Sitting of 2 May 2000

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  DEATH OF A MEMBER
  Madam Speaker: I regret to have to report to the House the death of Mr. Clifford Forsythe, Member for South Antrim. I am sure that Members on both sides of the House will join me in mourning the loss of a colleague and extending our sympathy to the hon. Gentleman's family and friends.
  PRIVATE BUSINESS

    CITY OF NEWCASTLE UPON TYNE BILL [LORDS] (BY ORDER)
    Order for Third Reading read.
    To be read the Third time on Tuesday 9 May.

    GREENHAM AND CROOKHAM COMMONS BILL (BY ORDER)
    Order for Second Reading read.
    To be read a Second time on Tuesday 9 May.

Oral Answers to Questions
  HEALTH
  The Secretary of State was asked—
  HEALTH

    Waiting Lists
    Mr. Owen Paterson: If he will make a statement on waiting times for surgery during the period from November 1999 to February 2000. [119054]
    The Secretary of State for Health (Mr. Alan Milburn): Average waiting times for operations are now lower than when we came to office. The waiting list figures for December and January reflect the fact that, as planned, the national health service gave priority to emergency cases. Waiting lists fell again in February and we remain on track to achieve our manifesto commitment to reduce waiting lists by 100,000 from the level that we inherited.
    Mr. Paterson: In February, the Secretary of State said that he would eat his hat if priorities in Shropshire were different from those in previous winters. Dr. Ian Rummens, secretary of the local medical committee, has written to me with numerous cases, some of which show that at times no beds at all were free in Shropshire this winter, even though there was less flu than usual. Even heart attack patients were turned away. Given this, will the Secretary of State please apologise, investigate these cases and go to a public place and eat his hat in penance?
    Mr. Milburn: As I said to the hon. Gentleman at the time, I do not normally wear a hat—probably just as well. As for his allegation, he is simply wrong. He knows fine well that this year, just as in previous years, the NHS did the right thing. It put emergency cases first, and if that meant cancelling elective work that was the right thing to

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    do. It was not a distortion of clinical priorities, but the right clinical priorities. It is the hon. Gentleman who should withdraw his allegation, not the Government.
    Fiona Mactaggart: I was pleased to welcome the Secretary of State to Wexham Park hospital in my constituency this morning. Will my right hon. Friend use this opportunity publicly to congratulate the hospital on reducing by 1,700 the number of people waiting over the past two years, and on ensuring that three quarters of patients are treated within three months? Can he keep giving that hospital the resources that will enable it to modernise and to continue its good work?
    Mr. Milburn: I am very pleased to join my hon. Friend in welcoming the excellent work that is undertaken at Wexham Park hospital. I had the pleasure of visiting the hospital this morning with her and my right hon. Friend the Prime Minister. I pay tribute to the work that my hon. Friend does with the hospital and, indeed, with the local trust and the broader local health community. The hospital is achieving results on the basis of a clear foundation of partnership between clinicians and managers and on the basis of the extra resources that we are investing in the national health service. I give my hon. Friend this undertaking: we will continue to invest those resources year on year to give patients the sort of modern, dependable health care that they deserve.
    Mrs. Caroline Spelman: What does the Secretary of State have to say to the widow of Bill Fox, who died, aged only 62, following a heart attack during the period referred to in this question? Sheffield health authority told him that there was no money to find the replacement for his outdated heart valve, but failed to warn him of the risk that such a delay might cause, or to give him the possibility of going privately, which might have saved his life.
    Mr. Milburn: I say to the hon. Lady and to the gentleman's family that it is precisely because of those sort of cases that we place such priority on tackling coronary heart disease and improving access to heart surgery for patients when they need it. That is why we have already invested extra money to provide more heart operations—an extra 3,000 operations over the next few years. It is why, incidentally, we have provided Sheffield health authority with cash increases of more than 8.7 per cent. in this financial year alone.
    Dr. Brian Iddon: I am pleased to tell my right hon. Friend that the ophthalmology department at the Royal Bolton hospital has become a centre of excellence. It could get its waiting list down even further and take on extra cases if it could get the theatre time. Will my right hon. Friend therefore look favourably on the bid that the trust has made for a designated theatre for eye operations?
    Mr. Milburn: How could I resist? I shall look very closely at the bid that my hon. Friend's trust has submitted. It is very important to use all the capacity that is available to the NHS so that we can reduce waiting times for patients. We are getting the waiting lists down and, as we know, reducing waiting lists reduces waiting times too. In particular, we are prioritising operations that
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    are regarded by patients as urgent. Cataract operations are precisely those sort of operations. They are largely the operations of old age, and we are shortening the waiting times for them. Incidentally, they are the sort of operations that would be taken out of the NHS altogether if the Conservative party had its way.
    Mr. Desmond Swayne: What estimate he has made of the number of patients who have left NHS waiting lists as a consequence of having paid for their treatment in the private health care sector since May 1997. [119055]
    Mr. John Bercow: What proportion of the decline in NHS waiting lists he estimates is attributable to patients having secured treatment from the private health care sector since May 1997. [119068]
    The Secretary of State for Health (Mr. Alan Milburn): The decision to seek treatment as a private patient, for whatever reason, is a matter for the individual. We have no data on the number of patients who have left NHS waiting lists and chosen to seek private treatment as an alternative.
    Mr. Swayne: Let me give the Secretary of State some data. My constituent, Mr. Charles Scott, who lives in Hordle, suffered from atrial fibrillation for a number of years. In despair of the waiting list, and because his attacks were becoming more frequent and debilitating, Mr. Scott sank £12,000 of his savings into having a pacemaker fitted. Since then, he has received from Customs and Excise a demand for more than £1,000 in value added tax payable on his pacemaker. That cannot be right, or is it what is meant by Labour's double whammy?
    Mr. Milburn: I remind the hon. Gentleman that it is not my party's policy to force patients to leave the NHS and pay for private treatment. That is, in fact, his party's policy. If he has a concern, he should take it up with the hon. Member for Woodspring (Dr. Fox), who told his party conference last October:
    What we are starting is perhaps a Trojan horse for private medical insurance.
    He went on to say:
    I think what we are proposing could revolutionise private insurance in the way we revolutionised pensions in the 1980s.
    And if that were not enough, he told The Sunday Times in January:
    Philosophically we have moved on. Insurance companies could cover conditions that are not high-tech or expensive, like hip and knee replacements, and hernia and cataract operations, which currently involve long waiting times.
    Those were not slips of the tongue, but the authentic voice of today's Conservative party. The Tories are condemned out of their own mouths. There is no use trying to deny that the hon. Member for Woodspring said those things. It is no use trying to close the stable door after that Trojan horse has bolted.
    Mr. Bercow: Given that Austria, Finland, France, Germany, Greece, Italy, the Netherlands, Portugal, Spain and Sweden all spend proportionately more on health than we do, and given that a larger share of their expenditure derives from the private sector—often, indeed almost

