  (a) in paragraph (a) for "£161.20" there shall be substituted "£166.70";

  (b) in paragraph (b) for "£37.92" there shall be substituted "£39.21"; and

  (c) in paragraph (c) for "£25.27" there shall be substituted "£26.13".

  (2) This Resolution shall have effect on and after 1st April 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  4. WINE AND MADE-WINE (RATES OF DUTY)
  Resolved,
  That—
  (1) For Part I of the Table of rates of duty in Schedule 1 to the Alcoholic Liquor Duties Act 1979 there shall be substituted—

  5. HYDROCARBON OIL (RATES OF DUTY AND REBATE)
  Motion made, and Question put,
  That—

  (1) In section 6(1A) of the Hydrocarbon Oil Duties Act 1979—

  131

  (a) in paragraph (a), for "£0.5288" there shall be substituted "£0.5468";

  (b) in paragraph (b), for "£0.4721" there shall be substituted "£0.4882"; and

  (c) in paragraph (c), for "£0.5021" there shall be substituted "£0.5182".

  (2) In section 11(1) of that Act—

  (a) in paragraph (a), for "£0.0265" there shall be substituted "£0.0274"; and

  (b) in each of paragraphs (b) and (ba), for "£0.0303" there shall be substituted "£0.0313".

  (3) In section 13A(1A) of that Act—

  (a) in paragraph (a), for "£0.0367" there shall be substituted "£0.0379"; and

  (b) in paragraph (b), for "£0.0567" there shall be substituted "£0.0586".

  (4) In section 14(1) of that Act, for "£0.0265" there shall be substituted "£0.0274".

  (5) This Resolution shall have effect as from 6 o'clock in the evening of 21st March 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 321, Noes 192.

  Division No. 121]

  [10.15 pm

  AYES

  Abbott, Ms Diane

  Butler, Mrs Christine

  Ainger, Nick

  Byers, Rt Hon Stephen

  Ainsworth, Robert (Cov'try NE)

  Campbell, Mrs Anne (C'bridge)

  Alexander, Douglas

  Campbell-Savours, Dale

  Anderson, Donald (Swansea E)

  Cann, Jamie

  Anderson, Janet (Rossendale)

  Casale, Roger

  Ashton, Joe

  Cawsey, Ian

  Atherton, Ms Candy

  Chaytor, David

  Atkins, Charlotte

  Clapham, Michael

  Austin, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  Banks, Tony

  Barnes, Harry

  Clark, Paul (Gillingham)

  Barron, Kevin

  Clarke, Charles (Norwich S)

  Battle, John

  Clarke, Eric (Midlothian)

  Bayley, Hugh

  Clarke, Rt Hon Tom (Coatbridge)

  Beard, Nigel

  Clarke, Tony (Northampton S)

  Beckett, Rt Hon Mrs Margaret

  Clelland, David

  Begg, Miss Anne

  Clwyd, Ann

  Bell, Stuart (Middlesbrough)

  Coaker, Vernon

  Benn, Hilary (Leeds C)

  Coffey, Ms Ann

  Benn, Rt Hon Tony (Chesterfield)

  Cohen, Harry

  Bennett, Andrew F

  Coleman, Iain

  Benton, Joe

  Colman, Tony

  Berry, Roger

  Cook, Rt Hon Robin (Livingston)

  Betts, Clive

  Cooper, Yvette

  Blackman, Liz

  Corbett, Robin

  Blair, Rt Hon Tony

  Corbyn, Jeremy

  Blears, Ms Hazel

  Corston, Jean

  Blizzard, Bob

  Cousins, Jim

  Blunkett, Rt Hon David

  Cranston, Ross

  Boateng, Rt Hon Paul

  Crausby, David

  Borrow, David

  Cryer, Mrs Ann (Keighley)

  Bradley, Keith (Withington)

  Cryer, John (Hornchurch)

  Bradley, Peter (The Wrekin)

  Cunningham, Rt Hon Dr Jack (Copeland)

  Bradshaw, Ben

  Brinton, Mrs Helen

  Cunningham, Jim (Cov'try S)

  Brown, Rt Hon Gordon (Dunfermline E)

  Curtis-Thomas, Mrs Claire

  Dalyell, Tam

  Brown, Rt Hon Nick (Newcastle E)

  Darling, Rt Hon Alistair

  Brown, Russell (Dumfries)

  Darvill, Keith

  Browne, Desmond

  Davies, Rt Hon Denzil (Llanelli)

  Buck, Ms Karen

  Davies, Geraint (Croydon C)

  Burden, Richard

  Dean, Mrs Janet

  Burgon, Colin

  Denham, John

  132

  Dismore, Andrew

  Jones, Rt Hon Barry (Alyn)

  Dobbin, Jim

  Jones, Helen (Warrington N)

  Donohoe, Brian H

  Jones, Ms Jenny (Wolverh'ton SW)

  Doran, Frank

  Dowd, Jim

  Jones, Dr Lynne (Selly Oak)

  Drew, David

  Jowell, Rt Hon Ms Tessa

  Dunwoody, Mrs Gwyneth

  Keeble, Ms Sally

  Eagle, Angela (Wallasey)

  Kemp, Fraser

  Eagle, Maria (L'pool Garston)

  Kennedy, Jane (Wavertree)

  Edwards, Huw

  Khabra, Piara S

  Efford, Clive

  Kidney, David

  Ellman, Mrs Louise

  Kilfoyle, Peter

  Ennis, Jeff

  King, Andy (Rugby & Kenilworth)

  Etherington, Bill

  King, Ms Oona (Bethnal Green)

  Field, Rt Hon Frank

  Ladyman, Dr Stephen

  Fisher, Mark

  Laxton, Bob

  Fitzsimons, Lorna

  Lepper, David

  Flint, Caroline

  Leslie, Christopher

  Flynn, Paul

  Levitt, Tom

  Follett, Barbara

  Lewis, Ivan (Bury S)

  Foster, Rt Hon Derek

  Lewis, Terry (Worsley)

  Foster, Michael Jabez (Hastings)

  Liddell, Rt Hon Mrs Helen

  Foster, Michael J (Worcester)

  Linton, Martin

  Fyfe, Maria

  Lloyd, Tony (Manchester C)

  Galloway, George

  Lock, David

  Gapes, Mike

  Love, Andrew

  Gardiner, Barry

  McAvoy, Thomas

  George, Bruce (Walsall S)

  McCabe, Steve

  Gerrard, Neil

  McCafferty, Ms Chris

  Gibson, Dr Ian

  McCartney, Rt Hon Ian (Makerfield)

  Gilroy, Mrs Linda

  Godman, Dr Norman A

  McDonagh, Siobhain

  Godsiff, Roger

  Macdonald, Calum

  Goggins, Paul

  McDonnell, John

  Gordon, Mrs Eileen

  McIsaac, Shona

  Griffiths, Jane (Reading E)

  McKenna, Mrs Rosemary

  Griffiths, Nigel (Edinburgh S)

  Mackinlay, Andrew

  Grocott, Bruce

  McNamara, Kevin

  Grogan, John

  McNulty, Tony

  Gunnell, John

  MacShane, Denis

  Hall, Mike (Weaver Vale)

  Mactaggart, Fiona

  Hall, Patrick (Bedford)

  McWalter, Tony

  Hanson, David

  Mahon, Mrs Alice

  Harman, Rt Hon Ms Harriet

  Marsden, Gordon (Blackpool S)

  Heal, Mrs Sylvia

  Marshall, David (Shettleston)

  Healey, John

  Marshall, Jim (Leicester S)

  Henderson, Doug (Newcastle N)

  Martlew, Eric

  Henderson, Ivan (Harwich)

  Meacher, Rt Hon Michael

  Heppell, John

  Meale, Alan

  Hesford, Stephen

  Merron, Gillian

  Hewitt, Ms Patricia

  Michael, Rt Hon Alun

  Hill, Keith

  Michie, Bill (Shef'ld Heeley)

  Hinchliffe, David

  Milburn, Rt Hon Alan

  Hodge, Ms Margaret

  Miller, Andrew

  Hoey, Kate

  Mitchell, Austin

  Home Robertson, John

  Moffatt, Laura

  Hood, Jimmy

  Moonie, Dr Lewis

  Hoon, Rt Hon Geoffrey

  Morley, Elliot

  Hope, Phil

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Hopkins, Kelvin

  Howarth, Alan (Newport E)

  Morris, Rt Hon Sir John (Aberavon)

  Howells, Dr Kim

  Hoyle, Lindsay

  Mountford, Kali

  Hughes, Ms Beverley (Stretford)

  Mullin, Chris

  Hughes, Kevin (Doncaster N)

  Naysmith, Dr Doug

  Humble, Mrs Joan

  Norris, Dan

  Hurst, Alan

  O'Brien, Mike (N Warks)

  Hutton, John

  O'Hara, Eddie

  Iddon, Dr Brian

  O'Neill, Martin

  Illsley, Eric

  Palmer, Dr Nick

  Jackson, Ms Glenda (Hampstead)

  Pearson, Ian

  Jackson, Helen (Hillsborough)

  Pendry, Tom

  Jenkins, Brian

  Perham, Ms Linda

  Johnson, Alan (Hull W & Hessle)

  Pickthall, Colin

  Johnson, Miss Melanie (Welwyn Hatfield)

  Plaskitt, James

  Pollard, Kerry

  133

  Pond, Chris

  Stewart, David (Inverness E)

  Pope, Greg

  Stewart, Ian (Eccles)

  Powell, Sir Raymond

  Stinchcombe, Paul

  Prentice, Ms Bridget (Lewisham E)

  Stoate, Dr Howard

  Prentice, Gordon (Pendle)

  Strang, Rt Hon Dr Gavin

  Prescott, Rt Hon John

  Stringer, Graham

  Primarolo, Dawn

  Stuart, Ms Gisela

  Prosser, Gwyn

  Sutcliffe, Gerry

  Purchase, Ken

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Quinn, Lawrie

  Radice, Rt Hon Giles

  Taylor, Ms Dari (Stockton S)

  Rammell, Bill

  Taylor, David (NW Leics)

  Raynsford, Nick

  Temple-Morris, Peter

  Reed, Andrew (Loughborough)

  Thomas, Gareth (Clwyd W)

  Reid, Rt Hon Dr John (Hamilton N)

  Thomas, Gareth R (Harrow W)

  Robinson, Geoffrey (Cov'try NW)

  Timms, Stephen

  Rogers, Allan

  Tipping, Paddy

  Rooker, Rt Hon Jeff

  Todd, Mark

  Rooney, Terry

  Touhig, Don

  Ross, Ernie (Dundee W)

  Trickett, Jon

  Rowlands, Ted

  Turner, Dennis (Wolverh'ton SE)

  Roy, Frank

  Turner, Dr Desmond (Kemptown)

  Ruddock, Joan

  Turner, Dr George (NW Norfolk)

  Ryan, Ms Joan

  Turner, Neil (Wigan)

  Salter, Martin

  Twigg, Derek (Halton)

  Sarwar, Mohammad

  Tynan, Bill

  Savidge, Malcolm

  Vis, Dr Rudi

  Sawford, Phil

  Walley, Ms Joan

  Sedgemore, Brian

  Watts, David

  Sheerman, Barry

  White, Brian

  Sheldon, Rt Hon Robert

  Whitehead, Dr Alan

  Simpson, Alan (Nottingham S)

  Wicks, Malcolm

  Singh, Marsha

  Williams, Rt Hon Alan (Swansea W)

  Skinner, Dennis

  Smith, Rt Hon Andrew (Oxford E)

  Williams, Alan W (E Carmarthen)

  Smith, Angela (Basildon)

  Williams, Mrs Betty (Conwy)

  Smith, Rt Hon Chris (Islington S)

  Winnick, David

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Winterton, Ms Rosie (Doncaster C)

  Wise, Audrey

  Smith, John (Glamorgan)

  Wood, Mike

  Smith, Llew (Blaenau Gwent)

  Woodward, Shaun

  Snape, Peter

  Worthington, Tony

  Soley, Clive

  Wray, James

  Southworth, Ms Helen

  Wright, Anthony D (Gt Yarmouth)

  Spellar, John

  Starkey, Dr Phyllis

  Tellers for the Ayes:

  Steinberg, Gerry

  Mr. Graham Allen and

  Stevenson, George

  Mr. David Jamieson.

  NOES

  Allan, Richard

  Burnett, John

  Amess, David

  Burns, Simon

  Ancram, Rt Hon Michael

  Burstow, Paul

  Arbuthnot, Rt Hon James

  Butterfill, John

  Ashdown, Rt Hon Paddy

  Cable, Dr Vincent

  Atkinson, David (Bour'mth E)

  Campbell, Rt Hon Menzies (NE Fife)

  Atkinson, Peter (Hexham)

  Baker, Norman

  Cash, William

  Baldry, Tony

  Chapman, Sir Sydney (Chipping Barnet)

  Ballard, Jackie

  Beggs, Roy

  Chidgey, David

  Beith, Rt Hon A J

  Chope, Christopher

  Bercow, John

  Clark, Dr Michael (Rayleigh)

  Beresford, Sir Paul

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Blunt, Crispin

  Body, Sir Richard

  Collins, Tim

  Boswell, Tim

  Cotter, Brian

  Bottomley, Peter (Worthing W)

  Cran, James

  Bottomley, Rt Hon Mrs Virginia

  Cunningham, Ms Roseanna (Perth)

  Brady, Graham

  Brake, Tom

  Curry, Rt Hon David

  Brand, Dr Peter

  Davey, Edward (Kingston)

  Brazier, Julian

  Davies, Quentin (Grantham)

  Breed, Colin

  Davis, Rt Hon David (Haltemprice)

  Browning, Mrs Angela

  Day, Stephen

  Bruce, Malcolm (Gordon)

  Donaldson, Jeffrey

  134

  Dorrell, Rt Hon Stephen

  Moss, Malcolm

  Duncan, Alan

  Nicholls, Patrick

  Duncan Smith, Iain

  Norman, Archie

  Evans, Nigel

  Oaten, Mark

  Ewing, Mrs Margaret

  O'Brien, Stephen (Eddisbury)

  Faber, David

  Ottaway, Richard

  Fabricant, Michael

  Page, Richard

  Fallon, Michael

  Paice, James

  Flight, Howard

  Paterson, Owen

  Forth, Rt Hon Eric

  Pickles, Eric

  Foster, Don (Bath)

  Portillo, Rt Hon Michael

  Fox, Dr Liam

  Prior, David

  Gale, Roger

  Randall, John

  Garnier, Edward

  Redwood, Rt Hon John

  George, Andrew (St Ives)

  Rendel, David

  Gibb, Nick

  Robathan, Andrew

  Gill, Christopher

  Robertson, Laurence

  Gillan, Mrs Cheryl

  Roe, Mrs Marion (Broxbourne)

  Gorrie, Donald

  Ross, William (E Lond'y)

  Gray, James

  Ruffley, David

  Green, Damian

  Russell, Bob (Colchester)

  Greenway, John

  St Aubyn, Nick

  Grieve, Dominic

  Salmond, Alex

  Hague, Rt Hon William

  Hamilton, Rt Hon Sir Archie

  Sanders, Adrian

  Hammond, Philip

  Sayeed, Jonathan

  Hancock, Mike

  Shephard, Rt Hon Mrs Gillian

  Harris, Dr Evan

  Shepherd, Richard

  Hawkins, Nick

  Simpson, Keith (Mid-Norfolk)

  Hayes, John

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

  Heald, Oliver

  Smyth, Rev Martin (Belfast S)

  Heath, David (Somerton & Frome)

  Soames, Nicholas

  Heath, Rt Hon Sir Edward

  Spelman, Mrs. Caroline

  Heathcoat-Amory, Rt Hon David

  Spicer, Sir Michael

  Hogg, Rt Hon Douglas

  Spring, Richard

  Horam, John

  Steen, Anthony

  Howarth, Gerald (Aldershot)

  Streeter, Gary

  Hughes, Simon (Southwark N)

  Stunell, Andrew

  Hunter, Andrew

  Swayne, Desmond

  Jack, Rt Hon Michael

  Swinney, John

  Jackson, Robert (Wantage)

  Syms, Robert

  Jenkin, Bernard

  Tapsell, Sir Peter

  Jones, Ieuan Wyn (Ynys Môn)

  Taylor, Ian (Esher & Walton)

  Keetch, Paul

  Taylor, John M (Solihull)

  Key, Robert

  Taylor, Matthew (Truro)

  King, Rt Hon Tom (Bridgwater)

  Thomas, Simon (Ceredigion)

  Kirkwood, Archy

  Thompson, William

  Laing, Mrs Eleanor

  Tonge, Dr Jenny

  Lait, Mrs Jacqui

  Townend, John

  Lansley, Andrew

  Tredinnick, David

  Leigh, Edward

  Tyler, Paul

  Letwin, Oliver

  Tyrie, Andrew

  Lewis, Dr Julian (New Forest E)

  Wallace, James

  Lidington, David

  Walter, Robert

  Lilley, Rt Hon Peter

  Wardle, Charles

  Livsey, Richard

  Waterson, Nigel

  Lloyd, Rt Hon Sir Peter (Fareham)

  Webb, Steve

  Llwyd, Elfyn

  Wells, Bowen

  Loughton, Tim

  Whitney, Sir Raymond

  MacGregor, Rt Hon John

  Whittingdale, John

  McIntosh, Miss Anne

  Widdecombe, Rt Hon Miss Ann

  Maclean, Rt Hon David

  Wigley, Rt Hon Dafydd

  Maclennan, Rt Hon Robert

  Wilkinson, John

  McLoughlin, Patrick

  Willetts, David

  Madel, Sir David

  Willis, Phil

  Major, Rt Hon John

  Wilshire, David

  Malins, Humfrey

  Winterton, Mrs Ann (Congleton)

  Maples, John

  Winterton, Nicholas (Macclesfield)

  Mates, Michael

  Yeo, Tim

  Maude, Rt Hon Francis

  Young, Rt Hon Sir George

  Mawhinney, Rt Hon Sir Brian

  May, Mrs Theresa

  Tellers for the Noes:

  Michie, Mrs Ray (Argyll & Bute)

  Mr. Geoffrey Clifton-Brown

  Moore, Michael

  and

  Morgan, Alasdair (Galloway)

  Mr. Peter Luff.

  Question accordingly agreed to.

  6. HYDROCARBON OIL (MIXING OF LIGHT OIL)
  Resolved,
  That provision may be made about the mixing of different kinds of light oil.

  7. HYDROCARBON OIL (AMENDMENT OF DEFINITIONS OF TYPES OF OIL)
  Resolved,
  That provision may be made for amending the provisions of the Hydrocarbon Oil Duties Act 1979 defining different types of oil.

  8. HYDROCARBON OIL (MISUSE OF REBATED HEAVY OIL)
  Resolved,
  That—
  (1) Section 13 of the Hydrocarbon Oil Duties Act 1979 shall be amended as follows.
  (2) In subsection (1)—

  (a) for "or, as the case may be, his becoming so liable" there shall be substituted "or his becoming so liable (or, where his conduct includes both, each of them)", and

  (b) the words from "; and the Commissioners" to the end shall be omitted.

  (3) After subsection (I) there shall be inserted—
  "(1A) Where oil is used, or is taken into a road vehicle, in contravention of section 12(2) above, the Commissioners may—

  "TABLE

  1. Cigarettes

  An amount equal to 22 per cent. of the retail price plus £90.43 per thousand cigarettes.

  2. Cigars

  £132.33 per kilogram.

  3. Hand-rolling tobacco

  £95.12 per kilogram.

  4. Other smoking tobacco and chewing tobacco

  £58.17 per kilogram.".

  (2) This Resolution shall have effect as from 6 o'clock in the evening of 21st March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968;
  The House divided: Ayes 364, Noes 7.

  Division No. 122]

  [10.27 pm

  AYES

  Abbott, Ms Diane

  Ballard, Jackie

  Ainger, Nick

  Banks, Tony

  Ainsworth, Robert (Cov'try NE)

  Barnes, Harry

  Alexander, Douglas

  Barron, Kevin

  Allan, Richard

  Battle, John

  Anderson, Donald (Swansea E)

  Bayley, Hugh

  Anderson, Janet (Rossendale)

  Beard, Nigel

  Ashdown, Rt Hon Paddy

  Begg, Miss Anne

  Ashton, Joe

  Berth, Rt Hon A J

  Atherton, Ms Candy

  Bell, Stuart (Middlesbrough)

  Atkins, Charlotte

  Benn, Hilary (Leeds C)

  Austin, John

  Benn, Rt Hon Tony (Chesterfield)

  Baker, Norman

  Bennett, Andrew F

  Benton, Joe

  Burstow, Paul

  Berry, Roger

  Butler, Mrs Christine

  Betts, Clive

  Byers, Rt Hon Stephen

  Blackman, Liz

  Cable, Dr Vincent

  Blair, Rt Hon Tony

  Campbell, Mrs Anne (C'bridge)

  Blears, Ms Hazel

  Campbell, Rt Hon Menzies (NE Fife)

  Blizzard, Bob

  Blunkett, Rt Hon David

  Campbell-Savours, Dale

  Boateng, Rt Hon Paul

  Cann, Jamie

  Borrow, David

  Casale, Roger

  Bradley, Keith (Withington)

  Cawsey, Ian

  Bradley, Peter (The Wrekin)

  Chaytor, David

  Bradshaw, Ben

  Chidgey, David

  Brake, Tom

  Clapham, Michael

  Brand, Dr Peter

  Clark, Dr Lynda (Edinburgh Pentlands)

  Breed, Colin

  Brinton, Mrs Helen

  Clark, Paul (Gillingham)

  Brown, Rt Hon Gordon (Dunfermline E)

  Clarke, Charles (Norwich S)

  Clarke, Eric (Midlothian)

  Brown, Rt Hon Nick (Newcastle E)

  Clarke, Rt Hon Tom (Coatbridge)

  Brown, Russell (Dumfries)

  Clarke, Tony (Northampton S)

  Browne, Desmond

  Clelland, David

  Bruce, Malcolm (Gordon)

  Clwyd, Ann

  Buck, Ms Karen

  Coaker, Vernon

  Burden, Richard

  Coffey, Ms Ann

  Burgon, Colin

  Cohen, Harry

  Burnett, John

  Coleman, Iain

  137

  Colman, Tony

  Heal, Mrs Sylvia

  Cook, Rt Hon Robin (Livingston)

  Healey, John

  Cooper, Yvette

  Heath, David (Somerton & Frome)

  Corbett, Robin

  Henderson, Doug (Newcastle N)

  Corbyn, Jeremy

  Henderson, Ivan (Harwich)

  Corston, Jean

  Heppell, John

  Cotter, Brian

  Hesford, Stephen

  Cousins, Jim

  Hewitt, Ms Patricia

  Cranston, Ross

  Hill, Keith

  Crausby, David

  Hinchliffe, David

  Cryer, Mrs Ann (Keighley)

  Hodge, Ms Margaret

  Cryer, John (Hornchurch)

  Hoey, Kate

  Cunningham, Rt Hon Dr Jack (Copeland)

  Home Robertson, John

  Hood, Jimmy

  Cunningham, Jim (Cov'try S)

  Hoon, Rt Hon Geoffrey

  Cunningham, Ms Roseanna (Perth)

  Hope, Phil

  Hopkins, Kelvin

  Curtis-Thomas, Mrs Claire

  Howarth, Alan (Newport E)

  Dalyell, Tam

  Howells, Dr Kim

  Darling, Rt Hon Alistair

  Hughes, Ms Beverley (Stretford)

  Darvill, Keith

  Hughes, Kevin (Doncaster N)

  Davey, Edward (Kingston)

  Hughes, Simon (Southwark N)

  Davies, Rt Hon Denzil (Llanelli)

  Humble, Mrs Joan

  Davies, Geraint (Croydon C)

  Hurst, Alan

  Dean, Mrs Janet

  Hutton, John

  Denham, John

  Iddon, Dr Brian

  Dismore, Andrew

  Illsley, Eric

  Dobbin, Jim

  Jackson, Ms Glenda (Hampstead)

  Donohoe, Brian H

  Jackson, Helen (Hillsborough)

  Doran, Frank

  Jenkins, Brian

  Dowd, Jim

  Johnson, Alan (Hull W & Hessle)

  Drew, David

  Johnson, Miss Melanie (Welwyn Hatfield)

  Dunwoody, Mrs Gwyneth

  Eagle, Angela (Wallasey)

  Jones, Rt Hon Barry (Alyn)

  Eagle, Maria (L'pool Garston)

  Jones, Helen (Warrington N)

  Edwards, Huw

  Jones, Ieuan Wyn (Ynys Môn)

  Efford, Clive

  Jones, Ms Jenny (Wolverh'ton SW)

  Ellman, Mrs Louise

  Ennis, Jeff

  Jones, Dr Lynne (Selly Oak)

  Etherington, Bill

  Jowell, Rt Hon Ms Tessa

  Ewing, Mrs Margaret

  Keeble, Ms Sally

  Field, Rt Hon Frank

  Keetch, Paul

  Fisher, Mark

  Kemp, Fraser

  Fitzsimons, Lorna

  Kennedy, Jane (Wavertree)

  Flint, Caroline

  Khabra, Piara S

  Flynn, Paul

  Kidney, David

  Follett, Barbara

  Kilfoyle, Peter

  Foster, Rt Hon Derek

  King, Andy (Rugby & Kenilworth)

  Foster, Don (Bath)

  King, Ms Oona (Bethnal Green)

  Foster, Michael Jabez (Hastings)

  Kirkwood, Archy

  Foster, Michael J (Worcester)

  Ladyman, Dr Stephen

  Fyfe, Maria

  Lepper, David

  Galloway, George

  Leslie, Christopher

  Gapes, Mike

  Levitt, Tom

  Gardiner, Barry

  Lewis, Ivan (Bury S)

  George, Andrew (St Ives)

  Lewis, Terry (Worsley)

  George, Bruce (Walsall S)

  Liddell, Rt Hon Mrs Helen

  Gerrard, Neil

  Linton, Martin

  Gibson, Dr Ian

  Livsey, Richard

  Gilroy, Mrs Linda

  Lloyd, Tony (Manchester C)

  Godman, Dr Norman A

  Llwyd, Elfyn

  Godsiff, Roger

  Lock, David

  Goggins, Paul

  Love, Andrew

  Gordon, Mrs Eileen

  McAvoy, Thomas

  Gorrie, Donald

  McCabe, Steve

  Griffiths, Jane (Reading E)

  McCafferty, Ms Chris

  Griffiths, Nigel (Edinburgh S)

  McCartney, Rt Hon Ian (Makerfield)

  Grocott, Bruce

  Grogan, John

  McDonagh, Siobhain

  Gunnell, John

  Macdonald, Calum

  Hall, Mike (Weaver Vale)

  McDonnell, John

  Hall, Patrick (Bedford)

  McIsaac, Shona

  Hancock, Mike

  McKenna, Mrs Rosemary

  Hanson, David

  Mackinlay, Andrew

  Harman, Rt Hon Ms Harriet

  Maclennan, Rt Hon Robert

  Harris, Dr Evan

  McNamara, Kevin

  138

  McNulty, Tony

  Salter, Martin

  MacShane, Denis

  Sanders, Adrian

  Mactaggart, Fiona

  Sarwar, Mohammad

  McWalter, Tony

  Savidge, Malcolm

  Mahon, Mrs Alice

  Sawford, Phil

  Marsden, Gordon (Blackpool S)

  Sedgemore, Brian

  Marshall, David (Shettleston)

  Sheerman, Barry

  Marshall, Jim (Leicester S)

  Simpson, Alan (Nottingham S)

  Martlew, Eric

  Singh, Marsha

  Skinner, Dennis

  Meacher, Rt Hon Michael

  Smith, Rt Hon Andrew (Oxford E)

  Meale, Alan

  Smith, Angela (Basildon)

  Merron, Gillian

  Smith, Rt Hon Chris (Islington S)

  Michie, Bill (Shef'ld Heeley)

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Michie, Mrs Ray (Argyll & Bute)

  Milburn, Rt Hon Alan

  Smith, John (Glamorgan)

  Miller, Andrew

  Smith, Llew (Blaenau Gwent)

  Mitchell, Austin

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

  Moffatt, Laura

  Snape, Peter

  Moonie, Dr Lewis

  Soley, Clive

  Moore, Michael

  Southworth, Ms Helen

  Morgan, Alasdair (Galloway)

  Spellar, John

  Morley, Elliot

  Starkey, Dr Phyllis

  Steinberg, Gerry

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Stevenson, George

  Stewart, David (Inverness E)

  Morris, Rt Hon Sir John (Aberavon)

  Stewart, Ian (Eccles)

  Stinchcombe, Paul

  Mountford, Kali

  Stoate, Dr Howard

  Mullin, Chris

  Strang, Rt Hon Dr Gavin

  Naysmith, Dr Doug

  Stringer, Graham

  Norris, Dan

  Stuart, Ms Gisela

  Oaten, Mark

  Stunell, Andrew

  O'Brien, Mike (N Warks)

  Sutcliffe, Gerry

  O'Hara, Eddie

  Swinney, John

  O'Neill, Martin

  Taylor, Rt Hon Mrs Ann
  (Dewsbury)

  Palmer, Dr Nick

  Pearson, Ian

  Taylor, Ms Dari (Stockton S)

  Pendry, Tom

  Taylor, David (NW Leics)

  Perham, Ms Linda

  Taylor, Matthew (Truro)

  Pickthall, Colin

  Temple-Morris, Peter

  Plaskitt, James

  Thomas, Gareth (Clwyd W)

  Pollard, Kerry

  Thomas, Gareth R (Harrow W)

  Pond, Chris

  Thomas, Simon (Ceredigion)

  Pope, Greg

  Timms, Stephen

  Powell, Sir Raymond

  Tipping, Paddy

  Todd, Mark

  Prentice, Ms Bridget (Lewisham E)

  Tonge, Dr Jenny

  Prentice, Gordon (Pendle)

  Touhig, Don

  Prescott, Rt Hon John

  Trickett, Jon

  Primarolo, Dawn

  Turner, Dennis (Wolverh'ton SE)

  Prosser, Gwyn

  Turner, Dr Desmond (Kemptown)

  Purchase, Ken

  Turner, Dr George (NW Norfolk)

  Quinn, Lawrie

  Turner, Neil (Wigan)

  Radice, Rt Hon Giles

  Twigg, Derek (Halton)

  Rammell, Bill

  Tyler, Paul

  Raynsford, Nick

  Tynan, Bill

  Reed, Andrew (Loughborough)

  Vis, Dr Rudi

  Reid, Rt Hon Dr John (Hamilton N)

  Wallace, James

  Rendel, David

  Walley, Ms Joan

  Robinson, Geoffrey (Cov'try NW)

  Watts, David Webb Steve

  Rooker, Rt Hon Jeff

  White, Brian

  Rooney, Terry

  Whitehead, Dr Alan

  Ross, Ernie (Dundee W)

  Wicks, Malcolm

  Rowlands, Ted

  Wigley, Rt Hon Dafydd

  Roy, Frank

  Williams, Rt Hon Alan (Swansea W)

  Ruddock, Joan

  Russell, Bob (Colchester)

  Williams, Alan W (E Carmarthen)

  Ryan, Ms Joan

  Williams, Mrs Betty (Conwy)

  Salmond, Alex

  Willis, Phil

  139

  Winnick, David

  Wright, Anthony D (Gt Yarmouth)

  Winterton, Ms Rosie (Doncaster C)

  Wood, Mike

  Woodward, Shaun

  Tellers for the Ayes:

  Worthington, Tony

  Mr. Graham Allen and

  Wray, James

  Mr. David Jamieson.

  NOES

  Beggs, Roy

  Ross, William (E Lond'y)

  Cash, William

  Townend, John

  Donaldson, Jeffrey

  Tellers for the Noes:

  Evans, Nigel

  Rev. Martin Smyth and

  Forth, Rt Hon Eric

  Mr. William Thompson.

  (a) assess an amount equal to the rebate on like oil at the rate in force at the time of the contravention as being excise duty due from any person who used the oil or was liable for the oil being taken into the road vehicle, and

  (b) notify him or his representative accordingly."

  (4) This Resolution shall have effect in relation to liability arising on or after 1st May 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  9. HYDROCARBON OIL (USE OF REBATED HEAVY OIL AS FUEL)
  Resolved,
  That—

  (1) In Schedule 1 to the Hydrocarbon Oil Duties Act 1979, the following provisions shall be omitted—

  (a) paragraph 2(1)(b) and the word "or" immediately preceding it, and

  (b) paragraph 2(4).

  (2) This Resolution has effect in relation to the use of rebated heavy oil as fuel on or after 1st May 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  10. TOBACCO PRODUCTS (RATES OF DUTY)
  Motion made, and Question put,
  (1) For the Table of rates of duty in Schedule 1 to the Tobacco Products Duty Act 1979 there shall be substituted—
  Question accordingly agreed to.

  11. TOBACCO PRODUCTS DUTY (RETAIL PRICE OF CIGARETTES)
  Resolved,
  That provision may be made amending section 5 of the Tobacco Products Duty Act 1979.

  12. AMUSEMENT MACHINE LICENCE DUTY (RATES OF DUTY)
  Resolved,
  That provision may be made about the rates of amusement machine licence duty.

  13. AMUSEMENT MACHINE LICENCE DUTY (MEANING OF AMUSEMENT MACHINE)
  Resolved,
  That provision may be made amending section 25 of the Betting and Gaming Duties Act 1981.

  14. AIR PASSENGER DUTY
  Motion made, and Question put,
  That provision may be made about air passenger duty.
  The House divided: Ayes 363, Noes 3.

  Division No. 123]

  [10.40 pm

  AYES

  Abbott, Ms Diane

  Blears, Ms Hazel

  Ainger, Nick

  Blizzard, Bob

  Ainsworth, Robert (Cov'try NE)

  Blunkett, Rt Hon David

  Alexander, Douglas

  Boateng, Rt Hon Paul

  Allan, Richard

  Borrow, David

  Allen, Graham

  Bradley, Keith (Withington)

  Anderson, Donald (Swansea E)

  Bradley, Peter (The Wrekin)

  Anderson, Janet (Rossendale)

  Bradshaw, Ben

  Ashdown, Rt Hon Paddy

  Brake, Tom

  Ashton, Joe

  Brand, Dr Peter

  Atherton, Ms Candy

  Breed, Colin

  Atkins, Charlotte

  Brinton, Mrs Helen

  Austin, John

  Brown, Rt Hon Gordon (Dunfermline E)

  Baker, Norman

  Ballard, Jackie

  Brown, Rt Hon Nick (Newcastle E)

  Banks, Tony

  Brown, Russell (Dumfries)

  Barnes, Harry

  Browne, Desmond

  Barron, Kevin

  Bruce, Malcolm (Gordon)

  Battle, John

  Buck, Ms Karen

  Bayley, Hugh

  Burden, Richard

  Beard, Nigel

  Burgon, Colin

  Begg, Miss Anne

  Burnett, John

  Beith, Rt Hon A J

  Burstow, Paul

  Bell, Stuart (Middlesbrough)

  Butler, Mrs Christine

  Benn, Hilary (Leeds C)

  Byers, Rt Hon Stephen

  Benn, Rt Hon Tony (Chesterfield)

  Cable, Dr Vincent

  Bennett, Andrew F

  Campbell, Mrs Anne (C'bridge)

  Benton, Joe

  Campbell, Rt Hon Menzies (NE Fife)

  Berry, Roger

  Betts, Clive

  Campbell-Savours, Dale

  Blackman, Liz

  Cann, Jamie

  140

  Casale, Roger

  Gilroy, Mrs Linda

  Cawsey, Ian

  Godman, Dr Norman A

  Chaytor, David

  Godsiff, Roger

  Chidgey, David

  Goggins, Paul

  Clapham, Michael

  Gordon, Mrs Eileen

  Clark, Dr Lynda (Edinburgh Pentlands)

  Gorrie, Donald

  Griffiths, Jane (Reading E)

  Clark, Paul (Gillingham)

  Griffiths, Nigel (Edinburgh S)

  Clarke, Charles (Norwich S)

  Grocott, Bruce

  Clarke, Rt Hon Tom (Coatbridge)

  Grogan, John

  Clarke, Tony (Northampton S)

  Gunnell, John

  Clelland, David

  Hall, Mike (Weaver Vale)

  Clwyd, Ann

  Hall, Patrick (Bedford)

  Coaker, Vernon

  Hancock, Mike

  Coffey, Ms Ann

  Hanson, David

  Cohen, Harry

  Harman, Rt Hon Ms Harriet

  Coleman, Iain

  Harris, Dr Evan

  Colman, Tony

  Heal, Mrs Sylvia

  Cook, Rt Hon Robin (Livingston)

  Healey, John

  Cooper, Yvette

  Heath, David (Somerton & Frome)

  Corbett, Robin

  Henderson, Doug (Newcastle N)

  Corbyn, Jeremy

  Henderson, Ivan (Harwich)

  Corston, Jean

  Heppell, John

  Cotter, Brian

  Hesford, Stephen

  Cousins, Jim

  Hewitt, Ms Patricia

  Cranston, Ross

  Hill, Keith

  Crausby, David

  Hinchliffe, David

  Cryer, Mrs Ann (Keighley)

  Hodge, Ms Margaret

  Cryer, John (Hornchurch)

  Hoey, Kate

  Cunningham, Rt Hon Dr Jack (Copeland)

  Home Robertson, John

  Hood, Jimmy

  Cunningham, Jim (Cov'try S)

  Hoon, Rt Hon Geoffrey

  Cunningham, Ms Roseanna (Perth)

  Hope, Phil

  Hopkins, Kelvin

  Curtis-Thomas, Mrs Claire

  Howarth, Alan (Newport E)

  Dalyell, Tam

  Howells, Dr Kim

  Darling, Rt Hon Alistair

  Hughes, Ms Beverley (Stretford)

  Darvill, Keith

  Hughes, Simon (Southwark N)

  Davey, Edward (Kingston)

  Humble, Mrs Joan

  Davies, Rt Hon Denzil (Llanelli)

  Hurst, Alan

  Davies, Geraint (Croydon C)

  Hutton, John

  Dean, Mrs Janet

  Iddon, Dr Brian

  Denham, John

  Illsley, Eric

  Dismore, Andrew

  Jackson, Ms Glenda (Hampstead)

  Dobbin, Jim

  Jackson, Helen (Hillsborough)

  Donohoe, Brian H

  Jamieson, David

  Doran, Frank

  Jenkins, Brian

  Dowd, Jim

  Johnson, Alan (Hull W & Hessle)

  Drew, David

  Johnson, Miss Melanie (Welwyn Hatfield)

  Dunwoody, Mrs Gwyneth

  Eagle, Angela (Wallasey)

  Jones, Rt Hon Barry (Alyn)

  Eagle, Maria (L'pool Garston)

  Jones, Helen (Warrington N)

  Edwards, Huw

  Jones, Ieuan Wyn (Ynys Môn)

  Efford, Clive

  Jones, Ms Jenny (Wolverh'ton SW)

  Ellman, Mrs Louise

  Ennis, Jeff

  Jones, Dr Lynne (Selly Oak)

  Etherington, Bill

  Jowell, Rt Hon Ms Tessa

  Ewing, Mrs Margaret

  Keeble, Ms Sally

  Field, Rt Hon Frank

  Keetch, Paul

  Fisher, Mark

  Kemp, Fraser

  Fitzsimons, Lorna

  Kennedy, Jane (Wavertree)

  Flint, Caroline

  Khabra, Piara S

  Flynn, Paul

  Kidney, David

  Follett, Barbara

  Kilfoyle, Peter

  Foster, Rt Hon Derek

  King, Andy (Rugby & Kenilworth)

  Foster, Don (Bath)

  King, Ms Oona (Bethnal Green)

  Foster, Michael Jabez (Hastings)

  Kirkwood, Archy

  Foster, Michael J (Worcester)

  Ladyman, Dr Stephen

  Fyfe, Maria

  Lepper, David

  Galloway, George

  Leslie, Christopher

  Gapes, Mike

  Levitt, Tom

  Gardiner, Barry

  Lewis, Ivan (Bury S)

  George, Andrew (St Ives)

  Lewis, Terry (Worsley)

  George, Bruce (Walsall S)

  Liddell, Rt Hon Mrs Helen

  Gerrard, Neil

  Linton, Martin

  Gibson, Dr Ian

  Livsey, Richard

  141

  Lloyd, Tony (Manchester C)

  Ross, Ernie (Dundee W)

  Llwyd, Elfyn

  Rowlands, Ted

  Lock, David

  Roy, Frank

  Love, Andrew

  Ruddock, Joan

  McAvoy, Thomas

  Russell, Bob (Colchester)

  McCabe, Steve

  Ryan, Ms Joan

  McCafferty, Ms Chris

  Salmond, Alex

  McCartney, Rt Hon Ian (Makerfield)

  Salter, Martin

  Sanders, Adrian

  McDonagh, Siobhain

  Sarwar, Mohammad

  Macdonald, Calum

  Savidge, Malcolm

  McDonnell, John

  Sawford, Phil

  McIsaac, Shona

  Sedgemore, Brian

  McKenna, Mrs Rosemary

  Sheerman, Barry

  Mackinlay, Andrew

  Simpson, Alan (Nottingham S)

  Maclennan, Rt Hon Robert

  Singh, Marsha

  McNamara, Kevin

  Skinner, Dennis

  McNulty, Tony

  Smith, Rt Hon Andrew (Oxford E)

  MacShane, Denis

  Smith, Angela (Basildon)

  Mactaggart, Fiona

  Smith, Rt Hon Chris (Islington S)

  Mc Walter, Tony

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Mahon, Mrs Alice

  Marsden, Gordon (Blackpool S)

  Smith, John (Glamorgan)

  Marshall, David (Shettleston)

  Smith, Llew (Blaenau Gwent)

  Marshall, Jim (Leicester S)

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

  Martlew, Eric

  Snape, Peter

  Meacher, Rt Hon Michael

  Soley, Clive

  Meale, Alan

  Southworth, Ms Helen

  Merron, Gillian

  Spellar, John

  Michie, Bill (Shef'ld Heeley)

  Starkey, Dr Phyllis

  Michie, Mrs Ray (Argyll & Bute)

  Steinberg, Gerry

  Milburn, Rt Hon Alan

  Stevenson, George

  Miller, Andrew

  Stewart, David (Inverness E)

  Mitchell, Austin

  Stewart, Ian (Eccles)

  Moffatt, Laura

  Stinchcombe, Paul

  Moonie, Dr Lewis

  Stoate, Dr Howard

  Moore, Michael

  Strang, Rt Hon Dr Gavin

  Morgan, Alasdair (Galloway)

  Stringer, Graham

  Morley, Elliot

  Stuart, Ms Gisela

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Stunell, Andrew

  Sutcliffe, Gerry

  Morris, Rt Hon Sir John (Aberavon)

  Swinney, John

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Mountford, Kali

  Mullin, Chris

  Taylor, Ms Dari (Stockton S)

  Naysmith, Dr Doug

  Taylor, David (NW Leics)

  Norris, Dan

  Taylor, Matthew (Truro)

  Oaten, Mark

  Temple-Morris, Peter

  O'Brien, Mike (N Warks)

  Thomas, Gareth (Clwyd W)

  O'Hara, Eddie

  Thomas, Gareth R (Harrow W)

  O'Neill, Martin

  Thomas, Simon (Ceredigion)

  Palmer, Dr Nick

  Timms, Stephen

  Pearson, Ian

  Tipping, Paddy

  Pendry, Tom

  Todd, Mark

  Perham, Ms Linda

  Tonge, Dr Jenny

  Pickthall, Colin

  Touhig, Don

  Plaskitt, James

  Trickett, Jon

  Pollard, Kerry

  Turner, Dennis (Wolverh'ton SE)

  Pond, Chris

  Turner, Dr Desmond (Kemptown)

  Powell, Sir Raymond

  Turner, Dr George (NW Norfolk)

  Prentice, Ms Bridget (Lewisham E)

  Turner, Neil (Wigan)

  Prentice, Gordon (Pendle)

  Twigg, Derek (Halton)

  Prescott, Rt Hon John

  Tyler, Paul

  Primarolo, Dawn

  Tynan, Bill

  Prosser, Gwyn

  Vis, Dr Rudi

  Purchase, Ken

  Wallace, James

  Quinn, Lawrie

  Walley, Ms Joan

  Radice, Rt Hon Giles

  Watts, David

  Rammell, Bill

  Webb, Steve

  Raynsford, Nick

  White, Brian

  Reed, Andrew (Loughborough)

  Whitehead, Dr Alan

  Reid, Rt Hon Dr John (Hamilton N)

  Wicks, Malcolm

  Rendel, David

  Wigley, Rt Hon Dafydd

  Robinson, Geoffrey (Cov'try NW)

  Williams, Rt Hon Alan (Swansea W)

  Rooker, Rt Hon Jeff

  Rooney, Terry

  Williams, Alan W (E Carmarthen)

  142

  Williams, Mrs Betty (Conwy)

  Worthington, Tony

  Willis, Phil

  Wray, James

  Winnick, David

  Wright, Anthony D (Gt Yarmouth)

  Winterton, Ms Rosie (Doncaster C)

  Wise, Audrey

  Tellers for the Ayes:

  Wood, Mike

  Mr. Kevin Hughes and

  Woodward, Shaun

  Mr. Greg Pope.

  NOES

  Beggs, Roy

  Tellers for the Noes:

  Donaldson, Jeffrey

  Rev. Martin Smyth and

  Ross, William (E Lond'y)

  Mr. William Thompson.

  Question accordingly agreed to.

  15. VEHICLE EXCISE DUTY (GENERAL RATE)
  Resolved,
  That—

  (1) In paragraph 1 of Schedule 1 to the Vehicle Excise and Registration Act 1994—

  (a) in sub-paragraph (2), for "£155" there shall be substituted "£160"; and

  (b) in sub-paragraph (2A), for "£100" there shall be substituted "£105".

  (2) This Resolution shall have effect in relation to licences issued on or after 1st March 2001.

  16. VEHICLE EXCISE DUTY (NEW LIGHT PASSENGER OR GOODS VEHICLES)
  Resolved,
  That provision may be made with respect to the vehicle excise duty chargeable in respect of light passenger and light goods vehicles first registered on or after 1st March 2001.

  17. VEHICLE EXCISE DUTY (RATES FOR GOODS VEHICLES ETC.)
  Resolved,
  That Schedule 1 to the Vehicle Excise and Registration Act 1994 be amended as follows-
  (1) For the Table in paragraph 9(1) there shall be substituted—

  Revenue weight of vehicle

  Rate

  (1) Exceeding

  (2) Not Exceeding

  (3) Two axle vehicle

  (4) Three axle vehicle

  (5) Four or more axle vehicle

  kgs

  kgs

  £

  £

  £

  3,500

  7,500

  165

  165

  165

  7,500

  12,000

  300

  300

  300

  12,000

  13,000

  470

  490

  350

  13,000

  14,000

  650

  490

  350

  14,000

  15,000

  840

  490

  350

  15,000

  17,000

  1,320

  490

  350

  17,000

  19,000

  1,600

  850

  350

  19,000

  21,000

  1,600

  1,020

  350

  21,000

  23,000

  1,600

  1,470

  510

  23,000

  25,000

  1,600

  2,230

  830

  25,000

  27,000

  1,600

  2,340

  1,470

  27,000

  29,000

  1,600

  2,340

  2,320

  29,000

  31,000

  1,600

  2,340

  3,360

  31,000

  44,000

  1,600

  2,340

  4,400

  (2) For the Table in paragraph 9B there shall be substituted—

  Revenue weight of vehicle

  Rate

  (1) Exceeding

  (2) Not Exceeding

  (3) Two axle vehicle

  (4) Three axle vehicle

  (5) Four or more axle vehicle

  kgs

  kgs

  £

  £

  £

  3,500

  7,500

  160

  160

  160

  7,500

  12,000

  160

  160

  160

  12,000

  13,000

  160

  160

  160

  13,000

  14,000

  160

  160

  160

  14,000

  15,000

  160

  160

  160

  15,000

  17,000

  320

  160

  160

  17,000

  19,000

  600

  160

  160

  19,000

  21,000

  600

  160

  160

  21,000

  23,000

  600

  470

  160

  23,000

  25,000

  600

  1,230

  160

  25,000

  27,000

  600

  1,340

  470

  27,000

  29,000

  600

  1,340

  1,320

  29,000

  31,000

  600

  1,340

  2,360

  31,000

  44,000

  600

  1,340

  3,400

  (3) For the Table in paragraph 11(1) there shall be substituted—

  Revenue weight of tractive unit

  Rate for tractive unit with two axles

  Rate for tractive unit with three or more axles

  (1) Exceeding

  (2) Not exceeding

  (3) Any no. of semi-trailer axles

  (4) 2 or more semi-trailer axles

  (5) 3 or more semi-trailer axles

  (6) Any no. of semi-trailer axles

  (7) 2 or more semi-trailer axles

  (8) 3 or more semi-trailer axles

  kgs

  kgs

  £

  £

  £

  £

  £

  £

  3,500

  7,500

  165

  165

  165

  165

  165

  165

  7,500

  12,000

  300

  300

  300

  300

  300

  300

  12,000

  16,000

  460

  460

  460

  460

  460

  460

  16,000

  20,000

  520

  460

  460

  460

  460

  460

  20,000

  23,000

  810

  460

  460

  460

  460

  460

  23,000

  26,000

  1,190

  590

  460

  590

  460

  460

  26,000

  28,000

  1,190

  1,130

  460

  1,130

  460

  460

  28,000

  31,000

  1,740

  1,740

  1,090

  1,740

  660

  460

  31,000

  33,000

  2,530

  2,530

  1,740

  2,530

  1,000

  460

  33,000

  34,000

  5,170

  5,170

  1,740

  2,530

  1,470

  570

  34,000

  35,000

  5,170

  5,170

  2,340

  2,530

  2,100

  860

  35,000

  36,000

  6,750

  6,750

  2,340

  2,530

  2,100

  860

  36,000

  38,000

  9,250

  9,250

  2,710

  2,820

  2,820

  1,280

  38,000

  41,000

  9,250

  9,250

  3,950

  3,750

  4,250

  2,500

  41,000

  44,000

  9,250

  9,250

  3,950

  7,250

  7,250

  2,950

  (4) For the Table in paragraph 11B there shall be substituted—

  Revenue weight of tractive unit

  Rate for tractive unit with two axles

  Rate for tractive unit with three or more axles

  (1) Exceeding

  (2) Not exceeding

  (3) Any no. of semi-trailer axles

  (4) 2 or more semi-trailer axles

  (5) 3 or more semi-trailer axles

  (6) Any no. of semi-trailer axles

  (7) 2 or more semi-trailer axles

  (8) 3 or more semi-trailer axles

  kgs

  kgs

  £

  £

  £

  £

  £

  £

  3,500

  7,500

  160

  160

  160

  160

  160

  160

  7,500

  12,000

  160

  160

  160

  160

  160

  160

  12,000

  16,000

  160

  160

  160

  160

  160

  160

  16,000

  20,000

  160

  160

  160

  160

  160

  160

  20,000

  23,000

  160

  160

  160

  160

  160

  160

  23,000

  26,000

  190

  160

  160

  160

  160

  160

  26,000

  28,000

  190

  160

  160

  160

  160

  160

  28,000

  31,000

  740

  740

  160

  740

  160

  160

  31,000

  33,000

  1,530

  1,530

  740

  1,530

  160

  160

  33,000

  34,000

  4,170

  4,170

  740

  1,530

  470

  160

  34,000

  35,000

  4,170

  4,170

  1,340

  1,530

  1,100

  160

  35,000

  36,000

  5,750

  5,750

  1,340

  1,530

  1,100

  160

  36,000

  38,000

  8,250

  8,250

  1,710

  1,820

  1,820

  280

  38,000

  41,000

  8,250

  8,250

  2,950

  2,750

  3,250

  1,500

  41,000

  44,000

  8,250

  8,250

  2,950

  6,250

  6,250

  1,950

  (5) In the following provisions—

  (a) in paragraph 11(1), after "Subject to sub-paragraphs (2) and (3)", and

  (b) in paragraph 11A(2), after "Subject to sub-paragraph (3)",

  there shall be inserted "and paragraph 11C".
  (6) After paragraph 11B there shall be inserted—
  "11C.—(1) This paragraph applies to a tractive unit that—

  (a) has a revenue weight exceeding 41,000 kilograms but not exceeding 44,000 kilograms,

  (b) has 3 or more axles and is used exclusively for the conveyance of semi-trailers with 3 or more axles,

  (c) is of a type that could lawfully be used on a public road immediately before 21st March 2000, and

  (d) complies with the requirements in force immediately before that date for use on a public road.

  (2) The annual rate of vehicle excise duty applicable to a vehicle to which this paragraph applies is—

  (a) in the case of a vehicle with respect to which the reduced pollution requirements are not satisfied, £1,280;

  146

  (b) in the case of a vehicle with respect to which those requirements are satisfied, £280.".

  (7) This resolution applies in relation to licences issued after 21st March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  18. VALUE ADDED TAX (REDUCED RATE)
  Resolved,
  That—
  (1) Schedule A1 to the Value Added Tax Act 1994 shall have effect with the following amendments.
  (2) In paragraph 1(1), after paragraph (a) insert—

  "(aa) supplies of services of installing List A energy-saving materials in residential accommodation or in a building intended for use solely for a relevant charitable purpose;

  147

  (ab) supplies of List A energy-saving materials by a person who installs those materials in residential accommodation or a building intended for use solely for a relevant charitable purpose;".

  (3) In paragraph 1(1), in each of paragraphs (b) and (c), before "energy-saving materials" insert "List B".
  (4) In paragraph 1(1), after paragraph (c) insert—

  "(d) supplies to a qualifying person of services of connecting, or reconnecting, a mains gas supply to the qualifying person's sole or main residence;

  (e) supplies of goods made to a qualifying person by a person connecting, or reconnecting, a mains gas supply to the qualifying person's sole or main residence, being goods whose installation is necessary for the connection, or reconnection, of the mains gas supply;

  (f) supplies to a qualifying person of services of installing, maintaining or repairing a central heating system in the qualifying person's sole or main residence;

  (g) supplies of goods made to a qualifying person by a person installing, maintaining or repairing a central heating system in the qualifying person's sole or main residence, being goods whose installation is necessary for the installation, maintenance or repair of the central heating system;

  (h) supplies consisting in the leasing of goods that form the whole or part of a central heating system installed in the sole or main residence of a qualifying person;

  (i) supplies of goods that form the whole or part of a central heating system installed in a qualifying person's sole or main residence and that, immediately before being supplied, were goods leased under arrangements such that the consideration for the supplies consisting in the leasing of the goods was, in whole or in part, funded by a grant made under a relevant scheme;

  (j) supplies to a qualifying person of services of installing qualifying security goods in the qualifying person's sole or main residence; and

  (k) supplies of qualifying security goods made to a qualifying person by a person who installs those goods in the qualifying person's sole or main residence."

  (5) For paragraph 1(1A) substitute—
  "(1A) A supply to which any of paragraphs (b) to (k) of sub-paragraph (1) above applies is a supply falling within this paragraph only to the extent that the consideration for it—

  (a) is, or is to be, funded by a grant made under a relevant scheme; or

  (b) in the case of a supply to which paragraph (i) of that sub-paragraph applies—

  (i) is, or is to be, funded by such a grant, or

  (ii) is a payment becoming due only by reason of the termination (whether by the passage of time or otherwise) of the leasing of the goods in question."

  (6) In paragraph 1(1B), for "sub-paragraph (1)(b) or (c)" substitute "any of paragraphs (b) to (k) of sub-paragraph (1)".
  (7) In paragraph 5(3)(c), for "disability working allowance" substitute "disabled person's tax credit".
  (8) In paragraph 5(3)(d), for "family credit" substitute "working families' tax credit".
  (9) In paragraph 5, after sub-paragraph (3) insert—
  "(3A) For the purposes of paragraph 1(1)(aa) and (ab) above "residential accommodation" means—

  (a) a building, or part of a building, that consists of a dwelling or a number of dwellings;

  (b) a building, or part of a building, used for a relevant residential purpose;

  (c) a caravan used as a place of permanent habitation; or

  (d) a houseboat.

  148
  (3B) For the purposes of paragraph 1(1)(aa) and (ab) above "use for a relevant charitable purpose" means use by a charity in either or both of the following ways, namely—

  (a) otherwise than in the course or furtherance of a business;

  (b) as a village hall or similarly in providing social or recreational facilities for a local community."

  (10) In paragraph 5(4), for "For the purposes of paragraph 1(1)(b) and (c) above "energy-saving materials" means" substitute "For the purposes of paragraph 1(1)(aa) and (ab) above "List A energy-saving materials" means".
  (11) In paragraph 5(4)(c), after "central heating system controls" insert "(including thermostatic radiator valves)".
  (12) In paragraph 5(4), after paragraph (d) insert—
  "(e) solar panels."
  (13) In paragraph 5, after sub-paragraph (4) insert—
  "(4A) For the purposes of paragraph 1(1)(b) and (c) above "List B energy-saving materials" means any of the following—

  (a) gas-fired room heaters that are fitted with thermostatic controls;

  (b) electric storage heaters;

  (c) closed solid fuel fire cassettes;

  (d) electric dual immersion water heaters with foam-insulated hot water tanks;

  (e) gas-fired boilers;

  (f) oil-fired boilers;

  (g) radiators.

  (4B) For the purposes of paragraph 1(1)(j) and (k) above, "qualifying security goods" means any of the following—

  (a) locks or bolts for windows;

  (b) locks, bolts or security chains for doors;

  (c) spy holes;

  (d) smoke alarms."

  (14) In paragraph 5(5), for "paragraph 1(1A) and (1B)" substitute "paragraph 1".
  (15) This Resolution applies to supplies made on or after 1st April 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  19. DISPOSALS OF ASSETS FOR WHICH A VAT REPAYMENT IS CLAIMED
  Resolved,
  That—
  (1) In section 3(2) of the Value Added Tax Act 1994, for "Schedules 1 to 3" there shall be substituted "Schedules 1 to 3A".
  (2) In section 67 of that Act—

  (a) in subsection (1)(a), for "or with paragraph 3 or 8(2) of Schedule 3" there shall be substituted ", with paragraph 3 or 8(2) of Schedule 3 or paragraph 3, 4 or 7(2) or (3) of Schedule 3A";

  (b) in subsection (3)(a), for "or paragraph 3 of Schedule 3" there shall be substituted ", paragraph 3 of Schedule 3 or paragraph 3 or 4 of Schedule 3A"; and

  (c) in subsection (3)(b), for "or with sub-paragraph (2) of paragraph 8 of Schedule 3" there shall be substituted ", with sub-paragraph (2) of paragraph 8 of Schedule 3 or with sub-paragraph (2) or (3) of paragraph 7 of Schedule 3A".

  (3) In section 69(1)(a) of that Act, for "or paragraph 5 of Schedule 3" there shall be substituted ", paragraph 5 of Schedule 3 or paragraph 5 of Schedule 3A".
  (4) In section 73(3)(b) of that Act, for "or paragraph 6(2) or (3) of Schedule 3" there shall be substituted ", paragraph 6(2) or (3) of Schedule 3 or paragraph 6(1) or (2) of Schedule 3A".
  (5) In section 74(1)(c) of that Act, for "under paragraph 8 of Schedule 3" there shall be substituted ", under paragraph 8 of Schedule 3 or under paragraph 7 of Schedule 3A".
  (6) In the following provisions of that Act—

  (a) paragraph 1(4)(a) and (5) of Schedule 1; and

  (b) paragraph 1(4) of Schedule 2,

  for "or paragraph 6(3) of Schedule 3" there shall be substituted ", paragraph 6(3) of Schedule 3 or paragraph 6(2) of Schedule 3A".
  (7) In paragraph 1(3) of Schedule 3 to that Act, for "or paragraph 6(2) of Schedule 2" there shall be substituted ", paragraph 6(2) of Schedule 2 or paragraph 6(2) of Schedule 3A".
  (8) After Schedule 3 to that Act there shall be inserted, as Schedule 3A, the following provisions—

  REGISTRATION IN RESPECT OF DISPOSALS OF ASSETS for WHICH A VAT REPAYMENT IS CLAIMED

    Liability to be registered
    1.—(1) A person who is not registered under this Act, and is not liable to be registered under Schedule 1, 2 or 3, becomes liable to be registered under this Schedule at any time—

    (a) if he makes relevant supplies; or

    (b) if there are reasonable grounds for believing that he will make such supplies in the period of 30 days then beginning.

    (2) A person shall be treated as having become liable to be registered under this Schedule at any time when he would have become so liable under sub-paragraph (1) above but for any registration which is subsequently cancelled under paragraph 6(2) below, paragraph 13(3) of Schedule 1, paragraph 6(2) of Schedule 2 or paragraph 6(3) of Schedule 3.
    (3) A person shall not cease to be liable to be registered under this Schedule except in accordance with paragraph 2 below.
    2. A person who has become liable to be registered under this Schedule shall cease to be so liable at any time if the Commissioners are satisfied that he has ceased to make relevant supplies.

    Notification of liability and registration
    3.—(1) A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability before the end of the period of 30 days beginning with the day on which the liability arises.
    (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the day on which the liability arises.
    4.—(1) A person who becomes liable to be registered by virtue of paragraph 1(1)(b) above shall notify the Commissioners of the liability before the end of the period by reference to which the liability arises.
    (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the period by reference to which the liability arises.

    Notification of end of liability
    5.—(1) Subject to sub-paragraph (2) below, a person registered under paragraph 3 or 4 above who ceases to make or have the intention of making relevant supplies shall notify the Commissioners of that fact within 30 days of the day on which he does so.
    (2) Sub-paragraph (1) above does not apply if the person would, when he so ceases, be otherwise liable or entitled to be registered under this Act if his registration and any enactment preventing a person from being liable to be registered under different provisions at the same time were disregarded.

    Cancellation of registration
    6.—(1) Subject to sub-paragraph (3) below, where the Commissioners are satisfied that a registered person has ceased to be liable to be registered under this Schedule, they may
    150
    cancel his registration with effect from the day on which he so ceased or from such later date as may be agreed between them and him.
    (2) Where the Commissioners are satisfied that on the day on which a registered person was registered he was not registrable, they may cancel his registration with effect from that day.
    (3) The Commissioners shall not under sub-paragraph (1) above cancel a person's registration with effect from any time unless they are satisfied that it is not a time when that person would be subject to a requirement, or entitled, to be registered under this Act.
    (4) In determining for the purposes of sub-paragraph (3) above whether a person would be subject to a requirement, or entitled, to be registered at any time, so much of any provision of this Act as prevents a person from becoming liable or entitled to be registered when he is already registered or when he is so liable under any other provision shall be disregarded.

    Exemption from registration
    7.—(1) Notwithstanding the preceding provisions of this Schedule, where a person who makes or intends to make relevant supplies satisfies the Commissioners that any such supply is zero-rated or would be zero-rated if he were a taxable person, they may, if he so requests and they think fit, exempt him from registration under this Schedule.
    (2) Where there is a material change in the nature of the supplies made by a person exempted under this paragraph from registration under this Schedule, he shall notify the Commissioners of the change—

    (a) within 30 days of the date on which the change occurred; or

    (b) if no particular date is identifiable as the day on which it occurred, within 30 days of the end of the quarter in which it occurred.

    (3) Where there is a material alteration in any quarter in the proportion of relevant supplies of such a person that are zero-rated, he shall notify the Commissioners of the alteration within 30 days of the end of the quarter.
    (4) If it appears to the Commissioners that a request under sub-paragraph (1) above should no longer have been acted upon on or after any day, or has been withdrawn on any day, they shall register the person who made the request with effect from that day.

    Supplementary
    8. Any notification required under this Schedule shall be made in such form and shall contain such particulars as the Commissioners may by regulations prescribe.
    9.—(1) For the purposes of this Schedule a supply of goods is a relevant supply where—

    (a) the supply is a taxable supply;

    (b) the goods are assets of the business in the course or furtherance of which they are supplied; and

    (c) the person by whom they are supplied, or a predecessor of his, has received or claimed, or is intending to claim, a repayment of VAT on the supply to him, or the importation by him, of the goods or of anything comprised in them.

    (2) In relation to any goods, a person is the predecessor of another for the purposes of this paragraph if—

    (a) that other person is a person to whom he has transferred assets of his business by a transfer of that business, or part of it, as a going concern;

    (b) those assets consisted of or included those goods; and

    (c) the transfer of the assets is one falling by virtue of an order under section 5(3) (or under an enactment re-enacted in section 5(3)) to be treated as neither a supply of goods nor a supply of services;

    and the reference in this paragraph to a person's predecessor includes references to the predecessors of his predecessor through any number of transfers.
    (3) The reference in this paragraph to a repayment of VAT is a reference to such a repayment under a scheme embodied in regulations made under section 39."
    (9) In paragraph 5(5) of Schedule 4 to that Act, for the words from "under sections 25 and 26" to the end there shall be substituted—

    "(a) under sections 25 and 26, to credit for the whole or any part of the VAT on the supply, acquisition or importation of those goods or of anything comprised in them; or

    (b) under a scheme embodied in regulations made under section 39, to a repayment of VAT on the supply or importation of those goods or of anything comprised in them."

    (10) Paragraphs (1) to (7) and (9) above have effect in relation to supplies made on or after 21st March 2000; and paragraph (8) above has effect in relation to relevant supplies (within the meaning of Schedule 3A to that Act) made on or after that date.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  20. CLIMATE CHANGE LEVY
  Motion made, and Question put,
  That provision may be made for charging a tax, to be known as climate change levy, on—

  (a) supplies of electricity; and

  (b) supplies of gas, coal or other commodities capable of being used as fuel.

  The House divided: Ayes 351, Noes 146.

  Division No. 124]

  [10.53 pm

  AYES

  Abbott, Ms Diane

  Brinton, Mrs Helen

  Ainger, Nick

  Brown, Rt Hon Gordon (Dunfermline E)

  Ainsworth, Robert (Cov'try NE)

  Alexander, Douglas

  Brown, Rt Hon Nick (Newcastle E)

  Allan, Richard

  Brown, Russell (Dumfries)

  Allen, Graham

  Browne, Desmond

  Anderson, Donald (Swansea E)

  Bruce, Malcolm (Gordon)

  Anderson, Janet (Rossendale)

  Buck, Ms Karen

  Ashdown, Rt Hon Paddy

  Burden, Richard

  Ashton, Joe

  Burgon, Colin

  Atherton, Ms Candy

  Burstow, Paul

  Atkins, Charlotte

  Butler, Mrs Christine

  Austin, John

  Byers, Rt Hon Stephen

  Baker, Norman

  Cable, Dr Vincent

  Ballard, Jackie

  Campbell, Mrs Anne (C'bridge)

  Banks, Tony

  Campbell, Rt Hon Menzies (NE Fife)

  Barnes, Harry

  Barron, Kevin

  Campbell-Savours, Dale

  Battle, John

  Cann, Jamie

  Bayley, Hugh

  Casale, Roger

  Beard, Nigel

  Cawsey, Ian

  Begg, Miss Anne

  Chaytor, David

  Beith, Rt Hon A J

  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)

  Berry, Roger

  Clarke, Rt Hon Tom (Coatbridge)

  Betts, Clive

  Clarke, Tony (Northampton S)

  Blackman, Liz

  Clelland, David

  Blears, Ms Hazel

  Clwyd, Ann

  Blizzard, Bob

  Coaker, Vernon

  Boateng, Rt Hon Paul

  Coffey, Ms Ann

  Borrow, David

  Cohen, Harry

  Bradley, Keith (Withington)

  Coleman, Iain

  Bradley, Peter (The Wrekin)

  Colman, Tony

  Bradshaw, Ben

  Cook, Rt Hon Robin (Livingston)

  Brake, Tom

  Cooper, Yvette

  Brand, Dr Peter

  Corbett, Robin

  152

  Corbyn, Jeremy

  Hill, Keith

  Corston, Jean

  Hinchliffe, David

  Cotter, Brian

  Hodge, Ms Margaret

  Cousins, Jim

  Hoey, Kate

  Cranston, Ross

  Home Robertson, John

  Crausby, David

  Hood, Jimmy

  Cryer, Mrs Ann (Keighley)

  Hoon, Rt Hon Geoffrey

  Cryer, John (Hornchurch)

  Hope, Phil

  Cunningham, Rt Hon Dr Jack (Copeland)

  Hopkins, Kelvin

  Howarth, Alan (Newport E)

  Cunningham, Jim (Cov'try S)

  Howells, Dr Kim

  Curtis-Thomas, Mrs Claire

  Hughes, Ms Beverley (Stretford)

  Dalyell, Tam

  Hughes, Simon (Southwark N)

  Darling, Rt Hon Alistair

  Humble, Mrs Joan

  Darvill, Keith

  Hurst, Alan

  Davey, Edward (Kingston)

  Hutton, John

  Davies, Rt Hon Denzil (Llanelli)

  Iddon, Dr Brian

  Davies, Geraint (Croydon C)

  Illsley, Eric

  Dean, Mrs Janet

  Jackson, Ms Glenda (Hampstead)

  Denham, John

  Jackson, Helen (Hillsborough)

  Dismore, Andrew

  Jamieson, David

  Dobbin, Jim

  Jenkins, Brian

  Donohoe, Brian H

  Johnson, Alan (Hull W & Hessle)

  Doran, Frank

  Johnson, Miss Melanie (Welwyn Hatfield)

  Dowd, Jim

  Drew, David

  Jones, Rt Hon Barry (Alyn)

  Dunwoody, Mrs Gwyneth

  Jones, Helen (Warrington N)

  Eagle, Angela (Wallasey)

  Jones, Ms Jenny (Wolverh'ton SW)

  Eagle, Maria (L'pool Garston)

  Edwards, Huw

  Jones, Dr Lynne (Selly Oak)

  Efford, Clive

  Jowell, Rt Hon Ms Tessa

  Ellman, Mrs Louise

  Keeble, Ms Sally

  Ennis, Jeff

  Keetch, Paul

  Etherington, Bill

  Kemp, Fraser

  Field, Rt Hon Frank

  Kennedy, Jane (Wavertree)

  Fisher, Mark

  Khabra, Piara S

  Fitzsimons, Lorna

  Kidney, David

  Flint, Caroline

  Kilfoyle, Peter

  Flynn, Paul

  King, Andy (Rugby & Kenilworth)

  Follett, Barbara

  King, Ms Oona (Bethnal Green)

  Foster, Rt Hon Derek

  Kirkwood, Archy

  Foster, Don (Bath)

  Ladyman, Dr Stephen

  Foster, Michael Jabez (Hastings)

  Lepper, David

  Foster, Michael J (Worcester)

  Leslie, Christopher

  Fyfe, Maria

  Levitt, Tom

  Galloway, George

  Lewis, Ivan (Bury S)

  Gapes, Mike

  Lewis, Terry (Worsley)

  Gardiner, Barry

  Liddell, Rt Hon Mrs Helen

  George, Andrew (St Ives)

  Linton, Martin

  George, Bruce (Walsall S)

  Livsey, Richard

  Gerrard, Neil

  Lloyd, Tony (Manchester C)

  Gibson, Dr Ian

  Lock, David

  Gilroy, Mrs Linda

  Love, Andrew

  Godman, Dr Norman A

  McAvoy, Thomas

  Godsiff, Roger

  McCabe, Steve

  Goggins, Paul

  McCafferty, Ms Chris

  Gordon, Mrs Eileen

  McCartney, Rt Hon Ian (Makerfield)

  Gorrie, Donald

  Griffiths, Jane (Reading E)

  McDonagh, Siobhain

  Griffiths, Nigel (Edinburgh S)

  Macdonald, Calum

  Grocott, Bruce

  McDonnell, John

  Grogan, John

  McIsaac, Shona

  Gunnell, John

  McKenna, Mrs Rosemary

  Hall, Mike (Weaver Vale)

  Mackinlay, Andrew

  Hall, Patrick (Bedford)

  Maclennan, Rt Hon Robert

  Hancock, Mike

  McNamara, Kevin

  Hanson, David

  McNulty, Tony

  Harman, Rt Hon Ms Harriet

  MacShane, Denis

  Harris, Dr Evan

  Mactaggart, Fiona

  Heal, Mrs Sylvia

  McWalter, Tony

  Healey, John

  Mahon, Mrs Alice

  Henderson, Doug (Newcastle N)

  Marsden, Gordon (Blackpool S)

  Henderson, Ivan (Harwich)

  Marshall, David (Shettleston)

  Heppell, John

  Marshall, Jim (Leicester S)

  Hesford, Stephen

  Martlew, Eric

  Hewitt, Ms Patricia

  Meacher, Rt Hon Michael

  153

  Meale, Alan

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Merron, Gillian

  Michie, Bill (Shef'ld Heeley)

  Smith, John (Glamorgan)

  Michie, Mrs Ray (Argyll & Bute)

  Smith, Llew (Blaenau Gwent)

  Milburn, Rt Hon Alan

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

  Miller, Andrew

  Snape, Peter

  Mitchell, Austin

  Soley, Clive

  Moffatt, Laura

  Southworth, Ms Helen

  Moonie, Dr Lewis

  Spellar, John

  Moore, Michael

  Starkey, Dr Phyllis

  Morley, Elliot

  Steinberg, Gerry

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Stevenson, George

  Stewart, David (Inverness E)

  Morris, Rt Hon Sir John (Aberavon)

  Stewart, Ian (Eccles)

  Stinchcombe, Paul

  Mountford, Kali

  Stoate, Dr Howard

  Mullin, Chris

  Strang, Rt Hon Dr Gavin

  Naysmith, Dr Doug

  Stringer, Graham

  Norris, Dan

  Stuart, Ms Gisela

  Oaten, Mark

  Stunell, Andrew

  O'Brien, Mike (N Warks)

  Sutcliffe, Gerry

  O'Hara, Eddie

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  O'Neill, Martin

  Palmer, Dr Nick

  Taylor, Ms Dari (Stockton S)

  Pearson, Ian

  Taylor, David (NW Leics)

  Pendry, Tom

  Taylor, Matthew (Truro)

  Perham, Ms Linda

  Temple-Morris, Peter

  Pickthall, Colin

  Thomas, Gareth (Clwyd W)

  Plaskitt, James

  Thomas, Gareth R (Harrow W)

  Pollard, Kerry

  Thomas, Simon (Ceredigion)

  Pond, Chris

  Timms, Stephen

  Powell, Sir Raymond

  Tipping, Paddy

  Prentice, Ms Bridget (Lewisham E)

  Todd, Mark

  Tonge, Dr Jenny

  Prentice, Gordon (Pendle)

  Touhig, Don

  Prescott, Rt Hon John

  Trickett, Jon

  Primarolo, Dawn

  Turner, Dennis (Wolverh'ton SE)

  Prosser, Gwyn

  Turner, Dr Desmond (Kemptown)

  Purchase, Ken

  Turner, Dr George (NW Norfolk)

  Quinn, Lawrie

  Turner, Neil (Wigan)

  Radice, Rt Hon Giles

  Twigg, Derek (Halton)

  Rammell, Bill

  Tyler, Paul

  Raynsford, Nick

  Tynan, Bill

  Reed, Andrew (Loughborough)

  Vis, Dr Rudi

  Reid, Rt Hon Dr John (Hamilton N)

  Wallace, James

  Rendel, David

  Walley, Ms Joan

  Robinson, Geoffrey (Cov'try NW)

  Watts, David

  Rooker, Rt Hon Jeff

  Webb, Steve

  Rooney, Terry

  White, Brian

  Ross, Ernie (Dundee W)

  Whitehead, Dr Alan

  Rowlands, Ted

  Wicks, Malcolm

  Roy, Frank

  Williams, Rt Hon Alan (Swansea W)

  Ruddock, Joan

  Russell, Bob (Colchester)

  Williams, Alan W (E Carmarthen)

  Ryan, Ms Joan

  Williams, Mrs Betty (Conwy)

  Salter, Martin

  Willis, Phil

  Sanders, Adrian

  Winnick, David

  Sarwar, Mohammad

  Winterton, Ms Rosie (Doncaster C)

  Savidge, Malcolm

  Wise, Audrey

  Sawford, Phil

  Wood, Mike

  Sedgemore, Brian

  Woodward, Shaun

  Sheerman, Barry

  Worthington, Tony

  Simpson, Alan (Nottingham S)

  Wray, James

  Singh, Marsha

  Wright, Anthony D (Gt Yarmouth)

  Skinner, Dennis

  Smith, Rt Hon Andrew (Oxford E)

  Tellers for the Ayes:

  Smith, Angela (Basildon)

  Mr. Kevin Hughes and

  Smith, Rt Hon Chris (Islington S)

  Mr. Greg Pope.

  NOES

  Ainsworth Peter (E Surrey)

  Atkinson, Peter (Hexham)

  Amess, David

  Baldry, Tony

  Ancram, Rt Hon Michael

  Beggs, Roy

  Arbuthnot, Rt Hon James

  Bercow, John

  Atkinson, David (Bour'mth E)

  Beresford, Sir Paul

  154

  Blunt, Crispin

  Loughton, Tim

  Body, Sir Richard

  MacGregor, Rt Hon John

  Boswell, Tim

  McIntosh, Miss Anne

  Bottomley, Peter (Worthing W)

  Maclean, Rt Hon David

  Bottomley, Rt Hon Mrs Virginia

  McLoughlin, Patrick

  Brady, Graham

  Madel, Sir David

  Brazier, Julian

  Major, Rt Hon John

  Browning, Mrs Angela

  Malins, Humfrey

  Burns, Simon

  Maples, John

  Butterfill, John

  Maude, Rt Hon Francis

  Cash, William

  Mawhinney, Rt Hon Sir Brian

  Chapman, Sir Sydney (Chipping Barnet)

  May, Mrs Theresa

  Morgan, Alasdair (Galloway)

  Chope, Christopher

  Moss, Malcolm

  Clark, Dr Michael (Rayleigh)

  Nicholls, Patrick

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Norman, Archie

  O'Brien, Stephen (Eddisbury)

  Collins, Tim

  Ottaway, Richard

  Cran, James

  Page, Richard

  Cunningham, Ms Roseanna (Perth)

  Paice, James

  Paterson, Owen

  Curry, Rt Hon David

  Pickles, Eric

  Davies, Quentin (Grantham)

  Portillo, Rt Hon Michael

  Davis, Rt Hon David (Haltemprice)

  Prior, David

  Day, Stephen

  Randall, John

  Donaldson, Jeffrey

  Redwood, Rt Hon John

  Dorrell, Rt Hon Stephen

  Robathan, Andrew

  Duncan, Alan

  Robertson, Laurence

  Duncan Smith, Iain

  Roe, Mrs Marion (Broxbourne)

  Evans, Nigel

  Ross, William (E Lond'y)

  Ewing, Mrs Margaret

  Ruffley, David

  St Aubyn, Nick

  Faber, David

  Salmond, Alex

  Fabricant, Michael

  Sayeed, Jonathan

  Fallon, Michael

  Shephard, Rt Hon Mrs Gillian

  Flight, Howard

  Shepherd, Richard

  Forth, Rt Hon Eric

  Simpson, Keith (Mid-Norfolk)

  Fox, Dr Liam

  Smyth, Rev Martin (Belfast S)

  Gale, Roger

  Soames, Nicholas

  Garnier, Edward

  Spelman, Mrs Caroline

  Gibb, Nick

  Spicer, Sir Michael

  Gill, Christopher

  Spring, Richard

  Gillan, Mrs Cheryl

  Steen, Anthony

  Gray, James

  Streeter, Gary

  Green, Damian

  Swayne, Desmond

  Greenway, John

  Swinney, John

  Grieve, Dominic

  Syms, Robert

  Hague, Rt Hon William

  Tapsell, Sir Peter

  Hamilton, Rt Hon Sir Archie

  Taylor, Ian (Esher & Walton)

  Hammond, Philip

  Taylor, John M (Solihull)

  Hawkins, Nick

  Thompson, William

  Hayes, John

  Townend, John

  Heald, Oliver

  Tredinnick, David

  Heathcoat-Amory, Rt Hon David

  Tyrie, Andrew

  Hogg, Rt Hon Douglas

  Walter, Robert

  Horam, John

  Wardle, Charles

  Howarth, Gerald (Aldershot)

  Waterson, Nigel

  Hunter, Andrew

  Wells, Bowen

  Jack, Rt Hon Michael

  Whitney, Sir Raymond

  Jackson, Robert (Wantage)

  Whittingdale, John

  Jenkin, Bernard

  Widdecombe, Rt Hon Miss Ann

  Key, Robert

  Wilkinson, John

  King, Rt Hon Tom (Bridgwater)

  Willetts, David

  Laing, Mrs Eleanor

  Wilshire, David

  Lait, Mrs Jacqui

  Winterton, Mrs Ann (Congleton)

  Lansley, Andrew

  Winterton, Nicholas (Macclesfield)

  Leigh, Edward

  Yeo, Tim

  Letwin, Oliver

  Young, Rt Hon Sir George

  Lewis, Dr Julian (New Forest E)

  Lidington, David

  Tellers for the Noes:

  Lilley, Rt Hon Peter

  Mr. Peter Luff and

  Lloyd, Rt Hon Sir Peter (Fareham)

  Mr. Geoffrey Clifton-Brown.

  Question accordingly agreed to.

  21. INCOME TAX (CHARGE AND RATES FOR 2000–01)
  Motion made, and Question put,
  That—
  Income tax shall be charged for the year 2000–01, and for that year—

  (a) the starting rate shall be 10 per cent.;

  (b) the basic rate shall be 22 per cent.; and

  (c) the higher rate shall be 40 per cent.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 311, Noes 48.

