Sitting of 30 March 2000

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

    LONDON LOCAL AUTHORITIES BILL [LORDS] (BY ORDER)
    Order for consideration, as amended, read.
    To be considered on Thursday 6 April.

    MERSEY TUNNELS BILL (BY ORDER)
    Orders for Second Reading read.
    To be read a Second time on Thursday 6 April.

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

    Rover Cars
    Mr. Michael Fabricant: If he will make a statement on the future of Rover's Longbridge plant. [115660]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): As the House knows, on 16 March BMW announced that, due to escalating losses, it intended to sell Rover Cars. Since then, BMW has said that it will do all it can to minimise the number of jobs to be lost. BMW has also committed itself to co-operating with the taskforce, which has as one of its objectives the development and regeneration of the Longbridge plant.
    Mr. Fabricant: Given that the Transport and General Workers Union estimates that 40,000 jobs will be lost in the west midlands with this Alchemy deal, why has the Secretary of State consistently refused to make a statement in the House so that he can be questioned on the Floor of the House for a sustained time? Does he not realise that there have been clear signs since September that Rover would be losing at least 2,000 jobs, quite apart from the collapse of Longbridge? If he denies that—and it seems that he does—will he now undertake to publish
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    all correspondence between the Department of Trade and Industry and Rover-BMW and any minutes of meetings between Rover and the DTI?
    Mr. Byers: This clearly is an important issue and the House needs to address it. That is why I answered a parliamentary question just the other day, and why I am answering questions here today. It is an opportunity for the House to consider these matters. As the hon. Gentleman will know, the Select Committee on Trade and Industry is taking evidence on these matters. I will be giving evidence before the Committee next Wednesday, which I think will be the appropriate time to put on record the dealings between myself, my Department and BMW.
    Mr. Richard Burden: Does my right hon. Friend share my disappointment that the hon. Member for Lichfield (Mr. Fabricant), in talking about the impact on the west midlands, did not give his support to the rally that is taking place this Saturday in Birmingham in support of Rover? Has not the most appropriate comment on who knew what over the past few months come in the past few days from Professor Milberg at BMW, who said on Tuesday that although he felt that he had been entirely open over the months, he now realised, with the benefit of hindsight, that his statements may have been interpreted differently? It seems that BMW itself recognises that it has not been entirely straight.
    Is it not important that we move on and give BMW a clear message that its decision about the future of its plants is not simply a commercial decision, but one which affects the communities in which its workers live, and that it should take the interests of those communities into account when making its decisions?
    Mr. Byers: My hon. Friend, as the constituency Member of Parliament, makes an important point. In all of this, the Opposition will try and score cheap political points, while we are concerned about protecting as many jobs as we can for those workers affected by BMW's decisions.
    My hon. Friend also makes the important point that BMW executives have, in the past two days, gone on the record. Professor Milberg, the chairman of BMW, said on Tuesday that with hindsight he could have been clearer. Just yesterday, before the Select Committee on Trade and Industry, Professor Samann, who is head of Rover in the United Kingdom, said that the DTI had not been informed because the information was market sensitive. Those are on the record comments by senior executives at BMW.
    Mr. John M. Taylor: One of the concerns at Longbridge, and in the Rover group generally, is about the future security of the pensions of retired employees. Will the Secretary of State use his good offices to procure a reassuring public statement about that, bearing in mind that there are retired employees of Land Rover in my constituency?
    Mr. Byers: The hon. Gentleman makes an important point. Present and former employees are clearly concerned about their pension entitlement. We have raised the issue within government with the Department of Social Security. I also raised it specifically with Professor Milberg last Thursday, when I met him to discuss the

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    consequences of BMW's decisions. He gave assurances about the pension funds. I will, after Question Time, be in touch with him again, and will ask him to make a public statement on this matter.
    Mr. Martin O'Neill: When some of us visited Longbridge yesterday, one of the most telling remarks that we heard was that major contracts were still being signed for the development and construction of new parts of the plant until three weeks ago by senior management. Is that not evidence that even those responsible for Longbridge did not know what would happen? To suggest that my right hon. Friend the Secretary of State should have some additional information is both ridiculous and misleading.
    Mr. Byers: My hon. Friend makes an important point, which confirms what Professor Milberg said at the Geneva motor show on 28 February, just a few weeks before BMW's decision. He said:
    I have absolute, serious and steadfast commitment to Rover and the United Kingdom.
    Only later did BMW begin to discuss the possible disposal of Rover.
    Dr. Vincent Cable: Does the Secretary of State still subscribe to the belief that an overvalued exchange rate was just an excuse for BMW management, or does he agree with the leaders of the Amalgamated Engineering and Electrical Union and the Transport and General Workers Union who said this morning that the overvalued exchange rate is the biggest difficulty facing the British car industry?
    Mr. Byers: BMW's record is clear: it says that the strength of sterling was one of the reasons for escalating losses. However, just 20 miles down the road in Coventry, Peugeot is enjoying record production and record exports, showing that some car firms in the UK are highly successful. That must lead us to ask about BMW's overall approach towards Rover.
    Ms Julia Drown: My right hon. Friend knows that the future of many workers is linked to the future of Longbridge. They include 2,500 Rover workers in my constituency and that of my hon. Friend the Member for North Swindon (Mr. Wills). Will my right hon. Friend ensure that the help that the Government are offering Longbridge will be available to tackle the uncertainties and difficulties facing those workers?
    Mr. Byers: I fully understand the concerns of workers in Swindon about the uncertainty created by BMW's decisions. I hope that BMW will be able to give those workers some guarantees about the future. If a decision is taken that affects those workers' livelihoods, the Government will provide support in the same way as we are providing it for those affected at Longbridge by BMW's decisions.
    Sir David Madel: Suppliers to the midlands car industry whose plants lie outside the midlands—including those in Bedfordshire—are extremely concerned about what is happening at Rover. Will the Secretary of State ensure that both
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    management and unions working in those plants are involved in the new taskforce that he is setting up to try to solve the problem?
    Mr. Byers: Yes. There must be great concerns about the effect down the supply chain of the decision taken by BMW. When I met BMW management last week, I asked the company to disclose an inventory of its suppliers so that we could contact them. That information has been provided, and contact will be made with engineering companies and manufacturers—wherever they are located, including outside the west midlands—which will clearly be affected by BMW's decisions.
    Mr. David Winnick: Will my right hon. Friend bear it in mind that there is deep concern and anxiety about jobs throughout the west midlands, not least in the black country where there are many suppliers of components for the motor industry? Perhaps the principal reason for concern about jobs in the west midlands is the memory of what happened in the 1970s, 1980s and early 1990s, when thousands of jobs were destroyed as a result of the policies of the previous Government. We should not forget that for one moment.
    Mr. Byers: My hon. Friend makes an important point. Just 10 years ago, about 1 million manufacturing jobs were lost because of the Conservative party's policies. We must not lose sight of the fact that we should be asking today about the future of those affected by BMW's decisions. That is what a responsible Government would do, and that is what we are doing. The Conservative party might want to divert us down a different road for party political reasons of its own. So be it. The efforts of the Department of Trade and Industry will be clearly committed towards securing a future for the people affected by the BMW's decisions.
    Mr. John Redwood: The Secretary of State must be feeling very nervous today without there having been a word of comfort or support from the Prime Minister yesterday. So bad is his position that he was not even said to be unassailable. Will he now tell us the truth? Either he knew full well that Rover was in difficulty and BMW had to take radical action, in which case he misled and let down the workers of Longbridge, or he knew nothing about it, in which case he is totally incompetent and should not be in the job. Does he now accept that the decent thing to do would be to go before more damage is done? Let us have a truthful Secretary of State who understands the needs of manufacturing industry.
    Mr. Byers: That was a bid for the shadow position held by the hon. Member for Tiverton and Honiton (Mrs. Browning). I say to the right hon. Gentleman, in all seriousness, that I have a degree of respect for his position because at least he has tabled questions to me about the issue, whereas the hon. Lady has not tabled a single question—[Interruption.] Not a single question. [Interruption.] She has not—
    Mrs. Angela Browning: That is not true.
    Madam Speaker: Order. The House must come to order.
    Mr. Byers: The right hon. Gentleman raised the important question about who knew what, when and why. I know that yesterday the Leader of the Opposition, at Prime Minister's questions, spoke about a report in the Daily Mail from an unnamed source claiming that on 20 December Professor Milberg told me:
    We may have to reconsider our whole investment in Britain altogether.
    Professor Milberg has made no such statement in any telephone conversation or letter. Moreover, there was no telephone conversation between us on 20 December.
    Mrs. Browning: Having just heard the Secretary of State's wholly inaccurate response about tabled questions on the subject of Rover, he has only confirmed what we all suspected—that not only does he never read newspapers or his own papers, he does not read parliamentary questions either. He knows that it is grossly unfair to have said something which he must know is inaccurate. [HON. MEMBERS: "Apologise."] The right hon. Gentleman continues to claim that all this has come out of the blue—[Interruption.]
    Madam Speaker: Order. I want to hear the hon. Lady.
    Mrs. Browning:—yet since last December there have been newspaper articles with headlines:

    DTI to fight Brussels' veto on the aid to Rover

    DTI denies Brussels may block aid package

    Brussels places Longbridge plan in doubt

    and

    Longbridge fears dent Labour support

    Does not the Secretary of State or anybody in the Department of Trade and Industry read newspapers and think that if an article is about something that they have brokered a deal on, it might be common sense to pick up a telephone and initiate a call to see exactly what is going on? Can the Secretary of State now, as a rehearsal for the scrutiny that he will receive next Wednesday from the Select Committee, answer one straightforward question: on what date did he personally first realise that the future of Longbridge was in doubt?
    Mr. Byers: I think that that is the sort of question that Members will not take seriously. The reality is that one does not take decisions based on newspaper reports. The hon. Lady will be well aware that the degree of speculation about the future of Rover and BMW is well known in the media. There is speculation before every supervisory board meeting. As Secretary of State, I speak on the telephone to the chairman of BMW, I hold meetings and talk to the company, and I ask questions to find out about the situation.
    At a meeting on 10 March, six days before the supervisory board meeting, I raised specific questions about how the company would tackle its escalating losses. I received assurances about the steps that were to be taken. None of those steps involved the disposal of Rover by BMW.
    Mrs. Browning: I hope, then, that the Secretary of State will reassure not only the House, but the Select
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    Committee on Trade and Industry—which has, I understand, asked for transcripts from his Department and from BMW of those telephone calls.
    Will the right hon. Gentleman comment on remarks made on the "Today" programme this morning? Dr. Garel Rhys of Cardiff university—an authority on the car industry in this country, as the Secretary of State will know only too well—said:
    You can't share a confidence with this Administration as it leaks.
    If the right hon. Gentleman's claim that he was deliberately kept in the dark is accurate, does he think the reason for that is because business does not trust this Administration or this Secretary of State? They have lost the confidence of business, and the workers at Longbridge will pay the price.
    Mr. Byers: There has been no suggestion from Conservative Members about how we can provide assistance and support to those workers affected by BMW's decisions. That is a matter of great regret.
    Many businesses share confidences with the Government—without leaks. We deal with market-sensitive information daily. When I have the chance to make the matter clear, in an hour and a half session before the Select Committee, the record will show that, unlike the claim made by the Leader of the Opposition yesterday, Professor Milberg did not say:
    We may have to reconsider our whole investment in Britain altogether.—[Official Report, 29 March 2000; Vol. 347, c. 333.]
    There was no telephone conversation on 20 December, so I hope that the Leader of the Opposition will withdraw the comments he made yesterday. They were inaccurate and untrue. We must move forward to put the interests of the work force at Longbridge first. That is what the Government intend to do.

    Scientific Research
    Dr. Phyllis Starkey: What recent discussions he has had concerning science with Ministers in other Departments which sponsor scientific research. [115661]
    The Minister for Trade (Mr. Richard Caborn): My right hon. Friend the Secretary of State, DTI Ministers and I hold regular discussions with colleagues in other Departments on all manner of issues, many of which have a science dimension. My noble Friend the Minister for Science set up the ministerial science group in 1998. That built on the ministerial foresight group.
    Dr. Starkey: I thank my right hon. Friend for that response and welcome the work of the ministerial scientific group. May I urge my right hon. Friend to be even more persuasive in convincing his colleagues in that group of the value of scientific research? In particular, will he draw the attention of the Agriculture Minister to the fact that it is not entirely sensible to reduce his research budget at a time when research could lead to new options that would help to inform the diversification that is being urged upon farmers by his Department?
    Mr. Caborn: I know that my hon. Friend has a history in the field of science and that she is well respected for her work. Last December, the Government announced

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    13 cross-cutting reviews as part of the 2000 spending review, one of which is to examine how the science spend across Departments can be more joined up. The Ministry of Agriculture, Fisheries and Food is spending about £30 million on its research and development budget. My noble Friend the Minister for Science has held discussions with Agriculture Ministers.
    Let me put the matter against the backcloth that, in the comprehensive spending review, the Government are investing about £20 million in science, engineering and technology over three years. That represents a £1.5 billion increase for the pre-CSR outturn. That is commendable. If the Conservatives had shown similar foresight when they were in government, we might not be experiencing some of the current problems in industry.
    Mr. Stephen O'Brien: Specifically on the question of scientific research, may I ask about the Secretary of State's catastrophic decision for my constituents and for the north-west to award the Diamond synchrotron project to Oxford rather than to the existing facility at Daresbury? There has been complete confusion about the Government's reasons for that decision. Initially, the reasons were given as pressure from the French Government and the Wellcome Trust, but yesterday, in a debate initiated by my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), the Minister for Competitiveness said in a debate in Westminster Hall that the decision was made for scientific reasons only. Will the Minister confirm the true reasons, and will he reverse this perverse and damaging decision?
    Mr. Caborn: I respect what the hon. Gentleman says—he should convey his views to his right hon. and hon. Friends on the Opposition Front Bench. They are sitting on the fence on this issue. The point made in the Westminster Hall debate was that science was one of the issues, but the partnership with the Wellcome Trust and the actions of the French Government also brought about the decision.

    Mineworkers' Pensions
    Mr. Eric Illsley: What representations he has received regarding surpluses in the mineworkers' pension schemes. [115662]
    The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): I have received a number of representations on the subject of coal miners' pension surpluses. Some have called for a re-examination of the deficit guarantee-surplus sharing arrangements that were established in 1994 to safeguard members' pension entitlements; some have drawn attention to pension entitlements in respect of pre-1975 service, and others have urged greater access to early pensions.
    Mr. Illsley: I am grateful to my right hon. Friend for that reply. Is she aware of reports from the coalfield communities campaign that the Government are about to take about £4 billion from the mineworkers' pension scheme surplus, which is their entitlement under the 50 per cent. division rule? Is that the case? Does she agree that as the mineworkers' pension scheme will no longer be in deficit and the Government will no longer have to guarantee a deficit, it is time to negotiate the 50:50 split
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    of surpluses and allow more money to be retained in the pension scheme to enhance the pre-1975 low pension entitlements?
    Mrs. Liddell: I studied in some detail the document from the coalfield communities campaign. It is very interesting and quite perceptive about the changes that have taken place in the industry over time. I have to say to my hon. Friend that the agreements arranged at the time of privatisation were made with the full support of the industry and the unions. As a consequence, the Government have to date received £519 million from the two coal miners' pension schemes—not just the mineworkers' pension scheme—and, over a 10-year period, will be paid about £1,670 million. In return, the Government give a guarantee about miners' pensions. That has allowed for a much more aggressive investment strategy, leading to 20 per cent. increases in miners' pensions. The trustees of the scheme are happy with the arrangement. Indeed, it is the envy of many mature pension schemes.
    A revaluation of the scheme is now taking place. I have asked the trustees to consider whether there are other ways in which, in particular, those on extremely low pensions under the pre-1975 arrangements can receive assistance from the scheme. I will certainly keep the matter under constant review.
    Mr. Alasdair Morgan: Is it not the case that the Government will never be called upon to meet the guarantee? Although the Government may be legally in the right, they are certainly morally in the wrong.
    Mrs. Liddell: The hon. Gentleman should do his homework. The Government have already paid £400 million into the coal miners' pension schemes since 1994. Some £132 million was paid into the mineworkers' pension scheme to meet deficiency contributions in respect of the additional cost of benefits payable to members made redundant, and an additional £268 million was paid into the staff superannuation scheme to provide early pensions.

    E-Commerce
    Mr. Geraint Davies: What assessment he has made of the impact the internet will have on overall levels of productivity in the next two years. [115663]
    The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): All the indications are that e-commerce will help to drive up productivity, but we have in hand a programme of research to measure its impact, including the impact on productivity.
    Mr. Davies: I welcome my hon. Friend's response. She will be aware that United States productivity in leading manufacturing sectors, such as steel instrument production and the manufacture of electronic goods, increased by 5.7 per annum between 1990 and 1996. Does she think that that evidence points towards a renaissance in productivity in British manufacturing? Is she, like me, concerned about a possible digital divide between the haves and the have nots? Individuals, sectors and regions should have access to new technology so that we are able

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    to boost productivity across the industrial base and so that all of us in Britain can benefit from the new prosperity that such technology promises.
    Ms Hewitt: My hon. Friend is right on both points. I am certain that the impact of e-commerce will help to create this country's 21st century manufacturing base in all sectors. On Tuesday, I published the Government's strategy for countering the digital divide and for ensuring that, in every part of our community, children and adults will have access to the internet and the skills and confidence to use it.
    Mr. Ian Bruce: Has the Minister noted that Three Corn, which supplies equipment to the Department of Social Security, the Ministry of Defence and many other Departments, has announced that it will no longer be supporting the products that it has sold to the Government? What effect will that have on the productivity of computer systems that are already under pressure and not working properly? Will the Minister make a statement on that? The Government may need to have urgent talks with Three Corn about the future of government computing and its productivity.
    Ms Hewitt: I am not aware of the specific announcement or the contracts to which the hon. Gentleman refers, but next week we shall publish our strategy for e-government. We are also undertaking a review of IT procurement within government to learn the lessons of what were, frankly, disastrous IT procurement projects undertaken by the previous Government.

    Textile Industry
    Mr. Vernon Coaker: What assessment he has made of the future of the textile industry in the east midlands. [115664]
    The Minister for Competitiveness (Mr. Alan Johnson): The textile industry in the east midlands faces strong competitive pressures which, regrettably, have led to a number of closures and job losses. However, there remain many companies which, with the Department's help, are responding to the competitive challenges through investment in new technologies and design.
    Mr. Coaker: Is my hon. Friend aware that tens of thousands of jobs nationally and many thousands in the east midlands have been lost? If all those jobs had been lost in one day and from one plant, the furore would have been far greater. I urge my hon. Friend to do all that he can to ensure that a positive message goes out about the future of the textile industry in the east midlands. Will he do everything possible, in the various trade talks that he attends, to continue the Government's work to find new markets for the textile industry?
    Mr. Johnson: My hon. Friend takes a close interest in these matters and I commend him on his work on behalf of the textile industry. There are outstanding textile companies in the UK which compete on quality alone in a difficult competitive world. We have set up a textile and clothing strategy group, which has produced 25 recommendations that we are considering carefully.
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    We will, of course, do all that we can to make the British textile and clothing industry as competitive as possible in difficult world conditions.
    Mr. John Bercow: Given that between September 1998 and September 1999 no fewer than 36,000 textile and clothing workers lost their jobs and that the projection is for a further 100,000 job losses in the next four years, why does not the hon. Gentleman understand that to burden businesses with £30 billion of extra taxes and regulations in this Parliament represents a death sentence for small textile businesses throughout the east midlands?
    Mr. Johnson: I had not realised that Buckingham had moved to the east midlands. The problems in the textile industry did not start on 1 May 1997. There are difficult problems, but in the textile and clothing strategy group, on which I sit with right hon. and hon. Friends, the question of the additional costs to which the hon. Gentleman refers has not arisen. The problems relate not to various employment relations Acts, but to the difficult world market in which our companies are trying hard to compete.
    Mr. Dennis Skinner: Is my hon. Friend aware that one of the main reasons for textile company closures, including the recent closure at Shirebrook in my constituency, is that Marks and Spencer and other big stores have changed their purchasing policy and are moving away from British goods to plants outside the United Kingdom where there is cheap labour and all the rest of it? However, another reason is that many textile manufacturers, not content with their factories in Britain, are setting up plants in Morocco, the far east and various other places. They are the same people who employ the British textile workers, who are mainly women, and they are throwing them out of work because of the money they make overseas. That is the reason—it has little to do with anything else.
    Mr. Johnson: My hon. Friend as always makes an important point. In the east midlands, we are working through the enterprise grant fund to assist SMEs in the textile and clothing industry to compete in difficult circumstances. Marks and Spencer's decision did not help our cause at all.

    India
    Mr. Jim Cunningham: What steps he is taking to encourage UK exports to India. [115665]
    The Minister for Trade (Mr. Richard Caborn): India offers a wealth of opportunity for British trade and investment, and is therefore designated a campaign market for trade promotion by British Trade International. During the visit of my right hon. Friend the Secretary of State in January, he announced a target of a 20 per cent. increase in bilateral trade. Only last week, I hosted an extremely positive inaugural meeting of the Indo-British

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    Partnership's business council. The council members come from Rolls-Royce, PowerGen, British Airways, JCB and the financial services.
    Mr. Cunningham: I thank my right hon. Friend for that answer. Given that many of us have constituents with connections with India, what financial resources have the Government committed to trade with India?
    Mr. Caborn: British Trade International has one of the key markets. I think that the investment level is about £800,000. With private sector involvement and joint ventures, we expect the total to be in excess of £1 million. That investment will be aimed very much towards medium-sized companies. My right hon. Friend the Secretary of State announced global enterprise initiatives, and has set a target of 200 partnerships, especially with small and medium-sized companies, where we believe there is a tremendous opportunity in India within the next two years.
    Mr. Eric Pickles: Does the right hon. Gentleman agree that motor cars are a great potential export to India? Does he recognise that if we are to export them, we need a motor manufacturing industry, and that Rover is not the only problem? Setting aside nuances about what the Secretary of State heard or did not hear, will the right hon. Gentleman tell me when he last had discussions with Ford about the future of car production at Dagenham? What was the date, and what assurances did he receive about the future of—
    Madam Speaker: Order. The export of cars to India is a good subject. I am sure that the Minister can reply to that question.
    Mr. Caborn: It was two days ago.

    Small Business Service
    Mr. Michael Jabez Foster: When the Small Business Service payroll facilities will be available to small businesses in Hastings and Rye; and if fees will be charged. [115666]
    The Minister for Small Business and E-Commerce (Ms Patricia Hewitt): Following extensive consultation with small businesses last year, the Inland Revenue has expanded its new enterprise support initiative to provide a payroll service from April 2000, free of charge to small businesses.
    Mr. Foster: I thank my hon. Friend for that response. In my constituency, small business has provided an enormous number of jobs over the past two and a half years, halving long-term unemployment and enabling two thirds of young people to be in work. That has all been achieved as a result of small business, because there is no big business in Hastings and Rye. Will the Inland Revenue be giving assistance with matters such as the working families tax credit within its payroll service?
    Ms Hewitt: My hon. Friend is quite right. We have 100,000 more businesses now than we had in May 1997, and that is very welcome. The Inland Revenue will certainly be giving advice to small businesses on the
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    working families tax credit. Last week's Budget announced incentives to small businesses to go online, which will make it even easier for them to process their PAYE returns and to administer the working families tax credit and payroll generally.

    Euro
    Dr. Julian Lewis: What assessment he has made of the implications for small businesses of future British non-participation in the single European currency. [115667]
    The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): I talk frequently to small and medium-sized enterprises and business groups as part of the Government's ongoing assessment of the impact of the euro on UK SMEs while the UK remains out. As euro use increases as we come nearer to the introduction of notes and coins on 1 January 2002 in the first wave, there will be increased pressure on UK SMEs because of increased price transparency. There will also be significant new opportunities for SMEs, and it is the aim of my Department to ensure that small firms benefit from them.
    Dr. Lewis: Is the Minister aware that the result of the latest ICM poll, which was commissioned by the commonsense Conservative keep the pound campaign, shows yet again that more than 60 per cent. of the British people do not wish Britain to join the single currency and that only 28 per cent. do? Does the right hon. Lady realise that the proportion of the British people who are against joining the single currency is much higher than the average among small businesses? Why do she and the Government persist with their arrogant disregard for the opinion of small business men and the British people as a whole on this crucial issue?
    Mrs. Liddell: The phrase "commonsense Conservative" is a contradiction in terms. The hon. Gentleman should reflect on the views of those on his own Front Bench. The hon. Member for Bognor Regis and Littlehampton (Mr. Gibb) said on 17 June last year in the Standing Committee considering the Finance Bill:
    Whether our party changes its policy will depend on what the right policy is.—[Official Report, Standing Committee B, 17 June 1999; c. 659.]
    I suppose it depends which part of the Conservative party one is a member of.
    The Government recognise that a single currency exists, and we will ensure that United Kingdom small firms get the full benefit of the opportunities that it offers, whether Britain is in or out. We will ensure that the people of this country get an opportunity to decide whether Britain should join a single currency when the economic circumstances are right.
    Mr. Dale Campbell-Savours: My right hon. Friend should ignore rigged Tory polls, which are what the hon. Member for New Forest, East (Dr. Lewis) cited. Business men in my constituency are making their position clear. They want to join the euro because they

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    believe that it will create better employment conditions in Britain, and they want an early referendum, so that the real arguments can be put before the British people.
    Mrs. Liddell: My hon. Friend makes a valid point. More than 40 per cent. of United Kingdom SMEs already export to the euro zone. There are significant opportunities for them in that zone, but it is important for the entire UK economy that we make sure that the economic preconditions are right before the Government recommend to the people of this country, in a referendum, entry to a single currency. The Government have the commonsense approach; the Opposition's attitude is increasingly turning into xenophobia.
    Mr. Dafydd Wigley: I speak as president of a small business in my constituency which employs 130 people in the food manufacturing sector. Does the right hon. Lady accept that that sector, along with agriculture, from which we get our raw materials, and tourism, to which we sell a proportion of our product, are being undermined by the strength of the pound against the euro, and that there is a crying need for us to go into the euro at the correct rate, to give those sectors, along with sectors such as steel, the opportunity of a future in an export market?
    Mrs. Liddell: I am very interested to hear about small firms that have presidents—an unusual development in the British small firms sector. It would not help any company, large or small, for the Government to take decisions that were not based on the best economic preconditions. That is why my right hon. Friend the Chancellor has set five commonsense tests that will have to be met before the Government could recommend to the country that we should join a single currency.
    In the meantime, the existence of the euro zone means that the United Kingdom's small and medium-sized enterprises must look to their marketing and the consequences of increased price transparency. That is why in my Department we are concentrating on exports, the euro and electronic commerce, so that SMEs know the benefits of all three.

    Aerospace
    Dr. Doug Naysmith: What support his Department has given the aerospace industry since May 1997. [115668]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): I announced on 13 March that the Government would provide launch investment for the A3XX. Since 1997, the Government have made two other launch investment commitments, and we continue to support research and innovation.
    Dr. Naysmith: I thank my right hon. Friend for that reply and for the repayable launch aid for the A3XX project. That is of great value to my constituents in Bristol, North-West and to the rest of the UK, where firms in the supply chain will feed into that international collaborative project. What support and help can my right hon. Friend give to firms that want to contribute to that
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    sophisticated high-tech engineering project, and get a share of the action and of the work that will become available?
    Mr. Byers: My hon. Friend raises an important point and I was pleased to visit Filton to see the excellent work being done at the plant. The aerospace industry is one in which Britain has a real lead in terms of worldwide development, which is one reason why we were prepared to make the launch investment available. We recognise how important and significant that is—it will safeguard about 62,000 jobs and create about 22,000 new ones. That is real investment and those are real jobs, which is what people want.
    Mr. John Wilkinson: While I have every sympathy for the project and hope that it goes well—the A3XX should fill the biggest niche in the market—can the Secretary of State explain why he did not announce the loan aid to the House? It is the biggest provision of loan capital of its kind for years and it has major implications for the industry as a whole. Will he assure the House that he is still in a position to give launch aid to other companies in the aerospace sector, if appropriate, and that other projects, such as the A400M, are still worthy of consideration?
    Mr. Byers: I was unable to come to the House because the information was market sensitive and the stock market had to be informed first, which it was at 7.30 am. The reply to the parliamentary question was consequent on that. Those are the formalities that we had to complete and it is wholly appropriate that we did so. The hon. Gentleman raises an important point about a further order that may come to the Airbus consortium. Clearly he will be aware that there are strong arguments about why that project should be supported as well.
    Mr. Barry Jones: My right hon. Friend deserves great credit for obtaining massive sums for the industry, but does he know that 4,200 Airbus workers in my constituency are incandescent with rage at the refusal of a regional grant? Has he had any discussions with the First Secretary as to how he might disgorge a modest sum to ensure that 1,400 jobs remain in my constituency? He might know that that decision is the most careless in the history of government in Wales—a kick in the teeth. All north Wales is contemptuous of a wretched decision that will do no good for the Assembly in Wales.
    Mr. Byers: I understand my right hon. Friend's concerns. Yesterday evening, I met the First Secretary to discuss the situation in the light of his decision to refuse regional selective assistance. He has now agreed to meet the company and the representatives of the work force to try to identify whether there is a different way forward that can give support to the project from the Welsh Assembly, although not in the same way as originally proposed. I think that he now recognises the significant part that that can play and he is more than willing to have discussions with the company to identify a way forward.
    Mr. Nick St. Aubyn: At Dunsfold, on the edge of my constituency, nearly 1,000 jobs are being lost as a result of the closure of British Aerospace's plant.

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    Does not that also emphasise the Bank of England's projection that the manufacturing sector is heading for its second downturn in three years? For many people in manufacturing whose jobs are going, the Government's claims to have abolished the cycle of boom and bust have a hollow ring.
    Mr. Byers: When the hon. Gentleman has the chance to refresh his memory of the manufacturing figures, he will see that there is no return to the days of boom and bust and that manufacturing has underlying strengths, which are coming to the fore. It is not good for manufacturing when people like him talk manufacturing down. There is much that is good in United Kingdom manufacturing and I am sure that he knows as well as I do that it does not want a return to the Conservative days of boom and bust, when 1 million manufacturing jobs were lost just over 10 years ago.

    Manufacturing (Worcestershire)
    Mr. Michael J. Foster: If he will assess the competitiveness of manufacturing industry in Worcestershire. [115669]
    The Minister for Trade (Mr. Richard Caborn): The west midlands economic strategy was published in autumn last year. It examined the competitiveness of the whole region, including Worcestershire, and recommended five priority actions to address issues that it identified. The economic strategy takes a wide view of the issues that bear on competitiveness, rather than concentrating solely on manufacturing. It identified the need for an increase in skills, support for innovation and a number of business clusters that could be developed in that area.
    Mr. Foster: I thank the Minister for that answer. What support will be given to Worcestershire's manufacturing industry following BMW's decision to sell Rover?
    Mr. Caborn: My right hon. Friend the Secretary of State has answered a number of questions that were raised—
    Mr. Michael Fabricant: Not enough.
    Madam Speaker: Order.
    Mr. Caborn: Thank you, Madam Speaker.
    A taskforce has been established and will report in the next few weeks. The Government will draw up their policies following its recommendations.
    Mr. Alan Duncan: Many manufacturers in Worcestershire are heavily reliant on their business with Rover. They will be none too pleased with the Labour Government's completely incompetent handling of the Rover issue: they raised hopes and then showed their naivety by being taken for suckers. What is the latest on the Secretary of State's proclaimed mission to find another buyer for Rover? To whom has he spoken? Who is on his nice little shortlist? What are the prospects
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    for a different deal? What exactly has the beleaguered Secretary of State done—or was it just a Quixotic outburst?
    Mr. Caborn: If Conservative Members had developed the industrial infrastructure of this nation when they were in power, we would not be facing these problems. I have no doubt that, if they were in power now, they would dispense with the committee that is considering the position of Rover, because Conservative Front Benchers intend to abolish the region development agencies. Conservative Members dismiss the plan for competitiveness that the RDA has proposed with the support of all the stakeholders in the region. The Conservatives have no track record on manufacturing.

    Car Manufacturing (West Midlands)
    Mr. Peter Luff (Mid-Worcestershire): What recent discussions he has had with Advantage West Midlands about the future of car manufacturing in the west midlands. [115670]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): I met Alex Stevenson, chairman of Advantage West Midlands, on Friday 17 March, when I asked him to lead a taskforce to deal with the consequences of BMW's decision on Rover. I met members of Advantage West Midlands when I attended the first meeting of the taskforce on 18 March, and 1 met Mr. Stevenson again on 23 March.
    Mr. Luff: As the Minister for Trade said in response to a previous question, Advantage West Midlands is leading the Longbridge taskforce. Does the Secretary of State recall telling the Sandwell and Dudley chamber of commerce recently that Advantage West Midlands came in the bottom half of the performance league of regional development agencies? Indeed, he hinted that it was one of the three underperforming agencies. Is it not bad enough to have the future of Rover handled by a Secretary of State who does not know what is going on, without his recklessly entrusting so much of the future of Longbridge and the whole of the motor manufacturing industry in the west midlands to such an incompetent organisation?
    Mr. Byers: The taskforce has an important role to play. The way in which it has already conducted itself by bringing the partners together is a good lesson in how to respond positively to the difficult situation that we face in the west midlands. I believe that there is a lot of confidence in the taskforce. It has the serious job of economic regeneration and job creation. We should judge it on the programme that it produces, and should not talk it down, because that will not help anyone. We should plan constructively for the future. That is what Advantage West Midlands is about, and, more importantly, what the taskforce has been charged with doing. I am confident that it will do precisely that.
    Mr. Lindsay Hoyle: It was stated earlier that Professor Rhys does not believe that sensitive information should be shared with the Government. When pressed, he could not produce any evidence of that, and had to state honestly that it was merely his personal hunch. When the taskforce considers how to save jobs in the west midlands,

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    will the Secretary of State also have regard to the component industry outside the west midlands, especially suppliers from Lancashire?
    Mr. Byers: I agree with my hon. Friend. What was interesting in the evidence given yesterday by BMW executives to the Select Committee were the many references to nods, winks and hunches and to the time on the face of a clock. That is really no way to do business. I think that, when the evidence is clearly before the Select Committee, people will be able to judge who said what and when, and the actions that were taken as a result. I will welcome that.
    My hon. Friend's important point on components was well made. The fallout from BMW's decision goes beyond the west midlands. Clearly, the west midlands is more seriously affected than any other region, but the supply chain is across the country. What we have to do—we are able to do it now because of the inventory that we have from BMW—is to identify those manufacturers and engineering companies that are part of the supply chain, so that we can give them help and assistance when it is appropriate to do so.
    Mrs. Angela Browning: I wonder whether the Secretary of State could explain a bit about this taskforce that he has set up. Is its remit—in the light of his own remarks, on 16 March, that he believed that Longbridge had a "viable long-term future"—to try to keep the Longbridge operation as it is now? When he last spoke to the House on the subject, he seemed to be somewhat sceptical of the Alchemy deal. Is the taskforce working with Alchemy, or is it looking for alternative options for Longbridge?
    Could the Secretary of State also explain how the taskforce committee has been set up? Concerns have been expressed that Bromsgrove council, for example, has not been included in the taskforce, although its council area covers one third of the Longbridge site. Why is it not included? The council clearly has an interest in the long-term future of Longbridge.
    Mr. Byers: If the hon. Lady has suggestions about how the taskforce can be improved, I would be more than happy to take them on board. It is important that we have a taskforce in which everyone has confidence. If there is an issue about Bromsgrove not being represented on the taskforce, I should be more than happy to reflect on that and to ensure that there is appropriate representation.
    I am particularly pleased that the right hon. Member for Sutton Coldfield (Sir N. Fowler) has agreed to be part of the taskforce. It is important that we have cross-party representation on the group, because there is a serious job of work to be done. The taskforce has a very important role, and I want it to be successful. I hope that all hon. Members will agree that that is the best way forward.
    Mrs. Browning: I hope that the Secretary of State will consider the representations that he received, before the crisis broke, from my colleague, Mr. Malcolm Harbour MEP. Mr. Harbour wrote to me—on 27 February, before the Secretary of State knew that there was such a serious problem at Longbridge—asking me to read and agree to
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    a letter, which I certainly did. I should add that he is not only the MEP for the West Midlands, but a former Rover director. He wrote to the Secretary of State saying:
    My purpose in writing to you now is to confirm that I would be pleased to join you for your meeting with Mr. Monti, both to demonstrate the cross party support for the aid package—
    to Rover—
    and also to contribute my experience as a former senior Rover executive.
    On 27 February, my colleague Malcolm Harbour was so concerned about the situation at Rover that he, with the support of official Opposition Front Benchers, offered the Secretary of State that expertise. Why has it not been taken up?
    Mr. Byers: For the simple reason that it was a matter of the Government talking to the Commissioner. As the hon. Lady must know from her own experience as a Minister—certainly the right hon. Member for Wokingham (Mr. Redwood) will know from his experience as a Cabinet Minister—when there are Government to Commission meetings, one does not involve Members of the European Parliament. That is not the way in which business is done, and I am sorry that the hon. Lady is not aware of that. The right hon. Member for Wokingham is nodding in agreement.
    Mr. John Redwood indicated dissent.
    Mr. Byers: The right hon. Gentleman knows that that is the way these things work. I am sorry that the hon. Lady is ignorant of these matters, but that is the reality of the situation.

    Redundancy
    Dr. Ian Gibson: How the UK Government will respond to representations on its implementation of the collective redundancies directive. [115671]
    The Minister for Competitiveness (Mr. Alan Johnson): The Government are satisfied that United Kingdom law fully and correctly implements the collective redundancies agreement.
    Dr. Gibson: I thank my hon. Friend for that answer. He will be aware that the directive is quite strong and quite clear on the need to consult workers' representatives before redundancies are made, to improve the prospects of an agreement. Will he ensure that representations are made to the European Commission on trying to ensure that United Kingdom employment law prevents workers from discovering their fate in the morning newspapers or on the radio? Several trade unions are already making such representations. Will he support them?
    Mr. Johnson: Thanks to the improvements that we introduced last year, employers who fail to inform and consult in good faith with a view to reaching agreement on matters, including the one which my hon. Friend cited—finding ways of avoiding redundancies, or mitigating their effects—are breaking the law.

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    Although there is no requirement for the consultation process to begin before the announcement of proposed redundancies, there is a requirement, in accordance with the directive, for the announcement to be made and the
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    process to begin in good time. It will not normally be appropriate for dismissal notices to be issued before sufficient meaningful consultation has taken place. That is the position under existing law.

Business of the House
12.30 pm
Sir George Young: Will the Leader of the House give the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business of the House for next week is as follows:
MONDAY 3 APRIL—Conclusion of remaining stages of the Child Support, Pensions and Social Security Bill.
TUESDAY 4 APRIL—Progress on remaining stages of the Freedom of Information Bill.
WEDNESDAY 5 APRIL—Conclusion of remaining stages of the Freedom of Information Bill.
THURSDAY 6 APRIL—Remaining stages of the Armed Forces Discipline Bill [Lords].

Opposition Day [7th Allotted Day] Second Part. There will be a debate on "The Patten Commission Report on the Royal Ulster Constabulary" in the name of the Ulster Unionist party.
FRIDAY 7 APRIL—Private Members' Bills.
The provisional business for the following week will be as follows:
MONDAY 10 APRIL—Motion on Standing Committee on Regional Affairs.
Second Reading of the Nuclear Safeguards Bill [Lords].

Remaining stages of the Royal Parks (Trading) Bill.
Second Reading of the Television Licence (Disclosure of Information) Bill.
TUESDAY 11 APRIL—Second Reading of the Local Government Bill [Lords].

WEDNESDAY 12 APRIL—Opposition day [9th Allotted Day], there will be a debate on an Opposition motion. Subject to be announced.
THURSDAY 13 APRIL—Debate on Armed Forces Personnel on a motion for the Adjournment of the House.
FRIDAY 14 APRIL—Private Members Bills.
The House will also wish to be reminded that on Tuesday 4 April there will be a debate on Banana Imports in European Standing Committee A. Also, on Wednesday 12 April, there will be a debate on the White Paper on Food Safety in the European Union in European Standing Committee C. Details of the relevant documents will be given in the Official Report.

[Tuesday 4 April 2000:

European Standing Committee A—Relevant European Union document: 13048/99, Banana Imports; Relevant European Scrutiny Committee Reports: HC 23-v and HC 23-x (1999-2000).]
[Wednesday 12 April 2000:
European Standing Committee C—Relevant European Union document: 5761/00, White Paper on Food Safety in the European Union; Relevant European Scrutiny Committee Report: HC 23-x 1999-2000).]
Sir George Young: I thank the Leader of the House for giving us next week's business, and an indication of the business that will be dealt with in the following week.
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I particularly welcome the announcement of the first of the three armed services debates for which I asked last week. There is concern in all parts of the House about the pressure on our armed forces, and the debate will give the House an opportunity to air its worries.
I am also grateful for the right hon. Lady's response to the request that I made last week for next Thursday's business to be thinned out. She has removed Second Reading of the Sea Fishing Grants (Charges) Bill. That is the good news; the bad news is that the following Monday now looks rather congested. We must first debate, for an hour and a half, a motion on a new Standing Committee; then we must debate Second Reading of the Nuclear Safeguards Bill, the remaining stages of the Royal Parks (Trading) Bill, and Second Reading of a Government Bill. At a time when the right hon. Lady is under pressure from her own colleagues to ensure that the House does not sit too late, is it sensible to table so much business for one day?
In view of the widespread problems in agriculture and the expectations aroused by today's meeting at No. 10 Downing street, might we expect a statement from the Government on the outcome of the farming summit?
Last week, when I asked for a statement about BMW, the right hon. Lady replied, referring to the Secretary of State for Trade and Industry:
I anticipate that he will do what he can to keep the House informed on the progress of any discussion in which he is engaged.—[Official Report, 23 March 2000; Vol. 346, c. 1113.]
The exchange that took place at Question Time an hour ago was not sufficient. I believe that the Government owe the House nothing less than a full day's debate on the future of Rover.
Mrs. Beckett: I thank the right hon. Gentleman for his recognition of the steps taken by the Government to provide some of the discussions that the House has been seeking, and for his recognition of the fact that, in response to his representations, we have thinned out Thursday's business. I undertake to look at next Monday's business, but I must point out that, in a cumulative sense, none of it amounts to more than a normal day's business. It involves useful but relatively minor measures, with which we can deal with no difficulty in the course of an ordinary sitting day. That is what I hope and anticipate that the House will do.
The right hon. Gentleman also asked for a statement on the outcome of the farming summit. I anticipate that my right hon. Friend will seek a means of making information available. He may well answer a question later today and make back-up information available to the House.
Finally, the right hon. Gentleman asked for a statement on BMW. We have just had Trade and Industry questions and I understand that the issue took up a considerable amount of time. As for a longer debate, although I was not able to be here throughout Question Time, my understanding from my hon. Friend the Member for Bolsover (Mr. Skinner), who is a good judge of such matters, is that it might not be to the Conservatives' advantage to have the matter discussed at greater length.
Mr. Paul Flynn: Proof of the power of business questions came in yesterday's long-awaited

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announcement on the take-up of the minimum income guarantee—an issue that has been raised in this forum and in early-day motion 2:
[That this House applauds the Government's intention to ensure that all pensioners entitled to income support receive it, making it a genuine minimum income guarantee; notes that, although the minimum income guarantee was introduced in April 1999, the promised national programme of measures to maximise take-up is still awaited; and urges the Secretary of State for Social Security to announce that claims made by pensioners after the date of that announcement will be treated as having been made on that date and that arrears of benefit will be paid accordingly.]

Unfortunately, we have not had a chance to debate this important Government initiative, but as it has been delayed for more than a year, can we debate the possibility of giving those who have been denied the minimum income guarantee for a year the opportunity to have their claims backdated, just as pension payments delayed by the Government are backdated?
Mrs. Beckett: When I heard the public announcement of the campaign, I immediately thought of my hon. Friend and thought that it had disposed of at least one business question. I should have known better. My hon. Friend should rest on his laurels for a little while. It was an important announcement and we all very much hope that it will solve a serious problem that has existed under successive Governments of all political shades. I cannot undertake to find time for a further debate on the subject in the near future. He will know that it is constantly discussed and kept under review.
Mr. Paul Tyler: The Leader of the House has just said that her right hon. Friend will make a statement on the outcome of the farming summit. Will she clarify which right hon. Friend? As the Prime Minister has made it clear for many weeks that the issue is a personal initiative and he is chairing the meeting this afternoon, can we be assured that he will demonstrate the severity of the crisis and the seriousness with which the Government are facing it by making a statement himself at the earliest opportunity? Answering a written question late on a Thursday afternoon is not sufficient to recognise the scale of the crisis.
Secondly, will the right hon. Lady clarify how the Government intend to handle the two days of debate on the Freedom of Information Bill? She will be aware that Front Benchers and Back Benchers on both sides of the House have tabled amendments, some of which have been jointly tabled. The management of that debate is extremely important for the interests of Back Benchers, for whom she has responsibility.
Thirdly, will the right hon. Lady undertake, as she has in the past, to look again at the issue of buck passing of Members' correspondence and questions? I draw her attention to a new twist in that tangled web. I wrote to the Minister of Agriculture, Fisheries and Food about meat inspection charges, which are very important to the agriculture industry. The Ministry sat on the question for a few days and then sent me a letter saying that, after 1 April, the issue will be the responsibility of the Food
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Standards Agency. By sitting on the question, the Ministry has passed the buck to a non-ministerial source. Hon. Members on both sides of the House will recognise that that is a new feature. If the Minister is accountable for the issue now, surely he must answer the question.
Mrs. Beckett: I cannot agree with the hon. Gentleman that we should hold on to the outcome of the discussions rather than answer a written question this afternoon, as I anticipate that my right hon. Friend the Minister of Agriculture, Fisheries and Food will do, and make the back-up information available to the House as speedily as we can. The hon. Gentleman says that that is not satisfactory, but this is where we are—it is Thursday afternoon now. Unless he does not want the farming industry to discuss the issue over the weekend, I see no solution to his problem. The discussions are under way and they will be properly reported to the House. As Madam Speaker has often pointed out, to make a statement by way of a written answer is a perfectly acceptable means of providing information to the House.
Mr. Eric Forth: No, it is not.
Mrs. Beckett: The right hon. Gentleman is being uncharacteristically foolish. There is nothing wrong with it in any way, shape or form. I remind him that Madam Speaker has stated that repeatedly. It is not true that there is something wrong with providing information through a written answer to the House. Indeed, usually, hon. Members complain that they do not get information through written questions.
The hon. Member for North Cornwall (Mr. Tyler) asked about the handling of the two-day Freedom of Information Bill debate. I agree that it will be important to try to manage the debate well. It will be possible in that time to air the issues that are genuinely of concern and to have a properly conducted debate. However, when a number of hon. Members wish to take part and there are a number of important issues to discuss, that requires management. As ever, the Government remain more than willing to discuss how that debate might be structured, so as to ensure that Back Benchers have the chance to make their concerns heard.
Mr. Gerry Steinberg: May I pursue the subject of the miners' pension fund, which was discussed earlier today at Question Time? My right hon. Friend will be aware that the previous Government and the trustees of the fund came to arrangements in 1994 after privatisation. The fund is now in excess of £23 billion and makes huge surpluses for the Treasury. Does she believe that it is time to look again at the distribution of those surpluses and to redistribute them more to retired miners—some of whom receive less than £10 a week—and to old coalfield communities, where there is still much devastation? May we please have a debate on that subject to discuss the obvious need to look again at the distribution of those funds?
Mrs. Beckett: I am grateful to my hon. Friend for raising what is a matter of great concern and interest, particularly in coalfield areas. I believe that the Minister for Energy and Competitiveness in Europe, my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell),

499
is looking into the matter, and has undertaken to discuss it with the trustees and to report back. Until those discussions have taken place, I do not anticipate being able in the near future to find time in the House for such a debate, but I remind him of the existence of Westminster Hall, where he might find that those concerns can be well aired.
Mr. Nigel Evans: I know that the Leader of the House thinks that it is in order for an answer to be given to a written question on the agriculture summit today, but it is not appropriate for my farmers, who are suffering the worst crisis in years. Farmers in the Ribble Valley are going broke, dairy farmers are getting lower farmgate prices for their milk and the industry is reeling. That covers a lot of people: not just farmers, but others in business who provide goods and services to the farming industry. Please will she ask the Prime Minister to come to the Dispatch Box? We know that he does not like the House of Commons, but will he make a statement, so that we can personally question him on what assistance he will give to our farming industry?
Mrs. Beckett: The farming industry is interested in the outcome of today's discussions, and in practical advice, assistance and support, which it looks for from the Government. I do not think that it is nearly so interested in the grand standing of Opposition Members or, indeed, in expressions of concern. I do not see why the industry should be grateful to them for one second for delaying an important announcement that the farming industry wants to hear, so that they can have their day in the House at prime time. That is not what we are here for.
Mr. Gordon Prentice: May we have an early debate on the hugely significant report from the Police Foundation, which was published on Tuesday and which fundamentally alters the rules about drugs? I do not want the report to be kicked into the long grass, so to speak.
My right hon. Friend will be aware that, throughout continental Europe, the laws are changing: in Portugal and Spain, cannabis is being decriminalised; in Ireland, people cannot be sent to prison for using it. The report was two years in the making. There were eminent members on the commission, including two chief constables, many scientists and pharmacologists. It would be a tragedy if the report were sidelined. It should be given debating time in the Chamber.
Mrs. Beckett: I do not think that anyone has any intention of sidelining the report, let alone of kicking it into what my hon. Friend so aptly called "the long grass". The report is thorough and contains a large number of recommendations, and it includes an endorsement of the Government's national drugs strategy. I have no doubt that the Government will want to give it very careful and thorough consideration, and that they will report in due course. However, in all honesty, I must say to my hon. Friend that I do not anticipate that that will be in the next few days.
Mr. Nicholas Winterton: The right hon. Lady is a leading and distinguished member of the Government but, as Leader of the House and Chairman of the Select Committee on Modernisation, she also has duties to the House. When will she find time for a
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debate on the Procedure Committee's report on the Government's expenditure plans, to which she has replied, on behalf of the Government, in a way that is, sadly, very negative? The recommendations of the Procedure Committee were picked up in the report from the Liaison Committee, so when will she find time for the House to debate how important issues are discussed in the Chamber and in Select Committee, and the restoration of the House's authority and integrity?
Mrs. Beckett: I am confident that the hon. Gentleman will agree that it would not be right to suggest that the House's integrity and authority had been undermined, but I accept that the Liaison Committee and the Procedure Committee have made some proposals that they consider would lead to improvement. The hon. Gentleman will appreciate that every Government at this time of year naturally concentrate on getting legislation through. However, although I am mindful of the importance of the debates that he seeks, I cannot give him a date in the near future.
Mr. Jim Cousins: I congratulate my right hon. Friend on the proposal to establish the Standing Committee on Regional Affairs, for which I have asked persistently. I also wish to place on record my acknowledgement of my right hon. Friend's personal work in the Modernisation Committee to bring that about. I do not want to anticipate the debate on the matter that we are due to have in 10 days' time, but can she assure the House that the Committee will genuinely allow hon. Members from the English regions to put forward items of business, and that there will be no inhibition against Ministers having to account for their actions in the regions?
Mrs. Beckett: I thank my hon. Friend for his remarks. Although we discussed the matter at the Modernisation Committee, and our debate was very helpful, the proposal to revive the relevant Standing Order that is already on what might be called our statute book stems from the Government. However, I certainly believe that the Committee will be a forum that will offer a genuine additional opportunity for debates focused on the concerns of the English regions. Knowing hon. Members, I have no doubt at all that the debates will be without inhibition.
Mr. Oliver Heald: May I ask about the timing of the Report stage of the Regulation of Investigatory Powers Bill? The right hon. Lady will know that there has been a barrage of criticism of the technical requirements and possible cost burdens that will be placed on internet service providers by the Bill. In Committee, the Minister of State, Home Office, the hon. Member for Norwich, South (Mr. Clarke), has said that he is having consultants prepare a technical document that will deal with those issues. Given the importance of knowing what the costs and technical burdens are, will the Leader of the House speak to the Minister to see whether it is possible to hold the Bill's Report stage after the consultants' report has been published, so that hon. Members can see the true picture?
Mrs. Beckett: Certainly, I take on board the hon. Gentleman's remarks, and I shall draw them to the attention of my hon. Friend the Minister of State. I fear

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that, without notice, I cannot undertake to accede to that request, as I shall have to make inquiries to discover the relative time scales, but I shall discuss the matter with my hon. Friend.
Mr. David Watts: The Wellcome Trust appears to have been able to blackmail the Government into deciding to remove the synchrotron from the north-west, and seven of its trustees seem to have been involved in the decision even though they did not declare their professional and financial interests in it. Given that background, will my right hon. Friend the Leader of the House ask my right hon. Friend the Secretary of State for Trade and Industry to make a statement about the Wellcome Trust's involvement in the future of Britain's science?
Mrs. Beckett: My hon. Friend expresses an anxiety that is felt on both sides of the House and is shared by the Government, as my right hon. Friend the Secretary of State has frequently made clear. I fear that I cannot undertake to ask my right hon. Friend to return to the Dispatch Box for a special statement, especially when he has only just had Question Time. The Government understand the concern expressed and will do all that we can to address it with other proposals for the science base.
Rev. Martin Smyth: I would not want to delay farmers gaining knowledge of what is going on today, but would it be possible for the First Lord of the Treasury to come to this House and make a statement in relation to early-day motion 551?
[That this House notes that the deadline for the Government to submit this year's claim for agrimonetary compensation is the end of April; recognises that agriculture is going through a very difficult period, not least because of the high value of sterling against the euro; sees agrimonetary compensation as a directly relevant way of ameliorating this problem; notes that all EU states, with the exception of the UK, have over recent years claimed the EU-funded share of agrimonetary compensation; and calls on the Government to submit a full claim before the end of April.]
It deals with the drawing down of agrimonetary compensation. At a time when the farming community is under severe threat, the right hon. Gentleman might be able to tell us why, for the second year in succession, farmers in Northern Ireland—who should have had payments several months ago—have been told that they can get nothing until after 5 April, despite the Government's present surplus.
Mrs. Beckett: As the existence of the meeting today confirms, the Government are aware of, and sympathetic to, the difficulties that farmers have been experiencing. The hon. Gentleman may know that, by the end of 2001, the Government expect to have paid £529 million in agrimonetary aid since 1997. We continue to keep the matters under review. I cannot undertake to ask my right hon. Friend the Prime Minister to come to this House to make a statement, but I can assure the hon. Gentleman that the Government are more than anxious to make the news of what is proposed and discussed with farmers available to hon. Members and to the farming community.
Shona McIsaac: I have served on the Committee scrutinising the Freedom of Information Bill,
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where there were some full debates. In order for us to have meaningful debates in the Chamber, could the remaining stages of the Bill be discussed on a timetable motion?
Mrs. Beckett: Whether we have a timetable for the debate on a programme motion has to be agreed across the House. The Government are more than willing to engage in discussions in the hope that we can get a good structure for the debate, so that hon. Members can be confident that they will have the opportunity to air their concerns.
Mr. Eric Forth: At the risk of incurring the wrath of the Leader of the House, could I have the temerity to suggest a debate in the House of Commons in Government time? I know that that thought increasingly appals the right hon. Lady, but it strikes me that it would be useful—indeed essential—following today's questions to have a full debate in Government time on Rover. The Secretary of State for Trade and Industry was only too happy to trumpet what he regarded as the success of his lashings of taxpayers' money for the Rover group at the time. He now seems remarkably silent on the subject, and unwilling to divulge the relationship between him being persuaded to give a lots of taxpayers' money to Rover and, a few months later, having to admit that the whole thing has turned into a fiasco. Can we get to the bottom of this by having a debate on the Floor of the House in Government time, with the Secretary of State here?
Mrs. Beckett: I am sure that the right hon. Gentleman or someone else will correct me if I am wrong, but I do not recall having a debate in Government time when the funding was made available for Rover, although it was properly announced in the House, as the House would expect. I fear that I cannot undertake to find time for a debate in Government time in the near future on BMW, although it is a matter of great concern. The House is anxious about the future and welfare of people at Longbridge and in the west midlands. Everyone on this side of the House is anxious to do all that we can to assist and support them, and I hope that that is true also of the Opposition.
Mr. Barry Gardiner: Can my right hon. Friend advise the House when the draft Bill on commonhold and leasehold reform will be published? Will she consider establishing a scrutiny committee for that Bill, given that it will establish a new form of property tenure in the law of England and Wales?
Mrs. Beckett: My hon. Friend makes an interesting and important point. I cannot at the moment give him a date for the likely publication of the Bill. However, as he knows, the Government are keen to promote pre-legislative scrutiny and good discussion, especially of Bills that are not only important but contain technical matters. My hon. Friend makes a very interesting suggestion, and I undertake to consider it.
Mr. Peter Brooke: Given the mystification of my old-age pensioner constituents that the concessions for the over-75s on the television licence appear to have made no

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practical progress so far, will the Leader of the House accept that my constituents will regard it as wholly in line with their mystification that the Television Licence (Disclosure of Information) Bill is not to be published until after her statement today, and that it also seems as if it will be debated in the middle of the night?
Mrs. Beckett: To be honest, I do not think that the right hon. Gentleman's constituents care when the Bill is debated as long as it goes through and they get their free television licences.
Helen Jones: Could my right hon. Friend find time for a debate on the Benefits Agency medical services, particularly the role of Sema Group Medical Services in arranging medical examinations and the instructions that it gives its doctors? In view of the number of cases that I and, I am sure, other hon. Members have seen in which doctors have spent as little as 15 minutes on an examination, including the paperwork, is it not time that the House had a proper debate about what is happening in these examinations? In that way, we can ensure that people claiming disability benefits get a fair deal and that there is a proper complaints process when the system goes wrong.
Mrs. Beckett: I know that all right hon. and hon. Members have, from time to time, experienced cases of this kind in which difficulty or resentment is caused. I believe that my right hon. Friend the Secretary of State for Health has given an undertaking that he will look at such issues if they are raised, and I will draw my hon. Friend's remarks to his attention.
Mr. Richard Shepherd: As we already have a Standing Committee on Regional Affairs, and as under Standing Order No. 117 it has the widest possible remit and enables every Member representing an English constituency to attend, why is it necessary to bring forward a motion? Could the Leader of the House not save the time of the House by not doing so?
Mrs. Beckett: I believe that the existing Standing Order on the Regional Affairs Committee, as it is on our statute book, so to speak, was devised by a previous Labour Government in the hope that devolution on that occasion would successfully reach the statute book. It has lain in desuetude in the intervening period. The Government believe that there is the potential for improvement in the proposals that were made then, particularly in building up a degree of expertise among a core membership who may specialise in regional affairs per se. The purpose of reviving an existing facility of the House which has not been used for many years is that any Member who sits for an English constituency will be able to attend and take part in those discussions. That is the worth of reviving the proposal.
Mr. Desmond Browne: Has my right hon. Friend had an opportunity to read the excellent and commendably short third report of the Select Committee on Science and Technology entitled "Scientific Advisory System: Diabetes and Driving Licences"? The report is highly critical of the arbitrary nature of the application of driving licence regulations to insulin-treated diabetic drivers, and makes important
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recommendations. There are 100,000 insulin-treated diabetic drivers in the United Kingdom. Does my right hon. Friend think that she could find some time in the near future to discuss these important recommendations?
Mrs. Beckett: My hon. Friend makes an important point. I fear that I cannot undertake to find time, which is always at a premium, on the Floor of the House for such a debate. However, I remind him that one of the principal reasons for the proposal to have extra sittings in Westminster Hall was to find more time for debate and scrutiny, particularly of Select Committee reports. May I recommend that course to him?
Mr. Tim Collins: Can the right hon. Lady find time for a debate on tourism? The recent decision by the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Sunderland, South (Mr. Mullin), to confirm a ban on motor sports on Lake Windermere is likely to cost around 500 jobs in my constituency. Will the Government look constructively at the case advanced by Cumbria tourist board and other organisations for assistance to those likely to lose business or their jobs?
Mrs. Beckett: I am aware of the proposal endorsed by my hon. Friend the Under—Secretary. I appreciate that it raises concerns for some people, but it is a step that others have long sought. I see the hon. Gentleman assenting to that. I cannot undertake to find time for a debate on the Floor of the House, but shall draw his remarks to my hon. Friend's attention. I recommend to the hon. Gentleman the facilities of Westminster Hall.
Mr. Jonathan Shaw: Is my right hon. Friend aware of press reports suggesting that the Home Office has made up its mind on the successful applicants for the prestigious city status awards? Outrageously, the press has suggested that the Medway towns, which, as I am sure she will agree, have made the finest bid, are not in the running. She will share my joy that the Under-Secretary of State for the Home Department, my hon. Friend the Member for North Warwickshire (Mr. O'Brien), has told me that that is not the case. The criteria have not yet been written and no announcement has even been timetabled.
Those who have made applications have been kept too long in the dark. Local people make a lot of effort to present the best of their areas, and it is time we heard from the Home Office when an announcement will be made. I should be grateful if my right hon. Friend could pass on that message.
Mrs. Beckett: I certainly cannot tell my hon. Friend when an announcement will be made. I can, however, confirm that the document reported in the press had not been seen by Ministers and was not even official advice to them. I entirely understand my hon. Friend's strong argument in favour of his own locality, but, with my hon. Friend the Member for Hove (Mr. Caplin) sitting behind me, he will understand that it is more than I dare do to endorse any applicant bid. I shall certainly draw his concerns to the attention of the Home Office.
Mr. David Chidgey: The Leader of the House may recall that the Select Committee on Foreign

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Affairs published its first annual report on human rights in January. The Government are responding to that report today. The Committee drew attention to the fact that a loophole in the law makes it possible for British firms to manufacture and export leg irons and shackles. The Foreign Secretary acknowledged the fault and said that new legislation would be prepared to close the loophole. Two months have since passed. Will the right hon. Lady let us know when that legislation will come before us, and what form it will take?
Mrs. Beckett: Of course I recognise the serious concerns contained in the report, which are shared across the House. Two months is not long in which to consider legislative change, and it is never right for me to anticipate future decisions about the form of legislation. However, I take the hon. Gentleman's point on board and shall bear it in mind.
Mr. David Taylor: Concern has been rightly expressed today about cars, agriculture and mining. May I bring to the attention of the Leader of the House the position of the United Kingdom's snack and biscuit industry, which employs tens of thousands of people, including the 11,000 employed by United Biscuits, which has more than 3,000 workers on three sites in Ashby de la Zouch in my constituency? They face a takeover bid by a consortium that includes an American equity finance firm with a slash-and-burn reputation that would warm the cockles of the hearts of Conservative Members. Several thousand jobs are in peril. Will my right hon. Friend please find time for a debate and urge my right hon. Friend the Secretary of State for Trade and Industry to review that takeover bid?
Mrs. Beckett: I certainly undertake to draw my hon. Friend's concern to the attention of my right hon. Friend the Secretary of State for Trade and Industry. Whether my right hon. Friend calls in bids is a delicate matter requiring careful consideration. I fear that I cannot undertake to find time in the near future for a debate in the House, and I recommend Westminster Hall to my hon. Friend.
Mr. Patrick McLoughlin: Can the Leader of the House understand the concern of Members who represent rural constituencies about a written question on farming on the Order Paper, tabled by a Member who represents a Bristol constituency? Given that the Government pretend to have many Members representing rural constituencies, it does not warm hearts that they have had to get a Member from Bristol to ask a question on this matter. No doubt this evening the Minister of Agriculture, Fisheries and Food will give numerous interviews on television and the radio, but Members of this House, elected to represent their constituents, will not have the chance to question him. Why can we not have a statement at seven o'clock tonight?
Mrs. Beckett: The hon. Gentleman's first point is more than a little bizarre. My understanding of the Bristol economy is that it has always had many links with the farming community which, in many ways, surrounds it. It is a rather strange concern to express. Of course I accept
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that the matter is of interest to the whole House. The farming industry wants to have those discussions and to know the outcome, which we hope will be constructive and with which it will be able to work. If it is possible, it is always desirable to structure every discussion that takes place in Government so that it can be reported in the middle of the week and the House can more readily address it, but we cannot bring government to a halt on the days surrounding weekends so that the House has the opportunity to hear a statement at a convenient time. The decisions and outcome are most important. Of course it is also extremely important that Members have those properly reported to them and have an opportunity to pursue them, and that opportunity will come.
Mr. Peter Bradley: In the light of persistent rumours that the list of new peers will include Mr. Michael Ashcroft, will my right hon. Friend arrange for a debate on the honours system? Could she conceive of any circumstances in which the Labour party would nominate for a peerage a man who has been a tax exile for the best part of 20 years, is an overseas resident and a representative of a foreign Government at the United Nations? Could she arrange, too, for proper scrutiny of the Scrutiny Committee which, apparently, only a year ago rejected his nomination but, if the rumours are accurate, has now rolled over in the face of disturbing lobbying from the Tory party which is, clearly, bankrupt in more ways than one? Does she agree that this episode illustrates beyond doubt that the party that now pioneers cash for coronets has sunk to depths previously unplumbed?
Mrs. Beckett: I fear that I cannot find time for a debate of the kind that my hon. Friend seeks. I am happy to say that I have no knowledge of whether the constant rumours that one reads are true. The particular characteristics of Mr. Ashcroft, including his representation of another power, are so unusual that his nomination would be unprecedented from any party. His is an unusual, if not unique, situation. Further than that, I will not go.
Mr. Bob Russell: Can the Leader of the House find time for a debate on Wembley stadium and, in particular, on the Wembley taskforce? She must be aware that this subject is controversial—so controversial that the two Departments do not know which one is responsible for the taskforce. On Monday, I had a question tabled to the Department for Culture, Media and Sport, which was kicked into touch because that Department ruled that it was a matter for the Department of the Environment, Transport and the Regions. Does she agree that the House is entitled to debate Wembley stadium and every aspect of the taskforce's work?
Mrs. Beckett: Of course the House is entitled to debate the taskforce and its work. Nobody would contest that. I am sorry if there has been a delay in answering the hon. Gentleman's question because of the confusion that he has identified. I shall draw the matter to the attention of my right hon. Friends.
Mr. Phil Hope: My right hon. Friend will be aware that last week the Government's social exclusion unit published a wide-ranging report on young people. It is a comprehensive analysis of the position facing

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young people today and makes several far-reaching recommendations about the creation of a ministerial group on young people and a youth card—a smart card for discounts on travel and other benefits. It calls on the Government to produce a comprehensive strategy to respond to the needs of young people. It is a vital report, yet it has not received much attention in the media. It has been overlooked, so may we have an urgent debate on the Floor of the House to raise the profile of the needs of young people in Britain today?
Mrs. Beckett: I share my hon. Friend's view that the report is interesting; it raises several important matters that will need to be discussed. Of course, as the report is important, weighty and worthy of consideration, it has not received much media coverage. However, I fear that I cannot undertake to find time for a special debate on it in the near future. My hon. Friend may find opportunities today, or on another occasion, to raise some of the issues that it sets out. They require the thorough consideration and debate that I am sure they will receive.
Mr. John Wilkinson: Why cannot the Leader of the House find time for the Secretary of State for Foreign and Commonwealth Affairs to announce in debate a success for his ethical foreign policy? Does the right hon. Lady realise how earnestly such a success is sought—most notably by the white farmers of Zimbabwe, who daily face forcible expropriation of their farms? Many of those farmers are British, and the House is entitled to know how the Secretary of State's foreign policy will curtail the lawless excesses that are being perpetrated in Zimbabwe, especially as that country is a recipient of British overseas aid and one to which Britain has exported armaments.
Mrs. Beckett: The hon. Gentleman must be aware of the Government's concerns about some of the things that have been happening in Zimbabwe and about the behaviour of the Zimbabwean Government. Only recently, we had to make strong protests to them. I hope that the hon. Gentleman will also be aware that the staff in Zimbabwe have—I understand—been increased to provide continuing help and support. The Government will maintain that role.
Mr. David Chaytor: In view of the welcome ministerial statement earlier this week, announcing the deferral of the decision on the public-private partnership for British Nuclear Fuels plc; in view of the continuing pressure applied to BNFL by utilities in Japan, Germany and Sweden; and in view of the pressure to close Sellafield now being applied by the Governments of Ireland, Iceland and Denmark, does my right hon. Friend agree that there is an irrefutable argument for holding a debate in Government time on the future of nuclear energy and, in particular, of nuclear reprocessing in this country?
Mrs. Beckett: I understand my hon. Friend's interest in this difficult and complex subject. May I pick him up on one point? He mentioned the calls about Sellafield from the Irish and Danish Governments. I think that I am right in saying that those Governments are not calling for the closure of Sellafield. It is not possible to close Sellafield, which is an important facility where large
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quantities of material need to be held and managed safely. Those Governments are calling for no further reprocessing and we have that matter under review.
My hon. Friend will know that BNFL has some current difficulties with its customers; those are for the company to resolve. Until there has been some progress on that, I cannot undertake to find time for a debate on the matter in the short term.
Mr. Graham Brady: Last week, the Commissioner for Public Appointments published a report which made important recommendations for ending what she found to be a systematic process of politicisation in NHS appointments under the Labour Government. Will the Leader of the House tell us when there will be either a debate on the report or a Government statement on when and how those recommendations will be implemented?
Mrs. Beckett: Of course, I am aware of the commissioner's report. I am a little surprised that the hon. Gentleman is so keen to highlight the comments to which he referred, as the system under which those appointments are made was set up by the previous Conservative Government. He should be aware that the sifting and interviews for such appointments are undertaken by a panel with an independent assessor, and that the process is not open to Ministers. Nor have Ministers appointed anyone—
Mr. Brady indicated dissent.
Mrs. Beckett: I do not know why the hon. Gentleman shakes his head. Those are facts, not matters of opinion. Ministers are not in a position to appoint anyone who has not been through that process. The hon. Gentleman should be aware of that; if he is not, that is no doubt why he continues to raise a matter that is erroneous.
Dr. George Turner: I am sad to tell the House that, for the second time within a few months, Barclays will close a branch in my constituency—this time, in Terrington St. Clement. Yesterday, the Prime Minister made it clear that the Government believe that when banks close, communities can be served by post offices. Last night's debate, in particular, made it clear that while there is uncertainty, there will be mischief making from Conservative Members about the future of the Post Office. The report that we await from the performance and innovation unit will be very important. Will my right hon. Friend undertake to provide an early opportunity, following its publication, for a proper and thorough debate in the House on its contents?
Mrs. Beckett: Of course I am aware of the concern that my hon. Friend has repeatedly raised in the House on behalf of his constituents about the impact of such closures. I know that that concern is shared by many Members and in many parts of the country, and the issue was discussed in Westminster Hall yesterday. We await the publication soon of the report to which he referred, but I cannot undertake to find time for a debate on it in the near future in this Chamber. However, no doubt to the despair of Opposition Members, I recommend to him that it is a matter that can be pursued in Westminster Hall.
Mr. Owen Paterson: Today's replies from the Leader of the House on agriculture show

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the real problem. With my hon. Friend the Member for Eddisbury (Mr. O'Brien), I represent the largest milk-producing area in western Europe. World demand for dairy products is increasing by 10 per cent. a year, but 10 or 12 quota holders in that area are applying to get out of the industry and people are emigrating to Saskatchewan. If the Prime Minister is going to devote time to the summit that has raised hopes in the farming industry, will he make time to come to the House so that we can see whether he has understood the issues?
Mrs. Beckett: With respect to the hon. Gentleman, it is important for Members to put the case on behalf of their constituents. However, people in the farming industry probably think that they are capable of putting their concerns across in person to my right hon. Friend the Prime Minister. That is why they are meeting him today. I accept that Members will wish to pursue any announcements that are made and to raise issues on behalf of their constituents. I remind the hon. Gentleman that Members can today table questions for the next Agriculture Question Time, which will be held on 13 April.
Mr. Desmond Swayne: When I was at school, if a boy showed unnatural inclinations, he was taken in the most sensitive way to see a shrink. [Interruption.] Now the Headmasters Conference has been told that, under the Government's human rights legislation, headmasters must tolerate openly homosexual relationships among their pupils. Today's newspapers carry reports that the Lord Chancellor is considering ways of protecting the legal system—and the English way of life—from the deluge of law suits that are about to hit it. Can we have a statement on the work that the Lord Chancellor's Department is doing in that respect?
Mrs. Beckett: I am afraid that, such was the reaction to the hon. Gentleman's remarks, that I was not able to follow them as readily as I might have wished. Therefore, I will simply say to him that of course I recognise that some of the legislative steps that have been taken will have implications for the future handling of cases and for the law courts. However, I was under the impression that the general moves were supported on both sides of the House.
Mr. Michael Fabricant: Will the right hon. Lady please impress on her right hon. Friends that this place is a Parliament where people are meant to parley? [Interruption.] For those Members who have not learned basic French, that means to talk. It will really not do, when there is such an important issue as Rover, for a Secretary of State to say that a written answer will suffice. At Question Time today, the Secretary of State for Trade and Industry refused to make public any of the correspondence that he has had with Rover or with BMW. More worryingly, the Chairman of the Select Committee on Trade and Industry has announced in his question that, in effect, he has already concluded what his inquiry findings will be. Will the right hon. Lady please either insist that we have a full-day's debate or use what
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influence she has to ensure that the Secretary of State for Trade and Industry comes to the House to make a full statement?
Mrs. Beckett: Given what seem to be the rather chauvinist tendencies developing among Conservative Members, the hon. Gentleman is taking his life in his hands by using a foreign language in the Chamber, but that is a matter for him. I did not hear the exchange between my right hon. Friend the Secretary of State and hon. Members about the subject to which he refers, but the Select Committee's conclusion is a matter for the Committee, and one that it will discuss. My right hon. Friend keeps the House informed, as he can, about the progress of discussions, and I am sure that no hon. Member would want him to do so in a way or at a time that might jeopardise the future success of such discussions.
Mr. John Bercow: May we have an early debate, in Government time, on regional aid to the British car industry? Does the Leader of the House agree that such a debate would be an ideal opportunity for the Secretary of State for Trade and Industry to explain to the House when he will be able to produce a regional aid map that is acceptable to his masters in the European Commission in Brussels, or simply to own up to the House that for all his charm and affability, he is not up to the job of Secretary of State and will speedily make way for someone who is?
Mrs. Beckett: Not only is it nonsense to suggest that my right hon. Friend is not extremely successful and effective in the post of Secretary of State, where he is doing a good job, but I remind the hon. Gentleman that my right hon. Friend has served in the job for longer than any of his 15 predecessors.
Dr. Julian Lewis: Opposition Members sympathise with the right hon. Lady, who is obviously still suffering from the effects of her severe cold, but at least it gave her the advantage of being able not to be present to hear the dismal performance of the Secretary of State for Trade and Industry commenting on Rover. She will not therefore have heard him, when he was challenged over his refusal to make a statement to the House on this crucial matter, say by way of an excuse that he was evidently taking it seriously and that was why he was answering the question asked by my hon. Friend the Member for Lichfield (Mr. Fabricant).
Does the right hon. Lady accept that it is the duty of Ministers to answer the questions of those hon. Members who are fortunate enough to be drawn high up in the ballot, and that it simply will not do to exhibit the cowardice shown by the Secretary of State and, when a statement on a crucial matter is evidently required, to shelter behind the fact that my hon. Friend was fortunate enough to think of the question in advance and to come top of the ballot? [Interruption.]
Mrs. Beckett: My hon. Friend the Member for Bolsover (Mr. Skinner), as I have said before, is a very good guide in these matters, and when he says that the Conservative party failed to lay a glove on the Secretary of State, I believe him.

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It is not helpful to the situation at Longbridge or to the interests of workers in the west midlands for Conservative Members to exploit the matter in the way that they are doing. It is perfectly legitimate for them to raise concerns, ask questions and criticise the Government as they choose, but they should have more regard for the interests of the car industry and the west midlands, and a little less for the interests of their own party.
As for my right hon. Friend the Secretary of State showing anything other than great devotion to duty, I remind the hon. Gentleman of how frequently my right hon. Friend and other Ministers such as the Minister for Employment, Welfare to Work and Equal Opportunities have been to Longbridge and talked to the work force and the management. Not only is that sensible, but I fear that it is in sharp contrast to the record of Secretaries of State in the previous Government.
Mr. Stephen O'Brien: I listened carefully to the earlier answer from the Leader of the House to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson). I am sure that the whole House will be deeply troubled by the appalling situation in Zimbabwe, the threat to farmers and the disregard for the rule of law by the increasingly despotic Mr. Mugabe. The House will be equally disturbed by the equivocal utterances of the Minister of State, Foreign and Commonwealth Office, the hon. Member for Neath (Mr. Hain), especially on the radio this morning rather than in the House. Is it not about time that we had a full day's debate to discuss the urgent question of the suspension or abeyance of Zimbabwe's membership of the Commonwealth, and to express our grave concern about what is going on in that country?
Mrs. Beckett: I did not hear my hon. Friend this morning, but I have heard him in recent days being extremely robust about our concerns about the behaviour of the Government of Zimbabwe. There will be oral questions to the Foreign Secretary on 11 April. I remind the hon. Gentleman that one of the purposes of the experiment in Westminster Hall was to provide more time, in particular, for more specialist foreign affairs debates, rather than debates that might range throughout the world. I recommend such opportunities to the hon. Gentleman.

Points of Order
1.25 pm
Mr. David Lidington: On a point of order, Madam Speaker. Earlier this morning, the social exclusion unit of the Cabinet Office published an important report on anti-social behaviour and policy measures to address that issue. Ministers were appearing in television and radio broadcasts throughout the morning to discuss the issue. Despite that, no copies of the report were made available in the Vote Office until 12 noon. They appeared only after a great deal of pressure and frequent reminders.
When I entered the Chamber about 45 minutes ago, the Library had just told me that it had yet to receive a copy of the report. I regard this as a deplorable breach of the normal courtesies of the House. It demonstrates a disdain on the part of Ministers for the rights of hon. Members on both sides of the House to know the contents of a Government report and Ministers' policy proposals. I ask you, Madam Speaker, to exercise whatever influence is available to you to ensure that there is no repetition of this sort of behaviour.
Madam Speaker: The hon. Gentleman was thoughtful enough to give me a little notice of his point of order. That was helpful because I was able to ascertain that the instructions about the document, which were given by one Department to another, were to my mind perfectly clear. Unfortunately, the receiving end did not find them quite so clear. I hope that, as a result of my actions over the past hour, what the hon. Gentleman has described will not occur again.
Mr. Graham Brady: On a point of order, Madam Speaker. In her response to my business question a few moments ago, the Leader of the House suggested that I had given erroneous information to the Chamber. In fact, I was quoting from the commissioner's report, which was published last week. To date, having raised the matter with the Prime Minister last week and now with the Leader of the House, I have received responses which have partially and selectively quoted phrases in the report, without giving the true intent of the full sentence contained in the report.
I am concerned that the Government are clearly trying to avoid a difficult issue. I understand why it is a difficult issue—
Madam Speaker: Order. That is not a matter for me. I understand the hon. Gentleman's anxiety, but he seems to wish to prolong business questions. I cannot allow such arguments across the Floor of the House now.

Points of Order
  BILL PRESENTED
    TELEVISION LICENCES (DISCLOSURE OF INFORMATION)
    Mr. Secretary Smith, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Darling, Mr. Secretary Reid, Mr. Secretary Murphy, Mr. Secretary Mandelson and Janet Anderson presented a Bill to make provision about the disclosure of certain information for purposes connected with television licences: And the same was read the First time; and ordered to be read a Second time on Monday 3 April, and to be printed. Explanatory notes will be printed [Bill 102].
Orders of the Day

  Learning and Skills Bill [Lords]
  [Relevant documents: The Eighth Report from the Education and Employment Committee, Session 1998–99, on Access for All? A Survey of Post-16 Participation, HC 57-1, and the Government's response thereto, Session 1999–2000, HC213.]
  Order for Second Reading read.
  1.27 pm
  The Secretary of State for Education and Employment (Mr. David Blunkett): I beg to move, That the Bill be now read a Second time.
  I wish to thank the staff in my Department for the enormous work that has already taken place in preparation for the conclusion of the debate and the urgent work that will need to be done in putting in train substantial structural changes, including funding, recruitment and the delivery of services. I wish also to put on record my thanks to the Further Education Funding Council for the work that it has done over many years and the co-operation that it is showing with the proposed changes.
  I put on record also my considerable thanks to the 72 remaining training and enterprise councils, to the volunteers who have manned those councils—the chairs, board members and staff—who have done sterling work in many parts of the country. I thank Nick Reilly and the small group that he is leading for promoting the new skills agenda with employers throughout the country. We are grateful to them all for the work that they have done.
  One of the greatest challenges facing the country is whether we can modernise and reform the learning and skills that we offer to young and old alike, and whether we can match the challenge of the new knowledge economy with a learning and skills market world wide while coping with the legacy of neglect, which we are dealing with in the Bill.
  In a rapidly changing world, our people need the skills to be able to adapt and to cope with changes, as well as to take on board the flexibility and adaptability in the new labour market. To do that, we need to ensure that the majority, not the minority, have higher level skills, access to continuing updating of training, and the most modern and effective support for their training needs. We must make sure that that takes place in co-operation with employers, trade unions and individual learners.
  In the past, a minority of people obtained the learning and skills that they required. For the majority of people, getting a job at 16 was the order of the day. It was argued that only a few—an elite—needed higher level skills to succeed, and that their talent would eventually allow wealth to trickle down to the rest.
  Those days have long gone. It is time to put in place the structures and support systems to ensure that, in the 21st century, we as a nation, our companies and our people can compete in the global economy, and to allow us to achieve sustainable growth with low inflation and low unemployment, in order to attain the goal of high and sustainable levels of employment and employability that was sought after the second world war.
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  To do that, we need to invest together in the relevant skills, co-ordinate learning and skills in a way that reflects the new century, and target investment to meet the needs of industry and individual learners.
  Mr. Bob Blizzard: I thank my right hon. Friend for giving way. As well as being responsible for training, the training and enterprise councils perform economic development functions. Some of their budget deals with their enterprise agenda. My constituency has had substantial funds from the Norfolk and Waveney TEC, which have been used to match-fund European structural funds. What will happen to that enterprise budget as we move to the learning and skills councils?
  Mr. Blunkett: The budget will be protected. We have made it clear that the continued use of discretionary funds at local level is essential. That includes securing the funds that would have been available in the years to come, which at present rest in training and enterprise council reserves.
  We have therefore been discussing with our colleagues in the Department of Trade and Industry and the Department of the Environment, Transport and the Regions how we can ensure that, through the Learning and Skills Council and in co-operation with the Small Business Service and the sub-regional economic development arm of the regional development agencies, we can do joined-up work at local level to ensure that intermediate labour market and other economic development programmes are sustained, and that they are linked to the skills needs of the area.
  Mr. Tim Boswell: Does the right hon. Gentleman concede that, according to a recent written answer, the overall situation of the TEC movement is one of deficit, not of reserves, by accountancy criteria? Will he therefore make it clear to the House that it will be impossible for him to pass on or to raid TEC reserves, if overall they do not exist?
  Mr. Blunkett: There are two key points. First, revenue reserves vary enormously across the country—some TECs hold several million pounds worth of reserves in the bank. Secondly, the totality of reserves includes capital stock, such as the premises and the land held by TECs. In my view, those are part of the reserves and will be realised as we develop the new system. Certain properties can be released on assignment as the headquarters of the 47 learning and skills councils at sub-regional level, replacing the existing 72 TEC headquarters.
  Mr. David Chaytor: On the transfer of some of the TEC functions to the learning and skills councils, will the LSCs still have the powers to apply directly for European streams of funding and for single regeneration budget funding?
  Mr. Blunkett: The necessary mechanisms for match funding for European and related funding will be in place. It would be foolish of the Government to remove mechanisms at regional and sub-regional level for achieving that. As part of the overall spending review, we shall also address the issue of ensuring that match funding is available through other sources at Government level to secure the full match funding available, which we have

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  never had before. I remind the House that that includes the adapt funds under objective 4, £80 million of which have been obtained over the past two years. They were never applied for by the previous Government, which is an extraordinary state of affairs.
  The present system is succeeding—where it works—despite, rather than because of, the structure. People find ways round anomalies and structural difficulties, but struggle with funding regimes that result in, for example, three-year modern apprenticeships in engineering costing between £3,000 and £10,500, and in business administration costing between £2,600 and £7,500 of public money—all to achieve the same goal, but through different TEC or FEFC-funded regimes. That kind of nonsense clearly cannot continue. One of the great savings—atleast £50 million a year—that will accrue from combining the existing regimes will be achieved by ironing out such anomalies and disparities.
  When new legislation is introduced and new structures are developed, the structures—the machinery of delivery—inevitably receive attention, but I stress that, although that is true of the Bill, clear policy objectives override everything else. We are bringing about change not for change's sake, but to ensure that we can determine a new, slimmed-down system that will enable us to meet the goals that I have set out. To do so, we need to change the structure and the systems and break down the barriers between what used to be called schedule 2 and the remaining areas of adult learning. We must do so to achieve a proper synergy between the commitment of employers and business and the public investment, which is substantial.
  As we have set out previously, £5 billion of expenditure will be available through the Learning and Skills Council and its sub-regional arms and we estimate that, on average, £100 million will be available at sub-regional level, which will engage partners in such sums for the first time. In two years, £6 billion of expenditure will be available through the national and sub-regional arms and that substantial money will be aimed at transforming the life chances of individuals across the country as well as the labour market.
  We seek a public-private endeavour, and I want to reinforce what we have guaranteed previously. We have said that two fifths of the council, nationally and sub-regionally, will contain those with recent or current business experience. The corollary is that we ask businesses themselves to be prepared to match that intent by offering their employees opportunities to train and to gain new skills. The significant investment of public money needs to be matched by the private sector at every level—by small industries as well as large—and businesses must be prepared to take on the challenge of investment in opportunity for the future.
  That commitment extends across the country, and I hope that, as well as participating in the new structure, businesses will encourage other businesses to be part of the delivery mechanism in terms of ensuring that their responsibility is seen to be carried through in action. The gas industry has given a first-rate lead in overcoming some of the real difficulties faced by small operators, such as their fear that people whom they have trained will disappear when they finish their apprenticeships—if they did, they would have been a deadweight cost. The experiment with the gas industry, in conjunction with the
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  financial institutions, is an example of how small businesses as well as large can contribute to the skills needs of their sector while protecting individual companies from the risk of seepage. I want to encourage other parts of the sector, including the national training organisations—of which there are now more than 70—to ascertain what can be achieved in their sector.
  Mr. Richard Allan: The Secretary of State may know that the national training organisations have expressed concern about their representation on the LSCs at national and local level. What role does he think that the NTOs should have in the LSCs, so that they are involved in policy making?
  Mr. Blunkett: As the hon. Gentleman knows, we have not assigned places to particular organisations and structures, but we are mindful of the need for national training organisations to be represented. They pull together particular sectors of the economy, and should be represented in the sub-regions that include that part of the industrial structure. It is helpful to put that on the record. The same is true of the important role of local government at sub-regional level and nationally. We need to bring together the skills and adult learning endeavours and the economic development functions to which my hon. Friend the Member for Waveney (Mr. Blizzard) referred.
  I want to announce to the House some important investment additional to what was already provided under the spending review and the previous review of further education funding. There will be a considerable expansion of education maintenance allowances for 16 to 19-year-old pupils. We have 15 pilot areas across the country. Given the success in accelerating full-time learning in those areas, and in particular the retention and qualification rate that is being achieved through the development of the education maintenance allowances, we believe that it is important to tackle those areas of the country where staying on in education is not a tradition and there is no culture of continuing learning. We want to match the major programme that we shall set in train in the months ahead with a campaign to encourage young people in those areas to stay on in full-time and work-based learning.
  It may be helpful if I announce the additional 40 areas that will be part of the pilot scheme from September. They will be: Liverpool, Knowsley, Halton, Wirral and St. Helens on Merseyside; Sandwell, Birmingham, Coventry, Wolverhampton and Worcestershire in the west midlands; Hull, Bradford, Sheffield, Barnsley, Wakefield and north-east Lincolnshire in Yorkshire and the Humber; Newham, Hackney, Tower Hamlets, Haringey, Islington, Camden, Hammersmith and Fulham, Brent, Waltham Forest, Ealing, Barking and Dagenham and Wandsworth in London; Sunderland, south and north Tyneside in the north-east; Hartlepool and Northumberland on Teesside; Salford, Manchester, Wigan and Tameside in the north-west; and Luton, the city of Leicester and Suffolk in the east and east midlands. All those areas will be pleased to have the opportunity to encourage and support young people in their endeavours.
  Mrs. Theresa May: I am interested in the Secretary of State's reference to the fact that the pilot projects for education maintenance allowance have increased staying-on rates. I recently tabled a written

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  question to the Secretary of State on that very issue, and the reply was that the Department did not have any figures on which to base a judgment. Can the right hon. Gentleman now give us those figures, as he must obviously have them?
  Mr. Blunkett: I now have the figures, and I am happy to send the hon. Lady the detailed appraisal. There has been an average assignable improvement of 2 per cent. in areas where there is matching, and 3 per cent. in other areas where there has been a substantial improvement and what could be described as a scatter approach, in which young people have been funded on the basis of testing what the change will be in a particular locality. It was an interesting experiment with the Treasury in trying to discover different ways of ascertaining what works and what works best.
  Mr. Ted Rowlands: Although I appreciate that the Secretary of State can make announcements affecting only the English side, may I ask whether there will be an equivalent expansion of the pilot schemes in Wales?
  Mr. Blunkett: I am obviously mindful of my hon. Friend's interest in the relationship between the Assembly and the United Kingdom-wide Government. However, I am absolutely certain that my right hon. Friend the Secretary of State for Wales will be talking to the Assembly leadership about its announcements on developing staying-on programmes and the acceleration of the commitment to post-16 education.
  I wish to make a second announcement—on a £15 million boost for 16 to 19 provision, for capital investment in sixth forms and sixth form colleges and further education colleges, not only for upgrading facilities, but for providing greater access and a better environment for young men and women with disabilities. As with the education maintenance allowances, that money will come out of the allocation made, last week, by my right hon. Friend the Chancellor of the Exchequer.
  Mr. Gerald Howarth: Can the Secretary of State explain how that money will be divided between sixth forms and sixth form colleges? He will know that there is great concern in sixth form colleges—particularly in my own excellent Farnborough sixth form college—about the funding disparity between sixth form colleges and sixth forms in maintained schools. Could he also tell the House whether that money will extend the computer support that is made available to teachers in sixth forms in maintained schools to teachers in sixth form colleges?
  Mr. Blunkett: As the money is for capital resources, it is potentially available not only for buildings, but for equipment. As the hon. Gentleman knows, sixth form colleges fall into the further education funding sector. One of the great advantages of the learning and skills proposals will be to bring not only greater co-ordination, but much greater parity of esteem, and equality of funding, to the various parts of the post-16 sector.
  The hon. Gentleman also mentioned the revenue disparity that exists, on average, between FE and sixth form colleges and sixth forms. I can increase his joy
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  by announcing that I am allocating from my own departmental reserve another £18 million to the sixth form college and FE sector specifically for 16 to 19-year-old education, to ensure that last week's announcement on targeted funding going directly to schools—the £30,000 to £50,000 for secondary schools—does not disadvantage those in further education because of the way in which that money is dependent on pupil numbers. [HON. MEMBERS: "Hear, hear."] I am very grateful for the considerable welcome that that announcement has received from Labour Members.
  Mr. Gerry Steinberg: I have received representations from people at my local sixth form centre who are very worried that there may be a levelling down of funds, rather than a levelling up. That is my greatest worry. Is the Secretary of State giving us a guarantee that sixth form centres and colleges will be funded at current levels and will not be levelled down in future?
  Mr. Blunkett: My announcement today ensures that things do not get worse, rather than that they will immediately get better—I am a great believer in being honest about these things. However, our announcement in November, at the Association of Colleges annual conference—which the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Croydon, North (Mr. Wicks) made, as I was in the House for the Queen's Speech debate—outlined an extra 10 per cent. next year for further education. That is the beginning of a process of catching up—so that we are levelling up, not levelling down, and so that we narrow and then eliminate the gap between student funding in different parts of the sector.
  Yesterday, I was in Welwyn Hatfield, and I saw real co-operation and collaboration in action between the FE college and the area's three sixth forms. They were collaborating in ensuring not merely that they rationalised and reinforced each other's work, but that students shared their courses between the different institutions. I want, through the Learning and Skills Council, to accelerate the programme of tertiary education, so that parity of both funding and quality is available to people regardless of where they live and where they are learning.
  Mr. Patrick McLoughlin: The Secretary of State says that he believes in tertiary education. Will he assure us that schools wishing to maintain their sixth forms will not be forced to close them while they are doing a good job?
  Mr. Blunkett: I think that that assurance has been given a number of times, but we are always happy to give it. We spelled out the position in the context of the guarantee that we gave in regard to funding, and that still stands. The issue involves quality, access, diversity and the rational provision that helps the consumer. Consumers of services, including individuals, business and the broader community—we are committed to providing community learning across the board—will be extremely important.
  Clauses 1 to 18 provide for the establishment of the Learning and Skills Council, and specify its duties, powers and funding. They also specify the power that will now exist through a duty to have regard to the needs of

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  those with learning difficulties, and to place much more emphasis on equality of opportunity. I think that all hon. Members will welcome that. Clauses 19 to 21 establish local arrangements for the necessary consultation and joint working to develop local plans. Part II—clauses 30 to 40—establishes similar arrangements in Wales, and explains the role of the Welsh Assembly.
  Mr. Dafydd Wigley: I welcome the Bill generally, and I know that a former MP, Cynog Dafis, who chairs the education committee of the Welsh Assembly, looks forward particularly to the establishment of the powers for which it provides.
  Will the Secretary of State consider, at a later stage, the way in which he allows the Assembly to confer or impose certain powers on the National Council for Education and Training for Wales? Will he also consider the use of the word "amend"? I know that this is really a Committee point, but that would give the Assembly the flexibility that it needs, and the Bill could subsequently provide a good model for other Bills in giving the Assembly the infrastructure that will allow us to get on with meeting our responsibilities.
  Mr. Blunkett: As the right hon. Gentleman says, that is a Committee point. Our deliberations in Committee will include reflections on the role of the Welsh Assembly: my colleagues will be happy to consider those matters. I hope that the right hon. Gentleman will accept that in the spirit in which it is meant.
  Part III establishes the new inspection arrangements, combining the three existing inspection regimes with the new adult learning inspectorate's remit for those aged over 19 and its collaboration with the Office for Standards in Education in regard to those aged between 16 and 19. I pay tribute to the Training Standards Council and the further education inspectorate for all the work that they have done, and the substantial and rigorous improvements that have been made recently in the quality that we can expect from both the public and the private sectors.
  The new inspection regime, together with the powers that the Learning and Skills Council will have, should and must be able to root out the incompetence and, in some cases, corruption—in others, mismanagement—that have bedevilled the sector in recent years. That is true of both public and private providers. We must root out that incompetence or corruption wherever it exists, in the interests of students. A good job has been done, but much more remains to be done. Before anyone asks me, let me add that the same will apply to Wales under part IV.
  Mr. Blizzard: My understanding is that, during the transition period, the Training Standards Council and the Further Education Funding Council will undertake joint inspections of FE colleges and work together in a co-ordinated way. During the recent inspection at Lowestoft college, the two organisations did not co-ordinate properly—in fact, it was a shambles. Will my right hon. Friend examine how joint inspections are being carried out, because colleges need to have confidence in the system and to feel that it augurs well for the future? I am not in any way opposing the joint inspection regime.
  Mr. Blunkett: The answer is unequivocally yes. Where collaboration and co-operation do not work, they must.
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  The structures are designed to achieve that. A willingness from the leaders of the new adult learning inspectorate and Ofsted will be crucial to ensuring that the system works in the interests of young people.
  Part V covers a range of miscellaneous issues, including the assignment of assets and the new powers that I mentioned a few moments ago on post-16 collaboration. It also includes clause 98, inserted by the House of Lords, which withdraws the rights of parents to decide on admissions at local level. Let me make it clear that we shall overturn the withdrawal of those rights in Committee.
  Clauses 103 to 112 provide for the new co-ordinated arrangements for the establishment of the youth support service, ConneXions, providing joined-up thinking in provision for 13 to 19-year-olds, linking adolescence with emergence into adulthood and ensuring that, for the first time, the whole of youth support service provision will be within statute. This new co-ordinated approach will cover the delivery and enhancement of careers services and guidance, mentoring, education and social work, the traditional youth work service and the funding of the voluntary and not for profit sector as well as the traditional local government youth support service.
  I pay tribute to those at local level who have agreed to provide the pathfinder areas for the new programme. We intend to learn lessons from them in developing a national system. Even though Matthew Parris is somewhere in the frosty cold of the—where is he? [HON. MEMBERS: "The southern Indian ocean."] I shall have to have a geography hour as well as a literacy and numeracy hour.
  As Matthew Parris is well across the world, freezing to death, I want to avoid his successor being able to write a sketch about the roll-out syndrome.
  Mr. Phil Hope: The Conservative reasoned amendment says that the Bill would curtail funding for the statutory and voluntary youth service. The ConneXions report published by the Government describes the Government's intention that local education authorities should continue to provide a youth service and retain the powers to do so and that the ConneXions service will have an important role in ensuring that all youth service activity is effectively co-ordinated and coherent and that gaps in provision are filled. Will my right hon. Friend assure that House that the Government support the voluntary and statutory youth services and believe that they have a major role to play in helping 13 to 19-year-olds?
  Mr. Blunkett: I certainly shall. I was a little mystified when I read the reasoned amendment, which I urge the House to reject. The notion that we would not continue funding may be a dream of the Opposition's that would enable them to put out leaflets saying that we have demolished what we value. I regret to tell them that, even in their wildest dreams, we are not going to offer them that opportunity. The amendment also says that we lack strategic vision and continuity for progress to adult life. The youth support service ConneXions is designed to ensure joined-up thinking and action for the 13 to 19-year-old cohort in a way that has not been possible before. I know that the job of the Opposition is to oppose, but, in learning how to oppose, it is best to pick on things that are realistic rather than making things up.
  Mr. David Heath: Leaving aside the way in which the right hon. Gentleman has

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  chosen to spell "ConneXions", may I test him on one point? There is considerable concern among some career services that the new arrangements may in some way inhibit their ability to provide services to the generality of children in schools. Will he give me an assurance that that will not be the case and that the careers service will still be able to provide the range of services that it does at the moment, particularly in secondary schools?
  Mr. Blunkett: We intend to expand, not contract, the role of the careers service, including careers education, to ensure that all young people at school receive the support and help that they need and to ensure that, in the transition, we target those at greatest risk, which makes sense to everyone.
  We are happy to work with the careers service in the way in which it has said that it is prepared to work with us to develop the new service. It is one reason why we want pathfinder and pilot programmes, rather than one big bang. There is much to be learned about what works and what does not, securing the confidence of those who are delivering services at the moment.
  I thank those in the careers service, youth services and others who are doing a first-rate job, often heavily underfunded. I hope that, subject to my right hon. Friends in the Treasury, we will be able to do something about that in the spending review.
  Clause 117 was inserted last week in an extraordinary debate in the House of Lords on sex education, in which one of the noble peers, Lord Moran, said that he believed that stable relationships might apply to necrophilia. That sort of debate has not helped to shed light on the issues that we are dealing with—sensitive, difficult issues that have been grossly misrepresented.
  The noble Baroness Young moved the amendment that is in the Bill in a slightly more measured tone, although she chose to eliminate aspects of the amendment that I had negotiated with those involved in a range of organisations and that protected young people against prejudice. We cannot accept something in the Bill that deliberately eliminates efforts in schools to reduce prejudice and misunderstanding. We will remove the Baroness's amendment and come back in due course with the way in which we intend to proceed.
  In the meantime, I make it clear that, subject to the consultation, I will issue the guidance to schools, on which there appears to be very little disagreement—which illustrates our difficulty in ensuring that light, rather than heat, has been available on the issue.
  Mr. Gerald Howarth: Will the Secretary of State acknowledge that my noble Friend Baroness Young has done a fantastic job in the other place, that she is widely regarded as having stood up for the protection of children throughout the country and that many parents have written to hon. Members on both sides of the House to salute her stand? Is it his intention to reverse her amendment, which was accepted by the other place and which said:
  The general objectives are that the pupils—
  (a) learn about the nature of marriage as the key building block of society?
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  He believes that, but other members of the Cabinet do not. Does he intend to invite the House to remove the requirement that was inserted in the other place that any guidance that is issued should be subject to the approval of both Houses of Parliament?
  Mr. Blunkett: I have already made the position absolutely clear. I said that I was intent on the House being asked to remove clause 117 for the reasons that I spelt out. I believe that marriage and stable relationships are key building blocks for community and society. I also believe that we should teach the nature of marriage and family life to children for the raising of children. The structure that we provide to young children in school is crucial to the health and well-being of our society in years to come. I was pleased that the Anglican, Roman Catholic and the free Churches believed that that was a sensible way forward. I regret that the House of Lords did not take that view.
  Fiona Mactaggart: I am sorry to be dim, but will my right hon. Friend clarify whether he plans to remove all of clause 117? My concerns about the clause do not centre on the content of the advice that he has given to schools, but on the wisdom of including such detailed proposals in primary legislation. I hope that he is committed to removing the clause in its entirety, and not just those elements of the Government's amendment that were changed in the House of Lords.
  Mr. Blunkett: Given the changes that the House of Lords made, progress will not be made simply by eliminating the words that were used. I intend to go forward with the guidance, which is being consulted on separately.
  The original objective of the proposals in the Bill was precisely to underpin the reassurance sought by many in the country that we were not promoting forms of sexual orientation in the classroom. We are not doing that, as the guidance makes clear.
  Very few people who have been debating the matter in the newspapers or in the House of Lords seem to have bothered to have read the guidance. That is a great shame, for them and for the rational thinking that democracy demands. My right hon. Friend the Prime Minister rightly said yesterday that it would be absurd for us to expect teachers to promote sexuality—their own or someone else's—in the classroom. That is not their job, and we would not countenance it. I think that my hon. Friend the Member for Slough (Fiona Mactaggart) will find that the situation is she would wish it to be.
  Mr. Desmond Swayne: The Secretary of State implied that the agreement struck with the Roman Catholic Church and the established Church was an agreement with those institutions, rather than with particular individuals in them. The correspondence that I have received leads me to believe that the individuals spoke largely for themselves, as opposed to the Churches that they represent.
  Mr. Blunkett: The leaders of Churches, like the leaders of all organisations, represent their membership and test the waters on their membership's behalf. They speak for, and with, their membership. I should be very disappointed if I were to believe that some of the speeches

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  made in the House of Lords by people who purport to represent the Conservative party genuinely represented the thinking on this issue of the party's rank and file.
  Schedule 8 will clarify the arrangements for powers of intervention in failing colleges and institutions. That will be welcomed by all hon. Members, and will ensure that decisive action can be taken, where necessary.
  The Bill is timely. It comes at a moment when we are addressing the economy and the education and skills needs of the future. Never before have business and Government had a greater commonality of agenda in terms of the labour market and of the need to ensure that men and women who are out of work can have the skills to take advantage of vacancies in the labour market. Never before have business, commerce and Government recognised so clearly that the knowledge economy poses a challenge to our nation as well as to individual businesses and sectors.
  That is why business, large and small, has welcomed the Bill. The managing director of Coca-Cola UK said that he thought that people would be "chuffed"—an interesting word to use: in light of this week's publication, I should say that I am sure that he was on Coca-Cola rather than coke at the time. BP has said that the Bill is an important measure in avoiding the problems that large companies have encountered in developing vocational qualification programmes. For example, some companies have had to deal with 52 different training and enterprise councils to set up such programmes and arrange funding for them.
  Those days will be over. There will be co-ordinated planning, funding and delivery of flexible services at local level, with sufficient responsiveness and delegated power to sub-regional learning and skills councils to enable them to respond to the needs of their travel-to-work and travel-to-learn areas. At the national level, there will be coherence in terms of the needs of both sectors and the nation as a whole. That is why I encourage and request the House to give the Bill a Second Reading.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Michael Lord): Order. Before I call the next speaker, I must inform the House that Madam Speaker has selected the amendment standing in the name of the Leader of the Opposition.
  2.10 pm
  Mrs. Theresa May: I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:
  'this House declines to give a Second Reading to the Learning and Skills Bill [Lords] because it increases bureaucracy and central control in the provision of education to young people over 16 and adults, diminishes the role of democratically elected local education authorities, poses a threat to school sixth forms and the independence of further education colleges, destroys the TEC network and weakens business involvement in education and training, creates an anomalous and incoherent inspection system, and would curtail funding for informal education for all young people through the statutory and voluntary youth service; and because it lacks strategic vision and continuity in the progression of young people from the years of compulsory schooling through the transition to further and higher education and thereby to working life and lifelong learning.'
  The House will agree that the training and education of young people post-16 and of adults are important not only for the individuals, but for the country as a whole,
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  and particularly for our economic vitality. Moreover, none of us who hear from employers about the skills gaps that exist today can fail to understand that needs do exist in a changing marketplace and that they must be addressed.
  We would wish to associate ourselves with the comments that the Secretary of State has made about the good work that has been done by various organisations involved in this arena in the past and, in particular, the work done over a number of years by the Further Education Funding Council and by those many business men and women who have given their time and efforts to their local TECs to ensure that those TECs are able to provide for the needs of local businesses.
  Far from providing coherence and co-ordination in this matter, the Bill provides for yet more bureaucracy and a multiplicity of bodies. I can assume only that the Secretary of State's references to co-ordination are similar to the Government's constant references to "joined-up government", which mean that it is all talk and no delivery. There is no joining up or co-ordination, and what we see is disparity in the arena.
  When the Secretary of State announced to the House last year his intentions in this area, I set out the Opposition's view that certain criteria would need to be met by any new proposals for the provision of education and training for young people post-16. They were clear and simple, and aimed at ensuring the best possible provision to meet the needs of young people and those of the country. We asked whether the proposals involved the minimum of centralisation, and devolved power down to local level for local decision taking. We asked whether the proposals minimised bureaucracy and ensured that maximum funding got to students in education or training. We asked whether they ensured a diversity of provision, and hence real choice for students. Finally, we asked whether the proposals preserved the best and improved the rest—not imposing a new structure willy-nilly, but preserving those areas and institutions that have worked well. I said at the time that the Secretary of State's proposals did not meet those criteria. Sadly, nothing that we have seen or heard since—or in another place—does anything to change that view.
  What is perhaps most striking about the Bill is that many of the external bodies which have commented on it and on the Government's proposals have started off by stating that they welcomed an intention by Government to provide coherence for post-16 education. However, they have gone on to question the bureaucracy and the practical implementation of the proposals, the confusion that will be created, and the impact on business involvement in defining training needs.
  Many are worried about the impact of the Bill. Schools are worried about the future of their sixth forms. Further education colleges fear that their independence will be reduced. Businesses fear that they will not be able to provide input on local skills needs. Local education authorities are worried about the way in which they have been written out of a real role in post-16 training and education. The youth service is worried that its role is being completely changed, and that it will not be able to continue to offer a proper service to all.
  Those involved in providing careers guidance worry that the new structure will not provide guidance to all, and those providing adult and community education fear

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  that both are under threat as regards funding and structural changes. The only thing that the Government have so far succeeded in doing with the Bill is to alienate every sector that is affected by it. We see that continually in the responses from every sector to the details of the Bill.
  Dr. Phyllis Starkey: Does the hon. Lady accept that whenever change is proposed, people not unnaturally feel concerned, and that it is not sufficient to simply recite worries that people have expressed? One must substantiate the idea that those worries are realistic, and that they are not counterbalanced by the huge advantages that may be brought to each of these sectors by the Bill.
  Mrs. May: I suggest that the hon. Lady stick around and listen, and I will substantiate my claims. It is for Ministers to respond to the concerns of bodies outside this House that are tuned in to the needs of young people and others in training and education and which see real problems arising as a result of the Bill.
  The Secretary of State said that the Bill gave life to the structures needed to achieve his vision of a slimmed-down approach to training and education post-16, and a vision for training and education for the future. Far from that, the Bill creates a bureaucratic nightmare: a multiplicity of bodies with some say or responsibility for education and training post-16. The Government talk of coherence, but they are delivering confusion.
  The Bill reveals much about the Government's approach, which here, as so often, mistakes central control for coherence. Divide and rule is the Government's approach in the Bill. Let us look at the multiplicity of bodies involved in working together, in partnership, in collaboration, through the centre or as consultees—and this is not necessarily a full list of the bodies that will be involved: the Secretary of State; the Department for Education and Employment; the Government offices for the regions; the national Learning and Skills Council; local learning and skills councils; the national training organisations; the regional development agencies; local education authorities; the Small Business Service; Ofsted; the adult learning inspectorate; education business partnerships; local learning partnerships; ConneXions; and the university for industry. That is before we get to a college, school or work place training facility, let alone to a student, young person or adult in training.
  Among this mushrooming of quangos and bureaucracies, the Government claim that the new structure will save £50 million. I was interested in that calculation.
  Mr. Gordon Marsden: Will the hon. Lady confirm that the number of systems and organisations left to the Government in this area by the previous Conservative Government was 250?
  Mrs. May: I do not know what point the hon. Gentleman is trying to make. If he adds up the number of bodies that will be involved in the future, he will find that it comes to far more than 250. His point was wasted.
  The Government claimed that the new structure would save £50 million. I asked the Secretary of State how much the system currently costs in administration of
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  bureaucracy, and how much it will cost in future. One would have thought that the answer would be two figures, with the difference between them being £50 million—but no. The Government could not answer, because they did not know the figures. How, therefore, do they know that the system will save them £50 million?
  We know that the Secretary of State believes that if one increases spending by £3 billion a year over three years, the total increase is £19 billion, rather than £9 billion. Now he seems to think that if one takes a sum that one does not know away from another one does not know, it automatically equals 50—and this is in maths year 2000. It is yet another fantasy figure from the Government.
  One of the central thrusts of the Bill is the change that it brings to the involvement of business in determining training needs. The Bill abolishes the TECs. I agree—there is widespread agreement—that not all TECs performed as well as they could have done, but there was good practice in many TECs, which were doing a good job. The Secretary of State made reference to the work of the businesses involved in TECs, but unfortunately made little reference to the fact that the Government are abolishing a lot of good work and excellent practice that has been achieved by the TECS in meeting the business needs and skills gaps in their local areas.
  The learning and skills councils, which replace TECs, have two characteristics that lead us to doubt their ability to do the job that is needed. First, the new structure is focused clearly on the national Learning and Skills Council. Despite protestations from Ministers, it is still not clear to what extent the local learning and skills councils will have discretion, and funding to match that discretion, over the provision of programmes at local level. The ability to determine local needs and respond to them is crucial if the learning and skills councils are genuinely to be able to meet local skills gaps. Yet despite the mention in the prospectus of discretion over 10 to 15 per cent. of funding, the Government have not been willing to include that in the Bill.
  Mr. Tim Collins: My hon. Friend will no doubt have noticed page 15 of the explanatory notes to the Bill:
  Clause 20 provides that the local LSC's duties and powers will be those of the national LSC which it chooses to delegate.
  Could there be a more explicit statement of centralisation?
  Mrs. May: I am grateful to my hon. Friend for pointing out that explanatory note. He is right that the new structure is a classic example of how the Government take power to the centre, removing it from the local level, along with the ability to determine local needs.
  The prospectus for the Learning and Skills Council says that the local learning and skills councils will have a range of flexible budgets which, taken together, will amount to around 10 to 15 per cent. of the overall funding for the Learning and Skills Council. Many external bodies have assumed that that meant an element of local discretion to meet local skills gaps. However, the prospectus also sets out exactly what each flexible budget will cover, including marketing and promotion activity, information, advice and guidance. The budget is not entirely discretionary in terms of providing training courses to meet the skills gaps that have been identified in a local