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    ordinarily, voluntarily—why does the Secretary of State not understand that his refusal to contemplate a bigger private sector contribution is blinkered, irresponsible and a betrayal of the very patients whom he is paid to serve?
    Mr. Milburn: I welcome the hon. Gentleman back from his break, which has obviously done him a power of good. There is a world of difference between the NHS paying the private sector to provide patients with care for free and the policy suggested by his party, which is that patients should be forced out of the NHS and should pay for their own care. That is precisely what the Tories advocate. The hon. Member for Woodspring advocates it, and so does the hon. Member for Buckingham (Mr. Bercow). However, he and his constituents should be aware that the operations that the Conservative Front-Bench team would take out of the NHS altogether are precisely those that involve old age—hips, knees, cataracts. Conservative policy amounts to a new tax on old age, and pensioners will reject it.
    Angela Smith: Is the Secretary of State not astounded by the Conservative party's hypocrisy on the NHS? The Conservatives claim that they want the NHS to deal with serious, life-threatening illnesses, but they would force my constituents to have private operations. It may not mean much to Conservatives if they have to pay £5,500 for a hip operation, but that is far too much for my constituents to pay.
    Mr. Milburn: My hon. Friend is absolutely right. The elderly are the very people who most need health care and can least afford private health insurance, yet it is their operations that the Conservatives want to force out of the NHS. Judge the Conservatives not only on their record—cuts in bed numbers, cuts in nurse numbers, cuts in NHS funding—but on what they promise for the future. They want treatment not according to clinical need, but according to ability to pay. The Conservatives offer patients only one guarantee for the NHS—an NHS that is not modernising, but privatising.
    Mr. Barry Jones: Can my right hon. Friend say what the Government have done so far to hurry along surgery for knee and hip operations? Can ordinary people afford large sums for private surgery on their joints? What does he hope to do to help older people who cannot afford private surgery?
    Mr. Milburn: We are trying to get waiting times down for precisely that sort of operation. Indeed, as we get the lists down, so waiting times go down too. It is obviously important that people do not have to wait, sometimes in pain and discomfort, for a long period before they receive treatment.
    It is self-evident that people cannot afford to pay for such operations. The average cost of a hip replacement is between £5,000 and £7,800; the average cost of a knee replacement is between £5,700 and £8,400. If the Conservatives had their way, too many people—especially pensioners—would simply be priced out of care and treatment altogether.
    Dr. Julian Lewis: Given that the Secretary of State's defence in this matter is that the service is giving priority to emergency cases, what does
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    he have to say to my constituent, Miss Kerry Wort of Totton, who, last December—at the very time he claims that emergency cases were being given priority—was told that she would have to wait 10 months for an emergency kidney operation, and that that wait would mean that she would lose the whole kidney, whereas if she could have had the operation sooner, she would save the kidney? She was, of course, forced off the list and had to use £5,000 of her own money to get the same operation from the same surgeon privately, three days later. If that is the Government's idea of emergencies receiving priority, they are not even delivering on that.
    Mr. Milburn: It is precisely so that patients avoid the invidious choices that they are sometimes forced to make that we are trying to get down waiting times and waiting lists. We are doing that by investing more cash in the national health service and modernising the way that it works. I wish that the hon. Gentleman and his party would have the courage of their convictions. Before the Easter recess, the Opposition had the opportunity to back their apparent commitment to match our spending on the national health service by supporting our proposal to increase tobacco taxation and to earmark the proceeds for the NHS. At the very first test, they failed. They failed to put their money where their mouth is, because their commitment to the NHS is, I am afraid, not what it was in the past.
    Dr. Phyllis Starkey: Last week, when I was canvassing, I met a constituent—an elderly woman—who had been forced into paying £7,000 for a hip replacement operation. However, my constituent was clear about who was most to blame for that—the Conservatives, for their previous underfunding of the NHS. Will my right hon. Friend confirm that the £800,000 allocated to Milton Keynes general hospital as its share of the extra money announced in the Budget to deal with waiting lists is a much more effective way of ensuring that no more of my constituents feel forced to go private than the Opposition's proposals?
    Mr. Milburn: My hon. Friend is right. The extra resources that we have already committed to the NHS are allowing services to be modernised. They are a once-in-a-lifetime opportunity to speed up treatment and care for all patients in the NHS—not just some patients, but every patient. Nobody pretends that that is easy or that it can happen overnight; of course, it cannot—not least because we have to recruit the extra staff and build the extra capacity that the NHS needs. However, we have the opportunity to do that because the Government have put their money where their mouth is: we have backed our commitment with real cash. We have done that because we believe in the NHS. We believe that the NHS can work—it can be sustainable; it can modernise and can offer patients the fast and convenient services that they want in the 21st century.
    We shall continue to invest resources in the NHS precisely because we believe in its ability to deliver the goods. What we have invested is the biggest increase in resources that the NHS has ever seen. I remind my hon. Friend that, over the past 20 or 30 years, the NHS saw real-terms increases in funding of about 3 per cent. on average. That is the record of the Tories in office. Over the next four or five years, we shall be doubling that