  Division No. 125]

  [11.5 pm

  AYES

  Abbott, Ms Diane

  Clelland, David

  Ainger, Nick

  Clwyd, Ann

  Ainsworth, Robert (Cov'try NE)

  Coaker, Vernon

  Alexander, Douglas

  Coffey, Ms Ann

  Allen, Graham

  Cohen, Harry

  Anderson, Donald (Swansea E)

  Coleman, Iain

  Anderson, Janet (Rossendale)

  Colman, Tony

  Ashton, Joe

  Cook, Rt Hon Robin (Livingston)

  Atherton, Ms Candy

  Cooper, Yvette

  Atkins, Charlotte

  Corbett, Robin

  Austin, John

  Corbyn, Jeremy

  Banks, Tony

  Corston, Jean

  Barnes, Harry

  Cousins, Jim

  Barron, Kevin

  Cranston, Ross

  Battle, John

  Crausby, David

  Bayley, Hugh

  Cryer, Mrs Ann (Keighley)

  Beard, Nigel

  Cryer, John (Hornchurch)

  Begg, Miss Anne

  Cunningham, Rt Hon Dr Jack (Copeland)

  Bell, Stuart (Middlesbrough)

  Cunningham, Jim (Cov'try S)

  Benn, Hilary (Leeds C)

  Curtis-Thomas, Mrs Claire

  Benn, Rt Hon Tony (Chesterfield)

  Dalyell, Tam

  Bennett, Andrew F

  Darling, Rt Hon Alistair

  Benton, Joe

  Darvill, Keith

  Berry, Roger

  Davies, Rt Hon Denzil (Llanelli)

  Betts, Clive

  Davies, Geraint (Croydon C)

  Blackman, Liz

  Dean, Mrs Janet

  Blears, Ms Hazel

  Denham, John

  Blizzard, Bob

  Dismore, Andrew

  Boateng, Rt Hon Paul

  Dobbin, Jim

  Borrow, David

  Donohoe, Brian H

  Bradley, Keith (Withington)

  Doran, Frank

  Bradley, Peter (The Wrekin)

  Dowd, Jim

  Bradshaw, Ben

  Drew, David

  Brinton, Mrs Helen

  Dunwoody, Mrs Gwyneth

  Brown, Rt Hon Gordon (Dunfermline E)

  Eagle, Angela (Wallasey)

  Brown, Rt Hon Nick (Newcastle E)

  Eagle, Maria (L'pool Garston)

  Brown, Russell (Dumfries)

  Edwards, Huw

  Browne, Desmond

  Efford, Clive

  Buck, Ms Karen

  Ellman, Mrs Louise

  Burden, Richard

  Ennis, Jeff

  Burgon, Colin

  Etherington, Bill

  Butler, Mrs Christine

  Field, Rt Hon Frank

  Byers, Rt Hon Stephen

  Fisher, Mark

  Campbell, Mrs Anne (C'bridge)

  Fitzsimons, Lorna

  Campbell-Savours, Dale

  Flint, Caroline

  Cann, Jamie

  Flynn, Paul

  Casale, Roger

  Follett, Barbara

  Cawsey, Ian

  Foster, Rt Hon Derek

  Chaytor, David

  Foster, Michael Jabez (Hastings)

  Clapham, Michael

  Foster, Michael J (Worcester)

  Clark, Dr Lynda (Edinburgh Pentlands)

  Fyfe, Maria

  Galloway, George

  Clark, Paul (Gillingham)

  Gapes, Mike

  Clarke, Charles (Norwich S)

  Gardiner, Barry

  Clarke, Rt Hon Tom (Coatbridge)

  George, Bruce (Walsall S)

  Clarke, Tony (Northampton S)

  Gerrard, Neil

  156

  Gibson, Dr Ian

  Macdonald, Calum

  Gilroy, Mrs Linda

  McDonnell, John

  Godman, Dr Norman A

  McIsaac, Shona

  Godsiff, Roger

  McKenna, Mrs Rosemary

  Goggins, Paul

  Mackinlay, Andrew

  Gordon, Mrs Eileen

  McNamara, Kevin

  Griffiths, Jane (Reading E)

  McNulty, Tony

  Griffiths, Nigel (Edinburgh S)

  MacShane, Denis

  Grocott, Bruce

  Mactaggart, Fiona

  Grogan, John

  McWalter, Tony

  Gunnell, John

  Mahon, Mrs Alice

  Hall, Mike (Weaver Vale)

  Marsden, Gordon (Blackpool S)

  Hall, Patrick (Bedford)

  Marshall, David (Shettleston)

  Hanson, David

  Marshall, Jim (Leicester S)

  Harman, Rt Hon Ms Harriet

  Martlew, Eric

  Heal, Mrs Sylvia

  Meacher, Rt Hon Michael

  Healey, John

  Meale, Alan

  Henderson, Doug (Newcastle N)

  Merron, Gillian

  Henderson, Ivan (Harwich)

  Michie, Bill (Shef'ld Heeley)

  Heppell, John

  Milburn, Rt Hon Alan

  Hesford, Stephen

  Miller, Andrew

  Hewitt, Ms Patricia

  Mitchell, Austin

  Hill, Keith

  Moffatt, Laura

  Hinchliffe, David

  Moonie, Dr Lewis

  Hodge, Ms Margaret

  Morley, Elliot

  Hoey, Kate

  Morris, Rt Hon Ms Estelle (B'ham Yardley)

  Home Robertson, John

  Hood, Jimmy

  Morris, Rt Hon Sir John (Aberavon)

  Hoon, Rt Hon Geoffrey

  Hope, Phil

  Mountford, Kali

  Hopkins, Kelvin

  Mullin, Chris

  Howarth, Alan (Newport E)

  Naysmith, Dr Doug

  Howells, Dr Kim

  Norris, Dan

  Hughes, Ms Beverley (Stretford)

  O'Brien, Mike (N Warks)

  Humble, Mrs Joan

  O'Hara, Eddie

  Hurst, Alan

  O'Neill, Martin

  Hutton, John

  Palmer, Dr Nick

  Iddon, Dr Brian

  Pearson, Ian

  Illsley, Eric

  Pendry, Tom

  Jackson, Ms Glenda (Hampstead)

  Perham, Ms Linda

  Jackson, Helen (Hillsborough)

  Pickthall, Colin

  Jamieson, David

  Plaskitt, James

  Jenkins, Brian

  Pollard, Kerry

  Johnson, Alan (Hull W & Hessle)

  Pond, Chris

  Johnson, Miss Melanie (Welwyn Hatfield)

  Powell, Sir Raymond

  Prentice, Ms Bridget (Lewisham E)

  Jones, Rt Hon Barry (Alyn)

  Prentice, Gordon (Pendle)

  Jones, Helen (Warrington N)

  Prescott, Rt Hon John

  Jones, Ms Jenny (Wolverh'ton SW)

  Primarolo, Dawn

  Prosser, Gwyn

  Jones, Dr Lynne (Selly Oak)

  Purchase, Ken

  Jowell, Rt Hon Ms Tessa

  Quinn, Lawrie

  Kemp, Fraser

  Radice, Rt Hon Giles

  Kennedy, Jane (Wavertree)

  Rammell, Bill

  Khabra, Piara S

  Raynsford, Nick

  Kidney, David

  Reed, Andrew (Loughborough)

  Kilfoyle, Peter

  Reid, Rt Hon Dr John (Hamilton N)

  King, Andy (Rugby & Kenilworth)

  Robinson, Geoffrey (Cov'try NW)

  King, Ms Oona (Bethnal Green)

  Rooker, Rt Hon Jeff

  Ladyman, Dr Stephen

  Rooney, Terry

  Lepper, David

  Ross, Ernie (Dundee W)

  Leslie, Christopher

  Rowlands, Ted

  Levitt, Tom

  Roy, Frank

  Lewis, Ivan (Bury S)

  Ruddock, Joan

  Lewis, Terry (Worsley)

  Ryan, Ms Joan

  Liddell, Rt Hon Mrs Helen

  Salter, Martin

  Linton, Martin

  Sarwar, Mohammad

  Lloyd, Tony (Manchester C)

  Savidge, Malcolm

  Lock, David

  Sawford, Phil

  Love, Andrew

  Sedgemore, Brian

  McAvoy, Thomas

  Sheerman, Barry

  McCabe, Steve

  Simpson, Alan (Nottingham S)

  McCafferty, Ms Chris

  Singh, Marsha

  McCartney, Rt Hon Ian (Makerfield)

  Skinner, Dennis

  Smith, Rt Hon Andrew (Oxford E)

  McDonagh, Siobhain

  Smith, Angela (Basildon)

  157

  Smith, Rt Hon Chris (Islington S)

  Touhig, Don

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Trickett, Jon

  Turner, Dennis (Wolverh'ton SE)

  Smith, John (Glamorgan)

  Turner, Dr Desmond (Kemptown)

  Smith, Llew (Blaenau Gwent)

  Turner, Dr George (NW Norfolk)

  Snape, Peter

  Turner, Neil (Wigan)

  Soley, Clive

  Twigg, Derek (Halton)

  Southworth, Ms Helen

  Tynan, Bill

  Spellar, John

  Vis, Dr Rudi

  Starkey, Dr Phyllis

  Walley, Ms Joan

  Steinberg, Gerry

  Watts, David

  Stevenson, George

  White, Brian

  Stewart, David (Inverness E)

  Whitehead, Dr Alan

  Stewart, Ian (Eccles)

  Wicks, Malcolm

  Stinchcombe, Paul

  Williams, Rt Hon Alan (Swansea W)

  Stoate, Dr Howard

  Strang, Rt Hon Dr Gavin

  Williams, Alan W (E Carmarthen)

  Stringer, Graham

  Williams, Mrs Betty (Conwy)

  Stuart, Ms Gisela

  Winnick, David

  Sutcliffe, Gerry

  Winterton, Ms Rosie (Doncaster C)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Wise, Audrey

  Wood, Mike

  Taylor, Ms Dari (Stockton S)

  Woodward, Shaun

  Taylor, David (NW Leics)

  Worthington, Tony

  Temple-Morris, Peter

  Wray, James

  Thomas, Gareth (Clwyd W)

  Wright, Anthony D (Gt Yarmouth)

  Thomas, Gareth R (Harrow W)

  Timms, Stephen

  Tellers for the Ayes:

  Tipping, Paddy

  Mr. Kevin Hughes and

  Todd, Mark

  Mr. Greg Pope.

  NOES

  Allan, Richard

  Jones, Ieuan Wyn (Ynys Môn)

  Ashdown, Rt Hon Paddy

  Keetch, Paul

  Baker, Norman

  Kirkwood, Archy

  Ballard, Jackie

  Livsey, Richard

  Beith, Rt Hon A J

  Llwyd, Elfyn

  Brake, Tom

  Maclennan, Rt Hon Robert

  Brand, Dr Peter

  Michie, Mrs Ray (Argyll & Bute)

  Breed, Colin

  Moore, Michael

  Bruce, Malcolm (Gordon)

  Morgan, Alasdair (Galloway)

  Burnett, John

  Oaten, Mark

  Burstow, Paul

  Rendel, David

  Cable, Dr Vincent

  Russell, Bob (Colchester)

  Campbell, Rt Hon Menzies (NE Fife)

  Salmond, Alex

  Sanders, Adrian

  Chidgey, David

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

  Cotter, Brian

  Taylor, Matthew (Truro)

  Cunningham, Ms Roseanna (Perth)

  Thomas, Simon (Ceredigion)

  Tonge, Dr Jenny

  Davey, Edward (Kingston)

  Tyler, Paul

  Ewing, Mrs Margaret

  Wallace, James

  Foster, Don (Bath)

  Webb, Steve

  George, Andrew (St Ives)

  Wigley, Rt Hon Dafydd

  Gorrie, Donald

  Willis, Phil

  Hancock, Mike

  Harris, Dr Evan

  Tellers for the Noes:

  Heath, David (Somerton & Frome)

  Mr. Andrew Stunell and

  Hughes, Simon (Southwark N)

  Mr. John Swinney.

  Question accordingly agreed to.

  22. INCOME TAX (EXTENSION OF STARTING RATE)
  Resolved,
  That—
  (1) Section 1A of the Income and Corporation Taxes Act 1988 shall be amended as follows.
  (2) In subsection (1)(b), after the words "is not" there shall be inserted "—

  (i) savings income falling within section 1(2)(aa), or

  (ii)".

  (3) After subsection (1) there shall be inserted—
  "(1AA) In subsection (1)(b)(i) 'savings income' means income to which this section applies other than—

  (a) income chargeable under Schedule F, or

  (b) equivalent foreign income falling within subsection (3)(b) below and chargeable under Case V of Schedule D.".

  (4) The preceding paragraphs apply for the year 2000–01 and subsequent years and shall be deemed to have had effect for the year 1999–00.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  23. CORPORATION TAX (CHARGE AND RATE FOR 2001)
  Resolved,
  That, for the financial year 2001, corporation tax shall be charged at the rate of 30 per cent.

  24. CORPORATION TAX (SMALL COMPANIES' RATE FOR 2000)
  Resolved,
  That, for the financial year 2000—

  (a) the small companies' rate shall be 20 per cent., and

  (b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 shall be one fortieth.

  25. GIFT AID PAYMENTS BY INDIVIDUALS
  Resolved,
  That—
  (1) Section 25 of the Finance Act 1990 shall be amended in accordance with paragraphs (2) to (7) below.
  (2) In subsection (1)(c), for "an appropriate certificate" there shall be substituted "an appropriate declaration".
  (3) In subsection (2)—

  (a) paragraphs (c) and (g) shall cease to have effect;

  (b) in paragraph (e), for "two and a half per cent of the amount of the gift" there shall be substituted "the limit imposed by subsection (5A) below"; and

  (c) for paragraph (i) there shall be substituted—

  "(i) either—

  (i) at the time the gift is made, the donor is resident in the United Kingdom or performs duties which by virtue of section 132(4)(a) of the Taxes Act 1988 (Crown employees serving overseas) are treated as being performed in the United Kingdom; or

  (ii) the grossed up amount of the gift would, if in fact made, be payable out of profits or gains brought into charge to income tax or capital gains tax."

  (4) For subsection (3) there shall be substituted—
  "(3) The reference in subsection (1)(c) above to an appropriate declaration is a reference to a declaration which—

  (a) is given in such manner as may be prescribed by regulations made by the Board; and

  (b) contains such information and such statements as may be so prescribed.

  (3A) Regulations made for the purposes of subsection (3) above may—

  (a) provide for declarations to have effect, to cease to have effect or to be deemed never to have had effect in such circumstances and for such purposes as may be prescribed by the regulations;

  (b) require charities to keep records with respect to declarations given to them by donors; and

  (c) make different provision for declarations made in a different manner."

  (5) After subsection (5) there shall be inserted—
  "(5A) The limit imposed by this subsection is—

  159

  (a) where the amount of the gift does not exceed £100,25 per cent of the amount of the gift;

  (b) where the amount of the gift exceeds £100 but does not exceed £1,000, £25;

  (c) where the amount of the gift exceeds £1,000, 2.5 per cent of the amount of the gift.

  (5B) Where a benefit received in consequence of making a gift—

  (a) consists of the right to receive benefits at intervals over a period of less than twelve months;

  (b) relates to a period of less than twelve months; or

  (c) is one of a series of benefits received at intervals in consequence of making a series of gifts at intervals of less than twelve months,

  the value of the benefit shall be adjusted for the purposes of subsection (4) above and the amount of the gift shall be adjusted for the purposes of subsection (5A) above.
  (5C) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a gift which is one of a series of gifts made at intervals of less than twelve months, the amount of the gift shall be adjusted for the purposes of subsection (5A) above.
  (5D) Where the value of a benefit, or the amount of a gift, falls to be adjusted under subsection (5B) or (5C) above, the value or amount shall be multiplied by 365 and the result shall be divided by—

  (a) in a case falling within subsection (5B)(a) or (b) above, the number of days in the period of less than twelve months;

  (b) in a case falling within subsection (5B)(c) or (5C) above, the average number of days in the intervals of less than twelve months;

  and the reference in subsection (5B) above to subsection (4) above is a reference to that subsection as it applies for the purposes of subsection (2)(e) above.
  (5E) In determining whether a gift to a charity falling within subsection (5F) below is a qualifying donation, there shall be disregarded the benefit of any right of admission received in consequence of the making of the gift—

  (a) to view property the preservation of which is the sole or main purpose of the charity; or

  (b) to observe wildlife the conservation of which is the sole or main purpose of the charity;

  but this subsection shall not apply unless the opportunity to make gifts which attract such a right is available to members of the public.
  (5F) A charity falls within this subsection if its sole or main purpose is the preservation of property, or the conservation of wildlife, for the public benefit.
  (5G) In subsection (5E) above "right of admission" refers to admission of the person making the gift (or any member of his family who may be admitted because of the gift) either free of the charges normally payable for admission by members of the public, or on payment of a reduced charge."
  (6) For subsections (6) to (9) there shall be substituted—
  "(6) Where any gift made by the donor in a year of assessment is a qualifying donation, then, for that year—

  (a) the Income Tax Acts and the Taxation of Chargeable Gains Act 1992 shall have effect, in their application to him, as if—

  (i) the gift had been made after deduction of income tax at the basic rate; and

  (ii) the basic rate limit were increased by an amount equal to the grossed up amount of the gift;

  (b) the provisions mentioned in subsection (7) below shall have effect, in their application to him, as if any reference to income tax which he is entitled to charge against any person included a reference to the tax treated as deducted from the gift; and

  160

  (c) to the extent, if any, necessary to ensure that he is charged to an amount of income tax and capital gains tax equal to the tax treated as deducted from the gift, he shall not be entitled to relief under Chapter I of Part VII of the Taxes Act 1988,

  but paragraph (a)(ii) above shall not apply for the purposes of any computation under section 550(2)(a) or (b) of that Act (relief where gain charged at a higher rate).
  (7) The provisions referred to in subsection (6)(b) above are—

  (a) section 289A(5)(e) of the Taxes Act 1988 (relief under enterprise investment scheme);

  (b) section 796(3) of that Act (credit for foreign tax); and

  (c) paragraph 1(6)(f) of Schedule 15B to that Act (venture capital trusts).

  (8) Where the tax treated as deducted from a gift by virtue of subsection (6) above exceeds the amount of income tax and capital gains tax with which the donor is charged for the year of assessment, the donor shall be assessable and chargeable with income tax at the basic rate on so much of the gift as is necessary to recover an amount of tax equal to the excess.
  (9) In determining for the purposes of subsection (8) above the total amount of income tax and capital gains tax with which the donor is charged for the year of assessment, there shall be disregarded—

  (a) any tax charged at the basic rate by virtue of—

  (i) section 348 of the Taxes Act 1988 (read with section 3 of that Act); or

  (ii) section 349 of that Act (read with section 350 of that Act);

  (b) any tax treated as having been paid under—

  (i) section 233(1)(a) of that Act (taxation of certain recipients of distributions);

  (ii) section 249(4)(a) of that Act (stock dividends treated as income); or

  (iii) section 547(5)(a) of that Act (method of charging life policy gain to tax);

  (c) any relief to which section 256(2) of that Act applies (relief by way of income tax reduction);

  (d) any relief under—

  (i) section 347B of that Act (relief for maintenance payments);

  (ii) section 788 of that Act (relief by agreement with other countries); or

  (iii) section 790(1) of that Act (unilateral relief);

  (e) any set off of tax deducted, or treated as deducted, from income other than—

  (i) tax treated as deducted from income by virtue of section 421(1)(a) of that Act (taxation of borrower when loan released etc); or

  (ii) tax treated as deducted from a relevant amount within the meaning of section 699A of that Act (untaxed sums comprised in the income of an estate) except to the extent that the relevant amount is or would be paid in respect of a distribution chargeable under Schedule F; and

  (f) any set off of tax credits.

  (9A) For the purposes of sections 257(5) and 257A(5) of the Taxes Act 1988 (age related allowances), the donor's total income shall be treated as reduced by the aggregate amount of gifts from which tax is treated as deducted by virtue of subsection (6) above."
  (7) In subsection (12), paragraphs (b) and (e) and the word "and" immediately preceding paragraph (e) shall cease to have effect.
  (8) In subsections (1)(b) and (3)(b) of section 257BB of the Income and Corporation Taxes Act 1988, after "section 256(2)(b)" there shall be inserted "(read with section 25(6)(c) of the Finance Act 1990 where applicable)".
  (9) In paragraph 4(1)(b) of Schedule 13B to that Act, after "section 256(2)(b)" there shall be inserted "(read with section 25(6)(c) of the Finance Act 1990 where applicable)".
  (10) This Resolution has effect in relation to—

  161

  (a) gifts made on or after 6th April 2000 which are not covenanted payments; and

  (b) covenanted payments falling to be made on or after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  26. GIFT AID PAYMENTS BY COMPANIES
  Resolved,
  That—
  (1) Section 339 of the Income and Corporation Taxes Act 1988 shall be amended in accordance with paragraphs (2) to (8) below.
  (2) In subsection (1), for paragraph (a) there shall be substituted—
  "(a) a payment which, by reason of any provision of the Taxes Acts except section 209(4), is to be regarded as a distribution; and".
  (3) Subsections (2), (3), (3A), (3F), (6), (7) and (8) shall cease to have effect.
  (4) In subsection (3B)(b), for "two and a half per cent. of the amount given after deducting tax under section 339(3)" there shall be substituted "the limit imposed by subsection (3DB) below".
  (5) After subsection (3D) there shall be inserted—
  "(3DA) The limit imposed by this subsection is—

  (a) where the amount of the payment does not exceed £100, 25 per cent of the amount of the payment;

  (b) where the amount of the payment exceeds £100 but does not exceed £1,000, £25;

  (c) where the amount of the payment exceeds £1,000, 2.5 per cent of the amount of the payment.

  (3DB) Where a benefit received in consequence of making a payment—

  (a) consists of the right to receive benefits at intervals over a period of less than twelve months;

  (b) relates to a period of less than twelve months; or

  (c) is one of a series of benefits received at intervals in consequence of making a series of payments at intervals of less than twelve months,

  the value of the benefit shall be adjusted for the purposes of subsection (3C) above and the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
  (3DC) Where a benefit, other than a benefit which is one of a series of benefits received at intervals, is received in consequence of making a payment which is one of a series of payments made at intervals of less than twelve months, the amount of the payment shall be adjusted for the purposes of subsection (3DA) above.
  (3DD) Where the value of a benefit, or the amount of a payment, falls to be adjusted under subsection (3DB) or (3DC) above, the value or amount shall be multiplied by 365 and the result shall be divided by—

  (a) in a case falling within subsection (3DB)(a) or (b) above, the number of days in the period of less than twelve months;

  (b) in a case falling within subsection (3DB)(c) or (3DC) above, the average number of days in the intervals of less than twelve months;

  and the reference in subsection (3DB) to subsection (3C) above is a reference to that subsection as it applies for the purposes of subsection (3B) above."
  (6) For subsection (4) there shall be substituted—
  "(4) Where a company gives a sum of money to a charity, the gift shall in the hands of the charity be treated for the purposes of this Act as if it were an annual payment."
  (7) For subsection (7AA) there shall be substituted—
  "(7AA) Where—

  (a) a qualifying donation to a charity is made by a company which is wholly owned by a charity, and

  162

  (b) the company makes a claim for the donation, or any part of it, to be deemed for the purposes of section 338 to be a charge on income paid in an accounting period falling wholly or partly within the period of nine months ending with the date of the making of the donation,

  the donation or part shall be deemed for those purposes to be a charge on income paid in that accounting period, and not in any later period.
  A claim under this subsection must be made within the period of two years immediately following the accounting period in which the donation is made, or such longer period as the Board may allow."
  (8) In subsection (9), the words "in subsections (1) to (4) above includes" shall cease to have effect.
  (9) In subsection (1) of section 209 of the Income and Corporation Taxes Act 1988, for "section 339(6) and any other express exceptions" there shall be substituted "any express exceptions".
  (10) In subsection (2)(a) of section 338 of that Act, after "company" there shall be inserted "or payments falling within paragraph (b) below".
  (11) This Resolution has effect in relation to payments made on or after 1st April 2000; and—

  (a) so much of an accounting period as falls before that date; and

  (b) so much of it as falls after 31st March 2000,

  shall be treated as separate accounting periods for the purposes of the amendment made by paragraph (5) above.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  27. COVENANTED PAYMENTS TO CHARITIES
  Resolved,
  That—

  (1) In subsection (5)(b) of section 338 of the Income and Corporation Taxes Act 1988, for "a covenanted donation to charity" there shall be substituted "a qualifying donation".

  (2) In section 347A of that Act, subsections (2)(b), (7) and (8) shall cease to have effect.

  (3) In subsection (3) of section 348 of that Act, at the end there shall be inserted "or to any payment which is a qualifying donation for the purposes of section 25 of the Finance Act 1990".

  (4) In subsection (1) of section 349 of that Act, at the end there shall be inserted "or to any payment which is a qualifying donation (within the meaning of section 339) or a qualifying donation for the purposes of section 25 of the Finance Act 1990".

  (5) In subsection (6) of section 505 of that Act, the words "and, for this purpose, all covenanted payments to charity (within the meaning of section 347A(7)) shall be treated as a single item" shall cease to have effect.

  (6) In subsection (9) of section 660A of that Act, for paragraph (b) there shall be substituted—

  "(b) qualifying donations for the purposes of section 25 of the Finance Act 1990."

  (7) Section 59 of the Finance Act 1989 shall cease to have effect.

  (8) Where a deed of covenant executed by an individual before 6th April 2000 provides for the payment of specified amounts, any amount payable under the deed on or after that date shall be determined as if the individual were entitled to deduct tax from that amount at the basic rate.

  (9) This Resolution has effect in relation to covenanted payments—

  (a) falling to be made by individuals on or after 6th April 2000; or

  (b) made by companies on or after 1st April 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  28. DISPOSALS OF INVESTMENTS TO CHARITIES ETC.
  Resolved,
  That provision may be made about the disposal of shares, securities or other investments to charities or other bodies.

  29. EMPLOYEE SHARE OWNERSHIP PLANS
  Resolved,
  That provision may be made for the purposes of income tax about employee share ownership plans.

  30. PROFIT SHARING SCHEMES (CORPORATION TAX RELIEF)
  Resolved,
  That provision may be made about corporation tax relief for payments to trustees of profit sharing schemes approved under Schedule 9 to the Income and Corporation Taxes Act 1988.

  31. PROFIT SHARING SCHEMES (ARRANGEMENTS FOR LOANS)
  Resolved,
  That—
  (1) In paragraph 2 of Schedule 9 to the Income and Corporation Taxes Act 1988, after sub-paragraph (2) there shall be inserted—
  "(2A) The Board shall not approve a profit sharing scheme unless they are satisfied—

  (a) that the arrangements for the scheme do not make any provision, and are not in any way associated with any provision made, for loans to some or all of the employees of—

  (i) the company that established the scheme, or

  (ii) in the case of a group scheme, any participating company, and

  (b) that the operation of the scheme is not in any way associated with such loans.

  (2B) For the purposes of sub-paragraph (2A) above 'arrangements' includes any scheme, agreement or understanding, whether or not legally enforceable."
  (2) In paragraph 3(2) of that Schedule, before paragraph (d) there shall be inserted—

  "(ca) the Board—

  (i) cease to be satisfied of the matters mentioned in paragraph 2(2A) above, or

  (ii) in the case of a scheme approved before 21st March 2000, are not satisfied of those matters; or".

  (3) This Resolution shall be deemed to have come into force on 21st March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  32. PROFIT SHARING SCHEMES (RESTRICTIONS ON TYPES OF SHARES)
  Resolved,
  That—
  (1) In paragraph 9(1) of Schedule 9 to the Income and Corporation Taxes Act 1988, after "below" there shall be inserted "(disregarding paragraph 11A)".
  (2) After paragraph 11 of that Schedule there shall be inserted—
  "11A.ߞ(1) In the case of a profit sharing scheme, scheme shares must not be sharesߞ

  (a) in an employer company, or

  (b) in a company thatߞ

  (i) has control of an employer company, and

  164

  (ii) is under the control of a person or persons within sub-paragraph (2)(b)(i) below in relation to an employer company.

  (2) For the purposes of this paragraph a company is "an employer company" if—

  (a) the business carried on by it consists substantially in the provision of the services of the persons employed by it, and

  (b) the majority of those services are provided to—

  (i) a person who has, or two or more persons who together have, control of the company, or

  (ii) a company associated with the company.

  (3) For the purposes of sub-paragraph (2)(b)(ii) above a company shall be treated as associated with another company if both companies are under the control of the same person or persons.
  (4) For the purposes of sub-paragraphs (1) to (3) above—

  (a) references to a person include a partnership, and

  (b) where a partner, alone or together with others, has control of a company, the partnership shall be treated as having like control of that company.

  (5) For the purposes of this paragraph the question whether a person controls a company shall be determined in accordance with section 416(2) to (6)."
  (3) In paragraph 12 of that Schedule—

  (a) in sub-paragraph (1), in paragraph (c) for "other than" to the end of that paragraph there shall be substituted "other than those permitted by sub-paragraph (1A) below.", and

  (b) after sub-paragraph (1) there shall be inserted—

  "(1A) Subject to sub-paragraph (1B) below, scheme shares may be subject to—

  (a) restrictions which attach to all shares of the same class, or

  (b) a restriction authorised by sub-paragraph (2) below.

  (1B) In the case of a profit sharing scheme, scheme shares must not be subject to any restrictions affecting the rights attaching to those shares which relate to—

  (a) dividends, or

  (b) assets on a winding-up of the company,

  other than restrictions which attach to all other ordinary shares in the same company."
  (4) Paragraphs (1) to (3) of this Resolution shall be deemed to have come into force on 21st March 2000.
  (5) Paragraphs (2) and (3) of this Resolution do not have effect in relation to shares acquired before 21st March 2000 by the trustees of a profit sharing scheme approved under Schedule 9 to the Income and Corporation Taxes Act 1988.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  33. PROVISION OF SERVICES THROUGH INTERMEDIARY
  Resolved,
  That provision may be made relating to the provision of services through an intermediary.

  34. RENT-FACTORING
  Resolved,
  That provision may be made for sums received by way of consideration for the transfer of rent, or by way of premium, under rent-factoring agreements to be chargeable to corporation tax or income tax.

  35. GROUPS OF COMPANIES ETC.
  Resolved,
  That provision may be made about groups of companies and consortia for the purposes of corporation tax.

  36. ENTERPRISE INVESTMENT SCHEME
  Resolved,
  That provision may be made amending Chapter III of Part VII of the Income and Corporation Taxes Act 1988.

  37. VENTURE CAPITAL TRUSTS
  Resolved,
  That provision may be made amending Schedule 28B to the Income and Corporation Taxes Act 1988.

  38. RESEARCH AND DEVELOPMENT
  Resolved,
  That provision may be made amending provisions referring to "scientific research".

  39. CAPITAL ALLOWANCES
  Resolved,
  That provision (including retrospective provision) may be made about capital allowances.

  40. RELIEF FOR INTEREST ON LOANS TO Buy ANNUITIES
  Resolved,
  That provision may be made amending sections 353, 365 and 369 of the Income and Corporation Taxes Act 1988.

  41. TAX TREATMENT OF ACQUISITION, DISPOSAL OR REVALUATION OF CERTAIN RIGHTS
  Resolved,
  That provision may be made as to the treatment for tax purposes of amounts relating to the acquisition, disposal or revaluation of—

  (a) certain licences granted under section 1 of the Wireless Telegraphy Act 1949,

  (b) indefeasible rights to use a telecommunications cable system, or

  (c) rights derived, directly or indirectly, from any such right as is mentioned in paragraph (a) or (b).

  42. CHARGEABLE GAINS (GIFTS AND TRUSTS)
  Resolved,
  That provision (including retrospective provision) may be made amending the Taxation of Chargeable Gains Act 1992 with respect to—

  (a) relief under section 165 or 260 of that Act,

  (b) gains accruing to trustees,

  (c) disposals of interests in settled property, and

  (d) transfers of value by trustees.

  43. CHARGEABLE GAINS (COMPANIES)
  Resolved,
  That provision may be made about the treatment of the chargeable gains of companies for the purposes of corporation tax (including provision for the recovery of unpaid tax).

  44. DOUBLE TAXATION RELIEF
  Motion made, and Question put,
  That provision may be made amending—

  (a) Part XVIII of the Income and Corporation Taxes Act 1988; and

  (b) section 278 of the Taxation of Chargeable Gains Act 1992.

  The House divided: Ayes 307, Noes 181

  Division No. 126]

  [11.18 pm

  AYES

  Abbott, Ms Diane

  Cunningham, Jim (Cov'try S)

  Ainger, Nick

  Cunningham, Ms Roseanna (Perth)

  Ainsworth, Robert (Cov'try NE)

  Allen, Graham

  Curtis-Thomas, Mrs Claire

  Anderson, Donald (Swansea E)

  Dalyell, Tam

  Anderson, Janet (Rossendale)

  Darling, Rt Hon Alistair

  Ashton, Joe

  Darvill, Keith

  Atherton, Ms Candy

  Davies, Rt Hon Denzil (Llanelli)

  Atkins, Charlotte

  Davies, Geraint (Croydon C)

  Austin, John

  Dean, Mrs Janet

  Banks, Tony

  Denham, John

  Barnes, Harry

  Dismore, Andrew

  Barren, Kevin

  Dobbin, Jim

  Battle, John

  Donohoe, Brian H

  Bayley, Hugh

  Doran, Frank

  Beard, Nigel

  Dowd, Jim

  Begg, Miss Anne

  Drew, David

  Bell, Stuart (Middlesbrough)

  Eagle, Angela (Wallasey)

  Benn, Hilary (Leeds C)

  Eagle, Maria (L'pool Garston)

  Benn, Rt Hon Tony (Chesterfield)

  Edwards, Huw

  Efford, Clive

  Bennett, Andrew F

  Ellman, Mrs Louise

  Benton, Joe

  Ennis, Jeff

  Berry, Roger

  Etherington, Bill

  Blackman, Liz

  Field, Rt Hon Frank

  Blears, Ms Hazel

  Fisher, Mark

  Blizzard, Bob

  Fitzsimons, Lorna

  Boateng, Rt Hon Paul

  Flint, Caroline

  Borrow, David

  Flynn, Paul

  Bradley, Keith (Withington)

  Follett, Barbara

  Bradley, Peter (The Wrekin)

  Foster, Rt Hon Derek

  Bradshaw, Ben

  Foster, Michael Jabez (Hastings)

  Brown, Rt Hon Gordon(Dunfermline E)

  Foster, Michael J (Worcester)

  Fyfe, Maria

  Brown, Rt Hon Nick (Newcastle E)

  Gapes, Mike

  Brown, Russell (Dumfries)

  Gardiner, Barry

  Browne, Desmond

  George, Bruce (Walsall S)

  Buck, Ms Karen

  Gerrard, Neil

  Burden, Richard

  Gibson, Dr Ian

  Burgon, Colin

  Gilroy, Mrs Linda

  Butler, Mrs Christine

  Godman, Dr Norman A

  Byers, Rt Hon Stephen

  Godsiff, Roger

  Campbell, Mrs Anne (C'bridge)

  Goggins, Paul

  Campbell-Savours, Dale

  Gordon, Mrs Eileen

  Cann, Jamie

  Griffiths, Jane (Reading E)

  Casale, Roger

  Griffiths, Nigel (Edinburgh S)

  Cawsey, Ian

  Grocott, Bruce

  Chaytor, David

  Grogan, John

  Clapham, Michael

  Gunnell, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  Hall, Patrick (Bedford)

  Hanson, David

  Clark, Paul (Gillingham)

  Harman, Rt Hon Ms Harriet

  Clarke, Charles (Norwich S)

  Heal, Mrs Sylvia

  Clarke, Rt Hon Tom (Coatbridge)

  Healey, John

  Henderson, Doug (Newcastle N)

  Clarke, Tony (Northampton S)

  Henderson, Ivan (Harwich)

  Clelland, David

  Heppell, John

  Clwyd, Ann

  Hesford, Stephen

  Coaker, Vernon

  Hill, Keith

  Coffey, Ms Ann

  Hinchliffe, David

  Cohen, Harry

  Hodge, Ms Margaret

  Coleman, Iain

  Hoey, Kate

  Colman, Tony

  Home Robertson, John

  Cook, Rt Hon Robin (Livingston)

  Hood, Jimmy

  Corbyn, Jeremy

  Hoon, Rt Hon Geoffrey

  Corston, Jean

  Hope, Phil

  Cousins, Jim

  Hopkins, Kelvin

  Cranston, Ross

  Howarth, Alan (Newport E)

  Crausby, David

  Howells, Dr Kim

  Cryer, Mrs Ann (Keighley)

  Hughes, Ms Beverley (Stretford)

  Cryer, John (Hornchurch)

  Hughes, Kevin (Doncaster N)

  Cunningham, Rt Hon Dr Jack(Copeland)

  Humble, Mrs Joan

  Hurst, Alan

  167

  Hutton, John

  Pearson, Ian

  Iddon, Dr Brian

  Pendry, Tom

  Illsley, Eric

  Perham, Ms Linda

  Jackson, Ms Glenda (Hampstead)

  Pickthall, Colin

  Jackson, Helen (Hillsborough)

  Plaskitt, James

  Jamieson, David

  Pollard, Kerry

  Jenkins, Brian

  Pond, Chris

  Johnson, Alan (Hull W & Hessle)

  Pope, Greg

  Johnson, Miss Melanie (Welwyn Hatfield)

  Powell, Sir Raymond

  Prentice, Ms Bridget (Lewisham E)

  Jones, Rt Hon Barry (Alyn)

  Prentice, Gordon (Pendle)

  Jones, Helen (Warrington N)

  Primarolo, Dawn

  Jones, Ieuan Wyn (Ynys Môn)

  Prosser, Gwyn

  Jones, Ms Jenny (Wolverh'ton SW)

  Purchase, Ken

  Quinn, Lawrie

  Jones, Dr Lynne (Selly Oak)

  Radice, Rt Hon Giles

  Jowell, Rt Hon Ms Tessa

  Rammell, Bill

  Kennedy, Jane (Wavertree)

  Raynsford, Nick

  Khabra, Piara S

  Reed, Andrew (Loughborough)

  Kidney, David

  Reid, Rt Hon Dr John (Hamilton N)

  Kilfoyle, Peter

  Robinson, Geoffrey (Cov'try NW)

  King, Andy (Rugby & Kenilworth)

  Rooker, Rt Hon Jeff

  King, Ms Oona (Bethnal Green)

  Rooney, Terry

  Ladyman, Dr Stephen

  Ross, Ernie (Dundee W)

  Lepper, David

  Rowlands, Ted

  Leslie, Christopher

  Roy, Frank

  Levitt, Tom

  Ruddock, Joan

  Lewis, Ivan (Bury S)

  Ryan, Ms Joan

  Lewis, Terry (Worsley)

  Salmond, Alex

  Liddell, Rt Hon Mrs Helen

  Sarwar, Mohammad

  Linton, Martin

  Savidge, Malcolm

  Lloyd, Tony (Manchester C)

  Sawford, Phil

  Llwyd, Elfyn

  Sedgemore, Brian

  Lock, David

  Sheerman, Barry

  Love, Andrew

  Simpson, Alan (Nottingham S)

  McAvoy, Thomas

  Singh, Marsha

  McCabe, Steve

  Skinner, Dennis

  McCafferty, Ms Chris

  Smith, Rt Hon Andrew (Oxford E)

  McCartney, Rt Hon Ian (Makerfield)

  Smith, Angela (Basildon)

  Smith, Rt Hon Chris (Islington S)

  McDonagh, Siobhain

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Macdonald, Calum

  McDonnell, John

  Smith, John (Glamorgan)

  McIsaac, Shona

  Smith, Llew (Blaenau Gwent)

  McKenna, Mrs Rosemary

  Snape, Peter

  Mackinlay, Andrew

  Soley, Clive

  McNamara, Kevin

  Southworth, Ms Helen

  McNulty, Tony

  Spellar, John

  MacShane, Denis

  Starkey, Dr Phyllis

  Mactaggart, Fiona

  Steinberg, Gerry

  McWalter, Tony

  Stevenson, George

  Mahon, Mrs Alice

  Stewart, David (Inverness E)

  Marsden, Gordon (Blackpool S)

  Stewart, Ian (Eccles)

  Marshall, David (Shettleston)

  Stinchcombe, Paul

  Marshall, Jim (Leicester S)

  Stoate, Dr Howard

  Martlew, Eric

  Strang, Rt Hon Dr Gavin

  Meacher, Rt Hon Michael

  Stringer, Graham

  Meale, Alan

  Stuart, Ms Gisela

  Merron, Gillian

  Sutcliffe, Gerry

  Milburn, Rt Hon Alan

  Swinney, John

  Miller, Andrew

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Mitchell, Austin

  Moffatt, Laura

  Taylor, Ms Dan (Stockton S)

  Moonie, Dr Lewis

  Taylor, David (NW Leics)

  Morgan, Alasdair (Galloway)

  Temple-Morris, Peter

  Morley, Elliot

  Thomas, Gareth (Clwyd W)

  Morris, Rt Hon Sir John (Aberavon)

  Thomas, Gareth R (Harrow W)

  Thomas, Simon (Ceredigion)

  Mountford, Kali

  Timms, Stephen

  Mullin, Chris

  Tipping, Paddy

  Naysmith, Dr Doug

  Todd, Mark

  Norris, Dan

  Touhig, Don

  O'Brien, Mike (N Warks)

  Trickett, Jon

  O'Hara, Eddie

  Turner, Dennis (Wolverh'ton SE)

  O'Neill, Martin

  Turner, Dr Desmond (Kemptown)

  Palmer, Dr Nick

  Turner, Dr George (NW Norfolk)

  168

  Turner, Neil (Wigan)

  Williams, Mrs Betty (Conwy)

  Twigg, Derek (Halton)

  Winnick, David

  Tynan, Bill

  Winterton, Ms Rosie (Doncaster C)

  Vis, Dr Rudi

  Wise, Audrey

  Walley, Ms Joan

  Wood, Mike

  Watts, David

  Woodward, Shaun

  White, Brian

  Worthington, Tony

  Whitehead, Dr Alan

  Wray, James

  Wicks, Malcolm

  Wright, Anthony D (Gt Yarmouth)

  Wigley, Rt Hon Dafydd

  Williams, Rt Hon Alan (Swansea W)

  Tellers for the Ayes:

  Mr. Clive Betts and

  Williams, Alan W (E Carmarthen)

  Mr. Mike Hall.

  NOES

  Ainsworth, Peter (E Surrey)

  Gale, Roger

  Allan, Richard

  Garnier, Edward

  Ancram, Rt Hon Michael

  George, Andrew (St Ives)

  Arbuthnot, Rt Hon James

  Gibb, Nick

  Ashdown, Rt Hon Paddy

  Gill, Christopher

  Atkinson, David (Bour'mth E)

  Gillan, Mrs Cheryl

  Atkinson, Peter (Hexham)

  Gray, James

  Baker, Norman

  Green, Damian

  Baldry, Tony

  Greenway, John

  Ballard, Jackie

  Grieve, Dominic

  Beggs, Roy

  Hague, Rt Hon William

  Beith, Rt Hon A J

  Hamilton, Rt Hon Sir Archie

  Bercow, John

  Hammond, Philip

  Beresford, Sir Paul

  Hancock, Mike

  Blunt, Crispin

  Harris, Dr Evan

  Body, Sir Richard

  Hawkins, Nick

  Boswell, Tim

  Hayes, John

  Bottomley, Peter (Worthing W)

  Heald, Oliver

  Bottomley, Rt Hon Mrs Virginia

  Heath, David (Somerton & Frome)

  Brady, Graham

  Heathcoat-Amory, Rt Hon David

  Brake, Tom

  Hogg, Rt Hon Douglas

  Brand, Dr Peter

  Horam, John

  Brazier, Julian

  Howarth, Gerald (Aldershot)

  Breed, Colin

  Hughes, Simon (Southwark N)

  Browning, Mrs Angela

  Hunter, Andrew

  Bruce, Malcolm (Gordon)

  Jack, Rt Hon Michael

  Burnett, John

  Jackson, Robert (Wantage)

  Burns, Simon

  Jenkin, Bernard

  Burstow, Paul

  Keetch, Paul

  Butterfill, John

  Key, Robert

  Cable, Dr Vincent

  King, Rt Hon Tom (Bridgwater)

  Campbell, Rt Hon Menzies (NE Fife)

  Kirkwood, Archy

  Laing, Mrs Eleanor

  Cash, William

  Lait, Mrs Jacqui

  Chapman, Sir Sydney (Chipping Barnet)

  Lansley, Andrew

  Leigh, Edward

  Chidgey, David

  Letwin, Oliver

  Chope, Christopher

  Lewis, Dr Julian (New Forest E)

  Clark, Dr Michael (Rayleigh)

  Lidington, David

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Lilley, Rt Hon Peter

  Livsey, Richard

  Collins, Tim

  Lloyd, Rt Hon Sir Peter (Fareham)

  Cotter, Brian

  Loughton, Tim

  Cran, James

  MacGregor, Rt Hon John

  Curry, Rt Hon David

  McIntosh, Miss Anne

  Davey, Edward (Kingston)

  Maclean, Rt Hon David

  Davies, Quentin (Grantham)

  Maclennan, Rt Hon Robert

  Davis, Rt Hon David (Haltemprice)

  McLoughlin, Patrick

  Day, Stephen

  Madel, Sir David

  Donaldson, Jeffrey

  Major, Rt Hon John

  Dorrell, Rt Hon Stephen

  Malins, Humfrey

  Duncan, Alan

  Maples, John

  Duncan Smith, Iain

  Maude, Rt Hon Francis

  Evans, Nigel

  Mawhinney, Rt Hon Sir Brian

  Faber, David

  May, Mrs Theresa

  Fabricant, Michael

  Michie, Mrs Ray (Argyll & Bute)

  Fallon, Michael

  Moore, Michael

  Flight, Howard

  Moss, Malcolm

  Forth, Rt Hon Eric

  Nicholls, Patrick

  Foster, Don (Bath)

  Norman, Archie

  Fox. Dr Liam

  Oaten, Mark

  169

  O'Brien, Stephen (Eddisbury)

  Swayne, Desmond

  Ottaway, Richard

  Syms, Robert

  Page, Richard

  Tapsell, Sir Peter

  Paice, James

  Taylor, Ian (Esher & Walton)

  Paterson, Owen

  Taylor, John M (Solihull)

  Pickles, Eric

  Taylor, Matthew (Truro)

  Portillo, Rt Hon Michael

  Thompson, William

  Prior, David

  Tonge, Dr Jenny

  Randall, John

  Townend, John

  Redwood, Rt Hon John

  Tredinnick, David

  Rendel, David

  Tyler, Paul

  Robathan, Andrew

  Tyrie, Andrew

  Robertson, Laurence

  Wallace, James

  Roe, Mrs Marion (Broxbourne)

  Walter, Robert

  Ross, William (E Lond'y)

  Wardle, Charles

  Ruffley, David

  Waterson, Nigel

  Russell, Bob (Colchester)

  Webb, Steve

  St Aubyn, Nick

  Wells, Bowen

  Sanders, Adrian

  Whitney, Sir Raymond

  Sayeed, Jonathan

  Whittingdale, John

  Shephard, Rt Hon Mrs Gillian

  Widdecombe, Rt Hon Miss Ann

  Shepherd, Richard

  Wilkinson, John

  Simpson, Keith (Mid-Norfolk)

  Willetts, David

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

  Willis, Phil

  Smyth, Rev Martin (Belfast S)

  Wilshire, David

  Soames, Nicholas

  Winterton, Mrs Ann (Congleton)

  Spelman, Mrs Caroline

  Winterton, Nicholas (Macclesfield)

  Spicer, Sir Michael

  Yeo, Tim

  Spring, Richard

  Young, Rt Hon Sir George

  Steen, Anthony

  Tellers for the Noes:

  Streeter, Gary

  Mr. Peter Luff and

  Stunell, Andrew

  Mr. Geoffrey Clifton-Brown.

  Question accordingly agreed to.

  45. CONTROLLED FOREIGN COMPANIES
  Resolved,
  That provision (including provision having retrospective effect) may be made amending Chapter IV of Part XVII of the Income and Corporation Taxes Act 1988.

  46. USE OF STERLING AND OTHER CURRENCIES
  Resolved,
  That provision may be made amending sections 92 to 95 of the Finance Act 1993 and Chapter II of Part II of that Act.

  47. INSURANCE
  Resolved,
  That provision may be made—

  (a) about the reserves and reinsurance contracts of certain companies and other persons carrying on general insurance business; and

  (b) amending sections 431D and 432ZA to 432C of the Income and Corporation Taxes Act 1988 and Schedule 11 to the Finance Act 1996.

  48. PETROLEUM REVENUE TAX
  Resolved,
  That provision may be made with respect to cases where operating expenditure is incurred by participators during chargeable periods to which section 9(1) of the Oil Taxation Act 1975 applies.

  49. PAYMENTS UNDER DEDUCTION OF TAX
  Resolved,
  That provision may be made about payments under deduction of tax.

  50. FILM PRODUCTION ETC.
  Resolved,
  That provision may be made about expenditure on the production or acquisition of films or sound recordings.

  51. STAMP DUTY ON CONVEYANCE OR TRANSFER ON SALE (RATES)
  Motion made, and Question put,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) In Part I of Schedule 13 to the Finance Act 1999, in the third column of the table in paragraph 4—

  (a) in the third entry, for "2.5%" there shall be substituted "3%"; and

  (b) in the fourth entry, for "3.5%" there shall be substituted "4%".

  (2) This Resolution applies to instruments executed on or after 28th March 2000.
  (3) But this Resolution does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.
  The House divided: Ayes 303, Noes 178.

  Division No. 127]

  [11.30 pm

  AYES

  Abbott, Ms Diane

  Browne, Desmond

  Ainger, Nick

  Buck, Ms Karen

  Ainsworth, Robert (Cov'try NE)

  Burden, Richard

  Allen, Graham

  Burgon, Colin

  Anderson, Donald (Swansea E)

  Butler, Mrs Christine

  Anderson, Janet (Rossendale)

  Byers, Rt Hon Stephen

  Ashton, Joe

  Campbell, Mrs Anne (C'bridge)

  Atherton, Ms Candy

  Campbell-Savours, Dale

  Atkins, Charlotte

  Cann, Jamie

  Austin, John

  Casale, Roger

  Banks, Tony

  Cawsey, Ian

  Barnes, Harry

  Chaytor, David

  Barron, Kevin

  Clapham, Michael

  Battle, John

  Clark, Dr Lynda (Edinburgh Pentlands)

  Bayley, Hugh

  Beard, Nigel

  Clark, Paul (Gillingham)

  Begg, Miss Anne

  Clarke, Charles (Norwich S)

  Bell, Stuart (Middlesbrough)

  Clarke, Rt Hon Tom (Coatbridge)

  Benn, Hilary (Leeds C)

  Clarke, Tony (Northampton S)

  Benn, Rt Hon Tony (Chesterfield)

  Clelland, David

  Bennett, Andrew F

  Clwyd, Ann

  Benton, Joe

  Coaker, Vernon

  Berry, Roger

  Coffey, Ms Ann

  Blackman, Liz

  Cohen, Harry

  Blears, Ms Hazel

  Coleman, Iain

  Blizzard, Bob

  Colman, Tony

  Boateng, Rt Hon Paul

  Corbyn, Jeremy

  Borrow, David

  Corston, Jean

  Bradley, Keith (Withington)

  Cousins, Jim

  Bradley, Peter (The Wrekin)

  Cranston, Ross

  Bradshaw, Ben

  Crausby, David

  Brown, Rt Hon Gordon (Dunfermline E)

  Cryer, Mrs Ann (Keighley)

  Cryer, John (Hornchurch)

  Brown, Rt Hon Nick (Newcastle E)

  Cunningham, Rt Hon Dr Jack (Copeland)

  Brown, Russell (Dumfries)

  171

  Cunningham, Jim (Cov'try S)

  Jackson, Helen (Hillsborough)

  Cunningham, Ms Roseanna (Perth)

  Jamieson, David

  Jenkins, Brian

  Curtis-Thomas, Mrs Claire

  Johnson, Alan (Hull W & Hessle)

  Dalyell, Tam

  Johnson, Miss Melanie (Welwyn Hatfield)

  Darling, Rt Hon Alistair

  Darvill, Keith

  Jones, Rt Hon Barry (Alyn)

  Davies, Rt Hon Denzil (Llanelli)

  Jones, Helen (Warrington N)

  Davies, Geraint (Croydon C)

  Jones, Ieuan Wyn (Ynys Môn)

  Dean, Mrs Janet

  Jones, Ms Jenny (Wolverh'ton SW)

  Denham, John

  Dismore, Andrew

  Jones, Dr Lynne (Selly Oak)

  Dobbin, Jim

  Jowell, Rt Hon Ms Tessa

  Donohoe, Brian H

  Kemp, Fraser

  Doran, Frank

  Kennedy, Jane (Wavertree)

  Dowd, Jim

  Khabra, Piara S

  Drew, David

  Kidney, David

  Eagle, Angela (Wallasey)

  Kilfoyle, Peter

  Eagle, Maria (L'pool Garston)

  King, Andy (Rugby & Kenilworth)

  Edwards, Huw

  King, Ms Oona (Bethnal
  Green)

  Efford, Clive

  Ladyman, Dr Stephen

  Ellman, Mrs Louise

  Lepper, David

  Ennis, Jeff

  Leslie, Christopher

  Etherington, Bill

  Levitt, Tom

  Field, Rt Hon Frank

  Lewis, Ivan (Bury S)

  Fisher, Mark

  Lewis, Terry (Worsley)

  Fitzsimons, Lorna

  Liddell, Rt Hon Mrs Helen

  Flint, Caroline

  Linton, Martin

  Flynn, Paul

  Lloyd, Tony (Manchester C)

  Follett, Barbara

  Llwyd, Elfyn

  Foster, Rt Hon Derek

  Lock, David

  Foster, Michael Jabez (Hastings)

  Love, Andrew

  Foster, Michael J (Worcester)

  McAvoy, Thomas

  Fyfe, Maria

  McCabe, Steve

  Gapes, Mike

  McCafferty, Ms Chris

  Gardiner, Barry

  McCartney, Rt Hon Ian (Makerfield)

  George, Bruce (Walsall S)

  Gerrard, Neil

  Macdonald, Calum

  Gibson, Dr Ian

  McDonnell, John

  Gilroy, Mrs Linda

  McIsaac, Shona

  Godman, Dr Norman A

  McKenna, Mrs Rosemary

  Godsiff, Roger

  Mackinlay, Andrew

  Goggins, Paul

  McNamara, Kevin

  Gordon, Mrs Eileen

  McNulty, Tony

  Griffiths, Jane (Reading E)

  Mactaggart, Fiona

  Griffiths, Nigel (Edinburgh S)

  McWalter, Tony

  Grocott, Bruce

  Mahon, Mrs Alice

  Grogan, John

  Marsden, Gordon (Blackpool S)

  Hall, Patrick (Bedford)

  Marshall, David (Shettleston)

  Hanson, David

  Marshall, Jim (Leicester S)

  Harman, Rt Hon Ms Harriet

  Martlew, Eric

  Heal, Mrs Sylvia

  Meacher, Rt Hon Michael

  Healey, John

  Meale, Alan

  Henderson, Doug (Newcastle N)

  Merron, Gillian

  Henderson, Ivan (Harwich)

  Michie, Bill (Shef'ld Heeley)

  Heppell, John

  Milburn, Rt Hon Alan

  Hesford, Stephen

  Miller, Andrew

  Hill, Keith

  Mitchell, Austin

  Hinchliffe, David

  Moonie, Dr Lewis

  Hodge, Ms Margaret

  Morgan, Alasdair (Galloway)

  Hoey, Kate

  Morley, Elliot

  Home Robertson, John

  Morris, Rt Hon Sir John (Aberavon)

  Hood, Jimmy

  Hoon, Rt Hon Geoffrey

  Mountford, Kali

  Hope, Phil

  Mullin, Chris

  Hopkins, Kelvin

  Naysmith, Dr Doug

  Howarth, Alan (Newport E)

  Norris, Dan

  Howells, Dr Kim

  O'Brien, Mike (N Warks)

  Hughes, Ms Beverley (Stretford)

  O'Hara, Eddie

  Hughes, Kevin (Doncaster N)

  O'Neill, Martin

  Humble, Mrs. Joan

  Palmer, Dr Nick

  Hurst, Alan

  Pearson, Ian

  Hutton, John

  Pendry, Tom

  Iddon, Dr Brian

  Perham, Ms Linda

  Illsley, Eric

  Pickthall, Colin

  Jackson, Ms Glenda(Hampstead)

  Plaskitt, James

  172

  Pollard, Kerry

  Stoate, Dr Howard

  Pond, Chris

  Strang, Rt Hon Dr Gavin

  Pope, Greg

  Stringer, Graham

  Powell, Sir Raymond

  Stuart, Ms Gisela

  Prentice, Ms Bridget (Lewisham E)

  Sutcliffe, Gerry

  Prentice, Gordon (Pendle)

  Swinney, John

  Primarolo, Dawn

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Prosser, Gwyn

  Purchase, Ken

  Taylor, Ms Dari (Stockton S)

  Quinn, Lawrie

  Taylor, David (NW Leics)

  Radice, Rt Hon Giles

  Temple-Morris, Peter

  Rammell, Bill

  Thomas, Gareth (Clwyd W)

  Raynsford, Nick

  Thomas, Gareth R (Harrow W)

  Reed, Andrew (Loughborough)

  Thomas, Simon (Ceredigion)

  Reid, Rt Hon Dr John (Hamilton N)

  Timms, Stephen

  Robinson, Geoffrey (Cov'try NW)

  Tipping, Paddy

  Rooker, Rt Hon Jeff

  Todd, Mark

  Rooney, Terry

  Touhig, Don

  Ross, Ernie (Dundee W)

  Trickett, Jon

  Rowlands, Ted

  Turner, Dennis (Wolverh'ton SE)

  Roy, Frank

  Turner, Dr Desmond (Kemptown)

  Ruddock, Joan

  Turner, Dr George (NW Norfolk)

  Ryan, Ms Joan

  Turner, Neil (Wigan)

  Salmond, Alex

  Twigg, Derek (Halton)

  Sarwar, Mohammad

  Tynan, Bill

  Savidge, Malcolm

  Vis, Dr Rudi

  Sawford, Phil

  Walley, Ms Joan

  Sedgemore, Brian

  Watts, David

  Sheerman, Barry

  White, Brian

  Simpson, Alan (Nottingham S)

  Whitehead, Dr Alan

  Singh, Marsha

  Wicks, Malcolm

  Skinner, Dennis

  Wigley, Rt Hon Dafydd

  Smith, Rt Hon Andrew (Oxford E)

  Williams, Rt Hon Alan (Swansea W)

  Smith, Angela (Basildon)

  Smith, Rt Hon Chris (Islington S)

  Williams, Alan W (E Carmarthen)

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Williams, Mrs Betty (Conwy)

  Winnick, David

  Smith, John (Glamorgan)

  Winterton, Ms Rosie (Doncaster C)

  Smith, Llew (Blaenau Gwent)

  Wise, Audrey

  Snape, Peter

  Wood, Mike

  Soley, Clive

  Woodward, Shaun

  Southworth, Ms Helen

  Worthington, Tony

  Spellar, John

  Wray, James

  Starkey, Dr Phyllis

  Wright, Anthony D (Gt
  Yarmouth)

  Steinberg, Gerry

  Stevenson, George

  Tellers for the Ayes:

  Stewart, David (Inverness E)

  Mr. Clive Betts and

  Stewart, Ian (Eccles)

  Mr. Mike Hall.

  NOES

  Ainsworth, Peter (E Surrey)

  Burns, Simon

  Allan, Richard

  Burstow, Paul

  Amess, David

  Butterfill, John

  Ancram, Rt Hon Michael

  Cable, Dr Vincent

  Arbuthnot, Rt Hon James

  Campbell, Rt Hon Menzies (NE Fife)

  Ashdown, Rt Hon Paddy

  Atkinson, David (Bour'mth E)

  Cash, William

  Baker, Norman

  Chapman, Sir Sydney (Chipping Barnet)

  Ballard, Jackie

  Beggs, Roy

  Chidgey, David

  Beith, Rt Hon A J

  Chope, Christopher

  Bercow, John

  Clark, Dr Michael (Rayleigh)

  Beresford, Sir Paul

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Blunt, Crispin

  Body, Sir Richard

  Collins, Tim

  Boswell, Tim

  Cotter, Brian

  Bottomley, Peter (Worthing W)

  Cran, James

  Bottomley, Rt Hon Mrs Virginia

  Curry, Rt Hon David

  Brady, Graham

  Davey, Edward (Kingston)

  Brake, Tom

  Davies, Quentin (Grantham)

  Brand, Dr Peter

  Davis, Rt Hon David (Haltemprice)

  Brazier, Julian

  Day, Stephen

  Breed, Colin

  Donaldson, Jeffrey

  Browning, Mrs Angela

  Dorrell, Rt Hon Stephen

  Bruce, Malcolm (Gordon)

  Duncan, Alan

  Burnett, John

  Duncan Smith, Iain

  173

  Evans, Nigel

  Nicholls, Patrick

  Faber, David

  Norman, Archie

  Fabricant, Michael

  Oaten, Mark

  Fallon, Michael

  O'Brien, Stephen (Eddisbury)

  Flight, Howard

  Ottaway, Richard

  Forth, Rt Hon Eric

  Page, Richard

  Foster, Don (Bath)

  Paice, James

  Fox, Dr Liam

  Paterson, Owen

  Gale, Roger

  Pickles, Eric

  Garnier, Edward

  Portillo, Rt Hon Michael

  George, Andrew (St Ives)

  Prior, David

  Gibb, Nick

  Randall, John

  Gill, Christopher

  Redwood, Rt Hon John

  Gillan, Mrs Cheryl

  Rendel, David

  Gray, James

  Robathan, Andrew

  Green, Damian

  Robertson, Laurence

  Greenway, John

  Roe, Mrs Marion (Broxbourne)

  Grieve, Dominic

  Ruffley, David

  Hague, Rt Hon William

  Russell, Bob (Colchester)

  Hamilton, Rt Hon Sir Archie

  St Aubyn, Nick

  Hammond, Philip

  Sanders, Adrian

  Hancock, Mike

  Sayeed, Jonathan

  Harris, Dr Evan

  Shephard, Rt Hon Mrs Gillian

  Hawkins, Nick

  Shepherd, Richard

  Hayes, John

  Simpson, Keith (Mid-Norfolk)

  Heald, Oliver

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

  Heath, David (Somerton & Frome)

  Smyth, Rev Martin (Belfast S)

  Heathcoat-Amory, Rt Hon David

  Soames, Nicholas

  Hogg, Rt Hon Douglas

  Spelman, Mrs Caroline

  Horam, John

  Spicer, Sir Michael

  Howarth, Gerald (Aldershot)

  Spring, Richard

  Hughes, Simon (Southwark N)

  Steen, Anthony

  Hunter, Andrew

  Streeter, Gary

  Jack, Rt Hon Michael

  Stunell, Andrew

  Jackson, Robert (Wantage)

  Swayne, Desmond

  Jenkin, Bernard

  Syms, Robert

  Keetch, Paul

  Tapsell, Sir Peter

  Key, Robert

  Taylor, Ian (Esher & Walton)

  King, Rt Hon Tom (Bridgwater)

  Taylor, John M (Solihull)

  Kirkwood, Archy

  Taylor, Matthew (Truro)

  Laing, Mrs Eleanor

  Thompson, William

  Lait, Mrs Jacqui

  Tonge, Dr Jenny

  Lansley, Andrew

  Townend, John

  Leigh, Edward

  Tredinnick, David

  Letwin, Oliver

  Tyler, Paul

  Lewis, Dr Julian (New Forest E)

  Tyrie, Andrew

  Lidington, David

  Wallace, James

  Lilley, Rt Hon Peter

  Walter, Robert

  Livsey, Richard

  Wardle, Charles

  Lloyd, Rt Hon Sir Peter (Fareham)

  Waterson, Nigel

  Loughton, Tim

  Webb, Steve

  Luff, Peter

  Wells, Bowen

  MacGregor, Rt Hon John

  Whitney, Sir Raymond

  McIntosh, Miss Anne

  Whittingdale, John

  Maclean, Rt Hon David

  Widdecombe, Rt Hon Miss Ann

  Maclennan, Rt Hon Robert

  Wilkinson, John

  McLoughlin, Patrick

  Willetts, David

  Madel, Sir David

  Willis, Phil

  Malins, Humfrey

  Wilshire, David

  Maples, John

  Winterton, Mrs Ann (Congleton)

  Maude, Rt Hon Francis

  Winterton, Nicholas (Macclesfield)

  Mawhinney, Rt Hon Sir Brian

  Yeo, Tim

  May, Mrs Theresa

  Young, Rt Hon Sir George

  Michie, Mrs Ray (Argyll & Bute)

  Tellers for the Noes:

  Moore, Michael

  Mr. Peter Atkinson and

  Moss, Malcolm

  Mr. Geoffrey Clifton-Brown.

  Question accordingly agreed to.

  52. STAMP DUTY ON LEASES (RENT)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) In Part II of Schedule 13 to the Finance Act 1999—

  (a) in paragraph 11, in paragraph 1 of the table, and

  (b) in paragraph 12(3), in paragraphs 1(a) and (b) of the table,

  for "£500" there shall be substituted "£5,000".
  (2) This Resolution has effect in relation to instruments executed on or after 28th March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  53. STAMP DUTY (SEVEN YEAR LEASES)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) In paragraph 12(3) of Schedule 13 to the Finance Act 1999, in paragraph 1 of the Table, for "less than 7 years" substitute "not more than 7 years".
  (2) Subject to paragraphs (4) to (13), paragraph (1) applies to instruments executed on or after 1st October 1999.
  (3) Paragraphs (4) to (13) apply to—

  (a) leases of land for a term of seven years, and

  (b) agreements for leases of land for a term of seven years,

  executed on or after 1st October 1999 and before the commencement date.
  (4) An instrument to which this paragraph applies which is stamped with the appropriate amount of duty is duly stamped, whenever it was executed.
  (5) An instrument to which this paragraph applies which—

  (a) immediately before the commencement date was duly stamped, but

  (b) was stamped with less than the appropriate amount of duty,

  ceases to be duly stamped on the commencement date.
  (6) Paragraph (5) applies even if the instrument has been stamped in accordance with section 12(5) of the Stamp Act 1891 with a stamp denoting that it is duly stamped.
  (7) If an instrument ceases to be duly stamped on the commencement date as a result of paragraph (5)—

  (a) section 12(6) of the Stamp Act 1891 does not apply to it at any time when it is not duly stamped, and

  (b) section 14(1) of that Act does not apply to it at any time when it is not duly stamped, unless the unpaid duty and any interest or penalty is paid in accordance with that subsection.

  (8) Section 12A(1) of the Stamp Act 1891 does not prevent an instrument to which this paragraph applies which is stamped with less than the appropriate amount of duty from being stamped with additional duty.
  (9) Section 14(4) of the Stamp Act 1891 applies in relation to an instrument to which this paragraph applies as if, as respects any time on or after the commencement date, the reference to the law in force at the time when it was executed were to the law in force on the commencement date.
  (10) Paragraphs (12) and (13) apply for the purpose of applying sections 12 to 13B and 15 to 15B of the Stamp Act 1891 in relation to any additional duty chargeable on an instrument to which this paragraph applies.
  (11) Those sections continue to apply without modification as respects any other stamp duty chargeable on the instrument.
  (12) Those sections have effect as respects the additional duty as if—

  (a) the additional duty were the only stamp duty chargeable on the instrument;

  (b) the instrument had been executed on the commencement date; and

  175

  (c) in the case of an instrument executed outside the United Kingdom and first received in the United Kingdom before the commencement date, the instrument had been first received in the United Kingdom on the commencement date.

  (13) Accordingly, those sections apply as respects additional duty as if—

  (a) references to duty were to additional duty;

  (b) references to stamping were to stamping with additional duty;

  (c) references to an instrument's being stamped were to its being stamped with additional duty;

  (d) references to an instrument's being duly stamped were to its being stamped with all the additional duty chargeable on it;

  (e) references to an instrument's being unstamped were to its not being stamped with any additional duty;

  (f) references to an instrument's being insufficiently stamped were to its being stamped with insufficient additional duty;

  (g) references to adjudication, or an appeal, under any of those sections were to adjudication or an appeal under the section in question as it has effect as respects additional duty; and

  (h) references to the maximum penalty were to the maximum penalty as respects additional duty.

  (14) In this Resolution—
  "additional duty", in relation to an instrument, means additional stamp duty chargeable on the instrument as a result of paragraph (1);
  "the appropriate amount of duty", in relation to an instrument, means the stamp duty that would have been chargeable on the instrument if paragraph (1) had had statutory effect when it was executed; and
  "the commencement date" means 28th March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  54. STAMP DUTY (VARIATION BY REGULATIONS)
  Resolved,
  That provision may be made authorising the variation of existing stamp duties by regulations.

  55. STAMP DUTY (LAND TRANSFERRED ETC. FOR OTHER PROPERTY)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Paragraph (2) applies where—

  (a) an instrument transferring or vesting an estate or interest in land would not, apart from this Resolution, be or fall to be treated as a conveyance or transfer on sale for the purposes of stamp duty; but

  (b) the transfer or vesting of the estate or interest is for consideration; and

  (c) the consideration is or includes any property ("the other property").

  (2) For the purposes of Part I of Schedule 13 to the Finance Act 1999, the instrument transferring or vesting the estate or interest shall be taken to be a transfer on sale of the estate or interest.
  (3) If—

  (a) the other property is or includes one or more estates or interests in land, and

  (b) ad valorem duty is chargeable on the conveyance or transfer of all or any of those estates or interests,

  176
  the amount of duty that would (apart from this paragraph) be chargeable in consequence of paragraph (2) on the transfer on sale there mentioned shall be reduced (but not below nil) by the total of the ad valorem duty chargeable as mentioned in paragraph (b).
  (4) If, for the purposes of Part I of Schedule 13 to the Finance Act 1999, the amount or value of the consideration for the transfer on sale mentioned in paragraph (2) would (apart from this paragraph) exceed the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it, the amount or value of the consideration shall be taken for those purposes to be equal to that market value.
  (5) For the purposes of this Resolution, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
  (6) Paragraph (2) has effect even though—

  (a) the transfer or vesting of the estate or interest is the whole or part of the consideration for a sale of the other property; or

  (b) the transaction is by way of exchange.

  (7) Paragraph (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.
  (8) This Resolution is subject to paragraph (5) of the Resolution of the House (Stamp duty (transfer of land to connected company)) of 27th March 2000.
  (9) This Resolution shall be construed as one with the Stamp Act 1891.
  (10) This Resolution applies to instruments executed on or after 28th March 2000.
  (11) But this Resolution does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  56. STAMP DUTY (TRANSFER OF LAND TO CONNECTED COMPANY)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) This Resolution applies where an estate or interest in land is transferred to or vested in a company ("A") and—

  (a) the person transferring or vesting the estate or interest ("B") is connected with A; or

  (b) some or all of the consideration for the transfer or vesting consists of the issue or transfer of shares in a company with which B is connected.

  (2) For the purposes of Part I of Schedule 13 to the Finance Act 1999, an instrument transferring or vesting the estate or interest shall he taken to be a transfer on sale of the estate or interest.
  (3) If for those purposes the amount or value of the consideration for the transfer on sale of the estate or interest would, apart from this paragraph, be less than the value determined under paragraph (4), the consideration shall be taken for those purposes to be the value determined under paragraph (4).
  (4) That value is—

  (a) the market value of the estate or interest immediately before the execution of the instrument transferring or vesting it; but

  177

  (b) reduced by the value of so much of any actual consideration as does not consist of property.

  (5) Where—

  (a) apart from this Resolution, an instrument would be chargeable to stamp duty in accordance with the Resolution of the House (Stamp duty: land transferred etc for other property) of 27th March 2000, and

  (b) apart from that Resolution, the instrument would be chargeable to stamp duty in accordance with this Resolution,

  the stamp duty chargeable on the instrument shall be determined in accordance with this Resolution (instead of that Resolution).
  (6) This Resolution applies only if, in consequence of its application, the instrument transferring or vesting the estate or interest is chargeable with a greater amount of stamp duty than it would be apart from this Resolution and that Resolution.
  (7) For the purposes of this Resolution, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
  (8) In this Resolution—
  "company" means any body corporate;
  "shares" includes stock and the reference to shares in a company includes a reference to securities issued by a company.
  (9) For the purposes of this Resolution, the question whether any person is connected with another shall be determined in accordance with the provisions of section 839 of the Income and Corporation Taxes Act 1988.
  (10) This Resolution shall be construed as one with the Stamp Act 1891.
  (11) This Resolution applies to instruments executed on or after 28th March 2000.
  (12) But this Resolution does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  57. STAMP DUTY (GRANT OF LEASE TO CONNECTED COMPANY)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) This Resolution applies where a lease is granted to a company ("A") and—

  (a) the person granting the lease ("B") is connected with A; or

  (b) some or all of the consideration for the grant of the lease consists of the issue or transfer of shares in a company with which B is connected.

  (2) Paragraph (3) has effect for the purposes of stamp duty chargeable under Part II of Schedule 13 to the Finance Act 1999 by reference to Part I of that Schedule.
  (3) If, apart from this paragraph, the amount or value of the consideration for the grant would be less than the value determined under paragraph (4), the consideration shall be taken to be the value determined under paragraph (4).
  (4) That value is—
  178

  (a) the market value, immediately before the instrument granting the lease is executed, of the lease granted; but

  (b) reduced by the value of so much of any actual consideration as does not consist of property.

  (5) This Resolution applies only if, in consequence of its application, the lease is chargeable with a greater amount of stamp duty than it would be apart from this Resolution.
  (6) For the purposes of this Resolution, the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
  (7) In this Resolution—
  "company" means any body corporate;
  "shares" includes stock and the reference to shares in a company includes a reference to securities issued by a company.
  (8) For the purposes of this Resolution, the question whether any person is connected with another shall be determined in accordance with the provisions of section 839 of the Income and Corporation Taxes Act 1988.
  (9) This Resolution shall be construed as one with the Stamp Act 1891.
  (10) This Resolution applies to instruments executed on or after 28th March 2000.
  (11) But this Resolution does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  58. STAMP DUTY (MARKETABLE SECURITIES TRANSFERRED ETC. FOR EXEMPT PROPERTY)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Paragraph (2) applies where—
  (a) an instrument transferring marketable securities would not, apart from this Resolution, be or fall to be treated as a transfer on sale for the purposes of stamp duty; but (b) the transfer of the marketable securities is for consideration; and (c) the consideration is or includes any qualifying property ("the other property").
  (2) For the purposes of Part I of Schedule 13 to the Finance Act 1999, the instrument transferring the marketable securities shall be taken to be a transfer on sale of those securities.
  (3) If the amount or value of the consideration for that transfer on sale would (apart from this paragraph) exceed the market value of the marketable securities immediately before the execution of the instrument transferring them, the amount or value of the consideration shall be taken to be equal to that market value.
  For this purpose the market value of property at any time is the price which that property might reasonably be expected to fetch on a sale at that time in the open market.
  (4) Paragraph (2) has effect even though—

  (a) the transfer of the marketable securities is the whole or part of the consideration for a sale of the other property; or

  (b) the transaction is by way of exchange.

  (5) Paragraph (2) does not affect any charge to stamp duty in respect of the same or any other instrument so far as it relates to the transfer of the other property.
  (6) In this Resolution "qualifying property" means any debt due, stock or securities, to the extent that the debt, stock or securities are not chargeable securities, within the meaning of Part IV of the Finance Act 1986.
  (7) This Resolution shall be construed as one with the Stamp Act 1891.
  (8) This Resolution applies to instruments executed on or after 28th March 2000.
  (9) But this Resolution does not apply to an instrument giving effect to a contract made on or before 21st March 2000, unless—

  (a) the instrument is made in consequence of the exercise after that date of any option, right of pre-emption or similar right; or

  (b) the instrument transfers the property in question to, or vests it in, a person other than the purchaser under the contract, because of an assignment (or, in Scotland, assignation) or further contract made after that date.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  59. STAMP DUTY (MISCELLANEOUS)
  Resolved,
  That provision may be made—

  (a) amending section 55 of the Stamp Act 1891, section 42 of the Finance Act 1930, section 11 of the Finance Act (Northern Ireland) 1954, sections 75 and 76 of the Finance Act 1986 and section 151 of the Finance Act 1995; and

  (b) about stamp duty on documents relating to the surrender or renunciation of leases.

  60. STAMP DUTY (INTELLECTUAL PROPERTY)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) No stamp duty is chargeable on an instrument for the sale, transfer or other disposition of intellectual property.
  (2) Where stamp duty under Part I of Schedule 13 to the Finance Act 1999 is chargeable on an instrument and part of the property concerned consists of intellectual property—

  (a) the consideration in respect of which duty would otherwise be charged shall be apportioned, on such basis as is just and reasonable, as between the part of the property which consists of intellectual property and the part which does not, and

  (b) the instrument shall be charged only in respect of the consideration attributed to such of the property as is not intellectual property.

  (3) Where part of the property referred to in section 58(1) of the Stamp Act 1891 consists of intellectual property, that provision shall have effect as if "the parties think fit" read "is just and reasonable".
  (4) Where—

  (a) part of the property referred to in section 58(2) of the Stamp Act 1891 consists of intellectual property, and

  (b) both or (as the case may be) all the relevant persons are connected with one another,

  that provision shall have effect as if the words from "for distinct parts of the consideration" to the end of the subsection read ", the consideration is to be apportioned in such manner as is just and reasonable, so that a distinct consideration for each separate part or parcel is set forth in the conveyance relating thereto, and such conveyance is to be charged with ad valorem duty in respect of such distinct consideration.".
  (5) In a case where paragraph (3) or (4) applies and the consideration is apportioned in a manner that is not just and reasonable, the enactments relating to stamp duty shall have effect as if—

  (a) the consideration had been apportioned in a manner that is just and reasonable, and

  (b) the amount of any distinct consideration set forth in any conveyance relating to a separate part or parcel of property were such amount as is found by a just and reasonable apportionment (and not the amount actually set forth).

  "The enactments relating to stamp duty" means the Stamp Act 1891 and any enactment amending or which is to be construed as one with that Act.
  (6) For the purposes of paragraph (4)—

  (a) a person is a relevant person if he is a person by or for whom the property is contracted to be purchased;

  (b) the question whether persons are connected with one another shall be determined in accordance with section 839 of the Income and Corporation Taxes Act 1988.

  (7) Intellectual property shall be disregarded for the purposes of paragraph 6 of Schedule 13 to the Finance Act 1999.
  (8) Any statement as mentioned in paragraph 6(1) of that Schedule shall be construed as leaving out of account any matter which is to be so disregarded.
  (9) Section 12 of the Finance Act 1895 does not require any person who is authorised to purchase any property as mentioned in that section after 27th March 2000 to include any intellectual property in the instrument of conveyance required by that section to be produced to the Commissioners.
  (10) If the property consists wholly of intellectual property no instrument of conveyance need be produced to the Commissioners under that section.
  (11) Subject to paragraph (12), the preceding paragraphs of this Resolution apply to instruments executed on or after 28th March 2000.
  (12) Paragraphs (9) and (10) apply where the Act mentioned in section 12 of the Finance Act 1895, and by virtue of which property is vested or a person is authorised to purchase property, is passed after 27th March 2000.
  (13) In this Resolution "intellectual property" means—

  (a) any patent, trade mark, registered design, copyright or design right,

  (b) any plant breeders' rights and rights under section 7 of the Plant Varieties Act 1997,

  (c) any licence or other right in respect of anything within paragraph (a) or (b), or

  (d) any rights under the law of a country outside the United Kingdom that correspond or are similar to those within paragraph (a), (b) or (c).

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  61. STAMP DUTY (NORTHERN IRELAND ASSEMBLY COMMISSION)
  Resolved,
  That the following provisions shall have effect for the period beginning 28th March 2000 and ending 31 days after the earliest of the dates mentioned in section 50(2) of the Finance Act 1973—
  (1) Section 55 of the Finance Act 1987 shall be amended as follows.
  (2) In subsection (1)—

  (a) after "agreed to be made" there shall be inserted "(a)";

  (b) after "Minister of the Crown or" there shall be inserted "(b)"; and

  (c) after "Treasury, or" there shall be inserted "(c)".

  (3) In subsection (1), after "National Assembly for Wales," there shall be inserted "or
  (d) to the Northern Ireland Assembly Commission,".
  (4) Paragraph (3) has effect in relation to instruments executed on or after 28th March 2000.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of section 50 of the Finance Act 1973.

  62. LANDFILL TAX (RATE)
  Motion made, and Question put,
  That—

  (1) In section 42 of the Finance Act 1996, in subsections (1)(a) and (2) for "£10" there shall be substituted "£11".

  (2) This Resolution has effect in relation to taxable disposals made, or treated as made, on or after 1st April 2000.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  The House divided: Ayes 334, Noes 136.