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  area. Not only is the figure of 10 to 15 per cent. not in the Bill, it is clear that it is not even intended to meet the needs of local areas in identifying local requirements.
  It is instructive that whenever the Secretary of State speaks on this issue, he refers to the welcome that national companies have given the new structure. He quoted Coca-Cola today—his normal quote is from BP. I can see that a national company would like to work with one national body, but small and medium-sized enterprises and small local companies do not want the training needs identified by a national body imposed on them. They want their local learning and skills council to have discretion, the ability to identify needs and the funding to back them up.
  The lack of local discretion is of key concern. The Confederation of British Industry summed it up thus:
  Employers rely on their local area, and to a lesser extent their region, from which to recruit their workforce, especially for those with skills below professional level. Small and medium enterprises are even more likely to recruit from local labour markets, for all levels of staff. Local labour markets are not only critical but also tend to differ from one locality to another. It is this fact which underpins the CBI's view that the new LSC must operate through a network of local LSCs with strong decision making and financial autonomy. The local LSCs have the key responsibility to adapt national plans … and therefore must have enough flexibility to be responsive to local markets.
  Yet as my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) pointed out, it is clear from the Bill that that strong decision making and financial autonomy will not be available to the local learning and skills councils.
  Mr. Allan: I share some of the hon. Lady's concerns about centralisation. The Liberal Democrat solution, which we have argued in another place and will argue here, is for much greater regional autonomy, with links to the regional development agencies and the regional assemblies, such as the Bill proposes for Wales, with the Welsh model. Does the hon. Lady wish the learning and skills councils, as set up with their existing boundaries, to have more discretion, or does she think that there should be a different arrangement for the LSC structure?
  Mrs. May: I am grateful to the hon. Gentleman for that question. If the Government are to put in place the learning and skills councils with the boundaries that have been set out, those councils should have the greater autonomy and decision-making powers for which I have argued. Whether those boundaries are the right ones is a different issue. Many issues will arise as a result of the boundaries that the Government have drawn in areas such as my own, where Berkshire is separate from the Milton Keynes, Oxfordshire and Buckinghamshire areas, rather than having a Thames valley area for a local learning and skills council. The Government should have looked at what is needed in particular local areas; sadly, they have failed to do that, and they will also fail to provide the local learning and skills councils with the responsibilities and powers to be able to do that.
  Mr. Chaytor: Is the hon. Lady arguing that the ideal solution would be to decentralise more power to the LSCs that the Government are proposing? Or does she prefer the old system, with complete chaos in the funding
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  arrangements? Under that system, training and enterprise councils not only funded colleges but competed with them in delivering provision. Which does she prefer?
  Mrs. May: I have just answered that in response to the hon. Member for Sheffield, Hallam (Mr. Allan). I suggest that the hon. Gentleman listen to the answers given to previous questions.
  I should like to give a couple of examples of the sort of things that the TECs did in bringing partners together to identify local needs. I quote a letter from Thames Valley Enterprise, the TEC that covered the Thames valley area. This example should appeal to the Secretary of State, given the Prime Minister's interest in the internet. Thames Valley Enterprise said:
  FutureFocus, a Virtual Centre of Excellence, was set up by a partnership led by Thames Valley Enterprise to provide IT training to SMEs.
  The partnership includes organisations from further and higher education, local authorities and local employers. It offers a choice of more than 200 internet-based training courses covering information technology and management training, together with 24-hour online mentoring and support. That is an example of meeting a local need.
  The letter gives another example:
  Thames Valley Enterprise made discretionary funding available to Newbury College of Further Education to offer training to address the regional skills shortage in the microchip industry. INPAQ, a division of Newbury College, is supported by major industry partners and offers short courses and one-day seminars in microchip design to both extend skills and help people enter the industry.
  Those may be small examples, but they are relevant to the needs of parts of the Thames valley region. They show that needs could be met because discretion was available at local level. Such discretion will not be available under the Bill.
  It is imperative that the national Learning and Skills Council should not simply impose a central agenda. That would lead to what the Institute of Directors said could be a wasteful and ineffective form of centralised manpower planning.
  I fear that, yet again, the Bill shows that the Government fail completely to understand business needs. If the sub-regional learning and skills councils do not have the powers and financial discretion that I am talking about, many business men will feel that they cannot contribute or make decisions about local skills needs, and will regard the Learning and Skills Council as a talking shop rather than a body that delivers action. The Government are all talk and no delivery. Given the Bill, it is little wonder that all the headlines since the Budget have shown how the Government's honeymoon with business is well and truly over.
  Business involvement is the second characteristic of the local LSCs that causes concern. Business organisations lobbied for a majority of members on the local LSCs to be from business. The Government have given them 40 per cent., but despite statements on that, the figures do not appear in the Bill. There have been Government promises aplenty on the Bill, but we know from experience how worthless, all too often, Government promises turn out to be.
  Another aspect of the national Learning and Skills Council concerns local bodies. Quite apart from funding and the power to exercise local discretion, there is real

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  fear that the council will direct that courses be provided at particular institutions, reducing choice and diversity. The Secretary of State referred, in answering a question on sixth forms and sixth form colleges, to the need for rationality. FE colleges, which have valued the independence and freedom given them by the Conservative Government, fear that their freedom will be eroded and their independence reduced. That is typical of the Labour Government, who choose to centralise decision-making power and to reduce local ability to take decisions in local interests.
  Last week, my hon. Friend the Member for Daventry (Mr. Boswell) challenged the Under-Secretary of State for Education and Employment, the hon. Member for Croydon, North (Mr. Wicks), on the fact that the numbers in further education rose by 1 million under the previous Government, but had remained static under the Labour Government. The Minister's response was typical. He attacked the courses concerned. Institutions were not doing what the Government wanted, so they did not count. Slowly and by stealth, the freedoms of FE colleges are being reduced. Once again, we see the impact of an interfering busybody Government intent on telling people what to do instead of letting them get on with whatever suits their own needs.
  The most worrying example of the Government's interference lies in the Bill's threat to sixth forms in schools. Funding is the first issue. The Secretary of State referred to his guarantee that funding will be maintained, provided the numbers in school sixth forms remain the same. What will happen if a sixth form expands? Will funding be provided? Many heads say that maintaining funding while introducing curriculum 2000 and new AS courses is not possible. Schools are struggling, and the Bill will make things worse.
  The Secretary of State said that he wanted equality of funding for 16 to 19-year-olds. That precise point has worried school sixth forms and others. They fear that funding will be levelled down and that no account will be taken of the fact that school sixth forms, by contrast with what FE colleges or other institutions offer young people, provide support and services outside of courses.
  Dr. Starkey: Will the hon. Lady clarify her meaning? What is her opinion of provision by FE colleges? Is she suggesting that it is proper to fund FE colleges less well than sixth forms? is she implying that FE colleges do not give support to students outside of formal courses?
  Mrs. May: I have always said that funding should be based on the offer given to a young person by the institution in which he or she studies. School sixth forms give services and support outside of courses that are often not available at FE colleges. Some sixth form colleges may make such services available, but the approach to education in an FE college is different from that in a school sixth form.
  The reactions of Labour Members are telling. As soon as one mentions the possibility of a threat to school sixth forms, they begin to mutter about how terrible funding for school sixth forms is. More than anything else, that makes the Government's agenda clear. I was grateful to the hon. Member for City of Durham (Mr. Steinberg)—no longer
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  present—for asking whether funding would be levelled up or down. The Secretary of State said that the Government wanted to level funding up. That is exactly what the Government told former grant-maintained schools, but their funding is being cut, not levelled up.
  The Bill will change the way in which school sixth forms receive funding. It will top-slice money from local education authorities, but it is not clear whether the slicing will be based on the standard spending assessment or on what is actually being spent on school sixth forms. The money will then go to the learning and skills council, which will make grants through LEAs to schools. On what basis those grants will be made, or how the funds will be guaranteed, we do not know. How can we guarantee that money will not be salami-sliced off by the council or the LEAs?
  Schools will have to deal with two funding streams, which may arrive at different times or involve different accounting procedures. There is genuine concern about the Bill's vague references to the way in which grants will be made to schools. The National Association of Head Teachers remains concerned about the powers of the Learning and Skills Council and the local councils to attach conditions to grants for school sixth forms. To date, the Government have not said what conditions they envisage attaching to grants on top of the general provisions in clause 6.
  I should be grateful if the Minister indicated what conditions the Government expect LEAs or the LSC to attach to those grants. There is a real danger that local LSCs will want more power over the running of school sixth forms than would be right for the sixth forms or the schools. Far from giving schools more freedom, the Government are yet again taking away power and freedom, imposing control from the centre and interfering.
  Mr. Chaytor: Does the hon. Lady honestly think that every sixth form should continue, regardless of its quality of education, its capacity to deliver a broad, balanced curriculum, the extent to which it might subsidise the sixth form by stealing from the lower forms, its Ofsted report, and its A-level and GNVQ results?
  Mrs. May: The hon. Gentleman's question relates directly to comments that I was just about to make about the Bill's provisions for declaring sixth forms weak or inadequate and for closing sixth forms accordingly. A trend lies behind what the Government are doing and what the hon. Gentleman has just said. The powers of the Bill would allow them to get rid of school sixth forms, regardless of whether they met a local need.
  The Bill's definitions of weak and inadequate sixth forms are very vague, and many sixth forms—particularly small, rural sixth forms that cannot provide as great a variety of courses as larger sixth forms or FE colleges or sixth form colleges—provide courses that local students want in the place where the students want them. Many students in rural areas will have to travel miles—they may not even find available courses anywhere reasonably accessible—if their school sixth form goes.
  We hear behind the scenes that the Department for Education and Employment talks of sixth forms being viable only if they have 200 pupils or more. Where does that leave small sixth forms in small secondary schools—rural or urban—which provide good quality courses that

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  pupils want in the environment where they want them? [Interruption.] The hon. Member for Bury, North (Mr. Chaytor) may shake his head, but if he is saying that a school with a sixth form—the evidence suggests that schools with sixth forms achieve better GCSE results than those that do not—
  Mr. Chaytor indicated dissent.
  Mrs. May: The hon. Gentleman shakes his head again, but I suggest that he read recent written answers on that point to my hon. Friend the Member for Daventry. The evidence is that schools with sixth forms achieve better GCSE results. If the hon. Gentleman is saying that a pupil cannot stay in a school sixth form because the Government say that pupils must go to the types of institution of which they approve, he is wrong.
  Mr. Blunkett: I have forborne from intervening, but I want to put it on the record that, in the circumstances that the hon. Lady has just outlined, the development of a coherent Learning and Skills Council and its sub-regional arm would guarantee the survival of that site—the sixth form of a school—much more effectively than the existing system. It will be fitted into a pattern of provision that secures access for young people wherever they live in that rural area, presumably reinforced by the ability to get colleges to provide back-up—for example, in terms of expertise in vocational areas where a school could not provide the expert staff. The Bill, far from threatening, will reinforce the existence of sixth forms.
  Mrs. May: I am grateful to the Secretary of State for that intervention. I take it, then, that the local learning and skills council will determine which courses can be offered at which institutions. [Interruption.] That is exactly what the Secretary of State said and it is precisely one of the concerns that schools have—the Government taking freedom from schools to provide courses that they wish to provide. The intention is clear. Sixth forms need to be clear about the threat that is hanging over their future.
  In addition to the sixth forms, there are the issues of the youth service and the ConneXions service. In response to some points and in his speech, the Secretary of State made much of the future of the youth service. The problem is that the ConneXions service is to be funded from money currently available to the youth and careers services. It is to bring together youth and careers guidance and come under a unit that is set up at the Department for Education and Employment.
  Local authorities are concerned that they will no longer have the funding to provide the sort of youth service that they believe is right in their area and that the only youth service provision that will be available and funded will be that which fits into the Government's ConneXions model. There has been little information about how ConneXions will be funded since the Government published their proposals.
  ConneXions provides a mentor for every young person from 13 upwards. Supposedly the mentors are to be the current youth and careers officers and people working in the youth and careers services, who will come together and give advice across a range of issues. Indeed, when challenged on their role, the Under-Secretary of State said:
  They are there because young people need somebody to take responsibility for them.
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  What about their parents? The Government are telling young people, "If you need advice, don't ask your parents, ask your Government-appointed mentor." Yet another way in which the Government are usurping the role of parents—[Interruption.] A number of hon. Members are complaining about that interpretation. They should listen to the words of the Under-Secretary, who makes it absolutely clear that the mentor provided under ConneXions for 13 to 19-year-olds is there to take responsibility for them and to take over some of the advice available to them from their parents.
  That is not the only issue with ConneXions. There have been reports that the Government's expectation is that the focus of ConneXions will be on the 9 per cent. of socially excluded young people. The danger of that absolute focus is that other young people will lose out and themselves be excluded. My hon. Friend the Member for Daventry recently received an equivocal response when he asked Ministers to guarantee that every 16-year-old would receive proper careers guidance. The danger is that there are those who will not and who will choose the wrong future as a result.
  The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): The hon. Lady's speech is deteriorating into mere scaremongering. For the record, the ConneXions service will be a universal service for all 13 to 19-year-olds. Far from replacing the parental role, it will work closely with the child's mother and father. That is common sense. There is no room for scaremongering.
  Mrs. May: If the Under-Secretary does not want people to be concerned about the future of careers guidance, he might look again at the response given to my hon. Friend the Member for Daventry, which made it absolutely clear that there would not be careers guidance available to every young person under the scheme. Perhaps, too, he should talk to local authorities who are genuinely worried about the impact that this change will have on their ability to provide careers guidance across the patch to all young people.
  There is also the issue of the sort of youth service that is to be provided. The informal youth service of today that provides help for young people where they are and when they need it, and that backs them up and supports them, will not exist under ConneXions. Local authorities are worried that they will not be able to continue to provide that service once the funding has gone into the ConneXions service.
  The other place passed amendments in relation to sex education guidance—the replacement for section 28, as the Government would have us believe—and ballots on grammar schools. I noted that the Secretary of State appeared to say that he would remove the whole of clause 117 on sex education and circulate guidance to schools in place of that legislative backing. My noble Friends moved the amendments because they were concerned that, although the Government were claiming that their amendment for inclusion in the Bill replaced section 28, it did not. It was not the compromise that the Government were suggesting it was. That is why my noble Friends' amendment is now in the Bill.
  On grammar schools, if the Secretary of State wants us to believe that his statement at the 1995 Labour party conference did not set out the Government's position on

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  selection—he will now tell us that it was not a joke, having described it as such previously—and if he stands by his remarks of a couple of weeks ago in The Sunday Telegraph that he is not hunting down grammar schools, he should accept the amendment of the other place and the proposal that the ballot should be removed. Threats and uncertainty will hang over grammar schools if he brings back those ballots. We have seen the vote in Ripon, and the anti-grammar school campaign in Kent give up on getting a petition together. Those grammar schools should not have their future threatened by the Bill.
  Dr. Starkey: Will the hon. Lady give way?
  Mrs. May: No, I have given way on a number of occasions to the hon. Lady.
  Mr. Gerald Howarth: Will my hon. Friend give way to me?
  Mrs. May: As this is the first time my hon. Friend has intervened, I will.
  Mr. Howarth: I am extremely grateful to my hon. Friend for giving way. The Government appear to be in some confusion over their sex education provisions and clause 117. Has my hon. Friend seen the draft guidance that the Secretary of State has distributed, and has she noticed the section entitled, "Working with the Wider Community", which refers to social workers and youth workers? Has she seen this quite disgusting leaflet, "Gay sex now", which was published with £50,000 of public money in Scotland? Does she agree that there is widespread concern about this issue, that our noble Friend Baroness Young has articulated it and that the Government have come up with no proposals to deal with it?
  Mrs. May: I agree that there is indeed widespread concern on this matter. It seemed as though the Government would respond to it, judging by the comments of a senior Cabinet Minister at the weekend that if concern continued and the Government were again defeated on section 28 in the other place, they would give up. Sadly, yesterday the Prime Minister made it absolutely clear that the Government are intent on going ahead with the repeal of section 28. In so doing, they are acting against the wishes of the many parents who want to ensure the protection of children in schools and other local authority institutions.
  The training and education of all young people post-16 is vital to our future as a vibrant economy. With the Bill, the Government had an opportunity to look ahead and to ensure that the system for providing that training and education is the right one to take us forward in the 21st century. In the dynamic and fast-moving economies of today, the key is flexibility—to meet national and local needs.
  However, far from producing flexibility and diversity, the Bill will increase bureaucracy, reduce freedom locally, remove business involvement and reduce guidance to young people. It is typical of a Government whose first instinct is always to centralise, regulate and control. It is typical of a Government who are all talk and no delivery.
  2.51 pm
  Mr. Ted Rowlands: I think that the hon. Member for Maidenhead (Mrs. May) was elected to the House in 1997. Perhaps that explains the curious and unbelievable pre-1997 world of training that she described. I have been a Member of Parliament for more than 30 years. During 18 of them, I watched as Bill after Bill was introduced by the Conservative Government. They eroded the rights, responsibilities and duties of local government; they created the world of quangos and then changed it; they altered and amended training legislation from one Parliament to the next.
  I could not believe or understand the hon. Lady's account of a pre-1997 world in which wonderful, democratic, stable training organisations delivered splendid programmes with no chopping and changing. One of the saddest features of the past 20 years—especially in training—was short-termism.
  I do not blame the training and enterprise councils per se—institutions such as the mid-Glamorgan TEC, which covered the communities that I represent—but, at best, they were able to offer only annual contracts to trainers and training providers. Frequently, those contracts were changed, even during that period. During the previous Administration, much of the training provision was hand to mouth—it operated from month to month, or from year to year. The hon. Lady's image of the present system is of a regulated, centralised and bureaucratic quangoland. The Conservatives created quangoland in many of our communities—certainly in Wales.
  I should like to offer the hon. Lady a sense of history. The 1980s and 1990s saw the collapse and implosion of what should have been the natural training providers and routes: training by the major public utilities—the gas, electricity and coal boards—and by great national companies such as GEC, BSC, and Hoover. Those institutions often trained beyond their own needs, thereby providing an amazing alternative educational opportunity—especially in the post-war world of the 1950s and 1960s—for many young people in communities such as the one I belonged to and now serve.
  In many cases, those companies offered an alternative form of technical education. They picked up young people who had been branded failures as a result of the 11-plus system and the grammar school structure. That alternative system was vital to the development of our economy in the 1950s and 1960s. Those training structures imploded in the 1980s and 1990s. Many of the companies closed down their training divisions because they could no longer afford them. In my community, with de-industrialisation came deskilling.
  Mr. Nick St. Aubyn: Surely the hon. Gentleman will go on to acknowledge—as did the Select Committee on Education and Employment—the important role played by franchising in developing training opportunities in the 1990s, under the new arrangements introduced by the previous Government.
  Mr. Rowlands: I do not condemn everything done by the previous Government. We should certainly have flexibility and diversity in training to meet the challenges of a more complex and diverse 21st-century economy.
  I was pointing out that deskilling was one of the consequences of that implosion and collapse, and of the deindustrialisation that occurred in communities such

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  as mine. At the same time, production technology transformed the nature of skills. Some of us can remember that there were ladders of skills in each company, with an accompanying training programme. Many intermediate skills were wiped out by new technology.
  Furthermore, in communities such as the one that I serve, there was a shift in the balance between the manufacturing and service sectors. When I first became a Member, between 30 per cent. and 40 per cent. of the economy in my constituency was in manufacturing; the figure is now between 26 per cent. and 27 per cent. Training requirements have changed because of that.
  It is a curious aspect of the Thatcher era that one of the consequences of those changes was the transfer of responsibility for training from companies in the private sector to the state. We had to build a large, alternative set of structures to deal with the gaps left after deindustrialisation. The previous Government acknowledged that. We had to establish organisations to deliver new programmes; there was a growth of training providers and quangos. That was what happened—not what the hon. Lady described. Successive Governments tried to find the best mechanisms to deliver new training programmes. Such programmes must be financed as much by the state as by the private sector.
  Mr. Wigley: I am following the hon. Gentleman's speech with great interest, because I lived in his constituency during the period to which he refers. Does he agree that one of the changes that has taken place since then is the immense speed of technological development? That often makes it difficult for companies, or for anyone else—even in the public sector—to anticipate what will be needed five years down the road. That point must be taken into consideration.
  Mr. Rowlands: The right hon. Gentleman makes an important point. Training is much more complex and diverse. To read future skills markets and needs is becoming increasingly difficult. If, as everyone says, the growth of our economy will be through small and medium-sized enterprises, they will need greater support in order to sustain and adapt training for their current and future work forces. We all accept that we live in a different world. That is why Governments have had to struggle to find the best structures and instruments to deliver training programmes.
  I confess to my right hon. Friend the Secretary of State that, when I first read the Bill, my heart sank. Here we go again, I thought. I had watched the previous Government introduce quangos and abolish them: from the MSCs—manufacturing skills councils—to the TECs and now to the LSCs. In Wales, at least, we have been saved from ALI and all the acronyms that go with it. Training has been a fertile breeding ground for acronyms; we have gone from YOPs to YTS—youth opportunities programmes to youth training schemes—and from WEPs to STEPS—work employment programmes to special temporary employment programmes. The Bill will spawn another new collection.
  I approached the Bill with some apprehension. I thought it might be just one more in a long line of measures that merely replaced one set of quangos with another. However, the Bill is sensible. It offers a new structure to ensure that there is a meaningful relationship
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  between school, college and training. The relationship will be co-operative. It will not be like the crabby, competitive system created under the previous Administration, in which school heads did not want their children ever to go near a training provider in case they lost them. Colleges were in direct competition with schools; and both were in competition with training providers. That is not the best approach. Choice is essential and we want to create as much choice as possible, but the crabby competition that grew up under the previous arrangements is not defensible. It is wasteful as well.
  I have concluded that the arrangements in the Bill are sensible. I hope to goodness that, for a period of time, the system will be stable structurally and financially. That has not been a feature of training for the past 20 years.
  Wales will have new quangos, such as the National Council for Education and Training for Wales and the Community Consortia for Education and Training, but not—I am glad to say—the Adult Learning Inspectorate. If I am to accept those quangos, there must be, as the hon. Member for Maidenhead said, a high degree of flexibility as the programmes roll out. I would like to illustrate the need for such flexibility as it relates to the needs of my community.
  I have admired the passionate support that my right hon. Friend the Secretary of State has given—both when he was in opposition and now—to the promotion of staying-on rates in schools. It is a sign of a civilised society that more young people are able to, can afford to and choose to stay on in school because they do not have the economic necessity to leave. I was the first person in my family to receive education after the age of 14. My mother was the most intelligent person in my household, but she was forced to leave school at 14. My generation understands the importance of having the opportunity and the ability to stay on at school and we appreciate the role of educational maintenance. Flexibility is therefore required.
  However, it would be foolish not to recognise that, alongside increased staying-on rates, the raising of the school leaving age and the increase in the number of people going on to further education, a growing and large minority of young people are alienated from, and disaffected with, the education process. At the same time as we have increased staying-on rates, truancy has risen in many communities. Although we must push on to improve staying-on rates, we must recognise that many young people are alienated by the education that they are offered. They vote with their feet. One sees far too many young people wandering the streets during school hours. Why is that? Alongside the measures that my right hon. Friend has announced, we must discover why young people play truant so that we can address their needs.
  In my community, a fascinating scheme has been introduced. I am sorry to say that it has another acronym—SSUP—because it is the school step-up programme for 15 year-olds. It enables youngsters who are about to leave school to spend days with an employer, and training is provided. To stay on the scheme the youngster must not play truant, and that means that we are reversing the trend. Because young people have the opportunity of work experience and because they would

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  lose that opportunity if they played truant, they are much more conscious of the need to attend school. Such flexible arrangements are essential.
  Caroline Flint: May I bring to my hon. Friend's attention a scheme between Doncaster college and Edlington school in my constituency? They provide a bridging course on information technology and I was happy to meet some of the students on it. Half of them had not intended to stay on in education after 16. Is not such collaboration at the heart of the Bill? It should be the norm rather than the exception to the rule.
  Mr. Rowlands: There are many good programmes of the type that my hon. Friend has mentioned. I have described one in my community. I hope and believe that such schemes can encourage and extend best practice.
  My other hope and prayer is that the new training organisations will answer the catch-22 question in communities such as mine. Every economist that I have read or heard has told me that, for my community to have a modern, 21st century economy, it needs modern training and skill opportunities. We are told that we are desperately short of NVQ 3 opportunities and NVQ 3 trained young people. That is where the future lies. How do young people get such opportunities, given the type of jobs that are available in my community? Not one of them offers the opportunity to obtain work-based NVQ 3 training.
  A couple of weeks ago, the Treasury announced a scheme to deal with the mismatch between 1 million unemployed people and 1 million vacancies. When my right hon. Friend the Chancellor of the Exchequer launched the scheme, I took a snapshot of the 115 vacancies that were available at the Merthyr job centre to see whether there was the mismatch that the Treasury talks about. I found that there were vacancies for cooks, cleaners, bar staff and bouncers. There were vacancies for a butcher, a bailiff, mechanics and a hairdresser. None of the vacancies offered a training opportunity of the character that I am told a modern economy requires. I do not deride the people who do such jobs, but that work does not constitute a base for a future training programme that will develop a 21st century economy.
  I hope that the new training structures will address the catch-22 questions faced in the valley communities that I represent. Training and NVQs need the same degree of enthusiasm and effort that has been put in to ensuring that school-leaving sixth formers find places at university. For training, we need the equivalent of the Universities Central Council on Admissions. That would enable young people to have better training opportunities than the job market in my community can offer. It would provide mechanisms, training and funding of the kind that we offer to sixth formers who go on to university.
  I have not seen such an arrangement in place. Above all, we should use—my right hon. Friend the Secretary of State has been responsible for this—the revitalised Employment Service, in which there has been a transformation. It is not an inward-looking organisation that provides the dole and benefit, but an excellent and proactive employment promoter, motivated chiefly by the new deal.
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  My worry for Wales is that the Employment Service will not be allowed to become an intrinsic part of the process. The best work-based training programmes that are attached to TECs should be linked to the Employment Service. With the new deal, they could provide the training that young people need.
  From correspondence that I have had with Welsh Assembly Secretaries, I understand it that some do not want such provisions and are not willing to accommodate the provision in the Bill. I tell the right hon. Member for Caernarfon (Mr. Wigley), who plays a leading part in the Assembly, that the reason for that is that new demarcation lines have been drawn up. Employment services are not within the scope of the Assembly, but TEC programmes and their budgets are. How dare one suggest that the best scheme is not one that is distorted by the demarcation disputes between the Assembly and central Government, but one that would allow the provisions in the Bill to be implemented and would allow the Employment Service to take a leading role in providing work-based training?
  Mr. Wigley: I agree wholeheartedly with the hon. Gentleman about the dangers of demarcation, but does he accept that the Bill contains flexible powers that can be adjusted, as appropriate, in either direction, to avoid the consequences that he has described?
  Mr. Rowlands: Yes. For England the Bill is prescriptive, but for Wales this is a skeleton of a Bill. I believe in the legislative role of the House and the right of Members to play their full part. The Bill contains provisions for Wales, but we do not know what effect they will have, and there are clauses that do not apply to Wales. We know that there will be a set of new clauses on the youth service. Those are the subject of discussion between Ministers, Assembly Secretaries and, presumably, Assembly committees. Why are not Members of this House involved in those discussions?
  If there are to be partnership arrangements between Ministers, Assembly Secretaries and Assembly Members, and if Bills such as this are to come to the House containing only skeleton arrangements, we need a different pre-legislative process that involves Members of the House. Are we expected to nod those Bills through the House? Do not we have a right to seek to amend or expand the provisions for training in Wales? I am sorry, but the likes of me will not nod through legislation—maybe I am a bit old-fashioned. I say to my right hon. and hon. Friends on the Front Bench, those who serve Wales as well as those who serve central Government, that we will have to devise a new way to prepare and deal with such Bills.
  At the moment, no one knows what the youth service provisions will contain. We do not have them in draft; they will be introduced in Committee. Will the Welsh Office Minister who is to introduce them come to us and say that they are the Assembly's provisions, so we should not amend them? Will they be presented not only as a fait accompli, but as provisions that we have no right to amend? I am not willing to accept such a legislative role.
  As the Member of Parliament for Merthyr Tydfil and Rhymney, I have as much knowledge on these vital issues as Assembly Members, if not a little more on occasion, and I intend to play a full and active part in ensuring that this is a better Bill when it leaves this place.
  3.12 pm
  Mr. Richard Allan: I am pleased to say that the Liberal Democrats welcome the Bill, although we have specific concerns that we will seek to raise constructively in Committee. I look forward to Ministers' positive responses to those issues.
  We welcome the Bill because it deals with this country's skills shortage and is essential not only for individual opportunities but for the general opportunity afforded by a successful economy, which depends on skills. Although the Bill deals with that problem, and that is what I shall concentrate my remarks on, one might be forgiven, thanks to the efforts of Conservatives in another place, for thinking that the Bill was about grammar schools and sex. I shall try to resist the temptation to pursue that argument.
  I was pleased, however, that the Secretary of State, whom I am happy to see still in his place, referred to the question of what constitutes a stable, long-term relationship. He noted that my noble Friend Earl Russell challenged the peer who tried to argue that necrophiliacs are involved in long-term relationships. I showed the Hansard report of that exchange to a friend outside the House who said that it was surreal, which is the best word to describe some of the debates on that issue.
  The core aim of the Bill, as I have said, is to make progress in delivering skills to young people in particular, and also to ensure lifelong learning. I reiterate other hon. Members' praise of the work of organisations involved, and I single out the Employment Service for particular praise. As a fellow Sheffield representative, the Secretary of State will understand why I think that the service is important, whether it is based in Moorfoot or anywhere else.
  The situation in Sheffield highlights for me the importance of skills. I readily recognise that I represent a more affluent constituency, which is perhaps characterised more by employers than by those seeking work, but the whole area depends on skills. Enterprises cannot function for the benefit of Sheffield and South Yorkshire without the existence of skills throughout the community, and there are chronic skills shortages in Sheffield and the region as a whole. That has been recognised by the awarding of objective 1 status, and we are all involved in making decisions about that now. Objective 1 will, rightly, focus on improving skills, and the new provisions will be essential in achieving that aim.
  The problems at Rover also highlight the importance of generating extra skills. This is not a party political issue. When one compares the productivity figures of UK industries with those in other countries, particularly in continental Europe, one finds that a key factor behind the difference are the skills bases of the people employed in those enterprises, who play a part in creating the industry's infrastructure. We must seek ways to avoid problems such as those at Rover occurring in future by making sure that our productivity keeps pace with that of other countries and that we have the best possible industry, not only in manufacturing but in all sectors, so that we are truly globally competitive.
  We have a background of failure, and I criticise the previous Government for moving in various directions but never getting to grips with skills shortages. Initiatives such as modern apprenticeships have been useful but they are not enough. There is still too much concentration on
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  quantity rather than quality. There is too much emphasis on output targets, such as how many people take courses, rather than on the nature of the course.
  People in the engineering sector, which is crucial in Sheffield, have told me that it is difficult to deliver engineering courses within the structure set up by the previous Government because they are expensive and require substantial investment in colleges. To put it simplistically, it is easier to deliver a higher number of courses at lower skills levels or for less appropriate skills than to teach the specific skills needed in an area. The incentives have, to a degree, been perverse.
  Liberal Democrats also query the incentives in the NVQ system generally and want quality and standards to be the priority. We hope that the Bill will improve NVQs. There is a suspicion, which seems to be borne out, that the incentives are aimed at getting people through NVQ courses and achieving targets of numbers of people rather than focusing on the quality of each course. We hope that during the proceedings on the Bill we will be able to consider the rigour of the qualifications that we are offering.
  There is also the question of stimulating demand. The National Institute of Adult Continuing Education referred to that issue in relation to community education outreach work, which has always been a feature of local government services. It is no good improving the system and putting new structures in place if we are not reaching out into the communities, particularly the deprived communities where people have not previously accessed further education. We must get out there and generate demand. The Bill does not explicitly refer to that, but we want it to reach out to people who are not yet involved.
  As I indicated earlier, we would favour a stronger regional structure similar to the Welsh model. The Welsh Assembly is the accountable body to which the local learning and skills councils will report, and there will be a tripartite structure involving the Welsh Development Agency, the Welsh Assembly and the LSC.
  Mr. Rowlands: I do not think that the hon. Gentleman is right about the Welsh scene. Wales will not have local learning and skills councils. We will have voluntary bodies called CCETs, which will consist of about 20 people, almost all of whom will be from the further education sector. There will not be a comparable structure in Wales.
  Mr. Allan: I understand that there will not be local LSCs, but the functions that the council will have in England will be controlled in Wales by the Welsh Assembly, and a regional assembly could do the same in England. We favour that model of accountability rather than the lower tiers of the detailed structure.
  In England, we would like LSCs in the regions to answer to a regional assembly, rather than simply to the national Learning and Skills Council, as the Bill currently proposes. We are also in favour of the WDA's involvement, and would like to follow that model in England, which now has a tier of regional development agencies. I apologise if I gave the impression that I thought that there would be exact comparability. We are considering more the accountability route and the involvement of the development agency in the English context.

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  We seem to be developing a regional structure within England. Much of the old structure for the areas with which we are dealing in the Bill was delivered at regional level by the Government offices of the regions. That structure was set up by the previous Government. We have some experience of that approach and we believe that that would be the appropriate level.
  The CBI is considering how we can deliver appropriate training with the flexibility that we want. Yorkshire and the Humber does not have to deliver the same thing as the south-west or any other region. We believe that there could be real flexibility through more regionalisation. In the area that I represent, for example, the engineering sector is looking for things from the regional skills base which perhaps might not be appropriate somewhere in the south-west, where there may be a much stronger focus on other forms of skill.
  We have some concerns about business involvement in the structures. Business has not always managed to deliver in the past. Many past structures have had significant business involvement but have not necessarily delivered. Contrary to what has sometimes been suggested, even beefed-up business representation on learning and skills councils is not a magic wand. It will not necessarily lead to any improvement.
  In many ways, the public sector is picking up on the failure of the private sector to deliver. Business has not delivered the training for its employees, which it should properly be doing as part of its own structure and viability. The bodies that we are setting up will be picking up the pieces and providing training for business.
  Mr. Brian Cotter: I hope that there will from time to time be an emphasis on the smallest businesses within the organisations to which my hon. Friend is referring.
  Mr. Allan: One of the key issues will be the relationship between the Small Business Service and the new bodies that we are setting up—the LSCs—in terms of determining how they will feed in their requirements. Mention has been made of the enterprise element of training and enterprise council work. That element was especially valuable to some of the smaller businesses that did not have access to facilities on their own.
  I understand that Conservative Members in another place proposed amendments to the formula for composition, with a fixed 25 per cent. for local government and a fixed 40 per cent. for business, for example. We do not favour such a prescriptive model but we are seeking reassurances that there will be broad representation.
  Local government has an enterprise function. In that connection, anything that is done about skill shortages and boosting the local economy will invariably have an impact on the broad range of local government services. They are all of a piece. Local government controls education, social services and services in general, and they are all tied into the regional or sub-regional economy. The LSCs will form an important part of that structure. Strong representation from local government will be important but, as I have said, we are not convinced that there should be a prescriptive model.
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  I have already mentioned representations from the national training organisations. That role will be important, especially in maritime areas, for example, where there is a particular requirement. That role will be important also in other areas.
  Some big questions remain about the transition from TECs to the new structures. The discretionary funds have already been mentioned. It has been pointed out to me by the Sheffield TEC that discretionary funds are used not only for enterprise functions but sometimes for training functions. There are extant training programmes that are doing a good job and which the TEC would like to see transferred to the new structures. I hope that we do not lose those programmes as we go forward. We should not assume that the discretionary funds are being used purely for enterprise.
  The picture that we get is that effectively everything will be put on hold for a year or two. It is inevitable that in a time of change things will slow down. I see that the Minister is shaking his head. My TEC tells me that it is losing staff all the time. They are leaving the sector and looking for jobs elsewhere. The TEC is putting such programmes as European funding programmes on hold because its experts have applied for other jobs and left because of the uncertainty. That is a real issue that we must address. The Government can do something about it by accelerating the process of informing people and indicating what their long-term future will be.
  We cannot afford too long a delay. People should not have their current contract terminated without knowing with any clarity whether they will get a subsequent contract. Their natural inclination will be to leave to find jobs elsewhere. That will happen unless the Government take swift action to put in place some security of tenure. That will be especially necessary in South Yorkshire, where TECs are amalgamating. Objective 1 areas need that more than anywhere else.
  I accept that that is special pleading, but objective 1 status covers many areas. We shall be delivering huge amounts of training as part of objective 1 programmes. The Minister will be aware that if we do not get the funding through quite quickly, we shall lose it. As we are entering the programme, it is vital that we have the organisations in place that can deliver the training so that we can get rid of as much uncertainty as possible.
  The TUPE implications have been referred to in the context of TECs. We need to know with more clarity what their liabilities will be. I understand that TECs feel that they will be significant. Many of them feel that where they are described as having an asset, they actually have a liability. For example, those TECs which have leased rather than purchased buildings may have to pay money to get out of the lease, rather than realising an asset. 1 understand that in South Yorkshire, the LSC will have its headquarters in Sheffield and that there is an issue relating to the building that the current TEC occupies. Other premises are used by the other two TECs in the area. As we unravel the proposals, I suspect that the financial situation will not turn out to be favourable. I think that it will be rather less favourable than was anticipated.
  Mr. Boswell: I agree with many of the points that the hon. Gentleman has been making. Does he agree that there is a particular technical problem with the TEC

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  movement where there is an association with the private sector—for example, membership of a chamber of commerce? Such assets will have to be unscrambled and returned, and a new membership organisation established.
  Mr. Allan: The hon. Gentleman is perfectly right. Some of the more successful TECs have been working hand in hand with chambers of commerce. The situation will have to be unravelled, and that will take time. That process of unravelling will draw attention away from the job of delivering education and training. I hope that the Government will accept that that is a genuine concern raised in the spirit of wishing to see these proposals succeed rather than fail. I know that the Government will try to be positive.
  Concerns have been raised by bodies such as the National Youth Agency and the Careers Services National Association as well as by Opposition Members. I know that my noble Friend Baroness Sharp of Guildford managed to secure an amendment on Third Reading, which will be quite useful. I suspect that the Government will seek to remove it, but I would ask them to think twice about doing that. The purpose behind the amendment is to put into the Bill assurances about the range of provision that the careers service will offer.
  We believe that we need to concentrate on the few as well as the many. The Government frequently take the opposite approach. In this context, the few are the 9 per cent. who leave education without any formal skills. They are a vital group and they have not been reached before. They have tended to be ignored as targets for general achievement become higher. When we reach an 80 or 85 per cent. target we think that we are doing well, but the 9 per cent. are being left out. We understand the focus and we think that it is entirely right that the Government should want to work on it, but we would argue that that should be additional to what is already being done. We seek assurances from the Government that they can achieve that additionality.
  There are two elements, the first of which is funding. If we want to provide individual mentoring services such as one mentor to 10 young people, it will not be cheap. However, that is the sort of intensive service that we probably need. We want to be sure that the funding the ConneXions service receives is sufficient to do the work that it has done through schools for the generality of young people and to offer the sort of mentoring service to which I have referred.
  Qualified staff are vital. There is a huge shortage of young people with social work qualifications. If we are sending people out on intensive work with people in the 13 to 19 age group, younger mentors will be of particular value. However, there is a shortage of qualified people across the profession. We have seen the Government enhance funding in other areas. Even if the money comes through, will there be the staff to deliver, and where will additional staff come from? Either they will come from delivering the existing careers service or from, for example, the youth service, which local authorities are using. There are peripatetic youth workers who are involved especially with the 13 to 19 age group. They may be appropriate for the ConneXions service but they cannot be in both places at once.
  Mr. Wicks: The hon. Gentleman makes a good point about professionals and where they will come from.
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  We must not inadvertently poach good professionals from, for example, social services. I assure the House that we are considering the issue cross-departmentally because we are aware of the danger.
  Mr. Allan: I am grateful to the Minister.
  I mentioned peripatetic youth workers and said that they could not be in two places at once, but they probably could—that is the definition of "peripatetic". I have seen the good work that they do with the group in question.
  I am glad that the Minister has in mind joined-up government in this area. I know that some of those youth workers are funded under Home Office programmes for crime prevention purposes and do good work; some are funded by social services, education departments and local authorities. They almost always work with the same client group as the ConneXions people, and we want to make sure that they all work in a co-ordinated way; otherwise, there will be confusion among that client group and money will be wasted. [Interruption.] The Minister says that that is the reason for the name "ConneXions". We hope that the reality is as good as the Government's sloganeering.
  We have concerns about the inspectorate. Some of the issues have already been raised. We are particularly concerned about a double inspection regime. We Liberal Democrats are not the biggest fans of Ofsted, and possibilities in the Bill for the expansion of its role are worrying. Ofsted may move into the FE sector in ways that may be inappropriate. We are also concerned about area-based inspections for the LSCs. We want to know what the areas will be and who will carry out those inspections.
  We tried in another place to clarify the roles of the adult learning inspectorate and Ofsted, to avoid duplication of effort. We believe that Ofsted is not the appropriate body to be expanded at this stage and that it already has enough power over education policy.
  With regard to post-19 provision and lifelong learning, we are concerned about the difference between clauses 2 and 3. Clause 2 effectively mandates a structure for pre-19 education up to level 3, giving a young person an entitlement to education up to level 3, whereas clause 3 suggests that that entitlement does not exist beyond that age, but that the LSC should take reasonable steps to provide such an education.
  We believe that the entitlement to education to level 3 should not be dependent on age. That is also the view of NIACE, which has issued statements to that effect. We should concentrate on getting everyone to level 3 and not worry too much about an age cut-off. I know that my noble Friends considered the matter, and I hope that the Government will return to it.
  We welcome individual learning accounts as another aspect of the lifelong learning agenda. That has been our policy for some time. We want individual learning accounts to become the norm for a range of people, to enable them to access lifelong learning, and we hope that the Government will not see such accounts as trivial, merely providing discounts on courses or a low level of support. We hope that individuals will feel that they can build on such accounts and contribute to them throughout their lives, and that their employers will want to contribute as well.

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  The Bill provides a framework for setting up individual learning accounts, but we do not have the detail of how they will be used. They should be used extensively for lifelong learning opportunities, rather than as a quick fix offering discounts on college courses.
  I am sensitive to the issue of sixth form schools. As the Secretary of State knows, I have sixth form schools in my constituency, which is the only part of Sheffield that does. That is because the schools resisted the single tertiary structure offered by Sheffield city council some years ago. I notice a silent Government Member, the hon. Member for Sheffield, Attercliffe (Mr. Betts), who also has some experience of Sheffield city council.
  I have heard the Minister's assurances about the future of sixth forms that are doing a successful job, but questions will have to be answered, particularly where a dispute arises. A local learning and skills council may decide for whatever reason that the sixth forms in its area are not the best means of delivering post-16 education. The LSC may hold that view strongly, the sixth forms will want to survive, and arbitration will be necessary.
  The present system for arbitrating between school provision and potential LSC provision is messy. The sixth forms must be able to have confidence in their security guarantee. There should not be battles between the LSCs, which will try to drive the costs down, and the sixth forms, which will argue against that.
  There are important questions relating to the expansion of sixth forms. In Sheffield, a number of schools have recently asked to open new sixth forms. Those requests were made under the old funding structure and were not accepted. If a school can make a good case for a sixth form, it will be interesting to see whether the new structure will allow the school to make that pitch, where it will be directed and how it will be assessed.
  I believe that demand for sixth forms will continue. Good sixth forms, in co-operation with colleges, is the sort of model that the Government want, although that may involve new sixth form provision in an area where there was none before.
  In conclusion, we offer general support for the Bill, but we seek assurances from the Government that they can deliver where previous Governments have promised but not delivered. I am tempted to use phrases that I have heard too often from Conservative Members about talk and no delivery, but that has been the case repeatedly with education initiatives over most of my lifetime, under a Conservative Government.
  There are three key requirements for successful delivery, which the Government will have to bear in mind as the Bill proceeds. The first is adequate funds for the further education and training sector. We keep returning to the subject of money, which gives the Government an opportunity to speak about our spending 1p several times, but they have acknowledged that the FE sector needs money. They have proudly boasted of the funds that they are giving, but we must make sure that the money goes to the right places and delivers quality as well as quantity. It is a matter not just of the amount of money, but of the way in which it is delivered.
  The second requirement is sufficient trained staff to deliver the programmes. I mentioned that in the context of ConneXions and the mentoring service, but it is equally
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  true in the FE sector. Morale in that sector has not been at its best over recent years, and there are still disputes about pay and conditions in the sector. If it is to expand, we must make sure that people want to go into FE, so that it gets quality staff who stay there and are not tempted to go elsewhere because they are on temporary or short-term contracts.
  Finally, we need proper accountability and flexibility to respond to local demands. We must be clear about how the LSCs report, particularly to bodies such as regional development agencies and regional assemblies.
  If we can work on those elements, the Bill should be able to deliver a better structure than the existing one. We therefore are not inclined to support the Conservative amendment. We believe that all parties should join together to try to improve the system, rather than seeking to damage an initiative that could lead to improvements in our skills base—improvements that are desperately needed if the country is to be competitive and if individual young people are to have the opportunities that they deserve.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Many hon. Members wish to speak, so shorter speeches would assist fellow Members.
  3.37 pm
  Ms Joan Ryan: I give the Bill a warm welcome. It brings us a long-overdue comprehensive framework for post-16 education and training. It is clear that current structures are letting us down. I know that from personal experience. I worked in the 16 to 19 sector for some years before becoming a Member of Parliament. The college in which I worked was a good college, but it brought me into contact with many other colleges and post-16 providers and made me aware of the needs that must be met.
  I commend the wide-ranging consultation that took place before the Bill reached the other place, which gave people and bodies time to respond. Overall, the responses were detailed and positive. Yes, they raised queries, but that is to be expected—it is the point of consultation. It is a hallmark of the Government and particularly of the Department that consultation is taken seriously. Good consultation is the first step to good legislation. That is why it is so important.
  The Bill is a serious attempt to address the weaknesses in our post-16 education and vocational training system. Sadly, the problems are not new. I have read that, in 1884, concern was expressed that Britain was increasingly losing out to its foreign competitors. Gladstone set up the Samuelson commission, which argued that neglect of education and training was one of the key factors in Britain's poor performance.
  The productivity gap between UK companies and our major competitors is between 20 and 30 per cent., which is a matter of great concern. It is a shocking fact that some 7 million people in Britain lack formal qualifications. That figure is far too high and 2.1 million people lack intermediate technical qualifications at the important general national vocational qualification level 3, which has been mentioned. The skills taskforce estimates that 80 per cent. of the work force will need level 3 skills in

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  the future so clearly there is a great deal to be done. It is also shocking that 170,000 16 to 18-year-olds are not in education, training or employment. That must change.
  The performance of further education colleges is variable—some are excellent, some are not—and their drop-out and retention rates should be of great concern to us. The raising of standards and quality in FE is, and has to be, a key part of the Bill's agenda, which is one fundamental reason why it is so welcome. Also welcome are the links between learning and work. The previous Administration brought education and employment together in one Department, and they were right to do that, but they did not establish the key links between learning and skills and between employability and business. On the ground, local providers have struggled to make those links, so it is right that they are part of the Bill.
  The proportion of 16 to 19-year-olds who receive job-related training increased from 21 per cent. in spring 1995 to 25.6 per cent. in spring 1998. There has been an improvement, but almost half all employers still think that their youngest employees lack the skills to meet business needs and slightly more than a third of all employees have never been offered training by their employer. There is work to be done on both sides of the equation and the structure provided by the Bill, which is a bold attempt to address those serious weaknesses, will enable us to do it.
  I want to say a few words specifically about London and why making what the Bill offers a reality is crucial to its future prosperity. London's unemployment is some 20 per cent. above the national average and we have heard it said before in the Chamber that unemployment here is the same as that for Scotland and Wales combined. It is important to consider London in that context. It is often thought of as affluent, but it is characterised by affluent areas existing side by side with areas of the deepest poverty.
  Mr. Boswell: I appreciate that the hon. Lady is a London Member and I have visited FE colleges fairly near her constituency recently. Will she concede that there is concern about whether the proposed structure for London and the local learning and skills councils, particularly in the northern sector, will be able to deliver adequately and meet the needs that she has properly addressed? Does she agree that there is also concern across the sectoral boundaries in London about whether it will be possible for colleges to make perfectly sensible collaborative arrangements to secure the adequate supply of high quality training for skills and education across the metropolis?
  Ms Ryan: The hon. Gentleman makes some important points and, if he waits a while, I shall come to them.
  Some 120,000 jobs are on offer, but people lack the skills to fill them. One in four Londoners has minimal qualifications or none and we need to raise drastically the level of technological skill among young people in London. We also know of the barriers that exist for black Londoners and members of minority ethnic groups, who are far more likely to be unemployed and far less likely to get the job. That is unacceptable. I am therefore pleased by the strength of the Bill's equal opportunities approach.
  On the point raised by the hon. Member for Daventry (Mr. Boswell), London will have five local learning and skills councils. Essentially, three options were before the
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  London Development Partnership, but it did not suggest the one that I favoured. I preferred the "wedges" option—which would have got rid of the inner and outer London doughnut and established travel-to-work areas to slice up the city—and saw sense in the pan-London LSC option as London is essentially one labour market, but our councils have been broadly based on the training and enterprise councils, although there are obviously fewer. I believe that that option can succeed.
  The hon. Member for Maidenhead (Mrs. May) said that the Government failed to consider what was needed in local areas, but they and the London Development Partnership considered London's needs and decided that it would be best to build firmly on the good practice and partnerships that are already in place and take them forward. I think and hope that, in a number of years, I will be able to look back and say that the best option was chosen. We are building on good practice and partnership while achieving a coherent structure and a quality agenda.
  However, the establishment of the five local learning and skills councils raised some issues, not least for Capel Manor college in my constituency, which is the only specialist horticultural college in London. It has a national and international reputation and is doing an excellent job, but it was concerned about relating to five different councils and thought that it might run into some of the problems that it had faced with local education authorities. It was worried that it would need to be represented on, and have an input to, each council and concerned about sorting out the financial situation across five different bodies.
  I made representations to the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Croydon, North (Mr. Wicks), on that issue. He corresponded with the college and took note of what it had to say. He wrote:
  We recognise that there will be a need for cross London co-operation when planning and allocating provision. We expect that LSCs will work together in London with a light touch co-ordinating mechanism. The exact form that this pan London co-ordinating body will take has not been agreed. However, it will mean that the five local LSCs will be able to agree common approaches to collective problems including developing strategies for sectoral cross regional provision.
  My college is heartened by that news and in a letter to me it says that it is
  delighted with the letter from Malcolm as it illustrates a real understanding of the potential inefficiency of small specialist providers, such as Capel Manor College, dealing with individual LSCs. They would welcome the opportunity to report directly to a London-wide body, co-ordinating the servicing of specialist needs across London.
  That is good news for regional organisations up and down the country, and my college and I have good reason to thank my hon. Friend the Minister for paying attention to those issues.
  I want briefly to discuss the work of the national training organisations. The White Paper "Learning to Succeed" said that NTOs have a pivotal role to play in the new arrangements. Many of us are delighted by that and the Bill's strength is that it is more demand led than the current provider-driven system. To ensure that that continues, and in acknowledgement of the work and relevance of NTOs, I am pleased that the Government have backed an amendment in the other place that will

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  mean that, as well as providing a national, regional and local focus on skills, the Bill will ensure that industrial and occupational needs are met. It is right and welcome that national training organisations are recognised by the Secretary of State as the employer voice on education and training issues.
  I welcome the LSC prospectus, and especially the reference to meeting the need for skilled child care workers to support the national child care strategy. To date, training and enterprise councils have played a pivotal role in training out-of-school child care workers, and have increasingly been involved in the development and provision of the training infrastructure to support child care for ages 0 to 14. It is vital that that role continues under the LSCs to ensure that the development of this substantial work force is no longer marginalised as low-status, low-paid work, or separated from other forms of vocational training and development.
  An estimated 100,000 new jobs in child care and early education and play work will be created in the coming years. As many as 60,000 people will be required to staff new out-of-school provision alone. We must ensure that the emerging Qualifications and Curriculum Authority's national framework of child care qualifications continues to be disseminated to local post-16 providers, and that those providers are supported in offering learning opportunities for workers in out-of-school child care, because there are considerable shortages of provision.
  Caroline Flint: I am glad that my hon. Friend has raised the important issue of child care workers and their training. Does she agree that it is vital that the LSC liaise with early years development and child care partnerships at local level, and enable parents to take part in the courses put on by the providers, wherever they may be?
  Ms Ryan: My hon. Friend makes the point well. Indeed, my next point was that local learning and skills councils must work closely with early years development and child care partnerships. We must identify and ensure provision for a wide range of learning opportunities for child care individuals, organisations and employers.
  LSC should be the favoured body to oversee the vocational training of child care workers and the development of family friendly policies by employers. We can be proud of the achievements to date of TECs and local education authorities working with early years development partnerships in this emerging area. I am concerned that there could be a loss in this field unless each local LSC has a specific child care brief. That would ensure that the work that I have outlined is co-ordinated, and that specialist knowledge provided by child care development teams informs the work of LSCs. I would like child care to be added to the equal opportunities brief in the functional diagram of a local LSC in paragraph 2.22 of the prospectus.
  The measures in the Bill are welcome and necessary. I particularly welcome the whole thrust of the measures to raise standards in post-16 education and of the quality agenda. I welcome the new inspection proposals. The focus on teacher performance and student achievement was and is a great strength of the Ofsted system. Post-16 education will benefit immensely from that focus, so the people who really matter will benefit immensely—our young people and our work force.
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  Too many people have a poor experience of education. Many see lifelong learning as far removed from their daily lives. Bringing together the work of the TECs and the Further Education Funding Council will mean that the false distinctions that have held back our post-compulsory education and training system will be removed. This will be the first time that we have had an integrated or coherent approach to further education and work force training post-16. That is very welcome.
  The Bill is about quality, coherence and choice, and it saves £50 million to boot. That is very good news.
  3.55 pm
  Mr. Michael Howard: The hon. Member for Enfield, North (Ms Ryan) was right to say that there is a great deal to be done. There always has been, and I dare say that there always will be.
  The House will no doubt be relieved to know that I shall resist the temptation to launch into a full-scale defence of the previous Government's record in the face of the casual and ill informed criticism that has been made during the debate. Suffice it to say that the previous Government presided over the greatest expansion ever in the number of our young people entering higher education, developed national vocational qualifications, introduced a range of innovative programmes, and created a proper framework within which those programmes could be developed. The creation of those additional opportunities transformed the lives of millions of our people.
  I want the improvement in our training and education system to continue, but I have significant reservations about the Government's approach in the Bill, which leaves a great deal to be desired. Its defects were eloquently described by my hon. Friend the Member for Maidenhead (Mrs. May). In my brief remarks, I want to concentrate on one aspect only: the wanton vandalism that the Government intend to perpetrate on training and enterprise councils.
  I have an interest to declare. TECs were established during my period of office as Secretary of State for Employment. The first became operational in April 1990, 10 years ago almost to the day, and the last was launched in October 1991. I cannot and do not claim any credit for the concept. That properly belongs to my immediate predecessor, my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler). It was his White Paper "Employment for the 1990s", published in December 1988, which proposed devolving responsibility for the Government's training and enterprise programmes to local level, and injecting into them a strong infusion of private enterprise.
  The essence of those imaginative and visionary proposals was that the local groups that were invited to submit propositions for the establishment of TECs would be led by employers. The objective of the proposals was set out in the White Paper in these terms:
  The Government hope to place "ownership" of the training and enterprise system where it belongs—with employers.
  The logic of that approach was—and is—simple and compelling.
  The training of young and unemployed people, on which Governments have rightly spent so much money over the years, has one objective: to help those being

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  trained to get and keep a job. It is local employers who provide those jobs. The direct involvement of local employers in this process—putting them in the driving seat and giving them ownership of the training—is the best possible guarantee that the training will achieve its objective of equipping unemployed people to fill the jobs that are available.
  Similarly, employers are likely to know best what help for enterprise is most likely to succeed, and which enterprise programmes are most likely to help firms that are starting or are still small and want to establish themselves and grow.
  That was a new and ambitious approach. It involved giving private sector bodies a large amount of public money with which to achieve the goals they were set. One of the most encouraging features in those early years as we were setting the TECs up was that there was all-party support for the initiative.
  In the whole of the time I was Secretary of State for Employment, the shadow Secretary of State was the right hon. Member for Sedgefield, the Prime Minister. This is what he said about TECs:
  The worst thing a Labour Government could do would be to scrap everything that has been achieved and start again.
  Labour will retain Training and Enterprise Councils but will make them more broadly representative of their local communities.
  I suppose that if the current Secretary of State had said that and it was put to him now, he would say that he was only joking. However, the Prime Minister is not renowned for his jokes, so we are entitled to assume that he was serious—as of course he was.
  The Government are now doing precisely what the Prime Minister said that they would not do: they are scrapping everything that has been achieved and are starting again. They are not retaining the training and enterprise councils, but destroying them. Is there any justification for that change of heart? I do not believe that there is.
  The TECs have many, many achievements to their credit. They have been outstandingly successful in attracting the involvement of senior, board-level members from companies involved in all sectors of the British economy, who give their time free of charge. Over 800 have done so, many of them from companies that are household names, such as BP, Mobil, Glaxo Wellcome, Rolls-Royce, Vauxhall, Marks and Spencer, Boots, Coopers and Lybrand, Royal Sun Alliance, Norwich Union—I could go on and on. The commitment and enthusiasm that they have displayed have been quite unprecedented. They have made an enormous contribution. It has truly been a public-private partnership which has been immensely successful.
  TECs have delivered year-on-year performance improvements in the main programmes for youth and adult training. They have achieved increasing numbers of jobs and qualifications for the unemployed. They have helped more than 1 million people to gain qualifications in the past five years alone, and the public cost of achieving qualification through the work-based route has been reduced by a quarter in the past three years.
  Mr. Rowlands: I am following the right hon. and learned Gentleman very closely, and he is quite right—most of us threw our full support behind TECs in those years. I did not have any problem at all with either the
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  nature or the structure of the operation—it is just that TECs did not deliver. I can only speak about my experience with the Mid-Glamorgan training and enterprise council. We thought that private resources would go into that TEC, and that it would not become a 100 per cent. publicly funded body—but that is what it turned out to be. Employer involvement in training in my area was only marginal.
  Mr. Howard: The hon. Gentleman's experience of the Mid-Glamorgan TEC is not typical. I was going to go on to make this very point. TECs have increased the sums that they were able to lever in from the private sector—the very point that has just been made—from about £100 million, in the mid-1980s, to £700 million today. That sum is coming in from the private sector to reinforce the money that the public sector has made available.
  Mr. Chaytor: I endorse the comments of my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). In my area, TECs' biggest critics are the representatives of the Engineering Employers Federation. In my recent meeting with engineering employers, they were delighted that the Government are reforming the TEC structure. I do not deny that TECs have some achievements to their name, but it would have been difficult for any institution that was so well funded not to have achieved anything. However, there is no lobby—
  Mr. Deputy Speaker: Order.
  Mr. Chaytor: There is no representation, no regret—
  Mr. Deputy Speaker: Order. When the occupant of the Chair stands, the hon. Gentleman sits. That intervention was far too long.
  Mr. Howard: If engineering employers in the constituency of the hon. Member for Bury, North (Mr. Chaytor) were not satisfied with the performance of their local TEC, the remedy was in their own hands: they could have got involved in the running of the TEC. That was the essence of the whole concept—local employers were in the driving seat, and they were able to drive developments in their own area to ensure that people had the qualifications that were needed to fill the jobs in those areas.
  I have so far spoken about the training performance, but of course TECs have become key players in local economic development. They have a solid track record there, too, of successful delivery of Government initiatives and programmes, ranging from modern apprenticeships and Investors in People—which started in my time as Secretary of State, and now is likely to be achieved by more than 70 per cent. of large companies and 35 per cent. of medium-sized companies by the end of this year—to business links.
  TECs can be proud of those achievements. They have established an outstanding track record of success. Of course it is true—of course one has to acknowledge—that because the essence of the exercise was to devolve responsibility to local level, not all of them were as good as the best. Of course not all of them were as good as they should have been. Of course that is inevitable. However, the answer to that is to improve those which needed improvement, not to abolish the lot.

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  All those achievements will now be at risk. TECs have been told that their current licences will end in April 2001 and will not be renewed. They will, to some extent, be replaced by the learning and skills councils, which will not be business-led in the same way. As my hon. Friend the Member for Maidenhead pointed out, the whole system is to be centralised, with the national Learning and Skills Council in the driving seat.
  There are also important questions to be asked about the budgets to be available to those new bodies. TECs' total income in 1997-98—the most recent year for which figures are available—was £1.5 billion. The Secretary of State has said that the local training and skills councils will have discretionary budgets of between 10 and 15 per cent. of the total LSC budget, which has been put at £5 billion. If that analysis is right, the new budget for the local councils will therefore be about £500 million—which is one third of their predecessors'.
  The Minister shakes his head. If I am wrong in that analysis, I hope that he will put it right when he replies to the debate. However, if the analysis is right, it is certainly unlikely to inspire confidence in the Secretary of State's promise to give substantial local flexibility to the 47 councils.
  It is therefore little wonder that Chris Humphries, chairman of the skills taskforce, has said:
  The proposed system does not allow sufficient capacity to offer an effective match between the skills demanded and the supply of skills. The flexibility to deal with local skills is totally inadequate. Local learning and skills councils must have sufficient authority and discretion to step outside the room and override dictates from the centre. They must have the power to substantially redress the balance if necessary to meet local needs.
  It is little wonder, too, that the same Chris Humphries, yesterday, wearing a different hat, told the Financial Times that there is disillusion with the Government's pro-business credentials.
  The truth is that, in this as in so many other spheres, the Government are introducing change for the sake of change. They are destroying what works in their desperate search for a spurious novelty. They are driven by the dogma of a determination to be different. We have seen it in their wasted three years of inaction on asylum seekers, with disastrous results, simply because they did not want to implement my Asylum and Immigration Act of 1996. We have seen it in their ludicrous decision to replace personal equity plans and tax-exempt special savings accounts with much more complicated and less successful individual savings accounts—simply because their arrangements have to be different. We have seen it in so many spheres, and we see it in the proposals in the Bill. It is irresponsibility of the highest order, and the country will pay a very high price for it.
  4.9 pm
  Mr. lain Coleman: 1 welcome the Bill and the objectives for further education and training that it embodies. I should like to concentrate briefly—I am aware that many other hon. Members wish to speak—on one aspect of the Bill that, although it comprises a relatively small proportion of the Bill's content, has wide implications for the structure of local education authority sixth form provision across England and Wales. I refer principally to clause 99.
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  The clause provides for inclusion within the range of secondary education establishments that may be supported by local education authorities an institution that is
  principally concerned with the provision of full-time education suitable to the requirements of pupils who are over compulsory school age but under the age of 19.
  In effect, local education authorities will have the opportunity to exercise much more flexibility in their arrangements for those aged over 16.
  I hope, and believe, that I can convince other hon. Members that there are vast gains to be made in the education that we offer to students over 16 through the development of more varied and flexible forms of provision. Currently there are only two alternatives in sixth form provision—sixth form colleges founded by the Further Education Funding Council for England, and sixth forms attached to LEA-funded secondary schools. The Further and Higher Education Act 1992 prevented any alternative funding arrangements from becoming commonplace. Clause 99 will amend the definition of secondary education in the Education Act 1996, so that the 1992 Act will no longer prevent such arrangements. However, significant practical gains can be secured from the alternatives, which the Bill would make possible. For some communities, there are certainly disadvantages in the alternatives available in the current legislation.
  I can give a particularly striking example of the way in which alternative provision can confer benefits. The William Morris academy in Fulham—my hon. Friend the Member for Enfield, North (Ms Ryan) was a much valued member of staff there before she became an MP—is an LEA-funded institution that takes students aged between 16 and 19 from five local feeder secondary schools. However one chooses to measure success, the academy constitutes one of the most successful examples of provision for 16-to-19-year-olds in the country. Its results have been well above the national average each year since it opened, with a 93 per cent. pass rate last year for students taking two or more A-levels.
  In terms of A-level points, the academy is ranked as the fifth-best college for 16-to-19-year-olds in inner London, which amounts to a favourable comparison with institutions working in the same educational environment. As for general national vocational qualifications, its pass rates are significantly above national rates. Last year, at foundation level—the first level of attainment in GNVQs—the academy's pass rate was 86 per cent., just under double the national rate of 44.7 per cent. The academy has also achieved excellent results in encouraging participation in higher education: 82 of 122 students studying for A-levels and advanced general national vocational qualifications progressed to higher education last year.
  When we examine the background of many of the students who enter the academy and build up a picture of its value-added success, its achievements become all the clearer. Some hon. Members may be unfamiliar with the concept of value-added analysis. It refers to the level of achievement of students who are leaving an institution over and above their potential for achievement on entry, as based on past results. It is an essential way of assessing the extent to which a school or college, or other institution, has determined a student's achievements, as opposed to the extent to which those achievements have been determined by the student's background.

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  The socio-economic composition of the academy's intake shows high levels of deprivation. According to the classic deprivation measure for education, there was a 38 per cent. entitlement to free school meals in 1999—more than twice the national average for secondary-school-age students in England. The figure had increased by a quarter since the previous year. Even with that deprivation, however, the academy has a record of enabling students who have not done well in GCSEs to proceed to higher education. Many young people who leave the academy for that purpose would not have done so without the support, encouragement, enthusiasm and commitment that they encountered there.
  Four students arrived at the academy recently with poor skills and no qualifications. After four years there, they had progressed through foundation, intermediate and advanced levels of the GNVQ course, and all four have now been able to go to university. Students have arrived with low GCSE grades, and have been encouraged to re-take the examinations and realise their potential at A-level in order to go to top-ranking universities.
  The academy has a remarkable record of success in helping students with physical disabilities to reach high levels of educational attainment. The disabilities of a number of students would have been a barrier to their studies without the encouragement, support and close attention that the academy has been able to provide.
  During its relatively short existence, the academy has developed a reputation in west London for having a supportive atmosphere and an ethos of work and study. It is significant that many students who have moved out of the borough for their secondary education return to the academy for their sixth form studies, and that out-of-borough students from areas throughout west London are attracted to it.
  The academy can be judged according to many criteria: its reputation in general, its success in strict terms of results or value-added analysis or its record of sending students from disadvantaged or low-achievement backgrounds to higher-education success. Above all, however, it is delivering the Government's widening participation agenda as reflected in Lady Kennedy's report "Learning works: widening participation in further education", published in 1997.
  Ms Ryan: I do not want to delay the House, but I want to say what a joy it was to work at the William Morris academy, and what an excellent education establishment it is—not least because of the commitment shown by the principal, the staff and the local education authority. I know that my hon. Friend played a considerable role in the authority before he became an MP. The academy's commitment to raising standards shows that it can be done.
  Mr. Coleman: I do not want this to turn into a mutual admiration society, so I shall try to make some progress with my speech.
  The academy provides a truly comprehensive service, catering for young people of all abilities and backgrounds, and adding value for all of them. Its history since its establishment six years ago constitutes an increasingly encouraging success story. When it was established, Hammersmith and Fulham fell between two stools in terms of sixth form provision. The authority had surplus
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  places, and the local secondary schools were too small to run effective sixth forms. The LEA undertook a review, as a result of which schools, parents and governors agreed that the five local secondary schools should give up their sixth forms in the interests of making a better offer to the young people of the borough aged 16 and over in the form of an LEA sixth form college.
  Unfortunately, the intervention of the Further and Higher Education Act 1992 meant that the academy would be taken away from the LEA and put under the authority of the FEFCE. To our dismay, owing to the policy of the Conservative Administration at the time, the proposal was turned down and the LEA was left to arrive at the imaginative and, as some of us thought, rather dangerous approach that created the current structure of the academy, providing services for 16-to-19-year-olds for and on behalf of its five feeder schools.
  The former Conservative Secretary of State ordered an investigation by the FEFCE of the academy's status. The investigation, which took some years, involved visits to the academy by many individuals and agencies, including two FEFCE inspections. I am happy to say that, as a result, everyone concluded that—as local people already knew—the William Morris academy was providing an excellent education for its students. The FEFCE recommended to the Secretary of State that it should not be incorporated as an FEFCE institution.
  I am delighted that clause 99 will regularise the academy's position and secure the benefits that it confers to its feeder schools, to students in Hammersmith and Fulham and to the many six-formers from the wider community in London who choose to attend it. I hope that it will continue to provide high-quality sixth form education in Hammersmith and Fulham for many years.
  Clear lessons can be learned from the history of the William Morris academy for the purposes of our operation of provision for 16-to-19-year-olds. The academy can give students the benefits associated with both colleges and school sixth forms. The advantages of a college atmosphere are both the independence that a school would not provide, and the benefit of wide curriculum choices and contact with a large number of fellow students. Students also have access to the pastoral care that would normally be associated with schools, and can benefit from close links with feeder schools and the local community.
  That is especially relevant to the environment in which the academy operates. The feeder schools from which students come—some of which work in a very challenging inner-city environment—would not otherwise have been able to sustain the quality of sixth form education that allows students to progress in this way.
  Collective sixth form provision is a vital option for many communities, but this successful experiment would not have been possible unless the LEA had chosen to function as a good LEA should. The local authority worked in partnership with the schools, the parents, the community and, most importantly, the pupils to secure the most appropriate provision.
  Hammersmith and Fulham LEA's flexibility required a creative and imaginative approach. Clause 99 will allow other local authorities to do the same. The Bill will enable the success of William Morris to be shared throughout the country and its good practice to be spread to other areas, where such an arrangement would be beneficial. It is particularly likely to be helpful in a conurbation that has

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  several secondary schools reasonably close together, all with small sixth form provision. In view of the resounding success of the William Morris academy in achieving high standards for its students and promoting the objectives of widening participation and furthering social inclusion, I hope that it will be used as a model for other LEAs to emulate.
  4.21 pm
  Mr. Tim Collins: It is a particular pleasure for me to speak soon after my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), because I had the great privilege of working as his special adviser for two years while he was Employment Secretary, when he drove through with immense energy and dedication the creation of the national network of training and enterprise councils. I hope that he will forgive me for saying that I doubt whether any other Secretary of State could have created that network as rapidly and as successfully. He was right to point out that although the TEC system was imperfect, as all systems are, it had many historic achievements to its name and it is much to be regretted that the Government appear determined to sweep aside so much good work rather than bringing the worst up to the standard of the best.
  I shall make a few general observations and then a constituency point. The subject of learning and skills is important and the Government are right to address it. They have rightly recognised that we cannot stand still. There has to be a process of constant improvement—indeed, to use a new Labour word, modernisation. These things have to change all the time. Businesses are particularly conscious of the fact that arrangements have to be altered and qualifications need to change.
  The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) talked about history and the training that used to be provided by large manufacturing companies. Whatever the political colour of any Government in this country or any other modern western country, the era of the large manufacturing company is probably drawing to its close around the world. Training has to reflect that.
  We have to modernise and provide training in new skills and different aptitudes. The idea that large numbers of teenagers will go to one company and stay there for the whole of their working lives is—sadly, in many ways—increasingly absent from the life cycles of people in this country. We need lifelong training. Skills that are at the cutting edge in one decade may be increasingly outdated by a second decade and wholly useless by a third. However, that should not mean that those who have acquired one set of skills are thrown on the scrap heap. On the contrary, they should be encouraged and helped by private sector enterprise and by the Government to acquire new skills so that they can contribute to the wider community for their own sense of dignity and so that the economy can take advantage of all the talents of all the people across the United Kingdom.
  Given how economies and businesses are changing, it is regrettable that the Bill will marginalise much of the private sector-led success of training and enterprise councils. The Secretary of State said that 40 per cent. of the membership of local learning and skills councils
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  would be provided by those with business or commercial experience. The implication was that that was a great concession to the business community and in exchange he looked to them to improve their investment in training and their commitment to the development of skills.
  However, that is not a great concession. There are two problems. First, why did the Government resist amendments in another place that would have written the 40 per cent. requirement into the Bill? If that is their policy, why do they resist having it spelled out in statute? Secondly, 40 per cent. representation is not what the business community is used to having on training and enterprise councils. TECs were essentially business-led and the majority of the board came from the private sector.
  Mr. Boswell: I do not dissent from what my hon. Friend has said. Does he agree that the suggestion that the 40 per cent. business involvement should include people who might have retired from business, albeit recently, is different from the situation with TECs, in which participants were required to be actively employed at a senior level in the businesses that they led?
  Mr. Collins: My hon. Friend is entirely right. I was coming to that. The nature of the business and commercial experience in question is deliberately left a little vague, whereas TECs, as he rightly said, were designed to bring active members of the local business community in to provide leadership of the business commitment to the success of the organisations. There will undoubtedly be a huge amount of public-spirited commitment from employers, who are not necessarily party political figures. They will work with any Government, whatever that Government's complexion, but senior business people have a huge amount of pressure on their time and they will want to be involved primarily with organisations in which they feel that their time is well spent and that the business ethos is in charge, not a bolt-on. I fear that there may be a presumption among local business communities that their relationship with LSCs is second class compared with the relationship that they had with TECs.
  That is not an imaginary consideration. The Minister will know that the Confederation of British Industry and the Institute of Directors have said that they want majority business representation on LSC hoards. We have not heard why the Government rejected that specific request from the main business organisations in the country. I hope that the Minister who replies to the debate will address that point, because it is important to understand why the Government have decided not to follow the strong request of the business community.
  My hon. Friend the Member for Maidenhead (Mrs. May) talked about centralisation. I quoted the explanatory notes on that, but clause 20 is even more explicit. It says that a local learning and skills council
  must perform in relation to its area such of the Council's duties—
  that is, the national council—
  as the Council specifies.
  It also says that a local council
  may exercise in relation to its area such of the Council's powers as the Council specifies.
  That is a clear charter for centralisation.
  My right hon. and learned Friend the Member for Folkestone and Hythe will recall that when the TEC network was being established, there was constant

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  pressure for more flexibility, more autonomy, more of a chance to adjust from national frameworks, guidelines and specifications to take into account differing local circumstances. That will mean differences around the country. That is the point of having local autonomy and giving people the chance to innovate and experiment and try out different approaches. That is clearly what local business people who are involved in TECs want.
  The Bill is a retrograde step. The Government have listened, in a way I am delighted to say that my right hon. and learned Friend did not, to the inherent bureaucratic pressure that will always argue in favour of centralisation and uniformity and stamping out differentiation. Clause 20 suggests that the Secretary of State has listened too much to the siren voices in his Department who say that if he grabs all the power into the hands of the people at the centre, they will iron out all the little differences and remove all the distinctions so that everything is the same everywhere. The United Kingdom is not the same everywhere. That is why it was sensible to have a network that delivered locally.
  The hon. Member for Sheffield, Hallam (Mr. Allan) said that the answer was to tie the councils in with the regional development agencies and have regional differentiation. Even that does not take sufficiently into account the very different circumstances that can prevail within regions. To take my own region, the north-west, the constituency that I represent in Cumbria is enormously different from inner-city Merseyside or Manchester. For that matter—because in Cumbria there is huge schizophrenia about whether it should be regarded as part of the north-west or north-east—it is also massively different from Newcastle.
  The idea that by concentrating power and decision making at regional level we would adequately take into account the differences between different parts of the country is wrong. That is why it was sensible to have a TEC network that was genuinely local and that in many cases took decisions on a county or even a sub-county basis, reflecting the greater distinctions.
  Mr. Cotter: Presumably, that is why the Conservative party does not support the concept of the regional development agencies, but our party believes that RDAs will work properly down to local level. That is the idea of RDAs. They should represent the local areas within their area of responsibility, so we do not accept what the hon. Gentleman is saying, although I listen to it with interest.
  Mr. Collins: I am grateful to the hon. Gentleman for listening with interest to what I am saying. For my constituents in South Lakeland, the north-west RDA has been a classic example of all mouth and no delivery—even more specifically, all committees and no delivery.
  Mr. Boswell: Would my hon. Friend like to add to his collection the thought that I can leave my home, travel exclusively within the east midlands until I reach my regional seat of government in Nottingham and clock 100 miles in my car, by which time I could have gone to four or five other regional headquarters, including the capital, which are considerably nearer than that?
  Mr. Collins: My hon. Friend makes his point admirably. It is regrettable that we are moving from a
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  system of genuine autonomy, with 72 or so TECs, to what will be, even at best, a much more centralised system, with 47 local learning and skills councils. By definition, on average, if we move from 72 to 47, areas will be roughly twice as large.
  As we have seen, under the Bill there will be nothing like the level of autonomy that there was under the TEC system. That is to be regretted, although I recognise that the Government have approached the matter with the purest of best intentions and are keen to see an enhancement of learning and skills. The Government are acting not malevolently or maliciously, but on profoundly misguided advice.
  My next point concerns another element that is inherent in the Bill. There will be a shift from TECs, which were private sector bodies, to a state-delivered system. I congratulate the Minister, who has previously been regarded as the absolute apotheosis of new Labour: he is supervising the first explicit act of nationalisation by the Government. There can be no doubt about it. TECs were private sector companies and the new system will be entirely within the public sector.
  If there is any doubt about that, I refer people to page 46 of the explanatory notes, which talks about the effects of the Bill on public service manpower. It states:
  There will be an increase in the number of staff employed in the public services because some of the activities of the LSC and the ALI were formerly conducted by private companies.
  In addition to centralisation, we have nationalisation.
  Surely even this Government would not openly advocate nationalisation. Many has been the occasion when they have openly rejected it, yet all those reasons should apply here. We know that public sector control, ownership and delivery simply do not work in a business context. At the heart of business competitiveness and training for the future, we see an act of nationalisation. That is to be regretted and is against what the Government said they would do when they were in opposition and, indeed, against what they have continued to say that they were doing in office.
  My right hon. and learned Friend the Member for Folkestone and Hythe rightly drew the parallel with what the Prime Minister said when he was the shadow Secretary of State for Employment before the 1992 general election. However, I remind him that the picture continued into the following Parliament.
  The Investors in People programme was delivered by TECs. It continues to be a huge success. It has been one of the great achievements in training under both Administrations—before 1997 and after.
  In 1995, I well remember that the Labour party announced with great fanfare that, as an institution, it would apply for Investors in People status. It invited local TECs to send inspectors round to validate Labour's internal training programmes. With great celebration, it unveiled the TEC Investors in People award outside what was then Labour party headquarters on Walworth road.
  Even in the previous Parliament, there was no remote indication that the Government, on election, would abolish the TEC network. Quite the contrary; Labour was going out of its way to give the impression that it subscribed to all the principles of the network and to all the things that TECs were trying to do.

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  I know that many business people throughout the land feel, I regret, somewhat cheated. They thought that, when Labour came in, it would not abolish TECs. They thought that it would seek to modify them, to build on their successes and, no doubt, to alter them at the fringes, but not to abolish them outright.
  Sadly, there is no doubt that abolition is what the Bill is about. Again, I turn to my favourite text, written by the Government in such admirably clear language. I cannot believe that it managed to get past Mr. Campbell and Downing street. Page 5 of the explanatory notes states clearly:
  The Government issued contractual notices to TECs in England in July 1999 informing them that their licences will expire on 25 March 2001. As a result, no organisation will be able to trade as a TEC.
  That is outright abolition. There are no ifs, buts or maybes. It is an act of wanton vandalism, as my right hon. and learned Friend said. It is not a modification or reform of TECs: It is abolition.
  Mr. Hilary Benn: If the hon. Gentleman is correct to say that it is a wanton act of vandalism, why has the CBI welcomed the Bill?
  Mr. Collins: As the hon. Gentleman will know, the CBI has said specifically that it wanted a majority of employer representatives on the learning and skills councils. The question to which I still await an answer from the Minister is why the Government have specifically rejected that advice.
  The hon. Gentleman will know that the CBI on many occasions welcomed the establishment of the TEC network. It made it clear throughout the 1990s that it would not wish TECs to be abolished. Of course, the CBI recognises that the Government can decide to abolish TECs. It is full of business realists and will roll with the world as it is, but there is no doubt what their preferences are: an employer-led private sector organisation of the sort that the Government are abolishing, not the state-delivered system.
  I mentioned that I would make a constituency point. The Bill deals with the future of the Further Education Funding Council and the new arrangements for that sector. There are two points. First, my hon. Friend the Member for Maidenhead rightly addressed the concern that a number of us have: the Government seem to have a not particularly well hidden agenda to reduce the number of school sixth forms.
  When my hon. Friend set out the strengths of the sixth form-delivered system of education, particularly in rural areas, a number of Labour Members expressed strong disagreement. They made it clear that they were happy to move towards a system of smaller numbers of larger deliverers of such organisational skills. They did not mind too much if rural sixth forms were reduced in number.
  My hon. Friend gave many excellent reasons why that was to be regretted, but another should be brought up. Many of the best teachers in secondary schools find teaching in sixth forms the most exciting, intellectually challenging and desirable part of the job. If we take that away from them, undermine it or situate it on a different site, making it more difficult for them to do as much of
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  it as they have, we will further demoralise the teaching profession, which, as we all know, under successive Governments, has been sufficiently demoralised as it is, with all the paperwork and so on that it must deal with. That would be much regretted.
  Secondly, I mention the way in which colleges of further education are funded. My local college, Kendal college, is at the heart of a very rural area. I was talking to its principal, Michael Wright, a little while ago. He expressed great concern about the way in which rural colleges of that sort are disadvantaged, compared with urban ones. The way that he put the point was to say that, because they had been very successful through most of the 1990s in attracting increasing numbers of students, they now find that they cannot access much of the genuinely welcome additional resources identified by the Government because they do not have enough of the right sort of students in their catchment area.
  That is a genuine concern for rural colleges. I am worried that the new arrangements set out in the Bill will bring about even more centralisation and uniformity. As a result, the small rural colleges—which, by definition, form a minority within the overall pattern—are likely to find themselves more disadvantaged.
  I end by saying that I believe that the Government are genuinely trying to get this reform and modernisation right, and that some elements in the Bill are welcome. However, many other aspects betray the natural instincts of a party which—all the new Labour rhetoric notwithstanding—still believes that greater centralisation, state involvement and public sector control offer better provision than services that are led by the private sector and delivered locally. Such services were very successful in the 1990s; if they had been given the chance, they could have been the platform for even greater success in the first decade of the new century.
  4.41 pm
  Mr. George Stevenson: I welcome the Bill, whose proposals I consider necessary.
  The first TEC was established in 1990, as has been noted. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who unfortunately has left the Chamber, seemed to be less upset at the Government's intention to change things than at their temerity in wanting to change what he had put in place. He seemed to be digging a large hole, and he should have stopped digging before his speech finished.
  1 shall concentrate on TECs, but I shall also mention the Further Education Funding Council, established in July 1992 by the previous Government on the basis of a White Paper published in 1991 entitled "Education and Training for the 21st Century". The structure thus established did not produce what the country needs in terms of education and training for this new century. That is why I consider the Bill both necessary and timely.
  The Government have recognised the serious flaws in the present system. I hope that my remarks will make it clear that I do not share the enthusiasm for TECs evident in the amendment and in the contribution from the right hon. and learned Member for Folkestone and Hythe. The Bill makes positive proposals for higher and further education, training, co-ordination, organisation and funding.

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  Some of the measures associated with TECs remain welcome. For example, the Investors in People awards are well respected, but the record of TECs with regard to training and skills can best be described as patchy. That failing has resulted from the fundamental flaws in the way that TECs were set up.
  The first problem was that the previous Conservative Government were so blinded by dogma that they set up TECs as private companies. They were not to be connected, even in a formal way, with the public or the public sector, but were to be separate, private companies—even though they are funded almost totally by the public purse.
  A full six years after the first TEC was established, the Select Committee on Education and Employment stated, in its 1996 report, that it was
  difficult to gain an overall impression of the scale of TEC funding and activity because they are so fragmented.
  I am sure that I do not need to remind the House of which party was in control in 1996 and to which party a majority of members of that Committee belonged. A full six years after the great innovation established by the right hon. and learned Member for Folkestone and Hythe, Conservative Members were admitting that no one knew where TECs were going, or how they were using their money. The Government are therefore well justified in wanting to get to grips with that unacceptable situation.
  My experience is that nothing much has changed as we begin the 21st century. In my area, the demands of industry for training and retraining have not been met, and the skills gap is growing wider all the time. Recent figures show that the TEC in my area for years has been sitting on a drop-out and non-completion rate of 40 per cent. in its youth training programmes.
  TECs have been notable for two other reasons. It is right that enterprise and enterprise activity should be given due prominence in training, but there has been a tendency to give it too much emphasis, at the expense of training. It is nice to have photographs in the press of presentations of Investors in People awards, and of other activities that colleges—quite rightly—undertake to gain public attention, but the day-to-day necessity of meeting, week in and week out, the training and skills demand of local industry and business does not get the headlines.
  TECs have also been notable for building up their reserves which, in my area, amount to some £5 million. Given the gaps in the training on offer and the increasing size of the skills gap, it is legitimate to wonder what TECs are doing with such large amounts of money. When I asked that question in my area, I was told that it had to do with the TEC' s credibility as a private company. In 1998, the Public Accounts Committee criticised those levels of reserves.
  The FEFC decides on recurring and capital funds, and how they are allocated to individual colleges. It has a duty also to monitor the use of those funds and the financial health of colleges. They have not exercised that responsibility satisfactorily. We have seen well publicised results of that, and the major further education college in my area has suffered.
  There has been an expansion in the number of students coming into the sector, but that may have had more to do with the financial health of the colleges than with the needs of business, industry, students and local communities.
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  Those vital aspects have suffered as a result. The Government proposals for a new framework for post-16 education and training are of profound importance.
  I offer the Government some warning signals. I know that they do not intend to do this, but we do not want the creation of TECs mark II. There are some worrying signs that that may be a danger. The local learning and skills council in my area is based on the same geographical area as the TEC. I recognise that it might be appropriate in some circumstances to identify "sub-regional" on a county basis, but that should not apply everywhere.
  I appreciate the Government's determination to reduce the 72 TECs to 47 local learning and skills councils. However, those councils are critical, as they must work within a framework set down by the national Learning and Skills Council. That delivery, how resources are used and how the local learning and skills councils raise participation, attainment and skills in their area are vital to the process.
  The Bill, the explanatory memorandum and the excellent document produced by the Library all contain references to the word "local", with reference to local needs, the local labour market, local FE colleges, varied local priorities, local development and innovation adapted to local needs—all the emphasis is on local. However, we need to define what we mean by local.
  Staffordshire is divided into north Staffordshire and south Staffordshire—completely different areas. North Staffordshire is industrially based, and has had massive changes in its economic base. Some 94 per cent. of students in local FE colleges come from the north Staffordshire conurbation. In south Staffordshire, about 90 per cent. of FE students come from that area. There are distinct local needs in an area such as Staffordshire, which has about 1 million people. That will strike a chord with many hon. Members.
  I am not advocating that we increase the number of councils, but it is essential that local learning and skills councils are monitored carefully. It must be made clear that councils must exercise flexibility that truly reflects local needs, which may differ widely within their areas. That is essential.
  Although we have heard much from the Opposition about how important it is that training and skills organisations are business led, we have lessons to learn on that. I believe that, for dogmatic reasons, the previous Government set up TECs as private companies. In addition, at a time—the late 1980s and 1990s—when business and industry had effectively opted out of training, the previous Government gave the helm to the very people who had shown by their record that they were not really interested. That is why the previous Government are to be condemned. Businesses wondered what they were doing, and why, and that was a profound flaw.
  When we talk about 40 per cent. of the membership of the local learning skills councils having substantial business and commercial experience, let us not, for goodness' sake, make the same mistake as the previous Government. We must not be beguiled by the hon. Member for Westmorland and Lonsdale (Mr. Collins), who reiterated the old, wasteful argument about public bad, private good. There should be a balance. I certainly reject the idea that the only way in which those essential services will be effectively delivered is by giving the

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  private sector the lead. Many people in the non-private commercial and business sector, the public sector and the voluntary sector have the expertise to make this work.
  I congratulate the Government on the Bill. My right hon. Friend the Secretary of State has had the courage, in spite of vested interest lobbying, to recognise that the best interests of the country and our young people must come first. We will not go down the dogmatic road that was the tragedy of the previous Government by thinking that the only way in which the system will work will be to pass the whole shooting match over to the private sector and create private companies.
  I wish the Bill fair speed. I look forward to the day that it becomes an Act, so that the social and economic well-being and requirements of this country and its young people in the 21st century can be achieved and met.
  4.57 pm
  Mr. Desmond Swayne: Notwithstanding the remarks of the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), I welcomed the contributions of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and of my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) in their robust defence of TECs. Their remarks tied in with my experience of working with TECs in the west midlands—not as an employer, but as a Territorial Army officer, strangely enough.
  Notwithstanding the achievement of TECs and the relative stability of the system, I found myself in sympathy with the early remarks of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), although I do not share his perspective. I come to the question of training as a profound sceptic. However good the partnership may be between the public and private sector and between employers and providers of training services, I do not believe that anyone can foresee with any accuracy industry's training requirements.
  The raw material for a well-trained work force is a well-educated work force with a great deal of self-discipline. We require people who are sufficiently well educated to be retrainable at several points in their working life. The best mechanism for delivering that is the school. It is the best way of providing the core training that the work force will require is to be flexible.
  That brings me to another concern about the Bill—the future funding of sixth forms. Those concerns were legitimately highlighted by my hon. Friend the Member for Maidenhead (Mrs. May) and by the hon. Member for Sheffield, Hallam (Mr. Allan). I have a fondness for sixth forms; I believe that they are the best mechanism for educating young people post-16. They give them an additional perspective—the ability to administer their juniors. That is of profound importance. It gives sixth formers an experience that they would otherwise lack. I know that hon. Members find that funny, but it is a traditional way of educating young people and giving them immense experience and self-confidence.
  I dislike the Bill, but for two clauses added in the other place. First, there are arrangements to put an end to ballots on grammar schools, which bring a truce to that battlefield and stability that is long overdue. Secondly, I have, since coming into the Chamber this afternoon, developed a
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  fondness for clause 117. I approach the clause as a sceptic because I have always doubted the advisability of teaching such things at all at school. The record has not been entirely successful. As I read the Bill, however, and found out what it actually represents, I have been increasingly admiring of it.
  Clause 117(2)(a) says that pupils will
  learn about the nature of marriage as the key building block of society and its importance for family life and for the bringing up of children.
  That is entirely unexceptionable and desirable. Subsection 2(b) says that children should
  learn about the significance of stability in family relationships.
  Who could be against that?
  Subsection 2(d) is what particularly impressed me, however. It seeks to ensure that children
  are protected from teaching and materials which a reasonable person would regard as inappropriate.
  That is an important requirement, and one that the Prime Minister supports. On his recent visit to Ayr for the by-election, the Prime Minister was—I cannot find the appropriate word—
  Mr. Allan: Forthright?
  Mr. Swayne: Indeed. He was very forthright in his criticism of what he regarded as the propaganda campaign mounted against his proposals. The Prime Minister said:
  I've just seen the posters here in Scotland. I don't think I've ever seen a more astonishing campaign in all my born days. People are being told their children will have to play—what was it?—homosexual role playing in school. No wonder parents are concerned. It's nonsense. No child is going to be given gay sex lessons in school. Not under this Government now. Not ever."
  I believe that the Prime Minister meant that, and that he believes it to be true, but he is wrong.
  I know that the Prime Minister is wrong because the leader of Hampshire county council, Councillor Ken Thornber, told me two weeks ago of a case in Hampshire where precisely that had taken place. I have with me a document—"A Practical Guide to Challenging Homophobia in Schools"—produced by the health promotion service in Avon. This pack for teachers specifies, in the form of lesson plans, precisely the role-playing that the Prime Minister is so against and has said must never happen. He is right: it must never happen, but here, in my hand, it is.
  I draw the House's attention to "Extra Lesson (I)", in which teachers are enjoined to attribute roles to different members of the class as follows:

  a 16 year old disabled heterosexual Woman,

  a 16 year old Asian Lesbian,

  a bisexual fourteen year old Young Woman,

  a female sex industry worker—

  I think that that is newspeak for the oldest profession—

  a male to female transgendered person,

  a married Man who has sex with other men in secret,

  a 62 year old Lesbian Woman,

  a transvestite cabaret artist,

  a Chinese bisexual 15 year old Young Man,

  a married Woman who has sex with other women in secret,

  a Black Disabled Lesbian who is also a wheelchair user,

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  an Out Lesbian mother,

  a 16 year old White Gay Man,

  a Middle aged Gay Man,

  and

  a White Lesbian Teacher.

  One is tempted to ask: what of the needs of the Aztec community in South Nerdley? Why has it been omitted from this litany of roles? Extra lesson plan II adds, for spice, a man "done for cottaging"—whatever cottaging may be—a "Bisexual Granny" and an "S & M Heterosexual Woman". Those roles are to be attributed to members of a class in a lesson so that they can fulfil those roles and have some understanding of the subject matter.
  Mr. Graham Brady: Does the list also include playing the role of an ordinary married couple? Does that feature anywhere in the lesson?
  Mr. Swayne: My hon. Friend is entirely right to require me to have some balance in my remarks. I did not want to try your patience too much, Mr. Deputy Speaker, so I omitted some of the more mundane roles suggested. For balance, it is right to say that the roles of "Catholic Priest" and "Nun" are also available for playing, should children so wish. This sort of guide is precisely what the Prime Minister, rightly, wants to stamp out. Therefore, I was shocked by the Secretary of State's determination—he made himself absolutely clear in his opening speech—to remove the one feature of the Bill that I have grown to love as I have sat here—clause 179, which will get rid of this filth and nonsense. For that reason alone, I will vote to deny the Bill a Second Reading.
  5.7 pm
  Mr. Michael J. Foster: In following the hon. Member for New Forest, West (Mr. Swayne) all I can say is: thank God he is in opposition.
  I begin by declaring my interest in the subject. I gained my professional qualifications from a further education college and I taught for six years at a further education college in the city of Worcester. In addition, I am secretary to the all-party parliamentary group on further education.
  Today I am delighted to speak in support of the Bill and to receive the welcome news, first, that sixth form colleges and further education colleges will also get direct grant funding similar to that for schools announced in the Budget last week, and secondly, that from September 2000 Worcestershire will be an area that gains from the educational maintenance allowances. I have been in favour of that since my sixth form days and I am delighted that my constituents will benefit from it.
  I remember when the Further and Higher Education Act 1992 passed through the House. I was teaching in FE at the time. I welcomed the fact that colleges would gain incorporated status and be freed from local education authority direction. If, Mr. Deputy Speaker, you had worked under the Conservative-controlled Hereford and Worcester LEA and the rulings of Dr. David Muffet, you too would have been glad to get rid of the control of the county council. Suffice it to say, all our hopes that funding for Worcester college of technology would rise to meet the national average were dashed because of core funding cuts under the previous Administration.
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  I shall press the Minister on a few points and raise some of the points that Opposition Members have also commented on. I acknowledge the longstanding interest of the hon. Member for Daventry (Mr. Boswell) in this subject. With all due respect, I found his article in The House Magazine of 14 February a little hard to take, particularly his comment that there is
  a marked democratic deficit running through the Bill.
  I found that a bit rich because it was the process of incorporation that removed democratic accountability from FE colleges. There was no LEA accountability and, in my experience, no local authority representation on boards of corporations post-1992. Indeed, where staff governors had been directly elected to the governing bodies of FE colleges, they were booted out. I am pleased that local authority and staff governors are now on the corporation of my former college, even though they were selected by the college rather than directly elected.
  Mr. Boswell: I am grateful to the hon. Gentleman for his kind remarks about my article and for doing me the courtesy of reading it.
  Is it not true that staff governors have been reintroduced under the current legislation? It would thus not have been impossible to include them previously. Will the hon. Gentleman tell the House what additional democratic control is imparted by the proposed legislation to a situation about which he has already expressed concern because of the alleged democratic deficit after the 1992 Act?
  Mr. Foster: My point about the hon. Gentleman's article is that it is a bit rich for him to decry the democratic deficit when he was party to its creation. I accept that the current legislation allows for staff governors, but colleges' interpretation of it enabled them to get rid of such governors. The then Government were warned about that; for example, by my former union NATFHE—the National Association of Teachers in Further and Higher Education. However, those warnings went unheeded.
  I want to press the Minister on consultation with teaching unions and teachers. Will the new LSCs be able directly to consult, nationally and locally, teaching professionals, so that their concerns are taken on board and so that some of the abuses of the past will not become future failures?
  I hold regular meetings with the principals of sixth form colleges in the west midlands—organised by the excellent principal of Worcester sixth form college, John Tredwell. The principal of King Edward VI college, Nuneaton, drew my attention to a matter that affects voluntary-aided sixth forms. Will the Minister confirm that the Bill deals with the anomaly that voluntary-aided sixth forms do not have incorporated status? That holds them back; they are not able to borrow and invest in facilities.
  In the article to which I referred earlier, the hon. Member for Daventry wrote:
  Our major single concern is that…it—
  the Bill—
  may further increase bureaucratic pressures on those actually teaching and swallow up some of their funding.
  The LSCs replace three funding systems and more than 250 funding bodies by one route. That is hardly a sign of greater bureaucracy. The reforms will free up savings of

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  at least £50 million a year—money that will be spent on learners. If the hon. Gentleman wants evidence of extra bureaucracy, he should ask colleges the following question: how many human resource managers, college accountants, property managers and administrative staff were based in colleges before incorporation, and what was the number afterwards? If Conservative Members are really so worried about bureaucracy, why has it taken them about eight years to notice it?
  I was disappointed by the remarks made by the hon. Member for Maidenhead (Mrs. May). She mentioned grammar schools and section 28, but she did not mention the current position of lifelong learning and educational achievements in the UK. No wonder—it makes depressing reading. The hon. Lady did not mention the 7 million adults who have no qualifications at all. Not once did she make a point about the one in five adults with numeracy and literacy problems, nor about the 170,000 16 to 18-year-olds who are not in education or training and who do not have a job. The delivery of the hon. Lady's speech and the points on which she concentrated were wide of the mark in a debate on such an important Bill.
  Those target groups are the ones it is most important to recruit for lifelong learning. During the past few years, marketing efforts have not been directed at those groups, but at those who already participate in education. I have seen at first hand the glossy prospectuses and the endorsing advertisements and leaflets that colleges produce. Indeed, as a course director, I have produced many myself. They were designed to show what a wonderful college I taught at, what great staff we were and how much students would learn from studying our courses.
  All that was true. However, the marketing did not seek to address the need that I have described of the many; it served the self-interest of the few. I do not blame teachers and colleges for that. The demand-led funding formula, post-incorporation, drove colleges in that direction when their core funding was cut from them. It is now the job of those marketing skills to be turned away from competition and towards widening participation.
  The Government have set a challenging target of increasing student numbers by 800,000. That represents a massive extension in the availability of education and training. However, given the position that I outlined earlier, that number is only a fraction of those in the target group.
  I wish to draw to my hon. Friend the Minister's attention a case of successful lifelong learning. Last week, I visited Jaguar cars to see the Jaguar employee development programme, which has run since 1993. I met staff and workers, and I am grateful for the time and effort that they put in. In particular, I met people such as Ken Wilson who have made the scheme work. It is run along the lines of the Ford employee development programme, with employees offered funding if they wish to undertake education, training or development in their own time. Courses on offer for hourly-paid workers include advanced car driving, bricklaying, computing, degree and Business and Technology Education Council courses, electronics, languages, supervisory management, teaching certificates and welding.
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  It was reassuring to hear from the workers that reskilling works. Workers who started with no qualifications whatever have successfully completed their degrees and are now considering whether to take a master's course. I have always believed that if people get a successful taste of education—at whatever level they start—they will be attracted to lifelong learning. The workers whom I met last week and the evidence that they supplied me with totally confirm that view. The scheme is clearly a success. It is supported by the company and the trade unions, and it is worthy of Ministers' attention.
  It is increasingly obvious that lifelong learning will not be formal classroom-based learning, but will be done at the time, the place and the point of access that workers need. That presents new challenges that the Bill, with its emphasis on partnership and collaboration, is well placed to deliver.
  One challenge ahead of us is to improve not only the quantity, but the quality of provision. Professionalism and the highest standards possible must apply to all providers of education. The discussions surrounding a mandatory teaching qualification for all further education teachers are welcome—I speak as one myself—but it should be extended to all providers. I would like the Minister to assure the House on that.
  In addition, there is a role for a professional body for those delivering lifelong learning. It should sit alongside the General Teaching Council and the Institute for Learning and Teaching for higher education. I have interviewed Lord Puttnam and I know that he will make a wonderful advocate for teachers. Lifelong learning needs a similar advocate with the same views about education.
  It would be remiss of me not to mention salaries in further education. I am genuinely concerned that the salaries of FE staff should not fall behind those of lecturers in higher education or teachers in schools. If FE is going to deliver top-quality teaching, we will need high-quality teachers who are rewarded properly. In return, they should seek to deliver continually improving teaching.
  Returning to partnerships, collaboration offers students a broad curriculum, with more courses and subject combinations. Courses can be provided more economically, particularly with regard to small classes. On the subject of class sizes and the Opposition's concern about sixth forms, I should like the Minister to give assurances on the relationship between school sixth forms and sixth form and further education colleges. In my experience, schools with sixth forms have not been particularly keen to allow colleges access to potential students—those who are in year 11.
  Mr. Boswell: I appreciate the hon. Gentleman's courtesy in allowing me to intervene again. Does he agree that one of the most important factors in brokering what is always a very sensitive relationship between co-existing sixth forms and colleges is access to independent guidance? It is particularly important that all young people have the opportunity to receive independent, out-of-school advice on the best life choices for them so that they can make that decision for themselves.
  Mr. Foster: I do not disagree with anything that the hon. Gentleman has said, but numerous complaints were

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  made to me about the barrier to access, and I should like the Minister to assure me that schools with sixth forms will in future be more open about the diversity and choice in local provision. It is the students who are important in the context of this Bill, not the structure.
  Mr. Rowlands: My hon. Friend has touched on an important point, and I am listening with great care. The key is to remove the funding distortions, which in many ways determine choice and lead to defensive arrangements as between schools and colleges.
  Mr. Foster: The Government have given assurances and sought to tackle issues concerning the funding disparity between sixth forms in schools and sixth form colleges.
  The hon. Member for Maidenhead made a slur on sixth form and FE colleges when she said that she believed that sixth forms in schools give better pastoral support. I hope that she will now retract that statement or at least modify it.
  Mrs. May: I did not say that FE colleges provided less adequate pastoral support. I said that school sixth forms provide services and support different from those of FE colleges. School sixth forms offer education services such as sporting facilities and the opportunity to be involved in drama, which are not generally available in FE colleges. I hope that the hon. Gentleman will accept that there are circumstances in which pastoral support in FE colleges is different—
  Mr. Deputy Speaker: Order. I cannot allow the hon. Lady to make such a long intervention. Back Benchers are waiting to speak.
  Mr. Foster: I would welcome it if the hon. Lady came with me to Worcester sixth form college, which has excellent sporting facilities and all the pastoral support that she would want it to have. Having taught at Worcester college of technology and provided pastoral care, I was extremely concerned that she should correct her comment about that provision.
  On partnerships and collaboration, I should like lifelong learning to offer a seamless service for students. They should see no difference when they move from adult and community education to further education and then to higher education. With that in mind, I am concerned about potential problems in the collaboration between colleges and universities, and I want those problems minimised.
  Locally, I am pleased to say that the relationship between Worcester college of technology and University college Worcester has improved enormously, but tensions can arise when they are competing for student market share. Will the Minister consider giving local learning and skills councils a statutory duty to consult local universities as a way of ensuring that there is collaboration?
  On a positive note, learning partnerships seem to have captured the imagination of local stakeholders. A couple of weeks ago, my hon. Friend the Under-Secretary of State attended the first lifelong learning conference for Worcestershire. More than 150 people attended that debate, and not all of them to hear my hon. Friend's speech. The meeting demonstrated the huge interest in and potential for getting things done at a local level. It
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  involved collaboration from all quarters. It was refreshing to be involved in such a positive meeting, and it augurs well for the future of lifelong learning in Worcestershire.
  Further education has been undervalued in the past. I have chastised hon. Members for referring to FE as a Cinderella service, even though I know that their sentiments are well meant. There is much good work in FE and I believe that the Bill seeks to improve upon it. If we are seriously to tackle social exclusion and if we want a highly skilled, highly trained, highly productive and highly paid work force, we must fully embrace the concept of lifelong learning, and I believe that the Bill is a perfect way to make progress.
  5.26 pm
  Mr. Gordon Marsden: I support the Bill because I believe that it represents bold enterprise. It is a modernising measure that is in tune with what we are trying to do as a Government. I welcome it also because it is an ambitious first attempt to deal with diversity and to develop an integrated system in further education and other areas.
  For me, the Bill has four key aspects. The new Learning and Skills Council and its 47 subsidiaries will support education and training. They are there to promote enterprise and employability. They will be in place to deliver skills to business and crucially to regenerate economies on a regional basis and deliver a lifelong learning framework.
  It is highly appropriate that it should be a Labour Government who bring forward this comprehensive measure. The Labour party brought the country the Open university. It also brought forward the university for industry. Throughout the century of the Labour party's history, from Kier Hardy through to Neil Kinnock's great speech in the late 1980s and on to my right hon. Friend the Prime Minister's own concentration today, it has been dominated by the vision of education its outreach to the many instead of the few.
  The Bill is sorely needed because despite the advances in numbers that were made in further education under the previous Government, the Conservatives in that process veered between a sense of paternalism and having too much faith in what the market could provide. I exempt from that criticism the hon. Member for Daventry (Mr. Boswell), who in his role as the Minister with responsibilities for further education was a significant supporter of that sector.
  Overall, however, further education was like Topsy, it just growed. In the speech of my right hon. Friend the Secretary of State and in exchanges with the hon. Member for Maidenhead (Mrs. May), we heard about the patchy provision under the Conservatives. There was a tremendous amount of overlap. To have 250 individual bodies with three different systems is no way to run a railway.
  The Bill and the new structure was needed because we had to address the weaknesses of the training and enterprise councils. I am not saying that all TECs failed; they did not. However, the staying-on rate was too low. There was poor co-ordination and poor coherence and clarity between FE sectors. There was duplication and layering. There was also, as many hon. Members have alluded to, unequal sixth form and FE college funding.
  Mr. Boswell: Is it not the case that historically British staying-on rates have been particularly low? There has

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  been a secular improvement, which was further enhanced by the moves in the Further and Higher Education Act 1992. We would all welcome a further improvement. I do not think that the present deficiencies can reasonably be laid at the door of the TEC movement.
  Mr. Marsden: I am grateful to the hon. Gentleman for that intervention. I agree with his strictures about the staying-on rate. My point is that we need a new integrated structure to improve the staying-on rate still further.
  I see the Bill as ending the divorce between education and skills and training, treating vocational qualifications seriously and providing a new, integrated youth service basis. The Bill recognises the importance of further education. It is right that we should move away from an unregulated approach which demands unattainable efficiency savings.
  The Government have delivered the largest rise in further education funding. In my part of the country, the north-west, that is crucial. There are 63 further education colleges in the north-west, and 670,00 students are dependent on that education.
  Because the Bill strengthens the importance of NVQs, secures the entitlement of 16 to 19-year-olds to education, builds on the education maintenance allowances—I welcome the announcement in that regard by my right hon. Friend the Secretary of State this afternoon—and recognises the growing importance of online distance learning, I agree with the chairman of the National Institute of Adult Continuing Education, who said that it was a new dawn for further education.
  The Bill emphasises partnership, and I shall deal with partnership in four areas. On partnership between the learning and skills councils and business, it is crucial that we attract and involve businesses actively and retain them in the new LSCs, but we do not want people who are professional committee-sitters. The Confederation of British Industry rightly asked for close links, and the Federation of Small Businesses and the Small Business Service stressed the need for close links with LSCs. Enterprise and economic development strategies through those organisations must be delivered by that close link.
  I am peculiarly conscious of that in a town such as Blackpool, where we do not have many large employers. The mainstay of our prosperity is still tourism, which is a micro-business. That is why it is extremely important that I have a college, Blackpool and The Fylde college, which is a beacon FE college, where tourism and leisure management training can go on. Such training is desperately needed in a low-skill industry and provides labour-intensive output for the economy regionally.
  On co-operation between learning and skills councils and the regional development agencies, the CBI has warned that that co-operation must be interlocking, not overlapping. I echo that concern. I am reassured by what was said in another place by my noble Friend Baroness Blackstone, and by the commitments that the Government have given today.
  A positive way to go forward, about which I have written elsewhere, would be for the new LSCs to deliver future local service agreements that might be brokered by the RDAs. Those agreements could be formal and binding on further and higher education colleges over a five or
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  seven-year period, guaranteeing access to students without formal qualifications, in much the same say as the Open university does at present.
  In addition, RDAs could have a role in supervising proper kite-marking schemes for access courses in particular, which currently operate with little regulation or input from the Quality Assurance Agency for Higher Education.
  With regard to local education authorities and their involvement with learning and skills councils, partnership between them is crucial. The Government were right to reject a quota approach, but whether at officer level or at the level of concerned and significant local councillors, there must be such involvement. I welcome the assurances in that respect.
  I echo the comments of my hon. Friend the Member for Worcester (Mr. Foster) about the co-operation that will be necessary between the LSCs and the universities. Lifelong learning is a continuing process. As we continue to develop lifelong learning and the links between higher education and further education become more closely interwoven, the more important it is that the universities that are currently closely involved with further education, and the universities that have yet to take up their responsibilities, are properly involved in that process.
  Baroness Warwick and Lord Dearing expressed concern about that on Second Reading in the Lords and were right to do so, but I am satisfied with the assurances given by Baroness Blackstone and such co-operation does not need to be dealt with in the Bill. However, it is extremely important that the example of Sunderland. Staffordshire, Lancaster and Portsmouth universities—all of which show a strong outreach commitment to the further education sector and to local schools—be encouraged and nourished under the new structures. If anyone doubts the need for that, I refer them to the Select Committee report on post-16 provision, over which the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Croydon, North (Mr. Wicks), presided as Chairman.
  ConneXions, the new integrated youth structure, has been mentioned by several hon. Members, but, because of the lack of time, I shall not dwell on it for too long. The advice in the social exclusion unit report, "Bridging the Gap", is crucial. Skill levels in Blackpool are low and a large number of younger people, particularly young families, who come from outside the town, feel socially excluded. The new service must deliver the support that is necessary, although I freely accept that there is a delicate balance to be struck between access for all and targeting the most needy. In targeting 13 to 19-year-olds, we must not neglect the needs of older lifelong learning students.
  The Bill deals with the responsibilities for setting up and carrying through individual learning accounts. Many have rightly praised ILAs and the already significant take-up, and the new Learning and Skills Council should seize the opportunity presented by ownership to promote them further. They should be significantly expanded, as should corporate involvement in them, and existing Government contributions should be boosted considerably in the long term, perhaps to between £750 and £1,000. In line with the statements of my right hon. Friend the Chancellor, the possibility of levering in more money from business, with the appropriate reliefs, should be

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  examined. It is vital that the new LSCs give employers and employees a stake in and ownership of continuous and lifelong learning.
  The LSCs will be an important vehicle for boosting the life chances of the 20 per cent. of adults without basic employability skills. Updating skills in the work force is crucial to the role of the new Learning and Skills Council and there are two interesting and significant private lifelong learning initiatives in my area: British Aerospace's virtual university and, in my constituency, the online access provided by Horizon Biscuits. It is crucial to remember that more than 80 per cent. of FE students in the north-west are adults and a significant proportion learn and will continue to learn part-time. The LSCs will therefore have a crucial role in ensuring that there is quality learning for adults as well as for 13 to 19-year-olds.
  My experience as a tutor with the Open university and the Workers Educational Association before being elected to the House convinces me that we cannot neglect that issue. More and more, further education is becoming a feeder for higher education. For example, as the young women in their 30s and 40s who live on the estates in my constituency go into further education and progress to higher education—not by going to a college three or four miles down the road, but by taking courses that come to them—the significance and relevance of that tie-up will become more apparent.
  My hope for the second term of a Labour Government is that we will move towards universal free tuition to level 3 in education and training and further education. If that target seems too ambitious for the Government at the moment, I suggest that we employ that quintessential new Labour mechanism of pilot schemes in particular areas. Local learning and skills councils could usefully take up that torch.
  The inspection regime must be vigorous and transparent. There are bad apples in further education, as in other sectors. Many hon. Members are aware of the problems. That underlines the need for rigorous inspection and expansion in this area. I support Ofsted's involvement. We must take stock of the excellent Select Committee report on Ofsted, under the chairmanship of the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Croydon, North. Intervention in this area is a balancing act, and should be in inverse proportion to success.
  I accept what has been said about the role of the adult learning inspectorate, and we should ensure that Ofsted and the ALI can work together harmoniously. I am reassured that my hon. Friend and the Association of Colleges believe that there is a role under the new structure for rigorous self-evaluation. We perhaps need to go beyond the provisions of the Bill and consider how we can more rigorously inspect facilities for adults along the lines of the measures for 16 to 19-year olds.
  The passage of the Bill in the House of Lords was distracted by the noises off about section 28 and grammar schools. I do not want to say a great deal about that. The only comment I would make is that I welcome wholeheartedly the commitment by Baroness Blackstone and the Secretary of State to reversing what the Lords have done. I support wholeheartedly what the Prime Minister said yesterday about resisting the forces that promote the retention of section 28. I am only sorry that
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  some Conservative Members in this place have been associated with the bigotry and ayatollandom coming out of the House of Lords on this issue.
  I believe that the Learning and Skills Bill offers a great opportunity. It should be used creatively as tertiary education expands rapidly and as globalisation increases. It is essential to have a framework that enables us to develop a seamless web of tertiary education. We can learn from the success of community colleges in the United States and their feeder mechanisms. We can end the damaging dichotomy between skills and education—between the mechanic's and the scholar's view of further education. The Bill balances both, and draws out innate abilities at all levels and all ages: that is its learning aspect. It also recognises the need for the continual renewal and recharging of skills to earn our way individually and collectively as a nation in the 21st century.
  It is not a question of either skills or learning: we need both. At the heart of the Bill is a recognition of the age-old justification of education, which is to draw out people's innate abilities. I apologise to my hon. Friend the Member for Worcester, but it is true and perhaps shameful that in the past further education has been described as the Cinderella sector. The good news is that Cinderella is being allowed to go to the ball, and is going to the ball for the benefit of the many, not the few.
  5.44 pm
  Mr. Graham Brady: I am tempted to say that I am following a lot of balls, but that is a reference to the closing remarks of the hon. Member for Blackpool, South (Mr. Marsden), not to his speech.
  The name "Learning and Skills Council" is neither here nor there. It does not matter whether we call it a learning and skills council or a training and enterprise council. However, the way in which the councils are constituted and the responsibilities and powers that they are given are enormously important. There is no doubt that the Bill proposes sweeping change. That change may offer some benefits, but it also poses considerable dangers.
  As for the constitution of the learning and skills councils, we are undoubtedly witnessing a very deliberate and determined process of centralisation. Allowing the Secretary of State, in the first instance, to appoint the learning and skills councils will provide an enormous opportunity for a Secretary of State to stamp his or her own ideological slant or to impose his or her own model on the process of post-16 learning and training. There are dangers there. We are potentially moving towards a much more uniform model of post-16 education.
  Local learning and skills councils will be appointed by the national Learning and Skills Council. However, the national council will exercise that power with the Secretary of State's approval. It will be important to watch exactly how that process is conducted and what use is made of the powers of patronage and the power to control the make-up of those bodies—which will have enormous power in both schools and colleges across the country.
  The proposed system will be more bureaucratic and centralised, and will allow less independence for further education colleges, schools and local education authorities. One of the perverse, slightly schizophrenic aspects of the Government's education policy is that they