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    investment record. With that investment, the NHS has to change and modernise—there has to be a step change in results to match that step change in resources.

    Nurses
    Mr. Michael Jack: What data his Department receives from hospital trusts on the number of nurses each employs. [119056]
    The Minister of State, Department of Health (Mr. John Denham): The Department receives information from national health service trusts on all nurses employed as part of the annual non-medical work force census. The census contains details of area of work, hours worked, age, gender and ethnicity. Data of that sort enable us to know that, in the year until last September, the number of nurses employed by the national health service increased by 5,580.
    Mr. Jack: I thank the Minister for that information, but it is a great pity that some of the nurse numbers that he mentioned have not made their way to the Blackpool Victoria hospital, which has, since 1997, been struggling with a shortage of nurses. Thankfully, it appears that that problem is being solved, but in making its case for greater nurse numbers, the trust had difficulty in obtaining comparative benchmark nurse numbers from other local hospitals to help it to make its case to the North West Lancashire health authority to ensure that nurse numbers and activity moved upwards together. What assurances can the Minister give me that that problem will not occur again?
    Mr. Denham: The right hon. Gentleman says, rightly, that the problem is being tackled. Indeed, as the House meets, a meeting is taking place between Blackpool Victoria hospital and the health authority to consider nursing numbers, and I understand that there are proposals for additional funds for additional nurses to meet that hospital's needs.
    The right hon. Gentleman asks for an assurance that the problem will not occur again. One thing that makes that possible is the fact that the health authority has received a 6.23 per cent. real-terms increase in finances for the coming year—part of the record level of additional resources that my right hon. Friend the Secretary of State mentioned. It is that, together with the fact that we have increased the number of nurses in training where the Conservative party cut them, that makes it possible to address the need for nurses in NHS hospitals.
    Mr. Nick Harvey: Understandably, the Government are claiming to have brought more nurses back into the profession, which is very welcome, but are they not concerned that there are still nearly 15,000 vacancies? As they look forward to the future, are they not concerned that things might get considerably worse before they get better, given the new emphasis that they have been placing on intermediate care and caring for people in the community? Are they not concerned that the age profile of community nurses, occupational therapists and health visitors—some of the very professions on whom the burden of caring for people outside hospitals will fall—is very top-heavy, and that there will be a real problem of recruitment in those areas in the next
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    few years? What further steps will the Government take to increase dramatically the number of nurses entering the profession and to reform the pay and conditions to keep the people who are already there?
    Mr. Denham: The work force needs of the new, modern national health service is one of the key issues to be addressed by the modernisation action teams set up by the Prime Minister following the Budget announcement. They will obviously address the numbers of staff that we need and the expanded roles that we want nurses and other health professionals to take on board.
    However, may I remind the hon. Gentleman of what we have already achieved? We inherited a difficult situation. The previous Government cut the number of nurses in training. As a result, there were about 15,000 fewer nurses available to recruit than there otherwise would have been.
    The number of hard-to-fill vacancies—those that have been empty for more than three months—is about 7,000. Against that background, we got more than 5,500 extra nurses back into the national health service last year; we were able to attract more than 5,000 new nurses who were qualified but not nursing, either straight back into the national health service or into return-to-practice courses. There was a 73 per cent. increase in applications for nurse training courses last year.
    All those figures show that, although there are challenges ahead, we have begun to turn the corner on the problem of nurse shortages, which has bedevilled the national health service for so long.
    Mr. William Ross: The Secretary of State said earlier that it was essential to use national health service capacity to the full. Does he agree that one of the great bottlenecks is the shortage of nurses trained for intensive care, because that ties up an awful lot of people in bed blocking when they should be out and about?
    Mr. Denham: The hon. Gentleman is absolutely right. We did increase the number of critical care beds last winter, but there was still significant pressure on the national health service. I believe that the national health service, and the trusts and hospitals within it, know that we need to do more to address that problem in the coming winter. Obviously, one of the issues that the health service is now looking at actively throughout the country is the need to ensure that we have more trained intensive care nurses.

    Patient Representation
    Mr. Syd Rapson: What steps he is taking to strengthen the system for representation of patients' views in the NHS. [119057]