  Division No. 128]

  [11.42 pm

  AYES

  Abbott, Ms Diane

  Burstow, Paul

  Ainger, Nick

  Butler, Mrs Christine

  Ainsworth, Robert (Cov'try NE)

  Byers, Rt Hon Stephen

  Allan, Richard

  Cable, Dr Vincent

  Allen, Graham

  Campbell, Mrs Anne (C'bridge)

  Anderson, Donald (Swansea E)

  Campbell, Rt Hon Menzies(NE Fife)

  Anderson, Janet (Rossendale)

  Ashdown, Rt Hon Paddy

  Campbell-Savours, Dale

  Ashton, Joe

  Cann, Jamie

  Atherton, Ms Candy

  Casale, Roger

  Atkins, Charlotte

  Cawsey, Ian

  Austin, John

  Chaytor, David

  Baker, Norman

  Chidgey, David

  Ballard, Jackie

  Clapham, Michael

  Banks, Tony

  Clark, Dr Lynda (Edinburgh Pentlands)

  Barnes, Harry

  Barton, Kevin

  Clark, Paul (Gillingham)

  Battle, John

  Clarke, Charles (Norwich S)

  Bayley, Hugh

  Clarke, Rt Hon Tom (Coatbridge)

  Beard, Nigel

  Clarke, Tony (Northampton S)

  Begg, Miss Anne

  Clelland, David

  Beith, Rt Hon A J

  Clwyd, Ann

  Bell, Stuart (Middlesbrough)

  Coaker, Vernon

  Benn, Hilary (Leeds C)

  Coffey, Ms Ann

  Benn, Rt Hon Tony (Chesterfield)

  Cohen, Harry

  Bennett, Andrew F

  Coleman, Iain

  Benton, Joe

  Colman, Tony

  Berry, Roger

  Corbyn, Jeremy

  Blackman, Liz

  Corston, Jean

  Blears, Ms Hazel

  Cotter, Brian

  Blizzard, Bob

  Cousins, Jim

  Boateng, Rt Hon Paul

  Cranston, Ross

  Borrow, David

  Crausby, David

  Bradley, Keith (Withington)

  Cryer, Mrs Ann (Keighley)

  Bradley, Peter (The Wrekin)

  Cryer, John (Hornchurch)

  Bradshaw, Ben

  Cunningham, Rt Hon Dr Jack (Copeland)

  Brake, Tom

  Brand, Dr Peter

  Cunningham, Jim (Cov'try S)

  Brown, Rt Hon Gordon (Dunfermline E)

  Cunningham, Ms Roseanna (Perth)

  Brown, Rt Hon Nick (Newcastle E)

  Curtis-Thomas, Mrs Claire

  Brown, Russell (Dumfries)

  Dalyell, Tam

  Browne, Desmond

  Darling, Rt Hon Alistair

  Bruce, Malcolm (Gordon)

  Darvill, Keith

  Buck, Ms Karen

  Davey, Edward (Kingston)

  Burden, Richard

  Davies, Rt Hon Denzil (Llanelli)

  Burgon, Colin

  Davies, Geraint (Croydon C)

  182

  Dean, Mrs Janet

  Johnson, Miss Melanie (Welwyn Hatfield)

  Denham, John

  Dismore, Andrew

  Jones, Rt Hon Barry (Alyn)

  Dobbin, Jim

  Jones, Helen (Warrington N)

  Donohoe, Brian H

  Jones, Ieuan Wyn (Ynys Môn)

  Doran, Frank

  Jones, Ms Jenny (Wolverh'ton SW)

  Dowd, Jim

  Drew, David

  Keetch, Paul

  Eagle, Angela (Wallasey)

  Kemp, Fraser

  Eagle, Maria (L'pool Garston)

  Kennedy, Jane (Wavertree)

  Edwards, Huw

  Khabra, Piara S

  Efford, Clive

  Kidney, David

  Ellman, Mrs Louise

  Kilfoyle, Peter

  Ennis, Jeff

  King, Andy (Rugby & Kenilworth)

  Etherington, Bill

  King, Ms Oona (Bethnal Green)

  Field, Rt Hon Frank

  Kirkwood, Archy

  Fisher, Mark

  Ladyman, Dr Stephen

  Fitzsimons, Lorna

  Lepper, David

  Flint, Caroline

  Leslie, Christopher

  Flynn, Paul

  Lewis, Ivan (Bury S)

  Follett, Barbara

  Lewis, Terry (Worsley)

  Foster, Rt Hon Derek

  Liddell, Rt Hon Mrs Helen

  Foster, Don (Bath)

  Linton, Martin

  Foster, Michael Jabez (Hastings)

  Lloyd, Tony (Manchester C)

  Foster, Michael J (Worcester)

  Llwyd, Elfyn

  Fyfe, Maria

  Lock, David

  Gapes, Mike

  Love, Andrew

  Gardiner, Barry

  McAvoy, Thomas

  George, Andrew (St Ives)

  McCabe, Steve

  George, Bruce (Walsall S)

  McCafferty, Ms Chris

  Gerrard, Neil

  McCartney, Rt Hon Ian (Makerfield)

  Gibson, Dr Ian

  Gilroy, Mrs Linda

  Macdonald, Calum

  Godman, Dr Norman A

  McDonnell, John

  Godsiff, Roger

  McIsaac, Shona

  Goggins, Paul

  McKenna, Mrs Rosemary

  Gordon, Mrs Eileen

  Mackinlay, Andrew

  Griffiths, Jane (Reading E)

  Maclennan, Rt Hon Robert

  Griffiths, Nigel (Edinburgh S)

  McNamara, Kevin

  Grocott, Bruce

  McNulty, Tony

  Grogan, John

  Mactaggart, Fiona

  Hall, Patrick (Bedford)

  McWalter, Tony

  Hancock, Mike

  Mahon, Mrs Alice

  Hanson, David

  Marsden, Gordon (Blackpool S)

  Harman, Rt Hon Ms Harriet

  Marshall, David (Shettleston)

  Harris, Dr Evan

  Marshall, Jim (Leicester S)

  Heal, Mrs Sylvia

  Martlew, Eric

  Healey, John

  Meacher, Rt Hon Michael

  Heath, David (Somerton & Frome)

  Meale, Alan

  Henderson, Doug (Newcastle N)

  Merron, Gillian

  Henderson, Ivan (Harwich)

  Michie, Bill (Shef'ld Heeley)

  Heppell, John

  Michie, Mrs Ray (Argyll & Bute)

  Hesford, Stephen

  Milburn, Rt Hon Alan

  Hill, Keith

  Miller, Andrew

  Hinchliffe, David

  Mitchell, Austin

  Hoey, Kate

  Moonie, Dr Lewis

  Home Robertson, John

  Moore, Michael

  Hood, Jimmy

  Morgan, Alasdair (Galloway)

  Hoon, Rt Hon Geoffrey

  Morley, Elliot

  Hope, Phil

  Morris, Rt Hon Sir John (Aberavon)

  Hopkins, Kelvin

  Howarth, Alan (Newport E)

  Mountford, Kali

  Howells, Dr Kim

  Mullin, Chris

  Hughes, Ms Beverley (Stretford)

  Naysmith, Dr Doug

  Hughes, Kevin (Doncaster N)

  Norris, Dan

  Hughes, Simon (Southwark N)

  Oaten, Mark

  Humble, Mrs Joan

  O'Brien, Mike (N Warks)

  Hurst, Alan

  O'Hara, Eddie

  Hutton, John

  O'Neill, Martin

  Iddon, Dr Brian

  Palmer, Dr Nick

  Illsley, Eric

  Pearson, Ian

  Jackson, Ms Glenda (Hampstead)

  Pendry, Tom

  Jackson, Helen (Hillsborough)

  Perham, Ms Linda

  Jamieson, David

  Pickthall, Colin

  Jenkins, Brian

  Plaskitt, James

  Johnson, Alan (Hull W & Hessle)

  Pollard, Kerry

  183

  Pond, Chris

  Strang, Rt Hon Dr Gavin

  Pope, Greg

  Stringer, Graham

  Powell, Sir Raymond

  Stunell, Andrew

  Prentice, Ms Bridget (Lewisham E)

  Sutcliffe, Gerry

  Prentice, Gordon (Pendle)

  Swinney, John

  Primarolo, Dawn

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Prosser, Gwyn

  Purchase, Ken

  Taylor, Ms Dari (Stockton S)

  Quinn, Lawrie

  Taylor, David (NW Leics)

  Radice, Rt Hon Giles

  Taylor, Matthew (Truro)

  Rammell, Bill

  Temple-Morris, Peter

  Raynsford, Nick

  Thomas, Gareth (Clwyd W)

  Reed, Andrew (Loughborough)

  Thomas, Gareth R (Harrow W)

  Reid, Rt Hon Dr John (Hamilton N)

  Thomas, Simon (Ceredigion)

  Rendel, David

  Timms, Stephen

  Robinson, Geoffrey (Cov'try NW)

  Tipping, Paddy

  Rooker, Rt Hon Jeff

  Todd, Mark

  Rooney, Terry

  Tonge, Dr Jenny

  Ross, Ernie (Dundee W)

  Touhig, Don

  Rowlands, Ted

  Trickett, Jon

  Roy, Frank

  Turner, Dennis (Wolverh'ton SE)

  Ruddock, Joan

  Turner, Dr Desmond (Kemptown)

  Russell, Bob (Colchester)

  Turner, Dr George (NW Norfolk)

  Ryan, Ms Joan

  Turner, Neil (Wigan)

  Salmond, Alex

  Tyler, Paul

  Sanders, Adrian

  Tynan, Bill

  Sarwar, Mohammad

  Vis, Dr Rudi

  Savidge, Malcolm

  Wallace, James

  Sawford, Phil

  Walley, Ms Joan

  Sedgemore, Brian

  Watts, David

  Sheerman, Barry

  Webb, Steve

  Simpson, Alan (Nottingham S)

  White, Brian

  Singh, Marsha

  Whitehead, Dr Alan

  Skinner, Dennis

  Wicks, Malcolm

  Smith, Rt Hon Andrew (Oxford E)

  Wigley, Rt Hon Dafydd

  Smith, Angela (Basildon)

  Williams, Rt Hon Alan (Swansea W)

  Smith, Rt Hon Chris (Islington S)

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Williams, Alan W (E Carmarthen)

  Williams, Mrs Betty (Conwy)

  Smith, John (Glamorgan)

  Willis, Phil

  Smith, Llew (Blaenau Gwent)

  Winnick, David

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

  Winterton, Ms Rosie (Doncaster C)

  Snape, Peter

  Wise, Audrey

  Soley, Clive

  Wood, Mike

  Southworth, Ms Helen

  Woodward, Shaun

  Spellar, John

  Worthington, Tony

  Starkey, Dr Phyllis

  Wray, James

  Steinberg, Gerry

  Wright, Anthony D (Gt Yarmouth)

  Stevenson, George

  Stewart, David (Inverness E)

  Tellers for the Ayes:

  Stewart, Ian (Eccles)

  Mr. Clive Betts and

  Stoate, Dr Howard

  Mr. Mike Hall.

  NOES

  Ainsworth, Peter (E Surrey)

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Amess, David

  Arbuthnot, Rt Hon James

  Collins, Tim

  Atkinson, David (Bour'mth E)

  Cran, James

  Atkinson, Peter (Hexham)

  Curry, Rt Hon David

  Beggs, Roy

  Davies, Quentin (Grantham)

  Beresford, Sir Paul

  Davis, Rt Hon David (Haltemprice)

  Blunt, Crispin

  Day, Stephen

  Body, Sir Richard

  Donaldson, Jeffrey

  Boswell, Tim

  Dorrell, Rt Hon Stephen

  Bottomley, Peter (Worthing W)

  Duncan, Alan

  Bottomley, Rt Hon Mrs Virginia

  Duncan Smith, Iain

  Brady, Graham

  Evans, Nigel

  Brazier, Julian

  Faber, David

  Browning, Mrs Angela

  Fabricant, Michael

  Burns, Simon

  Fallon, Michael

  Butterfill, John

  Flight, Howard

  Cash, William

  Forth, Rt Hon Eric

  Chapman, Sir Sydney (Chipping Barnet)

  Fox, Dr Liam

  Gale, Roger

  Chope, Christopher

  Garnier, Edward

  Clark, Dr Michael (Rayleigh)

  Gibb, Nick

  184

  Gill, Christopher

  Pickles, Eric

  Gillan, Mrs Cheryl

  Portillo, Rt Hon Michael

  Gray, James

  Prior, David

  Green, Damian

  Randall, John

  Greenway, John

  Redwood, Rt Hon John

  Grieve, Dominic

  Robathan, Andrew

  Hamilton, Rt Hon Sir Archie

  Robertson, Laurence

  Hammond, Philip

  Roe, Mrs Marion (Broxbourne)

  Hawkins, Nick

  Ross, William (E Lond'y)

  Hayes, John

  Ruffley, David

  Heald, Oliver

  St Aubyn, Nick

  Heathcoat-Amory, Rt Hon David

  Sayeed, Jonathan

  Hogg, Rt Hon Douglas

  Shephard, Rt Hon Mrs Gillian

  Horam, John

  Shepherd, Richard

  Howarth, Gerald (Aldershot)

  Simpson, Keith (Mid-Norfolk)

  Hunter, Andrew

  Smyth, Rev Martin (Belfast S)

  Jack, Rt Hon Michael

  Soames, Nicholas

  Jackson, Robert (Wantage)

  Spelman, Mrs Caroline

  Jenkin, Bernard

  Spicer, Sir Michael

  Key, Robert

  Spring, Richard

  King, Rt Hon Tom (Bridgwater)

  Steen, Anthony

  Laing, Mrs Eleanor

  Streeter, Gary

  Lait, Mrs Jacqui

  Swayne, Desmond

  Lansley, Andrew

  Syms, Robert

  Leigh, Edward

  Tapsell, Sir Peter

  Letwin, Oliver

  Taylor, Ian (Esher & Walton)

  Lewis, Dr Julian (New Forest E)

  Taylor, John M (Solihull)

  Lidington, David

  Thompson, William

  Lilley, Rt Hon Peter

  Townend, John

  Lloyd, Rt Hon Sir Peter (Fareham)

  Tredinnick, David

  Loughton, Tim

  Tyrie, Andrew

  MacGregor, Rt Hon John

  Walter, Robert

  McIntosh, Miss Anne

  Wardle, Charles

  Maclean, Rt Hon David

  Waterson, Nigel

  McLoughlin, Patrick

  Wells, Bowen

  Madel, Sir David

  Whitney, Sir Raymond

  Malins, Humfrey

  Whittingdale, John

  Maples, John

  Widdecombe, Rt Hon Miss Ann

  Maude, Rt Hon Francis

  Wilkinson, John

  Mawhinney, Rt Hon Sir Brian

  Willetts, David

  May, Mrs Theresa

  Wilshire, David

  Moss, Malcolm

  Winterton, Mrs Ann (Congleton)

  Nicholls, Patrick

  Winterton, Nicholas (Macclesfield)

  Norman, Archie

  Yeo, Tim

  O'Brien, Stephen (Eddisbury)

  Young, Rt Hon Sir George

  Ottaway, Richard

  Page, Richard

  Tellers for the Noes:

  Paice, James

  Mr. Peter Luff and

  Paterson, Owen

  Mr. Geoffrey Clifton-Brown.

  Question accordingly agreed to.

  63. LANDFILL TAX (RECOVERY)
  Resolved,
  That provision may be made about the recovery of landfill tax from persons other than landfill site operators.

  64. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)
  Resolved,
  That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from provisions designed in general to afford relief from taxation.

  PROCEDURE (MUTUAL SECURING OF EXCISE DUTIES)
  Resolved,
  That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision about security for excise duties charged in other Member States of the European Community.

  PROCEDURE (DONATIONS TO CHARITY)
  Resolved,
  That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for the payment by the Commissioners of Inland Revenue of supplements on sums falling to be paid to charities and other bodies in accordance with schemes approved under section 202 of the Income and Corporation Taxes Act 1988.

  PROCEDURE (R&D TAX CREDITS)
  Resolved,
  That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for allowing R&D tax credits to be paid to companies.

  PROCEDURE (MUTUAL EXCHANGE OF INFORMATION)
  Resolved,
  That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain provision for giving effect to arrangements made with the government of any territory outside the United Kingdom with a view to the exchange of information necessary for carrying out—

  (a) the domestic laws of the United Kingdom concerning income tax, capital gains tax, corporation tax in respect of income and chargeable gains and inheritance tax; and

  (b) the laws of the territory to which the arrangements relate concerning any taxes imposed by the laws of that territory which are of a similar character to those taxes, or are chargeable on or by reference to death or gifts inter vivos.

  PROCEDURE (FUTURE TAXATION)
  Resolved,
  That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—

  (a) provision about air passenger duty;

  (b) provision for charging climate change levy;

  (c) provision about children's tax credit;

  (d) provision for corporation tax to be charged for the financial year 2001;

  (e) provision about the income tax charge on cars available for private use;

  (f) provision relating to profit sharing schemes approved under Schedule 9 to the Income and Corporation Taxes Act 1988, including provision relating to individuals to whom shares are appropriated under such schemes and provision about corporation tax relief for payments to trustees of such schemes;

  (g) provision about relief under section 229 of the Taxation of Chargeable Gains Act 1992;

  186

  (h) provision relating to retirement benefits schemes, within the meaning of Chapter I of Part XIV of the Income and Corporation Taxes Act 1988;

  (i) provision relating to personal pension schemes, within the meaning of Chapter IV of Part XIV of the Income and Corporation Taxes Act 1988;

  (j) provision amending section 660A of the Income and Corporation Taxes Act 1988; and

  (k) provision about payments under deduction of tax and about returns and other information.

  FINANCE [Money]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Finance Bill, it is expedient to authorise—

  (a) the payment out of money provided by Parliament of sums payable by the Secretary of State by virtue of provisions of that Act relating to vehicle excise and registration;

  (b) the payment out of money provided by Parliament of such amounts as are required by the Commissioners of Inland Revenue to make payments under provisions of that Act relating to charities;

  (c) the deduction of sums from the gross revenues of the department of the Commissioners of Inland Revenue for the purpose of the payment of R&D tax credits; and

  (d) the payment out of money provided by Parliament of sums payable by virtue of provisions of that Act relating to incentives to use electronic communications—

  (i) for the purposes mentioned in section 132(1) of the Finance Act 1999, and

  (ii) for any other communications with the tax authorities or in connection with taxation matters.

  Bill ordered to be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Straw, Mr. Secretary Blunkett, Mr. Secretary Milburn, Mr. Secretary Darling, Mr. Secretary Byers, Mr. Andrew Smith, Dawn Primarolo, Miss Melanie Johnson and Mr. Stephen Timms do prepare and bring it in.

  FINANCE BILL
  Mr. Stephen Timms accordingly presented a Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 97].
  11.55 pm
  Mr. St. Aubyn: On a point of order, Mr. Deputy Speaker. Tonight, the Chief Secretary to the Treasury portrayed Mr. Peter Wyman as a personal tax adviser to a former Member, Mr. Neil Hamilton. Given that all that Mr. Wyman ever did was to give public, unpaid service to a Government deregulation task force when

  187
  Mr. Hamilton was a Minister, has the Chief Secretary approached the Chair to correct a pernicious insinuation against a leading accountant in this country?
  Mr. Deputy Speaker (Mr. Michael Lord): That is not a point of order for the Chair.
  Mr. Stephen O'Brien: On a point of order, Mr. Deputy Speaker. It is a separate point of order. Was it in order tonight for the Chief Secretary to traduce Mr. Peter Wyman's evidence to the Treasury last Friday?
  Mr. Deputy Speaker: That matter was dealt with in an earlier debate. It is not a matter for the Chair now.
  Mr. St. Aubyn: Further to that point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: No. It is not a matter for the Chair now.

  DELEGATED LEGISLATION
  Mr. Deputy Speaker: With the leave of the House, I will put motions 3 to 9 together.
  Hon. Members: Object.
  Mr. Deputy Speaker: In that case, we will do them one by one.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  FINANCIAL SERVICES
  That the draft Official Listing of Securities (Change of Competent Authority) Regulations 2000, which were laid before this House on 1st March, be approved.—[Mr. Greg Pope.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  INDUSTRIAL DEVELOPMENT
  That the draft Financial Assistance for Industry (Increase of Limit) Order 2000, which was laid before this House on 1st March, be approved.—[Mr. Greg Pope.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  CONTRACTING OUT
  That the draft Contracting Out (Functions relating to Social Security) Order 2000, which was laid before this House on 1st March, be approved.—[Mr. Greg Pope.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  SOCIAL SECURITY
  That the draft Social Security (Work-focused Interviews) Regulations 2000, which were laid before this House on 1st March, be approved.—[Mr. Greg Pope.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  LOCAL GOVERNMENT FINANCE
  That the Local Government Finance (England) Special Grant Report (No. 53) on rural bus subsidy grants for 2000–01 (HC 302), which was laid before this House on 3rd March, be approved.—[Mr. Greg Pope.]
  Question agreed to.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

  LOCAL GOVERNMENT FINANCE
  That the Local Government Finance (England) Special Grant Report (No. 54) on Rural Bus subsidy grants for 1999(HC 303),which was laid before this House on 3rd March, be approved.—[Mr. Greg Pope.]
  The House divided: Ayes 275, Noes 44.

  Division No. 129]

  [11.57 pm

  AYES

  Abbott, Ms Diane

  Clapham, Michael

  Ainger, Nick

  Clark, Dr Lynda (Edinburgh Pentlands)

  Allen, Graham

  Anderson, Donald (Swansea E)

  Clark, Paul (Gillingham)

  Anderson, Janet (Rossendale)

  Clarke, Charles (Norwich S)

  Ashton, Joe

  Clarke, Rt Hon Tom (Coatbridge)

  Atherton, Ms Candy

  Clarke, Tony (Northampton S)

  Atkins, Charlotte

  Clelland, David

  Austin, John

  Clwyd, Ann

  Banks, Tony

  Coaker, Vernon

  Barnes, Harry

  Coffey, Ms Ann

  Barron, Kevin

  Cohen, Harry

  Battle, John

  Coleman, Iain

  Bayley, Hugh

  Colman, Tony

  Begg, Miss Anne

  Corbyn, Jeremy

  Benn, Hilary (Leeds C)

  Corston, Jean

  Benn, Rt Hon Tony (Chesterfield)

  Cousins, Jim

  Bennett, Andrew F

  Cranston, Ross

  Benton, Joe

  Crausby, David

  Berry, Roger

  Cryer, Mrs Ann (Keighley)

  Betts, Clive

  Cryer, John (Hornchurch)

  Blackman, Liz

  Cunningham, Rt Hon Dr Jack (Copeland)

  Blears, Ms Hazel

  Blizzard, Bob

  Cunningham, Jim (Cov'try S)

  Boateng, Rt Hon Paul

  Curtis-Thomas, Mrs Claire

  Borrow, David

  Dalyell, Tam

  Bradley, Keith (Withington)

  Darvill, Keith

  Bradley, Peter (The Wrekin)

  Davies, Rt Hon Denzil (Llanelli)

  Bradshaw, Ben

  Davies, Geraint (Croydon C)

  Brown, Rt Hon Gordon (Dunfermline E)

  Dean, Mrs Janet

  Denham, John

  Brown, Rt Hon Nick (Newcastle E)

  Dismore, Andrew

  Brown, Russell (Dumfries)

  Dobbin, Jim

  Browne, Desmond

  Donohoe, Brian H

  Buck, Ms Karen

  Doran, Frank

  Burden, Richard

  Dowd, Jim

  Burgon, Colin

  Drew, David

  Butler, Mrs Christine

  Eagle, Angela (Wallasey)

  Campbell, Mrs Anne (C'bridge)

  Eagle, Maria (L'pool Garston)

  Campbell-Savours, Dale

  Edwards, Huw

  Casale, Roger

  Efford, Clive

  Cawsey, Ian

  Ellman, Mrs Louise

  Chaytor, David

  Ennis, Jeff

  189

  Etherington, Bill

  Lewis, Terry (Worsley)

  Field, Rt Hon Frank

  Linton, Martin

  Fisher, Mark

  Lloyd, Tony (Manchester C)

  Fitzsimons, Lorna

  Lock, David

  Flint, Caroline

  Love, Andrew

  Flynn, Paul

  McAvoy, Thomas

  Foster, Michael Jabez (Hastings)

  McCabe, Steve

  Foster, Michael J (Worcester)

  McCafferty, Ms Chris

  Fyfe, Maria

  McCartney, Rt Hon Ian (Makerfield)

  Gapes, Mike

  Gardiner, Barry

  Macdonald, Calum

  George, Bruce (Walsall S)

  McDonnell, John

  Gerrard, Neil

  McIsaac, Shona

  Gibson, Dr Ian

  McKenna, Mrs Rosemary

  Gilroy, Mrs Linda

  Mackinlay, Andrew

  Godman, Dr Norman A

  McNamara, Kevin

  Goggins, Paul

  McNulty, Tony

  Gordon, Mrs Eileen

  Mactaggart, Fiona

  Griffiths, Jane (Reading E)

  McWalter, Tony

  Griffiths, Nigel (Edinburgh S)

  Mahon, Mrs Alice

  Grocott, Bruce

  Marsden, Gordon (Blackpool S)

  Grogan, John

  Marshall, David (Shettleston)

  Hall, Mike (Weaver Vale)

  Marshall, Jim (Leicester S)

  Hall, Patrick (Bedford)

  Martlew, Eric

  Hanson, David

  Meacher, Rt Hon Michael

  Harman, Rt Hon Ms Harriet

  Meale, Alan

  Heal, Mrs Sylvia

  Merron, Gillian

  Healey, John

  Michie, Bill (Shef'ld Heeley)

  Henderson, Doug (Newcastle N)

  Milburn, Rt Hon Alan

  Henderson, Ivan (Harwich)

  Miller, Andrew

  Heppell, John

  Mitchell, Austin

  Hesford, Stephen

  Moonie, Dr Lewis

  Hill, Keith

  Morley, Elliot

  Hinchliffe, David

  Mountford, Kali

  Hoey, Kate

  Mullin, Chris

  Home Robertson, John

  Naysmith, Dr Doug

  Hood, Jimmy

  Norris, Dan

  Hoon, Rt Hon Geoffrey

  O'Brien, Mike (N Warks)

  Hope, Phil

  O'Hara, Eddie

  Hopkins, Kelvin

  O'Neill, Martin

  Howarth, Alan (Newport E)

  Palmer, Dr Nick

  Howells, Dr Kim

  Pearson, Ian

  Hughes, Ms Beverley (Stretford)

  Pendry, Tom

  Hughes, Kevin (Doncaster N)

  Perham, Ms Linda

  Humble, Mrs Joan

  Pickthall, Colin

  Hurst, Alan

  Plaskitt, James

  Hutton, John

  Pollard, Kerry

  Iddon, Dr Brian

  Pond, Chris

  Illsley, Eric

  Pope, Greg

  Jackson, Helen (Hillsborough)

  Prentice, Ms Bridget (Lewisham E)

  Jamieson, David

  Prentice, Gordon (Pendle)

  Jenkins, Brian

  Primarolo, Dawn

  Johnson, Alan (Hull W & Hessle)

  Prosser, Gwyn

  Johnson, Miss Melanie (Welwyn Hatfield)

  Purchase, Ken

  Quinn, Lawrie

  Jones, Rt Hon Barry (Alyn)

  Radice, Rt Hon Giles

  Jones, Helen (Warrington N)

  Rammell, Bill

  Jones, Ms Jenny (Wolverh'ton SW)

  Raynsford, Nick

  Reed, Andrew (Loughborough)

  Kemp, Fraser

  Reid, Rt Hon Dr John (Hamilton N)

  Kennedy, Jane (Wavertree)

  Robinson, Geoffrey (Cov'try NW)

  Kidney, David

  Rooker, Rt Hon Jeff

  Kilfoyle, Peter

  Rooney, Terry

  King, Andy (Rugby & Kenilworth)

  Ross, Ernie (Dundee W)

  King, Ms Oona (Bethnal Green)

  Rowlands, Ted

  Ladyman, Dr Stephen

  Roy, Frank

  Lepper, David

  Ruddock, Joan

  Leslie, Christopher

  Ryan, Ms Joan

  Lewis, Ivan (Bury S)

  Sarwar, Mohammad

  190

  Savidge, Malcolm

  Thomas, Gareth (Clwyd W)

  Sawford, Phil

  Thomas, Gareth R (Harrow W)

  Sedgemore, Brian

  Timms, Stephen

  Sheerman, Barry

  Tipping, Paddy

  Simpson, Alan (Nottingham S)

  Todd, Mark

  Singh, Marsha

  Trickett, Jon

  Skinner, Dennis

  Turner, Dennis (Wolverh'ton SE)

  Smith, Rt Hon Andrew (Oxford E)

  Turner, Dr Desmond (Kemptown)

  Smith, Angela (Basildon)

  Turner, Dr George (NW Norfolk)

  Smith, Rt Hon Chris (Islington S)

  Tynan, Bill

  Smith, Miss Geraldine (Morecambe & Lunesdale)

  Vis, Dr Rudi

  Walley, Ms Joan

  Smith, John (Glamorgan)

  Watts, David

  Smith, Llew (Blaenau Gwent)

  White, Brian

  Snape, Peter

  Whitehead, Dr Alan

  Soley, Clive

  Wicks, Malcolm

  Southworth, Ms Helen

  Williams, Rt Hon Alan (Swansea W)

  Spellar, John

  Starkey, Dr Phyllis

  Williams, Alan W (E Carmarthen)

  Steinberg, Gerry

  Williams, Mrs Betty (Conwy)

  Stevenson, George

  Winnick, David

  Stewart, David (Inverness E)

  Winterton, Ms Rosie (Doncaster C)

  Stewart, Ian (Eccles)

  Wise, Audrey

  Stoate, Dr Howard

  Wood, Mike

  Strang, Rt Hon Dr Gavin

  Woodward, Shaun

  Stringer, Graham

  Worthington, Tony

  Sutcliffe, Gerry

  Wray, James

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Wright, Anthony D (Gt Yarmouth)

  Taylor, Ms Dari (Stockton S)

  Tellers for the Ayes:

  Taylor, David (NW Leics)

  Mr. Don Touhig and

  Temple-Morris, Peter

  Mr. Robert Ainsworth.

  NOES

  Allan, Richard

  Keetch, Paul

  Ashdown, Rt Hon Paddy

  Kirkwood, Archy

  Baker, Norman

  Livsey, Richard

  Ballard, Jackie

  Llwyd, Elfyn

  Beith, Rt Hon A J

  Maclennan, Rt Hon Robert

  Brake, Tom

  Michie, Mrs Ray (Argyll & Bute)

  Brand, Dr Peter

  Moore, Michael

  Breed, Colin

  Morgan, Alasdair (Galloway)

  Bruce, Malcolm (Gordon)

  Oaten, Mark

  Burnett, John

  Rendel, David

  Burstow, Paul

  Russell, Bob (Colchester)

  Cable, Dr Vincent

  Salmond, Alex

  Campbell, Rt Hon Menzies (NE Fife)

  Sanders, Adrian

  Swinney, John

  Chidgey, David

  Taylor, Matthew (Truro)

  Cotter, Brian

  Thomas, Simon (Ceredigion)

  Cunningham, Ms Roseanna (Perth)

  Tonge, Dr Jenny

  Tyler, Paul

  Davey, Edward (Kingston)

  Webb, Steve

  Foster, Don (Bath)

  Wigley, Rt Hon Dafydd

  George, Andrew (St Ives)

  Willis, Phil

  Hancock, Mike

  Harris, Dr Evan

  Tellers for the Noes:

  Heath, David (Somerton & Frome)

  Sir Robert Smith and

  Hughes, Simon (Southwark N)

  Mr. Andrew Stunell.

  Question accordingly agreed to.
  Resolved,
  That the Local Government Finance (England) Special Grant Report (No. 55), on 1999–2000 Special Grant for Asylum Seekers' Support (Adults and Families of Asylum Seekers) (HC 304), which was laid before this House on 6th March, be approved.

  Graffiti and Vandalism
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. McNulty.]
  12.7 am
  Dr. Vincent Cable: For the benefit of the small number of night owls or masochists who have chosen to remain for this debate, I want to raise an issue that causes great concern, anger and frustration to many of our constituents. In many respects, it is a local problem dealt with through local agencies, but the Minister has a strategic role in looking at best practice and pulling the various threads together, so I think that it is an appropriate issue to throw at him.
  Why is graffiti a big issue and of such concern to many of us? First, in the areas in which it is a serious problem—and mine is one—it creates an atmosphere of neglect and disorder and fear of crime, particularly among vulnerable elderly people, who see it as evidence of the authorities' inability to maintain the fabric of local society and, rightly or wrongly, associate that with crime. Demoralisation flows from that.
  Secondly, graffiti is often associated with criminality. I had a long discussion before the debate with some of the youth workers in my constituency and with the local police, who know many of the perpetrators. Typically, in an area such as mine, which has 100,000 people, there are probably 20 youths seriously involved in graffiti. Many of them are also involved in theft. They probably stole the aerosols and may be at the beginning of involvement with substance abuse. Some of the aerosol sprays are intoxicating—apparently they give an adrenaline buzz to the kids who use them. Unless there is proper intervention by the courts, the police, the youth workers and others, many of those adolescents will find themselves on a slippery slope that will lead quickly to a young offenders institution and prison.
  The final reason why this is an issue of concern is the cost, which can be considerable. My local authority is severely stretched financially. That is one of the reasons for the last of the Divisions that we have just had, on a totally separate issue. The authority has a budget of £100,000 a year for a hotline on graffiti, but it has had to double the number of people involved because of rising demand.
  I have had correspondence with London United Buses, which is in despair about the enormous cost of cleaning buses and shelters. A study carried out five years ago on the London underground suggested that about £2 million a year had to be spent on the removal and clearing up of graffiti. That is a substantial cost for utilities, local councils and, indirectly, for all of us.
  I want to focus on areas of action and policy initiatives that the Minister can take forward. The first issue is policing. Clearly, the police are in the front line. My local police are positive about the issue, and they apply an effective zero-tolerance policy. They work closely with the police consultative group in the area, and give the matter appropriate priority.
  For the Metropolitan police as a whole, graffiti and associated vandalism is not a high-priority offence; perhaps it should be, and I am interested in the Minister's reactions to that. Clearly, this is also linked to the numbers of police officers. As the Minister knows—we will not
  192
  rehearse the party political arguments—there is a problem with the decline in police numbers in London. That has been particularly serious in suburban areas which are assumed to be less prone to crime, and which therefore have borne the brunt of the cuts.
  It is evident in the areas which have seen a decline in policing that graffiti and associated vandalism have blossomed. On Sunday afternoon, I went round an area which has just had a beat police officer withdrawn for reasons of economy. It is now one of the worst-affected areas. Cause and effect is difficult to prove, but that is certainly highly suggestive.
  Where police officers are not available, closed circuit television is important. I note here the positive initiatives of some of the train operators. South West Trains, whatever its other deficiencies, has seen the value of properly monitored CCTV. I hope that I have persuaded the company to accelerate the installation in some of the worst-affected stations. Clearly, that is an important part of the picture.
  The second line of defence is the courts, and I attended a meeting of the local police consultative group last week where there was consternation at the fact that, in the local magistrates court, one of the worst offenders had been up on 50 counts and had been given no more than a supervision order. I think it is now recognised that there is a wide range of possible offences. It will be interesting to hear from the Minister the results of the field surveys that have been done in 10 boroughs, from which are emerging the most promising lines of action through the courts.
  Perhaps we could draw on international experience. In Holland, widespread use was made of what could be called reparation provisions, insisting that graffiti offenders clear up the mess that they had created through community service orders. That would seem to be a promising route, and it would be interesting to hear the Minister's reaction to that.
  The third line of argument—it is perhaps a little different from the conventional way of pursuing the matter—is what we might call the supply-side problem. If we were talking about drugs, we would be talking about the supply of drugs. In terms of graffiti, far too little attention is paid to the issue of how aerosol sprays and other instruments get into the hands of potential young offenders. There is an issue here for the retail sector and for the manufacturers.
  I noticed in one of the local discount stores this weekend that aerosol sprays are being sold at a heavy discount—six for £1. The owners of the stores must know what the aerosols are being used for. Graffiti is now almost certainly the major market for a lot of aerosol sprays, and there is a complete absence of social responsibility. This seems to be an area where public education, led at ministerial level, might be useful.
  Similarly, the manufacturers know what they are producing; they know what these things are for, and there must be a heightened sense of social responsibility among them. The paint industry is giving a lot of thought to the matter. The Paint Research Association is based in my constituency, and has helpfully sent me some of its academic journals on new coverings which, were they used extensively by householders and utilities, would substantially diminish the adhesive potential of graffiti paint. I am not sure how widely that has been promoted

  193
  or how much support the Government and local authorities have given it. The industry has some responsibility. Has the Minister discussed the possible remedies with it?
  At present, there is a clean-up hotline in many boroughs and the council can paint over the damage, but it needs the permission of the property owner, which is frequently not forthcoming. Owners are sometimes difficult to find and many businesses do not want to pay the small charge that is asked of them. There is a particular problem with utilities, which will not allow authorities to touch their heavily marked equipment.
  Would it be useful for local authorities to have the additional power to compel clean-up, without the approval of property owners? I am not sure what the legislative problems might be. Secondary legislation might be needed. Something that allowed a more co-ordinated and tougher response would be appreciated.
  Dr. Julian Lewis: The hon. Gentleman has put his finger on the pulse of the problem. Is not the whole point of graffiti tags for one artist to advertise his handiwork to others, and is it not the case that, with a hotline such as that operated by New Forest district council, which leads to the graffiti being obliterated within 48 hours, not only is the vandals' objective defeated but policing is made much easier if they keep returning to the site to reinstate their efforts?
  Dr. Cable: The hon. Gentleman is right: speed is of the essence. That is why the local authority needs not only the resources but the legal powers to respond rapidly. I noticed that he used the word "artist". I try to avoid that expression. There may be occasional cases in which graffiti are artistic or even witty, but they are infrequent. Graffiti seriously disfigure public space.
  I am not asking for a heavy-handed intervention from the Home Office. The Minister is aware of good practice both here and abroad, in the courts and in local initiatives. Some bold schemes have been tried. I believe that in Los Angeles and Chicago, attempts were made to ban the sale of aerosol sprays to under-age children. It would be useful to have some reflection on that experience. What is good practice? Does the Home Office have a view, and is it disseminating it? How does it propose to bring the various threads together?
  There is a role for Ministers to bring together the various agencies. Even if the Minister does not legislate specifically, he could bring together the utilities, which are very variable in their response to the problem, and the private sector—not necessarily to coerce them but to improve their sense of public responsibility.
  12.19 am
  Mr. Edward Davey: I am grateful to my hon. Friend the Member for Twickenham (Dr. Cable) for allowing me to borrow a few minutes of his time, and I echo many of his comments.
  There is an epidemic of graffiti in my constituency. In New Malden, Chessington, Tolworth and Surbiton there is not a road sign, telephone box or bus shelter without some ugly scrawl or tag defacing it. It is not a coincidence that the rise in graffiti has accompanied the fall in the
  194
  number of police officers, and especially beat officers, in our community. There has been a cull of nearly a quarter of the Kingston police division in the past five years.
  The Minister may say that the Government have put more resources into the Metropolitan police and that the numbers are being turned around, but we have yet to see any evidence of that in Kingston. We have had the recent announcement that we will not get the cuts that we expected next year. I welcome that, but until we start rebuilding the local police force and get more police on the beat we will not turn the tide of vandalism and graffiti, which is sometimes called low-level crime.
  I have a few specific questions for the Minister. Will he ask his officials to review the problems faced by the police in getting evidence to convict vandals of graffiti offences? For example, is there any way for police to challenge and search youngsters who they suspect are carrying spray cans in their bags with intent to deface a property, or who they believe have come from defacing a property? At the moment, the law does not allow that.
  Will the Minister assure me that his Department will monitor the use of the new reparation orders to punish graffiti vandals? Will he make sure that the courts use the orders as Parliament intended—as an appropriate and common-sense punishment for offences of this type? Will he try to support the probation service and youth offender teams as they use the new punishments? Will he ensure that they are carried out properly?
  Will the Minister ensure that the effect of the reparation orders with regard to reducing graffiti is properly studied? Following what my hon. Friend the Member for Twickenham said, will he also review the policy with regard to age limits on the sale of spray paints? I received an e-mail today from a constituent, who said that he and his neighbours in New Malden believed that that solution would help. Similar arguments are used to support the limits on sales to minors of other products, and they apply equally to the sale of spray cans.
  Will the Minister consider issuing new Home Office guidelines to manufacturers and retailers of spray paints, to encourage them to play their part in combating the graffiti menace? Could not the guidelines offer advice on the storage and display of the paints, with a view to minimising the pilfering of spray paint cans?
  Finally, would the Minister be prepared to organise an anti-graffiti summit? The paint manufacturers could take part, as could public service organisations such as transport operators, telecoms providers, cable television suppliers and local authorities. That would be a way to generate new ideas, spread best practice and develop new partnerships to tackle the problem.
  In my gallop through these issues, I have not touched on clean-up, a part of the solution mentioned by my hon. Friend the Member for Twickenham. It is very important that graffiti are cleaned up as soon as possible, as that will discourage vandals.
  Government and local councils must give a lead on the matter. I hope that the Minister will join me in condemning those Conservative councillors who wanted to cut Kingston's graffiti clean-up budget. They talk tough in the local papers about graffiti, but they fail to provide the finances needed to clean up. Will the Minister join me in congratulating Liberal Democrat and Labour councillors in Kingston, who worked together to prevent the cuts in the clean-up budget?

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  We should not tolerate graffiti in our communities. I hope that the Government will build on the good measures, such as reparation orders, that they have taken and the previous Conservative Government did not. I hope that they will go much, much further.
  12.23 am
  The Minister of State, Home Office (Mr. Charles Clarke): First, I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this Adjournment debate. I also congratulate the hon. Members for Kingston and Surbiton (Mr. Davey) and for New Forest, East (Dr. Lewis) on their interventions.
  Initially, I was tempted to draw some association between Liberal Democrats and graffiti, but then I thought that that would be unworthy. I shall therefore take the subject at its face value.
  Mr. Bob Russell: The writing is on the wall.
  Mr. Charles Clarke: I hear what the hon. Gentleman says, but I was in his constituency last Friday, and I must say that I felt that the writing would be on the wall for him at the next general election.
  I can understand why, in the light of all the most recent pronouncements on crime and disorder, members of the public believe that offences such as vehicle crime, burglary and violent crime take a higher priority than quality-of-life issues such as vandalism and graffiti. However, the points made by the hon. Member for Twickenham are warranted, and we should take them very seriously.
  The Government recognise the damaging effect of vandalism and graffiti on neighbourhoods and how people feel about living where there are substantial amounts of criminal damage. We are concerned to tackle those issues with energy and enthusiasm; I shall set out the ways in which we plan to do so.
  It may be helpful to the House to understand the scale of the problem. According to the recorded crime statistics bulletin for the 12 months ending in September 1999, there were more than 900,000 offences of criminal damage. That included damage against vehicles, dwellings and buildings other than dwellings, such as bus shelters and post boxes—a wide range.
  That is not the whole picture. In 1998, the British crime survey, which measures reported and unreported crime, stated that, in 1997, there were more than 2,900,000 acts of vandalism against private property. It noted that vandalism was under-reported by 26 per cent.
  One of the reasons for that under-reporting was that those interviewed felt the offence too trivial to warrant troubling the police. It is important that we feel comfortable in reporting all crimes. I am sure Members on both sides of the House would join me in urging everyone to report crimes of that type, however trivial
  196
  they may seem. Without an understanding of the problem, we shall all struggle to tackle such issues in a measured and effective manner.
  It is important to recognise that the police need to set priorities for their time and money. It is not always possible for the police to be around when offences such as vandalism and graffiti are being committed. They look to members of the public to play their part in reporting offences.
  In the light of the comments made by the hon. Members for Twickenham and for Kingston and Surbiton, I remind them that, in our debate on the police grant, I committed myself to examine the issue of police numbers in suburban areas of London. Several Opposition and Government Members made powerful points about the need for such issues to be addressed properly. Indeed, my Parliamentary Private Secretary, my hon. Friend the Member for Harrow, West (Mr. Thomas), exerts immense pressure over such matters, and they are being set in hand.
  A range of groups, such as neighbourhood watch and community organisations, can actively contribute and help the police in developing and strengthening the quality of life of their communities.
  Many of the crime and disorder reduction partnerships across the country have identified graffiti and criminal damage as important issues for the community. According to our latest figures, 227 of the 363 strategies seen by the Home Office have given priority to criminal damage. More than 90 per cent. of the audits referred to graffiti and criminal damage. The problem is not limited only to the Liberal elements of south-west London; it exists throughout the country, as I am happy to acknowledge.
  Much of the work to tackle criminal damage will be undertaken locally, taking into account the most appropriate form of action for each neighbourhood. That was reflected in the speeches we heard this evening. Several local authorities have decided that the way to tackle the matter is through eternal vigilance—comments have been made about that. For example, Stevenage has a graffiti busters service, which acts rapidly on all reported incidences of graffiti. Part of Richmond's strategy is to highlight the fact that it has a graffiti removal service. Those are only isolated examples; across the country, authorities have developed strategies to address the matter effectively.
  The use of CCTV was mentioned by the hon. Member for Twickenham. It might have been gracious of him to acknowledge that the Government have made a major investment in CCTV, which has resulted in its being much more widespread. There has been an active commitment by local authorities and crime reduction partnerships around the country to introduce CCTV. That has the knock-on result of giving additional effective support to policing.
  Education campaigns—especially those aimed at schoolchildren—and improvement of the local environment can all play a part in reducing the incidence of criminal damage and in making people feel better about their surroundings.
  I have already mentioned crime and disorder reduction partnerships. The Crime and Disorder Act 1998 includes provision for orders aimed at confronting young people

  197
  with their behaviour, as well as tackling the circumstances that provide them with the opportunity to commit crimes. The reparation order requires the young offender to make specific reparation to his or her victim, or to the community. The hon. Member for Kingston and Surbiton asked me for an assurance that the Home Office is closely monitoring the use of the orders, to see whether courts use them as an appropriate and common-sense punishment for graffiti vandals. We support the probation service and youth offending teams to make sure that such punishments are properly carried out. My experience of the operation of the reparation schemes in various parts of the country is extremely positive. By forcing people to confront the consequences of their actions, they are an effective way of dealing with the issue at an early stage.
  Parenting orders are another device under the crime and disorder reduction partnerships and are intended to help and support parents to control their children's behaviour. That is an important element of the partnerships.
  I emphasise our commitment to the development of neighbourhood and community warden schemes, which are an additional resource that can help to develop the eyes and ears of the community above and beyond the police and neighbourhood watch schemes. In my city of Norwich, as in many areas, the neighbourhood warden scheme in the parks of the city has been an effective operation that has inhibited certain types of behaviour. Such schemes are an important development that should be generally welcomed.
  Spray paints and marker pens have been mentioned. In response to the specific point put to me, I have not discussed them with manufacturers thus far and I have not had discussions generally about the issue. Although the idea of restricting the sale of spray paints and marker pens is initially attractive, to do so would penalise young people who have genuine and legitimate reasons for their purchase. Marker pens in particular are widely used by young people in a variety of different ways and not for graffiti. Simply to say that someone cannot have one because he is a young person might be taking a sledgehammer to crack a nut.
  We believe that such a ban is unlikely to prevent the determined graffiti "artists"—like the hon. Member for Twickenham, I was entertained by the use of that word—from obtaining aerosol paint and continuing their criminal activity. I hope that retailers will, as a matter of course, consider who they are selling such products to. It is important to emphasise that, under the Intoxicating Substances (Supply) Act 1985, it is a matter for individual retailers to reserve the right to prohibit the sale of solvents to young people who appear not to have a legitimate reason for buying them. The Act provides some powers that retailers are able to use.
  The police already have the power to arrest anyone who they reasonably suspect has committed or is about to commit the offence of criminal damage. Where vandals are found in possession of a paint spray can with the intention of damaging property or after already having done so, the criminal law can be brought to bear.
  The hon. Member for Kingston and Surbiton referred to the problems that the police have in obtaining evidence to convict vandals of graffiti offences. The short answer
  198
  to his question is that we keep matters under constant review, but that we think that the police have significant powers in this area.
  It will interest the hon. Member for Twickenham—he represents a London constituency—to learn that the Department of the Environment, Transport and the Regions has advised me that section 12 of the London Local Authorities Act 1995 gives councils the power to serve a notice on an occupier of premises where a surface of those premises has on it a "sign". That includes any writing or picture—for example, graffiti—that a council feels is detrimental to the amenity of the area. Not all London councils have adopted the provisions in the Act—I do not know what the position is in the hon. Gentleman's constituency—but the power is there for London councils to use if they wish.
  The surface on which the graffiti exists must, according to the Act, be readily visible from a place to which the public have access. Once any council notice has been served, the owner or occupier has 14 days to remove the offending graffiti. The owner or occupier has the right to appeal to a magistrates court within the 14 days. If no appeal is made, and after 14 days the graffiti has not been removed, the council may do the work itself, incurring the clean-up costs. It would then have to go to court to recover the costs and would have to prove that the area's amenity had suffered detrimentally.
  Section 13 of the same Act provides additional leeway to the British Railways Board, Railtrack, London Regional Transport and any of their subsidiaries, such as London Underground. Those bodies are called protected parties. If graffiti exists on any of their property, the 14-day notice period is increased to 28 days and the protected party can serve a counter-notice on the council. The counter-notice lets it impose its own reasonable conditions on any cleaning-up work.
  As I said, I have been advised on that by DETR. It is important to note that what I have said is only the Department's interpretation, and matters of fine interpretation are for the courts. However, I am prepared to look further at how that Act has operated and to consider whether it might appropriately be extended to other local authorities or changed in certain respects.
  More fundamentally, with the Youth Justice Board, the Department for Education and Employment and DETR, we are funding a series of youth inclusion programmes, targeting young people in neighbourhoods most in need of support. Although those will concentrate on setting up family link centres and skills centres, environmental work will play an important part.
  I add that the social exclusion unit's policy action teams are considering a variety of issues that impact on vandalism and graffiti. I have mentioned neighbourhood wardens, and a range of other schemes are intended to focus on anti-social behaviour such as vandalism and graffiti. I agree with the hon. Member for Twickenham that developing a stronger approach on good practice is an important way to proceed, and we shall certainly consider ways in which we can do that and make progress.

  199
  I have already answered the points made by the hon. Member for Kingston and Surbiton about evidence and reparation orders. He asked me whether I could use what influence I have with the Crown Prosecution Service. I simply say to him that, as he knows, those are matters for the CPS, not for Ministers.
  I have responded to the question of reviewing policy on age limits for the sale of spray paints, and the case would have to be well made before we considered making such a draconian intervention. However, as I said, individual retailers have powers in these cases. I was asked whether I would consider issuing new Home Office
  200
  guidelines to spray paint manufacturers and retailers. At this stage we are not considering such guidelines, but we will of course consider what has been said in this debate.
  Finally, I respond to the suggestion of an anti-graffiti summit—I think that hon. Members were perhaps over-influenced by the European Union summit in Lisbon—which would involve everybody concerned. I have to confess with humility and shame that although we have a string of tsars, we do not yet plan to introduce an anti-graffiti summit that will shake the world, but we are certainly prepared to consider that.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes to One o'clock.

HOME DEPARTMENT

  Crime Fighting Fund
  Mr. Jim Cunningham
  To ask the Secretary of State for the Home Department if he will provide further details about the additional money for fighting crime, which was announced by the Chancellor of the Exchequer in his Budget Statement on 21 March; and if he will make a statement. [116484]

  Mr. Straw
  As a result of the funding decisions outlined in the Budget statement, there will be a significant injection of £285 million for tackling crime and the causes of crime. This comprises capital modernisation funding of £185 million for a range of projects and a £100 million fund for modernising policing, of which around £91 million is for England and Wales and £9 million is for Scotland. £14 million of expenditure under the capital modernisation fund has been previously announced in respect of DNA. The rest represents new money.

  This funding will be used to step up the fight against crime in four key areas. It will speed up the recruitment of new officers; create more opportunities for local partnerships to tackle crime and disorder; provide further scientific and technological support to increase their effectiveness; and will develop and modernise the Criminal Justice System.

  Crime Fighting Fund

  The first deployment of resources from the £91 million fund for modernising policing will be utilised to enhance the crime fighting fund. Under the crime fighting fund, police forces have been allocated their shares of the 5,000 additional recruits over the next three years. This programme will now be brought forward with the aim of delivering all 5,000 within two years. Doubling the number to be recruited during the coming financial year will cost in the region of £11 million, above and beyond the £35 million which has already been provided for the current allocation. A further significant portion of the new £91 million funding will be used to assist the Metropolitan Police and other forces which are having particular difficulties with recruitment and retention, including the development of a national police recruiting campaign.

  Partnerships

  This new fund will also be an important contributor to strengthening the services which the police deliver including cutting crime. In that context, I will also want to look closely at the resources available to support the work with which the police are involved on local partnerships for tackling crime. In particular, I want to look at the resources to deal with local problems of
  2W
  anti-social behaviour, to improve information sharing between partner agencies, and to provide more effective training in the development and implementation of local crime reduction strategies. One specific new development in this area is that capital modernisation fund monies will provide £950,000 to Operation LION. This is a programme being piloted in London which will encourage the development of integrated strategies to reduce crime and improve community safety.

  Police—Science and Technology

  The capital modernisation fund will also boost the programme of work we already have in hand to roll out the latest and best in science and technology to the Police Service.

  We shall be applying £40 million of new capital modernisation funding, together with £6 million already set aside, to roll out a new suite of information technology applications to support police operations as part of the national strategy for police information systems. The new systems, one on case preparation, the other for custody suites, will reduce considerably the burden of paperwork and bureaucracy, releasing police manpower to their primary duties. These projects will also be at the heart of a network of information technology systems connecting the criminal justice system and improving the efficiency of the whole process.

  We are also using £25 million of the capital modernisation funding to establish a new Government technical assistance centre (GTAC). GTAC will enable us to respond to the threat to public safety from criminal use of encryption and will provide law enforcement agencies with the capability to derive intelligence and evidence from new information and communication technologies. It will make a difference between serious crime being prevented or punished and criminals going unpunished and free to continue their activities by providing techniques for lawful interception of modern multimedia communications. It will also improve facilities for deriving evidence from lawfully seized computer data.

  The programme to expand the national database of criminal DNA profiles, which the Prime Minister announced last September, will also start delivering on 1 April. The capital modernisation funding includes £14 million specifically for the DNA database, as part of the £34 million envelope of funding for the DNA project which has already been announced.

  A further £21 million has been allocated for the roll out of equipment to police forces for the video recording of interviews with suspects. The full roll out is subject to the evaluation of an initial pilot scheme and the necessary parliamentary legislation. But in principle, video taping will offer the prospect of an end to disputes in court about what actually happened during police interviews and thus deliver fairer administration of justice.

  Another significant project using the latest technology will receive funding to help the fight against property crime. £4.5 million is being provided to develop the electronic 'chipping' of goods. These electronic data tags will assist police officers or investigators in identifying and recovering stolen merchandise and be a powerful

  3W
  deterrent to would-be thieves, not only by increasing the risk of being caught but by making it more difficult for them to find purchasers of stolen merchandise.

  Modernising and Developing the Criminal Justice System

  In addition to investing in science and technology for the police, the extra resources announced in the budget will provide additional investment right across the criminal justice system. The aim is to help modernise the system as a whole and to deliver a more joined-up approach to tackling crime. It will also help to deliver the modern service that the public is entitled to expect from the criminal justice system. The new capital investment includes the following.

  Video links: £5.3 million to allow the innovative use of video conferencing technology to allow vulnerable or intimidated witnesses to give evidence remotely and also to allow defendants remanded in custody to take part in preliminary court hearings without leaving prison. This will build on the existing pilot schemes for video links between courts and prisons in Bristol and Manchester.

  Post release hostels for prisoners after drug treatment: £5 million to allow the establishment of post release support for prisoners who have served sentences of up to a year and have drug misuse as well as housing problems. This will help in reducing re-offending by a group of high risk offenders.

  Restructuring the prison estate: an investment of £40 million to modernise the prison estate. This will enable a start to be made on a programme to provide additional prison capacity. It will include creating additional capacity in existing prisons and converting spare capacity in open prisons as a result of the success of the home detention curfew into closed conditions.

  Joining up criminal justice system information technology systems: £1.48 million to provide a central resource for the criminal justice system integrating business and information systems (IBIS) initiative. This will be used to ensure that criminal justice service and agency information technology systems are developed so as to allow inter-operability between them. Inter-operability will support the fast access to information to the key business areas in the criminal justice system, from preparing cases through the court process to serving sentences.

  Criminal justice units: £5 million to enable the Crown Prosecution Service to invest in the infrastructure needed for new joint Crown Prosecution Service/police criminal justice units. These will lead to improved quality and timeliness of prosecution files, involve closer and better working relationships so as to eliminate the duplication of tasks, and will improve the handling of criminal justice casework and get it right first time.

  In addition to these projects, the Lord Chancellor will make an announcement next month about additional investment of £23 million to modernise the Crown Court.

  Political Parties, Elections and Referendums Bill
  Mr. Gerrard
  To ask the Secretary of State for the Home Department what costs relating to the establishment 4W
  of the Electoral Commission will be met in advance of Royal Assent being given to the Political Parties, Elections and Referendums Bill. [116668]

  Mr. Straw
  It is in the public interest to ensure that the Commission is functioning at the earliest opportunity. I have made clear my wish that it should be up and running by this November. To meet this tight timetable, some costs such as those relating to the recruitment of the commissioners will necessarily be incurred before Royal Assent.

  Parliamentary approval to this service will be sought in a main estimate for the Electoral Commission Vote (Class XVIII, C, Vote 1). Pending that approval, urgent expenditure estimated at £300,000 will be met by repayable advances from the Contingencies Fund.

  Race Equality
  Mr. Gerrard
  To ask the Secretary of State for the Home Department when he will publish the basket of race equality performance indicators he has been developing. [116669]

  Mr. Straw
  I have today placed in the Library a copy of the document "Race Equality in Public Services—Driving Up Standards and Accounting for Progress". The document sets out performance data in a number of key areas which are of interest to ethnic minority communities, and provides a quantifiable way of demonstrating the Government's progress in promoting race equality.

  Sexual Assaults
  Mr. Baker
  To ask the Secretary of State for the Home Department how many incidents of(a) rape of men and (b) other sexual assaults on men were reported in the last year for which figures are available; how many such incidents attracted charges; and how many convictions have resulted. [116103]

  Mr. Charles Clarke
  The numbers of reported incidents and charges are not collected centrally. The number of recorded rapes of men and indecent assaults on men, and the number of defendants proceeded against and offenders convicted of these offences in England and Wales for the year ending September 1999, are as follows:

  Rape of a male

  Indecent assault on a male

  Number of offences recorded in year ended September 1999

  571

  3,682

  Number of defendants proceeded against in year ended September 19991

  107

  562

  Number of offenders convicted in year ended September 19991

  54

  438

  1 Provisional data

  It should be noted that as the recorded crime figures relate to offences, and the numbers proceeded against and convicted relate to offenders, the two types of data cannot be directly compared.

  Freedom of Information
  Mr. Hawkins
  To ask the Secretary of State for the Home Department when he intends to publish his draft code of guidance in relation to his Freedom of Information Bill; and if he will make a statement. [116288]

  Mr. Mike O'Brien
  I expect to be able to make available shortly a working draft of the code of practice for which provision is made at clause 44 of the Freedom of Information Bill.

  Copies of the working draft will be placed in the Library.

  Probation Service
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department what(a) representations and (b) external legal advice he has received concerning the conformity of current contracts for the installation and operation of probation service information technology systems with public procurement regulations; and if he will make a statement. [116294]

  Mr. Boateng
  The Home Office discusses the arrangements for the procurement of information technology for probation purposes with interested parties from time to time. It is not our policy to disclose details of legal advice in relation to such commercial arrangements.

  Average number of prisoners held two to a cell designed for one

  Prison name

  1992–93

  1993–94

  1994–95

  1995–96

  1996–97

  1997–98

  1998–99

  Acklington

  0

  0

  0

  0

  0

  0

  0

  Albany

  0

  0

  0

  0

  0

  0

  0

  Altcourse

  —

  —

  —

  —

  —

  198

  203

  Ashwell

  0

  0

  0

  0

  0

  0

  0

  Askham Grange

  0

  0

  0

  0

  0

  0

  0

  Aylesbury

  3

  2

  0

  0

  1

  0

  0

  Bedford

  105

  94

  129

  132

  143

  119

  150

  Belmarsh

  0

  0

  0

  0

  0

  0

  0

  Birmingham

  110

  474

  478

  578

  634

  753

  739

  Blakenhurst

  0

  0

  0

  134

  309

  360

  Blantyre House

  0

  0

  0

  0

  0

  0

  0

  Blundeston

  4

  0

  0

  0

  2

  0

  0

  Brinsford

  35

  0

  0

  0

  31

  179

  153

  Bristol

  83

  131

  123

  126

  81

  92

  86

  Brixton

  284

  326

  292

  322

  358

  361

  337

  Brockhill

  10

  4

  0

  0

  0

  0

  0

  Buckley Hall

  —

  —

  0

  2

  12

  9

  0

  Bullingdon

  0

  0

  0

  0

  0

  0

  97

  Bullwood Hall

  0

  0

  0

  0

  0

  0

  4

  Camp Hill

  31

  10

  2

  0

  27

  78

  115

  Canterbury

  78

  123

  158

  161

  211

  219

  219

  Cardiff

  187

  303

  311

  331

  314

  422

  458

  Castington

  0

  0

  0

  0

  0

  0

  0

  Channings Wood

  0

  0

  72

  155

  211

  242

  223

  Chelmsford

  167

  239

  289

  305

  143

  27

  38

  Coldingley

  0

  0

  0

  0

  0

  0

  0

  Cookham Wood

  0

  0

  14

  13

  43

  56

  77

  Dartmoor

  0

  0

  0

  0

  0

  0

  0

  Deerbolt

  0

  0

  0

  0

  0

  0

  0

  Doncaster

  —

  —

  124

  228

  399

  588

  626

  Dorchester

  76

  127

  142

  148

  176

  161

  157

  Dover

  32

  0

  0

  0

  0

  0

  0

  Downview

  0

  0

  0

  0

  5

  24

  32

  Drake Hall

  0

  0

  0

  0

  0

  0

  2

  Durham

  340

  320

  375

  476

  659

  573

  519

  East Sutton Park

  0

  0

  0

  0

  0

  0

  0

  Eastwood Park

  0

  0

  0

  6

  18

  Prison Accommodation
  Miss Widdecombe
  To ask the Secretary of State for the Home Department if he will list, for each of the last 10 years for which figures are available, the average number of prisoners in each prison establishment being held two in a cell in a single cell; for what reason the Prison Service does not collect data on the number of prisoners held three in a double cell; and if he will make a statement. [116473]

  Mr. Boateng
  The average number of prisoners held two to a cell designed for one, in each prison establishment since 1992–93, is given in the table. Prisons that are not currently operational are excluded from the analysis.

  The Prison Service has never collected centrally the number of prisoners held three to a cell designed for two. Prisons provide data on the total overcrowding level and on the numbers held two to a cell designed for one, known as "doubling". Total overcrowding includes those held three to a cell for two and those overcrowded in dormitories and larger cells. Doubling is an appropriate measure of the true impact of overcrowding on individuals.

  Overcrowding, other than doubling, is not widespread. At the end of February 2000, only nine establishments reported a total overcrowding figure in excess of the numbers doubled.
  7W

  Average number of prisoners held two to a cell designed for one

  Prison name

  1992–93

  1993–94

  1994–95

  1995–96

  1996–97

  1997–98

  1998–99

  Elmley

  0

  0

  0

  0

  0

  38

  230

  Erlestoke

  0

  0

  0

  0

  0

  0

  0

  Everthorpe

  0

  0

  0

  0

  26

  64

  64

  Exeter

  149

  273

  292

  304

  370

  364

  380

  Feathers tone

  16

  0

  0

  0

  7

  0

  0

  Feltham

  0

  0

  0

  0

  3

  21

  26

  Ford

  0

  0

  0

  0

  0

  0

  0

  Foston Hall

  0

  0

  0

  0

  0

  0

  0

  Frankland

  0

  0

  0

  0

  0

  0

  0

  Full Sutton

  0

  0

  0

  0

  0

  0

  0

  Garth

  0

  0

  0

  0

  0

  0

  0

  Gartree

  0

  0

  0

  0

  0

  0

  0

  Glen Parva

  88

  155

  171

  196

  239

  272

  243

  Gloucester

  67

  88

  106

  102

  116

  162

  162

  Grendon

  0

  0

  0

  0

  0

  0

  0

  Guys Marsh

  0

  0

  0

  1

  20

  40

  42

  Haslar

  0

  0

  0

  0

  0

  0

  0

  Hatfield

  0

  0

  0

  0

  0

  0

  0

  Haverigg

  0

  0

  0

  0

  0

  0

  5

  Hewell Grange

  0

  0

  0

  0

  0

  0

  0

  Highdown

  0

  0

  0

  0

  0

  30

  0

  Highpoint

  0

  0

  0

  0

  12

  32

  42

  Hindley

  183

  209

  105

  12

  7

  14

  0

  Hollesley Bay

  0

  0

  0

  0

  8

  24

  4

  Holloway

  0

  0

  0

  0

  0

  0

  0

  Holme House

  0

  0

  0

  0

  0

  84

  72

  Hull

  34

  163

  204

  153

  124

  6

  11

  Huntercombe

  0

  0

  0

  0

  1

  15

  16

  Kingston

  0

  0

  0

  0

  0

  0

  0

  Kirkham

  0

  0

  0

  0

  0

  0

  0

  Kirklevington

  0

  0

  0

  0

  0

  0

  0

  Lancaster

  54

  0

  0

  0

  0

  0

  0

  Lancaster Farms

  0

  0

  0

  0

  24

  46

  57

  Latchmere House

  0

  0

  0

  0

  0

  0

  0

  Leeds

  0

  743

  621

  537

  67

  318

  545

  Leicester

  167

  281

  286

  267

  271

  284

  279

  Lewes

  165

  164

  142

  15

  31

  32

  31

  Leyhill

  0

  0

  0

  0

  0

  0

  0

  Lincoln

  254

  394

  440

  429

  499

  440

  340

  Lindholme

  0

  0

  0

  0

  0

  0

  0

  Littlehey

  0

  0

  8

  0

  14

  42

  48

  Liverpool

  499

  465

  466

  264

  206

  446

  442

  Long Lartin

  0

  0

  0

  0

  0

  0

  0

  Low Newton

  120

  168

  151

  203

  232

  251

  179

  Lowdham Grange

  —

  —

  —

  —

  0

  0

  0

  Maidstone

  0

  0

  0

  0

  10

  45

  41

  Manchester

  134

  205

  191

  407

  466

  437

  399

  Moorland

  0

  0

  0

  0

  39

  56

  45

  Morton Hall

  0

  0

  0

  0

  0

  0

  0

  Mount

  0

  0

  0

  0

  38

  71

  69

  New Hall

  0

  0

  0

  0

  0

  28

  52

  North Sea Camp

  0

  0

  0

  0

  0

  0

  0

  Northallerton

  75

  101

  126

  135

  215

  254

  233

  Norwich

  76

  128

  162

  26

  0

  114

  128

  Nottingham

  10

  13

  10

  8

  0

  0

  0

  Onley

  30

  0

  0

  0

  0

  0

  0

  Pare

  —

  —

  —

  0

  0

  0

  0

  Parkhurst

  0

  0

  0

  0

  0

  35

  33

  Pentonville

  230

  364

  445

  557

  584

  419

  380

  Portland

  10

  0

  54

  40

  41

  90

  90

  Preston

  124

  320

  304

  273

  362

  510

  533

  Ranby

  0

  0

  0

  0

  0

  50

  50

  Reading

  55

  117

  123

  65

  97

  115

  138

  Risley

  8

  0

  0

  0

  14

  38

  74

  Rochester

  37

  15

  5

  4

  6

  0

  0

  Send

  0

  0

  0

  0

  0

  0

  0

  Shepton Mallet

  55

  22

  0

  0

  92

  119

  100

  Shrewsbury

  136

  230

  217

  241

  277

  297

  281

  Stafford

  45

  0

  296

  381

  226

  0

  0

  Standford Hill

  0

  0

  0

  0

  0

  0

  0

  Stocken

  0

  0

  0

  0

  36

  52

  41

  Stoke Heath

  31

  0

  0

  0

  0

  0

  0

  8W 9W

  Average number of prisoners held two to a cell designed for one

  Prison name

  1992–93

  1993–94

  1994–95

  1995–96

  1996–97

  1997–98

  1998–99

  Styal

  0

  0

  0

  0

  0

  0

  0

  Sudbury

  0

  0

  0

  0

  0

  0

  0

  Swaleside

  0

  0

  0

  18

  33

  9

  0

  Swansea

  105

  148

  130

  149

  185

  235

  221

  Swinfen Hall

  0

  0

  0

  0

  0

  38

  0

  Thorn Cross

  0

  0

  0

  0

  0

  0

  0

  Usk

  0

  0

  2

  60

  94

  117

  146

  Verne

  0

  0

  0

  0

  13

  37

  39

  Wakefield

  0

  0

  0

  0

  73

  98

  22

  Wandsworth

  274

  217

  199

  191

  156

  193

  316

  Wayland

  0

  0

  0

  0

  24

  50

  44

  Wealstun

  0

  0

  0

  0

  4

  10

  10

  Weare

  —

  —

  —

  —

  0

  0

  0

  Wellingborough

  0

  0

  0

  0

  0

  0

  0

  Werrington

  0

  0

  0

  0

  0

  0

  0

  Wetherby

  0

  0

  0

  0

  0

  0

  0

  Whatton

  0

  0

  0

  0

  0

  0

  0

  Whitemoor

  0

  0

  0

  0

  0

  0

  0

  Winchester

  126

  137

  182

  181

  245

  304

  272

  Wolds

  0

  2

  16

  1

  0

  0

  0

  Woodhill

  0

  0

  0

  0

  38

  106

  95

  Wormwood Scrubs

  322

  468

  425

  305

  289

  378

  299

  Wymott

  0

  0

  0

  0

  0

  0

  0

  Home Detention Curfew Scheme
  Miss Widdecombe
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 March 2000,Official Report, column 561W, on the home detention curfew scheme, what specific offences are defined as (a) other homicide and attempted homicide, (b) other motoring offences and (c) other offences; how many offenders were released having been convicted of each specific offence; and if he will make a statement. [116482]

  Mr. Boateng
  Further details of the offences defined as other homicide and attempted homicide, other motoring offences and other offences, and the number of prisoners convicted of each type of offence who have been released on home detention curfew are shown in the table.

  No eligible prisoner can be granted home detention curfew without first passing a risk assessment. The risk assessment addresses the risk to the public and the likelihood of the prisoner re-offending during his time on curfew. The details of the offence in each case will be known to the establishment before a risk assessment and release on home detention curfew can take place. The nature of the current offence, together with previous offending history, are important factors that are taken into account in assessing a prisoner's suitability for the scheme. Prisons have been instructed that prisoners who present a clear and immediate threat to the public must not be released on home detention curfew.

  Offence

  Number

  Other homicide and attempted homicide

  Attempted murder

  5

  Threats to kill

  29

  Conspiracy, aid and incite murder

  1

  Death by reckless driving

  115

  Total

  150

  10W

  Offence

  Number

  Other motoring offences

  Other motoring offences1

  1,239

  Reckless driving

  291

  Total

  1,530

  Other offences

  Procuration

  4

  False imprisonment

  22

  Bail Act offences

  4

  Assisting illegal immigrant

  49

  Minor firearms offences

  6

  Other indictable offences2

  548

  Escaping lawful custody

  6

  Making off without paying

  2

  Criminal attempts

  7

  Contempt of court

  1

  Deportee/detainee

  4

  Vagrancy Act offences

  2

  Cruelty etc. to animals

  18

  Total

  673

  1 Recorded under this code by individual establishments

  2 Other indicatable offences

  Miss Widdecombe
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 March 2000,Official Report, columns 561-62W, on the home detention curfew scheme, how many offenders who committed further offences while on the scheme committed an offence similar in character to that for which they were originally convicted; if he will provide a breakdown by type of offence of such offenders; and if he will make a statement. [116479]

  Mr. Boateng
  According to Prison Service records, of the 185 curfewees referred to in the reply I gave on 22 March 2000,Official Report, columns 561-62W, who have been charged with a further offence while subject to home detention curfew, 74 have been charged with an offence similar to that for which they were serving a

  11W
  sentence of imprisonment prior to being released on curfew. The table gives a breakdown of the types of offences committed.

  One of the factors addressed in the home detention curfew risk assessment is the likelihood of the prisoner re-offending during his time on curfew. If the offender's past history and current circumstances suggest that there is a probability that he will return to offending within the curfew period, release must be refused.

  An evaluation of the home detention curfew scheme is being carried out by the Research, Development and Statistics Directorate of the Home Office. It will include an analysis of reconviction of curfewees both during and after the curfew period. Results will be published later this year.

  Offences committed by curfewees

  Number

  Burglary

  20

  Theft

  16

  Driving/Motoring offences

  12

  Assault

  9

  Drug offences

  5

  Deception

  3

  Wounding

  3

  Robbery

  2

  Breach of Probation Order

  1

  Threats to kill

  1

  False Imprisonment

  1

  Affray

  1

  Total

  74

  Miss Widdecombe
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 March 2000,Official report, column 561W, on the home detention curfew scheme, how many offenders charged with a further offence committed while on the scheme have been convicted of such an offence; if he will provide a breakdown by type of offence; and if he will make a statement. [116480]

  Mr. Boateng
  Information is not held centrally on the convictions of those who have committed offences while subject to home detention curfew.

  Miss Widdecombe
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 March 2000,Official Report, column 561W, on the home detention curfew scheme, for what reason the original offence committed by 1,001 offenders released on the scheme was not recorded; and if he will make a statement. [116481]

  Mr. Boateng
  The statistics on the original offences committed by prisoners released on home detention curfew are taken from the Prison Service computer database, known as the Inmate Information System, and are based on the data entered by each prison. Where offence data are not completed by the prison, the category "offence not recorded" is used at the centre. At a local level, the details of the offence in each case will be known to the establishment before a risk assessment and release on home detention curfew can take place. In assessing a12W
  prisoner's suitability for release on the scheme, the nature of the offence is an important factor to be taken into account.

  Efforts are made to ensure the completeness and accuracy of all data as far as practicable, but there are inevitable errors of omission and commission. Guidance is being issued to establishments stressing the importance of recording the data on original offences as quickly as possible in every case.

  Miss Widdecombe
  To ask the Secretary of State for the Home Department what is the maximum sentence that may be passed on an offender who is eligible for release on the home detention curfew scheme. [116475]

  Mr. Boateng
  Under the Criminal Justice Act 1991, as amended by the Crime and Disorder Act 1998, no prisoner who has been sentenced to four years or more imprisonment is eligible for release under the home detention curfew scheme.

  Criminal Justice and Court Services Bill
  Miss Widdecombe
  To ask the Secretary of State for the Home Department further to his answers of 22 March 2000,Official Report, column 557W, on drug testing procedures under Clause 48 of the Criminal Justice and Court Services Bill, (a) if a positive test would in itself be sufficient proof of an offence of unlawful possession of a controlled drug, (b) what specified Class A drugs will be tested for, (c) if he intends to extend the testing procedure to include Class B drugs and (d) how he intends the tests to be used to assist in appropriate sentencing, and if this includes the length of sentence to be passed; and if he will make a statement. [116472]

  Mr. Boateng
  The purpose of drug testing on charge is to identify and monitor drug misusers who may need treatment and to inform any subsequent bail decisions. It is not intended that a positive test will be used to bring a prosecution for unlawful possession. Initially, tests will be made to detect heroin and crack/cocaine which research evidence shows are strongly linked to crimes committed in order to feed a drug habit. The Criminal Justice and Court Services Bill includes provision to extend the range of drugs tested for, including any in Class B, if a similar linkage to commission of crime emerges.

  The court will have regard to a positive test on sentencing and can make a drug abstinence order or add an abstinence requirement to a community sentence in cases where the criteria is met.

  A positive test result will not be an aggravating factor for sentencing purposes.

  Miss Widdecombe
  To ask the Secretary of State for the Home Department if he will make a statement on the new procedure for appointing local probation boards contained in Schedule 1 to the Criminal Justice and Court Services Bill, indicating how it differs from the present procedure. [116476]

  Mr. Boateng
  The present procedure is based on the nomination directly to the committee of local magistrates, a member of the judiciary and local authority members. In future, members of probation boards, with the exception of the Lord Chancellor's nominee, will be appointed by the Secretary of State following a process of open, public advertisement.
  13W
  We will be looking to recruit members who, in addition to meeting competences, being developed in consultation with the Central Probation Council, will reflect a breadth of experience from the local community. We are working with the Office of the Commissioner for Public Appointments to ensure that these new arrangements meet the highest standards of openness and transparency.

  Chief officers will, for the first time, be a member of local boards.

  Prisoners (Activity)
  Miss Widdecombe
  To ask the Secretary of State for the Home Department if he will list for each of the last 10 years for which figures are available the average amount of time spent by prisoners on purposeful activity. [116474]

  Mr. Boateng
  The average amount of time spent per prisoner on purposeful activity in the last 10 years is listed in the table. Data for 1999–00 are for the year to February 2000 and are provisional.

  Year

  Purposeful hours

  1990–91

  22.3

  1991–92

  22.7

  1992–93

  23.7

  1993–94

  24.7

  1994–95

  26.2

  1995–96

  25.2

  1996–97

  23.8

  1997–98

  23.3

  1998–99

  22.8

  1999–2000

  23.0

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Road Traffic Targets
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list those local authorities that have set targets for the overall level of road traffic in their area as part of their draft local transport plans, giving the targets set in each case. [114810]

  Mr. Hill
  [holding answer 16 March 2000]: Local traffic authorities in England (outside London) submitted interim road traffic reduction reports as part of their provisional local transport plans in July 1999. Due to the provisional nature of the plans, the status and coverage of some targets are uncertain. However, the following authorities submitted plans containing traffic targets for at least part of their area or for some types of traffic.

  Authority

  Target

  Oxfordshire

  Halve forecast traffic growth to 2016

  Hampshire

  Reduce the rate of traffic growth by 50 per cent by 2020

  Milton Keynes

  Reduce journey to work car trips by 4 per cent. between 1997 and 2011 and car mode share reduction from 77 per cent. to 55 per cent, between 1997 and 2011

  14W

  Authority

  Target

  West Berkshire

  Newbury and Thatcham area—reduce growth to zero from 1999. Rural area—limit growth to 10 per cent, between 1999 and 2009. Eastern area—reduction in growth forecast of 1-5 per cent. on major corridors and absolute reductions of 1-5 per cent. in residential areas

  Reading

  Reduce car travel by 5 per cent, in town centre. Reduce traffic levels by 2-5 per cent. in residential areas. Reduce traffic on major corridors by 2-5 per cent. over forecast levels

  Isle of Wight

  Halve the rate of growth by 2020

  East Sussex

  Reduce amount of car journeys to education establishments by 20 per cent. by 2005 in Bexhill, Hastings, Eastbourne and other towns. Achieve zero growth on minor rural roads in the Ashdown Forest area

  Slough

  10 per cent, reduction in current traffic levels by 2005

  Surrey

  Limit growth to 7 per cent. between 1998–2016

  Bournemouth, Poole and Christchurch

  Reduce rate of traffic growth by 50 per cent. by 2005 and reduce to zero growth by 2010. Reduce car trips to school by 50 per cent.

  Dorset

  Reduce rate of traffic growth to 50 per cent. of average growth forecast between 1998 and 2005

  Gloucestershire

  By 2011, average daily traffic volumes to increase by no more than 20 per cent. compared with 1995 levels

  Somerset

  Limit growth to 10 per cent. by 2011 in Taunton and 25 per cent. by 2011 in Bridgwater and to 13 per cent. by 2011 in Yeovil

  Bath and North East Somerset

  Bath centre—20 per cent. reduction in 1999 levels by 2005. Rest of Bath—10 per cent. reduction. Other towns stabilise traffic and no targets in rural areas

  Bristol

  Reduce growth in car traffic by 20 per cent. over the next five years. Thereafter a further 20 per cent. reduction over the next 10 to 15 years

  South Gloucestershire

  Zero growth in annual average traffic flows by 2005. Annual 2 per cent. reduction in proportion of people commuting by car

  Swindon

  Slow traffic growth by 35 per cent. (based on low growth assumptions)—29 per cent. increase 1996–2016 compared to do-nothing forecast of 44 per cent.

  Plymouth

  Maintain traffic at 1999 levels—0 per cent. traffic growth

  Torbay

  0.5 per cent. growth in traffic across area over all time periods by 2005

  West Midlands1

  Contain levels of morning peak car trips into the nine LTP centres to their 1995–96 levels up to 2006, and maintain the containment to 2011

  15W

  Authority

  Target

  Shropshire

  Reduce cars entering Shrewsbury by 5 per cent. by 2005. Outside city centre, limit growth to 1 per cent. or less per annum. Reduce per cent. of children given lifts to school by car by 10 per cent. by 2005. Limit traffic growth on inter-urban routes to 2 per cent, or less per annum until 2005 and 1 per cent. thereafter in the market towns and rural areas

  Stoke on Trent

  Constrain growth to 10 per cent. between 1999–2011

  Telford and Wrekin

  To limit traffic growth to 2 per cent. per annum or the rate of growth in population (whichever is lower) by 2005

  Warwickshire

  Reduce the rate of traffic growth in urban areas by 50 per cent. in peak periods

  Worcestershire

  To achieve 1991 traffic levels in Worcester City by 2011

  Merseyside2

  Keep traffic growth below 17 per cent.

  Cheshire

  Traffic to be restrained in Chester to a 2 per cent. increase on 1994 levels to 2011. In the rest of the County traffic to be restrained to a 16 per cent. increase on 1994 levels up to 2011

  Cumbria

  Cap growth at 2000 levels by 2005 in Carlisle City Centre. 24 per cent. reduction in existing peak hour traffic entering the Kendal by 2005–06

  Lancashire

  Traffic flows to and from town centres to be restricted to 1991 levels

  Blackburn

  Zero growth of peak hour traffic by 2006. Growth in off-peak limited to low NRTF levels from 2000

  Halton

  Restrain growth to 16 per cent. by 2011

  Durham

  Restrict traffic to 1999 levels to end of 2004 in Durham City. Reduce traffic growth to 0.33 per cent. per annum to 2004 in the rest of the County

  Northumberland

  Reduce AADT by 5 per cent. on base network at selected monitoring sites by 2005. No increase in traffic at selected sites by 2005

  Darlington

  Restrict growth to 4 per cent. between 1999 and 2006 into the Darlington Urban area. Restrict growth to 2 per cent. into Darlington town centre between 1999 and 2006. Restrict and/or reduce traffic growth on 4 key transport corridors by 2006

  Middlesborough

  Reduce AADT to zero growth in town centre by 2005 and reduce by 2 per cent. by 2010

  Hartlepool

  Limit traffic growth to 3.5 per cent. between 2000 and 2005

  Stockton-on-Tees

  5 per cent. reduction of AADT at specific sites. Peak hour traffic flow reduction by 5 per cent. and limit overall growth to 4.5 per cent.

  South Yorkshire3

  Contain car traffic at 1999 levels

  West Yorkshire4

  Constrain growth to 7 per cent. in Leeds, Bradford and Wakefield

  16W

  Authority

  Target

  North Yorkshire

  Maintain traffic in the urban area at 1994 levels in Harrogate, Knarsborough and Ripon. In the Yorkshire Dales, maintain traffic at 1994 levels

  York

  Maintain inbound morning peak traffic to 1992 levels. Provisional target of 7 per cent. reduction from 1999 to 2003

  Kingston-upon-Hull

  Reduce car flows by 1 per cent. per annum from present levels. Reduce proportion of car trips from 57 per cent. of total in 1991 to 50 per cent. in 2011

  North Lincolnshire

  Reduce the average peak hour growth rate of traffic from 2.5 per cent. to 2.2 per cent. by 2005 and to 1.1 per cent. by 2010

  Derbyshire

  Reduce traffic growth to 1 per cent. below the national average by 2011

  Leicester5

  Reduce growth to 2011 from 15 per cent. to 7 per cent.

  Nottingham

  Maintain growth at below 2.5 per cent. per annum by 2000

  Nottinghamshire

  Limit growth to 8 per cent. up to 2011

  Lincolnshire

  Reduce forecast peak hour car traffic in Greater Lincoln, Boston, Grantham and Skegness by 10 per cent. over the next five years. Reduce forecast peak hour car traffic in the large market towns of Gainsborough, Louth, Sleeford, Spalding and Stamford over the LTP period

  Northamptonshire

  Achieve zero growth above 1999 levels on radial routes in peak hours

  Bedfordshire

  Decrease travel to work by car from 71 per cent. in 1991 to 58 per cent. in 2011 in Bedford, market towns and rural areas

  Norfolk

  Private car traffic crossing the Norwich inner ring road and outer ring road to be no higher than 1995 levels in 2011. 10 per cent. fall in peak level of private car traffic along to A149 coastal road between 1997 and 2010

  Suffolk

  Achieve zero growth by 2006 in Ipswich, Bury St. Edmunds and Lowestoft

  Peterborough

  Maintain growth below NRTF low growth forecast till 2005

  1 A joint plan for the Metropolitan area consisting of the following traffic authorities: Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton

  2 A joint plan for the Metropolitan area consisting of the following traffic authorities: Liverpool, Knowsley, St. Helens, Sefton and Wirral

  3 A joint plan for the Metropolitan area consisting of the following traffic authorities: Sheffield, Rotherham, Barnsley and Doncaster

  4 A joint plan for the Metropolitan area consisting of the following traffic authorities: Leeds, Kirklees, Calderdale, Bradford and Wakefield

  5 A joint plan with Leicestershire

  Note:

  NRTF—Department of Transport National Road Traffic Forecasts 1997

  AADT—Annual Average Daily Traffic

  Park-and-Ride Schemes
  Mr. Edward Davey
  To ask the Secretary of State for the Environment, Transport and the Regions how many park-and-ride schemes have been introduced by local authorities since May 1997; and if he will make a statement. [116074]

  Mr. Hill
  The Department does not collect such information.