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  really cannot make up their mind about what they want to do with local education authorities. In the School Standards and Framework Act 1998, Ministers were determined to get rid of grant-maintained schools and to bring back power to local education authorities. In the Budget, they said that they do not trust local education authorities and that money will have to go directly to schools. In the Bill, funding of post-16 education in school sixth forms is being removed from local education authorities and given to learning and skills councils.
  It is regrettable that the new councils will no longer be business-led, as TECs are. That causes some concerns.
  Although it is not a black and white matter, I differ strongly from the hon. Member for Blackpool, South (Mr. Marsden) on the distinction between skills and education. He seemed to regard the distinction as entirely spurious, but I think that there is some validity in it. In placing the whole structure of post-16 education and training under learning and skills councils, it is important that we do not risk according a lower status or less recognition to the non-vocational aspects of education. Vocational education occurs in school sixth forms, and non-vocational education occurs in colleges of further education.
  Although that is right and proper, if we remove control of school sixth forms from local education authorities or from schools and give it to learning and skills councils, there is a danger that the councils' objectives—which may be far more biased towards the provision of vocational skills and education—may lead to a diminution of provision of non-vocational education. We need to be very cautious about that.
  Perhaps it is a slightly old-fashioned view, but I think that it is important to say as often as possible, in the House and when debating education issues, that there is value in education for its own sake. There is value in non-vocational education that is not directly oriented towards training people for work or otherwise providing employment skills. There is a danger that the thrust of the Government's policy might take them too far in a direction that was probably first pursued by previous, Conservative Governments—the belief that all post-16 education should be about skills and jobs. It is slightly surprising that Labour Members have forgotten that danger, as they used to enjoy branding Conservative Members as philistines in these matters. It does not all have to be directly about skills and jobs. I agree with my hon. Friend the Member for New Forest, West (Mr. Swayne) that much important educational work is being done in the provision of the building blocks that can form the basis of vocational training.
  My hon. Friend the Member for Maidenhead (Mrs. May) spoke about sixth form funding, a vital issue that the Government must get right. I would be more inclined to accept ministerial assurances about "levelling up" to the per capita funding currently available in school sixth forms were it not for the fact that I, like my hon. Friend, sat and listened to precisely the same assurances when we were told that when grant-maintained status was removed there would be a "levelling up" to expenditure in grant-maintained schools. That simply has not happened. Schools in my constituency lost £120,000 of revenue funding owing to the loss of grant-maintained status.
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  The Government assured us that the revenue of other institutions would rise, but that has not happened. If the same happened as a result of the transition from the current funding of school sixth forms to funding through the Learning and Skills Council, there would be considerable anger, and considerable problems for many sixth forms. Inevitably, some sixth forms involve a higher unit cost, given the need to maintain a varied curriculum for a relatively small group of pupils.
  I have already raised in the House the current problems in the borough of Trafford, where the cost of providing the new post-16 curriculum is not being passed on to local schools by the local authority. That means a loss of some £400,000 a year to local schools with sixth forms, on top of the loss of grant-maintained status in the case of most of my local schools. If funding was levelled down, or if, as suggested by my hon. Friend the Member for Maidenhead, sixth form numbers increased and funds did not increase commensurately, there would be a real problem.
  What about the creation of new sixth forms? I return to the question of the objectives and priorities of the learning and skills councils. A very successful sixth form was established a few years ago in one of the high schools in my constituency, New Wellington school. It is developing and becoming an important part of the school; it is popular with pupils, and I think that it should remain. From my reading of the Bill, however, there is a danger that a learning and skills council taking an overview of post-16 provision in a certain area might favour one model of provision rather than another. It might prefer, perhaps for financial reasons, to enlarge colleges of further education, rather than continuing to fund sixth forms or allowing new ones to be established.
  My constituency also contains a successful and expanding college of further education, South Trafford college, which is involved in a number of innovative programmes. It provides training in many other parts of the country and has a link with the Army. It is currently providing training in Harrogate. I would not like a loss of independence to restrict such entrepreneurial activity on the part of further education colleges.
  The Bill states that learning and skills councils "may" provide funding for local education authorities for sixth form provision, but as far as I can see it does not require them to do so. There is a genuine fear—it is not scaremongering—that the equality of education currently being provided will not be guaranteed.
  I shall conclude soon, because I know that others want to speak. The hon. Member for Worcester (Mr. Foster) talked about pastoral care. The principal of South Trafford college said to me last Friday that there are inevitable differences between the pastoral care available in a large further education college and that available in a school sixth form. Those differences are caused by the size of the college and the fact that it has a large number of part-time or older students, so a different kind of care is inevitably needed and provided. Even 16 to 18-year-olds sometimes choose to go to an FE college rather than a school sixth form because they want greater independence in the style of their education.
  Like my hon. Friend the Member for New Forest, West, I found two aspects of the Bill that appealed to me: the provision that would have lifted the threat from the grammar schools in the borough of Trafford and the

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  provision that would, in some measure, have compensated for the Government's planned repeal of section 28, which will allow the promotion of homosexuality through local education authorities. I was sorry to hear the Secretary of State make it clear this afternoon that he intended to use the Government's majority to delete both provisions from the Bill. I suspect that that intransigence may give the Government further problems when the Bill leaves this House. I hope that they are eventually prevailed upon to see sense.
  5.57 pm
  Mr. Ian Pearson: Learning and skills, along with innovation and entrepreneurship, are the global currency of the new knowledge economy. Britain's future economic prosperity will depend on having a well-educated, highly skilled work force that can adapt to the massive changes in learning and work that will take place over the next decade or more. It is an indictment of the previous Administration that, in Britain today, more than 6 million adults have no formal qualification and more than one adult in five has a lower level of literacy than is expected from an 11-year-old. The glaring problem of skill shortages across the country, particularly at technician level, is also a result of their failure, which contributes to Britain's 25 to 40 per cent. productivity gap with France, Germany and the United States.
  I am the first to admit that the best further education colleges and training and enterprise councils do a great job, but too often their performance has been patchy and disappointing. Drop-out rates in further education and in TECs are far too high. Qualification achievement rates in the FE sector vary from 34 per cent. to 94 per cent. In TECs, course completion rates vary from 40 per cent. to 70 per cent. We cannot afford to tolerate delivery systems that are at best flawed and second rate. Along with the expansion that we want in further education in the coming years, we need modernisation and reform. I am pleased that the Bill provides for that.
  On Second Reading in the other place, Baroness Blackstone said:
  The LSC will focus on customer need, collaboration rather than competition, and on cutting out bureaucracy.—[Official Report, House of Lords, 17 January 2000; Vol. 608, c. 878.]
  I fully share her sentiments. Given the limited time available, I shall make three brief comments.
  First, it is a bit rich of the Conservatives to criticise us on the grounds that the Bill is bureaucratic. They introduced TECs, which, on average, spend 14 per cent. of their budget on administration. They have a TEC operating agreement that runs to more than 100 pages and monthly, if not weekly, reporting to the Government offices for the regions. Their agenda was strangled by the Conservatives.
  However, I am acutely aware that we need to consider whether we can do things better across a range of Government initiatives. I use the analogy of whether we can put foot to floor faster.
  Can we get better at moving from voting resources in the House of Commons to delivering them to people on the ground, whether they be students, trainees or workers? We need to look again at the Government model—the traditional civil service model. As a party, we have spent much time thinking about politics and policy, but we have not examined the system to get to the implementation
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  level. Where new Labour thinking is needed is in ways of having a lean production model for getting benefits to those who need them most. I am optimistic that, through the Bill, we can provide a lean-burn model that shows how it can be done.
  Secondly, on collaboration rather than competition, I have been around a number of FE colleges. In my local area, we have four FE colleges within six miles. They offer similar courses in mechanical and electrical engineering. All are under-resourced. All offer poorer-quality education and training for that. If they came together and offered one or two courses in a subject, they would be far more efficient. Each of the 10 FE colleges around the Birmingham area employs more people in marketing than Birmingham council did when it covered all 10. That cannot be an efficient use of resources.
  We need to develop a system that offers real quality and choice. Across a range of areas, private sector providers already offer training courses that TECs contract with. We need to examine whether the private sector should offer some courses that have traditionally been offered by the FE sector: for example, information technology, law and accountancy. There is strong evidence that private sector training providers already offer courses of a far higher quality than the average further education college in those areas.
  Thirdly, I focus on customer need. We need to talk about different types of customer. For the individual, there must be choice and quality provision. For employers, we need to ensure that, as customers, they get the skilled employees that they require and that local learning and skills councils reflect the skill needs in their areas. They need discretion to be able to do that.
  There is a community customer need, too. I am concerned that some of the good things that TECs did in economic development should not fall through the cracks in the system. It is clear that learning and skills councils need an explicit local economic development agenda.
  I could give chapter and verse on the number of instances where TECs have made a major contribution to local economic development, whether it be building partnerships, preparing business plans or providing resources to make things happen, which otherwise would not. They add value. One local example is Red House cone, which was originally used to make glass in my constituency. A £1.8 million project is in place, with funding from the European regional development fund, the heritage lottery fund, English Partnerships and English Heritage. It would not have happened without the TEC providing some resource, working with the local authority.
  Britain faces enormous challenges as it competes in the global knowledge economy. We need modern, efficient delivery systems for learning and skills. I commend the Bill to the House.
  6.4 pm
  Mr. Peter Brooke: The hon. Member for Dudley, South (Mr. Pearson) and I were, in higher education and in Milton's words, although not at the same time, nursed on the self-same hill. It is a pleasure to follow him in such a debate.
  My remarks will be brief and certainly briefer than some. I should declare two unremunerated personal interests and ask for one past position to be considered in

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  mitigation. The first personal interest is that, although I doubt whether I am the oldest president of any youth club in the world, I am the president of the oldest youth club in the world: St. Andrew's club, which is within half a mile of the House. Secondly, I am the president—and I used to be the chairman—of the Conference on Training in Architectural Conservation. As a plea in mitigation, I should say that when I was Minister with responsibility for higher education 15 years ago, I also had responsibility for adult education and for the youth service. Unlike my hon. Friend the Member for Daventry (Mr. Boswell), I did not have responsibility for further education or for sixth forms.
  Like the hon. Members for Enfield, North (Ms Ryan) and for Hammersmith and Fulham (Mr. Coleman), I speak as a London Member. As such, I was proud of the verdict in the 1997–98 report on the London training and enterprise councils from the Government office for London. It said that, in the preceding year, the London TECs had played a leading part in preparing the London development partnership's strategies for competitiveness and skills.
  I was proud not least because, given the presence of seven TECs in London, the Department for Education and Employment had voted almost a third of its London budget to the TEC that covered my constituency. I can only regret that that substantial contribution to local economic development was a notable absentee from the "Learning to Succeed" White Paper published in June 1999.
  Although my references to each will be brief, I propose to cover five topics in my speech. The first is funding and saving, as that is a national and overarching issue. The second topic is partly related—the substantial local flexibility which the Secretary of State has claimed that the Bill will confer. The third topic, and again it is partly related, is that of sixth forms. The fourth topic is adult education and lifelong learning, and the fifth and last is commercial and business involvement in the new councils.
  I begin with funding and savings. The Secretary of State said in his statement on post-16 education made on June 30 last year that employers would be involved in spending £5 billion. On 14 December last year, he told a business audience in No. 10 Downing street that the Learning and Skills Council would have a budget of around £6 billion. An American once famously said, "A billion here, a billion there, and soon you're talking about serious money." No doubt he might give the same verdict on the question of a billion more or a billion less.
  Lest the Secretary of State should himself enter a plea in mitigation that the upward statement of £1 billion was an accidental slip of the tongue, made when he was addressing a business audience on a private occasion, I should add that Department for Education and Employment press release 587/99 of the same day confirmed the figure of £6 billion. Yet the figure of £5 billion still appeared on the Department's website as recently as 27 March—this week. It would be helpful if the Minister who winds up the debate would either say which figure is right, or rationalise the discrepancy between them. Unless he does that, I must confess to a certain anxiety about the Secretary of State's personal housekeeping.
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  In the same statement on post-16 education in which he originally quoted the figure of £5 billion, the right hon. Gentleman compared the £5 billion to the £1 billion under which, he said, the TECs were operating. Given that the present TECs budget is more than £1.5 billion, that also looks like a discrepancy of some size.
  That looseness with large figures necessarily increases one's anxiety about the savings figures quoted by the Government. We have already had the exchange between my hon. Friend the Member for Maidenhead (Mrs. May) and the Secretary of State on the £300 million that the Government are expecting to claw back from those elements of the TEC reserves that are funded by the Department for Education and Employment. Some of us will follow the development of that narrative in the future with close interest, as a significant element of the Government's funding and savings scenario depends on it.
  On the savings of £50 million, Baroness Blackstone told the House of Lords that the total was made up of £15 million savings in Government office spending thanks to the reduction in staff contracting with 72 TECs. The balance of £35 million would come from the reduction in local branch spending as the number of branches fell from 72 to 47. As the branches have shrunk by about a third, we assume that branch administrative spending was previously three times £35 million, or a little more than £100 million. That figure is another that needs to be verified in Committee.
  In his answer to the hon. Member for Reading, West (Mr. Salter) of 14 December 1999, the Secretary of State claimed that the Bill would entail substantial local flexibility. In part, he predicated that claim on the 10 to 15 per cent. of the learning and skills budget that will make up the local discretionary budgets, whose definition of discretion has already been dissected by my hon. Friend the Member for Maidenhead. Whether the total budget will be £5 billion or £6 billion will make quite a lot of difference to the amount realised when 10 or 15 per cent. of the total is calculated. With a total of £5 billion, 10 per cent. would equal £500 million, and 15 per cent. £750 million; with a total of £6 billion, the same percentages would come to £600 million and £900 million, respectively. When I was the Higher Education Minister, I would have commissioned a mass out of my own pocket if I had been given an extra £250,000 to spend on adult education nationally.
  In that capacity, I was also the chairman of the National Advisory Body for Public Sector Higher Education. Our Government created that body to introduce some rationalisation into local authority-funded higher education, but I would never have claimed among its attributes that it conferred substantial local flexibility. Nor would I have said, as the Department press release 473/99 said on 28 October 1999, that key decisions would be driven from the bottom up, rather than from the top down.
  On sixth forms, I echo what my hon. Friends have said—notably my hon. Friend the Member for Maidenhead—about different streams of funding, which historically has been one of the antipathies to Treasury conventional wisdom. I want to dwell for a moment on per capita funding for sixth forms. The permanent secretary at the Department revealed at a conference of the Society of Education Officers, reported by BBC News Online, on 3 August last year that what became the Learning and Skills Council prospectus safeguard—that a schools sixth form budget would not reduce in real terms

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  provided numbers were maintained—does not ensure that sixth forms with increasing numbers will continue to receive the necessary resources, since the permanent secretary had said that per capita funding would not be included.
  The LSC only delegates funds for sixth forms to local education authorities for local decisions by them, but its power does involve closing down sixth forms—rather as the mayor of London can only call in planning decisions, and not press for good, but controversial, planning decisions to be supported.
  When I lived in the United States 30 years ago, the front page of the Wall Street Journal reported that the recession had become so severe that the mafia had had to lay off two judges in New Jersey. I would not want to carry the analogy too far, but, in this transfer of overall sixth form funding to the LSC, there is a flavour of the mafia being invited to fund neighbourhood watch schemes at a headline level.
  On adult education and lifelong learning, I should declare a further family interest, in that my great-uncle, Sir Graham Balfour—chief education officer for Staffordshire and one of the first CEOs to be knighted—chaired the great report on adult education that the Government commissioned immediately after the first war, and my family were close friends with Albert Mansbridge, who dandled me on his knee as a child, but who played a rather more remarkable part in the history of adult education.
  I draw to the House's attention the fact that the Bill appears to contradict the learning and skills prospectus, which was published two days before the Bill. The former, notably in sections 4.3 and 4.4, draws attention to the way in which the age profile is rising in the labour force, even over the next 10 years, whereas the explanatory notes for the Bill make it clear that the LSC will give priority to meeting the learning and skills needs of a younger age group.
  That goes some way to dilute the high-minded remarks in the prospectus about older learners, when it says:
  we want the learning and skills council to ensure that high-quality learning opportunities are available to meet the needs of all learners across the range of abilities and aptitudes.
  The Bill says, more bleakly—in Procrustean mode—that the opportunities for older people are to be
  of a quality and quantity which the Learning and Skills Council can reasonably be expected to provide taking account of the resources available to it.
  This underlying attitude was also pinned down when I was the only Member of Parliament to attend a feedback of the university of Lancaster's review of the two past decades in higher education in the UK, which was funded by the EU. We were the one large-country study in a multi-country project. A consultant to the review, who is also a frequent consultant to the Department, said that it was a matter of concern that, in all the current talk of lifelong learning, no significant effort was going into finding out what lifelong learners actually wanted to learn about.
  My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) made some effective play with the commercial and business involvement in the councils. The Secretary of State said on 28 October last year that
  a minimum of 40 per cent. of the membership of both the national and local councils will be those with recent experience in business and commerce,
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  and he said immediately afterwards
  that the chairman of the national council and the majority of local council members will similarly have had recent business and commercial experience.—[Official Report, 28 October 1999; Vol. 336, c. 1079.]
  The second quotation—which was in the same sentence as the first—clearly expands the first. However, I appreciate that there may have been a slip of the tongue in the Hansard of the day—later corrected—and that what the Secretary of State meant was the majority of local council chairmen. The briefing issued for the debate by the TEC national council states that there will be 40 per cent. business representation, but that is a case of "put not your trust in princes". As my hon. Friend the Member for Westmorland and Lonsdale indicated, Baroness Blackstone resisted Conservative amendments in the Lords to enshrine in legislation the chairmanship and membership commitments that the Secretary of State gave the House on 28 October last year, and said that they should not be written into the Bill.
  Let me make a final plea that the chief executive of the council appointed should be independent of the Further Education Funding Council and the TEC movement, and should have a decent experience of work-based learning.
  I wish this sector of education well, and want to give it the best possible chance of success.
  6.15 pm
  Valerie Davey: In Bristol recently, within the space of one week, I met two groups of young people. They were in their late teens and early 20s, men and women. The first group was homeless. They had been sleeping on the street, and some were involved in drug abuse. Courageously, they were beginning to find their way back into the wider community. They were beginning to feel confident again, talking to other people and finding their way into their future.
  The second group were "live wires", so-called because they were competing for a young business award of that name. With courage, they were stepping into the future and gaining confidence. They were setting up in business—a good business, that they were proud to explain.
  The contrast was enormous. The first group on the street was literally on the pavement. The second group on the street had a business address. If we were to analyse the reasons for that, they would be complex and personal. It is too easy to make generalisations. However, the first group is part of the 170,000 young people who have slipped through the net and who have been failed by the present system. I would like to draw briefly on the elements of the Bill that will better serve that group of young people. Before I do so, let me also declare an interest—an interest of enthusiasm. I am an unpaid member of the board of Learning Partnership West in Bristol, which deals in the main with the careers service in the Avon area.
  The TEC system—the proud legacy of the previous Government—was fragmented. It did not celebrate the diversity that we want. It was underfunded and, in many cases, inappropriately funded. It was based on individual institutions, not local area needs. It met the needs of high fliers rather than those of lesser ability who needed more basic skills. The new approach looks in particular to the

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  needs of 16 to 19-year-olds from a more disadvantaged background, who would otherwise be less likely to succeed.
  I was delighted by my right hon. Friend's announcement today of the extension of the education and maintenance allowances. I look to a third-phase development, when Bristol will be included.
  The work of ConneXions and its progress are crucial to the Bill. I know that the careers service and youth support workers have identified that they will still need to make a general provision to serve all the young people in that age range—some 4 million. However, they do not demur from focusing on those with particular need.
  I want to say a word about the youth service and its ability to make contact with these young people. We have talked about the wonderful range of qualifications that will be available under a more integrated and collaborative scheme. However, many young people are not connected. The youth service will provide a bridge, giving young people the standard of having to turn up on time for an evening meeting once or twice a week, making contact and having a meaningful conversation.
  The young people whom I met who had been on the streets of Bristol said that they did anything to gain safety and security during their first six months of contact with an adult. No matter how apparently supportive those adults were, the young people told them what they thought they wanted to hear. Time and mentoring are needed. Imagination is required, and youth and community workers often give that imagination to their work with young people.
  The young people said that they were looking not for expertise, but for people whom they could trust. I want to turn that statement on its head. The Bill, through the youth service and other mentors, will offer people of experience who will trust young people. Every young person has much to offer, and the aspect of ConneXions which we should celebrate is that we shall take account of the views of young people. We can pontificate in the House as long as we like, but unless we get alongside young people and listen to their needs, we shall fail them yet again. The Bill brings new opportunities, and it will enable young people to be heard. Many more of them will succeed as a result.
  6.22 pm
  Mr. Nick St. Aubyn: I have listened to as much of the debate as possible and have found it most interesting. Like the hon. Member for Bristol, West (Valerie Davey), I am a member of the Select Committee on Education and Employment, and have worked through two reports into further education—one under the able chairmanship of the Under-Secretary of State for Education and Employment, the hon. Member for Croydon, North (Mr. Wicks).
  I hope that the Minister will be the first to recognise that the really great achievement of further education over the past decade came in 1992, when we liberated FE colleges from the dead hand of the local education authorities. In many cases, colleges had been held back, not being given enough funding or an opportunity to deliver as much, or as effective an education, as they were capable of giving. In a written reply to me a couple of months ago, the Minister confirmed that, between 1992
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  and 1997, the number of full-time equivalent students funded by the Further Education Funding Council increased from 860,000 to 1,084,000—nearly 30 per cent. more students.
  By comparison, the Labour Government's more modest aim was half that increase. They intended an increase of not 200,000 but barely 100,000 full-time equivalents over the course of this Parliament. I am disturbed to note that they are in no way achieving even that. It is another case of the Government's being all mouth and no delivery. I asked the Minister about the number of full-time equivalents in our FE colleges since the Government came to power, and, with a bit of cavilling, he eventually admitted that it had dropped by 1 per cent. last year. Fewer people are in further education today than there were when the Government came to power.
  The Government have spoken of hundreds of thousands—the Prime Minister mentioned half a million, and 700,000 was mentioned on another occasion—but the numbers are actually down over the first two years by more than 1 per cent. Far from being on course to deliver, they are on course to disappoint hundreds of thousands of people who would depend on further education for their best chance in life—the chance of job with a future.
  The Minister gave franchising as an excuse for his Department's failure. Interestingly, several hon. Members have said how they value the role of the private sector in contributing to training and development. They recognise that alliances between the private sector and further education colleges can deliver results. We should not be surprised by that because, in the first report of the Select Committee, that is exactly what the all-party group found. It stated:
  We believe that high quality franchising can play a valuable role in the FE system, because of the way it can increase participation, extend access and contribute towards a more skilled workforce.
  The Minister himself became Chairman of that Select Committee. Yet, when he reverts to his partisan political role, he sings a different tune. In his reply to me he talks about the
  unacceptable aspects of franchising which grew up under the previous administration.
  The Minister cannot have it both ways. He cannot, with his colleagues on the all-party Select Committee, applaud the achievements of the FE sector, which must include the vital role played by franchising, and then try to get away with excuses for his Department for failing to deliver further places.
  When the Select Committee delivered the report, we recognised that there was an element of curtailment in franchising because, when we Conservatives were in power, we ended the demand-led element of funding for franchising and in doing that, we acknowledged that there would be a drop in the numbers in further education. When the Prime Minister and the Ministers pledged to increase the numbers in FE by up to 700,000, they knew that this curtailment of enfranchising was in the pipeline. Therefore, it is no excuse now to say that, because of the drop in the numbers in franchising, the target cannot be achieved. The Government must achieve their target knowing now what they knew then—that the numbers in franchising might drop in this period.
  We are entitled to ask how, from this stage, the Government can achieve a 10 per cent. increase in full-time equivalent numbers in just over a year. Is it wise

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  to aim still for an increase of 10 per cent? Can the quality of courses be guaranteed by achieving such a massive increase in such a short time? Again, we see the Government talking high numbers, but failing to deliver and not having any clue how they will get there.
  The other aspect of the Bill that disturbs me is the instinct for conformity which, I am afraid, is the hallmark of the way in which the Secretary of State runs his Department. He wishes to destroy diversity in our education system rather than build it up. He wants to destroy grammar schools rather than preserve what is good in the education system that they represent. Now, he has set his sights on the sixth forms in schools, which are a vital part of the diversity of our provision.
  Let us be clear about the difference in funding between sixth forms and FE colleges and sixth form colleges. The differences are only a few per cent. As the Select Committee report made clear, there is a difference of 4 per cent. per year of funding for students in sixth forms in schools as opposed to sixth form colleges and of 7 per cent. between sixth forms in schools and FE colleges. If one looks at the post-16 provision overall, there is still greater diversity of funding between different colleges offering the same course in different areas.
  As the history of the sector since 1992 demonstrates, it is not the amount of money put in that counts, but the sum that we get out. We did not put a great deal more money into the FE sector, but we got out of it a 30 per cent. improvement in the quality and quantity of courses that were being delivered, and that measurably closed the skills gap. This Government are putting in more money, but getting less out. With their agenda on skills, without extra effort and concentration, we will see a widening of the skills gap, particularly in areas such as mine, where the curtailment of the careers service means that children thinking how best they can serve in the fast lane of Britain's economy are not getting the advice that they need if they are to give society what they want to. The Government's short-sighted treatment of the sector will undermine the aspirations of such children. The Minister has much to answer for, when he deals with those points.
  6.30 pm
  Mr. Tim Boswell: In general, the debate has been good-natured and informative. Many Members on both sides of the House share a strong personal commitment—as I do—to further education, to appropriate vocational routes and to the engagement of all young people in the high-quality development of their abilities.
  I do not normally think of the Under-Secretary of State for Education and Employment as a mad axeman, although he has taken on that role in the execution of the TECs movement. Even though he may be generally well-intentioned towards adult education and the 16 to 19 sector, it is possible to do much damage by accident or inadvertence.
  To pursue the analogy of cutting, the hon. Gentleman would do well to remember the dictum of the mediaeval philosopher Occam, who said that entities should not be multiplied beyond what is strictly necessary. My hon. Friend the Member for Maidenhead (Mrs. May) made a most distinguished speech, when she opened the debate for the Opposition. She analysed in some detail the additional bodies that would be created and that would overlap or interlock—according to the jargon.
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  Perhaps my hon. Friend did not make enough of the point that consultation will be necessary with the private sector or with non-government organisations. For example, liaison will be needed with employers, with trade unions—who are major education providers—and with the voluntary sector. The Government have not told us much about the local learning partnerships either. Only Uncle Tom Cobbleigh has been left out of my list.
  Even if we make the heroic assumption that there is nothing wrong with the Bill—not many of us would want to do that—there is a danger that practitioners in further and adult education, who work long hours for little remuneration and who sometimes have to deal with demotivated or disadvantaged people, may be so busy understanding the new regime, filling in forms, coping with consultation exercises and clarifying the interacting or sometimes mutually exclusive policies from the players in the jigsaw that they may not get around to doing much teaching. If we add to that the problems of those from the world of business, who may feel that the new arrangements will leave them with nothing much worth doing, we have a recipe for failure.
  I do not want to overstate the case. There will not be a dramatic or catastrophic collapse. However, the slow atrophy of the sector may be a greater danger—an ebbing of life, enthusiasm and activity.
  The Secretary of State graciously acknowledged the amount of staff work that had gone into the measure and the contributions of the predecessor bodies that will be extinguished or transmuted under the Bill. There were many worthwhile contributions from hon. Members, so the Secretary of State and the Under-Secretary will go away from the debate with some understanding of the increased complexities of the matter—if with nothing else.
  There were some distinguished contributions from Labour Members; it would be invidious to list them. I hope that those Members who have even a smidgen of criticism will be able to participate in Committee.
  I was delighted to hear the speeches of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins). Both of them emphasised the vandalism being done to the TEC movement.
  My hon. Friends the Members for New Forest, West (Mr. Swayne) and for Altrincham and Sale, West (Mr. Brady) made serious contributions on the impact on school sixth forms and other school provision.
  My right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) and my hon. Friend the Member for Guildford (Mr. St. Aubyn) concentrated on their experiences. My right hon. Friend referred to his administrative experience as a Minister. Both spoke about some of the practical implications of the measure for further education.
  All the contributions should have given the Government food for thought. They tie in with the formal consultation exercises that are still proceeding in some depth and with what I might describe as the mega-consultation exercise that took place recently in their lordships' House when it considered the Bill. That consideration has given the Government occasion to think and a considerably bloody nose in respect of section 28 and grammar school ballots. It remains to be seen what will happen in practice on those matters.

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  To be fair, a number of useful changes were made, and assurances received from Government, in the other place. However, it is clear to Members of this House that many people—not necessarily card-carrying ideologues of any kind—remain dissatisfied at best or, in some cases, deeply unhappy with the Bill's provisions. I do not want to overstate the nature of any of the objections received, but in the past 24 hours I have received further representations from, among others, the National Institute of Adult and Continuing Education, the four designated London colleges and the Institute of Careers Guidance. We have also to receive further comments from the national open college network.
  Some interesting exchanges took place in the debate about which I can offer some expertise of my own. I live 300 m from both a county and a regional boundary, and interesting points were made about cross-border collaboration between local learning and skills councils areas. The hon. Member for Enfield, North (Ms Ryan) also referred to sectoral issues in relation to specialist colleges.
  It should be clear to everyone that much needs to be done. I hope that the Government, who have not started too well in this House by rushing in Second Reading a mere week after the Bill concluded its passage in the other place, will not rely on their large majority to ram the measure through. I hope that they will accept in humility that there is a great deal to do even to make the Bill workable, let alone successful.
  I return to our strategic objections, which are set out in our reasoned amendment. I would like briefly—although others, including my hon. Friend the Member for Guildford, did so more eloquently—to remind Ministers that the Further and Higher Education Act 1992 provided a structure that paved the way for success. However much the point is argued, we increased further education enrolments by 1 million and we freed further education institutions to pursue their mission. All the waffle about franchising and real concerns about quality in some cases cannot take away those substantial achievements. They have not yet been matched by the present Government.
  With a fanfare, Ministers have recognised—I would have told them this for nothing three years ago if they had asked me—that there were certain anomalies in the funding and the delivery of education for 16 to 19-year-olds and for adults as well. No first-class honours degree will be awarded for noting the anomalies. However, Ministers have reacted not by seeking a sensible measure of evolution, by building on the framework that had been set or by adopting a genuine partnership approach, except in nominal terms. The Government's idea of a partnership is a compulsory one. They rely on the press release and the White Paper, which pose more problems than they resolve. It is not joined-up but kit-form government.
  First and foremost of our concerns is the issue of bureaucracy, to which hon. Members have referred, and that is coupled with the reference to central control. We know that giving independence and their own governance to further education colleges, within the framework of the public sector and continued public financing for the greater part, worked in responding to local labour market demands and in meeting the needs of students. We do not
  590
  need a local learning and skills council to tell us that. If the new councils are to estimate, for example, how many hairdressers are required by the local economy, that is useful information for further education colleges. However, if that means that the councils say that they will not fund more than 85 places in a region because that is their calculation of what is required, we shall end up in a sad old world of micro-management and manpower planning. That will have the same lack of success as always accompanies that approach.
  Training and enterprise councils draw on business for two thirds of their membership and actively involve senior business players. If TECs are destroyed and business participation is shrunk to a notional and uncertain commitment to 40 per cent. membership of local learning and skills councils, which themselves are a branch economy or wholly owned subsidiary of a national body, we are unlikely to get the same positive response from business.
  At best, the first year or two after the changeover next April are likely to be dominated by issues about the split of assets, the reconstruction of private sector chambers of commerce where they have been merged with TECs—as they are in my county; there are 16 in all—and the renegotiation of local partnership agreements, particularly where they cross existing TEC boundaries or the new local learning and skills council boundaries.
  Business is not the only sector that the Government have upset. It has become clear in recent weeks, not of course in statements to the House but in briefing by Ministers, that the Government are, to put it mildly, increasingly disenchanted with local education authorities, and it is reasonable to infer that they may have an agenda for progressively eroding LEAs' powers. The Bill alters the basis for sixth form funding, but it also threatens adult and community education and the youth service outwith the ConneXions operation.
  The threat to sixth forms is separate from, but not unrelated to, the grammar school issue, and those matters are at the centre of our concerns about the Bill. The Minister occasionally gives us helpful written replies, and I received one from him on 20 March about the percentage of pupils achieving grades A to C in schools with a sixth form and without a sixth form in England—there are roughly equal numbers of each. That test, which strictly has nothing to do with sixth forms, showed that there was a huge disparity of 9 percentage points. The figure was 49.9 per cent. for schools with a sixth form and 40.9 per cent. for those without. That convincingly demonstrates that the benefits of sixth forms can spread by osmosis throughout the secondary school, and that is certainly my local experience.
  We know that there are great benefits for certain pupils in having the transition from compulsory to post-compulsory education handled within the school framework. They may perhaps lack the confidence to go to college or they may live, as many of my constituents do, scattered over a rural area. In addition, much of that sixth form provision also provides a basis for the conduct of local adult education courses.
  By 2003, there will be the flimsiest of safeguards for sixth forms as the money will be top-sliced through the Learning and Skills Council. Any fall in pupil numbers, any expansion in numbers where the unit funding is scaled down or any decision on inadequacy under schedule 7 will lead to the extinguishment of the sixth form in question.

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  That brings me on to the inspectorate. We will end up with two and a half inspectorates and many anomalies in the provisions for 16 to 19-year-olds. The Government are not prepared strictly to follow their logic to its conclusions and to extend Ofsted's remit to the training of young people in the workplace. I am not saying that they should do so, but that is an example of continuing untidiness.
  Other hon. Members have talked eloquently about the exclusion of young people. I do not want the House to feel that we are not interested in those issues. The Government will not solve the problems simply by announcing that there are many people on whom they want to concentrate and that there will be a new service called ConneXions to deal with them and personal mentors if they can be recruited on a basis that has not been fully established. There are many difficulties involved, including fitting that service in with school provision and ensuring that there is adequate careers teaching and guidance. I am deeply worried, as are my colleagues, that the new ConneXions service may well amount to a service for the socially excluded rather than one available to all pupils. I know of no better way of consolidating social exclusion than by categorising teenagers as "in" or "out".
  The best that can be said of the Bill is that it seemed like a good idea at the time. Perhaps the worst but one comment that I could make is that it will be buried under a pile of bureaucracy. I still feel that there is a strategic failure of imagination. The Government have noticed that there is an administrative problem and an education problem for 16 to 19-year-olds, particularly when the emphasis is put on social exclusion. Yet there is no context for this. There are some moves to look back on the earlier compulsory school years, but that needs a more vigorous approach in relation to curriculum reform and development, and the resources to match them.
  There is scant reference to the further transition to higher education, which is already a normal option for many young people, and central to any programme of lifelong learning. There should be a vision of continuing professional development, adult learning and the learning society, and it is not really in the Bill. For all the pretensions of Ministers and for all their claims, this is work in progress. Some of it is perverse, some of it will not help and some of it is certainly speculative. We have expressed our doubts in our reasoned amendment and we shall be opposing the Bill shortly.
  6.46 pm
  The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): This is legislation for the 21st century. I believe that the 20th century will be seen essentially as one where we took the education of children seriously for the first time and recognised the state's obligation. We all know that that agenda is still a lively and active one under the Government. In this century, however, school education will be complemented increasingly by learning and skills over the life cycle, enhanced academic and vocational education opportunities for young people, skills for those of working age, and adult education. That is the sheer joy and challenge of education. It applies not least to those in later life as we appreciate that the silly term "retirement" becomes increasingly a new learning zone for older
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  people. It is fitting that the Bill has been introduced in the first months of our new century. It represents a new policy for a new century.
  We have had a useful and wide-ranging debate. I think sometimes that those who belittle the House should occasionally listen to it at its best, which I think we have seen today. There has been consensus about the need for change. I am pleased that hon. Members on both sides of the House recognise that skills and lifelong learning must underpin our drive for a knowledge-based economy.
  The Government's vision is clear. We believe that learning is crucial in offering the right start in life and in allowing people throughout their lives to improve their employability, to play an active role in local communities and to help secure the economic prosperity of our country. Learning becomes a common currency throughout the life cycle for the six-year-old, the 16-year-old, the 46-year-old and perhaps for those aged 86 or 96.
  It is clear, too, what principles should be at the heart of our system for delivering this vision. We must break down the unnecessary barriers between different funding and planning regimes, which are a recipe for confusion, waste and lost opportunity. We must replace them, as we will, with a single system for all post-16 learning and skills. We must put the consumer—the learner—at the centre of the system. That is why we want employers and individuals to lead, not to provide for us. The Bill is about demand and need, not existing supply. We must equip businesses and our citizens if we are to create the inclusive society.
  We must work in partnership with employers and the public and voluntary sectors to build on what is best in our current approach to learning. There are many existing strengths on which to build, and I shall emphasise them. We must combine the benefits of a single unitary system guaranteeing consistency and coherence for employers and individuals with local decision making and flexibility. The system must be strong at the centre and at local level. The Bill is at the centre of our vision. It offers the prospect of a real change of culture in both England and Wales.
  The Bill is a fine example of how the National Assembly for Wales can work with Government Departments in Westminster to meet the needs of the Welsh people. It contains radical and important provisions for the reform of post-16 education and training in Wales. Many of the provisions are similar to those for England, but there are important differences, reflecting the circumstances of Wales and the views of the National Assembly. We will have an opportunity to debate the provisions in Committee. The Under-Secretary of State for Wales, my hon. Friend the Member for Delyn (Mr. Hanson), will join me in Committee to deal with the detailed points raised by hon. Members.
  I cannot respond to all the points made today, but I acknowledge the thoughtful contribution from my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). He said much about training programmes and described the Bill as sensible, but there is much to reflect on in his speech.
  The Liberal spokesperson, the hon. Member for Sheffield, Hallam (Mr. Allan), also made a thoughtful contribution, pointing out the connections with regional development agencies, the Small Business Service and national training organisations—important matters for us to take up in Committee.

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  My hon. Friend the Member for Enfield, North (Ms Ryan) highlighted the plight of the 170,000 young people not in education, training or work, and she mentioned the particular circumstances of London.
  The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) produced a robust defence of training and enterprise councils. We agree about many of the strengths of TECs, although our critical analysis would be somewhat different from his.
  My hon. Friend the Member for Hammersmith and Fulham (Mr. Coleman) focused on the 16-to-19 age group and spoke about the good results achieved at the William Morris academy in Fulham—William Morris being someone who understood both the academic and the vocational aspects of education.
  The hon. Member for Westmorland and Lonsdale (Mr. Collins) recognised that TECs were imperfect. He mentioned centralisation, a subject to which I shall return.
  My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) spoke about the problems of the existing system and emphasised the importance of training.
  I missed the opening of the speech of the hon. Member for New Forest, West (Mr. Swayne), but I shall read it carefully in Hansard. He then went into the somewhat strange and the bizarre, and I shall need to read that with a cool glass of water, so that I can understand the full significance of his point.
  My hon. Friend the Member for Worcester (Mr. Foster), whose constituency I visited recently, focused on the essentials of the Bill and the importance of further education, and raised some important questions.
  My hon. Friend the Member for Blackpool, South (Mr. Marsden) made important comments about the links between higher education and further education, and the increasing importance of further education as a route into universities.
  The hon. Member for Altrincham and Sale, West (Mr. Brady) made an interesting contribution, drawing on the experience of his own constituency.
  My hon. Friend the Member for Dudley, South (Mr. Pearson) focused on delivery, which is a vital issue for us to consider in Committee.
  The right hon. Member for Cities of London and Westminster (Mr. Brooke) raised important points about the funding of the new system. I will write to him with a detailed response. I hope that he will forgive me, but I do not have time to reply now.
  My hon. Friend the Member for Bristol, West (Valerie Davey) stressed the importance of young people, the need for a proper deal for them and the need for us to hear their voice.
  The hon. Member for Guildford (Mr. St. Aubyn) raised some challenging points about further education numbers. We have a robust answer, which will have to be given in writing because of the shortage of time. I hope that he will forgive me for that.
  I take this opportunity of thanking all the bodies that have done such good work in recent years. They include the TECs, the further education colleges, the youth service, the careers service, the local learning partnerships which are developing so well, national training
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  organisations and many others. Of course we are not abolishing good work. We are looking forward, not back. We will build on good experience in order to produce comprehensive best practice across our country.
  I shall deal with some substantive points. Much of the concern expressed from the Opposition Benches was about school sixth forms. The cat has been let out of the bag. We have a document, a letter on Conservative party paper, from the hon. Member for Maidenhead (Mrs. May). It is being sent to schools, I understand, and here it is:
  The Conservative Party will shortly be launching a campaign to support the retention of school sixth forms.
  I could not understand why we were hearing gross scaremongering, which will frighten many parents in our communities, instead of constructive opposition. Here we have a crude Conservative party campaign, complete with illiterate questionnaire:
  Questionnaire for Headteachers whose school have a sixth form.
  We shall have to discuss with my right hon. Friend the Chancellor whether the literacy hour can be extended to Tory Front Benchers, such is their illiteracy.
  Let us state the truth about school sixth forms. The best do a superb job and many achieve excellent exam results, but under the last three years of the previous Tory Government funding for secondary schools, including those with sixth forms, was cut by £200 a pupil in real terms. Although we shall defend excellent and good school sixth forms, it is only right to take seriously the opportunity presented by the Bill to take action when school sixth forms fall well short of the standards of education that young people need to succeed in the modern world. Our priority is the decent education of young people in sixth forms—whether in sixth form colleges, further education colleges or schools—and good school sixth forms will be maintained and improved under the Government.
  There has been much false talk about centralism from the Opposition. We want a Learning and Skills Council that is strong at the centre and strong locally. For the first time, two funding streams—£6 billion—will come together to enable us to consider education and training. Local LSCs will have not only a 10 to 15 per cent. discretionary spend, but a big say over the whole 100 per cent. in making local decisions about how national strategy affects local communities. The LSCs are about local people making local decisions. That is at the heart of our concern.
  As for bureaucracy, we are replacing three funding systems and 250 funding bodies with one streamlined route, which will mean less red tape, shorter contracting chains and greater consistency. The £50 million saving means a £95,000 saving for each and every constituency. We are not prepared to spend money on bureaucracy, as the previous Government did. We are spending it on front-line learning. Surely that is the absolute priority. The ConneXions service is equally important and it is high time we built on good practice to offer all 13 to 19-year-olds proper advice and guidance, but there will be a special focus on the most disadvantaged.
  These are new policies and funding streams, and we deal with three major areas: young people aged 16 to 19, skills for those of working age, and adult and community education. That policy is at the heart of our economic strategy because it deals with learning and skills and the knowledge-based economy, but as important for some of

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  us is the fact that it is also at the heart of our social policy. It is about inclusion, the fair society, decent options for young people, and equal opportunities for those with learning difficulties and for others, not squandering the talents of too many of our young men and women. This is an equal opportunity measure—a clear national policy—but local people will make local decisions.
  Our policy is fit for the 21st century. Why? Because education is the liberator for the individual, because learning empowers the community and because skills become the engine for economic development. With enthusiasm, I commend the Bill to the whole House.
  Question put, That the amendment be made:—
  The House divided: Ayes 119, Noes 280.

  Division No. 133]

  [6.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Johnson Smith, Rt Hon Sir Geoffrey

  Arbuthnot, Rt Hon James

  Atkinson, Peter (Hexham)

  Key, Robert

  Baldry, Tony

  King, Rt Hon Tom (Bridgwater)

  Bercow, John

  Laing, Mrs Eleanor

  Beresford, Sir Paul

  Lait, Mrs Jacqui

  Blunt, Crispin

  Lansley, Andrew

  Body, Sir Richard

  Leigh, Edward

  Boswell, Tim

  Letwin, Oliver

  Bottomley, Peter (Worthing W)

  Lewis, Dr Julian (New Forest E)

  Brady, Graham

  Lloyd, Rt Hon Sir Peter (Fareham)

  Brazier, Julian

  Loughton, Tim

  Brooke, Rt Hon Peter

  Luff, Peter

  Browning, Mrs Angela

  Lyell, Rt Hon Sir Nicholas

  Bruce, Ian (S Dorset)

  MacGregor, Rt Hon John

  Burns, Simon

  McIntosh, Miss Anne

  Butterfill, John

  Maclean, Rt Hon David

  Chapman, Sir Sydney (Chipping Barnet)

  McLoughlin, Patrick

  Malins, Humfrey

  Chope, Christopher

  Maples, John

  Clappison, James

  May, Mrs Theresa

  Clark, Dr Michael (Rayleigh)

  Moss, Malcolm

  Collins, Tim

  Norman, Archie

  Davis, Rt Hon David (Haltemprice)

  O'Brien, Stephen (Eddisbury)

  Day, Stephen

  Ottaway, Richard

  Dorrell, Rt Hon Stephen

  Page, Richard

  Duncan, Alan

  Paice, James

  Duncan Smith, Iain

  Paterson, Owen

  Evans, Nigel

  Pickles, Eric

  Faber, David

  Portillo, Rt Hon Michael

  Fabricant, Michael

  Prior, David

  Fallon, Michael

  Redwood, Rt Hon John

  Flight, Howard

  Robathan, Andrew

  Forth, Rt Hon Eric

  Robertson, Laurence

  Fox, Dr Liam

  Robinson, Peter (Belfast E)

  Gale, Roger

  Roe, Mrs Marion (Broxbourne)

  Garnier, Edward

  Ruffley, David

  Gibb, Nick

  St Aubyn, Nick

  Gillan, Mrs Cheryl

  Shephard, Rt Hon Mrs Gillian

  Gray, James

  Shepherd, Richard

  Green, Damian

  Simpson, Keith (Mid-Norfolk)

  Greenway, John

  Spelman, Mrs Caroline

  Grieve, Dominic

  Spicer, Sir Michael

  Hamilton, Rt Hon Sir Archie

  Spring, Richard

  Hammond, Philip

  Stanley, Rt Hon Sir John

  Hawkins, Nick

  Swayne, Desmond

  Hayes, John

  Syms, Robert

  Heald, Oliver

  Tapsell, Sir Peter

  Heathcoat-Amory, Rt Hon David

  Taylor, Ian (Esher & Walton)

  Hogg, Rt Hon Douglas

  Taylor, John M (Solihull)

  Horam, John

  Taylor, Sir Teddy

  Howard, Rt Hon Michael

  Townend, John

  Hunter, Andrew

  Tredinnick, David

  Jack, Rt Hon Michael

  Trend, Michael

  Jackson, Robert (Wantage)

  Tyrie, Andrew

  596

  Walter, Robert

  Winterton, Nicholas (Macclesfield)

  Wardle, Charles

  Yeo, Tim

  Waterson, Nigel

  Young, Rt Hon Sir George

  Wells, Bowen

  Wilkinson, John

  Tellers for the Ayes:

  Willetts, David

  Mr. Geoffrey Clifton-Brown

  Wilshire, David

  and

  Winterton, Mrs Ann (Congleton)

  Mr. John Randall.

  NOES

  Abbott, Ms Diane

  Cunningham, Jim (Cov'try S)

  Ainsworth, Robert (Cov'try NE)

  Curtis-Thomas, Mrs Claire

  Alexander, Douglas

  Darling, Rt Hon Alistair

  Allan, Richard

  Darvill, Keith

  Allen, Graham

  Davey, Valerie (Bristol W)

  Anderson, Donald (Swansea E)

  Davies, Rt Hon Denzil (Llanelli)

  Anderson, Janet (Rossendale)

  Davies, Geraint (Croydon C)

  Armstrong, Rt Hon Ms Hilary

  Dawson, Hilton

  Ashton, Joe

  Dean, Mrs Janet

  Austin, John

  Denham, John

  Banks, Tony

  Dismore, Andrew

  Barnes, Harry

  Donohoe, Brian H

  Barron, Kevin

  Dowd, Jim

  Battle, John

  Drown, Ms Julia

  Beard, Nigel

  Dunwoody, Mrs Gwyneth

  Beckett, Rt Hon Mrs Margaret

  Eagle, Angela (Wallasey)

  Bell, Martin (Tatton)

  Eagle, Maria (L'pool Garston)

  Bell, Stuart (Middlesbrough)

  Edwards, Huw

  Benn, Hilary (Leeds C)

  Efford, Clive

  Benn, Rt Hon Tony (Chesterfield)

  Ellman, Mrs Louise

  Bennett, Andrew F

  Ennis, Jeff

  Benton, Joe

  Etherington, Bill

  Bermingham, Gerald

  Field, Rt Hon Frank

  Berry, Roger

  Fisher, Mark

  Blair, Rt Hon Tony

  Fitzpatrick, Jim

  Blizzard, Bob

  Flint, Caroline

  Blunkett, Rt Hon David

  Flynn, Paul

  Borrow, David

  Follett, Barbara

  Bradley, Keith (Withington)

  Foster, Don (Bath)

  Bradshaw, Ben

  Foster, Michael Jabez (Hastings)

  Brand, Dr Peter

  Foster, Michael J (Worcester)

  Breed, Colin

  Foulkes, George

  Brinton, Mrs Helen

  Fyfe, Maria

  Brown, Rt Hon Nick (Newcastle E)

  Galloway, George

  Browne, Desmond

  Gardiner, Barry

  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

  Caplin, Ivor

  Gordon, Mrs Eileen

  Casale, Roger

  Griffiths, Jane (Reading E)

  Caton, Martin

  Griffiths, Nigel (Edinburgh S)

  Cawsey, Ian

  Griffiths, Win (Bridgend)

  Chaytor, David

  Grocott, Bruce

  Clark, Paul (Gillingham)

  Grogan, John

  Clarke, Charles (Norwich S)

  Hall, Mike (Weaver Vale)

  Clarke, Rt Hon Tom (Coatbridge)

  Hall, Patrick (Bedford)

  Clarke, Tony (Northampton S)

  Hamilton, Fabian (Leeds NE)

  Clelland, David

  Hanson, David

  Clwyd, Ann

  Harman, Rt Hon Ms Harriet

  Coaker, Vernon,

  Heath, David (Somerton & Frome)

  Coffey, Ms Ann,

  Henderson, Doug (Newcastle N)

  Cohen, Harry

  Heppell, John

  Coleman, Iain

  Hesford, Stephen

  Colman, Tony

  Hewitt, Ms Patricia

  Corbett, Robin

  Hill, Keith

  Corbyn, Jeremy

  Hinchliffe, David

  Corston, Jean

  Hodge, Ms Margaret

  Cotter, Brian

  Hopkins, Kelvin

  Cousins, Jim

  Howarth, George (Knowsley N)

  Cranston, Ross

  Hughes, Ms Beverley (Stretford)

  Crausby, David

  Hughes, Kevin (Doncaster N)

  Cryer, Mrs Ann (Keighley)

  Hurst, Alan

  Cryer, John (Hornchurch)

  Hutton, John

  597

  Iddon, Dr Brian

  Powell, Sir Raymond

  Illsley, Eric

  Prentice, Ms Bridget (Lewisham E)

  Jackson, Ms Glenda (Hampstead)

  Prentice, Gordon (Pendle)

  Jackson, Helen (Hillsborough)

  Prescott, Rt Hon John

  Jamieson, David

  Primarolo, Dawn

  Jenkins, Brian

  Prosser, Gwyn

  Johnson, Miss Melanie (Welwyn Hatfield)

  Quin, Rt Hon Ms Joyce

  Radice, Rt Hon Giles

  Jones, Ms Jenny (Wolverh'ton SW)

  Rapson, Syd

  Raynsford, Nick

  Jones, Dr Lynne (Selly Oak)

  Reid, Rt Hon Dr John (Hamilton N)

  Jowell, Rt Hon Ms Tessa

  Rendel, David

  Keeble, Ms Sally

  Roche, Mrs Barbara

  Kelly, Ms Ruth

  Rogers, Allan

  Kemp, Fraser

  Rooker, Rt Hon Jeff

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Rooney, Terry

  Rowlands, Ted

  Kennedy, Jane (Wavertree)

  Roy, Frank

  Khabra, Piara S

  Ruddock, Joan

  Kilfoyle, Peter

  Russell, Bob (Colchester)

  King, Andy (Rugby & Kenilworth)

  Ryan, Ms Joan

  Ladyman, Dr Stephen

  Salter, Martin

  Laxton, Bob

  Sarwar, Mohammad

  Lepper, David

  Sawford, Phil

  Leslie, Christopher

  Sedgemore, Brian

  Levitt, Tom

  Sheldon, Rt Hon Robert

  Lewis, Ivan (Bury S)

  Shipley, Ms Debra

  Lewis, Terry (Worsley)

  Simpson, Alan (Nottingham S)

  Liddell, Rt Hon Mrs Helen

  Singh, Marsha

  Linton, Martin

  Skinner, Dennis

  Livsey, Richard

  Smith, Rt Hon Andrew (Oxford E)

  Lloyd, Tony (Manchester C)

  Smith, Angela (Basildon)

  Lock, David

  Smith, Rt Hon Chris (Islington S)

  Love, Andrew

  Smith, Llew (Blaenau Gwent)

  McAvoy, Thomas

  Soley, Clive

  McCafferty, Ms Chris

  Southworth, Ms Helen

  McCartney, Rt Hon Ian (Makerfield)

  Squire, Ms Rachel

  Starkey, Dr Phyllis

  McDonagh, Siobhain

  Steinberg, Gerry

  McDonnell, John

  Stevenson, George

  McGuire, Mrs Anne

  Stewart, Ian (Eccles)

  Mackinlay, Andrew

  Stinchcombe, Paul

  McNamara, Kevin

  Strang, Rt Hon Dr Gavin

  McNulty, Tony

  Stringer, Graham

  Mactaggart, Fiona

  Stunell, Andrew

  McWalter, Tony

  Sutcliffe, Gerry

  McWilliam, John

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Mahon, Mrs Alice

  Mallaber, Judy

  Taylor, Ms Dari (Stockton S)

  Mandelson, Rt Hon Peter

  Temple-Morris, Peter

  Marsden, Gordon (Blackpool S)

  Thomas, Gareth R (Harrow W)

  Marshall, Jim (Leicester S)

  Timms, Stephen

  Marshall-Andrews, Robert

  Tipping, Paddy

  Meale, Alan

  Todd, Mark

  Merron, Gillian

  Trickett, Jon

  Milburn, Rt Hon Alan

  Truswell, Paul

  Miller, Andrew

  Turner, Dennis (Wolverh'ton SE)

  Mitchell, Austin

  Turner, Dr Desmond (Kemptown)

  Moffatt, Laura

  Turner, Neil (Wigan)

  Morgan, Ms Julie (Cardiff N)

  Twigg, Derek (Halton)

  Morley, Elliot

  Tyler, Paul

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

  Tynan, Bill

  Vaz, Keith

  Mountford, Kali

  Walley, Ms Joan

  Mullin, Chris

  Wareing, Robert N

  Murphy, Denis (Wansbeck)

  Watts, David

  O'Hara, Eddie

  White, Brian

  Palmer, Dr Nick

  Whitehead, Dr Alan

  Pearson, Ian

  Wicks, Malcolm

  Pendry, Tom

  Williams, Rt Hon Alan (Swansea W)

  Perham, Ms Linda

  Pickthall, Colin

  Williams, Alan W (E Carmarthen)

  Plaskitt, James

  Wills, Michael

  Pond, Chris

  Winnick, David

  Pope, Greg

  Winterton, Ms Rosie (Doncaster C)

  Pound, Stephen

  Woodward, Shaun

  598

  Woolas, Phil

  Tellers for the Noes:

  Worthington, Tony

  Mr. Don Touhig and

  Wright, Dr Tony (Cannock)

  Mr. Clive Betts.

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).
  7.13 pm
  Mrs. Angela Browning: On a point of order, Mr. Deputy Speaker. During questions to the Secretary of State for Trading and Industry this morning, the Secretary of State refused to give information about meetings and telephone calls that had taken place between him, or his Department, and BMW. At 1 pm today, I faxed the permanent secretary at the Department of Trade and Industry, asking him to make the departmental records available and to place them in the House of Commons Library. I have received no reply, but I understand that at 4 pm journalists from the House of Commons were invited into the Department and briefed on the departmental records—information that was denied to the House this morning.
  May I ask through you, Mr. Deputy Speaker, for the records to be placed in the House of Commons Library as a matter of urgency?
  Mr. Deputy Speaker (Sir Alan Haselhurst): As the hon. Lady probably understands, that is not an issue that the Chair can directly affect. Those on the Government Front Bench will have heard what she has said.

  LEARNING AND SKILLS BILL [LORDS] [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
  That, for the purposes of any Act resulting from the Learning and Skills Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

  (a) any expenditure of the Secretary of State incurred in consequence of the Act;

  (b) any increase attributable to the Act in the sums payable out of money so provided under any other enactment.[Mr. Mike Hall.]

  Question agreed to.

  COMMITTEES
  Mr. Deputy Speaker (Sir Alan Haselhurst): With permission, I shall put together the motions relating to Committees.
  Ordered,

  COMMITTEES
    ENVIRONMENTAL AUDIT COMMITTEE
    That Dr. Brian Iddon be discharged from the Environmental Audit Committee and Mr. David Chaytor be added to the Committee.
    That Mr. Bill Rammell be discharged from the European Scrutiny Committee and Mr. Allan Rogers be added to the Committee.
    SELECT COMMITTEE ON PUBLIC ADMINISTRATION
    That Dr. George Turner be discharged from the Select Committee on Public Administration and Mr. Anthony D. Wright be added to the Committee.
    LIAISON COMMITTEE
    That Mr. Peter Luff be discharged from the Liaison Committee and Mr. David Curry be added to the Committee.—[Mr. Mike Hall.]

  Coal Miners' Compensation Claims
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Mike Hall.]
  7.15 pm
  Mr. Kevin Barron: I thank Madam Speaker through you, Mr. Deputy Speaker, because I understand that she selected my debate for this evening. The practice known as administration or success fees has been an issue in my constituency and many others for many months. The fees are asked by some solicitors from ex-miners who make successful claims under the schemes that have been agreed with the Department of Trade and Industry and a group of solicitors.
  In the middle of last year, I was approached by someone who works for the Coal Industry Social Welfare Organisation—CISWO—which is based in my constituency. The organisation has a long and proud record of working in coal mining communities, looking after the interests of retired miners and miners' widows. Families that suffered bereavement due to industrial accidents used to get good support from the organisation.
  I was told that miners and miners' widows were asking for advice on correspondence from solicitors that they found confusing. In July last year I sent copies of some correspondence to the previous Minister, my hon. Friend the Member for Leeds, West (Mr. Battle), showing that a firm of solicitors called Raleys in Barnsley is involved in the practice of getting claimants to agree to an arrangement under which 3 per cent. of any compensation received, up to a maximum of £750, is paid to them. That sum is paid in turn to the National Union of Mineworkers.
  Raleys argued:
  Under a Conditional Fee Agreement ("no win, no fee") solicitors are entitled to receive up to 25 per cent. of the claimant's damages (however large the damages are) which for a £25,000 claim could be up to £6,250; but under the mandate the Union administration fee is limited to £750 (3 per cent. of £25,000) and in many cases will be less.
  Does my right hon. Friend the Minister agree that, in the circumstances, the statement of the solicitors is grossly misleading? As part of a package agreed with the legal profession, the Government are paying all solicitors' costs for successful claims and even some costs for unsuccessful claims.
  Another argument used in the correspondence is:
  I believe that the Union exists to fight for the rights of working men and women. … The Union has for nearly 30 years been at the forefront of the campaign to have bronchitis and emphysema recognised as an industrial disease.
  I am sure that we all agree with those sentiments; I have been arguing the case for many years. However, that does not justify the union taking a cut from the compensation awards for those disabling diseases.
  Mr. Alan W. Williams: The South Wales area of NACODS—the National Association of Colliery Overmen, Deputies and Shotfirers—has a similar levy of 5 per cent. of the eventual award, or 10 per cent. in the case of lapsed members. In one case, there is a claim of £7,250 from a member's compensation.
  Mr. Barron: I am grateful for that intervention.
  Mr. Allan Rogers: As one of the Welsh members on the monitoring group that was set up by the

  601
  Government to expedite the claims, I have had a number of complaints. My hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) has passed some on to me. To put it in context, I understand that the solicitors are being paid tens of millions of pounds out of the money that has been made available. It is not as though it is petty cash. I am sure that the Minister for Energy and Competitiveness in Europe, my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), will give the exact figure.
  Mr. Barron: I ask my right hon. Friend to do exactly that.
  I have a constituency case of an ex-miner who was originally asked by Russell Young Solicitors of Newcastle to pay an administration fee of £1,000. He objected. That was consequently reduced to a maximum of £200. Because Russell Young went out of business, his claim, which was for vibration white finger, was sent to Thompsons Solicitors of Newcastle, which asked for and, I understand, has now received consent to take a £200 administration fee from my constituent's compensation.
  On 1 November last year, I sent those two cases to the Office for the Supervision of Solicitors, asking if it were able to take action to stop the practice of asking for fees from compensation, when the solicitor fees had already been met by the taxpayer.
  I emphasise that I did not write in any formal complaint on behalf of any constituent. I was concerned simply about the practice that I have outlined. I intended to bring the matter up in Parliament on Wednesday 10 November last year in a debate on the coal industry, but, sadly, I was not called.
  On that day, an article appeared in the Yorkshire Post, explaining what I had done and including some comments from the Minister. I received a letter from a firm of solicitors in Sheffield, Irwin Mitchell, which wrote on behalf of the co-ordinating group of claimants' solicitors, which represents former mine workers in the litigation. That firm was responsible for the handling agreement, which it agreed with the Department of Trade and Industry.
  The firm stated in its letter that the article in the Yorkshire Post was misleading. I wrote back telling it what the Minister had said in correspondence and asking the following three questions, given that it seemed to be the lead partner in the group.
  The first was:
  Why do you think it is right that a successful claimant or, on some occasions, his widow, has the responsibility/obligation to pay money towards an unsuccessful claimant's costs?
  The second was:
  Why is it that some solicitors are charging different administration fees? I have seen examples of some charging £200 and some charging up to £750.
  We have heard from my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) that there are different charges in South Wales.
  The third question was:
  Why is it that one firm of solicitors is charging an administration fee on successful claims and passing it on to a third party (the claimant's trade union)?
  602
  Irwin Mitchell's replies to my three questions are as follows. In reply to question one, it was stated:
  During the course of the passage of the Access to Justice bill and the withdrawal of legal aid for personal injury claims, the Government has made it clear that solicitors should adopt a business-like attitude towards claims funded by Conditional Fee Agreements and view successful claims which attract success fees as funding for unsuccessful claims.
  In answer to question 2, it was said:
  I am not in a position to comment on administration fees levied by some firms of solicitors. Funding and billing arrangements between solicitors and their clients are essentially private matters and I have no knowledge of the arrangements that most members of the solicitors group have made with their clients.
  I know some firms make no charge at all until the end of a case and from what I know of the litigation personally a charge of £750.00 would seem to be a lot, however I am unaware of the circumstances in which this sum is claimed and thus I am not in a position to express a considered opinion. The regulation of solicitors costs does allow clients the facility to challenge charges that they think might be inappropriate and if you consider it helpful I can provide you with the information as to this process.
  In answer to my third question, I was told that the
  arrangements made by trade unions to fund their members' claims varied from union to union. The matter you raise is one between the particular firm of solicitors, that firm's clients and the trade union concerned. I am not in a position to offer an explanation.
  In reference to the reply to my first question, does not my right hon. Friend agree that, if solicitors agree that they should be more businesslike, they should agree some form of code of conduct and scale of charges? However, I find it difficult to accept that successful claimants have any form of obligation to fund unsuccessful claims.
  Although the firm considers that the charge of £750 is high, it does not argue against some charge. As to the final response to my final question, I go back to the reply to my first question: on what basis can one of the charges be made when these solicitors are not retaining the fees for funding unsuccessful claims but are handing them over to a third party—in this case, a trade union?
  I sent this correspondence to the Office for the Supervision of Solicitors, which has appointed a leading solicitor in the west midlands to look into the matter. His preliminary report was completed on 27 January, and I am waiting to see whether there will be a full investigation. I would hope that that would include the collection of more evidence into what I believe is a very unsatisfactory situation.
  Meanwhile, the problem goes on. I received a letter dated 6 March from CISWO, stating that it had identified a differential fee charged by the company Irwin Mitchell, which is based in Sheffield. That differential fee is charged particularly in posthumous cases. One widow was asked to sign a conditional fee agreement for 10 per cent. payment, while another was asked to sign for a deduction of 20 per cent. CISWO pointed out that the charge can go as high as 25 per cent. in some cases.

  603
  That is true. I have here correspondence sent last month to a miner's widow in my constituency. Under the heading "Respiratory Disease", it states:
  If your claim proves to be successful generally "costs follow the event". This means that if you are successful in proving your claim for compensation then the party paying that compensation will in addition pay your legal costs. Under the terms of a Conditional Fee Agreement, you will then be liable to pay a success fee. The success fee being 25 per cent. of our basic costs.
  The letter goes on to state that the terms of the conditional fee agreement mean that if a claim failed, the claimant would not have to pay any costs. However, the fee agreement sent to my constituent to sign stated, under the heading "Paying Us", stated:
  If you win the case, you are liable to pay our disbursements, basic costs and success fee.
  Will my right hon. Friend confirm that, under the scheme agreed with the Government, disbursements and basic costs are met by the taxpayer, not by the successful claimant? Yet the conditional fee agreement makes it clear that that is what is expected to happen.
  I agree with CISWO: the whole matter is confusing to my constituents, many of whom are elderly or who have difficulty reading the reams of paper involved and coming to decisions that are in their own interests. I believe that most solicitors dealing with mineworkers' claims are not charging any success or administration fee.
  I have evidence from two solicitors' firms. Towells from Wakefield states in correspondence received by my constituents:
  We also confirm that whether or not your claim is successful, no charge will be made by this firm for work undertaken in connection with your claim. In the event that you are awarded compensation, our fees will be paid by British Coal's insurers. No monies whatsoever will be deducted from your compensation.
  Keeble Hawson in Sheffield, whose offices are a few hundred yards from those of Irwin Mitchell, states:
  I confirm that this firm does not charge any success fee on any claim whether the claimant is referred to us by a Union or from any other source.
  In addition we do not charge for any unsuccessful case again whether or not the individual has been referred from a Union or not. The only item we would charge is if we have to incur any disbursements such as GP records etc, then we usually ask the Claimant to confirm that they will meet the costs of such a disbursement or deduct it from their compensation. I would say at this stage, it has been rare if ever this has actually happened.
  Is there any way in which we can get messages to retired mineworkers to tell them that they do not have to sign up to these additional fees if they do not want to? Has my right hon. Friend thought of using the newsletter of the mineworkers' pension scheme—obviously at the Government's own expense—to put the message across to people, many of whom will be getting the newsletter, that they do not have to sign up to those solicitors who are levying charges on their rightful compensation?
  My right hon. Friend wrote to Members earlier this week with a progress report on the processing of compensation claims. I am grateful that the Department has come to an agreement with the British Medical Association regarding general practitioners assisting quickly in retrieving medical records of claimants. Will
  604
  the Department look into the retrieving of mineworkers' past work records, as I understand that that matter is causing some delay in terms of the levying of these claims?
  The Government are doing all within their power, and they have put many millions of pounds into this area to compensate people who have been disabled by these diseases. As a Member of Parliament from a coal mining area, I am grateful that that is happening, and it has the potential to help many hundreds, if not thousands, of my constituents. However, we need to try to speed the process up as best we can, and we need to make sure that constituents are getting good, sound advice on what they should be paying, or not paying, in relation to settling these damages against British Coal.
  7.33 pm
  The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell): I congratulate my hon. Friend the Member for Rother Valley (Mr. Barron) on securing the debate. I am grateful to him for putting so many of these issues on the record. I have been dealing with this matter since August last year, and my emotions have gone from shock to despair to anger at some of the stories that I have heard about how men—and their widows, sadly—are being abused in a situation where the Government are trying to make due recompense for terrible suffering that they have experienced as a result of their occupation.
  My hon. Friend has raised a large number of issues, not all of which I may have time to answer this evening. I will take on board the issues that he has raised. I draw to his attention and that of the House the fact that I am accompanied on the Front Bench by the Parliamentary Secretary, Lord Chancellor's Department, my hon. Friend the Member for Wyre Forest (Mr. Lock), who has taken copious notes of the points made by my hon. Friend in relation to the activities of solicitors.
  First, let me make it clear that there are some solicitors involved in this matter—as my hon. Friend pointed out—who are extremely honourable and give of their time with great dedication, often above and beyond the call of duty. Regrettably, there are others who see this as a dripping roast and do not give a service, leaving us in a situation where not only do we have difficulty progressing these claims but, in some cases, we cannot even get a response from them at all.
  Mr. Rogers: I hope that my right hon. Friend and my hon. Friend the Member for Wyre Forest (Mr. Lock), who represents the Lord Chancellor's Department, will look not only at the morality but the legality of solicitors charging success fees when they are not involved in litigation. All that solicitors do in this instance is process claims. They are not taking the matter to the courts, so how on earth they can claim success fees is beyond me.
  Mrs. Liddell: I am grateful to my hon. Friend for raising that point. We will look into it.
  It may help the House if I go through the handling agreement that we have with solicitors and what they get paid for. We are paying solicitors' fees to the tune of £100 million. We are not talking about small sums of money.

  605
  My hon. Friend the Member for Rother Valley also talked about obtaining information using the mineworkers' pension scheme. I will look into that. I am aware of the difficulty of accessing British Coal records. There are five and a half miles of records, many of them incomplete, which also slows down the process. I say to my hon. Friends—hon. Friends, because the Opposition Benches are completely empty for this important debate—
  Mr. Deputy Speaker: Order. I have to say, consistent with Madam Speaker's rulings, that Adjournment debates, which are individual debates initiated by a particular Member, are not a matter for any Member of the House other than the Member speaking to the motion and the Minister who replies. They are not general debates.
  Mrs. Liddell: I am grateful to you, Mr. Deputy Speaker, and 1 apologise for that remark. May I make the point, however, that these are extremely significant issues? Nearly 100,000 miners or their widows have already submitted claims.
  I would like to go through the handling agreement so that people in this House and outside know exactly what solicitors are paid for. Solicitors have a table of tariffs that cover their profit costs plus reasonable disbursements. The tariffs relate to the stage in the process that a claim is settled and the complexity of the work. At the lower end, a solicitor who represents a claimant who accepts an expedited offer after the initial spirometry test would receive £900 plus reasonable disbursements. At the top end, a solicitor representing a claimant who receives compensation having gone through the medical assessment process is entitled to £1,750 plus reasonable disbursements. In addition, certain top-ups are paid, ranging from £200 to £500, to reflect various difficulties that may be encountered during the life of a claim. Involving co-defendants, invoking the disputes procedure and carrying out complex calculations of special damages can all merit top-up payments.
  In addition—I make this point forcefully—the Department is paying a proportion of solicitors' costs incurred on unsuccessful claims because we agreed to pay towards client care for all claims received before 14 June 1999, regardless of whether they are ultimately successful or not; so any of the success fees recovered by the solicitors would be additional to these sums and would obviously reduce the compensation received by the claimant.
  The solicitors' tariffs were agreed after a great deal of negotiation. They reflect a great deal of work and cover a variety of tasks, such as keeping clients informed of the progress of their claim, giving face-to-face assistance with completing the various forms—which can take between one and one and a half hours—checking that offers of compensation are correct and that they accord with the terms of the agreement.
  I have seen the preliminary report of the complaint that my hon. Friend the Member for Rother Valley made to the Office for the Supervision of Solicitors. It is important that the conclusions are borne in mind. However, many
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  of the claims are being settled under an agreement whereby the Department of Trade and Industry meets the cost of collecting all medical records and the cost of medical consultation, regardless of the outcome of the claim. This is a risk-free enterprise for solicitors. The Government are carrying the risk. That is what I find so difficult to accept.
  I have some encouragement for my hon. Friend. First, in relation to the British Coal records, we will be content with a statement of employment where no record exists, to ease the search for records. However, the Parliamentary Secretary, Lord Chancellor's Department, informs me that under any conditional fee agreements entered into after 1 April, success fees can be claimed and paid by defendants, not out of damages. Not only will the success fee be paid by defendants—in this case the Government—but the percentage can be challenged by the defendant if the fee is excessive. My Department will take that into account if we receive evidence of excessive success fees being claimed after 1 April. We shall study all claims carefully.
  The president of the Law Society may have some interest in several points made this evening. Any claims for success fees from before 1 April can be challenged, and the reasonableness of charges can be analysed through an application for a remuneration certificate. Many elderly people will not want to go down that route. I hope that moral suasion will bring common sense to some of the activities taking place.
  This is the largest ever personal injury case, and that has brought significant difficulties. It is a one-off case, and we are to some extent learning as we go. It is a source of intense frustration to the Government that we have not made more progress, although the first major MAP compensation—in excess of £50,000—has been paid this week. To those awaiting payment, I can say only that we need the co-operation of solicitors. We need them to fill in forms and to have mandates signed. We shall consider every opportunity to progress matters as quickly as possible.
  Let me take the opportunity provided by my hon. Friend's debate to appeal to doctors and health authorities to help us to make quicker progress. People are dying. We are helping lawyers and health authorities with the administration related to releasing medical records. We are paying £100 a day for access to the records, and I appeal to the caring professions to help us to proceed as quickly as we possibly can.
  Much of what we have discussed tonight is not illegal, although it is immoral—a point that should be forcefully made. I want to issue another warning. We have talked tonight about solicitors, but the substantial sums of money involved have also been recognised by many people who describe themselves as claims handlers. IRISC—which handles claims for the Department—has been approached by claim-handling firms asking for a database of the miners who seek to pursue claims. The claim-handling firms also want success fees.
  I have no doubt that when significant sums are eventually paid to miners, another new form of vulture will appear in the mining communities—people who will

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  seek to advise miners, their widows and their families on how to invest the compensation. It is as well to warn people now to be cautious and not to be taken in by those who would seek to make a killing from people who are suffering, and, in some cases, from people who have lost their lives.
  We have heard that unions are seeking contributions from compensation. I can see a case for that in some circumstances. The unions began the whole process, and we recognise that they need help with the legal costs that they incurred. However, fairness is vital.
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  I urge those who are circling people who are desperately ill to be aware that wider society and the Government are watching what they do. I repeat that these people are very ill.
  Many important points have been put on the record tonight, and my Department and the Lord Chancellor's Department will consider them closely. 1 hope that the wider community will do the same.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Eight o ' clock.

Preamble
[MR MICHAEL J. MARTIN in the Chair]

Women and Development
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Sutcliffe.]
2.30 pm
Mr. Bowen Wells: I am grateful to have the opportunity to speak on what I regard as one of the most important subjects, not just for international development but for human society as a whole. Women constitute half the human population, and are of huge importance. I want this debate to initiate an understanding of the problems faced by women among not only women but men and the whole community. That is important in terms of achieving the international target of reducing poverty by half by 2015, which is closely related to the issue of women and development and their status in the world.
The Minister will know that the White Paper stated that the Government's prime objective was to achieve that international target. Women comprise 70 per cent. of the world's abjectly poor, so it is inevitable that if the objective is to be addressed seriously, the nature of, and remedies for, women's poverty must be understood and acted on. Of the 1.3 billion poorest people in the world, more than a third, or 450 million, live in India, 14.8 million live in Pakistan and 30 million live in Bangladesh. That is a total of 494.8 million women in abject poverty. The International Development Committee visited those three countries to learn at first hand why so many poor women lived in the subcontinent, and what could be done to help them out of poverty. Unless help is provided, the objective of reducing world poverty by half by 2015 cannot be achieved.
The first statistic that smacks an inquirer in the face is the one that shows that the gender balance is reversed in the three countries that I mentioned. In most human societies, the population is 52 per cent. female and 48 per cent. male—106 females to 100 males. In the early years, the male is much more vulnerable to illness and death than the female. Despite that, India, Pakistan and Bangladesh manage to achieve a population in which there are more males than females. In those countries, there are 94 females to 100 males, and the ratio is declining still further—it has declined during the past 50 years. In sub-Saharan Africa, where poverty is also rampant, the figures are better, but they are still alarming—102 females to 100 males. We concluded in paragraph 19 of our report "Women and Development":
The declining sex ratio in India provides a stark and shocking indication of the true extent and impact of women's low status in society, their lack of access to basic health and education services, and the discrimination and violence which continues to threaten their chances of survival.
Faced with such statistics, we must ask why that situation is so apparent in India, Pakistan and Bangladesh. We know that it is not the inevitable result
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of the culture and approach to life because, in our contacts with those countries, many of us have met sophisticated and powerful women, including the Prime Ministers of India and of Bangladesh.
The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): And the Leader of the Opposition.
Mr. Wells: Yes, the Prime Minister and the Leader of the Opposition in Bangladesh are both women. There seems to be a curious contrast, which is difficult to explain.
The Committee visited many areas where women were suffering, including, much to the amusement of many of my colleagues, two brothels, one in west Calcutta and one in Bogra in Bangladesh. I shall explain later why we felt it necessary to visit them, but I shall begin at the beginning of life and explain what happens to female children in infancy and childhood.
Modern methods allow the sex of a foetus to be ascertained and amniocentesis is being used ruthlessly in middle-class India, Bangladesh and Pakistan. When it is established that a foetus is female, the foetus is often aborted. There are more traditional ways of disposing of female foetuses and children, including direct infanticide. First, a female child may be fed on the breast for a shorter time and, therefore, will be less able to withstand attack by the variety of viruses and infections that confront young children. Secondly, if there is not enough food for the whole household, a boy child will be fed, but the girl child will not. If they have not succumbed to death in the first five years, many female children will be brain damaged due to a lack of food and unable to take advantage of education, if it were offered. There is a hugh preponderance of illiterate women and girls in India, Pakistan and Bangladesh, the whole of Africa and many parts of Asia. The appalling statistics are not confined to India, Pakistan and Bangladesh.
Education and the way in which children grow up can provide an exit from the appalling statistics. If a female child is educated, she will want to educate her children, whether they are male or female, when she becomes a mother. That is the solution to the problem of education for women, but due to the abject poverty in many areas of India, Pakistan and Bangladesh, female children are not educated because malnourishment has caused brain damage during childhood. Some female children are not offered any education.
If, by chance, female children have been able to achieve basic literacy by the time they reach adolescence, they are often taken out of school at the age of 10, 11 or 12 and are married and already having children by the age of 12, 13 or 14. Then the cycle of illiteracy, malnourishment and infanticide goes on. This is the cycle that somehow the world must break, if we are not only to achieve just rights for women but to confront the issue of abject poverty in the world.
In adolescence, the female may also be subjected to domestic violence, which takes a number of unpleasant forms. There are the dowry deaths in India; if the female is sold into marriage with a dowry, but the dowry is considered inadequate, she may be abused physically and mentally in the husband's family, whom she had probably never met before she married. There are also

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sati deaths. As you may know, Mr. Deputy Speaker, the wife of a dead husband is expected to throw herself on his funeral pyre and die with him.
In Bangladesh in particular, there is now the most appalling growing abuse of throwing acid at the wife if she has not performed in accordance with male needs. The most disgraceful episodes of that have recently come to the attention of the western press.
Mr. Andrew Robathan: My hon. Friend will know that the part of the Select Committee with which I was travelling went to Pakistan, where, I submit, the cases may be even worse. In Lahore, the practice of stove burning, which we would call murder and mutilation, is prevalent. The report states that at any one time in Lahore alone between 60 and 70 women are dying of burns, many of which are presumed, and likely, to have been caused by deliberate stove burning by their husbands or in-laws. That is yet another awful indicator of what happens in parts of the sub-continent.
Mr. Wells: Yes, indeed. My hon. Friend will remember the evidence given to us by Dr. Kate Young of Womankind, in which she talked about that kind of death for many women and referred to acid burning, particularly in Bangladesh. The World bank calculates that rape and domestic violence account for about 5 per cent. of the total disease burden among women aged between 15 and 44. Stove deaths are another manifestation of the same disregard lack of respect and care for women.
The figures for maternal mortality in the whole of India, Pakistan and Bangladesh are shocking and the deaths are almost entirely unnecessary and preventable. Dr. Kate Young also gave the Committee evidence on this subject. She said:
Maternal mortality—lack of family planning resources, high demands on women's fertility, and lack of birth spacing, combining with existing poor health conditions (ie anaemia and malnutrition) strains women's health.
That can result in their death, during or after giving birth.
Only by trying to improve the lot of women who suffer such abuses can we begin to find a solution. It is a matter not simply of looking after sexual and reproductive health but of taking care of the female child when she is confronted with normal childhood diseases such as measles or, on the sub-continent, malaria and tuberculosis. Often the female child is simply not taken to any kind of medical care and consequently dies.
Mrs. Cheryl Gillan: My hon. Friend mentioned malaria. Does he agree that the implications of a future malarial insurgence in Mozambique and the part of Africa that suffered severe flooding are very worrying? Does he agree that it would be helpful if the Minister could tell us what aid had been lined up for that area to help it to cope with the malarial infection that is expected to follow the flooding? Such an outbreak would disproportionately affect the population in that area, compared with the rest of Africa.
Mr. Wells: Any area hit by a major humanitarian disaster of the kind that has afflicted Mozambique must
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confront exaggerated and exacerbated health problems, including malaria, TB and, possibly, cholera. I have heard reports that although cholera has not yet broken out, it is an ever-present danger, especially in areas of flooding in which the population is vulnerable to waterborne diseases. In such cases, women are likely to be more vulnerable because they are probably less well fed than their male counterparts, whether adults or children.
The problems are not confined to health care and education. Women are often employed in difficult working conditions. Let us take the most common example, that of cooking for the household. In Pakistan, Bangladesh and India we saw very rudimentary housing with no windows, in which women were expected to spend almost all their lives. They were not expected to go out in public. The stoves in those houses filled the rooms with fumes and smoke throughout the day and night, because the women were expected to provide the food for the family and for her husband on his return. Dark, smoke-filled kitchens are a serious danger to women's health and to their lives. Women also perform all the menial and sanitary tasks around the house—I shall not go into details. Such work endangers their health and many women die as a result. Not only do women not own any property but they are the property either of their husband or of other male family members. They do not even own their children or the products of their labour. Those belong to the men.
What are the solutions to these problems? Before we get too depressed, we must recognise that there are solutions; the problems can be addressed and the conditions can be altered. The status of women in this country has altered dramatically. Even in my lifetime, women have achieved the vote. Actually, it was a little earlier than that. My mother achieved the vote in 1930, and I was born in 1935. While all men and women over 30 achieved the vote in 1918, women under 30 were not entitled to vote until 1928, so we must not congratulate ourselves too much on our treatment of women.
This is an international problem, but it can be solved. We have evidence of that, in the presence in this Chamber of some excellent women Members of Parliament, who are at least the equal of their male counterparts—and possibly superior, as former Prime Minister Thatcher certainly proved.
Dr. Jenny Tonge: On behalf of the women present, I cannot resist saying that I heard at lunchtime that both Uganda and South Africa have a much higher proportion of women in their legislatures than Britain does. Would the hon. Gentleman like to comment on that?
Mr. Wells: I would, because we should remember that one of India's achievements in the recent past is that a third of local government institutions are required by legislation to have at least a third of their constituencies represented by women. Although I have said many bad things about India today, I recognise that it is trying to deal with the issue. Many cultivated women, who are sensitive to their fellow females' plight, have managed to introduce such reforms.

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We must consider how the statistics can be changed. They can change, and have changed, and will change further if we are determined to try to develop the political will for change in those countries. There is not a total absence of will in that respect.
Mrs. Gillan: Is my hon. Friend as pleased as I am to see many women in Westminster Hall in this debate on women and development? Does he agree that it is, however, a shame that there are not more women here, and a crying shame that there are not more men? It is equally important for men to be engaged in this debate as it is for women.
Mr. Wells: I am deeply grateful to my hon. Friend for making that point. As I intended to say later on, unless men can be brought to understand the problems with which they confront women, and to join with women in improving their status and the way in which they are treated, none of the reforms that we are trying to introduce will happen. I should like to ensure that when one is involved in a debate on women, a nasty little titter does not run round the society or informal meeting that one happens to be in. The issue is as important for men as it is for women, and we need to join together to get it right. Men need to be understanding; those who love their women—as many do—must try to make the changes that are necessary to ensure that they achieve equal status. That is what I mean when I refer to political will, which must be generated by us all. The Committee saw examples of men who had agreed to do that, and their womenfolk and children had benefited from it.
Mrs. Maria Fyfe: The problem is not merely that the abominations that are perpetrated against women in some parts of the world are ignored by Members of Parliament, whether male or female. The lack of interest among many of our male colleagues has already been noted. Economic interests are also at work. Many people are not willing to embark on a strong argument with powerful countries with which they do business. It is all very well to talk about giving more aid to appropriate non-governmental organisations and helping women's groups, but unless we tackle the root cause of the problem and tell such countries that we will not trade with them, or help them in any way, unless they stop their abmoninations against women, they will continue.
Mr. Wells: I agree with the sentiment of the hon. Lady's comments. However, I am not certain that the big stick achieves the results that she and I would like to see. We have to persuade men that it is in their interests—and those of their children, families and countries—to change the way in which they treat women. We can back that up with a bit of stick—for example, by trading fairly in terms of what we buy. I should like to say more about that, if I have time. We visited the Gap factory in Dhaka in Bangladesh, where fairer trade was being insisted on, and further measures could be taken. However, I know that other hon. Members have valuable contributions to make. I promised the hon. Member for Clydebank and Milngavie (Mr.Worthington), who has just come into the Chamber, that I would not speak for too long this afternoon.
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I shall rehearse the six actions that the report recommended. We should understand the nature of women's poverty. I have given an outline of what that is. As I have said, we must increase girls' and women's access to effective basic education. That principle should extend to secondary and tertiary education. We must provide gender-sensitive services and resources for women's health. In discussing access to effective basic education, we must recognise that many girls do not have the confidence to say to their male partners, "I do not wish to have sex tonight." Nor do they think that they have the right to do so. We must provide that self-confidence. Education will enable girls to read and learn how others conduct relationships. Only when they are to some extent literate and educated will they acquire the self-respect and self-regard that will enable them to talk to their male partners on equal terms.
Of course, the provision of gender-sensitive services and resources for women's health is related to treatment in childbirth and women's understanding of their reproductive health. On our recent visit to Malawi, we were told that women there believe that a daily injection of sperm is necessary to remain healthy. We should consider what such an attitude to sex means in terms of the prevention of AIDS.
We must also improve women's access to credit and businesses. The small credit movement is a major example on which we must build. The Grameen bank, which began in Bangladesh, is now a huge concern. Minuscule amounts of money are lent for three-monthly periods at, I fear to say, high rates of interest, so that a cow, a chicken, or other goods to sell at market may be purchased. Those women have no property, and therefore no security to offer to a normal banking system. Women acting in groups have proved themselves able to help each other to repay loans. If a cow against which a woman has borrowed money dies, women join together to repay the loan and buy a new cow. Much more needs to be done, but that is a major step towards women earning a living to help themselves and their children.
We should also understand and address the root cause of women's disproportionate poverty. Why are women poorer than men? Why is there gender-based discrimination and violence? We must, above all, demonstrate political will by allocating resources, implementing relevant instruments of international agreements and national legislation, and mainstreaming gender concerns throughout all development programmes, as well as those aimed directly at women and girls.
That last point, to which I have already made reference, is one of the most important. Although today's debate is not as well attended as we would have liked, it has enabled discussion and understanding of these issues. I hope that the annual conference of the Commonwealth Parliamentary Association, which will be attended by women in London and Edinburgh, will also enable such discussion and understanding. We must encourage men to take part in such discussions.
We on the Select Committee welcomed the commitment to poverty eradication and women's empowerment as a key element of the White Paper. We also welcomed the 1997 paper entitled "Breaking the Barriers", and the consultation paper entitled "Poverty Eradication and the Empowerment of Women", which

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was published in February. My only complaint about that paper, copies of which are sitting on my and the Minister's desks, is that it makes no reference to the Select Committee report "Women and Development" that we are debating today. The Department for International Development should recognise that it operates in partnership with Select Committees—a partnership that should be built on and rejoiced in. Our function is to criticise, but also to support and empower poor people and help them to understand the issues.
Mr. Foulkes: I shall deal with the question of rejoicing in partnership later. In case hon. Members do not have the report to which the hon. Gentleman referred, additional copies can be found behind the officials.
Mr. Wells: I return to the point that was made by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) about the private sector's role. The International Development Committee went to a factory in Dhaka, Bangladesh, which produces clothes for the Gap Clothing Company. It employs many female employees, many of whom are working for the first time. The Department for International Development supported Marie Stopes International in the provision of a clinic in the factory, which taught those women how to control their fertility and practise safe sex. That would prevent their infection with HIV-AIDS and help them to control the number of children that they had, which would mean that they could continue to work. Conditions in the factory were far from perfect.
Committee members wondered why the Department for International Development was supporting such clinics with funds from taxpayers in this country. Why should not the Gap Clothing Company fund the clinic? Should we not talk to Gap and to similar companies, including B&Q, which buy from Indian sources? We could say to them, "You have got to ensure that labour conditions—the conditions in which people produce goods for you—are hygienic and are consistent with the social direction that the Government and the people of this country support."
I want to conclude by discussing HIV-AIDS, but I shall do so briefly—it is a big subject. HIV-AIDS will destroy many of our efforts in this context unless it is properly managed. That was why Committee members visited the brothel in Bogra. The fact that that brothel is 600-strong tells us something about the relations between males and females in that Muslim country. Those females—sex workers, as we must call them—were being taught English. They could be taught how to have safe sex only if they were taught how to read. They could read the instructions on a condom packet only if they were litertate. If we are to prevent HIV-AIDS from spreading, we have to start right at the beginning—it spreads fastest from brothels.
I asked to meet the owners of the brothel, and I interviewed the men concerned. I asked whether the clinic was doing their business any good, and they said that it was attracting more custom and they were doing better business. I asked whether they were getting larger profits. They said yes, and that the clinic was a very good
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idea. I asked, "So why don't you provide the clinic yourself?" "Oh, that would be far too expensive," they explained.
We must ensure that employers and the public and private sectors adopt the same targets in relation to education and health. Those targets must be adopted by the owners of brothels such as those in Bogra and west Calcutta, and throughout the country. That approach will give women self-confidence and help them to own property and to decide their future on equal terms.
Mrs. Fyfe: The hon. Gentleman's comments on the private sector remind me of a BBC2 programme that was broadcast last Saturday, which was about a woman who made a very modest effort to enter the private sector herself—she sold a few goods in the marketplace. Her son killed her because, according to the interpretation of Islam that is followed where she lives, what she was doing was immoral and wrong. The state did not prosecute him for her murder because his action was held to be acceptable. The problem goes even deeper than that outlined by the hon. Gentleman. The woman was making a modest effort to earn her own living, yet she was killed for her pains. To solve that problem, we need to go well beyond the attitudes and education in that village—we need to go to the top of Pakistan society and make it clear that such behaviour is not acceptable in international society.
Mr. Deputy Speaker (Mr. John McWilliam): Before I call the hon. Gentleman, I remind hon. Members that interventions should be brief.
Mr. Wells: I know of several examples of the behaviour to which the hon. Lady refers. The Select Committee also met several imams in Bangladesh who had been tackled first by the Department for International Development, which explained to them what it was trying to do for women. It tried to make them understand in terms of the Koran why such action was necessary. That is why I said to my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) that such education must involve men and women and that it had to start at the top of any society. Imams are most powerful people in many villages and they must be retaught that it is not in an ordinary person's reading of the Koran that women should be so treated. However, that is how the Koran is interpreted locally and regionally and men have power over women and throughout society. We must stop such bigotry and ignorance.
Mr. Robathan: I refer to the intervention of the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) and to what is an unusual cross-party consensus. Last year, we had a meeting with the Attorney-General of the Sharif Government in Pakistan—it was before the military coup. When the subject of a report on human rights was raised, especially the status and ill-treatment of women, he stormed out of the meeting and refused to discuss the matter with us. I hope that a change has come about under the new Government.
Mr. Wells: My hon. Friend makes an important point. We have a huge amount of work to do. It must be carried out constantly and enthusiastically by

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Parliament and the entire country, and we must start now. I want to see the reversal of such terrible statistics. I want women to stand up self-confidently in their own right and be responsible for their own future. I want them to have equal responsibility with their male partners for their children. They must have equal ownership of anything that they produce or that they labour to produce. I want them to be able to own property, discuss matters sensibly, know their legal rights and stand up as people of this world.
3.7 pm
Ms Glenda Jackson: I congratulate the International Development Committee on targeting its inquiries on women and their rights in the developing world. I have read the report and I am grateful to the hon. Member for Hertford and Stortford (Mr. Wells), but I am somewhat amazed at what was clearly a sense of bemusement on his part when he discovered the reality of life for women in such countries. I do not wish to be rude or dismissive of the Committee's findings. The facts that it outlined make shocking reading. In 1994, the United Nations published a report on the state of children in the world. It drew attention to the fact that three quarters of women in the world live in abject poverty, which means that three quarters of the world's children are in a similar state. The issues that he delineated for us were described in no small detail in that report.
The evidence that the International Development Committee presented to the House has been available to the world for the whole of my natural life.
Mr. Wells: It is a matter not of bemusement, but of shock. The situation continues to shock me. I know about the reports to which the hon. Lady referred, and I was shocked when I heard of them. When one sees it on the ground, it is even more shocking.
Mr. Deputy Speaker: Order. I must remind hon. Members to address the Chair. I am not touchy about this matter, but if hon. Members addressed the Chair, would allow the Hansard transcribers to hear the words clearly, rather than in a jumble. That would be helpful.
Ms Jackson: It is an example of the humanity of the hon. Member for Hertford and Stortford that he is capable of being shocked. The gross mistreatment and undervaluing of women, who are half the world's population, continue to shock even those of us who have been aware of it our whole lives.
I repeat that I strongly agree with the interventions of my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe). If the world wants to make the changes that basic humanity and the belief in human rights would suggest, the developed countries must change first, and change their treatment of the developing world.
My hon. Friend touched on the deep-seated problem of the treatment deemed to be the norm in the countries to which the report refers. That may be seen on all the continents, and in a more minor way within our own borders. Today, women in this country experience all the behaviour to which the hon. Member for Hertford and Stortford referred, and they may not have emigrated from countries in which it is part and parcel
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of tradition to deem women to be merely objects for abuse by whoever has the power in the relationship, whether it be one of the family, community or state.
I am grateful for the major changes in international development secured by the Government, and for their attempts to bring together all Departments that have any dealings with other countries, using joined-up thinking. They have prioritised making the case for altering dramatically for the better the circumstances of the majority of women around the world.
As my hon. Friend the Member for Maryhill said, the problem is deep-seated. I pay tribute again to what the Government are doing, although one always wishes that they could do more. What we, as well as the Government, should do, is find ways to make use of British businesses, for example, that invest or work in other parts of the world and apply for export credits guarantees. When those businesses invest in industries, businesses or services in other countries, it should be taken for granted that they will take the chief responsibility for ensuring that women who are employed by them will be given the respect and the basic rights of workers that we expect in this country.
I took to heart the point made by the hon. Member for Hertford and Stortford. If such issues are raised in the House, it is almost inevitable that they will be dubbed women's issues, because we remain a minority here. That has been our experience throughout our working lives. There will be either shuffling or a half-hearted titter, and sometimes outright abuse, which I am sure that we can all remember from exchanges across the Chamber.
The hon. Gentleman spoke of giving women the self-confidence to carry their responsibilities. The problem is not that women lack self-confidence or that they are unaware of their responsibilities; it is that they are deemed to be responsible for everything within their ambit, their community and even their state. Women are inevitably and consistently punished for their failures, even though there is no support to allow them to deliver fully on what is deemed to be their responsibility.
It is all very well for us to make categorical statements about sex education or what people in Malawi, as the hon. Gentleman said, perceive as the way for a woman to maintain her health—an injection of sperm every day—if she, her family, her community and her state deem that her prime purpose for being is to ensure the continuation of the male line. Prelates in this country have made that a requirement for families here, too, although in a rather angular way—they have not couched it in precisely the same terms.
That is why I return to my earlier point: if we are to energise the push to relieve women's and children's abject poverty, we must examine our actions. Instead of making a half-hearted response, which is still the norm in this country, we have to state categorically in all areas of our national life that equal opportunities, equal rights and equal pay for women are right and proper. It is only when we begin to examine ourselves that we will be able to implement essential changes in the world over a much wider range than is being attempted at present. That has to do with equality, opportunity, rights, education and health for women.
The hon. Member for Hertford and Stortford mentioned the incidence of violence against women, and we know that it happens in our own country. There is

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still a presumption that a woman who is beaten up by her partner has done something to deserve that. I always find it especially bemusing when women, who may have experienced violence themselves, presume that. I regret to say that I have direct experience of this. Women have come to me who have experienced domestic violence, and they regard it as proof of love. We are in very murky waters. Such presumptions about the reasons for women's experience stretch a long way back.
Mrs. Gillan: Although I do not disagree with the hon. Lady's argument, does she agree that we, as women, owe a duty to men not to be totally self-indulgent and not to focus entirely on one half of the human race? We need to admit that men often suffer domestic violence, and that they suffer from cancer. The emphasis has been on breast cancer, but prostate cancer has not been highlighted as it should have been. Equally, in war, men and boys can be raped and exposed to the privations that we have discussed. We must not fall into the trap of concentrating purely on women; we must remember the other 50 per cent. of the population.
Ms Jackson: I strongly disagree that we should prioritise the overwhelming arguments for greater equality for women by always presenting a balanced view. In my experience, the view that the hon. Lady described is remarkably unbalanced. She said that insufficient attention is paid to prostate cancer, with all the attention being devoted to breast cancer. I was one of the Members who entered the House for the first time in 1992 who organised an all-party group to deal with breast cancer. Previously, there had been no all-party group, or prioritisation of that issue.
As my hon. Friend the Member for Slough (Fiona Mactaggart) said from a sedentary position, one reason why so little attention is paid to prostate cancer is that men take so little responsibility for their own health and well-being. It has certainly been my experience that women are always regarded as being in the driving seat when it comes to ensuring—the hon. Member for Chesham and Amersham (Mrs. Gillan) is looking at me in a bemused way. I speak directly from my experience. It may not be hers, but it is no less valid when I say that people still believe that the woman has prime responsibility for ensuring the health of a family. I have no doubt that all hon. Members know of women who have made themselves ill by carrying the burden of that responsibility. I do not condone violence in any form, but we are debating the overriding emergency of the violence and lack of facilities, concern and consideration that women suffer—mainly at the hands of men. If we argue that we can move forward only when there is absolute equality, we will be standing here 20, 30 or 50 years from now, putting the same evidence.
Ms Oona King: Although it is true that some men also experience terrible domestic violence—I have recently had such a case in my constituency—in 90 per cent. of murder cases involving
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women the perpetrator is the partner or ex-partner, but the same is not true of men who are murdered. We must therefore give women precedence in that matter.
Ms Jackson: That certainly happens. When the case of a woman who has murdered her partner is taken to court, the legal arguments that may be put in the case of a man are not used.
Interesting though the exchange has been, I do not wish to be deflected from the core of my argument. I conclude with what was for me the most telling and crucial sentence in the Select Committee report, which appeared in the section on female genital mutilation; I am sure that we are all concerned about that appalling action on young women and girls. The Select Committee, in agreeing with Joan French, said at paragraph 147:
Culture can no longer be used as an excuse for inaction on securing women's rights.
That is fundamental and absolute. However, the Government response that
The Government agrees with the Committee that culture can not be used as an excuse for the violation of human rights
concerned me because it makes a subtle alteration to the original. I want the Government to act on the statement that culture cannot be used
as an excuse for inaction on securing women's rights.
We should make that part of Government policy in every Department. I hope that my hon. Friend the Under-Secretary of State will allay my concerns.
I have outlined the changes that I would like in regard to companies that invest abroad. I could give other examples of desirable changes in every Department. We all know what the problem is and what is experienced, day in and day out. No country can bring about on its own the changes that we desire. That can happen only if countries work with their partners as well as individually—and not just in their area of the world. A wider international consensus can bring about the changes that must occur. We have to accelerate the process of change, but we will not do that until we acknowledge the serious flaws in the equality of women in every country of the world, not simply those of the developing third world.
3.24 pm
Dr. Jenny Tonge: I thank the hon. Member for Hampstead and Highgate (Ms Jackson) for her useful reminder that we must not look at the mote in our brother's eye when we cannot see the beam in our own. I also thank the chairman of the Select Committee for spearheading the report; I was proud to be part of the Committee that considered it.
Seventy per cent. of the world's poor are women; yet, wherever one looks in the world, countries with good health care and education for women are also successful economically. The link stares us in the face, and I can never understand why men all over the world do not see it. Healthy women have healthy babies, male as well as female. Educated women are more likely to be healthy and have healthy children. Women who are malnourished and have poor health care will not have the energy to take up educational opportunities, and their children are less likely to be educated.

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Rather than try to cover all the issues in the report, which I would dearly love to do, I shall concentrate on women's health issues because I feel most passionately about them. They were my specialty before I became a Member of Parliament, and are crucial to development.
In paragraph 161 of the report, Marie Stopes International points out that
current levels of global expenditure on sexual and reproductive health—around ․3.7 billion—amount to less than the amount spent each year on confectionery in the UK.
That is a wonderful statistic. The paragraph states that the money
in real terms development assistance spent on sexual and reproductive health projects—
the subject that I care about so much—
has not increased for the past 20 years.
That says a lot about the aid we are giving.
Woman in the west take reproductive health for granted. I used to have trouble convincing my patients to come for their screening tests and exhorting them to be healthy. They are fed up with being pestered and told what to do. In developing countries, the situation is different. I must warn those who are squeamish that the next 10 minutes will be uncomfortable.
The hon. Member for Hertford and Stortford (Mr. Wells) dealt well with women's general health, which is crucial to their sexual and reproductive health. The picture in the report of an Asian woman feeding her boy baby was a wonderful example. It had grown fat and healthy while the girl baby died quickly from malnutrition, as the mother had enough milk for only one baby. In the short term, boy babies seem more important to poor families in developing countries, as it is felt that boys are the economic future of families and farms.
The hon. Gentleman mentioned women in huts in Bangladesh inhaling smoke all the time. When we were there, I asked myself whether that was a factor in giving Bangladesh the worst maternal mortality rate in the world. Bangladesh shares many qualities with other developing countries, such as poverty, poor hygiene, lack of obstetric care and lack of infrastructure. There are plenty of Muslim countries in the word. However, the women of Bangladesh do not only inhale smoke all day. The fuel that they use is dried cow dung, so I wonder what they inhale. Someone, somewhere, must be able to tell us whether that is significant. If anyone at the Department for International Development were interested, I would love there to be a little project on the subject. The problem would be relatively easy to deal with.
Obstetric care for women in developing countries is often non-existent. Another lovely statistic from the report is that maternal death rates in the developing world are equivalent to a jumbo jet full of women crashing every six hours, every day of the year. That is the number of women who die in childbirth. I have had three babies, and I shall not, as women love to do, describe the details of my labour. Being in obstructed labour for not hours, but days and days of agonising pain unrelieved by anything, would lead to death by exhaustion. There may be terrible haemorrhage, but no one can do anything about it—the women simply die of blood loss. That is relatively quick compared with dying in agony of an infection which leads to septicaemia after being contracted during the birth of a baby.
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In the western world, we have no idea of what our fellow women physically suffer to perpetuate the human race. Those who feel that they cannot have any more babies try to secure abortions, which are equally dangerous and place them at equal risk of infection and haemorrhage. We heard about a hospital in Nigeria where 77 per cent. of admissions related to complications from abortion.
I have professional experience of female genital mutilation, a subject raised by the hon. Member for Hampstead and Highgate. I do not think that any of us had any idea until recently of how extensive the practice was. It is forced on 85 million to 115 million women and girls each year, despite contravening the convention on the elimination of all forms of discrimination against women and a United Nations General Assembly resolution passed in 1997. It goes on in this country, albeit under anaesthetic and in hygiene and aseptic conditions which do not prevail in the developing world. It is carried out forcibly and against girls' will.
I have seen the effects of the practice and discussed them with my colleagues. I cannot say how appalling it is. Besides making sexual intercourse extremely painful and difficult, it doubles the risk of maternal death. It makes the death of a baby three or four times more likely. Without an episiotomy—surgical cutting to allow the baby to come out—there is splitting, tearing, haemorrhaging and infections. Horrible fistulae form, causing a woman to be incontinent of urine and faeces for the rest of her life. The death of the mother is almost preferable to that. If she is incontinent and unable to have sexual intercourse any more, she will not be accepted in the family or the villiage because, frankly, she smells. She will not be nice to have around, so she will be outcast as a result of the practice.
Mrs. Gillan: The hon. Lady renders the horrors perpetrated on women dramatically. I strongly feel that all hon. Members abhor the practice. Does she agree that it is even more horrifying because, in many cases, especially in our country, women procure the female circumcision of other women? The cultural side of the problem needs to be attacked, as well as the medical side which she is graphically outlining.
Dr. Tonge: What the hon. Lady says about the cultural side is right. Many women want to have the practice carried out on their daughters in developing countries because it makes them more marriageable and desirable. It is the custom and the culture. For that reason, the problem needs an extremely sensitive approach. It is no good western women muscling in over there and saying that the practice must stop because it is against human rights. We must also point in those countries the danger, complication, death and destruction that the practice causes. Economically, it will be a drag on the country and will affect the men's prosperity.
I want to take the opportunity on behalf of the International Development Committee to reply to a savage attack on it by Germaine Greer. In a book she has written, and in an article in The Daily Telegraph some months ago, she equated body piercing by consenting young women in the west with female genital mutilation. I must remind this Chamber that female genital mutilation is the forcible removal of the clitoris

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or the entire female genitalia, and the suturing up afterwards, with antiseptic, antibiotics or anaesthetic, leaving a tiny hole to allow blood and urine to escape. That is what we are talking about; we are not talking about a silver ring in an umbilicus.
Female genital mutilation is thought to have originated because men wanted to make sexual intercourse undesirable for the women, thereby making them faithful. Germaine Greer argues that we should not interfere with cultural practices. However, as Joan French remarked to the International Development Committee, if we did not want to interfere with cultural practices, we would still be burning witches in Europe. Germaine Greer has also accused members of the International Development Committee as knowing, in her words, "bugger all" about the subject. I object to that strongly. The Select Committee members were an interested and knowledgeable group, including a qualified nurse who had worked in Africa for a considerable period. As a doctor, I worked in reproductive and sexual health for 25 years. I therefore take exception to Ms Germaine Greer accusing the Committee of ignorance. I have got that off my chest. Female genital mutilation has been made illegal in most countries where it is practised, and we should encourage, as sensitively as possible, its abolition. I am sure that all hon. Members would agree with that.
On targeting young women, the hon. Member for Hertford and Stortford said that the Select Committee was not mentioned in the "Poverty Eradication and the Empowerment of Women" report, which the Department has just published. I endorse his remarks on that subject. I also felt that that strategy paper did not put enough emphasis on young women. In the developing world, women become sexually active and have babies at a very young age. That should be recognised and emphasised. Often, women in developing countries are married because their fathers see them as a liability and want to get them off their hands and into someone else's house. The younger they are, the more likely it is that they will suffer ill health or death from pregnancy.
It is essential to increase the emphasis on information and services to prevent pregnancy and infection, including HIV—AIDS, as the hon. Gentleman mentioned. Around the world, 7,000 people are infected with HIV every day, and 7.6 million people were newly infected last year. That is a terrible statistic, which is causing great damage to the developing world. Until a vaccine is available, about which the Minister knows I feel strongly, our only weapon is to provide sexual health clinics, condoms and education. That must start at a very young age.
Young women are more vulnerable to infections, because of bleeding and injury from sexual intercourse. That is, of course, more likely after genital mutilation. A catalogue of minor genital infections—thrush, trichomoniasis, gonorrhoea, tropical sores, chlamydia and so on—make it more like that a young girl will be infected with HIV-AIDS. That is why more women than men in the developing world have the disease. Any breakdown of the tissues, which causes bleeding or soreness, makes women more prone to infection. Family planning services and reproductive health services are
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therefore crucial. Indeed, we saw many excellent projects, among them the Gap factory, which has been mentioned, whoever was paying for it.
In the west Calcutta brothel and in Bogra we saw some good work being done. Marie Stopes International is doing brilliant work. I just wish that Marie Stopes were still alive and could see how, following her lifetime of persecution by male gynaecologists, her work has spread round the world and is so appreciated.
Ms Oona King: Going around that clinic, and particularly after we had met one woman, did the hon. Lady share my feeling that we had finally understood the need to change our language and should, from that moment forth, call prostitutes commercial sex workers? We must remain aware of the importance of language.
Dr. Tonge: I thank the hon. Lady for that intervention. It is important to remember that, wherever we are in the world, those people are sex workers. Did I use the word "prostitute"? I hope that I did not.
Mr. Wells: No, the hon. Lady did not.
Dr. Tonge: I was slightly worried that the hon. Lady intervened because I had. If I did not, that means that I am learning. We all learn.
I welcome the statement by the Department for International Development that it will continue to subsidise these projects, but there must be many more of them. More effort should be put into making multinational companies take on responsibility for the workers in whatever country they operate. Migrant labour is a particular problem in Africa: men are away from their wives and families for months and months, and are not given any help, education or advice, which is crucial in preventing the spread of disease.
I have covered a few aspects of women's health. I do not want to continue, because other hon. Members wish to speak. I simply remind hon. Members that educated women are healthier, have larger, healthier babies, are less likely to succumb to dangerous cultural traditions and practices and will see that their children are educated. Therefore, although health care and other factors are crucial, the education of women is a fundamental right and the single most effective way of tackling poverty.
When the hon. Member for Bethnal Green and Bow (Ms King) and I visited the Calcutta brothel, we met a young girl called Bobby, who was working there as a sex worker. She spoke perfect English because her mother and her grandmother had been sex workers in the same brothel. Her mother had worked extremely hard, because she had decided that, whatever happened, her daughter would have an education and a life, and she had worked hard to educate Bobby. Unfortunately, before Bobby was 14 or 15, her mother became very ill, lost her looks and did not get any more clients. What happened? Her precious daughter had to go into the brothel and work as a sex worker, the third generation of her family to do so. That affected us deeply, and we were all upset about the girl. Indeed, people have been trying to do something about the workers in that brothel since we came back to England.

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I hope that the report and the Government's response will try to ensure that future Bobbies stay out of brothels and have a different sort of life.
3.43 pm
Mr. Tony Worthington: I apologise to the hon. Member for Hertford and Stortford (Mr. Wells) for not hearing his speech. As he probably knows, I attended a meeting in another part of the building that was closely connected to the theme of this debate, at which President Museveni of Uganda and the Secretary of State for International Development were talking about education for all and particularly about education for girls.
The key issue is empowerment. It sounds like jargon, but it is a useful word, because it spans many dimensions. I want to talk about some of those dimensions.
The first dimension is education. My reason for attending the meeting this afternoon was that the World Education Forum will meet in Dakar, Senegal, at the end of April. We must redouble our efforts to get the donor community and the developing countries to achieve the UN targets relating to ending the disparity between male and female enrolment in schools by 2005. That is a huge task.
We must also embrace the challenge of achieving universal primary education by 2015. At present, about 90 million girls in the world receive no primary education. If that is the official figure, the real figure must be much higher. In my early days as a lecturer, I learned that there are all sorts of lies: there are lies, damned lies, statistics, and teachers' registers. The fact that a student enrols at school in the morning does not mean that they are still there at lunchtime. The drop-out rate in schools is considerable.
During our visit to the subcontinent, I and other members of the Committee came across one of the most appalling expressions that I have ever heard. It has stuck with me ever since; I think that the hon. Member for Bethnal Green and Bow (Ms King) knows what I am going to say. It is the old attitude that educating a girl is like watering another man's garden. That is a staggering statement. Its implication is that it is not worth using any of one's resources on a visitor to the family who will be leaving shortly to go and work in another one.
Ms Oona King: My honourable Friend is right. That was a truly appalling expression. Another one that we heard on the trip springs to mind: a lucky man is one whose wife dies; an unlucky man is one whose ox dies.
Mr. Worthington: We should get away from these horrific statements. Such attitudes are shattering. The truth is that educating a girl is like watering a country's garden. Statistics tell us that educating women leads to better health and higher incomes in families, and to higher levels of education among the children of those families. The countries involved then go into an upward spiral rather than a downward spiral.
Those appalling attitudes towards girls' education are linked to the fact that up to 100 million girls are missing from the world today. The report refers to that fact. Those girls ought to be alive, but are missing due to sex-selective abortions, infanticide or neglect. That is about
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undervaluing girls—those girls would live if they were valued. The education of girls is a way of challenging this appalling story. South Asia has the lowest rates of female literacy in the world and it is also where the majority of the world's poor live.
I hope that the World Education Forum in Dakar will re—focus attention on these problems. However, we must not only increase the resources to education, but address the proper use of those resources. As members of the Select Committee know, the standards of governance in some education departments are appalling. Resources go into education but do not come out. In Bangladesh, we saw the difficulties for donors in relation to investment in the NGO schools. There is an enormous organisation there—the Bangladesh Rural Advancement Committee—which can educate a person and achieve literacy for the price of a night's stay at the Safeway motel in Bogra. It is tremendous value to become literate for that price, and I would recommend that establishment to my hon. Friend the Under-Secretary. He has enjoyed most experiences in life, but I do not believe that he has had that one yet.
It must be difficult for the Department for International Development to decide how much of its resources it provides to Governments with education departments that are not working well because teachers do not turn up to teach and thousands of schools exist only on paper. There is inequality between towns and the country. How can teachers be persuaded to stay in the country when the towns are like magnets? Empowerment is necessary for education.
The hon. Member for Richmond Park (Dr. Tonge) referred to reproductive health. It is impossible to achieve development unless women are given the opportunity to take responsibility for their own fertility. There has been enormous progress and we saw that in Bangladesh. It is the most overcrowded country in the world and there is almost no opposition to family planning there and in other countries. Opposition has gone and the issue now is resources. Many countries in sub-Saharan Africa are still doubling in size every 25 years, not through choice, but because of lack of access to cheap, basic reproductive health services.
The hon. Member for Hertford and Stortford was with me when we visited Malawi. It is a desperately poor country, which has run out of land and has virtually no industrial base. The land cannot support families because, under the inheritance system, it is divided into smaller and smaller parcels.
Mr. Wells: Among the men.
Mr. Worthington: Yes, the land is divided among the men.
I visited Sierra Leone nine years ago when it had an embryonic reproductive health service, but it was destroyed by the war there. The hon. Member for Richmond Park used one of the favourite statistics in her support earlier and it is worth lingering on. More than 500,000 women a year die in childbirth, which is equivalent to a fully laden jumbo jet falling out of the sky every six hours, every day of the year. Those deaths are avoidable. I am pro-life, but I am also pro-women living and not being killed by lack of access to basic services. We must give people the right to choose and

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they can have the right only if resources are made available. There is no right to choose if there is nothing to choose from.
It is offensive that, when first-world countries such as Italy and Spain have static or falling populations, third-world countries are denied the right to choose. Imagine the uproar in our constituencies if we tried to deny our constituents the right to decide the size and spacing of their families. That would not be an election winner. Not one hon. Member, whatever his or her religion, would dare to campaign for withdrawal of family planning services, but that is effectively what happens in third-world countries.
Mrs. Ann Cryer (Keighley): I have spent only one week in Pakistan, but my constituency is a microcosm of that country and, to some extent, Bangladesh. My hon. Friend said that there is no ban on contraception, but there is a ban for women who persist in having female babies. We must get the matter straight. It is not only husbands who force their wives to produce babies. Dragon-like mothers-in-law in Keighley force their daughters-in-law to go on and on producing babies until that wonderful son is produced.
Mr. Worthington: I appreciate that point. As has been said, we must tackle head—on cultures that deny basic human rights. We in mainland Britain have invented the concept of the innocence of children, denying them information on sex education and social matters. It is absurd to advocate education, education, education, while taking the view that, in terms of sex, ignorance is best. That is an extraordinary cultural hang—up.
The enormous impact of the plague of AIDS became apparent during our visit to southern Africa. The impossible has happened: as a result of AIDS, which is hitting women hardest, life expectancy in countries such as Botswana. Zambia and Malawi is plummeting. In Britain, the number of AIDS cases related to heterosexual activity has for the first time become the majority, but such cases have always formed the majority in Africa and Asia. Women are the principal victims. Some become HIV-positive as a result of their husbands' activities; others witness their infant children dying of AIDS.
I find it unacceptable that women are denied access to condoms on moral grounds. That women should be denied access to the only known protection against AIDS is an appalling cruelty. We must remember that most women and men have no idea that they are HIV-positive until AIDS develops, and may not know even then, because other explanations of ill health may be sought. If women and men continue to have unprotected sex in Africa, AIDS will continue to surge through that continent. There are fears that the same will happen in Asia. As the report shows, the number of AIDS sufferers in Asia is huge: there are 3 million in India. However, incidence is low. Only 1 per cent. of people in the subcontinent are thought to he HIV-positive, compared with 20 or 30 per cent. in parts of sub-Saharan Africa. If the Asian rate moves towards the African rate, deaths will run to tens of millions.
The third and final source of empowerment about
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which I want to speak is economic and political. As has been said, during our visits to India, and particularly to Bangladesh, we were impressed by the difference that micro-credit schemes made to women's sense of independence and self-esteem. We should remember the marginal status of widows in India and Bangladesh. Unless one can be found, widows in those countries have no economic role.
We were enormously impressed by the resilience of Bangladeshis in making the maximum use of scarce land that constantly floods. I have never seen anything like it. When we were told that we would see a rice paddy that had been turned into a fish farm, I thought that it was April fool's day. I love gardening, but I have never seen such ingenuity in making the maximum possible use of banks in the fields. Any part that could be cultivated was cultivated. To witness the use to which women, in particular, put micro-credit schemes was amazing. We could see their independence growing. Wherever we went, we saw the consequences of women's lack of empowerment. In India, Bangladesh and Pakistan, people might respond, "We have had women presidents." Phooey. That is simply tokenism. Empires—baronies—of families have simply thrown a woman to the top.
Everywhere we went there were no women in positions of power or influence. When I was in Sierra Leone last week, someone confessed to me that, although women had been elected from list systems, not one woman had been elected by the men in a constituency to be a Member of Parliament.
Empowerment can involve education, reproductive health or economic independence, and all forms of empowerment should take place in the context of comprehensive community development. There appears to be a tendency to say, "We shall support a reproductive health scheme, a micro-credit scheme or an education scheme." However, the right approach involves allowing a reproductive health scheme to grow into a micro-credit scheme or vice versa—that would get comprehensive community development under way.
The Department and I think that this is a first-rate report, although I am biased—I helped to produce it. It will help to develop women's empowerment. If we can put more resources and ideas behind it, it will have an impact.
4.1 pm
Ms Oona King: It is truly a great pleasure to participate in this debate. I have heard some exceptional speeches, not least from the hon. Member for Hertford and Stortford (Mr. Wells), the Chairman of the International Development Committee, and from three of my hon. Friends, whose contributions I shall discuss presently.
I want to concentrate on the links that the report finds between women and their lack of access to various services and rights. As has been emphasised time and again this afternoon, the majority of the world's abjectly poor—70 per cent.—are women. My hon. Friend the Member for Hampstead and Highgate (Ms Jackson) rightly said that we should look to our own house and keep that in order. In Britain, 60 per cent. of those who rely on income support to top up their income to subsistence level are women.