    The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): The patient care empowerment modernisation action team and the wider consultation exercise with patients and the public on the national plan will develop and strengthen the representation of patients' views in the national health service.
    Mr. Rapson: We have excellent hospitals in Portsmouth, but concerns have been expressed to me,

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    mainly by elderly patients. They need more care, and extra effort must be made to ensure that they understand their rights. There is some confusion, so will the Minister make that extra effort to ensure that elderly patients and organisations that support them, such as Age Concern, understand their rights?
    Ms Stuart: We are committed to developing a service that is sensitive to patients' needs. As part of the national plan development, we shall consult regionally and locally and ensure that all representative groups have an opportunity to comment and feed in their opinions. In addition, the action teams have considerable patient representation, which we hope will cover the whole spectrum of needs. We shall, of course, pay particular attention to the needs of the elderly within that framework.
    Mr. Peter Lilley: Is not the best means of representing patients' views the right of their GP to refer them to the hospital of their choice? Why, therefore, have the Government effectively curtailed that right, and not even mentioned it in the circular on out-of-area treatments? What is the Minister's response to the president of the Royal College of Surgeons who, in last week's New Statesman, said:
    It is terribly important that a GP can refer to the appropriate specialist centre. Yet the new system…makes that more difficult. That is very disappointing and not right for the highest standards of patient care…?
    Ms Stuart: I do not agree that the right of GPs to make referrals has been restricted in a way that will adversely affect patients' treatment. It is absolutely important that we end up with a system in which patients see the right doctor at the right time in the right place, and many of the modernisation programmes are geared towards that. That means that there must be some reconfiguration of services, but I do not agree that the system of GP referral is in any way under threat.
    Mrs. Eileen Gordon: Will my hon. Friend join me in congratulating community health councils on the work that they do to represent patients and inform them of their rights? Does she agree that with more resources they could do much more work and represent many more patients?
    Ms Stuart: Community health councils have an important statutory function, but some groups of patients and parts of the community may not have a sufficiently well-structured input into service reconfiguration. We are keen to broaden that base and to involve the community health councils. We want to build on the model of CHCs in certain areas that have been very innovative, and we should recognise their role in involving the local community and build on that success.
    Dr. Liam Fox: Given that one of the roles of the House is to ensure that the rights of the weakest and most vulnerable are protected, what specific plans does the Minister have to improve representation for the mentally ill? In the light of yesterday's announcement, what specific ideas do Ministers have about advocacy for the elderly in the health care system?
    Ms Stuart: It is, of course, extremely important that the most vulnerable have the greatest protection.
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    The advocacy system is being examined as part of the national plan for development of patient empowerment, which can mean empowering individual patients themselves or their carers or those who speak for the patient. That remit also includes the mentally ill.
    Dr. Fox: The Minister might like to write to me with a fuller answer, which can be put in the Library, as this issue is obviously important to hon. Members on both sides of the House. I welcome yesterday's announcement and the Government's conversion to a public-private partnership in rehabilitation of the elderly, but what representations can patients make in such a system of treatment, and what say will they have? What safeguards will be put in place to guarantee minimum standards of care? Given that NHS treatments are subject to the Commission for Health Improvement, what changes will be required to the Care Standards Bill as a result?
    Ms Stuart: The hon. Gentleman's question rightly covers a range of issues, which I shall take one by one. Mental health patients will be taken much more into care. We have spent an extra £100,000 on NHS Direct for a special line for mental health service patients. The Care Standards Bill will strengthen services within the social care sector. As for evidence of greater involvement, I ask the hon. Gentleman to wait for the national plan, which will shortly be published. It will refer to real actions rather than aspirations.
    Mr. Peter L. Pike: A few moments ago, my hon. Friend referred to the important work of community health councils. Will the Government ensure that the councils can represent patients' views at local level? It is essential that they remain local and do not become remote, which is what the previous Government were threatening.
    Ms Stuart: It is absolutely essential that representation and consultation always take place at local level. That is why we are strengthening the role of health authorities and considering closely ways of broadening the base of that representation, which may not always be through the community health councils. The councils play a vital statutory role and we are committed to widening their base, but always with a focus on local delivery and local input to serve local patients.