  Affordable Housing (London)
  Mr. Edward Davey
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of houses built in London in each of the past four years has been classified as affordable; and what research his Department has undertaken to determine if this proportion meets local demand for such housing. [116084]

  Ms Beverley Hughes
  The information on affordable houses built is not held centrally. However, the London Research Centre is currently undertaking a research project to assess the extent of housing need in London.

  Regional Assemblies
  Mrs. Ellman
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the creation of directly elected regional assemblies in England. [116072]

  Ms Beverley Hughes
  We are committed to moving to directly elected regional government in England, where there is demand for it expressed in a referendum.

  Housing Development (Transport Links)
  Miss McIntosh
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to develop transport links in areas of new housing development in greenfield sites. [116236]

  Ms Beverley Hughes
  Planning Policy Guidance note 3, "Housing", (PPG3) (see paragraphs 47 and 48) provides that local planning authorities should seek to exploit opportunities to locate larger housing developments around major nodes along good quality public transport corridors (both existing and those with firm proposals for improvement in local transport plans). In addition, authorities should seek to ensure that all housing developments are accessible by a range of non-car modes. Draft PPG13, "Transport", also proposes that major development proposals should be supported by a transport assessment.

  Speed Limits
  Mr. Peter Bradley
  To ask the Secretary of State for the Environment, Transport and the Regions how many villages with populations of under 3,000 have a speed limit of 30 mph. [116015]

  Mr. Hill
  This information is not held centrally.

  Radioactive Waste
  Mr. Cox
  To ask the Secretary of State for the Environment, Transport and the Regions what are the procedures that must be followed regarding the dumping of radioactive waste in the UK. [115916]
  18W
  Mr. Meacher
  The disposal of radioactive waste is closely regulated under the Radioactive Substances Act 1993 by the Environment Agency in England and Wales, the Scottish Environment Protection Agency in Scotland and the Environment Heritage Service in Northern Ireland. Any person wishing to dispose of radioactive waste must make an application to the relevant agency.

  Mr. Chaytor
  To ask the Secretary of State for the Environment, Transport and the Regions when he plans to publish the green paper on radioactive waste management; and what will be its terms of reference. [115532]

  Mr. Meacher
  My Department aims to publish the consultation paper on the management of radioactive waste in late spring. The contents are still under consideration.

  Regional Development Agencies
  Mr. Quinn
  To ask the Secretary of State for the Environment, Transport and the Regions how many objections he received when he consulted on the location of boundaries for the regional development agencies. [116331]

  Ms Beverley Hughes
  We received 198 responses to our consultation paper, "Regional Development Agencies—Issues for Discussion", which was published in 1997. Of these responses, there were two objections to the boundaries proposed for the RDAs.

  GM Crops
  Sir Richard Body
  To ask the Secretary of State for the Environment, Transport and the Regions on what date the contract was signed for the growing of a GM crop at Friskney, Lincolnshire. [116448]

  Mr. Meacher
  My Department was notified by Monsanto of a proposed location of a field for a farm scale evaluation of GM beet near Friskney in Lincolnshire, on 16 March 2000. The contractual arrangements are a matter for Monsanto and the farmer involved.

  Mr. Keetch
  To ask the Secretary of State for the Environment, Transport and the Regions what GM crop trials there have been in Herefordshire; and if he will make a statement. [116343]

  Mr. Meacher
  The Government's farm scale evaluations programme, which I announced on 17 March, is designed to allow independent researchers to see what effect growing and managing GM crops might have on farmland wildlife, compared with non-GM crops. The programme this year will involve up to 80 GM field sites. To date, none of the proposed sites notified to my Department is in Herefordshire.

  Local Authorities (Leaders)
  Mr. Brady
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list(a) the name of the leaders, (b) the political party of the leader and (c) the annual allowance payable to the leader of each local authority in England. [116460]
  19W
  Ms Beverley Hughes
  This information is not collected by my Department.

  Euratom Directive
  Mr. Chaytor
  To ask the Secretary of State for the Environment, Transport and the Regions what he plans to implement the justification requirements of Euratom Directive 96/29. [115531]

  Mr. Meacher
  The Health and Safety Commission is in the lead for preparing proposals on behalf of Government for implementing the justification requirements of Euratom Directive 96-29. I await its revised proposals.

  Child Cyclists
  Mr. Andrew George
  To ask the Secretary of State for the Environment, Transport and the Regions what action he is taking to reduce brain injuries among child cyclists. [115739]

  Mr. Hill
  The road safety strategy, "Tomorrows Roads—Safer for Everyone", promotes the wearing of cycle helmets. They can provide significant protection against the severity of head injuries. This reinforces the advice contained in the "Highway Code", the "Highway Code for Young Road Users" and the Driving Standards Agency's "Road Code". We also promote their use in our "Cycle Smart" publicity material. Together with the Department of Health, we are supporting the Bicycle Helmet Initiative Trust project, the aim of which is to promote cycle helmet wearing among children and young people. We are monitoring the wearing rate in Great Britain (currently about 18 per cent.) and will continue to consider the option of compulsory wearing from time to time.

  Mr. Andrew George
  To ask the Secretary of State for the Environment, Transport and the Regions how many child cyclists have been(a) injured and (b) killed on the roads in each of the past 10 years. [115773]

  Mr. Hill
  The information requested is shown in the following table for the most recent 10 years for which data are available.

  Child1 cyclist casualties in road accidents: Great Britain 1989–98

  Year

  Killed

  Injured

  1989

  73

  9,254

  1990

  59

  8,661

  1991

  50

  8,132

  1992

  48

  7,677

  1993

  37

  7,349

  1994

  42

  8,033

  1995

  48

  8,085

  1996

  54

  8,163

  1997

  33

  7,866

  1998

  32

  6,898

  1 Children aged 0–15

  Breakdown and Recovery Vehicles
  Mr. Key
  To ask the Secretary of State for the Environment, Transport and the Regions how many breakdown and recovery vehicles exempt from the MOT 20W
  test (a) are currently operating on (i) motorways and (ii) other roads and (b) were involved in vehicle accidents in the last year for which figures are available. [116133]

  Mr. Hill
  Such vehicles are exempt from the MOT test if they are constructed such that they tow vehicles that they are recovering rather than carry them. Although it is not possible to say precisely how many of these there are, a good approximation is the number of vehicles whose body type is recorded as a breakdown truck. Further to these, there will also be a number of other vehicles in the recovery vehicles tax class that are exempt from the MOT test because they are less than one year old. The estimated numbers of those licensed and exempt from the MOT test at the end of 1998 are as follows:

  Breakdown trucks: 10,224

  Other recovery vehicles first registered in 1998: 110

  Total: 10,334

  These figures come from the record of licensed vehicles in Great Britain held by the Driver and Vehicle Licensing Agency. No details are held about the roads upon which these vehicles operate.

  Road accident data are available by body type of the vehicles involved. In 1998 there were 104 recorded injury accidents involving breakdown trucks. This figure may be a slight under-estimate as in some accidents details of the vehicle's body type can not be obtained.

  Rent Rebates
  Mr. McNamara
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what proposals he has to reimburse local authorities in full for current and future rent rebate expenditure; [115387]

  (2) for what reasons the housing revenue subsidy paid to local authorities is less than the rent rebate expenditure borne by local authorities; [115402]

  (3) for what reason local authorities' rent rebate expenditure is not reimbursed on the same basis as expenditure on rent allowances for private sector and association tenants; [115403]

  (4) what funding will be available to ensure that there is no further clawback of local authority rent income by central Government; [115428]

  (5) if the existing gap between rent rebate expenditure and housing subsidy will be funded in full without a corresponding fall in money available for council housing. [115427]

  Mr. Mullin
  There are two parts to housing subsidy: housing element and rent rebate element. Most authorities show a surplus on their housing element—that is their assumed rental income covers assumed costs. Where there is a surplus on housing element for an authority, we reduce the size of the rent rebate element by an equivalent amount.

  Other than in those cases where rent rebate subsidy limitation applies, local authorities are fully reimbursed for rent rebate expenditure. The effect of limitation is that

  21W
  if an authority increases its average rent above the limit rent level, it receives additional rental income only from those tenants not receiving rent rebate.

  This accounting arrangement reflects the different subsidy provisions which apply to different tenures. Local authority rents are generally lower than housing association or private sector rents, so it is not the case that council tenants are treated less favourably than other tenants. We intend to replace the current system with one that is easier to understand and which will avoid offsetting one expenditure stream against another and avoid the present confusion. The necessary legislation will be introduced as soon as parliamentary time permits.

  We are currently consulting on the detail of our proposals on how to structure and operate a new system for redistributing resources under resource accounting. We have also announced that the proposed major repairs allowance (MRA) will be introduced from April 2001 to meet the cost of keeping housing stock in good condition. We expect that there will be fewer surpluses when the MRA is introduced and that will itself ease concerns about the system.

  No decisions have yet been taken on the level of funding that will be available. This will form part of the discussions in the forthcoming spending review.

  Housing Revenue (Subsidy)
  Mr. McNamara
  To ask the Secretary of State for the Environment, Transport and the Regions what was the total amount of housing revenue account subsidy paid to local authorities in 1998–99. [115399]

  Mr. Mullin
  The total amount of housing revenue account subsidy paid to local authorities in 1998–99 was £3,371 million.

  Mr. McNamara
  To ask the Secretary of State for the Environment, Transport and the Regions what is the estimated subsidy for the housing revenue account of local authorities for the years(a) 1999–2000 and (b) 2000–01. [115401]

  Mr. Mullin
  Our forecasts of housing revenue account subsidy are as follows:

  £ million

  1Housing revenue account subsidy

  1999–2000

  3,190

  2000–01

  3,146

  1 Estimated

  Disabled Drivers
  Mr. Oaten
  To ask the Secretary of State for the Environment, Transport and the Regions when his Department will implement regulations covering changes to disabled drivers' badges and clocks. [116297]

  Mr. Hill
  I refer the hon. Member to my reply of 10 March 2000,Official Report, columns 834-35W, to my hon. Friend the Member for Hemel Hempstead (Mr. McWalter).
  22W
  I also announced on 18 November 1999 that the Orange Badge scheme is to be reviewed this year, and we will be looking at the eligibility criteria as well as the administration and enforcement of the scheme.

  Regional Planning Guidance
  Mr. Pond
  To ask the Secretary of State for the Environment, Transport and the Regions when he intends to publish his response to the recommendations of the panels which conducted the public examinations of the draft regional planning guidance notes for East Anglia and the South-East; and if he will make a statement. [116564]

  Mr. Raynsford
  My right hon. Friend the Deputy Prime Minister has today published for consultation Proposed Changes to the Draft Regional Planning Guidance (RPG) for East Anglia and to the Draft RPG for the South-East.

  On 7 March my right hon. Friend set out a new approach to planning for housing provision and made a preliminary announcement about housing in the South-East. The Proposed Changes to the draft RPG for East Anglia reflect the principles and priorities set out in that statement. They aim to support economic growth and regeneration, while protecting and enhancing the region's environment. They endorse the housing target proposed by SCEALA (the Standing Conference of East Anglia Local Authorities) of around some 9,600 additional dwellings a year as the starting point for the plan, monitor and manage approach. The Panel recommended that at least 40 per cent. of these new dwellings should be on previously-developed land. We are proposing a 50 per cent. target initially. This takes account of the likely availability of such land in a largely rural region.

  We endorse SCEALA's view that development should be concentrated in the cities and larger towns. This is consistent with our policies for urban renaissance and the better use of land.

  Cambridge now has world status as a centre for high-tech, knowledge-based industry. The emphasis must be on enabling the development of these industries while safeguarding the City's special character. However, we share the Panel's concern at the non-sustainable nature of much recent development around Cambridge, associated with increased car dependence and a lack of affordable housing. Building on the Panel's recommendations, we are proposing a sequential approach to development, looking first at the capacity of Cambridge, then possible urban extensions, then a new settlement—always considering brownfield land first.

  We have accepted the Panel's recommendation for a review of the Cambridge Green Belt as an essential part of the process of finding sustainable locations for development. It should be carried out by the local authorities, with any changes taken forward through the review of development plans.

  The integration of development and transport is at the core of our approach to regional planning. Our programme of multi-modal transport studies reflects the strategic priorities identified by SCEALA. The Minister responsible for roads announced on 3 February that the A11 Roudham Heath to Attleborough scheme was to be brought forward to start in 2000–01. In further recognition of the strategic priorities we are adding three schemes to

  23W
  the targeted programme of improvements at an estimated cost of £53 million: All Fiveways to Thetford and Attleborough Bypass Improvements, already in preparation, and A47 Thorney Bypass. The All schemes will complete a high-quality route to Norwich, improving access to Great Yarmouth and Lowestoft. Thorney Bypass will bring safety and environmental benefits for the local community, and will remove a bottleneck on a strategic east-west route.

  On 7 March, my right hon. Friend announced the overall housing numbers for the South-East region and the target for the use of recycled land. The Proposed Changes, published today, set out detailed proposals including a clear spatial strategy for the region.

  The Proposed Changes recognise the national priority for regenerating the Thames Gateway area, and the need within the region to promote the Priority Areas of Economic Regeneration and to facilitate the continuing economic success of the area to the west of London, while maintaining environmental quality, and of London as a World City. The policies are designed to help achieve an urban renaissance and the improved economic and social viability of the rural areas, while protecting and enhancing the countryside.

  The Proposed Changes set out priorities for transport investment and study, and include revised parking standards. However, they make clear that more work needs to be done to develop the Regional Transport Strategy to facilitate the economic performance of the region, achieve more sustainable patterns of movement and to combat congestion. The documents include an illustrative distribution of the housing numbers to county areas, a point on which we have specifically sought the views of SERPLAN (the South-East Regional Planning Conference). We consider that there is scope for potential growth areas at Milton Keynes, Ashford and, in the longer term, at Stansted. The potential of these areas will now be the subject of studies with the Regional Planning Bodies, the local authorities concerned and other interested parties.

  The consultation period on both sets of Proposed Changes will be for 12 weeks, ending on 19 June. Copies of the relevant documents have been placed in the House Library and made available to the two region's MPs.

  Green Glass Waste
  Mr. Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions what recent assessment he has made of the potential for re-using green glass waste; what recent discussions he has had with the importers of green glass bottles on this subject; and if he will make a statement. [116298]

  Mr. Mullin
  We are in close touch with British Glass and other materials organisations and we are planning a seminar on this issue later this year.

  Wembley Stadium
  Mr. Bob Russell
  To ask the Secretary of State for the Environment, Transport and the Regions what progress has been made by the Wembley Task Force towards improving the road and rail links to Wembley Stadium. [114856]
  24W
  Mr. Hill
  The Wembley Task Force are in close consultation with London Underground Ltd. A scheme to improve the capacity and quality of Wembley Park station is well advanced and will shortly be put to the LUL Board for approval. Parallel discussions are in hand with rail operators on potential enhancements to Wembley Stadium and Wembley Central station.

  An appraisal of local road improvements necessary to serve the Stadium and the Wembley Estate has been undertaken. Detailed proposals are now being developed in discussion with Wembley National Stadium Ltd. and the Highway Authorities.

  Local Transport Plans
  Mr. Pickthall
  To ask the Secretary of State for the Environment, Transport and the Regions when he intends to publish guidance for local authorities on the preparation of full local transport plans. [116684]

  Mr. Hill
  I am today issuing "Guidance on Full Local Transport Plans", which contains advice for local authorities on the preparations of their local transport plans for 2001–02 to 2005–06.

  Local transport plans are at the heart of our new deal for integrated transport, central to giving people improved travel choices, safer roads and better transport services. We are giving authorities more resources and more freedom to produce the best possible plans. We will be spending more than £750 million in the coming financial year, and more than £1 billion the following year. This reflects our commitment to supporting local solutions and initiatives.

  This summer the Government will publish their 10-year transport plan, a framework for investment over the next decade. Local authorities will play an important role in delivering that plan, and in the guidance issued today we are asking them for additional investment proposals for an integrated transport strategy over the next 10-years.

  Construction Industry
  Mr. John Cryer
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many workers in the construction industry are employed on a PAYE basis; [115051]

  (2) how many workers in the construction industry are self-employed on the basis of holding a C154 registration card. [115052]

  Dawn Primarolo
  I have been asked to reply.

  Whether an individual is employed or self-employed for tax and national insurance purposes depends upon the terms of the contract under which they are engaged.

  The Inland Revenue does not have information relating to the numbers of workers in the construction industry who are engaged on an employed or self-employed basis.

  A CIS4 registration card is no proof of self-employment and therefore there should be no workers in the construction industry who are treated as self-employed purely on that basis. The Inland Revenue, together with the former Contributions Agency published

  25W
  leaflet IR148/CA69 specifically to assist contractors in the industry on tackling the question of the status of their workers.

DEFENCE

  Lord Levy
  Mr. Baker
  To ask the Secretary of State for Defence on which dates Lord Levy has had meetings with(a) Ministers and (b) senior officials in his Department since 1 May 1997, giving in each case the purpose of the meetings; and if he will make a statement. [113503]

  Mr. Hoon
  [holding answer 7 March 2000]: Lord Levy had an office call with the Secretary of State for Defence on Thursday 28 October 1999.

  The Chief of Defence Staff (CDS) has met Lord Levy on four occasions. On 25 March 1999 Lord Levy made an office call on CDS in the Ministry of Defence for general discussion on the Middle East. During the period 3-7 September 1999, Lord Levy assisted CDS during his representational visit to Israel, and on 20 October 1999 he came to the Ministry of Defence to discuss the Middle East. On 22 February this year, CDS called on Lord Levy at the House of Lords to discuss the Middle East prior to Lord Levy's visits there, and CDS' visit to Bahrain.

  The Chief of Defence Intelligence had a short informal meeting with Lord Levy on 25 March 1999. At his request, Lord Levy was briefed on the situation in Syria prior to a visit to the area.

  Korean War (50th Anniversary)
  Mr. Duncan Smith
  To ask the Secretary of State for Defence what arrangements he is making to commemorate the 50 anniversary of the Korean War in the United Kingdom. [116459]

  Dr. Moonie
  I refer the hon. Member to the answer my right hon. Friend the Prime Minister gave to the hon. Member for North Dorset (Mr. Walter) on 21 March 2000,Official Report, column 480W. A comprehensive programme of commemorative events is planned over the next three years in the Republic of Korea, involving that country and those whose forces constituted the United Nations Command. As the United Kingdom's participation in the war as a contributor to the United Nations Command in defence of the Republic of Korea, it is appropriate that our commemoration should be as part of that programme, and we will be represented at a number of events at the appropriate level. The Ministry of Defence has no plans for additional commemoration of the anniversary.

  Seatbelts
  Mr. Key
  To ask the Secretary of State for Defence when his Department issued instructions that Army, Royal Navy and Royal Air Force cadets must not travel in four-tonne trucks or other military vehicles without seatbelts; and what assessment he has made of the impact of this ruling on(a) cadet training and (b) cadet financing. [116346]
  26W
  Mr. Spellar
  Instructions on the carriage of cadets in military vehicles were first issued on 20 March 1998, in response to the Road Vehicles (Construction and Use) (Amendment) (No. 2) Regulations 1996 (SI 1996/163). These instructions stated that the use of Troop Carrying Vehicles (TCVs) which were not fitted with passenger restraint was not appropriate for the routine movement of cadets. The use of TCVs for the carriage of cadets was therefore restricted to training areas and their immediate vicinity.

  The use of military vehicles during training is permitted, but only under a rigorous control regime. This requires Commanding Officers to consider whether it enhances training, whether it might be more appropriate to use civilian vehicles, the nature of the training and the terrain to be covered. This is aimed at ensuring that the proposed training is reasonable and that any risks are controllable.

  Following the Strategic Defence Review, additional funding of £500,000 per year was allocated to Headquarters Land Command for additional provision for routine travel for Army Cadet Force units and Army sections of the Combined Cadet Force, and additional facilities at detachment level. Of this, £200,000 per year has been allocated to TAVRAs for cadet travel. This is in addition to the usual process through which TAVRAs receive funding, including provision for a cadet travel vote. This additional funding has meant that the impact of the ruling with respect to the requirement for seatbelts in TCVs on Army Cadet Force training and financing has been minimal.

  Naval Cadet Forces seldom used four-tonne trucks for passenger carrying purposes, and therefore the ruling with respect to the requirement for seatbelts in these vehicles has had no impact either on cadet training or financing. Naval Cadet Forces use either loan vehicles from motor transport pools or hire vehicles, all of which are fitted with seat belts.

  Air Cadets do not travel in four-tonne trucks at any time. They may occasionally travel in Land Rovers, which are sometimes used at gliding schools. The ruling has had no impact on their training or financing.

  Correspondence
  Mr. Cummings
  To ask the Secretary of State for Defence when he will reply to the letter of 5 July 1999 and the fax of 24 August 1999 from the hon. Member for Easington concerning Mr. A. Jones of Seaham. [114942]

  Dr. Moonie
  I assume my hon. Friend is referring to correspondence concerning Mr. A. Lanes of Seaham. This has been transferred to the Department of Social Security for reply.

  Global Positioning System
  Mr. Hancock
  To ask the Secretary of State for Defence what estimate he has made of the cost of upgrading his Department's stock of Paveway II laser guided bombs to have a Global Positioning System/Inertial Measurement Unit capability; what safeguards would be taken to prevent the jamming of such a system; and if he will make a statement. [115750]
  27W
  Dr. Moonie
  We are currently considering lessons learned from Kosovo, including the need to bomb with precision in all weather conditions. However, no decisions have yet been made. Upgrading the Ministry of Defence's stock of Paveway II laser guided bombs to have a Global Positioning System/Inertial Measurement Unit capability is one of the options which are being considered. The disclosure of the estimate of the cost of any such upgrade could disadvantage the MOD in commercial negotiations and I am therefore withholding this information under Exemption 7 of the Code of Practice on Access to Government Information. If a decision were made to upgrade the weapons, we would consider what safeguards might be put in place to prevent jamming of the system.

  Iraq
  Mr. Quentin Davies
  To ask the Secretary of State for Defence on how many occasions, in each of the last six months, RAF aircraft patrolling the(a) northern and (b) southern no-fly zones in Iraq have been fired on; on how many occasions coalition forces have retaliated; and what targets have been destroyed as a result. [115913]

  Mr. Hoon
  During the six months from October 1999 coalition aircraft have been fired at by surface-to-air missiles or anti-aircraft artillery on over 200 occasions in both the northern and southern no-fly zones. Coalition forces responded in self-defence to these and other threats on some 50 days against almost 90 targets related to the Iraqi air defence network.

  Hong Kong
  Mr. Cox
  To ask the Secretary of State for Defence what land is still owned by his Department in Hong Kong; and if he will make a statement. [116213]

  Dr. Moonie
  The Ministry of Defence retains ownership of the Cassino Lines Gurkha Cemetery, San Tin, New Territories, Hong Kong, and the Cape Collinson Military Cemetery, Chai Wah, Hong Kong.

  Military Land
  Mr. Cox
  To ask the Secretary of State for Defence what was the estimated acreage of military land in the UK surplus to requirements on 1 March. [116212]

  Dr. Moonie
  Land which is declared surplus to defence requirements is disposed of. The Strategic Defence Review set a target of £700 million for estate disposals over the four years to 2001–02 and we are well on track to achieve that figure. Figures for the hectarage of land in disposal are not held centrally but I will write to my hon. Friend and place a copy of my reply in the Library of the House.

  Property Procurement
  Mr. Duncan Smith
  To ask the Secretary of State for Defence how much has been spent by his Department in each of the last three years in procuring new buildings and land. [116457]

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

  Naval Vessels
  Mr. Duncan Smith
  To ask the Secretary of State for Defence when the RFAs Olwen and Olna last put to sea. [116453]

  Mr. Spellar
  RFAs Olwen and Olna were last at sea in July 1999 and November 1999 respectively.

  Working Time Directive (TA)
  Mr. Key
  To ask the Secretary of State for Defence what advice he has issued to the Territorial Army on compliance with the Working Time Directive. [116345]

  Mr. Spellar
  No specific guidance has been issued to the Territorial Army, although general guidance has been given to the armed forces, much of which is relevant to the Territorial Army. It is our intention to issue further guidance to the reserve forces, in light of the amendments to the Working Time Regulations contained in SI 3372/99, within the next two months.

  Credit Facilities
  Mr. Key
  To ask the Secretary of State for Defence with which credit organisations his officials are discussing access to credit by members of HM Forces and their families; and if he will make a statement. [116131]

  Mr. Spellar
  Service families are occasionally refused credit because credit scoring systems used by some credit lenders do not take account of the mobility expected of Service families. This is a particular problem for Service personnel who have not lived at the same address for three years or who are registered as Service voters. My Service Families Task Force is in discussions on this issue with the British Bankers Association and the Finance Leasing Association. These organisations represent the majority of credit lenders in this country.

  Accommodation (Scotland)
  Mr. Alasdair Morgan
  To ask the Secretary of State for Defence what barrack accommodation is currently surplus to requirements in Scotland and awaiting disposal; and if he will estimate the potential single accommodation capacity of these barracks. [116224]

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

  Mr. Alasdair Morgan
  To ask the Secretary of State for Defence how many places(a) are currently available and (b) will be available by 2001, in training camps in Scotland for (i) Kirkcudbright, (ii) Barry Budden and (iii) Cultybraggan. [116225]

  Mr. Spellar
  The number of bed spaces(a) currently available and (b) available in 2001, in training camps in Scotland at (i) Kirkcudbright, (ii) Barry Budden and (iii) Cultybraggan are as follows:

  Training camp

  2000

  2001

  Kirkcudbright

  0

  0

  Barry Budden

  507

  507

  Cultybraggan

  600

  600

  29W
  A training camp is planned for Kirkcudbright which will offer accommodation for up to 480 soldiers in due course.

  Mr. Alasdair Morgan
  To ask the Secretary of State for Defence how many single accommodation places exist for each of the services in Scotland for(a) officers and (b) other ranks by location; and if he will estimate the total number of service personnel that could be accommodated onshore in Scotland if all available accommodation was utilised. [116226]

  Dr. Moonie
  The information requested is not held centrally. I will write to the hon. Member and a copy of my letter will be placed in the Library of the House when this information has been collated.

  Zimbabwe
  Mr. Salmond
  To ask the Secretary of State for Defence how many(a) Royal Navy, (b) Royal Marine, (c) Army and (d) RAF personnel there are in Zimbabwe; what roles they are fulfilling; and how many Zimbabweans are receiving military training in the UK. [116262]

  Mr. Spellar
  Nine British Army and two RAF UK military personnel currently serve in Zimbabwe as part of the British Military Advisory and Training Team (BMATT) Southern Africa. The BMATT's main role is to provide regional peacekeeping training in countries throughout the Southern Africa region.

  In addition, two Army personnel (the UK Defence Adviser and his assistant) provide advice to the British High Commissioner in Harare on defence issues.

  A total of four Zimbabwean officers are currently receiving training in the UK.

  RAF Base Budgets
  Mr. Salmond
  To ask the Secretary of State for Defence what was the station operating budget for each RAF base in the UK in the last year for which figures are available. [116223]

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

  Indonesia
  Ann Clwyd
  To ask the Secretary of State for Defence if UK military personnel provided advice to the Indonesian Armed Forces in respect of their 9 May 1996 assault on the village of Geselama to rescue foreign and Indonesian hostages held by West Papuan rebels; and what UK military personnel were(a) present at and (b) took part in the assault. [116106]

  Mr. Battle
  I have been asked to reply.

  I refer to the reply given by the then Minister of State, my right hon. Friend the Member for Ashfield (Mr. Hoon) on 23 July 1999, Official Report, column 727W. We worked closely with the Indonesian authorities to help ensure the safe release of the hostages. But Her Majesty's Government does not comment on the operational aspects of kidnap cases.

SOCIAL SECURITY

  Child Benefit
  Mr. Webb
  To ask the Secretary of State for Social Security if he will set out the criteria which determine which recipients of child benefit receive letters inviting them to move to four-weekly payment in arrears. [115852]

  Angela Eagle
  [holding answer 22 March 2000]: The administration of child benefit is a matter for Peter Mathison, the Chief Executive of the Benefits Agency. He will write to the hon. Member.

  Letter from Peter Mathison to Mr. Steve Webb, dated 24 March 2000:
  The Secretary of State has asked me to respond to your recent Parliamentary Question asking if he will set out the criteria which determine which recipients of child benefit receive letters inviting them to move to four-weekly payment in arrears.
  It may help if I explain that the normal frequency for paying Child Benefit is every four weeks. The only exceptions to this are lone parents, people who received weekly payments prior to 14 March 1982 and customers who are in receipt of Income Support, Income Based Jobseekers Allowance, Family Credit or Disability Working Allowance. However, customers in receipt of Working Families Tax Credit or Disabled Person's Tax Credit which replaced Family Credit and Disability Working Allowance on 5 October 1999 do not qualify for weekly payments.
  In October 1999, an exercise was taken to identify Child Benefit customers who were receiving their benefit on a weekly basis where it appeared that they should, in fact, have been paid four weekly. Customers selected were issued with a letter which explained their Child Benefit would, when their current order book expired, be paid on a four weekly order book basis unless the customer contended that this would cause hardship.
  This exercise has been completed and there are no plans to issue any further letters to these customers.
  I hope this is helpful.

  SERPS
  Mr. Robertson
  To ask the Secretary of State for Social Security what evidence he will require before compensation is paid as proof that a person has lost financially as a result of receiving inaccurate information from a Government Department regarding changes to inherited SERPS; and if he will make a statement. [116342]

  Mr. Rooker
  We shall put before the House the full details of the Inherited SERPS Scheme, including what information we will require from those wishing to claim, and the procedures that will be followed to scrutinise those claims, once we have developed them. The NAO and the Ombudsman will be fully involved in developing these procedures.

  Mr. Field
  To ask the Secretary of State for Social Security what will be the cost to public funds of compensation to contributors for the changes to surviving spouses' entitlement to SERPS. [116378]

  Mr. Rooker
  The cost to public funds will depend on the number of successful claims. The minimum cost will be £2.5 billion.

  Pensioner Households
  Mr. Webb
  To ask the Secretary of State for Social Security if he will set out the basis for his calculation that pensioner households are on average £400 per year better off than when the Government came into office. [116470]

  Mr. Rooker
  The £400 figure is a rounded illustrative average across all pensioner households and covers winter fuel payments, free television licences for the over-75s, our minimum income guarantee measures and various tax changes and includes measures announced in the Budget.

  Expenditure as a percentage of GDP1

  1996–97

  1997–98

  1998–99

  1999–2000

  2000–01

  2001–02

  Retirement Pensions2

  4.18

  4.12

  4.15

  4.19

  4.08

  4.10

  Winter Fuel Payments

  0.00

  0.02

  0.02

  0.08

  0.15

  0.13

  Means-tested benefits for pensioners3

  1.13

  1.07

  1.00

  1.00

  1.00

  1.03

  Other benefits paid to pensioners4

  0.02

  0.02

  0.02

  0.02

  0.02

  0.02

  Concessionary TV Licences

  0.00

  0.00

  0.00

  0.00

  0.04

  0.04

  Total

  5.33

  5.23

  5.19

  5.29

  5.28

  5.30

  1 Expenditure figures are consistent with estimates of Social Security AME expenditure published in the March 2000 Financial Statement and Budget Report (FSBR). GDP figures for 1996–97 and 1998–99 were published by HM Treasury at the same time. Forecast figures for GDP for 1999–2000 to 2001–02 are from Table B6 of the FSBR.

  2 Includes Retirement Pension basic and earnings-related components.

  3 Includes Income Support, Social Fund payments, Housing Benefit and Council Tax Benefit paid to people aged 60 and over.

  4 Includes non-contributory Retirement Pension and Christmas Bonus (contributory and non-contributory).

  Benefits Agency (Internal Security)
  Mr. Field
  To ask the Secretary of State for Social Security when the report by the Probity and Transformation Section on Benefits Agency internal security will be published; and if he will place a copy in the Library. [116379]

  Mr. Rooker
  No. The report on the internal security of the Benefits Agency will be produced at the end of April. It is an internal document and we have no plans to publish it. This is in line with Part II paragraph 2 of the Code of Practice on Access to Government Information.

  Personal Pensions
  Mrs. Ewing
  To ask the Secretary of State for Social Security (1) if the benefits from an occupational pension scheme which are transferred to a personal pension scheme will vest in the pension holder's trustee in sequestration in the event that the pension holder is sequestrated;[116228]

  (2) when he plans to bring into force the provisions of the Welfare Reform and Pensions Act 1999 whereby personal pensions, in the event of bankruptcy of the holder, will vest in the trustee; [116227]

  (3) what is his estimate of the numbers of persons who by virtue of becoming sequestrated or being sequestrated prior to the coming into force of section 11 of the Welfare Reform and Pensions Act 1999 will lose to the trustee in sequestration the benefit of their personal pension, assuming that section 11 is not brought into force until April 2001. [116229]

  Mr. Rooker
  Where a person becomes bankrupt, his assets, with some exceptions, usually vest in the trustee in bankruptcy (in Scotland, the permanent trustee in bankruptcy). In relation to personal pensions, current bankruptcy law is not wholly clear. Nevertheless, some

  Pensioners (Benefits)
  Mr. Webb
  To ask the Secretary of State for Social Security if he will estimate the value of expenditure on(a) retirement pensions, (b) winter fuel payments, (c) means-tested benefits for pensioners, (d) all other benefits for pensioners and (e) free TV licences for 1996–97 and each succeeding year to the end of the public expenditure planning period, as a share of GDP. [116471]

  Mr. Rooker
  The information is in the table.

  personal pensions have been taken by the trustee in bankruptcy. These can include personal pensions that contain transfers from occupational pensions.

  The Welfare Reform and Pensions Act 1999 contains a measure to protect all tax-approved pensions on bankruptcy. Regulations are needed to give full effect to the measure and in order to allow for the preparation of the regulations, April 2001 has been chosen as the date for bringing the new measure into effect.

  In Scotland it is estimated that the number of people who lose their personal pension on bankruptcy is around 375 a year. There is no reliable information for England and Wales.

  Rent Rebates
  Mr. McNamara
  To ask the Secretary of State for Social Security what was the total expenditure by local authorities in England and Wales on rent rebates for council tenants in 1998–99. [115398]

  Angela Eagle
  The total expenditure on rent rebates for council tenants (i.e. properties within the Housing Revenue Account (HRA)) in 1998–99 was as follows:

  £ million

  England

  4,318

  Wales

  265

  Source:

  Figures are taken from the HRA subsidy forms submitted by local authorities to the Department of Environment, Transport and the Regions, and the National Assembly for Wales.

  Mr. McNamara
  To ask the Secretary of State for Social Security what is the estimated expenditure by local authorities in England and Wales on rent rebates for council tenants for the years(a) 1999–2000 and (b) 2000–01. [115400]
  33W
  Angela Eagle
  The information is in the table.

  Forecast expenditure on rent rebates for council tenants (i.e. properties in the housing revenue account (HRA)) in 1999–2000 and 2000–01

  £ million

  1999–2000

  2000–01

  England

  4,319

  4,367

  Wales

  270

  282

  Source:

  Figures are DSS country-based forecasts of expenditure, which underlie the Budget 2000

  Child Support
  Mr. Fitzpatrick
  To ask the Secretary of State for Social Security what plans he has to improve access to child support for lone parents who claim income support or income-based jobseeker's allowance. [116667]

  Angela Eagle
  Closer working between the Child Support Agency and the Benefits Agency has already provided a more straightforward, responsive and easily understood child support service. Currently, when Benefits Agency staff interview lone parents to help with their claim for income support and income based jobseeker's allowance, they also help them complete a child support application. If the parent with care is unwilling to apply for child support, a statement is taken at the interview setting out her reasons. The statement is then passed to the Child Support Agency for a decision on whether the reasons for not applying for child support constitute "good cause".

  As a result of these changes, many more parents with care claiming income support and income-based jobseeker's allowance, now apply for child support. 87 per cent. now complete a child support application and provide details of the non-resident parent.

  From 1 April this year, following successful trials around the country, the current arrangements will be extended so that the Benefits Agency will take on responsibility for making decisions about good cause. This will further streamline the service offered to lone parents claiming benefit.

  Winter Fuel Payment
  Miss Geraldine Smith
  To ask the Secretary of State for Social Security how many pensioner households in Morecambe and Lunesdale have benefited from the winter fuel payment. [115747]

  Angela Eagle
  From the data we keep it is not possible to state how many separate households have received a winter fuel payment. However, in Morecambe and Lunesdale in the winter of 1999–2000, 9,333 pensioners received a £100 payment and 9,595 pensioners received a £50 payment.

  State Second Pension
  Mrs. Lait
  To ask the Secretary of State for Social Security when he expects the low-earning self-employed to be brought into the state second pension. [115910]
  34W
  Mr. Rooker
  Self-employed earners will not be included in the state second pension scheme from the outset. The issue of whether they should eventually be brought into the scheme was part of the Pension Green Paper consultation exercise we carried out. We are considering the outcome of this.

  Industrial Injury Benefit
  Mr. Cox
  To ask the Secretary of State for Social Security how many claims were made for industrial injury benefit during 1999. [115918]

  Mr. Bayley
  Data on the claims made to industrial injuries disablement benefit in the quarter ending December 1999 are not yet available. 54,600 claims were made for industrial injuries disablement benefit between January and September 1999. 70,300 claims were made in the 12 months ending September 1999.

  Notes:

  1. These figures are based on a 10 per cent. sample of industrial injuries disablement benefit claims.

  2. Figures are rounded to the nearest hundred.

  Source:

  Analytical Services Division.

  Incapacity Benefit
  Mr. Cotter
  To ask the Secretary of State for Social Security what was the average length of time between date of initial application and date of appeal for incapacity benefit applications in North Somerset in each of the last three years. [116005]

  Mr. Bayley
  The information requested is not available and could be obtained only at disproportionate cost.

  Stakeholder Pensions
  Mrs. Lait
  To ask the Secretary of State for Social Security what advice he has received from his advisers on the increase in the number of pensions taken out and the money likely to be put into pensions if stakeholder pensions were fully concurrent. [115908]

  Mr. Rooker
  If all members of defined benefit occupational pension schemes were permitted to contribute up to £3,600 to a stakeholder pension, regardless of existing limits, it is estimated that there would be an increase of around one million people taking out stakeholder pensions. The additional money put into pensions would be about £1.3 billion, of which about £400 million would come from tax relief.

  Key Client Groups
  Mr. Webb
  To ask the Secretary of State for Social Security, pursuant to his oral statement of 15 March 2000,Official Report, columns 307-21, if he will list his Department's key client groups other than children, people of working age and pensioners. [115851]

  Angela Eagle
  Our aim is to promote work for those who can and provide support and opportunity for all. As my right hon. Friend the Secretary of State said in his statement, we are focusing the Department on its key client groups: children, people of working age and
  35W
  pensioners. We recognise that within these key groups people will have different needs. Our approach will help us to focus services to meet these needs.

  Australia (Pensions)
  Mrs. Lait
  To ask the Secretary of State for Social Security what recent discussions he(a) has had and (b) plans to have with the Australian Government about frozen state pensions of British people living in Australia; and if he will make a statement. [115101]

  Mr. Rooker
  The Australian Government's proposal for a limited unfreezing of pensions for some UK pensioners living in Australia were discussed at a meeting with the then Minister of State in July 1999. This proposal was rejected.

  Formal notification of Australia's intention to terminate its social security agreement with the UK was received on 1 March. The agreement will end 12 months from this date. This action will have no effect on the great majority of UK pensioners living in Australia, nor will it affect those in receipt of an Australian age pension at the time the termination becomes affective.

  It is unfortunate that the Australian Government has decided to end this long-standing agreement. We have no plans to unfreeze pensions in Australia or elsewhere.

AGRICULTURE, FISHERIES AND FOOD

  Correspondence
  Mr. Jenkin
  To ask the Minister of Agriculture, Fisheries and Food when he will reply to the letter from the hon. Member for North Essex of 6 November 1999 concerning purchasing policies of local authorities. [116138]

  Mr. Nick Brown
  I replied to the hon. Member on 23 March 2000.

  National Hunt Horses
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the practice of firing National Hunt horses' tendons. [115804]

  Mr. Morley
  This practice has been condemned by the Council of the Royal College of Veterinary Surgeons as being therapeutically ineffective and unjustifiable.

  Food Supplements
  Mr. Fearn
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the timetable for the proposed Directive on Food Supplements; whether he has received a copy of the Draft Directive; what policy objectives he intends to pursue in connection with that Directive; and what steps is he taking to promote those objectives in discussions with other member states. [115798]

  Ms Quin
  In its White Paper on Food Safety published on 18 January, the Commission stated that it will adopt the proposal for a directive on food supplements in March 2000, with a view to it being adopted by the Council of Ministers and the European Parliament by March 20001. The draft directive has not yet been published.
  36W
  The Government believe that the level of vitamins and minerals in supplements sold under food law should be limited only where this is necessary for safety reasons, and we are taking every opportunity to promote this approach during discussions in Brussels and other international forums.

  Mr. Fearn
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to review food labelling regulations to ensure that consumers of food supplements and other health food products are given accurate, relevant information about these products, their safety, use and effectiveness in maintaining good health. [115795]

  Ms Quin
  The Government are committed to giving consumers clear, easily understood information so they can make informed choices about the food they buy. We have been pressing the European Commission for changes in existing food labelling rules, which are harmonised at Community level, to require mandatory nutrition labelling of all foods and for the development of harmonised rules on health and nutrition claims. In addition, we are supporting the work of the Joint Health Claims Initiative, an alliance of consumer, industry and enforcement groups, in the development of a Code of Practice on Health Claims.

  In January, my noble Friend Baroness Hayman launched the "Better Food Labelling" initiative to identify whether current labelling rules and regulations meet the needs of consumers. The views received will be passed to the new Food Standards Agency to help judge whether the current regime is in need of reform, and for use in formulating its advice to Government on the UK's food labelling policy.

  Mr. Fearn
  To ask the Minister of Agriculture, Fisheries and Food what is his policy in relation to the availability on general retail sale of safe vitamin and mineral supplements. [115797]

  Ms Quin
  The Government believe that in the interests of consumer choice supplements sold under food law should, like other foods, be freely available.

  Mr. Fearn
  To ask the Minister of Agriculture, Fisheries and Food when he expects to receive the report of the Expert Advisory Group on Vitamins and Minerals; and if he will arrange for the provisional findings of the Group to be made available for comment to consumer, retailer, practitioner and manufacturer representative groups prior to its publication. [115794]

  Ms Quin
  The Expert Group on Vitamins and Minerals is expected to submit its report to the Food Advisory Committee in spring 2001. Whether the provisional findings are the subject of consultation with interested parties prior to this is a decision for the group itself. However, the group is committed to publishing the scientific reviews of the nutrients that it is considering so that interested parties have an opportunity to comment. It is also aided in its work by observers from consumer, food and health food industries and alternative medicine who are free to participate in the discussion of the scientific reviews.

  Meat and Bone Meal
  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food what has been the cost of storing meat
  37W
  and bone meal produced under the over-30-months scheme prior to incineration in each of the storage locations. [115110]

  Ms Quin
  The total cost of storing meat and bone meal produced under the over-30-months scheme is currently around £9 million per year. Specific rates are negotiated individually with contractors and are commercial confidential.

  Quarantine Kennels
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food when his Department intends to enact the provisions of the Animal Health (Amendment) Act 1998, in respect of minimum animal welfare standards in quarantine kennels; and if he will make a statement. [115506]

  Ms Quin
  [holding answer 22 March 2000]: Statutory welfare standards for dogs and cats in quarantine premises will be introduced in the same statutory instrument that will implement the full pet travel scheme. It is intended that this will be in place by the end of March 2001.

  Regional Service Centres
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to close regional service centres; and if he will make a statement. [116264]

  Ms Quin
  ] [holding answer 23 March 2000]: No decisions have yet been taken on the future of the Ministry's regional service centres (RSCs) following the recent review of CAP scheme administration, which was commissioned to help us identify the best way to improve the service we offer to farmers and traders eligible to claim CAP payments, taking full advantage of the benefits offered by modern technology.

  We are now considering, in the context of the spending review 2000, how best to restructure MAFF's RSCs and the Intervention Board Executive Agency. Any major restructuring will only be possible if funding can be made available.

  My right hon. Friend the Minister has made it clear that he will not implement the recommendations of the review unless he is satisfied that we will be able to deliver real improvements in the service which MAFF and the Intervention Board currently provide to farmers and traders, as well as reductions in the cost to the taxpayer of administration of CAP payments.

  We are also taking forward plans to align MAFF's other regional activities, particularly on rural development, with the Government Offices for the Regions. This will ensure that we are able to work effectively with other regional partners including the regional development agencies.

  GM Crops
  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food if he will make it his policy to ban the commercial release of GM crops until tests demonstrate that they are safe for(a) people and (b) the environment. [115032]

  Mr. Meacher
  I have been asked to reply.
  38W
  It is the Government's policy to ban the commercial release of GM crops until it can be demonstrated that they are safe for people and the environment. The current European and UK legislation prohibits the commercial release of any genetically modified organism, including GM crops, until the applicant can demonstrate to the satisfaction of European member states that they will not cause harm to human health or the environment and a marketing consent has been issued under the terms of the Directive 90/220.

PRIME MINISTER

  Synchrotron
  Mr. Brady
  To ask the Prime Minister what representations were made to him by(a) Ministers and (b) officials in the Department of Trade and Industry regarding the Diamond Synchrotron Project. [115756]

  The Prime Minister
  [holding answer 21 March 2000]: Since my response to a question in the House from the hon. Member for Wantage (Mr. Jackson) on 8 December 1999, Official Report, column 826. I have been kept fully informed by Ministers and officials in the Department of Trade and Industry on important issues relating to the New Synchrotron project.

  Telecommunications Industry
  Dr. Cable
  To ask the Prime Minister what representations he received from, or on behalf of, the telecommunications industries between 20 January and 2 March in connection with the Utilities Bill; and if he will list the telecommunications companies involved. [115771]

  The Prime Minister
  [holding answer 22 March 2000]: None.

  Dr. Cable
  To ask the Prime Minister if he will list(a) the meetings and contacts he had with the telecommunications industry between 20 January and 2 March and (b) the telecommunications companies involved; and on which occasions ministers from the Cabinet Office attended. [115783]

  The Prime Minister
  [holding answer 22 March 2000]: I have meetings with a wide range of individuals and organisations.

  UN Millennium Summit
  Mr. Gill
  To ask the Prime Minister which Government Ministers will attend the forthcoming United Nations Millennium Summit. [116252]

  The Prime Minister
  The United Kingdom delegation to the summit has yet to be decided.

  Interactive Website
  Mr. Flynn
  To ask the Prime Minister with what frequency he examines the comments posted by members of the public on the No. 10 interactive website he established in February; and what criteria he uses to judge whether comments should be deleted. [116265]
  39W
  The Prime Minister
  The No. 10 Downing Street Internet Site was relaunched on 11 February 2000. The public can post comments in the "Your Say" section. There have been more than 17,000 postings since the site's launch. "Your Say" is divided into two parts:

  (a) Policy Forum: the public are invited to respond to specific questions posed by the Government. I see a synopsis of the responses, and a selection of individual postings, which are sent to the relevant Government Department for a ministerial reply. I also receive a copy of the reply.

  (b) Speakers' Corner: this is an open forum where people can submit postings on any issue. A monthly report is sent to me and I see a selection of individual postings.

  Postings are deleted in the following circumstances:

  (a) They are irrelevant (i.e. have no relation to the discussion stream into which they are posted);

  (b) They are dormant (i.e. have not provoked any discussion for five or more days). This only applies to the Speakers' Corner section;

  (c) They are inappropriate (including those containing offensive, defamatory or libellous comments).

  Irrelevant and dormant postings are removed to ensure the site operates as quickly as possible, and users can enjoy a focused discussion on the issues they are interested in. Inappropriate postings are deleted so that everyone (including young children) can use the discussion forums.

  Pig Farmers
  Mr. Gill
  To ask the Prime Minister, pursuant to his oral answer of 8 March 2000,Official Report, column 999, what steps he is taking to fulfil his commitment to assist pig fanners. [116239]

  The Prime Minister
  In my speech to the National Farmers Union AGM on 1 February, I made it clear that further Government help for the UK pig industry had not been ruled out. But I made it equally clear that any investment by Government must be linked to long-term change in the structure of the industry and be part of an agreed overall strategy. How we take this forward will be part of the meeting I am holding with leaders from the agriculture and food industries on 30 March.

  Roger Liddle
  Mr. Ottaway
  To ask the Prime Minister, pursuant to his answer of 20 March 2000,Official Report, column 403W, on Roger Liddle, for what reason he did not provide the information requested about what occasions and at which venues during November and December 1999 his Defence and Foreign Affairs adviser made speeches in (a) the United Kingdom and (b) other European countries. [116127]

  The Prime Minister
  [holding answer 24 March 2000]: As my answer of 20 March made clear, Mr. Liddle attended seminars during the period in question and made some introductory remarks. He did not speak from a written text.

EDUCATION AND EMPLOYMENT

  "Computers for Teachers"
  Mr. Breed
  To ask the Secretary of State for Education and Employment (1) if the £500 subsidy for teachers purchasing computer equipment will be liable for income tax; [115565]

  (2) if the grant which teachers can claim towards computer purchase, as part of the "Computer for Teachers" initiative, is taxable as a benefit in kind. [115790]

  Mr. Wills
  The subsidy is an addition to income over and above salary, so income tax and national insurance contributions are payable. However, the DfEE has made arrangements with the Inland Revenue for these liabilities to be met centrally. No liability will fall on individual teachers, and they will not have to include the subsidy in any income tax return.

  Advertising
  Mr. Clappison
  To ask the Secretary of State for Education and Employment how much has been spent by his Department on advertising in each of the last 10 years. [115094]

  Mr. Wills
  The Department's spending on advertising as the Department for Education and Employment, and previously as the Employment Department and Department for Education, over the past 10 years is:

  £

  Employment Department

  1989–90

  2,016,305

  1990–91

  7,094,284

  1991–92

  9,154,140

  1992–93

  3,180,585

  1993–94

  7,259,450

  1994–95

  6,477,791

  1995–96

  7,713,740

  Department for Education

  1989–90

  260,883

  1990–91

  2,405,522

  1991–92

  2,562,505

  1992–93

  734,599

  1993–94

  1,379,573

  1994–95

  114,423

  1995–96

  582,134

  Department for Education and Employment

  1996–97

  7,537,917

  1997–98

  119,992,350

  1998–99

  215,673,258

  1 Of this £6,093.649 was used to attract businesses to New Deal

  2 Of this £6,578,202 was used to attract businesses to New Deal—by December 1999, New Deal had helped find jobs for 219,420 people and is helping cut welfare bills—and £1,848,223 was spent on a campaign to encourage parents to help with their children's reading.

  New Deal (18 to 24-year-olds)
  Mr. Allan
  To ask the Secretary of State for Education and Employment if he will list by unit of delivery(a) the number of leavers from the full-time education and employment option of the New Deal for 18 to 24-year-olds from January 1998 to the end of July 1999 and (b) the number of those who left to (i) sustained,

  41W
  unsubsidised employment, (ii) jobs lasting less than 13 weeks (iii) no known destination and (iv) benefits other than the jobseeker's allowance. [113675]

  Ms Jowell
  [holding answer 9 March 2000]: there is no full-time education and employment option in the new deal. However, there is a full time education and training option (FTET) and an employer option. For the period January 1998 to July 1999, the number of leavers from the full-time education and training option and their destinations are shown in tables placed in the Library.

  Child Care
  Mr. Clappison
  To ask the Secretary of State for Education and Employment how many child care places for under-8s have been available in each of the last three years for which figures are available; and what was the breakdown of places available through(a) day nurseries, (b) pre-school playgroups and (c) child minders. [116083]

  Ms Hodge
  The available information is shown in the following table. This information was also published on 22 December 1999 in the Statistical Volume "Children's Day care Facilities at 31 March 1999", which is available in the Library.

  Child care places in day nurseries, child minders and playgroups, 1997–99

  As at 31 March

  Day nurseries1 Total places

  Child minders2 Total places

  Playgroups1 Total places

  19993

  247,700

  337,000

  347,200

  19983

  223,000

  370,700

  383,600

  19973

  193,800

  365,200

  383,700

  1 The totals include local authority provided, registered and non-registered for day nurseries, and playgroups.

  2 Local authority provided and other registered persons for child minders.

  3 These figures have been rounded to the nearest 100 as appropriate.

  Early Years Development Plans
  Ms Buck
  To ask the Secretary of State for Education and Employment if he will require local early years development plans to include data on the actual costs of nursery places and child minding places in each local authority. [116073]

  Ms Hodge
  We will consider requesting this information in future.

  Employment Service
  Mr. Oaten
  To ask the Secretary of State for Education and Employment if employment service staff issuing equipment for the blind are required to declare interests in companies providing this equipment. [R][115960]

  Ms Jowell
  [holding answer 23 March 2000]: responsibility for the subject of the question has been delegated to the Employment Service agency under its Chief Executive. I have asked him to arrange for a reply to be given.

  Letter from Leigh Lewis to Mr. Mark Oaten, dated 27 March 2000:
  As the Employment Service is an Executive Agency, the Secretary of State has asked me to reply to your question regarding Employment Service staff declaring interests in companies
  42W
  providing equipment for the blind. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.
  Exceptionally, Employment Service staff may, through the Access to Work programme, purchase equipment for disabled people to use in their job. In most cases, employers actually buy the equipment and claim the costs from the Employment Service. In these cases, Employment Service staff may advise the employer on likely sources of supply, especially where equipment is specialised or there are only a few suppliers.
  Employment Service staff who procure goods have to follow Treasury approved purchasing guidelines. These guidelines require that anyone with a personal interest in a purchase must report the fact to a senior manager. A decision is then made on whether the procurement should be passed to another member of staff who has no personal interest in the outcome.
  I hope this is helpful.

  Footballers
  Mr. Brady
  To ask the Secretary of State for Education and Employment if he will make a statement on negotiations between UEFA and the European Commission regarding the rules allowing professional footballers to work in any EEA country. [114850]

  Ms Hodge
  My Department notes with interest the discussions that have already taken place between the European Commission and UEFA and we will monitor closely any further developments on this matter.

HOUSE OF COMMONS

  Polis III System
  Mr. Key
  To ask the Chairman of the Information Committee if he will reintroduce the screen-based Polis III system for hon. Members and their staff in addition to the browser interface. [116347]

  Mr. Allan
  This is an operational matter falling within the remit of the Library and the Parliamentary Communications Directorate (PCD). I am advised that the decision to withdraw screen-based access to POLIS for the majority of PDVN users was implemented by PCD and the Library in order to comply with Parliament's IT convergence strategy. The cost of providing millennium compliant terminal emulation software to all PDVN users could not be justified, compared with the benefits of developing the browser-based version. The Library's POLIS development programme is now focused on that service. Future plans include active hypertext links to the text of the Official Report and other parliamentary publications in electronic format, and advanced search capability.

  I gather that screen-based POLIS is still available via one of the public access PCs in the Official Publications Library. I have asked the Librarian to investigate whether it could also be placed on the PCs in the Members Library.

  All-party Groups
  Sir John Stanley
  To ask the Chairman of the Administration Committee, pursuant to her answer to the hon. Member for Nuneaton of 22 February 2000,Official Report, column 844W, on all-party groups, if the new rules for all-party groups apply retrospectively from the date of a group's last AGM or from the date of a group's

  43W
  first AGM following her answer; if meetings held outside the Palace of Westminster count towards the minimum annual requirement; if a meeting of a group held separately from, but on the same day, and at the same place, as the group's AGM counts towards the minimum annual requirement; and if meetings at which the number of hon. Members present falls below five at any point can be counted towards the minimum annual requirement. [115775]

  Mrs. Roe
  I will answer the points raised in my right hon. Friend's question in the order listed.

  The new rules have been applied simultaneously to all all-party parliamentary and associate parliamentary groups with effect from 29 February 2000 (ie the date on which each group was individually notified of them).

  As long as a meeting has been called by a group, (and is not just an event at which some group members are present, eg a reception), such a meeting would count towards the minimum total, regardless of where it was held; however, the group must keep a record so that it can provide the same information as is required of meetings held on the Parliamentary Estate.

  I understand that some groups' AGMs are solely to attend to administrative necessities (eg electing officers), while others may combine their AGM with an ordinary meeting (ie the AGM consists of a few minutes to attend to administrative necessities, followed by the real business). I think this is the separation to which my right hon. Friend refers; meetings count as separate meetings only if they are separated by a significant length of time (ie they are not held on the same day).

  The rules require five hon. Members, who are members of the group, to be present for the duration of every meeting.

  Overseas Research Assistants
  Mr. Oaten
  To ask the Chairman of the Administration Committee if she will list those hon. Members who currently have passes for temporary research assistants from overseas. [116018]

  Mrs. Roe
  No. Details of an hon. Member's staff are matters entirely for that hon. Member and the relevant House authorities.

TRADE AND INDUSTRY

  Cluster Development
  Mr. Pearson
  To ask the Secretary of State for Trade and Industry if he will publish further details of the new funding to support cluster development, announced by the Chancellor of the Exchequer on 21 March. [116660]

  Mr. Byers
  I can announce £50 million of new money to enable the RDAs to support clusters, including business incubation, in the English regions. The eight Regional Development Agencies (and the London Development Agency, when it is established in the summer) will be responsible for promoting the development of clusters in their respective regions: the new money, together with existing funding streams, will provide them with resources towards this. This new DTI initiative demonstrates the Government's commitment to strengthening the business agenda in the regions.
  44W
  RDAs are being invited to prepare business plans for their regions setting out their proposals to support clusters development in line with the Regional Economic Strategies. These plans will set out details of what each RDA intends to achieve using money allocated to them from the new fund. The £50 million will cover the financial years 2000–01 and 2001–02. Financial allocations for future years are being considered as part of the current Spending Review. Each RDA (and the LDA) will receive an allocation from the Capital Modernisation Fund of £1½ million for the coming financial year (2000–01). For the following year (2001–02), we shall introduce a "Challenge" element in the allocations.

  West Midlands Task Force
  Miss Kirkbride
  To ask the Secretary of State for Trade and Industry what party affiliations are recorded against the members of the West Midlands Task Force dealing with the situation at Longbridge. [116281]

  Mr. Alan Johnson
  The Longbridge Task Force is a non-political group consisting of representatives drawn from a wide range of organisations across the West Midlands. Each member has been invited to join by the Chairman, Alex Stephenson, who has selected individual participants on the basis of their experience and the contribution they can make to the work of the Task Force. There is no record of their individual party political affiliations.

  Hydro Agri (Immingham)
  Shona McIsaac
  To ask the Secretary of State for Trade and Industry if he will make a statement on the job losses at Hydro Agri in Immingham. [113840]

  Mr. Caborn
  [holding answer 10 March 2000]: I was aware that Hydro Agri's plant at Immingham was under review. I am naturally disappointed about the job losses which will result from the closure of the production side of the plant.

  It would be inappropriate for me to comment any further as this is a commercial decision, but the Government Office for Yorkshire and the Humber stands ready to work with Yorkshire Forward and other relevant agencies to help with re-training and identifying new job opportunities if required.

  Welding Institute, Cambridge
  Mr. Paice
  To ask the Secretary of State for Trade and Industry if he will list the(a) grants made to and (b) contracts agreed by his Department or its agencies at the Welding Institute near Cambridge in (i) 1998 and (ii) 1999. [113879]

  Mr. Alan Johnson
  [holding answer 10 March 2000]: In 1998 the Department made total payments of £1,370,000 in grants or contracts to TWI. Much of this was for technology transfer activity in areas such as laser, plastics, structural composites and joining generally. The largest project (with grant of around 70 per cent. of the total paid) was to develop an internet based technology transfer delivery system based on BT communications expertise.
  45W
  In 1999 grants and contracts for similar work totalled £420,000 of which around 45 per cent, was to research the feasibility of developing their internet based technology transfer system into a knowledge trading system for other UK knowledge providers.

  In addition over this period TWI have secured grants through the North East Region for several projects funded from European Structural Funds, which the Department manages.

  Taiwan
  Dr. Gibson
  To ask the Secretary of State for Trade and Industry what plans he has to develop relationships through the Office of Science and Technology with Taiwan in the areas of science and technology. [113828]

  Mr. Byers
  The Office of Science and Technology attaches importance to facilitating civil scientific co-operation between the UK and Taiwan. A number of visits have recently been made by officials from Taiwan's National Science Council to discuss aspects of UK civil science policy. Dr. Jenn-Tai Hwang, Chairman of the National Science Council, will visit London in May this year.

  These contacts, and the work of staff in the British Trade and Cultural Office in Taipei to promote science and technology links, should raise the profile of UK science in Taiwan, and will help UK companies and the science base to gain access to Taiwanese innovation and technology.

  US imports from the UK

  Description

  US tariff code

  1998 (£ million)

  1999 (£ million)

  Percentage change 1998–99

  Absolute change (£ million)

  Batteries

  85072080

  10.80

  3.75

  -65.3

  -7.0

  Bath oils

  33073050

  4.76

  1.17

  -75.5

  -3.6

  Lithographs

  49119120

  2.56

  0.91

  -64.3

  -1.6

  Bed linen

  63022190

  0.34

  0.06

  -82.0

  -0.3

  Cartons

  48192000

  1.19

  0.79

  -33.6

  -0.4

  Coffee makers

  85167100

  0.62

  0.25

  -60.2

  -0.4

  Wallets

  42023210

  0.17

  0.07

  -61.2

  -0.1

  Handbags

  42022215

  0.01

  0.01

  -12.2

  0.0

  Felt paper

  48055000

  0.00

  0.00

  —

  —

  Total

  —

  20.44

  7.00

  -66.0

  -13.4

  Source:

  US International Trade Commission website. Converted to £ sterling using average sterling/dollar rates for each year.

  ONS Economic Trends

  The actual impact on UK companies in the targeted sectors will depend on a number of factors, including the length of time that the retaliatory measures remain in place, and the ability of affected companies to find alternative customers for their goods. However, I have received many representations from UK companies affected by the US retaliation. Taking into account these representations and the above data, my assessment is that there is a real risk of damage to UK companies in terms of lost trade and jobs.

  Synchrotron
  Ms Southworth
  To ask the Secretary of State for Trade and Industry if, when he wrote to the Welcome

  Global Enterprise Initiative
  Mr. Paul Marsden
  To ask the Secretary of State for Trade and Industry if he will make a statement on the effectiveness of the Global Enterprise Initiative. [116046]

  Mr. Caborn
  The Global Enterprise Initiative will be launched in the United Kingdom later this spring. It is a British Trade International scheme designed to bring British and Indian companies together in commercial co-operation—eg joint ventures or distribution agreements. We seek to encourage British firms to look again at the growing opportunities for them in India. The scheme has been tested successfully on the ground in India, and during his visit to India in January, my right hon. Friend the Secretary of State for Trade and Industry announced a target for the Global Enterprise Initiative to develop 200 new business partnerships over the next two years.

  Banana Dispute
  Mr. Sayeed
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact on United Kingdom companies of the banana dispute between the European Union and the United States. [115999]

  Mr. Caborn
  The United States has World Trade Organisation authority to retaliate up to an annual monetary value of $191.4 million against EU goods. The sectors that the US has chosen to include in this authorised retaliation, and the trends in US imports from the UK of these products, are as follows:

  Trust on 4 October 1999 to inform them that he was minded to locate Diamond at Daresbury, he wrote similarly to the French Government. [115632]

  Mr. Byers
  [holding answer 21 March 2000]: I did not.

TREASURY

  Departmental Secondment
  Mr. Willis
  To ask the Chancellor of the Exchequer, pursuant to his answer of 6 March 2000,Official Report,column 524W, on departmental secondment, if he will list the companies from which staff were seconded to his

  47W
  Department in the periods (a) May 1997 to April 1998, (b) May 1998 to April 1999 and (c) May 1999 to the latest date for which figures are available. [114544]

  Miss Melanie Johnson
  [holding answer 15 March 2000]: The information is as follows:

  1 May 1997 to 30 April 1998

  1 May 1998 to 30 April 1999

  1 May 1999 to date

  British Petroleum

  British Petroleum

  —

  Arthur Andersen

  Arthur Andersen

  Arthur Andersen

  BZW

  BZW

  —

  Coopers and Lybrand

  Coopers and Lybrand

  Coopers and Lybrand

  Tarmac

  Tarmac

  —

  Price Waterhouse

  Price Waterhouse

  —

  Pannell, Kerr Foster Associates

  Pannell, Kerr Foster Associates

  Pannell, Kerr Foster Associates

  Midland Bank

  Midland Bank

  Midland Bank

  —

  Slaughter and May

  Slaughter and May

  Ernst and Young

  Ernst and Young

  Ernst and Young

  Quality Business Management

  Quality Business Management

  Quality Business Management

  Esso

  —

  —

  Peat Marwick

  —

  —

  Robson Rhodes

  —

  —

  —

  Manpower

  Manpower

  —

  Deloitte Touche

  Deloitte Touche

  —

  Price WaterhouseCoopers

  Price WaterhouseCoopers

  —

  Dilston Management

  Dilston Management

  —

  —

  Financial Services Agency

  —

  —

  Brunswick Public Relations

  —

  —

  Institute of Fiscal Studies

  Bank Closures
  Mr. Gordon Prentice
  To ask the Chancellor of the Exchequer what representations he has made to the Chief Executive of Barclays Bank concerning its policy of closing banks in small towns and rural areas; and if he will make a statement. [116130]

  Dr. Jack Cunningham
  To ask the Chancellor of the Exchequer what representations he has made to Barclays Bank plc about their branch closure policy; what reply he has received; and if he will make a statement. [115996]

  Miss Melanie Johnson
  [holding answer 24 March 2000]: I refer my hon. Friend and my right hon. Friend to the reply given on 20 March 2000, Official Report, column reference 444–45W.

  Earnings Statistics
  Mr. Moore
  To ask the Chancellor of the Exchequer (1) what is the percentage of full-time workers in(a) Scotland, (b) each of the unitary local authority areas in Scotland and (c) Great Britain whose earnings on the basis of gross pay, (a) including and (b) excluding overtime were less than (i) £272.07 per week, (ii) £249.53 per week, (iii) £187.15 per week and (iv) £140 per week for the categories: (1) male manual, (2) male non-manual, (3) all male workers, (4) female manual, (5) female
  48W
  non-manual, (6) all female workers, (7) all manual, (8) all non-manual and (9) all workers at the latest date for which figures are available; [115789]

  (2) if he will list the average weekly earnings on the basis of gross pay (a) including and (b) excluding overtime for full-time workers in (i) Scotland, (ii) each of the unitary local authority areas in Scotland and (iii) Great Britain for (1) all manual, (2) all non-manual and (3) all workers at the latest date for which figures are available. [115788]

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

  Letter from John Pullinger to Mr. Michael Moore, dated 27 March 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent questions about earnings for workers in Scotland, the unitary areas in Scotland and Great Britain. I am replying in Dr Holt's absence.
  The New Earnings Survey (NES) can provide earnings data for small geographical areas. However, the release of NES data is restricted to figures that are derived from a sufficiently large sample of employees, and have an acceptable level of accuracy. I have provided the available data for Scotland, the unitary authorities in Scotland and Great Britain in the attached tables. These are based on the 1999 NES, the latest survey for which data are available. These are large tables and copies of them are being placed in the Library of the House rather than reproduced in Hansard.
  The NES is based on a one per cent sample of employees in the PAYE system and is therefore likely to under-represent relatively low paid staff earning below the tax threshold and in particular those who work part-time.

  Working Families Tax Credit
  Mr. Willetts
  To ask the Chancellor of the Exchequer how much he estimates will be spent in(a)1999–2000 and (b)2000–01 on the Working Families Tax Credit broken down between (i) basic tax credit, (ii) 30 hour tax credit, (iii) the child tax credits, broken down by age of child and (iv) the childcare tax credit. [115284]

  Dawn Primarolo
  [holding answer 20 March 2000]: It is not possible to provide a split of total expenditure between types of credit. The amount of award payable is reduced for families whose incomes are above the threshold, and this reduction is applied to the total value of all credits taken together.

  Dr. Jack Cunningham
  To ask the Chancellor of the Exchequer what estimate he has made of the take-up rate for Working Families Tax Credit in(a) Cumbria and (b) Copeland; and if he will make a statement. [115143]

  Dawn Primarolo
  [holding answer 20 March 2000]: It is estimated that 7,600 families in Cumbria had been awarded the Working Families Tax Credit by the end of February 2000, of which 1,100 were families in Copeland.

  Miss Geraldine Smith
  To ask the Chancellor of the Exchequer how many people in Morecambe and Lunesdale have benefited from Working Families Tax Credit since its introduction. [115715]

  Dawn Primarolo
  It is estimated that 1,800 families in the Morecambe and Lunesdale constituency have been awarded the Working Families Tax Credit by the end of February 2000.
  49W
  Mr. Kidney
  To ask the Chancellor of the Exchequer how many residents of Stafford constituency have(a) applied for and (b) received working families tax credit; and what has been the average award. [115569]

  Dawn Primarolo
  It is estimates that 1,400 families in the Stafford constituency have been awarded the Working Families Tax Credit (WFTC) by the end of February 2000.

  It is not possible to provide a reliable estimate of the average value of these awards. However, for the United Kingdom as a whole the average value of WFTC awards made up to the end of February 2000 was £71.48 per week, and for the West Midlands region the average was £72.42 per week.

  Ms Harman
  To ask the Chancellor of the Exchequer (1) how many families with children in Southwark he estimates are eligible for working families tax credit; [114840]

  (2) how many people in Southwark were in receipt of (a) family credit and (b) the child care allowance in each of the last five years. [114835]

  Dawn Primarolo
  It is estimated that 2,800 families in Southwark have been awarded the Working Families Tax Credit by the end of February 2000.

  Nationally, about 10 per cent. of awards of Working Families Tax Credit include a child care tax credit. There are too few cases in the 5 per cent. sample used for these analyses to provide a reliable estimate of the number of awards with a child care tax credit in Southwark.

  Dr. Gibson
  To ask the Chancellor of the Exchequer (1) what was the annual expenditure by Government on(a) working families tax credit and (b) childcare tax credit in Norwich in each of the last five years; [115100]

  (2) how many families in Norwich are eligible for working families tax credit; [115097]

  (3)how many people in Norwich are in receipt of (a) working families tax credit and (b) childcare tax credit. [115098]

  Dawn Primarolo
  It is estimated that 2,400 families in Norwich have been awarded the working families tax credit by the end of February 2000. Nationally, about 10 per cent. of awards of working families tax credit include a childcare tax credit. There are too few cases in the 5 per cent. sample used for these analyses to provide reliable estimates of the number of awards with a childcare tax credit in Norwich, or of expenditure on awards in Norwich.

  Tax Credits
  Mr. Willetts
  To ask the Chancellor of the Exchequer what is the total cost of the(a) information packs and (b) videos that have been sent to those employers who are expected to administer the Working Families Tax Credit and the Disabled Persons Tax Credit. [113585]

  Dawn Primarolo
  [holding answer 8 March 2000]: Information packs and videos have been produced by the Inland Revenue as part of a comprehensive programme of support for employers involved in administering the Working Families Tax Credit and the Disabled Persons Tax Credit. The total cost of adding tax credits material
  50W
  to the information packs already being sent to employers is £533,000. The total cost of making the video, and of sending a copy directly to smaller employers likely to benefit most from it, is £702,000.

  Costs are inclusive of Value Added Tax.

  National Insurance Contributions Office
  Mr. Lidington
  To ask the Chancellor of the Exchequer what plans he has to subject the National Insurance Contributions Office to legal obligations equivalent to those imposed on employers by the Pensions Act 1995. [115982]

  Dawn Primarolo
  [holding answer 23 March 2000]: There are no such plans.

  Mr. Lidington
  To ask the Chancellor of the Exchequer what estimate he has made of the amount of money which the National Insurance Contributions Office will pay in the age-related element of the NIC rebate to contracted-out money purchase schemes for the financial year 1999–2000; how much of that sum has so far been paid into schemes by the National Insurance Contributions Office; and if he will make a statement. [115981]

  Dawn Primarolo
  [holding answer 23 March 2000]: The overall amount of age-related rebates paid into the financial year 1999–2000, up to and including 1 March 2000, is £2,348,720,798. This amount includes rebates for personal pension and contracted-out money purchase schemes. The amount of rebates paid solely to contracted-out money purchase schemes in the 1999–2000 financial year is not currently available. All of the amount above has been paid to schemes, except £131,360,489 million that will be paid on 3 April 2000.

  Disabled Person's Tax Credit
  Mr. Ennis
  To ask the Chancellor of the Exchequer how many disabled people in(a) Barnsley and (b) Doncaster have benefited from the disabled person's tax credit since its introduction. [115198]

  Dawn Primarolo
  107 people in Barnsley, and 140 people in Doncaster, have been awarded the Disabled Person's Tax Credit by the end of February 2000.

NORTHERN IRELAND

  Protected Tenancy Dwellings
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if he will list for each council area in Northern Ireland the number of protected tenancy dwellings; and, of these, in each area how many are(a) restricted tenancies and (b) regulated tenancies. [112939]

  Mr. George Howarth
  The information requested is as follows:

  Council area

  Restricted tenancies

  Regulated tenancies

  Total

  Antrim

  10

  34

  44

  Ards

  59

  287

  346

  Armagh

  3

  40

  43

  Ballymena

  3

  55

  58

  51W

  Council area

  Restricted tenancies

  Regulated tenancies

  Total

  Ballymoney

  1

  32

  33

  Banbridge

  3

  31

  34

  Belfast

  158

  3,341

  3,499

  Carrickfergus

  5

  87

  92

  Castlereagh

  5

  128

  133

  Coleraine

  1

  76

  77

  Cookstown

  3

  38

  41

  Craigavon

  55

  397

  452

  Down

  5

  50

  55

  Dungannon and South Tyrone

  2

  67

  69

  Fermanagh

  1

  45

  46

  Larne

  1

  131

  133

  Limavady

  0

  24

  24

  Lisburn

  27

  217

  244

  Derry

  3

  52

  55

  Magherafelt

  1

  35

  36

  Moyle

  1

  9

  10

  Newry and Mourne

  9

  93

  102

  Newtownabbey

  6

  611

  617

  North Down

  25

  179

  204

  Omagh

  0

  35

  35

  Strabane

  3

  40

  43

  Household Division
  Mr. DuncanSmith
  To ask the Secretary of State for Northern Ireland if he will place in the Library his recent correspondence with the Major General commanding the Household Division. [115377]

  Mr. Mandelson
  The correspondence referred to is personal between myself and the Major General commanding the Household Division. It is therefore not appropriate to place a copy in the Library. I made public my regrets for my remarks during Northern Ireland questions in the House on 15 March, and the Major General has stated that he is perfectly content with my response and that the matter is closed.

  Police Authority
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what sums have been spent by the Police Authority on works to their office accommodation in each of the last three financial years and in the current year to date for which figures are available. [115587]

  Mr. Ingram
  Sums spent by the Police Authority on works to their office accommodation in each of the last three financial years and the current year to the latest date are as follows:

  £

  1996–97

  12,067

  1997–98

  62,597

  1998–99

  29,969

  1999–2000

  1,022

  Prisoner Release
  Mr. Pickthall
  To ask the Secretary of State for Northern Ireland if he will make a statement on his recent decision to suspend the licence of a prisoner who was released under the Good Friday Agreement. [116694]
  52W
  Mr. Mandelson
  This was the first time this power has been exercised but should I receive evidence that any other prisoners who have benefited from early release breach their license conditions, I will act immediately.

  Prisoners released early in accordance with the Good Friday Agreement are released on license and are subject to strict licence conditions.

  For a fixed-term prisoner, these conditions are:

  (a) that he does not support a specified organisation (within the meaning of section 3 of the Sentences Act), and

  (b) that he does not become concerned in the commission, preparation or instigation of acts of terrorism connected with the affairs of Northern Ireland.

  I have made it clear that anyone of whom I have evidence that they have breached these conditions would have their license suspended and be returned to custody.

  Given the circumstances of the case in question, I had no hesitation in suspending the licence in accordance with the legislation.

  The matter has been referred to the Sentence Review Commissioners (the prisoner may apply to them should he wish his case to be reconsidered).

CHURCH COMMISSIONERS

  Church Sales
  Mr. Paterson
  To ask the hon. Member for Middlesbrough, representing the Church Commissioners, if he will make a statement on the Commissioners' policy on the conditions attached to the sale of redundant churches relating to their subsequent use. [114847]

  Mr. Stuart Bell
  The Commissioners normally impose covenants on the new owner restricting the use to that approved and prohibiting unauthorised architectural changes, the disturbance of any human remains or memorials and demolition.

  Common Worship
  Mr. Swayne
  To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what estimate the Commissioners have made of the impact of "Common Worship" on the number of vocations. [114848]

  Mr. Stuart Bell
  Liturgy and fostering vocations are not the direct responsibility of the Commissioners. It is not possible to demonstrate a correlation between new liturgy and the rise and fall in the number of ordinations and ordinands.

FOREIGN AND COMMONWEALTH AFFAIRS

  Chinese President (State Visit)
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations were made to his Department by the Chinese authorities regarding the policing of the Chinese state visit last October. [113744]
  53W
  Mr. Battle
  I refer the hon. Member to the answer given to my hon. Friend the Member for Cynon Valley (Ann Clwyd) on 28 October 1999,Official Report, column 993W.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many meetings were held between his Department's officials and representatives of police services involved with policing the Chinese state visit. [113745]

  Mr. Battle
  I refer the hon. Member to the answer given to the hon. Member for Stratford-on-Avon (Mr. Maples) on 4 November 1999,Official Report, columns 271-72W. There was one meeting with the Cambridgeshire Constabulary on 1 October 1999.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many meetings were held between his Department and Chinese authorities regarding the policing of the Chinese state visit last October. [113742]

  Mr. Battle
  I refer the hon. Member to the answer given to the hon. Member for Stratford-on-Avon (Mr. Maples) on 4 November 1999,Official Report, columns 271–72W.

  Dialogue on Europe
  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will estimate the cost to public funds of the training programme for young citizens of the member states who will be attending the launch of the European Commission's Dialogue on Europe. [114135]

  Mr. Vaz
  [holding answer 14 March 2000]: The young people taking part in the launch of the European Commission's "Dialogue on Europe" were all participants in the long-standing programme of graduate traineeships with that institution. In 2000, 4.2 million euro have been allocated in the European Union budget for the operation of the traineeships programme.

  The launch of "Dialogue on Europe" took place at the biannual welcome event for the new intake of trainees on 1 March 2000. The additional costs to the EU budget are estimated by the Commission at 25,000 euro.

  The Government are keen to raise awareness of the European dimension of the work of UK Government Departments, and a secondment to one of the EU institutions serves that aim. Details of "stage" opportunities for UK civil servants are circulated biannually by the Cabinet Office, which also process the applications received. Staff input cannot be reliably quantified, but is not onerous. A maximum of five European Fast Streamers (the UK Government's development programme for British graduates who wish to make a career in the EU institutions) go on a "stage" in each biannual intake. Their salary and allowances while in Brussels are paid by the Cabinet Office.

  Tibet
  Mr. Stevenson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise concerns on human rights abuses in Chinese-occupied 54W
  Tibet in the United Kingdom's ministerial statements at the United Nations Commission for Human Rights. [115091]

  Mr. Hain
  I delivered the United Kingdom's opening plenary statement at the Commission on Human Rights on 23 March. A copy has been placed in the Library of the House. The speech is also available on the Foreign Office website (www.fco.gov.uk).

  Gedhun Choekyi Nyima
  Mr. Hancock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received relating to the safety of Gedhun Choekyi Nyima and his possible release from his captivity; what is the UK's policy on the matter; and if he will make a statement. [115924]

  Mr. Battle
  We are concerned about the situation of Gedhun Choekyi Nyima, the Dalai Lama's choice as the 11th Panchen Lama, and take every appropriate opportunity to press the Chinese Government to allow access to the boy to verify his health and living conditions. I did so myself when I met the Chinese Vice-Foreign Minister, Wang Yingfan, on 9 November 1999, following the disturbing reports that Gedhun had died. We subsequently received a written assurance that he was alive and well.

  The Chinese authorities maintain that Gedhun's parents want him to live a normal life and do not want visitors. While accepting the wishes of the parents, we continue to press the Chinese authorities to nominate an independent figure acceptable to the Chinese Government, the parents and the Tibetan leadership to meet with the boy.

  East Timor
  Ann Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received about how many refugees have been returned from West Timor to East Timor and how many refugees remain in West Timor. [116105]

  Mr. Battle
  Over 150,000 refugees have now returned to East Timor. There are no reliable figures for the number remaining in West Timor, but as of 22 March the UN estimated the number at up to 100,000 refugees.

  We will continue to press the Indonesian authorities to enable those who wish to return to East Timor to do so safely and speedily.

  Diplomatic Relations
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the countries with which the UK has no diplomatic relations. [116210]

  Mr. Battle
  The United Kingdom has no diplomatic relations with Bhutan, Iraq, the Federal Republic of Yugoslavia or North Korea.

  Minority Languages
  Mr. Andrew George
  To ask the Secretary of State for Foreign and Commonwealth Affairs what UK regional or minority languages the Government recognises in relation to the recent UK signing of the Council of Europe Charter on Regional or Minority Languages. [115997]
  55W
  Mr. Vaz
  The UK will apply the general provisions of the Charter in respect of all the languages which meet the Charter's definition of a regional or minority language. The Government recognise that this definition embraces Scots and Ulster-Scots and are considering what other languages, including Cornish, also meet the definition. To fulfil the Charter's requirement to implement specific provisions to promote the use of certain languages in public life, the Government intend to specify Welsh, Scots-Gaelic and Irish.

HEALTH

  Medical Technical Officers
  Mr. Austin
  To ask the Secretary of State for Health what steps he plans to take in respect of the survey published recently by the MSF union on levels of pay and morale of medical technical officers in the NHS. [112443]

  Mr. Denham
  [holding answer 1 March 2000]: We recognise that the Scientific and Technical staff groups employed and trained in the National Health Service have been experiencing recruitment, retention and a range of other human resource problems. Therefore, we aim to develop a human resource strategy that will underpin the education and training, recruitment and retention and general career development for NHS HCHS scientists and technicians. Medical Technical Officers (MTOs) are a part of this work force.

  This work will be taken forward as an integral part of the work programme of the National Advisory Group for Scientists and Technicians (NAGST).

  NAGST is collaborating with the professions to ensure the National Health Service has an adequate supply of competent scientists and technicians. There are three strands to the current work programme:

  collection of work force data;

  work force planning;

  implementation.