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Women's limited access revolves around a series of issues, including health, income, education and credit and finance. Interestingly, in this country we have concentrated on institutional discrimination of various kinds, but there is greater institutional discrimination than that which is based on gender.
Gender genocide—the declining ratio of men to women in some of the world's poorest countries—has been mentioned. Anyone who has not read at least the first page of the Select Committee's report, which contains the executive summary, should do so. It lists several astonishing facts, and states that
up to 100 million girls are thought to be missing as a result of sex-selective abortion, infanticide or neglect.
When we went to Rwanda, we saw the dreadful carnage that led to the murder of betwen 500,000 and 1 million people. I was so horrified and moved that I felt that I had no option but to set up an all—party group on Rwanda and the prevention of genocide. In view of the fact that 100 million young girls, women or foetuses are not on this planet because of targeted aggression as a result of their sex, it is strange that Parliament does not have an all-party group that deals in general terms with women.
Perhaps that is not a bad thing, and what is needed is an all party group on humanity. As we have heard, the issue is equally important to men, and changing their attitudes is as important as changing women's attitudes. Where men hold the balance of power—which is virtually everywhere—it is even more important to change their attitudes, Oxfam gave an example of that in the report. It said of Pakistan:
Family planning programmes have been targeting women for years, neglecting the fact that it is men who usually make decisions regarding fertility.
That fact was brought home to me when I was in Uganda. I went to a chemist that was distributing free condoms and contraceptive pills. It was all very progressive—men were allowing their women to make use of contraceptives. However, as the women were not allowed out of their home to carry out such errands, the men went to the chemist to collect the contraceptives and, because 70 per cent. of illiterate people in the world are women, many could not read the instructions when they were taken home to them.
That put in stark focus the fact that we must think in clear terms about the nitty-gritty of what happens once great policy issues have been resolved. For example, we get a Government to make contraception available, but do not take into account the factors that prevent women from taking up that access. Until we do that, women will remain in the dire situations that hon. Members have described.
My hon. Friend the Member for Hampstead and Highgate referred to the fact that all the problems that we have heard about in other countries apply—albeit usually to a lesser extent—in this country. I am reminded of a comment by the United Kingdom Men's Movement, which describes feminism as
the greatest social evil of our time.
In some respects, we are in the middle ages of gender equality. In America, Pat Robertson has warned his fellow Americans that feminism—I must quote this, as it always brings a smile to my face—
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encourages women to leave their husbands, kill their children, practise witchcraft, destroy capitalism and become lesbians.
I am glad that in this country, in theory, we do not have to argue the merits of feminism. I hope that anyone who reads the report will not fail to recognise the need for it. However, there has been a huge backlash against the word "feminism" and what is termed as feminism. The report hinges on people accepting that women should have equality with men. We take that as a given, but, even in this country, it is not.
I labour the point because feminism does more than simply posit the moral case for equality—at its root is an attempt to address the skewed division of labour that disadvantages women from the cradle to the grave. The report reveals the degree to which discrimination and disadvantage afflict women not only in developing countries but in this country. That skewed division of labour, in simplistic terms, gives women total responsibility for caring and domestic duties. Three important elements are involved in that: first, it is unpaid; secondly, it keeps women at home, and therefore marginalized; and, thirdly, it does not require education and militates against women being thought of as humans who deserve the right to education.
From all that stem further problems that hinge around a lack of access and a lack of independence. We have heard from many colleagues about the ways in which women are denied access to various things, so I shall not repeat that argument. We have not heard much, however, about women's lack of access to the legal system. When preparing for the conference at which I was to speak on domestic violence, I read some appalling British case law. I shall, however, cite an example of what happened in Bangladesh when a 14year-old girl was gang raped in a fairly remote village. The village elders decided to hold a traditional trial. It was established that a gang rape had taken place—I believe that 12 young men were involved—and the elders decided that the 14-year-old girl would receive 200 lashes for what had happened. She died. Nothing happened to the boys. That is an extreme example, but it demonstrates the lack of access that is prevalent throughout the world.
Women, many of whom are widows, have also drawn the short straw when it comes to justice following conflicts, when their entire position in society is undermined. I will never forget visiting a group of widows in Rwanda at a genocide site. I asked one of them whether she felt that justice would be done. The United Nations had attempted to solve the problem in Rwanda, but one woman looked at me and laughed. She said: "Justice? The people who murdered my entire family are now living in my house and sending me letters telling me that if I speak to people like you they will hack me to death." There was nothing that we could do.
The Department for International Development has spent an inordinate amount of time considering how to speed up justice and make it worthy of its name to 52 per cent. of the population. The Rwandan Government have received help for capacity building in their civil service. We must ensure that such measures are more mainstream than they have been to date. Although many conferences are held on protecting women's rights, they are simply words on paper and do not mean anything to a woman such as the one to whom I spoke in Rwanda.

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We visited a private factory in Bangladesh, which is a success story in many respects. The hon. Member for Hertford and Stortford said that positive steps can be taken and I echo those comments. It is not a case of our having to hang our heads and give up, even though the sheer scale of the oppression is so overwhelming. The factory in Bangladesh is an excellent example of the way in which women are being helped. I have mentioned three issues—women in unpaid employment, women being kept at home and women being marginalised. All those issues were being addressed in that factory and those women were in paid work, out of the home and had access to services that they had not had before.
Much of the debate about the World Trade Organisation has hinged on whether it helps the poorest of the poor. There are many huge problems with the negotiations at Seattle, but we must recognise the fact that trade in textiles has increased from approximately £3 million to £3 billion in Bangledesh, and that 90 per cent. of those workers are women who are now paid but who were previously excluded. That generates much social change, so there are swings and roundabouts and pros and cons, but, as the Chairman of the Select Committee said, why should British taxpayers subsidise an American multinational corporation?
I agree with the Department for International Development that it is more important for those women to have access to health services than it is for us to argue about who pays for them, but I ask Gap's chief executives in Britain, Europe and America, who will receive copies of the report of this debate and of our report, to make a personal commitment to review such matters and to report to the House on whether they believe that our taxpayers should subsidise an excellent project in their factory that, none the less, enhances their profits? I do not believe that they would be so short-sighted as to refuse.
A consensus has emerged in international development over the past two or three decades but especially in the past decade. The consensus, which has been reached by organisations as diverse as the International Monetary Fund and Oxfam, is that discrimination against women is the single most important factor that inhibits the development of society, global society and the poorest countries. As we heard, if a woman is educated, her family is educated. That is no less true in Britain, where 90 per cent. of lone parents are women and 2 million children live in poverty as a result. As we enter the new millennium, it is worth taking stock. Women today make up half the world's population, yet do two thirds of its work, receive only one tenth of its income and own less than 1 per cent. of world property. To say that women have achieved equality, even on paper, is to dabble in fiction.
I commend the report and the work of the Department for International Development. I hope that, in future, we shall be joined by a larger number of Members who recognise the central importance of this issue to a sustainable and equal future.
4.18 pm
Fiona Mactaggart: I should like to add my small mite to this debate from the point of view of someone whose job before being elected to the House
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was teaching people to read. The human right to read is more acknowledged in the breach than the observance. Many of the speeches that we have heard today and the work of the Select Committee make it obvious that an absolute priority in enabling women to be part of the development and civilisation of their communities is giving them the right to read. That is at the heart of this debate.
It is interesting that education in Britain is still dependent on gender in many ways. I am the first woman in my family to have completed a university degree. When I left school, my mum assumed that I would go to a finishing school and learn to type. That was what people like me did, and that is what my sisters did. At the school that I attended, many girls—one of whom will shortly contribute to the debate—did not face those expectations in their families. My school expected women to succeed, but the view in my family was that the guys, not the girls, should be educated. That remains the case in many societies throughout the world.
However, we now have the opportunity to change that view. The world has long recognised the importance of primary education and the right to read. In Thailand 10 years ago, the countries of the world met and said, "We need universal primary education and we'll get it by the millennium." We did not achieve that. Next month, those countries will meet again, in Dakar, Senegal. There, they will set a more generous target of 2015. We cannot afford the same slippage in the next 15 years as we have had in the past 10 years. The world cannot afford that, and neither can women. It is a recipe for poverty and underdevelopment.
Two thirds of those who are out of primary education are girls, and in some countries, the situation is worsening. In the past 10 years, the number of girls in primary education in Pakistan has declined by 10 per cent. Nevertheless, I met the new Education Minister for Pakistan recently. The first thing that she said was, "I'm not related to anybody," which was not reassuring, because it said a lot about the history of politics in Pakistan; but next she said that she had gone to see the schools that her Government were funding, but that she could not find them all. It was clear that education money in Pakistan had ended up in the pockets of the wrong people, and had not helped to teach one person to read one book or to add up. I hope that Pakistan's new Government will challenge that situation and that they will quickly obtain a mandate from the people.
The problem is not a phenomenon of Islam. In many Islamic countries, the number of girls in education has increased significantly. We have heard about the achievements of Bangladesh, for which it should be praised. Education is a key. It allows women to look after their own health by reading the instructions on tablets or on baby formula, if they must resort to that, and it is the key to taking control of their own lives. We must ensure that we take the opportunity offered by the summit in Dakar next month to change the current situation.

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In Zambia last year, more teachers died of AIDS than entered teaching. We must invest in the educational infrastructure of developing countries. Some very poor countries have clear educational strategies that allow them to outperform their level of income. For example, Vietnam and Cuba have made wonderful achievements through their education systems. If we educated 1,000 girls in Pakistan, we would save 60 babies. The sums are simple and straightforward.
I hope that when the Secretary of State for International Development goes to Dakar, she will pledge the United Kingdom to the campaign for universal primary education, and offer practical strategies in our aid programme, with special emphasis on achieving universal primary education. We must make reading a human right in the poorest countries. I was pleased to learn, from the Secretary of State's response to a question that I asked yesterday, that the Prime Minister has already launched a teacher education programme, using a British information technology company that gives packages to developing countries.
The Prime Minister has made education his passion. I ask him to focus that passion globally. He could galvanise international attention on the issue. The Secretary of State is great at achieving focus and passion among her colleagues, but, because of the way the world works, it is still the big boys who shift things. We have talked about the emancipation of women and about how we might begin to achieve that. If Bill Clinton and my right hon. Friend the Prime Minister focus their attention on that, it is more likely to make a difference.
Britain should find ways of taking the lead internationally on the universal right to primary education. The resources for that exist: it would take something like a quarter of the money that Africa currently spends on debt servicing to deal with the deficit in its education spending. The ideas exist: there are models in many countries that we could follow. However, that right is not yet being delivered, partly because of a lack of international leadership and partly because of a lack of resources. I detect the willingness in regard to resources and I see the beginnings of Britain offering to take a lead internationally. We should go further down both those roads because this country can help to make a difference.
I would like to thank Oxfam for making the issue of universal primary education a campaigning priority. One of the achievements of that campaign is having ensured that the debate takes place not just behind closed doors at global summits that get reported in the pages of newspapers that many of us do not bother to read, but in staff rooms, church congregations, and even pubs. If we made sure that women up and down Britain, over cups of tea, learned some of the stories and facts in the report and which have been raised today, they too would feel the passion that we have heard expressed to ensure that there is investment in women. One gets a good return from investing in women. Women all over the world should have the human right to read.
4.28 pm
Mrs. Cheryl Gillan: We have had an uncharacteristically unanimous debate, even for Westminster Hall. I shall not strike a note of
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discord; there has been something in the contribution of every speaker with which I could wholeheartedly agree. I am grateful to my hon. Friend the Member for Hertford and Stortford (Mr. Wells) for initiating the debate and for presenting what is, by any standards, an exceptionally good report.
Nothing can more graphically have brought home to people the plight of women and children than the recent story of the woman in the Mozambique floods who gave birth in a tree. The pictures that we saw in the United Kingdom were moving, but also brought home the deprivation and agony faced by women and mothers. I am sure that we all wish that mother and child well.
Empowering women is doubtless the key to dealing with poverty, sickness and all the other issues tackled by the Department for International Development. That has been reflected in our debate.
Having been lucky enough to come from what I consider to be a privileged background, I did not fully realise the meaning of poverty or the privations that we hear about in the media until I had the privilege of travelling to Beijing in the last year of the previous Government, where we signed the women's platform for action. I met women whose very presence in Beijing put their lives at risk. They had to walk for two or three hours a day carrying water, not only for themselves but for their family. Until one meets such people face to face, one cannot begin to understand the stress and the strain that is put on the female part of the human race. It was an eye-opener and something that will stay with me for the rest of my life.
I was also pleased that our inadequacies in the United Kingdom have been touched on in the debate. Fortunately, in the main, they are not the ones of starvation or of having to walk for three hours to collect water, but the inequalities must be addressed. I want no special treatment for women, but I want equality of opportunity—hopes that I am sure are shared by everyone in the Chamber. I was pleased that we did not debate such matters from a smug and self-satisfied perspective but are willing to recognise their own failings.
Sadly, my hon. Friend the Member for Hertford and Stortford announced at the weekend that he will be standing down as a Member of Parliament. He will be much missed because his contribution has been phenomenal, not least in his work as Chairman of the Select Committee on International Development, which is responsible for the report. His graphic introduction to the debate was an example of the effort and the humanity that he puts into his role as a parliamentarian. He has also served the Commonwealth Parliamentary Association in sterling fashion as its treasurer. He agrees with me that, although we have developed a women's organisation within the CPA, it is essential that we do not split from the men and that men and women discuss women's issues, because it is not only the women who need convincing. Indeed, in many instances, men need to be carried along to achieve success. In all instances, it is easy for women to talk to women, but it is much harder to engage men in the political process for which my hon. Friend has pushed hard in the CPA.
The hon. Member for Hampstead and Highgate (Ms Jackson) made a powerful speech but, unless we misunderstood one another, I disagree with what she

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said. I hope that she was not being dismissive of prostate cancer. I do not want to diminish the work done on breast cancer, which is so important in terms of health awareness, but an even-handed approach has not been taken with regard to prostate cancer. For example, as women parliamentarians we all contributed to a picture book in aid of breast cancer awareness. I wish that there were a book in support of doing something for men and prostate cancer. In our desperation to ensure that women's voices are heard, we must not forget men's.
Ms Glenda Jackson: I should be happy to participate in such a book, either verbally or visually, urging how important it is for men to examine themselves to discover whether they are suffering from prostate cancer as we, as women, are encouraged to examine ourselves to ensure that we are not suffering from breast cancer. I shall not, however, be deflected from my inability to see that the rights of women can be advanced only if the rights of men are advanced, too. I would not wish any man to suffer from prostate cancer. Indeed, more money should be put into the work on that illness. However, if a woman dies from breast cancer, the whole family suffers that that is not exactly the same in the case of a young man. If we have to prioritise, we must acknowledge what is most important for the whole family and—
Mr. Deputy Speaker: Order, I have already warned hon. Members about the length of interventions.
Mrs. Gillan: I do not mind the length of the intervention, but I am still not enlightened—
Mr. Deputy Speaker: Order. It is I who mind the length of interventions.
Fiona Mactaggart: Perhaps the hon. Lady is not aware that the chairman of the all-party group on breast cancer is a woman, as is the chairman of the all-party group on male cancers.
Mrs. Gillan: I am grateful to the hon. Lady—my old school friend—for that intervention. I was aware of that, but I still do not agree with the hon. Member for Hamstead and Highgate. We should not focus solely on women's issues and forget or fail to emphasise those that concern men, especially violence against men, which is a taboo subject. We are much readier to discuss domestic violence against women than against men. Much domestic violence against men is swept under the carpet, and it should be brought into the open and dealt with.
I have great respect for the medical background of the hon. Member for Richmond Park (Dr. Tonge). Her description of what we all abhor—female circumcision—made one squirm. We should not underestimate the courage that it takes for a woman in her own country and village to say no, whether on her own behalf or on that of her female child. It is exceedingly difficult to stamp out a practice that is heavily rooted in culture and religion, but I agree with her that the practice must be stamped out. I hope that her graphic description of the horrors of female circumcision will strike a chord, and be spread further than this Chamber, so that others can read about what
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a barbaric practice it is. Any comment from the Minister on what progress is being made to eradicate female circumcision will be welcomed.
The hon. Member for Clydebank and Milngavie (Mr. Worthington) spoke, from great experience, about education, AIDS and the denial of condoms. Again, 1 found myself in agreement—I do not want to attract a bad reputation for agreeing with members of other parties. His descriptions of micro—credit schemes are a great encouragement to that form of financing, which should spread further. Such empowerment of women is proving extremely successful. I join him in his call for more resources. The Minister may be able to say more about what the Department for International Development can do in that regard.
The hon. Member for Bethnal Green and Bow (Ms King) spoke with her usual eloquence, especially about gender genocide and sex-selective abortions. I would go further and conjure up a horror that is not yet with us, but that I can see coming. In the previous Parliament, I did some early work on the human genome project. When science advances so that prospective parents can find out whether their child will have fair hair and blue eyes, or whether it will be intelligent or suffer from various diseases, there may be even more selective abortions because of lack of perfection in children. I am especially worried about that. It could affect not only unborn children but mothers who may be forced to make a decision because of the attitude of those around them. I agree with her that if one educates a woman, one educates a family; there is no doubt about that.
The hon. Member for Slough (Fiona Mactaggart)—she and I have known one another for many years—taught people to read and believes that people have a right to read. I do not disagree with that, but it will be hard to explain the right to read to people who still do not have access to fresh water and food. Although reading is important, there are still people who do not have access to the basics necessary to sustain existence, let alone the ability to take that jump forward. I hope that she will not forget that, when we are considering women and development, there is a stage before reading; but I join her in hoping that that will be the next stage.
When I worked for Ernst and Young, we used to hold a cocktail party once a year and raise money from the partners, the managers and the staff, who were all accountants. The money was sent to a school in Kathmandu, courtesy of one of our great partners, John Brown. That cocktail party would pay the teachers in the school for a year and provide books for the children. It gave us a great deal of pleasure to be able to do something directly for a school that Ernst and Young's indirect taxation department had adopted. I hope that that practice continues. The money was well received and very necessary. Both boys and girls were educated in that school: they were of equal importance in that community.
Mr. Wells: In the debate on the right to education and the right to read, is it not fundamental that a great programme should be launched by the Department

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for International Development and international organisations to make good-quality teacher training a reality?
Mrs. Gillan: I do not disagree with my hon. Friend. I hope that we will hear the Minister's views on that issue.
Education has been the common theme of almost every contribution to the debate and is undoubtedly the key to improving the lot of women worldwide. However, getting more girls into school is not a straightforward process, as has been illustrated in this debate. To educate more girls, developing countries must overcome social and religious barriers to the increased role of women in society, and the work must be done with sensitivity. Western countries must be careful, when they promote the schooling and education of both sexes in the developing world, in line with our established traditions, to do so in a sensitive way that takes the whole community along with them. I share some of the views expressed in the debate about that. We must ensure that we encourage only sustainable development, not unsustainable development, so that we carry with us the whole culture, the whole area, the whole village and the whole town.
One of this country's great assets is the British Council and the role that it plays in education throughout the world. As I have done in other debates, I want to draw the Minister's attention to its remarkable work on women and development. Around the developing world, the major barrier for women is lack of education, as has been said time and again. The British Council works with education ministries and local communities to help to meet that need. In addition, it works to empower women in developing countries by promoting their access to political involvement. Through its seminars and conferences and on-the ground training, women are encouraged to play their part in politics and equipped with the necessary skills. Without that work, many developing countries would be deprived of the good sense that women can bring to politics.
Like all other aspects of the British Council's work, its involvement in educating women is threatened and limited by the Government's serious underfunding. The Select Committee on Foreign Affairs found that the funding would be lower than in any year of the previous Government. Therefore, I hope that, in a debate in which we have highlighted education, the Minister will give me a constructive answer and tell me if and when he proposes to increase funding to the British Council, in view of its important role in development.
I want to give the Minister the chance to reply at length to this debate, because the report is highly significant. However, I should like to mention a couple of matters arising from the Government's response to the report, in the hope that he will deal with them in his reply. In response to paragraphs 2 and 3, the Government said:
Further details of how we intend to implement … commitments—
to a rights-based development policy agenda—
are to be set out in a series of strategy papers to be published during the course of the coming year. The series of strategy papers will include specific papers addressing women's equality, and human rights for poor people.
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I know that the Minister has kindly made available a report, which he has left with his officials. What further strategy papers can we expect, and when will they be delivered?
Following their visit to Pakistan, Committee members rightly expressed great concern in paragraph 8 about the situation in that country. The Government's response states:
We take every opportunity to ensure that the Pakistani authorities are aware of our concerns.
I am sure that those concerns have been expressed to the Pakistani authorities, but I hope that the Minister will say where, how and on what occasions they were expressed, and outline his plans for monitoring the situation. The Pakistani authorities should be actively reminded that the UK Government are paying attention to events in that region.
Paragraph 16 says:
DFID India will be actively considering support to a second volume of the Atlas—
the "Atlas of Women and Men in India"—
following the completion of the 2001 census in India.
Has a decision been taken on that? When can we expect a definite yes or no?
In paragraph 22 of the report, the Committee recommends
that DFID conduct an assessment of the impact of radio gender training projects such as those run by Trish Williams, and provide an analysis of the value of the radio as a mechanism for distributing information to women and men about, for example, education and health.
I think that the hon. Member for Slough will admit that, for those who cannot read, the radio is a valuable medium for transmitting advice. Indeed, the BBC World Service, whose educational activities are targeted to providing learning opportunities and enabling informed choices, has first-class radio programmes. If the Minister is unaware of programmes such as "Everywoman" and "New Parents", he should familiarise himself with them immediately.
What is happening in the DFID's social development department? Apparently, it has recently strengthened its professional capacity in relation to media and development, and will shortly begin work on developing approved approaches to assessing the impact of radio programmes, including the benefits to women as well as men. I am pleased to hear that, but I wonder what progress has been made since the publication of the response.
Female genital mutilation has been mentioned by several hon. Members in this debate. Paragraph 46, in which Ms Greer, the well-known feminist, is condemned, meets with a singularly brief response:
The Government agrees with the Committee that culture can not be used as an excuse for the violation of human rights.
I hope that the Minister will tell us exactly what additional action he proposes to take to eradicate this barbaric practice as soon as possible.
I would not want to deny that progress has been made on the plight of women, thanks to the tireless efforts of campaigners and contributors around the world, both male and female, who have helped to raise the status of women. However, we must face the fact that when it comes to poverty and oppression, women undoubtedly

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remain at the bottom of the heap in many of the world's poorest countries. They not only deserve better but are so obviously the key to raising living standards and conditions for all that we must ensure an increasing focus on women in all our development programmes.
The hon. Member for Bethnal Green and Bow said that if any part of the report should be read, it was the first page. I disagree with her. I believe that if any part of the report should be looked at and read, it is page 170. The caption below the photograph reads:
Having been told she had only enough milk for one child, and in keeping with cultural biases in favour of the male, this Pakistani mother opted to breast feed her son and bottle feed her daughter. Receiving a fraction of the essential nutrients as her twin brother, the daughter died the next day.
It is a shocking picture, and a vivid example of what is happening to women and men in many parts of the world. No life is worth more or less than another. A woman is not of less value than a man. Our policies must reflect that, and I hope that the Minister will give us that assurance today.
4.51 pm
The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): I am replying to this debate partly in my capacity as the Department for International Development Minister responsible for gender issues. Perhaps it will please the hon. Member for Chesham and Amersham (Mrs. Gillan) that, although a man has that responsibility, it was given by a woman—our Secretary of State. Perhaps the hon. Lady will also be pleased that, bearing in mind the presence of Baroness Amos—our spokesperson in the House of Lords—our ministerial team contains two very powerful and effective women. The addition of the Parliamentary Private Secretary provides the perfect balance in the Department. As far as the DFID is concerned, we take account of the importance of women.
Mrs. Gillan: I am pleased that the Under-Secretary is pointing out how good his Department is. However, women are making a good contribution in all areas. When one looks at the educational results in this country, one finds that girls are out-performing boys at GCSE and A—level right across the board. Furthermore, I am glad that his Department has been wise enough to appoint such a large number of women.
Mr. Foulkes: I am grateful to the hon. Lady for paying such a generous tribute to the Government's education policies. I am impressed by her generosity. Madam Speaker once referred to Westminster Hall as a parallel Chamber, although not quite a parallel universe. However, if there were a parallel universe in which the gender roles were reversed, imagine the anger that my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington), the hon. Member for Hertford and Stortford (Mr. Wells) and I would feel—you, as well, Mr. Deputy Speaker, my old friend. If we imagine ourselves in that position, we might not fully understand, but we might begin to understand how our female colleagues feel.
I say, without condescension, that we have had a
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really excellent debate. It is one of the best, most informed and most interesting debates that I have participated in for a long time. It was initiated in excellent fashion by the hon. Member for Hertford and Stortford. I am not going to enter into valedictories because the hon. Gentleman has a long time to go before he leaves us thankfully. We entered the House at the same time, but I hasten to add—in case anyone suggests that I should follow his example—that he is a little older than me—
Mr. Deputy Speaker: Order. Perhaps the Minister should revisit his earlier sentence. He put the word "thankfully" in the wrong place.
Mr. Foulkes: I always accept your corrections, Mr. Deputy Speaker—I have done so for a long time.
The hon. Member for Hertford and Stortford has my support. We are colleagues and good friends. I also know his wife very well, and I understand the basis of his knowledge on this subject.
We have had an excellent debate. I shall mention particular speeches as I proceed. I hope that hon. Members will forgive me if I pick out that of the hon. Member for Richmond Park (Dr. Tonge), whose graphic and moving speech made me think. Other hon. Members elaborated on matters about which we have heard previously, but her speech gave me a new perspective.
A phrase that was used by my hon. Friend the Member for Clydebank and Milngavie, and by others, suggests that we could retitle our debate. It should be not "Women and Development" but "The empowerment of women".
I shall do my best to reply to all of the points that have been raised, but if I miss out anything, I shall try to follow it up in correspondence. When the International Development Committee said that it would carry out a study of women and development, my Department and 1, like my hon. Friend the Member for Hampstead and Highgate (Ms Jackson), were overjoyed. We were more encouraged when that Committee decided to inform its study with an extensive field visit to programmes in south Asia. It also took account of its earlier visit to east Africa. If anyone criticises the expenditure of Select Committees on travel, they should read the Select Committee's report and the Official Report of this debate. We have had a better, and better informed, debate as a result of the experiences of hon. Members on those visits.
A central plank of the programme of the Department of International Development is, as several hon. Members said, to work for greater equality for women. Our work cannot be fully understood if that is not taken into account. It is only when we see the work on the ground that we truly begin to understand the complexities of the issues surrounding women's equality. I hope that the sincerity of our aims is appreciated. When the Committee published its report last November, we were pleased that it presented a positive view of our efforts, but we accept its statement that much remains to be done.
Before I pick out some of the report's findings and some of the points that were raised in the debate, I want to reiterate our policy and the thinking that lies behind

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it. Our position is clear: world poverty will not be eliminated without the empowerment of women. That simple and clear statement is supported by compelling evidence. As several hon. Members said, women make up the majority of the world's poor and—this is the crucial point—they hold the key to their escape from poverty.
Several hon. Members have reported that the United Nations has said that poverty has a woman's face, and the facts suggest that that is right. The hon. Member for Hertford and Stortford and other hon. Members reminded us that 70 per cent. of the world's poor are female. The simple statement hides a complex reality. Poverty involves a lack of income, a lack of access to public services, the denial of the opportunity for human development, the lack of a voice in political life and decision making—to which many hon. Members referred—social exclusion and subordination. All poor people suffer those deficits but, almost without exception, women suffer them more than men.
My hon. Friend the Member for Bethnal Green and Bow (Ms King) explained that she had another engagement and that she would read the response to her comments in Hansard. She said that most women's work was unpaid and taken for granted, although it was vital to economic and social development.
The hon. Member for Hertford and Stortford said that in many countries women had little or no control over land and other vital assets. They also receive a lesser share of household income, but consistently give priority to other family members, especially their children, when using the limited resources over which they have control.
Two out of every three children in the world who do not go to school are girls—I shall return to the matter of education in Dakar later. Every year, 500,000 women die as a result of pregnancy. Women in Africa have a one in 12 lifetime risk of dying in childbirth compared with one in 4,000 in western Europe. Millions of women every year are subjected to violence and abuse in the home, as well as in the ever-increasing conflicts.
The hon. Member for Richmond Park asked about women who held a parliamentary seat. For every such women in the world, there are almost nine men who hold a seat. The problem is widespread and there is a long way to go. South Africa is a good example, with almost 30 per cent. of seats being held by women, which is almost twice the proportion here, despite the great efforts of the Labour party to increase female representation in the House. We do not have all the answers and we can learn from experience elsewhere. I could go on, but it would be wrong to paint an unmitigated picture of gloom. When women are given a proper chance, the whole world benefits. Women should be seen not as victims but as active agents of change.
My hon. Friend the Member for Clydebank and Milngavie and many other hon. Members, including my hon. Friend the Member for Slough (Fiona Mactaggart), said that education was the key. Getting more girls through school brings a huge development dividend. Research shows that women with even a few years of basic education are economically more productive. They have, as the hon. Member for Richmond Park said, smaller, healthier familes and are more likely to send their own children to school.
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The facts and figures speak for themselves. Let us not forget that we are talking about basic human rights, as well as the common good, when we argue for women's equality. Our policy is not merely an instrument to achieve a higher goal; it is a fundamental goal in its own right.
Let me now turn to the report. I shall not go through the findings one by one, but I shall deal with those that have been raised today. The Government's response to the Committee's 68 findings and recommendations has been published, and I shall draw attention to a few themes.
First, the continued spread of HIV is one of the most alarming threats to world development. It has already estabished a firm grip in Africa, where it is one of the biggest direct obstacles to be overcome in the struggle for sustained poverty reduction. As the Committee noted, the impact of the pandemic has not yet been felt to the same extent in Asia, although the absolute number is higher. We must quickly learn the lessons from Africa and prevent the further spread of the deadly virus.
The Department for International Development recognises the concern expressed by the Committee and I assure the Chamber that we share that concern. We are working closely with Governments, civil society and other donors through the United Nations AIDS consortium to increase the impact of our efforts to slow the spread of HIV in Asia, as well as making a major contribution to international funding to combat HIV and AIDS in Africa.
I attended the Commonwealth Heads of Government meeting at which the Prime Minister announced £100 million to tackle AIDS worldwide. That is a huge amount from our budget. I visited Umlazi township, which is just outside Durban, and spoke to youngsters about the problem of AIDS. I also visited a clinic and spoke to a doctor who told me that he had visited a school on the previous day, and had explained to a teacher that 25 per cent. of his class would die of AIDS. That is a frightening prospect.
We are also putting much effort and resources into the search for an AIDS vaccine, although such a vaccine is unlikely to become available for some years. As the Select Committee knows, openness about the challenge of HIV and AIDS is an essential first step. That is a clear lesson of the African experience, as the true extent of the spread of the virus was hidden for too long, especially in certain countries. HIV affects all layers of society, but the poor are hit especially hard. The rate of infection among women is starting to overtake that among men. Women are more susceptible to the virus than men, and appear to develop full-blown AIDS more quickly. HIV-AIDS is more than a health problem; it is strongly related to the way in which sexual and other relationships are negotiated between men and women.
I want to deal with one or two of the points made by Select Committee members. The hon. Member for Richmond Park raised reproductive health. Better sexual health is a priority for the Department. Women are especially vulnerable to infection, which often goes unnoticed until serious damage has been done. We are giving great support to programmes that improve access to quality basic services and community-based campaigns to promote safer sex and help empower

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women and girls to reject unwanted sexual attention. Our strategy is to support initiatives to improve young people's access to information about sex and sexuality, and to help develop social skills and gender awareness, especially among young men. We want to improve access to gender-sensitive and user-friendly services, including making condoms more readily available to young people when they commence sexual relations, which is at a much earlier age than when we were young, and is much earlier in certain countries than in the United Kingdom. We also want to provide information to young people in a language and style that they understand. On reproductive health, we are taking account of what is being said.
The hon. Member for Hertford and Stortford and my hon. Friend the Member for Bethnal Green and Bow spoke about the Gap clinic. Paragraph 29 of our response to the Select Committee states:
The Government remains convinced that short to medium term subsidies for reproductive health care services for women in garment factories in Bangladesh are justified…DFID agrees that in many circumstances employers could—
and should—
do more to protect and improve the health of their workers.
Like my hon. Friend the Member for Bethnal Green and Bow, I hope that if Gap reads the report it, along with other employers, will take note. Hon. Members—especially Select Committee members—would be concerned if advice and help were not available to Gap workers because we had pulled out of the project. We have made short-term provision, but I hope that we have put pressure on multinational companies to make provision in the longer term.
The hon. Member for Chesham and Amersham asked what the Government were doing to help combat malaria, especially in Mozambique. We are providing huge financial assistance to the World Health Organisation's roll back malaria campaign. We are aware of the potential for a sharp increase in disease in Mozambique, and we are channelling resources to the United Nations and the Red Cross to cope with any increase in malaria and cholera.
While I am talking about health issues, I want to deal with maternal mortality, which was raised by the hon. Member for Richmond Park. She described it graphically, as well as other issues affecting women in childbirth. A reduction in maternal mortality is one of the key international development targets. That shows the importance that the United Nations and the Government attach to it. We aim to play our part in dramatically reducing the present unacceptably high rate. It is a big challenge and may be the hardest of all the targets that we have agreed to achieve. However, we do not shrink from it. I give hon. Members the assurance that our work will not be complete until that target is achieved.
My hon. Friend the Member for Hampstead and Highgate apologised for the fact that she would have to leave the Chamber before the end. However, she and other hon. Members raised questions of violence against women. The Select Committee expressed deep concern about violence against women in all its forms and about the limits placed on women's freedom by appeals to the
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sanctity of culture and tradition. We share those concerns. We have considerably broadened our support of initiatives aimed at stopping gender-based violence in all its forms—in the home, during times of conflict and in the chaos and confusion caused by human disasters and emergencies, particularly in relation to culture and tradition.
As my hon. Friend the Member for Clydebank and Milngavie rightly said, the Committee expressed its alarm at the problem of missing women that it noted during its visit to south Asia. Demographic data show that there are far fewer women in the population there than one would expect. In some places, being conceived or born as female can literally be a sentence of death. Governments are taking steps to stamp that out, but we share the Committee's view that greater urgency is required.
My hon. Friend the Member for Hampstead and Highgate asked for an assurance in relation to paragraph 147 of the Select Committee's report. We strongly reject arguments that seek to legitimise women's oppression on the grounds of culture or tradition. People have the right to their own culture, but not at the expense of fundamental human rights. Human rights are universal and take precedence over all other considerations. We will continue to support women who challenge oppressive traditions and to play our part in promoting public dialogue in the developing world, aimed at changing attitudes in favour of women's equality. I hope that that reassures hon. Members who raised the issue.
The hon. Member for Hertford and Stortford raised the issue of infanticide and the neglect of girls. It is hard to explain the neglect and abuse of children, but no doubt poverty is both a cause and a consequence. Governments must work to meet that challenge, and we shall support them in our work.
My hon. Friend the Member for Bethnal Green and Bow asked about access to justice, which we accept is a key concern. We are developing a new approach to security and accessible justice that seeks to match the best parts of traditional systems—there are some good parts; they are not all bad—with better access to modern systems. Women's access and the upholding of women's rights are central in our thinking.
Before I go on to some of the lessons that we have learned from the Select Committee's report and our own work, I want to deal with some of the other points raised. The hon. Member for Chesham and Amersham referred to the British Council's role in education and claimed that it was seriously underfunded. That is wrong. The British Council's core funding is increasing. The Foreign and Commonwealth Office has responsibility for that. She is alluding to the contracts for which it bids, and for which DFID is responsible. It now bids along with many other bodies, but does not always gain the contracts that it might have gained in the past, because we are trying to get the best value for money.
The hon. Lady asked about radios. I assure her that we have a specialist in post who is developing a programme of work, which includes the question of gender impact.
Several hon. Members referred to the importance of micro—credit, and we agree with that. I shall not repeat what has been said, but I will say that we are increasing

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our activities and resources in that respect. The hon. Member for Chesham and Amersham will be especially pleased to hear that.
Mrs. Gillan: I am delighted that the Minister is increasing the resources. Can he tell us when, and by how much?
Mr. Foulkes: Not immediately off the top of my head. I shall write to the hon. Lady giving chapter and verse.
The international community is continually learning more about the pursuit of women's equality, both from successes and failures. The Committee's inquiry has helped us to focus on lessons from its experience and our own.
Three key lessons stand out. First, good policy is not enough—it must be followed through in practice. That requires good planning, technical experience, good follow up, high levels of management support and, above all, adequate resources. Many countries, including those visited by the Committee, claim to guarantee women's equality in their constitutions. However, one does not have to look hard to see that it is yet to be delivered in practice.
Secondly, good statistics and other data, broken down by sex, are necessary to inform policy making and to monitor progress. The lack of good data has been a major obstacle to good development work for far too long.
Thirdly, a major lesson is that little can be achieved in the long term by focusing on small-scale initiatives alone. While those bring direct benefits to many people, they rarely bring about lasting, strategic change. Their greatest value is a knowledge-generating, learning experiences, and as ways of hearing the voices of women. Lasting change is best brought about through interventions that focus on major policy reforms, changes to laws and regulations, the reallocation of financial and other resources, and the promotion of changes in attitude through public debate.
That brings me to DFID's new strategy. Those three lessons are reflected in a new global strategy paper—"Poverty Elimination and the Empowerment of Women"—which the Department has recently published for consultation. It has been sent to members of the Committee, and we would welcome their views—and, indeed, those of all hon. Members. The paper is one of a series that explains in detail what is required to deliver the international development targets to which we are committed.
The hon. Member for Chesham and Amersham asked what other strategy papers we have issued and how they are available. Papers have been published on: income, poverty and economic well being; health; education; women; human rights; the environment; water supply; better government; and urban development. They are all available on our website or from our information department, and I hope that hon. Members will take the opportunity to comment on them. We are producing reports, seeking views on them and evaluating how far we are progressing, year by year, in achieving the targets. That indicates how seriously we take those targets.
Mr. Wells: I hope that the Minister will agree that the Committee's report should form a base resource
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document to be discussed at the panel session of the meeting of the annual conference of the Commonwealth Parliamentary Association, which is to be held in London and Edinburgh.
Mr. Foulkes: That is a good suggestion, which I shall take on board. An indication of how much the hon. Gentleman and I have in common is the fact that we are both wearing the tie of the UK Committee of the Commonwealth Parliamentary Association. He and I are both trustees of the CPA's international fund, but perhaps I ought not to say too much about that. We would like views on our report to be expressed by the end of April, so that is an Easter task for hon. Members.
The international community has pledged to remove gender disparities in access to primary and secondary schooling in the next five years. That is a major priority. As my hon. Friend the Member for Slough rightly said, education provides an excellent starting point, but it is the beginning, not the end. Our strategy recognises that greater gender equality is required in all development areas. The goal of gender equality must be pursued in respect of all the internationally agreed development targets to which I have referred, and in the wider process of governance and the pursuit of human rights. Our strategy paper sets out the steps that our Department proposes to take in contributing to achieve those goals.
We see many opportunities for accelerated progress. A solid global policy framework is in place that is based on numerous international agreements. The knowledge and evidence base that links greater women's equality with material gains in economic and social development is well established and, thankfully, is growing fast. There is also much greater understanding of remaining obstacles to the achievement of international gender equality goals.
As the Secretary of State and I have said on a number of occasions, targets have been agreed at successive UN conferences. Immediate opportunities to reaffirm and further strengthen the international policy framework and consolidate lessons learned are presenting themselves as, at the turn of the millennium, the UN takes stock of progress made in implementing agreemets reached at the major UN conferences of the 1990s.
Progress towards women's equality will be reviewed in June at the highest international level—a special session of the General Assembly of the UN in New York. That is a clear sign of the growing importance of this issue on the world stage. Of course, we will play our part in ensuring that the event is a signpost to further progress for women. However, we shall also work hard to protect gains made for women in respect of education, at Jomtien, in 1990; the environment, at Rio, in 1992; human rights, at Vienna, in 1993; health, at Cairo, in 1994; and social development, at Copenhagen, in 1995.
Several hon. Members have raised the issue of education. My right hon. Friend the Secretary of State is at the forefront of international work in this area. In April, she will travel to Dakar, Senegal, to attend the "Education for All" conference, and will enjoy the full authority and support of the Prime Minister. In debating the empowerment of women today, we should be pleased that the United Kingdom will be represented at that conference by a woman, with all the power,

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authority and strength that the office of Secretary of State possesses. I guarantee my hon. Friend the Member for Slough that the Secretary of State will join forces with others in the international community in arguing for universal primary education and equal opportunity for girls in the completion of schooling.
The remaining major constraints on women's equality relate to the underlying issue of political will and the need to develop a much greater capacity to translate good policy intentions into real actions on the ground. Although partnerships are strengthening around a greater sense of common purpose, much remains to be done to close gaps in understanding and increase co-operation between Governments, and between the state and civil society. The heart of the matter is social change, and we must recognise that a strong women's movement has been a key driving force in the United Kingdom and internationally.
The Department for International Development and the Government as a whole are strongly committed to supporting the world's women in setting the agenda on their own behalf. Donors, including the Department for International Development, have an important strategic role to play, but we must recognise our limitations and deficiencies, including problems relating to co-ordination and capacity, and the way in which we prioritise the use of our resources. The richer countries must also pay their part in addressing issues involving global regulation and equity. We must work actively with the private sector to improve labour and trading
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standards and strengthen social responsibility and business practice in ways that promote and support greater equality. The private sector needs to be targeted.
My hon. Friend the Member for Hampstead and Highgate discussed labour standards. We are working with the International Labour Organisation to promote more widespread adoption of core labour standards and to guarantee better terms and conditions for workers, including, in particular, women, who make up a large proportion of the lowest-paid workers.
We have a huge agenda, to which we are firmly committed. Unless development is for all of us, it means nothing. If development is not working for women, it is not working at all.
This excellent report is a great contribution to our thinking on this subject. I hope that the Chairman of the International Development Committee and its members will not feel belittled if I say that the report is not the beginning of our consideration of the issue, and it is certainly not the end of it. The report and this debate have improved our thinking and informed us.
The next stage is our consultative document, to which I hope many hon. Members will contribute, including, in particular, members of the International Development Committee. Beyond that, the challenge is to translate our words into actions. We can talk in the House, in this Chamber and in Committee, but unless we go out into Africa, Asia and other parts of the developing world we shall not have taken up the challenge. I give an assurance that the Department for International Development and, more generally, the Government will take up that challenge.
Question put and agreed to.
Adjourned accordingly at twenty-six minutes past Five o'clock.

CABINET OFFICE

  Modernising Government
  Angela Smith
  To ask the Minister for the Cabinet Office what changes she intends to make to the Modernising Government Action Plan targets for delivery of Government services electronically. [117046]

  Mr. Ian McCartney
  In October 1997, the Prime Minister announced that within five years a member of the public would be able to carry out a quarter of dealings with Government electronically through their telephone, television, or computer. Further, in March 1999, in our Modernising Government White Paper we proposed that all Government services should be available online by 2008.

  We have been making good progress. Already, we offer online tax returns and online advice in areas such as health, overseas travel and consumer protection. Businesses can make online returns to Companies House, and soon they will be able to make VAT returns online. Next week the Small Business Service will launch a website offering small and medium businesses tailored advice based on their size, location, and sector.

  But we want to increase the pace of change in Government so that we can offer our businesses and citizens more efficient and effective services. I am pleased to announce that the Prime Minister has today decided to bring forward the date by which all Government services should be available online from 2008 to 2005. Also, in line with the outcome agreed at the Lisbon summit, Government Departments will be expected to prioritise their proposals for offering all services online by 2005 so as to ensure online access to main basic public services by 2003.

  We are also introducing an improved monitoring regime. Progress towards the target will no longer be based on the number of individual transactions with Departments. Instead we will monitor progress on the basis of the number of services that we deliver online. The monitoring regime for UK based services will as far as possible be aligned with public service agreements and service delivery agreements.

  Business Regulation
  Mr. Page
  To ask the Minister for the Cabinet Office if she will estimate the total administrative cost imposed on businesses as a result of regulation since May 1997. [R] [115689]

  Mr. Stringer
  The information required is not held in the form requested and could be obtained only at disproportionate cost.
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  All regulatory proposals likely to impact on business are subject to Regulatory Impact Assessment (RIA). RIAs are published and placed in the Libraries of the House. In addition a series of Command Papers list RIAs for each six month period, the most recent being Cm 4664.

  RIAs contain a wide range of information on the costs and benefits of each proposal.

  Taskforces
  Mr. Maclennan
  To ask the Minister for the Cabinet Office if an agreed definition of taskforces has been identified since the publication of the sixth report of the Neill Committee (Cm 4557-1). [116640]

  Mr. Stringer
  I refer the right hon. Member to the answer given to the right hon. Member for Wells (Mr. Heathcoat-Amory), on 9 December 1999,Official Report, column 634W. We are considering carefully the recommendations made in the sixth Report of the Committee on Standards in Public Life and will respond in due course.

EDUCATION AND EMPLOYMENT

  Disability Rights Taskforce
  Mr. Berry
  To ask the Secretary of State for Education and Employment when the Government will respond to the final report of the disability rights taskforce. [117387]

  Ms Hodge
  The final report of the Disability Rights Taskforce, "From Exclusion to Inclusion", was published on 13 December 1999. The Government has already announced that they intend to legislate to address the Taskforce's recommendations on education, introducing significant new civil rights for disabled children and students in school, further, higher and adult education. We issued a public consultation paper on the measures to be included in the legislation on 17 March 2000.

  Further to the response to the education recommendations, the Government have issued today an interim response to the Taskforce's report, which is available on the Government's Disability website at www.disability.gov.uk or from the DDA Help line on 0345 622 633. Copies have been placed in the House Libraries. The interim response covers a range of the Taskforce's recommendations in the areas of local government, health and social services, housing and the environment and participation in public life.

  The Taskforce made a number of recommendations that require changes to the Disability Discrimination Act and the Government are still considering these. A final response to the report will be made in due course.

  Teachers' Pension Scheme
  Mr. Campbell-Savours
  To ask the Secretary of State for Education and Employment if he will make a statement about the outcome of the latest valuation of the teachers' pension scheme. [117306]

  Mr. Wicks
  I have today laid formally before both Houses; the Report and Supplementary Report of the Government Actuary on the Teachers' Pension Scheme
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  for the period 1991–96. As a result of the Supplementary Report, the rate of contribution payable by employers will be increased by 0.95 per cent. from 1 April 2002.

  In the Government Actuary's initial report on the valuation of the scheme he recommended that the employer contribution rate should be increased from April 2000 to remove the balance of liability over the next 40 years as required under the pension regulations. The Government Actuary was subsequently asked to advise on the consequences of an alternative approach, which would enable the increase in the employer contribution rate to come into effect in 2002, but with the deficit still being removed within 40 years from 2000. We have decided to adopt the alternative approach with the result that some £90 million will be available in each of the next two years for the direct benefit of schools. Teachers can be assured that this approach does not in any way affect the security of the Teachers' Pension Scheme or the level of benefits payable to its members.

  Education Spending
  Mr. Matthew Taylor
  To ask the Secretary of State for Education and Employment what amounts are projected to be spent from public funds in(a) the United Kingdom, (b) England, (c) Wales, (d) Scotland and (e) Northern Ireland (i) in cash terms and (ii) as a proportion of GDP for financial years 1999–2000, 2000–01 and 2001–02 on education; and if he will make a statement. [116645]

  Mr. Blunkett
  Next year, the proportion of GDP spent on UK education and training will be around 5.0 per cent., not including education and training supported under the New Deal.

  UK education spending will increase from £41.1 billion in 1999–2000 to £45.8 billion in 2000–01, using the narrower definition of education in "Budget 2000", and, subject to spending review decisions to be announced in the summer, £48.0 billion in 2001–02.

  The Manifesto commitment was to increase the share of national income spent on education. We shall meet that commitment: spending will be higher as a proportion of GDP by 2001–02 than it was in 1996–97, and over 16 per cent. higher in real terms.

  Details of spending in England will be published shortly in the DfEE Departmental Report. Spending in Wales, Scotland and Northern Ireland is the responsibility of the National Assembly, Scottish Executive and Northern Ireland Office.

  Internet Access
  Dr. Cable
  To ask the Secretary of State for Education and Employment what impact there has been on(a) the timetable for and (b) the cost of providing internet access to schools as a result of delays caused by the Competition Commission's review of the proposed acquisition by NTL of Cable and Wireless Communications' cable interests. [116960]

  Mr. Wills
  The Government do not anticipate any delays in the programme for connecting all schools to the internet by 2002. The cost of providing Internet access for schools is subject to a number of factors, including 206W
  the availability of relevant services and competition in the market. It is not yet clear what effect, if any, the proposed merger will have on the cost of such services.

  Permanent Exclusion
  Ms Buck
  To ask the Secretary of State for Education and Employment what was the permanent exclusion rate(a) per 1,000 pupils, (b) per 1,000 white pupils and (c) per 1,000 black pupils in each local education authority in (i) 1996–97, (ii) 1997–98 and (iii) 1998–99. [116075]

  Ms Estelle Morris
  The information requested is available in tables, copies of which have been placed in the Library. Information on permanent exclusions for the academic year 1998–99 is currently being collected and national estimates are expected to be published in a Statistical First Release in May.

  New Deal (Young People)
  Mr. Allan
  To ask the Secretary of State for Education and Employment if he will list by unit of delivery(a) how many people joined the full-time education and employment option of the New Deal for 18 to 24-year-olds between January 1998 and the end of September 1999 and (b) how many people were on this option at the end of each month between January 1998 and the end of September 1999. [113677]

  Ms Jowell
  [holding answer 9 March 2000]There are four separate New Deal options—full-time education and training, employment, voluntary sector and environment task force. There is no full-time education and employment option.

  Teacher Training
  Mr. Clappison
  To ask the Secretary of State for Education and Employment what factors he took into account in setting recruitment targets for 1999–2000 for recruitment into initial teacher training for secondary school teachers of(a) mathematics, (b) science, (c) languages and (d) technology. [112978]

  Ms Estelle Morris
  Targets for recruitment to initial teacher training use teacher supply models which take into consideration: future demand for teachers; projected flows of teachers into and out of the maintained nursery, primary and secondary sectors, split by age and gender.

  Further details of assumptions used in the Teacher Supply Models can be found in 'Teacher Supply and Demand Modelling: A technical description', published in July 1998, copies of which are available in the Library.

DEFENCE

  Chemical Protection Programme
  Helen Jones
  To ask the Secretary of State for Defence if he will publish information about the United Kingdom's chemical protection programme. [117307]

  Mr. Spellar
  The UK's chemical protection programme is designed to protect against the use of chemical weapons. Such a programme is permitted by the Chemical Weapons Convention, with which the United Kingdom is fully compliant. Under the terms of the
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  Convention, we are required to provide information annually to the Organisation for the Prohibition of Chemical Weapons. In accordance with the Government's commitment to openness, I am placing in the House of Commons Library a copy of the summary which has been provided to the Organisation outlining the UK's chemical protection programme for 1999.

  Infantry Units
  Mr. Malcolm Bruce
  To ask the Secretary of State for Defence (1) what proposals he has for moving infantry units to the north of Scotland; [l16781]

  (2) what plans he has to assess proposals for the closure of the Aldershot infantry base; [116784]

  (3) when Major General Anthony Palmer's report on location changes for Army units will be (a) published and (b) evaluated by Ministers. [116782]

  Mr. Gerald Howarth
  To ask the Secretary of State for Defence if he will make a statement about the future of the Aldershot military garrison. [l16783]

  Mr. Spellar
  An internal discussion document entitled, "The Strategic Development of the Army Training and Recruiting Agency" has been prepared by the Chief Executive of the Agency. The document does not address the location of trained units of the Field Army but rather outlines a possible future strategy for the Agency and covers training establishments only. The report constitutes internal discussion and advice and will not be published under Exemption 2 of the Code of Practice on Access to Government Information.

  The work is at a very early stage and recommendations will not be made to Ministers until detailed staffing at an official level has taken place.

  Naval Vessels
  Mr. Duncan Smith
  To ask the Secretary of State for Defence what plans he has to acquire Primary Casualty Receiving ships. [116452]

  Dr. Moonie
  [holding answer 27 March 2000]Our current requirement for a Primary Casualty Receiving ship capability was identified in the Strategic Defence Review and is based on the provision of two ships at different states of readiness each capable of carrying a 200 bed hospital. We hope to place a contract for this in 2002 with the ships being available from 2005.

  Mr. Duncan Smith
  To ask the Secretary of State for Defence what progress has been made in the upgrading of afloat medical support facilities. [116450]

  Dr. Moonie
  [holding answer 27 March 2000]The three vessels whose medical support facilities are to be upgraded are the Royal Fleet Auxiliaries Argus, Fort George and Fort Victoria. The design work necessary to upgrade the facilities is well advanced and the procurement of equipment has commenced. We plan to carry out the installation work on Argus and Fort George in 2001 and on Fort Victoria in 2002, during scheduled maintenance periods.

  Mr. Duncan Smith
  To ask the Secretary of State for Defence (1) when the expected in-service date is for the Royal Navy survey ships which will replace HMS Beagle and HMS Bulldog; [116454]
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  (2) when he will withdraw from service (a) HMS Roebuck, (b) HMS Hecla and (c) HMS Herald; [116455]

  (3) what plans he has to procure new survey ships for the Royal Navy. [l16456]

  Dr. Moonie
  [holding answer 27 March 2000]The existing Royal Navy Hydrographic Survey Squadron includes HMS Herald, HMS Bulldog, HMS Beagle, and HMS Roebuck (HMS Hecla was taken out of service in December 1996). The first three of these vessels are planned to leave service between mid 2001 and early 2002 with HMS Roebuck being maintained into 2003.

  To meet our future requirements, we plan to replace these ships with new, more capable, multi-role survey vessels, backed by a long-term in-service support contract. These new vessels will provide both hydrographic and oceanographic military surveying data, as well as a combat survey and mine warfare support capability. Balance of investment considerations, including the number of vessels to be acquired, are ongoing, as are contractual negotiations with the preferred bidder, Vosper Thornycroft. We plan to place a contract in the next few months, with new vessels entering service from 2002.

  Mr. Duncan Smith
  To ask the Secretary of State for Defence what will be the cost of each Type 45 destroyer. [116449]

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

  Letter from Robert Walmsley to Mr. Iain Duncan Smith, dated 30 March 2000 I am replying to your question to the Secretary of State for Defence about the cost of the Type 45 destroyer. This matter falls to me to answer within my area of responsibility as Chief of Defence Procurement and Chief Executive of the Defence Procurement Agency.
  The total programme cost for the twelve currently planned Type 45 warships including their missiles is approximately £6Bn. This includes approximately £1.2Bn for the development, design and build of the first of class ship and £lBn for the development and initial production of the Principal Anti Air Missile System (PAAMS). The balance contains funding for further missile procurement and allows for the incremental acquisition of the combat system. As a result, the platform design will incorporate significant growth margins. The actual cost per individual ship is thus difficult to assess but the average is expected to be within a target cost of about £270M excluding missiles.

  Ro-ro Ferries
  Mr. Key
  To ask the Secretary of State for Defence what civilian use he envisages for the new roll-on, roll-off ferries on order for his Department. [116132]

  Mr. Spellar
  [holding answer 27 March 2000]This is a matter for the Chief Executive of the Defence Procurement Agency. I have asked the Chief Executive to write to the hon. Member.

  Letter from Robert Walmsley to Mr. Robert Key, dated 30 March 2000:
  I am replying to your question to the Secretary of State for Defence asking whether civilian use is envisaged for the roll on roll off ships that will be provided to meet the MOD's strategic sealift requirements. This matter falls within my area of responsibility as Chief of Defence Procurement and Chief Executive of the Defence Procurement Agency.

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  MOD is currently proposing to meet its strategic sealift requirement through Private Finance Initiative arrangements, with the objective of maximising value for money and affordability. Rather than procuring ships ourselves we plan, instead, to procure sealift capability in the form of a service. This will comprise a number of vessels (with crews) at differing readiness periods designed to meet our needs, including those of the Joint Rapid Reaction Force. This approach will afford the ship-owner the opportunity to use the vessels for commercial trading when they are not required by MOD. The extent of such commercial use of any underused capacity will depend upon the service provider. Selection of a preferred bidder will be made in late Spring.

  Alternative Landing Ships
  Mr. Duncan Smith
  To ask the Secretary of State for Defence when he will place a contract for the Alternative Landing Ships Logistic Programme; and at which shipyard the work will be carried out. [116458]

  Dr. Moonie
  [holding answer 27 March 2000]This is a matter for the Chief Executive of the Defence Procurement Agency. I have asked the Chief Executive to write to the hon. Member.

  Letter from Robert Walmsley to Mr. Iain Duncan Smith, dated 30 March 2000:
  I am replying to your question to the Secretary of State for Defence about the Alternative Landing Ships Logistic (ALSL) Programme. This matter falls within my area of responsibility as Chief of Defence Procurement and Chief Executive of the Defence Procurement Agency.
  An Invitation to Tender (ITT) has been prepared by the ALSL Integrated Project Team and on current plans will be issued to 5 UK Shipyards in late Spring 2000. Contract placement would occur in late 2000 on completion of tender assessment and final negotiations.
  The contract will be awarded to the shipyard that offers the highest confidence that they will provide the best whole life value for money.

  United States National Missile Defense Strategy
  Mr. Flynn
  To ask the Secretary of State for Defence what proposals have been made by the United States Department of Defense to use the communications bases at Menwith Hill and Fylingdales as part of the planned United States National Missile Defense Strategy. [116271]

  Mr. Spellar
  We have received no formal request to this effect, nor would we expect any until after a US decision on whether or not to proceed towards deployment of such a system.

WALES

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Wales how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116771]

  Mr. Paul Murphy
  My Department uses and controls only one building, which has six workplace car parking spaces available.

  Additionally, my Department has offices in the National Assembly building in Cardiff, where we share the car parking facilities, although no specific car parking spaces are reserved for my Department's use.

  Websites
  Mr. Maclennan
  To ask the Secretary of State for Wales if he will list the expenditure incurred by his Department, agencies and non-departmental public bodies on(a) the setting up and (b) the operation of websites, indicating the cases in which the expenditure has been above that budgeted; and if he will list for each website (i) the topics which have been covered, (ii) the current average number of hits per month and (iii) the estimated expenditure on each website for each of the next three years. [115843]

  Mr. Paul Murphy
  My Department has one website which contains information about the purpose and structure of my office, together with all our press notices. It was built "in house" at no extra cost to the Welsh Office, our predecessor Department. It is operated on our behalf by NISS (National Information Systems and Services) based at Bath University. Their charges—now and in the future—are a matter of commercial confidentiality but are well within the expenditure budgeted for them. At the present time we are averaging 4,000 (mainly document) hits per month.

  New Deal (Over-50s)
  Mr. Rowlands
  To ask the Secretary of State for Wales what estimate he has made of the expenditure on the New Deal for those aged over 50 years in 1999–2000; and what is his estimate for 2000–01. [115077]

  Ms Jowell
  I have been asked to reply.

  New Deal 50 plus was introduced in nine selected areas in October 1999. Forecast expenditure for 1999–2000 is £1.7 million. The New Deal for 50 plus will be available nationally from 3 April 2000 with estimated expenditure for 2000–01 set at £16.1 million from the Windfall Tax and a further £102 million set aside within this Department's Annually Managed Expenditure to cover Employment Credits.

  New Deal (Over-25s)
  Mr. Rowlands
  To ask the Secretary of State for Wales what estimate he has made for the New Deal expenditure for over 25-year-olds in 1998–99 and 1999–2000; and if he will estimate the expenditure for 2000–01. [115076]

  Ms Jowell
  I have been asked to reply.

  My Department has spent or allocated the following sums to the New Deal for people aged 25 years and over:

  £ million

  1998–991

  26

  1999–20002

  90

  2000–013

  130

  1 Outturn

  2 Estimated outturn

  3 Provisional allocation

  In addition New Deal for 25 plus clients have access to the Work Based Learning for Adults programme which has an annual budget of £328 million.

  New Deal (Under-25s)
  Mr. Rowlands
  To ask the Secretary of State for Wales what estimate he has made of the spending on the New Deal for 18 to 24-year-olds in each year since 1997–98; and what estimate he has made of expenditure in 2000–01. [115075]

  Ms Jowell
  I have been asked to reply.

  My Department has spent or allocated the following sums to the New Deal for 18 to 24-year-olds in each year since 1997–98:

  £ million

  1997–981

  36

  1998–991

  254

  1999–20002

  345

  2000–013

  470

  1 Outturn figures

  2 Estimated outturn

  3 Provisional allocation

HOME DEPARTMENT

  Metropolitan Police
  Mr. Dismore
  To ask the Secretary of State for the Home Department if he will make a statement on the progress towards implementing the change to the boundaries of the Metropolitan Police District to make them coterminous with the boundaries of the London boroughs. [117309]

  Mr. Straw
  The change to the boundaries takes effect on 1 April, as planned. The responsibility for policing those parts of Essex, Hertfordshire and Surrey which are currently within the Metropolitan Police District will pass from the Metropolitan Police to the respective county forces.

  Essex Police, Hertfordshire Constabulary, Surrey Police, their Police Authorities, and the Metropolitan Police have prepared for the changeover in a thorough and professional manner. A great deal of detailed work has been put in since I announced the change in June 1998. I commend them for their close co-operation, and I am confident that there will be a smooth transfer of responsibilities. People in the transferring areas need have no concerns about disruption to their local policing service.

  The funding for the three county Police Authorities will be increased from April to reflect their enlarged areas. In addition, we are making special payments out of the police grant totalling £10 million to go towards costs arising out of the transfer.

  I am confident that the benefits of the boundaries change will soon show through. I decided to change the boundaries for three main reasons.

  First, it makes it easier for the criminal justice agencies in the area to work together in the fight to reduce crime. Local councils and other agencies will no longer have to work with two different police forces when discharging their responsibilities under the Crime and Disorder Act
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  1998. This is an important step towards aligning boundaries in the criminal justice system, thereby improving efficiency and effectiveness.

  Secondly, the change supports democratic accountability. It gives local people a say, through their county Police Authority, in the way their area is policed. People in the transferring areas will not have a vote in the forthcoming election for London's Assembly members, who will be in the majority on the new Metropolitan Police Authority. It is right that these areas be policed by county forces whose Police Authorities, with councillor members in the majority, already provide local democratic accountability.

  Thirdly, the change allows the Metropolitan Police to focus its efforts on the huge task of policing the nation's capital.

  The Metropolitan Police have policed the transferring areas since the time of Sir Robert Peel. I would like to pay tribute to the efforts of all the officers and civil staff of the Metropolitan Police who have worked in these areas over the years. They deserve the Government's thanks, and the thanks of the local communities.

  Mr. Dismore
  To ask the Secretary of State for the Home Department when the Metropolitan Police Commissioner's Policing and Performance Plan for 2000–01 will be published. [117310]

  Mr. Straw
  The Commissioner of Police of the Metropolis tells me that he will be publishing details of his Policing and Performance Plan for 2000–01 on the Metropolitan police website http://www.met.police.uk on Friday 31 March.

  Advertisements have also been placed in the London press summarising key performance data and targets set out in the Plan.

  Some of the performance data for 1999–2000 are provisional. Audited data will be included in a hard copy version of the Plan to be published in June.

  The Policing and Performance Plan combines the requirements of an annual Policing Plan, an annual Efficiency Plan and, for the first time, an annual Best Value Performance Plan.

  The Plan sets out the Metropolitan police's two key priorities for 2000–01: reducing crime and disorder and diversity. The Plan sets out the Metropolitan police's crime reduction targets—a two per cent, reduction in burglary, stopping the increasing level of street crime and an eight per cent. reduction in vehicle crime—together with key activities for delivery. It also contains a suite of Best Value Performance Indicators (BVPIs) with a summary of the Metropolitan police's performance against those BVPIs for which historical data is available and targets for future performance. The Plan also sets out a five-year plan of Best Value reviews. The areas selected for review in the coming year are; investigating and detecting crime; combating bureaucracy and managing information; and consultation.

  The Plan also sets out the means by which the Metropolitan police aims to exceed the two per cent, efficiency gains required by the Government from all police forces.
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  The Commissioner will report on performance against the Plan to me, in my capacity as the Metropolitan police's police authority, and to the Metropolitan Police Committee, until 3 July, when the Metropolitan Police Authority (MPA) is established.

  I believe that the Commissioner's Plan will enable the MPA to make an effective start by providing a solid basis for monitoring and interrogating the Metropolitan police's performance as the foundation for the Plan the MPA will develop for 2001–02.

  Prison Service
  Mr. Hope
  To ask the Secretary of State for the Home Department when he will publish the Prison Service's Business Plan and the Key Performance Indicators for 2000–01. [117466]

  Essex police—sickness absence for police officers and civilian support staff

  1996–97

  1997–98

  1998–99

  Police officer working days lost through sickness

  28,399

  34,066

  38,748

  Average days sickness per police officer

  10

  12

  13

  Civilian support staff working days lost through sickness

  16,903

  21,309

  19,232

  Average days sickness per civilian support staff

  12

  14

  13

  Scientific Procedures Committee
  Dr. Ladyman
  To ask the Secretary of State for the Home Department what requirement, in terms of objectivity, is requested of members of the Scientific Procedures Committee. [116952]

  Mr. Mike O'Brien
  The Animal Procedures Committee was established by the Animals (Scientific Procedures) Act 1986. The Act requires the Secretary of State, who appoints members, to have regard to the desirability of ensuring that the interests of animal welfare are adequately represented. There is also a requirement that the committee shall have regard both to the legitimate requirements of science and industry and to the protection of animals. The key consideration in making appointments to the committee is the need to maintain a breadth of professional experience and a proper balance of views among the membership.

  In 1998, the committee adopted a Code of Conduct for Members. This requires members at all times to act in good faith and observe the highest standards of impartiality, integrity and objectivity in relation to the conduct of the Committee's business; to declare any personal or business interest which may influence their judgment: not to participate in discussion of matters in which they have a personal or business interest; and to understand that they are appointed as individuals and not as representatives of organisations with which they have significant contacts.

  Vivisection
  Dr. Ladyman
  To ask the Secretary of State for the Home Department if he will make a statement on the progress of negotiations with the British Union for the Abolition of Vivisection in respect of their lifting their restrictions on the full publication of the Harlan report; and if he will publish the full report. [117012]

  Mr. Mike O'Brien
  I am pleased to report that the British Union for the Abolition of Vivisection (BUAV) agreed on Monday 27 March to waive confidentiality of all
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  Mr. Boateng
  The Prison Service Business Plan for 2000–01, which includes the key performance indicators, has been published today and copies have been placed in the Library.

  Police Sick Leave
  Mr. Jenkin
  To ask the Secretary of State for the Home Department what was the absence through sickness rate among(a) police officers and (b) civilian support staff in the Essex police for each month since 1 May 1997. [116859]

  Mr. Charles Clarke
  The information requested for monthly sickness rates is not held centrally but annual sickness rates for the last three years for Essex police are given in the table.

  of the material in the report stemming from videotapes, an audio tape and diaries kept by the undercover investigator and an interview conducted with her during the course of the Animals (Scientific Procedures) Inspectorate's investigation. I have, therefore, today laid in the Library, copies of a fuller version of the report in which only those sections containing commercially sensitive information, or information relating to individuals and third parties remain censored. I regret that the BUAV were unable to agree to release this information earlier as I requested.

  Dr. Ladyman
  To ask the Secretary of State for the Home Department if the author of the British Union for the Abolition of Vivisection report on Harlan UK is a member of the Scientific Procedures Committee. [116958]

  Mr. Mike O'Brien
  The administration of the Animal Procedures Committee is the responsibility of the Chairman, the Reverend Professor Michael Banner. He will write to my hon. Friend.

  Racism and Xenophobia
  Mr. Lidington
  To ask the Secretary of State for the Home Department who will represent the United Kingdom at the official opening of the European Monitoring Centre on Racism and Xenophobia on 7 and 8 April in Vienna. [116955]

  Mr. Mike O'Brien
  The United Kingdom will be represented at the official opening of the European Monitoring Centre on Racism and Xenophobia on 7-8 April in Vienna by either a Minister or a senior official (yet to be finalised) from the Foreign and Commonwealth Office, and by the Director of Constitutional and Community Policy from the Home Office.

  This Government remain committed to the work undertaken by the Centre. The event in Vienna marks the official opening of the Centre, but in fact it has been in existence for over a year now. The Centre is supported

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  financially by the European Commission; the Home Office provided £48,000 to cover the running costs of the Centre's United Kingdom Secretariat during 1999–2000.

  Public Bodies
  Mr. Quinn
  To ask the Secretary of State for the Home Department how many board members he appoints to each non-departmental public body. [116336]

  Mr. Straw
  A full list of the non-departmental public bodies to which I make appointments is published in the publication "Public Bodies 1999", a copy of which is available in the Library.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for the Home Department how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116761]

  Mr. Straw
  The Home Office Central London Estate, which comprises six buildings, has a total of 177 car park spaces. Figures for the rest of the Home Office estate could be obtained only at disproportionate cost. We are extending travel plans for all our key buildings in line with the commitment set out in the Transport White Paper and are reviewing the scope for reducing our car parking requirements in that context.

  Consultants
  Mr. Heald
  To ask the Secretary of State for the Home Department, pursuant to his answer of 14 March 2000,Official Report, column 168W, concerning external consultants used by his Department since 1997, if the individual value of every consultancy contract is commercial in confidence, with particular reference to Clear Communications; and if he will indicate the reasons for commercial confidentiality in each case. [116774]

  Mr. Straw
  In line with the Code of Practice on Access to Government Information issued by the Cabinet Office, my Department encourages transparency and openness in the tendering and contracting process and where possible, we will publish information on individual contract values. However, where publishing such information would prejudice the legitimate commercial interest of any person or competition between service providers or where such information has been given in confidence, it is my Department's policy to treat this information as commercial in confidence unless consent to publish has been obtained.

  It had not been possible, in the reply I gave the hon. Gentleman on 14 March 2000, Official Report, columns 168-69W, in the time available, to obtain consent from Clear Communication to disclose information on contract value. I have now obtained their consent and the information available is as follows:
  Clear Communication Contract Value £46,000

  In the time available, I have been unable to seek consent from other consultancy companies listed in my previous reply.

  Mr. Heald
  To ask the Secretary of State for the Home Department what consultancy contracts the Smith Group has entered into with his Department since May 1997. [116775]
  216W
  Mr. Straw
  From the information available, there is no record of the Smith Group entering into any contracts with my Department since May 1997.

  Jon Riser
  Mr. Streeter
  To ask the Secretary of State for the Home Department if he will order an external inquiry into the handling of the immigration case of Jon Riser, deceased. [116733]

  Mr. Straw
  Following Mr. Riser's tragic death in the United States of America, I am making arrangements for a senior officer within the Home Office to conduct an urgent and detailed investigation into the handling of the case by the Immigration and Nationality Directorate. I have asked to be provided with a full report of the findings.

  I will of course inform the hon. Member of the outcome. I should also be happy to meet the hon. Member to discuss his concerns, and am making arrangements to do so.

HEALTH

  Research and Development
  Angela Smith
  To ask the Secretary of State for Health how he intends to take forward the reform of research and development in the NHS. [117075]

  Yvette Cooper
  We are today announcing a programme of modernisation to give strategic direction to the management of Research and Development in the National Health Service.

  High quality modern health care depends on high quality research-based evidence. These changes bring the management of R&D in the NHS into line with the principles set out in "The new NHS" (Cm 3807, December 1997). They provide a quality framework within which all R&D funded from NHS resources will respond to the priorities and needs of the NHS.

  The Department of Health will take the lead in expressing priorities for the national effort in health services research, on behalf of the NHS. The NHS will work with other funding bodies and the universities to deliver advances in knowledge the NHS needs for evidence-based practice and policy.

  Collaboration will replace unproductive competition. There will be no time-consuming NHS-wide bidding for NHS R&D allocations from April 2001. Instead, the Government will use a modernisation fund to encourage research partnerships and networks in areas of high priority for the NHS. We want to ensure that consumers of health services are involved at every stage in the research process. New guidance will reinforce the standards of governance and performance management required of R&D in the NHS.

  The NHS is part of the national science base. These reforms ensure the NHS and the Department of Health meet the obligations of their partnership with other research funding bodies. Within this framework, the NHS

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  will target resources on providing a suitable environment for high quality research conducted within strategies that take account of its priorities and needs.

  The paper, "Research and Development for a First Class Service: R&D funding in the new NHS", sets out a new statement of policy and principles together with plans for implementation. Copies have been placed in the Library. It is also available on the Department of Health's website.

  These reforms build on a review led by Professor Michael Clarke on behalf of the Central R&D Committee for the NHS. We are today making his report available on the Department of Health's website. As well as the management and funding of R&D in the NHS, Professor Clarke's review considered NHS priorities for R&D related to cancer, the elderly, heart disease and stroke, mental health, and primary care and took account of a review of research priorities for accidental injury. We are placing these reports on the Department's website. We intend to make early progress with the R&D priorities for cancer, heart disease and stroke, and mental health.

  Local Government Expenditure
  Mr. Baker
  To ask the Secretary of State for Health what account he takes of the expenditure by local authorities on social service functions in framing his Department's expenditure plans. [116777]

  Ms Stuart
  The Department takes full account of the current level of service provided by local government to social services recipients when considering the level of specific and special grants paid to local authorities.

  Mid-Essex Hospital Trust
  Mr. Burns
  To ask the Secretary of State for Health how much the Mid-Essex Hospital Trust has spent from 6 April 1999 to the latest date for which information is available on having NHS patients treated in the private healthcare sector. [116732]

  Ms Stuart
  The information requested is not available centrally.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Health how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116769]

  Ms Stuart
  There are 1,745 car parking spaces available for use by visitors and staff at premises occupied by the Department and its agencies.

  Waiting Lists (Essex)
  Mr. Jenkin
  To ask the Secretary of State for Health how much money Essex Rivers Healthcare Trust has spent in the latest financial year for which figures are available for the treatment of NHS patients by the private healthcare sector. [116840]

  Ms Stuart
  The information requested is not available centrally.

  Antenatal Screening
  Mr. Key
  To ask the Secretary of State for Health if he will introduce antenatal screening for genetic abnormality, including biochemical screening for Down's syndrome; and if he will make a statement. [116731]

  Yvette Cooper
  The United Kingdom National Screening Committee advises the Government on all aspects of screening policy. It considers the aim of all antenatal screening to be informed choice for parents. The NSC would rarely recommend the introduction of a blanket test such as a blood test for chromosomal disorders for all or most pregnant women, but rather a specific test for a known disorder. At present, individual women who have already had an affected pregnancy or have a family history of a genetic disorder should be offered specific genetic testing and counselling. We are currently considering the Committee's recommendation to offer all pregnant women second trimester serum screening for Down's Syndrome.

  Cleft Lip and Palate Patients
  Mr. Lidington
  To ask the Secretary of State for Health if he will make a statement about his plans for the future treatment of cleft lip and palate patients from Buckinghamshire. [116956]

  Ms Stuart
  A final decision on the future configuration of cleft lip treatment centres is still to be taken. Any changes to services will be subject to full statutory public consultation.

  Crown Report
  Mr. Oaten
  To ask the Secretary of State for Health when he will respond to the Crown report on the Review of Prescribing, Supply and Administration of Medicines. [116905]

  Ms Stuart
  We announced our decisions on the implementation of the main recommendations of the Review on 13 March.

  Meningitis C Vaccine
  Mrs. Spelman
  To ask the Secretary of State for Health for what reasons some private practices are being denied access to the meningitis C vaccine. [107990]

  Yvette Cooper
  The campaign to immunise all children and young people under the age of 18 with the new meningococcal Group C conjugate vaccine is being undertaken by the National Health Service. Any child eligible to receive this vaccine can do so via the NHS. Any individual in the country may approach a general practitioner for NHS treatment, including immunisation if appropriate. Treatment is conditional on the GP's acceptance of the patient for NHS services.

  The meningococcal Group C conjugate vaccine is new and manufacturers held no stockpiles in advance of the launch. We have distributed every batch of vaccine as fast as it has been released. Distribution has been in line with the implementation schedule with the vaccine being targeted specifically at those groups at highest risk first.
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  The only way to guarantee a successful roll-out of the new vaccine, which is in limited supply, has been to ensure it is available through the NHS. The Department of Health has therefore bought all the vaccine available for the NHS. Once the NHS programme to immunise every child under-18 has been completed, sometime later this year, the vaccine will then be available to others outside of this group.

  Mrs. Spelman
  To ask the Secretary of State for Health how he intends to ensure sufficient supplies of the meningitis C vaccine are produced. [107992]

  Yvette Cooper
  The meningococcal Group C conjugate vaccine is a brand new vaccine. The Department has calculated the amount of vaccine needed to immunise those covered by the immunisation programme and has contracted with vaccine manufacturers to ensure sufficient vaccine is available to implement the programme. The Department continues to liaise closely with manufacturers and the National Institute for Biological Standards and Controls, which tests every batch of vaccine for safety and potency, to ensure vaccine is made available to the NHS as soon as it becomes available. The Department will continue to seek to ensure adequate supply through close liaison with vaccine manufacturers. The NHS is the first healthcare system in the world to protect people with this new vaccine.

  Mrs. Spelman
  To ask the Secretary of State for Health if the meningitis C inoculation programme for the under-18s will be completed this year. [107993]

  Yvette Cooper
  Yes, subject to manufacturers meeting their supply contracts.

  Vaccinations
  Mrs. Spelman
  To ask the Secretary of State for Health if a non-NHS patient in the high risk categories can receive a vaccination by a GP working in the NHS. [107991]

  Yvette Cooper
  Any individual in the country may approach a general practitioner for National Health Service treatment, including immunisation if appropriate. Treatment is conditional on the GP's acceptance of the patient for NHS services.

  Renewable Energy
  Mr. Flynn
  To ask the Secretary of State for Health if he will make it his policy to discover what proportion of the energy supplied to his Department by utility companies comes from renewable sources. [116270]

  Ms Stuart
  Buildings occupied by the Department and its agencies currently purchase energy from utility companies through contracts let by the buying agency.

  In future procurement of energy, where the Department of Health is the lead Department, we will require the supplier to provide information on the proportion of the energy supplied that comes from renewable sources.

  NHS Volunteers
  Mrs. Virginia Bottomley
  To ask the Secretary of State for Health what progress has been made in giving an individual trust board member the responsibility for volunteer involvement; and how many NHS trusts have achieved this. [116444]

  Mr. Hutton
  The National Health Service Executive has taken, and continues to take, a great deal of action on the recommendations of the "Making a Difference: Strengthening Volunteering in the NHS" report. NHS trusts were asked to name a volunteering 'champion' at Board level. A recent progress update showed that 76 per cent, of trusts have a member in place.

  Political Activities
  Mr. Brady
  To ask the Secretary of State for Health if he will list the(a) chairmen and (b) non-executive directors of health trusts and health authorities who have made a declaration of political activity indicating the party affiliated in each case. [116973]

  Ms Stuart
  Information on candidates appointed to National Health Service boards and any political activity declared is recorded in the Department of Health Public Appointments Annual Report for 1999, a copy of which is in the Library. The 2000 report will be published in May.

  Residential Care
  Ms Walley
  To ask the Secretary of State for Health what his timetable is for reviewing the residential care allowance as proposed in the White Paper, "Modernising Social Services". [116750]

  Mr. Hutton
  As my right hon. Friend the Secretary of State announced in the House on 2 December 1999,Official Report, columns 444-45, we are examining the implications of phasing out the residential allowance and transferring the resources to councils as part of the year 2000 spending review, which will be completed this summer. We are planning to seek the views of councils, service users and their carers and families and care providers on the impact of such a change over the next few weeks. We shall publish a White Paper on long-term care later this year.

LORD CHANCELLOR'S DEPARTMENT

  Executive Agencies
  Mr. Hope
  To ask the Parliamentary Secretary, Lord Chancellor's Department what the key performance targets are for Her Majesty's Land Registry and the Public Record Office executive agencies for 2000–01. [117393]

  Mr. Lock
  The following tables set out the key performance targets that the Lord Chancellor has set for Her Majesty's Land Registry and the Public Record Office for 2000–01.
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  HM Land Registry—key performance indicators and targets 2000–01

  Indicator

  Target

  Financial

  Percentage return on average capital employed

  6

  Efficiency

  Cost per unit in real terms

  £25.09

  Cost per unit in cash terms1

  £30.87

  'Service First' Standards

  Speed

  Percentage of office copy and official search applications processed within two working days, and

  98

  Percentage of office copy and official search applications processed within three working days

  100

  Percentage of all registrations processed within 25 working days2

  80

  Accuracy

  Percentage of registrations processed free of any error

  98.5

  Percentage of customers responding to the Annual Survey who perceive the accuracy of registrations to be excellent or good

  Better than 902

  Delivery of Electronic Services

  Percentage of dealings (key customer interactions) capable of electronic delivery

  50

  Percentage of titles in the land register capable of electronic delivery

  96

  Percentage of title plans in the land register capable of electronic delivery

  All

  Number of scanned pages of filed documents (millions)

  11

  1 The inflation factor for the cost per unit in cash terms is derived from the GDP indices announced by HM Treasury in December 1999

  2 In 2000–01 the categories will be 'very satisfied' and 'satisfied' with the accuracy of registrations

  Notes:

  1. The financial target of £0 External Financing Limit shown in the corporate plan 1998–2003 has been removed at the request of HM Treasury.

  2. Fuller details of HMLR's targets are in its Business Plan.

  Public Record Office—key performance targets 2000–01

  Indicator

  Target

  1. Efficiency

  Unit cost of activities:

  (a) selecting and preserving the public records

  Limit increase to 3 per cent, in real terms

  (b) giving access to records

  Reduce by 26 per cent, in real terms

  Backlog of records in departments reported as being over 30 years old and awaiting review

  Reduce by 397 metres

  Management efficiency in running support services and projects

  Reduce the level of staff sick absence in 2000 by 8.2 per cent. Pay 99 per cent, of invoices within 30 days

  2. Quality of service

  The achievement of Charter Standards:

  (a) Charter Standards targets for: making newly opened records and their catalogues available to users; answering letters; delivering records to users; supplying copies of records; answering the telephone; and keeping appointments

  Achieve 98.5 per cent, against the targets

  (b) User satisfaction surveys

  Carry out four satisfaction surveys and achieve assessments of 'good' or 'excellent' from 90 per cent, of those expressing a view

  3. Effectiveness

  Performance in achieving specified milestones towards strategic objectives in the light of emerging Government policies

  (a) Facilitate the achievement by the Departments of the Modernising Government Action Plan objective for managing records electronically, by testing electronic records management systems and by providing details of those which are suitable for inclusion in GCat (the Government Catalogue) by 30 September 2000

  (b) Increase revenue by 3 per cent, against the 1999–2000 outturn

  Note

  Fuller details of the Office's targets are given in its Business Plan which is available from the Public Record Office

  Access to Justice Act 1999
  Ms Keeble
  To ask the Parliamentary Secretary, Lord Chancellor's Department which bodies the Lord Chancellor intends to prescribe as entitled to take advantage of the costs recovery provisions contained in section 30 of the Access to Justice Act 1999; what criteria he will take into account in determining status as a prescribed body; and what procedure membership 222W
  organisations should follow if they wish to be approved as prescribed bodies. [117308]

  Mr. Lock
  Section 30 of the Access to Justice Act 1999 comes into force on 1 April. From that date membership organisations with prescribed body status will be able to recover a sum as part of legal costs from unsuccessful opponents to reflect the provision of legal help for members and their families.
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  By virtue of the Access to Justice (Membership Organisations) Regulations 2000 which also come into force on 1 April bodies which are prescribed for the purpose of section 30 of the Act are those bodies which are for the time being approved by the Lord Chancellor.

  From 1 April the Lord Chancellor will approve all trade unions listed by the Certification Officer as at 31 March 2000 as prescribed bodies. Other membership organisations may apply to him for approval.

  Rather than setting down rigid criteria for prescription in regulations the Lord Chancellor believes that there should be a flexible approach with each application for approval treated on its merits. Therefore, in deciding whether an organisation should be approved, the Lord Chancellor will take account of any relevant representations in its application, but will be mindful, so far as it is relevant, of whether the organisation in question:

  Exists to protect, defend, represent and promote the interests of its members.

  Has a range of benefits for members.

  Offers litigation funding as one of those benefits and on a discretionary basis, at no additional charge.

  Publishes annual accounts.

  Uses monies paid by members to promote their interests and benefits.

  Covers all those deemed eligible by the organisation (not only members).

  Organisations wishing to seek the Lord Chancellor's approval as prescribed bodies for the purposes of section 30 of the Act should apply in writing to:

  Costs and Litigation Funding Branch

  Lord Chancellor's Department

  3rd Floor Selborne House

  54-60 Victoria Street

  London SW1E 6QW

  Workplace Parking
  Mr. Gray
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116760]

  Mr. Lock
  The information requested is not held centrally and could be provided only at disproportionate cost.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Departmental Expenditure
  Mr. David Taylor
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to change his departmental expenditure limits for 1999–2000. [117304]

  Mr. Prescott
  (i) The DETR Main Programmes Departmental Expenditure Limit will be increased by £700,000 from £10,403,990,000 to £10,404,690,000 as a result of a transfer of this amount from the DETR Local Government Departmental Expenditure Limit. There are 224W
  also changes between the Voted and non-Voted elements of the Main Programmes Departmental Expenditure Limit. The changes are set out in greater detail as follows.

  (a) Provision within the non-Voted element of the DETR Main Programmes Departmental Expenditure Limit will be increased by £7,413,000 from £1,697,254,000 to £1,704,667,000. This reflects a transfer of £700,000 from the DETR Local Government Departmental Expenditure Limit, a transfer of £910,000 from Class III, Vote 2 (Planning, roads, local transport and vehicle safety); and £5,803,000 from Class III, Vote 6 (Transport industries).

  (b) The transfer of £700,000 from the DETR Local Government Departmental Expenditure Limit to the non-Voted element of the DETR Main Programmes Departmental Expenditure Limit is to provide other capital support to the London Borough of Haringey.

  (c) The change for Class III, Vote 2 (Planning, roads, local transport and vehicle safety) is a transfer of £910,000 to the non-Voted element of the DETR Main Programmes Departmental Expenditure Limit for transport Supplementary Credit Approvals.

  (d) The change for Class III, Vote 6 (Transport industries) is a transfer of £5,803,000 to the non-Voted element of the DETR Main Programmes Departmental Expenditure Limit to take account of British Rail's revised grant claim for 1999–2000.

  (ii) The DETR Local Government Departmental Expenditure Limit will be increased by £720,000 from £34,218,737,000 to £34,219,457,000. This increase is the net effect of a take-up of end year flexibility of £1,420,000 and a transfer of £700,000 to the DETR Main Programmes Departmental Expenditure Limit. The changes are set out in greater detail as follows.
  (a) Provision within the non-Voted element of the Local Government Departmental Expenditure Limit will be increased by £720,000 from £371,906,000 to £372,626,000. This reflects a take-up of end year flexibility of £1,420,000 for the Local Authority Capital Challenge programme, and a transfer of £700,000 to the DETR Main Programmes Departmental Expenditure Limit for other capital support to the London Borough of Haringey.

  The transfers will be offset by transfers or charged to the DEL Reserve and will not therefore add to the planned total of public expenditure.

  Air Pollution Control
  Mr. Hoyle
  To ask the Secretary of State for the Environment, Transport and the Regions if he will provide the details of the 2000–01 charging scheme for local air pollution control under Part I of the Environmental Protection Act 1990. [117388]

  Mr. Hill
  Charges to cover the costs of local enforcing authorities in regulating processes which are subject to Part I of the Environmental Protection Act 1990 were introduced in April 1991.

  With the approval of the Treasury, and following consultation with local authority associations and industry, my right hon. Friend the Secretary of State for the Environment, Transport and the Regions has made a revised scheme specifying the scale of fees and charges to take effect from 1 April 2000.

  The initial application fee will be unchanged and the annual subsistence fee will be increased by roughly 0.75 per cent. The main change is that the standard subsistence fee is increased by £6 from £790 to £796. The standard application fee remains at £1,280.
  225W
  The scheme will be laid before both Houses and copies placed in the Libraries.

  GLA Transport Grant
  Mr. Fitzpatrick
  To ask the Secretary of State for the Environment, Transport and the Regions what amount of Greater London Authority transport grant he has determined for 2000–01. [117389]

  Mr. Hill
  I have today formally determined GLA Transport Grant at £392,700,000. £73,768,000 is to cover period before Transport for London assumes its full responsibilities on 3 July 2000. This is therefore for amounts to be spent by the relevant predecessor bodies of Transport for London, including the Secretary of State himself. The balance of £318,932,000 will be paid in instalments to the Greater London Authority for the purposes of Transport for London.

  Maritime and Coastguard Agency
  Mr. Ivan Henderson
  To ask the Secretary of State for the Environment, Transport and the Regions when he expects to announce the key targets for the Maritime and Coastguard Agency for 2000–01. [117390]

  Mr. Hill
  I have today placed in the House Library a copy of the Agency's Business Plan which includes its key targets for 2000–01. The key targets are:to agree a new statutory safety regime for under 12 m fishing vessels by 31 October for implementation by 30 April 2001;
  to complete at least 95 per cent. of the agreed programme of vessel inspections by March 2001;
  to decide on the search and rescue response to accidents and life-threatening situations, and to initiate action if necessary, within 5 minutes of being alerted in at least 95 per cent. of cases;
  to undertake a review of the UK Search and Rescue Helicopter coverage as recommended in the National Audit Office report, "Civil Maritime Search and Rescue", and make recommendations to Ministers by December;
  following the Marine Environment High Risk Areas consultation we will prepare for Ministers a response plan by autumn 2000 proposing the most cost effective options for Emergency Towing Vessel provision;
  to evaluate and report to Ministers on the effectiveness of the National Contingency Plan for Counter Pollution by March 2001;
  to evaluate the provision of UK port waste reception facilities and report to Ministers on this by December;
  following an analysis of Headquarters and regional management costs, produce a specific programme for new efficiency measures and proposals to reduce such costs, and set targets for Agency management costs against pay and non-pay costs by July, for each of the years 2001–04;
  to analyse the first annual cycle of the time-recording Management Information System to agree, by September, specific national and regional targets for chargeable, other core and non-core activities undertaken by operational staff for 2001–04;
  to complete re-location programme by releasing properties in Liverpool, Great Yarmouth, Plymouth and Newcastle by 31 March 2001.

  London Underground
  Ms Harman
  To ask the Secretary of State for the Environment, Transport and the Regions what further progress has been made with the London Underground public private partnership; and if he will make a statement. [117391]
  226W
  Mr. Hill
  London Transport awaits bids for the two deep tube infrastructure service contracts tomorrow. These will be very detailed, weighty proposals. It will take several weeks to analyse and clarify them properly. When this process is completed, the bids will be tested for best value against the public sector comparator.

  I have today placed in the Library of the House a detailed note which describes how London Transport have constructed the public sector comparator against which bids for infrastructure improvement and maintenance contracts under the Public Private Partnership (PPP) can be tested.

  The methodology on which the comparator has been built is designed to offer a fair and reliable estimate of how much it would cost London Underground itself to carry out all the work needed to upgrade and maintain the Underground network over the next 30 years, to the standard required under the PPP contracts. The comparator will show the cost for each of the three infrastructure companies separately, so that each bid can be directly assessed against its public sector alternative.

  The comparator will also explicitly establish how much it would cost to deliver the required contract outputs if London Underground were to raise the necessary finance through the issuance of public sector bonds. The bids will also be tested against this means of raising finance.

  The methodology which London Underground is using, and which is described in the note that I have placed in the Library, has been reviewed by KPMG as London Underground's independent, external auditors. KPMG were asked to consider whether the note accorded with the relevant Treasury guidance and was appropriate to the circumstances of the PPP. KPMG will also be asked to review the actual comparator and the bond-financed variant before they are used to test bids for best value.

  The actual values produced by the comparator can be released only once negotiations with bidders have been completed, so as not to expose the taxpayer's negotiating position, and thus jeopardise the chances of securing best value.

  As well as the external audit undertaken by KPMG, the design, construction and use of the comparator will be made available for scrutiny by the National Audit Office (NAO). The NAO has made clear that while it is always available to give guidance to the bodies whom it audits on areas of risk and uncertainty, and to draw attention to relevant financial experience in NAO and Public Accounts Committee reports—my Department has accordingly received such guidance—it could not go further and become involved in the decision-making process. This would inevitably lead to questions about its ability subsequently to carry out an independent examination for Parliament, once the key decisions on the PPP have been taken.

  The NAO, however, notes that as part of the decision-making process, London Transport is having its work on building and using the public sector comparator reviewed by KPMG. The NAO regards it as being in line with good practice for such comparators to receive scrutiny external to the project.

  Highways Agency
  Mr. Salter
  To ask the Secretary of State for the Environment, Transport and the Regions what targets he has set for the Highways Agency for 2000–01. [117392]

  Mr. Hill
  The key targets set for the Highways Agency are included in the Agency's business plan for 2000–01, which is being placed in the Library.

  The key targets are to:
  in order to deliver best value for money, maintain the network so that the proportion of the network requiring maintenance within the next year is held between 7 and 8 per cent;
  achieve a saving of 250,000 estimated vehicle hours from the network communications and economy local network management schemes completed in the year;
  to demonstrate progress towards achieving the 2010 targets for motorways and trunk roads set out in "Making the Network Safer: the Highways Agency's Strategic Plan for Safety" published on 1 March:
  reduce the number of people killed and seriously injured on trunk roads in 2000 to 5,056 (compared with the 1994–98 average of 5,589);
  reduce the slight casualty rate in 2000 to 21.13 slight casualties per million vehicle km (compared with the 1994–98 average of 21.76);
  in each case to allow for expected year-to-year fluctuations in casualty levels, the Agency will be deemed to have met the target if the result is no more than 5 per cent. above the milestone target figure;
  achieve an average target of 85 per cent. across the four environment programme sub-indicators;
  achieve by the end of the year no less than 90 per cent. of the 24 targeted programme of improvement scheme milestones listed in Chapter 3.4 of the business plan.

  Planning Inspectorate
  Mr. Paul Clark
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to review the Planning Inspectorate. [117394]

  Mr. Raynsford
  My Department has today launched a review of the Planning Inspectorate. The Planning Inspectorate was established as an Executive Agency in April 1992 and, in line with Cabinet Office guidelines for all executive agencies, it must be reviewed at least every five years.

  The last review of the Inspectorate in 1995 confirmed its Agency status. This review which will be completed by the end of 2000 will be undertaken in two stages.

  The first will consider all the organisational options for the Inspectorate including abolition; continued agency status; contracting-out; market testing; merger or rationalisation; privatisation.

  If Agency status is confirmed, the second stage will consider how the Inspectorate's efficiency could be improved.

  The review will be undertaken jointly by DETR and the National Assembly for Wales. The Agency's customers and other interested parties will be consulted.

  Energy-from-waste Plants
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what 228W
  compensation payments are available to those living in an area where an energy-from-waste plant is to be constructed. [116779]

  Ms Beverley Hughes
  None. A planning application for such a plant would be determined by a local planning authority in accordance with the development plan for the area, unless material considerations indicated otherwise. Such considerations could include the effects of the proposal on the locality and the views of local people. In some cases planning conditions or obligations might be appropriate to mitigate the effects of a proposed scheme.

  Social Services Expenditure
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what was the actual expenditure on social services for each local authority in England for(a) 1997–98 and (b) 1998–99; and what is the estimated expenditure for (i) 1999–2000 and (ii) 2000–01. [116836]

  Ms Beverley Hughes
  English local authorities have reported a total net current expenditure on social services of £8,454 million in 1997–98 and £9,059 million in 1998–99 and a budgeted expenditure of £9,645 million in 1999–2000. The information for 2000–01 is not yet available.

  The information by local authority has been placed in the Library of the House.

  Housing Improvement Agencies
  Sir Paul Beresford
  To ask the Secretary of State for the Environment, Transport and the Regions what organisation has been contracted to undertake the administration of grants to the housing improvement agencies; when the contract was granted and at what value; which organisations(a) sought and (b) were short-listed for the contract; and if the contract was let under the European negotiated procedure. [116888]

  Mr. Mullin
  Collective Enterprises Ltd. has been appointed the national co-ordinating body for home improvement agencies under a contract awarded on 8 March. The value of the contract is £1,576,515 (excluding VAT) over four years. Five organisations expressed interest in the contract of which two, Care and Repair England Ltd. and Collective Enterprises Ltd., were invited to tender. The contract was awarded under the EU Restricted Procedure.

  Airports
  Sir Paul Beresford
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make public the options he decides to take forward following the decision-making process outlined in the consultation paper, Appraisal Framework for Airports in the South East and Eastern Regions, to reduce the potential for blight and developmental delays. [116885]

  Mr. Mullin
  As I stated in my answer to the hon. Member on 14 March 2000,Official Report, column 116W, the options will be appraised through the process of successive sifts, and following completion of the study there will be a public consultation on the options arising from it. In advance of that consultation, it would be premature to comment on the status of any option.
  229W
  The approach adopted in this study is consistent with my Department's Code of Practice on the Dissemination of Information during Major Infrastructure Developments. Releasing information in the earliest stages of a possible project, in advance of final options, could result in unnecessary and lengthy blight, as well as multiplying uncertainty and anxiety.

  Sir Paul Beresford
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment the South East and East of England Air Study will make of work done by the Runway Capacity to serve the South-East Working Group. [116887]

  Mr. Mullin
  The final terms of reference for the South East and East of England Regional Air Services Study make it clear that in undertaking the study it will be necessary to take advantage, where appropriate, of the technical work done on the options examined by the Working Group. As my right hon. Friend the Member for Hamilton, North and Bellshill (Dr. Reid) indicated in his announcement on 11 March 1999,Official Report, columns 360-61W, the study has started from the position that nothing is ruled in or ruled out.

  I announced publication of the final terms of reference to the House on 9 February 2000, Official Report, column 106W. Copies are available in the House Libraries.

  Sir Paul Beresford
  To ask the Secretary of State for the Environment, Transport and the Regions if the South East and East of England Air Services Study will include an assessment of the effects of growth of aircraft movements at airports in the South East and East of Manchester Airport. [116886]

  Mr. Mullin
  Forecasts of future aircraft movements at airports in the South East and East of England used in the assessment of options in the South East and East of England Regional Air Services study (SERAS) will take into account potential capacity gains at other airports including Manchester Airport.

  Sir Paul Beresford
  To ask the Secretary of State for the Environment, Transport and the Regions if, in announcing new housing development for the South East, an assessment was made of the effects of any increases in runway capacity at South East airports. [116889]

  Ms Beverley Hughes
  No assessment has been made of the effects of airport proposals which are not covered in current permissions or development plans. The South East and East of England Regional Air Services study is examining a wide range of options to address changes in demand for air services. In doing so it will, among other impacts, assess regional planning guidance implications and urbanisation impacts, including housing, of airport development options. Following completion of the study, we shall consult on a shortlist of options. After decisions have been taken on airport development, any implications for housing provisions will be taken into account in future revisions of housing rates in the light of the monitoring and review arrangements set out in draft Regional Planning Guidance for the South East and East Anglia.

  Transport Council
  Mr. Hood
  To ask the Secretary of State for the Environment, Transport and the Regions what was the outcome of the Transport Council held in Brussels on 28 March; and if he will make a statement. [117118]

  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the outcome of this week's EC Council meeting of Transport Ministers. [116843]

  Mr. Hill
  The Transport Council met in Brussels on 28 March. My right hon. and noble Friend the Minister for Transport represented the United Kingdom.

  The Commission gave a further report on progress of the definition phase of the Galileo satellite navigation project. Commissioner de Palacio asked for member states' support at the forthcoming World Radio Conference, to ensure that the Galileo project has the radio frequencies needed. She reported that the public private partnership had attracted expressions of interest from the private sector. My right hon. and noble Friend emphasised the need for full cost benefit analysis of the project. The Presidency asked for a written report from the Commission to the June Council.

  There was a debate on the Commission's Communication on air transport and the environment, first presented at the December 1999 Council. The Communication describes the Commission's proposed five-year work plan for policies and measures to limit or reduce noise and gaseous emissions from aircraft. Member states broadly welcomed the Commission's approach. The UK was among the member states, which emphasised that, where possible, international noise standards should be developed at the global level through the International Civil Aviation Organisation. Likewise, on the question of aviation fuel tax, my right hon. and noble Friend joined others in stressing that this was best handled at the global level. Council Conclusions were adopted, confirming the Commission plan and setting priority areas for action.

  The Commission set out recent development on the hushkits issue. The Regulation on the use of hushkitted aircraft would come into force on 4 May; it was possible that some changes could be made to the date of application to third country aircraft. Work would continue on a joint declaration, committing the EU and the US to a new standard in ICAO. My right hon. and noble Friend referred to the need for a new international standard, and stressed that the Commission should do all possible to seek a solution. The Council agreed Conclusions, endorsing the Commission's further engagement with the US.

  The Commission stated that it would be producing a list of air passengers' existing rights. This would be followed by legislative proposals. At the June Council, they would report in full on the recent consultation exercise. The Presidency, identifying the issue of a European Charter of Air Passenger Rights as a priority, encouraged the Commission to submit its Communication, including legislative proposals in time for the June Council.

  The Commission presented a working paper on establishment of a European aviation safety authority (EASA). My right hon. and noble Friend expressed disappointment that the paper did not provide a full analysis of the options of an international organisation or

  231W
  an EU agency, as the December Council had requested. The Presidency said that the Transport Council should aim to take a decision in June on the best legal form for the EASA.

  The Presidency tabled a revised text of the draft directive on the interoperability of conventional rail systems, which had been presented by the Commission to the December Council, and which the UK broadly supports. The Presidency noted that substantial progress had been made in the Working Group. The Commission agreed that progress had been made and felt that a common position on the draft directive should be possible in June.

  The Commission presented to the Council its Communication on road safety. Key proposals for action were: further development of the European new vehicles crash testing programme (ENCAP), use of speed limiters on larger vehicles, higher levels of seatbelt and child restraint usage, safer car fronts, and targeting of accident blackspots. Legislative proposals would follow in these areas. My right hon. and noble Friend welcomed the general approach of the Communication, which fitted in well with the recently announced UK road safety strategy. The Communication also refers to the Commission's intention to bring forward a recommendation for a maximum blood alcohol level of 0.5 milligrams per millilitre. The Presidency concluded that further work should be done on the Communication, in preparation for discussion at the June Council.

  The Commission introduced new proposals on maritime safety, stressing that it was important to make progress in preventing future accidents like that involving the Erika. Action was proposed in two stages. The first stage would involve measures tightening the regulation on port state control of ship standards, improving control of classification societies, and phasing out single-hulled tankers, the last in line with the US timetable. In the short-term, oil companies would be asked to avoid voluntarily the use of tankers more than 15 years old. The second stage of the Commission's proposals involves a change in the information system for all ships, building on the new EQUASIS international database, better monitoring of sea movements of freighters, setting up a European Maritime Safety Agency, and examination of the liability and compensation aspects of oil pollution accidents. Member states supported the proposals for directives on port state control and classification societies, but, more generally, the need for the International Maritime Organisation to be involved was widely stressed. The UK was among member states, which stressed the importance of a proper prior assessment of the economic impact of a rapid phase-out of single hulled tankers. My right hon. and noble Friend also noted the UK's recent proposals to increase the ceiling for payments from the International Oil Pollution Compensation Fund (IOPCF), and suggested that wider reform should be pursued through the IMO. The Commissioner felt that global action alone was not enough and argued for her proposal on single hulls. The Presidency, however, asked for more work to be done in preparation for the June Council. They urged member states to work together to increase compensation levels in the IOPCF.
  232W
  Under other business, the Commission reported that there had been good progress in the High Level Group set up following the presentation at the December Council of the Commission Communication on air traffic management ("A Single European Sky").

  Manchester Metrolink
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions (1) under what headings of expenditure the aid to be provided for the Manchester Metrolink will be spent; [116864]

  (2) what proportion of the aid to be provided for the Manchester Metrolink will be given as (a) grant and (b) credit approval. [116863]

  Mr. Hill
  As my right hon. Friend the Secretary of State made clear in his reply to my hon. Friend the Member for Manchester, Central (Mr. Lloyd) on 22 March 2000,Official Report, column 549W, the final details of the funding package are still to be determined. However, it will include both grant and credit approvals. Public support will be towards the capital costs of the project which would typically include construction costs, rolling stock, utility diversion and land purchase.

  Aircraft Noise
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what EU measures he supports to reduce noise from civil aircraft. [116846]

  Mr. Mullin
  The UK broadly supports the Commission's proposals in the recent communication on Air Transport and the environment, particularly the need to work through the International Civil Aviation Organisation for new standards. We shall consider the proposals as they come forward on their merits. My hon. Friend the Member for Streatham (Mr. Hill) will report the conclusions of the transport council today.

  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what measures he will adopt to reduce the noise of civil aircraft over the Stour Valley in Essex and Suffolk. [116845]

  Mr. Mullin
  Local concerns about an increase in over flight, following the introduction of a second stack for Stansted, have been addressed as far as possible, given the competing demands for airspace and the general build up of air traffic in the South East. We shall continue to press for international agreement on higher noise certification standards and the phasing out of noisier aircraft. This will benefit people there and elsewhere.

  European Aviation Safety Authority
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if it is his policy to support the establishment of EASA as an international rather than an EU body; and if the rules of EASA are intended to have direct effect and direct applicability in the law of the member states. [116867]

  Mr. Mullin
  The Government are committed to taking action with their Community partners on setting up a new aviation safety body which will raise aviation safety standards across Europe in an effective and efficient way.
  233W
  In June 1998, during the UK Presidency, the Council mandated the Commission to develop, on behalf of the European Community and the member states, a treaty for a new international organisation to be known as the European Aviation Safety Authority, involving both EU and non-EU member states, as well as the Community itself. The mandate required the Commission first to submit a draft outline text of the founding treaty to a Special Committee of member states representatives.

  The draft treaty agreed by the Special Committee assumes that the most effective way of achieving uniformly applied, high safety standards was to provide that all EASA rules should be directly applicable in Contracting Parties' law. The draft also provides for extensive judicial control mechanisms. Member states and the Commission have been unable to agree this draft treaty in its entirety and the Commission has suggested an alternative option, based on a community agency. The Council on 28 March agreed that further analysis should be undertaken of the best legal form for EASA.

  Air Cargo
  Mr. Jenki
  n: To ask the Secretary of State for the Environment, Transport and the Regions what encouragement he gives to research into ways of reducing the hazards associated with the transport of air cargo. [116849]

  Mr. Mullin
  Certain types of cargo are known to present specific hazards when transported by air and these are categorised as dangerous goods. The carriage of dangerous goods by air is governed by the Air Navigation (Dangerous Goods) Regulations 1994 which implement the requirements of Annex 18 to the Chicago Convention. This requires that all dangerous goods transported by air must be carried in accordance with the International Civil Aviation Organisation's Technical Instructions for the Safe Transport of Dangerous Goods by Air. The Technical Instructions themselves are based upon the UN Recommendations on the Transport of Dangerous Goods.

  The Technical Instructions are reviewed regularly by an ICAO panel of experts on dangerous goods. The Department funds a dangerous goods specialist from the Civil Aviation Authority to participate in the panel, which she currently chairs. The ICAO panel does not consider that any research is necessary.

  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the adequacy of the regulations governing the use of frozen carbon dioxide for packaging for chilled and frozen goods transported by air. [116848]

  Mr. Mullin
  n: In accordance with Annex 18 to the Chicago Convention the transport of all dangerous goods by air in the UK is governed by the International Civil Aviation Organisation's (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air. The Technical Instructions are regularly reviewed by an ICAO
  234W
  panel (which includes a UK member) and revised biennially. The hazards from frozen carbon dioxide are well known and the ICAO panel considers that the present requirements for its carriage are adequate.

  Galileo Project
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if it remains his policy to oppose the EU Galileo project; and if he will make a statement. [116844]

  Mr. Mullin
  The Government have not opposed the EU Galileo project. They have adopted a prudent approach to the project as they consider that key issues such as cost, funding (including arrangements for a public-private partnership), user benefits, security and management arrangements need to be properly evaluated. Such views are shared by other EU member states. Hence, the Transport Council, at its meeting in June 1999, adopted a Resolution that invited the European Commission to proceed only with the Definition Phase of Galileo in conjunction with member states and the European Space Agency. This phase has begun and includes detailed work on the issues of concern to the UK and other EU states. Based on the results of this work and negotiations with the US and the Russian Federation, the Commission is required, by the end of this year, to put forward proposals to the Council on the best way to proceed with the project either independently or in co-operation with international partners.

  Regional Planning Guidance
  Mr. Brake
  To ask the Secretary of State for the Environment, Transport and the Regions what is the assumed scale of net regional population migration underlying the projected level of household formation proposed for the current round of draft regional planning guidance(a) in each of the eight English regions and (b) for the spatial development plan for London. [116653]

  Miss Melanie Johnson
  I have been asked to reply.