    In Vitro Fertilisation
    Mr. Bob Russell: What steps he is taking to ensure that IVF treatment is available throughout the country. [119058]
    The Parliamentary Under-Secretary of State for Health (Yvette Cooper): The decision to provide specialised infertility treatment is one for individual health authorities. This decision should be taken in the light of local needs, available resources and clinical effectiveness.
    The Government are continuing to consider ways of providing fairer access to infertility services while ensuring that resources are not diverted from the key priorities of cancer, coronary heart disease and mental health.
    Mr. Russell: With that answer the Minister confirms that postcoding exists when it comes to this form of

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    treatment. Does she agree that that is unfair on a couple in my constituency—hence my question—who are being deprived of the service, whereas if they lived in another part of the country, it would be available to them? Surely the Government should insist on fairness throughout the country. We must end postcoding.
    Yvette Cooper: We are very concerned about the postcode lottery in care, which is a legacy from the previous Government. The internal market perpetuated a postcode lottery and a money lottery. We are taking action to tackle the postcode lottery, including setting up the National Institute for Clinical Excellence and the Commission for Health Improvement and referring important cancer drugs to NICE. We shall build on this in future. We shall publish shortly a survey of IVF provision throughout the country to inform local decision making.

    Funding Formula
    Mr. Tony Lloyd: What plans he has to review the formula for distribution of funding between health regions and individual health authorities to take account of the impact of poverty on health. [119059]
    The Minister of State, Department of Health (Mr. John Hutton): On 24 March 1999, my right hon. Friend asked the Advisory Committee on Resource Allocation to undertake a wide-ranging review of national health service resource allocation.
    The review of the formula will ensure that the health care needs of populations, including the impact of deprivation, will be the driving force in determining future health allocations. We want a fairer formula that contributes to our goal of reducing health inequalities.
    Mr. Lloyd: I think that it is common knowledge that people in constituencies and cities such as mine are among the poorest in the country. As a result, they live shorter lives, which are punctuated by more frequent episodes of ill health. Does my hon. Friend agree that the last thing that my constituents need is another Conservative Government, who would widen the gap between the poor and the better off, and would ask my poor constituents to pay for health care? Does he agree also that the time for redistribution to ensure that health funding matches health need is now, when the Government are putting record sums of money into the health service? That process would make things much easier for everybody else.
    Mr. Hutton: I strongly agree with my hon. Friend. There is little doubt that it would be a disaster for the people of Manchester if the Conservatives were ever returned to office to implement the policies that they are proposing for the national health service. We should not forget that the Tories found it impossible to use the two words "health inequalities". We recognise that there are serious health inequalities in our society, which continue to scar communities throughout the country, including those in Manchester. My hon. Friend will be aware that, thanks to the measures that we have taken this year, an additional £30 million is going into the NHS in Manchester. In addition, Manchester is a health action zone, which is being supported by nearly £12 million
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    of additional resources. His constituents face serious challenges. We are determined to rise to them, but the Conservative party would not.
    Mr. Crispin Blunt: Does the Minister appreciate that some of the longest waiting lists are in Surrey, where the length of the waiting lists has led to the effective dismissal of the chief executive of the East Surrey hospital for her political failure to meet, within the resources made available to her, the political targets imposed on her? When reconsidering the formula, should the Minister not bear in mind that the effective increase in Surrey will be less than 2 per cent. in real terms? Therefore, there is no confidence in Surrey that the money made available to Isobel Gowan's successor as chief executive will be sufficient for him to be able to carry out the task that the Government have set him.