  A pay offer is with the staff side of the Professional and Technical Staffs' B Whitley Council covering Medical Technical Officers for:
  an increase of 3 per cent. or £250, whichever is the higher for 1999–2000;
  an increase of 3.25 per cent. or £300 whichever is the higher for 2000–01; and
  in the context of agreement on the negotiations on Agenda for Change (including the principle of pay linkage as set out in paragraph 7.4 of the Joint Framework of Principles and Agreed Statement on the Way Forward issued on 8 October 1999) and the joint commitment to lifelong learning, a minimum RPI(X) at December 2000 reported in January 2001, plus 0.5 per cent.

  Adoption
  Mrs. Spelman
  To ask the Secretary of State for Health how many adoption breakdowns there have been in each of the last five years; and what plans he has for greater funding of post-adoption support and advice. [112750]
  56W
  Mr. Hutton
  Information about the number of adoption breakdowns in the last five years is available in the form of the number of children who enter care as a result of adoption breakdowns. The figures do not distinguish between the adoption breakdowns of "looked after" children placed for adoption by local authorities; children placed by voluntary adoption agencies; children placed privately with relatives by birth parents; children adopted by step-parents.

  Estimated numbers1 of children who started to be looked after, with reason for being looked after coded as 'adopted child—breakdown of adoptive family', England, 1995 to 1999 2,3

  Year ending 31 March

  Number of children starting to be looked after

  1995

  50

  1996

  70

  1997

  60

  19984

  50

  19994

  50

  1 Data are rounded to the nearest 10

  2 Excludes children looked after under an agreed series of short term placements

  3 Only the first occasion on which a child started to be looked after in the year has been counted

  4 Estimates based on a one third sample of looked after children

  The Government's Quality Protects programme aims to develop a modern adoption service that is more responsive in all its aspects, including post-adoption support, to meet the best interests of children and the needs of birth parents and adoptive parents. My right hon. Friend the Prime Minister is reviewing with ministerial colleagues how we can build on Quality Protects, moving further and faster to secure our aim of maximising the use of adoption for all children for whom it is appropriate and also minimising delay.

  The table shows the number of pre-adoptive breakdowns for the same period.

  Pre-adoptive breakdown: Estimated number1 of placements for adoption ceasing during the years ending 31 March 1995 to 19992, England

  of which

  Year

  Total number of placements

  Percentage that ended in adoption

  Percentage that did not end in adoption

  1995

  1,600

  80

  20

  1996

  1,620

  77

  23

  1997

  1,560

  78

  22

  19983

  1,790

  85

  15

  19993

  1,800

  82

  18

  1 Data are rounded to the nearest 10

  2 Excludes children looked after under an agreed series of short term placements

  3 Estimates based on a one third sample of looked after children

  HSG(94)27
  Dr. Cable
  To ask the Secretary of State for Health (1) if he will list by name of subject and health authority the independent inquiries established under HSG(94)27 which are currently being conducted; [113748]
  57W
  (2) if he will list by name of report and health authority all the independent homicide inquiries established under HSG(94)27, the reports of which were published since February 1994. [113749]

  Mr. Hutton
  [holding answer 9 March 2000]: The information requested has been placed in the Library.

  NHS Hospital and Community Health Services (HCHS): All nursing, midwifery and health visiting staff, Practice Nurses and NHS Doctors within London Regional Office Area and England as at 30 September each year

  All nursing, midwifery and health visiting staff

  Practice nurses

  NHS doctors

  Whole-time equivalent

  Numbers (headcount)

  Whole-time equivalent

  Numbers (headcount)

  London regional office area

  England

  London regional office area

  England

  London regional office area

  England

  London regional office area

  England

  1979

  1—

  316,840

  1—

  372,070

  1—

  990

  1—

  59,850

  1980

  1—

  327,800

  1—

  381,560

  1—

  1,070

  1—

  61,270

  1981

  1—

  347,010

  1—

  397,420

  1—

  1,240

  1—

  62,560

  1982

  64,370

  391,110

  71,210

  447,540

  1—

  1,450

  1—

  63,540

  1983

  67,380

  394,680

  76,410

  452,380

  1—

  1,660

  1—

  64,820

  1984

  66,680

  393,740

  77,320

  452,450

  1—

  1,920

  1—

  65,130

  1985

  64,990

  397,030

  77,270

  458,410

  1—

  2,210

  1—

  66,040

  1986

  63,920

  397,240

  75,260

  459,080

  1—

  2,500

  1—

  66,770

  1987

  59,270

  397,910

  72,900

  463,310

  2300

  22,770

  11,800

  69,530

  1988

  62,920

  397,840

  76,200

  465,060

  410

  3,480

  12,050

  70,910

  1989

  63,670

  398,660

  77,890

  467,700

  570

  4,630

  12,580

  72,450

  1990

  58,020

  395,360

  64,630

  463,790

  1,140

  7,740

  12,560

  73,720

  1991

  63,960

  396,130

  73,520

  477,570

  1,230

  8,780

  12,880

  74,680

  1992

  65,640

  382,020

  76,850

  463,740

  1,210

  9,120

  12,910

  75,740

  1993

  57,480

  366,240

  66,160

  450,360

  1,390

  9,600

  13,910

  77,280

  1994

  55,160

  353,130

  64,340

  436,100

  1,320

  9,100

  14,630

  77,970

  1995

  49,410

  330,440

  59,010

  411,840

  1,370

  9,740

  15,560

  81,000

  1996

  51,180

  332,660

  60,910

  415,750

  1,460

  9,820

  15,790

  83,090

  1997

  51,450

  330,620

  62,140

  417,570

  1,530

  10,080

  16,550

  86,050

  1998

  51,610

  332,200

  63,870

  421,750

  1,550

  10,360

  16,870

  88,230

  1 Not applicable.

  2 Data for London in 1987 are incomplete, there are no data below national level prior to 1987. In April 1996, FHSAs merged to form Health Authorities, in this process some of Barnet FHSA split to form part of West Hertfordshire (which is not in the London Region).

  Notes:

  1. Figures are rounded to the nearest ten.

  2. 1995 to 1998 figures exclude learners and agency staff. Figures from 1982 to 1994 include learners, trainees and students.

  3. England figures for 1979 to 1981 include staff in certain centrally-based services, ie, family planning, occupational health and staff nurseries. Excluded are regional nursing officers, nursing cadets, agency staff and staff in the blood transfusion service and primary health care services. These figures were taken from 'Health and personal Social Services Statistics for England'.

  4. London Regional Office Area figures from 1979 to 1981 are not available.

  5. Due to a change in classification in 1995 for collecting the data, from payscale to occupation code, 1995, 1996, 1997 and 1998 figures are not comparable with earlier years.

  Source:

  Department of Health Non-Medical Workforce Census.

  Notes for Practice Nurses:

  1. The whole of Barnet FHSA has been included prior to 1996, data from 1996 onwards will not include staff who left Barnet FHSA to join West Hertfordshire HA.

  Source:

  Department of Health General and Personal Medical Services Statistics.

  Notes for NHS Doctors:

  1. All Doctors includes doctors in hospitals, public health medicine, the community health services. General Medical Services and Personal Medical Services. Hospital Practitioners and Clinical Assistants are excluded, as most of these are also GPs. The figures exclude doctors working in the HCHS sector in one of the dental specialities.

  2. London figures should be interpreted with caution. The London Regional Office came into being on 1 April 1999 while the former Thames Regional Offices covered areas outside London. The 1998 figures are for the (shadow) London Regional Office. The 1987 to 1997 figures are estimates from Health Authorities (Family Health Service Authorities and District Health Authorities prior to 1996) or NHS Trusts that would now be in the London Region. Some HCHS doctors may be counted more than once. This is because they will be counted once for each region where they worked, based on the regional structure in place at the time, and also in the current London region which overlaps with more than one of the former regions.

  3. It is not possible to provide numbers for all doctors in London from 1979 to 1986. While estimates for GPs are available, because these were returned by Family Service Health Authorities, estimates for all other doctors are not because these were only returned at regional level and the former Thames regions are not comparable with the new London region.

  NHS Staff
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Health how many(a) doctors and (b) nurses there were (i) nationally and (ii) in London in each year between 1979 and 1999. [115086]

  Mr. Denham
  The available information is shown in the table.

  Drug Prescribing (Children)
  Mr. Love
  To ask the Secretary of State for Health (1) in what circumstances the prescribing of a drug to a child in care can be challenged by the parents, if they believe that the child may have suffered an adverse reaction to the drug, where that adverse reaction is (i) reported and (ii) unreported; [115521]

  (2) in what circumstances independent medical advice can be sought when there is a disagreement between parents and the local authority with a duty of care for a child who may have suffered an adverse reaction to a drug, where that reaction is (a) reported and (b) unreported; and if he will make a statement; [115523]

  (3) in what circumstances the local authority with a responsibility of care for a child could challenge the prescribing of a drug to that child if they believe the child may have suffered an adverse reaction to the drug, where that adverse reaction is (a) reported and (b) unreported. [115522]

  Mr. Hutton
  Where a child is looked after by a local authority and is on a care order, the local authority has parental responsibility for the child. It shares that parental responsibility with the child's parent(s), but the local authority has the power to determine the extent to which the parents may exercise their parental responsibility in relation to the child. Where a child is looked after by a local authority and the authority is accommodating the child, it does not have parental responsibility—but a person may arrange for someone else to discharge all or some of it on their behalf, so a parent whose child is accommodated may arrange for the local authority to be responsible on their behalf. Even without such an arrangement, the local authority may do what is reasonable for the purpose of safeguarding or promoting the child's welfare, which may include arranging for urgent medical attention.

  Centrally Funded Special Schemes
  Mr. Mitchell
  To ask the Secretary of State for Health what was the total spending by his Department for the last five available years on centrally funded special schemes in(a) the Northern and (b) the Yorkshire and Humberside Region. [114904]

  Mr. Denham
  The information requested has been placed in the Library.

  Correspondence
  Mr. Luff
  To ask the Secretary of State for Health when he will reply to the letter from the hon. Member for Mid-Worcestershire of 24 January about care homes in Worcestershire. [115568]

  Mr. Hutton
  I replied to the hon. Member on 22 March.

  Psychiatric Beds
  Dr. Cable
  To ask the Secretary of State for Health what percentage of available acute psychiatric beds were used in(a) 1997–98, (b) 1998–99 and (c) the first two quarters of 1999–2000. [115786]
  60W
  Mr. Hutton
  The percentages of available acute psychiatric beds used in 1997–98 and 1998–99 were 86.5 per cent, and 87.5 per cent, respectively.

  Data for the first two quarters of 1999–2000 for the same breakdown are not available as the source of the acute psychiatric bed availability and occupancy figures are collected annually.

  Children's Services (Human Rights Act)
  Mr. Hammond
  To ask the Secretary of State for Health what assessment he has made of the impact of the coming into force of the Human Rights Act 1998 on the provision of children's services. [115847]

  Mr. Hutton
  Government Departments are undertaking a broad assessment of the likely impact of the Human Rights Act 1998 on their work, as part of the preparations for implementation on 2 October 2000. This task is in progress in the Department of Health and includes children's services with our other responsibilities.

  Waterhouse Report
  Mr. Hammond
  To ask the Secretary of State for Health for what reasons he was unable to act prior to publication of the Waterhouse report in extending the consultancy index to include people named in that report. [115848]

  Mr. Hutton
  We were unable to act on the information contained in the Waterhouse report until after the report had been presented to Parliament. However, following publication, immediate action was taken to extend the Department's consultancy index to include eligible named individuals who had been convicted of offences against children or against whom a clear finding had been made in the report. This action enabled us to include on the index individuals falling into these categories who had not previously been referred to the index through another route.

  Outpatients (Avon)
  Mr. Cotter
  To ask the Secretary of State for Health what assessment he has made of Avon health authority's scheme to reduce outpatient waiting times by guaranteeing a number of outpatient appointments for each primary care group; and if he will make a statement. [116002]

  Mr. Denham
  Avon health authority, working with local general practitioners and trusts, is looking at ways of improving orthopaedic waiting times. As part of this work the health authority is considering how the successful pilot scheme, operated by North Bristol National Health Service Trust and North West Bristol Primary Care Group, which guarantees individual GP practices a specified number of outpatient appointments can be extended across the health authority area. No formal assessment of the North Bristol pilot scheme has been undertaken by the NHS Executive. We welcome local initiatives to reduce outpatient waiting times by involving PCGs.

  Learning Disabilities
  Mr. Cotter
  To ask the Secretary of State for Health what measures he will take to ensure that services for
  61W
  children with learning disabilities in the Weston-Super-Mare area will not decline following the disbandment of Phoenix NHS Trust. [116010]

  Ms Stuart
  It is the responsibility of Avon health authority, working together with local National Health Service trusts and primary care groups, to ensure that appropriate services for children with learning disabilities are provided. I understand that the Chief Executive of the authority has recently written to the hon. Member assuring him of the health authority's commitment to ensuring that the same level of services is available following the disbandment of Phoenix NHS Trust.

  Weston Area Health Trust
  Mr. Cotter
  To ask the Secretary of State for Health (1) what is the staff to patient ratio for children with learning disabilities within the Weston Area Health Trust; [116006]

  (2) if he will estimate the staff to patient ratio for children with learning disabilities within the Weston Area Health Trust following the disbanding of the Phoenix NHS Trust. [116007]

  Ms Stuart
  The Department does not collect the requested information. The hon. Member may wish to contact Ms Martha Perriam, Chairman of Weston Area Health National Health Service Trust, for the information.

  Avon Health Authority
  Mr. Cotter
  To ask the Secretary of State for Health if he will make a statement on the annual NHS funding allocated to Avon Health Authority for 2000–01. [116004]

  Ms Stuart
  Avon Health Authority's revenue allocation for 2000–01 is £629.4 million, which represents a cash increase of £40.7 million (6.9 per cent.). Money from the £660 million announced by my right hon. Friend the Prime Minister on 22 March will be allocated to health authorities shortly.

  Capital Prioritisation Process
  Mr. Norman
  To ask the Secretary of State for Health if he has begun to consider the conclusions of the review of the Capital Prioritisation Process; and when he expects to make an announcement on the outcome. [116116]

  Mr. Denham
  The review of the capital prioritisation process is currently under way. Ministers will make an announcement about the outcome in due course.

  Oxted and Limpsfield Community Hospital
  Mr. Peter Ainsworth
  To ask the Secretary of State for Health if he will make a statement on the future of Oxted and Limpsfield Community Hospital. [116043]

  Mr. Denham
  [holding answer 23 March 2000]: The Surrey and Sussex National Health Service Trust is currently preparing a full business case for the reprovision of Oxted and Limpsfield Community Hospital. The case will be assessed by the South East Region of the NHS Executive once it has been submitted.

  Hospital Waiting Lists
  Mr. Oaten
  To ask the Secretary of State for Health how many people were on NHS inpatient waiting lists in each year since 1979 for which figures are available(a) nationally and (b) in each health authority (i) fully and (ii) partially in Hampshire, including the unitary authorities of Southampton and Portsmouth. [116019]

  Mr. Denham
  [holding answer 23 March 2000]: The information requested can be found in the "Hospital Waiting List Statistics: England. Quarter ending", copies of which are available in the Library.

  Children's Homes (Staff)
  Mr. Ruane
  To ask the Secretary of State for Health how many staff of children's homes providing 24 hour care in the(a) voluntary, (b) local authority and (c) private sector were (i) raped, (ii) sexually assaulted, (iii) victims of grievous bodily harm and (iv) murdered by residents in the last three years. [116199]

  Mr. Hutton
  [holding answer 24 March 2000]: Information about the number of incidents of violence against the staff of children's homes is not collected centrally. However, we are determined to reduce substantially the incidence of violence towards everyone working in social care. We have set up a taskforce to produce a national action plan by November 2000 with recommendations and timescales for action to reduce violence against social care staff and to promote the safety and welfare of all social care workers.

  Oxaliplatin
  Mr. Webb
  To ask the Secretary of State for Health if he will ask the National Institute for Clinical Excellence to assess the effectiveness of the cancer drug Oxaliplatin. [116129]

  Ms Stuart
  [holding answer 24 March 2000]: We are considering a number of possible additional topics for appraisal by the National Institute for Clinical Excellence during the year 2000–01, including a number of anti-cancer drugs. An announcement will be made shortly.

  Prozac
  Mr. Baker
  To ask the Secretary of State for Health if he will make a statement on the prescription of Prozac to children under 10 years; and what guidelines in respect of the prescription of Prozac his Department has issued. [116102]

  Ms Stuart
  Prozac is not licensed for treatment of children. Doctors prescribe medicines outside their licensed indications in the knowledge that they then bear the full legal and clinical responsibility for the patient's condition in relation to that treatment.

  Doctors are advised of the clinical considerations which are relevant to their prescribing decisions in publications such as the British National Formulary (BNF). The BNF advises that Prozac is not recommended for children.

  Broomfield Hospital
  Mr. Burns
  To ask the Secretary of State for Health, pursuant to his answer of 16 March 2000,Official Report,column 304W, and the appeal by the Mid-Essex CHC

  63W
  against the closure of wards at Broomfield Hospital, if he will order the three wards to be (a) kept open or (b) reopened until he has determined the appeal. [116027]

  Mr. Denham
  Following detailed discussions between North Essex health authority, Mid Essex Hospital Services National Health Service Trust and local primary care groups as part of the Service and Financial Framework for 2000–01, an agreement has been reached to reopen the remaining beds at Broomfield Hospital which had been taken out of use.

  Long-term Care
  Mr. Burstow
  To ask the Secretary of State for Health, pursuant to his answer to the hon. Member for Coventry, South (Mr. Cunningham) of 20 March 2000,Official Report,column 430W, on long-term care, how many of the representations received were critical of the recommendation of the majority report of the Royal Commission on Long-term Care. [116273]

  Mr. Hutton
  A minority of the representations which we have received have preferred an alternative approach from that recommended by the Royal Commission on long-term care.

  Seafood (Technetium)
  Mr. Chaytor
  To ask the Secretary of State for Health what research he has commissioned on the health implications of very high concentrations of technetium in seafood; and if he will make a statement. [115529]

  Yvette Cooper
  No specific research is currently carried out into the health effect of technetium-99 in seafood as the effects of ingested radioactivity have been studied for many years. The Ministry of Agriculture, Fisheries and Food carries out a comprehensive monitoring programme around the British Isles, which shows the most exposed seafood consumer received only 2 per cent, of the annual dose limit from exposure to technetium-99.

  Perioperative Deaths
  Mr. Waterson
  To ask the Secretary of State for Health what steps he is taking to implement the national confidential inquiry into perioperative deaths; and if he will make a statement. [110434]

  Ms Stuart
  The recommendations of the National Confidential Enquiry into Perioperative Deaths (NCEPOD) are primarily for the professions who need to re-evaluate their practice in the light of the evidence found. Other recommendations are concerned with organisational issues and are for local National Health Service management to address. The National Institute for Clinical Excellence is undertaking a review of all four confidential inquiries which will include an assessment of the impact of NCEPOD and the other inquiries.

  NHS Funding
  Mr. Cotter
  To ask the Secretary of State for Health what plans he has to review the system used to assess annual increases in NHS funding. [116011]

  Mr. Andrew Smith
  I have been asked to reply.
  64W
  The Chancellor of the Exchequer announced in his Budget medium-term plans for the NHS, involving average annual real terms increases of over 6 per cent. for the NHS.

CULTURE, MEDIA AND SPORT

  Millennium Dome
  Mr. Paterson
  To ask the Secretary of State for Culture, Media and Sport what estimate he has made of the eventual total cost to public funds of the Millennium Dome. [114865]

  Mr. Chris Smith
  The Millennium Experience has a cash-limited budget of £758 million for the Dome at Greenwich and its associated national programme of events and activities. The budget is made up of grant from the Millennium Commission, private sector sponsorship and commercial income. The New Millennium Experience Company aims to stay within that budget. The project is receiving no funds from the Exchequer.

  Mr. Efford
  To ask the Secretary of State for Culture, Media and Sport what assessment he has made of the most recent attendance figures for the Millennium Dome. [114866]

  Janet Anderson
  The Government are extremely encouraged by the continuing upward trend in visitor numbers to the Millennium Experience at Greenwich—10 million paying visitors will enable the company to deliver a break-even operating budget. NMEC's target remains higher than that but its focus at this stage is achieving 10 million.

  Over 1.25 million people have visited the Dome so far, which is remarkable in itself given that January, February and March are traditionally low season periods for visitor attractions.

  Film Industry
  Mr. Syms
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement on the future of the British film industry. [114867]

  Janet Anderson
  Britain's world-class facilities continue to attract very substantial inward investment and we continue to turn out world-class talent, both in front of and behind the camera. But these great strengths are vulnerable without the commercial infrastructure, particularly in terms of film distribution, that would allow the UK film industry to realise the full economic potential of its talent and skills.

  The Government's objective is to create the right conditions for a sustainable UK film industry, through the use of well-targeted tax incentives and the creation of a strategic body, the Film Council, which will provide support in key areas.

  Regional Theatre
  Charlotte Atkins
  To ask the Secretary of State for Culture, Media and Sport what measures he is taking to assist regional theatres in attracting young audiences. [114868]
  65W
  Mr. Alan Howarth
  The Arts Council's Theatre Review will address the ways in which regional theatres can meet the needs of young people. Despite the recent misinformation in the press, classic texts are currently and will continue to be one of the most important ways of meeting the needs of young people.

  Helen Jackson
  To ask the Secretary of State for Culture, Media and Sport what advice the Arts Council's theatre review has issued to regional theatres about the use of classic texts. [114872]

  Mr. Beard
  To ask the Secretary of State for Culture, Media and Sport what advice the Arts Council's theatre review has issued to regional theatres about the use of classic texts. [114873]

  Mr. Chris Smith
  The Arts Council's theatre review is about ensuring the best possible access to the best possible theatre across the country. Classic texts are currently, and will continue to be, one of the most important strands of programming by regional theatres and especially popular with young people. Reports in the press suggesting that the ACE wants to downgrade classic theatre, or only favour lasers, acrobats or video technology, have absolutely no foundation in fact.

  Sport Action Zones
  Mr. Campbell-Savours
  To ask the Secretary of State for Culture, Media and Sport what guidance he is issuing about applications for support in sport action zones. [114869]

  Kate Hoey
  Sport action zones are a direct response to the need to address sporting deprivation in some of the most socially and economically deprived areas of the country. Sport England is now discussing with all the local interests the production of a plan for each zone to ensure they meet the needs of the area. Those plans will form the basis of bids for lottery funding.

  Libraries
  Helen Jones
  To ask the Secretary of State for Culture, Media and Sport what guidance he provides to local authorities on the minimum level of service that public libraries should provide to their local communities. [114870]

  Mr. Alan Howarth
  There is currently no defined minimum level of public library service, but all library authorities must meet the requirement of the Public Libraries and Museums Act 1964 to provide a "comprehensive and efficient" service. In order to assist them, I will be issuing a draft set of public library standards for consultation later in the spring, and will be bringing the final version into force from 1 April 2001.

  Tourism Summit
  Mr. Rapson
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement on the outcome of the recent tourism summit. [114871]

  Mr. Hoyle
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement on the outcome of the recent tourism summit. [114878]
  66W
  Janet Anderson
  I am happy to say that the tourism summit held on 1 March was a great success. For the first time Ministers from a range of Departments whose policies significantly affect tourism were able to engage in close discussion on priorities for joint progress in the year ahead.

  Ministers committed themselves to the fulfilment of the tourism strategy. Collectively, they also made two specific pledges. Most notable of those is the establishment of a cross-departmental network of officials to ensure close working on policies affecting tourism. They will also consider the forthcoming report from the Better Regulation Task Force on the impact of regulation and enforcement on the hotel and restaurant sector and how to improve co-ordination of regulation in this area.

  We will publish a report on the summit.

  School Sports
  Mr. Jim Cunningham
  To ask the Secretary of State for Culture, Media and Sport what contribution the national lottery is making towards encouraging the playing of competitive sporting fixtures in schools. [114875]

  Kate Hoey
  Inter-school competitive fixtures will be an important part of the job description of the School Sports Co-ordinators, a new initiative which is being supported by the Lottery Sports Fund with additional support expected to come from partnership funding, including the new opportunities fund. Detailed proposals for the initiative are being drawn up in conjunction with key partners.

  Green Spaces Initiative
  Caroline Flint
  To ask the Secretary of State for Culture, Media and Sport in what ways he expects children to benefit from the green spaces initiative funded by the new opportunities fund. [114876]

  Mr. Chris Smith
  The new opportunities fund launched the green spaces and sustainable communities initiative in January, and hopes to make its first grants this summer. The initiative covers, among other things, opportunities for children's play, organised and informal sport, playing fields, access to the countryside and creating safer routes to school. These opportunities will greatly benefit the health, happiness, safety and social well-being of children, particularly in areas of multiple deprivation.

  Televised Sport Revenues
  Dr. Whitehead
  To ask the Secretary of State for Culture, Media and Sport what steps he is taking to encourage professional sport to invest income from the sale of television rights in amateur and youth sport. [114877]

  Kate Hoey
  A number of UK governing bodies have signed the Central Council of Physical Recreation's Voluntary Code, under which a minimum of 5 per cent, of broadcasting income is invested in grass roots development. The resulting arrangements in cricket, tennis and other sports appear to be working well. The football authorities are currently drawing up—in consultation with Sport England and my Department—
  67W
  detailed proposals for using their broadcasting income with the public funds to improve the development of grass roots football in England. An announcement will be made when discussions have been completed.

  Seaside Resorts
  Miss Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport what steps his Department is taking to encourage the regeneration of British seaside resorts; and if he will make a statement. [114879]

  Janet Anderson
  I refer my hon. Friend to the reply I gave earlier today to my hon. Friend the Member for Harwich (Mr. Henderson),Official Report, column 4.

  Lottery Funding
  Mr. Robertson
  To ask the Secretary of State for Culture, Media and Sport if he will make a statement about the distribution of lottery grants across the country. [114874]

  Mr. Chris Smith
  The Government are committed to ensuring that Lottery funding is distributed fairly both geographically and across all groups of society. This is reflected in the changes made to lottery distribution through the National Lottery Act 1998, and through the revised policy directions which I issued in summer 1998. My Department and the lottery distributors have jointly commissioned research, due shortly, into why coalfield areas have fared badly from the lottery, which I hope will hold lessons for distribution to other areas of low take-up.

  Mr. Pendry
  To ask the Secretary of State for Culture, Media and Sport if he will list the amounts of moneys(a) distributed to good causes from the National Lottery Fund and (b) which have yet to be allocated. [116489]

  Mr. Chris Smith
  All the funds in the National Lottery Distribution Fund available for distribution have been allocated to the National Lottery Distributing Bodies, and all but £200 million of this money has already been committed by them. While money remains in this fund, it earns tax free interest which goes to the good causes, not Government.

  National Sports Museum
  Mr. Bob Russell
  To ask the Secretary of State for Culture, Media and Sport what plans he has to establish a national sports museum; and if he will make a statement. [113734]

  Kate Hoey
  I refer the hon. Member to my answers of 15 March 2000,Official Report,column 251W.

  Correspondence
  Mr. Winnick
  To ask the Secretary of State for Culture, Media and Sport when the hon. Member for Walsall, North will receive a reply to his letter of 8 February regarding a constituent. [116381]

  Janet Anderson
  I have now replied to my hon. Friend, with an explanation of the reasons for the delay in responding to his correspondence.

  Historic Railway Engines
  Mr. Keetch
  To ask the Secretary of State for Culture, Media and Sport how much national lottery funding has been provided to historic railway engine restoration projects since the start of the national lottery; and if he will make a statement. [116100]

  Kate Hoey
  Since the beginning of the national lottery, the Heritage Lottery Fund has made 17 awards to historic railway engine restoration projects, and the total value is £2,161,158.

CABINET OFFICE

  Drugs
  Mr. Hurst
  To ask the Minister for the Cabinet Office what new initiatives the Government are introducing to help vulnerable young people resist drugs. [116649]

  Mr. Ian McCartney
  I am pleased to announce that today my Department was able to help launch Positive Futures, a joint sports and drug prevention initiative designed to engage young people at risk.

  The UK Anti-Drugs Co-ordination Unit in the Cabinet Office, Sport England and the Youth Justice Board have joined together to create the initiative, which will use sporting and drug education activities to divert vulnerable young people away from drug misuse and crime.

  Between the three partners, £950,000 will be invested in 2000–01 to fund 24 projects around the country. By the end of October, all 24 will have begun.

  As we set out in our 10-year anti-drugs strategy "Tackling Drugs to Build a Better Britain", the Government are committed to helping young people resist drug misuse in order to achieve their full potential in society. I believe that this initiative will give hope to young people in areas of deprivation, helping them to build self-esteem and confidence while, at the same time, offering a healthy alternative to involvement in drugs.

  Bank Closures
  Dr. Jack Cunningham
  To ask the Minister for the Cabinet Office what representations she has made, in her role as interdepartmental co-ordinator of policy on rural affairs, to Barclays Bank plc about their branch closure policy; what reply she has received; and if she will make a statement. [116289]

  Marjorie Mowlam
  I refer my right hon. Friend to the answer that my hon. Friend the Economic Secretary gave on 20 March 2000,Official Report,column 445W.

  Knowledge Network Project
  Mr. Simon Hughes
  To ask the Minister for the Cabinet Office (1) if she will list the categories of information which are(a) held and (b) planned to be held on the Knowledge Network Project which are broken down by constituency level; [116290]

  (2) which Ministers, special advisers and civil servants have control of the input of information to the Knowlege Network Project; and if she will make a statement. [116293]
  69W
  Marjorie Mowlam
  I refer the hon. Member to the reply given to the hon. Member for South Cambridgeshire (Mr. Lansley) on 24 March 2000,Official Report, column 691W.

  Mr. Simon Hughes
  To ask the Minister for the Cabinet Office if she will publish the communications audit of Whitehall departments; and if she will make a statement. [116291]

  Marjorie Mowlam
  The communications audit of Whitehall Departments is part of Phase 1 of the work of the Knowledge Network Project. The results and findings of Phase 1 will be reported to me by July 2000 and will subsequently be made available on the Internet.

  Mr. Simon Hughes
  To ask the Minister for the Cabinet Office what is the total planned and current cost of the Knowledge Network Project; and if she will make a statement. [116292]
  70W
  Marjorie Mowlam
  The estimated cost of Phase 1 of the Knowledge Network Project is £242,000. Subsequent work, including costs, will be planned following the outcome of Phase 1.

  Euro
  Mr. Portillo
  To ask the Minister for the Cabinet Office how much money has been spent to date by her Office and by bodies funded by her Office in connection with the National Changeover Plan; under what headings this money has been spent; and how much her Office plans to spend on implementing the plan over the next 12 months. [112143]

  Marjorie Mowlam
  I refer the right hon. Gentleman to the answer given by my hon. Friend the Economic Secretary to the Treasury on 29 February 2000,Official Report,column 223W, and to the answer my right hon. Friend the Chancellor of the Exchequer gave on 9 March 2000, Official Report,column 1181 to my hon. Friend the Member for Stockton, South (Ms Taylor).

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

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Irvine of Lairg): My Lords, before business begins, I take the opportunity to inform the House that I am to host a lunch in honour of the Speaker of the Hungarian Parliament on Wednesday, 29th March, when the House will sit. Accordingly, I trust that the House will grant me leave of absence.

UN Millennium NGO Forum
Lord Archer of Sandwellasked Her Majesty's Government:
What action they are taking to ensure the success of the forthcoming United Nations Millennium NGO Forum.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, the Government believe that the millennium forum should make an important contribution to the deliberations of the United Nations' role in the 21st century. We have offered the forum financial assistance and have contributed to the United Kingdom preparatory event. We also support plans for the forum to be represented at the intergovernmental millennium summit in September.
Lord Archer of Sandwell: My Lords, as ever, I thank my noble friend for that encouraging Answer and in particular for the reference to financial assistance. Will she confirm that the Government have taken a commendable lead in encouraging the United Nations to summon the millennium assembly and the millennium summit to discuss its future role in promoting peace, security and development?
But does she agree that unless the bones are to remain dry, it is essential to involve civil society in those discussions and that that is the purpose of the forum? Given that it is due to take place in May of this year and that many delegates from less privileged areas are relying on financial assistance to pay their fares, how much money are the Government proposing to contribute; when is it likely to be available; and who else has made any contribution?
Baroness Scotland of Asthal: My Lords, first, I say straightaway that I endorse wholeheartedly what my noble and learned friend said in relation to the importance of the summit. The Government strongly
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support the idea of the millennium forum. It is a unique occasion for global civil society to consider the challenges facing the United Nations in the 21st century and to propose initiatives to tackle them.
The Government are to make a contribution. We have, in principle, offered to contribute towards the costs of securing developing country representation at the forum to ensure that it is truly representative of the global civil society. We also provided £15,000 to the United Kingdom United Nations Association to help fund the national preparatory event in February which sought to frame the national civil society input to the forum. Unfortunately, I cannot tell my noble and learned friend the precise nature of the further contribution but we are hopeful that it will be substantial.
Baroness Gardner of Parkes: My Lords, will the Minister tell the House where the forum is to be held? I was involved in the World Conference of Women and I remember clearly the NGO forum there. Will the Minister tell me also whether the NGOs will be adequately housed in one huge area? In the past, the problem has always been that there has not been adequate space for all the representatives to be together. Their value is greatly diminished if they have to be separated.
Baroness Scotland of Asthal: My Lords, I can tell the noble Baroness that the forum is to be held in New York. I cannot give her the precise location in New York but I am sure that I can write to her with that information if that is what she requires. We believe that the forum will be extremely important and that accommodation will be available for those who attend. I hope that that is a full answer to the noble Baroness's question. I can certainly take forward those matters and if I am able to cull further details from the information available, I shall write to the noble Baroness in relation to it and make available a copy of that letter to other Members of the House.
Baroness Whitaker: My Lords, does my noble friend agree that since the UN Charter refers to "We, the peoples" of the United Nations and not "We, the governments", and since this country has one of the largest proportions of NGOs among the UN members, it is entirely appropriate that this Government should give a lead in supporting the forum?
Baroness Scotland of Asthal: My Lords, I respectfully agree with my noble friend. It is extremely important that civil society plays its full part in that regard. We are most encouraged that the forum is to take place and are very hopeful that there will be a full and frank exchange and that there will be opportunity at the summit for the results of the deliberations to be communicated more broadly.
Baroness Rawlings: My Lords, does the Minister not agree that this is an ideal opportunity for this Government to pledge greater financial and other

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support, beyond that which the Minister mentioned, to our two outstanding British export successes—the BBC World Service and the British Council—both of which could and would make a major contribution to ensuring the success of that NGO forum?
Baroness Scotland of Asthal: My Lords, as the noble Baroness will know, we already give extensive support to both the British Council and the BBC World Service. They have worked extremely hard and well with Her Majesty's Government, as they have with previous governments. We shall certainly continue to be supportive in the links that we have and in the partnerships and working together which we believe will evolve over a period of time.
Lord Jenkins of Putney: My Lords, I am sure that my noble friend has welcomed the universal support that the project has received in the House. Will she give the House some idea of the extent to which other countries are participating?
Baroness Scotland of Asthal: My Lords, other countries are participating in the event. We are hoping that our partners in Europe also will make a contribution. I am not able to tell noble Lords the precise nature of their contribution, but I am aware that they are deliberating as to financial and other participation. The forum is being welcomed by a number of our partners.

Data Protection Codes: Revision
2.42 p.m.
Viscount Astorasked Her Majesty's Government:
When they will bring forward a revised Data Protection (Designated Codes of Practice) Order to comply with the Press Complaints Commission's revised code.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, we are checking whether there are proposals to amend any of the other codes designated under Section 32 of the Data Protection Act 1998. We shall bring forward a draft order shortly after Easter in the light of those checks and after consulting the Data Protection Commissioner.
Viscount Astor: My Lords, will the Minister apologise to the House for bringing forward an order on 7th February which referred to a code that was out of date? The changes of which he was not aware then, but he is now, were made on 20th January. Does that not show that the consultation promised by the Minister did not take place? Will he assure the House that it will take place in the future? Does he agree that the changes are important because they relate to the identification of juvenile victims and juvenile witnesses to crime?
Lord Bassam of Brighton: My Lords, it is most regrettable that we were unable to designate the appropriate code. That must be common ground. I regret that there was a temporary breakdown in communication. Such things happen from time to time. We need to ensure that we get consultation absolutely right so that we designate the appropriate order. The changes reflected in the order are minor in extent but they are important. They reflect important changes in other aspects of public policy, partly in reaction to the Thompson and Venables case.
Lord Campbell of Alloway: My Lords, will the code of practice take account of the use of the new form of the electoral register for commercial purposes under Section 9 of the Representation of the People Act without the consent of the person registered, in context with the provisions of Article 8 of the European Convention on Human Rights? Also, will the order be subject to affirmative resolution?
Lord Bassam of Brighton: My Lords, the code of practice to which the Question relates does not bear any resemblance to the noble Lord's question. I am more than happy to consider the issue raised in his second point and to communicate with the noble Lord to clarify any issues of concern.
Viscount Astor: My Lords, will the Minister confirm that the Data Protection Commissioner has been notified that the code designated was out of date? Will he say what steps are being taken to inform journalists who, looking at the present code published by the Press Complaints Commission, might believe that it was the one with which they should comply? In fact, they should be complying with a code that dates from three years earlier. What steps are the Government taking to help such journalists, who may be put in a position where they might unintentionally break the law due to the error made by the Government?
Lord Bassam of Brighton: My Lords, we are in contact with the data protection registrar on those matters. In response to the noble Viscount's second point, we take the view that journalists could rely on the current code in any event, simply and primarily because there is no major difference between the two codes on privacy matters, which are obviously the issues of primacy concern. We are safe on those terms. As I said earlier, we intend to bring forward an amended order shortly after Easter so that we may deal with those matters. I believe that that will put the matter to rest.

Football: Proposed Regulator
2.47 p.m.
Lord Davies of Coityasked Her Majesty's Government:
What steps, if any, they are taking to appoint a football regulator.
Lord McIntosh of Haringey: My Lords, the majority report of the football task force's report, Football: Commercial issues, proposed an independent regulator for foot ball—the football audit commission. The Government are considering their response to that proposal and to the football authorities' alternative proposal for an independent scrutiny panel. Ministers have had a number of useful discussions with the football authorities and other interested parties over recent weeks and the Government will respond to the report shortly.
Lord Davies of Coity: My Lords, I am extremely encouraged by my noble friend's response. However, I should like to draw to his attention and to ask for his views about the current negotiations taking place with the television companies, which are likely to produce over £1 billion in funding over the next five years—a 20 per cent increase. Is he aware that on the last occasion that a deal was struck with the television companies, all the increased income went into the pockets of players? There are now over 100 players earning £l million per year from football. At the same time, the cost to fans for admission to the grounds is soaring. The lower clubs are finding it extremely difficult in such outrageous circumstances. Does the Minister believe that the appointment of a regulator would go some way to correct those disastrous circumstances?
Lord McIntosh of Haringey: My Lords, it is important to consider those parts of the report of the football task force upon which there is agreement rather than the single issue of the nature of the regulator, upon which there is disagreement. All members of the football task force recognise the seriousness of the points raised by my noble friend concerning the needs of the less rich clubs and the need for affordat le access to football. That is linked to the television agreements, which are still to be concluded.
Lord Lyell: My Lords, can the Minister advise me to whom he believes the regulator should report? Will it be the noble Lord, the Government, the football authorities or the fans, like myself, who paid £7 to stand in freezing conditions on Saturday with little in the way of facilities?
Lord McIntosh of Haringey: My Lords, it sounds as though the regulator should report to the noble Lord, Lord Lyell! That would do the trick. If there is to be a single regulator, rather than an independent scrutiny panel, it is important that that position is set up by the Government rather than the football authorities. The exact terms of reference would still be a matter for discussion.
Lord Faulkner of Worcester: My Lords, I declare an interest as vice-chairman of the football task force and as a signatory to the majority report to which my noble friend referred. Is he aware that a number of us who were majority signatories, including supporters'
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representatives, met his colleagues, the Secretary of State and the Minister for Sport, last Thursday? We were gratified to learn that the football authorities have made considerable progress on their own plans on matters such as consumer representation, financial compliance and the independence of the regulatory body. We believe there is now some prospect of an agreed solution being presented to my noble friend and his ministerial colleagues which will satisfy the expectations of supporters and substantially take the game forward.
Lord McIntosh of Haringey: My Lords, I am glad to be able to confirm the meeting at which my noble friend was present. I confirm too that a meeting took place with the authorities on 16th March which was also constructive and had the benefit of a detailed presentation from the football authorities. All that underlines the importance of making progress on those parts of the report of the football task force which are agreed without waiting for a final decision on the nature of the regulatory person or body.
Lord Clinton-Davis: My Lords, can the noble Lord confirm that the ordinary fans will have a say in the matter; that the football regulator will formally or informally consult the ordinary fans?
Lord McIntosh of Haringey: My Lords, one of the proposals contained in the report of the football task force was for a supporters' direct unit. That unit is already in place in shadow form, providing advice to fans who are interested, in particular, in taking part in the management of football by setting up trusts. That confirms the importance we attach to ensuring that fans have a voice in football.
Lord McNally: My Lords, did not the Minister read in yesterday's paper that the right honourable Jack Cunningham, MP is already lined up to be appointed as football regulator? What is the veracity of that story? Is it a "star signing" or an "own goal"?
Lord McIntosh of Haringey: My Lords, the noble Lord knows perfectly well that I am no good at sporting metaphors. However, I can inform him that there is no truth in the report to which he has referred.
Lord Brookman: My Lords, if there is to be an appointed regulator, I believe, from these Benches, that the appointment of Jack Cunningham would be a good choice. Does the Minister not agree that it is about time we, the British people, had more Davieses, Clarkes, Evanses and Joneses playing in the premier league?
Lord McIntosh of Haringey: My Lords, I thought that those with Welsh grandfathers tended to come from New Zealand.

GM Technologies and the Developing World
2.55 p.m.
Lord Taverneasked Her Majesty's Government:
Whether, in the light of the Organisation for Economic Co-operation and Development conference in Edinburgh on genetically modified foods and health, they will promote the use of genetically modified crops in the developing world.
Baroness Amos: My Lords, we support demand-led research directed at the needs of poor farmers in developing countries using whatever technology is most appropriate, cost-effective and safe. Genetic modification (GM) technologies could produce considerable benefits if applied safely and responsibly to the crops on which the poor rely. We shall continue to support the development and dissemination of beneficial technologies which poor farmers can afford and use to create sustainable livelihoods. We shall also consider how we might help developing countries to develop the capacity they need to handle and assess GM technologies.
Lord Taverne: My Lords, are the Government aware that at the Edinburgh conference, which it was my pleasure to attend, two matters became absolutely clear? First, there was not a shred of evidence that GM foods are harmful to health. Indeed, hundreds of millions of people have now consumed them for over a decade without any apparent ill effects. Secondly, there was enormous enthusiasm among representatives from the developing world for the new technology, which they regard as essential to the fight against hunger and disease and, indeed, which was already shown to be having beneficial effects in countries such as China and South Africa. In the circumstances, is there not a moral imperative on the Government to do everything they can to encourage and promote the spread of such technology?
Baroness Amos: My Lords, the Government aim to protect public health and the environment by taking a science-based approach to GM crops and food. We are pro-safety, pro-environment and pro-choice. As regards the question raised by the noble Lord on the developing world and the new technology, we are aware that in developing countries there is a concern that the focus has been on the developed world rather than on the way in which GM technologies can be used in the developing world. We are supporting developing countries to develop their capacity in that area. We are also supporting research on rice, for example. Bearing in mind that we are pro-safety, pro-environment and pro-choice, the Government are doing all they can with regard to the issue in developing countries.
The Lord Bishop of Oxford: My Lords, there are important scientific questions to be answered about GM crops. Such questions will not all be answered negatively; they could be of great benefit to the third
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world. Does the Minister not agree that there are no less important social, economic and political questions to be answered? It would be possible for small farmers to switch to monocrops using the so-called "terminator" seeds and to find themselves totally in the hands of the large trans-national corporations.
Baroness Amos: My Lords, I agree with the right reverend Prelate; there are social, economic and political considerations. DfID is funding research which supports the safe development and testing of affordable GM technologies which have the potential to benefit poor farmers, improve food availability, human well-being and the environment. We are also funding research designed to assess the economic, environmental and social impact of GMOs on poor farmers. The concerns expressed are being taken on board by that department.
Lord Swinfen: My Lords, will the Government ensure that in areas of the world in which small farmers save their own seed for the next crop, such farmers are not supplied with a so-called "terminator seed" which could not be used for their next crop?
Baroness Amos: My Lords, the Government do not support the development of the terminator seed. The noble Lord may be aware that last year Monsanto, which had conducted the most research on this issue and was within five or 10 years of concluding that research, decided not to take it forward. We are not supporting any kind of development of any kind of terminator gene.
The Countess of Mar: My Lords, will the Minister bear in mind the lessons learned from the profusion of toxic chemicals which have been spread around the world and have caused enormous damage? Slogans such as that used by the noble Lord, Lord Taverne, regarding the absolute safety of chemicals have proved to be untrue. Would the Minister bear in mind that, with genetic modification, there is no going back? We are playing with the basic building blocks of life and must be absolutely sure of safety before we use them.
Baroness Amos: My Lords, that is why the Government's approach is science-based and money is invested in research so that we do not facilitate the use of GM crops in areas where developing countries have not put in place the basic infrastructure or legislation that will enable them to use this technology beneficially. We want to see developing countries use this technology in a way which is beneficial for them and to ensure that they have the capacity not only to develop the technology in ways that suit them but also to market it to their own advantage.
Baroness Whitaker: My Lords, does the noble Baroness agree that the alternatives to genetically modified crops tend to be pesticides which are

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ecologically damaging and expensive, in particular when they are used on marginal land, which so many poor people are reduced to farming?
Baroness Amos: My Lords, I agree with my noble friend. It is important that developing countries are included in an elective and inclusive dialogue on the risks and benefits of GMOs. However, it is also important to remember that much of the research has to date been focused on the use to be made of GMOs in the developed world by large commercial organisations. We want to see the technology used to assist developing countries in the ways that suit them best.
Lord Avebury: My Lords, did not Watson and Crick win the Nobel Prize for their research on the basic building blocks of life, and is anything wrong with that? Furthermore, does the noble Baroness agree that all the opinions so far expressed on GM crops have come from the developed world? Does she further agree that it is about time that the third world, where the benefits of GM crops may well be felt the most, should have their say as well?
Baroness Amos: My Lords, I entirely agree that a public debate is needed on this issue. We need a public debate that focuses not only on the developed world but also includes the developing countries. For that reason, DfID provided funding for some developing countries to send representatives to the Edinburgh conference so that their voices could be heard. I hope that their voices will continue to be heard.
Baroness Rawlings: My Lords, as the right reverend Prelate the Bishop of Ely has so rightly said, in the Middle Ages the Church condemned surgery because it interfered with God's handiwork, and we must follow science rather than emotions. With that in mind, does the Minister agree—taking into account all the necessary precautions that have already been mentioned, including the TRIPS agreement—and the fact that at least 30 million hectares worldwide were planted successfully with GMOs in 1998, saving many starving people in the developing world, that the Government should promote GMOs far more?
Baroness Amos: My Lords, I believe that I have already addressed many of the points raised by the noble Baroness in her question. As I said, we are funding research but we are not yet at a stage where we will fund crops in developing countries unless those countries have in place the necessary legislation and infrastructure. We will continue with this work. Furthermore, we want to involve people in developing countries by helping them to build the capacity to take this technology forward.
The Lord Bishop of Hereford: My Lords, perhaps I may take this opportunity to thank the noble Baroness for the Government's change of heart on GM technology and for demonstrating their greater awareness of public unease. I believe that the
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Government have also shown a greater awareness of the environmental dangers of this technology. Perhaps I may make two points, both of which have been touched on but have not yet, I think, been answered satisfactorily. First, some NGOs, in particular Christian Aid, have taken a very negative view of this technology and have considerably influenced developing countries against it. While I accept what the noble Lord, Lord Taverne, has said about expressions of enthusiasm for it on the part of many developing countries, can the noble Baroness say a few words on the Government's relationship with NGOs? Secondly, is there any prospect of progress on some kind of international agreement on the vexed question of intellectual property rights in GM technology? That question lies behind much of the fear and unease.
Baroness Amos: My Lords, first, perhaps I may say to the right reverend Prelate that there has been no change of heart by the Government. We have said consistently that we need to have an open debate about these matters. To enable us to have that debate, we need to gather the right information. The Government have consistently argued that some of what has been said in the press has been inaccurate and that we have tried to address that. Indeed, in the Government's response to the Science and Technology Committee's report on this matter, we expressed the concern that we needed to see greater understanding and greater probity on the part of all the players involved. As regards the attitude of NGOs, I think it is important to ensure that dialogue continues between all NGOs and the Government on this matter. We have done our best to promote that dialogue.
In response to the point made by the right reverend Prelate on international agreements, we are of course constantly discussing ways in which we might take those international agreements forward.

Business
Lord McIntosh of Haringey: My Lords, at a convenient moment after 3.30 p.m., my noble friend the Leader of the House will, with the leave of the House, repeat a Statement being made in another place on the Special European Council in Lisbon.

House of Lords' Offices: Select Committee Report
3.6 p.m.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Fourth Report from the Select Committee (HL Paper 45) be agreed to.— ( hairman of Committees.
Following is the report referred to:
1.Steps of the Throne
The Committee has considered the four categories of heirs to peerage currently allowed to sit on the Steps of the Throne:

eldest sons of Peers of Parliament;

eldest daughters or grand-daughters of such Peers when heiresses presumptive;

grandsons of such Peers when heirs apparent;

eldest sons of those who have disclaimed their peerage.

In the case of hereditary peerages, these categories all assumed that those exercising the right would eventually become Members of the House. That is no longer true, except as the result of a by-election to become one of the 90 hereditary peers who remain Members of the House. The chances of the eldest son, daughter or grandchild of a hereditary peer who had been a Member of the House being elected would be uncertain, though not impossible.
As the original rationale for the four categories no longer applies, the Committee considers that in future the privilege should be granted to the eldest child of a Peer of Parliament, without regard to gender. The Committee was, however, mindful of the need to avoid any unfairness to eldest sons who had previously exercised their right to sit on the Steps of the Throne but who have older sisters, and therefore recommends that the privilege be granted to:
"the eldest child of a Peer of Parliament (or the eldest son where the right has been previously exercised)."
2. Black Rod
The Committee agreed to an extension of the appointment of Sir Edward Jones for one final year to 8 May 2001.
3. Staff of the House
The Committee was informed of the following new posts:

—an additional Assistant Archivist / Records Manager in the Record Office;

— an additional personal secretary in the Committee Office;

— four Legal Assistants to the Law Lords, the posts to be held for up to one year at a time, with effect from September 2000.

4. Private Bill fees
The Committee agreed to the following increases in fees, broadly in line with inflation over the period 1995–99:

Current Fee

Proposed Fee

Payable on First Reading of Private Bill

£3,500

£4,000

Payable on Third Reading of Private Bill

£3,500

£4,000

Payable on Second Reading of Provisional Order Confirmation Bill

£3,500

£4,000

Payable on appearance at Joint Committee on Special Procedure Order

£1,750

£2,000

Payable on appearance at Select Committee on Hybrid Instrument

£1,750

£2,000

Taxation fee per £100 of any bill of costs allowed

£1.40

£1.60

5. Emergency Medical Services—Defibrillators
The Committee took note of the decision of the Medical Advisory Panel that the House should hold two defibrillators, one in Peers' Lobby and the other in 1 The Abbey Gardens. The defibrillators and trained personnel will be in place by Easter.
Lord Barnett: My Lords, I should like to raise two points with the noble Lord the Chairman of Committees. Perhaps I should declare an interest, in that the first section of the report will allow my own daughter to sit on the Steps of the Throne. I very much applaud that ruling.
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However, I believe that many other matters should be of concern to the noble Lord the Chairman of Committees and the House authorities. First, what facilities will be made available for those sitting on the Steps of the Throne? Secondly, and more important, are we pressing the other place—when they have acquired 200 offices at a cost of £1 million each in Portcullis House—to concede 200 offices to your Lordships' House? If not, why not?
The Chairman of Committees: My Lords, as regards the first point raised by the noble Lord, Lord Barnett, it is proposed that those mentioned in the report of the House of Lords' Offices Committee should be given the facility of being allowed to sit on the Steps of the Throne, if that is acceptable to your Lordships this afternoon. No other facilities were envisaged in relation to those concerned.
So far as concerns office space, which the noble Lord, Lord Barnett, has mentioned, that is not a matter which arises out of this report. I believe that I would be trespassing on the indulgence of noble Lords were I to venture into that matter this afternoon. However, perhaps I may indicate that matters connected with accommodation are very much in the minds of those committees of your Lordships' House which are concerned with these issues.
Lord Peyton of Yeovil: My Lords, perhaps the noble Lord the Chairman of Committees will agree that it would be wise if he were to take away the question put to him by his noble friend and give it a great deal more thought than he has been able to give it so far? Personally, I should hate it if he were to leave the Chamber without having it clearly in his mind that a great many noble Lords agree with what has been said by the noble Lord, Lord Barnett.
Lord Peston: My Lords, will the noble Lord the Chairman of Committees explain the meaning of the word "or" used in the sentence quoted at the end of the first point, where it states, "or the eldest son"? "Or" can mean one of two things: it can mean one but not both, or it can mean "and/or". Am I right to assume that here it means "and/or", in that, where an eldest son is sitting but his sister is older, she will be able to sit on the Steps as well? That would seem to me to be an entirely correct recommendation.
Lord Bruce of Donington: My Lords, can the noble Lord, Lord Boston, give the House an indication as to whether or not the committee discussed the agenda of its next and future meetings? Also, will the whole question of repairing and bringing up to a tolerable standard the acoustic properties of the various committee rooms of this House receive more than a perfunctory consideration?
The Countess of Mar: My Lords, I take this opportunity to thank the committee for extending the rights of females to sit on the Steps of the Throne. Perhaps I may remind the noble Lord that new incumbents will have will far less of a battle than I had

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with the noble Lord, Lord Denham—I see he has just taken his seat—when he was Chief Whip. When I sought to persuade him that my daughter, who is also my heir, should be allowed to sit on the Steps of the Throne, after a lot of excuses which did not stand up, he said that I might produce a son. I said that I could produce a certificate to prove that I could not and he finally gave way.
Lord Boardman: My Lords, as hereditary Peers who have been excluded from this House were granted as a concession the right to sit on the Steps of the Throne, should not the order be amended?
The Chairman of Committees: My Lords, perhaps I can deal with the last point first; that is, the one raised by the noble Lord, Lord Boardman. Hereditary Peers in fact already had the right to sit on the Steps of the Throne. On the point raised by the noble Countess, Lady Mar, I can only say that I am grateful to her for what she said, and am happy that she is happy.
The noble Lord, Lord Peyton of Yeovil, mentioned the matter of the House of Commons and House of Lords offices arising from the question raised by the noble Lord. Lord Barnett. There is no lack of interest in your Lordships' committees on this matter; indeed, it is being actively dealt with in the committees. I can give the noble Lard that assurance. However, I hope he will forgive me if I do not go further today because these matters will be referred to at a later date, though they are very much in people's minds.
The noble Lord, Lord Bruce of Donington, raised the question of repair of committee rooms. As your Lordships will he aware from earlier reports, there is a continuing and extensive programme of work along the lines mentioned by the noble Lord, Lord Bruce. I can assure him that those are being pursued with vigour. If he has any problems in mind relating to specific rooms and will let me know outside the Chamber what they are, I will look into those to see whether they are being dealt with.
The noble Lord, Lord Peston, raised a point in relation to the word "or". That word has its legal connotation and therefore it is used to indicate the alternative, not both.
On Question, Motion agreed to.

Financial Services and Markets Bill
3.14 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee. — (Lord McIntosh of Haringey.)
Lord Saatchi: My Lords, the Minister proposes that we should now go into Committee. The House should be aware that we have some difficulty with this.
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There is deep concern on these Benches in relation to the conduct of this Bill through this House. This Bill changes the face of regulation of Britain's most successful industry. The Government take the view that this Bill is the best of all possible Bills in this best of all possible worlds. So it should be; it is the single biggest piece of legislation that this Government have introduced.
The Bill is 215 pages and 408 clauses long. In its epic 18-month passage through another place it attracted 1,450 amendments. The standing committee sat for 17 hours in 35 sessions and a fine Joint Committee of both Houses, chaired by the noble Lord, Lord Burns, prepared a set of 37 recommendations. Yet after all that, the Government have now tabled 254 more amendments and say that they have hundreds more to come. Few of those amendments are in response to the Opposition's substantive amendments in another place.
I stress that this is not a complaint about the Minister, who graciously apologised to the Committee for the scale of government amendments we are being asked to consider. Nevertheless, it is difficult to avoid the conclusion that the Government are almost redrafting the Bill as it goes along. First, the Government seem to be trying to correct bad drafting; secondly, they are introducing new concepts, some of which they say we shall not see in their final form until Report stage.
This is a complex and technical Bill whose 30 parts are highly interconnected, but under the avalanche of government amendments the Committee of your Lordships' House is unable to see the Bill in the round. I therefore ask for the Government's co-operation in this because we support the primary effect of this Bill; that is, the creation of an overarching financial services authority. But what explanation can the Minister give for the large number of government amendments, given the level of pre-legislative scrutiny this Bill received?
If the Bill is as perfect as the Government claim, one is entitled to ask why they are having so many second thoughts about it. To express our concern, I give notice of our intention to vote against the first government amendment in Committee this afternoon as a form of gentle protest.
Lord Newby: My Lords, I give modified support to the noble Lord, Lord Saatchi. As someone else who is attempting to deal with the government amendments as they are brought forward, I find it extremely difficult to deal with such a huge volume of highly technical amendments on which one sometimes needs outside advice at short notice. The Minister made it clear at the beginning of proceedings that there were likely to be a large number of amendments, and he has certainly been right.
As a general principle, we support the idea that government amendments should come forward in due time. But the point made by the noble Lord, Lord Saatchi, about the long process through which this Bill has gone, is absolutely valid. There was a pre-legislative committee on the Bill; it went through the

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Commons some time ago. Although the Bill is complicated, it is unfortunate that the Government should be tabling so many amendments to it.
However, I hope that the noble Lord, Lord Saatchi, will not mind if I disagree with him on two points. First, I notice from my supplementary list of amendments tabled on Friday that all bar one came from the Conservative Front Bench and we are facing the same difficulty in relation to late amendments from that front as we are from the Government. Secondly, I am not convinced that the best way to express our displeasure is to vote against an amendment with which we may agree, and therefore we do not propose to do so from these Benches.
Lord Peyton of Yeovil: My Lords, I give warm support to my noble friend and to the points he made. Nobody can possibly say that my noble friends on the Front Bench have been other than extremely temperate so far in their opposition to the Bill.
I also echo one point made by my noble friend; that is, I exempt the Minister, who handles a difficult, long and complicated Bill in a civil and courteous fashion, from any criticism. Having said that, I extend to him my strong personal sympathy that he should now find himself in loco parentis to such a monstrous child. It is an unfortunate and embarrassing position in which to find oneself. In saying what I now say, I am not in any way underrating the parliamentary skills of the noble Lord, but they will be fully exercised in defending the Government's rather sloppy conduct with this specific measure.
The Minister finds himself in charge of a baby which has put on an enormous amount of weight in a record space of time. Indeed, even now, it shows further signs of extremely undesirable growth. I hope that the Minister will realise how very sorry we all are for him in the terribly unfortunate role that he finds himself having to play.
Lord Elton: My Lords, if the noble Lord accepts the role of parenthood perhaps we may invite him to sign a certificate such as the one mentioned by the noble Countess, Lady Mar, which she offered to my noble friend Lord Denham a while ago? However, if the noble Lord was not present during Question Time, he may not see the point of that request.
On a more substantive matter, could the noble Lord put this Bill into context? I agree with other noble Lords that the Minister finds himself in a position with which one can sympathise, but is not the real problem the fact that this Committee stage has been scheduled too soon, before all the government amendments have been thought through? We receive government amendments almost daily through the post, accompanied by very helpful notes. Can the Minister say whether this haste arises from the pressure of other legislation that the Government propose to bring forward? Further, can the noble Lord remind the House of the total number of main programme Bills
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that the Government propose to bring to this House and tell us how many Second Readings are still ahead of us?
Lord Stewartby: My Lords, I should like to support what my noble friend Lord Saatchi said. Like him, I have particular sympathy for the Minister. Indeed, I spent many hours in Committee in another place on regulatory Bills. They are always very complicated and difficult to handle, especially when they are dealt with single-handedly by a Minister. But the problem with this Bill is not simply its length and the number of amendments that have already been tabled—and, indeed, the number of further amendments that are due to be tabled—but the fact that not only are some details of the Bill still unclear at this stage but also certain issues of policy still need to be resolved. That is the great difference between the present position and what I thought was the tradition in Parliament; namely, that one does not debate Bills in Committee unless the policy has been established, even if the amendments to implement that policy have not been brought forward.
During the passage of the Building Societies Bill in the 1980s—for which, for my sins, I was responsible—a large number of amendments were tabled in this House. That was a great pity. However, we took the greatest care to ensure that the import of all government amendments of any consequence that were due to be tabled was already known and published. I am afraid that that is not a position that we enjoy in relation to the present Bill.
Lord Jenkin of Roding: My Lords, I should very much like to endorse what my noble friend from the Front Bench said and to make one or two suggestions. I, too, am grateful to the noble Lord, Lord McIntosh of Haringey, for the care that he has taken to ensure that those of us who are taking part in the proceedings on the Bill have at least one or two days' notice of the amendments that the Government are tabling. I very much welcome and thank the noble Lord for the accompanying notes. However, with the greatest respect, I do not think that the noble Lord has taken on board the difficulty that faces those of us on this side of the House who are seeking to understand the Bill and to deal with it. These really are shifting sands. One thinks that one has understood a clause to which amendments may well have been tabled, but then one finds that the whole clause is to be left out and replaced with an entirely new one. Therefore, as my noble friend said, the context in which one is trying to debate the Bill seems to shift almost day by day.
Perhaps I may indicate to noble Lords exactly what we have been confronted with. On 22nd March, 81 new amendments were tabled and nine new clauses; on 23rd March, 23 amendments were tabled, together with three new clauses and one new schedule. All this actually runs into many, many pages on the Marshalled List. Therefore, having tried to understand the Bill, one then has to grapple with the detail—in this case, over the weekend—in an effort to try to understand the changes. I frankly concede that

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many of the amendments are properly described as "minor drafting amendments". I have no doubt that the Minister will use those words to justify such amendments. If there are a dozen or even half a dozen minor drafting amendments, one can cope; but it is extremely difficult to cope if there are hundreds because one has to satisfy oneself that a whole string of amendments really are just minor drafting amendments and that they will not change the policy significantly.
However, it goes further than that point. In an effort to be helpful, the noble Lord has already given some of us notice regarding amendments that will be tabled on Report to parts of the Bill that have already been dealt with. I have with me a copy of the notification that we were sent, which is headed, "Draft Decision-Making Amendments to Parts III to IX". As noble Lord may be aware, we shall begin to consider Part X later this afternoon. The problem with those amendments is that their references are to the Bill in the form that it appears before the Committee; but, when they are tabled, they will refer to the Bill as amended in Committee. I am sorry, but I just do not have the resources to begin to go back and look through the Hansard reports and the Marshalled Lists to find what amendments have already been made to the clauses that the Government now propose to amend still further on Report. I am certain that the noble Lord was trying to be helpful, but I have to tell him that it is almost useless for one to try to understand what is intended to happen. Indeed, it emphasises my point that it is very difficult to find firm ground on which to stand.
Perhaps I may take up a point made by the noble Lord, Lord Newby. I am not trying to keep in touch with a number of experts in the field—namely, legal advisers and others—because, if I may say so, my noble friends on the Front Bench are doing that wholly admirably. But life is made extremely difficult for some of us as regards trying to understand what is happening when things change day by day. I totally support the protest made by my noble friend Lord Saatchi.
Lord Boardman: My Lords, I should like to add my support to the concerns that have been expressed regarding the amendments that have been tabled. Indeed, the amendments that arrived at the end of last week were such that, quite clearly, they should have required me to stay up late all weekend in an effort to understand them. One receives much comment from commercial interests with which one was previously connected. Those concerned have very strong views on the amendments that are being made. It would be helpful if one were to have the opportunity to discuss such amendments with them and to take note of their points, but one never seems to have the time to do so.
Like other noble Lords on this side of the House, I have no complaint to make about the personal approach of the Minister. Indeed, he has been most helpful. Although I understand the problem with which he is faced, he must, nevertheless, understand
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ours. We are experiencing much difficulty in the proceedings on this most important Bill. I hope that something can be done to ease the situation.
Lord Peston: My Lords, I hope that my noble friend is not taken in by all the flattering remarks that the Opposition are making about him. I certainly have no intention of associating myself with all those kind remarks. It seems to me that the Opposition are now learning that it is a tough job being in opposition. When they have spent as many years on the Opposition Benches as I did, they will realise how difficult it is to scrutinise technical Bills.
This is a difficult Bill. But, in a way, the Government cannot win. They are trying to improve it. We made the terrible error of having this Committee stage in the Chamber of the House rather than proceeding with it in the Moses Room, which is much more suitable for such technical matters. But, as I understand it, the Opposition did not want us to deal with it in a much more professional way in the Moses Room.
I have seen the difficult amendments to which reference has been made. They are technical; indeed, I have yet to see anything from the Government'side that suggests a fundamental change in policy. It was not clear from the remarks of the noble Lord, Lord Saatchi, whether he feels that there has been a change of policy at some point. I have seen no evidence to support that view. I have seen adjustments because, quite rightly, the Government are thinking matters through. The alternative—this shows that they can never win—would be for the Government to decide not to think it all through in order to get it right. However, they would then be told off for that reason.
Having thoroughly enjoyed the debate of the past quarter of an hour—indeed, it is rather more interesting that the Bill itself—I feel that we ought to get down to business and actually look at some of the incredibly boring material that is set out on the Marshalled List for today.
3.30 p.m.
Lord Harris of Greenwich: My Lords, I hope that I may say a few words on this matter. I can recall, as I think the noble Lord, Lord Peston, can, precisely the same kind of complaint being made when the Labour Party was in opposition as is now being made by the noble Lord, Lord Saatchi, and his noble friends. That is to some extent inevitable although I think that the noble Lord, Lord McIntosh, should take the complaints seriously, as I hope that he will. However, the thing which worries me—which was referred to by my noble friend Lord Newby—is the number of starred amendments. This really is highly objectionable; it means that they were tabled on Friday. Many Members of the House looked at both Government and Opposition amendments for the first time this morning. That is most unsatisfactory.
Quite apart from this Bill, we have had two other examples in recent weeks where major issues of principle appeared on the Order Paper with a star beside them. I do not say that we should object in

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principle to all starred amendments but there should be some discussion through the usual channels, with the Government Chief Whip and others, to see whether we can avoid repetition of incidents of this kind which are not in the interests of this House.
Lord Barnett: My Lords, I shall try to be as civil and courteous as the noble Lord, Lord Peyton, and my noble friend always are. I read in the press this morning—I do not know whether this is true—that the noble Lord, Lord Strathclyde, the Leader of the Opposition, now has it in mind to make matters extremely difficult for the Government in your Lordships' House. The noble Lord is shaking his head; I am delighted that the report is untrue. However, I am not sure whether he nodded or shook his head; he did both!
However, as has been said, the Bill is complex. It is non-party political in any sense. Indeed, the Official Opposition have made it clear that they support the Bill. However, when a Bill is as complex as the one before us it is not too surprising that the Government should table amendments to it. Indeed, if they had not tabled amendments, I should have thought that the Opposition would be rather annoyed about that. But to take to a vote an amendment with which they broadly agree as a form of protest is rather silly. I would not have expected the noble Lord, Lord Saatchi, to associate himself with that kind of nonsense.
My noble friend Lord Peston was absolutely right to say that a Bill as complex as the one before us should be discussed in Committee off the Floor of the House, as in another place, and then returned to the Floor of the House on Report. To discuss these kind of technical matters at Committee stage on the Floor of the House seems to me to be quite wrong.
Lord Lyell: My Lords, will the noble Lord who is to reply on behalf of the Government cast his mind back 23 years? He need look only at the noble Lord, Lord Strabolgi, who is seated one row behind him. The noble Lord, Lord Harris of Greenwich, may also remember that in 1977 I had the honour of attempting to work out, with the valuable help of the government Front Bench of that time and of my noble friend Lord Belstead, the then Patents Bill. There were 650 government amendments for amateurs such as myself and my noble friend Lord Belstead to consider between Second Reading and Committee stages. I tactfully remind the noble Lord, Lord Peston, that the then government successfully got their business through. The noble Lord, Lord Barnett, will remember those days well. Those were technical and professional amendments. The House discussed them until late at night but the then government got their business through. If the noble Lord, Lord Peston, wants to go over the ball, he will find someone here who can do it too.
Lord Clinton-Davis: My Lords, I was the Minister in charge of the then Patents Bill. There were so many amendments because representations were specifically made by people who were technically expert in the patents profession. That is the reason for the number of amendments that were tabled. I cannot remember whether there were 550 or 650, but certainly there was a large number. They were tabled because technical experts made representations to the then government which received a positive response.
Lord Lipsey: My Lords, unlike the noble Lord, Lord Peston, I have not had the experience of 17 years in opposition. Therefore I perhaps have more sympathy with the Opposition than he does. I would have much more sympathy if they had not decided on the stunt of pressing the amendment to a vote. The Government's dilemma is absolute. Every day that we do not have this Bill, the present, rather ramshackle system—I speak as a board member of one of the SROs—has to trundle on. The sooner we get the Bill, the better. We could have the amendments in better shape in two or three months' time, but the ramshackle system would have to continue for another two to three months. It is sad but inevitable that we have ended up as we have.
Lord Hunt of Wirral: My Lords, in agreeing with my noble friend Lord Saatchi, I respond to a number of points that have been made by the noble Lords, Lord Barnett and Lord Peston. First, it is not the fact that the Government seek to improve the Bill that is at fault, but that they should try to do that while at the same time debating parts of the Bill that they already admit need further amendment. The answer surely therefore is to allow more time for the Committee stage. That is, of course, an option very much up to the Government.
Secondly, I say to the noble Lord who spoke from the Liberal Democrat Benches that the first amendment concerns Clause 129. It is apposite to oppose any amendment to Clause 129. Here I pay tribute to the noble Lord, Lord McIntosh. When I raised the need for further amendment to Clause 129, the noble Lord conceded that there might be a case for doing so and invited me to a meeting to discuss it. This morning staff from his office contacted me and sought to arrange that meeting. I believe that Clause 129 needs further amendment. It is a good moment to reflect on whether we should seek to amend it further before it is in its final form.
Rather than seek to point up the historical significance of opposition and government performance in the past, will the Minister continue with his positive and constructive attitude of inviting noble Lords to discuss parts of the Bill, take his foot off the accelerator and give us time to ensure that we get the Bill right, as the noble Lord, Lord Barnett, said? It affects the competitiveness of one of our most important areas of the economy; namely, the City, the insurance market, banking and financial services. It is vital that we get it right; that is why I so strongly support my noble friend Lord Saatchi.
Lord McIntosh of Haringey: My Lords, I do not know how clear it will be to those who are relatively new to this House how familiar I am with the arguments that have been put forward from the Opposition Benches. I put them forward from the Opposition Benches over a period of 14 years before the previous general election. However, I must confess that before doing so I usually thought that it was proper to give the then government notice of that, which did not occur in this case. However, I say that with all the mildness at my command.
Of course the Bill is immensely complicated. It is inevitably immensely complicated because it deals with immensely complicated markets which change from day to day. It is for that reason that the Bill tries not to be unduly prescriptive about the coverage of the regulation system of financial markets. It seeks to provide the flexibility which protects not only the financial markets themselves but—this is equally, if not more, important—also the people who use those financial markets; the consumers of financial products and investments. That results, inevitably, in this being a complicated Bill. The procedure which was adopted in the months and years preceding the arrival of the Bill in your Lordships' House is unprecedented in being the subject of a report by the Treasury Select Committee in another place and in being scrutinised by a Joint Committee of both Houses. It is unprecedented in the sense that a draft Bill was produced following the Joint Committee and the Government's response to the Joint Committee—and yet the natural and inherent complexity of the subject has still mad, it necessary to have further amendments. That is inevitable.
If anything has changed during the past week or so, it has not been that the Government have tabled more amendments. On the contrary, the Government have managed to concentrate their amending obligations so that the number of amendments to be tabled is substantially fewer than the 500 or 600 of which I gave notice at Second Reading.
What has given rise to some of the indignation —which I do not deny is understandablev—is that, in describing what the amendments would be about, I have given as much notice as I conceivably can in advance of the amendments, at the time of the amendments and subsequently. In other words, I have been flooding noble Lords opposite and my noble friends with explanatory material about the amendments. I hope that those who have received that material will recognise that we are improving the Bill but not fundamentally or significantly changing its policies; we are reflecting the inevitable complexity of the subject matter.
Of course I apologise to noble Lords for their difficulties in understanding the Bill and the changes being made. As my noble friends have pointed out, those difficulties are paralleled by the very late stage at which opposition amendments have been tabled. That has meant that some of us have had considerable difficulty in dealing with them over the past weekends. We are not used to dealing with
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manuscript amendments on major Bills of this kind, but we have had to—and they have not been government amendments.
We have to do what we have to do in order to obtain the best Bill. Many of the government amendments are entirely positive in the sense that they reflect our reconsideration of points made by the Opposition and others during the passage of the Bill; they may be entirely neutral in the sense that they are purely drafting amendments which need not detain the House or the Committee; and some of them involve not a change of policy but a rethink of the way in which that policy may best be achieved.
We appreciate the difficulties involved. We do not believe this is unprecedented—and we certainly do not believe that it justifies the price to be exacted in the form of a vote in Committee today against the first amendment, which the Opposition may well support on its merits.
As my noble friend the Leader of the House is ready to repeat the Statement made in another place, it may be as well if I seek leave to withdraw the Motion that the House resolve itself into Committee on the basis that I shall reintroduce it after the debate on the Statement. I beg leave to withdraw the Motion standing in my name.
Motion, by leave, withdrawn.

Lisbon: Special European Council
3.43 p.m.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, with the leave of the House, I should like to repeat a Statement which is being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With my right honourable friends the Foreign and Commonwealth Secretary and the Chancellor of the Exchequer, I attended a special meeting of the European Council in Lisbon on 23rd and 24th March.
"Ever since this Government took office, my right honourable friends and I have consistently advocated the need for comprehensive economic reform within the European Union. From the first European Council I attended at Noordwijck, through the launch of the British presidency and since, we have made clear that the central European economic issue for Britain in this Parliament is reform: how we modernise the European social model; how Europe embraces the enterprise agenda and seeks to match the dynamism of the United States, while at the same time preserving our commitment to social justice.
"The idea of holding a special summit at Lisbon on economic reform was originally put forward as a joint British/Spanish initiative. The Portuguese presidency has been rightly praised for the energetic and thorough way in which it took the issue forward.