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

  Letter from Tim Holt to Mr. Tom Brake, dated 30 March 2000 As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent question on the assumed scale of net regional population migration, underlying the projected level of household formation proposed for the current round of draft regional planning guidance.
  You requested information for each of the eight English regions and for the spatial development plan for London. The 1996-based household projections are one factor taken into account in arriving at the level of housing and households provision in regional planning guidance and spatial development plans.
  The latest household projections are consistent with the 1996-based subnational population projections at regional level. The attached table provides the assumed levels of migration in the subnational population projections for each government office region. Projections of migration are shown for five different years in the projection period and those for the intervening years are consistent with these figures.
  235W

  Subnational population projections: assumed net annual migration for projected years

  Thousand

  Mid year ending

  Government office region

  2001

  2006

  2011

  2016

  2021

  North East

  -3.2

  -2.6

  -1.8

  -1.1

  -0.1

  North West

  -8.0

  -7.8

  -6.8

  -5.0

  -3.6

  Yorkshire and the Humber

  1.6

  1.5

  1.3

  1.4

  2.2

  East Midlands

  13.1

  12.5

  12.0

  12.0

  12.0

  West Midlands

  -2.9

  -2.3

  -1.7

  -0.9

  0.0

  East

  19.8

  19.6

  19.4

  19.6

  19.7

  London

  -18.2

  -17.4

  -17.9

  -21.8

  -26.4

  Sough East

  34.2

  32.7

  31.2

  30.6

  30.5

  South West

  29.5

  29.7

  30.1

  30.9

  31.6

HOUSE OF COMMONS

  Advisory Committee on Works of Art
  Mrs. Roe
  To ask the hon. Member for Roxburgh and Berwickshire, representing the House of Commons Commission, if he will make a statement about the membership of the Advisory Committee on Works of Art. [116746]

  Mr. Kirkwood
  Madam Speaker has appointed the hon. Member for West Ham (Mr. Banks) in place of the hon. Member for Dudley, North (Mr. Cranston) as a Member of the Advisory Committee on Works of Art.

  Research Assistants
  Mr. Oaten
  To ask the Chairman of the Administration Committee how many hon. Members currently have passes for temporary research assistants from overseas. [l16957]

  Mrs. Roe
  Forty-seven.

TRADE AND INDUSTRY

  Employment Regulations
  Mr. Brooke
  To ask the Secretary of State for Trade and Industry what recent representations he has received from businesses on the introduction of employment regulations. [115672]

  Mr. Alan Johnson
  I receive many representations from business on a variety of employment issues.

  Regulation
  Mr. Love
  To ask the Secretary of State for Trade and Industry what steps his Department is taking to relieve small businesses of regulatory burdens. [115673]

  Ms Hewitt
  One of the primary functions of the Small Business Service will be to ensure that the "Think Small First" philosophy is applied across Whitehall. The Small Business Service will also encourage Government Departments to make information on regulations more comprehensible and accessible, including through an SBS gateway.

  Textile and Clothing Industry
  Charlotte Atkins
  To ask the Secretary of State for Trade and Industry what the Government's initial response is to the consultation document, "A National Strategy for the UK Textile and Clothing Industry". [115674]

  Mr. Caborn
  The Government welcome the production of the consultation document "National Strategy for the UK Textile and Clothing Industry". We shall make a detailed response to the report, including the recommendations, when the final document is produced later in the spring.

  Employment Agencies
  Mr. Hope
  To ask the Secretary of State for Trade and Industry if he will make a statement on the regulation of employment agencies. [115675]

  Mr. Alan Johnson
  Our review of the agency conduct regulations, following last year's consultation, is progressing well. The new regulations will be laid before Parliament shortly. We will streamline and clarify the existing regulations while ensuring workers' and hirers' interests are properly protected.

  Cybersquatting
  Mr. Evans
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with interested parties relating to cybersquatting. [l15676]

  Ms Hewitt
  The Department of Trade and Industry has been working for some time both in the UK and in international fora to develop consistent and workable procedures for resolving domain name disputes.

  The law applies online just as much as it does offline so, where the UK courts have jurisdiction, owners of trade marks and other well known names can pursue legal remedies against cyber squatters who infringe their rights under UK law.

  Post Office
  Shona McIsaac
  To ask the Secretary of State for Trade and Industry how the Post Office will help tackle financial exclusion. [115677]

  Mr. Byers
  The Horizon project to computerise the whole of the post office network will provide an automated IT platform from which basis the Post Office can substantially extend its arrangements to act with banks and building societies on an agency basis. In addition, my right hon. Friend the Chancellor of the Exchequer announced in his recent Budget statement that he has asked the banks to work with the Post Office to offer a universal banking service available at post offices. Development of these measures has the potential to provide banking facilities to the substantial number of people currently financially excluded.

  Milk Industry
  Mr. David Heath
  To ask the Secretary of State for Trade and Industry if he will make a statement on competition in the milk industry. [115678]
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  Mr. Byers
  I welcomed the voluntary decision by the members of Milk Marque to break up into three independent successors. All sectors of the UK dairy industry will benefit from a more competitive structure.

  I have asked the Director General of Fair Trading to advise me by Easter whether the market is now operating competitively. I will make an announcement once I have considered his advice.

  Minimum Wage
  Mr. Corbyn
  To ask the Secretary of State for Trade and Industry when he next expects to review the level of the national minimum wage. [115680]

  Mr. Alan Johnson
  We are asking the Low Pay Commission, in its new remit, to continue to monitor the minimum wage and advise on a range of issues including whether there is a case for a further increase in the minimum wage rates and, if so, by how much. The Commission has been asked to report again by July 2001, and the Government will implement any rate changes in October of that year.

  Meanwhile, in the light of the Low Pay Commission's positive findings in its second report, which we published on 15 February, we have already announced increases in the minimum wage rates later this year. The youth rate increases to £3.20 on 1 June 2000 and the main rate increases to £3.70 on 1 October 2000.

  Mr. Swayne
  To ask the Secretary of State for Trade and Industry what account is taken of an employer's provision of board and lodging when calculating the minimum wage payable. [115693]

  Mr. Alan Johnson
  The only benefit in kind which counts towards national minimum wage pay is accommodation. The maximum amount which can be offset against national minimum wage pay by employers who provide accommodation is £19.95 per week.

  The provision of other benefits such as meals is not taken into account when calculating whether the national minimum wage has been paid. This approach follows recommendations by the Low Pay Commission in its first and second reports and its special report into the accommodation offset.

  Sub-post Offices
  Dr. Palmer
  To ask the Secretary of State for Trade and Industry if he will make a statement on the role of sub-post offices in supplying electronic services to local communities. [115681]

  Mr. Alan Johnson
  The Government are fully committed to a nationwide network of post offices and are contributing nearly £500 million towards the cost of equipping the network with a modern, automated IT platform. The system will be installed at some 18,000 post offices throughout the country by spring 2001, to enable the Post Office to improve services and take advantage of new business opportunities. Creation of an extensive automated infrastructure will facilitate the use of the Post Office network as a delivery channel for electronic Government services.
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  Mr. Kenneth Clarke
  To ask the Secretary of State for Trade and Industry when he expects to receive the Performance and Innovation Unit report on the sub-Post Office network; and if he will make a statement. [115769]

  Mr. Byers
  [holding answer 22 March 2000]As my right hon. Friend the Prime Minister indicated in his answer to the hon. Member for Torbay (Mr. Sanders) on 17 January 2000,Official Report, column 267W, the Performance and Innovation Unit's report on the Post Office network is expected to be completed this spring.

  EU Membership
  Helen Jackson
  To ask the Secretary of State for Trade and Industry if he will make a statement on the benefits to British manufacturing of membership of the European Union. [115682]

  Mrs. Liddell
  For British business, the greatest of all benefits of our membership of the EU is being part of the European single market. This gives all UK manufacturers access to the largest single market in the world—a market of nearly 380 million consumers.

  Almost 60 per cent. of the UK's trade, worth nearly £120 billion a year, is with the EU. In addition we attract a huge amount of inward investment as a gateway to the single market, for countries outside the EU.

  Internet Access
  Mr. Peter Bradley
  To ask the Secretary of State for Trade and Industry what steps he is taking to overcome difficulties in improving access by rural communities to the internet; and if he will make a statement. [115683]

  Ms Hewitt
  The Prime Minister recently announced the Government's goal of universal internet access by 2005. People in rural areas can already get such access via a PC and a telephone line. The Government are also making sure that there are public internet access points widely spread across the country, including in rural areas.

  Pirate Radio Stations
  Mr. Gerrard
  To ask the Secretary of State for Trade and Industry what steps he is taking to curb the activities of pirate radio stations. [115685]

  Ms Hewitt
  My Department's Radio communications Agency is constantly active against pirates. Last year it conducted a record 1,414 operations against pirates across the UK and successfully prosecuted 47 people.

  Competition
  Mr. Sheerman
  To ask the Secretary of State for Trade and Industry what assessment he has made of the competitiveness of UK industry in relation to its major European rivals. [115686]

  Mrs. Liddell
  Competitiveness depends on a wide range of factors as discussed in the Government's Competitiveness White Paper. Following on from the White Paper, the Secretary of State for Trade and Industry published, in December 1999, a set of indicators which provided a systematic assessment of the UK's competitiveness against the world's leading economies, including its major European rivals.
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  The overall message from the Indicators is that the UK is beginning to succeed as a knowledge driven economy, but in many areas has some way to go to match the standards of the best.

  Communications Regulation Reform
  Mr. Ian Bruce
  To ask the Secretary of State for Trade and Industry if he will bring forward the publication of the White Paper on communications regulation reform; and if he will make a statement on its proposed contents. [R] [115687]

  Ms Hewitt
  The White Paper is a priority for both the Department of Trade and Industry and the Department for Culture Media and Sport. It will cover areas such as the economic regulation of broadcasting and telecommunications, content regulation, media ownership and the role of public service broadcasting. It will be published as soon as possible before the end of the year.

  Small Business Service
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry if he will make a statement about the recent consultation exercise conducted with businesses by the Small Business Service. [115688]

  Ms Hewitt
  We published and laid in the House on 17 January the results of the very extensive consultation carried out last year, together with the Government's response. We had 700 replies, from a complete cross-section of all those with an interest.

  Working Time Directive
  Mr. Shaw
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact of the working time directive. [115690]

  Mr. Alan Johnson
  The Government commissioned an interim report of research on the implementation of the Working Time Regulations. A copy of the report is available from the Library of the House.

  Electricity
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what measures he proposes to encourage micro-cogeneration of electricity within the UK. [115694]

  Mrs. Liddell
  The Chancellor announced his intention in the Pre-Budget Report of trebling support for energy efficiency measures under the climate change levy to around £150 million for 2001–02. This has been confirmed in the Budget.

  Final decisions on use of the £50 million "energy efficiency" fund will be made in the 2000 spending review. The overall aim will be to encourage take-up of low-carbon technologies, including renewables, with an expanded programme of support.

  The Budget has also confirmed, subject to obtaining EU State Aids clearance, that a system of 100 per cent, first year capital allowances will be introduced for certain eligible technologies—to include "good quality" CHP—from April 2001.
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  Micro-CHP giving energy saving benefits to consumers could also be eligible for Utilities' programmes to meet Energy Efficiency Standards of Performance Obligations.

  The draft Strategy for CHP to 2010 is due to be published soon by my right hon. Friend the Minister for the Environment. It will invite comments on how we can achieve our CHP objectives, including developing the market for micro-CHP.

  Consumer Protection
  Dr. Tony Wright
  To ask the Secretary of State for Trade and Industry what proposals he has to protect consumers in relation to schemes run by trade associations. [115695]

  Dr. Howells
  When seeking to buy products or services many consumers will be influenced by logos or membership of trade associations. Consumers need to know that these provide effective redress and are properly enforced. The Government propose to change the law to give the Director General of Fair Trading a power to give a seal of approval to effective codes. This will enable the consumer to choose a supplier with confidence, knowing that if something does go wrong, redress is available.

  Inward Investment
  Mr. Brady
  To ask the Secretary of State for Trade and Industry if he will make a statement on inward investment to the North West of England. [115696]

  Mr. Caborn
  Since May 1997 my Department has made 672 offers of Regional Selective Assistance in the North West of England, including 51 offers to overseas companies, creating or safeguarding nearly 33,000. Major inward investment successes have included MBNA in Chester and New Balance Athletic Shoes in Cumbria.

  Business Burdens
  Mr. Blizzard
  To ask the Secretary of State for Trade and Industry what initiatives his Department is taking in conjunction with other Departments to reduce the burdens on business. [115697]

  Ms Hewitt
  The Small Business Service is working closely with other Government Departments to reduce burdens on business. For example it is working closely with the Inland Revenue's business support teams to make it easier for employers to establish and operate their payroll operations; and it is working with the HSE to help implement the Health and Safety Commission's strategy for small firms.

  BMW (Land Rover)
  Mr. John M. Taylor
  To ask the Secretary of State for Trade and Industry what is the position regarding BMW's ownership of Land Rover in Solihull; and if he will make a statement. [115698]

  Mr. Byers
  I understand that Ford has reached a memorandum of understanding with BMW to acquire Land Rover. The transaction is subject to BMW and Ford achieving a definitive agreement, due diligence and regulatory approvals. If successful the acquisition is expected to be completed in the second quarter of this year.

  Aerospace Projects
  Mr. Wilkinson
  To ask the Secretary of State for Trade and Industry if he will list the five aerospace projects on which his Department has disbursed the most launch aid in the last 20 years, indicating the sums involved in each case. [115699]

  Mr. Byers:
  In the last 20 years, the five largest launch investment commitments which the Government have made are:

  To BAE SYSTEMS for the Airbus A3XX in March 2000, £530 million

  To British Aerospace for the Airbus A340-500/600 in February 1998, £123 million

  To Rolls-Royce for the Trent aero engine in November 1997, £200 million

  To British Aerospace for the Airbus A330/340 in December 1988, £447.1 million

  To British Aerospace for the Airbus A320 in March 1985, £249.3 million.

  Enterprise
  Mr. Healey
  To ask the Secretary of State for Trade and Industry what steps he is taking to encourage the growth of enterprise in areas of high unemployment. [115691]

  Mr. Caborn
  The Government recognise the need to encourage the growth of enterprise in disadvantaged areas such as those with high unemployment.

  One of the Policy Action Teams set up by the Social Exclusion Unit was asked to look at the role of 'Enterprise and Social Exclusion'. It reported in November 1999.

  The report made several recommendations for the Government's new Small Business Service (SBS). A key role for the SBS will be to identify those people who face specific barriers to entrepreneurship, for example some ethnic minorities and those in disadvantaged communities and to ensure that business support is tailored to meet their needs.

  At the local level there will be a new network of SBS franchises which will replace the Business Links network. The Government's SBS franchise bidding guidance has set out a clear message to the potential franchisees to demonstrate how they will deliver their services to those in deprived communities and other under-represented groups.

  The SBS has established a new social inclusion team to take these issues forward and in all aspects of this work, the SBS will build on the excellent work that is already going on at the local level. It will identify good practice and ensure that it is shared widely.

  Another area of assistance is Enterprise Grants. These are available to SMEs in the 'Assisted Areas' and in additional areas of identified special need, including local authorities with high unemployment or low employment rates.

  In addition, the Phoenix Fund was announced by my right hon. Friend the Secretary of State for Trade and Industry in November 1999 to take forward specific activities in deprived areas. The fund will have a budget of £30 million over three years. The Fund will support
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  entrepreneurship in deprived areas and will respond to issues raised in the PAT 3 report. It will provide funding for:

  piloting of the new Business Volunteers Mentor Association;

  support for new and existing community finance initiatives;

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

  The Department is currently considering ways of developing the fund for the benefit of business.

  State Aid
  Mr. Mitchell
  To ask the Secretary of State for Trade and Industry, pursuant to his answer of 22 March 2000,Official Report, column 613W, on state aid to industry, what formal investigation procedures concerning the United Kingdom have been initiated by the Commission since May 1997 other than that relating to the Rover/BMW plant in Birmingham; and if he will place the information supplied to the Commission by (a) Her Majesty's Government and (b) other parties in each such case in the Library. [116835]

  Mr. Byers
  Other than the proposed aid for Rover/BMW plant in Birmingham, the Commission has initiated two formal investigation procedures into aid concerning the United Kingdom since May 1997. The cases were as follows: Pig Welfare Slaughter Compensation Scheme (C76/98) in Northern Ireland and the English Partnership/Investment Programme (N31/95).

  I will arrange for the information requested to be placed in the Library of the House.

  Small Businesses
  Mr. Steinberg
  To ask the Secretary of State for Trade and Industry how many small businesses are based in North East England; and what percentage this represents of the UK total. [117215]

  Ms Hewitt
  The total number of small and medium enterprises in the North East is 39,600 and this represents 3 per cent, of the equivalent figure for the UK.

  Part-time Workers Directive
  Fiona Mactaggart
  To ask the Secretary of State for Trade and Industry if he will make a statement on progress in consultation about the part-time workers directive. [115684]

  Mr. Alan Johnson
  The Government are currently considering the responses to the consultation on part-time work. We will announce the outcome and lay the regulations on part-time work as soon as possible.

  Gas Directive
  Mr. Doran
  To ask the Secretary of State for Trade and Industry what plans he has to implement Article 23 of the Gas Directive (98/30/EC) in respect of access to upstream pipeline networks. [117465]

  Mrs. Liddell
  I have today issued a consultation document outlining proposals to implement those aspects of the Gas Directive which apply to upstream pipeline networks.
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  The consultation document outlines proposals to amend the Pipelines Act 1962 and the Petroleum Act 1998 in order to give effect to Article 23 of the Gas Directive by placing a duty on upstream pipeline owners to consider applications for access to their pipelines against certain criteria and placing certain new duties and powers on the Secretary of State to settle disputes between pipeline owners and applicants for access.

  As many upstream pipelines carry a complex mix of hydrocarbons from which gas and oil may be extracted at a processing facility, the consultation document proposes applying the provisions of Article 23 of the Directive to certain upstream pipelines which carry either gas or oil or both. It proposes a definition of "upstream pipeline network" which would include offshore and onshore pipelines of any length carrying gas or oil from an oil or gas production field to processing terminals in the United Kingdom or carrying gas to terminals in another country. The definition would also include pipelines carrying gas directly from a production field to a power station or industrial plant.

  The consultation document seeks views on all of these proposals and, in particular, on how the interconnecting pipeline between the United Kingdom and Belgium should be regarded for the purposes of the Directive.

  The proposals clarify certain aspects of the Pipelines Act 1962 and the Petroleum Act 1998, in particular the Secretary of State's role as the dispute settlement authority, and reflect current practice in the offshore industry under the Offshore Infrastructure Code of Practice. The material impact on business is expected to be negligible.

  Comments on the consultation document have been requested by 30 May 2000.

  A copy of that document has been placed in the Library of the House. The document is also available on the Department's website (www.og.dti.uk).

NORTHERN IRELAND

  Parliamentary Questions
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland, pursuant to his reply to the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) of 29 February 2000,Official Report, column 200W, on Parliamentary Questions, what expense was incurred in answering questions from the hon. Member for Hull, North (a) concerning the circumstances surrounding and subsequent inquiries into the deaths of (i) Patrick Finucane, (ii) Rosemary Nelson and (iii) Robert Hamill and (b) concerning (1) the RUC's response to the Patten report and (2) the Police Federation's response to the Patten report. [113435]

  Mr. Ingram
  During the period 1 June 1999 to 31 January 2000, my hon. Friend tabled a total of 25 Parliamentary Questions on these issues. A rough calculation of the cost of answering these questions has been estimated at £8,500.

  Mrs. Rosemary Nelson
  Mr. Donaldson
  To ask the Secretary of State for Northern Ireland how many RUC detectives are engaged in the investigation into the death of Rosemary Nelson. [114717]

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many RUC(a) detectives and (b) other officers are working (i) full-time and (ii) part-time, on the investigation into the death of Mrs. Rosemary Nelson. [114935]

  Mr. Ingram
  The number of officers involved in this investigation has varied at different times to accommodate the needs of the necessary inquiries. However, I can advise that, for example, on 14 March there were a total of 68 officers attached to the inquiry, 22 of whom were RUC officers.

  Probation Board
  Mrs. McKenna
  To ask the Secretary of State for Northern Ireland when he will publish the Probation Board for Northern Ireland's Corporate Plan for 1999 to 2002. [117395]

  Mr. Ingram
  The Probation Board for Northern Ireland's Corporate Plan was published on 28 March 2000. Copies of the plan have been placed in the Library.

  Fuel Poverty
  Mr. Don Foster
  To ask the Secretary of State for Northern Ireland what plans he has to monitor the number of households in fuel poverty in Northern Ireland. [116678]

  Mr. George Howarth
  The Department of Social Development is in the process of developing a scheme of assistance to address fuel poverty in Northern Ireland, similar to the Home Energy Efficiency Scheme (HEES) in England. As part of this, monitoring procedures will be produced to determine the effectiveness of the energy efficiency measures installed in the homes of the fuel poor.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Northern Ireland how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116772]

  Mr. Ingram
  There are approximately 7,300 car park spaces attached to office buildings owned or leased by Office Accommodation Branch.

PRIME MINISTER

  Prime Ministerial Appointments
  Mr. Llew Smith
  To ask the Prime Minister if he will list the(a) non-departmental public bodies and (b) Task Forces for which he holds sole responsibility for making appointments. [113286]

  The Prime Minister
  I am required by legislation to make a number of appointments to non-departmental public bodies. However, this is usually done in consultation with, and on the advice of, appropriate departmental Ministers.
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  In addition, I am consulted on a number of appointments made by departmental Ministers and I advise The Queen on appointments made under the Royal Prerogative.

  Appointments to Task Forces are made by the relevant departmental Minister. I have sole responsibility for the following appointments to non-departmental public bodies:

  Advisory Committee on Business Appointments

  Committee on Standards in Public Life

  Senior Salaries Review Body.

  Lord Levy
  Mr. Baker
  To ask the Prime Minister what authority he has given Lord Levy in his capacity as his personal envoy to meet and deal with senior civil servants in the UK. [113507]

  The Prime Minister
  [holding answer 7 March 2000]Access to civil servants is determined by the Secretary of State of the Department in question.

  Mr. Maude
  To ask the Prime Minister what representations he made to the Secretary of State for the Foreign and Commonwealth Office about Lord Levy's role as the Prime Minister's personal envoy. [113365]

  The Prime Minister
  [holding answer 8 March 2000]My right hon. Friend the Foreign Secretary and I have of course discussed the outcome of the meetings Lord Levy has held.

  Mr. Maude
  To ask the Prime Minister when he asked Lord Levy to become his personal envoy to the Middle East. [113567]

  The Prime Minister
  [holding answer 8 March 2000]I refer the right hon. Member to the answer I gave the hon. Member for Lewes (Mr. Baker) on 22 February 2000,Official Report, column 852W.

  Mr. Maude
  To ask the Prime Minister, pursuant to his answer of 22 February 2000,Official Report, column 852W, which senior officials and which Ministers Lord Levy met during each of his visits. [113930]

  The Prime Minister
  [holding answer 10 March 2000]Lord Levy has met a range of senior figures during his visits, including President Assad of Syria, King Abdullah of Jordan, the Sultan of Oman, the Amir of Qatar, the Amir of Bahrain, Prime Minister Al-Hoss of Lebanon, Prime Minister Barak of Israel, Foreign Minister Moussa and Presidential Adviser Al-Baz of Egypt, President Ben Ali of Tunisia and King Mohammed VI of Morocco.

  Mr. Maude
  To ask the Prime Minister, pursuant to his answer of 22 February 2000,Official Report, column 852W, on which occasions Lord Levy has stayed in British Government accommodation while carrying out official business on behalf of the Prime Minister during his visits to Israel and the Middle East. [113928]

  The Prime Minister
  [holding answer 10 March 2000]In connection with his work on my behalf, Lord Levy has stayed in the Ambassador's residence in Syria, Jordan, Oman and Qatar, and (since my answer of 22 February 2000,Official Report, column 852W) in Tunisia and Morocco. He has stayed at the Ambassador's residence in Israel once, when accompanying my right hon. Friend the Foreign Secretary as part of my right hon. Friend's delegation.
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  Mr. Maude
  To ask the Prime Minister what restrictions there are on persons conducting party political business while acting as the Prime Minister's personal envoy on business overseas. [114592]

  The Prime Minister
  [holding answer 15 March 2000]Lord Levy conducts no Labour Party political business in the Middle East or North Africa on his visits as my personal envoy.

  Mr. Maude
  To ask the Prime Minister if Lord Levy has conducted business on his behalf while on personal visits to Middle Eastern states other than Israel. [114681]

  The Prime Minister
  [holding answer 15 March 2000]No. Since April 1999 Lord Levy has conducted business on my behalf in the Middle East only during the visits referred to in my answer of 22 February 2000,Official Report, column 852W, and during his recent visit to Tunisia and Morocco.

  Mr. Maude
  To ask the Prime Minister what account he took of the business interests of Lord Levy in deciding whether to appoint Lord Levy as his personal envoy. [114591]

  The Prime Minister
  [holding answer 15 March 2000]Lord Levy has no business interests in the Middle East or North Africa.

  Mr. Maude
  To ask the Prime Minister what representations or inquiries he has received from Israeli authorities about Lord Levy's role as his personal envoy or otherwise acting on his behalf. [114694]

  The Prime Minister
  [holding answer 15 March 2000]None.

  Mr. Maude
  To ask the Prime Minister if he will set out the distinction between visits conducted by Lord Levy(a) travelling as the Prime Minister's personal envoy and (b) travelling in his personal capacity while also having discussions on the Prime Minister's behalf. [114690]

  The Prime Minister
  [holding answer 15 March 2000]Lord Levy has been described as my personal envoy when the main purpose of his travel was to pass messages on my behalf. Only his visits to Israel, which have been primarily for private and family reasons, have been described as travel in his personal capacity.

  Lindisfarne Gospels
  Mr. Beith
  To ask the Prime Minister what discussions he has had about the displaying of the Lindisfarne Gospels in(a) Durham, (b) Newcastle and (c) Holy Island; and if he will make a statement. [115941]

  The Prime Minister
  [holding answer 23 March 2000]I very much welcome the work done by the British Library and Northumberland county council to enable the display of the Lindisfarne Gospels in the North East. Although primarily a matter for the two parties involved, I have taken a keen interest in this partnership and am pleased that they have reached an agreement which will allow the people of the North East to see the Gospels when they are loaned to the Laing Art Gallery in Newcastle later this year. Thanks to the British Library, the North East will also have a permanent digital copy of the Gospels using the Library's award winning "Turning the Pages" technology.

  Nuclear Weapons
  Mr. Cohen
  To ask the Prime Minister when NATO will commence a review of its nuclear weapons policy. [116505]

  The Prime Minister
  At the Washington Summit in April 1999, the Alliance approved a revised Strategic Concept which set out NATO's political and military policy, including nuclear policy. All aspects of this policy are kept under regular review.

  Mr. Cohen
  To ask the Prime Minister how he has responded to the request from the United Nations Messenger of Peace, Michael Douglas, that he take the lead in promoting a new round of multilateral negotiations on nuclear weapons non-proliferation and disarmament. [116506]

  The Prime Minister
  When they met on 21 March, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs emphasised to Mr. Douglas our commitment to advancing the goal of nuclear disarmament and to reaching a successful outcome to the forthcoming Review Conference of the Treaty on the Non-proliferation of Nuclear Weapons.

  Mr. Cohen
  To ask the Prime Minister if he will appoint a special representative to promote non-proliferation of nuclear weapons. [116504]

  The Prime Minister
  I have no plans to do so. We are unequivocally committed to nuclear non-proliferation, and to the goal of nuclear disarmament. This can be best achieved through the Treaty on the Non-proliferation of nuclear weapons. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Neath (Mr. Hain), who has responsibility for non-proliferation issues, will represent the United Kingdom at the Review Conference of the Non-proliferation Treaty in New York from 24 April to 19 May.

  Genetics
  Mr. David Heath
  To ask the Prime Minister (1) if he will make a statement on the outcome of his recent discussions with President Clinton on the subject of the human genome project; [115656]

  (2) what recent discussions he has had with the Government of the United States on patent law with regard to genetic sequencing. [115659]

  The Prime Minister
  [holding answer 27 March 2000]On 14 March President Clinton and I agreed a joint statement on access to information produced by researchers into human genetics. Our statement recognised that research into human genetics offers enormous potential for new ways of understanding, treating and curing disease. It goes on to say:To realise the full promise of this research, raw fundamental data on the human genome, including the human genome, including the DNA sequence and its variations, should be made freely available to scientists everywhere. Unencumbered access to this information will promote discoveries that will reduce the burden
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  of disease, improve health around the world, and enhance the quality of life for all humankind. Intellectual property protection for gene-based inventions will also play an important role in stimulating the development of important new health care products.

  Mr. David Heath
  To ask the Prime Minister (1) what proposals he has to seek to amend the law relating to patents with regard to genetic sequencing;[115657]

  (2) what recent discussions he has had with (a) other European Union Governments and (b) the European Commission on reform of patent law with regard to genetic sequencing. [115658]

  The Prime Minister
  [holding answer 27 March 2000]: A European Directive on legal protection of biotechnological inventions which establishes rules for patents relating to gene sequences, has been adopted with the support of the United Kingdom and passed into European law in July 1998. It is due to be implemented in all member states including the United Kingdom by 30 July 2000. Implementation of the Directive will require amendment of the Patents Act 1977. An Order under section 2(2) of the European Communities Act 1972 to make the required changes is being prepared. Comprehensive discussions with the European Commission and all Governments of our European Union partners over several years culminated and are reflected in the adoption of this Directive. No further discussions have taken place since the adoption of this Directive.

  Lisbon Summit
  Mr. Lansley
  To ask the Prime Minister what the breakdown was of the cost of Cabinet Ministers' flights to the European summit in Lisbon. [116569]

  The Prime Minister
  A detailed list of Cabinet Ministers' visits overseas, and information on spend by all Ministers on travel overseas for the period 1 April 1999 to 31 March 2000 will be published as soon as possible after the end of the current financial year.

  Mr. Lansley
  To ask the Prime Minister (1) how many meetings Cabinet Ministers attended in their official capacity during the European summit in Lisbon; [116652]

  (2) if he will publish the itineraries of the Cabinet Ministers attending the European Union summit in Lisbon. [116568]

  The Prime Minister
  Together with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer, I attended a special meeting of the European Council from 22 to 24 March in Lisbon. The main purpose of the meeting was to agree measures to bring about comprehensive economic reform within the European Union. I refer the hon. Member to the Oral Statement I made on the outcome of the Council on 27 March 2000,Official Report, columns 21-23.

  In addition, my right hon. Friends and I held meetings with EU counterparts and others during which a broad range of issues were discussed.

SCOTLAND

  Assisted Areas
  Mr. Maclennan
  To ask the Secretary of State for Scotland, pursuant to his answer of 29 February 2000,Official Report, column 260W, on Assisted Areas, if he will place in the Library the representations he has received from Highlands and Islands Enterprise about the Assisted Areas map proposals. [115782]

  Dr. Reid
  [holding answer 21 March 2000]Following the consultation on the Assisted Areas map carried out in 1998, all replies to that consultation were made available for inspection in the library of the Department of Trade and Industry, including the response from Highlands and Islands Enterprise. I am arranging for copies of this response to be placed in the Library of the House.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Scotland how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116770]

  Dr. Reid
  There are six car parking spaces available at buildings used and controlled by my Department.

AGRICULTURE, FISHERIES AND FOOD

  Prime Minister's Summit
  Dr. Naysmith
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the outcome of the Prime Minister's summit on the Government's strategy for agriculture. [117545]

  Mr. Nick Brown
  I have placed in Libraries of both Houses a paper outlining the Government's strategy for agriculture as discussed at the Prime Minister's summit today.

  Departmental Contracts
  Mr. Willis
  To ask the Minister of Agriculture, Fisheries and Food what is the number and value of contracts let by his Department since May 1997 to external consultants and advisers for the management of competitive tendering processes. [109455]

  Mr. Morley
  [holding answer 10 February 2000]From records held centrally, since May 1997, the Ministry has let 11 contracts to external consultants and advisers for the management of competitive tendering processes. The total value of these contracts is £345,265 excluding VAT.

  BSE
  Mr. Todd
  To ask the Minister of Agriculture, Fisheries and Food if traces of agents thought to be sources of BSE have been found in meat imported into the United Kingdom since 1996. [115092]

  Ms Quin
  No test has been validated for the purpose of detecting the BSE agent in meat.

  Over-30-months Scheme
  Mr. Cotter
  To ask the Minister of Agriculture, Fisheries and Food what measures he is taking to reduce the backlog in payments due under the over-30-months scheme. [116012]

  Ms Quin
  Compensation payments under the over-30-months slaughter scheme (OTMS) are usually made within the Intervention Board's published target of 21 days. However, in the run-up to the extended Millennium break demand for the scheme reached the highest level since 1996, typically 20-25 per cent, above forecasts. This unexpected surge led to some payments being made outside target.

  I am pleased to report, however, that since the end of February all payments have been made within the target.

  Farmers (Bankruptcies)
  Mr. Flynn
  To ask the Minister of Agriculture, Fisheries and Food how many bankruptcies there have been among farmers in England in each of the last 10 years. [115948]

  Ms Quin
  [holding answer 28 March 2000]Data on bankruptcies are available only for England and Wales combined as set out in the table.

  Number of bankruptcies in the agricultural and horticultural sector: England and Wales 1989–99

  Year

  Bankruptcies of self-employed individuals

  Company1 insolvencies

  Total

  1989

  142

  78

  220

  1990

  198

  111

  309

  1991

  266

  135

  401

  1992

  313

  191

  504

  1993

  277

  157

  434

  1994

  231

  166

  397

  1995

  218

  99

  317

  1996

  168

  89

  257

  1997

  155

  51

  206

  1998

  157

  65

  222

  1999

  2149

  252

  2201

  1
  Including partnerships

  2
  Not including data for the fourth quarter

  Source

  Department of Trade and Industry

  Regional Service Centres
  Mr. Bradshaw
  To ask the Minister of Agriculture, Fisheries and Food what the operating costs are of each of his Department's regional service centres; what refurbishment costs have been incurred at each centre in each of the last three years; and on what terms each of the buildings accommodating the regional service centre are secured, indicating which are(a) freehold and (b) leasehold. [115920]

  Ms Quin
  The data requested are set out in the table. This shows the latest forecast operating costs for the 1999–2000 financial year for each RSC; the expenditure on refurbishments (excluding normal maintenance) for the years from 1997–98 to 1999–2000; and the terms of occupancy at each site.
  251W

  Operating and refurbishment costs of regional service centres

  £000

  Refurbishment costs

  RSC

  Operating costs 1

  1997–98

  1998–99

  1999–2000

  Terms Freehold/leasehold

  Bristol

  3,590

  105

  232

  0

  Ground lease

  Cambridge

  4,497

  173

  80

  0

  Freehold

  Carlisle

  4,262

  0

  33

  0

  Freehold

  Crewe2

  4,056

  0

  0

  0

  Freehold

  Exeter

  5,143

  0

  0

  0

  Leased

  Northallerton3

  6,016

  0

  0

  0

  Leased

  Nottingham

  4,349

  424

  0

  0

  Leased

  Reading

  4,023

  13

  0

  340

  Freehold

  Worcester

  3,583

  104

  0

  170

  Freehold

  1Pay, non-pay running costs and decentralised capital costs

  2Newly built office acquired in 1998

  3Newly built office completed in 1999

  Milk
  Mr. Ainger
  To ask the Minister of Agriculture, Fisheries and Food if he will list the countries from which(a) raw milk and (b) UHT milk was imported into the United Kingdom in (i) 1997, (ii) 1998, and (iii) 1999, indicating the quantities in each case. [116573]

  Ms Quin
  Total imports of raw (ie untreated) milk are shown in the table. The vast majority of imports of raw milk into the United Kingdom are from the Republic of Ireland. Between 1997 and 1999 small quantities were also imported from Austria, Belgium, Denmark and the Netherlands.

  Raw (ie untreated) milk imported into the UK

  Million litres

  Total imports

  1997

  128.2

  1998

  128.7

  1999

  112.7

  Source

  IBEA, DARD

  It is not possible to separately identify trade in UHT milk from trade in other types of liquid drinking milk (eg fresh pasteurised milk). The following table shows total imports of all liquid drinking milk (in packages not exceeding two litres), by main country of origin.

  Drinking milk imported into the UK, in packages not exceeding two litres

  Million Litres

  1997

  1998

  1999

  Belgium and Luxembourg

  14.2

  10.4

  6.7

  France

  19.7

  20.3

  13.2

  Germany

  20.6

  20.4

  10.2

  Ireland

  6.8

  4.2

  5.7

  Others

  0.3

  0.0

  0.1

  Total imports

  61.6

  55.4

  36.0

  Note:

  Due to rounding the totals may differ from the sum of the individual figures

  Source:

  Overseas Trade Statistics

  Forest of Bowland
  Mr. Keetch
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the 252W
  Special Area Project for Forest of Bowland; what plans he has to introduce schemes to address the needs of areas in England that contain sites of international importance for wildlife; and if he will make a statement. [116319]

  Mr. Morley
  The Forest of Bowland was one of two areas selected in 1999 for a two-year, experimental project to test an integrated approach to environmental and rural economy issues in the uplands. A review of the project (and the experiment in the other areas—Bodmin Moor in Cornwall) will be carried out after an economic evaluation has taken place next year.

  The Ministry already operates agri-environment schemes which help to address the needs of areas in England that contain sites of international importance for wildlife. We announced on 7 December 1999 that the funding for these schemes will be increased significantly. By 2007 it is expected to be double its present level.

  EU Rural Development Regulation
  Mr. Keetch
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to make use of the provisions of the EU Rural Development Regulation allowing support of agricultural production to be conditional on the carrying out of measures to protect wildlife; and if he will make a statement. [l16320]

  Mr. Morley
  There are already measures in our livestock subsidy schemes to prevent overgrazing and environmentally damaging feeding practices and in our arable payments schemes relating to the management of set-aside land.

  Consultation last year on the European Commission's Agenda 2000 reforms revealed numerous suggestions of additional environmental conditions which might be attached to agricultural support payments. These need to be considered very carefully with regard to whether they would be easily understood, their ease of enforcement, the environmental benefits and the cost to farmers. Further work is being done on this. If possible measures are identified, a further round of consultation on detailed proposals would be needed before introducing them.

  Organic Farming
  Mr. Oaten
  To ask the Minister of Agriculture, Fisheries and Food if he will list the number of(a) organic farms, (b) farms currently in the process of converting into organic farms and (c) farms that have applied for the

  253W
  organic farming scheme, in (i) England, (ii) Hampshire, (iii) each local authority in Hampshire and (iv) each constituency in Hampshire [116478]

  Mr. Morley
  [holding answer 27 March 2000]Information is currently available only for England. The number of applications to the Organic Farming Scheme that passed the initial validity checks is currently 1,185. A small number of these were either withdrawn or were not accepted onto the Scheme. As at November 1999 in England there were 34,534 hectares of land converted to organic farming and 94,144 hectares in conversion.

  Spanish Fishermen
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what EU funds have been made available to Spanish fishermen to compensate them for the loss of access to Moroccan fisheries waters. [116249]

  Mr. Morley
  According to our information, all compensation paid so far to Spanish fishermen, available from 30 November 1999 to 31 May 2000, has come from national funds made available by the Spanish Government.

  Under the new Financial Instrument for Fisheries Guidance (FIFG), which came into force on 1 January 2000, aid is available for vessel owners and fishermen whose activities are temporarily ended due to the non-renewal of a fisheries agreement. If offered, this aid would count against the allocation for Spain under the new FIFG.

  Inshore Fishing
  Mr. Moss
  To ask the Minister of Agriculture, Fisheries and Food (1) what representations he has received from the inshore fishermen at Hastings and Rye with regard to illegal fishing in their traditional waters by boats of over 10 m in length which hold licences for 10 m and under; [116090]

  (2) what assessment he has made of the extent of illegal fishing in inshore waters along the South Coast of England by boats with under 10 m licences but which are above 10 m in length; how many such boats are involved; and what action his Department is taking and planning to take. [116092]

  Mr. Morley
  Following representations from inshore fishermen and my hon. Friend for Hastings and Rye (Mr. Foster), the Ministry identified more than 20 vessels, licensed as 10 m and under vessels, whose overall length appeared to have been extended by adding structures (removable or otherwise) and which were effectively operating as over 10 m vessels.

  The owners concerned have been advised that they must reduce the overall length of their vessel to 10 m or under, or acquire over 10 m licences by 30 June 2000. If they fail to do so their fishing vessel licences will not be renewed from 1 July 2000. A number of owners have already taken appropriate action and others are planning to do so.

  Fisheries Agreement
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what is the estimated number of fishing vessels affected by the absence of a new fisheries agreement between the EU and Morocco. [116250]

  Mr. Morley
  The European Commission has estimated that 500 Community vessels operated in Moroccan waters during the period of the EC/Morocco fisheries agreement from 1 December 1995 to 30 November 1999.

INTERNATIONAL DEVELOPMENT

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for International Development how many workplace car parking spaces are available at the buildings used and controlled by her Department. [116765]

  Clare Short
  There is a total of 356 car parking spaces available at buildings controlled by my Department, with 305 spaces in East Kilbride and 51 spaces in London.

  Zimbabwe
  Mrs. Gillan
  To ask the Secretary of State for International Development what was the value of aid from(a) the EU and (b) the British Government directly paid to the Zimbabwean Government in the last 12 months. [116900]

  Clare Short
  The most recent figures available on EC aid for Zimbabwe are for 1998, when total EC official development assistance was £13.2 million. The figure for EU member programmes plus the EC was £99.7 million. We have no information on how much of this was paid direct to the Government of Zimbabwe. In 1998–99, the value of British assistance to the Zimbabwe Government is estimated at £10 million.

TREASURY

  Migrants
  Mr. Brake
  To ask the Chancellor of the Exchequer what mechanism is in place to ensure that, for the purpose of compiling the sub-national population projections, migrants to the United Kingdom are not recorded at the point of entry to the United Kingdom as well as at subsequent places of residence elsewhere in the United Kingdom within the same statistical period. [116572]

  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 Tim Holt to Mr. Tom Brake, dated 30 March 2000 As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent question on recording of migrants to the United Kingdom in the subnational population projections at point of entry as well as subsequent places of residence elsewhere in the United Kingdom within the same statistical period.
  The projections model takes the ONS mid-year population estimates for the base year. The population is then projected one year ahead, by ageing on the population one year and applying

  255W
  assumptions on births, deaths, international migration to and from England and internal migration within England. This process is then repeated for each year projected.
  The model treats international and internal migrants separately. The assumptions on international migration in the sub national projections are based on recent past information using a range of survey and administrative data. International in-migrants are assigned to their final destination, not their port of entry and added to the general population in the year of their arrival. As they are then included in the general population, any subsequent moves within England are covered in the internal migration element of the model.

  Death Rates (Merseyside)
  Mrs. Curtis-Thomas
  To ask the Chancellor of the Exchequer what were the average death rates allowing for age and sex standardisation for(a) all causes, (b) coronary heart disease, (c) stroke and (d) cancer, for each ward in the Crosby parliamentary constituency and for the City of Liverpool as a whole in the last year for which figures are available. [116674]

  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 Tim Holt to Mrs. Curtis-Thomas, dated 30 March 2000:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent question on the average death rates for each ward in the Crosby parliamentary constituency and for the City of Liverpool as a whole.
  The attached table shows indirectly standardised mortality ratios (SMRs) for all causes of death, coronary heart disease, stroke and cancer, for each ward (as constituted at the time of the 1991 Census) that lies wholly in Crosby parliamentary constituency, in the years 1991–1993, based on populations from the 1991 Census. Comparable figures are also provided for Liverpool metropolitan county district (based on 1991 boundaries).
  We have provided indirectly standardised ratios rather than European standardised rates as the latter do not incorporate sex standardisation and are likely to be less accurate for small numbers of deaths by cause in each ward.
  An SMR is defined as the ratio of the observed deaths in a given population over the expected deaths in that population if it experienced the age-specific death rates of a standard population (in this case the United Kingdom). The SMR for the UK is 100. Values greater than 100 indicate higher than average mortality and values lower than 100 indicate lower than average mortality.

  Standardised Mortality Ratios (SMRs) by ward and cause of death1—1991–93

  Wards in Crosby parliamentary constituency and Liverpool MCD

  Standardised Mortality Ratio (SMR)

  Wardcode

  All causes

  Coronary heart disease

  Stroke

  Cancer

  Wards in Crosby

  Blundellsands

  CAFC

  117

  109

  134

  113

  Church

  CAFE

  140

  122

  131

  150

  Harington

  CAFJ

  92

  95

  74

  94

  Manor

  CAFN

  96

  108

  85

  106

  Ravenmeols

  CAFW

  90

  98

  87

  96

  Victoria

  CAFZ

  96

  100

  87

  113

  Liverpool metropolitan county district

  105

  103

  99

  110

  1Cause of death is based on the underlying cause, using the following codes from the International Classification of Diseases, Ninth Revision

  Coronary Heart Disease: 410–414

  Stroke: 430–438

  Cancer: 140–208

  National Insurance Contributions Office
  Mr. Lidington
  To ask the Chancellor of the Exchequer what is his policy on requiring the National Insurance Contributions Office to pay interest on the late payment of the age-related element of NIC rebates to contracted-out money purchase schemes; how much has been paid in such interest payments for(a) 1997–98, (b) 1998–99 and (c) 1999–2000 to date; and if he will make a statement. [115984]

  Dawn Primarolo
  [holding answer 23 March 2000]The National Insurance Contributions Office applies the policy set out in the Inland Revenue's code of practice 1 when paying interest on the late payment of age-related rebates to contracted-out money purchase schemes. However, special arrangements were made for the 1997–98 tax year where payments were made at 0.5 per cent, of the rebate cumulatively for each month of delay after October 1998. The objective was to replace any State Earnings Related Pension benefits foregone at an annual rate of 6 per cent, (the prevailing gilt interest rate).

  The 0.5 per cent, payable for the 1997–98 tax year includes both personal pension and money purchase schemes and a separate breakdown for each category is not yet available.

  Compensation amounting to £40.9 million has been paid due to the late payment of age-related rebates for the 1997–98 tax year as a result of introducing the 0.5 per cent, addition. To date no compensation has been paid to contracted-out money purchase schemes for the 1998–99 tax year and as we have not yet commenced the processing of 1999–2000 employers end of year returns compensation is not yet an issue for this tax year.

  Banking Services
  Mr. Wray
  To ask the Chancellor of the Exchequer if he will make a statement on the Cruickshank report, Competition in United Kingdom Banking. [116368]

  Miss Melanie Johnson
  The Government welcome the report and will act on its recommendations to improve competition in banking and services to customers. On 20 March, the Chancellor of the Exchequer and the Secretary of State for Trade and Industry referred the provision of banking services to small and medium enterprises to the Competition Commission for examination under the complex monopoly provisions of the Fair Trading Act 1973. The Chancellor announced in the Budget on 21 March that the Government would legislate to open up access to payments systems and to oversee access charges; and that he had asked the Financial Services Authority to consider the recommendations in the Report concerning consumer information and to report to him within three months, consulting widely, on how they propose to respond. The Government will respond to the other recommendations in the report shortly.

  Genetic Testing
  Dr. Gibson
  To ask the Chancellor of the Exchequer what assessment he has made of the use by members of the Association of British Insurers of genetic tests
  257W
  that have not been approved by the Department of Health's Genetics and Insurance Committee for insurance purposes. [116566]

  Miss Melanie Johnson
  None.

  Migration (London)
  Mr. Blunt
  To ask the Chancellor of the Exchequer what is his estimate of the size of annual migration into and out of London from other parts of the United Kingdom, broken down by region, in each of the last five years. [116139]

  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 Tim Holt to Mr. Crispin Blunt, dated 30 March 2000:
  As Director of the Office for National Statistics (ONS), I have been asked to reply to your recent question about the estimated migration between London and other parts of the United Kingdom for each of the last five years.
  The enclosed table presents the information that you require. The latest year for which estimates are available is 1998. The estimates of internal migration within the United Kingdom are based on the movement of NHS doctor's patients between the former Family Health Service Authorities. They should not be regarded as a perfect measure of migration as there is variation in the delay between a person moving and registering with a new doctor. Additionally some moves may not result in a re-registration: for example, individuals may migrate again before registering with a doctor. Conversely, there may be others who move and re-register several times a year.
  Moves between the individual Government Office Regions (GOR's) and the rest of the United Kingdom are published in Key Population and Vital Statistics which is available in the House of Commons Library.

  Migration into and out of London from other parts of the United Kingdom broken down by region

  Thousand

  Area

  1994

  1995

  1996

  1997

  1998

  To London from:

  North East

  4.7

  5.3

  4.9

  4.9

  5.0

  North West

  13.2

  14.0

  13.7

  13.6

  13.9

  Yorkshire and the Humber

  9.7

  10.6

  10.6

  10.3

  10.6

  East Midlands

  9.2

  10.4

  10.0

  10.1

  10.3

  West Midlands

  11.0

  11.8

  11.8

  11.5

  11.3

  East

  29.2

  30.8

  29.7

  30.6

  31.6

  South East

  54.0

  56.3

  55.6

  54.7

  57.0

  South West

  15.5

  16.7

  16.2

  16.9

  16.5

  England

  146.4

  156.0

  152.6

  152.6

  156.1

  Scotland

  7.0

  7.3

  7.8

  7.6

  8.0

  Wales

  5.4

  5.8

  5.7

  5.6

  5.6

  Northern Ireland

  1.6

  1.7

  1.9

  1.5

  1.5

  Total

  160.4

  170.7

  168.0

  167.3

  171.2

  From London to:

  North East

  3.7

  3.7

  3.7

  3.6

  3.8

  North West

  10.8

  11.1

  10.8

  10.8

  10.5

  Yorkshire and the
  Humber

  8.2

  8.5

  7.9

  8.1

  8.1

  East Midlands

  10.0

  10.2

  10.0

  10.3

  10.4

  West Midlands

  8.9

  9.8

  9.3

  9.7

  9.6

  East

  49.5

  50.3

  52.8

  56.7

  55.4

  South East

  80.6

  78.9

  84.0

  86.6

  85.4

  South West

  20.3

  20.4

  21.2

  21.8

  20.4

  England

  192.1

  193.0

  199.8

  207.6

  203.5

  Scotland

  6.8

  6.4

  6.3

  7.0

  7.1

  Wales

  5.2

  5.5

  5.2

  5.4

  5.3

  Northern Ireland

  2.2

  2.7

  2.2

  1.8

  2.0

  Total

  206.3

  207.6

  213.4

  221.7

  217.9

  258W

  Migration into and out of London from other parts of the United Kingdom broken down by region

  Thousand

  Area

  1994

  1995

  1996

  1997

  1998

  Net gain to London:

  North East

  1.0

  1.5

  1.3

  1.4

  1.2

  North West

  2.4

  2.9

  2.9

  2.8

  3.4

  Yorkshire and the Humbe

  1.4

  2.1

  2.7

  2.2

  2.5

  East Midlands

  -0.8

  0.2

  0.0

  -0.2

  -0.1

  West Midlands

  2.0

  2.0

  2.5

  1.8

  1.7

  East

  -20.3

  -19.5

  -23.1

  -26.1

  -23.8

  South East

  -26.6

  -22.6

  -28.4

  -31.9

  -28.4

  South West

  -4.8

  -3.7

  -5.0

  -4.9

  -3.9

  England

  -45.6

  -37.0

  -47.2

  -55.0

  -47.4

  Scotland

  0.1

  0.8

  1.5

  0.6

  0.9

  Wales

  0.3

  0.3

  0.6

  0.3

  0.3

  Northern Ireland

  -0.7

  -1.0

  -0.3

  -0.3

  -0.4

  Total

  -45.9

  -36.9

  -45.4

  -54.5

  -46.7

  Statistics Commission
  Mrs. Lawrence
  To ask the Chancellor of the Exchequer what progress has been made with plans to establish the Statistics Commission; and if he will make a statement. [117386]

  Miss Melanie Johnson
  The Statistics Commission will be set up early in the next financial year.

  Parliamentary approval of the expenditure will be sought in the 2000–01 Main Estimate for HM Treasury, Class XVI, Vote 1. Pending that approval, urgent expenditure estimated at £500,000 will be met by a repayable advance from the Contingencies Fund.

  Capital Modernisation Fund
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer which allocations of spending referred to in his oral statement of 21 March 2000,Official Report, columns 858–72, were from the Capital Modernisation Fund; if he will list the projects to which the allocations have been made; if he will list the amounts allocated and unallocated from the Capital Modernisation Fund for financial years 1999–2000, 2000–01 and 2001–02; and if he will make a statement. [116646]

  Mr. Andrew Smith: The Budget statement included the following allocations from the Capital Modernisation Fund:

  £million

  Total

  2000–01

  2001–02

  Addition to total CMF

  200

  200

  0

  SMEs on-line (DTI/IR)

  60.0

  55.0

  5.0

  Innovative Clusters package (DTI)

  50.0

  15.0

  35.0

  Criminal Justice Package

  184.6

  103.4

  81.2

  of which:

  Home Office1

  154.8

  88.2

  66.6

  Lord Chancellor's Department1

  23.3

  10.0

  13.3

  CPS joint police units

  5.0

  3.8

  1.3

  Integrated Business Information Systems

  1.5

  1.5

  —

  DLR extension to City airport (DETR)

  30.0

  9.6

  20.4

  Unallocated

  516.0

  2185.2

  330.8

  1Detailed announcements to be made by the Home Secretary and Lord Chancellor respectively

  2Includes under spend from 1999–2000

  Further details will be set out in the Public Expenditure Statistical analyses to be published in April.

  Social Services Funding
  Mr. Baker
  To ask the Chancellor of the Exchequer what plans he has to increase the funding available for social services functions in line with planned increases on health service funding. [116778]

  Mr. Andrew Smith
  Funding for social services will be set as part of the Spending Review.

  Spending Review
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer when he will announce the outcome of the second comprehensive spending review. [116675]

  Mr. Andrew Smith
  The 2000 Spending Review will conclude by July.

  Working Families Tax Credit
  Mr. Kidney
  To ask the Chancellor of the Exchequer if he will make working families tax credit a qualifying benefit for free school meals. [116702]

  Dawn Primarolo
  The provision of free school meals in England and Wales is a matter for the Secretary of State for Education and Employment, and in Northern Ireland it is a matter for the Secretary of State for Northern Ireland. In Scotland, free school meals are a devolved issue for the Scottish Executive.

  The child tax credit elements of a Working Families Tax Credit award were built on the child credit rates in family credit, which WFTC replaced from October last year. The child credit rates in family credit included, from the outset, an additional weekly cash sum, provided to replace the value of entitlement to free school meals. These rates have been uprated annually in line with the Rossi index.

  Customs Officers (UK Airports)
  Mr. Hancock
  To ask the Chancellor of the Exchequer how many customs officers(a) are employed at each UK airport and (b) have been employed at each UK airport in each of the last five years. [116717]

  Dawn Primarolo
  It is policy not to make public details of the deployment of Customs anti-smuggling officers at each individual UK airport.

  Customs (Drugs Seizures)
  Mr. Hancock
  To ask the Chancellor of the Exchequer how many drug seizures have taken place in 1999–2000 and in the previous three years at airports in the UK; and if he will list them by airport. [116719]

  Dawn Primarolo
  Customs made 1,369 drug seizures at UK airports in 1996; 1,259 in 1997; and 1,412 in 1998. Figures for 1999 have yet to be validated.

  It is policy not to make public details of Customs drug seizures at each individual UK airport.

  Mr. Hancock
  To ask the Chancellor of the Exchequer how many drug seizures have taken place in the year 1999–2000 and in the previous three years at ports in the UK; and if he will list them by port. [116716]
  260W
  Dawn Primarolo
  Customs made 798 drug seizures at UK sea ports in 1996; 791 in 1997; and 673 in 1998. Figures for 1999 have yet to be validated.

  It is policy not to make public details of Customs drug seizures at each individual UK port.

  Climate Change Levy
  Mrs. Ewing
  To ask the Chancellor of the Exchequer what assessment he has made of the compatibility of the penalty regime for the climate change levy with the European Convention on Human Rights. [116582]

  Mr. Timms
  [holding answer 28 March 2000]In accordance with section 19 of the Human Rights Act 1998, the Chancellor of the Exchequer will publish a statement about the compatibility of the provisions of the Finance Bill, including those relating to the climate change levy, when the Bill is published.

  Workplace Parking
  Mr. Gray
  To ask the Chancellor of the Exchequer how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116758]

  Mr. Timms
  The number of workplace car parking spaces available at the two buildings used and controlled by the Treasury is shown in the table:

  Building

  Number of spaces

  Allocated to other Departments

  Parliament Street

  (GOGGS)

  9—Cabinet Office

  London SW1P 3AG

  42

  3—Cabinet War Rooms

  Allington Towers,

  19 Allington Street,

  London SW1E 5EB

  11

  Nil

  In March 1999 we introduced a Green Transport Plan covering both buildings. These plans are in line with the commitment set out in the Transport White Paper and we have reviewed the scope for reducing our car parking requirements in that context.

  Landfill Tax
  Mr. Baker
  To ask the Chancellor of the Exchequer if he will extend the landfill tax provisions in so far as they relate to making available funds to local communities for energy from waste plants. [116780]

  Mr. Timms
  Operators of landfill sites who are registered for landfill tax may claim for tax credits for contributions that they make to support environmental projects. These may include research for the purpose of encouraging the use of more sustainable waste management. Landfill site operators may choose to support research into energy from waste as part of such projects.
  261W
  Further information regarding the scheme can be obtained from the regulatory body, ENTRUST Ltd., at the following address:

  ENTRUST

  Acre House

  2 Town Square

  Sale

  Cheshire

  M33 7WZ

CULTURE, MEDIA AND SPORT

  NESTA Fellowship Awards
  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport if NESTA fellowship awards will be regarded as prizes for tax purposes. [116538]

  Mr. Chris Smith
  [holding answer 28 March 2000]NESTA's fellowships are not regarded as prizes for tax purposes. Fellows will receive individually tailored personal development programmes, which will be designed to make the most of their potential. As each of these programmes will vary according to individuals' needs, the tax implications of the awards will also differ from case to case. NESTA is exploring the tax position of its programmes with the Inland Revenue with a view to ensuring that its Fellows and other grant recipients can receive the maximum benefit from their awards.

  Stonehenge
  Mr. Key
  To ask the Secretary of State for Culture, Media and Sport if the preferred commercial operator of the proposed visitor centre at Stonehenge has been chosen; and if he will make a statement. [116486]

  Mr. Alan Howarth
  [holding answer 28 March 2000]No decision has yet been made. English Heritage is still in confidential commercial negotiations with short listed bidders. The outcome of these negotiations will be announced as soon as possible.

FOREIGN AND COMMONWEALTH AFFAIRS

  Lord Levy
  Mr. Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs on which dates Lord Levy in his capacity as the Prime Minister's special envoy 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. [113498]

  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the dates when he held discussions with Lord Levy about his role as the Prime Minister's personal envoy; and if he will make available minutes of those meetings. [113566]

  Mr. Hain
  [holding answer 7 March 2000]Lord Levy liaises regularly with the Foreign Secretary, Ministers and a limited number of officials in the Foreign and Commonwealth Office. The Foreign Secretary most recently spoke to Lord Levy on 16 March. I spoke to him on 21 March.
  262W
  Mr. Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs if Lord Levy reports directly to him on his activities as the Prime Minister's personal envoy; what mechanism exists to ensure information gathered by Lord Levy while acting as personal envoy to the Prime Minister is communicated to his Department; and if he will make a statement. [113506]

  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he held discussions with Lord Levy about Lord Levy's visits to the Middle East dated(a) 9 to 10 April 1999, visit to Syria, (b) 5 to 7 June 1999, visit to Jordan, (c) 7 to 10 June 1999, visit to Syria, (d) 8 October 1999, visit to Egypt, (e) 9 to 11 October 1999, visit to Oman, (f) 11 and 12 October 1999, visit to Qatar, (g) 12 to 14 October 1999, visit to Bahrain, (h) 29 November to 1 December 1999, visit to Syria, (i) 2 and 3 February, visit to Syria, (j) 3 February, visit to Lebanon and (k.) 3 February, visit to Egypt. [113877]

  Mr. Hain
  [holding answer 7 March 2000]Lord Levy's visits are reported to the Prime Minister and Foreign Secretary, in person by Lord Levy and by telegram from the Ambassador in the country concerned.

  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 22 February 2000,Official Report, column 852W, what practical support was given by his Department to Lord Levy during his visits to Middle Eastern states, apart from Israel, on official business as the Prime Minister's personal envoy. [114680]

  Mr. Hain
  [holding answer 15 March 2000]I refer to the answer given by my right hon. Friend the Prime Minister on 30 March 2000,Official Report, columns 245-6W. In addition, Lord Levy has been briefed by Ambassadors. Embassies have assisted in arranging programmes, and have provided accompanied transport by road. Lord Levy has been accompanied by a Foreign and Commonwealth Office official from London on some of his trips.

  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 22 February 2000,Official Report, column 852W, what practical support was given by his Department to Lord Levy during his visits to Israel (a) on official business as the Prime Minister's personal envoy and (b) on private visits during which Lord Levy conducted business on behalf of the Prime Minister. [114693]

  Mr. Hain
  [holding answer 15 March 2000]Practical support has been determined on a case-by-case basis, and has included briefing Lord Levy and providing accompanied transport by road when he is working on the Prime Minister's behalf.

  Miss McIntosh
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent meetings he has had with Lord Levy to discuss the Middle East peace process. [115222]

  Mr. Hain
  I refer the hon. Member to the answer I gave to the hon. Member for Lewes (Mr. Baker) on 30 March 2000,Official Report, column 261W.

  Iraq
  Mr. Galloway
  To ask the Secretary of State for Foreign and Commonwealth Affairs in the most recent year for which figures are available, how many applications were made to the UN Sanctions Committee under(a) the Oil for Food programme and (b) other humanitarian programmes; how many of these applications were (i) approved and (ii) refused; how many are outstanding; and what was the average length of time taken to consider each application. [116311]

  Mr. Hain
  Between December 1999 and 6 March 2000, 2,443 applications were submitted to the UN Iraq Sanctions Committee under the Oil for Food programme. None of these applications was refused. The Committee raised no objection to 1,883 of these applications. Additional information was requested on 560 applications.

  Detailed information on all Oil for Food applications submitted over the last year can be found on the UN website at http://www.un.org/Depts/oip.html.

  During the period 1 August 1998 to 20 November 1999 over 6,000 applications were received for humanitarian goods outside the Oil for Food programme. Of these 2,654 were approved, 427 were placed on hold for further information, and 2,823 were refused since the Committee considered them inconsistent with the relevant resolutions on Iraq. Some applications were withdrawn or nullified. A key factor here is the potential for dual use.

  Medical supplies and food applications are circulated under a no objections procedure within two business days; applications for other humanitarian supplies within seven business days. Under the terms of United Nations Security Council resolution 1284, it has been agreed that a wide range of humanitarian items will no longer require Sanctions Committee approval. These items include foodstuffs, pharmaceutical and medical supplies, medical equipment and educational items. These items require notification to the UN's Office of the Iraq Programme.

  Mr. Galloway
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will give details of each application refused by the UN-Iraq Sanctions Committee under(a) the Oil for Food programme and (b) other humanitarian programmes in the last year for which the information is available. [116309]

  Mr. Hain
  I refer my hon. Friend to my answer of 30 March 2000,Official Report, column 263W.

  Detailed figures on all applications to the United Nations Oil for Food programme, giving the number of applications and the status of the applications, can be found on the United Nations website at: http://www.un. org/Departments/oip.html

  Mr. Galloway
  To ask the Secretary of State for Foreign and Commonwealth Affairs what procedures the UN Iraq Sanctions Committee use in reaching decisions on applications under(a) the Oil for Food Programme and (b) other humanitarian programmes. [116310]

  Mr. Hain
  The UN Iraq Sanctions Committee established by United Nations Security Council resolution 661, comprising all members of the UN Security Council, reaches decisions on applications under the Oil for Food programme or under other humanitarian programmes by consensus in accordance with the relevant resolutions on 264W
  Iraq. A significant number of applications, for essential civilian needs, medical supplies and foodstuffs are circulated under a no objection procedure. Medicines are generally exempt from Committee approval.

  Under the terms of United Nations Security Council resolution 1284, it has been agreed that an even wider range of humanitarian items will no longer require Sanctions Committee approval. These items include foodstuffs, pharmaceutical and medical supplies, medical equipment and educational items. These items require notification to the UN's Office of the Iraq Programme.

  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the oral statement of the Minister of State, the hon. Member for Neath (Mr. Hain), of 24 March 2000,Official Report, column 1290 on Iraq, if it is part of Yuli Vorontsov's brief to make inquiries about missing Iraqi nationals in Kuwait. [116870]

  Mr. Hain
  Mr. Vorontsov's brief is set out in paragraphs 13-14 of Security Council resolution 1284. He has been appointed as a high-level coordinator to pursue Iraq's obligations since the Gulf War and to return stolen Kuwaiti property, in collaboration with the International Committee of the Red Cross.

  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the oral statement of the Minister of State, the hon. Member for Neath (Mr. Hain), of 24 March 2000,Official Report, column 1292, to which brutality in relation to the Shia, the Minister was referring other than that which took place in 1991 in the Kerbala area. [116872]

  Mr. Hain
  I refer my hon. Friend to the regular reports from the UN Special Rapporteur on Human Rights in Iraq, particularly that of February 1999, which record the systematic assassinations, attacks and threats carried out against the Shiite leadership since 1991. The November 1999 Amnesty International report on Iraq also documents the assassinations of prominent Shia clerics over the previous 18 months. These documents are available on the UN website (www.un.org).

  Mr. Dalyell: To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the oral statement of the Minister of State, the hon. Member for Neath (Mr. Hain), of 24 March 2000, Official Report, column 1292 on Iraq, in what ways the Shia population of Iraq is protected by UK forces. [116874]

  Mr. Hain
  UK and US aircraft patrolling the southern No Fly Zone serve to protect the population, primarily Shia, from attacks by the Iraqi air force.

  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the oral statement of the Minister of State, the hon. Member for Neath (Mr. Hain), of 24 March 2000,Official Report, column 1292 on Iraq, from which countries of origin Saddam Hussein is smuggling materials for chemical and biological weapons. [116873]

  Mr. Hain
  As the record makes clear, I was describing the hypothetical situation if we were, inadvisedly, to lift sanctions prematurely.
  265W
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to the oral statement of the Minister of State, the hon. Member for Neath (Mr. Hain), of 24 March 2000,Official Report, column 1293 on Iraq, what assessment he has made of the threat to the Kirkuk oil field arising from the shortage of oil industry spare parts. [116936]

  Mr. Hain
  We have noted the comments on the Kirkuk oil field in the UN's latest report on Iraq's oil industry.

  The Security Council is expected to adopt a new resolution on 31 March which will implement the Secretary-General's recommendation for an additional allocation of $600 million from oil for food revenue for the purchase of oil spare parts.

  Zimbabwe
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of farmers in Zimbabwe; and if he will place the minutes of that meeting in the Library. [116494]

  Mr. Hain
  The High Commission in Harare is in regular touch with the Commercial Farmers' Union. They have not sought a meeting in London.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many farmers in Zimbabwe are British passport holders. [116493]

  Mr. Hain
  We have no precise figures of how many Zimbabwe farmers hold British passports. British passport holders are not obliged to register their presence with the High Commission in Harare.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Commonwealth Secretary General calling on him to suspend Zimbabwe from the high-level group formed by the Commonwealth Ministerial Action Group. [116893]

  Mr. Hain
  No.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what requests he has made to the Zimbabwean Government to allow election observers to attend the forthcoming general election. [116899]

  Mr. Hain
  None this far.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to President Mugabe concerning the(a) postponement of the general election and (b) invasion of farms. [116969]

  Mr. Hain
  We have not made representations to President Mugabe about the postponement of the elections. On farm invasions, I spoke to the Vice-President on 6 March and wrote to the Foreign Minister on 7 March. My right hon. Friend, the Development Secretary, wrote to the Vice-President on 15 March.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans there are for the emergency evacuation of British passport holders from Zimbabwe. [116891]
  266W
  Mr. Hain
  We have a Civil Contingency Plan for Zimbabwe, as we do for many other countries. The Contingency Plan is designed to help the British community in a crisis, and in a worst case scenario, to provide for their evacuation. The Contingency Plan comes into effect if there is a breakdown in law and order leading to a significant risk to the safety of British nationals. We do not believe this is the case in Zimbabwe and our travel advice reflects that view. Our travel advice, and the safety of British nationals, is kept under constant review.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many officials have been sent to Zimbabwe in the last 12 months to enhance the consular operation there. [116896]

  Mr. Hain
  Four.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many Zimbabwean nationals are currently in possession of(a) a UK work permit and (b) a holiday working visa. [116898]

  Mr. Vaz
  A total of 526 work permits were approved by the Overseas Labour Service for Zimbabwean nationals in 1998 and 905 in 1999.

  Our High Commission in Harare issued 389 working holiday-maker visas in 1998 and 303 in 1999. However, since visa statistics are not collected on the basis of the nationality of applicants, these figures may include applications made in Harare by non-Zimbabwean nationals. Figures for the number of Zimbabweans applying for working holiday-maker visas at entry clearance posts worldwide are not available and could be obtained only at disproportionate cost.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met(a) civil and (b) human rights organisations to discuss Zimbabwe; and if he will publish the minutes of those meetings. [116894]

  Mr. Hain
  We are in close and regular touch with civil and human rights organisations in Zimbabwe through our High Commission in Harare.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many residents of Zimbabwe are eligible for British passports; and how many British passport holders there are in Zimbabwe. [116892]

  Mr. Hain
  We cannot provide exact figures because British nationals are not obliged to register with the High Commission in Harare. Our High Commission currently has 6,700 British nationals and some 5,000 dual British/Zimbabwe nationals registered. Actual numbers will be higher.

  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many UK visa applications have been received in the last 12 months from Zimbabwean nationals. [116897]

  Mr. Vaz
  Zimbabweans do not normally require visas before travelling to the United Kingdom though some in certain categories may do so. However, statistics on visa applications received worldwide are not collected on the basis of the nationality of applicants. We do not therefore have figures for the number of Zimbabweans applying at entry clearance posts worldwide. This could be obtained only at disproportionate cost.

  Chechnya
  Mr. McCabe
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his Russian counterparts concerning the exchange between the UK and Russia of anti-terrorist information, with particular reference to Chechnya. [116563]

  Mr. Battle
  The Foreign Secretary discussed counter terrorism and Chechnya when he met the Russian Foreign Minister and the then Acting President Putin in February this year. It was agreed that the UK and Russia should continue to work together in combating terrorism.

  Bangladesh
  Ms Oona King
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received concerning the impact of the Public Safety Act (Special Powers) introduced by the Government of Bangladesh on 30 January. [116671]

  Mr. Hain
  There are reports of some arrests under the Public Safety Act. Our High Commissioner has raised our concerns about the Act with Bangladeshi Ministers. We continue to monitor the situation.

  Moldova
  Mr. Browne
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the Government are doing to ensure that the commitments agreed at the OSCE Istanbul Summit concerning Russian withdrawal from the Transdniestrian region of Moldova are met. [117385]

  Mr. Vaz
  Her Majesty's Government fully support the OSCE Istanbul Declaration on Moldova, which called for complete withdrawal of Russian troops, armaments and ammunition from Moldovan territory by the end of 2002. Her Majesty's Government regularly emphasise the need to comply with this agreement in our discussions with the Russians, Moldovans and Ukrainians (the latter as guarantors of the peace). The Declaration agreed to consider the establishment of a voluntary fund for international assistance to facilitate the withdrawal. The Foreign and Commonwealth Office has contributed £100,000 to this fund from its ASSIST budget.

  An international Needs Assessment Mission to explore the removal and destruction of the ammunition and armaments is negotiating for access to Transdniestria. The UK is planning to contribute military experts to this Mission.

  Iran
  Mr. Amess
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the death sentences passed on three Iranian Baha'is and a sentence of 10 years prison imposed on a fourth in the city of Mashad and the impact this will have on the Anglo-Iranian dialogue on human rights. [117221]

  Mr. Hain
  We remain concerned at reports of the death sentences passed on Mr. Najafabadi, Mr. Moghaddam and Mr. Khulusi in Mashad on 3 February. The picture has been somewhat confused by the recent statement by Mr. Sadeqi, spokesman for the Iranian Judiciary, that no such sentences had been passed. The Portuguese Presidency, on behalf of EU partners, presented a268W
  demarche to the Iranian authorities expressing our concern and seeking clarification as to the current status of these three gentlemen on 17 February. This was followed up with a further demarche in Tehran on 19 February. We took similar bilateral action with the Iranian Ambassador on 21 February. I raised this issue with Deputy Foreign Minister Sarmadi on 6 March.

  Iran is aware of our serious concern about the Baha'is. Persecution of individuals on religious grounds is totally unacceptable.

  Mr. Amess
  To ask the Secretary of State for Foreign and Commonwealth Affairs what support the Government will give to the resolution condemning Iran at the Commission on Human Rights in relation to the death sentences passed on three members of the Baha'i community in Iran on 3 February. [117220]

  Mr. Hain
  We, in conjunction with our EU partners, have drafted and will table the resolution to which the hon. Gentleman refers. We hope that the resolution will accurately reflect the human rights situation in Iran, both the improvements and the outstanding concerns such as the plight of the Baha'i community, as did the EU-sponsored resolution on human rights in Iran adopted at the United Nations General Assembly on 17 December.

  Mercenaries
  Mrs. Gillan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will bring forward proposals in the UN for the drafting of a UN Convention on banning the use of mercenary soldiers. [116890]

  Mr. Hain
  The Secretary of State for Foreign and Commonwealth Affairs has no plans to bring forward proposals in the UN on this subject. The Government are committed to issuing a Green Paper on mercenary activity by November 2000. We will consider the way ahead in the light of the public response to that Green Paper.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116759]

  Mr. Battle: My Department has a total of 1,018 car parking spaces—88 in London and 930 at Hanslope Park, near Milton Keynes.

  EU Legislation
  Mr. Mitchell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what arrangements exist for regulatory impact assessments to be made for prospective items of European Union legislation. [116317]

  Mr. Stringer
  I have been asked to reply.

  The Government take the same approach to prospective European legislation as to our own national proposals. We assess and scrutinise proposals in line with the requirements set out in our "Better Regulation Guide and Guide to Better European Regulation", copies of which are in the Libraries of the House. Government Departments carry out regulatory impact assessments (RIAs) for prospective European legislation where this imposes additional costs or savings, or has an impact on

  269W
  business, charities, or voluntary bodies. Subject to the expectations set out in the "Guide to Better European Regulation", an RIA must accompany any Explanatory Memorandum (EM) on prospective European legislation submitted to Parliament for its consideration.

  The European Commission has its own internal rules for evaluating prospective European legislation to take account of costs and benefits, called the fiche d'impact or business impact assessment. It is applied only to a limited range of legislative proposals.

SOCIAL SECURITY

  Housing Benefit
  Mr. Field
  To ask the Secretary of State for Social Security (1) what are the estimated total savings to date for each month during which the non-redirection of benefit post scheme has been running; and how many local authorities have been running the scheme during each of those months; [114001]

  Month

  Number of LAs using the service 1

  Number of LAs that are in their second or subsequent calendar month of using the service2

  Estimated number of fraudulent cases identified2

  Estimated savings (£000)3

  1999

  February

  3

  1

  1

  1

  March

  16

  3

  2

  3

  April

  31

  16

  11

  18

  May

  76

  31

  22

  35

  June

  101

  76

  53

  85

  July

  104

  101

  71

  113

  August

  112

  104

  73

  116

  September

  169

  112

  78

  125

  October 4

  194

  169

  118

  189

  November4

  211

  194

  136

  217

  December

  213

  211

  148

  236

  2000

  January

  248

  213

  149

  239

  February

  256

  248

  174

  278

  1 Data are provided by Royal Mail HQ based on information supplied by Delivery Offices.

  2 Assumes that LAs identify an average of 0.7 fraudulent case per month in all months other than the first month that they use the service when it is assumed that no fraudulent cases are identified(based on data collected in a telephone survey of LAs).

  3 Assumes that the saving from identifying a fraudulent case is £1,600 (based on data supplied by a sample of LAs).

  4 Data supplied by Royal Mail listed some LAs as using the scheme but gave no date. These LAs are assumed to have started between October and November 1999.

  Mail (Non-redirection)
  Mr. Field
  To ask the Secretary of State for Social Security if he will estimate what proportion of the savings from the non-redirection of mail accrue from claims made by(a) landlords, (b) private tenants and (c) local authority or housing association tenants. [114672]

  Angela Eagle
  [holding answer 14 March 2000]While estimates can be made of the average and total savings to date for local authorities from the non-redirection of benefit post scheme, the level of data available is insufficient to assess what proportion accrues from different types of tenancies.
  270W
  (2) what the average savings per local authority per week have been to date from the non-redirection of benefit post scheme. [114002]

  Angela Eagle
  e [holding answer 10 March 2000]The figures given are based on a series of estimates and assumptions set out in the notes to the table. They do not include the deterrent effect of the Royal Mail "do not redirect" scheme.

  The table shows the number of local authorities (LAs) using the Royal Mail "do not redirect" service in each month since it became available in February 1999. It also shows the estimated number of frauds identified and total savings achieved on the assumption that each fraud case saved an average of £1,600.

  On the basis of these estimates and assumptions the average weekly benefit savings achieved by each LA using this service would be around £250, which equates to £13,000 per authority per year. This means that on current information, were all local authorities to use this service, we would expect it to realise total savings of around £5.3 million per year.

  Lone Parents
  Mr. Webb
  To ask the Secretary of State for Social Security if the benefits of lone parents will in future be administered by the new agency dealing with people of working age. [115850]

  Angela Eagle
  The new organisation will administer benefits including Jobseeker's Allowance, Income Support for people of working age, Incapacity Benefit, Widow's Benefit, Severe Disablement Allowance, Invalid Care Allowance and industrial injury disablement benefits. This will therefore include benefits for lone parents of working age. It will also administer the New Deal for Lone Parents, and other employment-focused programmes.

  Pensions (Self-employed)
  Mrs. Lait
  To ask the Secretary of State for Social Security when he plans to announce his conclusions on pensions for the self-employed. [115909]

  Mr. Rooker
  In our Green Paper, "A new contract for welfare: PARTNERSHIP IN PENSIONS", we invited views on the proposal to bring self-employed people into the State Second Pension. The results of that exercise were inconclusive.

  We also asked the independent Pension Provision Group for their views. We are now considering their report, which we intend to publish shortly.

  Child Care Disregard
  Ms Buck
  To ask the Secretary of State for Social Security how many households currently in receipt of the child care tax credit component of the working families tax credit will gain from the amendment of housing benefit regulations introducing a disregard of the child care component; what will be the average gain; and what is the total cost. [116076]

  Angela Eagle
  We made changes in Housing Benefit and Council Tax Benefit to take account of the introduction of the working families tax credit in October 1999. These changes included an increase in the amount deducted from earnings for child care costs. The effect of this change is minimal.

  This summer, subject to parliamentary approval and consultation with the Social Security Advisory Committee and the Local Authority Associations, we will be introducing a further amendment in Housing Benefit and Council Tax Benefit to increase the help available for child care. This amendment will allow child care costs to be deducted from working families tax credit or disabled persons tax credit in addition to earnings where those earnings are less than their eligible child care costs.

  Estimate of the number of gainers, average gain and the total cost of the effect of proposed changes to Housing Benefit/Council Tax Benefit summer 2000

  £

  Housing Benefit

  Council Tax Benefit

  Total

  Cost (£ million per annum)

  1

  1

  2

  Gainers

  1,000

  1,000

  n/a

  Average gain (£ per week)

  18

  16

  n/a

  Notes:

  1. Based on data taken from 1998 HBMIS datasets.

  2. Costs are quoted in millions and are rounded to the nearest million.

  3. Gainers are rounded to the nearest 1,000. Gainers cannot be added together because some people will benefit in both Housing Benefit and Council Tax Benefit.

  4. Average gains are rounded to the nearest pound.

  Widowers
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Social Security how many men have been widowed and left with children under 16 years of age in each year since 1995. [116670]
  272W
  Angela Eagle
  The information is not available in the format requested. Such information as is available is in the table.

  Number of existing widowers with children who are aged under 16 in Great Britain

  Number

  Spring 1995

  15,000

  Spring
  1996

  15,000

  Spring
  1997

  15,000

  Spring
  1998

  20,000

  Spring
  1999

  20,000

  Note:

  Estimates rounded to nearest 5,000

  Source:

  Labour Force Survey

  Widowers' Benefits
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Social Security how many ex gratia payments have been made by his Department in respect of benefits for widowers in each of the last five years. [116881]

  Angela Eagle
  One widower has been paid ex gratia payments of widows' benefits in the current year. No other such payments have been made in the last five years.

  Workplace Parking
  Mr. Gray
  To ask the Secretary of State for Social Security how many workplace car parking spaces are available at the buildings used and controlled by his Department. [116766]

  Mr. Bayley
  There is a total of 29,960 car parking spaces at 492 buildings used and controlled by the Department. These buildings are where either the Department is the sole occupier or buildings where the Department is the major occupier and other Government Departments or private tenants share the premises.

  We are preparing Green Transport Plans for our key buildings in line with the commitment set out in the Transport White Paper and are reviewing the scope for reducing our car parking requirements in that context.

  Websites
  Mr. Maclennan
  To ask the Secretary of State for Social Security if he will list the expenditure incurred by his Department, agencies and non-departmental public bodies on(a) the setting up and (b) the operation of websites, indicating the cases in which the expenditure has been above that budgeted; and if he will list for each website (i) the topics which have been covered, (ii) the current average number of hits per month and (iii) the estimated expenditure on each website for each of the next three years. [115842]

  Angela Eagle
  The Department and its agencies use the internet as one of a variety of methods to communicate with the public. The DSS website is updated regularly and includes separate webpages for the individual agencies and others. The website covers numerous topics and contains over 3,000 pages providing a range of information on benefits, complaints procedures and corporate documentation such as press releases, Ministerial speeches and Agency business plans.
  273W
  The Departmental website is currently under development and is due to be relaunched shortly to take account of the Department's priorities in delivering services to its identified client groups. £245,000 has been allocated from the Departmental publicity budgets for this relaunch to ensure the DSS website meets Government website standards and addresses the criticisms voiced in the NAO report. Ongoing departmental costs at this stage are not yet finalised but are likely to change to reflect the need to improve content and service provision.

  The information that is available on costing and visits to the website are shown in the tables. To provide further breakdowns of the figures and costing would incur disproportionate costs.

  Topics

  BA site

  Benefit Information, Local office details, reports and leaflets, Press Releases, Customer Charter, Complaint Procedures, Pension Forecasting Information, Feedback section

  CSA site

  Child Support Maintenance leaflets, CSA publications, frequently asked questions and answers and CSA contact details

  HQ site

  General DSS information, DSS Facts and Figures, DSS reports and publications, speeches, press releases, the Decision Makers Guide, statistical information from ASD

  ITSA site

  ITSA publications, ITSA fact sheets and the history of ITSA

  WPA site

  Background to the scheme, War Pension Welfare Service, types of claim, how to make a claim, supplementary allowances, war widows entitlement, treatment and allowance, your rights to appeal and contacting WPA

  Appeals Service Agency
  Mrs. Anne Campbell
  To ask the Secretary of State for Social Security when the Appeals Service Agency will be introduced; and if he will make a statement. [117573]

  Angela Eagle
  The Appeals Service agency will be established with effect from Monday 3 April 2000. This new executive agency will be responsible for administration of appeals, and its Chief Executive will be accountable to Parliament for performance. Appeal tribunals will remain independent of the Department with the President, who remains head of the tribunal Non Departmental Public Body, and panel members being appointed by the Lord Chancellor. The new structure will bring greater accountability, but will also retain and support the independence and impartiality of tribunals.

  In the past year, following the introduction of the new decision making and appeals arrangements, the Appeals Service under its Chief Executive designate has achieved both substantial reductions in the backlog of older cases and reduced waiting times for appeals to be heard. Full agency status, and the fact that the Chief Executive will be accountable to Parliament for the agency's performance for the first time, will provide the scope to consolidate these gains and wherever possible improve upon them over the coming year.

  A Framework Document for the agency will set out its aims and objectives, together with lines of accountability and details of planning, reporting, personnel and finance arrangements. A Service First statement will set out the standards of service appellants can expect from the agency. A Business Plan has also been published, together with Secretary of State targets for the forthcoming year. Copies of these documents are being placed in the Library.
  274W

  £000

  Approximate costs

  Initial start up costs (including staff and resources for the launch of the service)

  430

  Annual cost for service and maintenance

  80

  Costs for annual licence

  50

  Note

  These costs are only available for the Department as a whole and are borne by the Information Technology Services Agency who undertake a corporate role with respect to DSS Internet service provision.

  Statistics

  Average hits (departmental)

  2,510,316

  Estimated average user sessions (departmental)

  636,967

  Performance Targets
  Mrs. Anne Campbell
  To ask the Secretary of State for Social Security what performance targets he has set his Department's agencies for 2000–01; and if he will make a statement. [117574]

  Mr. Darling
  The targets I have set the Child Support Agency (CSA), War Pensions Agency (WPA) and The Appeals Service (TAS) for 2000–01 are as given. The targets reflect our determination to reform the welfare state and to modernise the Social Security system to encourage work for those who can and provide security for those who cannot. They underpin the Departmental Aim and Objectives set out in our Public Service Agreement.

  Further information on CSA, WPA and TAS plans for 2000–01 is contained in their individual business plans, which have been published today. Copies have been placed in the Library.

  The targets I have set for the Benefits Agency and publication of its Business Plan will be announced in due course.

  Targets for 2000–01 are:
  CSA Secretary of State Targets 2000–2001

  Outstanding Work
  The Agency will reduce its outstanding work to a prescribed level in all key business processes by 31 March 2001. The reduction in outstanding work to be achieved is based on a prescribed level of work equivalent to (x) weeks of intake and is different for each business process:

  Pre Maintenance Assessment (18 weeks)

  Revisions, Super cessions and Case Checks (6.2 weeks)

  Account Advice (4 weeks)

  Interim Maintenance Assessment (49 weeks)

  275W

  Account Maintenance (1.4 weeks)

  Debt Management (12 weeks)

  Enforcement (30 weeks)

  Case Compliance
  To collect child maintenance and arrears from 71 per cent, of non resident parents with maintenance liability due to be paid through the Agency's collection service.

  Cash Compliance
  To collect 68 per cent, of child maintenance and arrears due for payment through the Agency's collection service.

  Accuracy
  The cash value of all assessments checked in the year to be correct to the nearest penny in at least 78 per cent, of cases.

  Complaints
  To reduce the number of complaints received compared with current caseload to less than 0.15 per cent.

  Customer Service Standards
  The Agency will demonstrate improvement across the range of the Customer Service Standards.

  Secretary of State Milestone Targets

  The Change Agenda—Child Support Reform

  (a) establish Process Learning Centres by 30 April 2000

  (b) complete the introduction of customer account statements for clients by 30 June 2000

  (c) establish a Model Office by 31 December 2000

  (d) commence data cleansing by 31 January 2001

  Debt Reduction
  To reduce the outstanding level of debt owing from full maintenance assessments at 31 March 2000 by 25 per cent, by 31 March 2001.

  Staffing

  (a) by March 2001, work with others in the Department to develop, pilot and evaluate new ways of measuring staff perception of the organisation to improve satisfaction and motivation; and

  (b) contribute to the reduction in public sector sickness by reducing absences by 10 per cent, from 1998 Public Service Agreement baseline levels by 31 December 2000.

  Investors in People
  Individual Business Units will maintain Investors in People accreditation during 2000–01 and the Agency will achieve Investors in People accreditation by 31 March 2001.

  Fraud/Security Measures
  To develop and implement shadow measures for fraud/security by 1 July 2000; and for these measures to be reported on for the remainder of the year to inform the development of targets for 2001–02.

  Customer Service Standards:

  Payments
  98 per cent, of payments made to the Parent with Care (or their bank or building society) to be made within 10 working days of receipt from the Non Resident Parent.

  Customer Account Statements
  When requested, we aim to issue the majority of customer account statements within 40 working days.

  Office Interview
  98 per cent, of clients to be seen within 10 minutes of the time of a pre-booked office appointment.

  Client Help lines and the National Enquiry Line
  80 per cent, of telephone calls to Client Help lines and the National Enquiry Line to be answered first time.
  276W
  Correspondence
  65 per cent, of letters to be answered within 10 working days of receipt.

  Customer Satisfaction
  95 per cent, of customers surveyed on quality call backs (following contact with the National Enquiry Line/Client Help lines and Face-to-Face) to be at least satisfied with the service received.

  Complaints
  To resolve the majority of customer complaints within 20 working days of receipt.

  The Appeals Service Agency Targets 2000–01

  Active Customer Focused Service Delivery

  1. By March 2001, the average waiting time for an appeal to be heard will be no more than 14 weeks from time of receipt within the Appeals Service.

  2. By March 2001, no more than 10 per cent, of cases will have been outstanding for more than 26 weeks.

  3. To publish a Service First Statement, put in place arrangements to collect information on performance against the new measures, and meet the published standards.

  4. To put in place monitoring systems to allow a Secretary of State target for customer satisfaction to be set in April 2001.

  5. To reduce instances of avoidable adjournments by 25 per cent.

  Investing in People

  6. To lead and manage people effectively through specified measures and contribute to the reduction in public sector sickness absence levels by reducing absences by 10 per cent, from 1998 Public Service Agreement baseline levels by 31 December 2000.

  7. By 31 March 2001, work with others in the Department to develop, pilot and evaluate new ways of measuring staff perception of the organisation to improve satisfaction and motivation.

  War Pensions Agency Targets 2000–01

  Putting Service First
  1. To deliver a quality service to war pensioners and war widows by achieving the standards published in the War Pensions Agency's Service First Charter.

  Working in Partnership
  2.By 31 March 2001, to implement those recommendations of the 1999 War Pensions Agency Prior Options Review which relate to the objectives of the War Pensioners' Welfare Service and the partnership opportunities associated with the management of the Ilford Park Polish Home to the standards and timetable agreed with the Department.

  Modernisation and Managing Change
  3. To work with the Lord Chancellor's Department, Ministry of Defence and the voluntary sector/ex-service organisations to implement the recommendations of the War Pensions Agency's 1999 Decision Making and Appeals Study to the standards and timetable agreed with the Department.

  Valuing our People
  4. To lead and manage people effectively through specified measures and contribute to the reduction in public sickness absence levels by reducing absences by 17 per cent, from 1998 Public Service Agreement baseline levels by 31 December 2000.

  Efficiency
  5.To generate efficiencies during 2000–01 to absorb the effect of pay and price pressures; and introduce additional cost saving measures that will enable the War Pensions Agency to operate within its running cost allocation.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Bradford): The LORD CHANCELLOR on the Woolsack.

European Committee for Prevention of Torture
Lord Aveburyasked Her Majesty's Government:
When they will reply to the letter from the President of the European Committee for the Prevention of Torture dated 29th March 1998 which transmitted the committee's report on its visit to the United Kingdom and the Isle of Man from 8th to 17th September 1997, and asked the Government to provide a report within six months on action taken to deal with the matters raised.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, the Government responded formally to the letter referred to on 16th October 1998. The report was published on 13th January 2000, and the Government hope to respond to it by Easter. When the report is published, the noble Lord will see that the Governments of the United Kingdom and the Isle of Man are facing the committee's recommendations squarely, and have already implemented a substantial number of them.
Lord Avebury: My Lords, will the Minister confirm that it has been more than two years since the Committee for the Prevention of Torture asked the Government to report on the measures to be taken by them in pursuance of the recommendations made by the committee following its visit in November 1997? Given that the Government have had two years to consider those recommendations, why has it taken them at least a further three months since the delayed publication of the report in January to make a substantive response to the recommendations?
Lord Bassam of Brighton: My Lords, this is a complicated issue with complex subsidiary issues that need to be considered. In our discussions with the committee, we have endeavoured to ensure that it reports appropriately, with due regard given to the applicable rules of professional ethics. We have taken some time since the publication of the final report and, as I have said, we intend to make our response at some point around Easter. We have taken that time because we needed to consult with others over our response. I am sure that the noble Lord will appreciate that it is better to make a fuller response than one which perhaps might not be up to the job.
Lord Archer of Sandwell: My Lords, does my noble friend recollect that the report dealt principally with
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two subjects: remedies for complaints against the police and overcrowding in prisons? Both of those subjects have been fully discussed over a long period both in your Lordships' House and elsewhere. Is the response of the Government a closely guarded secret? If so, why is that? If it is not, perhaps we could be given an indication of what the response is to be.
Lord Bassam of Brighton: My Lords, I believe that it would be entirely inappropriate for me to comment on our response this afternoon. It will be published, quite properly, in due course. Thenceforward, noble Lords will be able draw their own conclusions on it. However, we should observe the proper process here; indeed, we have done so. We have complied with the wishes of the Committee for the Prevention of Torture in that regard. I am sure that Members of your Lordships' House will be extremely interested in the content and fullness of the Government's response.
Lord Avebury: My Lords, I am a little mystified by the Minister's answers. He has stated that he had to consult with others, but he has not denied that the committee's recommendations have been in the Government's hands since March 1998. Since that is the case, why have they not been consulting on the recommendations in advance of the publication of the report? Why did they need to wait until January before they began those consultations? Furthermore, even if consultations only commenced in January, as the noble Lord, Lord Archer of Sandwell, has already pointed out, since the matters dealt with in the report recur frequently—for example, in reports of the Chief Inspector of Prisons—why has it taken a further three months?
Lord Bassam of Brighton: My Lords, it was necessary for the Government to consult with the Metropolitan Police, the Prison Service, the Foreign and Commonwealth Office and all those with policy interests in the subject of the report. Those consultations have taken some time. As regards matters discussed between the committee and the Home Office, they were important points relating to legal confidential privilege. Those issues took some time to resolve; I fully accept that. I can tell the noble Lord that the points were properly resolved and the final report was made in January. As I have said, we intend to make our response during the Easter period.

Zimbabwe
3.4 p.m.
Lord St John of Bletsoasked Her Majesty's Government:
What measures they are taking to ensure that the forthcoming elections in Zimbabwe are free and fair.
Baroness Ramsay of Cartvale: My Lords, we have made clear to the Zimbabwe authorities our hope that the forthcoming elections will be free and fair. We

903
welcome the decision to extend the voter registration period until 31st March. We are currently contributing funds to the Election Support Network, a grouping of NGOs involved in training Zimbabwean election observers.
Lord St John of Bletso: My Lords, I thank the Minister for her reply. Does the Minister agree that Zimbabwe is currently facing one of its worst financial crises in its entire history, due in large degree to the military intervention of Zimbabwe in the civil war in the Democratic Republic of Congo? Is it not the case that President Mugabe is clearly putting his personal interests ahead of those of his country and the civilian population? Against the background of the farm invasions by the so-called war veterans, the fuel and currency crises and the intimidation of opposition political parties, as well as the issue of unequal access to the media, is it not now time for Her Majesty's Government, together with the Commonwealth, to take far sterner action in order to insist that the elections—which are to be delayed until the end of May or possibly until June—are free and fair?
Baroness Ramsay of Cartvale: My Lords, we share the concerns touched upon by the noble Lord, Lord St John of Bletso, in particular as regards the economic and other developments in Zimbabwe. We will give serious consideration to any request from the Zimbabwean Government for support in the forthcoming elections. However, we would need to ensure that there was sufficient time to establish the minimum conditions necessary for free and fair elections. Many noble Lords will be aware that a UN team of electoral experts visited Zimbabwe last year. The team concluded that a period of six months would be required to make the technical preparations for elections. In the meantime, we are consulting others to see what action the international community can make to ensure that the elections run smoothly. We shall give serious consideration to any request that is made. However, I have to tell noble Lords that, so far, the Zimbabwean Government have not invited the international community to observe the elections. As my noble friend Lady Amos made clear in the debate in your Lordships' House on 22nd March, we would not wish to give legitimacy to a flawed process.
Lord Moynihan: My Lords, in pursuit of the point made by the noble Lord, Lord St John of Bletso, does the Minister agree that the Government of Zimbabwe's recent actions, including the postponement of next month's elections, the threats to kill political opponents and the revelation that many of the farms seized illegally have been distributed to Robert Mugabe's cronies, are not consistent with the Commonwealth's fundamental political values of democracy, human rights and the rule of law? Given those circumstances, will the Government press for the rules of the Commonwealth Ministerial Action Group to be changed to permit the suspension of Zimbabwe from the Commonwealth? Furthermore, in the meantime, taking into consideration the corruption of
904
the Zimbabwean Government, will the Government freeze the bank accounts of Zimbabwean Ministers and high level officials?
Baroness Ramsay of Cartvale: My Lords, the matter of the farm invasions is serious. There is no question about that. The Government have robustly made known their views on the matter and have been joined in their response by the declaration made by the European Union and many other international countries. However, they do not constitute the serious and persistent violation of the Harare Declaration principles which would demand investigation by the Commonwealth Ministerial Action Group—CMAG—to which the noble Lord, Lord Moynihan, has referred.
We continue to follow events closely. We deplore the ongoing farm invasions. We have made clear to the Zimbabwe Government our concerns about that and our concerns with respect to law and order, human rights issues and the need to restore sound economic policies. The noble Lord looks disappointed, but I have to tell him that there are not yet serious and persistent violations of the principles of the Harare Declaration which would demand an investigation by CMAG. That is the legal reality.
Lord Hughes of Woodside: My Lords, does my noble friend agree that to talk at this stage of suspending Zimbabwe from the Commonwealth and to argue that the rules of engagement should be changed, as the Opposition now suggest, would simply feed the paranoia of those in Zimbabwe who believe that all the problems stem from outside the country? Is not the test as to whether Zimbabwe should remain in the Commonwealth whether the president accepts the result of the elections when they occur, as in the recent referendum the population of Zimbabwe showed itself not so easily taken in by rhetoric?
Baroness Ramsay of Cartvale: My Lords, I can only reiterate that, like everyone in the House, we hope that the elections are fair and free. Although electoral roll registration has been extended to 31st March, no date has yet been announced for the elections. One presumes that they will slip from April in to May, but no date has yet been announced. At the moment therefore we are all discussing this matter in a slight vacuum.
Lord Harris of Greenwich: My Lords, we understand, of course, the point that the noble Baroness has made about the Harare principles. However, the continued seizure of land and handing it over to friends of Mr Mugabe is entirely unacceptable. Is there not some way in which we can discuss this matter with some degree of urgency with other leading members of the Commonwealth so that a joint approach can be made to Mr Mugabe, pointing out that if he continues to behave in this fashion the most serious consequences will follow?
Baroness Ramsay of Cartvale: My Lords, the House will not be surprised to hear that we are very much in

905
contact with the leaders of the Commonwealth, as, indeed, with other members of the international community. For example, with our EU partners we initiated discussion which led to a troika démarche in Harare on 14th March on the farm invasions and to the publication of the EU declaration which noted that the farm occupations seriously undermined the right of ownership and the freedoms guaranteed under the Zimbabwe constitution. The important point to add is that this was not only a declaration of the EU. The central and eastern European countries associated with the European Union, the associated countries, Cyprus, Malta and Turkey, the EFTA countries and members of the European Economic Area were all aligned with that declaration. The Zimbabwe Government are left in no doubt about the isolation of their position and their method of proceeding.
Baroness Whitaker: My Lords, does my noble friend the Minister agree that equitable and legitimate land reform to change the status quo is nevertheless essential for Zimbabwe? Will Her Majesty's Government support that?
Baroness Ramsay of Cartvale: My Lords, we have always recognised the need for equitable land redistribution and have to date contributed £44 million to a land reform programme. A noble Lord opposite says the words "serious socialism" from a sedentary position. I do not see why recognising the need for equitable land redistribution in Zimbabwe is a party political point. We remain willing to support a land reform programme that is transparent, fair and cost effective and which contributes to the reduction of poverty in Zimbabwe. These principles were agreed by the Zimbabwe Government and international donors at the land conference held in Harare in September 1998. We are now looking at a number of proposals submitted by the private sector and NGOs. Noble Lords opposite hiss the word "stealing" from a sedentary position. Have they not heard of the compensation arrangements? To date, in spite of all the rhetoric, no land has been taken without compensation.
Baroness Chalker of Wallasey: My Lords, will the noble Baroness impress upon the Secretary of State, who will go to Cairo this weekend to attend the Europe/Africa Conference, that he should take these matters up in no uncertain terms on behalf of all those who love Zimbabwe and cannot bear to see what is being done to its ordinary people? I am sorry that the Prime Minister will not now go to Cairo, but it seems to me that we have a good opportunity this weekend, with our European partners, to make a difference. Will the noble Baroness please ensure that that is done?
Baroness Ramsay of Cartvale: My Lords, the noble Baroness, Lady Chalker, is absolutely right that all friends of Zimlx.bwe—that is very much the position of Her Majesty's Government—are extremely upset and concerned about the situation in which Zimbabwe
906
now finds itself. The matter will certainly he taken up with other leaders both in Europe and in the Commonwealth at every opportunity.
Lord Avebury: My Lords, will the noble Baroness confirm that the Zimbabwean Registrar General has rejected an offer from the United Nations to assist with the preparation of the register; that the provisional register is not to be produced until the middle of April, and that in those circumstances it is virtually impossible to go through the statutory procedures that would be required for a free and fair election to be held this side of the end of May, in spite of Mr Mugabe's denials that it will spill over until June? Has the noble Baroness seen the reports in a Zimbabwean newspaper about the diversion of aid money running to tens of millions received from China and Libya into the ZANU-PF coffers to help them fight the election? If the Commonwealth Secretariat is not able to send a mission to observe the election, will it at least carry out a study from a distance to see whether it can he deemed free and fair?
Baroness Ramsay of Cartvale: My Lords, the noble Lord, Lord Avebury, raises many different points. I reassure him that we shall all do our utmost to take whatever steps we can to make sure that the elections in Zimbabwe are fair and just.
Noble Lords: Next Question!
Lord Carter: My Lords, we have now reached the 17-minute point of Questions; I think that we should move on.

Prison Population: Statistics
3.17 p.m.
Lord Allen of Abbeydaleasked Her Majesty's Government:
How many people are now in prison in England and Wales; and how many are likely to be there in 12 months' time.
Lord Bassam of Brighton: My Lords, as of 30th March this year there were 65,403 prisoners held in prison establishments in England and Wales. It is estimated that the prison population will be some 70,100 at the end of March 2001.
Lord Allen of Abbeydale: My Lords, I am most grateful for that information. However, I am bound to say that I find those high figures and the prospect of further increases to come somewhat disquieting. Everyone would agree that offenders convicted of serious crimes should normally be sentenced to imprisonment, but not everyone in prison falls into that category. I wish to ask the Minister two questions. First, am I right in assuming that this Government at any rate do not regard it as a matter of pride that we have more people imprisoned in this country, in proportion, than any other country in western Europe

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with the sole exception of our oldest ally, Portugal? Secondly—I know that this is not easy—could not Ministers take a little time off from building all these new prisons to try to give the public and the media rather better information on non-custodial forms of punishment?
Lord Bassam of Brighton: My Lords, I shall deal, if I may, with the second point first. I entirely agree with the distinguished noble Lord that it is most important that we stimulate a better quality of public debate and perhaps a more reasoned reaction from the media to prison and prison regimes. However, it is not the Government who imprison people; it is the courts. The courts take a view based on the evidence before them. As to whether the Government take pride in the size of the prison population, we have a duty to provide prison places for those whom the courts have sentenced to imprisonment. I am sure that all Members of your Lordships' House will agree that that is the right way forward. We predict, we provide and we try to ensure that prison regimes are effective in restraining people and in stopping them from committing further crimes. That is one of the primary purposes of the prison regimes.
Lord Dholakia: My Lords, I agree that since 1992 the prison population has risen by 60 per cent. However, the population of women's prisons has risen by a staggering 140 per cent. Does the Minister accept that much of this increase is due to drug-related crime and an element of harshness in sentencing women? Will he have a word with his right honourable friend the Home Secretary to ensure that he uses one of his high-powered speeches to draw attention to the effect that the harsh prison sentencing of women has, especially on children? Will he ensure that this is drawn to the attention of judges?
Lord Bassam of Brighton: My Lords, I do not wish to argue with the noble Lord's statistics today; that would not be too fruitful. It is the case that the number of women in prison has increased remarkably over that period. That is, no doubt, a reflection of the seriousness of many of the crimes they have committed. The noble Lord's observation about their crimes in relation to drugs is also true. We have to find prison regimes that are effective and that turn people away from a life of drugs and crime. That is in everyone's and society's best interests.
Lord Elton: My Lords, is it not clear that the Government's approach is failing and that the number of people in prison shows that they are not acting on the possibility of identifying children about to go into crime—for example, those on school exclusion lists? School exclusion results in 80 per cent of excluded young people being involved in crime. Why do not the Government spend £5 a week on such children rather than more than £500 a week on catching people when it is too late?
Lord Bassam of Brighton: My Lords, we need to continue to ensure that local education authorities and
908
the criminal justice system work well together in order to abate the need to send young adolescents—and, as they get older, teenagers and adults—to prison for offences which perhaps begin when young people truant. I do not agree with the noble Lord's assertion that we are failing because the prison population is rising. The noble Lord's own party was in office during a time when there were unprecedented increases in the prison population. I am sure that the noble Lord will accept that point. We have to ensure that we have prison accommodation which is appropriate for the crimes committed, effective and secure.
The Lord Bishop of Bradford: My Lords, as bishop of a diocese with a substantial Asian and Muslim population, with whom I work regularly, I welcome the appointment of Maqsood Ahmed as the new Muslim adviser to prisons. Is the Minister confident that in prisons and other penal institutions where there are Muslim prisoners, satisfactory arrangements are made for the timing of Friday congregations, for the provision of halal meat and for imams to visit? Given the increased number of Muslim young men imprisoned during the 1990s—often for drug-related offences—have the Government made any inquiry as to why this should be so? Is there evidence that it may be related to poverty, underachievement at school and unemployment?
Lord Bassam of Brighton: My Lords, I shall deal first with the right reverend Prelate's last point. There is much in what he said. There is little doubt that the kinds of issues he mentioned are related to criminality. In going round various prison establishments, I have been impressed by the way in which prison regimes have responded to the fact that we live in a multi-faith, multi-ethnic society. That is now beginning to be reflected more accurately in the way that people are given the opportunity to celebrate their particular religions. I am grateful to the right reverend Prelate for his support for that programme.
Lord Cope of Berkeley: My Lords, can the Minister confirm that the prison population would be even higher if it was not for the early release tagging scheme? Does he agree that, under that scheme, some 18,000 prisoners have been released early, including those convicted of attempted murder, sex offences and, in 2,000 cases, drug dealing? Does he further agree that some of those who have been released early have subsequently been charged with further crimes, including rape, assault, theft and burglary?
Lord Bassam of Brighton: My Lords, I am impressed by the noble Lord's interest in this issue. My understanding is that the previous Government began experiments in this programme and that they supported it at that time. Now it would appear the party opposite does not support it. Yes, of course, occasionally there will be failures—that is accepted—but the home detention curfew programme has had a 95 per cent success rate. We should be grateful for that. If we increase the prison population by continuing to restrain those who could be released on home

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detention curfew, the size and scope of the problem will continue to expand. I ask the noble Lord how much more public funding he would like to see put into the Prison Service. That is an important consideration. I should like to know at some point exactly what the noble Lord thinks about that issue.

Working Families: Tax Burden
3.25 p.m.
The Earl of Northeskasked Her Majesty's Government:
On what statistical basis they state that next year's tax burden for the working family will be the lowest since 1972.
Lord McIntosh of Haringey: My Lords, as a result of personal tax and benefit measures introduced by this Government, the tax burden on a typical single-earner couple, on average earnings and with two children under 11, will fall from 21.5 per cent in 1996–97 to 18.8 per cent by 2001, the lowest level since 1972.
The tax burden on such a family is measured as income tax plus national insurance contributions less tax credits and child benefit, as a share of pre-tax earnings. This definition has been used for many years, under successive governments, in the Treasury's Tax Benefit Reference Manual, which is placed in the Library of the House.
The Earl of Northesk: My Lords, I thank the Minister for tint Answer. How seriously can that claim be taken when it fails to take into account the impact of indirect taxation?
Lord McIntosh of Haringey: My Lords, the problem with adding indirect taxation to direct taxation is that indirect taxation depends on the particular consumption patterns of households. It cannot be predicted definitively from a family's level of earnings and family structure in the way that tax credits, income tax, NICs and child benefit can be predicted. No external organisations produce estimates of indirect taxes at the individual level, and that includes the Institute for Fiscal Studies.
Lord Clark of Kempston: My Lords, does the Minister agree teat the so-called "stealth taxes"—such as petrol tax, the disappearance of MIRAS and the marriage allowance, and so on—mean that the take-home pay of the average working family has decreased? Why do not the Government take notice of the various independent reports which have been published by the Library of the House of Commons, the OECD and others? Would it not be a good idea to bring forward the debate on the Budget so that the Government can either substantiate their figures or apologise for misleading the general public?
Lord McIntosh of Haringey: My Lords, the noble Lord used the phrase "so-called stealth taxes"; they are
910
not called "stealth taxes" by me. I take no responsibility for that phrase. As to the noble Lord's reference to the report from the Library of the House of Commons, I do not know whether he knows that the author of that report has written to the Shadow Chancellor and said:
"I have had to make some detailed assumptions"—
that is, in estimating the burden of indirect taxation—
"the results are therefore unlikely to be representative of the majority of the population".
Lord Saatchi: My Lords, can the Minister confirm that the Government's tax receipts last year and this year have risen by three times the rate of inflation, by three times the rate of wage increases, and by three times the rate of increase in GDP? Can he tell the House why?
Lord McIntosh of Haringey: My Lords, I can suggest one reason: more people in work. That is rather a good reason for increases in Treasury receipts from taxes.
Lord Haskel: My Lords, does my noble friend agree that the stronger the economy, the more tax the Government collect?
Lord McIntosh of Haringey: My Lords, my noble friend has said in more elegant terms what I said rather more bluntly. Of course, he is quite correct.
Lord Northbrook: My Lords, does the Minister agree that another example of a misleading statistic in the Budget relates to the effect of the impact of proposals to tighten tax rules for companies with overseas subsidiaries? Is he aware that, according to the Financial Times of 23rd March, this will cost companies a total tax figure of £10 billion?
Lord McIntosh of Haringey: My Lords, we have departed a considerable way from the Question about the tax burden on the working family.
Lord Strathclyde: My Lords, perhaps I may ask the Government Chief Whip a procedural question. N of for the first time—I do not wish it to become a habit—a Minister has insisted on posing questions to the Opposition. We make no complaint about that. But will the Government Chief Whip have a discussion with the Leader of the House and with the usual channels so as to make time available for the Opposition to answer?
Lord Carter: My Lords, after all his years in the House, the noble Lord should recognise a rhetorical question.

Business of the House: Standing Order 40
3.30 p.m.
Lord Carter: My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in her name on the Order Paper.

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Moved, That Standing Order 40 (Arrangement of the Order Paper) be dispensed with this day to allow the Motions standing in the name of the Lord Bach to be taken last.—(Lord Carter.)
Lord Henley: My Lords, I wonder whether the noble Lord, on behalf of the Leader of the House, can offer a slightly lengthier explanation of the need for this Business Motion. Is it not a fact that it deals with the education regulations and order to which my noble friend Lady Blatch will respond. Is it not also a fact that the regulations and the order were introduced by the Minister responsible only some two days ago? It was then announced by the Minister responsible that the regulations and the order had to go through by the end of the week. Having earlier been offered to my noble friend on a Friday two weeks ago, which my noble friend agreed to do, they were then withdrawn. Is it really a satisfactory way of doing business to force my noble friend to have to respond to two important provisions—one relating to student loans, a subject on which this House feels very deeply—at a very late hour at night? What can the Government Chief Whip say about the time at which the regulations and the order will come up?
We have before us the fifth and possibly—I only say "possibly"—the final Committee day on the Financial Services and Markets Bill. There are more than 30 groups of amendments. I am advised by those responsible for the Bill on this side of the House that there is certainly more than a whole day's business ahead of them in relation to that Bill. Will the noble Lord give an assurance that he will allow my noble friend Lady Blatch to respond to the regulations and the order at a reasonable time, so that she will not have to respond to them at two, three or four o'clock in the morning, and so allow the Financial Services and Markets Bill to be completed on another day, possibly next week?
Lord Carter: My Lords, the Motion is necessary to enable us to take the regulations and the order in the name of my noble friend Lord Bach at the end of business today. Under Standing Order 40, Unstarred Questions always come last. In order to take today's Unstarred Question before the regulations and order, it is necessary to suspend the standing order.
I had understood that the noble Lord opposite was happy with that arrangement. It is true that the regulations and the order were tabled only on Tuesday. I can explain the reason why they need to be taken so quickly. They come into force tomorrow and they have already been agreed by another place. Attempts were made to find the time to debate them earlier this month, but no mutually convenient time could be found. Having said that, now it is clear that we are running out of time, I understand that the Opposition Front Bench has been extremely helpful and flexible in finding a time to debate the regulations and the order before the deadline. I am grateful for that co-operation.
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As regards today's business, there are 30 groups of amendments. There were 30 groups on the third Committee day and we rose at 10 o'clock.
Lord Henley: My Lords, that is certainly not satisfactory. My noble friend agreed the time of the regulations and the order. It is the duty of the Minister to come to the House to push her orders. It is not a matter of finding a mutually agreeable time. Ministers are always available to the House. Ministers' first duty is to the House. If my noble friend could not agree with the Government Whips' Office an appropriate time to take the regulations and the order, the Minister should have been here. It is only fair for the Chief Whip to tell us exactly who is responsible for putting us in this mess and forcing the House to debate at a very late hour matters that are of considerable importance. What is the noble Lord going to do at 10 o'clock or 11 o'clock tonight if three, four, five or six hours are still required for the Financial Services and Markets Bill? Will he come to the House and agree to suspend that business to allow my noble friend to deal with the regulations and the order at a reasonable time?
Lord Carter: My Lords, I am not completely briefed on all that has taken place on all the attempts to find a date. I understand that on the first date that they might have been taken my noble friend Lady Blackstone was in Lisbon on government business. Another attempt was made to find a date convenient for the noble Baroness, Lady Blatch. The noble Baroness says "no", but I understood that that was the case. They have to be dealt with today because they come into force tomorrow. I thought that an attempt had been made to find a time that was mutually convenient.
To avoid having a very long dinner hour this evening—to take the regulations and the order in the dinner hour with the Unstarred Question—with the help of the noble Baroness, Lady Blatch, for which I am extremely grateful, it was agreed to find time at the end of today's business. I do not think that there is any need for today's business to take exceptionally long. As I said, on the third Committee day we had 30 groups of amendments—exactly the same number as today—and we rose at 10 o'clock.
On Question, Motion agreed to.