    Mr. Hutton: The hon. Gentleman usually does his homework meticulously, but I am afraid that he has not done so on this occasion, if he wants to check allocations to the East Surrey health authority for this year, he will find that it will have a cash increase of 8.26 per cent., which is a real-terms increase of 5.62 per cent. Uncharacteristically, he is quite wrong about these matters. This Government, unlike the one whom he supported, are determined to ensure that we have a genuine national health service that provides high-quality care right across the country. That, I am afraid, was not the legacy that we inherited from the previous Administration.
    Helen Jones: Will my hon. Friend bear in mind that there are inequalities in health care not only in inner cities, but in constituencies such as mine where people in wards such as Bewsey, Poplars and Hulme suffer much higher rates of debilitating long-term illnesses than the areas that surround them? Will he also bear in mind that people in such wards have never been able to buy private health care because they simply could not afford to? That is why the private wing in the grounds of Warrington hospital went bust. When he considers future allocations, will he ensure that the areas that I have mentioned receive their fair share of resources, which they were denied during 18 years of Tory Government? Will he look favourably on the application of Warrington hospital to use the Daresbury wing to provide orthopaedic facilities for all the people of Warrington and not just for those who can afford to pay for them?
    Mr. Hutton: We shall certainly consider that, and I agree with my hon. Friend about many of the points that she made. I tried to emphasise that we want a system that guarantees fairer funding right across the national health service, which was not the case with the arrangements left in place by the previous Administration. She is right to draw attention to deprivation and health inequalities in her constituency and such problems are found all over the country. Unlike our predecessors, we are determined to ensure that the NHS provides high-quality care and improves at a faster rate the health of those who live in the poorest and most deprived parts of the country.

    New Opportunities Fund
    Mr. Andrew Robathan: How much of the £150 million committed from the new opportunities fund to combat cancer has been distributed. [119060]
    The Parliamentary Under-Secretary of State for Health (Yvette Cooper): Some £116.25 million from the new opportunities fund has been made available for cancer services in England and £93 million of that has already been allocated across the country for new cancer equipment. A further £23.25 million will be spent on palliative care and support and information services. Successful applicants for this money will be announced in September 2000.
    Mr. Robathan: Does not the Minister, in her heart, agree that state health care should be funded by Government money and not by lottery money? However, is she aware that, if we are to have such funding, although that £150 million was trumpeted with fanfares and welcomed by the Prime Minister and the previous Secretary of State for Health, Leicestershire health authority is having to make a bid for a health care initiative for disadvantaged communities? Would it not be better to provide a CT scanner that would benefit all the people of Leicestershire than to have such gimmicks?
    Yvette Cooper: I strongly agree with the way in which the new opportunities fund is being spent, and I think that the people of Britain also agree. They would certainly far rather have the money spent on important cancer equipment than on the Churchill papers. I am proud that the money for palliative care is being spent on disadvantaged communities, because this Government, unlike the previous one, are committed to tackling health inequalities and the unfair lottery of care across the country.
    Mr. Philip Hammond: Is the Minister aware that the director general of the Cancer Research Campaign will give evidence to the Select Committee on Science and Technology tomorrow that the use of Temodal, the revolutionary brain cancer drug developed by Cancer Research Campaign's own scientists here in Britain, is eight times higher in Germany than in Britain, five times higher in Italy, three times higher in France and twice as high in Spain and Greece? Against the backdrop of the Government's rhetoric of priority to cancer services, does the Minister consider it acceptable that a world-class cancer drug developed in Britain with voluntary contributions made by the British people should be freely available in other EU countries, but available to only one in four of British patients who could benefit from it?
    Yvette Cooper: We take seriously the lottery of care across the country with regard to cancer drugs, which is why we referred the taxanes to NICE as a matter of early priority. We will shortly make an announcement about the next wave of cancer drugs to be referred to NICE, and Temodal will be one of those drugs.