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"The challenge facing Europe today is fundamental. In many aspects of the new knowledge economy, the United States has established a clear lead. Seventy per cent of all e-commerce business in the world is presently conducted in the US; less than 20 per cent in Europe; and despite the gathering strength of Europe's economic recovery and the advances we have made in some key areas— for example, mobile telephony—15 million European men and women are without jobs.
"The Council marks a sea change in European economic thinking. It points Europe in a new direction—away from the heavy-handed intervention and regulation towards a new approach based on enterprise, innovation and competition.
"As part of this fundamental reorientation of economic policy, the Council agreed a whole series of concrete measures, with clear deadlines, including: rapid agreement this year on an effective legal framework for e-commerce within the EU; a fully liberalised and competitive telecoms market by the end of the next year; access to the Internet for all schools by 2001; electronic access to the main basic public services by 2003; the introduction of a European diploma for basic IT skills; a Community-wide patent by the end of 2001, making European patent protection as simple, inexpensive and comprehensive as anywhere in the world; and government and community procurement to be fully on line by 2003.
"The need for reform is not confined to the "new economy". We agreed at Lisbon on the need for urgent measures to make the European economy as a whole more competitive, flexible and dynamic. To support this objective, the Council concluded that: there must be faster liberalisation of previously protected sectors like gas, electricity and transport; there should be further support for European R&D, with the EIB making an additional one billion euro available for venture capital to support SMEs over the next three years; there should be a general reduction in the level of state aids throughout the Union; the financial services action plan should be implemented in full by 2005, with earlier progress in priority areas; for example, the introduction of a single prospectus for companies raising capital across the EU and the elimination of barriers to investment in pension funds; and a European charter for small firms should be developed, to clear away the obstacles to the growth of small businesses.
"In these and other areas, we agreed to benchmark each member state's performance and progress, not just against other countries in Europe but, where appropriate, against the best in the world.
"We also agreed that EU social policy must be modernised to respond to changing employment patterns, increasing life expectancy and deepening social exclusion. Again, the European Council agreed on a number of specific measures to take this new agenda forward: we agreed action to combat
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social exclusion, with member states setting targets in specific areas—unemployment, youth unemployment, overall employment, child poverty and so on; we agreed to halve by 2010 the number of 18 to 24 year-olds excluded from the labour market because of low educational qualifications; we finally opened up the issue of the long-term sustainability of member states' pension systems and the need to reform them across the EU; we agreed to establish a new Europe-wide database on jobs and learning opportunities; we agreed to put life-long learning at the centre of job creation, and to monitor each member state's progress against a series of agreed aims; we agreed to improve equal opportunities, increase the provision of childcare and promote greater flexibility in the management of working time. Each year, the European Council will meet to examine progress and agree further action specifically on economic reform.
"The Lisbon European Council represents a turning point in Europe's approach to economic and social policy. With a sound macro-economic framework in place and the euro safely introduced, the concrete actions agreed at the Council should help to deliver an increase in the EU employment rate over the next 10 years, from an average of 61 per cent today to something close to 70 per cent. I have no doubt that this is achievable. In the last three years, we have created over 800,000 new jobs in Britain; in Spain there have been over a million new jobs; and in France, too, employment has risen by over 800,000 in the last two years, in part reflecting new measures to cut the cost of labour.
"Above all, the European Council agreed that once again in Europe we can seriously contemplate a return to full employment. That post-war goal, achieved 30 or 40 years ago, but then abandoned, is back on the agenda and quite right too. Each citizen unemployed is a resource wasted.
"But we have the courage to recognise that the aspiration cannot be met unless we are prepared to make the fundamental reforms necessary to equip our countries for the modern age, a new 21st century economy. It is in the combining of traditional aims and values with modern means and reforms that the true significance of Lisbon lies.
"We had a full discussion of the situation in the Balkans, including the continuing problems in Kosovo and Montenegro. We agreed that the countries of the region need to be brought more into the European mainstream, and committed ourselves to enhance economic assistance, including through early trade liberalisation. The Lisbon Council recognised the immense progress made since the Kosovo conflict began a year ago, but agreed that a more coherent approach by the international community was needed. We asked the Council Secretary General and the European Commission to come forward with early recommendations on how to strengthen the impact of the European contribution and enhance co-ordination of the overall international effort. We believe this will

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enable Javier Solana and Chris Patten to promote a more coherent international strategy for Kosovo and the region.
"Finally, we discussed relations with Russia on the eve of the presidential elections, agreeing on the need for a full partnership between the European Union and Russia, and emphasising our concerns again about the situation in Chechnya.
"I spoke to President Putin this morning to congratulate him on his emphatic election victory. He was very conscious of the weight of responsibility on his shoulders, both to restore order and democracy in Chechnya and to rebuild the Russian economy.
"Lisbon was a highly successful summit. By getting our way in Europe, we are standing up for Britain's economic interests. Making Europe more dynamic benefits Britain. More competition in Europe means new markets for British business. More enterprise in Europe means more jobs in Britain. More e-commerce means more opportunities for British companies. More jobs, cheaper goods and easier access to the Internet are good for Britain.
"Once again, constructive engagement has been shown to be the right policy for Britain and for Europe".
My Lords, that concludes the Statement.
3.52 p.m.
Lord Strathclyde: My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement. Will the noble Baroness will join me in welcoming the presence in Lisbon, with such strong popular backing, of Prime Minister Aznar of Spain? Does she agree that his influence on future discussions is likely to be far more constructive than the rather outdated attitudes of M. Jospin?
We welcome the fact that at last some EU leaders seem to accept the need to reduce regulation and increase competitiveness. We welcome the fact that the EU has realised that it is not internationally competitive and that the crucial services sector is underdeveloped. But we do have to ask why it has taken so long. We have been saying this for decades. And has anyone told the EU Commission, which still seems to be working with undiminished zeal on measures for harmonisation and regulation?
There are many fine words in the Lisbon communiqué. In fact, I have rarely read such a torrent of aspirations—the small print of which amounted to the Prime Minister and his colleagues confessing, "We"ve over-regulated, overspent and overtaxed". But words are not enough. The commitment to deregulate must be matched in action. Small business people in Britain and throughout Europe are crying out at the cost of the regulation and nannying interference that they now face in running their businesses. In the spirit of the Lisbon summit, can the noble Baroness undertake to review all those regulations imposed on small businesses in the United Kingdom since the signing of the Social Chapter by the Prime Minister?
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We welcome the commitment in principle in Lisbon to deregulate in the fields of telecommunications and utilities. But how does that sit with the Government's plans to introduce more regulation on these industries in the current parliamentary Session? Will the Lisbon discussions affect that legislation in any way? And, when will all this happen? Were target dates set for the liberalisation of markets in gas, electricity, water, postal services and transport? If so, what were those target dates? Will the Utilities Bill currently before Parliament be dropped?
Why did the Prime Minister commit himself to the so-called "pending tax package"—tax harmonisation by another name?
On research, where again there are worthy aspirations, most of them are best met not by states, but by the private sector. What is meant by giving the Commission powers to "build a European Research Area", including mechanisms for monitoring research and using tax policies to promote research? I wonder whether this represents an extension of Community taxation competence. It sounds as though it does.
We read in paragraph 21 of the conclusions that the Ministers want to,
"eliminate barriers to investment in pension funds".
How does that sit with the Chancellor of the Exchequer's smash-and-grab raid on pensions investments with his massive increase in taxation of dividends?
We welcome the commitment to lower taxes on low-paid workers. But does not the American model point to the urgent need to lower taxes in the European economies overall? Therefore, will the Government set a lower tax target for the UK? Does not this commitment at Lisbon suggest that the huge increase in the tax burden since May 1997—now of course admitted by the Chancellor of the Exchequer—is taking Britain in precisely the opposite direction to what is needed?
We welcome another Lisbon aspiration, which is to facilitate cross-border investment. We need and support such a free market. But when will the Government wake up to the fact that unless sensible action is taken this could represent a threat as well as an opportunity to our most vital national interests in the City of London? Will they reconsider their decision in the Budget not to reduce or eliminate stamp duty on transactions in shares, given the fact that UK rates are now becoming increasingly uncompetitive in Europe? We do not want to wake up to a world in which business drains away from the London market because of the determination of the Chancellor to cling to stamp duty.
As usual, a number of initiatives were suggested at Lisbon. Perhaps the noble Baroness will indicate to us how she believes they will be paid for. Will any addition be requested to current EU funds?
Perhaps I may turn briefly to foreign affairs. We welcome what is said about securing the stability of south-eastern Europe. But when do the Government expect navigation on the Danube to be opened, as called for in paragraph 51? What part will the

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UK Government play in this? Do the Government envisage any further burdens falling on our magnificent servicemen and women in the Balkans?
Finally, the most absurd part of the summit was the body language of the Prime Minister when sitting next to the Chancellor of Austria. For how long do he and his EU partners intend to go on with the futile boycott of the democratically elected government of Austria? Will he still be boycotting Austria while congratulating Mr Putin, who has presided over a catalogue of human rights abuses in Chechnya, or feting President Jiang Zemin, who has done the same in Tibet? Was not the "musical chairs" in Lisbon another example of the frankly rather adolescent Blair doctrine on human rights: hector the weak, but lick the boots of the strong? Is this now the policy of the British Government?
What is needed in Europe following Lisbon is not what we were presented with—a further addition to the mountain of Euro-rhetoric—but a radical shift of direction, to lower tax, less regulation and more open competition. There can be no sense of a sea change in European economic thinking until we see less interference from Europe in the nooks and crannies of business and our private lives.
3.59 p.m.
Lord Rodgers of Quarry Bank: My Lords, I thank the noble Baroness the Leader of the House for repeating the Prime Minister's Statement. Despite some discussion of Kosovo and of Russia, the Lisbon summit has been given the convenient title of "the Internet summit". That is what I shall address my remarks to.
As the House will recall, the whole question of the preliminary paper for the Lisbon summit was discussed by the Select Committee on the European Union, which reported to the House in its sixth report. If I were to summarise the tone of that report, I would say that it was a healthy scepticism about what the summit might achieve. It referred to the uncertainty of the underlying rationale of the special council and to the danger that it would be long on objectives but short on the means to achieve them. That was very much the mood when, on the initiative of my noble friend Lord Wallace of Saltaire in tabling an Unstarred Question on 15th March, the House debated the Lisbon summit. In reply to that debate the noble Lord, Lord Sainsbury, said:
"This summit is ultimately about making Europe the best place in the world to do business".— [0fficia/ Report, 15/3/2000; col. 1674.]
That was a very good summary and we should attempt to judge the achievements of Lisbon against that criterion. I prefer to use the word "criterion" because I am still not quite sure what a "benchmark" is. Indeed, the verb "to benchmark" finds no place in the Larger Oxford English Dictionary, but I take it to mean "to measure against objectives". In a sense, that will be the test of Lisbon: whether, given the aspirations of Lisbon—that is what they mainly were—we will be able to measure achievement
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positively against what was discussed and agreed last weekend. As a result of Lisbon, will Europe be the best place in the world to do business?
Put like that, on the basis of the communiqué itself, the answer is plainly "no". I do not think that the Prime Minister or the Leader of the House would claim that Lisbon has solved the problem of how to make Europe the best place in the world for business. The most it has done is to take some steps in that direction. The achievement will depend on a persistent will on the part of the Union itself and its member countries over a long period. Very many decisions will be required—most of them not by governments and most of them not yet taken—if we are to achieve the aspirations of Lisbon.
On my part, I have divided thoughts: welcoming what was achieved but perhaps suspending judgment on whether history will show that it was mainly rhetoric or there was real substance behind it. Certainly, in historical terms, it is too soon to sustain the Prime Minister's main claim that it is a turning point. It may be. It could be a turning point for the better, but we cannot even say that for the moment.
The emphasis in the Statement is on modernisation and liberalisation. Those are the fashionable "buzz words" but they are not the whole language of politics.
I have two principal mainstream reservations about the Statement. First, I cannot share the passionate belief in markets solving all problems. Liberalisation is not all good. For example, would it get rid of poverty; and what would be the cost in dislocation and personal security? That is what we have to set against the advantages of liberalisation, although they can be recognised. Secondly, I found no reference in the communique to the danger that Europe may become a rich island in a poor world. If it is successful, if the aspirations of Lisbon are fulfilled, we shall be very rich indeed. We shall be growing at 3 per cent per annum. We shall be a competitor to the United States. But where does that leave the rest of the world? Will the rich be getting richer and will the poor be getting poorer? If that were to be the case, it would be right to have reservations on whether Lisbon has been a turning point or at least a turning point in the right direction.
Although we broadly welcome the Lisbon communiqué and congratulate the Prime Minister both on writing the Lisbon agenda and the communiqué in Downing Street—that is precisely what I think happened—I hope that there will be no attempt to lecture other European Union countries on the way we would want them to run their own economies. Even for those of us who are strong Europeans, that is further than any European Union communique should go. Perhaps it would be a good time to say again that if Britain is to play its full part I hope that the strong, clear leadership that was the theme of the Prime Minister's own statement about his achievement will soon lead to Britain's participation in the single European currency.
The noble Baroness will be very glad to know that I have only one question on the Statement. Although there was no reference to it in the communiqué,will she

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say whether there was any discussion of the single currency—if not in the Council itself then in the margins—and whether the Government have moved any further forward to taking a more positive view on this issue, which is central to the part that Britain will play in the Union in the years ahead?
4.6 p.m.
Baroness Jay of Paddington: My Lords, I am grateful to both noble Lords who have, I think it would be fair to say, broadly welcomed the Statement. I am glad that both noble Lords acknowledged that the Statement was the result of the positive leadership role played by the United Kingdom Government on the agenda. I remind the noble Lord, Lord Rodgers, of the scope of the agenda which, I am sure the Government would acknowledge, did not include all of the global picture which he rightly identified as being of relevance to the Union. But, as the title or "theme", if one wants to so describe it, of the particular meeting was employment, economic reform and social cohesion within the Union, perhaps that broader global context, although it would be relevant to discuss it in another forum, was not the main subject of the agenda for today.
The noble LOrd, Lord Rodgers, also said that many of the decisions and items for discussion within the context of the Statement and the agenda at Lisbon were not those to be taken necessarily by government but were in a sense more relevant to the private market place. But he is right in saying that the underlying theme of the summit, at least from the UK Government's perspective, was to ensure that the European Union is the best place to do business. That was particularly relevant to the e-commerce agenda and all of those issues that flow from that.
Both noble Lords were somewhat sceptical about the precise points that had been agreed by the summit and any form of action that had been set out on a specific timetable. It is right to say that in the conclusions and in the Statement there is indeed a new emphasis both on deadlines and specific objectives. For example, it has been agreed that a fully integrated and liberalised telecommunications market should take place before 2001. The charter for small firms, which is particularly relevant to the new economy, is to be agreed by June of this year. A financial services action is to be implemented by the year 2005. There is to be procurement on-line by 2003. There is to be a Community-wide patents agreement by 2001 and teachers are to be skilled in the Internet and multimedia resources by 2002. Those are all specific objectives with specific timetables which do not stand up to the criticism that the Statement or the conclusions of the summit were related only to rhetorical ambition rather than a specific programme.
The noble Lord, Lord Strathclyde, asked whether what had been agreed would make any difference to the Government's position on tax in the European Union. I am sure the noble Lord is aware that Her Majesty's Government have long made it clear that we will not sign up to EU tax measures which bring any form of tax regulation under the QMV arrangements
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or any that are harmful to the City. Those positions were protected at Lisbon and the conclusions demonstrate that.
The noble Lord, Lord Strathclyde, mentioned Austria and asked whether what was said was simply symbolic. As the noble Lord will be aware, the UK Government and their European partners have said clearly that the Austrian Government must be judged by their record in government. It is still too soon to draw any conclusions. We shall continue to monitor developments and implement the measures agreed, and see what comes out of that in the long run.
Overall, it is true that the constructive leadership given by both the United Kingdom and Spain—the noble Lord, Lord Strathclyde, rightly drew attention to the role that the Spanish Government had played—and by the Portuguese presidency, together with the very good preparation achieved by a large number of bilateral contacts and statements by various European partners before Lisbon, have produced this very practical outcome. I challenge both Lords that this is a sea change. As a result of Lisbon we have seen riot only the specific set of goals and programmes for change that I have listed, but also the important achievement of a different approach to the liberalisation of certain important matters. I have already mentioned the telecommunications and utilities issue. Maintaining common issues of social justice has also been important in the bilateral discussions. Noble Lords will not be surprised to hear me refer to my portfolio as Minister for Women. I am particularly pleased, for example, that the conclusions contain references to an improvement in equality of opportunity and improvements in the numbers of jobs for women within the European Union; they contain also a specific reference to childcare.
4.10 p.m.
Lord Tomlinson: My Lords, I should like to ask my noble friend two questions. First, perhaps I may rebut slightly the scepticism expressed by the noble Lord, Lord Rodgers, in regard to the Select Committee report. My noble friend will be aware that the report was produced only on the basis of the presidency paper, and that subsequent to the presidency paper there were seven further Commission papers, three Council papers and four others which substantially improved input to the European summit and made it more focused and much clearer, especially in regard to macro-economic objectives.
One point that is lacking in both the Statement and in the presidency conclusions is any interface between the decisions at Lisbon and the future enlargement of the European Union. If this Lisbon Statement is to produce real actions—as I believe it should and can—does it not somewhat alter the goal-posts of the acquis communautaire for those countries seeking to join the European Union? Is it not therefore necessary for the Government to address at some future stage, with ministerial colleagues from the rest of the European Union, the question of what support there will be for the applicant countries aspiring to join the European Union, in order that many of the high objectives

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agreed at Lisbon can be partly implemented in those countries so that they are not further behind us when enlargement takes place?
Baroness Jay of Paddington: My Lords, my noble friend raises an important question. It is right that the matter of the IGC should be seen along the lines developed at Lisbon. My noble friend makes more specific the general point made by the noble Lord, Lord Rodgers, about seeing the conclusions of the Lisbon summit in a broader context. The broad context of the IGC process and the applicant countries is the more precise and immediate one.
Clearly the objectives of the discussions and the proposals at Lisbon must not, as it were, take existing members of the European Union so far out in front in such matters as e-commerce arrangements that it becomes impossible for other countries to come alongside them in terms of Community regulations and understandings. My noble friend is right on that point. I am sure that that matter will be taken under the umbrella of the IGC as discussions progress. That process is only just beginning.
Lord Howell of Guildford: My Lords, can the noble Baroness help me to solve a puzzle? First, if Lisbon really is a turning-point, leading Europe in new directions of flexibility and liberalisation, why on earth was there no review of the Working Time Directive or the provisions of the Social Chapter—which everyone recognises have been a major force of paralysis in European reform?
Secondly, did it occur to Ministers assembling at Lisbon that the major explosion in recent years in e-commerce and Internet enterprise has come about in areas that are so far removed from government that they have had nothing to do with government? I refer, for instance, to enterprises in Silicon Valley and Bangalore which have prospered almost despite government, and which are in great fear of the worst slow-down on these developments—namely, too much regulation. Was that idea in the minds of leaders at Lisbon? If so, might it not have been wise for them to demonstrate a little more candidly that they understood that the e-commerce revolution lies outside the realms of government control?
Baroness Jay of Paddington: My Lords, I made it clear in my initial response to the noble Lord, Lord Rodgers, that it was understood—possibly not as explicitly as the noble Lord might have liked—that many of the matters discussed at Lisbon were indeed the prerogative of the private markets and of private enterprise. I believe that the noble Lord will agree that there are many ways in which governments, acting collectively or individually, can support much of the new investment and activity needed to stimulate, for example, small business investment in e-commerce. That was precisely the direction that was intended from the point of view of the specific arrangements made.
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In regard to directives under the Social Chapter, I am afraid that I disagree with the noble Lord. For example, I should have thought that the introduction of the minimum wage and the discussions now being negotiated about the part-time working directive were achieving precisely what the Prime Minister described in his Statement; namely, an improvement in the economic direction of Europe for the new economy while at the same time retaining the appropriate attention to social justice.
Lord Harrison: My Lords, will my noble friend agree that the Lisbon Council has been big for small businesses— not only because of the 1 billion euros provided for small businesses through the EIB but also because of the European charter for small businesses? Will she take this opportunity to repudiate the suggestion of the noble Lord, Lord Strathclyde, that the Government are trying to snarl up the single market for small businesses? Indeed, my noble friend mentioned the minimum wage. It is the subject of a report today indicating that British businesses have demonstrated an enormous welcome for the minimum wage and wish to see the amount raised. Finally, does my noble friend agree that there is still much work to be done to complete the single European market—the inspiration of the noble Lord, Lord Cockfield—which will be the best solution and opportunity for British businesses and for jobs and prosperity?
Baroness Jay of Paddington: My Lords, I agree with my noble friend. In replying to his specific point, it may be helpful if I reply to a point made by the noble Lord, Lord Strathclyde, which I did not do in replying to his general remarks. The noble Lord asked whether the proposals would cost a great deal of money. That is not the case. The conclusions make it clear that achieving the strategic and specific goals that I have mentioned will depend on mobilising resources available on the markets. I emphasis again that this is predominantly a matter for the private sector. Naturally, the UK Government and their partners hope that, where appropriate, public/private partnerships can also he utilised.
Lord Chalfont: My Lords, perhaps the noble Baroness will allow me to return momentarily to the question of Austria. In his interesting intervention, the noble Lord, Lord Rodgers of Quarry Bank, said that he hoped we should not get into the habit of interfering in the internal economic arrangements of other countries. I should like to add that I hope we shall not interfere too much in the internal political arrangements of other countries.
In reply to the noble Lord, Lord Strathclyde, the noble Baroness said that we would keep an eye on the behaviour of the Austrian Government to see how well they did. Is that not the same as saying that the Austrian Government are assumed to be guilty until they have proved themselves innocent? If so, is that the right way to treat a sovereign government? Perhaps I may repeat the question put by the noble Lord, Lord Strathclyde: how long is this period of probation to

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last? Do we wait until the Austrian people change their government? What are the criteria? For how long is Austria to be cast into the outer darkness because of a democratic decision taken by its own people?
Baroness Jay of Paddington: My Lords, I hesitate to argue with the noble Lord on questions of international law or relative constitutionality. However, I believe that a distinction should be drawn between the internal democratic processes of a member government of the European Union, as the noble Lord suggests, and the requirement that member governments fulfil their obligations along the lines of what may be described as the values to which the European Union in general has collectively agreed. The noble Lord asks me how long the process will take. All I can do is repeat what I said in answer to the noble Lord, Lord Strathclyde. The view of our European Union partners is that sufficient time has not elapsed to ensure that there is a consistent commitment to European Union values by the new Austrian Government, and that is something that they will wish to continue to monitor.
Lord Blaker: My Lords, paragraph 50 of the Council's conclusions state:
"The European Union…will … continue to support the democratic opposition [in Serbia], but will also develop a comprehensive dialogue with civil society [in that country]".
In view of the continued presence of Mr Milosevic, how is that support being given, and how will that dialogue be developed?
Baroness Jay of Paddington: My Lords, as I believe was fairly clear from the Statement, there is some disquiet within the European Union about the need for,
"a more coherent and action-oriented strategy",
to quote the conclusions dealing with the Balkans. That means that there are ways to achieve that particular form of dialogue other than those agreed under the Stability Pact and other bilateral interventions by individual European countries. I do not have details of the specific methods of engagement with the Serbian Government. I can only express the general understanding about trying to extend the existing channels with the Serbian Government. Obviously, there is a belief within the European Council that something more pro-active must be done to establish a better situation there. If I receive any more specific information about the particular channels with the Serbian Government, I shall write to the noble Lord.
Lord Lea of Crondall: My Lords, I declare an interest as a member of the EU high level group on benchmarking. l t may assist if I explain what that is, given that the noble Lord, Lord Rodgers of Quarry Bank, said that he had to look it up in a dictionary. This was an initiative taken more than a year ago by the European employers' organisation UNICE as a new half-way house between over-regulation and simply letting free markets operate. It has been widely
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welcomed by the Council as a means of introducing best practice in Europe. Does my noble friend agree that in Lisbon a new philosophy in regard to both the public and private sectors has been developed so that we can emulate best practice in different parts of Europe to try to improve the performance and competitiveness of Europe's economy? In that connection, does my noble friend also agree that that initiative has strong support? For example, the leader of my group was the chairman of Ericsson in Sweden; another member was the director-general of the organisation of small businesses in Germany. This is not a concept that is opposed by small businesses. Does my noble friend agree that the Social Chapter is compatible with that, in that minimum standards are one of the results of benchmarking? For example, one finds minimum standards in connection with the percentage of women in the labour force. Requirements in relation to such matters as the protection of those in part-time work and fixed-term contracts pro rata with men are exactly the concepts which emerge from this kind of analysis.
Lord Pearson of Rannoch: My Lords, I hesitate to interrupt the noble Lord, but perhaps I may remind him that we are here to ask questions, not to make speeches.
Baroness Jay of Paddington: My Lords, I believe that my noble friend did ask a general question. I hope that he also helped the noble Lord, Lord Rodgers, in understanding the concept of benchmarking. I am inclined to sympathise with the noble Lord, Lord Rodgers, about the infelicity of the verb "to benchmark". However, benchmarking as a concept is probably well understood. I agree with my noble friend that the process of assessing best practice is very well understood in the public and private sectors in this country. I was grateful for my noble friend's authoritative experience of the engagement by both small and large EU businesses in this subject. That again demonstrates, particularly to noble Lords opposite, that this is something with which the free market, the private sector and business in Europe agree.
Lord Dahrendorf: My Lords, while I appreciate the Statement repeated by the Leader of the House and the language of the Lisbon Summit, there is one small technical question the answer to which interests me, although perhaps it is the subject for another debate. It seems to me that this is the first time that the objective of raising the employment rate from 61 per cent to nearly 70 per cent has played an important part in Statements of this kind. Why has this particular benchmark entered the debate, especially in view of the fact that one of the main instruments to fight unemployment in many European countries is the extension of primary education and early retirement?
Baroness Jay of Paddington: My Lords. I should not like to challenge the noble Lord on his statement that this is the first time the matter has been mentioned in this form. The noble Lord is probably right; I do not know otherwise. The point about the relative rates of

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employment was simply to put into context the overall attempt to increase the number of jobs, particularly those in the new knowledge economy. The noble Lord is right to mention the relative value of what we in this country call "lifelong learning". That is specifically mentioned in the conclusions as something of very great importance to the successful implementation of much of the policy. I believe that what is conveyed by the Statement is that employment has risen significantly in the various member states of the Union, and therefore it is perfectly legitimate to attempt to aspire to (to use a fashionable phrase) a percentage rise in employment to achieve the 20 million extra jobs, to which the Prime Minister referred. To put on my hat as Minister for Women, one of the UK's economic predictions is that probably 1.7 million new jobs will be created in this field in the next decade, of which 1.3 million will be for women. Therefore, it appears that the overall percentage is an aspiration that is worth setting down.
Lord Pearson of Rannoch: My Lords, perhaps I may press the Leader of the House on two of the answers that she has given, one to my noble friend Lord Strathclyde and the other to my noble friend Lord Howell. I thought I heard the noble Baroness say in reply to my noble friend Lord Strathclyde that the Government would not sign up to any tax harmonisation measures which they did not like. Presumably, the Government have signed these conclusions of the presidency. In the fourth part of paragraph 21 one sees that they have agreed,
"to conclude, in line with the Helsinki European Council conclusions, the pending tax package".
In paragraph 22 one also sees that they have signed up to the statement:
"The opportunity provided by growth must be used to pursue fiscal consolidation more actively".
As regards red tape, I heard the answer the Minister gave my noble friend Lord Howell. However, in view of what is said in paragraph 14 of the presidency conclusions, can the noble Baroness tell the House unequivocally whether the Council agreed to withdraw any of the acquis communautaire or whether they remain sacrosanct? If so, how on earth can one possibly hope to meet the aims of paragraph 14?
Finally, I refer to another item which is not included in the somewhat rosy Statement of the Prime Minister. These Statements always appear to be the triumph of bureaucratic hope over what will certainly turn out to be the bitter experience dictated by the world market. I note in paragraph 21—perhaps the Minister can confirm this—that the Government have agreed,
"to make rapid progress on the long-standing proposals on takeover bids".
How can that be good for the British economy?
Baroness Jay of Paddington: My Lords, I hope that the noble Lord did not mishear me or that I did not mis-speak. In relation to the tax issue, I thought that I said that the Government have made it clear over a long period that those matters of tax relating to our
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own tax situation will not be subject to qualified majority voting. If I said something different, I apologise; that is what I meant.
Tax was not explicitly discussed at Lisbon. The noble Lord is right to refer back to the conclusions at Helsinki. As he will know, discussions on the broad package are under way with our European partners.
On the paragraph relating to the acquis—the noble Lord referred, I think, to paragraph 14—it relates specifically to small and medium-sized enterprises. I do not have the information about whether there has been specific change to the acquis on that. I doubt it very much or it would have been made explicit. I can only refer the noble Lord back to the point I made to the noble Lord who asked me whether it was possible to align that with the existing acquis and IGC process. It is a live issue which would have to be set under that umbrella.
The noble Lord raised the tight timetable on the financial services action plan.
Lord Pearson of Rannoch: My Lords, I refer to the takeover directive.
Baroness Jay of Paddington: My Lords, I am sorry; I have misunderstood.
Lord Pearson of Rannoch: My Lords, the takeover directive appears to be being pushed ahead with Prime Ministerial support.
Baroness Jay of Paddington: My Lords, in that case I am not sure to which paragraph the noble Lord refers.
Lord Pearson of Rannoch: My Lords, paragraph 21.
Baroness Jay of Paddington: My Lords, I was emphasising the previous part of paragraph 21.I apologise to the noble Lord.
The noble Lord is right to say that the issue will have to be considered in the broader context of the tax package. It was not specifically addressed at Lisbon. I refer the noble Lord back to the Helsinki arrangements which establish the package for tax reform.

Financial Services and Markets Bill
4.33 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee. — (Lord McIntosh of Haringey.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE DEPUTY CHAIRMAN OF COMMITTEES (Lord Murton of Lindisfarne) in the Chair.]

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Clause 129 [General rule-making power]:
Lord McIntosh of Haringeymoved Amendment No. 226D:
Page 60, line 6, after ("activities") insert ("or
(b) with respect to the carrying on by them of activities which are not regulated activities,").
The noble Lord said: In moving the amendment, I speak also to government Amendments Nos. 230C, 230G, and 277 B; and refer to opposition Amendment No. 231XA.
We begin today's Committee with a debate on Part X of the Bill—Rules and Guidance. It is one of the most vital, if technical, parts of the Bill. Rules are a key instrument by which the authority will give effect at working level to its statutory objectives and the principles to which it must have regard. The role of guidance is to provide information and advice to the regulated community—with respect to rules but also on more general issues.
The first clause of Part X is Clause 129, the authority's general rule-making power. This is a key clause in the new regime. It confers a power on the authority to make rules applying to authorised persons in carrying on regulated activities. Clause 130 gives the FSA power to apply rules to authorised firms' non-regulated activities where it is necessary in order to avoid an adverse effect on the customers of the authorised business.
The effect of Amendment No. 226D and my intention to oppose the Question that Clause 130 stand part of the Bill will be to integrate the authority's power to make rules which affect non-regulated activities as part of its power to make general rules. Amendments Nos. 230C, 230G, and 277B delete references to non-regulated activities rules elsewhere in the Bill.
There are two main reasons for this change. First, it will bring much greater focus to the authority's remit to make non-regulated activity rules. I shall come back to that point in a moment. Secondly, although in many respects Clause 130 repeats what is in Clause 129, one point in which Clause 130 differs is that Clause 129 allows the FSA to make rules even when there is no relationship between the authorised person to whom the rules will apply and the persons, that is those consumers dealing with persons providing regulated activities, whose interests are protected by the rules. This is necessary to cover situations where rules are necessary to control systemic risk. The absence of such a provision in respect of non-regulated activities could lead to doubt about when a rule applies.
Returning to the first point, the authority will be able to make rules under the integrated power—those were Clauses 129 and 130—only if it appears to be necessary or expedient for the purpose of protecting the interests of cansumers. It is worth emphasising that the people whose interests are being protected are limited to consumers dealing with persons who are carrying on regulated activities; and that the protection is focused on protection in relation to the carrying on of those activities. It is clear as a matter of common sense that what a person does otherwise than
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in connection with regulated activities is capable of having an effect on his regulated activities. But that is not a licence for the authority to interfere with the running of a person's non-regulated activities.
This Bill is about regulated activities. But there is an important qualification to this. Where there is a risk that a person's non-regulated activities could damage the interests of his regulated activity customers in relation to the carrying on of regulated activities then that is a matter for the Bill. It is right that the rule-making powers of the authority should extend to this type of situation. This is the effect of our amendments. They make it clear that the authority's powers are limited to this situation That is what our Amendment No. 229 (which we have already debated) says. It is worth remembering that we are talking here about a power.
It is at the stage when the authority makes its rules that it must consider whether there are situations where non-regulated activities could damage the interests of a consumer of a regulated activity. Even if it can identify such situations, the authority must also reach the view that a rule it made could provide protection for such a consumer and that it is necessary or expedient to make that rule, bearing in mind the authority's general duties as set out in Clause 2.
As a result of the amendments, Clause 129(1) will allow the authority to make rules to protect the interests of consumers. By bringing in non-regulated activity rules into Clause 129, it will be clear that the purpose of such rules is also to protect the interests of consumers; and by making this small change all the provisions of Clause 130 can be removed.
I turn to Amendment No. 231XA. Clause 141 allows an authorised person to be sued for damages if a private person—
The Earl of Onslow: I tried very hard to understand what the Minister said. I found it immensely difficult. I shall be surprised if I am alone. Is it possible for the noble Lord to sum up what he said during the past five minutes—I see he grins with horror at the thought—in something which is called the Queen's English? I listened very hard but found it incredibly difficult to understand. I do not think that I am the most stupid Member of your Lordships' House.
Lord McIntosh of Haringey: First, this part of the Bill is about the Financial Services Authority making rules. Secondly, Clause 129 says that it makes rules about authorised persons, who are the people covered by the Bill in activities which are regulated by the Bill. Thirdly, Clause 130 states that there might be occasions when the authority must regulate activities carried out by authorised persons which are not regulated activities. Therefore, the amendments take out Clause 130 and bring those provisions into Clause 129. However, there is one exception to that. Fourthly, there must be a restriction on which unregulated activities are covered by the rule-making power.
The Earl of Onslow: That is terrific. Why the hell did he not say it before? That told us exactly what we wanted to know. I stand gobsmacked in admiration for what the noble Lord said. That explanation was very good, but the other one was very difficult to understand. I thank him.
Lord McIntosh of Haringey: It might be difficult for Members of the Committee to understand and it was difficult for me to understand. I ran a management practice and having been in business all my life I used to say to people who wrote reports for me, "Tell me what that means". After they had told me what it meant, I would say, "Well, why didn't you write that?". Unfortunately, legislation and even Ministers' speeches about legislation are different. I have to cover the waterfront and go into more detail. It was true of the noble Earl's government, too.
The Earl of Onslow: Of that, there is no doubt whatever. I was not making a party political point; I was making a general point. I am immensely impressed by the Minister's explanation.
Lord McIntosh of Haringey: And, by the way, it is what the noble Lord, Lord Saatchi, intends to vote against!
I turn to Amendment No. 231XA. Clause 141, which has nothing to do with Clauses 129 or 130, allows an authorised person to be sued for damages if a private person suffers loss as a result of the contravention of a rule. The effect of Amendment No. 231XA would be to prevent such actions for damages in respect of non-regulated activity rules.
As I explained in putting the case for the Government's amendments, we are proposing to remove the clause which confers the power to make non-regulated activity rules as such. That was the second point I made. In any event, we believe that the FSA's power to make rules relating to non-regulated activities is narrower than has often been supposed. We believe that under our new proposals it will be clear that the FSA will have a power to make rules only about non-regulated activities if it considers that it is necessary or expedient to do so in order to protect the consumers of regulated activities.
I believe that the same logic which results in the authority being given power to make rules in relation to non-regulated activities follows through to there being a right of action for breach of statutory duty in relation to contraventions of such rules. I keep looking towards the noble Earl, Lord Onslow, to make sure that he is still with me!
It is part of the necessary protection for consumers of regulated activities. The right of action for breach of statutory duty is of course only available to private persons. Perhaps I may give an example. Let us suppose that an authorised person who also carried on a non-regulated coin-dealing business were to operate an authorised collective investment
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scheme is a regulated activity and it is perfectly lawful to operate such a scheme as long as the operator is authorised.
However, it is not inconceivable that some rules might need to be applied to the coin dealing business—purely as a minimum—in order to make sure that the funds contributed by participants in the collective investment scheme—that is, the consumers of the regulated activity—are protected.
A rule might be necessary to require an independent valuation of any purchase for the scheme made using investors' funds which the scheme operator makes for his coin dealing business in order to avoid any conflict of interest he might otherwise have and to ensure that the scheme participants' interests are protected. It may be arguable that the rule would touch on the running of the non-regulated coin dealing business. However, it is clear that if he contravenes such a rule, and the coins are sold to the scheme at what turns out to be a disadvantageous price, there could be damage to the interests of the scheme participants. Are we together on this?
The Earl of Onslow: The noble Lord deserves great credit. I believe that I am with him on the pennies, yes.
Lord McIntosh of Haringey: That is why we believe that the FSA must have the power, exercisable only in such cases, to make rules which affect the carrying on of a non-regulated activity. It follows that if an authorised person were to breach such rules, a private person should be able to bring an action for breach of statutory duty in any case where he suffers loss or damage as a result of the rule breach. The two propositions go hand in hand.
I hope that the noble Lord will not press his amendment.
Lord Stewartby: I do not want to add to the Minister's already heavy burden, but could we have five Haringey bullet points at the beginning of each government amendment? That would make them a great deal easier to understand.
Lord McIntosh of Haringey: The risk of oversimplification is great. The case of Pepper v. Hart states that what Ministers say at the Dispatch Box when explaining Bills can sometimes be taken into account in a court of law. It is dangerous.
Lord Stewartby: I am not suggesting that he should dispense with the Treasury rhubarb, but we should all be helped by starting with such a punchy introduction.
4.45 p.m.
Lord Kingsland: My rather furtive expression exhibits my fear that when I subside my noble friend might rise again!
Our Amendment No. 231XA is an amendment to Clause 141. Under that clause, the contravention by an authorised person of the authority's rules is actionable at the suit of a private person who suffers loss as a

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result of the contravention. Members of the Committee are also aware that, in such circumstances, compliance with the FSA's guidance is not a defence to the statutory right to bring an action for damages. Compliance with guidance does not provide a safe harbour against proceedings under Clause 141(1).
Our amendment would add a caveat to the application of Clause 141(1) by adding to Clause 141(4) the words,
"or a non-regulated activity rule".
Non-regulated activity rules are referred to in Clause 130. They are rules made by the FSA applying to authorised persons with respect to the carrying on by them of non-regulated activities. Rules made under Clause 131 are non-regulated activity rules. The proposed amendment would mean that the statutory right to bring an action for damages would be precluded in the case of contraventions of such rules. It is submitted that that is reasonable in principle because the statutory right in Clause 141 should be limited to breaches of the rules which apply to the authorised person's regulated activities.
For those reasons, we object to the Government's Amendment No. 226D. Our amendment draws the distinction between regulated activity and non-regulated activity, as does the Bill as drafted. We do not believe that the right to damages should apply in cases involving breach of non-regulated activities. The effect of the Government's amendment is to do away with that distinction, which we believe should be kept.
Lord McIntosh of Haringey: I commend Amendment No. 226D to the Committee.
4.49 p.m.
On Question, Whether the said amendment (No. 22613) shall be agreed to?
Their Lordships divided: Contents, 130; Not-Contents, 71.

Division No. 1

CONTENTS

Addington, L.

Crawley, B.

Alli, L.

Dahrendorf, L.

Amos, B.

Darcy de Knayth, B.

Ampthill, L.

David, B.

Archer of Sandwell, L.

Davies of Coity, L.

Ashton of Upholland, B.

Davies of Oldham, L.

Avebury, L.

Dean of Thomton-le-Fylde, B

Bach, L.

Desai, L.

Barnett, L.

Dholakia, L.

Bassam of Brighton, L.

Dixon, L.

Bledisloe, V.

Dormand of Easington, L.

Bradshaw, L.

Dubs, L.

Bragg, L.

Elder, L.

Brooke of Alverthorpe, L.

Evans of Parkside, L.

Brookman, L.

Evans of Watford, L.

Bruce of Donington, L.

Falconer of Thoroton, L.

Burlison, L.

Falkland, V.

Carter, L, [Teller]

Farrington of Ribbleton, B.

Christopher, L.

Faulkner of Worcester, L.

Clarke of Hampstead, L.

Gale, B.

Clinton-Davis, L.

Gavron, L.

Craig of Radley, L.

Gladwin of Clee, L.

532

Goodhart, L.

Merlyn-Rees, L.

Goudie, B.

Milner of Leeds, L.

Gould of Potternewton, B.

Morris of Manchester, L.

Grabiner, L.

Murray of Epping Forest, L.

Gregson, L.

Newby, L.

Hardy of Wath, L.

Orme, L.

Harris of Greenwich, L.

Patel of Blackburn, L.

Harris of Haringey, L.

Peston, L.

Harrison, L.

Pitkeathley, B.

Haskel, L.

Prys-Davies, L.

Hayman, B.

Puttnam, L.

Hilton of Eggardon, B.

Ramsay of Cartvale, B.

Hollis of Heigham, B.

Rea, L.

Holme of Cheltenham, L.

Rendell of Babergh, B.

Howie of Troon, L.

Rodgers of Quarry Bank, L.

Hoyle, L.

Roll of Ipsden, L.

Hughes of Woodside, L.

St. John of Bletso, L.

Hunt of Kings Heath, L.

Sandberg, L.

Irvine of Lairg. L. (Lord Chancellor)

Sawyer, L.

Scotland of Asthal, B.

Islwyn, L.

Scrota, B.

Jay of Paddington, B. (Lord Privy Seal)

Sharman, L.

Sharp of Guildford, B.

Jeger, B.

Shepherd, L.

Jenkins of Hillhead, L.

Shore of Stepney, L.

Jenkins of Putney. L.

Simon, v.

Smith of Clifton, L.

Joffe, L.

Stoddart of Swindon, L.

Kennedy of The Shaws, B.

Stone of Blackheath, L.

Lea of Crondall, L.

Strabolgi, L.

Levy, L.

Symons of Vernham Dean, B.

Lipsey, L.

Thomas of Gresford, L.

Lockwood, B.

Thomas of Walliswood, B.

Lofthouse of Pontefract, L.

Thornton, B.

Longford, E.

Tomlinson, L.

Lovell-Davis, L.

Tordoff, L.

Macdonald of Tradeston, L.

Turner of Camden, B.

McIntosh of Haringey, L. [Teller]

Walker of Doncaster, L.

Warwick of Undercliffe, B.

McIntosh of Hudnall, B.

Weatherill, L.

MacKenzie of Culkein, L.

Whitaker, B.

Mackenzie of Framwellgate, L.

Whitty, L.

Maddock, B.

Wilkins, B.

Mallalieu, B.

Woolmer of Leeds, L.

Massey of Darwen, B.

Young of Old Scone, B.

NOT-CONTENTS

Blackwell, L.

Higgins, L.

Blatch, B.

Holderness, L.

Boardman, L.

Home, E.

Brabazon of Tara, L.

Hunt of Wirral, L.

Brigstocke, B.

Jenkin of Roding, L.

Campbell of Alloway, L.

Kingsland, L.

Campbell of Croy, L.

Lucas, L.

Carnegy of Lour, B.

Luke, L.

Clark of Kempston, L.

Lyell, L.

Cockfield, L.

McColl of Dulwich, L.

Colwyn, L.

McConnell, L.

Courtown, E.

Mayhew of Twysden, L.

Cox, B.

Miller of Hendon, B.

Dean of Harptree, L.

Monro of Langholm, L.

Denham, L.

Mowbray and Stourton, L.

Eccles of Moulton, B.

Murton of Lindisfarne, L.

Elles, B.

Northbrook, L. [Teller]

Elliott of Morpeth, L.

Northesk, E.

Elton, L.

O'Cathain, B.

Fookes, B.

Onslow, E.

Gardner of Parkes, B.

Oppenheim-Barnes, B.

Geddes, L.

Park of Monmouth, B.

Gilmour of Craigmillar, L.

Peyton of Yeovil, L.

Goschen, V.

Plummer of St. Marylebone, L

Gray of Contin, L.

Prior, L.

Hanham, B

Rawlings, B.

Hayhoe, L.

Renton, L.

Henley, L. [Teller]

Roberts of Conwy, L.

533

Rotherwick, L.

Shrewsbury, E.

Ryder of Wensum, L.

Stewartby, L.

Saatchi, L.

Swinfen, L.

Saltoun of Abernethy, Ly.

Trefgarne, L.

Seccombe, B.

Trumpington, B

Tugendhat, L.

Sharpies, B.

Vivian, L.

Shaw of Northstead, L.

Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.
4.58 p.m.
Lord McIntosh of Haringeymoved Amendment No. 227:
Page 60, line 8, leave out from ("of") to end of line 15 and insert ("consumers.").
On Question, amendment agreed to.
Baroness Turner of Camdenmoved Amendment No. 228:
Page 60, line 17, at end insert—
("( ) The Authority may make rules under this section to require authorised persons to advise and inform persons referred to in subsection (1) about matters arising during the course of their use of the services referred to in that subsection.").
The noble Baroness said: In moving this amendment, I assure Members of the Committee that it is not a technical amendment. The focus of the Personal Investment Authority with regard to consumer protection was on the selling of products and on ensuring that sellers knew their customers' needs and gave the best advice to meet those needs.
However, consumers' needs change. They may need advice and information at any time during the life of a product. Changes in consumers' needs may arise from changes in their circumstances. Consumers often need to cash in endowment policies early because they cannot afford to continue paying the premiums. There are several options for consumers, such as trading the policies, borrowing on the security of their value, or making them fully paid up. Those are often much more advantageous than simply cashing in the policies.
Consumers need to be informed about those options when they approach their life companies. Of course, some companies make a practice of advising clients in this regard. I am aware of that from my own experience some years ago when I sought to cash in a policy with my company (which was a mutual company). It advised me that I would probably be better off if I traded the policy. Not every company does that. If the client does not know, he may well lose out.
Some changes are caused by outside factors. Changes to assumptions about yields have meant that some endowment policies are not sufficient to pay off an interest-only mortgage; ISA mortgages are set up with the assumption that the investment will pay off the mortgage. If it is clear at some point that the investment will not be sufficient, consumers will need to be told early that that may be the case and what their options are. Sometimes changes in taxation will have an effect on products, and consumers will need to know about that.
534
The FSA should be able to make rules to require information and advice to be given in similar circumstances. Leaving it to the companies concerned may mean that consumers do not receive the information that they need at the right time.
I understand that the FSA believes that the Bill already allows it to make rules covering that, but that does not seem to me to be absolutely clear in the Bill. Therefore, I believe it necessary to have a provision on the face of the Bill which makes that absolutely clear. This may be extremely important to people at quite difficult times in their lives, when they need to have advice about the best options available. Therefore, I hope that the Government will be prepared to accept the amendment. I beg to move.
5 p.m.
Lord Kingsland: Our reaction to the noble Baroness's amendment is similar to the kind of reaction which the Minister has given to us on numerous occasions: we agree with it but we do not think it is necessary.
We think that because not only is the protection of consumers an objective contained in Clause 2(2)(c), but also in the way the objective is further elaborated in Clause 5(2)(c); almost the express terms of the noble Baroness's amendment are contained in the expression,
"the needs that consumers may have for advice and accurate information".
Moreover, under Clause 29, there does not seem to be any constraint on the scope of rules which can be made within the objectives of the Bill.
I do not wish the noble Baroness to be in any doubt about our commitment to the principles which underlie her amendment; but for all those reasons, we believe that it is otiose.
Lord McIntosh of Haringey: I do not believe that I have used the word "otiose" once throughout the whole proceedings in Committee. It is a lovely word; that is quite true.
My noble friend's amendment to Clause 129 proposes that the FSA should have power to make rules requiring authorised persons to advise and inform consumers about matters arising during the course of their use of the authorised person's services. She gave a very good example, which was also given in another place, of a requirement on an insurer to notify a surrendering endowment policyholder of the existence of the second-hand traded endowment market.
Stephen Timms, the Financial Secretary to the Treasury, explained then that the FSA would be able to make rules using its general rule-making power, although it was for the FSA to determine whether and how to use its powers, having regard to its general duties.
I am happy to confirm that it is still the Government's understanding that the FSA would be able to make rules to deal with this problem on the basis that they would apply to authorised persons with

535
respect to the carrying out of a regulated activity and would be for the purpose of protecting the interests of consumers. My noble friend cast doubt on that, but I really do believe that to be the case.
It is worth noting that such a rule could not have been made under the Financial Services Act 1986. Paragraph 4 Schedule 10 of that Act prevented conduct of business rules applying to a regulated insurance company, except in relation to the selling and advice of long-term policies or to the management of pension fund assets. That restriction has not been continued under this Bill and I hope that my noble friend will recognise that, in effect, we have brought her amendment into the scope of the Bill for the first time and that, therefore, she will not feel it necessary to press the amendment.
Baroness Turner of Camden: I thank my noble friend for his explanation in opposition to the amendment. It is obviously not my intention to seek to divide the Committee on I should like to think about what he said and to have a word with the people who have been advising me in this connection because it was our impression that without some wording of this kind on the face of the Bill, the FSA may very well conclude that it did not have authority to give advice in the circumstances which I have been suggesting.
However, in view of what the Minister said, I shall withdraw the amendment and consider what he said between now and Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 228A:
Page 60, line 24, leave out from ("rules") to ("may") in line 25.
The noble Lord said: In moving this amendment, I shall speak also to government Amendment No. 230ZA and speak in a friendly tone to opposition Amendment No. 230A because I believe that our thinking on these matters is very much at one.
Subsection (1) of Clause 131 allows the authority to make requirements relating to the financial resources of particular authorised persons. Subsection (2) allows it to direct a particular person to hold a specified amount of capital.
Amendment 230ZA deletes those subsections. The substantive change we are making here relates to the removal of Clause 131(2). Under that provision, the FSA would have been able to notify individual authorised persons as to the level of financial resources that they must maintain. Subsection (1) of Clause 131 was included only in order to provide the basis for the proposition in subsection (2). Subsection (2) needed to be stated expressly because the sort of individual notification for which it provides is not the type of provision one usually finds in rules—the general idea being that rules are legislative acts which apply to all authorised persons or specified classes of such persons.
We now intend that individual financial resources requirements for particular authorised persons will be made using the power to impose requirements in Clause 41 (in Part IV).
536
General provisions about financial resources will continue to be able to be made using the rule-making provisions of Clause 129. This will cover general rules about the nature of resources that a person must have. It will also allow general rules to be made which apply to all authorised persons, or specified groups of such persons, which set out formulae and so on in accordance with which the level of resources a person must have can be calculated. The power to make the rules will of course be subject to the requirements of Clause 129(1); namely, that they are necessary or expedient to protect the interests of consumers of regulated activities, a mantra which I have repeated far too many times.
We no longer think that there is any need to deal with these matters expressly in Clause 131 if subsection (2) is removed. As indicated, Clause 131(1) is there only so that subsection (2) could hang on it.
The important change that we are making here impacts directly on the rights of individual authorised persons. As indicated, individual financial resources requirements will be imposed under Part IV. Under that part, the authorised person will be able to refer to the tribunal any requirement that has been imposed on him which he thinks is unfair or disproportionate. Depending on the circumstances, he may be able to refer the matter to the tribunal before the requirement takes effect or after it has done so. It may be necessary in some cases for a requirement to take effect straight away, but in either case the authorised person may challenge the authority's decision. The FSA will also have to go through a number of procedural steps in accordance with Part IV when imposing requirements in relation to particular authorised persons.
That is a significant change from the existing provisions. Under the Bill as it stands at the moment a person has a right to challenge the FSA's decision as to the appropriate amount of financial resources only if he disobeys the requirement and the authority takes enforcement action against him. Under the proposed procedures in Part IV a person may comply with the requirement so as not to jeopardise his standing as an authorised person while at the same time questioning the appropriateness of the particular level of resources.
Amendment No. 228A follows changes already made to Schedule 6 which allow for consolidated supervision of groups. Considering the overall structure of a group is important in terms of ensuring proper supervision of members of the group who are authorised persons. The change that we propose simply recognises that in the rules which relate to authorised persons it may be necessary to impose requirements on the authorised person which are not artificially limited to the financial resources of the group. The bottom line is that it will be possible to make only rules which apply to authorised persons and only if they are necessary or expedient to protect the interests of consumers of regulated activities.

537
Opposition Amendment No. 230A would also have the effect of making financial resources rules subject to the procedures of Part IV. In the light of our Amendment No. 230ZA, I hope that the noble Lord will not press his amendment. I beg to move.
Lord Hunt of Wirral: Having heard the Minister's explanation I am still a little confused. From the way in which I understood what he said, I believe that deleting subsections (1) and (2) of Clause 131, which is the effect of the Minister's Amendment No. 230ZA—which, I must confess, I have only just seen; indeed, I have only just received his kind letter explaining the amendment—might well have a significant impact.
The PIA currently has discretion over certain aspects of the financial resources rules. The current wording of Clause 131 allows the Financial Services Authority a similar discretion. I understood that that was causing some disquiet within certain parts of the Government. I was therefore expecting to see some amendment to Clause 131(2)(a). That is why I am troubled by the conclusive deletion of both subsections (1) and (2).
As I understand it—perhaps the Minister can assist me—capital adequacy and expenditure-based requirements will remain the same. If Clause 131(2)(a) is removed, firms with limited financial reserves whose resources fall temporarily below the £10,000 capital adequacy limit could find themselves technically in breach. That is why hitherto the PIA has exercised discretion in that area in respect of, for example, subordinated loans and contingency liabilities. There could be other areas, but I have not had time to explore those further since I have seen the Government's amendments. I wonder whether I am right in my concern that the discretion hitherto exercised by the PIA will now be taken away from the FSA. If it is, that could have a significant impact across the financial services market in the sector to which I am referring.
Lord McIntosh of Haringey: I assure the noble Lord that there is no question of the discretionary power being taken away. It is simply being transferred to Part IV of the Bill instead of occurring here. Under Part IV the principal difference, as I said, is that it allows for an application to the tribunal to be made and for it to be made even before any rule takes effect. There is the additional complication of European Union directives and their definition of what resources are. Perhaps if the noble Lord and I are meeting tomorrow or on Wednesday, as I hope that we are, we may deal with the matter then rather than take up the time of the Committee.
Lord Hunt of Wirral: I am extremely grateful to the Minister for that explanation. All I should say in passing is that Part IV deals with applications which bring into effect the whole bureaucratic process involving payments by the applicant and a whole series of administrative arrangements. I was referring to the discretionary power of the PIA which could be exercised without an application. However, as the
538
Minister suggests, that is a matter on which I could perhaps reflect further in the light of his helpful comments.
Lord McIntosh of Haringey: If we were to meet, I could write a note at the meeting and send it to all noble Lords taking part in the Committee proceedings.
Lord Hunt of Wirral: I am grateful to the Minister.
Lord Kingsland: Having heard the Minister's explanation of his amendment, I can confidently say on behalf of the Opposition that it satisfies the problem which concerned us. In those circumstances, there will be no need for us to press our amendment.
On Question, amendment agreed to.
5.15 p.m.
Lord McIntosh of Haringeymoved Amendment No. 229:
Page 60, line 35, at end insert—
("(7) "Consumers" means persons—

(a) who use, have used, or are or may be contemplating using, any of the services provided by—

(i) authorised persons in carrying on regulated activities; or

(ii) persons acting as appointed representatives; or

(b) who have rights or interests which—

(i) are derived from, or are otherwise attributable to, or

(ii) may be adversely affected by,

the use of any such services by other persons.
(8) If an authorised person is carrying on a regulated activity in his capacity as a trustee, the persons who are, have been or may he beneficiaries of the trust are to be treated as persons who use, have used or are or may be contemplating using services provided by the authorised person in his carrying on of that activity.
(9) For the purposes of subsection (7) a person who deals with an authorised person in the course of the authorised person's carrying on of a regulated activity is to be treated as using services provided by the authorised person in carrying on those activities.").
The noble Lord said: I beg to move.
[Amendment No. 229A, as an amendment to Amendment No. 229, not moved.]
On Question, Amendment No. 229 agreed to.
Clause 129, as amended, agreed to.
Lord Joffemoved Amendment No. 230:
After Clause 129, insert the following new clause—
LIFE ASSURANCE BUSINESS RULES
(". The Authority shall make rules requiring an authorised person who has permission to carry on a regulated life assurance activity to consult and account to with-profits policyholders for—

(a) any appropriation of reserves or surplus assets to shareholders, and

(b) decisions on the application or investment of assets or reserves which could adversely affect the rights of such policyholders.").

539
The noble Lord said: I declare an interest in that my family and I are with-profit policyholders in proprietary life insurance companies. The purpose of the amendment is to help protect the interests of with-profit policyholders in proprietary life insurance companies. Policyholders, while notionally owning the majority of assets in many life insurance companies, are normally not represented, consulted or even informed when decisions which could affect their best interests are taken by the directors. That is because the boards of such companies are elected by and legally accountable to their shareholders but not to their policyholders.
However, shareholders' interests do not always coincide with those of policyholders. Where such conflicts arise, boards of directors tend to focus on the interests of the shareholders who elect them. That is an entirely unsatisfactory state of affairs, aggravated by the fact that decisions taken by the boards are generally taker in secret and without any prior consultation with policyholders. There is not even a mechanism by which policyholders can obtain information on issues which are of vital importance to them.
The system is a model of opaqueness and lack of transparency. I shall seek to illustrate that claim by reference to a number of decisions taken by the Prudential insurance company. In so doing, I am not suggesting that that company is behaving differently from other companies in a similar position, nor am I seeking to impugn personally any of its directors.
The Prudential, as a result of the mis-selling of personal pensions, was obliged to pay compensation in the amount of approximately £2 billion to policyholders who had been mis-sold pensions. In order to find the resources to pay the compensation, it decided to utilise for the purpose what is variously known as its orphan estate, inherited estate or surplus assets.
The orphan estate does not, as may be imagined, consist solely of assets arising from unclaimed policy proceeds but rather more from surplus reserves arising from a number of sources, including in most cases underpayment of bonuses to previous generations of policyholders.
It is by no means clear who owns the orphan estate but many, including a number of actuaries, believe that policyholders might have the most valid claim to some or all of it. In practice, the Prudential may have appropriated resources arguably belonging to policyholders to Day for losses which policyholders, if they had been consulted, which they were not, could well contend had nothing whatever to do with them and should have been entirely borne by the shareholders who, after all, had elected the directors but failed to control their salespeople. Indeed, the views of policyholders on that issue may well be influenced by the findings of the Treasury Select Committee in its 9th report in 1998, paragraph 32 of which reads,
"The shareholders, who benefit from the profitability of the company, have a responsibility and should hear a substantial share of the loss from pensions mis-selling".
540
On that matter we concur with the judgment of the Consumers' Association that placing responsibility on shareholders will encourage better management in future.
In making the decision to pay the compensation for mis-selling out of the orphan estate, which incidentally was approved by the Treasury, neither the Prudential board nor the Treasury consulted policyholders nor, apparently, even considered the question of accountability. After all, if £2 billion of a company's assets have been lost, somebody must be accountable. At the very minimum, policyholders whose money it may have been, or who may have been prejudiced by its loss, should have been informed of why the misselling was not prevented and who was responsible so that they could take any action they felt appropriate.
However, there is a further interesting twist. The Prudential's orphan estate, even allowing for the depletion of the £2 billion paid to policyholders who had been mis-sold, will still have within it a balance of approximately £5 billion. The board of the Prudential decided that it would like to reallocate the orphan estate.
It is by no means clear to policyholders what precisely is intended by the board or the reasons for their new-found interest in clarifying the position relating to the orphan estate. However, policyholders may well speculate that the purpose of the reallocation is more to do with enhancing shareholder value than benefiting policyholders. Does the Prudential intend to appropriate the whole of the orphan estate to shareholders, 10 per cent, or some intermediate figure? The policyholders certainly have no idea. The Prudential has been locked in negotiations with the Treasury for several years. Policyholders have been unable to extract any information on what the Prudential would like to do with the £5 billion, give or-take a couple of billion.
The response to all questions to the Prudential and the Treasury is that it is price-sensitive information for shareholders, but it apparently occurs to no one that it is vital information to policyholders who might want to block any appropriation they consider contrary to their interests.
It is also instructive to note that the Prudential, the United Kingdom's mightiest insurance company, appears to make little or no effort to communicate with its policyholders. Its annual reports are replete with references to maximising shareholder value, but I could find nothing in its recent reports about maximising policyholder value or, indeed, virtually any reference whatever to policyholders. Based solely on its annual reports, one could be forgiven for-concluding that policyholders might be an extinct species.
I am pleased to say that there is, however, potentially some good news for policyholders on at least one issue. In my discussions with the Prudential it emerged that at long last the industry is planning actively to address the communications issue through a new project called "Project Salter" headed by Sandy Leech, chief executive of Zenith Life and chair of the

541
Association of British Insurers. Although that initiative is to be welcomed, it is a voluntary code that is proposed. We all know, based on previous experience, that voluntary codes in the life assurance industry are disregarded by many of its members and that the standards which voluntary codes set tend to be watered down to the lowest common denominator in order to attract comprehensive industry support.
Nevertheless, I urge the Government strongly to support the Salter initiative, provided that it sets high standards, is universally agreed to by the industry, and meets its timetable of setting standards by June this year and implementation in the first half of next year.
I submit that the failure of companies to consult with, and account to, their policyholders is an untenable situation and that in the Bill, one of the objectives of which is the protection of consumers, steps should be taken to ensure that companies consult with and inform policyholders about issues which may affect their best interests.
In the draft regulations just published relating to stakeholder pensions, the Government have insisted on ring-fencing with-profits funds because of their opaqueness and have called for greater transparency. That is what the amendment also seeks to achieve for with-profits policyholders. The draft regulations also set standards for product design and communication with policyholders which could serve as a model for the Salter initiative and for the implementation of the resolution I propose.
I should also like to draw attention to the relevant precedent in relation to pension funds in which the rights of pensioners are protected through direct representation on pension trustee boards. The most effective protection afforded to policyholders would be for direct representation on the boards of life assurance companies, which I hope Government will soon require. However, I appreciate that to move such an amendment at this stage would be inappropriate. Instead, the amendment I propose should be seen as a first step towards protecting the rights of policyholders. I beg to move.
Lord Haskel: I spoke to this matter at Second Reading. The noble Lord, Lord Joffe, has put the case so well and in such detail that there is no need for me to cover the ground again. However, I indicate my support for his amendment.
Lord Jenkin of Roding: Perhaps I may offer a word or two, having spent some years as chairman of a mutual life assurance company. I listened with great interest to the noble Lord, Lord Joffe, who made a convincing case. In the case of a mutual company, the policyholders have all the power in their hands. We were a statutory company. The directors were elected by policyholders and only policyholders had votes at the annual meetings. We were under considerable restraints, both under our rules and general laws, to the extent to which the board could use the policyholders' money in, for instance, taking over another company. There had to be procedures before
542
a court with an assurance that the policyholders had been fully informed, were properly consulted, and had consented to the change.
If people want the benefits of a with-profits policy, they should go to a mutual company. Perhaps I may add that I now have nothing whatever to do with the company I chaired, nor have I been briefed by it. However, the problem faced by directors is what to do when the same policyholders learn that a bid has been made for their company. Policyholders want the money now. They put themselves into precisely the position described by the noble Lord, Lord Joffe, concerning the "Pru". I have always found that to be a disappointing trait in policyholders.
I had a short answer to questions I received in correspondence or those raised at an annual meeting. I would say, "You are in this for the long term. You have taken out a long-term life policy or pension policy in order to protect your family or yourselves in your old age. You cannot have it twice. If, when a company comes in and buys up the company, you take it as a payment, you are then a policyholder in a proprietary company and the amount of money you would have had when your policy matures will be reduced. You cannot have it twice".
I have a great deal of sympathy with the point made by the noble Lord, Lord Joffe. I do not know whether it is susceptible to rules. However, it seems to me that the mutual companies are fighting a losing battle. It has been the same as regards the building societies. A few have succeeded—the Nationwide remains where it is—but most have succumbed. Why is that? Because most of their members wanted money now rather than money in a few years' time. My faith in this form of saving in modern society has been somewhat undermined, notwithstanding that of course very large sums of money are invested regularly and entirely properly for the long term—until a bidder comes along and makes an offer of money now.
I believe this to be a real problem and I hope that, in the course of its general work of protecting consumers and giving out information, the Financial Services Authority will be able to indicate that those who take out life insurance and pension policies for the long term should almost always be advised to stick with them for the long term rather than to take a quick buck now.
5.30 p.m.
Lord Lipsey: I am aware that after such expert speeches, a few words from me may be perceived as possibly otiose. However, I believe that it is worth emphasising that the Committee will be grateful to the noble Lord, Lord Joffe, for raising this matter.
In this area we are looking at very big bucks. Some figures were published in The Sunday Times: £7.8 billion for the Prudential; £1.4 billion for Britannic Assurance; £3.8 billion for CGU; £2.1 billion for Legal & General and £2.1 billion for AXA. That total would just about fund the defence budget for a year. These are very large sums. Surely in principle it is intolerable that such sums should be

543
dealt with by secret deals made in the back room, free from the light of publicity which would allow all those with an interest to express their opinion. No doubt the Minister will address whether the Bill deals with this question.
While I do not necessarily press this particular amendment, I hope that in the course of our debate this afternoon we shall have at least forced the issue out into the open. If we ensure that the matter is dealt with, we shall have done a service.
Lord Blackwell: While I understand the sentiments that lie behind this amendment, I have grave doubts about its practicality. If directors are conducting a business in the interests of their shareholders, the FSA has the right and obligation to put controls around the use of reserves so as to protect policyholders. However, to impose an obligation to consult with-profit policyholders on the use of those funds seems to me to present a complication in terms of who the directors are supposed to be serving and what would be the rules and appropriateness of taking decisions on the use of those reserves.
I believe that it would be cleaner if policyholders who have taken the decision that they want to invest their money in with-profits company then left it to the directors of that company to run the business so that it delivers returns in the long run that continue to attract new policyholders, and for the FSA to establish rules to ensure that policyholders are protected, rather than confusing the issue by imposing a duty of consultation. I can see that situation ending in a great deal of confusion and added bureaucracy on how decisions are taken.
Lord Grabiner: I should disclose a professional interest in some of the questions that have been raised by this proposed amendment. Having said that, I wish to comment on the drafting of the amendment rather than on its underlying merit. Perhaps I may say only that I certainly agree that the noble Lord, Lord Joffe, has identified an area of real concern here.
So far as subsection (a) is concerned, on the face of it, it is confined to the need to make rules requiring an authorised person to consult in relation to the,
"appropriation of reserves or surplus assets to shareholders".
The example given by the noble Lord in his opening remarks concerned the activities of the Prudential, in particular the payment of victims of mis-selling. Subsection (a) would not help because the victims of mis-selling are generally not shareholders—they may be, but that would only be by chance. In that regard, the drafting is not adequate. I can think of one or two other examples, such as the use of such moneys for the payment of windfall tax. It may be that we have not yet seen the end of windfall tax. If we have not, this would obviously provide a way of meeting those liabilities. Furthermore—dare I say—there is also the possibility of such moneys being used for the purpose of paying directors' bonuses. However, I had better not say anything more about that. However, in subsection (a), the use of the word "shareholders" is not a satisfactory piece of drafting.
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As regards subsection (b), I should like to home in on the word, "rights". My concern here is that the expression, "rights of such policyholders" is simply too vague and uncertain for the following reasons. First, there is no statutory definition of the expression, "reasonable expectations" in the context of a discussion about the reasonable expectations of policyholders. I believe that the only place where an attempted definition can be found is in the context of the obligations cast on a scheme actuary when he comes to advise the trustees; otherwise, one is not told what that expression means. It obviously includes statements that may have been made at the point of sale, but it could include all kinds of other things as well. Indeed, in a sense it is a highly subjective point, because one policyholder's expectation may bear little or no relation to that of another. That is one area of uncertainty.
The second area of uncertainty that I see is that, if these are rights as defined in subsection (b), I suggest that it will almost certainly be the case that what is being done with the money should not—ex hypothesi—be done with the money. That is because if the policyholders' rights are being infringed, the money should not be used for any other purpose. That leaves an inherent incongruity in the drafting which presupposes that there are rights which, so to speak, sit outside rights. That, of course, cannot be right.
The third area of uncertainty that I have identified is that it is not at all clear from the drafting of subsection (b) whether it would encompass the manner in which the money was invested. The subsection states:
"decisions on the application or investment of assets or reserves which could adversely affect the rights of such policyholders".
That might—I suggest that it would—encompass poor quality investment. However, how does one judge that or draw attention to it? How can one substitute oneself for the person whose professional role may be precisely to deal with the investment of those assets?
With respect, I suggest that the drafting is not adequate. However, viewed as a probing exercise, perhaps I may say that the amendment raises extremely important questions.
Lord Elton: Perhaps the noble Lord, Lord Joffe, could offer a little further clarification on an important issue? I apologise to the noble Lord if I should have gathered this already. If the policyholders are to be able to require the authorised person to be accountable to them, that suggests that the policyholders will hold something approaching a veto. The noble Lord may have already explained this, but what I cannot see from the drafting of this amendment is whose will is to prevail where there is a conflict of opinion between the policyholders and the shareholders? Either a nihil obstat, as it were, will prevail, or someone on the board must have the last word.
Lord Joffe: The intention is that policyholders would be consulted. But if the impasse suggested arose between the shareholders and the policyholders, at that stage the policyholders would have the right to apply to the court to protect their interests.
Lord Donaldson of Lymington: I support what was said by the noble Lord, Lord Grabiner. This amendment speaks of rates. Let me say I have no life insurance policies, but things may have changed since the days I took out with-profits policies with satisfactory results. I was always under the impression that my only right was a contractual right. If I looked in my policy, I would certainly be guaranteed a basic return—that is what I was after—but thereafter it would depend expressly, in contractual terms, on what bonuses were declared by the board.
Unless the animal has changed considerably, this amendment will leave me in exactly the same position as I was over the years; that is, I could go to the courts and say, "This company is going bankrupt", or, "This company is not going to meet its obligations", which were merely for the basic amount.
Lord Stewartby: This amendment, in its present form, will not do, as a number of noble Lords said. But the thought behind it is important. I hope that one of the consequences of this short debate will be that the FSA will look at this area and see whether there are steps it can take to encourage greater transparency.
There is no doubt that the with-profits element, whether of a life policy or a personal pension fund, is determined in an arbitrary fashion. I strongly support any measures which make it clearer on what basis the figures are plucked out of thin air, not only to judge whether the resources of the company—whether it is an incorporated business or a mutual—were being reasonably allocated between different types of claimant on that fund, or the other comparison with the outside world as to how it was genuinely performing in relation to its competitors rather than just on the figures for a specific year.
There seems to be a gap which has widened in recent years between the information available to other sorts of investors who have benefited from a lot of initiatives by the FSA and its related bodies (a general encouragement in advertising and accounts to provide more information so that investors know where they stand) and this corner of an old system which remains unduly obscure and where it is difficult for any with-profits element to have any idea whether or not it is being fairly treated. Therefore, although I do not support the amendment, I strongly support its message.
Lord Elton: The answer of the noble Lord, Lord Joffe, to my question with the comments of the noble Lord, Lord Grabiner, show that the effect of the amendment is merely to produce a piece of machinery which in some cases, but not all, will bring to court matters which otherwise may not have gone to court. As I understand it, it is a way of enabling policyholders to realise that they have a means of testing rights which they might otherwise not have.
Many of the people we are talking about are not sophisticated policyholders and one has a great deal of sympathy with what the noble Lord, Lord Joffe, is trying to do. But this points in the direction more of some sort of ombudsman or referee rather than yet
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another apparatus within this legislation. If we are leaving thoughts for the FSA when it comes into being under the Act, that may be a better route rather than the route taken by the noble Lord, Lord Joffe.
5.45 p.m.
Lord McIntosh of Haringey: I should declare an interest, first, as a policyholder with Sun Life of Canada and with Scottish Widows, both of which propose to demutualise. I voted against demutualisation in both cases. I was overruled and shall be receiving cheques and/or shares in due course. So my conscience is clear.
I shall make a long boring speech and then summarise it in five or six points for the noble Earl, Lord Onslow. Of course, there can be conflicting interests between shareholders and policyholders. This amendment relates to a specific type of life insurance where policies are described as being "with profits". Commonly, "with profits" policies are insurance policies with a savings element. There is an expectation that bonuses will be paid from time to time, usually annually, depending on the performance of the fund in which the premiums have been invested. These bonuses go to increase the benefits that will be payable to the policyholder at maturity.
Current industry practice in shareholder-owned life offices is generally to distribute surplus in the fund in the proportions: 90 per cent as bonus to with-profits policyholders and 10 per cent to shareholders, although there are some exceptions. In the case of mutual life offices, all the surplus will be distributed to policyholders as there are no shareholders. However, to ensure fairly steady returns to policyholders year on year, the insurance company does not each year distribute the whole of the year's profits earned by the business. Like prudent companies in other walks of life, it creates a reserve for undistributed assets within the with-profits fund. That is called the "estate" or, in certain circumstances, the "orphan estate".
In some cases, the estate has been allowed to grow up over a long period of time and has been passed on from one generation of policyholders to the next. That is called an "inherited estate"; that is really what the orphan estate is. The estate may reach a point which exceeds that considered necessary for the efficient management of the business. We were given some figures and they are pretty big figures. In such circumstances, the company may wish to manage down the level of estate by distribution to policyholders and shareholders.
The question is: who does the undistributed sum, the inherited estate, belong to and how should it be distributed? Although inherited estates have been built up over many years, the status of the funds within them and the appropriate basis of attribution are clear. However, in a small number of shareholder-owned offices this is not so. Over the years, policies and practices in these offices may have changed so that there are doubts about the respective interests of shareholders and policyholders in relation to the attribution of surplus.

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The guiding principles in relation to the attribution between shareholders and policyholders of assets from a firm's inherited estate are those set out in a statement on 25th February 1995 by Mr Jonathan Evans who was then Minister for Consumer Affairs and responsible for insurance matters within the DTI. The Government have since confirmed their agreement to those principles.
Where there is lack of clarity over the origins of the inherited estate, the regulator (whether the DTI, the Treasury or the FSA on behalf of the Treasury) has taken the view that the compatibility of any proposed attribution with these general principles needs to be considered in the light of the particular circumstances of the case. Therefore, in practice a dialogue takes place with the company over any proposed attribution. Before a final decision is taken, the regulator will also request a report on the proposals from an independent actuary and that policyholders are consulted.
This case-by-case assessment is conducted in the light of Section 45 of the Insurance Companies Act which enables the regulator to impose requirements on a company to ensure that the criteria of sound and prudent management are met. Those criteria include,
"having due regard to the interests of policyholders and potential policyholders".
The phrase, "policyholders' reasonable expectations" which has been the subject of debate, occurs in Section 45 of the 1982 Act, but is not used in this Bill which refers here, as throughout, to the "interests of consumers".
The Act contains further safeguards for with-profits policyholders. Sections 28 to 31A provide controls over transactions involving and distributions from the assets attributable to the with-profits fund. Section 2C provides controls over transfers of business between companies; and Sections 18 to 23 require insurers to submit annual re turns to the Treasury incorporating a valuation by an appointed actuary and to make copies available to any policyholder or shareholder who asks for one.
I listened most carefully to what the noble Lord, Lord Joffe, said about the lack of transparency on the part of life insurance offices. We must consider whether the provisions in the 1982 Act, which seem, on the face of it, to answer the complaints that he made, are actually being implemented. This is a matter that I should like to consider between now and the next stage of the Bill.
The Bill will provide for the continuation of the existing protections under the Insurance Companies Act 1982. Clauses 129, 134 and 330 will enable the FSA to make rules that maintain the existing statutory safeguards in the interests of with-profits policyholders. Indeed, I understand that the FSA proposes to reproduce these in its draft interim prudential rules contained in Consultation Paper 40a. The FSA will be able to use its guidance power under Clause 148 to continue and, if necessary, supplement the existing advice and information that has been given.
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Part VII of the Bill will also provide a statutory framework for the transfer of with-profits business between companies to replace Schedule 2C to the 1982 Act. Finally, the FSA will be able to impose particular requirements on an individual insurer for the purposes of protecting consumers, including of course policyholders. So the Bill will—I put it no higher at the moment—in no way reduce the existing protections available, and the FSA will be able to intervene to protect consumers using its Part IV powers.
However, the noble Lord's amendment would go further and require the FSA to make rules requiring insurers to consult and account to policyholders—I must say that I would pay more attention to the phrase "account to" than I would to "consult"—on each and every appropriation to shareholders, and other decisions that could adversely affect the rights of policyholders. Again, I listened to the debate about whether policyholders have rights that go beyond contractual rights. Clearly, this is a very difficult issue.
Clause 129 would give the FSA powers to make such rules if they appeared to be necessary or expedient for the purpose of protecting policyholders. Similarly, Clause 148 would allow the FSA to issue individual or general guidance consisting of advice or information to that effect.
However, there is a balance to be struck in deciding what degree of protection is appropriate for with-profits policyholders given the FSA's general duties in Clause 2. In particular, the FSA will need to have regard to the principle that the burdens that its rules or regulatory guidance would impose should be proportionate to the benefits. For example, in the ordinary course of events, the distribution to shareholders of their share of the surplus should be unexceptional. Similarly, it would be unusual to require an insurance company to consult policyholders about operational decisions such as asset allocations and investment decisions, which may obviously affect their investment but will usually be within the company's own discretion both as a matter of company law and under its contracts. To require companies to do this would force them to reveal commercially sensitive information about their business, which cot Id potentially prejudice the interests of both shareholders and policyholders.
Where insurance companies will owe duties to their policyholders, as they do currently, will be in relation to their policies and the actual bonuses that they declare. Companies are already required to provide an annual notice to their policyholders setting out the bonuses allocated to their policies, as well As explaining the background to the declaration.
Therefore, we do not think that the Bill should require the FSA to make rules which would make insurance companies accountable to their with-profits policyholders for operational decisions or decisions relating to shareholder distributions. This does not, of course, prevent the FSA adding to the existing requirements in response to particular problems that may arise. However, we believe that it should be a

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matter for the FSA to decide in the light of its general duties, consultation and cost-benefit analysis in the usual way.
Perhaps I may sum up my response for the benefit of the noble Earl, Lord Onslow. First, the Bill will certainly enable the FSA to carry on providing the sort of protection that it has in the past in relation to orphan assets. Secondly, the powers will be at least as wide and effective as those available under the Insurance Companies Act. Thirdly, we believe that those powers give a perfectly adequate regulatory response to the potential difficulties. Fourthly, the general presumption of a 90 per cent/10 per cent split will not change as a result of the Bill, but the formula must be able to take into account particular factors in some cases; for example, where there is a transfer of business and something on which a court might rule. Fifthly, the ability of the FSA to obtain independent actuarial reports on the funds and liabilities is an important tool of regulation.
I apologise for the length of my reply, but this is clearly an important issue. The fact that the noble Lord, Lord Joffe, has raised the matter has been widely welcomed by Members of the Committee. It is important for us to continue to reflect on the adequacy of the protection that is already provided. In the mean time, I hope that the criticism that has been made about the "warm wording" of the amendment will encourage the noble Lord, Lord Joffe, not to press the matter. We are certainly prepared to discuss these issues with him at any time between now and the Report stage.
Lord Peston: Before my noble friend the Minister concludes, there are two questions that I should like to ask him. I listened to this debate as a layman and was most impressed by the analysis of the problem put forward by the noble Lord, Lord Joffe. Two matters struck me as being of overwhelming interest. The first is the transparency question. It was not clear from my noble friend's reply whether he is satisfied with the transparency aspect of the matter, or whether what he said forms part of his further reflection on the matter.
The second matter which, as a layman, rather horrified me was the fact that the noble Lord, Lord Joffe, seemed to be saying—he cited but one example, but that may well have been for the sake of brevity—that certain actions were getting very close to being unlawful in terms of the use of funds. I do not speak as an expert but as someone who has simply listened to the debate. If there were any danger that these enormous amounts of orphan assets were being used in, to say the least, a doubtful way, did I understand my noble friend to say that the matter could be drawn to the attention of the FSA, which would then deal with it? Is my noble friend saying that he is confident that that is at least one response to the noble Lord, Lord Joffe? I ask these questions purely because I have been listening to the debate and am quite interested in the answers for their own sake, quite apart from the practicalities involved.
Lord McIntosh of Haringey: My noble friend's first question was about whether the existing rules were being adhered to. I read out to the Committee what I understand the Insurance Companies Act 1982 provides as regards transparency and reporting to policyholders. It seems to me that the Act makes certain provisions which the noble Lord, Lord Joffe, said were not being implemented; in other words, that particular insurance companies are not obeying those rules. I do not know whether that is the case, but it is certainly a matter that needs further investigation.
As regards uses that may be unlawful, the particular point made by the noble Lord, Lord Joffe, referred to the suggestion that such orphan assets should be used in compensation for pensions mis-selling. As I should have said before, the Government made it entirely clear on 1st July 1997 (very soon after we came into office) that surplus assets in a company's with-profits fund should be used only to meet pensions mis-selling costs, first, where any profits from the pensions business concerned would also be attributed to the with-profits fund; and, secondly, to the extent that use of such surplus was consistent with policyholders' reasonable expectations. Indeed, we have returned to the "reasonable expectations" problem. However, that is the responsibility of this Government. We did try to make it as clear as possible.
Lord Joffe: Perhaps I may comment briefly on some of the points made in the debate. I entirely agree with the noble Lord, Lord Jenkin, that policyholders often act irrationally and seldom take account of their best long-term interests. However, the distinction between a mutual and a proprietary company is that in a mutual company there is a mechanism for policyholders to object because they are the owners; in a proprietary company, which is the main subject of my amendment, the policyholders have no rights whatever other than the contractual rights that they have in relation to their policies. Perhaps I may remind the noble Lord, Lord Jenkin, that in the Nationwide case the members actually rejected the money—the bribe—offered to them.
On the question of practicality, I refer to a distinction here. The noble Lord said that one elects directors, one takes out a policy and one leaves matters to the directors. However, the distinction in the life assurance industry is that these are long-term contracts; they often run for 30 or 40 years. The directors who are elected today may be very different from the directors in charge in 20 or 30 years' time.
I think that I am grateful to the noble Lord, Lord Grabiner, for his comments on the wording of my amendment. I agree with him entirely that the amendment as phrased does not achieve its objective. Should I retable the amendment, I shall certainly take advice of the noble Lord, Lord Grabiner, on how to draft it.
6 p.m.
Lord Grabiner: There will be no charge!
Lord Joffe: I thank the noble Lord. I believe that for an ombudsman to have certain rights is a help but is

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not the answer because the ombudsman's powers are restricted. I am not sure whether an ombudsman would have the right to look into the position of with-profits policyholders, but I think that the awards that the ombudsman can grant are limited. I see that as a useful addition but not as a substitute for what I have proposed.
The Minister mentioned the regulator having all sorts of rights to protect the interests of with-profits policyholders. The lack of transparency and opaqueness with which the regulators operate is not something which policyholders would necessarily applaud. Policyholders have by no means complete confidence in what the Treasury and the Department of Trade and Industry have decided in the past in relation to these orphan funds. It is clear that there is a need for remedies which are not solely the prerogative of the regulators.
The question of unlawfulness was raised. I did not suggest categorically that the actions of the Pru and the other life assurance companies were in any way unlawful. The difficulty is that one does not know whether they arc unlawful because one does not know who owns the orphan assets and it is impossible for the consumer to find that out. One of the purposes of the amendment is to look into these issues.
I am pleased to hear that the Minister will reflect on these issues. I, too, wish to reflect on them before deciding what course of action to take. I thank all those who have participated in this short debate. I express my appreciation to the Minister for his patience in advising me as a novice on how to submit this probing amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 130 [Non-regulated activity rules]:
On Question, Whether Clause 130 shall stand part of the Bill?
Lord McIntosh of Haringey: I gave notice of my intention to oppose this Question when debating Amendment No. 226D.
Clause 130 negatived.
Clause 131 [Miscellaneous ancillary matters]:
Lord McIntosh of Haringeymoved Amendment No. 230ZA:
Page 61, line 13, leave out subsections (1) and (2).
The noble Lord said: This amendment was spoken to with Amendment No. 228A. I beg to move.
On Question, amendment agreed to.
[Amendment No. 230A not moved.]
Lord Kingslandmoved Amendment No. 230B:
Page 61, line 39, after ("person") insert ("carrying on a deposit-taking business").
The noble Lord said: Clause 131 deals with a number of miscellaneous and ancillary matters relating to the authority's rule-making powers set out in Clause 129. In particular, Clause 131(3) is concerned with the rules relating to the handling of money held by
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an authorised person in specific circumstances. These rules, I understand, are usually referred to as the client money rules.
Clause 131(4) provides that an institution, which is usually a bank, with which an account is kept in pursuance of the client money rules, does not incur any liability as a constructive trustee if money is wrongfully paid from the account unless the institution permits the payment, first, with the knowledge that it is wrongful or, secondly, having deliberately failed to make inquiries in circumstances in which a reasonable and honest person would have done so.
Given that the institution will almost certainly be a person carrying on a deposit-taking business, it would be more satisfactory if the reasonable and honest person test should apply to a reasonable and honest person carrying on a deposit-taking business. It would be difficult to judge what inquiries a reasonable and honest person would have made if that person was the proverbial man on the Clapham omnibus. It would be more sensible to apply the test to a reasonable and honest person carrying on the relevant type of activity. I beg to move.
Lord McIntosh of Haringey: This interesting amendment concerns an institution such as a bank at which an authorised person keeps a special account for its clients' money pursuant to client money rules under Clause 131. For example, when an authorised person receives money from his client, he may be required by rules to hold it on trust in a separate bank account until he invests it on his client's behalf.
The institution will be required to handle instructions from the authorised person in relation to the account. The problem for the institution is how to know if the authorised person is withdrawing money from the account to invest on behalf of his client or if he is acting fraudulently.
Under the ordinary common law a banker will not normally be liable to repay the authorised person's client unless he could be treated as a constructive trustee on the basis that he either knew the withdrawal was wrongful or if he deliberately failed to make inquiries in circumstances in which a reasonable arid honest person would do so.
For example, one might expect a reasonable arid honest person in those circumstances to be suspicious if the authorised person started taking unusually large amounts of money out of the account or asked for funds to be transferred to his own personal or business account. That test was included in the Financial Services Act and is reproduced in Clause 131(4). The amendment would add an additional clarification to that second test by emphasising that it was based on a reasonable and honest person,
"carrying on a deposit-taking business".
I fully agree with the intention behind the amendment. However, the courts have had no difficulty in interpreting the test of a reasonable and honest person

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in the context of the law of constructive trusts. I respectfully suggest to the noble Lord that the clarification is unnecessary.
The test is concerned with circumstances in which a reasonable and honest person would have made inquiries. Those circumstances involve the handling of funds which have been deposited in an account with that institution pursuant to client money rules. Therefore we are already concerned with the actions of a reasonable and honest person in circumstances in which he is carrying on a deposit-taking business. I hope that on that basis the noble Lord will not press the amendment.
Lord Elton: As a listener to the debate, I had regarded the words that my noble friend seeks to insert into the clause as being some remedy for the presence of the word "deliberately" earlier in the paragraph. Can the Minister assure us that a failure through negligence by a person conducting this business is equally culpable under some other part of the Bill? Or is it that ignorance of the law is a defence, uniquely, in this position?
Lord McIntosh of Haringey: As I said, the law that applies is the law of constructive trusteeship. I would not dare to try to interpret that law. There is a great deal of case law on the subject; the issue is not a new one. I hope that the noble Lord will allow me to write to him on the subject.
Lord Elton: With eager pleasure.
Lord Kingsland: I shall avoid entering into that debate. The Minister is clearly in the frame of the mind where he says to the Opposition, "We entirely agree with the motive behind your amendment but, on the wording of the Bill, it is unnecessary". I shall reflect on his response. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 230C:
Page 62, line 4, leave out ("or non-regulated activity rules").
The noble Lord said: I spoke to this amendment with Amendment No. 226D. I beg to move.
On Question, amendment agreed to.
Clause 131, as amended, agreed to.
Clauses 132 to 134 agreed to.
Clause 135 [Endorsement of codes etc. issued by other bodies]:
Lord McIntosh of Haringeymoved Amendment No. 230D:
Page 63, line 14, at end insert—
("(2A) At any time when endorsing rules are in force, and if asked to do so by the Panel, the Authority may exercise its powers under Part IV or section 65 as if failure to comply with an endorsed provision was a ground entitling the Authority to exercise those powers.").
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The noble Lord said: In moving Amendment No. 230D, I shall speak also to Amendments Nos. 230E and 230F.
These are three technical amendments to Clause 135 in the light of discussions between the Treasury and the takeover panel. The clause confers a power on the authority to make rules endorsing the City code on takeovers and mergers (the takeover code) and the substantial acquisition rules, which I gather are known as "SARs". Generally, these endorsing rules cover areas where the FSA would not be able to make rules—that is, in relation to conduct during public takeovers. The effect of this clause is that the authority may exercise its disciplinary powers over authorised persons for a breach of the endorsed provisions of the takeover code or SARs, if the takeover panel has requested it to do so.
Amendment No. 230D proposes that a new subsection be introduced after subsection (2) enabling the authority to exercise its disciplinary powers under Part IV or Section 65 in circumstances equivalent to those set out in subsection (3). This will specifically enable the panel to invoke the authority's disciplinary powers with regard to approved persons in addition to its powers referred to in subsection (3). Amendment No. 230E, which proposes to delete the reference to Part IV in subsection (3), is consequential upon this new amendment.
Amendment No. 230F proposes that a new subsection be introduced after subsection (3) making it clear that a failure to comply with a requirement imposed, or ruling given, under an endorsed provision is to be treated as a failure to comply with the endorsed provision under which that requirement was imposed or ruling was given. This will ensure that proper account is taken of the exercise of the panel's discretion under the City code.
As I say, these are technical amendments. There is a much more important issue in relation to the takeover code which I have discussed with its representatives. I suggest that it would be more appropriate to deal with that when we come to the Opposition's proposed new clause which it seeks to have inserted after Clause 389. I beg to move.
6.15 p.m.
Lord Elton: I have a small question for the Minister. I apologise for not giving him notice of it, but it is probably very simple to answer.
It is apparent from Clause 135 what happens when the takeover panel makes a rule and the authority decides to endorse it. What happens to the endorsement when the takeover panel decides to withdraw a rule? There seems to be a machinery for putting endorsements in place; I take it that there is a machinery for removing them. I dare say that it is only the size of the Bill and the limited time that has prevented me from finding it, but I do not know where it is.
Lord McIntosh of Haringey: When these powers are being put into place, the issue is to make sure that there is not a gap—in other words, there is no period during which no rules are being applied. When a rule is withdrawn or repealed, that problem does not arise because no disciplinary action is called for.
Lord Kingsland: We are perfectly content to endorse these amendments. As the Minister is well aware, we have other concerns about the relationship between the takeover panel and the authority. We raise these concerns in Amendments Nos. 276E and 276F.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendments Nos. 230E and 230F:
Page 63, line 16, leave out ("IV,").
Page 63, line 18, at end insert—
("( ) For the purposes of subsections (2A) and (3), a failure to comply with a requirement imposed, or ruling given, under an endorsed provision is to be treated as a failure to comply with the endorsed provision under which that requirement was imposed or ruling was given.").
On Question, amendments agreed to.
Clause 135, as amended, agreed to.
Clauses 136 to 138 agreed to.
Clause 139 [Modification or waiver of rules]:
Lord McIntosh of Haringeymoved Amendment No. 230G:
Page 65, line 6, leave out paragraph (d).
The noble Lord said: I spoke to this amendment with Amendment No. 226D. I beg to move.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Baroness Gardner of Parkes): In calling Amendment No. 230H, I should say that if this amendment is agreed to I cannot call Amendments Nos. 230J and 230K.
Lord Kingslandmoved Amendment No. 230H:
Page 65, line 18, leave out from ("may") to ("the") in line 22 and insert ("only give a direction if it is satisfied that").
The noble Lord said: In moving Amendment No. 230H, I shall speak also to Amendment No. 231A, as the grouping requires.
Lord McIntosh of Haringey: The noble Lord will have to speak also to starred Amendments Nos. 230J and 230K because they will be pre-empted if this amendment is agreed to. He will have to make up his mind which amendment he is going to go for.
Lord Kingsland: I am most grateful to the Minister for pointing that out. I may need to sit down, reflect and stand up again before I move on to his agenda.
Amendment No. 230H relates to Clause 139. It is an important provision in the Bill which allows the authority to direct that all or any of the regulatory rules set out in Clause 139(1) are not to apply to an authorised person. It also allows the authority to direct
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that the rules can apply to such a person with such modifications as may be specified in a direction to be made by the authority. However, as I understand it, under Clause 139(4) the authority's power to give such a direction is qualified by two conditions. The first is that the authority must be satisfied that,
"compliance by the authorised person with the rules, or with the rules as unmodified, would he unduly burdensome or would not achieve the purpose for which the rules were made".
The second qualification is that the authority must be satisfied that:
"the direction would not result in undue risk to persons whose interests the rules are intended to protect".
The first qualification is a severe limitation on the ability of the authority to make use of the power of modification. It is likely that circumstances where rules would be unduly burdensome or would not achieve the purpose for which the rules were made would be rather rare. It is in a case such as this where some flexibility would be most desirable. This amendment seeks to remove the first qualification, with the result that Clause 139(4) provides that the authority may only give a direction if it is satisfied that the direction would not result in undue risk to persons whose interests the rules are intended to protect.
It is also worth noting that there are further safeguards in that under Clause 139(5) "a direction may be given subject to conditions", and the authority may also, under Clause 139(6), publish the direction in a way most suitable for bringing the direction to the attention of those most likely to be affected by it.
I turn to Amendment No. 231A which relates to Clause 148. Clause 148 relates to guidance. This amendment would ensure that an authorised person who acts in accordance with guidance is treated as satisfying the requirements of the relevant rule. The purpose of the amendment, principally, is not to forestall the authority bringing an action itself, but to prevent investors claiming that a firm has none the less contravened the rule and accordingly has brought an action for damages under Clause 141.
The issue of guidance is extremely important for the Opposition. As the Minister will be aware, one of the most important uncertainties in the field of action of the firm in the City is regulatory uncertainty. We believe that this uncertainty would be substantially reduced by a rule that stated that if an authorised person acted consistently with guidance it would make that person immune, not only from action by the FSA but also by action from a private party.
We recognise that the Minister might be reluctant to give us such a sweeping exemption. However, there is another way that this problem can be largely, if not entirely, met. That is by the authority being prepared to give specific guidance in instances where it is asked for. For example, a financial institution may, in innovatory mode, have a new way of approaching a problem which would create business not only for itself, but for the United Kingdom abroad.
If the financial institution comes to the authority and says, "I am not sure whether this complies", surely it must be in the interest of the authority to give clear

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guidance on whether it complies or not? What possible reason could the authority have for denying help in these circumstances? Yet, as I understand it, in another place, the Government was most reluctant to provide guidance in these circumstances.
Earlier on in Committee stage I made the statement that there seemed to me to be circumstances in which regulatory risk was a bigger risk for an operator in the City than the risk provided by the markets in which that operator conducted his business. I well remember a groan emitting from the Government benches.
This is the correct context in which to make that point again. The Government have a clear opportunity to make a statement now that if an authorised firm, operating in the market, complies with general guidance, it will be immune from suit. Or, alternatively, that to provide for an authorised firm that seeks the authority's help to decide whether or not what it is about to do might breach the law, the Government will introduce a clause in the Bill which requires the authority, within a reasonable time, to react positively to such a request. I beg to move.
Lord McIntosh of Haringey: We have had some difficulty in understanding these amendments because they are mutually contradictory. Amendment No. 230H deletes subsection (4)(a), which provides that the authority may not give a direction unless it is satisfied that:
"compliance by the authorised person with the rules, or with the rules as unmodified, would he unduly burdensome or would not achieve the purpose for which the rules were made".
But Amendments Nos. 230J and 230K, which would be pre-empted if 230H were carried, add an additional limb to the test. An authority may give a direction if it is satisfied that the purpose for which the rules are made can be achieved in a different manner from those specified in the rules.
Taking those amendments together, it is difficult to work out which is the one I have to reply to, whether we are being asked to delete subsection (4)(a) or simply expand it by adding the third criterion. I shall assume for the purpose of this debate that the noble Lords are advocating the deletion of paragraph (a) with the insertion of an additional test. I will first argue against the deletion of paragraph (a) and then I will argue against the additional test. That should cover the ground.
With regard to deleting paragraph (a), no one appears to disagree that the rules should not be waived, if the effect of the waiver would be to bring undue risks to the interests of consumers. We think this is not enough. Where a rule can be disapplied—remember we are talking about waiving rules, disapplying rules, not imposing them—without damaging consumer interests, a question might arise that the FSA should be looking at whether the rule as a whole is justified. The use of the waiver power is envisaged in circumstances where the rule has a particular exceptional effect on a particular authorised person. So it should be incumbent on the applicant to demonstrate the effect that compliance with an FSA
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rule would have on him. This is the purpose of putting in paragraph (a) which it is proposed should be deleted, and which we think should not be deleted.
Moving on to the additional test proposed by the noble Lord, Amendments Nos. 230J and 230K provide that the authority may only grant a waiver or modification where it is satisfied that:
"the purpose for which the rules were made can be achieved in a different manner than as specified in the rules".
As I have already said, it is unclear whether this is intended as an alternative to the tests already mentioned or to replace them. Either way, I must argue against them. It is not enough to know that the purpose of the rule can be achieved in some other way. The SFA would need to know that as a matter of fact the effect was being achieved by some other means; for example, that the firm was committed to not taking action of a particular kind. It is difficult to see that the authorised person would be unable to demonstrate that the rule was not either unduly burdensome or not achieving the intended effect.
It should be said that while the onus is on the applicant to show that the criteria set out in subsection (4) have been met, the FSA has said in its policy statement, the FSA's approach to giving guidance and waiver to firms in September of last year that:
"It will apply its general requirements in a way that allows them to be tailored to fit the circumstances of particular firms in accordance with its commitment to a flexible and differentiated risk-based approach".
It should be mentioned that the waiver power in Clause 139 is wider than that in the Financial Services Act 1986 in a number of respects. It covers a wider range of issues, including for the first time cancellation rules and collective investment scheme regulations. The purpose for which the rules were made test is new, a test that will be given proper weight when considering applications for waivers. Therefore, we believe subsection (4) should contain two limbs. These have already been correctly framed in the clause as it stands.
On the issue of whether the guidance can be relied on by an authorised person as a defence for a claim for damages under Clause 141—to which the noble Lord, Lord Kingsland, referred at the opening of his speech—there is a difficulty. There is a balance to be struck between fairness to the authorised person who has done what he is told and the private person who may be deprived of a right of action that he would otherwise have. The difficulty is that if a person who has complied with the guidance is let off an action for breach of statutory duty, this has the effect of allowing the guidance to override the rule. Whether that is right in policy terms is difficult to know. But while there is this difficult balance, we think that it is important to preserve the principle that third parties, in particular, private investors, should not lose the opportunity for redress where they suffer from a breach of the law.