Financial Services and Markets Bill
3.35 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 CHAIRMAN OF COMMITTEES in the Chair.]
Clause 202 [Notice for payment]:
Lord Fraser of Carmylliemoved Amendment No. 241N:
Page 102, line 12, at end insert ("unless an appeal has been made to the Tribunal").
The noble and learned Lord said: This amendment has been prompted by the Law Society of Scotland and is essentially probing in nature. I trust that the Government will respond to it in that fashion. A number of other amendments have been prompted by the Law Society of Scotland. In the main, they are of the same character. However, I am bound to say to the Government that a number of administrative decisions may be taken before we reach Report stage on the Bill. If the Minister is not already aware, I hope he will take step; to appreciate that if the decisions are taken in a certain way, they are fraught with constitutional sensitivities and could cause some very real upset north of the Border.
I can be brief on the amendment because I discover from the Marshalled List that the Minister has indicated that it is his intention to oppose the Question that Clause 202 stand part of the Bill. I shall listen with care to what he has to say about that to try to understand his justification for doing so and what amendments he himself proposes in the fullness of time to bring forward. It will not be a new experience for us but it will be useful to know what the amendments are going to be.
The short point that arises here is that if a notice of penalty is to be given to an authorised person under Clause 202, the notice for payment must be in writing and require the person to pay the penalty before the end of such period as specified in the notice. From looking back to the preceding clause, Clause 201, I understand that in such circumstances where a decision notice has been given to an authorised person and where that indicates that there is a proposal to impose a penalty under Clause 199, the opportunity is then given to the authorised person to refer that matter to the tribunal. There is, if one likes, a right of appeal against such a decision notice.
However, unless I am missing the point, there seems to be something rather surprising and unusual here. If one takes that circumstance, and if indeed an appeal has been marked or a requirement that it should be taken up before a tribunal, notwithstanding that indication by the authorised person, he still has to pay the penalty, however vigorously he wishes to reject the imposition of the penalty on him before the tribunal. A more appropriate course would seem to be that suggested by the amendment; namely, until the matter has been satisfactorily resolved one way or another before a tribunal, there should be no requirement on the authorised person to pay the penalty. That is what I understand frequently happens; indeed, I understand it to be the ordinary practice in our courts. In the circumstances it seems appropriate that a comparable provision should be included in the Bill.
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I shall not press the amendment, given that Clause 202 is to be withdrawn. However, I hope that the Minister will be able to give a clear undertaking that the point raised by the Law Society of Scotland will be addressed in the doubtless reconstituted Clause 202 before the Bill returns to this place. I beg to move.
Lord Bach: I hope to be able to satisfy the noble and learned Lord, Lord Fraser of Carmyllie, by speaking to the government amendments that are now grouped with his amendment. I am grateful to him for informing the Committee that this is a probing amendment.
This group of government amendments all deal, in one way or another, with the end of a notice procedure and the manner in which the final determination of the matter may be notified to the person concerned and published more widely.
The Joint Committee, in its first report, rightly took the view that a transparent procedure was necessary for publication of the end result of the disciplinary process. The report said that,
"the pre-Tribunal process must lead as transparently as possible to a fair and just decision in the public interest: it must avoid any impression of secret and collusive plea-bargaining".
The committee therefore recommended that,
"In the interests of public confidence, all final decisions … should be made public, save in exceptional circumstances which would require to be justified".
This group of amendments is concerned with ensuring that this occurs in the variety of situations which may arise under the Bill. Before I deal with publication itself, therefore, it may be helpful to outline the changes we are making to the notice procedures which apply at the final stages of action by the authority.
First, if having issued a warning notice or a decision notice, the FSA decides not to proceed with the action which it originally proposed, we consider that the person concerned is entitled to know that the proposal is being dropped. That is an important part of ensuring fairness. Accordingly, the FSA will be required to give formal notice to the person concerned under the new clause with the rubric, "Notice of discontinuance".
Such a decision might be the result of having considered the person's representations, or further evidence having come to light. On the other hand, in some cases the FSA will wish to proceed with the action proposed, in which case the right will arise to refer the matter to the independent tribunal (and thereafter to appeal on a point of law to the courts against the tribunal's decision).
We propose in due course to amend Clause 124 to make it clear that the authority may not take any further action in relation to a decision contained in a decision notice until such time as the person has had the opportunity to refer the matter, or until a reference (and any appeal) has been finally determined.
Once the time for making a reference has passed, however, or once any reference (and appeal) has been finally determined, the person concerned is entitled

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again to receive proper notice of the ultimate outcome. The new clause on final notices is designed to ensure that that happens.
If the decision has not been referred to the tribunal within the time permitted under Part IX of the Bill, the final notice simply confirms and gives effect to the decision in the decision notice. But if the matter has been determined by the tribunal or the higher courts, the final notice will set out the action the authority is taking to fulfil its obligation (under subsection (2) of the new clause) to give effect to the determination and any directions which have been given to it.
Thus the authority is the instrument by which the determination of the tribunal or court is given effect. The tribunal or court might, for example, direct the FSA: to impose the penalty originally proposed, or a different penalty; to make a public statement instead of a penalty, or vice versa; to make a public statement as originally proposed, or in different terms from those proposed; or to take no further action on the matter.
The final notice clause replaces a number of existing clauses relating to notices for payment which we shall be opposing in Committee or on Report. These are: Clause 202, plus Clauses 67, 92 and 118. Those are the financial penalty clauses under Parts V, VII and VIII respectively.
The final notice given by the FSA under our new clause will have to include full details of any action which the FSA is taking and the date it takes effect. In the case of a penalty, this will include details of how much has to be paid, when and how, and how it will be recovered if it is not paid.
I now turn to the noble and learned Lord's amendment. There was concern among Members of the Opposition in another place that there was a lack of clarity on whether a notice for payment could be issued before a reference had been made or determined. Therefore, we hope that the noble and learned Lord and all other Members of the Committee will be pleased to note that the final notice clause makes it clear that final notices, which will serve that purpose in cases where penalties are proposed, may not be issued before the deadline for reference to the tribunal, and if referred, until the matter is finally determined. That would seem both common sense and justice. That is made clear in subsections (1) and (2) of the new clause.
I have already referred to the Joint Committee's deliberations on publication of decisions. The determinations of the tribunal and higher courts will, of course, be matters of public record. But whether or not the matter was referred to the tribunal it is important for the reasons given by the Joint Committee that the final outcome of the matter is made public.
The remainder of my remarks relate to publication. The new clause on publication, therefore, requires the authority to publish such details about a final notice as it considers appropriate, except for information the
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publication of which would, in its opinion, be unfair to the person concerned or prejudicial to the interests of consumers.
The Government believe, however, that it is necessary to avoid any risk that a person might be unfairly tainted, by giving publicity to the fact that some contravention had been alleged by the FSA, before the person concerned had had an opportunity to refer the matter to the tribunal, or before a matter referred to the tribunal had been finally determined by the tribunal or the appeal courts. Under the new clause on publication, the authority is, therefore, prevented from publishing details about warning and decision notices.
Where action has been proposed in a warning notice or decision notice but is then not pursued by the authority, it would be equally unfair if any suggestion of guilt were given by giving publicity to the fact that the authority had decided not to proceed with the action. At the same time, there might be circumstances where the person concerned might wish that information to be made public in order to clear up any suspicion or rumour which was already in the public domain. Accordingly, this clause allows the authority to publish details about notices of discontinuance only with the consent of the person concerned.
The remaining government amendments in this group are consequential and I shall not weary the Committee with a description of them unless I am asked to do so. My reply has been rather full, but it relates to an important matter. I hope that it has satisfied the noble and learned Lord who moved the amendment.
3.45 p.m.
Lord Elton: I wonder whether the noble Lord can help me by telling me a little more about the new clauses to which he is speaking, and whether they are all on the Marshalled List. At one point he appeared to indicate that the new clause would be produced in the future, after the Committee stage had been completed. If that is the case, I am sure that most Members of the Committee will want to know what scrutiny the new clause has received and the proposed procedures for seeing that it is properly considered by this House and another place.
The noble Lord also used the phrase, "we shall be opposing in Committee or on Report". I do not know whether he was referring to a group of clauses, some of which would be dealt with today and some later. Again, when he comes to them, I hope that we may be told the extent to which the principle and the detail were discussed in another place—that being the procedure that is supposed to replace what we should normally do in Committee in this House.
Lord Jenkin of Roding: While the noble Lord is considering how he will reply to my noble friend Lord Elton—I understand that he might like a moment or two before that happens—perhaps he will take the trouble to explain why it is proposed, in Amendment No. 275B, to leave out the words in Clause 376, "or not

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to take". That amendment is grouped with Amendment No. 241N and it is not immediately clear from the comments of the noble Lord, Lord Bach, why it is proposed to omit those words.
Lord Fraser of Carmyllie: If I have properly understood the Minister's response and the import of the new clauses I will join him in voting that Clause 202 should not stand part. It seems appropriate, given the amendments, for that clause to be withdrawn.
If I understood the Minister correctly, under his Amendment No. 275K if the authority resolved to discontinue any action against an authorised person, a notice of discontinuance might be issued. Under subsection (2) of the proposed new clause, the person to whom the notice is given must consent before it is placed in the public domain. If that is so, I am not sure how subsection (5) comes into play, for it provides that:
"the Authority may not publish information under this section if publication an would, in its opinion, be unfair to the person with respect to whom the action was taken or prejudicial to the interests of consumers".
I am not sure whether that is a second or supplementary test. Even if the individual consents to a notice of discontinuance, is the authority under a duty to look at the matter afresh and reach a decision—notwithstanding the consent of the authorised person? In our view, that would be unfair to the authorised person. It is obvious that if the individual did rot see it as unfair to himself, there should be no bar on publication.
Lord Bach: The noble Lord, Lord Jenkin, asked why the words "or not to take" are to be removed by Amendment No 275B. A decision not to proceed with action will now be the subject of the new notice of discontinuance. Notice will be given only where the decision is to maintain a proposal set out in the warning notice. So those words—to use an expression commonly used in the Committee last Monday—are otiose.
In reply to the noble Lord, Lord Elton, Amendments Nos. 275H, 275J and 275K in the Marshalled List set out the new clauses. Some of the clauses that are to be opposed will hopefully be opposed formally on Report—apart from Clause 202, which I hope will be opposed today. These improvements are brought forward in light of lengthy debate in another place.
To answer the noble and learned Lord, Lord Fraser, a notice of discontinuance should not normally be published unless the person consents. Subsection (5) only allows the authority not to publish—so it does not override the consent of the person concerned.
Lord Boardman: The Minister referred to alterations to Clause 124, which I understand have already been
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discussed in this House. Does the noble Lord propose tabling further alterations on Report? If so, what impact will they have on other provisions?
Lord Bach: I have made it clear that we intend to return to that matter on Report. I hope that I am safe in saying that it will not have a great impact on other of the Bill's provisions.
Lord Fraser of Carymyllie: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 202 negatived.
Clause 203 [Publication]:
Lord McIntosh of Haringeymoved Amendment No. 241P:
Page 102, line 20, leave out ("376(2)") and insert ("(Third party rights)(4)").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 241Q:
Page 102, line 21, leave out subsections (2) and (3).
On Question, amendment agreed to.
Clause 203, as amended, agreed to.
Clauses 204 to 208 agreed to.
Clause 209 [Rights of the scheme in relevant person's insolvency]:
Lord Bachmoved Amendment No. 242:
Page 106, line 27, after ("who") insert ("or an entity which").
The noble Lord said: Amendments Nos. 242 and 243 are truly technical, to ensure that Clause 209 properly reflects legal arrangements in Scotland. The clause gives the compensation scheme manager rights in insolvency proceedings. Subsections (5) and (7) contain the provisions relevant to bankruptcy proceedings. As they stand, the subsections refer only to individuals. That is satisfactory for England, Wales and Northern Ireland—where it is only possible to take bankruptcy proceedings against individuals. In Scotland, it is possible to take bankruptcy proceedings against other entities, such as partnerships. The amendments adjust Clause 209 to take account of that difference. I beg to move.
On Question, amendment agreed to.
Lord Bachmoved Amendment No. 243:
Page 106, line 38, at end insert ("; or
( ) under section 6 of the 1985 Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section.").
On Question, amendment agreed to.
Clause 209, as amended, agreed to.
Clauses 210 to 212 agreed to.
Clause 213 [Scheme manager's power to require information]:
Lord McIntosh of Haringeymoved Amendment 244:
Page 109, line 37, leave out subsection (6).
On Question, amendment agreed to.
Clause 213, as amended, agreed to.
Clause 214 [Scheme manager's power to inspect information held by liquidator etc]:
Lord McIntosh of Haringeymoved Amendment No. 245:
Page 110, line 15, leave out subsection (4).
On Question, amendment agreed to.
Clause 214, as amended, agreed to.
Clause 215 [Powers of court where information required]:
On Question, Whether Clause 215 shall stand part of the Bill?
Lord Elton: I should like to seek clarification on one matter, which perhaps should have occurred to me earlier. Can the Minister say why it has been decided that a person who fails to comply with a requirement imposed under Clause 213 should be dealt with as if he is in contempt of court rather than being subject to some stated penalty?
Lord Bach: The intention behind the provision is to avoid, as far as possible, the use of the criminal law in this part of the Bill. Therefore, contempt proceedings, which are civil but also often apply in criminal cases, are thought to be a more appropriate way to deal with the issue. I do not believe that that is the only example in the Bill.
Clause 215 agreed to.
4 p.m.
Clause 216 [Statutory immunity]:
Lord Tavernemoved Amendment No. 246:
Page 110, line 41, after ("faith") insert ("or reckless").
The noble Lord said: This is my first appearance in the Committee stage of the Bill. I apologise for having been unavoidably absent throughout the previous stages. I owe a particular apology to my noble friends on these Benches who have carried the burden. Having carefully read the Official Report, I must say that my noble friends have done so admirably. I do not intend to move the amendment because the matter has already been discussed. However, before sitting down I should like to refer to one matter.
Lord Elton: I apologise for intervening. The noble Lord can speak only to a Motion. Therefore, he may withdraw his Motion after it has been put to the Committee but not before.
Lord Taverne: I stand corrected. I beg to move the amendment before I withdraw it. The only matter to
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which I draw the attention of the Committee is a report in today's Financial Times to the effect that Conservative and Liberal Democrat Peers have accused the Government of botching the Financial Services and Markets Bill and have united in fighting against it. I make it quite clear to the Committee that that report has no foundation and is incorrect.
By and large, we on this side of the Committee believe that this is a good Bill and we support it. We have argued, and will continue to argue, that parts of it can be improved. So far we have not supported the issues on which the Conservative opposition have called a Division. In time we may move amendments and hope that others from both sides of the Committee will support them. If we agree with an amendment moved by the Conservatives we may well support it. However, I make it absolutely clear that we have not joined forces against the Bill. Such a comment is unhelpful and wrong. I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 216 agreed to.
Clauses 217 to 219 agreed to.
Schedule 16 [The Ombudsman Scheme]:
Lord Sharmanmoved Amendment No. 247:
Page 258, line 23, after ("Authority") insert ("and the Treasury").
The noble Lord said: In rising to move Amendment No. 247 I should like to speak also to Amendments Nos. 248 and 249. This group of amendments concerns the establishment of the ombudsman scheme. Earlier this week the Minister told us that when he awoke in the middle of the night he frequently searched for words or phrases to improve the Bill. He may wish to know that when I wake in the middle of the night thinking about the Bill I am frequently confronted by images from "Jurassic Park". For those members of the Committee who are unfamiliar with "Jurassic Park", the film is about the re-creation of dinosaurs by a group of scientists. The security system to contain those dinosaurs is adequate as long as the people who are there at the moment remain. Once one has a change in personnel or a disgruntled personality the system breaks down and chaos ensues.
The reason for the analogy is that, as has been said on many occasions in this Chamber, this Bill creates an organisation of unparalleled size and power. The legislation is itself huge. The system of checks and balances which surrounds that organisation is absolutely vital, and that is the reason why we on these Benches have paid so much attention to it. The ombudsman scheme to be set up under the Bill is just another part of the system of checks and balances. For it to be effective, and for the marketplace to have confidence in it, the scheme must be independent and be seen to be independent.
It is worth pausing for one moment to consider the scale of the scheme. What is proposed is that eight ombudsmen be merged into one. There will be a budget of some £20 million and more than 400 employees. It is anticipated that they will deal

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with 200,000 telephone complaints and 30,000 written complaints annually. As the Bill stands, I do not believe that the scheme will meet the test of market confidence. The ombudsman scheme is just another part of the FSA. Schedule 16 provides that the FSA shall establish the scheme, appoint the ombudsman and receive its report. There is a total absence of any other party to the process.
The question one asks is: why bother? Why not simply provide that there should be another department of the FSA called "the ombudsman"? Amendment No. 247 provides that both the authority and the Treasury are to establish the scheme. Amendment No. 248 provides that both the authority and the Treasury are required to ensure that the ombudsman don the job properly. Amendment No. 249 requires the Treasury to lay before Parliament the reports which it receives. I believe that that is the minimum required for a sensible, independent ombudsman scheme which enjoys the necessary confidence of the market in the carrying out of its duties. I beg to move.
Lord Borrie: Following the earlier welcome remarks by the noble Lord, Lord Taverne, I hesitate to criticise an amendment tabled by the Liberal Democrats who have been so helpful, and not at all obstructive, in regard to this Bill. But I am not convinced by the argument of the noble Lord, Lord Sharman. The noble Lord said that, according to the schedule, the ombudsman appeared to be merely another part of FSA: he even said that the FSA would appoint the ombudsman. That is not so. Schedule 16 appoints a scheme operatcr—it is the FSA that makes the appointment—which is to be a body corporate quite separate from the FSA. Schedule 16(3) provides that the terms of appointment of the board of directors of the scheme operator,
"must be such as to secure their independence from the Authority in the operation of the scheme".
In other words, the scheme operator is a body interposed between the Financial Services Authority and the ombudsman. That is a common feature among private sector ombudsmen whose position has been set up recently, sometimes informally and sometimes by statute, in order to achieve the vital factor of independence of the ombudsman, ombudsmen or ombudspersons (if one wishes to use that phrase) who makes or make the decisions in disputes.
I hope that my noble friend Lord Bach will confirm that paragraph 3, which provides that the appointment of the board of directors of the scheme operator,
"must be such as to secure their independence from the Authority",
means that, as historically has been the case in the past 10 or 15 years when such schemes have been set up, a majority of the hoard will be completely independent of the people who provide the finance, resources and so on—in this case, the authority. Surely the vital matter is that the people who determine disputes—the ombudsmen—will be independent. The panel of ombudsmen is provided for in paragraph 4. The
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ombudsmen's independence is specified in paragraph 4 so that they and the body interposed between the authority and the ombudsmen are also independent. That vital factor is already well assured by Schedule 16. To use again that delightful word, this amendment is "otiose".
4.15 p.m.
Lord Elton: It is important that the scheme shall be seen to be, as well as being, effective; and that these people are seen to be, as well as being, independent. I wonder how the interposing of a body appointed by the FSA to appoint the ombudsman will secure the feeling that it is in some way insulated from the ombudsman. Presumably any unsatisfactory appointments made by the interposing body can result in discomfort for the interposing body or perhaps departure of some of its members.
The noble Lord, Lord Borrie, has great experience of these matters to which I defer. He referred to the independence of the "ombudspeople" (if that is the correct term). However, the provision as stated in paragraph 3 seems analogous to the independence of the editor of a newspaper wholly owned by a certain person of a certain political complexion. For that reason also there is need for greater insulation and distance.
Finally, the importance of the matter is even greater than was described by the noble Lord, Lord Sharman, who spoke so graphically of the release into the landscape of a tribe of lumbering and possibly fearsome creatures. That may not be the right analogy because the creatures will not be proactive. However, they will need restraint. They are localised in one place. Perhaps a nuclear fuel reprocessing organisation would be a better analogy. If we apply his analogy of people changing and disregarding the procedure set out on the face of the Bill, the result is incalculable damage. In nuclear terms, we have Chernobyl to consider.
It is not a small issue. I hope that the noble Lord will not be lightly dissuaded by the arguments which no doubt will be put to him in due course by the Government Front Bench.
Lord Lipsey: I do not know whether the noble Lord, Lord Sharman, will be persuaded by the Government's arguments. Perhaps I may try an argument of my own in the hope of persuading him that the amendment is indeed otiose. I wonder how many "otioses" we shall get through today!
I have been a director of one of the schemes to be abolished by the Bill, under the Personal Investment Authority. For the Personal Investment Authority ombudsman there is a separate board, the PIA Ombudsman Bureau, which happens to comprise directors, for the time being, of the Personal Investment Authority, so the independence is less than that under this Bill.
In these cases, I believe that practice is worth quite a lot of theory. Having been such a director, I know that the idea that we would in any sense interfere with

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the ombudsman's independence is completely theoretical. He would have our guts for garters, publicly and privately, if we did so. There are some issues where it is helpful to have a dialogue with the ombudsman, such as about the use of resources, and how many staff he requires for certain purposes. It is right that there should be a dialogue, as I am sure there will be under the provisions for the Financial Services Authority. No one has ever questioned that the ombudsman is properly independent under the arrangements in place. I believe, therefore, that it is not necessary—although I can see its attractions—to write on the face of the Bill the provision that the noble Lord, Lord Sharman, seeks.
Lord Jenkin of Roding: There is a great deal in the Bill about the need to protect consumers, much of which we have already debated.
I am sure that I am not alone in having received in my post this morning a press release from the Financial Services Authority with the heading, "Consumer help at the click of a button". It states:
"Baffled by all the different financial products available? Fed up with small print and jargon? Want to complain but don't know how?
"Don't despair. A new website section is now available to answer any questions you may have about your personal finances—no jargon, no gobbledegook, just easy-to-understand, totally impartial information at the click of a mouse".
So I tried to access the website. It is called "www.FSA.gov.uk/consumerhelp". I tried three times; but my computer was unable to find it. I talked to one of those extremely helpful people at 2001, our helpdesk, who also tried and said, "Yes, we have succeeded. You don't write 'consumerhelp' but simply 'consumer'". So I deleted the last four letters and—bingo!—it worked. When I eventually got on to the website, it was quite good; there was quite a lot of information. But it is not very encouraging if the FSA cannot get the address right. I do not know whether that is the sort of complaint that should go to the ombudsman.
The point I want to make about the noble Lord's amendment is this. The noble Lord, Lord Lipsey, referred to previous ombudsmen. In the insurance company I used to chair, we dealt with his ombudsman. We always felt that the post was independent of the regulator. When one had an extremely intransigent policyholder who could not possibly be persuaded that what we had done for him was perfectly reasonable, we always ended our letters in reply to the complaint by giving the ombudsman's address, saying that if the individual felt unable to accept the company's decision, he should feel entirely free to take up his complaint with the ombudsman.
I was somewhat sceptical about the scheme at first, but I came to recognise that it is quite good. Its independence is important—not only its independence from the companies the authority regulates, which goes without saying, but also its independence of the authority itself. Sometimes it might be said, "Perhaps
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the company did everything perfectly all right but the regulator should have stopped what it was doing, or should have ensured that it behaved properly".
I attach great importance to the independence of the ombudsman. I hope that when the Minister replies he will satisfy us that that will be the case. It is an important arm of consumer protection. It has worked quite well in the past. It needs to work even more effectively in the future.
The Earl of Onslow: We all know the old Latin tag, guis custodiet ipsos custodes—who guards the guards themselves? It is important that the ombudsman appears to be divorced from the authority setting up the post. During the water industry privatisation, it was originally proposed that the water authorities should police themselves. Reasonably, there was an uproar, especially in this House. Michael Howard changed his mind and set up a separate policing authority for the water companies.
Everyone agrees that the proposal in the Bill is a good idea. No one is saying that the person who will be proposed by the FSA will be anything other than a totally honourable, upright man who will do his job properly.
Lord Borrie: Does the noble Earl accept that the Bill does not provide that the authority will appoint the ombudsman?
The Earl of Onslow: I understand that he is indirectly appointed by the body which in turn is appointed. If I appoint the noble Lord, Lord Borrie, to do something and he appoints someone else to do something else, there is a direct link between the person he has appointed and myself. That is not to take away from the genius of the noble Lord, Lord Borrie, or the superb appointment he makes. All one is saying is that it appears to be wrong.
For the sake of argument, let us assume that I appoint the noble Lord, Lord Borrie, to do something and that he makes a totally out-of-character error of judgment and appoints my noble friend Lord Archer who appears—and I use that word totally advisedly—not to be as good as he is appointed to be. I then get the rocket, as does the noble Lord, Lord Borrie, because he has not been appointed by someone else. Appearances are so important. We want the system to work; we want the ombudsman to protect the consumer and we want him to be at arm's length.
That metaphor may have been a little hyperbolic, but I intended no insult. I merely illustrate what can go wrong and we do not want that to happen. We want the system to work.
Lord Bach: We want it to work and we believe that it will. We believe that the body's independence is already well established in practice as well as in theory.
I shall deal first with Amendments Nos. 247 and 248. They deal with paragraph (2) of Schedule 16, which sets out the FSA's key responsibilities in relation to the ombudsman scheme. Those

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responsibilities are, first, that the authority must establish the scheme manager to exercise the functions of the scheme; and, secondly, that the authority must take the necessary steps to ensure that the scheme operator is at all times capable of exercising those functions. The amendments seek to change paragraph (2) so that both the authority and the Treasury are placed under these obligations. At first blush, that does not seem an unattractive change. However, on reflection, we believe that it would be a mistake.
Schedule 16 places two key obligations on the authority; unequivocal statutory obligations. The Bill is clear and the authority must do these things. There is no get-out clause and no room for fudge. By splitting those obligations in some unspecified way, as the amendments propose, we would reduce the clarity of that responsibility. It would not be clear where the buck stopped and that could damage the commitment of the FSA to get an effective scheme up and running and to enable it to keep running.
Nor do we believe that it would be right to say that the amendments would increase accountability. On the contrary, they would confuse the lines of accountability. The Bill as drafted makes the authority responsible for setting up the scheme, and it makes the scheme operator and the chief ombudsman clearly accountable to the FSA.
However, we believe that the fear about independence is unreal. Schedule 16 also makes it clear that the board's independence from the authority must be secured by the terms of appointment and, importantly, the terms governing removal from office. As my noble friend Lord Borrie made clear, the scheme operator, not the FSA, will appoint the ombudsman again on terms consistent with their independence. Therefore, the independence of the scheme operator and of the ombudsman is written onto the face of the Bill.
Perhaps I may remind Members of the Committee that the present chairman of the Financial Services Ombudsman Scheme is no less than Mr Andreas Whittam Smith. It was perhaps ironic that the noble Lord, Lord Don, should use the parallel of a newspaper editor when debating this topic. Members will know well that a few years ago Mr Whittam Smith was a most distinguished and independent-minded editor of the Independent newspaper. He was appointed following a Nolan-style selection process on terms designed to secure independence. Following open competition, Walter Merricks was appointed as chief ombudsman. Anyone who has any dealings with him, or knows anything about him, will know that, to put it mildly, he is an independent-minded individual.
Lord Elton: The more the noble Lord makes us repose our confidence in the excellent characters of the people who will fill the post, the more he diminishes it in the machinery which those people will fill. I was hoping that he would persuade us that nothing could go wrong, whoever did the job. However, he is saying that nothing can go wrong because brilliant saints and
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wonderful geniuses are filling the jobs. I say nothing in denigration of them, but they are the worst possible examples he could choose.
Lord Bach: I do not believe that the noble Lord could have been listening carefully to what I was saying before I began my eulogy on the two individuals concerned. I was pointing out—and I thought that it was clear—that Schedule 16 makes it clear on the face of the Bill, which is significant, that the scheme is as independent as is sensible.
I turn to Amendment No. 249. It would have the effect of requiring the Treasury to lay before Parliament copies of reports it receives under paragraph (7). That paragraph does not appear to provide for any such reports to be made to the Treasury. Members of the Committee may consider that that goes to the heart of the matter and that the Bill should make provision for the Treasury and for Parliament to receive such reports. I have no doubt that that was one of the issues being addressed by the noble Lord, Lord Sharman. Indeed, that appears to be the intention behind Amendment No. 249.
We can understand the concern of Members of the Committee. Clearly, Parliament has a valid interest in what the ombudsman scheme gets up to, just as more generally it has an interest in the activities of the authority itself. However, the Bill sets up a clear line of accountability which we believe it would be wrong to confuse. The line runs from the scheme operator to the FSA and then further to the Treasury and to Parliament. The FSA has a responsibility for setting up the ombudsman scheme.
Both the scheme operator and the chief ombudsman report at least once a year to the FSA and those reports must be published. In turn, the FSA will be accountable to Treasury Ministers, who are of course accountable to Parliament. The FSA in its turn must make an annual report to the Treasury covering the discharge of its functions under the Bill. One of them is to set up a scheme and ensure that it can run effectively. That report must itself be laid before Parliament. That requirement is set out in Schedule 1, paragraph (10). We believe that the amendments would muddy the water. Furthermore, the scheme manager will be a company under the Companies Act and it will be obliged to publish a full report and accounts in accordance with relevant statutory requirements.
The Government are grateful to the noble Lord, Lord Sharman, for tabling the amendments because we have had a short and good debate on the important issue of the independence of the new scheme. We believe that there are protections on the face of the Bill and that, as my noble friend Lord Lipsey said, in the real world there is nothing for the noble Lord, Lord Sharman, to be concerned about.
Lord Sharman: I am grateful to the Minister for his reply. He adequately summarised my anxieties by saying that I am more concerned about the perception of independence than the actual activity of those charged with the duty of performing the role of

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ombudsman. We have touched on this matter in previous debates on the Bill. The purpose of legislation is not to provide for those who are carrying out the job at present; it is to provide for an ongoing situation. That is why I use the analogy of "Jurassic Park": when the scientists were good and friendly, nothing happened. That is my concern.
I would point out that the ombudsman operates from the same address as the FSA. That, prima facie, does not exactly make one think that he is independent. I can understand the noble Lord's response that the first two amendments that we tabled might cause a little confusion, but they were intended to add an independent thread to the appointments process. I, for one, endorse the comments made by the noble Earl, Lord Onslow, who made the point more elegantly than I did.
The chain of command is there. If one appoints a body to appoint someone, that person is appointed. This is wonderful, but out in the real world that is what happens. If I create a subsidiary of a business and that subsidiary appoints its chief executive, no one would consider that I had appointed him. My goodness! Therefore, I believe that a misperception exists and that is what market confidence is about. I accept that the final amendment in the group was not elegant in its drafting. It did not achieve what I sought to achieve.
The phrase in the Bill that concerns me is,
"publish[es]…[as] it considers appropriate".
I have forgotten the exact reference but I am sure that the noble Lord will remember it. The ombudsman will publish his annual report as he considers appropriate. I do not believe that that is adequate. I believe that there should be a compulsion to lay those reports before Parliament. Nevertheless, having listened carefully to what the noble Lord—
4.30 p.m.
Lord Elton: Before the noble Lord withdraws his amendment—I believe that that must have been the preface to withdrawing the amendment—I am anxious to be clear in my own mind. I presume that he will come back to the matter at a later stage. If that is the case, I should like to refer to something that the Minister said with regard to splitting the authority and the Treasury and putting them in a harness together. If the noble Lord were to bring back the amendment without "the authority" and have this matter stand clear of the ombudsman, from a different postal address and with the right website address functioning, then I would find it a much more attractive amendment. I hope that we shall see it again in that form.
The Earl of Onslow: Before the noble Lord continues, it seems to me that Members of the Committee have a perfectly genuine and real concern. I understand also that the Government believe that they have it right. Although I have a feeling that they may have it right, it does not look right. Can the noble Lord say, "I accept that concern has been raised. We
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shall have a little think about it again. I cannot promise to do anything but I shall look at it with an open mind"? That is the House of Lords at its best, and he is a good Minister.
Lord Bach: The noble Earl flatters easily and he flatters me even more easily than others. Of course, we shall do exactly as he says. Our doors are open to representations on this, as on any other, subject between now and Report. I must cover what I say by using one of the remarks that he made; that is, we do not commit ourselves to any change. I thank him for his contribution.
Lord Sharman: I was about to say that, having listened very carefully to the contributions of noble Lords in this short debate, for which I am grateful, nevertheless I want to consider the matter. We shall look carefully at the situation before perhaps we return to it on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 248 to 250 not moved.]
Schedule 16 agreed to.
Clauses 220 and 221 agreed to.
Clause 222 [Determination under the compulsory jurisdiction]:
Lord Saatchimoved Amendment No. 250ZA:
Page 114, line 13, leave out subsection (2) and insert—
("(2) The Ombudsman shall only make a determination in favour of a complainant where he is satisfied that the respondent has breached either or both of—

(a) the Authority's general rules;

(b) any relevant provision of the law.").

The noble Lord said: In moving Amendment No. 250ZA, I wish to speak also to the other amendments in our names in this group. It is also my pleasure to be able to tell the Committee that I believe that the super-ombudsman himself, Walter Merricks, is in the Chamber to hear our debate about his role.
I start by examining certain aspects of the workings of the ombudsman scheme. I believe that it might be of help to begin by trying to define in simple terms what the role of the ombudsman is supposed to be. I believe that, in principle, it is to provide a quick and cost-effective forum for settling disputes between firms and investors in order that investors may avoid incurring the time and expense of going to court to settle their disputes. That is surely well and good and we all applaud that. However, we believe that, in order to act fairly to both parties, the ombudsman should be bound by the same rules as a court. But the Bill does not describe the processes that the ombudsman will follow in that regard.
Clause 222(2) states that the ombudsman is to determine a complaint,
"by reference to what is, in [his] opinion, fair and reasonable in all the circumstances".
That does, indeed, sound reasonable. However, the problem with this formulation is that it would enable the ombudsman to uphold a complaint, even though a

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firm had observed all the FSA's rules and all the relevant legal provisions. That is potentially unfair to firms. In addition, it removes the level of certainty which firms should have when they devise their own procedures. Therefore, this first amendment in the group proposes that the ombudsman will uphold a complaint only where the respondent has breached either the FSA's rules or the relevant provisions of the law.
I now address our second amendment, Amendment No. 250A, and I shall speak also to Amendments Nos. 250B and 250D. I start with Amendment No. 250A, which relates also to Clause 222 and the method of determination of complaints by the ombudsman. I believe that it ad dresses a most important point and, I hope that the noble Lord will agree, a point of principle; that is, the imbalance that now exists in the Bill between the complainant and the authorised person who is the subject of the complaint.
I shall try to describe the imbalance. First, the complainant can choose whether or not to have a complaint dealt with under the ombudsman scheme. We find that in Clause 220(2)(a). On the other hand, the authorised person has no such choice. The scheme is compulsory and the firm must submit itself to it.
Secondly, once the ombudsman has determined the complaint, if the complainant does not like the determination, he can reject it and take the matter to court. Only the complainant can appeal to the courts. The company that is complained of has no such right. It is true that this non-binding nature of the determination of the ombudsman on the complainant is a feature also of some other existing ombudsman schemes. However, in those cases the schemes are voluntary. But under this proposed Act the ombudsman scheme will not be voluntary; it will be compulsory on authorised persons. Under those circumstances, we believe that it would be fairer to both parties if both were bound by the ombudsman's determination or if both could decide to reject the determination. That is the purpose of Amendments Nos. 250A and 250B.
I turn now to Amendment No. 250D. We find in Clause 224(3) that the ombudsman's rules,
"may not provide for the making of an award against the complainant n respect of the respondent's costs".
I imagine that the logic behind that provision is that access to the ombudsman should be without charge to the investor. However, participation in the ombudsman scheme is expensive for firms; for example, the PIA currently charges firms a fee of £500 whenever it receives a complaint from an investor relating to that particular firm. In addition, the firm's costs of investigating that complaint could also be substantial. There is no reason that we can see why the scheme rules should not provide that an award of costs may be made against a complainant where that complainant's claim is frivolous, vexatious or dishonest.
That may sound far-fetched but I can give the Committee an illustration. That was a case where a group of 10 investors made what turned out to be
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fraudulent complaints against a well-known firm which was put to substantial expense in gathering evidence to refute the claims. In such a case, we believe—and this amendment seeks to provide—that it would be appropriate for the ombudsman to have required the investors in that case to pay the firm's costs. I beg to move.
Lord Taverne: I wish to speak to Amendment No. 251 which stands in my name and that of my noble friends Lord Newby and Lord Sharman. Clause 224(4) seems to sit rather oddly with subsection (3) which states:
"Costs rules may not provide for the making of an award against the complainant in respect of the respondent's costs",
while subsection (4) states:
"But they may provide for the making of an award against the complainant in favour of the scheme operator, for the purpose of providing a contribution to resources deployed in dealing with the complaint".
I should like the Minister to answer that point because it seems to be a somewhat strange provision. I do not know what are the precedents for it. There are occasions on which professional bodies—for example, the Institute of Chartered Accountants—provide, in the case of disciplinary proceedings, that an order for costs may be made in favour of the costs incurred by the proceedings themselves. But that seems to be a very different case because the ombudsman is not a disciplinary body. He is taking up complaints.
If it is decided that he should not be able to make an order against the respondent, why should he then make an order in favour of himself? It is almost as though, when the funds run low, the ombudsman might be tempted to take a rather more severe view than he would do otherwise. It seems to me a surprising provision. Therefore, our amendment proposes that subsection (4) should be omitted. However, we await with interest the Minster's explanation.
4.45 p.m.
Lord Lipsey: I wish to speak in particular to Amendment No. 251 but, first, I want to make a few comments on the amendments proposed by the noble Lord, Lord Saatchi.
The purpose of an ombudsman scheme is to provide reassurance and redress for consumers and to have a process which is reasonably quick for the resolution of disputes. That is why, as the noble Lord, Lord Jenkin, said earlier, the scheme has won the support of the industry.
What I fear about the noble Lord's amendments is that if you take away from complainants the right to go to the court if they do not like the ombudsman's decision, they will be encouraged by legal advisers to go straight to the courts, ducking the ombudsman on the way. That will lead to a more expensive and less satisfactory procedure than would otherwise be the case.
I turn now to what seems to me to be the more substantive amendment before us; that is, Amendment No. 251, which removes the ombudsman's right to levy

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costs against complainants who are vexatious. I use that word for the purposes of simplicity. There are two questions to be asked about that. First, is it likely to lead to fewer vexatious complaints? I make the following points. First, there are not many. I have checked with the ombudsman's office. They really are a rarity.
Secondly, on the whole, people who are thinking about being vexatious are not put off by this kind of provision. They are out to cause bother or, as the noble Lord, Lord Saatchi, said, to commit fraud. If that is their purpose, this provision is not likely to put them off.
The third point is that a provision of this kind will add to costs and not reduce them, because in each case the ombudsman will have to decide whether it is a vexatious complaint. That will be another process in addition to the process of resolving the complaint. So it will add to the costs.
Finally, I do not believe that the ombudsman has put forward any proposal to make rules under this scheme. So he perhaps regards the power—to use the word for the fourth time this afternoon—as "otiose."
But it is not merely that it is otiose. It would have an ill effect. I believe that it would cause legitimate complainants to be reluctant to go to the ombudsman. We can imagine the scene. Someone has had a trusted IFA for some years and then he finds that he has been flogged something which was not appropriate for the purpose. That person then says, "Right, I am going off to the ombudsman to complain". The IFA says, "You do that. Did you know that the ombudsman has the right to award costs against you and you may lose not only the money you lost on my product but you may lose your costs? And I can tell you when I get to the ombudsman, with my knowledge of the industry against your rather feeble knowledge, I am going to make a case that you have been a vexatious complainant and it may cost you your home, your car and your estate".
I know that that is an empty threat if you have the degree of expertise that we have, perhaps, in this Chamber. But it is not an empty threat if you are Joe Soap. You are rather out of your depth in these waters anyway and you are looking to someone to sort out your complaint. Therefore, the effect of the proposal will not be to discourage vexatious complainants but to discourage genuine complaints, which will seriously weaken the scheme.
I beg the Minister to think very hard about this between now and Report stage. I hope that on reflection, looking again at the debate that has taken place in the industry and on consultation, he will agree that the Bill will be stronger with the amendment proposed.
Lord Elton: What protection or redress does the noble Lord, Lord Lipsey, suggest for perfectly honest practitioners against vexatiously expensive
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complainants of whom we have already heard—as I know myself—there are a number around in the market?
Lord Lipsey: The person against whom the complaint is made will not get redress under this clause anyway. The redress will go to the ombudsman himself. The ombudsman has made it very clear that he will ruthlessly strike out what appears to be a vexatious complaint at an early stage. It really does not need this provision.
Lord Bach: Before responding to the specific amendments, I want to make a few key points, perhaps, about the ombudsman scheme. In many ways, they echo what the noble Lord, Lord Saatchi, said, when he moved his first amendment.
It is important that I should do so because it may help us to see these interesting amendments in context. As he said, effectively the scheme is intended to provide a quick, cheap and informal mechanism for resolving disputes between authorised firms and consumers. Past experience shows the benefit for firms and consumers in having those arrangements. Traditionally, ombudsman schemes have accepted cases only where the firm and consumer concerned are in a stalemate position; and yet by referring the dispute to an independent third party, the vast majority—over 80 per cent—are resolved between the parties without the ombudsman having to take a decision one way or another.
So questions about who should be bound by the determinations and on what basis they will be reached, and the circumstances in which a complainant could be ordered to pay certain costs, must be seen against a background where those issues do not even arise in the vast majority of cases.
I turn to the amendments. Amendment No. 250ZA would alter the basis on which the ombudsman is to determine complaints. We have considered the matter carefully and we believe it right to require the ombudsman to determine cases on the basis of what is fair and reasonable in all the circumstances. Of course we would expect him to take the matters mentioned in the amendment into account where they were relevant. But we do not believe it is appropriate to be too prescriptive. This is not a court of law.
To ensure transparency, the ombudsman will be required to make a written statement of the reasons for his determination. He will, of course, be required to comply with Article 6 of the European Convention on Human Rights. I say that to the noble Lord, Lord Kingsland, with rather more confidence than the other day. However, it is the very point of an ombudsman scheme that it should be quick and informal. It would not be right to constrain the ombudsman by requiring a purely legalistic focus or a focus on general rules to the exclusion of everything else. Indeed, to do so could mean that he was unable to examine all the matters, such as delay or maladministration, relevant to a complaint. It is right to provide such an accessible and flexible means of consumer redress. Previous schemes have determined cases on the basis of what is fair and

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reasonable, and we do not believe that we should abandon that principle in setting up this new and important scheme.
Amendments Nos. 250A and 250B deal with the question of whether the ombudsman's decisions should be binding on the complainant. We do not believe that they should. In that respect, the new ombudsman scheme will again follow those it replaces. Those schemes are based on the premise that the decision is not binding on the complainant. They provide consumers with an alternative to court action, but they do not deprive them of their legal rights at any stage before they decide to accept the determination. We believe that, in providing for the new scheme, it would be wrong to design it in such a way as to put the complainant in a less favourable position than under the current schemes.
The ombudsman's decisions are of course binding on respondents. The purpose of the scheme is to provide consumers with a free and accessible means of redress where there has been wrongdoing to ensure that individuals without the vast resources and expertise available to some firms are treated fairly in the financial marketplace. A scheme that achieves that aim will underpin consumer confidence in financial markets and services. Were the ombudsman's decisions not binding on respondents, that objective would not be realised. The consumer could find himself, once again, faced with having to decide whether to pursue a case through the courts, which, we know, is frequently a long and expensive process.
Amendment No. 250C has not been spoken to. Amendments Nos. 250D and 251 pull the Government in different directions. On the one hand, Amendment No. 250D, spoken to by the noble Lord, Lord Saatchi, would allow for the ombudsman to make an award of a firm's costs against a consumer. On the other hand, Amendment No. 251, spoken to by the noble Lord, Lord Taverne, and by my noble friend Lord Lipsey would mean that it was not possible for the ombudsman to award any costs at all against a complainant, even where his behaviour had been improper, unreasonable or vexatious. Together, those amendments illustrate that the Bill probably—I emphasise that word—strikes the right balance at the present time.
It would not be right or desirable to provide for the ombudsman to award the respondent's costs against a complainant. The scheme is intended to provide consumers, many of whom in the real world simply do not have the resources to pursue a case through the courts, with a free means of redress. The respondent's costs will be outside the control of the ombudsman. To allow those costs to be awarded against the complainant would risk imposing heavy penalties or the perception just as importantly—that such penalties might be imposed on complainants, which might discourage them from properly using the scheme. That would run against the grain of what we are trying to achieve.
However, to protect against the possibility that consumers may misuse the scheme, the Bill as presently drafted allows, in limited circumstances, for the
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ombudsman to make an award of the scheme operator's costs against a complainant. That is an important balance which Amendment No. 251 would remove. It is important to remember that the ombudsman will normally be able to award costs against a complainant only when he has acted improperly or unreasonably, or has been responsible for an unreasonable delay. Consumers should be free to complain when they have not been treated fairly. The scheme could provide an accessible, free means of doing so. We agree that if the ombudsman were routinely to award costs when he found against the complainant, that could deter people with a legitimate grievance from seeking the redress to which they are entitled.
We do not believe that any such award would be made except in extreme cases and only after prior warnings had been given to the complainant and—what I am about to say now is also an important rider—only if it has been shown to be necessary in the light of experience for rules to have been made to allow it. Although we shall invite the noble Lord to withdraw Amendment No. 251, I want to make it clear that we want to consider the matter before Report stage. We should like to listen to representations if any noble Lord interested in the amendment wishes to make them.
As I have said, it is important that the provisions allowing for such awards to be made where the complainant's behaviour has been improper or unreasonable remain in the Bill. They provide an important and necessary safeguard against inappropriate use of the scheme. It would not be right for the Bill to allow consumers carte blanche to indulge in unreasonable behaviour. All the amendments would disturb arrangements that have been carefully designed to produce a scheme which safeguards consumers while, we hope, remaining fair to business. Significantly, they are also broadly similar to those under the existing schemes which firms have joined on a voluntary basis in the past. I therefore ask all noble Lords who have put their names to the amendments to consider not pressing them.
Lord Jenkin of Roding: Perhaps I may begin by making the representations for which the Minister has just asked. I have been reminding myself of the evidence given to the Joint Select Committee about the scheme by Mr Andreas Whittam Smith, acting as spokesman for the ombudsman. It so happens that Mr Whittam Smith and I had a passage of arms three or four years ago, where I sought the help of the Press Complaints Commission. It would be entirely wrong for me to take up the Committee's time in describing the circumstances.
Before I went to the Press Complaints Commission, I had clearly to agree that it was a complete alternative to suing the newspaper for libel. Once I had initiated a complaint with the Press Complaints Commission, I was, as I understood the matter, precluded from taking my case to the courts. I considered at some length wit h my legal adviser as to whether that was the right course

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of action in the circumstances. I was advised that the hassle of the courts would not be worth what I might get out of it.
I then had a long battle with the help of the Press Complaints Commission to get Mr Whittam Smith to issue an apology. I am happy to say that after some months his newspaper published an appropriate apology and that was the end of the matter. I cannot quite understand why it is right that someone who can be quite seriously damaged by a newspaper should have to give the kind of undertaking which complainants to the Press Complaints Commission have to give, whereas someone can go to the ombudsman and, if he does not receive the answer he wants from the ombudsman because under the Bill the ombudsman's decision is not to be regarded as final, he is then free to pursue his complaint in the courts.
It may well be that there are significant differences between the two and, obviously, one must not take the parallel too far. But it has always seemed slightly odd that the complainant, having failed to persuade the provider or authorised person that he has a justified complaint, having then failed to persuade the ombudsman that he has a justified complaint, may then continue to pursue his case through other channels at the cost, it seems, of the authorised person. I certainly believe that the amendment in the name of my noble friend on the Opposition Front Bench is one that requires careful consideration.
On the amendment spoken to by the noble Lord, Lord Taverne, I believe that to be a reasonable provision to retain in the Bill in view of the fairly extreme circumstances that the subsection requires before costs can be awarded against the complainant.
I listened to the noble Lord, Lord Lipsey, with some concern. He fears that this provision will deter genuine claimants. With the greatest respect, I do not recognise the circumstances that he describes. I have never met an authorised person, if I may so describe an insurance broker or some such person, who would even remotely behave in that way. Maybe such people exist, but there needs to be a sanction against the totally unreasonable and vexatious complainant. After all, the courts will act in that way, to the extent of ultimately barring someone from the proceedings in the court. If the Attorney-General is prepared to certify that someone is a vexatious litigant, such a person cannot attend the proceedings.
I am unsure why this limited power to award costs in the circumstances of unreasonable behaviour or unreasonable delay should have a bad effect. Perhaps the noble Lord will take that on board. I believe that the amendment of my noble friend is justified. I would hate to see subsection (4) removed because I believe it is a valuable discipline against unreasonable complainants.
5 p.m.
Lord Lipsey: Does the noble Lord accept that the reason he has not met such people is that he moves in highly respectable financial services circles? I
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commend to him the experience that I have of sitting on the disciplinary committee of the Personal Investment Authority. At the bottom end of the industry he will find people who are not of the character that he represents to the Committee.
Lord Donaldson of Lymington: I repudiate emphatically any suggestion that one should use the Press Complaints Commission as the yardstick for deciding what we should do in this scheme. That commission invented its own scheme. If relevant, I would happily join in the debate about the unnecessary omissions from that scheme. I merely state that is not the yardstick.
On the provision in Clause 224(4)(b), where costs can be awarded in favour of the scheme operator if the complainant is responsible for unreasonable delay, would it not be more appropriate to provide that his complaint should be dismissed? If he is responsible for unreasonable delay, I do not understand why everybody should be put to the trouble involved.
Lord Walker of Worcester: In support of the amendment in the name of my noble friend Lord Saatchi, the situation of an unauthorised person and a consumer involved in a procedure, where only one of them is bound by that procedure, is an uncomfortable one. The Minister's main argument appeared to be that consumers are small people with limited resources and authorised persons are large people with plenty of resources, although sometimes it could be the other way around. There are plenty of small insurance brokers and small financial advisers, who are perfectly honourable and who may have wealthy clients who are in dispute with them. In that situation, the ability to meet future legal costs is totally the other way around.
In my view it would be advantageous if the ombudsman could say to both sides, "If you wish to pursue my procedures the result will be binding on both sides". That could also result in many people seeking redress before the ombudsman before seeking redress in the courts because the cost would be small, the procedure speedy and they may achieve a quick result. In the event, plenty of people, perhaps against legal advice, may go to the ombudsman.
I hope it will not embarrass the noble Lord, Lord Taverne, if I support the Government in their opposition to his amendment. From his opening remarks this afternoon, I thought that there would be total agreement between the Government and the Liberal Democrats on all issues. However, I believe that the noble Lord, Lord Lipsey, was correct in his criticism of the potential effect of this. I hope that that amendment will be withdrawn.
Listening to the noble Lord, Lord Taverne, I was reminded of a letter written many years ago by AP Herbert of The Times, in which he said that the Liberal Party is as a herring: the backbone is to the left or to the right depending on which way you open it!
Lord Elton: The noble Lord has made it clear, as does the Bill, that the decision of the ombudsman is binding on the respondent. I understand that that is

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the case only if the respondent accepts the award. If the respondent goes to court, is there a provision in the Bill that makes this an alternative, or is it an additional recourse? I assume that it is not an alternative and that it is the expectation that the complainant will appeal against the award of the ombudsman. However, there is nothing to stop the complainant seeking an award against the practitioner, thus having two bites at the cherry. Surely there must be a protection for practitioners against such a situation.
As the award is not binding on the complainant, the result is that there will be two classes of decision within the compulsory jurisdiction. In many respects, although not in all, I take it that the ombudsman is expected to conduct himself—I speak of him collectively—as a court. To what extent are his—or its—decisions binding? To what extent must decisions taken on Wednesday be consistent with decisions taken on Tuesday? Is there any difference between a decision that has been accepted by the respondent and one that has not and, therefore, has not been put into force? Is the ombudsman bound by that when a similar case comes up in the future?
Such matters may seem small now, but they are cumulative. Down the years a considerable body of what we would otherwise call "case law" will build up, and it is important to know how that will build up.
Lord Donaldson of Lymington: The noble Lord, Lord Borrie, knows far more than I do about this. However, I know quite a lot about the bank ombudsman scheme and people do not have trial runs in front of the ombudsman. One may think that they would, but they do not. Furthermore, there is no doctrine of precedent. The operation is much more like that of a mediator. Indeed, as I understand it, in practice the banking ombudsman used to issue a draft award, so to speak, so that the complainant would know what would happen if he pursued the matter and usually that settled the issue one way or the other. The answer is that it works, although intellectually that may be a little surprising.
Lord Elton: The noble and learned Lord treats the experience of the banking ombudsman as though it were precedential. Can we be assured by the Government that this scheme will operate in the same way? If not, from where will that reassurance come?
Lord Borrie: Perhaps I can add a helpful point of fact. The insurance ombudsman, a position that has existed since 1982—a precursor of the other private sector ombudsmen—from time to time has published quite detailed case law in terms of loose-leafed volumes of decided cases. I understand that they are not strictly speaking precedents in the same way as decisions of the Court of Appeal under the Master of the Rolls are regarded as binding precedents, but they are useful both to later ombudsmen and to the industry.
Lord Elton: That is helpful. Does that mean that a complainant can look through the records and,
938
through the ombudsman, apply the same principle to his case as was applied in a decision taken three or four years ago?
Lord Borrie: The noble Lord is speculating about something I do not know. I know that there is availability and, therefore, a very bright complainant may well check. It may be that one of these days such information will be available on the Internet and many people will see these "precedents".
Lord Elton: The noble Lord mistakes me. In any case, I am asking the question in the presence of those who know everything: the Government and their advisers. The question I am asking is not whether people will appeal to previous cases for precedent, but whether in fact they will be entitled so to do. The noble Lord, Lord McIntosh, looks as though I am straining rather far, but I am not. I have been on the edge of these affairs. It is quite important for those making the decisions to know whether a decision made today will be held to under different circumstances on another occasion in the same way as is a court. The noble Lord may want to write to me about this; I would like an answer.
Lord Bach: I have nothing further to add to the letter I wrote; I should just be repeating myself. In each case, the ombudsman must be fair and reasonable, given the circumstances of the matter before him. If one of the parties to the case wants to refer to whether it is a "loose leaf" precedent or not, that will be his or her right. No doubt the ombudsman will take note of that, but he will decide the case on what is fair and reasonable to that particular complainant and respondent. That is all I want to say on the matter.
Lord Elton: The noble Lord said that in fact it will not form a precedent and presumably will not be justiciable as such. A precedent is something by which one is bound. I beg the noble Lord's pardon, it will not form a binding precedent and therefore it will not be justiciable as such, which is what I wanted to know.
Lord Saatchi: I am grateful to all noble Lords who have spoken in this short debate about the ombudsman. His role is probably one of the most important aspects of this Bill. Therefore, we shall want to come back to this issue on Report. The noble Lord, Lord Sharman, made some very interesting points as regards the ombudsman in relation to a previous group of amendments. I am grateful to noble Lords who have spoken to this point.
The striking thing about the very short debate that we have had is that one gets a slight impression that the Government's position is that the authorised persons—namely, the firms—are like naughty school children. There is a presumption that that is what they are. However, we should remember for a moment that it is the authorised persons who are paying for this scheme. It is their money that is being contributed to making the ombudsman scheme work. I believe that

939
we could give them a little more credit than has been apparent in some of the comments we have heard this afternoon.
Lord Bach: There is no way in which we believe the authorised person, to use the expression of the noble Lord, to be like a "naughty person" in all this. As I understand it, already many people will voluntarily become authorised and use any ombudsman scheme that is now available because it has been found to be a practical and satisfactory way of dealing with disputes. There is absolutely no bias set into this scheme at all. We want to see the problems sorted out as quickly, flexibly, and cheaply as possible.
Lord Saatchi: How can the Minister say that there is no bias? The two parties who come before the ombudsman—namely, the authorised person and the complainant—do not have the same rights. Therefore, bias is built into the structure of the Bill. Nevertheless, I shall not delay the Committee any longer. We shall return to this matter on Report. I am grateful for what noble Lords have said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 250A and 250B not moved.]
Clause 222 agreed to.
Clause 223 [Awards]:
[Amendment No. 250C not moved.]
Clause 223 agreed to.
Clause 224 [Costs]:
[Amendments Nos. 250D and 251 not moved.]
Clause 224 agreed to.
Clause 225 [Ombudsman's power to require information]:
Lord McIntosh of Haringeymoved Amendment No. 252:
Page 116, line 27, leave out subsection (6).
The noble Lord said: This amendment was spoken to with Amendment No. 89. I beg to move.
On Question, amendment agreed to.
Clause 225, as amended, agreed to.
Clauses 226 to 229 agreed to.
5.15 p.m.
Lord McIntosh of Haringeymoved Amendment No. 252VA:
After Clause 229, insert the following new clause—
OPEN-ENDED INVESTMENT COMPANIES
(" .—(1) In this Part "an open-ended investment company" means a collective investment scheme which satisfies both the property condition and the investment condition.
(2) The property condition is that the property belongs beneficially to, and is managed by or on behalf of, a body corporate ("BC") having as its purpose the investment of its funds with the aim of—

(a) spreading investment risk; and

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(b) giving its members the benefit of the results of the management of those funds by or on behalf of that body.

(3) The investment condition is that, in relation to BC, a reasonable investor would, if he were to participate in the scheme—

(a) expect that he would be able to realize, within a period appearing to him to be reasonable, his investment in the scheme (represented, at any given time, by the value of shares in, or securities of. BC held by him as a participant in the scheme); and

(b) be satisfied that his investment would be realized on a basis calculated wholly or mainly by reference to the value of property in respect of which the scheme makes arrangements.

(4) In determining whether the investment condition is satisfied, no account is to be taken of any actual or potential redemption or repurchase of shares or securities under—

(a) Chapter VII of Part V of the Companies Act 1985;

(b) Chapter VII of Part VI of the Companies (Northern Ireland) Order 1986;

(c) corresponding provisions in force in another EEA State; or

(d) provisions in force in a country or territory other than an EEA state which the Treasury have, by order, designated as corresponding provisions.

(5) The Treasury may by order amend the definition of "an open-ended investment company" for the purposes of this Part.").
The noble Lord said: The definition of an open-ended investment company, which I gather is called an "OEIC", has generated much discussion in the course of debates on this part of the Bill, and the Government have indicated at each stage that they are carefully considering the issue. I am pleased to say that, with the help of industry representatives, these deliberations have been successful and we now have a robust and well-targeted definition to put to the Committee. A draft reflecting the substantive changes brought about by the Government's amendment was shared with the main industry representative body, the Association of Unit Trusts and Investment Funds, which I understand is called AUTIF, and the FSA, both of which strongly welcomed it.
The difficulties in defining an OEIC have largely been in pitching the definition at the correct level to cover companies that need to be regulated as OEICs (and thus as collective investment schemes), without catching those that do not have the necessary characteristics. It is also important to get the definition right because it forms the foundation on which certain types of investment scheme can be formed and, together with the regulations to be made under Clause 256, which the Government have recently put out in draft form for consultation, will facilitate the development of innovative new investment products. In line with the wider aims of the Bill, this reflects the Government's desire to keep the UK at the leading edge of the highly competitive international collective investment schemes market and to continue to improve consumer choice in these products.
In his Budget speech last week, the Chancellor announced a wide-ranging review of UK institutional investment to be led by Paul Myners. The investment-raising opportunities for UK business are very much at the forefront of this. The possibilities opened up by the definition of an OEIC given by the Government's

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amendment reinforce this theme and form the foundation on which new ways of raising funds for UK business hero and abroad can be developed.
The definition given by these amendments is framed by reference to two tests, both of which must be satisfied in order for a scheme to be an OEIC; namely, the property condition and the investment condition. I promise that ore gets used to the word "OEIC" after a while.
The property condition carries forward tests in the existing clause. The investment condition, however, now has two limbs. The first relates to the rights of investors over the redemption of their shares or securities, the second to the expectations that a reasonable investor would have.
The important features that the amendments secure in the investment condition are, first, to tie into the definition the expectations of a reasonable investor in relation to the period within which he will be able to realise his investment, and, secondly, to stipulate that he would have to be satisfied that the amount so realised would be based on the value of the relevant scheme property. This brings in an element of judgment as to whether or not a company actually functions as an open-ended investment company.
The investment condition is concerned with actual or potential redemption of shares or securities. It is important here to exclude redemption outside the scope of an OEIC's activities as a collective investment scheme, so actual or potential redemptions under the Companies Act 1985 is excluded as are those under corresponding provisions in an EEA state. In order to be able to take into account redemption under provisions of non-EEA states, a new subsection (to be inserted by subsection (4)(d) of Amendment No. 252VA) gives the Treasury the power to designate, by order, such provisions. This will be subject to the negative resolution procedure. Subsection (5) gives the Treasury the power to amend the definition of o n OEIC for Part XVII purposes. This may be used in the future to enable the definition to respond rapidly to commercial developments or to rectify weaknesses in the current definition if they become apparent. As an order under this power could widen the scope of the definition, and thereby have broader implications, for example, for orders made by the Treasury, under the powers in Clause 256, it will be subject to affirmative resolution. Amendment No. 278E provides that orders made by the Treasury under this amendment changing the definition of an OEIC will be subject to the affirmative resolution procedure.
There are a number of opposition amendments in this group. It may be for the convenience of the Committee if Members opposite speak to them now. I can then respond rather than trying to anticipate what they might say. I beg to move.
Lord Elton: It would have been fascinating to hear what the noble Lord said in response to everything Members might Lave said but did not; however, we are to he denied that pleasure.
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Can the Minister say whether this amendment has been seen by the Delegated Powers and Deregulation Committee for its comments on the delegated powers therein? If so, which report can we find it in?
Lord McIntosh of Haringey: I have written to the noble Lord, Lord Alexander, as chairman of the Delegated Powers and Deregulation Committee, who expressed concern that we were sending him amendments in dribs and drabs for his comment. It is with his agreement and that of the committee that we shall be sending all the amendments together before Report stage so that they can be considered by the committee at one go, at its convenience, in time for the House to consider them on Report. We do not believe that this specific amendment has been put forward already. Therefore, although I have taken care to ensure that these are affirmative resolution procedures—I am sure that is what everyone wants—the amendment will be included in the more substantial batch which will go to the Delegated Powers and Deregulation Committee shortly.
Lord Elton: I am grateful to the Minister and am reassured by the level at which he is putting in these powers. Can I also be reassured that if, by any chance, the committee were to be critical of one or other of the amendments—there are many—we would be in order to table amendments supportive of that, even though it would not have been possible to give notice, as is normal, in Committee that we were planning so to do because we would not know what the criticisms were?
Lord McIntosh of Haringey: There is nothing in procedure or in propriety which would stop the noble Lord from doing that.
Lord Kingsland: By Amendment No. 252VA the Government are altering the definition of "open-ended investment companies". These are the only bodies corporate which constitute collective investment schemes and so are subject to the extra marketing restrictions on authorised persons contained in Clause 231; to the requirement for the manager to be authorised under the Bill; and to United Kingdom offshore funds tax legislation which treats capital gains as if they were income.
The substantive part of the amendment seeks to change the definition of when the company is to be regarded as open-ended. The Government have accepted that, unless there is an express right to redeem, redemptions made should not make the investment company open-ended unless the redemptions are at the option of the investor. As the Minister is aware, the Government consistently refused our amendments to this effect in another place, even though this was exactly what the UCITS directive provided.
We, the Opposition, welcome the new clause, subject to one important caveat, which I shall explain in a moment. The clause appears to provide a much more flexible and forward-looking definition of open-ended investment schemes. It should allow the

943
establishment in the United Kingdom of a greater variety of products, thereby enhancing the competitive position of the United Kingdom as a place in which to operate such schemes.
The ability to develop new products is, as Members of the Committee are well aware, of vital importance to the United Kingdom investment funds industry if it is to respond to the changing needs of investors and maximise its potential for international growth. We would welcome the Minister's confirmation that these provisions are intended to encourage innovation and development, already well established in other jurisdictions, of authorised investment companies where redemption periods may vary. Indeed, an "investment company with variable capital" may well be a more accurate description of such companies than is contained in the present title.
There are concerns that the wording in subsection (3)(a) could, notwithstanding the exemptions in subsection (4), have the effect of bringing within the definition a closed-ended company with a finite life. The example might be of a company set up for a fixed period of 10 years, at which point it would be liquidated. An investor who invested in such a company in year nine would have a reasonable expectation that he would be able to realise his investment within a year, which would be a period appearing reasonable to him.
That could have unexpected consequences for tax status, for example. Would that company be regarded as open-ended under the proposed definition? We would welcome clarification on that point before Report stage. One way of avoiding this possibly unintended effect may be to refer in subsection (3)(a), to the realisation of the investment being, "at the request of the investor", rather than as a result of a corporate decision which was known in advance. We would also welcome confirmation that the new definition will allow scope for a wider range of authorised funds which are intended for domestic consumption and which do not seek to benefit from the UCITS passport.
With that caveat in mind, it will not be necessary for us to move Amendments Nos. 252XA, 252A, 252AA, 252AB and 252AC. Amendment No. 252AD concerns the definition of "operator". The current definition, which is the same as that in the Financial Services Act, covers unit trust schemes with a separate trustee and open-ended investment companies; but it does not cover other types of collective investment scheme. The identification of who is the operator is important for the purposes of the definition of a collective investment scheme in Clause 229, and for determining whether someone is carrying on a regulated activity which includes establishing and operating a collective investment scheme in accordance with paragraph (8) of Schedule 2.
Finally, I turn to Amendment No. 254YK. As the Committee is aware, Clause 264 of the Bill contemplates individually recognised overseas schemes becoming recognised schemes. The provisions of the clause are unclear as to whether such schemes
944
must have a trustee or depository. The amendment is intended to make it clear that, if the scheme takes the form of an open-ended investment company, it must have a depository; and if the scheme takes some other form, it must have a trustee or depository. That would be consistent with good market practice and would be for the protection of consumers.
Lord McIntosh of Haringey: I can give the noble Lord the assurance he seeks which will enable him not to move the amendments whose numbers he listed. It is not the case that the Bill provides only that redemption should be at the request of the shareholder. Introducing the requirement that redemption of shares must always be at the request of the shareholder would narrow the definition to an unacceptable degree. A company could be open-ended if the redemption was initiated by the company provided that there was an expectation that this would occur. That is what is provided for in the new clause.
In relation to limited life companies, again I can put the noble Lord's mind at rest. The answer to his point on the fixed life company in the last few months of its life is that the definition we proposed is based on the overall impression that the reasonable investor would get when he is considering investing in it. The investment condition operates in relation to the company itself. It does not concern a particular point in time at the end of the company's life. Focusing on that particular point in time does not give an impression of the nature of the company; it is the nature of the company that counts as far as concerns the definition in the new clause.
I hope that that enables me to speak only to Amendments Nos. 252AD and 252YK, to which the noble Lord referred. As regards Amendment No. 252AD, this point was brought up in the other place. I believe that the concern here is that in the case of collective investment schemes that are neither OEICs nor unit trusts, the term "operator" is not defined. The amendment proposes a definition.
We feel that it is unwise to speculate on the nature of schemes constituted under non-UK law. It is far from clear that the definition proposed would be appropriate in any given case, given that in subsection (4) of the amendment we need to cover all of the possibilities covered by Part V of the Companies Act 1985 in this country, the Companies (Northern Ireland) Order 1986, provisions in another EEA state or provisions in force in a country other than in the EEA which the Treasury has designated for corresponding provisions.
In any event, the operator of a scheme will generally be apparent from the conduct of the scheme and the natural meaning of the word itself. Furthermore, when dealing with unfamiliar arrangements, we believe that this is the best approach with which to address the question rather than a definition which might be defective and, indeed, might not be robust as the international implications of OEICs develop.

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Amendment No. 254YK also came before the Committee in another place. It is difficult to specify precisely the structures under which non-UK, non-EEA schemes will operate. Although generally they will have trustees or depositories, this will not always be the case, and exceptionally a scheme without these may be fit for recognition by the FSA. We wish to retain this flexibility for recognised schemes, but it will in no sense be allowed to diminish the investor protection considerations applied when recognising such schemes.
5.30 p.m.
Lord Stewartby: Perhaps I may ask the Minister whether subsection (5) of the new clause proposed in the government amendment regarding the Treasury's power to amend the definition is only a general precaution against changing patterns in the marketplace. Alternatively, does it presage any specific changes?
Lord McIntosh of Haringey: The subsection has been written in because we intend to move towards a home-state base for all such schemes under EEA law. At the moment, we have a host-state based system in many countries. The firm intention of the EEA is to move to home-state systems. However, the speed at which that is done and the differences between countries that have reached one or other stage of the process means that it might be necessary, on occasion, for the Treasury to make amendments to the definition to reflect the changing position. When we reach that home-state base, then no such changes will be necessary.
Lord Stewartby: Should I take it that the Government do not expect significant changes other than those which the Minister has just mentioned?
Lord McIntosh of Haringey: That is correct.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Strabolgi): I have informed the Committee that, if Amendment No. 252WA is agreed, I shall not be able to call Amendments Nos. 252XA to 252AC inclusive.
Lord McIntoshmoved Amendment No. 252WA:
Page 118, line 6, leave out subsections (2) and (3).
On Question, amendment agreed to.
[Amendments Nos. 252XA to 252AC not moved.]
[Amendment No. 252AD not moved.]
Clause 230, as amended, agreed to.
Clause 231 [Restrictions on promotion]:
Lord Kingslandmoved Amendment No. 252B:
Page 119, line 10, leave out from ("communicate") to end of line 11 and insert ("to a person in the United Kingdom—

(a) an invitation to participate in a collective investment scheme; or

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(b) information which is intended or might reasonably be presumed to be intended to induce any person to do so.").

The noble Lord said: Before I turn to the amendment, perhaps I may say a few words to the Minister with respect to his last intervention concerning Amendment No. 252VA. I thank the Minister very much indeed for his words. His contribution appeared to be most helpful, but I shall need to read the text in Hansard to be sure that all the points I raised were satisfactorily covered.
I beg to move Amendment No. 252B. Clause 231 imposes special restrictions on the marketing of collective investment schemes. As it stands, the prohibition applies to even non-UK branches of an authorised person and even in relation to investors outside the UK. We wish to make the same amendments to the prohibition as we propose for financial promotion generally.
Mrs Melanie Johnson, the Economic Secretary and Member of another place, said in Committee in another place that she had in fact begun to realise that marketing restrictions applicable to authorised persons under Clause 231 do not need to be as wide as those applicable to non-authorised persons under Clause 19. This is why the amendment restricts the prohibition to communications,
"to a person in the United Kingdom".
This restriction follows the existing rule. In another place, Members of the Official Opposition tried several times to persuade the Minister that it would damage United Kingdom competitiveness if the local regulator allowed the marketing of collective investment schemes to particular categories of investor not allowed by the authority—for example, typically high-networth individuals. Thus, the only firms which could not market the schemes to them were authorised persons.
The prohibition applies to all authorised persons, not only United Kingdom firms. Why should non-United Kingdom firms which establish a branch in the United Kingdom—perhaps using the passport—have to be subject to a worldwide prohibition on marketing investment funds to prohibited categories of investor from the United Kingdom branch? In addition, if the collective investment scheme that they want to market is actually established in the United Kingdom—typically an English limited partnership—the non-United Kingdom firm cannot market it from any branch anywhere in the world. That goes, perhaps, just a shade over the top.
The imposition of the worldwide prohibition is likely to induce United Kingdom or non-United Kingdom authorised persons to use an offshore group company—for example, a special purpose subsidiary—to market the collective investment scheme to prohibited categories of investors outside the UK. It really does not seem to do anyone any good to force this step to be taken and thus to incur perhaps substantial expenses.

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As far as concerns Amendment No. 252C, again this makes a similar amendment to the special restrictions on promoting collective investment schemes as the amendment we proposed to the general prohibition on financial promotion marketing in Clause 19.
Amendment No. 252D relates to Clause 231(5) and the exemption from the prohibition in Clause 231 for promotions otherwise than to the general public. Amendment No. 252D removes the uncertain concept of "the general public" and allows instead promotion to "persons of specified descriptions".
Clause 231(7) elaborates on what is meant by the term,
"Promotion otherwise than to the general public",
and introduces a further uncertain category of,
"persons for whom participation would be unsuitable".
This amendment seeks to give the authority greater flexibility in determining which types of unauthorised collective investment scheme can be promoted to identified categories of persons without having to be concerned as to whether those categories of persons may constitute the general public.
5.45 p.m.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Kingsland, for the way in which he has introduced his amendments, which I shall deal with in turn.
Amendment No. 252B would have a number of adverse effects. First, it would remove the prohibition on the communication of "inducements" and replace it with a prohibition on the communication of,
"information which is intended or might reasonably be presumed to be intended to be acted on by a person".
"Inducement" was introduced into what is now Clause 231 in another place, at the same stage that it was brought into the general financial promotion rules of Clause 19. It is therefore consistent with that. The Government have outlined the policy behind "inducement" on several occasions. The paper Financial Promotion—Second Consultation Document issued last October indicated that the term includes a degree of incitement, and does not apply to purely factual communications which contain no incitement. However, as indicated in the discussions on Clause 19, we would appreciate a further opportunity to review whether the policy here should be clarified. We may also bring amendments in relation to the "inducement" question here at Report stage.
Secondly, the amendment would reduce the territorial scope of the communications to be prohibited to those communicated to a person in the United Kingdom. This is unnecessary as the Government have already announced that they intend to introduce a "directed at" test in secondary legislation, on which we also consulted through the October 1999 Financial Promotion consultation document. Furthermore, it is important that the rules are capable of addressing promotions out of the
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United Kingdom. For example, the Government have important European obligations in relation to the marketing of collective investment schemes, and this amendment would prevent them from being honoured.
We have had representations on the issue of outward promotion, notably from the British Venture Capital Association. It has emphasised the importance of the international competitiveness of the UK collective investment schemes not just for the financial services sector but also in enabling UK business to access overseas funds. The Government understand this, but compliance with our European obligations is essential—not respecting these would invite retaliatory action that would have a substantial economic and political cost.
The amendment that the Government are bringing forward, on the other hand, allows us to balance our obligations with the need for international competitiveness. Although we must currently prohibit certain outward promotions, we must be able to adapt our rules when to do so becomes appropriate, for example, when EU law and home state regulation have changed as we expect they might do. This comes back to the point that was properly raised by the noble Lord, Lord Stewartby. The opposition amendment allows neither of these to happen.
Thirdly, the opposition amendment lacks the flexibility of the Government's preferred approach, a necessary quality of a regime required to deal quickly with international and technological developments. It will be easier to cut back a wide scope, for example, taking account of general moves to home state regulation of collective investment schemes, than to specify a narrow scope in primary legislation.
If we are to deal with new, and increasingly sophisticated, means of communication, we do not see any alternative to pitching the scope of the prohibition so that we can move to meet the requirements of the times by using secondary legislation. In this way we shall be able to take account of any European moves to increase the range of collective investment schemes which benefit from the product passport (and in respect of which we will have to ensure that outward promotions are prohibited). Even if we took the approach of getting the extent of the prohibition just right as matters currently stand, we would set in stone a system of controls that could be out of date even before the Bill comes into force. I hope that the Opposition will withdraw Amendment No. 252B, particularly given my assurances with regard to secondary legislation and the further thought to be given to the question of "inducement".
Amendment No. 252C has a similar effect to the territorial impact of Amendment No. 252B and I hope that it will not be pressed. Amendments Nos. 252D and 253A would allow FSA rules to override the general promotion prohibition in subsection (1) of the clause in the case of promotions to "specified descriptions of persons" rather than promotions,
"otherwise than to the general public".

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The clause as it stands allows FSA rules to specify persons or groups of persons, so in this sense the amendment adds nothing. Furthermore, it introduces the prospect of exempting promotions that are to the general public. That the prohibition should apply to promotions to the general public—except where the scheme is authorised or recognised—is a cornerstone of government policy on the regulation of collective investment schemes. The current clause achieves this by setting out in subsection (7) precisely what is meant by,
"promotion otherwise than to the general public".
I turn to government Amendment No. 253. Clause 231 contains the basic promotion prohibition for collective investment schemes by authorised persons, and some exemptions from it. The prohibition does not apply to the promotion of authorised or recognised schemes, nor to promotions originating outside the UK unless they are capable of having an effect in the UK
The purposes of the Government amendment are to allow UK firma to remain fully competitive in the international collective investment schemes market; and to allow the territorial scope of the prohibition to take full account of future international and technological developments, for example, in the field of electronic commerce. The amendment enables the Treasury to specify further circumstances in which the prohibition does not apply. In particular, it can specify that the prohibition does not apply to specified descriptions of communications; communications originating in a specified country or territory outside the United Kingdom; those originating in a specified group or description of countries or territories (for example, EEA states); or any communication originating outside the United Kingdom. These are not cumulative; clearly, they are alternatives.
The first case could cover, for example, promotions of specified unauthorised schemes, such as certain venture capital funds originating in the United Kingdom which could not be promoted to the UK public but which are allowed by the regulatory authorities in the target country. An order under this amendment could enable such schemes to raise funds abroad and compete with non-UK schemes in those markets. This order-making power will address the concerns expressed to the Government by industry representative groups such as the British Venture Capital Association over UK schemes' international competitiveness and the ability of UK business to raise money abroad.
The general prohibition applies in relation to promotions of collective investment schemes by authorised persons originating outside the United Kingdom if they are capable of having an effect here. The final three cases mentioned allow the prohibition to be lifted if this becomes appropriate. For example, as I have already said, EU legislation could move to a full home state regime for these schemes, in which case an order specifying communications originating in EU states may become necessary. But as I explained when we debated the general financial promotion rules in Clause 19, the EU has not yet made this move and we
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cannot afford to leave anyone unprotected in the mean time. Until a full home state regime exists in Europe and all member states have adequate regulatory regimes for the purpose, we cannot unilaterally lift all prohibitions on outward promotions.
The final line of the amendment enables the Treasury to repeal the condition in Clause 231 that the prohibition applies only to communications originating outside the UK if they are capable of having an effect here. This may be necessary if an order disapplying the prohibition to all communications from outside the UK became appropriate, making the "having an effect in the UK" condition redundant.
Lord Stewartby: I wish to comment on one or two aspects of the drafting of the clause which has become a little more complicated since the introduction of Amendment No. 253, to which the noble Lord has just spoken.
Clause 231(1) is a blanket statement which the remainder of the clause goes on to limit in a substantial way. It is likely to be limited even more if the Treasury makes orders under the new subsections (5A) and (5B). Subsections (1) and (2) are a single sentence. Subsection (2) is, in many ways, the more important part because the exemptions are a large part of the total. If the language of the clause has not yet reached its final form, perhaps the Minister will consider whether it would be better to run those two subsections together.
The Minister partly answered my second point when he said that the four different categories in paragraphs (a) to (d) of subsection (5B) of his amendment are alternatives. What is meant by,
"a country or territory which falls within a specified description of country or territory outside the United Kingdom".
and how is that not covered by either paragraphs (b) or (d)?
In relation to subsection (3), the Minister gave an explanation of the Treasury's ability to repeal that by order—which I shall have to read tomorrow in the written text—but, again, is this something which is imminent?
Lord Jenkin of Roding: Before the Minister replies, perhaps I may ask him a question. Presumably subsection (5C), to which my noble friend Lord Stewartby referred, will be included in the report to the Delegated Powers and Deregulation Committee. Is it intended that this should be subject to an affirmative or negative resolution procedure? It will change the Bill; in its own way, it is a Henry VIII clause. It would be helpful if the Minister could give an indication of the Government's intentions.
Lord McIntosh of Haringey: Perhaps I may start with the point made by the noble Lord, Lord Jenkin. Yes, of course it will be included in the submission to the Delegated Powers and Deregulation Committee. It is too early to say whether we shall recommend or the committee will require that it should be subject to

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affirmative resolution. With the change from host state to home state regimes, this is a time-limited exercise. The horrific complication of the language which I perfectly well recognise—is required because we are in the middle of that changing process and we have to legislate now.
The noble Lord asked me the significance of subsection (5B) and whether it would be enough to have a specified description of countries. We want to be as precise as we can and aim at recognised groups—for example, all EEA countries. We could, of course, have a specified description but—although still necessary—it would be less helpful than being as precise as we are in paragraphs (b), (c) and (d).
The repeal of subsection (3) is not imminent. Although it is a time-bound process, it is not one in which the end is in sight, or even in which the time-scale is known. The noble Lord, Lord Stewartby, made some interesting points about the drafting of the earlier parts of the clause and about perhaps combining subsections (1) and (2). I should like to think about that to see whether it is feasible. I shall write to the noble Lord about that. I am sure that I will be presented with all kinds of reasons why it is not feasible, but that does not deter me from attempting to explain it to the noble Lord.
Lord Kingsland: I thank the Minister for his very full response to my amendment. It gave me some comfort, but not by any means complete comfort. I shall look at the transcript in Hansard and consider what further initiatives I may take at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 252C and 252D not moved.]
Lord McIntosh of Haringeymoved Amendment No. 253:
Page 119, line 25, at end insert—
("(5A) The Treasury may by order specify circumstances in which subsection (1) does not apply.
(5B) An order under subsection (5A) may, in particular, provide that subsection (1) does not apply in relation to communications—

(a) of a specified description;

(b) originating in a specified country or territory outside the United Kingdom;

(c) originating in a country or territory which falls within a specified description of country or territory outside the United Kingdom; or

(d) originating outside the United Kingdom.

(5C) The Treasury may by order repeal subsection (3).").
On Question, amendment agreed to.
[Amendment No. 253A not moved.]
Clause 231, as amended, agreed to.
Clause 232 [Single property schemes]:
On Question, Whether Clause 232 shall stand part of the Bill?
Lord Jenkin of Roding: Before we decide whether Clause 232 should stand part of the Bill, I should like
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to ask the Minister a question. I apologise to the noble Lord—I should have given him notice of this—but it is a fairly simple question. Clause 232 gives the Treasury power to exempt single property schemes from Clause 231(1). I was aware some years ago that considerable efforts were made to try to "securitise", I think was the expression, individual commercial properties with a view to making them more marketable. My impression at the time was that they never got off the ground; there were no successful moves in that direction. Are the Government anticipating that this power of exemption is likely to be used in the near future? What circumstances have prompted the Government to include this clause?
It seems quite right that they should be exempted as they will be investments directed at a very special class of investor. I can understand that. I hope that normal members of the public will be a bit chary about going into that kind of thing. But none the less, given that that is the case, are the Government contemplating an exemption order fairly soon?
Lord McIntosh of Haringey: This provision has been in legislation in almost identical terms since the Financial Services Act 1986. As the noble Lord, Lord Jenkin, said, it has not worked very well. We have no particular knowledge to suggest that it will work any better in the future, but we thought we should carry forward the provision in case it does work and we need to make the exemption.
Lord Jenkin of Roding: I thank the Minister for that reply.
Clause 232 agreed to.
Clauses 233 and 234 agreed to.
Clause 235 [Applications for authorisation of unit trust schemes]:
Lord Kingslandmoved Amendment No. 253B:
Page 120, line 36, after ("information") insert ("or documents").
The noble Lord said: In moving Amendment No. 253B, I shall speak also to my other amendments in the group.
The amendment relates to the requirement in Clause 236(1)(c) that an application for authorisation of a unit trust under Clause 235 must include a copy of the trust deed and a certificate signed by a solicitor that the trustee complies with the authority's regulations. This requirement, apparently, has its history in the procedures adopted by the Department of Trade and Industry prior to the Financial Services Act. In our view, it would be better and more flexible for the Bill to allow the authority to stipulate its requirements for authorisation under Clause 235(3), rather than including a requirement of this kind, which may not always be appropriate, on the face of the Bill.
Amendments Nos. 254A and 254C relate to the same basic proposition that the UCITS European directive requirement that unit holders must have a right to repurchase their units, which is interpreted by the authority as requiring a redemption date once every two weeks, should only be required to apply to

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UCITS qualifying unit trusts. That would then allow, assuming the authority so permitted, authorised unit trusts with limited redemption rights or redemption rights subject to conditions. An example would be an authorised unit trust established for stakeholder pension purposes, such as a pooled pension investment.
At present, the authority takes the view that an authorised securities fund cannot be established as a pooled pension investment because, in order to satisfy the pension requirements, the investor must accept restrictions on his ability to redeem. An authorised unit trust established as a feeder fund can, it appears, be established as a pooled pension investment. But that adds another fund layer to the structure. It is therefore plainly inefficient. These amendments would allow an authorised securities-type fund to be established as a pooled pension investment with restrictions on redemption consistent with the requirements for pensions. I beg to move.
6 p.m.
Lord McIntosh of Haringey: I do not recognise what the noble Lord saying as relating to Amendment No. 253B, which seeks to add the words "or documents" to "information". I am a little taken aback.
Lord Kingsland: I am speaking to Clause 236, page 121, line 19.
Lord McIntosh of Haringey: That is in the next grouping.
Lord Kingsland: I beg the noble Lord's pardon and indeed the Committee's pardon.
Lord Strabolgi: The amendment before the Committee is Amendment No. 253B.
Lord Kingsland: I thank the noble Lord the Deputy Chairman for that intervention. I have already spoken to that opening amendment. But I am speaking also to other amendments.
Lord McIntosh of Haringey: I shall speak to my amendments in the group and see whether I can keep up with the noble Lord.
Lord Kingsland: We are extremely keen to get on with the Bill.
Lord McIntosh of Haringey: The Front Bench is!
Amendment No. 253B would add the words "or documents" after the word "information". It is unnecessary as the term "information" is used in its general sense and includes documents. "Information" means information whether or not in a document. "Document" means recorded information.
Amendment No. 254A would remove from the authorisation procedure the requirement for a unit trust scheme to submit a copy of its trust deed and certification from a solicitor that the deed complies with the rules. The effect of the amendment would be
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to shift a considerable burden to the FSA and away from the scheme itself. While the Government are keen to ensure that costs of compliance with authorisation and regulation requirements are kept to a minimum, certain precautions have to be taken by the providers of investment products. These should include such basic due diligence as ensuring that the trust deed—at the heart of a unit trust—complies with the rules governing it. This can be done adequately only by an appropriately qualified professional, and it is right that those responsible for the unit trust should ensure that it is undertaken.
Amendment No. 254C reflects amendments raising similar issues that were put forward in another place. As Clause 236(9) stands, one of the requirements that must be satisfied before a unit trust can be authorised is that,
"participants must be entitled to have their units redeemed in accordance with the scheme at a price…related to the net value of the property to which the units relate; and…determines in accordance with the scheme".
The effect of the amendment would be to change t he focus of this authorisation requirement so that a person's entitlement to have his units redeemed would be dependent on what was said in the FSA's rules. It would also move away from the need for there to be an entitlement to redeem units and simply leave it that a person should be "be able to realise" his investment in accordance with the FSA's rules.
As I understand it, the intention here is to draw a distinction between authorised schemes covered by the UCITS directive and those which are not. Perhaps I may deal first with UCITS schemes. It is essential for compliance with the directive that the investor should be entitled to have his investment redeemed on request. For that purpose, realising units on exchange also counts, so the circumstances in subsection (1) must be provided for. In any event, I cannot see why the noble Lord, Lord Kingsland, does not want subsection (10), which provides an additional means of meeting the requirement for authorisation set out in subsection (9). If subsection (10) were deleted, the noble Lord would be reducing people's options for obtaining authorisation.
I turn now to non-UCITS schemes. I have to say that the Government think that the existing wording already provides the kind of flexibility which the noble Lord seeks. All that subsection (9) currently says is that a unit holder must be "entitled" to have his units redeemed. That must be right. The subsection does not say anything about the time within which that entitlement can be exercised, so there is already built into the existing provisions considerable flexibility as to the time within which redemption make take place. It is then for the FSA to decide appropriate redemption periods for any particular type of unit trust scheme. Amendment No. 254C would add nothing to the effect of the existing provision. I hope that that will give the noble Lord some comfort.
Quite apart from the fact that this amendment is unnecessary, it would remove the requirement in the case of an authorised unit trust for the participants to be able to have their units redeemed at a price related

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to the value of a scheme's property. This is the very nature of an authorised trust and a feature that we think is so fundamental that it must appear in primary legislation. It is not sufficient for redemption to be "in accordance with the scheme". The scheme could itself be defective in this sense.
The purpose of the amendment was described in the other place as allowing for the authorisation of non-UCITS schemes—that is, those that are outside the Undertaking for Collective Investments in Transferable securities—because they allow more flexible redemption conditions. However, the amendment would go too far and allow, for example, redemption at inappropriately long intervals. That is inconsistent with the aim of consumer protection. Adequate flexibility exists.
I am not sure whether the noble Lord has yet spoken to Amendments Nos. 254G, 254RA and 254RB, which are in the same group. If he would like to speak to them, I shall then respond.
Lord Taverne: Before the noble Lord, Lord Kingsland, speaks to the other amendments, perhaps I may say that the Minister's reply to the amendments reminds me—I cannot forbear to mention it—of some remarks made by the noble Lord, Lord Hayhoe, in a debate some years ago. He explained that when he first became a Minister of State, during proceedings on a very complicated Finance Bill he duly read out his brief. He was congratulated on the clarity of his exposition and later discovered that he had actually read out his brief from the wrong clause. That throws a certain amount of doubt on the new rule of interpretation whereby one can refer to Hansard in elucidating the meaning of statutes.
Lord Jenkin of Roding: I cannot resist the temptation of reminding the Committee of the occasion when I was debating in another place with the late Lord Lever. He was Financial Secretary and I was a shadow spokesman and precisely the same happened. I moved an amendment. He looked extremely puzzled and said, "Well, that has nothing to do with my reply but I had better give it". I said, "That sounds to me rather like the examination candidate who was asked to describe the principles of the Archimedes pump. After chewing his pencil for some time, he wrote, 'I know nothing about the Archimedes pump, but here is a list of the kings of Israel and Judah—. The Daily Mail, in a leading article, commented under the headline, "Laughter in Committee Room 10".
Lord McIntosh of Haringey: That reminds me of Browning's reply when he was asked, late in life, what was the meaning of a certain poem—whose title I am afraid I cannot remember so I cannot properly trump it. He said:
"When it was written, God and Robert Browning knew what it meant: now only God knows".
Lord Kingsland: I am worried that the same thought might apply to what I am about to say to the next
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amendment! I shall withdraw the amendment, but, first, perhaps I may respond to the Minister's request to say something about my Amendments Nos. 254RA and 254RB—or at least say something about what I think my amendments are about.
Both amendments deal with technical points. They seek to query why the present wording of Clause 255 does not reflect Regulation 24(6) of the draft OEICs regulations. Clause 255 applies the provisions of Clause 141 on action for damages in respect of unit trusts. However, the equivalent provision in the draft OEICs regulations applies the provisions of Clause 141 and, in addition, Clause 367 on injunctions, Clause 369 on restitution orders, Clause 371 on the power of the authority to require restitution and Part XIV in respect of OEICs.
Lord McIntosh of Haringey: I hope I am right in thinking that Amendments Nos. 254RA and 254RB both relate to Clause 250 on page 128, lines 1 and 3. These amendments are unnecessary. The provisions they seek to apply when the authority has given a direction under Clause 250 relating to injunctions, restitution and disciplinary measures already apply as the clause stands.
It is necessary to refer specifically to the actions for damages provisions of Clause 141 because they apply to contraventions of rules, whereas Clause 255 is concerned with contraventions of directions. Without the mention, the Clause 141 provisions would not apply in these cases. The provisions that the amendment seeks to apply, which are to be found in Parts XXV and XIV of the Bill, on the other hand relate to the contravention of requirements. Clause 250 gives the authority power to make directions imposing certain requirements. So the provisions referred to automatically apply.
Lord Kingsland: I am much obliged to the noble Lord for that answer and the others he has given to amendments in the group. I shall read Hansard and reflect on what he has said. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 254:
Page 120, line 40, leave out ("further information") and insert ("such further information as it reasonably considers necessary to enable it to determine the application").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 235, as amended, agreed to.
Clause 236 [Authorisation orders]:
[Amendment No. 254A not moved.]
6.15 p.m.
Lord McIntosh of Haringeymoved Amendment No. 254B:
Page 121, line 14, at end insert—

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("( ) If the Authority makes an order under subsection (1), it must give written notice of the order to the applicant.").
On Question, amendment agreed to.
[Amendment No. 254C not moved.]
Clause 236, as amended, agreed to.
Clause 237 agreed to.
Clause 238 [Procedure when refusing an application]:
Lord McIntosh of Haringeymoved Amendments Nos. 2541D to 254F:
Page 122, line 10, leave out ("refuses") and insert ("decides to refuse").
Page 122, line 12, leave out ("against the refusal").
Page 122, line 14, leave out subsection (3).
The noble Lord said: I spoke to these amendments in the debate on Clause 188 stand part. I beg to move.
On Question, amendments agreed to.
Clause 238, as amended, agreed to.
Clauses 239 to 243 agreed to.
Clause 244 [Alteration of schemes and changes of manager or trustee]:
[Amendment No. 254G not moved.]
Lord McIntosh of Haringeymoved Amendment No. 254H:
Page 125, line 24, after ("Authority") insert (", by written notice,").
The noble Lord said: I spoke to this amendment in the debate on Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clause 244, as amended, agreed to.
Clause 245 [Procedure when refusing approval of change of manager or trustee]:
Lord McIntosh of Haringeymoved Amendments Nos. 254J and 254K:
Page 125, line 43, leave out ("refuses") and insert ("decides to refuse").
Page 126. line 2,leave out subsection (5).
The noble Lord said: I spoke to these amendments in the debate on Clause 188 stand part. I beg to move.
Lord Elton: Perhaps I am confused; however, I have the groupings list before me which indicates that Amendments Nos. 254H, 255J and 255K are a separate group. I take it that when the noble Lord says that the amendments were spoken to in relation to Clause 188 stand part, they were caught up, as it were, in spite of the published list. Am I right?
Lord McIntosh of Haringey: I am afraid that there is a mistake in the groupings. The group to which the noble Lord refers should in fact be Amendments Nos. 255H, 255J and 255K which are position amendments in Clause 277. If we were responsible for that, I am sorry.
Lord Jenkin of Roding: I am sure that the noble Lord was not responsible. If he was, we certainly accept his apologies. I find it extraordinarily difficult, going through the groupings list with such a complicated
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system of letters—sometimes three letters after three numbers—to get them all straight in my mind and mark them in the Bill. I cannot help feeling that there must be a better way of doing this. It is astonishingly confusing. If there is only one mistake in the groupings list, that says a great deal about the skill of the Public Bill Office in dealing with these very difficult matters.
Lord McIntosh of Haringey: I do not think that it was the Public Bill Office. It was probably those of us in the department who proposed the grouping wrongly. I think that the numbering itself was correct. I have a knock-down argument against the argument against all these government amendments, but I a m not going to waste it now.
On Question, amendment agreed to.
Lord Saatchimoved Amendment No. 254KA:
Page 126, line 3, at end insert—
("( ) If both the trustee and the manager are given a warning or decision notice, neither of them is to be treated as a third party for the purposes of section 375(2) or 376(2).").
The noble Lord said: We had thought that it might not be necessary to move this amendment in view of later government Amendments Nos. 275L and 275M which propose new clauses setting out the procedure regarding third party rights. However, we have had another look at the new clauses and we believe that it may be necessary after all to table amendments to the new clause introduced by Amendment No. 275L to achieve the effect that intended by our Amendment No. 252KA. That is because there is still a mismatch between the procedures described in Clause 245, which is the proposal to refuse replacement of the manager or trustee, and Clause 248, which deals with the proposal to revoke an authorisation order.
The new clause to be introduced by the Government in Amendment No. 275L will apply to warning and decision notices given in accordance with Clause 248 but, as we read it, will not apply to warning and decision notices given in accordance with Clause 245. I am aware that this is a technical matter. Nevertheless, we should like to understand it better. The provisions relate to the procedures regarding third parties when separate warning notices are given to the manager and trustee of a unit trust scheme. It is not completely clear why the procedure on refusing to replace a manager or trustee should be different from that relating to revocation of authorisation. It may be necessary to table amendments to the new clause on Report, to add references to Clause 245(2) in respect of warning notices, and to Clause 245(4) in respect of decision notices.
Is this the appropriate time to debate Amendment No. 254S?
Lord McIntosh of Haringey: My understanding is that Amendment No. 254KA was debated in the group relating to Clause 188. It is certainly the case that Amendment No. 254S was debated then. I do not have a brief for Amendment No. 254KA, so I ask the noble Lord to give me a rain check. I will advise him before

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Report—not as to what he should do but whether there is an issue to which he may feel it necessary to refer on Report.
Lord Saatchi: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 245, as amended, agreed to.
Clause 246 agreed to.
Clause 247 [Revocation of authorisation order otherwise than by consent]:
[Amendments Nos. 254L and 254M not moved.]
Clause 247 agreed to.
Clause 248 [Procedure]:
Lord McIntosh of Haringeymoved Amendment No. 254N:
Page 126, line 41, leave out from ("Tribunal") to end of line 2 on page 127.
On Question, amendment agreed to.
Clause 248, as amended, agreed to.
Clause 249 [Requests for revocation of authorisation order]:
Lord McIntosh of Haringeymoved Amendments Nos. 254P to 254R:
Page 127, line 4, at end insert—
("( ) If the Authority makes an order under subsection (1), it must give written notice of the order to the manager and trustee of the scheme concerned.").
Page 127. line 14, leave out ("refuses") and insert ("decides to refuse").
Page 127. line 16. leave out from ("Tribunal") to end of line 18.
On Question, amendments agreed to.
Clause 249, as amended, agreed to.
Clause 250 [Directions]:
[Amendments Nos. 254RA and 254RB not moved.]
Clause 250 agreed to.
Clause 251 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 245S:
After Clause 251, insert the following new clause—
PROCEDURE ON GIVING DIRECTIONS UNDER SECTION 250 AND VARYING THEM ON AUTHORITY"S OWN INITIATIVE
(".—(1) A direction 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

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A direction 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 under section 250, considers that it is necessary for the direction to take effect immediately (or on that date).
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(3) If the Authority proposes to give a direction under section 250, or gives such a direction with immediate effect, it must give separate written notice to the manager and the trustee of the scheme concerned.
(4) The notice must—

(a) give details of the direction;

(b) inform the person to whom it is given of when the direction takes effect;

(c) state the Authority's reasons for giving the direction and for its determination as to when the direction takes effect;

(d) inform the person to whom it is given that he may make representations to the Authority within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and

(e) inform him of his 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 a person to whom the notice was given, the Authority decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction,

it must give separate written notice to the manager and the trustee of the scheme concerned.
(7) If, having considered any representations made by a person to whom the notice was given, the Authority decides—

(a) not to give the direction in the way proposed,

(b) to give the direction in a way other than that proposed, or

(c) to revoke a direction which has effect,

it must give separate written notice to the manager and the trustee of the scheme concerned.
(8) A notice given under subsection (6) must inform the person to whom it is given of his right to refer the matter to the Tribunal.
(9) A notice under subsection (7)(b) must comply with subsection (4).
(10) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(11) This section applies to the variation of a direction on the Authority's own initiative as it applies to the giving of a direction.").
The noble Lord said: This was debated with Clause 188 stand part. I beg to move.
Lord Saatchi: I am genuinely curious about the nomenclature of amendments. I wish to understand for my own benefit, having little experience of such matters, why it is necessary to have such complicated designations. They are almost impossible to follow and the confusion felt by members of the Committee testifies to that. Perhaps the Minister can shed some light on the matter.
Amendment No. 254S worries us because the latest set of amendments to Clauses 251 to 255 appear to allow the FSA to exercise its powers of intervention in relation to a collective investment scheme without giving firms a minimum of 28 days in which to make representations. We acknowledge that provision may be necessary in rare and urgent cases but the new clause appears to apply also to non-urgent cases. The wording does not include any test of reasonableness in relation to the period allowed for representations. The

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changes have the effect of removing for managers and trustees the safeguards provided in Clause 375 in relation to warning notices.
We are puzzled, to say the least, as to why the Government want to make those changes at such a late stage of the Bill.
Lord McIntosh of Haringey: I am grateful to the noble Lord for reading the brief provided by AUTIF because this matter was distinctly debated with Clause 188. If I had not also read that brief, I would not have been able to reply.
The new clause for governing the procedure for issuing clirecticns to managers and trustees of authorised unit trusts requires the FSA to consider if necessary, having regard to the grounds for giving the direction, whether the direction is to have immediate or early effect. That is a stiffer test than requiring the FSA to consider reasonableness.
Earl Russell: The nomenclature of the amendments arises from the fact that it is possible to table amendments after the composition of the original Marshalled List. In a lengthy Bill such as this, people inevitably notice things that they might not have done on first, second, third, fourth or even fifth reading. One could either change the numbering of the amendments already identified, which would cause confusion, or stop the power to table amendments as we go along—which would restrict the power of the House. If amendments are to be added between Amendments Nos. 153 and 154, attaching letters is the only option. It is confusing and perhaps it is the worst system, except for the alternative.
Lord McIntosh of Haringey: There was an attempt a couple of years ago to change to the system in the other place, whereby amendments are numbered according to the order in which they are tabled. I was among those who resisted that change rather fiercely. I believe that it is essential for the proper conduct of business in this House that we go through the Bill exactly in the order in which it is printed. There should not be another climens.on—the date that an amendment is tabled. That would mean going backwards and forwards through the numbers. Of course the lettering system is difficult but it is logical.
Lord Elton: Since the noble Lord saved us from the imposition of such a system, we all owe him a great debt. The present system is very difficult to understand but the other one would have been impossible. To speak in defence of my noble friend on the Front Bench, this amendment may be part of a group that has already been spoken to, but the number of amendments in the groups that come before the Committee is such that those who are not full-time professionals with appropriate staff cannot always be expected to keep up to date with them.
6.30 p.m.
Lord Saatchi: I am grateful to my noble friend and also to the noble Earl, Lord Russell, for setting me straight on the procedure.
On Question, amendment agreed to.
Clause 252 [Procedure: giving directions and varying them otherwise than as requested]:
On Question, Whether Clause 252 shall stand part of the Bill?
Lord McIntosh of Haringey: I have already given notice of my intention to oppose the Question that Clause 252 stand part of the Bill.
Clause 252 negatived.
Clause 253 [Procedure: refusal to revoke or vary direction]:
Lord McIntosh of Haringeymoved Amendments Nos. 254T and 254U:
Page 129, line 18, after ("proposes") insert ("—
(a) to vary the direction otherwise than in accordance with the application, or
(b)")
Page 129, line 20, leave out subsection (2).
The noble Lord said: Amendments Nos. 254T and 254U have already been spoken to in the same group. I beg to move.
Lord Elton: I am now becoming confused. The Minister said that these amendments had been spoken to in the same group. I cannot find Amendment No. 254T in the same group which begins with Amendment No. 254J.
Lord McIntosh of Haringey: It is in the group which begins with the Question whether Clause 188 stand part of the Bill. I shall be more explicit in future.
Lord Elton: The noble Lord refers to the gigantic group. I am grateful to him.
On Question, amendments agreed to.
[Amendment No. 254UA not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 254V and 254W:
Page 129, line 22, leave out ("refuses") and insert ("decides to refuse").
Page 129, line 25, leave out subsection (4).
The noble Lord said: Amendments Nos. 254V and 254W were spoken to in the group which includes the Question whether Clause 188 stand part of the Bill. I beg to move.
On Question, amendments agreed to.
Clause 253, as amended, agreed to.
Clause 254 [Procedure: revocation of direction and grant of request for variation]:
[Amendment No. 254X not moved.]
Clause 254 agreed to.
Clause 255 [Procedure in cases of urgency]:
[Amendment No. 254 Y not moved.]
On Question, Whether Clause 255 shall stand part of the Bill?
Clause 255 negatived.
Clauses 256 to 258 agreed to.
Clause 259 [Representations and references to the Tribunal]:
Lord McIntosh of Haringeymoved Amendments Nos. 254YA and 254YB:
Page 133, line 34, leave out subsection (5).
Page 133, line 38, leave out subsection (7).
The noble Lord said: Amendments Nos. 254YA and 254YB were spoken to with Clause 188 stand part. I beg to move these amendments en bloc.
On Question, amendments agreed to.
Clause 259, as amended, agreed to.
Clause 260 agreed to.
Clause 261 [Power of Authority to suspend promotion of scheme]:
Lord McIntosh of Haringeymoved Amendments Nos. 254YC and 254YD:
Page 134, line 19, leave out subsections (4) to (9).
Page 135, line 10, at end insert ("and sections (Procedure on giving directions under section 261 and varying them on Authority own initiative) and (Procedure on application for variation or revocation of direction)").
The noble Lord said: Amendments Nos. 254YC and 254YD were spoken to with Clause 188 stand part. I beg to move them en bloc.
On Question, amendments agreed to.
Clause 261, as amended, agreed to.
Lord McIntosh of Haringeymoved Amendment No. 254YE:
After Clause 261. insert the following new clause—
PROCEDURE ON GIVING DIRECTIONS UNDER SECTION 261 AND VARYING THEM ON AUTHORITY"S OWN INITIATIVE
(" .—(1) A direction under section 261 takes effect—

(a) immediately, if the notice given under subsection (3)(a) states that that is the case;

(b) on such date as may be specified in the notice; or

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A direction may be expressed to take effect immediately (or on a specified date) only if the Authority, having regard to its reasons for exercising its power under section 261, considers that it is necessary for the direction to take effect immediately (or on that date).
(3) If the Authority proposes to give a direction under section 261. or gives such a direction with immediate effect, it must—

(a) give the operator of the scheme concerned written notice; and

(b) inform the competent authorities in the scheme's home State of its proposal or (as the case may be) of the direction.

(4) The notice must—

(a) give details of the direction;

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(b) inform the operator of when the direction takes effect;

(c) state the Authority's reasons for giving the direction and for its determination as to when the direction takes effect;

(d) inform the operator that he may make representations to the Authority within such period as may be specified in it (whether or not lie has referred the matter to the Tribunal); and

(e) inform him of his right to refer the matter to the Tribunal.

(5) The Authority may extend the period allowed under the notice for making representations.
(6) Subsection (7) applies if, having considered any representations made by the operator, the Authority decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction.

(7) The Authority must—

(a) give the operator of the scheme concerned written notice; and

(b) inform the competent authorities in the scheme's home State of the direction.

(8) Subsection (9) applies if, having considered any representations made by a person to whom the notice was given, the Authority decides—

(a) not to give the direction in the way proposed,

(b) to give the direction in a way other than that proposed, or

(c) to revoke a direction which has effect.

(9) The Authority must—

(a) give the operator of the scheme concerned written notice; and

(b) inform the competent authorities in the scheme's home State of its decision.

(10) A notice given under subsection (7)(a) must inform the operator of his right to refer the matter to the Tribunal.
(11) A notice under subsection (9)(a) given as a result of subsection (8)(b) must comply with subsection (4).
(12) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(13) This section applies to the variation of a direction on the Authority's own initiative as it applies to the giving of a direction.").
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 254YF:
After Clause 261, insert the following new clause—
PROCEDURE ON APPLICATION FOR VARIATION OR REVOCATION OF DIRECTION
(" .—(1) If, on an application under subsection (10) or (11) of section 261, the Authority proposes—

(a) to vary a direction otherwise than in accordance with the application, or

(b) to refuse the application,

it must give the operator of the scheme concerned a warning notice.
(2) If, on such an application, the Authority decides—

(a) to vary a direction otherwise than in accordance with the application, or

(b) to refuse the application,

it must give the operator of the scheme concerned a decision notice.

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(3) If, on such an application, the Authority decides to grant the application it must give the operator of the scheme concerned written notice.
(4) If the Authority decides on its own initiative to revoke a direction given under section 261 it must give the operator of the scheme concerned written notice.
(5) The Authority must inform the competent authorities in the scheme's home State of any notice given under this section.").
On Question, amendment agreed to.
Clause 262 [Schemes authorised in designated countries or territories]:
Lord McIntosh of Haringeymoved Amendment 254YG:
Page 135, line to, after ("Authority") insert (", by written notice,").
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clause 262, as amended, agreed to.
Clause 263 [Procedure]:
Lord McIntosh of Haringeymoved Amendments Nos. 254YH and 254YJ:
Page 136, line 36, leave out ("refuses") and insert ("decides to refuse").
Page 136, line 39, leave out subsection (4).
The noble Lord said: These amendments were spoken to with Clause 188 stand part. I beg to move these amendments en bloc.
Lord Elton: Perhaps I may take this opportunity to suggest that where large blocks of interleaved amendments in the list of groupings have been debated on an earlier day it may be helpful to know the head amendment so that Members can refer back to the appropriate date. At the moment one takes the matter entirely on trust, which one does happily.
Lord Jenkin of Roding: I endorse the observation of my noble friend. I kept all of the earlier lists of amendments and during the course of the morning tried to identify the particular amendments. I ran out of time and enthusiasm and gave it up. I believe that my noble friend's suggestion would be extraordinarily helpful. Perhaps, we should discuss these procedural matters in another forum.
Lord McIntosh of Haringey: I used to be infuriated when Ministers of another government stood up to say that an amendment had already been debated and begged to move it. Sometimes they did not even stand up. It is very good for me that I must continually stand up. I try to give the group in which the particular amendment appeared. I do not know whether there is a method of making that more generally available.
Lord Elton: It should not be beyond the wit of man to print that information on the list of groupings. However, my noble friend is quite correct: this is the wrong forum in which to hold that debate.
On Question, amendments agreed to.
Clause 263, as amended, agreed to.
Clause 264 [Individually recognised overseas schemes]:
[Amendment No. 254 YK not moved.]
Clause 264 agreed to.
Clause 265 [Matters that may be taken into account]:
[Amendments Nos. 254 YL and 254 YM not moved.]
Clause 265 agreed to.
Clause 266 [Applications for recognition of individual schemes]:
Lord McIntosh of Haringeymoved Amendment No. 255:
Page 138, line 32, leave out ("further information") and insert ("such further information as it reasonably considers necessary to enable it to determine the application").
The noble Lord said: This amendment was debated with Amendment No. 155. I beg to move.
Lord Elton: As a matter of interest, I think that we have just passed the middle point of the Bill on the fifth and last day of debate in Committee.
Lord McIntosh of Haringey: Ligne de partage des eaux!
On Question, amendment agreed to.
Clause 266, as amended, agreed to.
Clause 267 [Determination of applications]:
Lord McIntosh of Haringeymoved Amendment No. 255A:
Page 138, line 45, at end insert—
("( ) If the Authority makes an order under section 264(1), it must give written notice of the order to the applicant.").
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clause 267, as amended, agreed to.
Clause 268 [Procedure when refusing an application]:
Lord McIntosh of Haringeymoved Amendment No. 255B:
Page 139, line 3, leave out ("refuses") and insert ("decide5. to refuse").
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clause 268, as amended, agreed to.
Clause 269 [Alteration of schemes and changes of operator, trustee or depositary]:
Lord McIntosh of Haringeymoved Amendments Nos. 255C to 255E:
Page 139, line 10, after ("Authority") insert (", by written notice,").
Page 139, line 12. leave out ("notified") insert ("given written notice to").
Page 139, line 13, leave out ("the proposal is not approved") and insert ("it has decided to refuse approval").
The noble Lord said: These amendments were spoken to with Clause 188 stand part. I beg to move.
On Question, amendments agreed to.
Clause 269, as amended, agreed to.
Clauses 270 and 271 agreed to.
Clause 272 [Procedure]:
Lord McIntosh of Haringeymoved Amendment No. 255F:
Page 140, line 7, leave out subsection (3).
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clause 272, as amended, agreed to.
Clause 273 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 255G:
After Clause 273, insert the following new clause—
PROCEDURE ON GIVING DIRECTIONS UNDER SECTION 273 AND VARYING THEM OTHERWISE THAN AS REQUESTED
(" .—(1) A direction 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

(c) if no date is specified in the notice, when the matter to which it relates is no longer open to review.

(2) A direction 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 under section 273, considers that it is necessary for the direction to take effect immediately (or on that date).
(3) If the Authority proposes to give a direction under section 273, or gives such a direction with immediate effect, it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.
(4) The notice must—

(a) give details of the direction;

(b) inform the person to whom it is given of when the direction takes effect;

(c) state the Authority's reasons for giving the direction and for its determination as to when the direction takes effect;

(d) inform the person to whom it is given that he may make representations to the Authority within such period as may be specified in it (whether or not he has referred the matter to the Tribunal); and

(e) inform him of his 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 a person to whom the notice was given, the Authority decides—

(a) to give the direction in the way proposed, or

(b) if it has been given, not to revoke the direction

it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.
(7) If, having considered any representations made by a person to whom the notice was given, the Authority decides—

(a) not to give the direction in the way proposed.