    Medical Laboratory Staff (Pay)
    Mr. Hilary Benn: If he will make a statement on the pay of medical laboratory staff working in hospitals. [119061]
    The Minister of State, Department of Health (Mr. John Denham): For the first time, we have offered all medical laboratory scientific officers—MLSOs—a guarantee of rises above projected underlying inflation, not just for one year, but for three years. In addition, trainees have been offered increases of up to 26 per cent. for last year, all MLSOls have been offered 7.1 per cent., and we have offered to increase the minimum national starting pay for MLSO2s by 7.1 per cent. If accepted, all that would be backdated to 1 April 1999. We are also discussing positively with the NHS trade unions proposals to reform and modernise NHS pay, as we outlined last year in "Agenda for Change".
    Mr. Benn: When I recently visited the pathology laboratories at St. James's hospital in my constituency, I met staff there who are committed to the work that they are doing, but concerned about the reward that they receive for that job, and about the difficulties that they face in recruiting adequate staff. I welcome the step that the Government have taken to recognise that problem through "Agenda for Change". Can my hon. Friend tell the House how soon he expects proposals to be forthcoming so that those staff, a vital group of backroom staff in the NHS, receive the reward that they feel is long overdue?
    Mr. Denham: We are making good progress with the NHS trade unions, and I hope that we continue to do so. We hope to reach broad agreement about how the proposals would be implemented this summer or later this year. They would then have to be implemented effectively and properly by NHS employers throughout the country. On our side, we are determined to make good progress with the trade unions and, with good will on their side, I am sure that we can do that.
    Sir Sydney Chapman: I welcome the Minister's announcement today. Does he accept that there is still a pretty wide disparity in pay between medical laboratory staff and other professionals in the NHS, particularly after four years' service, when the disparity is about £4,000? Does he agree that there is an overwhelming case for medical laboratory staff to be included in pay review body reports?
    Mr. Denham: As I should have said earlier, I pay tribute to the work done by all our medical laboratory staff, to whom hon. Members on both sides have referred. They do a tremendous job and are a key part of the health team. With regard to the disparity in salaries between those jobs and other professions, any existing disparities certainly did not begin to emerge over the past three years, but are a much more long-standing part of the pay system. It is possible, and it is envisaged in "Agenda for Change", that some professional staff groups might become members of the pay review body system. It is too early in the process to have reached agreement on which groups those might be. That is part of the overall package of

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    measures that we are negotiating under "Agenda for Change" and on which we are keen to make progress in the next few months.
    Dr. Liam Fox: The Minister knows that there is a crisis of confidence in the laboratory service and a major problem with recruitment and retention. Why will he not give the simple undertaking, which the Conservative party is happy to provide, that in future all medical laboratory staff will be included in the full pay review structure?
    Mr. Denham: The hon. Gentleman is unbelievable. His party was in power for 18 years and had the opportunity to implement his proposal. That the hon. Gentleman makes such a suggestion without prior notice or discussion shows that nothing that he says can be taken seriously. We have made it clear that some professional groups can join the review bodies. However, that needs to be part of a negotiated package of changes to the national health service pay system, which will benefit not only staff but patients. The hon. Gentleman's proposal to announce one part of the negotiation as Opposition policy is not credible. He shows no understanding of what is necessary to provide a modern pay system for the national health service.

    Osteoporosis
    Mr. Dafydd Wigley: What steps he is taking to improve facilities for identifying and treating those suffering from osteoporosis. [119063]
    The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): The Government take osteoporosis very seriously. Significant progress has been made in highlighting the importance of preventing osteoporosis and resulting fractures since the launch of the national strategy in June 1998. That provides a solid foundation for health authorities to develop local strategies. The Government expect to publish the national service framework for older people in the autumn. That will focus on areas of greatest concern to older people including falls and fractures partly in the context of osteoporosis.
    Mr. Wigley: I thank the Minister for that hopeful answer. The cost of osteoporosis amounts to £4 million a day because of fractures. Will the Government provide specific funding for primary care groups to manage osteoporosis, especially for elderly people?
    Ms Stuart: The causes and treatments of osteoporosis are complex. Medical conditions that result from osteoporosis, such as fractures, are fully funded and treated by the national health service. Several health authorities have adopted a strategy for prevention. Primary care trusts will continue to receive basic guidelines, which will be taken up with more enthusiasm in some areas than in others. To be frank, the response in some areas has not been as encouraging as we would wish.
    It is important to note that the Care Standards Bill will set minimum standards in all care homes because elderly people are most at risk. Those standards have not yet been defined, but the consultation document, "Fit for
    16
    the Future", makes it clear that facilities such as grab rails should be provided in homes. For the first time, minimum standards will apply throughout the country in homes, which house many of those most at risk.
    Mr. Tam Dalyell: The Minister has been candid. Why do differences exist in the response to the serious matter of osteoporosis in various parts of country?
    Ms Stuart: When local health authorities decide priorities, prevention of osteoporosis may be higher on the agenda in some areas than in others. However, the national health service framework for the elderly and the Care Standards Bill will highlight osteoporosis and prevention. Prevention is a long-term issue, and our strategy includes work on better nutrition because vitamin D deficiencies and an unhealthy life style can cause osteoporosis. Health action zones have taken up those matters, and we are dealing with the differences in several ways.
    Miss Anne McIntosh: The Minister rightly referred to the importance of prevention of osteoporosis. Has she had time during the recess to assess the evidence that shows that light gardening by the over-50s can prevent the onset of osteoporosis?
    Ms Stuart: If the hon. Lady wants me to support gardening and exercise in the open air as measures to prevent osteoporosis, I am more than happy to do so.