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The noble Lord asked whether there should not be a requirement to give guidance in certain cases. In paragraph 246 of its first report the Joint Committee recommended that,
"a requirement would be an unreasonable burden and a restriction on its freedom of action".
Our response to the noble Lord, following the Joint Committee's report, has to be negative.
6.30 p.m.
Lord Donaldson of Lymington: Perhaps I may join in this party because I met all of this in the late 1960s when the Imperial Tobacco Company came to the commercial court—I may have the details wrong—and said, "Can we lawfully run a lottery?" We went into this and I gave a judgment saying that it could. I was overruled by the Court of Appeal on the basis that it was not for the civil courts to tell people what did and did not constitute a criminal offence. I am not arguing about whether it was right in law, but I think that it was quite wrong in policy.
It must be wrong if, where there is some question as to whether one is committing a criminal offence, one cannot go to some court and say, "Look, can I do this?" If someone is told that he can do it, he must receive protection. The Minister suggested that that meant that the advice was modifying the rule. With respect, I do not agree. The Financial Services Authority is being asked to tell the person operating the market what the rule provides. If it gets it wrong, that is a pity. But there is certainly no reason why the operator—the merchant—should suffer. The FSA is not saying, "There will be a different rule for you". But if it is are saying, "It is a different rule for you", and is prepared to justify it, the new rule or different rule ought to be accepted by the trader without there being any risk on his behalf.
The Financial Services Authority is immensely powerful, immensely learned and immensely well advised. It is very highly experienced. We are entrusting it with discretionary powers. But the one thing we ought not to do is to give it a discretionary power to say, "If you use this power, you may not protect people who act on the basis of it".
I turn to much more modern times. About a year ago I heard on television a member of the other place, not acting in his parliamentary capacity, complaining bitterly that in some activity—I imagine it was agricultural—he had gone to the Environment Agency to ask for advice on what he should do. He did it and the agency promptly prosecuted him. I do not for one moment suggest that those were the actual facts, but I was horrified on the basis that those were the facts. As I understand the Minister, he would be prepared to accept a situation in which the same facts could occur in the financial context. I hope that he will not.
Lord Jenkin of Roding: Perhaps I may intervene for a moment. When I read Amendment No. 231A, I thought to myself, "That sounds very reasonable". I listened to my noble friend on the Front Bench and it still sounded fairly reasonable. I was reminded of the
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provisions that used to work in the field of what was called surtax or super tax. The taxpayer could apply to the commissioners for a clearance against a direction that he had to distribute so much of his profits, which would then attract taxation in the hands of the shareholders. There started to be an informal procedure whereby the taxpayer could get in touch with the commissioners and could be given a clearance that if he distributed so much the commissioners would not make a surtax direction on him. That eventually became statutory. Happily, it was eventually abolished altogether. It was a very oppressive piece of legislation for private companies.
I thought to myself, "What my noble friend is moving in Amendment No. 231A is equivalent to the surtax clearance procedure". However, on reflection, I have to say that the Minister is right. There is a third party. There is the client or customer. If a clearance were given by guidance which allowed the authorised person not to comply with particular rules, where would that leave the customer? In theory, he should be able to sue the authority. But, of course, on provisions we have already discussed, he cannot. The authority has immunity in that respect.
Therefore, as a consequence of the immunity—I totally understand the reasons for the immunity—a customer might suffer quite substantial loss because, inadvertently, the waiver of the rules produced that result. With the greatest respect to my noble friend, if he seeks to take the opinion of the Committee on that amendment, I shall he unable to support him.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Jenkin, for his unexpected support. When the noble and learned Lord, Lord Donaldson, was dealing with these matters in the commercial court in the 1960s I do not know whether the concept of guidance was as common as it is now. There is also the relationship between guidance and rules. 1 know that in my business —the market research business—we had a code of conduct which was in two parts. There were rules. If one broke the rules, one could he kicked out of the society. There was also good practice. If one did not adhere to good practice, one might be required to put it right; there might be lesser requirements, but they were not hanging offences. What the noble and learned Lord, Lord Donaldson, and the noble Lord, Lord Kingsland, are suggesting is that the FSA should simply tell the authorised person what the rule provides. But that would have the effect that the guidance would take precedence over the rule. It would mean that what the authority says the rule will mean will be the law, instead of what the rule actually says.
The rule surely has to take precedence over the authority's interpretation of it. The whole principle on which the Bill is based is the accountability of the authority in many different ways. One of the ways in which it is accountable is in the framing of rules. If it does that wrong, the authority is in trouble. But if it

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can simply interpret rules as it wishes to suit needs, even at the request of an authorised person, one loses the effect of the rule-making powers.
Lord Kingsland: This seems to be the world of Alice in Wonderland. The authority issues guidance to the authorised community; a member of the authorised community faithfully follows it; and as a result of doing so he exposes himself not only to an action by a private party but also to the authority itself, even though it is what the authority has told the authorised party to do. That cannot be right.
Lord McIntosh of Haringey: We are talking about a waiver here. The amendments would provide that a person who has complied with guidance would be let off an action for breach of statutory duty. It is the other way round.
Lord Kingsland: I am talking about my Amendment No. 231A and the shelter the guidance ought to give someone if he complies with it. I adopt wholly the speech of the noble and learned Lord, Lord Donaldson, in that respect. As he said, the authority has huge discretionary powers. If it chooses to exercise its discretionary power in a certain way and the authorised party follows the exercise of that discretionary power, that party ought not to be vulnerable.
Lord McIntosh of Haringey: I must agree to disagree. I shall think about the noble Lord's point and, without any commitment, I shall attempt to resolve the matter so that there is not a misunderstanding between us and write to him between now and Report stage.
Lord Donaldson of Lymington: While the Minister is thinking about these matters, will he think also about a confusion that has been creeping in to the discussion? I refer to the difference between "guidance" and "waiver". Noble Lords have spoken as though a waiver made by a rule-making authority were an indication that someone could by-pass the rules. I do not think that that is quite the right analysis. It is a rule-making authority that will give the waiver—perhaps "waiver" is the wrong word. The authority will modify the rule in that case, rather as the Takeover Panel has always done.
Lord McIntosh of Haringey: I have been waking up at a quarter-to-four in the morning thinking about these matters. I shall go on doing so, and I shall write to the noble and learned Lord.
Lord Kingsland: With respect to the Minister, the noble and learned Lord's intervention is pertinent. On what other basis were the amendments grouped?
Lord McIntosh of Haringey: It was the noble Lord, Lord Kingsland, who agreed to the grouping. We
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thought that we had grouped them together because they all dealt with conditions under which waivers could be applied.
Perhaps I may say a further word about guidance. The noble Lord, Lord Kingsland, raised this matter when we were talking about market abuse. He spoke about SEC no-action letters. No-action letters are non-binding. So long as a person has acted within current written guidance issued to him in the circumstances contemplated by the guidance the FSA will not take regulatory action against him. That was reflected in the September 1999 policy statement, to which I have already referred, on the FSA's approach to giving guidance and waivers to firms.
Similarly, where matters are referred to the tribunal, the authority's chances of successfully bringing an enforcement action in relation to a person who has fully complied with guidance must be seen as pretty low. In criminal proceedings, Clause 22 of the Bill provides that it is a defence for an accused to show in relation to an alleged false claim to be authorised or exempt that,
"he took all reasonable precautions and exercised all due diligence".
Under Clause 23, in relation to an alleged breach of the financial promotion prohibition it is a defence for the accused to show,
"that he took all reasonable precautions and exercised all due diligence to avoid committing the offence".
Both defences may well focus on reliance on FSA guidance.
But the Bill does not just provide for FSA guidance. Clause 139 provides the FSA with waiver powers in relation to all or any of the rules specified in Clause 139. Once a waiver has been given, the FSA will not be able to take action for breach of a particular rule if someone has acted in accordance with the waiver. This supplements the guidance provisions under the Bill, ensuring that authorised persons are treated fairly.
In simple terms, a "waiver" means that the rule is disapplied or modified; and that has binding effect. "Guidance" is the interpretation of a rule to assist the firm; and that is not binding. We shall have to think about the different words, some of which, I admit, are not used in their normal common parlance sense. As I say, I shall wake up in the early hours of the morning, and when I have done so I shall write to all noble Lords who have taken part in the debates.
Lord Kingsland: Meanwhile, I shall console the Minister by begging leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 230J and 230K not moved.]
Clause 139, as amended, agreed to.
Clause 140 agreed to.
Clause 141 [Actions for damages]:
Lord McIntosh of Haringeymoved Amendment No. 231:
Page 66, line 35, after ("include") insert ("—

(a) listing rules or

b)")

The noble Lord said: I spoke to this amendment with Amendment No. 180. I beg to move.
On Question, amendment agreed to.
[Amendment No. 231XA not moved.]
Clause 141, as amended, agreed to.
Clauses 142 to 145 agreed to.
Clause 146 [Consultation]:
Lord Saatchimoved Amendment No. 231YA:
Page 65, line 6, after ("2;') insert—
("( ) a statement of the extent to which the Authority has taken into account the matters in section 2(3) in making the proposed rules;").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 231ZA. The Committee will note that, in addressing Amendment No. 231YA, I shall follow the path of the noble Baroness, Lady Turner, in wanting to see spelt out on the face of the Bill for the absence of doubt a matter that I in my case and the noble Baroness in her case think is of great importance.
The background to the amendment is that Clause 146 requires the FSA to carry out a consultation exercise where it proposes to make any rules. The consultation procedure is defined in the clause. First, a draft copy of the rules must be published; then, together with the rules, there will also be published a cost-benefit analysis and certain other items referred to in subsection (2).
The amendment adds a further item to the list in Clause 146(2) of items that would be published with a draft copy of the rules. The additional item that we propose is a statement showing the extent to which the FSA has taken into account the provision in Clause 146(3) in making the proposed rules. Members of the Committee will remember that Clause 2(3) requires the FSA, when discharging its general functions—which include the function of making rules—to have regard to the matters described in Clause 2(3). Among those provisions it is stated that the global nature of the financial services market and the desirability of maintaining the competitive position of the UK should be considered and regard should be paid to them. Therefore, the purpose of the amendment is to require the FSA to focus on its obligations under Clause 2(3) by producing the form of statement described in the amendment.
Amendment No. 231ZA deals with the point that the FSA's obligation to consult on the rules referred to in Clause 146 presently applies only to new rules made after the coming into force of the legislation. However, the Government are expected to introduce a series of transitional provisions which will "grandfather" a significant number of existing rules which will be carried forward under a new regime. If that is so, the
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cost-benefit analysis requirement will not apply to those grandfather rules. Therefore, the purpose of our amendment is to require the FSA to review all the rules made by it within a proposed period of three years after they have been made to determine whether they indeed serve the purpose for which they were made in the first place.
If the FSA concludes that the rules should be changed in a way which is in its opinion "significant", the FSA will be obliged to make new rules to which the consultation provisions of Clause 146 will apply. However, where the FSA concludes that the rules should be approved in the form then in force, or in a form which does not differ very much from those rules, it will nevertheless be obliged to carry out a consultation exercise on the rules and issue a cost-benefit analysis.
The effect of our amendments is that the FSA will be under a continuous obligation to review its rules, carry out consultation exercises and issue cost-benefit analyses, with the result that no rules will exist which are not kept up to date and tested on a regular basis against the discipline of a cost-benefit analysis.
Members on these Benches have referred on many occasions to the importance that we attach to people's concerns that the Bill has the potential to create bureaucracy and stifle competition. That is why the amendments are important to us. They mean that competition will be raised to a higher level, as we have sought to do in other parts of the Bill, and that redundant rules will die an early and timely death. I beg to move.
The Deputy Chairman of Committees: I must inform the Committee that there is a misprint in Amendment No. 231ZA. In subsection (2), "section 129" should read "section 146".
Lord Newby: While I agree with what the noble Lord, Lord Saatchi, seeks to achieve in Amendment No. 231YA, I believe that the amendment is unnecessary. Clause 146(2)(c) already requires the authority to explain why it believes that the rules that it makes are compatible with its general duties under Clause 2. By definition, that includes Clause 2(3) which is referred to in the amendment.
As to Amendment No. 231ZA, I have some sympathy with the idea that there should be a trigger whereby rules can be revised. There is always a danger that one piles rules upon rules, and one must have a trigger to review the process. However, I believe that the amendment as set out is unduly prescriptive. It requires every set of rules to be reviewed within three years, which presumably means that the review must be completed in that period. Presumably, the purpose of the amendment is that, having been reviewed within three years, the rules should be further reviewed with; n another three years. That seems to us to be unduly prescriptive. What is required is a situation in which it is relatively easy to require the authority to amend the rules either because the circumstances to which they apply have demonstrably changed or there have been complaints about them. Arguably, that can already be

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achieved under the Bill either by the practitioner or consumer panel expressing a view or the Treasury itself ordering a review under Clause 10, although one suspects that the latter would be to use a sledgehammer to crack a nut. I should be grateful for guidance from the Minister as to whether under the Bill as drafted it is easy for such a review to be triggered by external pressure on the authority.
I conclude with a question to the Minister and perhaps also to the noble Lord who moved the amendment. I believe that this is the first time in the Bill that the authority is required to justify its conclusions by reference in part to the publication of a cost-benefit analysis. Like motherhood and apple pie, that is one of those sentiments which sounds very good on paper, but one wonders to whom the cost and the benefit are to be applied. Who will bear the cost and who is to benefit? We have assumed that the cost will be borne by the body to be regulated and that the consumer will benefit, but we should welcome clarification on that. We should also welcome clarification on how the benefit of the rules can be quantified given that in many cases their purpose is to prevent an abuse. One can draft a paragraph and claim that it is a cost-benefit analysis which shows that the benefit is that the consumer is spared a particular abuse. That may represent potentially a huge sum compared with the relatively modest costs to the firms involved and, therefore, it may be a sensible precaution. However, one doubts whether a cost-benefit analysis often achieves the claims that are made for it.
Lord McIntosh of Haringey: The first amendment is to Clause 146 which sets out the FSA's consultation requirements when it wishes to make any rules. Those requirements were expanded and made more detailed during the passage of the Bill through the Commons. I am pleased to see that the requirements are so extensive that noble Lords opposite have drawn on the wording of new Clause 146 in framing the second amendment in this group. The effect of the amendment is to require the FSA before making a rule to issue a statement of the extent to which it has taken into account the principles—proportionality, facilitating competition and so on—to which it must have regard in discharging its functions.
There is a technical problem with the amendment—I do not make too much of it—in that it requires the FSA to take into account the principles. Clause 2 requires the FSA to have regard to the principles, not to take them into account. Therefore, it is, strictly speaking, incompatible with the requirement in Clause 2.
Fortunately, the noble Lord, Lord Newby, said it first. I support the thinking behind the amendment but believe that it is unnecessary. That is the mantra that we use in these circumstances. Clause 146(2)(c) requires the FSA when making a rule to provide an explanation of why it is compatible with its general duties under Clause 2. That clause sets out the FSA's general duties. The principles to which it must have regard are part of that clause. Therefore, the FSA is
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already required to explain why the rule is compatible with those principles. For that reason, we do not believe that the amendment is necessary.
Amendment No. 231ZA requires the FSA to review each and every one of its rules three years after it is made. It also requires the authority to publish a cost-benefit analysis and effectively to consult on each one every three years. I appreciate that the purpose behind the amendment is to ensure that the authority regularly reviews its rules, and that where the rules are no longer appropriate they should be changed. I agree that there should be regular review and I expect the FSA to monitor the application and implications of its rules on an ongoing basis, not just every three years; but to require the FSA to go through a public consultation exercise on each and every rule every three years is unnecessary.
In addition to the FSA's own review, the consumer and practitioner panels will play an important role in monitoring the rules on an ongoing basis. To require the FSA constantly to monitor its rules would also be administratively onerous. The noble Lord, Lord Saatchi, said that this would be a continuous obligation on the authority, and he referred to the potential to create bureaucracy. The potential to create bureaucracy is created precisely by this amendment. The amendment would place a huge strain on the authority and divert time and money away from its proper business—regulating—but it would also have knock-on effects on the regulated community and consumers. The regulated community would have to pay the costs of the review and consultation, and consumers would have to put up with the disruption involved. I fear that the effect of the amendment would be the reverse of the very admirable sentiments which the noble Lord, Lord Saatchi, expressed.
In relation to reviews under Clause 10, which was a matter touched on by the noble Lord, Lord Newby, normally they could not be triggered by outsiders unless the effect of a rule was to lead to a major regulatory upset. However, it is open to the Director-General of Fair Trading to report at any time on the competition implications of the rules, and we shall turn to that matter in a few moments.
The noble Lord, Lord Newby, also asked about the quantification of cost-benefit analyses. We have deliberately refrained from specifying the methodology of cost-benefit analyses. As the noble Lord suggests, it is rather akin to motherhood and apple pie. Those who conduct such analyses, such as the consultancy divisions of some major accountancy firms, frequently change their methodologies because a good number of them do not work. (Perhaps I should not have said that!) We do not believe that we should prescribe details of that kind in a Bill which must survive for a number of years to come. I am sorry to be discouraging about the wording of the amendments and the way in which they would operate because the original thinking behind them is very sound.
Lord Jenkin of Roding: I do not believe that the Minister has met the point raised by my noble friend and the noble Lord, Lord Newby. What appears to be missing is some way in which the practitioner community can compel the authority to review rules. Yes, the panel can make its report. We have discussed all the provisions for that. But one can envisage that an authority with these powers and the substantial domination that it will inevitably exercise will simply say, "We'll get round to it some time". The practitioner community—it might be the consumers might say, "You really should review your rules; they are not working correctly". There should be some provision which could ultimately be justiciable.
That is what my noble friend seeks. The Minister has not replied. It is hot a Clause 10 situation. I think that the phrase used is "a sledgehammer to crack a nut", but what else do we have? There needs to be some provision.
7 p.m.
Lord Elton: I support my noble friend Lord Jenkin of Roding. We have been reminded that there are bodies outside the authority which can review it or require it to review. But surely there needs to be some internal duty on the authority to maintain a regulatory system that is efficient. That may sound like befriending the practitioner at the expense of the client. But in fact the public who use the financial services in this country will be properly served only if the regulation of those services is not only effective but also efficient.
We have seen how enormously burdensome regulations can be on what we now call authorised persons if there is no satisfactory link between them and the bodies which regulate them. From time to time they thought that regulators had ears that did not work. That is why I was moved earlier to press for an effective mechanism within the practitioner panel for bringing the needs of the practitioner to the notice of the Financial Services Authority. I express badly the same fears to which other noble Lords around the Chamber have referred. The danger is that the FSA may believe that its mechanism is working wonderfully and is intellectually sound and criminologically faultless but it may cost so much to run that it will drive people out of business. The people then to suffer will be the consumers.
Lord McIntosh of Haringey: That is exactly why we have practitioner and consumer panels. Noble Lords are pushing in different directions. The noble Lord, Lord Newby, was satisfied that there was enough internal pressure in the FSA to make it review its own rules. His question was: what external pressure was there; and under what circumstances could external pressure be triggered? The noble Lord, Lord Elton, is now worried about the lack of internal pressure on a self-satisfied financial services authority which thinks that its rules are marvellous and does not want to consider changing them.
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That is exactly why we have the consumer and practitioner panels. They are set up to do exactly that job. Their chairmen have to be approved by the Treasury, so they have a sufficient level of independence to provide the external trigger. At the same time they are enough within the FSA to understand the issues and developments taking place within the regulation of financial markets and financial services in order to ensure that they are capable of making a well informed and rapid response to difficulties which arise. They are available both to the financial community and to consumers to do exactly the job for which noble Lords call.
I repeat this. There are adequate external constraints on rule making. The FSA needs to comply with its general duties, objectives and principles, as we debated at length on the first day in Committee, which will require the FSA in practice to keep under review all its operations. The panels will no doubt bring pressure to bear. Surely that is what we have been debating earlier in Committee. Surely that is the proper answer to the issues raised by the amendments.
Lord Saatchi: I am grateful to my noble friends for making somewhat better than I did the point I sought to make. Having listened to the Minister I am even more of the belief that we should test the opinion of the Committee on this matter.
I agree that these amendments would place an onerous obligation on the FSA to carry out these cost benefit analyses at regular intervals; and that the FSA would not enjoy that very much. That is exactly the point. If the amendments serve as a deterrent to excessive rule making and if a burden had to be fulfilled every time a rule was made, we should regard that as a benefit to the working of the FSA.
The second amendment seeks to raise competition to a higher level. As the noble Lord, Lord Newby, and the Minister said, that matter can arguably be dealt with in other parts of the Bill. However, we regard the raising up of the competition objective and the des, re to maintain the competitiveness of the UK at every opportunity as a benefit. Therefore I should like to test the opinion of the Committee. I commend the amendment.
7.7 p.m.
On Question, Whether the said amendment (No. 231YA) shall be agreed to?
Their Lordships divided: Contents, 46; Not-Contents, 112.

Division No. 2

CONTENTS

Astor of Hever, L.

Cope of Berkeley, L.

Attlee, E.

Crathorne, L.

Blackwell, L.

Dean of Harptree, L

Blatch. B.

Denham. L.

Boardman, L.

Elton, L.

Brigstocke, B.

Ferrers, E.

Carnegy of Lour, B.

Flather, B.

Colwyn. L.

Fookes, B.

569

Gardner of Parkes, B.

Montagu of Beaulieu, L.

Goschen, V.

Montrose, D.

Haslam, L.

Northbrook, L.

Henley, L. [Teller]

Northesk, E.

Home, E.

Onslow, E.

Jenkin of Roding, L.

Park of Monmouth, B.

Jopling, L.

Pilkington of Oxenford, L.

Kingsland, L.

Rees,L.

Luke, L. [Teller]

Renton, L.

Mackay of Ardbrecknish, L.

Roberts of Conwy, L.

Marlesford. L.

Rotherwick, L.

Masham of Ilton, B.

Saatchi, L.

Miller of Hendon,B.

Seccombe, B.

Monro of Langholm, L.

Tugendhat, L.

Monson, L.

Vivian, L.

NOT-CONTENTS

Addington, L.

Jay of Paddington, B. (Lord Privy Seat)

Ahmed, L.

Alli.L.

Jeger, B.

Amos, B.

Jenkins of Putney, L.

Archer of Sandwell, L.

Judd,L.

Ashton of Upholland,B.

Kennedy of The Shaws, B.

Avebury, L.

Kirkhill,L.

Bach, L.

Lea of Crondall, L.

Bassam of Brighton, L.

Levy, L.

Bragg, L.

Lipsey, L.

Brooke of Alverthorpe, L.

Lockwood, B.

Brookman, L.

Lofthouse of Pontefract, L.

Brooks of Tremorfa, L.

Mclntosh of Haringey, L.

Burlison, L.

McIntosh of Hudnall,B.

Carlile of Berriew, L.

MacKenzie of Culkein, L.

Carter, L. [Teller]

Mackenzie of Framwellgate, L

Christopher, L.

Mackie of Benshie, L.

Clarke of Hampstead, L.

Maddock, B.

Crawley, B.

Mallalieu, B.

David, B.

Mason of Barnsley, L.

Davies of Coity, L.

Massey of Darwen, B.

Davies of Oldham, L.

Merlyn-Rees, L.

Dean of Thornton-le-Fylde, B.

Milner of Leeds, L.

Desai, L.

Morris of Castle Morris, L.

Dixon. L.

Murray of Epping Forest, L.

Donoughue. L.

Newby, L.

Dormand of Easington, L.

Orme, L.

Dubs, L.

Patel of Blackburn, L.

Elder, L.

Paul, L.

Evans of Parkside, L.

Phillips of Sudbury.L.

Fvans of WatforH L.

Pitkeathley, B.

Farrington of Ribbleton, B [Teller]

Plant of Highfield,L.

Ramsay of Cartvale, B.

Faulkner of Worcester, L.

Rea, L.

Filkin, L.

Rendell of Babergh,B.

Rennard, L

Gale. B.

Richard, L.

Gavron, L.

Scotland of Asthal, B.

Gilbert, L.

Sharman, L.

Gordon of Strathblane, L.

Sharp of Guildford, B.

Goudie, B.

Simon, V.

Gould of Potternewton, B.

Stoddart of Swindon, L.

Grabiner, L.

Stone of Blackheath, L.

Hardy of Wath,L.

Symons of Vernham Dean, B.

Harris of Haringey. L.

Taylor of Blackburn, L.

Harrison, L.

Thomas of Gresford, L.

Haskel, L.

Thornton, B.

Hilton of Eggardon, B.

Tomlinson, L.

Hollis of Heigham, B.

Turner of Camden, B.

Holme of Cheltenham, L.

Walker of Doncaster, L.

Howie of Troon, L.

Warner, L.

Hoyle, L.

Whitaker, B.

Hughes of Woodside, L.

Whitty, L.

Hunt of Kings Heath, L.

Wilkins, B.

Irvine of Lairg, L. (Lord Chancellor)

Williams of Elvel,L.

Woolmer of Leeds, L.

Islwyn. L.

Young of Dartington, L.

Janner of Braunstone, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.17 p.m.
Clause 146 agreed to.
[Amendment No. 231ZA not moved.]
Clause 147 agreed to.
Clause 148 [Guidance]:
[Amendment No. 231A not moved.]
Clause 148 agreed to.
Clause 149 agreed to.
Clause 150 [Interpretation]:
Lord McIntosh of Haringeymoved Amendment No. 232:
Page 70, line 22, leave out paragraph (c).
The noble Lord said: Chapter III of Part X is concerned with the external competition scrutiny arrangements for the FSA. In earlier debates, I made it clear how much importance the Government attach to ensuring that the FSA gives the right weight to competition concerns. Getting the competition framework right is one of the main planks of economic growth and prosperity. But so is regulation. Without regulation there would be less investment and I do not need to spell out the adverse consequences of that. Consumers, both individually and as a whole, need to have confidence in the fairness and soundness of those with whom they deal if they are going to be willing to entrust their money to them.
The key to maximising welfare is ensuring that the level of regulation, and therefore the level of competition, is set at the right level; neither too much, nor too little. There are two ways in which that is achieved in the Bill. First, there are the internal constraints on the FSA and we have debated those. Most obviously, there are the constraints set out in the objectives and in Clause 2(3). Among those, as Members of the Committee will know, is the requirement in Clause 2(3)(f) for the FSA to have regard to the need to minimise the adverse effects on competition that may arise from any exercise of its general functions.
However, that is not all. The other matters in Clause 2(3) also act as constraints on over-regulation. There are procedural checks as well. I could single out the requirements that are placed on the FSA to consult on its regulatory provisions—rules, guidance and so on—and produce a cost benefit analysis (I can say that safely in the absence of the noble Lord, Lord Newby) which will have to look at the wider economic costs of the proposed rule or rules and not only at the direct costs for regulated persons.
In addition, we shall ask the FSA to produce an analysis in its annual report on the effect of its regulatory provisions on competition in the financial services markets. We want the FSA to take competition concerns very seriously indeed. Those are the internal constraints. Secondly, there are the arrangements for external oversight by the competition authorities. That is what this chapter of Part X is concerned with.

571
Let us look at the special nature of this regime. If it was not there, there would be no competition scrutiny of FSA rules and practices. Statutory rules are not covered by general domestic or European competition law. We do not claim the credit for that. It was brought in by the Financial Services Act 1986. However, we have extended it to cover all the sectors which will be regulated by the FSA. That means that, for the first time, there will be competition scrutiny of rules to cover insurance companies, friendly societies, building societies and banks.
Furthermore, not only does the Bill include a competition regime for the FSA as regulator, it will also include similar regimes which cover the rules and practices of recognised exchanges and clearing houses and, for the first time, the competent authority for listing securities. Those arrangements are intended to be along broadly the same lines as those for the FSA, and we shall bring forward amendments to achieve that in due course.
Not only do the external scrutiny arrangements mean that matters can be put right where the FSA does not get them right, but their very existence will work to reinforce the provisions which the Bill applies directly to the FSA. It will be mindful that if it does not get the balance right between competition and regulation, it will run into trouble.
We have also made a number of improvements to the way that the arrangements work in the light of Don Cruickshank's interim report on banking services in the UK. The main change is that the Competition Commission will play a very significant role in the process. Rather than Ministers taking the final decision on whet her regulatory provisions or practices have a significantly adverse effect on competition, that decision will be for the Competition Commission under the Bill. Where the commission finds that regulating provisions or practices have that effect—that is, an adverse effect on competition—it will have to come to a conclusion as to whether that effect is justified. In other words, it will balance the interests of competition against regulation and reach a view on whether the FSA got it right. Treasury Ministers came to a conclusion in this respect under the Financial Services Act 1986.
If the commission believes that the adverse effect is not justified, then the Treasury will have to direct the FSA to make changes. The only time that that does not apply is where the Treasury considers that there are exceptional circumstances which make it inappropriate or unnecessary to direct the FSA. The Bill does not spell out what those might be; we cannot predict them in advance. However, for example, it might be the need to meet the UK's international obligations.
The amendments which we propose make some further improvements to those made in another place. Amendments Nos. 232 and 233 provide necessary "tidying up". At present, the definition of regulatory provisions in Clause 150(1)(c) refers to guidance issued under Section 69. There is no guidance issued under that section. Therefore, Amendment No. 232 deletes subsection (c).
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Amendment No. 233 deletes subsection (e). That subsection includes in the definition of regulating provisions in Clause 150(1) the FSA policy statements on the imposition and amount of penalties. However, such statements bite on the FSA itself; they do not require anyone else to do anything and, therefore, there is no need to cover them in this definition. The important matter is what the FSA requires or encourages people to do through rules, guidance or statements of conduct and what it does itself. Those issues are covered by the reference to regulating provisions, as amended by Amendments Nos. 50 and 51, and by the reference to practices in Clause 150(1).
Amendment No. 233A makes a change to the language used to describe what the competition authorities—that is, the Director-General of Fair Trading and the Competition Commission—should be examining. At present, Clause 150 uses language which mirrors that in the Competition Act, which itself mirrors that in Article 81 of the European Treaty. When we looked at that clause, we considered that it was not appropriate. That legislation is concerned with the anti-competitive practices of commercial undertakings, not with statutory bodies.
If we were to keep the current wording, there would be a danger that it might attract the European Court of Justice jurisprudence. That is particularly the case now that the Competition Act, which imports the treaty test into domestic law, has been enacted. That has never been our intention and there are two reasons why it concerns us. First, the jurisprudence has developed in the context of commercial undertakings. There is always a risk that this would have unforeseen, and possibly unwelcome, consequences if applied in a different context.
Secondly, we do not want the external competition scrutiny arrangements to turn on the legal issues. While that may be appropriate under the Competition Act regime, where penalties can be imposed and legal certainty is essential, here we are dealing with questions of judgment rather than law. The key question that we want the competition regulators to address is whether the FSA, in discharging its general duties, has struck the right balance between competition and regulation. The answer to that should turn more on economic than legal arguments.
That is why we are using the reporting side of the Competition Commission rather than the appeal side. It is the reporting side of the commission which considers mergers where the issues are similarly economic ones rather than legal ones. Therefore, Amendment No. 233A moves away from the Competition Act language and refers to adverse effects on competition. That is a broad term which is readily understandable and which picks up the language used in the principle in Clause 2(3)(f), which has been agreed.
In addition, this amendment allows the competition authorities to look at the regulating provisions or practices of the FSA which require or encourage people—perhaps for a good reason which I shall explain in a moment—to exploit strong market

573
positions. In most cases where someone exploits a strong market position there will also be an adverse effect on competition, but that is not always the case. The change simply ensures that the coverage is complete.
The other amendments in this group simply make consequential changes, replacing references to significant anti-competitive effects, as currently defined in Clause 150(2), with references to significantly adverse effects on competition, as defined in this amendment. However, I am grateful to noble Lords for spotting an error in Clause 154 where the reference should indeed be to Clause 153(2). That is dealt with in opposition Amendment No. 234L. However, since the effect of my Amendment No. 234K is to amend that subsection, I am afraid that I am denied the pleasure of accepting it.
However, I am not so grateful for Amendment No. 233B, the effect of which would include in the definition of anti-competitive effect things which prejudice the competitive position of the United Kingdom. There can be no doubt about the importance of the FSA having regard to the competitive position of the United Kingdom. That is why we have included such a provision in Clause 2(3). That requires the FSA to have regard to,
"the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom".
Although I have sympathy with the aim which underlies Amendment No. 233B, there is no need for it. It would be unnecessary.
If the FSA were to regulate in an anti-competitive way, it would undoubtedly impact on the competitive position of the UK, given the level of competitiveness in the global market place for financial services. However, there is no need to spell that out here. There is also a more specific point. The whole purpose of this section is to bring to bear the expertise of the competition authorities—that is, the OFT and the Competition Commission—on matters covered by Clause 2(3)(f). That expertise is not directly relevant to the other principles covered by Clause 2(3)(a) to (e). That does not in any way diminish their importance to the FSA. However, it means that there will not be a role for outside agencies to assist in taking account of those principles in the same way as there is for competition. I beg to move.
Lord Elton: Before the noble Lord sits down, perhaps I may ask whether I heard him aright, or is it the case that it is Amendment No. 234K in which the reference to Clause 154(2) should be Clause 153(2)? I believed that I heard him say that it was in Amendment No. 234L.
Lord McIntosh of Haringey: Opposition Amendment No. 234L is then dealt with by my Amendment No. 234K. Therefore, both of them correct the error.
7.30 p.m.
Lord Jenkin of Roding: We had a short discussion at the beginning of the afternoon about the volume of government amendments which are still coming on to the Marshalled List. I have one question to ask about that. I listened to the noble Lord, Lord McIntosh, with great care. He speaks fairly quickly and perhaps I do not always catch everything he says. However, it is clear that the largest number of amendments in the group seek to change the wording in relation to the adverse effect on competition from that which has prevailed in our own competition Acts to that which is appropriate for a regulatory body. I hope that I am putting that into what I might call "Onslow" language.
My question is: how did the wrong form of words get into the Bill to begin with? I should have thought that the authorities concerned, and not least parliamentary counsel who have a huge repository of wisdom in these matters, might have recognised that the wording in the Bill as originally drafted would be likely to—I coin the Minister's phrase—involve European jurisprudence. Obviously having discovered that, it is right to change it. I do not quarrel with that. But we have now been dealing with this Bill for 18 months. Why is it that that has been discovered only in the last days of the Committee stage in the second House to consider the Bill, after all that has gone before? That is relevant to the criticisms which have come from these Benches. The manner in which this legislation has been produced and is being presented to the Committee leaves a great deal to be desired.
If the amendments were in response to debating points made in another place, one would be kinder to the Government. But, as I understand it, they have discovered that their own wording was wrong. That is not a particularly good way of legislating.
Lord Elton: I cannot resist rising to that fly and telling my noble friend that that comes back to the complaint which I made ineffectively in our exchanges on whether or not we should sit as a Committee; that is, the enormous amount of legislation going through at the moment. That does not impact only on the timetable; it impacts also on the draftsmen and parliamentary counsel. The answer is that the Government are trying to do more than Parliament can properly do in the time available to it, unless we sit through August.
Lord McIntosh of Haringey: I am making no promises about sitting in August. The reason for the different wording is, as I said before, that the language at present used is that used in the Competition Act 1998. That mirrors Article 81 of the European treaty. I should add also that it is inherited from the Financial Services Act, which is the work of the previous government. When the Bill was being drawn up, the Competition Act, as it now is, was a Bill.
There are advantages in taking things slowly, over a long period, with a lot of consultation; and there are disadvantages because while that period is going on things change—for example, the demutualisation of

575
the Stock Exchange. That requires an enormous number of amendments which are simply unavoidable.
We have been working closely with the competition authorities on the wording of the competition provisions and appropriate changes following the Cruickshank review. Again, that is a step forward. It did not exist when the Bill was drafted. If we want to incorporate those improvements and have the best Bill possible, we must deal with those matters.
While I am on my feet, I should say to the noble Lord, Lord Elton, that I wrongly said to him that our Amendment No. 234K corrects the mistake in the wording. In fact, it does not make that correction. The correction is a typing error and the Clerk advises me that that correction may be made without formal amendment.
Lord Kingsland: In one way or another, the Minister has accepted the three amendments that we have tabled in this group. Therefore, I have no need to speak to them.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 233:
Page 70, line 24, leave out paragraph (e).
On Question, amendment agreed to.
The Deputy Chairman of Committees (Viscount Simon): Before calling Amendment No. 233A, I should advise the Committee that if this amendment is accepted, Amendment No. 233B cannot be called due to pre-emption.
Lord McIntosh of Haringeymoved Amendment No. 233A:
Page 70, line 28, leave out from ("a") to end of line 30 and insert ("significantly adverse effect on competition if —

(a) they have, or are intended or likely to have, that effect; or

(b) the effect that they have, or are intended or likely to have, is to require or encourage behaviour which has, or is intended or likely to have, a significantly adverse effect on competition.

()If regulating provisions or practices have the effect of requiring or encouraging exploitation of the strength of a market position they are to be taken, for the purposes of this Chapter, to have an adverse effect on competition.").
On Question, amendment agreed to.
[Amendment No. 233B not moved.]
Clause 150, as amended, agreed to.
Clause 151 [Reports by Director General of Fair Trading]:
Lord McIntosh of Haringeymoved Amendments Nos. 233C to 233E:
Page 70, line 38, leave out ("significant anti-competitive effect") and insert ("significantly adverse effect on competition").
Page 71, line 2, leave out ("any significant anti-competitive effect") and insert ("a significantly adverse effect on competition").
Page 71, line 8, leave out ("anti-competitive effect") and insert ("adverse effect on competition").
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On Question, amendments agreed to.
Clause 151, as amended, agreed to.
Lord McIntosh of Haringey: I beg to move that the House do now resume. In doing so, I suggest that the Committee stage begin again not before 8.37 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

British History
7.36 p.m.
Lord Lukerose to ask Her Majesty's Government whether the teaching of British history in schools is satisfactory.
The noble Lord said: My Lords, I thank all noble Lords and noble Baronesses for taking part in this debate. I always think it is rather strange to do that before they have taken part, but I assume that they will all do so. I look forward to their contributions. I look forward to hearing the speech of my noble friend Lady Blatch and the answers from the Minister.
Henry Ford said, "History is bunk". Mr Blair said, in 1996:
"You are proud to be British, but too much of that pride depends on history and nostalgia and not on what Britain is today".
So why are we so fascinated by historical novels? Why do we watch in our millions so-called "period" dramas on television? Instant archaeology on Channel 4 is tremendously popular, although I cannot help wondering sometimes whether it is a little bogus. Why do we want to visit so many places associated with our history or, as I like to call it, with an echo of my childhood, our "island story"?
I believe that that is a subconscious reaction to a very deep-seated desire to know our history; to know our ancestors; and above all, to find out as much as possible of our past to relate to our present life.
History is knowledge. If you are lucky enough to have been taught it, you will be a more rounded person than if you have not. You will be in a position to improve your life; to know where you stand in the general scheme of things. I was lucky enough to have been taught history and, perhaps more importantly, an appreciation of history at school, starting with a structure of dates, political events and people who have had influence in their times.
"Willy, Willy, Harry, Ste, Harry, Dick, Dick, John, Harry III, I, II, III Neds, Dick the Lad",
and so on, may be a joke these days, but it was a wonderful way of remembering the sequence of English kings and, therefore, significant events. After I had thoroughly learnt that essential background, I had a wider appreciation of how we lived in the past, how and why we behaved as we did, and the mistakes that we made.

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It has been rightly said that those who forget the past are condemned to repeat it. When my younger son sat his GSCE history exam some 14 years ago, I was amazed to discover that his main subject was the history of China from 1914 to 1948—an excellent subject, no doubt, but for GSCE? He did not seem to have been taught any British history at all. It is surely essential to be taught at least some coherent British history to compare with and relate to that of foreign countries and peoples.
When my noble friend Lord Patten—I am sorry to say that he is not in his place this evening—was Secretary of State for Education, he said:
"Our history has been formed and charged by the individual actions of great people;—heroes and villains; saints and sinners; generals and sea-farers … all these have stamped their mark on British history".
Wellington never fought Waterloo; he merely opposed the Chartists. Churchill never led this country from defeat to victory; all that he did of note was to lose the 1945 election. Clive of India, Wolfe, Nelson, Florence Nightingale, Gordon, Pitt the Younger, Peel and Palmerston are not even mentioned. All the above examples come from a new textbook for national curriculum history. Does not that show that the Government's claims, as reported in the Times Education Supplement under the heading,
"British stamp back on history",
including the phrase,
"The government hopes to put British heritage at the heart of all history exams by making it impossible to avoid studying the nation's past".
and so on, may be a little misleading? Will the Minister confirm that history will no longer be compulsory after the age of 14? Will he say whether British history will indeed be at the heart of history exams?
I am enormously proud of my country; of its traditions; of the many great and noble people who forged our history and made things happen. They were sometimes kings and sometimes commoners. I want all children—and even more so those of foreign parents—to learn, to appreciate and to profit from proper teaching of our history, which is the most important basic building block of our society and citizenship. Without it, we cannot appreciate the past, we cannot adequately fulfil our lives during the present, and we have no hope of introducing the next generation to a successful future.
7.42 p.m.
Lord Harrison: My Lords, in Sellar and Yeatman's 1066 and All That, British history is divided into "Tory Acts", "Factory Acts", "Satisfactory Acts" and "Unsatisfactory Acts". I therefore thank the noble Lord, Lord Luke, for posing the Question as to whether the teaching of British history in schools today is carried out in a satisfactory or unsatisfactory manner.
I wish to concentrate on the Tory acts which brought about today's national curriculum and the factory acts—that is, Britain's economy—which I
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believe should govern the history curriculum's future development. A decade ago, the creation of the national curriculum provoked enormous controversy. Much of the argument turned on whether pupils could,
"go back to the good old days when we learnt by heart the names of the kings and queens of England, the names of our warriors and battles and the glorious deeds of our past"—
a sentiment for which the then Prime Minister, Mrs Thatcher, vented enthusiastic support. Indeed, the story of the deeds of derring-do concerning the development of the history curriculum in 1990 are vividly recounted in Robert Phillip's book, History teaching, Nationhood and the State. I allude to that treatise partly to highlight why history teaching is a contentious issue. At the core of the debate is the issue of nationhood; the fear that Britain is losing its identity and that, in modifying the history curriculum, we could somehow restore Britain to perceived former glories.
Such anxieties and some of the remedies proposed to mitigate them are misplaced. A more sober critique of history teaching today would invite us to be alive to more immediate and pressing concerns, in particular, our relationship to Europe, with whose history Britain's growth has been so intimately bound. But before turning to those concerns, perhaps I may remind your Lordships that the Government have given us the assurance that in the revised history curriculum to be taught in our schools from this autumn,
"important key events, historical figures and developments in British history will be retained as a central feature".
Furthermore, the announcement in last week's Budget that £1 billion extra is to be given to our schools, principally in the form of the book fund—so vital to the teaching of history—is warmly welcomed.
My anxieties lie elsewhere. I return to my factory acts and to the economy; to my concerns for Britain's future, including its manufacturing base. Because Britain must look to its economic future, our history must look to the future. We must see how the teaching of history can contribute to Britain's future prosperity.
How do I justify such a paradox? Let us read through the history section of the national curriculum. The one period airbrushed out of our history is Britain's post-war engagement with the European Union. The glory that was Greece and the splendour that was Rome are timetabled there, but the evolution of the European Union and, crucially, Britain's engagement with the single market lie absent from the national curriculum. Yet what is the principal market into which we shall send our British school students? It is of course the single European market of 370 million consumers, soon to swell to 500 million. Where is the evidence that, in drawing up the national curriculum over a decade ago, anyone asked the core curriculum question: what are the skills, knowledge, attitudes and aptitudes that our young people require today to be successful entrepreneurs in tomorrow's single European market? It is indisputable that Britain's economic backyard is no longer just the UK; it is indeed Europe. We thrive or wither there.

579
The proof that we are still thinking in the past and not about the past is the fact that we dub the curriculum a national one and not the "European" or indeed the "international" curriculum. If our young entrepreneurs want to make the goods and to provide the services that will sell in the single market, we must give them a thorough knowledge and understanding of the histories of continental countries into whose markets we currently send them so poorly informed. A deep knowledge of the market into which one is selling is the sine qua non of successful business.
It was a folly a decade ago when the noble Baroness, Lady Thatcher, tried to restrict the percentage of European history to be taught in the national curriculum. Slavish concentration on British history is not in Britain's interest. To help our young people to compete and for them to become Britain's intelligent ambassadors in a civilised and civilising Europe, we need to place more, not less emphasis on Britain's role in the development of Europe and its union. After all, chickens come home to roost. One glance at the car industry in Britain today suggests that those vital European and international connections have still not been fully appreciated or understood. Even when making cars we should have known that history is not bunk. I fear that for too long we have failed to place Britain's history in its true context. We have been content to be left on the continental shelf.
The teaching of history in our schools should no longer be left to the image of,
"an old-fashioned schoolmaster, perhaps in his sixties, with tweed jacket and a pipe".
History and history teaching are too vital for us to be nostalgic about. Used wisely, our past is our future; used ill, our future will be only our past, where acts of factory closure such as Rover's will mark our decline. As 1066 and All That concludes,
"This would be a bad thing. America will become top nation and history will Come to a lull stop".
7.49 p.m.
Lord Roberts of Conwy: My Lords, I compliment my noble friend on calling and securing this important debate. Those of us who share a love of history and owe the cast of our minds to its study are naturally concerned about how it is taught to those who come after us and that concern extends to what is taught.
As a minister in the Welsh Office with a responsibility for education, I was deeply involved in the preparations for the introduction of the national curriculum in the late eighties. I well remember the controversial discussions within Government when the history working groups produced their report. The Welsh history report, produced under the chairmanship of Professor Rees Davies, found more favour among some of my colleagues than its English equivalent because the history of Wales can hardly be told without close reference to the political history of England, while t le history of England traverses many parts of the world. The problem with English history is to grasp the core of that history and the same applies to British history.
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At the time I thought that the outcome of those reports transposed into the curriculum would stand for a generation at least but there have been two major revisions: in 1994 and again last year. I have no personal experience of teaching. I rely on the critical observations of professional teachers who have an abundance of such experience. They tell me that history is not what it used to be. Its study as prescribed has been diluted in the name of flexibility.
I hope all that has not been carried too far. Without a degree of prescription as to the basic factual knowledge to be acquired by young people it is difficult to see how historical inquiry can be at all meaningful and anything other than a playful exercise. Nor can the process of understanding what happened in the past be properly conducted unless it is rooted in real events.
Much re-writing of history goes on; there is nothing new in that. But there have to be identifiable reference points, even then, before their significance is reinterpreted and the new re-interpretation judged. Without traditional teaching, young people will not be able to sense the pace of change at different times in our history; surely one of the most valuable things to be learnt from historical study.
Contrary to Emerson's interesting dictum that,
"There is no history; only biography",
the revisionists reject the significance of individuals. I wonder what Cromwell or Churchill would think of that. My objection to the view of revisionists is that history without heroes and villains is dull and unedifying. I suspect that the airbrushing of personalities from history is a secret vice of the inferior second-hand scribbler of history who seeks his own glorification and that of his personal, potted retrospective view imposed on our complex and ever-changing past.
When I think of my own induction to an enduring love of history, I think of a pre-Raphaelite, textbook picture of a smartly dressed, golden-haired and noble Caractacus in chains before an effete Charles Laughton look-alike emperor in Rome. I am glad to see that Caractacus is mentioned as suitable for study at key stage 2. The social history counterpart is the twentieth century story of the two ancient Britons, Dai and Ianto, who appeared in the Coliseum about that time. Ianto, the duller of the two, asked who the lady was in the imperial box, next to the chap wearing the laurel leaves. Dai, ever knowledgeable, replied, "I'll tell you later; here come the lions".
What is history? It certainly should be fun and not the dull stuff some of our educators would have it be. I have studied the revised programme for key stages 1 to 3. There is an astonishing range of possibilities there; perhaps too wide a range. But it is what happens in the classroom that matters and what the teachers make of such little prescription there is. Without first-class guidance I suspect that they, the teachers, will find history very confusing and not he able to convey the joy of it to their pupils.
7.54 p.m.
Baroness Thornton: My Lords, from the outset I declare an interest. I am the parent of two children who attend a London comprehensive. When I told them I was to take part in the debate, they were keen for me to tell your Lordships' House how brilliant they think Mr Stokes their history teacher is, and how much they enjoy his subject. I can testify to the enthusiasm with which they approach the projects and homework they undertake.
I welcome the Question posed by the noble Lord, Lord Luke, for tonight's debate. It is a rare opportunity to comment upon and perhaps compare the British history that I was taught at my comprehensive in Bradford some 30 years ago and the British history which my 12 and 13 year-old are taught at the Camden comprehensive which they attend.
I was fortunate to be taught British history by an inspired and enthusiastic teacher who motivated me sufficiently to take the subject at both A level and as part of my degree. But however inspired he was, I confess that the teaching materials available and the methods by which we were taught amounted to books, more books, chalk and talk, and almost certainly did not have an appeal to a wider group. Pupils less bookish than myself regarded history as something for the more academically inclined and thus it had a more elitist image than I thought it and the teacher deserved.
How different is today's curriculum and teaching. In preparation for the debate I looked at what my children had been learning in humanities and history over the past five years or so in both primary and secondary school. I also looked at the teaching material available to them and the projects they produced.
It cannot be said that they have not been studying British history. They have studied the Romans in Britain. If I have any complaint it is that there has been a surfeit of Romans in their curriculum; they seem to have studied them on several occasions. They have studied the Anglo-Saxons, Vikings and Celts, the Tudors and Stuarts. One of my children studied the Tudor period and undertook a project which involved creating a Tudor street. At the same time they did a colourful piece of work about the Aztec Empire. As your Lordships will know, the Tudors and the fall of the Aztecs were contemporaneous. They have learnt how to use time-lines and so, indeed, have I. They have studied Victorian Britain and the impact of the Second World War, slavery and the Industrial Revolution. They have been taught both the broad spread, and the events and heroes.
My son has just completed a project about the First World War and life in the trenches. To do his project and provide a mini-dissertation, he not only read and researched the obvious books but used the Internet at school and at home. He delved into archives of all kinds, including German and British war propaganda. He and his class read poetry. They visited the Imperial War Museum and made use of its excellent materials. They watched BBC videos and he and his classmates performed a short theatrical production about life in
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the trenches, using contemporary sources, music and poetry. He now knows the dates of the battle of the Somme and other major events. He understands the battle strategies. He has some knowledge of life in the trenches and some understanding of the consequences of the Versailles Treaty. He has decided opinions on the competence of the British Generals. He looks forward next term to learning about the Vietnam war and I look forward to seeing what he will make of that episode.
How different that is from my experience of learning history. How accessible it is to youngsters of all talents and abilities. This, surely, is what we want from the teaching of British history for our young people. They must understand not only our history but our place in the world; what other peoples and cultures experience, and place a value on that too. The national curriculum is the mechanism which has provided the framework for that kind of teaching. As a parent I welcome the clarity of the syllabus which is available at every stage of their school life. In common with most parents, I like to know what my children will be learning and how that subject will reinforce other subjects in the curriculum.
In conclusion, I believe that the state of British history teaching in our schools is more than satisfactory. I believe it merits at least a B + or an A-and is improving steadily.
8 p.m.
Lord Pilkington of Oxenford: My Lords, even though I taught history for 40 years, I find it hard to present to noble Lords a philosophy of the subject, so my approach will be somewhat pragmatic and practical, as one would expect from an ex-teacher.
Certainly I never taught my pupils how to sell cars in Europe. I believe that the noble Lord, Lord Harrison, mistakes the idea of history as it relates to the business of the economy. One of the problems of history is that it never stops happening and the last century saw revolutions, wars and massive changes. As a teacher the problem one finds is that there is always more to study. Pupils are now expected to study not only British and European history, which was the case in the past, but to have some understanding of world history. As the noble Lord, Lord Luke, pointed out, his son was presented with China.
Added to this, there have also been enormous advances in the study of social history. However, speaking as a teacher, one has to start somewhere and to lay the foundations and understanding that guide further study. The obvious area for starting is the history of one's own country, because the cathedrals, castles, factories and so forth are there to be seen. This is rather like the study of other religions. A person can only understand other religions if he has some understanding of his own. Furthermore, what is of most importance for the study of history is that one must have a sense of time, an idea of the progress of history, a peg on which one can hang one's coat.
The old idea, which I began with when I was eight years old, was that of drawing timelines showing little pictures of Charlemagne and Alfred. I liked drawing

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those little pictures. From that, I acquired a sense of time which has never deserted me. In contrast to the noble Baroness, Lady Thornton—although I appreciate the understanding that her son has acquired—I rather deplore the modern tendency to study projects rather than long periods. One can only understand the Vietnam War in the context of some knowledge of when the French took over Vietnam in 1881 and what Vietnam was like before that. One can only understand the Romans and so forth with a sense of time. It is important, when teaching British history, to get a sense of the whole—from the Romans to the present day.
Actually, the Romans were only a minor part of British history. It really begins with the Anglo Saxons. Yes, it might be somewhat "surface" at times—Our Island Story and such like—but it worked in the past. We must remember that we are looking at around eight or nine ye.rs of tuition for a child of seven to a person taking GCSEs at 16 years old. Perhaps I may give two examples. The problems of Ireland date from the Reformation. Understanding can only be achieved if pupils undertake a study of Ireland from the Reformation——which, if I may say a little arrogantly, could be done in a simplistic way over two or three weeks. It is not enough to do projects from the First World War and various other 20th century topics.
As pupils understand more, they can be encouraged to make comparisons and consider, for example, why it was that the old Scottish parliament became the prisoner of the Crown whereas the English parliament—our ancestor—became the conqueror of the Crown. That is the kind of thing that students ought to think about. We must remember that pupils will abandon history at 16 years old. This will be all the understanding they achieve. It is not enough to understand what it must have been like in the trenches during the First World War. Pupils must get a sense of and feeling for British history. It is this country where those students will cast their vote and where they will live.
Finally, in the last year of GCSE, and for the minority of those who will move on to A-level, students must able to write essays. One can only understand history if one can analyse. History is not a matter of saying, "Let's understand Charlie or Ludwig in the trenches during the First World War"; it is a matter of understanding the complex arrangements that produced us sitting here and our colleagues sitting in the other place. That is what history is all about and what teachers must try to teach. History must not be reduced to mere projects that look attractive. Students must learn a sense of time and how to analyse and understand what made us. Once that has been achieved, students can go on to study China, India or America—whatever they wish. However, I shall never regret what I learned when I was at school.
8.5 p.m.
The Earl of Onslow: My Lords, I failed history O-level. Obviously I did not go to the excellent
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comprehensive school referred to by the noble Baroness, Lady Thornton. I went to a rather expensive school on the banks of the Thames.
However, because I had read Our Island Story—by far the best history book that has ever been written—I went on to study the subject in more detail. Perhaps noble Lords will remember the part describing the Siege of Lucknow. There is a picture of two Scottish girls with dust and smoke swirling around them. One is saying to the other, "Dinna ye hear them? Dinna ye hear them?" It is the sound of Havelock's pipes leading the Argyll and Sutherland Highlanders through mutineering Pandies, bayoneting them and saving the residency. That kind of heroic and, I accept, possibly jingoistic story gave me a love of history which allowed me to fail it at Eton.
However, there is something slightly more important than loving Our Island Story, and it is this. First, as my noble friend Lord Pilkington said, we must start the teaching of history from around the Roman Conquest to 1945. In my view, everyone should be given a complete list of English history. At my private school in 1946, the headmaster had written a book called Dr and Mr Fox's Date Book. It began with Julius Caesar and finished in 1945. In one column it stated, "Date joined British Empire". The book allowed the reader to understand the dates so that the complete picture was formed. I do not believe that it is possible to learn history without understanding the scale of its long, long story.
Perhaps I may tell noble Lords a parable to illustrate my thoughts on the teaching of history. My daughter Arabella studied at the university in Athens. She returned home with some Greek friends, whom she took on a trip to the British Museum. When they came out, they were absolutely purple in the face with rage. Arabella thought that they would mention the Elgin Marbles, but that was not the problem. They said, "How dare they give the Turkish exhibits bigger labels than those of the Greeks?" That incident had taken place because the history of Greece is taught in a way that encourages xenophobia. I suggest that, when reading history, one must learn not only about the grandeur of one's country, but also about where it went wrong. History must not be treated solely as a jingoistic exercise.
There is enough in British history of which to be quite phenomenally proud. After all, gentlemen making speeches in a disused chapel ensured that Louis XIV was no longer master of Europe; that Philip II of Spain could not impose a laver on the Low Countries or England; that there are no more French Hussars in Moscow or WaffenSS in Paris; and that von Kluck was turned on the Marne in the same place where Attila the Hun had been turned by Aëtius. The grandeur of British history is sufficient not to need any nationalistic hubris attached to it. We must be careful. Nevertheless, it is a grand story and all of us should know about it.
The noble Lord, Lord Harrison, said that we must learn about continental economics. I believe that we really need to learn about Adam Smith, not about the

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imposed mercantilism of Colbert and Joseph II. They were the ones whose attitudes still dominate the thinking of the European Community, along the lines of, "We shall only have silk merchants in Lyons". That is not a good way to form an economic strategy. Indeed, the present First Lord of the Treasury constantly urges our continental neighbours to base their economics on Adam Smith. However, he seems to be immensely surprised that when tobacco is taxed too highly here, everyone flees to Calais to buy cheap cigarettes. That should be a history lesson; that is our history; that is Adam Smith.
We can go further. We only need to look at Ireland to see where history is taught in such a way that it poisons relations. My noble friend Lord Pilkington said that the differences in Ireland go back to the Reformation; I suggest that they go back to when the Irish Parliament tried to impose Perkin Warbeck on the English; or even further, to when Richard II went recruiting Irish soldiers to dominate England.
It is a complicated issue. We must try to teach history so that we know the whole of it; we must not teach history so that it is xenophobic. We must be able to judge the grandeur of this country, which is mind-blowing, and be fair by recognising that it has "warts and all", to quote Cromwell.
8.10 p.m.
Baroness Sharp of Guildford: My Lords, from these Benches I congratulate the noble Lord, Lord Luke, on initiating this debate. I speak not as an expert but as one who has always enjoyed the study of history and believes that as legislators and policy-makers we have much to learn from the past.
My profession—that of an economist—is much too arrogant and tried to simplify the complex conjunction of events that fall into history; to create models with which it feels it can predict the future. My view is that what history teaches us is that the future always contains surprises.
I studied history at school through to advanced and then to scholarship level. But that was a long time ago. My daughters also studied history at school, but even their experience pre-dates the national curriculum. In preparing for this debate I talked to some of the teachers in schools in Guildford and I also looked up two recent Ofsted reports. I was interested to discover from the reports that underlying today's national curriculum, which has had a considerable effect on the teaching of history in schools, are five key elements.
The first is to provide a chronological frame of reference so that, as the noble Lord, Lord Pilkington, said, pupils are able to locate in time the material that they are studying and to cross-refer between periods; secondly, to acquire a range and depth of knowledge sufficient to be able to answer historical questions not just descriptively but also in order to make explicit links between related ideas; thirdly, to acquire an understanding of historical interpretation. It is important to recognise that the same events can be viewed differently from different perspectives: that the
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Battle of Waterloo was a great victory for us but can be viewed from the French perspective also, perhaps not as a victory but with a different interpretation.
The fourth element is to develop a sound use of historical sources. That is very different from the sort of history I studied, which was largely derived from textbooks. The Internet is a great opening where one gets to see the original sources.
The last element is to develop an ability to order and communicate those facts and ideas both in writing and orally. The noble Lord, Lord Pilkington, stressed that the writing of essays is an important part of history. But oral history is important also; it has perhaps had a longer tradition than the writing of essays and is an important part of the transmission of our culture. I am sure no one disputes the importance of those key elements. They include a sense of chronology, a sense of time.
If we look at the national curriculum itself, we see a good deal of history in it. It starts at key stage 1 where the aim is broad coverage from the ancient Britons, the Romans, the Vikings, William the Conqueror, the Tudors and the Stuarts; then key stage 2, a more detailed knowledge of different periods and the heroes that come in—William the Conqueror, Bad King John, Henry VIII, Oliver Cromwell and Queen Victoria. Personalities begin to emerge. For the older pupils in key stage 2 there is an emphasis on research, on retrieving information.
Key stage 3 in the secondary schools involves reasonable coverage of both the medieval realm, the Tudors and the Stuarts, and then into the 18th and 19th century, with the industrial revolution, its consequences, the growth of empire and the development of parliamentary democracy. It is a great shame that history is optional at key stage 4 in the national curriculum; namely, for GCSE. Only Albania, other than Britain in Europe, makes history optional for 14 year-olds.
I end on the question of whether politicians should dictate history syllabuses. Yes, we have a duty to ensure that we transmit the culture; but we also have a duty to equip our young people as citizens of the modern world. We must have some knowledge of and empathy towards other cultures and understand where Britons fit in. It is a slippery slope if we politicians start laying down what should or should not be taught. That is where many of the great dictators began: in the laying down of guidelines for their thought police to follow. It ill behoves any British Government to go down such a route.
From the evidence that I put together in order to participate in this debate, it seems to me that the study of British history in English schools, if well taught, is more than adequate and that the majority of our schools are doing a good job in teaching it. Given all the pressures on teachers today, rather than criticising them for not doing it in the same way as it was done when we were young, they deserve a sound round of applause.
8.16 p.m.
Baroness Blatch: My Lords, I thank my noble friend for initiating this debate because it is interesting, but the great frustration is that we do not have more time. Indeed, I know other speakers would like to have spoken tonight and have not been able to do so. But any fears that some of us had about history in the national curriculum, I am afraid were only heightened tonight by the contribution of the noble Lord, Lord Harrison.
The Secretary of State, announcing the details of the national curriculum revision, said that,
"Dates and events will continue to form the cornerstone of the teaching of history and we have strengthened the guidance from the draft so that everyone is clear about the importance of chronological events. The curriculum will include a strong emphasis on distinctive civilisations, key individuals and chronology".
We heard comments to that effect in the press and on the media. The schools Minister, Estelle Morris, went on to say,
"Our priority for the National Curriculum is to ensure that the important key events, historical figures and developments in British history, wit be retained as a central feature of the revised curriculum. They will be taught at all key stages. This will ensure that pupils learn the richness of British history".
But those announcements are arguably misleading. The Secretary of State recommended to the Qualifications and Curriculum Authority,
"It is proposed to introduce slimmer programmes of study at key stages 1 and 2 … which are less prescriptive than those introduced in 1995 by reducing the general requirements, and the detailed specification within each area of study at key stage 2. It is also proposed to increase flexibility at key stage 3 … by removing detailed specification from each area of study and the requirement to teach the first four study units in the current programme of study in chronological sequence".
As a result of that flexibility and the removal of prescription, the Qualifications and Curriculum Authority produced a history curriculum which does not refer to a single monarch or Prime Minister by name. All we have now is illustrative examples of individuals and events set out in brackets in the curriculum notes.
As a Minister—I admit of some time ago—I visited a school, which will have to remain nameless, where I was told that they taught all subjects through prejudice, racism, gender and conflict. Apart from needing to be held down by my officials when I heard that, what went through my mind was the denial of the glories of literature and history denied to those pupils. That is not to say that prejudice, racism, gender and conflict are not important in themselves, but to teach all subjects through those themes seemed to be almost a criminal activity on the children. But there seems to be a return to that.
There is also a concern about the changes to post-16 courses. Why, for example, in a letter today—it would be interesting to have a reply from the Minister—has the traditional essay question requiring at least 40 minutes continuous writing been eliminated from the history A-level?
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A new history textbook has just been published by Longman, called Minds and Machines, Britain 1750–1900. If this is to be an acceptable current textbook, we really do need to worry about what will happen. The textbook closely reflects the requirements and sociological bias of the current national curriculum. It is more concerned with leading children into superficial and moral judgments than in providing them with knowledge. Many of the chapter headings are dominated by gloom, doom and despair, suffering and desperation, injustice and exploitation; for example, one reads:
"White gold & black misery, Fingers weary and worn, A perfect wilderness and foulness, Pauper places, Riot and reform, A policy of sewage".
Is this the new textbook that is consistent with the requirements of the national curriculum?
The impossibility of safeguarding the landmark personalities and events of British history without requiring them to be taught is amply demonstrated by this book. It makes a mockery of the present Government's claims that the new history national curriculum for the year 2000, which is totally non-prescriptive, will,
"ensure that the important key events, historical figures and developments in British history will be retained".
It is important for the Minister to cover this point in his reply. The criticism I have just made of the book—the newest modern textbook for history—gives great cause for concern. It would be helpful to know whether the Minister agrees with that criticism. The book was in fact criticised by Chris McGovern, the director of the History Curriculum Association, who is an authority on such matters. The noble Lord must allay those fears in his response and assure the House that such textbooks will not be deemed appropriate in the future. We must be assured that children will be taught British history, including its chronology of events and the influence and impact of historical characters.
I conclude by saying that Mr Blair and his ministerial colleagues appear to be obsessed with all things modern. The intellectual richness of our people will be the greater when informed by a knowledge and an appreciation of our history.
The Earl of Onslow: My Lords, before my noble friend sits down, perhaps she can tell me whether that book is on the same shelf as the one on teaching people how not to be homophobic?
Baroness Blatch: My Lords, I do not know.
8.22 p.m.
Lord Bach: My Lords, the House will be most grateful to the noble Lord, Lord Luke, for having tabled the Unstarred Question this evening, thereby giving rise to this all-too-short debate on such a fascinating subject. Indeed, thanks have been expressed to him from all parts of the House and I also thank all other noble Lords who have taken part in our debate.

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Perhaps I may, first, declare two interests. The first relates to the fact that I am the father of an 11 year-old daughter who is finishing in primary school this year. I spoke to her about this debate and she, too, thought that the history teaching that she had undergone—I was about to say "endured", but that would be the wrong word—in the past few years had been very good and most successful.
My second interest is one that I am particularly pleased to be able to declare. I was privileged to be taught history by someone whom, among a whole range of very fine history teachers, I believe was undoubtedly one of the finest history teachers that there has ever been. His name was Charles Keeley. He was brilliant; he was unique; and he sparked off not just my interest in history but also that of many other people, including the noble Lord, Lord Lloyd-Webber, who cannot be in his place this evening. He, too, was taught by Charles Keeley, who died at the close of 1998. I am glad to be able to pay him this tribute in the House tonight. He was one of many outstanding history teachers and will not be easily forgotten.
Perhaps I may begin my reply to the debate by assuring the noble Lord, Lord Luke, that the Government value the teaching of British history very highly indeed. We fully recognise the important role that the subject plays in a broader education. Of course, history fires pupils' curiosity about the past in Britain and the wider world. Pupils consider how the past influences the present, what past societies were like, how those societies organised their politics and what beliefs and cultures influenced their actions. To do this, pupils develop—and need to develop—a chronological framework for their knowledge of significant events and people.
Those noble Lords who spoke about time, like the noble Lord, Lord Pilkington, were quite right. Pupils see the diversity of human experience and understand more about themselves as individuals and members of society—the precise point made by the noble Lord, Lord Luke. What they learn can influence their decisions about personal choices, attitudes and values. But, of course, history is more than that: pupils find evidence, weigh it up and reach their own conclusions. They need to be able to research, sift through evidence and argue for their point of view—skills that are prized in adult life and, indeed, in this House. The importance that the Government place on British history was, we believe, reflected in the revisions that we made to the national curriculum last November.
In designing this new curriculum for history, we have reinforced the importance of pupils securing a knowledge and understanding of key dates, events and people, as well as the chronological framework that unites them. It is perhaps worth pointing out that on page 6 of the document, which I know many noble Lords have studied, History: the National Curriculum for England, and to which the noble Baroness, Lady Sharp, made specific reference, the first two items referred to under "Knowledge, skills and
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understanding" in the Programmes of Study which identified the aspects of history in which pupils made progress are "chronological understanding" and,
"knowledge and understanding of events, people and changes in the past".
It would be difficult to suggest that the present Secretary of State for Education and Employment was anything other than someone who values many of the traditional aspects of British history teaching. Indeed, to suggest anything else would not be right—
Lord Baker of Dorking: My Lords, before the Minister leaves this part of his speech perhaps he could reflect upon the fact that in the past three years the number of pupils aged 16 taking GCSE in history has declined by 5 per cent each year. So, at key stage 4 history is slowly beginning to edge out of the curriculum. As the noble Lord said that the Government value the teaching of history, would he consider making history a compulsory subject for the age group of 14 to 16, as it was when I established the national curriculum? One of my successors—foolishly, in my view—allowed pupils to opt out and not take history from the age of 14. The only other country in Europe that allows its children to choose whether to study history after the age of 14 is Albania.
Lord Bach: My Lords, it is always fascinating to hear the contributions of the noble Lord on this subject, not only because of his time as Secretary of State for Education but also because he is known to be an expert in the field. I shall return to the question he raised later in my speech.
The Government have worked hard to get the balance right between the key areas that should be compulsory, while still ensuring greater flexibility for teachers. Noble Lords will be aware that it was necessary to relax the existing primary curriculum in 1998 to enable the literacy and numeracy strategies to settle in. Although history has always been a compulsory part of the primary curriculum, we have now reintroduced a full programme of study for history and given teachers a clear framework for teaching.
The noble Lord, Lord Luke, suggested that the fact that history was no longer a compulsory subject under the curriculum post-14 was somehow new. It is not new. As I understand it, since the national curriculum came into being under the aegis of the noble Lord it has not been compulsory for pupils aged over 14 to take history. No doubt the noble Lord now thinks that it should be. I give way.
Lord Baker of Dorking: My Lords, when the curriculum was established in 1988 taking history was compulsory up to the age of 16; and that also applied to geography. However, one of my successors—someone in my party, I regret to say—made the decision to change the policy. In my opinion that was a grave error. I am innocent of the charge that the Minister has just made against me.
Lord Bach: My Lords, if I have wronged the noble Lord, I apologise. However, he will agree with me that the subject has not been compulsory for some years now.
From September this year all pupils from the age of five up to 14 will, of course, have an entitlement to the revised history curriculum. Beyond 14, pupils can opt to pursue their history studies, through GCSE, alongside the compulsory subjects of English, Maths and science, and on to A-level. I am pleased to say that many pupils follow this course. I am not in a position to argue facts and figures with the noble Lord, but nearly a third of the school population enters for GCSE history. One in 20 do so at A-level.
As regards the primary history curriculum, pupils begin to learn about British history from the very start of their school life. That is the way it should be. In primary schools, pupils study key periods in British history, as well as those in European and world history. At first they learn about people's lives and lifestyles. They find out about significant men, women and children and events from the recent and more distant past, including those from this country and the wider world. When they reach key stage 2, pupils move on to study change and continuity in their local area, in Britain and in other parts of the world.
Pupils between the ages of five and 11 study British history, starting with the Romans, Anglo-Saxons and Vikings, moving on to Britain and the wider world in Tudor times, and concluding with studies in either Victorian Britain or Britain since 1930. Children will undertake specific local, European and world history studies. In Europe, the Ancient Greek times offer a rich source of study, for example myths, legends, beliefs and customs.
I move on to the secondary history curriculum. Between 11 and 14, pupils learn about significant individuals and events from the Middle Ages to our time. They also learn about key aspects of European and world history. Pupils undertake three British studies, one European study and two world studies. What is studied in this curriculum? It covers all the key phases in British history from the Norman invasion on. Pupils investigate the major features of our medieval past—the development of the monarchy, significant events and characteristic features of the lives of people living in these islands.
Between 1500 and now the European study covers a significant period of events in the pre-history or history of our Continent. The world study before 1900 covers the cultures, beliefs and achievements of other countries and continents in the world. After 1900—this is particularly important—pupils study some of the significant individuals, events and developments from across the 20th century, including the two world wars, the Holocaust and the Cold War and their impact on our country, Europe and the wider world.
History has an important role in putting lives, beliefs, values and attitudes in a much broader context. How others lived their lives and how their moral, social and cultural frameworks shaped the world are
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vital aspects for us to learn. History shows us human frailty too. Pupils can be encouraged to understand that greatness does not always equal perfection.
I turn now to the heart of the noble Lord's Question—standards. The noble Baroness on the Benches opposite and others in this House have heard government spokesmen and spokeswomen over the years say that the raising of standards in education is the Government's highest priority in this field. Delivering a big change in achievement in primary schools has been our first priority. We believe that the literacy and numeracy strategies are on the way to success. It is right to point out that history has played its part, particularly in the literacy strategy. There are, of course, problems between the ages of 11 and 14. The success of primary school literacy and numeracy hours has only served to highlight the relative lack of progress between those ages. Over the next year or so the Government will be developing an ambitious programme designed to raise teachers' expectations of pupils and to support teachers in raising standards at key stage 3.
Teacher training is surely the key to all effective teaching. We need to ensure that initial teacher training equips trainees with the confidence and skills they need to deliver a broad and balanced curriculum. Recent Ofsted teacher training inspection evidence shows that the quality of secondary history courses is far higher, on average, than the quality for all secondary courses.
Time is against me, as it has been against all noble Lords who have spoken in the debate. As regards the teaching of history in primary schools, many pupils are making good progress and often demonstrate good knowledge. They are able to ask questions of evidence and draw conclusions. The vast majority of schools (over nine out of every 10) provide a curriculum that is rated as at least satisfactory.
That is also the case in secondary education. A recent Ofsted inspection shows that many pupils have a good working knowledge of the subject. In history, 58 per cent of pupils reach the expected level of attainment by age 14. The combined average for the other foundation subjects is 53 per cent. My figures suggest that the number of 15 year-old pupils achieving grades A to C in GCSE has increased over the past five years by nearly 6 per cent. The number of 17 year-old pupils achieving grades A to C at A-level has increased by nearly 8 per cent over the past five years.
I shall have to stop speaking shortly. However, everyone present, whatever their views about the teaching of history, accepts that it is a crucial part of our education system and should remain so. The answer to the noble Lord's Question is that the teaching of British history is satisfactory but it is much more than that: it has breadth and depth and we believe that it draws together all that is significant and influential in the life of our country today.