(b) to give the direction in a way other than that proposed, or

(c) to revoke a direction which has effect,

it must give separate written notice to the operator and (if any) the trustee or depositary of the scheme concerned.
(8) A notice given under subsection (6) must inform the person to whom it is given of his right to refer the matter to the Tribunal.
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(9) A notice under subsection (7)(b) must comply with subsection (4).
(10) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.
(11) This section applies to the variation of a direction on the Authority's own initiative as it applies to the giving of a direction.").
The noble Lord said: This amendment was spoken to with Clause 188 stand part. I beg to move.
On Question, amendment agreed to.
Clauses 274 and 275 negatived.
Clause 276 agreed to.
Clause 277 [Power to investigate]:
[Amendments Nos. 255H to 255K not moved.]
Clause 277 agreed to.
Clauses 278 and 279 agreed to.
6.45 p.m.
Clause 280 [Application by an investment exchange]:
On Question, Whether Clause 280 shall stand part of the Bill?
Lord Donaldson of Lymington: I want to speak to Clause 280 because it is the clause which provides for applications to be made for recognition by investment exchanges. A parallel clause, Clause 281, relates to clearing houses.
Anyone considering the Bill will be interested to know the conditions for the recognition of investment exchanges and clearing houses. The answer is provided in part on page 19 of consultation paper 39a. It relates to investment exchanges and states:
"Financial crime and market abuse.
Without prejudice to the generality of sub-paragraph 5(1)"
—which I do not think matters—
"the RIE must ensure that appropriate measures are adopted to prevent market abuse"—
that is a pretty formidable task; nevertheless it states that it must adopt appropriate measures to prevent market abuse, not to make it more difficult or anything like that—
"and financial crime, facilitate their detection and monitor their incidence".
It does not say, and I should like to know, whether it is proposed that an investment exchange or a clearing house, having adopted measures designed to prevent market abuse and financial crime, and having taken measures to facilitate their detection and to monitor their incidence, should do any more about it by way, for instance, of bringing complaints against their members. I assume that the answer is "yes". At a much earlier stage I believed that the FSA was to take this over and I am told that that caused some alarm and despondency. So the load is to be shared.
The difficulty is that market abuse may not be so described in the rules of the exchange or clearing house. Nevertheless, if one looks at Clause 109, and the rules made by the FSA under Clause 109, it will be clear that that is what it is talking about. Even if both

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bodies speak the same words, we still have the problem of double jeopardy. It would be extremely difficult to be certain that to one was prosecuted by both bodies. I know that there is power for the FSA to call in. But if the FSA calls in, the complainant finds himself in an entirely different arena. He finds himself in an arena where there is an appeal to the tribunal.
Perhaps I may remove any misapprehension about the tribunal. We had the same problem with the industrial relations legislation where there was a national industrial relations court. The incoming government of a different political persuasion naturally—I dc, not blame them in any way—wanted to get rid of the idea of a court and called it a "tribunal". However, the constitution was word for word the same. The draftsman simply struck out the word "court" and wrote "tribunal".
Let there be no mistake about it: this is a court. There is a direct appeal—granted, it is restricted—to the Court of Appeal. That means immediately that the court/tribunal s of co-equal status with the initial stage of the High Court, the Queen's Bench Division, or whatever.
Therefore, that is something quite different which, I dare say, the complainant would welcome. However, if it is not called in and he is left with his domestic rules, there is a real risk that the courts will intervene. They may intervene on the basis of the Human Rights Act or on their ordinary historic jurisdiction if they believe that there has been any unfairness in the work of a tribunal. They would not accept the statement, "Oh, well, the person being pursued agreed to the rules", where the rules would affect his livelihood. There are many examples where the courts have moved in in such circumstances.
I do not want the courts to become involved in these issues. Even where people try unsuccessfully to involve the courts, the reputation of the system that we are trying to set up will be damaged. Therefore, I hope that serious thought can be given to the relationship between the disciplinary powers of the investment exchanges and the clearing houses and what is to be done when one has what is, in reality, the same offence falling within the jurisdiction of both.
No doubt it will be said that each investment exchange will be required, as part of its rules, to have an internal appeal procedure, but that is different from being able to appeal to a court with a right to go on to the Court of Appeal. It is probable that as so much is going on no one has time to set out the whole story. However, if thought is being given to the issue, it would be nice to know what it is; and if no thought—or insufficient thought—is being given, it is very much needed.
Lord McIntosh of Haringey: I am grateful to the noble and learned Lord for raising these issues. He has chosen to do so under Clause 280, but has justifiably widened the issues beyond the basis of application for recognition as a recognised investment exchange.
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Raising the issue in such a way enables me to put on the record the relevant content of a letter which I wrote to him yesterday.
Lord Donaldson of Lymington: I have not received it.
Lord McIntosh of Haringey: Well, now, it was sent to him yesterday. Perhaps I may refer to the relevant parts of my letter. I wrote:
"I do not disagree with the points made concerning the possible attitude of the courts in this area. While the disciplinary arrangements of recognised bodies have to be seen against the background of contractual relationships which they enter into with their members, I think that it is indeed possible that the courts would take the view that in certain respects these bodies are exercising public functions. This is particularly so in the light of the extension of statutory immunity to recognise bodies for the first time for things done in the discharge of their functions arising out of obligations to which they are subject under the Act, in particular the recognition requirements. I do not think, though 0that any change to the Fill is necessary either for European Convention on Human Rights reasons or to achieve any changes along the lines outlined in "our letter for policy reasons. In order to be recognised, and thus exempted from the general prohibition, an exchange or clearing house has to meet certain recognition requirements. These will be set out in regulations made by the Treasury, rather than the FSA, under the powers conferred by subsection (1) of Clause 27 of the Bill".
Draft regulations were published for consultation in February last year.
The noble and learned Lord asked whether recognised investment exchanges and recognised clearing houses should be required to have independent tribunals. We are giving serious thought to what the recognition requirements made by the Treasury should say about the right to refer decisions of recognised bodies to an independent tribunal, and in doing so will certainly bear in mind the points that he has made.
It will be possible for the Treasury to provide for recognition requirements which will mean that exchanges and clearing houses must have fair and independent arrangements for dealing with disciplinary proceedings. But the exchanges are also commercial private bodies, which may mean that appeal to the High Court may not be appropriate.
If I have omitted any of the points which the noble and learned Lord made—I probably have—I had better burden him again with more correspondence.
Lord Donaldson of Lymington: I thank the Minister for the letter which I am yet to receive. I am sure that it is most helpful. I am worried about one issue; everything else can be sorted out by regulations. I AM worried because, as far as I can discover, there is no way in which one can move a system from the exchange or clearing house to the tribunal. Not only do I believe that it would be better if that were possible, but it would ensure a degree of consistency which might otherwise not exist. I hope that if regulations are to be made, they will require the investment exchanges and the clearing houses to treat the decisions of the tribunal as binding.
Lord McIntosh of Haringey: On 21st March, at col. 251 of Hansard, the noble and learned Lord pointed

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out that there would need to be a right of appeal from the RIE and RCH tribunals to the financial services and markets tribunal established by the Bill. That is the point he is making today—and that it would require an amendment to the Bill. I agree that if we were to make such a change, an amendment to the Bill probably would be required. However, we do not believe that it is necessary to do that in order to ensure that the RIE and RCH tribunals are fair, impartial and have the necessary degree of independence. We believe that we can achieve that through the recognition requirements—which, of course, brings us back to Clause 280.
Clause 280 agreed to.
Clause 281 agreed to.
Clause 282 [Applications: supplementary]:
Lord McIntosh of Haringeymoved Amendment No. 256:
Page 145, line 43, leave out ("additional information") and insert ("such further information as it reasonably considers necessary to enable it to determine the application").
On Question, amendment agreed to.
Clause 282, as amended, agreed to.
Clause 283 agreed to.
Clause 284 [Liability in relation to recognised body's regulatory functions]:
Lord Kingslandmoved Amendment No. 256A:
Page 146, line 33, at end insert(",reckless or negligent").
The noble Lord said: Part XVIII relates to recognised investment exchanges and clearing houses, called "recognised bodies". Clause 284(1) provides that a recognised body and its officers and staff will not be liable in damages for anything done or omitted in the discharge of that body's regulatory functions unless it is shown that the act or omission was in bad faith.
The amendment concerns the old chestnut of immunity from damages. In the first version of the Bill, the provision provided immunity from liability in damages only to the members of the relevant recognised body. However, the Government subsequently introduced amendments which extended the immunity to claims by all persons. The amendment adds the words "reckless or negligent" to the end of the provision. The next amendment adds to Clause 284(2) the words,
"or was in breach of Community law",
as a further exclusion from the immunity provision.
Some Members of the Committee may recall that in an earlier part of the Bill giving statutory immunity to the authority itself, similar amendments were added to a similar immunity clause. Therefore, the Opposition's approach to the position of recognised bodies with respect to statutory immunity is exactly the same as it has been in relation to the authority.
So far as concerns Amendments Nos. 257B and 257C, Clause 293(1) requires the authority to make arrangements for the investigation of complaints
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about a recognised body. Amendment No. 257B would require the appointment of an independent person to investigate complaints. Amendment No. 257C would add new provisions which would allow the investigator to make recommendations to the authority on the steps, if any, which a recognised body should take to remedy a complaint which is well founded. Specified steps may include the payment by the recognised body of a specified sum to a specified person.
The Committee may recall that, with respect to recognised exchanges, originally the concept was not to give them statutory immunity. However, as I pointed out earlier, the Bill now gives it to them. In those circumstances, it is our contention that at this point it is necessary to inject into the Bill a counterbalance in the form of a genuinely independent complaints investigator who will mirror the independent complaints investigator whom we seek in relation to the authority.
We place very great importance on this amendment and we earnestly hope that the Government will feel inclined to accept it. I beg to move.
7 p.m.
Lord McIntosh of Haringey: Clause 284 gives recognised investment exchanges and clearing houses statutory immunity from liability in damages in respect of anything done or omitted in the discharge of their regulatory functions. I want to emphasise "regulatory functions" because those bodies have commercial functions and there is no immunity from them.
Amendments Nos. 256A and 256B seek to cut back on the scope of the immunity by removing it, first, in cases where the action complained of was reckless or negligent and, secondly, where the body concerned was in breach of European Community law. Of course, we considered similar amendments when we dealt with the statutory immunity of the FSA. The noble Lord, Lord Kingsland, will not be surprised to hear that I cannot accept these amendments any more than I could on the earlier occasion.
So far as concerns Amendment No. 256A, there is a balance to be struck in granting immunity. It must be sufficiently broad to enable the regulatory body to carry out its functions effectively without being inhibited by the threat of litigation. At the same time, it must not restrict unreasonably the ability of those who feel that they have been adversely affected by its actions to seek legal redress. I believe that the formula that we have proposed of allowing actions where the regulator has acted in bad faith, or where this concerns Section 6(1) of the Human Rights Act or through judicial review, strikes the right balance.
Like the FSA, the exchanges will have to take difficult regulatory decisions, sometimes very rapidly and perhaps without all the information about a situation which subsequently will be available. If they needed to be constantly alert to the possibility of an

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action alleging recklessness or negligence, that could seriously interfere with their effective functioning. They need to be able to devote their mind to the proper running of the market and not to be distracted by legal action. That is not only my view; it was the view of the Joint Committee of both Houses which considered the draft Bill.
On one level, Amendment No. 256B is simply unnecessary. The Bill does not, and cannot, override any obligations of European Community law to which the recognised Bodies may be subject. Therefore, there is no need for such an amendment. As I said when we debated the FSA's immunity, the responsibility for ensuring that proper effect is given to the UK's Community obligations is one which rests primarily with the Government. Where it is necessary for regulatory bodies to take action in order to implement a directive, the Government must ensure that relevant action is taken. If they fail to do so, the United Kingdom will be in breach of its Community obligations and the Government will be the proper respondent in infraction proceedings.
That is one reason why Clause 289 gives the FSA a power to give directions to recognised bodies which are in breach of their recognition requirements. If the recognised body was in breach of European Community law, undoubtedly it would be in breach of those requirements. If it did not take action to put matters right, the FSA would be able to make use of that power. However, if for some reason the FSA was reluctant to do that, the Treasury would be able to make use of its power under Clause 389 to direct the FSA to take action in order to ensure that the UK remained in compliance with its international obligations.
Amendments Nos. 257B and 257C deal with Clause 293, which gives the FSA power to make arrangements for the investigation of complaints against authorised bodies. I can understand what lies behind the amendments but still I cannot accept them. They seek to provide in the Bill for matters that we believe should be dealt with in the regulations which we shall make after the Bill comes into force. Those regulations will set out the recognition requirements for recognised bodies.
Clause 293 requires the FSA to make arrangements for the investigation of a complaint which is relevant to the question of whether a recognised body should remain a recognised body. Therefore, if someone felt that a recognised exchange or clearing house had taken action which was not in accordance with the recognition requirements—that is, the basic rules with which exchanges and clearing houses must comply in order to become and remain recognised—he would be able to complain to the FSA. If the FSA felt that that complaint demonstrated that the body did not meet the recognition requirements, it would be able to give the body concerned directions under the powers of Clause 289 or, in an extreme case, to revoke its recognition under Clause 291.
Therefore, the clause deals with complaints of major problems within a recognised body which are
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such that the FSA might be moved to intervene. However, it does not deal (because that is not its purpose) with what might be called "day-to-day" complaints where a person does not allege that the body is not fit to continue to be recognised but, nevertheless, has what might be a legitimate grievance which, rightly, he would expect to be addressed.
Although such complaints would not call into question the continuing recognition of the body concerned, that does not mean that they are not important. Indeed, I believe that it was that type of complaint that the Joint Committee had in mind when it said that the extension of immunity should be conditional on there being an adequate complaints procedure in place in each body. We accepted that recommendation of the Joint Committee. However, rather than put any requirements for complaints procedures on the face of the Bill, we continue to believe that the better way to deal with this matter is through the recognition requirements. This refers back to the point made by the noble and learned Lord, Lord Donaldson.
The draft recognition requirements on which we consulted last year currently require recognised bodies to have in place satisfactory arrangements for the investigation of complaints in respect of the use of their facilities. In due course, we shall review those requirements before we make regulations to bring them into effect. They will ensure that the complaints arrangements which a recognised body will be required to maintain provide for adequate and independent investigation of complaints about how it has acted.
Lord Elton: Perhaps I may intervene because this matter reads across to a letter which the noble Lord, Lord McIntosh, was kind enough to write to me in which he says that,
"wrongful payment due to the negligence of an institution holding clients money in an account held by an authorised person will not make the institution liable, as constructive trustee, under Clause 131(4) of the Bill. The institution has to be acting dishonestly—
legal semantics will no doubt explain how a trustee can be either reckless or negligent and still be honest—
"before liability as constructive trustee is incurred.
There is nothing elsewhere in the Bill to make such an institution liable for negligence. An authorised person who placed their clients money on trust might well have a case for action for negligence".
However, it is the client—I am reading the noble Lord's words. If they seem surprising, I shall read them again.
Lord McIntosh of Haringey: I express concern only because the letter did not refer to recognised investment exchanges; it referred to constructive trusteeship.
Lord Elton: I stand corrected. However, I am trying to address a principle. If I come by the side door. I apologise. What puzzles me is that I believed that the

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Bill set out to provide a complete umbrella over the financial services industry and to protect all the customers or clients of the financial services industry by regulating practitioners in that industry. But here, as my noble friend pointed out, there is a large area where the penalties are not provided to extend that protection to those who may suffer as a result of the negligence or recklessness of the authorised persons.
It seems to me that that runs against the grain of the Bill itself. Before the Minister answers my noble friend in detail, perhaps he will reassure me that that is not against the philosophy of the Bill and that, by some means, clients are still protected and will not have to seek more expensive recourse outside the provisions of the Bill than the Bill itself provides.
Lord McIntosh of Haringey: I thought that that is what I said when I answered the noble Lord, Lord Kingsland, in detail. After all, the existence of a recognised investment exchange or a clearing house is, in a sense, a privilege because, although the FSA is responsible, as the noble Lord, Lord Elton said, for the whole of the financial services market, nevertheless, it delegates some of its responsibilities under certain circumstances to recognised investment exchanges and clearing houses.
It must then ensure—and I thought I spent quite a long time showing how it did so—that there are adequate procedures for the protection of the consumers of the products of those recognised investment exchanges and clearing houses. I made it clear that our view is that they should not be on the face of the Bill but should appear in recognition requirements. I made it clear that we have already published draft recognition requirements to bring that into effect and that, following consultation, we were proposing to bring into effect suitable recognition requirements to cover all those points after the Bill comes into force.
Lord Donaldson of Lymington: I support the Government's reluctance, indeed, refusal, to alter the immunity provisions as contained in the Bill. Members of the Committee must remember that this is a field where there is a lot of money swilling about. While the ordinary man in the street will hesitate, unless he is a lunatic, to start litigating as a tactical manoeuvre, in the financial markets, that is not unknown and the sums of money are so great that there may be very little disincentive for doing so.
Lord Kingsland: The Minister will not be surprised to learn that I am less than happy with his response in relation to all the amendments. Therefore, I have a choice between pressing the point on statutory immunity or pressing the point in relation to an independent investigator. My approach will be to ask leave to withdraw Amendment No. 256A and I shall not press, when we reach them, Amendments Nos. 256B and 257B but I give notice that when we arrive at the point on the Marshalled List, I shall test the opinion of the Committee on Amendment No. 257C relating to the independent investigator.
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There is one other observation that I want to make on the Minister's reply; that is, on the question of European Community law. He said that our amendment on European Community law was not necessary because the state's international responsibility is engaged. But, in fact, I think I am right in saying that the authority, because of its regulatory responsibilities, will be classified in European law as an emanation of the state. There may be circumstances in which individuals will have directly effective rights against the authority. Therefore, the question of immunity in respect of those rights may be important.
Therefore, for clarity—and it may be a matter to which we shall return on Report—I believe that the Government should make the concession for which I have asked in Amendment No. 256B.
7.15 p.m.
Lord McIntosh of Haringey: Before the noble Lord withdraws Amendment No. 256A, I am grateful to him for his notification about Amendment No. 257C. I should say, for the benefit of anybody who may have difficulty with this amendment, that the provisions which we make to deal with the problem raised by the amendment are not provisions which are made now. They were made last year in the draft regulations. Those draft regulations have been the subject of consultation. There has been no dissent from the view expressed that the draft regulations were the right place for that, and I have made clear our determination, or the FSA's determination, to enforce those draft regulations after the Bill is passed.
In case there is any doubt on the matter, the issues covered by Amendment No. 257C are fully covered and have always been fully covered by our provisions.
Lord Kingsland: I hear what the noble Lord says. Of course, those arrangements will not be on the face of the Bill. It is our view that this matter is of such central importance to the matter of checks and balances within the Bill that to have it contained in secondary legislation is not enough. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 256B not moved.]
On Question, Whether Clause 284 shall stand part of the Bill?
Lord Taverne: On the question of whether Clause 284 shall stand part, there is one brief point that I want to make. This clause extends the immunity to recognised bodies. The fact that that immunity is extended in that way rather reinforces the point made by my noble friend Lord Sharman at col. 1781 on the first day in Committee, in which he moved an amendment which proposed that the immunity should be extended to any person who is, or is acting as, a member, officer, member of staff or in the capacity of an agent of the authority.
Indeed, he pointed out that paragraph 6(2) of Schedule 1 provides that:

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"Those arrangements may provide for functions to be performed on behalf of the Authority by any body or person who, in its opinion, is competent to perform them".
It seems to me that that strengthens the case for extending the immunity to agents. I hope that the Government will bear that in mind when they reconsider the amendment moved by my noble friend.
Lord McIntosh of Haringey: I am grateful to the noble Lord, Lord Taverne, for raising that matter. If he refers back, as I thought he was doing, to earlier debates, he will find that we have covered rather fully in debate the points which he raised; that is, both the difference between the regulatory and commercial functions of exchanges. I have forgotten what the second issue was. I was interrupted by my noble friend the Chief Whip, as so often happens, and I momentarily lost attention. I shall read carefully in Hansard what the noble Lord said. If there is any response that it would be helpful to give, I shall give it to him in writing.
Clause 284 agreed to.
Clauses 285 to 289 agreed to.
Clause 290 [Variation of recognition order in relation to recognised nominee]:
Lord McIntosh of Haringeymoved Amendment No. 257:
Page 150. line 2, after first ("it") insert ("reasonably").
On Question, amendment agreed to.
Clause 290, as amended, agreed to.
Clause 291 agreed to.
Clause 292 [Directions and revocation: procedure]:
Lord Kingslandmoved Amendment No. 257A:
Page 151. line 12, at end insert—
("( ) During the period for making representations, the recognised body shall be given access to the information and documents which the Authority has relied on in deciding on its proposed action.").
The noble Lord said: As Members of the Committee are well aware, Clause 292 sets out the procedures before the authority. The authority may give a direction under Clause 289 or may make a revocation order under Clause 291(2). The usual decision notice procedure has not been included in Clause 289. The amendment includes one of the protections provided by that procedure; that is to say, during the period in which representations can he made to the authority. It specifies that the authority should give access to the information and documents upon which it has relied in deciding on its proposed action.
I am at a loss to understand why the procedure has been excluded. In my submission, if someone is under suspicion and an investigation is made and a decision taken to penalise that person, there should be a period between that decision and the imposition of the penalty itself during which the person concerned has access to the documents upon which the decision to
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penalise has been based, because he may well be able to give a satisfactory answer. That is the basis upon which the amendment has been tabled. I beg to move.
Lord Taverne: In our view there is some merit in the amendment and indeed also in Amendment No. 257C, which, I understand, the noble Lord will press to a vote. Regarding the second amendment, we do not believe that this is the right time at which to vote and so we shall abstain.
Lord McIntosh of Haringey: I return to Amendment No. 257A. When the FSA proposes to issue a direction under Clause 289 or to revoke recognition under Clause 291, it must follow the procedures set out in this clause. It must give written notice to the body concerned and, so far as is reasonably practicable, let members of the body know what is going on and publish the notice so that others who might be affected know what is happening. The notice must set out the reasons why the FSA is proposing to take action and draw attention to the right to make representations. The minimum period for representations is two months. The body, its members and those affected may make representations during that period and the FSA must have regard to them in deciding whether to carry out its proposal. It must then inform the recognised body of its decision to make or not make the order.
The procedures set out in the clause ensure that recognised bodies, their members and others affected or potentially affected by an FSA direction or revocation order can make full and proper representations. The noble Lord's amendment provides that when the FSA proposes to give a direction, or to make a revocation order and has given the recognised body notice of its proposal, it must allow the body concerned access to the information and documents on which it has relied in deciding the proposed action. I understand the thinking behind the amendment, but it is both unhelpful and unnecessary.
The purpose of the procedure in Clause 292 is to make the body concerned aware of why the FSA is proposing to take action and to give it the chance to inform the FSA of any information which might lead it to change its mind. Subsection 2(a) is quite clear about the matter. So the FSA cannot simply say, for example, that it is minded to revoke recognition of a body, without giving details of why it proposes to do so. That said, the FSA is not required to make available the actual evidence on which it relied in deciding upon the proposed action, but I do not see why that would be necessary. The FSA may have a great deal of material in its possession which it would be bureaucratic and overburdensome to expect it to have to disclose. The important thing is that it must make available to the body the reasons which led to its decision. The clause already provides for that.

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That is different from a situation in which the FSA is proposing to take disciplinary action against an authorised person, just as recognised bodies themselves are different from authorised persons. In disciplinary cases, the authorised person has the right to refer the matter to a tribunal, so it is right that he should be aware of the evidence that the FSA may be preparing to put to the tribunal and have the chance to comment on it. In the case of recognised bodies, FSA decisions are of a supervisory rather than a disciplinary nature and there is no right to refer matters to the tribunal. That is because, as I have just been saying, recognition is a special privilege giving recognised bodies exemption from the general prohibition. The FSA cannot make conduct of business rules apply to recognised bodies in the same way that it could for an authorised person.
Recognised bodies also have quasi-regulatory functions under the Bill and, as a result, statutory immunity. They are therefore in a different position from authorised persons. We do not believe that it is right, given that position, that they should be able to challenge FSA decisions before a tribunal. That is not to say, of course, that recognised bodies have no recourse against a decision by the FSA which they consider unreasonable. In such a circumstance they could apply for judicial review of the FSA's decision and in that case it would be for a court to say what evidence the FSA was required to disclose.
Lord Kingsland: The Minister will not be surprised to hear that I am not satisfied with his reply, although I do not intend to press the amendment today. The Minister has referred me to Clause 292(2)(a) and (b), but how could the recognised body assess the reasons given for the direction if it cannot look at the underlying evidence? It seems illogical for the authority to give reasons and then, if challenged on them, to refuse to give the evidence upon which it reached its conclusions. This is a matter to which we shall certainly return on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 292 agreed to.
Clause 293 [Complaints about recognised bodies]:
[Amendment No. 257B not moved.]
Lord Kingslandmoved Amendment No. 257C:
Page 151, line 43, leave out subsection (2) and insert—
("( ) The arrangements made by the Authority must provide for the investigator to report to the Authority on the result of his investigation and, if he considers a complaint to be well-founded, to make recommendations to the Authority on the steps (if any) which the recognised body should take to remedy the matter complained of.
( ) If the investigator reports to the Authority that a complaint is well-founded, the Authority may direct the recognised body to take specified steps in response to the investigator's report.
( ) Specified steps may include the payment by the recognised body of a specified sum or specified suits to a specified person or specified persons.
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( ) "Independent" means appearing to the Authority to be independent of the recognised body.
( ) "Specified" means specified by the Authority.").
7.27 p.m.
On Question, Whether the said amendment (No. 257C) shall be agreed to?
Their Lordships divided: Contents, 30; Not-Contents, 73.

Division No. 1

CONTENTS

Anelay of St. Johns, B.

Howe, E.

Attlee,E.

Jenkin of Roding, L.

Blatch, B.

Kingsland, L.

Bowness, L.

Lyell, L.

Byford,B.

Marlesford, L.

Colwyn, L.

Mayhew of Twysden, L.

Courtown, E. [Teller]

Northbrook, L. [Teller]

Cox, B.

Northesk, E.

Dixon-Smith, L.

Onslow, E.

Dundee, E.

Park of Monmouth, B.

Eccles of Moulton, B.

Patten, L.

Elton, L.

Pearson of Rannoch, L.

Flather, B.

Renton, L.

Glentoran, L.

Saatchi, L.

Home, E.

Skelmersdale, L.

NOT-CONTENTS

Allenby of Megiddo, V.

Hilton of Eggardon, B.

Alli,L.

Hollis of Heigham, B.

Amos, B.

Howells of St.David, L.

Archer of Sandwell, L.

Hoyle, L.

Bach, L.

Hughes of Woodside, L.

Bassam of Brighton, L.

Hunt of Kings Heath, L.

Beaumont of Whitley, L.

Jay of Paddington, B. (Lord Privy Seal)

Borrie, L.

Brooke of Alverthorpe, L.

Jeger, B.

Brookman, L.

Lea of Crondall, L.

Burlison, L.

Lipsey, L.

Burns, L.

Macdonald of Tradeston, L.

Carter, L. [Teller]

McIntosh of Haringey, L. [Teller]

Christopher, L.

Clarke of Hampstead, L.

MacKenzie of Culkein, L.

Cocks of Hartcliffe. L.

Massey of Darwen, B.

Craigavon, V.

Milner of Leeds, L.

Crawley, B.

Morris of Manchester, L.

David, B.

Nicol, B.

Davies of Oldham, L.

Pitkeathley, B.

Dean of Thornton-le-Fylde, B

Puttnam, L.

Donaldson of Lymington, L.

Ramsay of Cartvale, B.

Dormand of Easington, L.

Rea, L.

Dubs, L.

Rendell of Babergh, B.

Eatwell, L.

Richard, L.

Farrington of Ribbleton, B.

Sawyer, L.

Faulkner of Worcester, L.

Sewel, L.

Gale, B.

Simon, V.

Goldsmith, L.

Stone of Blackheath, L.

Goudie, B.

Symons of Vernham Dean, B

Gould of Potternewton, B.

Turner of Camden, B.

Grabiner. L.

Uddin, B.

Graham of Edmonton, L.

Walker of Doncaster. L.

Hardy of Wath, L.

Warwick of Undercliffe, B.

Harris of Haringey, L.

Whitty, L.

Harrison, L.

Wilkins, B.

Hayman, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.36 p.m.
Clause 293 agreed to.
Clauses 294 to 300 agreed to.
Lord McIntosh of Haringey: I beg to move that the House do now resume. I suggest that the Committee stage begin again not before 8.38 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

NHS Blood Products: Effects of Contamination
7.38 p.m.
Lord Morris of Manchesterrose to ask Her Majesty's Government what further help they are considering for people who were infected with hepatitis C by contaminated NHS blood products and the dependants of those who have since died in consequence of their infection.
The noble Lord said: My Lords, I declare an interest—not a financial one—as Honorary President of the Haemophilia Society.
This debate is about what my noble friend Lord Winston, among other distinguished members of the medical profession, sees as the worst treatment disaster in the history of the National Health Service. My noble friend is a Vice-President of the Haemophilia Society and regrets very much that a commitment which he agreed to before the debate was arranged makes it impossible for him to be here this evening.
The scale of the disaster is still not realised widely enough, even among parliamentarians, and needs to be clearly restated this evening. Already suffering from a rare, lifelong genetic condition that requires continuous medical treatment and for which there is no cure, Britain's haemophilia community has been twice devastated by contaminated NHS blood products. Over 1,200 people with haemophilia were infected by their NHS treatment with HIV and over 4,000 with hepatitis C (HCV). Almost everyone with haemophilia who is now over 14 years of age was infected with one or other of these two life-threatening viruses. Even more sadly and disturbingly, many were doubly infected with both HIV and HCV.
A total of over 700 of those infected with HIV have now died of AIDS-related illnesses. Of the people with haemophilia who were infected with HCV, including some who were co-infected with HIV, figures collected by the UK Haemophilia Doctors' Organisation show that at least 113 have now died from liver disease and liver cancer, both of which are related to end-stage HCV. No official statistics have been published on the HCV-infected haemophilia population, however, and the actual number of HCV-related deaths may be much higher than 113. Thus a haemophilia community of no more than 5,000 people has suffered at least 813 deaths in direct consequence of contaminated NHS blood products.
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Many others are now in very poor health and have lost their jobs, homes and sometimes family, due to their infection. Their most daunting worry is not knowing which of them will develop chronic liver disease and perhaps cirrhosis and cancer of the liver. But regardless of their health now, everyone who is HCV-infected will be unable to secure life insurance except at prohibitive rates, while those with young families and other dependants are denied the peace of mind that goes with knowing that, if they become terminally ill, their dependants will be provided for.
Yet despite the scale of the disaster and in contrast to the lead given by other governments across the world there has been no official inquiry here, nor even a "lookback" exercise to ensure that everyone infected with HIV and/or HCV by NHS blood products has been traced, tested, counselled and treated.
That has to be compared with the rapid response of the Department of Health this morning, for which there has been huge media coverage all day, to the discovery that two surgeons infected with hepatitis C may have passed on the virus to their patients. In this instance a full "lookback" exercise has been mounted that includes letters to patients, local helplines and access to special counselling. Why could not this have been done to help a community that has lost 813 people to blood-borne viruses in the NHS's worst-ever treatment disaster?
Time and again the Haemophilia Society has warned Ministers that time is running out for more and more of those infected with HCV. The virus progresses more slowly than HIV. It can be 20 to 30 years before it becomes active; but when it does it is extremely damaging and dangerous. Within the HCV-infected haemophilia population, many of whom have been infected with the virus for over 20 years, the toll is now becoming apparent. Current medical opinion is that up to 80 per cent of those infected with HCV will develop chronic liver disease; up to 25 per cent may develop cirrhosis of the liver and see it progress to liver cancer.
The previous government accepted that it had a moral duty to help those infected by their NHS treatment with HIV. With all-party support, a financial assistance scheme was introduced which the Macfarlane Trust was set up in 1988 to administer. Some £90 million has been made available in across-the-board payments and hardship grants since then. But nothing has been done for those infected in exactly the same way and at the same time with hepatitis C. This is an injustice the haemophilia community and their supporters on both sides of both Houses of Parliament want the Government urgently to correct.
Both viruses came from the same source contaminated NHS blood products—and the discrimination against those infected with HCV is thus blatant and indefensible. In July 1998 the then Health Secretary, Frank Dobson, rejected the Haemophilia Society's call for financial help for them, arguing that the harm done by their NHS treatment was inadvertent. But Ministers in successive governments have said that the same is true of HIV infection. Frank

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Dobson argued also that the decision to help those infected by HIV was in recognition of the social stigma attached to HIV. But again, ask the haemophilia community and it will give you evidence galore of the stigmatising of people with hepatitis C by those who fear that they too could become infected by contact with them.
The truth is that the last government's setting up of the Macfarlane Trust for HIV-infected people was an official acceptance of moral responsibility for their loss and hardship. They made an exception from normal practice in regard to the NHS and negligence for people with haemophilia who had been infected by the NHS with a life-threatening virus and the present Government, who came to power committed to higher moral standards, must surely do so too.
There is exactly the same moral responsibility for loss and hardship among those infected with HCV. Yet 13 years on they are still waiting for parity of treatment with others in the same small community who were infected at the same time and by the same route.
The NHS was founded on a moral principle in which we on these benches can take special pride. But as my noble friend Lord Winston said in a previous debate I initiated on this issue,
"moral principles…impose obligations and responsibilities. There is a price as well as an advantage in taking the moral high ground".—[Official Report, 5/6/98; col. 673.]
The last government paid that price in the case of HIV infection. The moral promise on which this Government came to power alone commits us to do no less now for those infected in the same way and by the same route with HCV.
I must strongly emphasise that this is not a debate about medical negligence and legal liability for loss and hardship. The last Government made financial help available on an ex-gratia basis without any admission of liability. It was not done from fear of legal action, but because it was the right and just thing to do. Following that precedent, the same step could and should now be taken to help those infected with HCV. Fortunately the mechanism already exists for them to do so. They could extend the remit of the Macfarlane Trust to enable it to provide help for those affected by HIV and HCV alike, a move which would command wide all-party support, both here and in another place, as a fair and long overdue corrective to the inequity that now exists.
It is a cruel irony that, given the family inheritance of haemophilia, at present a dividing line is drawn between brothers, cousins and uncles in the same families, all of whom were infected by contaminated NHS blood products at the same time. But those who were infected with HIV may receive financial help, while those who contracted HCV may not. What could be more demonstrably unjust?
The tragic story of three brothers exemplifies this injustice. All three inherited haemophilia. Two brothers were infected with HIV by their NHS treatment and died of AIDS-related illnesses. They
984
received financial help from the Macfarlane Trust and were able to make provision for their families. The third brother escaped HIV but contracted HCV and died of liver failure. For him there was no financial help. He went to his grave unable to make any provision for his family. Each of the three brothers died of the same cause. But one was denied the help given by a government-funded trust to the other two. That contrast in treatment not only suggests but shouts of injustice. And the test of any defence of present policy by anyone is how he or she will convince the mother of these three brothers of its fairness.
Nor is the lack of financial assistance the only injustice. In spite of repeated assurances from Ministers that people with haemophilia would not be denied treatment for HCV, local health authorities in many parts of England—Sunderland, West Hertfordshire and Avon to name but a few—refused to fund their only hope of a cure: a combination therapy of Interferon and Ribavirin. The fact that the National Institute for Clinical Excellence is currently looking at this treatment is seen by the haemophilia community as no excuse for dishonouring ministerial assurances. On the Haemophilia Society's behalf, I now ask health Ministers to issue an urgent instruction to health authorities to make this treatment available in response to clinical need.
Professor Roger Williams, Director of the Institute of Hepatology at the Royal Free and University College Medical School, referring in The Times on 28th March to the widely reported case of the woman in Avon who has been denied treatment with the drug Ribavirin for her hepatitis C infection, pointed out that if the drug had been prescribed for her for the requisite period of six to 12 months, she would have had up to a 60 per cent chance of getting rid of the infection. He wrote:
"With this, liver damage is likely to improve and the risks of long-term liver cancer developing become less…What a ridiculous state of affairs to give inadequate treatment when much better, albeit more costly therapy is available".
That case achieved more media attention than the refusal by one health authority after another, in total violation of ministerial assurances, to make available to people with haemophilia who were infected with HCV their only hope of a cure. It underlines again how much more could have been and could now be done to reduce avoidable suffering in the haemophilia community.
Living with HCV involves uncertainties that can hardly be imagined by those unaffected. Doctors are unable to predict for any individual how the virus will affect their health, how soon they may become ill and how seriously, which creates stress and deep anxiety, more especially for those with family responsibilities.
Research carried out by the Haemophilia Society illustrates the disastrous impact HCV infection has had on the lives of families who were already struggling to cope with a life-long disability. Many have had to reduce or give up work because of the effects of the virus and face a sharp loss of income. Serious problems have been caused for people seeking mortgages once they have been diagnosed with

985
hepatitis C. Again, fear of passing on the virus within families creates damaging stress on relationships between parents and children and husbands and wives. Social stigma adds further stress as HCV-infected people are increasingly shunned—even by neighbours, friends and colleagues—because of the virus.
The threat of new variant CJD is a now a further worry. Experts agree that there is no way of guaranteeing that blood products still used in the treatment of haemophilia are free from CJD infection. The Department of Health describes the risk as "theoretical" but fear persists in the haemophilia community that the treatment on which they may rely every day may carry CJD. The Government recognised then anguish by ensuring that children under 16 are treated with recombinant genetically engineered Factor 8 or 9 rather than plasma-derived products. But many older teenagers and young adults over 16 in England are still reliant on plasma products and have no option but to accept the "theoretical" risk. But in Scotland, Wales and Northern Ireland recombinant is being provided for everyone—children and adults alike
When will the Government be ending the injustice of treatment by postcode? What new steps will they be taking to protect the haemophilia community from the threat of variant CJD? What progress is being made towards introducing an effective screening test for CJD or prophylactic treatment against variant CJD through use, for instance, of pentosan polysulphate? With questions like those on the minds of people with haemophilia, it i3 all the more distressing that they are forced to continue the long campaign for justice and recompense for the historic tragedy of contaminated blood.
In none of the parliamentary campaigns I have been closely involved in over 36 years in Parliament—even thalidomide and that for statutory recognition of dyslexia—have I had so strong a sense that no campaigning ought to have been necessary to right so obvious a wrong. Enormous cross-party backing has been given by MPs to motions calling for parity of treatment, not least by many of our present Ministers, including Alan Milburn, the present Health Secretary. As each successive motion has shown, the issue is seen not as one of Right and Left, but of right and wrong. And all of us knew that, given the nod by Ministers, both Houses could end the injustice to HCV-infected patients within an hour. For in truth there is no difference in principle between the claims of those infected with HIV and HCV.
There are many celebrated texts on the wrong of delaying justice. My choice this evening is Magna Carta which famously declares:
"To no one will delay right or justice".
Recognition that justice delayed is justice denied was never more relevant than it is today in the small community for whom I speak in this debate. They hope profoundly that the opportunity provided by this debate will he taken to end the injustice that leaves so many of them doubly disabled and in double despair. But if their striving for equity has to go on, then let no one be in any doubt that go on it will until right is done.
7.54 p.m.
Lord Clement-Jones: My Lords, first, I want to say what a great debt we owe to the noble Lord, Lord Morris of Manchester, not only for raising this issue tonight in your Lordships' House, but also for continuing to raise the issue and campaigning so vigorously on behalf of those whom many of us believe have suffered one of the greatest injustices of recent times.
It is sad to he here yet again asking for justice for those haemophiliacs who contracted hepatitis C in the circumstances outlined so graphically by the noble Lord, Lord Morris. The case today of the two surgeons who are passing on hepatitis C demonstrates and reminds us not only of the severe effects of hepatitis C, but also of the action that can be taken if a vigorous approach is taken by the NHS, and if government have the will to do it.
The noble Lord, Lord Morris, reminded us that nearly 5,000 haemophiliacs in the UK were infected with HCV through contaminated blood products pre-1991, before blood-donor screening was instituted. He also reminded us about the institution by a Conservative government of the Macfarlane Trust in 1988, which since then has been given sums amounting to £90 million to provide compensation to haemophiliacs who contracted HIV through contaminated blood products. In that case, there was no admission of liability; yet the trust was set up; yet the compensation has been provided.
We are reminded by the noble Lord, Lord Morris, that no equivalent provision has been made for those who contracted HCV in similar circumstances. Up to 80 per cent of those infected will develop chronic liver disease; up to 25 per cent may develop cirrhosis of the liver; between 1 and 5 per cent may develop liver cancer. Indeed, as the noble Lord, Lord Morris, also reminded us, 113 haemophiliacs who contracted HCV are estimated to have died from liver disease up to the end of 1999. That figure is expected to rise considerably as the 20 to 30-year progressive phase of HCV nears its end.
In addition to the fact that there is no compensation, there appears to be no national strategy for provision of care for those suffering from HCV. There are few counselling or support services available. There are a number of treatments—they were mentioned by the noble Lord, Lord Morris—which can now be used if they are available. New combination drug treatments are available which have modest success rates, such as Ribavirin and Interferon, but the costs are high. As the noble Lord, Lord Morris, reminded us, they are subject to the classic lottery of postcode prescribing. A number of health authorities, such as Avon, West Hertfordshire, and Sunderland do not provide those treatments at all for those with hepatitis C.
There is also the issue of the use of molecular diagnostic assays to determine a patient's HCV genotype which could determine which combination course to use. If they were available, that would save considerable expense for the NHS.

987
But the key argument in this case surrounds the issue of compensation. There have been previous arguments against hasty compensation because of the fear of institutionalising a culture of "claim and counterclaim" in the NHS, if I may quote an Opposition spokesman in the debate in 1988. As recently as 7th March, in a debate in the other place, the Government reiterated their stance that compensation will not be forthcoming. John Denham, the Minister of State for Health, said,
"We concluded that haemophiliacs infected with hepatitis C should not receive special payments".—[Official Report. Commons, 7/3/00; col. 138WH.]
Indeed, government policy appears to be centred around the determination not to breach their general rule that they will provide compensation or other financial help for particular patients or groups of patients only where the NHS or individuals working within it have been at fault. They refuse to consider that HCV infection is a special case, despite the fact that sufferers have to face many of the same problems as those infected with HIV who were judged, by the previous government, to be a special case.
This contrasts with other EU governments, such as that in France, who have provided compensation. Furthermore, it is contrary to the policy of this Government when they themselves were in opposition. A number of quotations could be produced from debates held prior to 1997 in which many Opposition spokesmen made it quite clear that they supported haemophiliacs in these circumstances.
As the noble Lord, Lord Morris, reminded us several times during his speech, this contrasts very strongly indeed with the treatment of those who contracted HIV as a result of similar kinds of blood products. Indeed, many parallels can be drawn between the two viruses: they are both viral infections; both were transmitted to haemophiliacs in the same manner, through infected blood products; both almost certainly lead to debilitating illness, often followed by lingering and painful deaths; it is difficult to predict the viral progression, which leads to fear, insecurity and increased stress in patients; and the drug therapies themselves often bring distressing side effects to patients, occasionally intolerably so.
For both groups, there is a great danger of falling into a poverty trap. Their costs of living increase due to special dietary requirements, very high insurance premiums, but reduced earning abilities as a result of the attendant illness, fatigue and workplace discrimination. Furthermore, both groups of sufferers sometimes encounter difficulties in developing and maintaining relationships. All these factors add to the sense of ostracism from society. Yet despite the similarities between the two viruses, a haemophiliac with HIV has and can receive compensation, while a haemophiliac with HCV cannot.
The essence of tonight's debate, debates on previous occasions, and the entire campaign is a moral one; that of the disparity between the treatment of
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haemophiliacs infected with HIV and those who in very similar circumstances contracted HCV and are not being compensated. As I have said, the Government have stated that they will not provide compensation where the NHS is not at fault. However, that argument falls down because that is exactly what was done by the previous administration in the case of those infected with HIV. The previous government were prepared to compensate those with HIV. The similarity between the predicaments of the two groups is so clear that, in refusing to provide the same level of support, it makes the Government appear, at best, completely cold-hearted and at worst, indefensibly miserly.
The Government's refusal to acknowledge another demand of the campaign, the instigation of a public inquiry, also fails the morality test. Surely the sequence of events that led up to what has been widely referred to as one of the greatest tragedies in the history of the NHS—those were the words of the noble Lord, Lord Winston, and were quoted by the noble Lord, Lord Morris—needs to be closely examined. If the Scottish Executive can take such a course, why cannot the Westminster Government? It should be remembered that this is something that has already claimed more lives than the "Marchioness", Southall and Paddington disasters combined, and it is set to go on claiming lives for many years to come.
It is too simplistic to say, "We did not have the screening technology at the time, therefore there is nothing we could have done about it and so we are not at fault". Doctors predict that the numbers of HCV cases among both haemophiliacs and the general population is set to rise considerably over the next decade, so why do the Government refuse to act at this point?
The Department of Health should stop ignoring the plight of this group and should face the fact that these people are being unfairly penalised. In recent months, the Prime Minister has taken a great personal interest in the health service. It is high time that he responded to the concerns of haemophiliacs and ensured that justice is secured for them.
8.3 p.m.
Earl Howe: My Lords, the noble Lord, Lord Morris, is to be congratulated on having tabled this Question today. The cause about which he has spoken so well and which he brought to your Lordships' House in a short debate nearly two years ago is one that, for reasons that are all too obvious, refuses to lie down. I do not think that any of us should find this surprising.
We are speaking here about a substantial number of people who through no fault of their own have found themselves stricken with a condition that can be disabling and sometimes fatal as a direct result of treatment that they received from the National Health Service. The natural response of anyone who understands the dreadful pain and anguish of those

989
with hepatitis C who go on to develop chronic liver disease, cirrhosis or liver cancer, as many have done or will do, is a feeling of profound sympathy. Furthermore, in remembering the sufferers themselves, we should not forget the stress and grief experienced by their families.
In a sense, the emotional reaction that all of us must have is both a help and a hindrance. We want to see these unfortunate people assisted in some way. Yet at the same time we know that when it comes to formulating balanced and practical policies, all governments have a duty to put emotion to one side. That is this Government's difficulty, exactly as it was for the last government, in the face of claims for financial compensation.
We are not talking here about medical negligence. If we were, the matter would be quite straightforward. No one—not the sufferers themselves or the noble Lord, Lord Morris—is saying that the NHS was at fault in the 1970s and early 1980s when contaminated Factor VIII was given to haemophiliacs. As the noble Lord has emphasised, the issue of compensation is essentially a moral one.
It was the moral case of those who had contracted HIV as a result of receiving contaminated Factor VIII that in 197 led my right honourable friend Mr Major—with al1-party agreement—to establish the financial assistance scheme that is now administered by the Macfarlane Trust. In the mid-1980s, the moral case for assisting such HIV sufferers appeared unique and overwhelming. Not only was there a social stigma attached to HIV unlike that of any other disease, but HIV was also invariably the precursor of full-blown AIDS and death. Furthermore, it is much more capable of being transmitted to sexual partners.
In those days, combination therapies were unknown. At the same time, public attitudes towards AIDS were not as understanding or as informed as they are today. I have no doubt that those were the considerations that impelled my right honourable friend, with very considerable compassion and courage, to provide assistance to that group. Because the circumstances were seen as unique, the funding was provided on the basis that it was not to be regarded as a precedent for other no-fault compensation claims. That was always going to be a difficult line to hold.
Successive governments have resisted the principle—in my view, rightly—of an across-the-board system of no-fault compensation for medical accidents in the NHS. The problems that would attach to such a system, were it to be introduced, would be considerable. It would instantly dilute accountability. It would also mean that in one important respect the distinction between negligence and innocent action would become blurred. Furthermore, from a practical standpoint there would be all kinds of problems about proving cause and effect. I have no doubt that at a time when we want to see greater accountability in medicine and greater emphasis placed on quality of treatment,
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anything that might be seen as a tacit acquiescence in poor quality clinical practice would be the wrong way to go.
If the issue of compensation for hepatitis C sufferers is to be resolved in the negative—as I suspect it will be—then I believe that, at the very least, the Government owe it to the victims to provide a detailed explanation of why they have come to this view. I recognise that this is a sensitive and far from easy request to make. That is because it involves drawing comparisons. As we have heard, there are situations where in the same family, and as a result of identical treatment, a person infected with HIV is receiving compensation from the public purse, while another member of the family with hepatitis C is not. We need the Government to say explicitly—if they are going to maintain their current policy—that they do not regard the unique circumstances that surrounded HIV infection in the 1980s as being directly comparable to the plight of haemophiliacs suffering today from hepatitis C.
There is one particular aspect of this issue on which I should be glad of the Minister's comment. Many of those of whom we are speaking suffer not only physical disability but also financial hardship as a result of what has happened to them. Up to now, perhaps not unreasonably, the Government's response to the latter issue has been to point to the existence of the benefits system. But there is, I think, a good argument for looking at the benefits system and asking whether it really meets the case of those who, as a result of medical accidents within the NHS, incur direct additional expense in terms of medication, travel and subsistence costs, special diets and so on. It might be possible to regard such support as quite separate from the question of means. It seems inequitable that we should ask these individuals not only to tolerate the many disadvantages which their condition brings—not the least of which can be a substantially reduced level of income—but also to pay out of their own pockets for the privilege of receiving appropriate treatment.
Unfortunately, though, as we have heard from both the noble Lords, Lord Morris and Lord Clement-Jones, effective treatment is often unavailable. Hepatitis C is difficult to treat, but Interferon and Ribavirin combination therapy was licensed last year and has been shown to clear the virus in about 30 per cent of cases. Many health authorities have decided not to authorise this treatment on grounds of cost. Can the Minister confirm my understanding that this matter has been referred to NICE? It cannot be right that across the country there is unequal access to treatment which, on the face of it, seems like a lifeline for these unfortunate people.
What is really needed is a national service framework covering the management and care of hepatitis C sufferers. Support services, including counselling, are, as we have heard, woefully thin on the ground. At the clinical level it is quite wrong that in some areas of the UK patients have to wait months or years to see a hepatologist or HCV specialist. That sort of delay is bad enough normally, but where the cause

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of the problem is the NHS itself we surely all feel that we owe it to those people to give them the swiftest possible medical attention. Can the Minister say what strategy the Government have to co-ordinate the clinical and support services available to hepatitis C sufferers across the country?
Mention has been made of the inquiry instituted by the Scottish Parliament into the allegation that hepatitis C patients north of the Border continued to receive contaminated blood for a full year after blood purification techniques were introduced in England. I do not wish to debate that matter or pre-empt the inquiry's conclusions. However, can the Minister comment on his Written Answer of 13th October last year? In it he stated that between 1985 and 1987, after viral inactivation by heat treatment for blood and blood products was introduced in England and Wales, 190 vials heated to less than the requisite temperature were sent from Scotland to England and Wales. Can he say how many people, and in particular how many haemophiliacs, were infected from this source?
If it should be found that some individuals have contracted HCV from this source, will the Government review the circumstances in which these blood products were allowed to reach English and Welsh patients? Even if—as I suspect the Minister is unable to give comfort to the noble Lord, Lord Morris, on the question of compensation, for haemophiliacs I hope that he can provide some reassurance on some of the other important issues that have been raised this evening on behalf of this most hapless group of people. I greatly look forward to hearing what he has to say.
8.13 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, I join other noble Lords in thanking my noble friend Lord Morris for raising this matter. As honorary president of the Haemophilia Society he brings much knowledge and wisdom to your Lordships' House on this issue. As all noble Lords know, he has been a tremendous campaigner for many years. I am sure that we are all in his debt for allowing us to debate some important questions relating to the help that government can give to people who were infected with hepatitis C by contaminated NHS blood products.
My noble friend Lord Morris began by talking of the scale of the disaster. He spoke movingly of the plight of haemophiliacs who received infected blood products before technology could remove hepatitis C infection. I, too, share his concern at what happened. The Government are committed to providing solid, practical help for people with haemophilia inadvertently infected with hepatitis C. We want these people to be well cared for in the NHS; to receive effective support in their communities; and to have better information about how to look after their health.
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I want to take time today to talk in some detail about how the Government plan to achieve this. But, first, I want to respond to the requests made by my noble friend and the noble Lord, Lord Clement-Jones, for the Government to provide financial assistance for people with haemophilia and hepatitis C and their dependants.
As noble Lords will know, when this Government came to office we met the Haemophilia Society and listened to its arguments for a special payments scheme for people with haemophilia and hepatitis C, similar to that in place for HIV. After long and careful consideration, the Government came to the conclusion that a special payments scheme should not be established. Government policy remains that compensation or other financial help to patients is paid only when the NHS or individuals working in it are at fault. As the noble Earl, Lord Howe, suggested, the underlying principles are clear-cut and independently established under common law. They apply to personal injury cases in general, not just those arising from healthcare. The same conclusion was reached by the previous government.
I listened with interest to the point the noble Earl, Lord Howe, made about benefits. In a sense he suggested that we might provide a limited special payment scheme or hardship fund. The Government have considered that also. However, as we do not make payments to other groups or individuals inadvertently harmed by the NHS, the Government believe that the same arguments apply.
How can we be sure that the NHS was not at fault? The fact is that the technology to make blood products free from hepatitis C in sufficient quantities to treat all haemophiliacs in the UK was simply not possible prior to 1985. Even then, it was not until 1987 that there was proof positive of the means of eliminating the virus from these blood products so essential to the lives of people with haemophilia. It must be a matter of deep regret that, before this, many haemophiliacs were inadvertently infected by treatment designed to improve their quality of life. But this is not of itself considered a justification for special payments.
We believe that the financial needs of people whose condition results from inadvertent harm should be met through the benefits system. I know that the Haemophilia Society does excellent work ensuring that people with haemophilia are made fully aware of their benefit entitlements.
As my noble friend Lord Morris has drawn to our attention, comparisons are inevitably made between the decision not to offer special payments to haemophiliacs with hepatitis C and the special payments established in the late 1980s for haemophiliacs with HIV. However, there are significant and real differences between the two situations.
If we think back to the 1980s, HIV had a vast and dramatic impact. It was a source of fear and stigma for all those who became infected with the virus. There was wide-scale public reaction. Here was a new sexually transmitted infection which was rapidly fatal.

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There was no treatment and at that time death from AIDS-related diseases was considered inevitable. HIV and AIDS arrived at a time when people with haemophilia were beginning to receive more manageable treatment with newer blood products—blood products which were much easier to use and more effective and which normalised the lives of haemophiliacs.
The future looked bright. Young people with haemophilia started to pursue education more hopefully, to have families and, in effect, began to lead full and normal lives. When it became evident that blood products were infected with HIV, that bright future faded. It was in this context that special payments were introduced and the MacFarlane Trust was established. This has to be seen as a reflection of those truly exceptional circumstances—the very poor prognosis at that time for people with haemophilia who became infected with HIV.
My noble friend has drawn attention to a family where two members have HIV and receive special payments and a third who has hepatitis C and receives nothing. But HIV and hepatitis C are different. As I mentioned earlier, when the special payments scheme was introduced for people with haemophilia and HIV in the late 1980s, it was in the context of an infection that was considered to be inevitably and rapidly fatal.
In saying this, I am not losing sight of the fact that a number of people with haemophilia and hepatitis C have tragically died from liver cancer and other causes, nor do I ignore the fact that many others have hepatitis C-related illness. That is why we must continue to support the search for new treatments and therapies for hepatitis C. I was asked about that and I shall say more about it in a moment.
The noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, referred to the Scottish investigation. This investigation relates to a specific issue to which I have already referred, the circumstances surrounding the development of heat treatment of factor 8 in Scotland in the mid-1980s. It is not a general inquiry into the history of the matter but into the specific issue of the timing and sequence of events in the context of the scientific knowledge at the time.
The noble Earl, Lord Howe, asked about the 190 vials which were imported from the Scottish centre. These were used mainly to treat a number of haemophiliacs on a named patient basis, gaining their consent. It must be recognised that at that time and until 1987 it was not clear from the information available that the treatment might have transmitted HCV. We have asked the Haemophilia Society directors to take part in tracing, counselling and testing any people who may have received these products.
Lord Clement-Jones: My Lords, I apologise for interrupting the Minister in full flow. Is there not a good case to be made for having a similar inquiry in England?
Lord Hunt of Kings Heath: No, my Lords, I do not think so. The best approach is to await the outcome of
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the Scottish investigation. I do not think there is a case for saying that there needs to be an investigation into the English circumstances.
Noble Lords have asked about services. We clearly want the health service as a whole to have good quality, modern, dependent services and we want people with haemophilia to benefit from the improvements in services that we intend to make. In that context, let me turn to one key issue which has been mentioned today, the availability of the latest drug treatments for hepatitis C.
Until recently, the only treatment available for hepatitis C was Alpha Interferon. This had a limited success rate—around 20 per cent—in removing the virus and is not suitable for all patients. However, the use of Alpha Interferon in combination with Ribavirin appears to be significantly more effective, clearing the virus in around 40 per cent of those treated. This combination therapy is now licensed. I can confirm to the noble Earl, Lord Howe, that we have asked NICE to assess this as a matter of urgency. We look forward to receiving its guidance later this year.
Several other therapeutic agents are in development which show great promise—a point raised by the noble Lord, Lord Clement-Jones. Other treatments are being researched such as different combinations of drugs. We hope that the next few years will see significant developments and improvements in the treatments available.
All noble Lords referred to the recent coverage of cases where health authorities have said that they cannot prescribe combination therapy on grounds of cost. I wish to make two points in regard to that. It is important that we do not seek to pre-empt the independence of NICE on the cost-effectiveness of this treatment. To do so would undermine the effectiveness of NICE, which has been set up to put an end to postcode prescribing. In the meantime, I would expect local decisions on providing combination therapy for hepatitis C to be based on the available evidence of clinical and cost effectiveness, taking account of the needs of individual patients.
Both my noble friend and the noble Lord, Lord Clement-Jones, asked about the availability of counselling services. When I met members of the Haemophilia Society last year, they told me that they considered there was insufficient counselling available. We have therefore given careful consideration to how we may help to improve that situation. As a first step, we have asked the UK Haemophilia Centre doctors' organisation to ensure that counselling provision is available and accessible to all haemophiliacs with hepatitis C. This will mean that the facilities at the 22 comprehensive care centres in the UK are available to the smaller haemophilia centres. I hope that that will be a significant improvement.
We are also working with the organisation to collect better data on the number of people with haemophilia infected with hepatitis C. This can be used to support better service delivery and provision. We are also

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talking to the Haemophilia Society and the Manor House Group to see how counselling and support services might be further developed.
The professional groups with an interest in haemophilia have also recommended the development of a set of minimum standards for service delivery. Both the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones, asked about how we might develop a national strategy in relation to service provision. I believe that the development of a set of minimum standards would be an effective way of improving counselling provision and other aspects of haemophilia services in the longer term.
With this in mind, the recently formed Haemophilia Alliance has started work on a proposed national specification. This specification will outline the key components of a high-quality haemophilia service, whether this is provided in the larger comprehensive care centres or the smaller haemophilia centres. The Alliance has asked the NHS Executive to circulate information about its work on the service specification through our national networks, and we have done that.
We have also identified haemophilia services as appropriate for specialist service commissioning, and three regional specialised commissioning groups—in London, the west Midlands and the south-east—are looking at designating their services at present. I hope that that combination of measures will help to put haemophilia services at the top of their agendas and support those services in performance managing the services for people with haemophilia in the NHS as a whole.
To underpin the work of the Haemophilia Society, we give an annual grant towards its administration. We also provide individual grants to help with the excellent projects it develops to support people with haemophilia and hepatitis C. For example, over the past two years we have supported a Haemophilia Society project to develop and produce material on hepatitis C for young people, their families and teachers. The booklets are: Living Life to the Full; Alive and Kicking; Being There; and Haemophilia and School. These are available from the Haemophilia Society. All have been highly praised, and rightly so.
We are also funding a seminar for professionals on co-infection with HIV and hepatitis C. That will take place later this year. The Haemophilia Society is developing the programme and arrangements. We are keen to build on our work with the society and I am sure that there will be further projects we can take forward.
Looking at hepatitis C in a wider context, we are aware that it is a significant public health issue. We recognise the need to increase knowledge about the natural history, prevalence, transmission and treatment of hepatitis C. This will ensure that the NHS is equipped to deliver services based on the best scientific and medical evidence available.
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In order to address this, we have commissioned research totalling £1 million. We are currently in the process of investing a further £0.5 million of research money specifically into the area of hepatitis C and injecting drug misuse. This is currently responsible for most new cases of hepatitis C. The research will investigate ways of reducing the incidence, spread and progression of the disease. There is also a trial under way into the possible benefit of treating hepatitis C in the early, mild stage.
I was asked a number of questions concerning the case of the hepatitis C-infected surgeons. We are aware of these incidents. We have worked hard to identify other patients who may have been at risk. Although we believe that the risk to the individual patient will be very small, patient notification allows those who may have been at risk to receive advice and the offer of hepatitis C testing. Any found to be infected can then be referred for specialist assessment and advice.
As part of our programme of measures, we have also funded a group from the Royal College of Physicians, the British Society of Gastroenterology and the British Association for the Study of the Liver to draw up evidence-based guidelines for the management of patients with hepatitis C. These guidelines will form part of NICE's consideration. In addition, we support the work of voluntary organisations working with people who have hepatitis C. I have already mentioned the Haemophilia Society projects. The British Liver Trust, a charity representing all patients with liver disease, has received grant aid for projects to raise awareness of hepatitis C, to produce information leaflets and run a telephone helpline, and to develop its chronic disease self management programme.
My noble friend asked about a "look back" for HCV. He is quite right. There has not been a specific look back study for HCV. That is because the haemophilia centres are regularly attended by people with haemophilia and are tested for the virus. A small number may not have been tested. We have written to the UK haemophilia doctors to ensure that they recall those attending their centres and offer them counselling and, if they wish, HCV testing.
In conclusion, I should like to assure my noble friend of my great sympathy for people with haemophilia who have been inadvertently infected with hepatitis C. I understand only too well the difficult dilemma where treatment and care can lead to harm where none is intended. This is an area of clinical practice that we are determined to address through our investment in quality systems in the NHS. I fully recognise that for people with haemophilia the clock cannot be turned back and we can only consider with great regret what better progress in anti-viral technology might have helped us to avoid.
However, the constructive, forward-looking initiatives we have in hand with the Haemophilia Society and other groups, the ever newer treatments

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for hepatitis C and our overall drive to raise quality in the NHS as a whole should improve the services and support available to haemophiliacs with hepatitis C.
Lord Burlison: My Lords, I beg to move that the House do now adjourn during pleasure until 8.38 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended, from 8.32 to 8.38 p.m.]

Financial Services and Markets Bill
House again in Committee.
Clause 301 [Investigations by Director General of Fair Trading]:
[Amendments Nos. 257D and 257E not moved.]
Lord McIntosh of Haringeymoved Amendment No. 258:
Page 156, line 36, leave out subsection (4).
The noble Lord said: This amendment was debated with Amendment No. 189. I beg to move.
On Question, amendment agreed to.
Clause 301, as amended, agreed to.
Clauses 302 to 307 agreed to.
Clause 308 [The Society: authorisation and permission]:
Lord McIntosh of Haringeymoved Amendment No. 259:
Page 160, line 41, leave out paragraph (b).
The noble Lord said: I spoke to this amendment with Amendment No. 89. I beg to move.
On Question, amendment agreed to.
Clause 308, as amended, agreed to.
Clause 309 agreed to.
Clause 310 [The core provisions]:
Lord McIntosh of Haringeymoved Amendment No. 259NA:
Page 162, line 5, after ("XII,") insert ("XIV, XV, XVI,").
The noble Lord said: In moving this amendment, I should like to speak also to Amendments Nos. 259PA to 259WAB. This group of largely technical amendments concerns the regulation of insurance business carried on at Lloyd"s. The amendments in this group can conveniently be sub-divided into three topics.
The first topic is the power conferred on the authority to make directions under Clause 309. Such a direction would apply to members of Lloyd's those parts of the Bill—referred to as "the core provisions"—that otherwise apply only to authorised persons.
Clause 310(1) sets out the core provisions. Amendments Nos. 259NA and 259PA add to the list a number of other provisions of the Bill: Part XIV (disciplinary measures); Part XV (compensation
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scheme); Part XIV (ombudsman scheme); Part XXIV (insolvency); and Clauses 371 to 374 (injunctions and restitution). We believe that these amendments complete the list of relevant provisions.
Amendment No. 259QA adds a new subsection to Clause 310 which makes it clear that in exercising its powers to apply a core provision of the Bill to a member of Lloyd's, the authority may modify the way in which the core provisions will apply. The Explanatory Notes gave an example of the practical issues that would arise if every member of a syndicate were required personally to obtain approval for retaining the services of a syndicate underwriter.
Another example might be in the case of the application of the ombudsman or compensation arrangements, where we should expect the FSA to want to specify how those arrangements would interact with Lloyd's internal mechanisms for dispute resolution between policyholders and Names, and compensation in the event of the insolvency of a Name. These are sensible bits of polishing to the provisions of the Bill which I hope will be welcomed.
Amendments Nos. 259SA to 259WA are part of the package of amendments that the Government are bringing forward to improve the FSA's decision-making procedures. Clause 314 gives the FSA powers to impose requirements on former underwriting members of Lloyd's. Former members continue to carry on insurance business until all their liabilities under the contracts that they have underwritten at Lloyd's are discharged. However, rather than requiring such persons to be authorised, which would be excessive, we have introduced these provisions which give the FSA the powers it needs to impose any requirements it considers necessary to protect policyholders.
These amendments make a small number of changes to Clause 314. The clause, which was added to the Bill at Committee stage in another place, already incorporates most of the new features which we are now introducing into other equivalent provisions elsewhere in the Bill. The amendments ensure that the procedures are consistent.
The third package within this group is also about the arrangements for giving the authority appropriate powers over former Names. The Government do not believe, as I said, that it is appropriate for former Names to have to be authorised, but it is none the less necessary for the authority to have adequate powers to protect its policyholders.
Clause 313 enables the authority to make directions that would impose specific requirements on former members. It is, if you like, a form of intervention power. However, it will be sometimes necessary for the authority to impose requirements in the form of rules—that is to say, requirements that apply across the board rather than on a case-by-case basis. Under the current arrangements introduced to apply the powers of the regulator under the Insurance Companies Act 1982, former Names are required to notify the authority of a change of permanent address. The new clause introduced by Amendment No.

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259WAA would give the authority an appropriate rule-making power. The exercise of the power will be subject to the normal procedures that apply to the exercise of other delegated legislative powers in the Bill and include, for example, requirements for consultation and cost-benefit analysis.
Amendments Nos. 259RA and 259WAB are consequential on that amendment as they move the definition of "former underwriting member" from Clause 313 to the interpretation provision (Clause 315), since the definition is now needed for the purposes of Clause 313 and the new clause.
The overall effect of the changes in relation to former members of Lloyd's is to continue the arrangements already provided for under the 1982 Act. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendments Nos. 259PA and 259QA:
Page 162, line 5, after ("and") insert (", XXIV, sections 371 to 374 and Part").
Page 162, line 8, at end insert—
("( ) An insurance market direction may provide that a core provision is to have effect, in relation to persons to whom the provision is applied by the direction, with modifications.").
The noble Lord said: I have just spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Clause 310, as amended, agreed to.
Clauses 311 and 312 agreed to.
Clause 313 [Former underwriting members:]
Lord McIntosh of Haringeymoved Amendment No. 259RA:
Page 163, line 39, leave out subsection (1).
The noble Lord said: I have just spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 313, as amended, agreed to.
Clause 314 [Requirements imposed under section 313:]
Lord McIntosh of Haringeymoved Amendments Nos. 259SA to 259WA:
Page 164, line 24, at end insert—
("( ) The Authority may extend the period allowed under the notice for making representations.").
Page 164, line 33, at end insert—
("( ) If the Authority decides to grant an application by A for the variation or revocation of a requirement, it must give him written notice of its decision.").
Page 164, line 36, at beginning insert ("If").
Page 164, line 37, leave out from first ("notice") to end of line 38 and insert ("decides to refuse the application, it must give A a decision notice.").
Page 164, line 42, at end insert—
("( ) If an application for a variation or revocation of the requirement is refused, the applicant may refer the matter to the Tribunal.
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( ) If a notice informs a person of his right to refer a matter to the Tribunal, it must give an indication of the procedure on such a reference.").
The noble Lord said: I have just spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Clause 314, as amended, agreed to.
Lord McIntosh of Haringeymoved Amendment No. 259WAA:
After Clause 314, insert the following new clause—
RULES APPLICABLE TO FORMER UNDERWRITING MEMBERS
(".—(1) The Authority may make rules imposing such requirements on persons to whom the rules apply as appear to it to be appropriate for protecting policyholders against the risk that those persons may not be able to meet their liabilities.
(2) The rules may apply to—

(a) former underwriting members generally; or

(b) to a class of former underwriting member specified in them.

(3) Section 312 applies to the making of proposed rules under this section as it applies to the giving of a proposed direction under section 309.
(4) Part X (except sections 143 to 145) does not apply to rules made under this section.").
The noble Lord said: I spoke to this amendment with Amendment No. 259NA. I beg to move.
On Question, amendment agreed to.
Clause 315 [Interpretation of this Part]:
Lord McIntosh of Haringeymoved Amendment No. 259WAB:
Page 165, line 4, after ("2;") insert—
(""former underwriting member" means a person ceasing to be an underwriting member of the Society on, or at any time after, 24 December 1996;").
Then noble Lord said: I have just spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 315, as amended, agreed to.
Clause 316 [Authority's general duty]:
Lord Fraser of Carmylliemoved Amendment No. 259XA:
Page 165, line 30, leave out ("and in other ways").
The noble and learned Lord said: I understand that I am now speaking to three amendments standing in my name. I shall happily be corrected, but I understand them to be Amendments Nos. 259XA, 259YA and 259ZA. I understand the Minister's desire to gallop towards a conclusion, and the idea of building up momentum is a technique that I readily accept I have previously deployed—
Lord McIntosh of Haringey: Proper consideration of the Bill is essential for this Government.
Lord Fraser of Carmyllie: I am deeply honoured that the noble Lord should have intervened in that way to indicate to me that I can take as long as I wish to over

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this set of amendments. If he is getting up from his place to attract the attention of the Chief Whip, he need not bother. I am not going to undertake anything now that might cause him any concern.
There are a number of points relating to Part XX of the Bill that I should like to explore by means of these three amendments. As I understand it, these provisions were first introduced into the Bill at Report stage in the House of Commons. If that is correct, it seems wholly appropriate that in this Chamber some time should be taken to examine them.
This part of the Bill seems wholly appropriate and I have no fundamental difficulty with it. As I indicated when I introduced the first amendment today, a number of amendments that I have tabled have been promoted by the Law Society of Scotland. This statute will regulate investment on both sides of the Border.
So far as Scottish solicitors are concerned, there is undoubtedly a degree of tension that emerges here, not least because, as solicitors, they are governed principally by the Solicitors (Scotland) Act, and that statute has now passed to the responsibility of the Scottish Parliament. So as they conduct their ordinary business as solicitors, if that is to be changed in any way, it will not be a matter for this House or another place, but for the Scottish Parliament.
That said, it is clear to me that those who carry on investment business north of the Border, whether they are solicitors, bankers or whatever, would be exceedingly alarmed were there to be separate regimes for investment regulation on either side of the Border. I hasten to stress that I have no difficulty with that provision, provided there is the understanding that solicitors in Scotland will be statutorily governed by two separate Parliaments.
What I understood as a relatively simple arrangement has become more complicated over the past week or so. I thought that the Financial Services Authority, as Clause 316 indicates, will be required to keep itself informed about
"the way in which designated professional bodies supervise and regulate the carrying on of exempt regulated activities by members of the profession"
and
"the way in which such members are carrying on exempt regulated activities".
Scottish solicit ors might grumble about having two masters but that would be relatively acceptable.
Such activities are not an incidental matter because unlike solicitors in England, for more than 100 years solicitors in Scotland have not only conveyed houses, concluded contracts and made up wills but have carried out a considerable degree of investment business. They continue to do so, so that is an important aspect of their work,
I now understand that in the regulation of Scottish solicitors' exempt activities, the FSA—using one power or another conferred by the Bill—has put out to tender to a number of organisations the task of regulating solicitors in Scotland that carry on exempt regulated activities. The reasoning behind that is to keep fees down, which is not a bad idea. One of the
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bodies might be the Law Society of Scotland. If that were the arrangement, there would not be any difficulty or exaggerated degree of tension.
Another possibility is that the duties relating to activities that fall within Clause 316(1)(b) might be given to PricewaterhouseCoopers. That is an exceptionally good organisation. I have worked with it in the past and have no complaint about its professionalism in accounting, auditing and consultancy.
The third possibility is that the Law Society of England and Wales might be given responsibility for looking after the exempt business of solicitors in Scotland. If the Minister can assure me that is an off-the-wall proposal and that no decision is likely to be taken to give the ultimate power of regulation or oversight to the English society, I would be immensely reassured. Were such a thing to be proposed, if the Minister has not already heard the rumble of distant thunder, he shortly will.
I am exploring the matter now because I understand that a decision one way or the other is to be taken by 10th April—and I doubt that we will reach Report stage before then. I shall be grateful if the Minister will clarify the issue. I am not sure whether the matter falls within Clause 316(1)(b) or is covered by the power that we have already given the FSA in Schedule 1(6).
As to Amendment No. 259YA, when my noble friend Lord Kingsland moved an amendment not so long ago, the noble Lord, Lord McIntosh, indicated that the word "information" encompassed a wide range of material, not just documents. As one who likes an unencumbered statute book, I believe that anything that can be deleted should be deleted.
My second amendment would require the authority to apply to the courts if it wishes to obtain information. If we were to have the contained arrangement that I first understood to be the basis of Part XX, that might be excessive. If a body, however distinguished, such as PricewaterhouseCoopers—or in Scotland, the Law Society of England and Wales— is to exercise that activity, intervention by a court would seem an appropriate regulation on the possibly arbitrary exercise of power by the FSA.
If the designated professional body—which I understand to be the Law Society of Scotland—found that the arrangements were so elaborate and excessive in their regulatory burden that it wanted to get out, it should have the opportunity to say, "We are not going to permit lawyers in Scotland to carry on investment business any longer. It is too excessive a burden".
Lord McIntosh of Haringey: Oh!
Lord Fraser of Carmyllie: The Minister may grin. One matter that takes up an excessive amount of time at Scottish Law Society AGMs and otherwise is the onerous and proper requirement imposed upon lawyers in Scotland to contribute to a guarantee fund. If the complaint is that the burden of that fund is so heavy, solicitors in Scotland ought to have the opportunity to withdraw by their own hand from that

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activity. The noble Lord may be right—that they have been good at that work and there is no reason for them not to continue being good at it. But if there is an excessive degree of regulatory burden, they should at least be accorded the opportunity to withdraw from such activities themselves.
I am probing as carefully as I can and no Chief Whip needs to be worried about my intentions at this stage—but the fuller the answer that I secure this evening, the less time we will devote to the issue on Report.
9 p.m.
Lord Taverne: I rise to speak to Amendments Nos. 259A, 259B and 259C which in effect delete subsection (7) of Clause 318. The subsection provides exemption from the general prohibition on some activities if they are the only activities carried on by a person. The amendments are directed at the problems faced by solicitor investment managers who may now find themselves at a disadvantage because they are subject to regulation by both the FSA and one of the Law Societies.
For some time a number of firms of solicitors have provided clients with professional investment services. Many clients are retired or elderly people; others act on behalf of relatives, trusts or charities. Those clients look for a seamless legal and financial service so that they do not have to waste a lot of time and money co-ordinating the help of different services. Solicitor investment managers usefully fill a gap in the market because they provide independent financial management integrated with traditional legal services. They provide a personal service, which is perhaps somewhat unusual today, and an important one. Examples of activities that would be regulated in the case of some firms and not others include: acting for clients who are trustees; providing custody service for trust share certificates; acting for clients who are executors of an estate; advising on and arranging transactions to effect bequests in wills; and the provision of custody service of share certificates during the administration period. They also advise clients in divorces and, for example, arrange the disposal of a life policy which is part of a matrimonial settlement.
If those services are regulated by the FSA in some cases and not in others, those firms which are subject to two forms of regulation will have higher costs than those which are not but which carry out exactly the same service. Many firms will be unable to sustain the increased costs compared with their competitors and will close or demerge their investment departments which carry out mainstream investment business in order to remain competitive in their core legal business. That would reduce consumer choice, because at present professional firms provide a distinctive, independent service that is not motivated by commissions. This is a personal service which is provided by a known individual, often against the
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background of a long-term relationship with the client. It would be rather ironic if a Bill which was intended to simplify and streamline regulation had the opposite effect.
Clauses 316 to 323 in Part XXII of the Bill provide that solicitors who conduct investment business as an incidental part of their practice are to be regulated by one of the Law Societies. However, where a firm carries out any mainstream investment business, that business, and any incidental investment business which the firm carries on, is to be regulated by both the FSA and Law Society. The Association of Solicitor Investment Managers believes that the Bill needs to be amended to deal with that anomaly. The association accepts that mainstream investment business should be within the remit of the FSA but that incidental investment business performed by solicitors as part of their legal practice should remain to be regulated by the Law Societies alone. The answer to this appears to be the deletion of subsection (7), which is what these amendments are about. I hope that the Government will give this serious consideration.
Lord Kingsland: As to Amendment No. 259AC, as the Committee must by now be aware, Part XX of the Bill deals with the provision of financial services by the professions. Clause 318 sets out the conditions which must be satisfied by a member of the profession if he intends to avoid the general prohibition against carrying on regulated activities when not authorised to do so. Clause 318(3) requires that the person concerned,
"must not receive from a person other than his client any pecuniary reward or other advantage, for which he does not account to his client, arising out of his carrying on of any of the activities".
The amendment simply adds to the end of Clause 318(3) the words,
"for or on behalf of his client".
We believe that that would narrow down the current drafting and make it much clearer.
Amendments Nos. 260 to 262 amend Clause 319 in Part XX. That clause provides an exemption for the provision of financial services by members of the profession where those are not mainstream financial services and, therefore, are to be regulated (as now) by the recognised professional bodies which are described in the Bill as "designated professional bodies". Amendment No. 262 works on the same basis as the extended definition of "consumer" to include as clients beneficiaries of trusts where the professional is a trustee and provides regulated services. That gives rise to the same issues.
However, what do the Government propose to do in relation to members of the professions who do not carry out regulated activities, properly so called, at all? I am concerned here with law firms, whether UK firms or, perhaps more importantly, non-UK firms, which operate in the United Kingdom and give advice on the commercial terms of an investment transaction. For

1005
example, they may point out exposures or liabilities and by so doing in effect advise the client to enter into, or not to enter into, a transaction to buy or sell shares. I believe that that is not a regulated activity at all and therefore the exemption provided in Part XX is unnecessary. Non-UK law firms are unlikely to be members of, or regulated by, a designated professional body. American law firms are a very good example of this.
In addition, where a law firm, or indeed an accountancy firm acting as lawyers or accountants and not as corporate finance advisers, negotiates the commercial terms of an agreement for the purchase or sale of shares or options, or the terms of a class of securities, or drafts an optional agreement, it also should not be regarded as carrying on regulated activities, and therefore would not have to seek to fall within this exemption.
As I understand it, some months ago the Treasury were invited to make it absolutely clear that these activities, which are intrinsic to the profession of a corporate finance lawyer or accountant, do not involve the giving of investment advice or the arranging of transactions in the sense meant by the Bill, or the present Financial Services Act. This is particularly important as the authority, in a recent consultation paper on the exemption provided by Part XX, expressly referred to negotiating transactions as non-mainstream financial services so, implying that this activity requires authorisation unless the exemption applies, which it cannot do in the case of non-UK law firms.
Because Parliament cannot effectively debate the terms of the Treasury's regulated activities order which spells out what activities require authorisation, it is important that the Government make clear that advising on, or negotiating the terms of an investment agreement, are not financial services requiring authorisation. They do not relate to the merits of the investment as such but to the merits of the transaction for the acquisition or disposal of the investment; and do not involve persuading people to buy or sell investments because of their investment merits but merely arrange for the negotiation and exchange or execution of documentation for the purpose of sale of investments. Under the Bill that is all currently completely unclear.
The Treasury will presumably make it clear in the regulated activities order. But we cannot allow a debate on the amendment to pass without discussion on the scope of the authorisation requirement in relation to the activities relating to the transaction rather than to the investment itself without making clear that the exemption is needed only where the member of the profession is doing something which is indeed providing investment services.
Lord Fraser of Carmyllie: Before the Minister responds, my noble friend on the Front Bench has
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many qualities but none more subtle than the signal to me that I had failed to mention Amendments Nos. 259AA and 259AB.
Lord Bach: I have the noble Lord down for two more amendments, Amendments Nos. 259AA and 259AB. If I am wrong perhaps the noble and learned Lord will tell me.
Lord Fraser of Carmyllie: It may not be subtle, but it is correct. Amendment No. 259AA is a paving amendment to allow me to introduce Amendment No. 259AB. The point is simple. At present the Bill requires that if anyone earns a commission, it must be accounted for to his client. The amendment proposes the obligation to disclose to the client such a payment in order for the client to decide whether or not he is prepared to continue with the transaction.
I understand that that is the present requirement. If I am correct, and there is an intention to change the provision, it would be useful to know the basis for proposing that change.
Lord Bach: In dealing with the group of amendments, it is right to set out the background. The noble and learned Lord, Lord Fraser of Carmyllie, is right. The Bill was amended in another place on Report to incorporate government proposals under which professional firms which, among other things, are subject to regulation by a designated professional body and which provide financial services as an incidental and complementary part of their professional practice, will not require authorisation by the FSA. One would have thought that, on balance, the professions would have been content with that change to the Bill. Reading between the lines of the speeches to the amendment, noble Lords probably are content. The problem is that it is not always the contentedness that is demonstrated when amendments are moved.
I deal, first, with the amendments moved and spoken to by the noble and learned Lord, Lord Fraser of Carmyllie. Under Clause 316(4) each designate body must co-operate with the authority by the sharing of information and in other ways in order to enable the authority to perform its functions under Part XX. The noble and learned Lord, Lord Fraser, in his Amendment No. 259YA is proposing that the authority, for the purposes of obtaining this information, apply for an order from the court which will detail the information sought, the person to whom it is to be provided and the timescale in which it should be given. Additionally, a designated professional body which complies with such an order should not be liable in any court for any damages arising from breach of contract or tort or any obligation in restitution.
We believe that the amendment is unnecessary. Recognised professional bodies under Schedule 3, paragraph 6, to the Financial Services Act 1986 are subject to an identical requirement to co-operate with the Financial Services Authority,
"by the sharing of information and otherwise".

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Clause 316(4) merely replicates the existing regime which, I understand, has not caused significant difficulty for bodies representing professional firms. I hope that the noble Lord will not move that amendment.
With regard to Amendment No. 259XA, which proposes the deletion of the words "and other ways" in subsection (4), it is important that the designated professional body's co-operation should not just be limited to the sharing of information, however wide it may be drawn, as there are other ways of co-operating. We should keep the terms of that co-operation as broad as possible in order to ensure that the provision is as effective as it can be. As I have said, the position of professional bodies in this respect will be no different from the position of professional and other bodies recognised under the 1986 Act.
In Amendment No. 259ZA, the noble and learned Lord, Lord Fraser, proposes to add the words:
"if a designated professional body wishes to cease to be designated for the purposes of this Act, it may request the Treasury to revoke its designation as a designated professional body and the Treasury shall comply with such a request".
This is clearly a complicated issue as members of a professional body which ceases to be designated will require FSA authorisation in order to offer financial services to their clients. We will need to make sure that proper arrangements are in place to cover this situation to ensure that consumers receive the right level of protection where professional firms are engaged in regulated activities.
We cannot easily foresee a situation where a designated professional body would request to have its designated status revoked. However, if that situation arose, the Government would need to assess whether it is appropriate to meet the professional body's request in the light of all the circumstances. There should be no obligation imposed on the Treasury to accede to a professional body's request automatically, given the complexity of issues that such a situation would no doubt create. I hope that the noble Lord will reflect on that answer. Of course, I understand that these are probing amendments dealing with a part of the Bill which has only recently come into existence.
I shall do my best to answer the broader question that he asked. I understand that no tender has yet been sought, but the duties to which he referred could not be delegated to the English Law Society. It could not be given such powers. I also understand that the authority can delegate the monitoring of authorised persons, which could include solicitors carrying on non-mainstream business. That comes under Schedule 1, paragraph 6(2), to the Bill. However, the FSA would retain ultimate responsibility. There are no powers to delegate under Part XX. I realise that that is not an entirely satisfactory answer to the issue he raised tonight. Therefore, having read Hansard, I should like to write to him with, it is to be hoped, a more full answer.
I turn to the two amendments spoken to by the noble Lord, Lord Taverne, who seems concerned that professional firms which offer mainstream financial
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advice may be subject to a double regulation by their respective professional body with regard to its provision of professional services and by the authority with regard to its provision of financial services. He fears that that might produce an undue regulatory burden on them.
Firms which conduct mainstream financial services and whose activities are not covered by exclusions set out in the draft regulated activities order will require permission from the authority to carry out both mainstream and ancillary financial services. That is on the basis that it is in the interests of consumers that an authorised firm's overall fitness to conduct financial services be assessed in the light of its activities as a whole. However, it does not follow that the authority must necessarily apply any additional burdens in respect of the non-mainstream business of authorised professional firms. They will be expected to act in accordance with their statutory duties, including the need to have regard to considerations of proportionality and competition.
The FSA indicated in one of its consultation papers, The FSA's regulation of professional firms, published in October last year, that, with regard to the provision of non-mainstream activities, it proposes, in line with the degree of risk attaching to such business, a differentiated and, where appropriate, less burdensome regime. I do not know whether those words have any comfort for the noble Lord in relation to his amendment.
I believe that his second amendment deals with subsection (5), as opposed to subsection (7), but I do not believe that he addressed that particular point in what he said to the Committee. I ask him to consider what has been said and to withdraw the amendment tonight.
I now come to the one Front Bench opposition amendment and link that with the two remaining amendments of the noble and learned Lord, Lord Fraser. First, the noble and learned Lord, Lord Fraser, proposed Amendments Nos. 259AA and 259AB, amending Clause 318, to enable professional firms to retain commissions and other benefits resulting from the introduction of their clients to third parties. Under the clause as amended by the amendment, the professional firm would still be required to disclose the commission if the firm is to benefit from the Part XX exemption.
We are not happy with this particular amendment. Commission sharing may well be appropriate in relation to authorised professional firms. However, we believe that in relation to professional firms which carry on exempt regulated activities, it is right and proper, and that firms should be barred from retaining any commission obtained from IFAs in return for referring their clients to them. We believe that, in any event, that prohibition is in line with a professional's general obligation to act in the best interests of his client where the professional is not a mainstream provider of financial services. In such cases, the source of third-party advice should be determined solely by reference to the client's needs. We believe that that is a

1009
small price to pay for the benefits bestowed by Part XX exemption. Those benefits are fairly substantial. Therefore, we oppose the noble and learned Lord's amendment.
Amendment No. 259AC in the name of the noble Lord, Lord Kingsland, proposes to insert,
"for or on behalf of his client",
at the end of subsection (3). As I understand it, this is a drafting amendment and we are grateful to the noble Lord for his attempt to improve the drafting of the Bill. He obviously believes that Clause 318(3) is unclear as to whether the regulated activities which give rise to the pecuniary award or advantage must be those carried on for or on behalf of a client. We do not agree. We believe that it is clear enough, and it is unlikely that a court would construe the clause any differently. Therefore, for the moment, that remains a matter of difference between us.
I turn to Amendments Nos. 260 and 262A in the Government's name. They allow the authority to give directions in respect of the exemption to the general prohibition which is allowed to professional firms for which regulated activities are a non-mainstream activity. Amendment No. 260 brings Part XX into line with procedures set out in other parts of the Bill. It is a "tidying-up" amendment. It will require that any direction given must be published in a way best calculated to bring it to the attention of the public. It allows the authority to charge a reasonable fee for providing a copy of the direction and requires the authority to give without delay a copy of any direction to the Treasury. Those requirements will ensure consistency of procedure between directions given under Clause 319 and those given under Clauses 309 and 311, both of which are in respect of Lloyd's.
Lastly, I turn to Amendment No. 262A. This government amendment proposes that a new clause be added after Clause 323. Under this new clause, where professional firms describe themselves as professional firms carrying out exempt regulated activities or hold themselves out in a manner which indicates that they are such persons, they will be subject to a similar offence of holding out to that set out in Clause 22.
Clause 22 creates an offence of falsely describing oneself or holding oneself out as authorised or exempt in relation to a particular regulated activity. Professional firms are not subject to that offence with the result that there is currently nothing in the Bill to prevent a person holding himself out as being a member of a designated professional body nor, where a person is a member of a designated body, is there anything that prevents that person from holding himself out as being entitled to exemption under Part XX at a time when he is disqualified.
It follows that it is necessary to rectify that problem. We believe that our amendment does that. As such, it is an important, even if technical, amendment and I commend it to the Committee.
Lord Fraser of Carmyllie: First, I thank the noble Lord, Lord Bach, for the courtesy and care with which he has responded to the amendments. Furthermore, I
1010
thank him for the acknowledgement that he has given that it is appropriate for us to explore these matters on Part XX because these provisions were first introduced into the Bill on Report in another place. I assure him that I have no intention of pursuing the amendments further at this stage.
I may wish to return on Report to the amendment on accounting and disclosure. But otherwise, I am most grateful to the noble Lord for his explanation of the thinking behind the proposals. I am grateful to him also for the confirmation that what I indicated in opening is broadly speaking correct. If my recollection is accurate, I said that it was under paragraph 6 of Schedule 1 that I understand that there may be a derogation or devolution of some power by the authority to another body.
I understand that that is a slightly delicate matter at present because it may be an issue for administrative decision and not for legislative consideration at this time. But the Government really should think very carefully about and reflect on that pattern of activity. It seems that the power of monitoring is to be given to the Law Society of England and Wales which may find that some part of investment activity by a Scottish solicitor must then be referred to the FSA which, in turn, requires the Law Society of Scotland to suspend, fine or whatever it does to that Scottish solicitor. The Government really do not appreciate what risk they are taking in the devolutionary arrangements which are presently in place.
I am grateful to the noble Lord for his offer to write to me. But I ask the Government to think about this very, very carefully indeed unless they wish to introduce a degree of instability into the recent constitutional arrangements. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 259YA not moved.]
Clause 316 agreed to.
Clause 317 [Designation of professional bodies]:
[Amendment No. 259ZA not moved.]
Clause 317 agreed to.
Clause 318 [Exemption from the general prohibition]:
Lord Tavernehad given notice of his intention to move Amendment No. 259A:
Page 166, line 27, leave out ("(7)") and insert ("(6)").
The noble Lord said: I am not sure that I fully followed the Minister's reply but at this time of night one's mind is not as clear as it might be.
I do not believe that the Minister really answered the point that there is this distinction between firms which carry out mainstream activities only—and it is perfectly reasonable that they should be regulated by the Financial Services Authority—and those where an investment activity is carried on incidentally to the other legal activity. In the latter cases, there appears to be double regulation. Companies are now demerging or closing down because they find that to be an excessive burden. I am sure that that is not what the Bill is intended to achieve. It is intended to achieve a

1011
streamlining and simplification of regulation, not an increase in regulation. For that reason, I hope that the Minister will reconsider the matter. We shall look at what he says, but we may well return to the matter on Report.
[Amendment No. 259A not moved.]
[Amendments Nos. 259AA to 259C not moved.]
Clause 318 agreed to.
Clause 319 [Directions in relation to the general prohibition]:
9.30 p.m.
Lord McIntosh of Haringeymoved Amendments Nos. 260 to 262:
Page 167, line 14, at end insert—
("( ) A direction under subsection (1) must be published in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
( ) The Authority may charge a reasonable fee for providing a person with a copy of the direction.
( ) The Authority must, without delay, give the Treasury a copy of any direction which it gives under this section.").
Page 167, line 29, after ("use,") insert ("have used or are").
Page 167, line 34, at end insert—
("( ) If a member of a profession is carrying on an exempt regulated activity in his capacity as a trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or are or may be contemplating using services provided by that person in his carrying on of that activity.").
On Question, amendments agreed to.
Clause 319, as amended, agreed to.
Clauses 320 to 323 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 262A:
After Clause 323, insert the following new clause—
FALSE CLAIMS TO BE A PERSON TO WHOM THE GENERAL PROHIBITION DOES NOT APPLY
(" .—(1) A person who—

(a) describes himself (in whatever terms) as a person to whom the general prohibition does not apply, in relation to a particular regulated activity, as a result of this Part, or

(b) behaves, or otherwise holds himself out, in a manner which indicates (or which is reasonably likely to be understood as indicating) that he is such a person.

is guilty of an offence if he is not such a person.
(2) In proceedings for an offence under this section 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.
(3) A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding level 5 on the standard scale, or both.
(4) But where the conduct constituting the offence involved or included the public display of any material, the maximum fine for the offence is level 5 on the standard scale multiplied by the number of days for which the display continued.").
On Question, amendment agreed to.
Clause 324 agreed to.
Schedule 17 agreed to.
Clauses 325 to 330 agreed to.
Clause 331 [Auditor or actuary's access to books etc.]:
Lord McIntosh of Haringeymoved Amendment No. 263:
Page 173, line 32, leave out ("thinks") and insert ("reasonably considers").
On Question, amendment agreed to.
Clause 331, as amended, agreed to.
Clauses 332 to 336 agreed to.
Clause 337 [The record of authorised persons etc.]:
Lord Saatchimoved Amendment No. 263A:
Page 176, line 8, at end insert—
("( ) approved persons within the meaning of section 63(13);").
The noble Lord said: In moving the amendment I shall speak also to Amendment No. 263B. The Committee will be delighted to hear that these are possibly the simplest amendments that we have discussed in the whole of Committee stage. I hope that the Government have no difficulty with them. Part XXIII requires the FSA to maintain certain public records. The items of information which the records must cover are defined in Clause 337(1) paragraphs (a) to (h). However, in that list there is no requirement for the FSA to keep a record of approved persons; in other words, the individuals approved to be employed by authorised persons. Amendments Nos. 263A and 263B simply require records of approved persons to be kept, covering the name of the approved person—the people working in the company—and the name and address of the authorised person—the company itself—for which the approved person performs a controlled function. I beg to move.
Lord Bach: Clause 337 requires the FSA to maintain a public record of certain categories of person. Of greatest importance will be the record of authorised persons, since it will enable consumers to check that the firm with which they are dealing is authorised. It includes also a number of other people and bodies subject in one way or another to oversight under the Bill, such as recognised investment exchanges. The two amendments so briefly and well spoken to by the noble Lord, Lord Saatchi, would impose requirements on the authority to maintain a public record of persons approved under Part V to perform particular functions. We do not believe that that is necessary. Clause 337 does not limit the information that may be included in the public record; it simply sets out the minimum that must be made publicly available.
I understand that the authority hopes to set up a record containing relevant information about approved persons. However, it has some concerns about the practicalities of setting up a public record of approved persons, at least in the early days. The other persons referred to in subsection (1) will, for the most part, already be established and included on the current register. It should be reasonable to expect the public record to be in good shape when this provision

1013
comes into force. It is not reasonable to think that the public record of approved persons, which will be quite different from the records currently available—where indeed they are available—can be up and running quite as quickly.
If the authority overcomes those difficulties and establishes a public record of that information, there will be a further question of how easy it will be to keep it up to date. That too will be of real concern to the authority, given that the information will need constant revision. Changes to the entries for the other persons mentioned in subsection (1) will not change on anything like such a regular basis, and so the concerns will not arise.
We are not persuaded that the need for the public register is so great in the case of approved persons. While we would expect consumers to take reasonable care to ensure that the firm with which they deal is an authorised person or within one of the other categories specified in subsection (1), we would normally expect them to want to check on a regular basis that employees of such firms have been approved under Part V. The concepts of approval and authorisation are different, as are the consequences of acting without the necessary regulatory consent.
However, the authority intends to seek to make publicly available information of the kind sought by the noble Lord. If it overcomes the practical difficulties that I have attempted to describe, we are sure that it will do so in the way suggested, but we cannot place on the authority an obligation that it may not be able to fulfil. I invite the noble Lord to withdraw his amendment.
Lord Saatchi: I am pleased to hear that the Minister is willing to encourage the FSA to keep such records. I am surprised that, after all this time, this vast organisation finds it impossible to publish a record of the names of the people whom it regulates, particularly as one of its main functions is to provide reassurance to the public that people who are authorised persons or approved persons are people with whom it is safe to do business. Therefore, I find it strange that the FSA cannot cope with the administrative burden of compiling a list of names of those whom it regulates. We shall probably return to this issue. I am slightly taken aback by the answer.
Lord Elton: Can the Minister be specific as to what the difficulty is? As almost everything is done electronically nowadays, surely when somebody is approved and the computer has the correct program, that name will appear on the public list on the website. Now that we have done away with paper, I believe that instantaneous publication is possible and that there is no difficulty.
Lord Bach: I fear that the noble Lord is much too optimistic. Approved persons are employees and they change on a regular basis. Apart from that, I have nothing to add fo the reply that I have given.
Lord Sharman: Perhaps the Minister can clarify this matter. It is surprising that the FSA cannot maintain
1014
such records. It must know who these individuals are as it is responsible for approving them. Professional bodies do not seem to find it a great problem, so I cannot believe that it is insurmountable.
Lord Elton: I see that the noble Lord is not inclined to answer that point, so I shall try to tempt him further. If an approved person cannot practise without approval, he cannot practise without the knowledge of the authorising body, and the authorising body cannot give approval without knowing who the individual is. Therefore, I believe that my question is relevant. In typing out the information, "You have approval", one can cause it to appear in a public list at the same time as it is put in the letter to be posted. I accept that all computers have difficulties—none more so than the ones with which I am concerned personally. I hope that I have now given the noble Lord a chance to reply to the question.
Lord Bach: I do not believe that I am going to satisfy the noble Lord with an answer tonight. Difficulties are involved. There would be the need to include details of the person, the employer, the functions that he carries out and the type of regulated activities. At present, all that is just not possible. I could give an unrealistic answer and suggest that it was, but it is not. It is for that reason that we do not accept the amendment.
The Earl of Home: Before my noble friend replies, I must declare an interest as chairman of Coutts & Company. I am puzzled by this. We have all that information on our files and it is available to the FSA on a regular basis. I cannot see why any institution cannot tell the FSA when someone comes or goes.
Lord Bach: I have heard the debate. The FSA will read it. It may be that we shall hear more about this matter before the Bill finishes its course in this House.
Lord Saatchi: That is not the answer that I was expecting and I have not said what I expected to say. The Minister's reply is so unsatisfactory and inexplicable that I should like to test the opinion of the Committee.
9.41 p.m.
On Question, Whether the said amendment (No. 263A) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 57.

Division No. 2

CONTENTS

Alexander of Weedon, L.

Glentoran, L.

Astor of Hever, L.

Home, E.

Attlee, E.

Howe, E.

Blatch, B.

Hunt of Wirral, L.

Bowness, L.

Jenkin of Roding, L.

Byford, B.

Kingsland, L.

Dixon-Smith, L.

Lamont of Lerwick, L.

Elton, L.

Lyell, L.

Fraserof Carmyllie, L.

Northbrook. L. [Teller]

1015

Northesk, E.[Teller]

Sharman, L.

Saatchi, L.

Skelmersdale, L.

St. John of Fawsley, L.

Taverne, L.

NOT-CONTENTS

Alli, L.

Howells of St Davids, B.

Amos, B.

Hoyle, L.

Archer of Sandwell, L.

Hughes of Woodside, L.

Bach, L.

Hunt of Kings Heath, L.

Bassam of Brighton, L.

Irvine of Lairg, L. (Lord Chancellor)

Borrie, L.

Brooke of Alverthorpe, L.

Jay of Paddington, B. (Lord Privy Seal)

Brookman, L.

Burlison, L.

Lea of Crondall, L.

Carter, L. [Teller]

Lipsey, L.

Christopher. L.

Macdonald of Tradeston, L.

Clarke of Hampstead, L.

Mclntosh of Haringey, L. [Teller]

Cocks of Hartcliffe, L.

Crawley, B.

MacKenzie of Culkein, L.

Currie of Marylebone, L.

Massey of Darwen, B.

Davies of Oldham, L.

Milner of Leeds, L.

Dean of Thornton-le-Fylde, B.

Morris of Manchester, L.

Dormand of Easington, L.

Pitkeathley, B.

Dubs, L.

Ramsay of Cartvale, B.

Falconer of Thoroton, L.

Rendell of Babergh, B.

Farrington of Ribbleton, B.

Richard, L.

Faulkner of Worcester, L.

Sawyer, L.

Gale, B.

Simon, V.

Goldsmith, L.

Stone of Blackheath, L.

Gould of Potternewton, B.

Symons of Vernham Dean, B.

Harris of Haringey, L.

Turner of Camden, B.

Harrison, L.

Warner, L.

Haskel, L.

Warwick of Undercliffe, B.

Hayman, B.

Whitty, L.

Hilton of Eggardon, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.51 p.m.
[Amendment No. 263B not moved.]
Clause 337 agreed to.
Clause 338 [Restrictions on disclosure of confidential information by Authority etc.]:
Lord McIntosh of Haringeymoved Amendment No. 264:
Page 178, line 15, at end insert—
("( ) a competent person appointed by the competent authority under section (Appointment by competent authority of persons to carry out investigations);").
On Question, amendment agreed to.
Clause 338, as amended, agreed to.
Clauses 339 to 342 agreed to.
Lord Bachmoved Amendment No. 265:
After Clause 342, insert the following new clause—
AUTHORITY'S DUTY TO CO-OPERATE WITH OTHERS
(" .—(1) The Authority must take such steps as it considers appropriate to co-operate with other persons (whether in the United Kingdom or elsewhere) who have functions—

(a) similar to those of the Authority, or

(b) in relation to the prevention or detection of financial crime.

(2) Co-operation may include the sharing of information which the Authority is not prevented from disclosing.
(3) "Financial crime" has the same meaning as in section 6.").
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The noble Lord said: On behalf of my noble friend I should like to move Amendment No. 265. This amendment will place a duty on the Financial Services Authority to take such steps as it considers appropriate to co-operate and share information with other bodies or persons. These bodies or persons can be in the UK or elsewhere, as long as they have a function broadly similar to that of the Financial Services Authority or they have a role in relation to the prevention or detection of financial crime.
The amendment carries forward the provision in paragraph 5 of Schedule 7 to the Financial Services Act 1986 which places a similar duty on the authority. I am sure that this amendment will be welcomed by noble Lords opposite, given the remarks made by the Opposition in another place about the need for effective information sharing and co-operation in order to combat financial crime. I beg to move.
Lord Fraser of Carmyllie: As the noble Lord has anticipated, this amendment is welcome. While looking at the legal luminaries ranged on the Government Back Benches behind the noble Lord, I should like to ask one question. Although the clause is desirable, does the noble Lord believe that subsection (2) adds anything to the provision? Does it not add only somewhat otiose, redundant and unnecessary verbiage to the Bill?
Lord Jenkin of Roding: My query concerns the relationship of this clause to the Data Protection Act. When the 1986 Act just referred to by the noble Lord was introduced, the Data Protection Act was not on the statute book. However, that Act carries all kinds of restrictions on what may be disclosed. Are all the details simply swept up in the phrase, "not prevented from disclosing"? If that is the case, it seems to me that those are only a very few words to cover what may be a large swathe of information. I should be grateful for a little clarification on this point.
Lord Hunt of Wirral: It would be most helpful if the noble Lord could give some consideration to the European dimension here. As he will know, a wide range of moves are presently taking place in the European Union to try to take further steps in the prevention and detection of financial crime. I hope that this new clause will enable that kind of cooperation to gather strength. However, a problem may arise in that each national jurisdiction still retains its own individual rights to prosecute.
As regards financial crime which crosses a number of boundaries, it would be helpful if the Minister could mention the latest discussions on this matter within the European Commission and the European Union. I believe that this clause will fit in neatly with some of the initiatives being taken at the present time.
Lord Bach: I am grateful to noble Lords who have taken part in this short debate. Perhaps the best way I can answer the noble and learned Lord, Lord Fraser of Carmyllie, is to invite him to consider the comments of his noble friend Lord Jenkin of Roding as to why

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subsection (2) is necessary. It concerns, among other things, the Data Protection Act. I am afraid that I cannot satisfy the noble Lord, Lord Hunt, tonight, although we both considered this problem for many hours on Sub-Committee E in relation to fraud in the Community and Community funds. I hope that I may consider his remarks and write him a short letter on the latest position on this matter as far as the Treasury is concerned.
Lord Elton: I hope that we may receive a rather longer letter on what information the authority is prevented from disclosing. I do not think that what the noble Lord said about the intervention of my noble friend Lord Jenkin of Roding relates to what my noble friend said. He said that there is substantial legislation preventing the disclosure of information by all kinds of people. All the measure we are discussing states is not that that is to be disregarded but that it is to be enforced. It states that the authority may give whatever information it is allowed to give. That comes close to being otiose. We are being required to use that word too often with regard to this Bill.
Lord Bach: If e purpose of subsection (2) is to make clear that the authority is not obliged to disclose information which it is under an obligation not to disclose. That can be information on a wide variety of matters; for example, matters which come under the protection of the Data Protection Act. I think that is about as far as I can take it this evening.
Lord Elton: That is why I prefaced my remarks by inviting a letter. However, I think that it will be a fairly long letter.
On Question, amendment agreed to.
Clauses 343 to 345 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 266:
After Clause 345, insert the following new clause—
AUTHORITY'S POWERS TO PARTICIPATE IN PROCEEDINGS: TRUST DEEDS FOR CREDITORS IN SCOTLAND
(" . —(1) This section applies where a trust deed has been granted by or on behalf of a debtor who is an authorised person.
(2) The trustee must, as soon as practicable after he becomes aware that the debtor is an authorised person, send to the Authority—

(a) in every case, a copy of the trust deed;

(b) where any other document or information is sent to every creditor known to the trustee in pursuance of paragraph 5(1)(c) of Schedule 5 to the 1985 Act, a copy of such document or information.

(3) Paragraph 7 of that Schedule applies to the Authority as if it were a qualified creditor who has not been sent a copy of the notice as mentionec in paragraph 5(1)(c) of the Schedule.
(4) The Authority must be given the same notice as the creditors of any meeting of creditors held in relation to the trust deed.
(5) A person ap3ointed for the purpose by the Authority is entitled to attend and participate in (but not to vote at) any such meeting of creditors as if the Authority were a creditor under the deed.
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(6) This section does not affect any right the Authority has as a creditor of a debtor who is an authorised person.
(7) Expressions used in this section and in the 1985 Act have the same meaning in this section as in that Act.").
The noble Lord said: Amendments Nos. 266 to 271 make technical changes to bring this part of the Bill into line with Scots bankruptcy law—about which I know nothing! Amendment No. 272 is a drafting change resulting from earlier amendments to Part VII of the Bill.
Amendment No. 266 is necessary because in England, Wales and Northern Ireland insolvency law provides that an individual who is unable to pay his debts may apply to the court for a moratorium during which he may prepare a proposal to his creditors for settlement of his debts. While this is in force the person is protected against the presentation of a bankruptcy petition.
If an authorised person wished to enter into such an arrangement this would clearly be of interest to the FSA. Therefore Clause 345 gives the FSA various rights in these circumstances, including the right to be heard by the court when the authorised person applies for such a moratorium.
Scotland has a separate law of bankruptcy which makes no provision for individual voluntary arrangements. It does, however, provide for a broadly equivalent procedure: that is to say, a voluntary trust deed for creditors within the meaning of Section 5(4A) of the Bankruptcy (Scotland) Act 1985. The purpose of the trust deed is to allow a person who cannot pay his debts to hand over his assets to a trustee, who will then arrange a settlement with his creditors as an alternative to sequestration in the courts. I hope that the noble and learned Lord, Lord Fraser, will agree that that is an accurate summary of the situation.
The new clause after Clause 345 is intended to provide the FSA with similar rights in respect of voluntary trust deeds entered into by authorised persons in Scotland as it has in respect of individual voluntary arrangements in England, Wales and Northern Ireland.
Amendments Nos. 267 to 271 are also concerned to ensure that the FSA has equivalent rights in Scotland as in the rest of the UK. Clauses 360 and 361, which these amend, deal with the FSA's rights in respect of the bankruptcy or sequestration of authorised persons. In England, Wales and Northern Ireland it is possible to take bankruptcy proceedings only against individuals. In Scotland, however, it is possible to take bankruptcy proceedings against other kinds of entities, such as partnerships, under Section 6 of the Bankruptcy (Scotland) Act 1985. These amendments ensure that the FSA has the same rights in respect of such persons as it does in respect of individuals.
Amendment No. 272 makes a drafting change to Clause 363, which deals with the insolvency of insurance companies. This is necessary to take account of amendments we have made to Part VII of the Bill. I beg to move.
10 p.m.
Lord Fraser of Carmyllie: I compliment the Minister on what he has said. I took the 1985 Bill through another place. His recollection of its terms is infinitely greater than my own.
On Question, amendment agreed to.
Clauses 346 to 359 agreed to.
Clause 360 [Insolvency practitioner's duty to report to Authority]:
Lord McIntosh of Haringeymoved Amendment No. 267:
Page 188, line 13, at end insert—
("( ) "Individual" includes an entity mentioned in section 361(1)(c).").
On Question, amendment agreed to.
Clause 360, as amended, agreed to.
Clause 361 [Authority's powers to participate in proceedings]:
Lord McIntosh of Haringeymoved Amendments Nos. 268 to 271:
Page 188, line 19, at end insert ("; or
(c) under section 6 of the 1985 Act for the sequestration of the estate belonging to or held for or jointly by the members of an entity mentioned in subsection (1) of that section").
Page 188, line 22, after ("individual") insert ("or entity").
Page 188, line 29, at end insert ("or entity").
Page 188, line 39, at end insert—
("( )"Entity" means an entity which—

(a) is, or has been, an authorised person; or

(b) is carrying on, or has carried on, a regulated activity in contravention of the general prohibition.").

On Question, amendments agreed to.
Clause 361, as amended, agreed to.
Clause 362 agreed to.
Clause 363 [Continuation of long term business while in liquidation]:
Lord McIntosh of Haringeymoved Amendment No. 272:
Page 190, line 6, leave out ("Schedule 2C to the 1982 Act") and insert ("Part VII").
On Question, amendment agreed to.
Clause 363, as amended, agreed to.
Clauses 364 to 366 agreed to.
Clause 367 [Injunctions]:
Lord McIntosh of Haringeymoved Amendment No. 273:
Page 192, line 4, at end insert—
("( ) In the application of subsection (6) to Scotland—

(a) in paragraph (a)(ii) for "which the Authority has power to prosecute under this Act" substitute "mentioned in paragraph (a) or (b) of section 384(1)"; and

(b) in paragraph (b) omit "which the Secretary of State has power to prosecute under this Act".").

The noble Lord said: In moving Amendment No. 273, I shall speak also to Amendments Nos. 274 and 275.
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This part of the Bill gives the FSA and the Secretary of State rights, in certain circumstances, to take out injunctions or interdicts against persons carrying on financial services business and to seek restitution orders against persons engaged in such business. These amendments make technical changes to bring these provisions into line with Scots law.
Clauses 367, 369 and 371 each include a power to take action when a person commits, or may be about to commit, offences created under other legislation which the FSA or the Secretary of State has the power to prosecute—in other words, the offence of insider dealing or an offence under the money laundering legislation.
So far as concerns England, Wales and Northern Ireland, this is satisfactory because the FSA and the Secretary of State have such prosecution powers. In Scotland, however, neither the FSA nor the Secretary of State has powers to prosecute these or any offences because the Lord Advocate is the sole prosecuting authority. The amendments are intended to take account of this by making direct reference to subsection (1) of Clause 384, where the offences which the FSA has the power to prosecute are set out. I beg to move.
On Question, amendment agreed to.
Clause 367, as amended, agreed to.
Clause 368 agreed to.
Clause 369 [Restitution orders]:
Lord McIntosh of Haringeymoved Amendment No. 274:
Page 193, line 39, at end insert—
("( ) In the application of subsection (9) to Scotland—

(a) in paragraph (a)(ii) for "which the Authority has power to prosecute under this Act" substitute "mentioned in paragraph (a) or (b) of section 384(1): and

(b) in paragraph (b) omit "which the Secretary of State has power to prosecute under this Act".").

On Question, amendment agreed to.
Clause 369, as amended, agreed to.
Clause 370 [Restitution orders in cases of market abuse]:
Lord Kingslandmoved Amendment No. 274A:
Page 194, line 6, at end insert—
("( ) in a case within paragraph (b) of that subsection, to whether the person concerned intended, or might reasonably be presumed to have intended, to commit market abuse;").
The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 274B. Clause 370 allows the court to impose restitution orders in cases of market abuse. The amendment seeks to bring in the element of intent. It follows the wording which the Government themselves introduced in the case of penalties. We want that to apply equally to restitution because that can be just as open-ended as a financial penalty. The "presumed to have intended" language is to help with proving the intention.