Financial Services and Markets Bill
8.37 p.m.
House again in Committee.
Clause 152 [Power of the Director to request information]:
Lord Saatchimoved Amendment No. 233F:
Page 71, line 42, after ("information") insert ("relevant to the investigation").
The noble Lord said: This is a relatively minor amendment. It is simply intended to qualify the power of the Director-General of Fair Trading in obtaining information for the purposes of an investigation being carried on by him. The amendment would require the information requested by the director-general and the notice referred to in Clause 152(3) to be information relevant to the investigation. I beg to move.
Lord McIntosh of Haringey: This is certainly a nice, straightforward amendment; unfortunately, accreted to it are many government amendments to which I must speak. However, I start by making welcoming noises to Amendment No. 233F.
The amendments in this group concern the investigation powers of the Director-General of Fair Trading and the role of the Competition Commission in the external scrutiny arrangements. Amendment No. 233F, to which the noble Lord, Lord Saatchi, has just spoken, would amend subsection (3) of Clause 152. This clause gives the director-general powers to require people to provide him with documents and information.
Documents and other information are dealt with separately, in Clause 152(2) and (3) respectively. In Clause 152(2) the director may require someone to produce a specified document which, under paragraph (c) relates,
"to any matter relevant to the investigation".
Clause 152(3), which concerns information, does not contain any similar provision. I agree that such a limitation would be appropriate. This would bring the clause into line with the analogous provision in Clause 26 of the Competition Act 1998. I am grateful to the noble Lord, Lord Saatchi, for bringing forward this amendment. If I may, I shall take it away and produce our own amendment on Report which will meet the point while ensuring consistency with the provisions of Clause 152(2)(c)—the main problem being the use of the words "relevant to" in the amendment.
Turning now to my own amendments in this clause—Amendments Nos. 234A, 234B, 234E, 234H, 234J, 234M and 234P—these amendments align the language in the Bill with that used to describe what the Competition Commission does in connection with mergers under the provisions of the Fair Trading Act 1973. In the case of mergers, following a reference by the Director-General of Fair Trading, the reporting side of the commission "investigates" a matter and reports its "conclusions".
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The language of this part of the Bill is partly consistent with this at present. For example, paragraph 1 of Schedule 13 refers to an "investigation" carried out by the commission, and Clause 153(8) talks about the commission's "conclusions". But there are also references to the commission "considering" a report at various stages and to the commission coming up with "opinions". The amendments we are proposing simply replace references to the commission "considering" the matter and coming up with "opinions" with reference to its "investigating" and coming up with "conclusions".
Finally, let me deal with Amendments Nos. 234G and 234R. These amendments affect what the FSA can be directed to do following an investigation by the commission. Clause 153 places the commission under a duty to come up with its conclusion as to whether regulating provisions or practices are anticompetitive. If it concludes that they are, then it considers whether the effect is justified. If it does not consider that the effect is justified, then it must say what it thinks should be done about it.
But Clause 153(7) provides that the commission must ensure, so far as is reasonably possible, that the conclusion it reaches should be compatible with the functions conferred on the FSA and the obligations imposed on it under the Bill.
Clause 154(7), which concerns the Treasury's power to direct the FSA to make changes, similarly provides that the authority may not be required to take action that would be incompatible with its functions or obligations.
Amendments Nos. 234G and 234R have not yet been spoken to. Although we can still deal with them in the same group, I would rather noble Lords opposite spoke to those amendments before I continue. I commend my amendments to the Committee.
8.45 p.m.
Lord Kingsland: My Lords, I shall now speak to Amendments Nos. 234G and 234R. So far as concerns Amendment No. 234G, under the procedure envisaged by Chapter III of Part X of the Bill, the Director-General of Fair Trading keeps the authority's so-called regulating provisions under review. If a report is made by the Director-General, the Competition Commission must consider the matter. However, under Clause 153(7) the commission must ensure, so far as it is reasonably possible, that the conclusion it reaches is compatible with the functions conferred, and obligations imposed, on the authority by or under the Bill.
This amendment proposes that the provisions of Clause 153(7) should be amended so that the Competition Commission must ensure that the conclusions it reaches take into account the functions conferred, and obligations imposed, on the authority by or under the Bill. The amendment would give the commission more flexibility in reaching its conclusions and it would not be restrained by the requirement that its conclusions must be compatible with the authority's functions.

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Amendment No. 234R is a probing amendment. Clause 154 of the Bill deals with the role of the Treasury once the Competition Commission has made its report under Clause 153. Clause 154(7) provides that the authority may not be required as a result of that clause to take any action—
"(a) that it would not have power to take in the absence of a direction under—
the clause—or,
"(b) that would otherwise be incompatible with any of the functions conferred, or obligations imposed, on it by or under this Act".
The precise effect of this provision is not clear. If the authority cannot be required to do anything which is incompatible with any of the functions conferred or obligations imposed on it by or under the Bill, it puts into doubt the effectiveness of the competition provisions set out in Chapter III of Part X. The authority could argue that the rules in question are necessary in order for it to meet its regulatory objective of, for example, protecting consumers. In those circumstances, can the Treasury really require the authority to modify its rules?
There seems to be, if I can put it this way, an unsatisfactory overlap between the powers of the Treasury under Chapter III of Part X and the functions conferred or obligations imposed on the authority by Clause 2.
Lord McIntosh of Haringey: I am grateful to the noble Lord for his explanation of Amendments Nos. 234G and 234R.
These amendments effect what the FSA can be directed to do following an investigation by the commission. Clause 153 places the commission under a duty to come up with its conclusion as to whether regulating provisions or practices are anticompetitive. If it concludes that they are, then it considers whether the effect is justified. If it does not consider that the effect is justified, then it must say what it thinks should be done about it.
But—almost in the same words as those used by the noble Lord, Lord Kingsland—Clause 153(7) provides that the commission must ensure, so far as it is reasonably possible, that the conclusion it reaches should be compatible with the functions conferred on the FSA and the obligations imposed on it under the Bill.
Clause 154(7), which concerns the Treasury's power to direct the FSA to make changes, similarly provides that the authority may not be required to take action that would be incompatible with its functions or obligations. I fear that the noble Lord and I are repeating each other to some extent.
The amendments tabled by the noble Lord would remove this constraint. I am afraid that I cannot accept this. The effect would be to allow the Treasury, following an adverse report by the Competition Commission, to direct the FSA to change its rules in a way which could mean that the statutory objectives were no longer met. For example, the Treasury would be able to tell the FSA to stop imposing requirements
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X" or "Y" or new entrants to the banking sector, where the effect of not imposing those requirements would be that consumers would not be adequately protected or that confidence in the financial system would not be maintained.
The purpose of this external competition scrutiny is not—let me emphasise this—to provide a means for the commission and the Treasury to second guess whether the objectives which Parliament has given to the FSA are the right ones. That would be the effect of these amendments. The purpose of this external competition scrutiny is to provide a mechanism for ensuring that where the FSA does not regulate at the right level—that is, where it fails to give sufficient weight to the matters set out in Clause 2(3)—then the Competition Commission can report its conclusions as to what action should be taken and the Treasury can direct the FSA to make any necessary changes to get regulation back to the right level.
That must surely be the right approach. Otherwise we would not need to put objectives or principles in the Bill; we could just give the Treasury a power to tell the FSA what its objectives should be from time to time. The noble Lord, Lord Saatchi, suggested that as a way of cutting out a lot of time-consuming debate at an earlier point in our proceedings. However, if we are serious about it, the Committee will agree that the current approach in the Bill is the better one.
Lord Kingsland: If that is so, why does the Minister need to interpose the Treasury at all in this part of the Bill? Surely, if the authority, in implementing the recommended changes of the Director-General of Fair Trading and the Competition Commission, is constrained by the objectives of the Bill, then surely the Treasury has nothing to fear from seeing what they conclude is implemented—because, by definition, it can only be implemented within the objectives.
Lord McIntosh of Haringey: That is nearly always the case, but, as so often, we have to provide a reserve power because the Treasury has to pay attention to other wider implications, such as our international obligations, which must override any other domestic legislation.
Lord Kingsland: I knew that there must be an answer to that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 234:
Page 72, line 3, leave out subsection (4).
The noble Lord said: I spoke to this amendment with Amendment No. 89. I beg to move.
On Question, amendment agreed to.
Clause 152, as amended, agreed to

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Clause 153 [Consideration by Competition Commission]:
Lord McIntosh of Haringeymoved Amendments Nos. 234A to 234F:
Page 72, line 20, leave out ("consider") and insert ("investigate").
Page 72, line 27, leave out ("whether, in the opinion of the Commission") and insert ("the Commission's conclusion as to whether").
Page 72, line 30, leave out ("significant anti-competitive effect") and insert ("significantly adverse effect on competition").
Page 72, line 34, leave out from ("section") to ("must") in line 35 and insert ("stating the Commission's conclusion that there is a significantly adverse effect on competition").
Page 72, line 39, leave out ("opinion as to the action, if any, that") and insert ("conclusion as to what action, if any,").
Page 72, line 42, leave out ("anti-competitive effect") and insert ("adverse effect on competition").On Question, amendment agreed to.
On Question, amendments agreed to.
[Amendment No. 234G not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 234H and 234J:
Page 73, line 3, leave out paragraphs (a) and (b) and insert ("its conclusions").
Page 73, line 7, leave out ("that conclusion or opinion") and insert ("them").
On Question, amendments agreed to.
Clause 153, as amended, agreed to.
Clause 154 [Role of the Treasury]:
The Deputy Chairman of Committees, (Lord Dean of Harptree): I call Amendment No. 234K. I should point out that there is an error in this amendment. It should read "153(2)" and not "154(2)".
Lord McIntosh of Haringeymoved Amendment No. 234K:
Page 73, line 12, leave out from ("section") to end of line 13 and insert (" 154(2) which states its conclusion that there is a significantly adverse effect on competition").
The noble Lord said: This amendment was spoken to with Amendment No. 232. I beg to move, as corrected by the Deputy Chairman.
On Question, amendment agreed to.
[Amendment No. 234L not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 234M to 234Q:
Page 73, line 14, leave out ("opinion,") and insert ("conclusion,").
Page 73, line 14, leave out ("anti-competitive effect") and insert ("adverse effect on competition").
Page 73, line 24, leave out from ("to") to ("section") in line 25 and insert ("any conclusion of the Commission included in the report because of").
Page 73, line 27, leave out ("anti-competitive effect") and insert ("adverse effect on competition").
The noble Lord said: These amendments have already been spoken to. I beg to move.
On Question, amendments agreed to.
[Amendment No. 234R not moved.]
Clause 154, as amended, agreed to.
Schedule 13 agreed to.
Clause 155 [The Competition Act 1998]:
Lord McIntosh of Haringeymoved Amendment No. 234S:
Page 74, line 25, leave out ("is required or contemplated") and insert ("in the agreement is encouraged").
The noble Lord said: In moving Amendment No. 234S, I should like to speak also to Amendments Nos. 234T to 234X. At present the Bill excludes from the scope of the Competition Act agreements or conduct which is "required or contemplated" by FSA regulating provisions or practices. The wording of this exclusion is carried forward from the Financial Services Act 1986. The competition regime in that Act was cast originally against the background of legislation which has been replaced by the Competition Act 1998. However, the exclusion in the Bill for things "required" by FSA regulating provisions is not necessary. As I have said, this is already the effect of the Competition Act. These amendments therefore delete the exclusion for things required. This just removes unnecessary words.
We are also taking this opportunity to narrow the exclusion from the Competition Act for things contemplated by the FSA's regulating provisions. This is in response to Don Cruickshank's interim report on banking services in the United Kingdom, which recommended removing any unnecessary exclusions from domestic competition law. We think that there is merit in exclusion from the Competition Act going wider than "things solely required" of the FSA. This is because the FSA may issue guidance or codes of conduct which do not require anyone to do anything, but which indicate a course of action which the FSA thinks is the acceptable way of complying with the rule or with the statute. Guidance cannot require something to be done. If people act in accordance with options afforded in guidance or a code, then it would not be fair if they could be penalised under the Competition Act.
In addition, guidance which represents the FSA's considered view as to acceptable ways of complying with rules would be undermined if those who follow it could be penalised under the Competition Act for doing so. In the absence of a provision to the effect of the amendment, we think that the FSA would come under pressure to write a very prescriptive rule book, which I think that everybody is agreed would not be the best way to regulate. However, we think that the current exclusion goes too far. What might be contemplated by the FSA's regulating provision could be things which the FSA had not considered in any depth, if at all, when drawing up these provisions. This represents a wide exclusion from the Competition Act.
In the exclusion we want to cover things to which, in drawing up the regulatory provisions, the FSA has turned its mind. Don Cruickshank, in commenting on our proposals, welcomed this change. We are therefore cutting back the exclusion for things which are encouraged by FSA regulating provision.

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Finally, Amendments Nos. 234T, 234V and 234X, delete references to "practices". As drafted, the exclusion in the Bill covers things which are done as a result of the FSA's regulating provisions or practices. However, again we think that this goes too far. If people are encouraged to do something by the FSA regulatory provisions, which have been through the consultation process, and will have been the subject of cost-benefit analyses that is one thing, but where people do things as a result of FSA's practices, we do not think there should be an exclusion. It will be up to firms to decide what they do in response to practices. They are not obliged to do anything. Where they do something which is anti-competitive, there will be no protection from the Competition Act. That is the current position under the Financial Services Act and we are simply reverting to that. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendments Nos. 234T to 234X:
Page 74, line 26, leave out ("or practices")
Page 74, line 29, leave out ("required or insert ("encouraged").
Page 74, line 30, leave out ("or practices")
Page 74. line 35, leave out ("required or insert ("encouraged ").
Page 74, line 36, leave out ("or practices")
On Question, amendments agreed to
Clause 155, as amended, agreed.
Clause 156 [Authority's power to require information]:
The Earl of Northeskmoved Amendment No. 234Y:
Page 75, line 4, leave out ("in writing").
The noble Earl said: I beg to move Amendment No. 234Y. I hope that it will be for the convenience of the Committee if I confine myself to this amendment. My concern here is unrelated to the subject matter of the others in the grouping, to which my noble friends will speak in Ale course in their place on the Marshalled List.
I begin by reassuring the Minister that this is very much a probing amendment and confess that I ought to have spotted the point of concern rather earlier in the Bill's passage. Indeed, in the interests of consistency I could perhaps have trailed though all the Bill's 408 clauses and 19 schedules, to delete all instances where the words "in writing" appear. As a marginal defence, I suspect that the query that I have may be especially apposite in the context of the authority's information-gathering remit. None the less, I hope that the Minister and the Committee will excuse me for succumbing to the convenience at this stage of limiting myself to probing this single example.
My purpose is straightforward. I simply want to clarify that the mechanisms for communication within, to, and from the authority are consistent with the provisions of the Electronic Communications Bill; in effect, that the Bill is entirely e-commerce friendly. Using the specific example that I am probing here, it would seem that the authority is required to serve a
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notice on an authorised person for the information it requires exclusively in writing. Perhaps I am being too stupid, but there does not seem to be any facility for allowing the authority to achieve the same end electronically, although I note the phrasing of subsection (5) that information can be provided,
"in such form as it [the authority] may reasonably require".
That may be the Government's expressed intention. It may even be that such an approach is appropriate in the context of this part of the Bill. But, as we all know, the Chancellor and the Government attach huge importance to speeding up the UK's progress towards an "e-shaped" economy. As we also all know, financial services are already well down that path. Accordingly, it is important to ensure that, where appropriate, facility for electronic communication is fully on the face of the Bill.
Perhaps I may therefore ask the Minister, in his absence, whether, in the context of this clause, it is the intention that the notices referred to should always be in writing—that is to say, paper based—or is it the intention that the drafting allows for an either/or interpretation that includes communication by electronic means? If the latter is the case, should not that be spelt out more clearly in the drafting? More generally, is the Minister satisfied, in his absence, that the whole Bill has been drafted to ensure that, where appropriate, facility to communicate electronically is explicit on its face?
I hope that the Government can give the Committee some comfort on these points. I beg to move.
9 p.m.
Lord Kingsland: I wonder whether this is an appropriate moment to speak to the other 17 amendments in the group.
Lord Bach: I am to reply to these amendments. I think that the noble Earl, Lord Northesk, was under a misunderstanding. The Minister, my noble friend Lord McIntosh, would not dream of disappearing while the noble Earl was on his feet. I am afraid that the noble Earl has me to reply to him.
Lord Kingsland: I see that the noble Lord, Lord McIntosh, finds the attractions of your Lordships' House quite irresistible because he is amongst us again.
Amendment No. 234YC follows on the requirement in Clause 157(5) that certain service providers to the person referred to in Clause 157(2), to whom the authority has given a notice under Clause 157(1), must provide all such assistance to the person appointed to provide a report under Clause 157(1). Those service providers could be bankers, lawyers and other advisers and indeed agents who owe fiduciary duties of confidentiality to their clients. The amendment makes it clear that those persons do not breach their duties to their clients by complying with the obligation imposed by Clause 157(5).

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Amendment 234YD makes the same amendment to Clause 159 by replacing the words "circumstances suggesting" with the words "reasonable grounds for suspecting". This is the judicial review point to which I have already referred. Interestingly, the words "has reasonable grounds for suspecting" were in the original draft of the Bill printed on 17th June 1999; but it was only later that the Government replaced those words with the words "circumstances suggesting".
Amendment No. 234YG also relates to the point about judicial review and adds the words "on reasonable grounds" to Clause 161(3)(a). Members of the Committee may recall, in the course of their preparations for work on the Bill, that it was remarked in the Committee stage in the Commons that the Government appeared to be determined to reduce the risk of the authority's activities being subject to judicial review. Many of the amendments to Part XI which we are now discussing are intended to redress this balance.
Clause 161(3)(a) deals with the powers of investigators appointed by the FSA or the Secretary of State. Normally the investigating authority must give written notice for the appointment of an investigator to the person who is the subject of the investigation. However, this requirement does not apply in certain circumstances, including where the investigating authority believes that the notice would be likely to result in the investigation being frustrated. Our amendment would require the belief to be "on reasonable grounds".
Amendment No. 234YH concerns Clause 161(6) of the Bill. Here the investigator must make a report of his investigation to the investigating authority. This amendment would require the investigator to provide also a copy of such a report, not unreasonably, to the person subject to the investigation.
Amendment No. 234YJ covers the same point. When a person is required to attend upon an investigator, to answer questions or to provide other information, the investigator should give that person a notice which specifies the provisions under which the investigator was appointed and which states the reasons for his appointment.
Amendment No. 234YK is similar to the amendments above and inserts the words "on reasonable grounds" to Clause 163(3). Clause 163(2) refers to the powers of the investigator to require a person, who is neither the subject of the investigation nor a person connected with him, to attend before the investigator to answer questions or otherwise provide information. The amendment would require the investigator to be satisfied "on reasonable grounds" that the requirement imposed on the person concerned was necessary or expedient for the purposes of the investigation.
Amendment No. 234YL makes the same amendment to Clause 164(3). Again, Amendment No. 234YM adds a "reasonable grounds" qualification when the investigator considers the matters in Clause 164(1).
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Amendment No. 234YN amends Clause 164 so that its provisions are consistent with Clause 162. It is not clear why the provisions of these two clauses differ, given that they cover the same point—an investigator requiring a person to attend before him to answer questions or otherwise provide information.
Amendment No. 237A is, I say candidly, a probing amendment. It is intended to raise the issue of the status of confidential information which is produced or disclosed to an investigating authority under Part XI. It is not clear under what obligation the investigating authority will be when, in the course of an investigation or in other circumstances, a person, whether an authorised person or not, produces documents or other information to the regulators. Is the authority under any obligation to keep that information confidential, or can it pass it on to other regulators, either in the United Kingdom or abroad? To what extent can the authority make the information publicly available?
Amendment No. 237B refers to Clause 166(6), which contains a specific provision to protect a person engaged in the banking business to take into account the duty of confidentiality owed by the bank to the customer. The amendment would extend the protections to others; for example, solicitors and persons acting as agents who owed duties of confidentiality as a result of acting in a fiduciary capacity.
Amendment No. 237C mirrors Amendment No. 234YA and provides that a "Relevant person" in Clause 166(8) means a person who, within the previous six years, has been a director, controller, auditor or another similar party, as set out in paragraphs (a) to (d) of Clause 166(8).
Finally, Amendment No. 237D makes it absolutely clear that the person upon whom an information requirement has been imposed has a reasonable period in which to comply with the information request. I shall have to reflect on Amendment No. 257D and come back to your Lordships.
Lord Grabiner: Perhaps I may comment on the fasciculus of amendments tabled by the noble Lord, Lord Kingsland, which are conveniently gathered together under Clause 159, Amendments Nos. 234YD to 234YF, and under Clause 161, Amendment No. 234YG. The import of the proposed amendments is essentially to delete the expression, "circumstances suggesting", and substitute, "reasonable grounds for suspecting".
The structure of Clause 159 in its bare essentials is subjectively worded; it provides that,
"if it appears to the Authority that there are circumstances suggesting that",
and there follows a whole series of matters that would give cause for concern to the regulatory body. In those circumstances, under subsection (3) the authority is empowered to,
"appoint one or more competent persons to conduct an investigation on its behalf".

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I am not sure what the relevance of "competent" is; one would assume that only competent persons would be appointed. However, we shall see that there is some origin to the prevision, which has to do with necessary expertise rather than ability. There are a number of legislative examples. There is a good record for the use of that language.
First, it is suggested by the noble Lord, Lord Kingsland, that the object of the exercise is to secure, so far as possible, some basis for introducing the application of the judicial review process. That is the purpose of the amendment.
First, if it does not "appear to the authority", that would be eminently judicially reviewable. If there are no "circumstances suggesting", again that would be eminently judicially reviewable. Therefore, I respectfully suggest that the amendment adds nothing to the debate because, under the Bill as currently drafted, all would be eminently and properly the subject of judicial review, or would be in an appropriate circumstance.
The only other point of principle that I make is that there is a great deal of relevant legislative history relating to this problem. This afternoon I dug out quite quickly some working examples. One appears in Section 177 of the Financial Services Act 1986, which provides:
"If it appears to the Secretary of State that there are circumstances suggesting that an offence under Part V of the Criminal Justice Act 1993 (insider dealing) may have been committed, he may appoint one or more competent inspectors"—
one sees the familiar expression—
"to carry out such investigations as are requisite to establish whether or not any such offence had been committed and to report the results of their investigations to him".
That is an example where the investigation could in due course lead to a criminal prosecution. Precisely the same formula is used in that Act as appears in the drafting of this Bill which the noble Lord seeks to amend.
Another example is to be found in Section 432(2) of the Companies Act 1985:
"The Secretary a State may make such an appointment [of competent inspectors] if it appears to him that there are circumstances suggesting",
that an investigation should be conducted.
The final example is to be found in the Fair Trading Act 1973. Sections 50 and 51 give power respectively to the Director General of Fair Trading and the Secretary of State, or the Secretary of State and any other Minister, to make a monopoly reference where it appears to him or them that a monopoly exists, or may exist. In that legislation the reference is to the Monopolies and Mergers Commission, now the Competition Commission. However, that legislation is unaffected by the introduction of the Competition Act 1998.
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Very similar provisions are to be found in Section 64(1)(a) of the 1973 Act in respect of a merger reference:
"A merger reference may be made to the Commission by the Secretary of State where it appears to him that it is or may be the fact that two or more enterprises … have … ceased to be distinct enterprises".
Similarly, in Section 75(1) provision is made for a reference in anticipation of a merger.
All of those examples turn upon the subjective judgment of the person who is charged with the duty to make the necessary appointment. Some of the examples can lead to criminal proceedings; others can lead to an expensive and complex inquiry by the Competition Commission. None of those examples incorporates the kind of language which the amendments suggest. I respectfully suggest that these amendments are entirely unnecessary and, if anything, indicate a little over-lawyering on the part of those who advise noble Lords opposite.
9.15 p.m.
Lord Kingsland: I believe I said, when I dealt with these amendments, that their object was not to convert matters which were not judicially reviewable into matters which were but to make them more easily judicially reviewable. The noble Lord, Lord Borrie, will recall that two years ago when we debated the Competition Bill—not at exactly the same length as this Bill but almost—an issue arose as to the investigatory powers of the director-general.
My memory may not serve me well and therefore I cannot claim certainty in this regard. I recall that in that Bill, in regard to the director-general, a similar form of words indicating subjectivity was used, but that in the course of the debate it was accepted by the Minister that the word "reasonably" could be incorporated into the text. In other words, that word impliedly qualified the discretion of the authority. If tonight the Minister is prepared to go as far as the Minister did in the context of the Competition Bill I shall be perfectly content. If not, I believe that my form of words makes it easier. I see the noble Lord, Lord Grabiner, nodding.
Lord Grabiner: I entirely agree with what the noble Lord says. The point is that the amendment would make the position too easy; and one would simply invite litigation as an entirely unnecessary exercise.
Lord Kingsland: I have the greatest admiration for the noble Lord, Lord Grabiner, but I regard it as a shocking allegation that I, of all people, should wish to encourage litigation. On the contrary, I wish to encourage a prudent authority. I believe that an objective requirement which makes the authority look before it leaps is likely to lead to much better decision making than is a subjective requirement. That was the force that drove me to table the amendments. It was not the honeyed words of the advisers to which the noble Lord, Lord Grabiner, referred.
Lord Grabiner: Before the noble Lord sits down, I am delighted that those words struck home!
Lord Bach: If the Front Bench can get a word in, this is my first entry into discussions on the Bill$ I believe that the same applies to the noble Earl, Lord Northesk. I do not know whether he thought of any animal analogies. I thought of shark-infested waters, but immediately put that to one side because it would not be a fitting description of any noble Lord. However, "Daniel in the lion's den" might be more suitable because a lion is more similar to a number of noble Lords.
The key to effective regulation is information. That is what this part of the Bill is about. To regulate effectively the broad range of markets and businesses for which it is responsible, and to take timely, well-considered and proportionate—that is an important word—regulatory decisions, the FSA must have access to detailed, up-to-date and relevant information. Equally, it must have effective powers to investigate possible wrong-doing in order to maintain the confidence of all players in our financial markets from the small investor to the large market professional. This is vital for maintaining the high reputation of the United Kingdom as a place in which to do financial services business.
The effectiveness of the powers in this part of the Bill is therefore central to the new, rationalised regulatory system. In keeping with our general policy of rationalising powers, Part XI of the Bill represents a careful synthesis of the different investigation powers exercised by the existing regulators. What we started with was a mixture of statutory and contractual powers—one kind of power for one kind of person doing one kind of activity, with another power for another person doing a similar sort of business.
Much of the debate in another place—it has been referred to—centred on the extent to which the FSA is required to act reasonably and to impose requirements only to the extent that they are reasonable. It was following that discussion that the Government agreed to review the use of explicit reasonableness references in the Bill more generally, with the result that we made a number of amendments to other parts of the Bill the other day. Clearly some of the more important amendments moved and spoken to today seek
to introduce further explicit references to "reasonableness". I do not think that the noble Lord will be surprised to hear that we do not consider those to be as helpful or as necessary as the other amendments.
Dealing with the amendments debated, but not necessarily in order, as regards reasonableness, Amendments Nos. 234YD, 234YE and 234YF seek to reverse changes made in another place by changing the trigger for the FSA and the Secretary of State to start an investigation into particular possible contraventions. This important clause, Clause 159, covers a broad range of possible contraventions, ranging from breaches of rules by authorised persons, through market abuse, to serious criminal offences under the money-laundering regulations, the carrying
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on of illegal regulated activity, the making of misleading statements and, last but not least, insider dealing.
When we introduced the Bill in another place, the clause was drafted on the basis that the trigger for an investigation power was where the FSA or the Secretary of State had,
"reasonable grounds for suspecting that".
a contravention may have taken place.
However, we concluded that that wording imposed too high a test for launching an investigation. We are talking about an investigation in this context. It is similar to, if not the exact equivalent of, the level of suspicion that a policeman must have in order to carry out an arrest and which would often be met only after some, perhaps considerable, investigation.
This is too high a test if we want to have a regulatory system that responds quickly and effectively to possible wrong-doing. We cannot have a system where the regulator must have the kind of case required to justify an arrest in other circumstances before investigations can begin. That might not matter when what is at issue is a breach of the rule by an authorised person, as the more general information gathering powers under Clause 156 would be available to build such a case.
However, the trigger is wholly unsuitable for investigating possible illegal regulated activity or financial promotion, market abuse and the other issues I raised. In such cases, there may be no alternative means for exploring the circumstances in order to build the kind of case that would be sufficient to meet the reasonable-grounds-for-suspecting trigger. We make no apologies for wanting to be sure that investigations can take place as and when the circumstances suggest that they are needed. Nothing is to be gained by having a regulator who cannot respond quickly or by encouraging wrong-doers to seek to prevent the launch of inquiries through procedural challenges in the courts.
Therefore, the Bill was amended in another place to align the trigger for these investigation powers with those currently applying to the investigations of insider dealing under Section 177 of the Financial Services Act 1986. My noble friend Lord Grabiner regaled the Committee with other examples which, perhaps to put it mildly, are telling.
We cannot accept any weakening of the powers. The FSA and the Secretary of State must have powers they can exercise on the basis of circumstances suggesting a contravention. Waiting until the existence of the kind of grounds which would in a different context be clear enough to justify an arrest means leaving things too late.
The noble Lord, Lord Kingsland, suggested that that has something to do with trying to avoid judicial review. That is not the case. As I believe my noble friend Lord Grabiner made clear, one cannot get rid of judicial review so easily. Judicial review will still exist. It is true that we do not want to encourage a situation in which every decision to launch an investigation is liable to be referred to the courts. That would severely

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reduce the effectiveness of the system in detecting wrong-doing and eliminating it from our financial markets. For those reasons, I invite the noble Lord not to move his amendments.
Amendments Nos. 234YG, 234YK and 234YM contain the phrase "on reasonable grounds" in connection with other judgments which an investigator y be called upon to make. We want investigation powers which are effective. A balance must be struck. The requirement for reasonable grounds perhaps seems more onerous than it sounds, bearing in mind that reasonable grounds for suspecting is the test which a police officer must satisfy before he can arrest a citizen.
We do not want to open up too great a scope for investigations to be tied up or frustrated. We want an investigator to be able to take a reasonable judgment about the prospects of the investigation being frustrated without a substantial risk that the investigation could then be frustrated by a subsequent challenge to the decision to withhold the notice. We want investigators looking into serious crimes such as illegal deposit-taking or insider dealing to be able to form a reasonable judgment as to the witnesses to interview without opening up the investigation to a risk of challenge.
After all, if the investigator is wrong to consider that a person can give information, he will gain no information as a result. We must not allow amendments to take place at the expense of the ability to launch investigations when appropriate, or the ability of investigators to take simple practical judgments about the proper conduct of those investigations. We believe that these three amendments go too far and, again, we would ask the noble Lord to withdraw them.
I move on because this is a large number of amendments, moved briefly by the noble Lord, Lord Kingsland. I deal next with Amendments Nos. 234YB and 237C. I shat come to the amendment of the noble Earl, Lord Northesk, when it is moved shortly. If I may, I shall call these the "statute of limitations" amendments. Amendment No. 234YB would impose a statute of limitations of six years on the period after which a person who used to be an authorised person may be required to provide regulatory information. Amendment No 237C would impose that same six-year limit on the period during which a former controller, auditor, actuary, accountant, lawyer or employee of a person under investigation could be required to disclose information covered by banking confidence.
I want to make it clear on behalf of the Government that it is not our intention that any person who has once been authorised, or who has held some position in relation to an Authorised person, should be subject to an endless stream of information requests for ever more. We considered the possibility of a cut-off period for those powers but concluded that, by its very nature, it was bound to arbitrary. We do not believe that we can afford to introduce some arbitrary period after
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which the regulator must simply wash his hands of an authorised person and the customers of that person for whom he bears some responsibility.
What would happen if, some years down the road, concerns emerged that there had been mass mis-selling along the lines of the pensions scandal about which the House heard so much. Surely that scandal is evidence enough that there can be a very real need for information about transactions carried out many years previously, certainly more than six. In order to assess the extent of the problem, the FSA may well need to have access to information from all those who were active in the market at the time, not only those who are still authorised. The Government are committed to ensuring that the regulator will have all the powers that he needs in order to deal with any future scandals of that nature. The Committee would not expect anything less.
Therefore, we have taken forward the existing approach—it is not a novel one—to be found in Section 39(8) of the Banking Act, which applies the power to collect information to former authorised institutions under the Act. However, it would be wrong to give the impression that those powers are not properly constrained. The power under Clause 156 is circumscribed, for example, by the requirement in subsection (4) of that clause, which limits it to,
"information and documents reasonably required in connection with the exercise by the Authority of functions conferred on it by … this Act".
That ensures that a former authorised person will not be pursued endlessly with information requests. Only when the FSA has some legitimate need for information in connection with the discharge of its functions may it invoke this power.
The same applies to the investigation powers. The information that the FSA can require from a former auditor, controller or employee is constrained by the purpose of the investigation. It is common sense that the longer the period since they held the position in question, the less likely it is that they will have relevant information required by the authority. However, if they have that information, why should we prevent the authority from requiring it?
I turn to Amendment No. 234YA, which I call the "without delay" amendment. It is important that the FSA can gain access to information and documents on a timely basis—obviously, the vital ingredient of effective regulation. That is why in our subsection (3) of the clause we provide that the FSA can require the information and documents "without delay". The noble Lord's amendment would require instead that all requests for information are subject to some specified period for compliance. Clearly, the intention behind the amendment is laudable. However, we maintain that it is unnecessary.
The FSA must, of course, be reasonable in its expectations of when information may be forthcoming. It is implicit in the use of the term "without delay" that what is being referred to is some unjustified or unreasonable delay. So the true meaning of Clause 156(3) does not enable the FSA to require a

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person to meet some unreasonable or impractical requirement. That would clearly be an absurd interpretation.
The noble Lord suggests instead that there should always be a specified period which is reasonable. That would be rather more bureaucratic and would place the onus on the FSA to decide what period must reasonably be allowed for producing the information, whereas the current wording enables the provider of the information to take such time as is necessary for providing the information, so long as he does not delay in the normal sense of that word.
I turn to Amendments Nos. 234YC and 237B which deal with fiduciary duties. The Government have sympathy with the noble Lord's wish to ensure that a person who is required to give assistance under Clause 157(5) cannot be sued for breach of fiduciary duty or other obligation as a result. That is clearly right. However, we have concluded that the insertion of an explicit provision is unnecessary. Compliance with the statutory duty imposed by subsection (5) would be a defence to any allegation of breach of a fiduciary or other duty.
Moreover, Amendment No. 234YC is potentially damaging because it could cast doubt on that principle in other cases by implying that compliance with a statutory requirement could otherwise give rise to an action for breach of some other duty.
Amendment No. 237B seeks to extend the additional protection for banking confidentiality under Clause 166(6) to duties of confidence arising from acting in a fiduciary capacity. Clause 166(6) follows the model under current legislation—specifically Section 105(2A) of the Financial Services Act, as inserted by the Companies Act 1989. We are not attracted to extending this special regime in the way suggested. For one thing the term "acting in a fiduciary capacity" covers a very broad range of circumstances: for example, professional advisers such as accountants, stockbrokers and solicitors who may owe duties to their clients; company directors in relation to their shareholders; and agents and trustees. Those are all people from whom the FSA may require information. But it is necessary to draw a line somewhere. Why should it not apply to other duties of confidence? We cannot draw up special rules for them all.
We are following the existing legislation in drawing it round the relatively well-understood legal concept of banking confidentiality. That is a concept which has grown up over many years and has a clear and accustomed meaning.That is less true of fiduciary duties, particularly given that that would include constructive trusts which can arise, as the Committee heard earlier, in a wide variety of situations. There is a danger that this amendment will give rise to many different interpretations and disputes over the exercise of these powers.
The noble Earl, Lord Northesk, has been very patient and I turn now to his amendment. Amendment No. 234Y would remove the need for a notice issued
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under Clause 156 requiring information to be "in writing". We were not sure what was the noble Earl's concern until he made his helpful speech, but it is about electronic communications. I can tell him clearly that the Electronic Communications Bill will enable the Government to ensure that all references like this in this Bill will be kept up to date with modern communications technology. So he need not fear that e-commerce will play no or little part in those transactions.
I turn now to the three amendments, Nos. 234YJ, 234YL and 234YP, which would require the investigator to issue copies of a notice setting out details of the investigation to anyone subject to a requirement under Clauses 162, 163 and 164. In the case of the former two clauses, that would apply only if the person on whom the requirement was being imposed was not himself the subject of the investigation. We do not believe that the amendments are necessary. If an investigator is to require anyone to comply with statutory powers to provide information or to attend for an interview or whatever, of course that investigator must produce evidence of their powers to so require. We see no advantage in specifying that that needs to take a particular form. The Bill has been criticised in some quarters as being too long and it has been alleged that that stems from too much readiness to write into statute that which is perhaps not needed. This amendment may be an example.
Amendment No. 234YP, along with Amendment No. 234YN, to which I shall speak also, would include an unnecessary additional reference to requirements being reasonably considered,
"relevant to the purposes of the investigation".
The Committee will have read the various subsections of Clause 164. We do not believe that there is any need for the new provision. Amendment No. 234YN would require an investigator to provide the person under investigation with a copy of the report at the same time as he sent it to the investigating authority, whether that be the FSA or the Secretary of State. We are bringing forward amendments which will provide persons against whom the FSA is taking disciplinary action with generous rights of access to material modelled on the criminal disclosure regime. The amendment would take transparency to a level that is—bizarre is perhaps too strong a word—rather too far.
To require an investigator to copy his report to the person under investigation as a matter of routine, even before the investigating authority had seen it or had had time to consider whether it should lead to any action, would be unprecedented. The investigating authority must be able to make a judgment on what action to take on the basis of the report it has commissioned. If a decision to take disciplinary action is taken, the rights of access to material will apply from the warning notice stage, subject to the necessary opportunity for the investigating authority to decide whether certain disclosures would be against the public interest, including, for example, disclosures which would unfairly identify the source of information or prejudice the source for the future or

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involve an unjustified disclosure of commercially sensitive information about the business of others. The amendment would by-pass all those important judgments. I believe that a like amendment was moved in another place.
Amendment No. 237D, to which I shall come in a moment, leads me to Amendment No. 237A, which we believe to be unnecessary. Of course it is necessary for investigators or an investigating authority to respect the confidential nature of information which has come under its possession in the course of its duties, unless disclosing it is necessary for the performance of their functions. Clause 338 provides for that already. It makes it cleat that any confidential information obtained by any one of a number of primary recipients must be kept confidential. Subsections (5)(a) and (5)(c) define the FSA and the Secretary of State as primary recipients. Subsection (5)(d) does the same for persons appointed to make a report under Clause 157.
The Committee will perhaps be pleased to hear that I turn finally to Amendment No. 237D, which again raises a debate familiar from another place. We do not believe it is necessary. No warrant will be issued if the justice of the peace or sheriff is not satisfied that there has been a failure to comply with the requirement. If a reasonable period had not been allowed for compliance, no doubt the justice of the peace or the sheriff would say in a robust way that the test had not been met, so no warrant would be forthcoming. All that the amendment would achieve is to require arbitrary timescales to be set on all information requirements under this part. We do not believe that that is the best way in which to carry on.
I have attempted to answer the many amendments raised by noble Lords opposite. I have tried to explain why we must resist them. I hope that they will withdraw them.
9.45 p.m.
Lord Kingsland: Does the Minister believe that Article 6.1 of the European Convention on Human Rights applies to this part of the Bill?
Lord Bach: I believe that Article 6.1 of the European Convention on Human Rights applies to all parts of the Bill. I shall be surprised if it does not.
Lord Kingsland: I am much obliged and thank the Minister for that reply.
Lord Elton: Before my noble friend replies, in speaking to Amendment No. 234YH the Minister sought to dissuade my noble friend from proceeding with his amendment on the grounds that—I think I quote his words exactly—"We are bringing forward amendments to provide generous rights of access". Can he tell us when that will be and where they will strike?
Lord Bach: At Report stage, the noble Lord will be pleased to hear.
Lord Elton: I have to say I am pleased only for the sake of getting to bed earlier tonight. It would be better to have discussed them in Committee, unless they are entirely uncontroversial.
The Earl of Northesk: I am grateful to the Minister for his diligence in responding to this grouping. I apologise for my slight confusion at the start of this mini-debate. As the noble Lord pointed out, after all these hours in Committee, it is a happy coincidence that the stalwarts of the respective Front Benches have found themselves making their first forays into the lions' den.
I accept that the grouping is something of a miscellany, but it is an important one, not least because of the inclusion of Amendment No. 234Y. We shall want to reflect carefully on the Minister's comments, particularly as regards the amendments spoken to by my noble friend Lord Kingsland. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 234 YA and 234 YB not moved.]
Clause 156 agreed to.
Schedule 14 agreed to.
Clause 157 [Reports by skilled persons]:
[Amendment No. 234 YC not moved.]
Clause 157 agreed to.
Clause 158 agreed to.
Clause 159 [Appointment of persons to carry out investigations in particular cases]:
[Amendments Nos. 234YD to 234YF not moved.]
Clauses 159 agreed to.
Clause 160 agreed to.
Clause 161 [Investigations: general]:
[Amendments Nos. 234YG and 234YH not moved.]
Clause 161 agreed to.
Clause 162 [Powers of persons appointed under section 158]:
[Amendment No. 234YJ not moved.]
Clause 162 agreed to.
Clause 163 [Additional power of persons appointed as a result of section 159(1)]:
[Amendments Nos. 234YK and 234YL not moved.]
Clause 163 agreed to.
Clause 164 [Powers of person appointed to investigate as a result of section 159(2)]:
[Amendments Nos. 234YM to 234YP not moved.]
Clause 164 agreed to.
Clause 165 [Admissibility of statements made to investigators]:
Lord Bachmoved Amendment No 235:
Page 81, line 42, leave out from second ("to") to end of line 1 on page 82 and insert ("action to be taken against a person under section 113—").

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The noble Lord said: Amendment No. 235 has already been debated with Amendment No. 219. However, I should like to make a point to the noble Lord, Lord Kingsland.
The noble Lord asked me a question concerning Article 6 of the ECHR. I was tempted into making a response that may yet prove to be correct. However, I have to tell the noble Lord that I do not yet know whether it is. I undertake to research the matter and I shall write to him with a view. I felt that it would be best to put this matter on the record straightaway.
On Question, amendment agreed to.
[Amendment No. 235A not moved.]
Clause 165, as amended, agreed to.
Clause 166 [Information and documents: supplemental provisions]:
Lord McIntosh of Haringeymoved Amendments Nos. 236 and 237:
Page 82, line 30, leave out from beginning to ("a") in line 32.
Page 82, line 32, after ("required") insert ("under this Part").
The noble Lord said: Amendments Nos. 236 and 237 have already been spoken to with Amendment No. 89. I beg to move.
On Question, amendments agreed to.
Lord Boardmanmoved Amendment No. 237A:
Page 82, line 33, at end insert—
("( ) Where confidential information is produced or disclosed to an investigating authority under this Part the investigating authority shall keep such information confidential unless it is necessary to disclose such information for the purposes of the proper performance of its functions under this Act.").
The noble Lord said: On behalf of my noble friend, I should like to move Amendment No. 237A. I am still concerned about these amendments and the replies which the Minister gave a few moments ago to other similar points that have been made as regards the breach of confidentiality that applies throughout this Bill.
These clauses provide for a free-for-all supply of information from those sources that are essentially looked upon as being confidential; namely, bankers, lawyers and the like. While I understand the need to get hold of such information, I am still concerned at the inclusion in the Bill of phrases such as,
"such information as is necessary",
without any controls and breaching every established rule of confidentiality. I worry tremendously.
One safeguard that helps to maintain the rule of law is that people who have doubts about their affairs are prepared to take advice. I believe that there is an advantage to be had when individuals can, as it were, put their head on someone else's shoulder, speak of their troubles and receive appropriate advice. That established the convention of confidentiality between lawyers and their clients. The same applies to a great extent to bankers.
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I deplore the way in which breach of confidentiality is incorporated into the Bill whenever someone thinks that it is right that such confidentiality should be breached. It is a great pity that this should be allowed to pass without any form of scrutiny. I beg to move.
Lord McIntosh of Haringey: I take it that the noble Lord, Lord Boardman, is moving the amendment tabled in the names of the noble Lords, Lord Saatchi and Lord Kingsland. I had thought that this amendment was not going to be moved on the basis that the matter has already been debated. These amendments have been spoken to by the noble Lord who moved the whole group, and have already been replied to by my noble friend Lord Bach.
Lord Boardman: These amendments were not grouped with the amendments to which my noble friend spoke and the noble Lord, Lord Bach, replied. I know my noble friend touched on the subject many times, but he did not speak to these amendments. I refrained from entering into the debate at the time because I thought that we would come to them later. They are quite separate amendments from those which my noble friend moved and to which the Minister replied.
Lord McIntosh of Haringey: Clearly I am ultimately responsible for the groupings that come before the Committee. If I have made a mistake, I apologise. My firm understanding was that we proposed to Members of the Committee opposite a grouping for the amendments which included Amendments Nos. 237A to C. I know that my noble friend Lord Bach responded specifically to those amendments. If I am wrong, I apologise to the noble Lord, Lord Boardman. Perhaps my noble friend could write to him amplifying his responses.
In case there is any suggestion that we may have been breaching well established rules of confidentiality, let me say that we inserted into this Bill, in the form of amendments last week, firm protection for legal confidentiality. We shall have to think about whether there is any analogy with banking confidentiality which ought to be enshrined in the Bill.
Lord Kingsland: I apologise to my noble friend Lord Boardman. I ought to have come back to the noble Lord, Lord Bach, who replied and said something further on the question of confidentiality, if only to warn the noble Lord that the Opposition intend to return to it on Report.
This point is linked with the issue of privileged communications in Clause 401, which we have not yet reached. I recognise that Members of the Committee opposite have given some consideration to this matter, but I share my noble friend's anxiety as to what happens to information given to the investigators once it is in their hands, particularly in relation to other authorities. This was a vexed problem at the time we debated the Competition Bill and I should like to go back and look at the solution there in order to inform myself as to what the solution should be here.

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There is a linked issue with privileged communications and when we reach Clause 401—I intend to table an amendment to that—we ought to be able to reopen this topic. To that extent I can reassure my noble friend and at the same time let the Government know, roughly speaking, what my position is.
Lord McIntosh of Haringey: That is fair. We are happy to debate this when we reach Clause 401 in Committee or indeed on Report if Members of the Committee prefer.
Lord Boardman: In view of those assurances that we will come to this matter in the future—confidentiality is a matter of considerable importance and must be preserved—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 237B and 237C not moved.]
Clause 166, as amended, agreed to.
Clause 167 [Entry of premises under warrant]:
[Amendments Nos. 237D and 237E not moved.]
Clause 167 agreed to.
Clause 168 agreed to.
Clause 169 [Obligation to notify the Authority]:
10 p.m.
Lord Kingslandmoved Amendment No. 237F:
Page 85, leave out lines 32 and 33 and insert ("A person may not acquire—").
The noble Lord said: In moving Amendment No. 237F, I shall speak also to a long list of other amendments connected to it by the grouping.
Amendments Nos. 237F to 237H should be read together. Their purpose is to tighten up the current drafting in Clause 169 which is concerned with the acquisition of control, additional kinds of control or increases in relevant kinds of control over a United Kingdom authorised person. Failure to comply with Clause 169(1) is a criminal offence. That fact can be gleaned from Clause 182. Therefore it is particularly important that persons seeking to acquire control or to increase control over a UK authorised person should know exactly where they stand.
The present wording in Clause 166(1), which refers to a step which a person proposes to take, is not particularly satisfactory. What kind of step would result in acquiring the relevant control? Is it when the managing director of the acquirer decides to make the acquisition, or when his board endorses the decision, or at some later stage? Moreover, the use of the word "step" is confusing in this context because it has a particular meaning in Clauses 171(2) and 172(2).
These amendments would make the position clear beyond doubt and also mirror the corresponding provisions in Regulation 41 of the Investment Services Regulations 1995 which implement the Investment Services Directive in United Kingdom law. The amendments are also consistent with the relevant provisions of the Investment Services Directive.
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Neither the directive nor the regulations refer to "steps" that a person proposes to take. The requirement in the directive and in the regulations is straightforward and clear; namely, a person cannot acquire control (or increase control) of an authorised person unless he has first notified the competent authorities. As I have already mentioned, the criminal sanction for breach of Clause 169(1) requires a clear procedure with no room for uncertainty.
Amendments Nos. 241A and 241B deal with the corresponding case of where a person ceases to hive control, or reduces his control, of a UK authorised person. Again, there is a requirement to notify the authority before taking the relevant action. Under Clause 182, failing to give notice is a criminal offence. For the same reasons given in relation to Amendments No. 237F to 237H, greater certainty is required. These amendments follow precisely the same approach as the amendments to Clause 169. Amendments Nos. 241C and 241D are consequential.
Amendments Nos. 241E and 241F and I believe Amendment No. 254L all relate to the same point. Clause 247(2)(e) and (h) refer to persons "exercising influence over" other persons. There is an extended definition of "controller" in Clause 397. It would be more satisfactory to use this defined term rather than the somewhat vague expression of persons "exercising influence over".
Amendment No. 278A is a technical but very important amendment. Clause 397 defines who is to be a controller, which is important, for example, in relation to the whole of Part XII—the part concerned with control over authorised persons. The proposed amendment relates to one of the definitions of "associate", which is to found in subsection (4)(g) of the clause. This is a crucial term because, when determining whether a person does acquire control, it is important to look at that "person's associates", as is clear from subsection (3). Subsection (4)(g) is far wider than I think is needed, or required, by the Disclosure of Major Shareholdings Directive, which is used to define who acquires control, so that the acquisition can be regulated under the directive.
Paragraph (g) is far too wide, as, in effect, it requires even more than double counting the shares or other interests where a certain Mr X owns those shares or other interests but uses a broker to buy or sell them for him or a nominee to hold them. The broker's or nominee's own holdings have to be aggregated with those of Mr X. I understand that the Department of Trade and Industry has accepted that the nominee would not hold a disclosable interest for the purposes of the disclosure provisions of Section 198 of the Companies Act (which is also based on the definitions in the Major Shareholdings Directive) where the nominee cannot exercise or control the exercise of voting rights otherwise than at the direction of Mr X. This is clear from Section 109.
It is also important to persuade the Treasury to agree to this proposal. We are aware of a particular instance where a leading merchant bank was told by its lawyers that it would have to aggregate, for the

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purposes of the present "acquisition of control" provisions in the third life assurance directive, all the holdings of its nominee, whoever the nominee was holding for, even if the nominee could not vote in its own discretion; and also had to aggregate all of the holdings of the stockbroker that it used to acquire the shares—again, whoever the stockbroker had been acting for. I believe that I have spoken to all the amendments in the group. I beg to move.
Lord McIntosh of Haringey: I shall speak first to Amendments Nos. 237F to 237H and 241A to 241F. We are broadly in agreement on the objectives of these amendments. We are keen that we do not go too far down a chain of causation, and that it is only the step which results in the acquisition of control that should need to be notified. It is also important that it should be made clear that the acquisition of control cannot proceed without approval.
When I looked at these amendments I had two thoughts. First, they appeared to be drafting amendments. They seemed to say the same thing as the Bill, but rather more elegantly than the Bill says it. I shall no doubt get into terrible trouble for saying that. I understand now that there may be points of substance in the difference in drafting. We believe that the text of the Bill is correct as it stands. However, I wish to think about the points that have been made by the noble Lord and, if necessary, consult further with our lawyers to make sure that no amendment is required. I should not like to think that we had turned down something which either constitutes more elegant drafting or which makes more clearly a substantive point that we wish to make. I hope that on that basis the noble Lord will not press the amendment.
Amendments Nos. 254L, 254M, 254YL and 254YM are also matters to which we have given much thought. The term "controller" has been defined—and has been included in the Bill rather late—in order to set thresholds for the point at which a person comes under the obligation to notify the FSA of their control. The term is defined in strict terms in Clause 397.
Clauses 247 and 265 do not set out a strict threshold test for the exercise of the FSA's powers to authorise or order the end of authorisation of a collective investment scheme. They are concerned with the matters which may be taken into account when the FSA is revoking an authorisation order for a collective investment scheme or when deciding whether an operator of an individually recognised overseas scheme and its trustees or depositories are fit and proper persons.
It would be absurd if, when making an assessment, the FSA could take into account the fact of a 10 per cent holding but not that of a 9.5 per cent holding. That would be the result of replacing "any person exercising influence" with the stricter term "controller", which is what these amendments would do. The amendments would introduce an artificial restraint on the FSA in the proper conduct of its duties. I hope that the noble Lord will not press these amendments.
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Amendment No. 278A is also interesting. The noble Lord explained it clearly. I am sympathetic to the point that he raises. I agree that there may be a degree of unnecessary double counting of shares and voting rights in the Bill as currently drafted. The noble Lord referred to a particular merchant bank and to a particular example. As I do not know which merchant bank he is talking about, I should be grateful if he will write to me about it and we can discuss the matter more effectively than we can across the Floor of the Chamber.
The amendment as drafted would breach the European directives—Article 11 of the Second Banking Directive and Article 9 of the Investment Services Directive—which state that a holding of voting rights or capital must be notified. The point raised by the amendment does not stand alone; it is one of several issues thrown up by the definition of "associate" in Part XII of the Bill.
There could be a similar difficulty in relation to provisional agreements between buyers and sellers of shares. We are considering the point that has been raised. As I say, we shall be glad to discuss the example that the noble Lord has mentioned. However, we recognise that there may be a need in the context of Part XII to take other steps to cut back on the existing procedures.
The noble Lord told the Committee that the DTI has advised that there is no need to aggregate nominee holdings for the purpose of the major shareholdings directive. The difficulty did not arise with the major shareholdings directive but with the investment services directive and the second banking directive, to which I have referred. They apply the requirements to holdings of shares or voting rights, and both count equally for these purposes. I hope that there will be no conflict between one directive and another, otherwise we shall get into deeper waters than we can deal with in the Committee.
Our aim is to strike the right balance between giving full effect to the requirements of the directives while not going too far the other way and imposing unnecessary, onerous requirements on people. This is a difficult exercise. We are currently trying to find a ready solution to the point that has been raised that is compatible with the directives. One approach we are considering is to introduce a power to exempt particular circumstances from the requirement to notify. But clearly further thought is required on these matters. On the basis of my response, I hope that the noble Lord will not press these amendments.
Lord Walker of Worcester: When the Minister said that he thought the amendments would add elegance to the Bill, I thought that he would immediately accept them. Anything that can add elegance to this Bill is something to be welcomed.
In reality, my noble friend made a very important point, which needs clarifying. I hope that if the Government do not take action we will return to it at Report stage.
Lord McIntosh of Haringey: I did not reject the amendment on the ground of inelegance, nor did I put that forward as being the only consideration. I hate to say it, but in many ways this is a very beautiful Bill. It uses common language to give precision in a way that I have not encountered before in legislation. I am rather proud to be involved in it in that respect.
But my arguments against the amendment were not about the elegance or inelegance of the language but about compliance with European directives.
Lord Walker of Worcester: I can only say that, in all the legislation with which I was involved in the previous government, no Bill was beautiful if it needed several hundred government amendments.
Lord Kingsland: The Minister's emollient observations have had a suitably disarming effect on the Opposition Front Bench. It is the first occasion during the Committee stage of the Bill that I have been offered by the Minister what I would call "the Lord Hunt of Wirral facility"—that is to say, the offer to talk to me in private before the next phase. I feel particularly flattered that I have at last reached the point where I have been put on the same pedestal.
Lord McIntosh of Haringey: My door has been open throughout. It is always open.
Lord Kingsland: I like to wait for an invitation.
Lord McIntosh of Haringey: The invitation is now suitably made in public.
Lord Kingsland: I notice that I did not speak to Amendment No. 241M. Perhaps I might rather unconventionally do this now so that when we get to Amendment No. 241M I shall not have to speak to it again. I hope that the Minister will tolerate that because the amendment should be part of this group.
Part XIV of the Bill deals with disciplinary measures in the event of a contravention by an authorised person of a requirement imposed on him by or under the Bill. The authority has two basic disciplinary measures: the first is that the authority may publish a statement to the effect that it considers that an authorised person has contravened a requirement—the so-called naming and shaming measure in Clause 198; the second is that the authority may impose a financial penalty, and here the Committee has to look at Clause 199 to understand the details of that.
I understand that it has been a source of controversy that the regulators under the current regime have imposed substantial penalties on authorised persons, not only for breaches of business conduct rules but also for breaches of the FSA's statement of principles. As the Committee is aware, the statement of principles is drafted in very wide and general terms. For example, the first principle is that a firm should observe high standards of integrity and fair dealing. The second principle is that a firm should act with due skill, care and diligence. Because of the very wide scope of those
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principles, the regulators have found it relatively easy to establish breaches, and they have not hesitated to impose substantial fines in cases of those breaches.
In most of the cases of breaches of the principles a better remedy, I would submit, is the naming and shaming remedy in Clause 198. Therefore, Amendment No. 241M provides that:
"The Authority may not in respect of any contravention or a statement of principle or code of practice with respect to the conduct expected of an authorised person … require a person to pay a penalty under this section".
Lord Bach: I am not sure that Amendment No. 241 M has been taken in the right order, but I am quite happy to reply to it briefly, if that would be to the convenience of the Committee. It does stand on pits own in that sense.
As the noble Lord has explained, the effect of the amendment would be that an authorised person would not be required to pay a financial penalty in respect of a contravention of a statement of principle or code of practice. My honourable friend the Financial Secretary to the Treasury dealt with this amendment in some detail in another place. The only place in the Bill where statements of principle or codes of practice are provided for is Part V, which applies to approved persons rather than authorised persons. Part VIII of course applies for the market abuse code. Financial penalties for market abuse are provided for under that part, not Part XIV. In addition, a penalty under Part VIII is for committing market abuses defined in Clause 109, rather than for a breach of the code as such.
The principles for business are in fact not, in the terminology of the Bill, statements of principle, but are rules under Part X, albeit ones that are set at a very high level of generality. People certainly could be disciplined for a breach of them in the normal way. Most of the cases expected by the FSA will involve breaches of detailed rules and only some cases on the basis of the principles alone. As its use would be rare, it would not be sensible to remove the authority's ability to take action for breach of rules, even high level rules like the principles for business. Detailed rules are never going to be able to cover every eventuality, particularly in innovative markets. If an authorised person does breach a high level rule in a way which is not foreseen in more detailed rules, his conduct may just the same harm the interests of consumers. We believe it is right that the regulators should be able to take appropriate action. Without this option, the authority would inevitably, in the interests of protecting consumers, draw up more and more detailed rule books; a regime which was more highly prescriptive would serve only to increase costs and deter business. We do not want that. Nor do we believe it is what the industry wants either.
A Joint Committee under the noble Lord, Lord Burns, considered this issue at some length and came to the conclusion that strengthening the role of guidance was a better way to meet legitimate demand for greater certainty than writing more rules. The principles for business will be elaborated on by a body

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of rules, evidential provisions and guidance. The FSA make clear in its response to consultation paper 17 the importance of ensuring that the application of the principles of business is reasonably predictable. We agree with that. On that basis I hope that the noble Lord will consider withdrawing his amendment.
Lord Kingsland: I am sorry if I spoke to that amendment out of turn. I had the impression that it was part of the group that I had previously dealt with. I am obviously not going to press this amendment, but I think the point that lies behind the amendment is a point that has lain behind a number of other amendments to the systems of codes, rules, guidance, principles and so forth. What the Opposition are seeking is as certain an environment as possible for authorised persons operating in markets.
In that respect, I believe that there is room for improvement in the Bill. I am not particularly concerned about how it is achieved—whether it is achieved by greater precision of principles or allowing guidance to have greater weight in terms of protecting an individual or even giving him a safe haven. The method used is not the most important part. The most important part is that the overall framework should provide a suitable degree of certainty; so that the market can remain confidently innovative without in any way being fraudulent or corrupt. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments No. 237G and 237H not moved.]
Clause 169 agreed to.
Clauses 170 to 172 agreed to.
Clause 173 [Notification]:
Lord McIntosh of Haringeymoved Amendments Nos. 238 and 239:
Page 88, line 10, after ("may") insert ("reasonably").
Page 88, line 12, leave out ("considers reasonable") and insert ("reasonably considers necessary in order to enable it to determine what action it is to take in response to the notice").
The noble Lord said: These amendments were debated with Amendment No. 155. I beg to move.
On Question, amendments agreed to.
Clause 173, as amended, agreed to.
Clauses 174 to 176 agreed to.
Clause 177 [Objection to acquisition of control]:
Lord McIntosh of Haringeymoved Amendment No. 240:
Page 89, line 28, leave out from ("of") to ("would") in line 30 and insert ("consumers").
The noble Lord said: This amendment was debated with Amendment No. 62. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 241:
Page 89, line 44, at end insert—
("( ) "Consumers" means persons who are consumers for the purposes of section 129.").
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The noble Lord said: I should have moved Amendment No. 241 with Amendment No. 240. I beg to move.
On Question, amendment agreed to.
Clause 177, as amended, agreed to.
Clauses 178 to 180 agreed to.
Clause 181 [Notification]:
[Amendments Nos. 241A to 241E not moved.]
Clause 181 agreed to.
Clause 182 [Offences under this Part]:
[Amendment No. 241F not moved.]
Clause 182 agreed to.
Clauses 183 and 184 agreed to.
Clause 185 [General grounds on which powers of investigation are exercisable]:
Lord McIntosh of Haringeymoved Amendment No. 241G:
Page 94, line 28, leave out ("in relation to a regulated activity carried on by the firm").
The noble Lord said: This amendment concerns the FSA's powers of intervention in respect of an incoming firm; in other words, a treaty or EEA firm which is exercising its treaty or passport rights to carry out a regulated activity in the United Kingdom in accordance with Schedules 3 and 4.
Clause 185 provides that the FSA may exercise its power of intervention in respect of an incoming firm if it contravenes a requirement or knowingly or recklessly gives the FSA false or misleading information. The FSA can also exercise its power of intervention if it is desirable in order to protect the interests of consumers. However, the current clause limits that power to protecting the interests of consumers in relation to a regulated activity carried on by the firm. That limitation would prevent the FSA from taking steps to protect consumers generally from systemic risks which may be posed by the firm, rather than just to protect the firm's own customers in relation to regulated activities carried on by it.
For example, the FSA might have concerns about the impact of an incoming dealer or hedge fund, which could go wider than considering just the firm's own customers in relation to a regulated activity, which might themselves be wholesale firms. Those concerns could extend to the customers of those firms also.
A similar restriction is to be found in subsection (1)(c) of Clause 42, which provides for the exercise of the FSA's own initiative power where it appears to it to be desirable to vary a Part IV permission in order to protect the interests of consumers or potential consumers in relation to a regulated activity covered by the permission.
It is the Government's intention to introduce further amendments on Report to remove the limitation in that clause also, and to align these grounds on the basis of consumers and potential consumers generally. I beg to move.
Lord Kingsland: This is a tidying-up amendment of which we approve.

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On Question, amendment agreed to.
Clause 185, as amended, agreed to.
Clauses 186 and 187 agreed to.
Clause 188 [Procedure]:
On Question, Whether Clause 188 shall stand part of the Bill.
Lord McIntosh of Haringey: I gave notice of my intention to oppose the Question that Clause 188 stand part of the Bill. That notice is the introduction to a horribly long list of amendments on the groupings list which I shall not weary the Committee by repeating. Amendment No. 254A, an opposition amendment, appears to have crept into the group by mistake. I apologise for that. I shall expect noble Lords to speak to it when we come to that point on the Marshalled List.
Perhaps I may now speak to the amendments. This is the first of a series of groups of amendments which take forward the rationalisation of the decision-making procedures. The amendments may seem rather daunting. These are important changes and have taken some time to work through. I recognise that Members of the Committee may wish to subject these aspects of the Bill to further scrutiny on Report.
As I explained to the noble Lord, Lord Saatchi, in my letter to him on 22nd March, which was copied to all Members of the Committee who have taken part in these debates to date, we have been acutely conscious of the need to give your Lordships as much opportunity as Possible to study the changes and to debate them. It is for that reason that we have brought forward these amendments in the manner that we have. We have made them available at the earliest opportunity in order that noble Lords can see and debate the overall effect of the changes.
As well as the amendments that we have tabled, we have made available the texts of the amendments that we propose to table on Report. In other words, these are the amendments to parts of the Bill that have already been dealt with in Committee. There may be some further refinements to be made on Report, perhaps reflecting points raised today.
In the light of what was said by the noble Lord, Lord Saatchi, and others at the outset of this Committee stage this afternoon, I appreciate the particular point that was raised; namely, that the co-ordinates of these draft amendments are to the Bill as printed in Committee. I undertake to provide a concordance very rapidly between those amendments and the Bill as amended in Committee, which will be produced at the end of this week or the beginning of next week, so that noble Lords who have taken the time to study the draft amendments will see how they fit into the debate on Report.
Lord Saatchi: I thank the Minister very much for dealing with a large part of our concern.
Lord McIntosh of Haringey: I am grateful for that response.
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These rather technical amendments to Parts XIII and XVII of the Bill—quite technical and complex parts in their own right—should assist in understanding the critical changes to the decision-making procedures which we shall come to debate when we reach Part XXVI of the Bill.
Perhaps I may outline the overall intention of the changes that we seek to make, which are twofold. First, we seek to enhance the rights of persons who are subject to disciplinary-type action, including market abuse and the other powers to impose penalties or make public statements about misconduct, or whose livelihoods are threatened by a proposal to cancel permission under Part IV, or to withdraw approval or issue a prohibition order under Part V. Secondly, we seek to ensure that these protections, which considerably enhance those that exist currently, apply only where appropriate and not generally to routine supervisory actions. We do not want a regulatory system that is too hamstrung by its procedures to respond in a timely fashion to market developments.
I remind the noble Lord, Lord Kingsland, of the distinction that I drew earlier in Committee between routine supervisory decisions and those decisions which, by their nature, remove or damage a person's ability to pursue his business. It is not the case, as the noble Lord appeared to suggest last week, that we are insensitive to the potential effect of a range of regulatory decisions on the livelihoods of financial services professionals. We attempt to strike a careful balance between the need for effective regulation and the legitimate expectations of those involved in the industry. While it is simply not appropriate to deal with the generality of supervisory-type decisions as if they were disciplinary actions, we recognise that there is a class of decision which implies the permanent or long-term removal of the ability of a person to pursue his current line of business. As I have indicated, this includes those cases where the FSA proposes to cancel an authorised person's permission under Part IV, or to withdraw approval or issue a prohibition order under Part V. The full disciplinary procedures will apply in those cases.
I deal briefly with the procedures for these disciplinary-type decisions. The FSA's disciplinary procedures have rightly attracted considerable interest at every stage in the consideration of this Bill. En response to concerns, the Government have stressed the importance of the new, independent first instance tribunal. However, the Government have also built in a number of further administrative safeguards, some of which draw on the procedural provisions which apply to the criminal law—for example, those contained in the Criminal Procedure arid Investigations Act 1996. Some noble Lords may remember that with the same pain as I recall.
In disciplinary-type cases, Part XXVI will require the FSA to give persons, including third parties who may be affected by the decision, the right to make representations and refer matters to the tribunal. Persons affected will be given access to the FSA's material, including evidence which it considers might undermine the decision. The FSA will be required to

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set up procedures which ensure that the person who prepares the FSA's case is not also involved in the FSA's decision. The FSA will not be able to implement the decision until the person's remedies, such as his right to refer the matter to the tribunal, have been exhausted.
However, it would not be right or effective to require the FSA to treat all its decisions as if it were conducting something akin to a criminal prosecution. That would introduce an unnecessary level of formality into the FSA's day-to-day supervisory relationship with the firms that it regulates; and it would add substantially and unnecessarily to the costs of FSA supervision, which could adversely affect the competitive position of the United Kingdom. It is the Government's policy that the FSA should apply light touch regulation where possible and effective consumer protection where necessary. For example, the FSA's supervisory functions may require it to act swiftly in an emergency so that decisions have to be taken by an appropriately senior person within the FSA, notwithstanding that he may have been involved in some way in gathering the evidence or have an existing supervisory relationship with the firm concerned. When faced with a difficult and important decision whether to intervene, we expect that those responsible will want to test their options. It must be clear that the senior executives within the FSA can explore the options without denying themselves the ability then to act as necessary to protect the interests of consumers. Similarly, it is not practical or sensible in supervisory cases to require the FSA to provide access to all the material which it may have considered in the background to its decision.
The other main area in which we are rationalising procedures relates to applications to the FSA, whether they seek the FSA's approval of some change in relation to a firm or scheme or a variation in requirements which the FSA may already have imposed.
If the FSA decides to grant an application in full or decides to remove a requirement on a firm, it is clearly not necessary for the full warning notice and decision notice procedure to apply. In other cases where the decision will not be so welcome to the person concerned, we are taking the opportunity to align the warning notice/decision notice procedures throughout the Bill so that the same safeguards can apply.
The government amendments relate specifically to the exercise of the powers of intervention in relation to incoming EEA and treaty firms under Part XIII and collective investment schemes under Part XVII. Similar provisions will be introduced on Report into earlier parts of the Bill such as in relation to the exercise of the FSA's own initiative powers under Part IV. Draft texts of those amendments have been made available with the explanatory notes.
In Part XIII, Amendment No. 241H introduces a new clause setting out the procedure for exercising its power of intervention in relation to incoming firms. This clause replaces the existing Clauses 188 and 189. The clause is modelled on the procedural provisions currently adopted in Clause 314, which concerns a
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direction in relation to former underwriting members at Lloyd's but will itself be enhanced, first, to allow the FSA to extend the period for making representations; secondly, to provide that a decision notice must be issued if the FSA decides to refuse an application to vary or revoke a requirement; and, thirdly, to provide that a decision to refuse can be referred to the tribunal. Under this procedure the subject of the decision will enjoy standard rights to know the reasons for the decision, to make representations and to refer the matter to the tribunal.
However, it is not possible to introduce a standard clause for all procedures because of the particular circumstances relating to each of the FSA's supervisory intervention powers. In Part XVII, Amendment No. 254S introduces a similar clause in relation to authorised unit trusts which replaces the existing Clauses 252 and 255.
Amendment No. 254YE introduces a similar clause in relation to a decision to suspend the promotion of a collective investment scheme recognised by virtue of being constituted in another EEA member state. The new clause replaces the procedural provisions contained in Clause 261.
Finally, Amendment No. 255G introduces a similar clause in relation to other recognised schemes. It replaces Clauses 274 and 275.
The other government amendments are minor consequential or drafting changes to reflect the approach I have just outlined in relation to applications to the FSA.
I think the best way for me to illustrate the effect and operation of these amendments will be to consider them in the context of the helpful amendments that have been made by noble Lords on the Opposition Benches. Amendment No. 254Y concerns the emergency procedure for the FSA's powers of intervention under Clause 250 whereby the FSA may require the manager to suspend the operation of the scheme until a specified date or require the manager and the trustee to wind the scheme up by a specified date. The amendment would restrict the emergency exercise of the FSA powers in accordance with Clause 255 to cases in which it considers that urgency is desirable in order to protect the interests of participants or potential participants.
As I have already outlined, the Government propose to replace Clause 255 with a new procedure introduced by Amendment No. 254S, but the amendment helpfully raises a point of principle which is of wider application. The new clause in Amendment No. 254S replaces the existing provision in Clause 255 for dealing with urgent applications by allowing the decision to take effect on a specified date or immediately in accordance with subsection (2) if the FSA, having regard to the ground on which it is exercising its power, considers it necessary for it to take effect immediately. The grounds on which the FSA may exercise its powers under Clause 250 are that the requirements for the making of an authorisation are no longer satisfied; that the manager or trustee has contravened, or is likely to contravene, a requirement;

627
that the manager or trustee has given the FSA false or misleading information; or that it is desirable to give a direction in order to protect the interests of participants or potential participants. The interests of participants or potential participants are likely to be a very important factor in the FSA's decision whether to exercise its powers. However, there may be other equally urgent considerations.
For example, it may be that the scheme as constituted is unlawful, so that the FSA is bound by UK law or EC directives to suspend the operation of the scheme with immediate effect even if the participants are benefiting from the illegality. The scheme may also be competing unfairly or unlawfully with other schemes and damaging the interests of their participants, or damaging the financial system generally.
We therefore think it is best to rely on the test in subsection (2) which is wider in terms of possible grounds, but narrower in the sense that the FSA must consider that immediate effect is necessary, rather than merely desirable in the interests of participants.
Subsection (4)(c) will also require the FSA to state its reasons for the determination as to when the direction should take effect so that those affected will in any event be able to make urgent representations to the FSA and if necessary to the tribunal or the court.
Amendment No. 254UA concerns the procedure under Clause 253 by which the FSA refuses to revoke or vary a direction under Clause 250. It provides that the decision notice procedure in subsection (3) applies only if the FSA has previously given a warning notice. I can quite see the concern behind this amendment, which again is or wider application, that it is unclear when the status of a continuing condition such as a refusal to act might trigger the formal decision notice part of the decision-making procedure. However, Clause 253 is also the subject of government Amendment No. 254V which rationalises the wording of subsection (3) with the warning and decision notice procedures in the rest of the Bill. The Government's amendment makes clear that subsection (3) involves a definite act by the FSA; namely, a decision to refuse to grant an application.
Amendment No. 254X concerns the procedure in Clause 254 for revoking or varying a direction under Clause 250 on the application of the scheme's manager or trustee. It would require the FSA, in granting the application, to give written notification of its decision to both the manager and the trustee, rather than just whichever one of them was the applicant. It is conceivable that the application by one of them, and the terms of the FSA's written notice in response, might contain information which is confidential to the applicant, so that it might be necessary for the FSA to notify the other party in different terms.
As the FSA already has power to do this under subsection (4), by publishing such information about the revocation or variation, in such way as it considers appropriate, I hope that Members of the Committee will not press the amendment.
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Finally, Amendment No. 254KA concerns the procedure under which the FSA may refuse to approve a change of manager or trustee sought through an application under Clause 244. It would provide that, if both the trustee and manager are given a warning or decision notice, neither of them is to be treated as a third party.
The treatment and status of third parties has now been rationalised by the Government's amendments which will be debated later (Nos. 275L and 275M) so that third party rights will not now attach to notices given under Clause 245. The amendment is therefore unnecessary. I should add that subsection (5) would currently require the FSA to give a person a decision notice if, having given a warning notice, it subsequently decides to approve the proposal. However, Amendments Nos. 254H and 254K now ensure that this requirement is subsumed in the approval procedures under Clause 244(4)(a), which now require the FSA's approval to be by written notice.
I beg to oppose the Question that Clause 188 shall stand part of the Bill.
Lord Kingsland: Perhaps I may ask the Minister an orientation question. I believe that in his presentation he dealt with issues of investigations and open-ended investment companies. If not, it is getting very late indeed.
Lord McIntosh of Haringey: I was dealing with three kinds of business: incoming firms under Part XIII and unit trusts and recognised overseas schemes. Open-ended investment companies come later on.
Lord Kingsland: So I would be wrong in believing that the Minister sought to deal with Amendment No. 252VA in the group and that that will come later. It is on page 15.
Lord McIntosh of Haringey: We shall come to that when we consider Part XVII of the Bill.
10.45 p.m.
Lord Kingsland: Perhaps I may also ask about Amendment No. 275N, which relates to access to evidential material.
Lord McIntosh of Haringey: That is not included in this group either.
Lord Kingsland: Does it come later? That simplifies my task enormously. I believe, therefore, that I shall speak to only two amendments in this group; that is, Amendments Nos. 254X and 254Y. Do we agree? I must be very careful after my previous errors.
Amendment No. 254X concerns Clause 254. That clause deals with the procedure whereby the authority decides on its own initiative to revoke a direction made by it under Clause 250. Under Clause 256, either the manager or the trustee may apply to have the direction revoked or varied and, as presently drafted, Clause

629
254(2) provides that if the authority decides to revoke or vary the direction, it must give notice of the revocation or variation only to the person who is applying. However, both the manager and the trustee will have a valid interest in any revocation or variation. In our view, and in those circumstances, it would be more appropriate for any notice to be given to both the manager and the trustee. That is the sole purpose of Amendment No. 254X.
So far as concerns Amendment No. 254Y, Clause 255 allows the authority to give directions in urgent cases without going through the warning notice procedures. Therefore, as presently drafted, there is no qualification to the authority's power to give a decision notice under Clause 255(1). Amendment No. 254Y would qualify the authority's powers in such circumstances to cases where it is desirable in order to protect the interest of participants or potential participants.
Lord McIntosh of Haringey: I shall deal, first, with Amendment No. 254X. I quite see that both the manager and the trustee would need to be informed. However, I tried to make the point clearly and effectively that it is conceivable that the application by one of them and the terms of the FSA's written notice might contain information which is confidential to the applicant. Therefore, it might be necessary for the FSA to notify the other party in different terms. The FSA already has the power to do that under subsection (4) by publishing,
"such information about the revocation or variation, in such way, as it considers appropriate".
That will allow notification to be made both to the manager and to the trustee, which is what the amendment seeks, but to be made in a different way which would maintain confidentiality, which is, I hope, what the noble Lord would seek.
Amendment No. 254Y relates to the emergency procedure for the powers of intervention under Clause 250. The amendment would restrict the emergency exercise of the powers to cases in which it is considered that urgency is desirable in order to protect the interests of participants or potential participants. It is not that we disagree with that, but that we believe that it is dealt with by our Amendment No. 254S, which is the replacement for Clause 255. Again, I hope that, on reflection, the noble Lord will feel that we have covered his point.
Lord Jenkin of Roding: Perhaps I may make a remark. I started by trying to listen very carefully to what the noble Lord, Lord McIntosh, said in introducing this group of amendments. It is late and he left me behind. I read the notes, which he was kind enough to circulate to me, along with others, over the weekend. They were very condensed.
Perhaps I may put it this way. If a group of bankers or investment brokers had listened to the proceedings in this Committee over the past hour or so and had heard the noble Lord, Lord Bach, replying to the long string of amendments that had been tabled—even
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more so, had listened to the noble Lord, Lord McIntosh, galloping through (I hope that I am not being unkind) the explanations that he gave—quite frankly, I believe that they would have been horrified. Moreover, they would wonder how many of us understand what we are doing. I am sure that the noble Lord, Lord McIntosh, understands it. Indeed, I have been full of admiration for him. I am sure that my noble friends on the Front Bench understand it. But those of us trying to follow it on the Back-Benches are, I must confess, totally floundering.
There is enough in this group of amendments for a small Bill which would have merited half a day of discussion, taking them seriatim and recognising that they covered a whole range of different points. They may all be part of a common strategy. But we are rewriting a very large part of the Bill, late at night, in a Committee which is not well attended. How many people would be able to follow this matter?
I believe that this is a monstrous way of trying to legislate for a Bill of this sort. These amendments are being introduced late in the proceedings, long after the Bill started its passage. They will have a profound effect on the way that thousands of people carry out their professional activities in this field.
I hope that the Government will resolve not to impose on the House and on Parliament this kind of procedure and process for legislation. To pretend that we are dealing with it effectively really would be a complete fiction. It cannot be done. I feel that I must protest that we are being hustled along, amid all these complexities. We are dealing with matters in half an hour or an hour which should take half a day. I must protest.
Lord McIntosh of Haringey: I do not believe that the Committee would appreciate it if I repeated the remarks which I made on the Motion that the House do resolve itself into a Committee at the beginning of this afternoon.
I fully understand the points made not only by the noble Lord, Lord Jenkin, but also by many other noble Lords. I fully appreciate the difficulties that they have and, indeed, which the Government have in dealing with opposition amendments but I do not complain about that. I fully appreciate that this is not an ideal way in which to consider legislation. I only hope that, in the end, the justification will be that the people outside to whom the noble Lord refers will feel that they have a better Bill as a result.
Clause 188 negatived.
Lord McIntosh of Haringeymoved Amendment No. 241H:
After Clause 188, insert the following new clause—
PROCEDURE ON EXERCISE OF POWER OF INTERVENTION
(".—(1) A requirement takes effect—

(a) immediately, if the notice given under subsection (3) states that that is the case;

(b) on such date as may be specified in the notice; or

631

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A requirement may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to the ground on which it is exercising its power of intervention, considers that it is necessary for the requirement to take effect immediately (or on that date).
(3) If the Authority proposes to impose a requirement under section 187 on an incoming firm, or imposes such a requirement with immediate effect, it must give the firm written notice.
(4) The notice must—

(a) give details of the requirement:

(b) inform the firm of when the requirement takes effect:

(c) state the Authority's reasons for imposing the requirement and for its determination as to when the requirement takes effect;

(d) inform the firm that it may make representations to the Authority within such period as may be specified in the notice (whether or not it has referred the matter to the Tribunal); and

(e) inform it of its right to refer the matter to the Tribunal.

(5) The Authority may extend the period allowed under the notice for making representations.—
(6)If, having considered any representations made by the firm, the Authority decides—

(a) to impose the requirement proposed, or

(b) if it has been imposed, not to rescind the requirement,

it must give it written notice.
(7) If, having considered any representations made by the firm, the Authority decides—

(a) not to impose the requirement proposed,

(b) to impose a different requirement from that proposed, or

(c) to rescind a requirement which has effect,

it must give it written notice.
(8) A notice given under subsection (6) must inform the firm of its right to refer the matter to the Tribunal.
(9) A notice under subsection (7)(b) must comply with subsection (4).
(10) If a notice in forms a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.").
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On Question, amendment agreed to.
Clause 189 negatived.
Clauses 190 and 191 agreed to.
Clause 192 [Rescission and variation of requirements]:
Lord McIntosh of Haringeymoved Amendments Nos. 241J to 241L:
Page 99, line 3, at end insert—
("(2A) Section (Procedure on exercise of power of intervention) applies to the exercise of the power of the Authority on its own initiative to vary a requirement as it applies to the imposition of a requirement.
(2B) If the Authority proposes to refuse an application for the variation or rescission of a requirement. it must give the applicant a warning notice.").
Page 99, line 4, leave out from ("Authority") to end of line 5 and insert ("decides to refuse an application for the variation or rescission of a requirement—").
Page 99, line 6, leave out ("that person written notice of [he refusal") and insert ("the applicant a decision notice").
On Question, amendments agreed to.
Clause 192, as amended, agreed to.
Clause 193 negatived.
Clauses 194 to 196 agreed to.
Schedule 15 agreed to.
Clauses 197 and 198 agreed to.
Clause 199 [Financial penalties]:
[Amendment No. 241M not moved.]
Clause 199 agreed to.
Clauses 200 and 201 agreed to.
Lord McIntosh of Haringey: I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at four minutes before eleven o'clock.

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