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I turn now to Amendment No. 274B. Clause 371 is concerned with the power of the authority to apply restitution in accordance with Clause 370, which, as we have seen, allows the court to impose restitution orders in cases of market abuse. This amendment also seeks to bring in the element of intent. I beg to move.
Lord McIntosh of Haringey: Where someone has engaged in market abuse Clause 370 allows the courts to order restitution to be paid to those who have lost out as a result of the abuse. Clause 371 gives the FSA itself a similar power to make restitution orders where the market abuse has been engaged in by an authorised person.
In deciding how much it is just for the abuser to pay by way of restitution, the courts and the FSA have to have regard to extent of the loss or other adverse effect. These amendments would require the courts or the FSA to have regard to the extent to which the market abuse was intended, or might reasonably be presumed to have been intended. I am afraid that this is something which I cannot accept. Intent is not a necessary feature of market abuse. We debated this point when we were considering Part VIII of the Bill. The reason for this is clear: the damaging effects of an abuse do not depend on the state of mind of the person concerned, but on the impact it has on markets and consumers. As the noble Lord, Lord Grabiner, said most succinctly when we debated the market abuse provisions last week,
"the strength of the clause as drafted is that it would oblige people, where appropriate, to err on the side of caution. It means: 'If there is a risk that your conduct may be likely to produce the result that you fall foul of the abuse provisions, you had better beware"'.
He went on to say that he had great difficulty,
"in understanding any justification for saying to those grown-up, sophisticated people that nothing short of intention will do".—[Official Report, 21/3/2000; co1.216.]
I entirely agree with those points.
The same arguments as regards intent apply in the case of restitution as they do in the case of the market abuse penalty provisions—indeed, more so. That is not to say that intention or recklessness is irrelevant in the case of market abuse penalties where deterrence is the key concern. There are degrees of culpability, and the fact that someone may have intentionally engaged in abuse is relevant to this. That is why Clause 114, which deals with the FSA's policy on the amount of penalties which can be imposed for abuse, requires the FSA to take into account the extent to which the behaviour was deliberate or reckless.
The situation with restitution is quite different. A restitution order is intended to restore any loss which may have been incurred by others as a result of the abuser's actions. The position here is the same as with breaches of FSA rules which lead to loss for consumers. A failure, for example, to observe a rule which results in a loss to consumers may not be something which an authorised person intended to do;
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however, it would be wrong if in such circumstances the consumer could not get his or her money back. I have to oppose the amendments.
Lord Elton: I am no doubt mistaken, but what puzzles me is that the noble Lord refers to restitution, and indeed the rubric of the clause refers to restitution orders. Restitution has nothing to do with punishment; it is about paying back someone who has lost something. However, at the end of subsection (1)(a) is the word "or". The subsection states that,
"The court may, on the application of the Authority, make an order under subsection (2) if it is satisfied that a person has engaged in market abuse and … that profits have accrued to him as a result; or"—
The restitution order appears to be penalising the person or organisation, whether or not the offence has been deliberate, for doing something to his or its own benefit.
Subsection (1)(b) relates to loss suffered by other persons. But it appears from paragraph (a) that there is no need for loss to have been suffered by other persons; merely that the gains have been made improperly. I suppose it can be said that, if someone has gained something improperly, there must have been a loser. But in this case it seems that it is not necessary to identify the loser; otherwise, why are the two factors not linked by "and" rather than "or"?
Lord McIntosh of Haringey: The noble Lord has answered his own question.
Lord Elton: I asked why the provisions are not linked by "and", in which case there would have to be a loser as well as a gainer; whereas with the use of the word "or", there is a gainer in paragraph (a) and a loser in paragraph (b), and they are separated by "or".
Lord McIntosh of Haringey: The noble Lord did answer his own question. He said that if someone has made a profit, someone has made a loss: that is within paragraph (a). The other option is complementary and not otherwise.
Lord Elton: It does not feel very complementary at the moment. If I buy a motor car, there is a profit for the person who made the motor car and there is no loss to me, unless I have been overcharged. It is perfectly possible to make profits without there being losers. I still maintain that this is a very puzzling piece of drafting.
Lord McIntosh: It is not necessary for someone to make a profit from abuse. The important thing is that someone may make a loss, and that may occur under the provisions of either, not necessarily both, of the paragraphs. If I crash my car when I am driving carelessly and I demolish the wall of someone's house, should I only be liable to pay for restoring half the wall because I did not intend the damage? It does not make sense. These amendments are about the amount of

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restitution. They suggest that it should be governed by intent; we are saying that it should not be governed by intent but by the loss.
Lord Kingsland: I think the point my noble friend has expressed so eloquently is that the word "restitution" is used here to cover in law both the notion of restitution and the notion of compensation. Compensation compensates someone for a loss suffered as a result of someone else's action; restitution relates to any improper profit that a person might have made as a result of that action, even if another person suffered no loss.
What my noble friend is saying is that there might be circumstances in which a person not only commits an action which causes loss to someone, and is therefore liable to compensation, but also profits from that action; and in those circumstances, under the rules proposed by the Government, he ought both to compensate and to restitute. My noble friend is saying that the clause does not allow for that; it only allows a person to pay restitution or compensation. Of course, it is possible that I have misunderstood my noble friend; but I believe that is what he was saying.
Lord McIntosh of Haringey: The provision does not say anything of the sort. It says that these are not mutually exclusive circumstances in which there might be a need for restitution. Perhaps I may give examples. Someone might not make a profit from abuse but it might cause loss to others. In the Sumitomo scandal, for example, the abuser actually lost money. The abuse procedures would now catch him; the existing law does not. The profits may have been made at the expense of those of other market users, even if—strictly speaking—there was no loss. It is clear from subsection (8) that restitution must be either to a person from whom the profits enjoyed by the abuser arose or to the person who lost. In the first case there will have been profits earned at the expense of someone else; in the second, an actual loss. Both are covered by the amendment.
10.15 p.m.
Lord Elton: If the clause contains a provision that is purely punitive, the question of intent is not put out of court by the Minister's arguments. He said that with restitution, the question of intent does not arise. The Minister, having backed into a wall while driving carelessly, would have to pay the full sum of repairs, whether or not they were caused intentionally. I accept that, but the drafting of Clause 370(1)(a) makes it clear that there can be cases where profits have accrued and one or more persons have not suffered loss. They are isolated by the word "or". That being the case, the implication is that there are cases where people may not suffer loss as a result of pure profit. We are saying that a person, having acquired profits improperly, should be punished for so doing—and that if it is a
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question of punishment, intent is relevant to the quantity of the punishment. That is all that I am trying to say. I am sorry that it is so difficult to get that across.
Lord McIntosh of Haringey: Then the noble Lord is criticising the Opposition amendments, not the Bill—which is clear that either profits have accrued or someone has suffered loss. One or the other, not both. If the word "and" were used, it would have to be both—and that would be restrictive. It has nothing to do with restitution, which is to make up a loss. A loss could either be a real loss or a diversion of profits from one person to another. I do not see the difficulty.
Lord Borrie: The noble Lord, Lord Elton, is right to refer to the word "or". There are situations in which no individual can establish and prove, as a matter of cause and effect, that he has suffered loss as the result of a market abuse. However, there are situations where someone guilty of market abuse has obtained profits as a result and ought to be required to disgorge them—even though no individual can establish a precise loss. The general body of market users relevant to the situation would enjoy the benefit under the later subsection. That seems a perfectly good provision.
Lord Elton: I find the noble Lord more persuasive than the Minister. I do not say that in any pejorative sense because I do not wish to annoy either of them. I am content with the Minister's remarks in regard to my difficulty.
Lord Kingsland: In the circumstances, I shall read the Minister's comments carefully in Hansard. Intent is a big problem for us in this Bill, not only in relation to this issue but to market abuse. We shall return to it on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 370 agreed to.
Clause 371 [Power of Authority to require restitution]:
[Amendment No. 274B not moved.]
Lord McIntosh of Haringeymoved Amendment No. 275:
Page 195, line 25, at end insert—
("( ) In the application of subsection (5) to Scotland, in paragraph (b) for "in relation to which this Act confers power to prosecute on the Authority" substitute "mentioned in paragraph (a) or (b) of section 384(1)".")
On Question, amendment agreed to.
Clause 371, as amended, agreed to.
Clause 372 [Warning notices]:
Lord Bachmoved Amendment No. 275RA:
Page 195, line 31, leave out subsection (3).
The noble Lord said: This group contains a number of further amendments to clarify the warning notice and decision notice procedure and provide a more consistent approach to the rights of third parties. Dealing shortly (I hope) with each amendment,

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Amendment No. 275TA in Clause 375 responds to points raised by members of the Opposition in another place and requires a warning notice to state the action which the authority proposes to take. We believe that that is already implicit in the Bill but agree that it is better to put the matter beyond doubt.
Amendment No. 275XA in Clause 375 enables the authority to extend the period for making representations. This will allow the authority to respond to any legitimate difficulties that the person concerned may have in making his representations within the period specified. The existing provision is too restrictive in this respect.
Amendment No. 275YA deletes the words "carry out its proposal" in subsection (4) of Clause 375. Those words give the impression that the authority can give effect to its proposal at the end of the warning notice stage. That is not the Government's intention. We propose to substitute the words,
"give the person concerned a decision notice",
to make clear that the next stage is for the authority to issue a decision notice. Alternatively, the authority may decide to issue a notice of discontinuance.
Amendment No. 275D in Clause 376 is a highly significant amendment. Its effect is to restrict the action that the authority may then go on to include in a decision notice. It must be action that is taken under the same part of the Bill. Thus, a proposed financial penalty under Part XIV may be reduced or replaced with a public statement, but the authority cannot move from, say, a warning notice that proposes disciplinary action under Part XIV for a breach of rules to a decision notice which raises allegations of market abuse under Part VII. The authority needs some flexibility, but the person concerned is entitled to the protection of the proper notice procedures being followed: a set of proceedings begun for one purpose should not be the subject of a complete change of character half-way through.
Amendment No. 275G in Clause 376 makes clear that, having issued a decision notice, the authority can agree with the person concerned to substitute a different decision notice. This will enable the person to settle a case without pursuing a reference to the tribunal, although he will not lose the right to refer the matter just because he has agreed a different action with the authority. This ensures that there is the necessary flexibility in the procedure to achieve sensible outcomes to cases without requiring the person or the authority to incur unnecessary costs. It also enables the authority to state clearly if, for example, the grounds put forward in support of a reference to the tribunal cause it to believe that a lower penalty than originally proposed is appropriate. In such a case the person concerned can agree to the serving of a further decision notice while continuing to contest even the reduced penalty, which means further clarity for everyone.
This is not a device to enable back room deals to take place. We are conscious of the need for transparency, on which the Joint Committee had very clear views. Even if a deal is struck on the steps of the
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courthouse, the final stage in the process will still be the issuing of either a final notice or a notice of discontinuance. If it is a final notice, the authority will be under the same obligation as under the existing provisions of the Bill to publish appropriate information about the decision reached. If the end result is a notice of discontinuance, publication may take place only with the consent of the person concerned.
The new clause on third party rights, Amendment No. 275L, rationalises the existing provisions dealing with the rights of third parties identified in warning or decision notices in a way that is prejudicial to them. These provisions were designed to deal with cases where there is some wrong-doing alleged on the part of a third party who is not himself the subject of action by the FSA. For instance, in disciplinary cases under Part XIV, it was felt that action might he taken against a firm for reasons which implied that there had been some failing by one of its directors or employees; or in market abuse cases, where other parties might well have been involved in the transactions giving rise to the allegation that market abuse has been engaged in.
The provisions give third parties, who are identified in prejudicial terms in the reasons for a warning or decision notice, the right to receive a copy of the notice, and to make representations or refer the matter to the tribunal in the same way as the person who is the subject of the FSA's proposed action. We took the view that although these rights create an administrative burden for the FSA, they are necessary to give the third party the right to defend himself against any implied blame arising from the reasons given for the action. Thus the new clause on third party rights will apply to a wide range of disciplinary-type cases. This is the effect of the other new clause which sets out the application of the clause on third party rights. This applies the third party rights to a large number of cases.
We also propose to apply these rights where it is proposed to cancel an authorised person's permission under Part IV. We shall table a further amendment to this effect when we table our amendments to that part on Report. However, we do not consider it appropriate to impose these requirements for the more routine types of regulatory decision, where the matter at issue is not some wrong-doing, but whether conditions are met, or consumers' interests are at risk. Thus they do not apply to refusals of applications, variations of permission, or approval or imposition of requirements on such permission or approval, whether under Part IV or some other part of the Bill.
As a consequence a number of provisions in other parts of the Bill, such as Clauses 372(3) and 373(3) in respect of restitution under Part XXV, can be omitted. That is the effect of the consequential amendments, Amendments Nos. 275RA and 275SA. Some other similar provisions earlier in the Bill will also need to be removed in due course Amendments Nos. 275VA, 275WA and 275E are further consequential amendments to Clauses 375 and 376 which reflect the new clause on third party rights. I beg to move.
10.30 p.m.
Lord Kingsland: We have no amendments in this group. However, I have some views on the government amendment, if I may be allowed to express them.
Clauses 375 and 376 set out the procedural requirements relating to warning notices and decision notices. These include giving the firm or approved person subject to the notices access to the evidence on which the FSA relied. However, in our submission, these parties should also have access to any helpful evidence even though the authority may not want to surrender it. Under English law, this is required in criminal cases, but—so the Government tell us—not in civil cases.
However, two recent European Court of Justice cases held that the specific protections in Article 6.3 are only examples of the "fair hearing" requirement in Article 6.1 and that these included the right to see all the evidence unless, in a public interest immunity case, the court itself saw it first. Those cases are respectively, Rowe and Davis v. the United Kingdom, Jasper v. the United Kingdom, and Fitt v. the United Kingdom, the judgments in all those cases being delivered on 16th February 2000.
As regards Amendment No. 275G, the Government propose to add three new subsections, (8), (9) and (10), on page 198, line 6. The purpose of the amendment is, to us, unclear. It appears to give the authority the ability to issue, with the consent of the firm or the individual concerned, a second "further" decision notice modifying the effect of the first decision notice.
If the purpose of that is to allow the FSA and the recipient scope to renegotiate the terms of the disciplinary action after the issuance of the first decision notice, we would have no difficulty with it in principle. However, we would be concerned if the procedure were to be used to exert pressure on firms or individuals to rescind their decision to refer the matter to the tribunal. Can the Minister confirm that these amendments do not have the effect of diluting the existing safeguards provided under Clauses 375 and 376?
As regards Amendment No. 275J, the Government have introduced a new clause about decision notices. As I understand it, they are setting out the provision which we want; which is, that the authority cannot issue a notice for payment until the time for referral to the tribunal has passed without a reference, or, if there is a reference, until it has been finally disposed of.
However, there seems to be no provision to the effect that the existing notice for payment provisions do not apply; in particular, the provision of a notice for payment of a market abuse penalty (I refer to Clause 118) and the notice for payment of restitution (1 refer to Clause 374). The new clause provides only that the FSA must issue a final notice in all decision notice cases. However, it seems that there is nothing to stop the authority acting on a decision notice given under earlier clauses such as those I have mentioned. Clause 202 is now deleted, but it related only to notices for
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payment of a penalty imposed under Clause 199—and the fact that it has been deleted does, indeed, imply that the new clause has not ousted the existing clauses.
As regards Amendment No. 275K, I do not understand why the person who has received a warning or a decision notice cannot publish it. Surely at the very least he should be allowed to publish it to his legal advisers or accountants. That ought to be an easy matter for the Government to deal with.
Amendment No. 275L has the effect that the defendant's right to see evidence is excluded in relation to both Clauses 51 and 52. I can see no reason why in such cases the firm should not be entitled to have access to the authority's evidence. In addition, it may as a consequence be intended that the authority should not be required to keep the investigation separate from the enforcement function. Again, I can see no reason why that should be the case. It is those two consequences of being supervisory-type decisions which should not be allowed to apply in relation to Clauses 51 and 52.
The Government have indicated in their note to amendments that they want to have a short form authority enforcement procedure in what they call "supervisory-type decisions". These are decisions where they believe that a more flexible procedure is required, which in particular allow the authority's decision to take effect on a specified date, including the date on which the notice is served. The fact that the notice is referred to the tribunal does not appear to affect that. Why are the Government including among the supervisory-type decisions the authority's decisions to vary permissions and impose requirements under Part IV in relation to Clauses 51 and 52? I can well see why an immediate decision is needed in the case of Clause 53, which gives the authority power to exercise its own-initiative power to cancel or amend a permission (or to impose a requirement or prohibition, which again acts as a limitation on the permission) on its own initiative without having to comply with its due process.
In that case, there will be, ex hypothesi, a danger to consumers. However, there is no such emergency in the two other cases where the authority makes decisions in this context. The first is in Clause 51, where the firm has approached the authority and the authority wants to refuse the application. Here, clearly, there can be no question of any need to exercise the power "with immediate effect". In addition, the authority is given the right to exercise its own-initiative power to cancel or change a firm's permission where the emergency situation in Clause 53 does not apply.
The exercise of the own-initiative power may be very prejudicial to the firm, as it will stop it carrying on a particular type of business which it currently carries on, or impose on it what may be substantial limitations on the way that it can carry on its business. As there is no threat requiring the authority to exercise its own-initiative power "with immediate effect", it seems to me, at any rate, that there is time to go through the proper procedures.

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I believe that Amendment No. 275N is in the next group. Therefore, I shall pause for appropriate reflection.
On Question, amendment agreed to.
Clause 372, as amended, agreed to.
Clause 373 [Decision notices:]
Lord Bachmoved Amendment No. 275SA:
Page 196, line 1, leave Out subsection (3).
The noble Lord said: I was fascinated and intrigued by the expert analysis of this field by the noble Lord, Lord Kingsland. I believe that he strayed into one or two amendments that are not in this group. He will forgive me if I d 3 not reply to every one of the excellent points that he made. I should certainly need to look at Hansard for a long time before I could answer him satisfactorily. However, I shall do my best in terms of one or two—
Lord Kingsland: I understand entirely that the Minister may feel unable to reply to Amendment No. 275J. I could not find it in the group. Indeed, I could not find it anywhere in today's groupings. It may well be that the matter was dealt with on a previous Committee day However, in the context of the set of amendments, I felt it appropriate to deal with that point.
Lord McIntosh of Haringey: We understand that it was debated with Amendment No. 241N.
Lord Kingsland: In saying what I said, I by no means felt that I was necessarily in the right. The Minister has pointed out that, indeed, it has already been debated. I understand entirely that the Minister does not want to repeat what he said previously.
Lord Bach: I do not, and the noble Lord made the point that Amendment No. 275N is in the next group and will no doubt be answered.
Amendment No. 275G is in this group. It concerns the opportunity for the authority to vary a decision notice that does not dilute anyone's rights because it is subject to requirement for consent. As regards final notices, we have previously said, and I repeat, that they will replace the Part V and Part VIII penalty notice provisions. We shall oppose those provisions on Report.
The Government's amendments to Clause 377 apply the separation requirement to supervisory decisions as well as those subject to warning and decision notices. That is the extension we thought that the Opposition sought, although the nature of those decisions requires some limited provision for urgent circumstances.
I guarantee that I shall look carefully at the other comments and questions which the noble Lord asked during his response to the amendments which I moved and shall write to him in due course.
On Question, amendment agreed to.
Clause 373, as amended, agreed to.
Clause 374 agreed to.
Clause 375 [Warning notices:]
Lord McIntosh of Haringeymoved Amendment No. 275TA:
Page 196, line 25, at end insert—
("( ) state the action which the Authority proposes to take;").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275UA:
Page 196, line 28. leave out paragraph (c) and insert—
("( ) state whether section (Access to Authority material) applies; and
( ) if that section applies, describe its effect and state whether any secondary material exists to which the person concerned must be allowed access under it.").
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 275ZA, 275A, 275C, 275N, 275NA, 275NB and 275NC. They are not all government amendments, but would noble Lords opposite prefer me to deal with their amendments now or wait until they have spoken to them? I am in their hands.
Lord Kingsland: We should be delighted if the Minister would speak to these amendments as well as to the government amendments. It will save a lot of time.
10.45 p.m.
Lord McIntosh of Haringey: I recognise Amendment No. 275A tabled by noble Lords opposite. It goes too far, but as my colleagues said in another place when responding to an identical amendment, we have been considering further amendment to the provisions concerning access to the evidence relied on by the FSA.
That further consideration was prompted by representations made to us by the Law Society after the Bill had been introduced in another place and was already being debated in Committee there. The concern of the Law Society was that the FSA could, if it was minded to do so, selectively rely on evidence, such as expert witness statements, that pointed in different directions.
We accepted that point, and have been actively engaged in finding a solution. The result of those considerations are the amendments before the Committee. In all those cases to which the full disciplinary-type procedure applies— which includes market abuse, cancellation of permission, issuing a prohibition order and all those types of decision to which my noble friend Lord Bach referred in relation to third party rights—we are proposing a considerable enhancement to the right of access.
Not only will there be a right of access to the evidence the FSA is relying on, but there is in addition to be a right of access to material that the FSA has considered in arriving at its decision or which it has obtained in the course of investigating the matter and which it considers might undermine its case.

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That test is modelled on the disclosure rules that apply in criminal proceedings—I am not getting any attention from the crowded Opposition Front Bench—under the Criminal Procedure and Investigations Act, though adapted to reflect the fact that the FSA is not simply an investigatory or prosecuting body, but one with broad supervisory responsibilities. The FSA will potentially hold a large amount of evidence in relation to an authorised person that could be said to relate to the matter covered by a notice without being particularly germane to it.
It would be excessively bureaucratic if the FSA were required to assess all the information it might hold for various purposes which may be said, in some loose sense, to relate to a matter covered by a warning notice. That is why the secondary material which must be considered for granting access is deliberately restricted to matters considered by the FSA in taking the decision or obtained in the course of investigating the matter with which the notice is concerned. Without that, the extensive access requirements that we are proposing would hopelessly disadvantage the regulator.
I wish to make it clear that we would not normally apply such onerous access requirements to a regulatory body and we certainly do not regard that as a precedent for other areas. But we are conscious that the FSA is a body exercising a necessarily wide range of powers and we are sensitive to the concerns that have been expressed. We have concluded, therefore, that an approach modelled on the criminal procedures is appropriate and justified here. However, it would not be appropriate or desirable to extend those rights across the full range of FSA decisions. The disclosure rules on which they are modelled are designed for cases where there is some mischief alleged. That translates readily enough into market abuse and the various disciplinary powers.
We propose also to extend those rights where the FSA is proposing to take the ultimate step of cancelling a person's authorisation under Part IV or approval under Part V or to issue a prohibition order under Part V or Part XX. But we do not consider it appropriate or desirable to apply those rights to the majority of supervisory decisions, many of which will be relatively routine, or to the determination of applications for new or increased permission or approval, recognition or authorisation. In those cases the FSA is not judging whether X has done Y, but whether the FSA is satisfied that X meets standard Z.
Applying the rights of access to all those decision-making procedures would be excessive and would unduly interfere with the ability of the FSA to respond prudently and sensitively to the very different circumstances which different supervisory cases will present. I should add that the rights of access will apply at both the warning and decision notice stages—a further enhancement on the position under the Bill as it stands—because we have no wish to deprive a person of the opportunity to see the evidence in order to assess whether or not to refer the matter to the tribunal,
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irrespective of whether the person had previously taken the opportunity in order better to inform their representations.
We have also made provision dealing with the issues of public interest immunity and commercial sensitivity, as we said in another place that we would. Finally, we have provided that the third parties whose interests may be prejudiced by the reasons given in a warning or decision notice will also enjoy rights of access to the relevant evidence.
I turn to Opposition Amendments Nos. 275NA, 275NB and 275NC which focus on an important and interesting aspect of the new, wider access rights set out in the new clause. Subsection (2) ensures that the FSA is able to consider how similar or comparable cases have been dealt with in order to ensure proper consistency in its proposed actions and penalties, without thus opening up sensitive commercial details about other businesses to scrutiny by the subject of the action currently proposed. If action is being taken against a person X, it is no business of X's whether or not similar action was previously taken against another person, Y.
Indeed, the action in the earlier case may not have been pursued, in which case it would be unfair to reveal details of what had been proposed to another person without consent. I can see that noble Lords opposite appreciate that thinking, but they propose through Amendment No. 275NA that there should be a right of access to the material considered for comparative purposes so long as the material can be made available without disclosing the other person's identity. I cannot agree. Even if it was sufficient not to disclose Y's identity—and in many cases I doubt whether that would be sufficient to avoid revealing sensitive information about identifiable other persons—I do not accept that X has any business knowing what was or was not decided in the case concerning Y. I certainly do not see the need to require the FSA to give access to such material, which could involve a lot of additional cost in terms of editing documents.
There will, however, be considerable material in the public domain to assist X in determining whether the action proposed is in line with general FSA policy and practice. First, where the FSA proposes to impose a financial penalty under Parts VIII or XIV it will be required to have regard to its published statement of policy. The tribunal will also be able to refer to the relevant statement, and the person subject to the proposed decision, X, will be able to refer to it too.
Secondly, if the action against Y proceeded, and any consideration by the tribunal or higher court has been completed, details of the case would have been made public under the new clause on final notices and X would have access to those details. If the action was still subject to reference to the tribunal it would hardly be right to disclose any details about it, anonymous or not.
Finally, the FSA has already proposed that from the bringing into force of this legislation, the FSA annual report will include accounts of enforcement action taken, including in particular details on cases settled or

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determined by the tribunal; financial penalties imposed and costs awarded; and significant judgments by the tribunal.
Amendment No. 275NB simply says that subsection (2) does not prevent the FSA from providing a summary of the principal characteristics of those cases, Let me assure the noble Lord, Lord Kingsland, that as currently drafted, subsection (2) does not prevent that. As I have indicated, we expect that the FSA will publish some information along those lines in its annual reports.
Subsection (3)(b) enables the FSA to withhold material where providing access would be unfair given the likely significance of the material to the current case, weighed against the potential prejudice to the commercial interests of another person.
Again, the Opposition suggest that there should be a requirement to permit access to the material if the identity of the other person or persons could be withheld. That goes too far. The FSA is required to come to a conclusion about the fairness of providing access to the material. If the material can be made available in a way that is not unfair, the FSA should do so. However, requiring the FSA to provide access where, despite withholding the identities, it is still unfair to do so, would be wrong.
So again I cannot accept this amendment. The necessary discretion is already provided for. Overriding it may lead to unfair and unintended results. In resisting these amendments, I have sought to make clear that I am not disagreeing with the noble Lords that the FSA should consider whether the objections against disclosure can be satisfactorily overcome, but the new clause strikes the right balance already. I beg to move.
Lord Kingsland: This time my intervention will be mercifully telegraphic. The Government have provided that in certain cases the authority may refuse access to particular material, for example, material subject to legal privilege and where access would be unfair. That is set out in the Government's notes under the heading "Access to Authority Material".
Earlier this evening I referred to the Rowe and Davis case in which judgment was handed down in February this year. In that case we see that even public interest immunity certificates cannot make the hearing fair if evidence is withheld. However, in two other cases involving the United Kingdom that were brought before the European Court of Human Rights—Jasper and Fitt—the court held that the hearing could be fair even if evidence was withheld under public interest immunity certificates provided that, as I understand it, the judge sees the evidence and the defence is told that evidence is being withheld and is given a summary of it.
Am I entitled to conclude that that is intended to happen if the authority holds back evidence? Will the authority notify the defendant that it is withholding
1034
evidence and give the reasons for doing so? As the Government understand it, is that the current position?
Lord McIntosh of Haringey: I believe that to be the case.
Lord Kingsland: I am much obliged.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Lyell): I have to inform the Committee that, if Amendment No. 275ZA is agreed to, I shall not be able to call Amendment No. 275A in the name of the noble Lord, Lord Kingsland, although I believe he has spoken to it already.
Lord Bachmoved Amendments Nos. 275VA to 275ZA:
Page 196, line 29, leave out subsection (2).
Page 196, line 36, leave out ("or copied").
Page 196, line 37, at end insert—
("( ) The Authority may extend the period specified in the notice.").
Page 196, line 39, leave out ("carry out its proposal") and insert ("give the person concerned a decision notice").
Page 196, line 40, leave out subsection (5).
On Question, amendments agreed to.
Clause 375, as amended, agreed to.
Clause 376 [Decision notices]:
Lord McIntosh of Haringeymoved Amendment No. 275B:
Page 197, line 5, leave out (", or not to take,").
The noble Lord said: This amendment was debated with Amendment No. 274N. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275C:
Page 197, line 6, after ("relates") insert—
("( ) state whether section (Access to Authority material) applies; and
( ) if that section applies, describe its effect and state whet her any secondary material exists to which the person concerned must be allowed access under it;").
On Question, amendment agreed to.
Lord Bachmoved Amendments Nos. 275D and 275E:
Page 197, line 10, at end insert—
("(1A) If the decision notice was preceded by a warning notice, the action to which the decision notice relates must be action under the same Part as the action proposed in the warning notice.")
Page 197, line 11, leave out subsections (2) and (3).
On Question, amendments agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275F:
Page 197, line 36, leave out subsections (5) to (7).

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On Question, amendment agreed to.
Lord Bachmoved Amendment No. 275G:
Page 198, line 6, at end insert—
("(8) The Authority may, before it takes the action to which a decision notice ("the original notice") relates, give the person concerned a further decision notice which relates to different action in respect of the same matter.
(9) The Authority may give a further decision notice as a result of subsection (8) only if the person to whom the original notice was given consents.
(10) If the person to whom a decision notice is given under subsection (8) had the right to refer the matter to which the original decision notice related to the Tribunal, he has that right as respects the decision notice under subsection (8).").
On Question, amendment agreed to.
Clause 376, as amended, agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275H:
After Clause 376, insert the following new clause—
NOTICE OF DISCONTINUANCE
(" .—(1) If the Authority decides not to take—

(a) the action proposed in a warning notice, or

(b) the action to which a decision notice relates,

it must give a notice of discontinuance to the person to whom the warning notice or decision notice was given.
(2) But subsection (1) does not apply if the action proposed in a warning notice was the refusal of an application made by the person to whom the notice was given.
(3) A notice of discontinuance must identify the proceedings which are being discontinued.").
The noble Lord said: This amendment was spoken to with Amendment No. 241N. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275J:
After Clause 376, insert the following new clause—
FINAL NOTICE
(" .—(1) If the Authority has given a person a decision notice and the matter was not referred to the Tribunal within the period mentioned in section 124(1), the Authority must, on taking the action to which the decision notice relates, give the person concerned and any person to whom the decision notice was copied a final notice.
(2) If the Authority has given a person a decision notice and the matter was referred to the Tribunal, the Authority must, on taking action in accordance with any directions given by—

(a) the Tribunal, or

(b) the court under section 128,

give that person and any person to whom the decision notice was copied a final notice.
(3) A final notice about a statement must—

(a) set out the terms of the statement;

(b) give details of the manner in which, and the date on which, the statement will be published.

(4) A final notice about an order must—

(a) set out the terms of the order;

(b) state the date from which the order has effect.

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(5) A final notice about a penalty must—

(a) state the amount of the penalty;

(b) state the manner in which, and the period within which, the penalty is to be paid;

(c) give details of the way in which the penalty will be recovered if it is not paid by the date stated in the notice.

(6) In any other case, the final notice must—

(a) give details of the action being taken;

(b) state the date on which the action is to be taken.

(7) The period stated under subsection (5)(b) may not be less than 14 days beginning with the date on which the final notice is given.
(8) If all or any of the amount of a penalty payable under a final notice is outstanding at the end of the period stated under subsection (5)(b), the Authority may recover the outstanding amount as a debt due to it.").
The noble Lord said: This amendment was spoken to with Amendment No. 241N. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275K:
After Clause 376, insert the following new clause—
PUBLICATION
(" .—(1) Neither the Authority nor a person to whom a warning notice or decision notice is given or copied may publish the notice or any details concerning it.
(2) A notice of discontinuance must state that, if the person to whom the notice is given consents, the Authority may publish such information as it considers appropriate about the matter to which the discontinued proceedings related.
(3) A copy of a notice of discontinuance must be accompanied by a statement that, if the person to whom the notice is copied consents, the Authority may publish such information as it considers appropriate about the matter to which the discontinued proceedings related, so far as relevant to that person.
(4) The Authority must publish such information about the matter to which a final notice relates as it considers appropriate.
(5) But the Authority may not publish information under this section if publication of it would, in its opinion, be unfair to the person with respect to whom the action was taken or prejudicial to the interests of consumers.
(6) Information is to be published under this section in such manner as the Authority considers appropriate.
(7) "Notice of discontinuance" means a notice given under section (Notice of discontinuance).
(8) "Consumers" means person who are consumers for the purposes of section 129.").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendments Nos. 275L and 275M:
After Clause 376, insert the following new clause—
("Third party rights and access to evidence
APPLICATION OF SECTIONS (THIRD PARTY RIGHTS) AND (ACCESS TO AUTHORITY MATERIAL)
Sections (Third party rights) and (Access to Authority material) apply to—

(a) a warning notice given in accordance with section 56(1), 62(3), 66(1), 88(1), 116(1), 200(1), 248(1), 272(1), 322(1), 335(2) (whether as a result of subsection (1) of that section or section 242(1)) or 372(1);

1037

(b) a decision notice given in accordance with section 56(3), 62(4), 66(4), 88(4), 117(1), 192(3)(a), 201(1), 248(2), 272(2), 322(3), 335(3) (whether as a result of subsection (1) of that section or section 242(1)) or 373(1).").

After Clause 376, insert the following new clause—
THIRD PARTY RIGHTS
(" .—(1) If any of the reasons contained in a warning notice to which this section applies relates to a matter which—

(a) identifies a person ("the third party") other than the person to whom the notice is given, and

(b) in the opinion of the Authority, is prejudicial to the third party,

a copy of the notice must be given to the third party.
(2) Subsection (1) does not require a copy to be given to the third party if the Authority—

(a) has given him a separate warning notice in relation to the same matter; or

(b) gives him such a notice at the same time as it gives the warning notice which identifies him.

(3) The notice copied to a third party under subsection (1) must specify a reasonable period (which may not be less than 28 days) within which he may make representations to the Authority.
(4) If any of the reasons contained in a decision notice to which this section applies relates to a matter which—

(a) identifies a person ("the third party") other than the person to whom the decision notice is given, and

(b) in the opinion of the Authority, is prejudicial to the third party,

a copy of the notice must be given to the third party.
(5) If the decision notice was preceded by a warning notice, a copy of the decision notice must (unless it has been given under subsection (4)), be given to each person to whom the warning notice was copied.
(6) Subsection (4) does not require a copy to be given to the third party if the Authority—

(a) has given him a separate decision notice in relation to the same matter;

(b) gives him such a notice at the same time as it gives the decision notice which identifies him

(7) Neither subsection (1) nor subsection (4) requires a copy of a notice to be giver to a third party if the Authority considers it impracticable to do so.
(8) Subsections (9) to (11) apply if the person to whom a decision notice is given has a right to refer the matter to the Tribunal.
(9) A person to whom a copy of the notice is given under this section may refer to the Tribunal—

(a) the decision in question, so far as it is based on a reason of the kind mentioned in subsection (4); or

(b) any opinion expressed by the Authority in relation to him.

(10) The copy must be accompanied by an indication of the third party's right to make a reference under subsection (9) and of the procedure on such a reference.
(11) A person who alleges that a copy of the notice should have been given to him, but was not, may refer to the Tribunal the alleged failure and—

(a) the decision in question, so far as it is based on a reason of the kind mentioned in subsection (4); or

(b) any opinion expressed by the Authority in relation to him.

(12) Section (Access to Authority material) applies to a third party as it applies to the person to whom the notice to which this section applies was given, in so far as the material which the Authority must disclose under that section relates to the matter which identifies the third party.
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(13) A copy of a notice given to a third party under this section must be accompanied by a description of the effect of section (Access to Authority material) as it applies to him.
(14) Any person to whom a warning notice or decision notice was copied under this section must be given a copy of a notice of discontinuance applicable to the proceedings to which the warning notice or decision notice related.").
On Question, amendments agreed to.
Lord McIntosh of Haringeymoved Amendment No. 275N:
After Clause 376, insert the following new clause—
ACCESS TO AUTHORITY MATERIAL
(" .—(1) If the Authority gives a person ("A") a notice to which this section applies, it must—

(a) allow him access to the material on which it relied in taking the decision which gave rise to the obligation to give the notice;

(b) allow him access to any secondary material which, in the opinion of the Authority, might undermine that decision.

(2) But the Authority does not have to allow A access to material under subsection (1) if the material is excluded material or it—

(a) relates to a case involving a person other than A; and

(b) was taken into account by the Authority in A's case only for purposes of comparison with other cases.

(3) The Authority may refuse A access to particular material which it would otherwise have to allow him access to if, in its opinion, allowing him access to the material—

(a) would not be in the public interest, or

(b) would not be fair, having regard to—

(i) the likely significance of the material to A in relation to the matter in respect of which he has been given a notice to which this section applies; and

(ii) the potential prejudice to the commercial interests of a person other than A which would be caused by the material's disclosure.

(4) If the Authority does not allow A access to material because it is excluded material consisting of a protected item, it must give A written notice of—

(a) the existence of the protected item; and

(b) the Authority's decision not to allow him access to it.

(5) If the Authority refuses under subsection (3) to allow A access to material, it must give him written notice of—

(a) the refusal; and

(b) the reasons for it.

(6) "Secondary material" means material, other than material falling within paragraph (a) of subsection (1) which—

(a) was considered by the Authority in reaching the decision mentioned in that paragraph; or

(b) was obtained by the Authority in connection with the matter to which the notice to which this section applies relates but which was not considered by it in reaching that decision.

(7) "Excluded material" means material which—

(a) has been intercepted in obedience to a warrant issued under any enactment relating to the interception of communications;

(b) indicates that such a warrant has been issued or that material has been intercepted in obedience to such a warrant; or

(c) is a protected item (as defined in section (Protected items)).").

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The noble Lord said: This amendment was spoken to with Amendment No. 275UA. I beg to move.
Lord Kingslandmoved, as an amendment to Amendment No. 275N, Amendment No. 275NA:
Line 10, after ("A") insert ("unless it is possible to provide this material without disclosing the other person's identity").
The noble Lord said: I have not spoken to these amendments and I am delighted to do so now. Amendments Nos. 275NA, 275NB and 275NC are our amendments which to seek to amend the new clause in Amendment No. 275N. They would require the authority to disclose additional information which the authority could withhold under subsections (2)(a) and (b) of the new clause, and under subsection (3)(b). Amendments Nos. 275NA and 275NC concern information which can be disclosed without identifying the person concerned—that is to say, a person other than the person against whom the authority action is being taken. I beg to move.
11 p.m.
Lord McIntosh of Haringey: I spoke to these amendments, with the agreement of the Opposition Front Bench, at inordinate length. But clearly we are not meeting each other in debate. Perhaps I can undertake to write to the noble Lord or even meet him to discuss the details, in the light of what I said at length and what he said rather more tersely.
Lord Kingsland: I am happy to read what the noble Lord said in Hansard. If I feel that I need a further reaction from the noble Lord, I shall send him an appropriate signal. I beg leave to withdraw the amendment.
Amendment No. 275NA, as an amendment to Amendment No. 275N, by leave, withdrawn.
[Amendments Nos. 275NB and 275NC, as amendments to Amendment No. 275N, not moved.]
Amendment No. 275N agreed to.
Clause 377 [The Authority's procedures]:
Lord McIntosh of Haringeymoved Amendment No. 275P:
Page 198, line 9, after ("of") insert ("—
( ) supervisory notices; and
( )")
The noble Lord said: In rising to move Amendment No. 275P I shall be more cautious. I shall speak to the government amendments and let the Opposition move their amendments. We can vary these procedures as it suits us. I shall speak to Amendments Nos. 275Q, 275R, 276, 276ZA and 276AA at the same time.
Clause 377(2) requires the authority to have procedures designed to ensure that the final decision giving rise to a warning or decision notice is taken by someone not involved in gathering the evidence. This subsection was introduced in response to a recommendation of the Joint Committee that the Bill
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should enshrine the role envisaged for the FSA's "Enforcement Committee". It deliberately leaves open the form that this separation must take, so as not to set the FSA's current administrative procedures in stone. It is right that it should be able to change them from time to time in the light of experience and in line with best administrative practice.
As Clause 377 is currently drafted, this separation requirement would apply only to decisions which give rise to a warning notice and a decision notice. This covers disciplinary type decisions and decisions to revoke authorisation, approval and so forth, and decisions to refuse (or not fully grant) applications.
The Government's Amendments Nos. 275P, 275Q and 275ZA apply the important principle of separation also to supervisory decisions such as decisions to vary Part IV permission. I believe that that goes beyond what was required to meet the concerns of the Joint Committee, but they should be all the more welcome to the Committee for that.
However, this extension raises new issues. We are all conscious of the need to ensure that the authority is able to act speedily when necessary in order to ensure that consumers are not put at risk. That concern has lain behind many of these procedural changes. Amendment No. 275R therefore allows the authority's procedures to provide for a supervisory decision to be taken by an appropriately senior person within the authority even though he may have been involved in some way in gathering the evidence, if this is necessary in order to avoid harm to the interests of consumers which might be caused if the decision was delayed whilst it was considered by a separate person.
It is of course important that this should not mean that decisions are taken by someone unsuitable within the authority. Accordingly, the amendment goes on to provide that the person must be of a level of seniority appropriate to the importance of the decision, and this level of seniority must be specified in the published procedure on which the authority is required to consult by Clause 378.
The "supervisory notice" category is defined by Amendment No. 276AA to cover notices issued in relation to decisions taken to intervene in relation to a collective investment scheme under Clause 250; to suspend promotion of an overseas collective investment scheme under Clause 261; to intervene in relation to an overseas scheme under Clause 273; or to impose a requirement on a former underwriting member of Lloyd's under Clause 314.
We will bring forward amendments at Report to extend that to include the procedures applicable for varying an authorised person's Part IV permission, for discontinuing or suspending the listing of any securities under Part VI, or for imposing requirements under Part XIII on an incoming firm. We did not insert the references to these new clauses at this stage because some of the new clauses themselves need to be added on Report.

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The remaining government amendment in this group, Amendment No. 276, is a minor drafting point. I beg to move.
Lord Kingsland: I shall respond to what the Minister has said on Amendment No. 275R, while my noble friend Lord Saatchi will speak to our Amendment No. 276A.
As regards Amendment No. 275R, this amendment inserts a new subsection, subsection (2A) in Clause 377. It sets out a requirement that the authority must determine the procedure it is to follow in relation to the giving of warning and decision notices, to which are now added supervisory notices as defined in Amendment No. 276AA.
The most important part of this procedure is that the decision that gives rise to the obligation to give a notice is to be taken by a person not directly involved in establishing the evidence on which the decision has been based. In other words, the investigatory function is to be separated from the enforcement function. As I understand it, Amendment No. 275R will provide an exception to this principle. The exception will be that in the case of supervisory notices, the decision to issue the notice can be taken by the same person investigating, if the authority thinks that this is necessary in order to protect the interests of consumers, and if the person taking the decision is of a sufficiently senior level.
I can see the sense in this procedure, which the Government have indicated will apply only where it is necessary for the authority to act swiftly in emergencies. However, although the authority may need to take the enforcement decision quickly, I think that it would be perfectly appropriate to urge the Government also to provide that, once the enforcement decision has been taken, a separate senior official of the authority should review that decision internally and be empowered to reverse it. Presumably the emergency would then be over and therefore the normal procedures would apply, albeit retrospectively.
I emphasise that our Amendment No. 276A is still needed. It relates to Clause 377(9) which provides that the FSA's failure to follow its published procedures does not invalidate the notice given. In other words, the person who decided to issue the notice could be the same person who investigated the circumstances, even though new subsection (2A), which we have discussed, does not apply.
I understand that the Government have justified subsection (9) by saying that it is needed to correct clerical and miner inaccuracies; this is because they do not want the whole regulatory procedure to be invalidated for this reason. However, there is no limitation to clerical or other minor errors. That is why we must insist that the provision applies only if the failure is not material and does not, as it were,
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prejudice the person who receives the notice. This seems to me to play fair with both the authority and the defendant.
Lord McIntosh of Haringey: It may be helpful if, before the noble Lord, Lord Saatchi, moves the opposition amendment, I respond to the point that has been made about Amendment No. 275R. The noble Lord has made what appears to me to be a perfectly legitimate point. He has recognised the need for swift action in such cases and has suggested that subsequently there should be a review by another senior person. Perhaps I may say, first, that we are referring only to supervisory cases here, not to regulatory cases.
Nevertheless, I should like to think about the practicality of the noble Lord's suggestion for a review. Without making any commitment at this stage, perhaps I may talk to him further on the matter between now and Report stage.
Lord Kingsland: I am most grateful to the Minister for that intervention.
Lord Saatchi: I wish to speak to Amendment No. 276A. Clause 377 requires the FSA to set out procedures in relation to the giving of warning notices and decision notices. In particular, the clause separates the people who investigate from the people who decide on enforcement, which is as it should be. However, subsection (9) then allows the FSA to ignore its own procedures, which is not as it should be. So far, the Government have refused to delete subsection (9) or limit it to situations where the firm is not unduly prejudiced. The Government, I believe, think that subsection (10) solves our problem. However, we disagree because we find that that works only if the authorised firm appeals. Therefore our amendment seeks to deprive the FSA of the right to ignore its own procedures except in minor clerical cases.
Lord McIntosh of Haringey: I shall respond to Amendments Nos. 276YA and 276A. Subsection (9) of Clause 377 does not excuse the FSA from the need to take care in following its published procedures. It is important that these procedures are transparent and fair. It is also important that people can rely on their being followed.
However, subsection (9) is needed in order to ensure that the tribunal procedures, which are designed to test out the merits of the decision, cannot be hijacked by lengthy arguments on prior procedural details. For example, it would be ridiculous if a person could argue that some minor deviation in the way that a notice was drafted meant that the notice was ineffective, that the tribunal could not determine the merits of the case and that the whole procedure had to be started afresh. It would be worse still if this meant that the person was able to ignore an important supervisory notice that varied his permission or otherwise required him to behave, or refrain from behaving, in a certain way.

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In this latter situation, the arguments might potentially not be raised at the appropriate time, but months or even years later when the FSA sought to take further action against a firm which had ignored an earlier FSA decision. We would not want a minor clerical error in the drafting of a notice to be the ground for reopening a decision.
As the Government explained in another place, where the FSA has failed to follow its procedures, the appropriate course is for the tribunal to proceed to hear the case, exercising its unfettered discretion to consider the merits of the FSA's decision.
The tribunal is a first instance tribunal. The tribunal's own fair procedures should rectify any failure by giving the person a fresh chance to have a fair hearing. It is right that its consideration should overtake the FSA's consideration, including any earlier procedural errors that may have been made by the FSA. Subsection (10) makes that explicit.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendments Nos. 275Q, 275R and 276:
Page 198,1ine 11, leave out ("a warning notice or decision") and insert ("any such").
Page 198, line 13, at end insert—
("(2A) But the procedure may permit a decision which gives rise to an obligation to give a supervisory notice to be taken by a person other than a person mentioned in subsection (2) if—

(a) the Authority considers that, in the particular case, it is necessary in order to protect the interests of consumers; and

(b) the person taking the decision is of a level of seniority laid down by the procedure.

(2B) A level of seniority laid down by the procedure for the purposes of subsection (2A)(b) must be appropriate to the importance of the decision.").
Page 198, line 14, leave out ("publish") and insert ("issue").
The noble Lord said: I beg to move Amendments Nos. 275Q to 276 en bloc.
On Question, amendments agreed to.
[Amendment No. 276YA not moved.]
Lord McIntosh of Haringeymoved Amendment No. 276ZA:
Page 198, line 27, leave out ("warning notice or decision").
On Question, amendment agreed to.
[Amendment No. 276A not moved.]
Lord McIntosh of Haringeymoved Amendment No. 276AA:
Page 198, line 29, at end insert—
("( ) "Supervisory notice" means a notice given in accordance with section—

(a) (Procedure on giving directions under section 250 or varying them on Authority's own initiative)(3), (6) or (7)(b);

(b) (Procedure on giving directions under section 261 or varying them on Authority's own initiative)(3), (6) or (7)(b);

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(c) (Procedure on giving directions under section 273 or varying them on Authority's own initiative) (3), (7)(a) or (9)(a) (as a result of subsection (8)(b)); or

(d) 314(2) or (4).").

On Question, amendment agreed to.
Clause 377, as amended, agreed to.
Clause 378 agreed to.
Clause 379 [Misleading statements and practices]:
[Amendments Nos. 276AB and 276AC not moved.]
Clause 379 agreed to.
Clauses 380 and 381 agreed to.
11.15 p.m.
Clause 382 [Offences by bodies corporate etc.]
Lord Kingslandmoved Amendment No. 276B:
Page 201, line 13, leave out ("in") and insert ("constituted under the law of").
The noble Lord said: As the Committee is aware, an English limited partnership is not a legal entity and therefore each partner is treated as committing an offence committed by any of them while acting as a partner. Subsection (3) therefore provides for exemptions. The amendment makes sense of subsection (3). Conversely, it is ridiculous to think that there are exemptions for partners of any partnership provided only that the offence is committed in England.
So far as concerns Amendment No. 276C, subsection (4) is the opposite of subsection (3). It surely relates to a Scottish limited partnership, which is a legal entity. This is why the liability provisions are set out in the same language as those for a body corporate in subsection (1). Again, it does not make any sense that any kind of partnership will have its partners liable on this basis provided only that the offence is committed in Scotland. I beg to move.
Lord McIntosh of Haringey: These amendments seek to replace the definition of a partnership "in" England or Scotland with the formula of a partnership "constituted under the laws of" England or Scotland.
I am grateful to the noble Lord for bringing forward these amendments. I can see that there might be some confusion as to whether what is being referred to in subsections (3) and (4) is the "nationality" of the partnership—that is, whether it is constituted under English, Scots or Northern Ireland law—or the territory in which the offence may have been committed.
Unfortunately, I am unable to accept the amendments as they stand. Although they would leave the Bill in a form which might cover partnerships formed in any part of the UK, they would not cover a partnership constituted under the laws of a foreign state. Since it is possible for such partnerships to do business in the UK, and to commit offences in the UK, it is clearly necessary that the Bill should enable us to deal with such persons.

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I can assure the noble Lord, Lord Kingsland, that we are aware that there is a problem and that we intend to bring forward amendments which will deal with the problem he has identified.
Lord Kingsland: I can hardly believe it. I think that is four in a row. I am very much obliged to the Minister.
Lord McIntosh of Haringey: Let me assure the noble Lord that I went further this time than I went last time.
Lord Kingsland: I am extremely happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 276C not moved.]
Clause 382 agreed to.
Clauses 383 to 388 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 276D:
After Clause 388, insert the following new clause—
GIBRALTAR
(" .—(1) The Treasury may by order—

(a) modify Schedule 3 so as to provide for Gibraltar firms of a specified description to qualify for authorisation under that Schedule in specified circumstances;

(b) modify Schedule 3 so as to make provision in relation to the exercise by UK firms of rights under the law of Gibraltar which correspond to EEA rights;

(c) modify Schedule 4 so as to provide for Gibraltar firms of a specified description to qualify for authorisation under that Schedule in specified circumstances;

(d) modify section 258 so as to make provision in relation to collective investment schemes constituted under the law of Gibraltar;

(e) provide for the Authority to be able to give notice under section 258(2) on grounds relating to the law of Gibraltar;

(f) provide for this Act to apply to a Gibraltar recognised scheme as if the scheme were a scheme recognised under section 258.

(2) The fact that a firm may qualify for authorisation under Schedule 3 as a result of an order under subsection (1) does not prevent it from applying for a Part IV permission.
(3) "Gibraltar firm" means a firm which has its head office in Gibraltar or is otherwise connected with Gibraltar.
(4) "Gibraltar recognised scheme" means a collective investment scheme—

(a) constituted in an EEA State other than the United Kingdom, and

(b) recognised in Gibraltar under provisions which appear to the Authority to give effect to the provisions of a relevant Community instrument.

(5) "Specified" means specified in the order.
(6) "UK firm" and EEA right" have the same meaning as in Schedule 3.").
The noble Lord said: I gave notice of this amendment in the Second Reading debate. This is a new clause which has been introduced to take account of several matters arising from Gibraltar's status within the European Economic Area.
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The provisions of the treaty relating to the right of establishment and the freedom to supply services apply to Gibraltar. However, Gibraltar is not a separate member state in its own right, but its nationals have rights to passport into other member states on the basis that it is part of the UK for these purposes.
Because of this unique status, there is no Community obligation to provide the passporting mechanism between the UK and Gibraltar. However, it has been the established policy of the previous Government and of this one to provide for an "internal passport" between Gibraltar and the UK for the activities covered by the passport directives, as and when we are satisfied with the relevant regulatory standards in Gibraltar. The clause provides the necessary mechanism for this. It carries forward existing provisions (subsection (1)(a)) in the relevant regulations which give the Treasury the power to extend the passport arrangements to Gibraltar firms which are covered by one of the single market directives.
At present, if they comply with the relevant notification procedure, Gibraltar insurance companies are allowed to passport their services into the UK. Similarly, Gibraltar credit institutions are allowed to passport into the UK for the provision of banking services. But this does not yet extend to investment services; investment firms have not yet been granted the right to passport into the UK. The Gibraltar insurance companies and credit institutions which benefit from this passport will continue to do so. Further passport rights will be granted as and when we are satisfied with the relevant regulatory standards in Gibraltar. As now, the passport will be optional and not an exclusive route to authorisation. Gibraltar firms will still have the option of seeking Part IV permissions.
The clause also enables the Treasury to enable firms from other EEA states which have exercised passport rights to branch or provide services into Gibraltar to then exercise those rights in relation to the United Kingdom proper without going through the full directive notification requirements. The phrase "or otherwise connected with Gibraltar" ensures that the power is broad enough to cover such firms. Without this, we might be in breach of our obligations under the directives.
The clause also gives the Treasury the power under subsection (1)(b) to extend the application of Schedule 4 so that a Gibraltar firm can exercise treaty rights if it is authorised by the Gibraltar competent authority and the relevant conditions in Schedule 4 are met. Subsection (1)(c) gives the Treasury the power, by order, to extend the application of Part III of Schedule 3 in relation to the exercise by UK firms of rights to establish branches or to provide services into Gibraltar in accordance with the equivalent provisions under Gibraltar law.
Subsection (1)(e) enables the Treasury to modify the provisions of Clause 258 so that the authority can refuse to admit a collective investment scheme from

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another member state if the way in which it proposes to market its units is incompatible with requirements imposed in Gibraltar in the general good. This is necessary to accommodate the possibility that a collective investment scheme from another member state may acquire an automatic right to sell units in Gibraltar once it is recognised by virtue of Clause 258. The clause will confer no new rights on Gibraltar firms until the relevant powers are exercised, but existing rights will continue. I beg to move.
Lord Elton: I am sure that this is welcome in Gibraltar. My only concern is with subsection (3) and the definition of "Gibraltar firm", which means,
"a firm which has its head office in Gibraltar or is otherwise connected with Gibraltar".
That seems to be a term almost without boundary. It could have a partner living in Gibraltar; it could have a branch office in Gibraltar; it could have been, as my noble friend put it, elsewhere constituted or incorporated under the law of Gibraltar. I wonder whether there is anywhere in the Bill, or there is going to be anywhere in the Bill, a more precise definition of what this means.
Lord McIntosh of Haringey: I have attempted, but clearly not successfully, to set this out. The clause enables the Treasury to enable firms from other EEA states which have exercised passport rights to branch or provide services into Gibraltar to then exercise those rights in relation to the United Kingdom proper without going through the full directive notification requirements. The phrase "or otherwise connected with Gibraltar" ensures that this power is broad enough to cover such firms. Without this, we might be in breach of our obligations under the directives.
On Question, amendment agreed to.
Clause 389 agreed to.
Lord Saatchimoved Amendment No. 276E:
After Clause 389, insert the following new clause—
("City Code
STATEMENTS OF POLICY: CITY CODE
.—(1) Subject to subsection (2), the Authority may adopt a policy that it will not exercise its powers under sections 113, 120, 368 and 370 in respect of conduct which is not in conformity with the City Code except following a request by the Panel that the Authority consider whether to exercise all or any of these powers.
(2) Subsection (1) does not apply in respect of behaviour which satisfies the condition in section 109(2)(a).
(3) The Authority may adopt the following policy in respect of the exercise of its powers under section 368(1) to (3), namely that, in any case where the Authority is of the opinion that—

(a) any application or proposed application by the Authority for any order or interdict under that section, or

(b) the making, confirmation or continuance of any order or interdict made under that section,

may materially affect the timetable or outcome of an offer to which the City Code applies, the Authority shall consult the Panel—
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(i) before making or proceeding further with the application, and

(ii) (in any case where the Authority forms such opinion after an order or interdict has been made) before making any further representations to the court seeking the confirmation or continuance of the order or interdict.

(4) Where the Authority has adopted a policy within subsections (1) or (3), such policy shall be recorded in a statement issued under this section and the provisions of section 114(6) to 114(8) shall apply to a statement issued under this section.
(5) The Authority shall not exercise its powers under sections 113, 120, 368 and 370 in a manner which is not in accordance with any statement of policy issued under this section.
(6) The provisions of this Act which refer to the Panel or to the City Code shall not be construed as imposing any statutory duty on the Panel and no such duty shall be imposed on the Panel by reason of anything done or not done by the Authority or the Panel under or in connection with such provisions.
(7) Neither the Panel nor any person who is, or is acting as, a member, officer, member of staff or agent of the Panel is to be liable in damages for anything done or omitted which is or may be connected in any way with the exercise or purported exercise of any duty, power or function of the Authority under this Act unless the act or omission is shown to have been in bad faith.
(8) In this section—
"conduct which is not in conformity with the City Code" means conduct of a person which, in the opinion of the Panel, does not conform with the responsibilities imposed on that person by the City Code (as applied by the Panel);
"offer" has the meaning given in the City Code, as determined by the Panel.").
The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 276F. The amendments concern the Panel on Takeovers and Mergers. Amendments Nos. 277A and 277C add consequential definitions of the City code and the panel to the definitions contained in Clause 392. I gather that the Treasury says that it does not want the FSA's powers to intervene in cases of market abuse to be fettered in any way by the takeover panel. The reason given is that it is believed that in the regulation of market abuse, self-regulation has failed and needs to be replaced by statutory regulation. These amendments would avoid the FSA being drawn into takeover regulation, which I am told is an outcome that Treasury officials and the FSA say they desire, and they would eliminate the danger of possible damage by the unintended consequence of regulatory overlap between the two bodies.
I cannot dispute that there have been significant failures in the self-regulation of financial services—famously, in the case of the insurance markets. Meanwhile, the Takeover Panel's non-statutory regulation of takeovers, which at its heart includes the regulation of behaviour which creates a misleading impression or distorts the market, has been effective. That is widely recognised in the City. I also acknowledge the view that the current legal framework under the Criminal Justice Act has been ineffective in deterring or punishing the misuse of unpublished information. But our amendments would not impact in any way on the manner in which the new FSA market abuse regime would address that.

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The Treasury says that it does not want to create the unusual situation of a non-statutory body being responsible for deciding in respect of certain abuses whether and when action could be taken under a statutory regime. It is true that, while the panel does not have statutory functions, it nevertheless has statutory recognition; for example, as a body to which disclosures may be made under Section 180 of the Financial Services Act 1986. It also has statutory underpinnings; for example, through the endorsement of the takeover code under Section 47A of the same Act. The courts have taken the view that the panel performs a public duty. In due course, when the European takeover directive is adopted and implemented in UK law, the panel will, like the FSA today, be a private body with statutory functions.
Therefore, we believe that the best way to safeguard effective takeover regulation while also enabling the FSA to administer the market abuse regime consistently across all markets, is to amend the Bill in two ways: first, behaviour which complies with the takeover code would not constitute market abuse—that is, it would be a safe harbour; secondly, in cases of non-compliance with the takeover code, the panel would have the ability to pass serious cases to the FSA based on criteria and parameters which should be pre-agreed between the panel and the FSA, for the FSA to consider whether market abuse had occurred and whether to take further action. But other than in those circumstances, the FSA would not intervene directly. That is what our Amendments Nos. 276E and 276F achieve. I beg to move.
Lord Borrie: The Government should consider this amendment in a positive way. The Bill as drafted may well adversely affect the effectiveness, credibility or authority of the Takeover Panel and the City take-over system that hay operated for some 30 years. The difficulty with the Bill as drafted is that there is an overlap between the market abuse powers of the Financial Services Authority under the Bill and the role of the Takeover Panel under the self-regulatory code which has operated to ensure fair and equal treatment and that best business standards are observed during a takeover. Under the terms of the Bill, many breaches of the code will also amount to market abuse.
The great advantage that many people have seen of the code system over the years is that it is flexible and speedy, and it enables decisions which are made speedily to be both binding and final. The virtues of those factors were, for example, recognised by the Court of Appeal in the well known Datafin case in 1986. I am sorry that the noble and learned Lord, Lord Donaldson, who presided over that court is not in his place. Briefly, the courts then decided that they were not, for good reason, willing to intervene contemporaneously with anything to do with a take-over while the bid was being conducted. They would intervene, in the courts' own words, historically but not contemporaneously, so that the matter could be determined on a rapid basis. That decision, some 14 or 15 years ago, forestalled the very bad possibility of tactical litigation in which a party to a bid might use
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judicial review proceedings simply as a ploy, which was not helpful to anyone concerned. The virtues of self-regulation have been recognised by the present and past Governments in their relationship with and attitude towards intended European Union directives from Brussels.
If the panel's decision is no longer binding and final because somebody could seek—for meritorious or unmeritorious reasons—a different decision from the FSA, the virtues of speed and finality could be lost. If the authority, without any statutory power, were to leave things to the panel and reject claims of market abuse, the FSA could be subject to judicial review on the ground that it has improperly fettered its own discretion. The Bill gives the authority discretion. It does not have a statutory power to exercise a self-denying ordnance. The amendment would add a useful self-denying ordnance.
Even if the Government do not think that the drafting is precisely right, the amendment recognises the principle of trying to avoid a duality of authority and the risks of tactical litigation—which would put the clock back after many years in which governments and the courts have recognised the present system as useful.
11.30 p.m.
Lord Taverne: The letter that I assume we have all received from the Director-General of the Takeover Panel makes a persuasive case. The amendments seem to meet the problems set out in that letter—to which the noble Lord, Lord Borrie, referred. I hope that the Government will take account of them but I trust that the amendments as drafted are not the last word. It took me a long time to understand what was being said, for example, by Amendment No. 276F—which lacks the eloquence that is generally present in the Bill.
Lord Elton: As an ex-member of the panel, I endorse the remarks of the noble Lords, Lord Borrie and Lord Taverne. I ask the Government to pay close attention to the case made by my noble friend Lord Saatchi.
Lord McIntosh of Haringey: We have certainly paid close attention to the case that has been made. I had the pleasure of meeting the Director-General of the Takeover Panel and his colleagues with my noble friend Lord Richard. Also, a number of meetings have taken place between the panel and Treasury officials.
There is not too much between us. Neither we nor the FSA want the authority pulled into the tactical manoeuvring of parties to takeover battles. It is important that the interests of shareholders are not unnecessarily affected during takeover bids. That can be achieved through the FSA's enforcement policies and code of market conduct. The amendments acknowledge that there may be times when it will be appropriate for the FSA to intervene during or after a takeover, to take action against those who have engaged in or are engaging in market abuse.
Broadly speaking, these amendments would allow the FSA to adopt a policy that in takeovers it would take action in market abuse cases only where the Takeover Panel requested it to do so. The panel has

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indicated that it would, for example, seek to involve the FSA where its own rulings were not complied with or it believed that a penalty might be merited. Given that all sides acknowledge that there will be occasions when it is appropriate for the FSA to take action under its market abuse powers, the key question is: who should take that decision? We firmly believe that the decision in a particular case should rest with the statutory regulator charged by Parliament with the responsibility to tackle market abuse across the board.
The fundamental theme of the Bill is that all financial regulation, including self-regulation, should be brought within the umbrella of the Financial Services Authority. We cannot accept that it is right for the FSA to adopt a policy of exercising its market abuse powers in the case of a takeover only on the say-so of the panel. We are setting up the FSA as the single statutory regulator of the financial services industry. What the FSA does is conditioned by the objectives and principles given to it by Parliament, among them the protection of consumers and the maintenance of market confidence. In the area of market abuse we are giving it new powers to protect the financial markets and extending its reach to cover both regulated and unregulated persons. Together with that, it has statutory powers of investigation which enable it to compel people to answer questions.
While the Takeover Panel does a satisfactory job in regulating the conduct and process of takeovers, it is a very different body. The remit of the panel is much narrower than that of the FSA and is concerned with the interests of the shareholders of companies involved in takeovers—and why not? That is perfectly reasonable. There are good reasons for maintaining the current non-statutory approach to the regulation of takeovers. We want the process to be as quick and efficient as possible. But as far as concerns market abuse, the last word should rest with the body to which Parliament has given the job of tackling it. There are interests at stake other than those of the shareholders and the various parties to a takeover: the interests of other market participants and the market as a whole. Concerns about fairness and efficiency are at the heart of what we are doing.
Having said that the issue is narrower than may have appeared from the debate which has taken place, I hope that the Committee will not pursue the amendment and will allow the FSA, the Treasury and the Takeover Panel to continue the discussions which are in course at the present time.
Lord Northbrook: Can the Minister say whether there may be a conflict of interest in a case where a company which is subject to a takeover bid appeals to the FSA after the Takeover Panel has made an adjudication? That may be a more disadvantageous situation than the previous regime where the Takeover Panel makes a judgment. The whole regulatory framework may be more complicated, leading to delays in bid situations.
Lord McIntosh of Haringey: I entirely agree with the noble Lord. We do not want the dual responsibilities to be exercised in such a way that one party plays one off against the other, or appeals from one to the other. That is what the current discussions between the Takeover Panel and the FSA are about.
Lord Elton: This is a complex and important matter. I hope that my noble friend will be able to provide noble Lords with an opportunity to debate this matter at a later stage when we are not quite as tired and anxious to conclude, as I am for one.
Lord Saatchi: I am grateful to all noble Lords on all sides of the Committee who have supported these amendments. We shall return to this matter at Report stage. This issue is much too important to debate at a quarter to 12, and perhaps we shall have another opportunity to debate it at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 276F not moved.]
Clauses 390 and 391 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 277:
After Clause 391, insert the following new clause—
("Limitation on powers 10 require documents
PROTECTED ITEMS
.—(1) A person may not be required under this Act to produce, disclose or permit the inspection of protected items.
(2) "Protected items" means—

(a) communications between a professional legal adviser and his client or any person representing his client which fall within subsection (3);

(b) communications between a professional legal adviser, his client or any person representing his client and any other person which fall within subsection (3) (as a result of paragraph (b) of that subsection);

(c) items which—

(i) are enclosed with, or referred to in, such communications;

(ii) fall within subsection (3); and

(iii) are in the possession of a person entitled to possession of them.

(3) A communication or item falls within this subsection if it is made—

(a) in connection with the giving of legal advice to the client; or

(b) in connection with, or in contemplation of, legal proceedings and for the purposes of those proceedings.

(4) A communication or item is not a protected item if it is held with the intention of furthering a criminal purpose.").
The noble Lord said: Amendment No. 277 was debated with Amendment No. 89. I beg to move.
On Question, amendment agreed to.
Clause 392 [Definitions]:
[Amendments Nos. 277ZA and 277A not moved.]
Lord McIntosh of Haringeymoved Amendment No. 277B:
Page 207, leave out line 46.
The noble Lord said: This amendment was debated with Amendment No. 226D. I beg to move.
On Question, amendment agreed to.
[Amendment No. 277C not moved.]
Lord McIntosh of Haringeymoved Amendment No. 278:
Page 208, leave out lines 32 and 33.
The noble Lord said: This amendment was debated with Amendment No. 168. I beg to move.
On Question, amendment agreed to.
Clause 392, as amended, agreed to.
Clauses 393 to 396 agreed to.
Clause 397 [Controller]:
[Amendment No. 278A not moved.]
Clauses 397 to 400 agreed to.
Clause 401 [Privileged communications]:
On Question, Whether Clause 401 shall stand part of the Bill?
Lord McIntosh of Haringey: I gave notice in the debate on Amendment No. 89 that I should oppose the Question that Clause 401 shall stand part of the Bill.
Clause 401 negatived.
Clause 402 [Consequential and supplementary provision]:
Lord Kingslandmoved Amendment No. 278B:
Page 214, line 3, leave out subsection (4) and insert—
("(4) No provision of this Act other than section (Imposition of restrictions or requirements by the Treasury) restricts powers conferred by this section.").
The noble Lord said: In moving the amendment, I speak to Amendment No. 278D. Amendments Nos. 278B and 278BA are, I think, consequential and supplementary provisions. On Amendment No. 278C, it is our view that the Treasury should be made subject to the same objectives as the authority. Only that will enable persons successfully to lobby the Treasury not to impose the authorisation requirement where that is not necessary to protect investors and to provide exemptions from the financial promotion regime.
Amendment No. 278D would require the Treasury to consult when exercising its power to make regulations or orders under the Act. Noble Lords are probably aware that a similar amendment was tabled previously in relation to particular powers of the Treasury to make orders. If the authority wishes to make rules, it has to go through a consultation procedure. But the Treasury does not have to do so. Many believe that it should have to undergo the same procedure. I beg to move.
Lord Bach: The new clause introduced by Amendment No. 278C is concerned with the constraints on the Treasury when exercising its delegated legislative powers conferred by the Bill.
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Amendment No. 278D takes a slightly different route but essentially that, too, is directed at restricting the exercise of powers by the Treasury.
I understand the thinking behind Amendment No. 278C. It is certainly not the Treasury's practice or intention to make regulations that are not necessary for a particular purpose, nor to make regulations that would in any way seek to damage competition, competitiveness or innovation. However, the difficulty with a provision such as this is that its effect cannot really be determined until the powers under the Bill are being exercised. For example, there could be a difficulty if we were required by EC directives or treaties to include within the regulated activities order something that we were not entirely persuaded on consumer protection grounds merited being subject to regulatory burdens.
From time to time, we all know that unforeseen circumstances arise that need to be dealt with. By their nature, we cannot predict what these will be or when they will arise. However, the Bill states clearly, so far as possible, what the relevant powers to make regulations and orders are for and how they are to be used. Many of the powers are very narrow in scope.
Amendment No. 278B is a consequential amendment to Clause 402 to ensure that the restrictions that would be introduced by Amendment No. 278C would apply equally to orders under Clause 402.
I hope that I can give the noble Lord reassurance about Amendment No. 278BA. I shall be plain and up-front about it. Part of the reason for having a provision along the lines of Clause 402—it is a fairly common Bill provision—is to enable the government of the day to cope with things that could not have been envisaged at the time the legislation was enacted, or matters of such detail that it would have been inappropriate for them to feature in a Bill. That is particularly important in a Bill of this length and complexity which is designed to enable the effective regulation of dynamic and diverse markets.
Amendment No. 278D seeks to impose on the Treasury obligations to consult on draft secondary legislation. Members of the Committee will be well aware that the Treasury has undertaken a number of consultation exercises on its proposed exercise of powers under the Bill. However, we must not lose sight of the reason for subjecting the authority to consultation and cost-benefit requirements. That reason is because the Bill will confer on the authority delegated powers to make legislative provision without parliamentary scrutiny. Of course, the same is not true in the case of the powers conferred on the Treasury. Secondary legislation will be made subject to parliamentary scrutiny. Therefore, we argue that the amendments are unnecessary. Normal parliamentary procedures provide adequate protection. I hope that the noble Lord will consider my reply and not press his amendments tonight.
11.45 p.m.
Lord Kingsland: I shall do precisely what the Minister has asked me to do. I shall consider what he said and shall not press the amendment tonight. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendment No. 278BA not moved.]
Clause 402 agreed to.
[Amendment No. 278C not moved.]
Clause 403 agreed to.
[Amendment No. 278D not moved.]
Clause 404 [Parliamentary control of statutory instruments]:
Lord Bachmoved Amendment No. 278E:
Page 214, line 15, after ("(d)") insert (", (Open-ended investment companies)(5)").
On Question, amendment agreed to.
Lord Bachmoved Amendment No. 278F:
Page 214, line 22, after ("(4)") insert ("or (4A)").
The noble Lord said: The Government have tabled amendments in response to one of the recommendations of the Delegated Powers and Deregulation Committee. Clause 36 confers on the Treasury a power by order to exempt persons from the general prohibition under Clause 17. An exempt person would not, therefore, need to be authorised to carry on regulated activities.
The Bill as it stands would make an order under Clause 36 subject to the negative resolution procedure. The effect of the amendments is to require an affirmative resolution procedure in one of two cases. The first case is the first order made under the powers in Clause 36. This will ensure that there is opportunity for a proper debate on the persons who are to be exempted from regulation at the time the Bill is brought into force. A second case, which was not a matter that the Delegated Powers and Deregulation Committee addressed, is when the Treasury makes a further order under Clause 36, the effect of which is to remove an exemption. We believe that an affirmative resolution procedure should additionally apply in that case because the effect of such an order is to extend the scope of regulation.
The proposals therefore parallel the procedures that would apply to the making of the first order, defining "regulated activities" under Clause 20, and subsequent orders which add new activities. We thank the Delegated Powers and Deregulation Committee for the valuable role it has played in scrutinising the delegated legislative powers conferred by the Bill. That committee made a number of helpful recommendations which the Government were pleased to accept. I beg to move.
On Question, amendment agreed to.
Lord Bachmoved Amendment No. 278G:
Page 214, line 35, at end insert—
("(4A) This subsection applies to an order under section 36 if—
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(a)it is the first order to be made, or to contain provisions made, under that section; or

(b) it contains provisions restricting or removing an exemption provided by an earlier order made under that section.").

On Question, amendment agreed to.
Clause 404, as amended, agreed to.
[Amendment No. 279 not moved.]
Clauses 405 and 406 agreed to.
Clause 407 [Minor and consequential amendments, transitional provisions and repeals]:
Lord Bachmoved Amendment No. 280:
Page 215, line 16, at end insert—
("( ) Schedule 18A makes transitional provisions.").
The noble Lord said: Amendments Nos. 280 and 281 are the first of the transitional provisions that we have introduced to the Bill. Amendment No. 280 is a paving provision to introduce new Schedule 18A regarding transitional provisions. Amendment No. 281 is the start of the transitionals schedule. It inserts into the Bill provisions which deal with the transition from the current regulatory structure under the Financial Services Act 1986 to those to be established under the Bill.
Under the 1986 Act, the authority has responsibility for recognising the self-regulating organisations for the purposes of Section 8 of the Act and Schedule II to the Act in relation to friendly societies. It also has a continuing responsibility in relation to the supervision of organisations which are recognised under those provisions. Firms are able to carry on investment business on the basis of an authorisation conferred by the 1986 Act on persons who are members of an SRO recognised under the Act.
The transition to the new regulator is, of course, well under way. Responsibility for banking supervision was transferred to the authority in 1998. Responsibility for the supervision of insurance was transferred in 1982 and has been contracted out to the authority by the Treasury. Similarly, the authority is supporting the Building Societies Commission, the Friendly Societies Commission and the Registry of Friendly Societies in relation to credit unions in performing their statutory functions, again, on a contractual basis. The authority has also entered into arrangements with the three self-regulating organisations—PIA, IMRO and SFA—for which it performs many functions, also under contract. The staff of those organisations have already transferred, for the most part, to the FSA.
The need for a transition provision of this kind is particular to the recognised SROs. To a large degree, it is a result of the legal status of those organisations. Provision is needed because they are self-regulating organisations, the members of which are the regulated community. As the date for the commencement of the Bill approaches, there will be an increasing need for the authority to be able to exercise close control over the affairs of those organisations so as to ensure the smooth handling of the final stages of the transition. The authority will need to be able to do that

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consistently with the provisions of the 1986 Act, which currently do not envisage the kind of relationship that will be required It is also important that the directors of the SROs do not do anything that puts them in breach of their statutory obligations; for example, under the Companies Acts.
This provision will help to achieve what is needed. It will, for example, with the consent of the SROs, allow the authority to begin to appoint directors to those companies so that it can better co-ordinate the transition from the old system to the new. I beg to move.
On Question, amendment agreed to.
Clause 407, as amended, agreed to.
Schedule 18 agreed to.
Lord Bachmoved Amendment No. 281:
After Schedule 18, insert the following new schedule—
("SCHEDULE 18A TRANSITIONAL PROVISIONS AND SAVINGS
Self-regulating organisations
1.—(1) No new application under section 9 of the 1986 Act (application for recognition) may be entertained.
(2) No outstanding application made under that section before the passing of this Act may continue to be entertained.
(3) After the date which is the designated date for a recognised self-regulating organisation—

(a) the recognition order for that organisation may not be revoked under section 11 of the 1986 Act (revocation of recognition);

(b) no application may be made to the court under section 12 of the 1986 Act (compliance orders) with respect to that organisation.

(4) The powers conferred by section 13 of the 1986 Act (alteration of rules for protection of investors) may not be exercised.
(5) "Designated date" means such date as the Treasury may by order designate.
(6) Sub-paragraph (3) does not apply to a recognised self-regulating organisation in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act before the passing of this Act if that notice has not been withdrawn.
(7) Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.
(8) "Recognised self-regulating organisation" means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.
(9) "The 1986 Act" means the Financial Services Act 1986.
Self-regulating organisations for friendly societies
2.—(1) No new application under paragraph 2 of Schedule 11 to the 1986 Act (application for recognition) may be entertained.
(2) No outstanding application made under that paragraph before the passing of this Act may continue to be entertained.
(3) After the date which is the designated date for a recognised self-regulating organisation for friendly societies—

(a) the recognition order for that organisation may not be revoked under paragraph 5 of Schedule 11 to the 1986 Act (revocation of recognition);

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(b) no application may be made to the court under paragraph 6 of that Schedule (compliance orders) with respect to that organisation.

(4) "Designated date" means such date as the Treasury may by order designate.
(5) Sub-paragraph (3) does not apply to a recognised self-regulating organisation for friendly societies in respect of which a notice of intention to revoke its recognition order was given under section 11(3) of the 1986 Act (as applied by paragraph 5(2) of that Schedule) before the passing of this Act if that notice has not been withdrawn.
(6) Expenditure incurred by the Authority in connection with the winding up of any body which was, immediately before the passing of this Act, a recognised self-regulating organisation for friendly societies is to be treated as having been incurred in connection with the discharge by the Authority of functions under this Act.
(7) "Recognised self-regulating organisation for friendly societies" means an organisation which, immediately before the passing of this Act, was such an organisation for the purposes of the 1986 Act.
(8) "The 1986 Act" means the Financial Services Act 1986.").
On Question, amendment agreed to.
Schedule 19 [Repeals]:
Lord Eltonmoved Amendment No. 282:
Page 268, line 9, at end insert—

("1977 c. 46.

The Insurance Brokers (Registration) Act 1977.

The whole Act.")

The noble Lord said: I should be very unpopular if I spent long on this amendment. I tabled it in a spirit of inquiry as it seemed to me that the current legislation which we are discussing now makes the apparatus set up under the Insurance Brokers (Registration) Act 1977 superfluous. Since I tabled it, I understand that the Government are of the same mind and are intending to repeal that Act.
I am glad that they have this opportunity to do so because, while it was still active, it was a difficult anomaly in the self-regulatory field in which I acted and I should not wish that anomaly to persist and annoy in years to come. I shall listen with great interest to the Minister's reply.
Lord Bach: I would like to thank the noble Lord, Lord Elton, for moving this helpful amendment. I can assure him that the Government are happy to accept the amendment in principle. He may have been told that before the amendment was called. Indeed, the Government have already announced their intention to repeal the 1977 Act as part of their reform of the financial services regulatory structure. However, I would ask that the matter is not pressed further at this stage.
The council is a statutory body, and it is therefore necessary to make provision for dealing with its abolition in statute. However, there are certain transitional matters arising from repeal that we need t o ensure are adequately addressed. We will need, in particular, to consider whether we need to make provision to deal with any assets and liabilities that the council may have, and to deal with any contracts or litigation that arise.

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I hope the Committee will understand that the final shape of transitional and consequential provisions depends on the substantive provisions in the Bill. My noble friend's officials are currently discussing the associated transitional issues with the council. Those issues are complex but they are technical rather than substantive. However, the Government accept the point in principle and will bring forward appropriate amendments as part of their package dealing with repeals. Once again, we express our thanks to the noble Lord.
Lord Elton: I am grateful to the noble Lord. If he nods, I take it that the amendments will be brought forward in this Bill on Report or at Third Reading. In that case, I am happy and satisfied to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 19 agreed to.
Clause 408 agreed to.
House resumed: Bill reported with amendments.

Business
Lord Carter: My Lords, before my noble friend Lord Bach moves the Motion, perhaps I may apologise to the House for having to take these important orders so late at night. In particular, I thank the noble Baroness, Lady Blatch, for her forbearance and patience in waiting. We entered the House together in 1987 and we have followed each other's careers with interest ever since.
The noble Baroness has been a Minister and she will know that the business does not always proceed as smoothly as Chief Whips and Opposition spokesmen would like. I really am grateful to her for her co-operation in taking these orders at the end of business for reasons outside my own control, which I have explained to her, and for her patience in waiting to deal with them. Again, I thank the noble Baroness.

Education (Student Loans) (Repayment) Regulations 2000
11.58 p.m.
Lord Bachrose to move, That the draft regulations laid before the House on 17th February be approved [11th Report from the Joint Committee].
The noble Lord said: My Lords, these regulations will introduce a new system for the repayment of student loans. They will provide for the collection of repayments through the tax system. The level of repayments will be linked to levels of income.
These regulations are the first dealing with the repayment of student loans to be made under Section 22 of the Teaching and Higher Education Act 1998. They were laid before Parliament on 17th February and have been considered by the Joint Committee on
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Statutory Instruments. They were considered by the other place on 8th March. We apologise for the delay in bringing the regulations before the House. Our intention was to have done so towards the end of last year, but the drafting of the regulations raised a number of difficult issues.
The regulations introduce three important changes to the present system of student loan repayment. They bring in, first, a new repayment threshold of £10,000 per year; secondly, a liability to repay 9 per cent of income above that level; and, thirdly, the collection of repayments through the tax system.
Perhaps I may briefly draw the House's attention to the main aspects of the regulations. Part I includes their extension to the United Kingdom, where they confer powers on the Board of the Inland Revenue. Part II contains general provisions, including liability to repay from 6th April after a borrower has completed or left higher education; when loans will be cancelled; and when borrowers will be entitled to a refund of repayments. Part III deals with recovery through self-assessment for tax. Borrowers, who are required for tax reasons to submit a self-assessment tax return, will be liable to repay 9 per cent of total annual income over £10,000, including any taxable unearned income in excess of £2,000. Provisions in that part of the regulations describe also which sources of income will be excluded from that liability.
Part IV covers recovery by employers, which is the main part of the regulations, as most recovery of student loans will be carried out by employers. Loan repayments will be collected and accounted for by employers in the same way as for income tax and national insurance. Deductions will be based on 9 per cent of a borrower's earnings over £192 per week, or £833 per month, which is equivalent to £10,000 per year. Part V gives the Secretary of State powers to recover student loans from borrowers who are not resident in the UK for income tax purposes.
The new arrangements will in time affect large numbers of graduates and employers. We have therefore consulted extensively. An employers group helped the Inland Revenue to identify ways of keeping additional work for employers to a minimum, and with a range of technical issues. My department held a 10-week public consultation. The regulations require employers to undertake a new activity, but the additional work has been kept to a minimum and the effect on employers generally is gradual. A regulatory impact assessment, lodged in the Libraries of both Houses, sets out the impact on employers, as well as the benefits of the new scheme.
We took particular note of the points raised in relation to small businesses and have agreed, importantly, to conduct a review of the impact on small firms after the first year of the scheme. We shall consider any additional help if the impact on small businesses is found to be unduly burdensome. In planning the introduction of the new arrangements, my department and the Inland Revenue have ensured that borrowers and employers have been kept well informed.

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The draft regulations before the House will enable the Government to introduce a fairer and more effective system for recovering student loans. It will become an integral part of our new student support system. I beg to move.
Moved, That the draft regulations laid before the House on 17th February be approved [11th Report from the Joint Committee].—(Lord Bach.)
Baroness Blatch: My Lords, I thank the Chief Whip, in his absence, for his kind remarks earlier. I hope that the House will forgive me, even at this late hour, if I say that I am somewhat puzzled. First, I agreed to debate these regulations some weeks ago on a Friday. They were pulled, or withdrawn—whatever the word is—because the noble Baroness, Lady Blackstone, could not he present. She is not present this evening, so I find it extraordinary that the debate could not have been carried out on that day as arranged.
Secondly, the Minister has just said that everyone has been kept informed. I might say everyone except myself. As the Shadow Minister for Education in this House, I have not been kept informed at all. Thirdly, I find it absolutely extraordinary that we have just had a statement from the Minister without a single mention of a report which I discovered had been released only by reading about it in a newspaper this morning—the report of the Scottish Fee Support Review. It slipped out yesterday.
On a daily basis I receive missives from the Department for Education and Employment, glossy brochures—usually with a foreword from the Secretary of State—photographs, illustrative drawings and massive supporting press releases. However, interestingly the Quigley report, which we have debated many times and asked when it is likely to be published, came out without a single press release, in an absolutely plain cover, with not a photograph in sight and absolutely no notification to me as the chief Opposition spokesman on this issue.
I notice that the Liberal Democratic Benches are completely empty for such an important subject.
This matter is not only highly controversial, but has also been the subject of votes in this House. Votes have been won by this House when the matter has gone backwards and forwards between the two Houses; and yet the Government have seen fit not to give any publicity, as far as this House is concerned, in relation to this order, other than to lay it down technically yesterday.
The recommendation completely vindicates the stand that we took on the issue of the Scottish anomaly. The Government have not only lost this battle, but they have decided to concede it. When did that happen? When did the Secretary of State take that decision? They say that the Scottish Executive has also conceded the battle. When?
If this report was produced only yesterday, when did the meetings take place; who decided the outcome; and who was informed about them? I understand that the Secretary of State for Education and Employment, David Blunkett, welcomes the publication of the
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report that looks into the fees for students from England, Wales and Northern Ireland who, in their fourth year, study in Scotland. The Quigley report recommends that Scotland should meet the cost of exempting such students from paying tuition fees in that year. The Scottish Executive has accepted that recommendation; and Mr Blunkett welcomes the report and congratulates George Quigley and other members of the committee on their thorough examination of all the relevant issues. Although the Government accept the recommendations addressed to them in the report, there has been not a word from the Minister tonight about that.
The report has been somewhat overtaken as the anomaly has changed in that Scottish students in Scotland will not pay fees at all. They will have no obligation to pay fees up front, but when they have completed their degrees and are earning above a determined threshold, they will make a graduate contribution. So a completely different system and a completely new anomaly now exists.
It would be helpful to know exactly where the order fits into the report that has been laid, totally unannounced, before the House and the effect of the changes that have taken place in Scotland which create yet another anomaly between Scottish students and English, Welsh and Northern Ireland students. Is the concession whereby Scottish students in Scotland do not pay tuition fees, other than a graduate contribution when they have completed their degrees, enjoyed by EU students, but not by English, Welsh and Northern Ireland students, or is that concession exclusive to Scotland? If that is the case, why has it not been extended to EU students when the original concession was deemed to be a legal obligation that had to be extended to such students?
Given the short notice that I have had in regard to these orders, I find it extraordinary that the order states that it will come into force on 1st April. I am told that the DfEE was unaware of that—it had thought the date would be in the middle of April—and that it forgot to tell us until less than 48 hours ago that it had decided to go ahead with these regulations now as they come into force on Saturday.
I am sure that the noble Lord will agree that they are shatteringly complex. There are six or seven A4 pages of fairly close type just explaining the order, let alone reading the legalese of it. The Bill itself was passed in 1998. The orders were laid before Parliament in February 1999, which is more than a year ago. These matters should have been discussed weeks ago, as they were in the Commons. But, as I said, the Minister pulled out simply because the noble Baroness was unable to be here. Yet suddenly, in extremely indecent haste, we have to deal with this order past midnight on a Thursday night.
I now deal with some of the detail of the Bill. The noble Lord may not be familiar with it because he was not party to the detailed discussions on it. We still regard the threshold of £10,000 as being very low indeed. For someone with that income it represents 20 per cent which they would be ordered to repay. It

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would be helpful to know from the Minister what is the present average national wage and the degree to which £10,000 falls below it. My understanding is that the debt is cancelled at the age of 65 and not, as previously, as the age of 50 or after 25 years. The marginal tax rate, for example, for a person earning £15,000 a year will be considerable. It would be helpful to know in percentage terms what that would be.
The noble Lord said that there had been a great deal of consultation with employers and that the impact on them would be minimal. We have not seen joined up government in the past three years from this Government. Each department is putting burdens on the employer. Family tax credits and so many other benefit systems are for the employer to sort out and no one else. This measure is just one more burden on the employer.
It is not just a question of taking this matter in isolation and saying that it will not impact very much on employers. It would be very helpful to know what the combined burden from all the Bills passing through Parliament will mean to employers. Has there been a costing and, if so, what is it? Has there been a financial appraisal? I have not seen one. When I was asked to take these orders at short notice I asked whether I could receive all related material. I have received nothing but the orders, other than picking up the Quigley report on my own.
If employers need not know the size of an employee's loan, how will the employer know when to cease taking payments from an ex-student? It is extraordinary that an employer need not know the extent of the loan. It would be helpful to know how the employer is expected to second guess that.
When this matter was discussed in another place the honourable gentleman, Mr Wicks, referred to the Inland Revenue, which would send a notice to employers to inform them that they have an employee who has a student loan and when repayments should start. What system will be used by the Inland Revenue to know where a student is working? For example, there are addresses and names. Many students have similar names. They do not always return to the home address. Frequently, they go to another address in another part of the country. What will be the system for keeping tabs on those students when they move away? Will it be the job of the Inland Revenue, the local authority, the ex-institution or a government department? How will that work?
Out of interest, will the £10,000 threshold for repayment be uprated for inflation as time passes? It would also be helpful if the noble Lord were able to explain how the two different systems—the Scottish and the English systems—will be dealt with by the Inland Revenue. Scotland is not charging fees for its students. It is charging a graduate contribution that will be paid when the student has completed a degree. Yet in England fees will be paid on an annual basis, including for the fourth year. So those are two completely different systems and yet we have a UK-wide Inland Revenue system which will have to operate separately and differently for different
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students. As we know, there are Scottish students who live in England and Scottish students who live in Scotland, and they will be treated differently.
Again, the noble Lord made no reference at all to the fact that we have the Bill as it is passed as an Act; we have the Act as it will be changed by the Quigley Report, because we now know that the Scottish Executive agreed it and the Secretary of State agreed it; and we also have the changed situation as a result of the recent Scottish Parliament decision.
Postgraduate students were referred to again by Mr. Wicks. The information he gave is interesting in relation to postgraduate courses. A postgraduate teacher-trainee does not pay fees. The UK Government exempted postgraduate teacher-trainees from paying for what would be their fourth year; they do their degree in three years and for the year in which they do their PGCE they will not be paying fees at all. What does the reference mean therefore when it says that PGCE students will be exempt from fees? They are already exempt from fees.
Yet another announcement that was made this morning by the Secretary of State for Education—again to Radio 4 in the morning but not to Parliament—was that postgraduate students in their fourth year doing their teacher-training year are to be given a grant of £6,000, and an extra £4,000 if at the end of that time they become employed in a school. I will point out an anomaly which I regard as grossly unfair. In this country there are around 24,000 schools, almost 20,000 of which are primary schools. Predominantly, the teachers who teach in our primary schools do four-year Bachelor of Education courses. The postgraduate courses are mainly taken by those people who go into secondary school teaching. Is it fair that the bulk of the teachers who teach in United Kingdom schools, and certainly in English, Welsh and Northern Ireland schools, will receive no relief for their fourth year, yet their fellow teachers who teach in secondary schools and do a fourth-year PGCE will not only be exempt from paying fees, but will have a grant of £6,000 followed by another grant of £4,000 if and when they receive a teaching job? I regard that as pretty unfair and extremely anomalous for our primary school teachers.
I understand that penalties levied by the Inland Revenue will be pretty severe. Given the complexity of the system—I have never seen anything quite so complex—it is possible that there will be students who default on their repayments simply because they do not understand the system. We know that there will also be those who can pay but wilfully will not pay. It is important that some sensitivity is exercised by the Inland Revenue and local authorities when considering the degree of wilfulness in terms of defaulting on repayment. When the system is in full swing it will affect up to 1 million students, almost all employers and almost all families. It is extremely important, therefore, that that issue is addressed. The Government are talking about a slow start and a slow build-up; but each year it will grow quite quickly.

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The next issue relates to overseas students. Some overseas students will be UK-resident students who, at the end of their degree course, go and work abroad; there will then be the overseas students who come into our UK universities and at the end of their courses return to their country of origin. Given that only a small section in Part V of today's order mentions overseas students, it would be helpful to know the mechanism used to trace such students. At col. 7 of the Standing Committee's deliberations of 8th March, Mr. Wicks stated:
"To help ensure compliance, a borrower who does not supply evidence of income may be liable to repayments based on a notional income, set at twice UK national average earnings".
I have already asked the Minister what are the national average earnings. It seems to me that twice that level will represent a very sizeable income to deem to be notional. It will affect many students who simply disappear from this country and go abroad. Are they to be set a notional income and will this debt pile up behind them?
I understand that practically the first task students must complete before they go abroad is to inform the Inland Revenue that they are going abroad. I do not know if any noble Lords present have had a son or daughter prepare to leave the country, but I certainly have. My son left to undertake research in Japan. I know that the last thing on his mind was to let the Inland Revenue know what he was doing. He was much more preoccupied with the practical business of moving from the UK to another country. If he had forgotten to inform the Inland Revenue, what would be the penalty?
How will the payments be managed? How will they be enforced if these people simply disappear into the ether in other countries? What about European Union students? Although they reside in more neighbourly countries, how will they be traced?
A number of questions were asked of the Minister in another place, but they were not answered for lack of time. I shall ask them now because the Government have had a long time to think about the matter and I have no doubt that they have all the answers. If a student works in a foreign regime that is subject to a double taxation agreement, would the deduction of a loan repayment be regarded as a payment and reduce his net income?
Perhaps I may also refer to part-time and seasonal earnings. A student's income could fall below the £10,000 threshold in the course of a year. In that case, if he could produce a self-assessment form, could he reclaim some of the loan repayments he had already made? If not, his income might be reduced to an unacceptably low level. How will the repayments of self-employed students be calculated? Furthermore, how will they be phased? Their income may fall under Schedule B, which is taxed in the current year, or under Schedule E, which covers income from a trade and is taxed in the preceding year. Which will be used to calculate the deduction? Can the Minister confirm whether the £10,000 income will be upgraded each year in respect of average earnings?
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Will the cut-off point for freedom from debt at pensionable age be set at 60 for women and 65 for men, or is it to be set at 65 for both? In paragraph 15(6) relating to capital receipts, will the unearned income under £2,000 that is to be disallowed include capital receipts? Paragraph 36 of the order covering deduction for employers makes it clear that an attachment of earnings order for income tax is a priority, but what will happen if an attachment of earnings order for income tax is already in place as well as one for another purpose? I am thinking of payments to the Child Support Agency, for example. What priority will be given to the loan? Whatever happened to phase 3 of the plans to sell the student loans portfolio? What are the most up-to-date drop-out rates from our universities?
The noble Lord will by now have guessed that not only am I pretty dissatisfied at having to respond to these orders at such late notice—given the reason that the noble Baroness could not be present on a previous occasion—but I am also extremely angry that we have had to undertake our own detective work to sort out Quigley and understand what it says. We have had to discover the information the Secretary of State had already decided not to give out in a press release, when almost anything that happens at the DfEE is released to the press. I have to say that if the department has good news to tell, one gets it quickly. However, if it is bad news it is hidden under a stone.
Lord Glentoran: My Lords, I want to wear my Northern Ireland hat. I attended the debate about the fees. None of the Unionist Peers is able to be present. I am sure that they knew nothing about the Quigley report and probably knew little about the measure that we are discussing.
The Quigley report was published on 29th March, some 24 hours ago. Perhaps I should declare an interest in as much as Sir George Quigley is a personal friend of mine. The Quigley report contains a number of recommendations. Recommendation 3 concerns Northern Ireland. It recommends,
"that Northern Ireland should consider how best to ensure that its students are not disadvantaged by the deficiency of higher education places in the province".
It clearly makes the point that Northern Ireland students will be disadvantaged in this respect. As I understand the position, the Secretary of State has accepted that recommendation, has done a U-turn, and is now agreeing to some fee concessions. I want to be told whether Recommendation 3 in the Quigley report still applies or whether it has been covered in the announcement of the Secretary of State earlier today, or, rather, yesterday, as we are now into Friday.
I believe that the Secretary of State said that the fee concessions for fourth year students will apply for those starting in 2001. That makes no sense whatever. It is quite ridiculous. I believe that the position in Scotland has changed anyway and there are now to be no fees in Scottish universities. What will the fee structure for Northern Ireland students comprise for the first three years? I can see absolutely no conceivable reason whatsoever why this concession should not apply to those who joined Scottish

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universities in 1998, 1999 or 2000. Why should they be disadvantaged? This is total and utter government rubbish! I see no reason why students in Northern Ireland and elsewhere who are subject to the ridiculous law that was passed—on which a U-turn is now being done—should suffer.
I want absolute clarification of the position for students in Northern Ireland. What fees will they pay for the first three years? What will be the concessions? Why should students who joined Scottish universities in 1998, 1999 and 2000 be disadvantaged in this way?
Lord Bach: My Lords, I am grateful to other noble Lords who have spoken in this debate. I remind noble Lords that today we are discussing student loan repayments; we are not discussing tuition fees. Although it is, of course, legitimate to broaden the debate, I am sure the House will forgive me if I concentrate on—
Baroness Blatch: My Lords—
Lord Bach: My Lords, perhaps I may just finish my first point before I am interrupted. I hope that the House will forgive me if at this hour of the night I concentrate on what we are supposed to be discussing; namely, student loan repayment regulations. But before I do so, I remind the noble Baroness, Lady Blatch, that when she criticises by implication the Minister for not being present when she was available two weeks ago, the Minister was in Lisbon on government business. I was not on government business but I was not available. That must have been the reason that this measure was not discussed on that day.
Having said that, I echo the words of my noble friend the Chief Whip in thanking the Opposition and particularly the noble Baroness for her courtesy in agreeing to discuss these measures tonight. I apologise to her for the lateness of the hour at which they are being debated. However, I hope that she will consider that any criticism she made of my noble friend the Minister was misplaced in this context. I see that she wishes to interrupt.
Baroness Blatch: My Lords, I wish to raise two issues on both of those points. First of all, the noble Lord reminds us that we are talking about repayments and therefore chides us slightly for talking about fees. It is some of the fees that are being repaid. It is what students borrow—that is, fees and maintenance grants—that they have to repay. One cannot talk about repayments unless one talks about the source of the borrowing.
Secondly, I did not schedule the Friday we are discussing. The Government Whips Office did so on the basis of the Minister being present. That was not my fault. The matter was then withdrawn because the Minister was not there. It clearly stated on the face of the order that the matter should be dealt with by 1st
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April, in which case it should have been rescheduled fairly quickly after the cancellation of the business that day.
Lord Bach: My Lords, I am grateful to the noble Baroness. We do not want to go any further over spilt milk. However, I insist that what we are talking about are loans which students have taken out for maintenance. The issue that has been raised at considerable length concerns tuition fees—and I cannot see the relevance of tuition fees to this particular order.
Let me try to answer briefly some of the questions that have been raised. I am astonished by the noble Baroness's attack so far as concerns the Quigley report. As I understand it, there was a Written Answer yesterday in the Hansards of both this House and the other place which dealt with the Quigley report. I hasten to say—I am sure the noble Baroness will agree—that it is an excellent report, which we welcome. Sir George and his committee have done a thorough job. No doubt the next time that the noble Lord, Lord Glentoran, sees Sir George he also will congratulate him on a job well done in looking at the issue of whether students from England, Wales and Northern Ireland studying in Scotland should continue to make a contribution to their tuition fees in their fourth year.
The Government accept the recommendations addressed to the issue. As the noble Baroness reminded us, the Scottish Executive has also accepted the recommendation that it should meet the net costs of the tuition fees of students from England, Wales and Northern Ireland in their fourth year in Scottish universities. The Scottish Executive has accepted the recommendation because, as the committee pointed out, it is the Scottish universities which receive the benefit of those fees and which would suffer if those students were deterred from studying by the extra year's fees. The committee was clear that this was not a matter for the Secretary of State.
I shall move on now to try to answer some of the questions raised by the noble Baroness. The current average national wage is some £21,000 per annum. However, I should point out that the new system we are setting in place by this order is income-based. It is contingent and sensitive. If someone does not obtain or receive £10,000 a year, he or she will not be repaying any loan that they owe. If they fall below £10,000 in the course of a year, they will not have to repay any loan while they remain earning less than £10,000 a year.
Under the old scheme, repayments were over a fixed period and were not income contingent; the amount of the repayments was determined by the size of the loan, not the level of income. That was the previous position. We believe that the advantages of the new scheme are shown by the fact that if the same fixed-term repayments were kept for new loans, a borrower with a loan of £10,000, for example, and an annual income of £20,000 would be repaying £2,000 a year. Under these arrangements that person would be

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repaying £900 a year. A liability to repay £2,000 would be reached under our scheme only when earnings exceeded £32,000.
The noble Baroness asked a number of questions arising out of the order being discussed in another place. I suspect that she has not yet seen—there is no reason why she should have—a letter sent to her honourable friend Tim Boswell, MP, from my honourable friend Malcolm Wicks. It deals with a number of the points she raised and I shall make sure that she is sent a copy of the letter forthwith.
Let me deal briefly with the question of students who go abroad. Borrowers outside the UK tax system who fail to give the Student Loans Company the information for which it asks or who do not make repayments may incur penalties. For example, failure to provide information may mean that the company will increase the amount of interest. Noble Lords will know that the amount of interest charged in the normal way is inflation linked. The rate of interest charged on repayments not paid can increase to three times the normal rate of interest. Continuing failure to make repayments may mean that the debt is accelerated, which means that the Student Loans Company can seek a court order for the full repayment of the loan in a single payment. Any problems that we have under this new system will not be new to the Student Loans Company because there have been problems under the old system as well.
I was asked how employers will know when to stop collecting the money. The Inland Revenue will tell them when to stop. I was asked how the Inland Revenue will know when students move. It will use the national insurance card number that former students have. The Inland Revenue and the Student Loans Company monitor that. Of course there will be some minor costs for employers in operating the scheme. But even for the smallest employer we do not believe that the amount will be very great in the scheme of things. We are determined to look again in a year's time to see whether it has been a real burden on business and on employers. If it has, no doubt we will consult and consider what to do about that.
Finally, the current drop-out rate for students is about 18 per cent. That figure has remained fairly consistent for some time.
Baroness Blatch: My Lords, before the noble Lord sits down, I asked a great many more questions. I am assuming that I will receive answers in writing to any questions that were not answered by the noble Lord in his response. Do I take it now that in order to receive information I have to look up Hansard each day to see whether something has been produced from the DfEE? That is not consistent with the way in which I have been receiving information from the DfEE. As for the letter—if there is a letter in existence—as I was dealing at such short notice with the regulations, I was told by the Whips' Office that officials would provide me with all relevant information and papers. Those were not forthcoming. I am interested to know that people who are earning £10,000 are to be hounded in this way and that if they default on payments inflation is to be
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added at three times the level. I find that a rather severe way to deal with people on such low incomes. But if that is the Government's way with students, so be it.
My noble friend Lord Glentoran has not had an answer to his question about students who started in 1998, 1999 and 2000.
Lord Bach: My Lords, before the Question is put, perhaps I may ask the noble Baroness this. Is she saying that Conservative Party policy is to be against the principle behind the regulations?
Baroness Blatch: No, my Lords. I am saying that the threshold for paying back under our system was 75 per cent of the national average wage, which is a great deal more than £10,000.
Lord Glentoran: My Lords, I have not had answers to the questions I asked. I want to know why students from Northern Ireland who started in 1998, 1999 and 2000 should be penalised. Why does this fee exemption start for those who join in 2001?
Lord Bach: My Lords, I shall write to the noble Lord with the answers to the questions that he asked during the course of the debate, which is now over.
On Question, Motion agreed to.

Foundation Subject (Amendment) (England) Order 2000
12.37 a.m.
Lord Bachrose to move, That the draft order laid before the House on 24th January be approved [7th Report from the Joint Committee].
The noble Lord said: My Lords, the draft order creates, under Section 354(6) of the Education Act 1996, a new national curriculum foundation subject of citizenship in key stages 3 and 4 from the start of the school year 2002. It gives schools, under Section 354(4)(a), the power to offer pupils the opportunity to study any modern foreign language in addition to offering them the opportunity to study one or more of the official languages of the European Union under the foundation subject of modern foreign languages from the start of the school year 2000. It changes the designation of the foundation subject of art to one of art and design from the start of the school year 2000.
The proposals set out in the order were included in the consultation on the review of the national curriculum during last summer, along with non-statutory guidelines for personal, social and health education and citizenship at key stages 1 and 2 and for PSHE at key stages 3 and 4. They received support during the consultation, and final versions (subject of course to parliamentary approval) were sent to all schools in November in handbooks containing the revised national curriculum.
The Foundation Subject (Amendment) (England) Order 2000 is the first stage of a two-stage process. The next stage will be to lay orders under Section 356(2) of

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the Education Act 1996 to give effect to the revisions to the programmes of study for existing national curriculum subjects—from the start of the school year 2000—and to the new programmes of study and attainment target for citizenship at key stages 3 and 4—from the start of the school year 2002.
We believe that the changes are needed, and that they are sensible. We are renaming art as "art and design" to better reflect the essential relationship of art and design, recognise the importance of the creative industries in the economy, and highlight the role of design in stimulating creativity in industry and commerce. We are reducing the number of attainment targets from two to one to simplify assessment and to integrate the practical and theoretical aspects of the subject. A new eight-level scale will clarify and support progression. And we have reintroduced a programme of study for art and design into the primary curriculum, to give teachers a clear framework for teaching.
The change to the modern foreign languages will allow greater flexibility for schools. European Union languages will have priority, as before, with two recent additions—Finnish and Swedish. So long as the offer of an EU language is made, any other modern language can be taught. It will be for schools to decide whether a language can be taught effectively according to the programme of study, and whether suitable assessment or examination is available. We are dropping the restriction on schools to offer only additional modern foreign languages from a prescribed list to allow a much wider range of languages to be taught in schools. That will be especially helpful in areas where there are large concentrations of pupils who may wish to learn non-EU modern foreign languages. It better reflects the changing needs of our society and pupils, and gives schools the flexibility they need to react to local demand. I should emphasise that the requirement is for a modern foreign language to be taught. Schools are free to offer Latin and so on, but as well as, not instead of, a modern foreign language.
Our plans for citizenship are part of a broader curriculum development. Citizenship in key stages 1 and 2 will be part of new non-statutory guidelines for personal, social and health education which take effect in 2000. But at key stages 3 and 4, we see a need for more distinct statutory provision to reflect the greater emphasis on community involvement, critical thinking and informed discussion within the programme of study. The statutory provision for citizenship as a new foundation subject in secondary schools will take effect from the start of the school year 2002. We have published the details almost three years early so that schools have plenty of time to build up their practice.
Our plans for citizenship have been known for some time. The support for them expressed during the consultations on the national curriculum review builds on the public support which followed the final report of the national advisory group on education for
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citizenship and the teaching of democracy in schools in September 1998—a project which had cross-party support here and in another place.
That is not surprising. Citizenship education is much needed and long overdue. Modern society is complex and fast-changing. Citizenship will help pupils to understand the world in which they live, how it works and how decisions are made. It will provide opportunities for them to develop the aspirations and the skills needed to make a positive difference to their own lives and the lives of their schools and communities through greater knowledge and understanding of politics and contemporary moral and social issues and a chance to have a real say and exercise real responsibility.
The value of citizenship education is recognised by schools, most of which already provide some teaching in this area. The programme we have developed will build on and extend that. It is flexible and will allow schools to make the most of what they do already: to teach different aspects to different depths and to be innovative in their approach.
The draft order will improve the entitlement it offers to all pupils. I beg to move.
Moved, That the draft order laid before the House on 24th January be approved [7th Report from the Joint Committee].—(Lord Bach.)
12.45 a.m.
Baroness Blotch: My Lords, my understanding is that this is a devolved issue for Wales, yet the Government have seen fit to make some recommendations. They do not represent much of a change but why are they in the order at all if the issue is devolved?
There is art, but not with design, in the Welsh list. The Government may answer that that is a devolved matter, but so too is the whole order. Why are there any national curriculum recommendations? Why is language a matter for stages 3 and 4 for England but only for key stage 3 for Wales? There is citizenship for England, but not for Wales. There is something strange in the way that the order is set out.
I recognise that it is entirely legitimate to present a national curriculum order for England, but why are all the arrangements for Wales not being dealt with by the Welsh Assembly?
The explanatory note states that the order-making power relating to modern foreign languages is being changed and that an order no longer needs to specify a modern foreign language. The Government cannot have it both ways. They cannot say that the order gives priority to European languages. The programme of study does so but that is a different matter. The legally binding article is the order, so there is real inconsistency. It would be helpful to know the reason.
According to the Minister, the order does not change priorities in respect of EU languages. What does that mean? The programme of study refers to one or more of the official working languages of the EU

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and states that non-EU languages can be offered only when secondary to an EU language. If that is legally binding, why is it not part of the order?
The situation is not the free-for-all that the Minister suggested. The Secretary of State has control over languages and will produce the list. We do not know whether the schedule will be the existing one or whether it will be changed. It would be helpful to know.
Schools are free to choose other languages, but if there are no syllabuses, set exam papers, or assessment procedures, there is no choice. When I was a Minister with responsibilities for education, there was constant pressure to remove languages from the list because so few pupils studied them and producing assessment procedures and setting examination papers involved unacceptable cost. It is a chicken-and-egg situation. If there are few student takers, the syllabuses disappear. If one wants to introduce new subjects, there will be the cost of syllabuses, of setting examination papers, and of assessment procedures. Who would incur those costs without knowing whether there would be any takers? How will that aspect be dealt with by the Government?
The Minister in the other place claims that citizenship is too important to be left to chance. What will be displaced that is less important in the curriculum? One cannot introduce a new foundation subject unless something goes. The unacceptable answer in the other place was, "All the other subjects are more or less prescriptive". Something will have to go. What exactly will slip?
Is citizenship a subject to be taught in addition to personal, social and health education? There is a great deal of overlap one with the other. Does one subsume the other, or do they continue to be separate subjects? Whether they are separate or combined, what percentage of curriculum time in schools do the Government suggest should be taken up to cover these matters, given that all children will have to study them?
It would be helpful to hear from the Government about the need for regionalism to be given such a high profile. In whit way does it fit in with the Government's focus on regional policy; and is it at the expense of strengthening communities? We know from the Learning and Skills Bill, which has just passed from this House to another place, that there is a definite movement away from community and locally-based groups to the regions. It would be helpful to know whether what is proposed here is another way to reinforce that agenda.
I am sure the noble Lord agrees that this is not an easy subject for teachers to deliver. As to that, is role play by students to be advocated? I refer, for example, to the sex guidelines, which is another sensitive subject. Certainly, sexuality is to be dealt with in one or other subject. In paragraph 4.4 we are told:
"Teachers can avoid embarrassment and protect pupils' privacy by always de-personalising discussions [on these sensitive issues]. For example, role play can be used to help pupils 'act out' situations. Case studies with invented characters, appropriate videos, and visits to theatres in education groups can all help
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pupils discuss sensitive issues and develop their decision making skills in a 'safe' environment. Some of these methods are listed below".
The guidelines go on to list them. It will be helpful to hear from the Minister whether it is envisaged that that will be the case.
Very substantial training will be required. A serious subject is to be introduced into the curriculum which covers a wide variety of aspects of life as young people mature into adulthood. How will teachers cope, especially when they deal with very sensitive and controversial issues? It is not an easy task. Are teachers to be judgmental or non-judgmental? What is the advice of the Government to teachers about that? Do they have any views on how the subject is to be delivered?
If there is to be no lengthening of the school day, what is to be sacrificed within the curriculum? What are the resource implications, and the source of funding, for this subject? Teaching mutual respect and understanding is one thing, but to deal with a plethora of political and highly controversial issues is another. I believe that a great deal of advice to teachers and governors, and information to parents, will be required as to how these issues are to be handled. For example, the Government have to an extent focused on marriage. In the sex guidelines there is an equality of focus on other lifestyles alongside marriage in terms of recognising their significance.
Where matters to do with sexuality—that is, lifestyles—as opposed to sex education, are covered in one or other of these subjects, how is the right of parents to withdraw their children dealt with? Is it likely that because sex education will be acceptable to parents their children will not be withdrawn? However, if sexuality is dealt with in a way that is unacceptable to parents, but it is covered with other subjects, where will the right of parents to withdraw their children then lie?
I agree with my honourable friend James Clappison in another place, who, when discussing these matters, said at col. 10 on 9th February 2000 in Standing Committee that,
"it would have been better if the guidelines had said more about what unites this country and binds us all together and about our common history and sense of nationhood, rather than about the things that set us apart".
He went on to say more of the same.
Out of interest, focus groups were used extensively by the Government on the question of citizenship. What a pity that public opinion focus groups were not heeded in relation to Section 28 and the sex guidelines.
Lord Bach: My Lords, I am grateful to the noble Baroness for her comments. However, I listened in vain to hear whether she supported the order in principle. Criticisms there were a-plenty, but if positive or helpful comments were made about the order, I must have missed them.
I deal with some, if not all, of the issues the noble Baroness raised. As regards Wales, the foundation subject order that was before the House does not

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change the law in Wales. The order is drafted in such a way as to amend the law in relation to England, and merely clarifies what the law is in Wales. The passing of the order does not involve legislating in relation to Wales. The order has been drafted and amended in consultation with legal advisers at the Welsh Assembly. They have no difficulty with the order and are in the process of drafting their own order to mirror our provisions.
As regards foreign languages, the noble Baroness may have missed the point. We are giving a greater potential choice. We are dropping a prescribed list. We are making it possible—we give power at least—for any foreign language to be taught. It does not take away from the importance of learning an EU language as well. That still remains. But any foreign language may now be taught provided there is the ability and willingness to teach it. The power relates to teaching any foreign language. That is an improvement, and something that I should have hoped that the noble Baroness would acknowledge.
The noble Baroness raised the point about what will give way to the teaching of citizenship. The noble Baroness will know that many schools already find time to teach citizenship in their busy programmes. We think that the revised national curriculum has a rather sharper focus, and that the citizenship programme has a somewhat light touch and is flexible. The time needed will depend on the approach taken by individual schools, many of which are already covering aspects of the order.
There are no plans to extend the school day, but we recognise that there is a wide variation in the length of time pupils are taught in schools. Although some schools have increased the length of time for which pupils are taught, many have not, or are providing less than the required minima. As levels of taught time can have a significant effect on the quality of the curriculum, we have decided to review the whole issue
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of taught time and to issue new guidance. Notwithstanding this, schools should, as a matter of good practice, review their taught-time arrangements.
I hope that the noble Baroness will forgive me if I do not go down the avenue of discussing sex education, education about sexuality, or Section 28 tonight. I think that this House has heard quite enough about that for the time being. I commend the order to the House.
Baroness Blatch: My Lords, before the noble Lord sits down, there is an inconsistency between his remarks and those of his colleague in another place, and what the order and the programmes of study say.
In Standing Committee in another place, the Minister said at col. 5 on 9th February:
"European Union languages will have priority, as before, except that there are two recent additions—Finnish and Swedish. As long as the offer of an EU language is made, any other modern language can be taught".
The order refers to any modern language. It does not refer to any European language. The noble Lord has said that schools will be entirely free to choose a modern language, but the programme of study states that one or more of the official working languages of the EU and non-EU languages can be offered only when secondary to an EU language. Who is right?
Lord Bach: My Lords, the order does not change the priority for EU languages. Schools must offer pupils the opportunity to study one or more of the official working languages of the EU. Non-EU languages count as a foundation subject only when offered with a working language of the EU. The order will remove the restriction on which additional languages schools can offer their pupils. If the noble Baroness will look at Article 2(4) of the order, she will see how "modern foreign language" is defined.
On Question, Motion agreed to.
House adjourned at one o'clock.

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