    Breast Cancer Unit, Nottingham
    Mr. Vernon Coaker: What discussions he has had with Trent regional health authority about the building of a new breast cancer unit at Nottingham City hospital. [119064]
    The Parliamentary Under-Secretary of State for Health (Yvette Cooper): The national health service executive's Trent regional office is working with Nottingham City Hospital NHS trust to take forward its proposal for a new breast care centre. The case is considered to be of high priority by both the regional office and the Nottingham health community. The project will be considered by Ministers, along with other priorities, when the capital allocations for the next year are announced shortly.
    Mr. Coaker: Is the Minister aware that the development of a new breast cancer unit at Nottingham City hospital is a huge local priority? I have visited the breast cancer unit and the work of Professor Blamey, Dr. Robin Wilson and the staff is well appreciated by the local community, but for too long they have had to work in substandard accommodation. With the extra money that we have made available, there are high hopes that they will soon have the first-class accommodation and facilities that they should expect for the first-class service and professionalism that they provide at the hospital.
    Yvette Cooper: I shall certainly take on board the points that my hon. Friend makes. He has been a strong advocate for the new breast care centre and I can tell him

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    that the regional office and Ministers will note his argument that it is considered to be a regional priority. We shall bear what he says in mind when we make a decision.

    Domiciliary Care Agencies
    Mrs. Sylvia Heal: If he will make a statement on his plans to regulate and inspect domiciliary care agencies. [119065]
    The Minister of State, Department of Health (Mr. John Hutton): The Care Standards Bill will introduce a new regulatory framework for home care services. We have amended it to ensure that all domiciliary care agencies—not only those contracting with local authorities—will be required to register and be inspected annually by the National Care Standards Commission. A consultation version of the proposed regulations and standards will be published later this year.
    Mrs. Heal: I welcome what my hon. Friend says about including all domiciliary care agencies in the proposed regulations, but can he provide an assurance on domiciliary care workers in particular, many of whom do an excellent job, provide a high standard of care and enable people to remain in their homes, which is usually their choice? Sadly, there have been cases of care workers abusing or taking advantage of the people for whom they care. Will the regulations take into account not only quality of service, but the recruitment and training of staff employed by the agency?
    Mr. Hutton: I can give my hon. Friend that assurance and she is right to say that enabling more people to stay longer at home is one of the principal objectives that we have set for social services. If we are to succeed, we need higher-quality domiciliary care services. A key part of that is making sure that the right people with the right training and the right supervision are employed in domiciliary care agencies. I give her an absolute assurance that, as we develop those new national standards, we will put a premium on ensuring that domiciliary care workers are properly vetted, trained and supervised in future.
    Mr. Paul Burstow: During the drafting of the domiciliary care regulations, will the Minister consider the difficulties that many private sector providers of such services face with the contracts and spot contracts that they are being given by local authorities? They are set at such unrealistically low prices that even now they find it difficult to provide a quality service: we know that many are leaving the residential sector and are beginning to abandon the provision of services at home. Insufficient resources are being allocated to guarantee the quality that he and I both want to be provided.
    Mr. Hutton: I will consider the point that the hon. Gentleman raises, but I remind him that social services are being resourced at a record level. There is a significant increase year on year—more than twice the rate of inflation is going in—but how local authorities decide to use those additional resources and the rates at which they contract are matters for them. We have made it clear that we do not want rates to be set mechanistically, but we will look into those issues. I am sure he agrees that we
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    need high-quality domiciliary care and residential care services and we expect local authorities to make sure that those services are available locally.

    Poverty and Heart Disease
    Mr. Bill Michie: What assessment he has made of the nature of the relationship between poverty and heart disease. [119066]
    The Secretary of State for Health (Mr. Alan Milburn): Poverty is a major cause of heart disease. The poorest working-age men are 50 per cent. more likely to die of coronary heart disease than men in the overall population. That is why one of the key objectives of our new national service framework for heart disease is to tackle inequalities in the incidence of the disease, and access to services dealing with it.
    Mr. Michie: I thank my right hon. Friend for his reply. We are now more hopeful that we will get to the bottom of illnesses caused by poverty, particularly heart disease. Does my right hon. Friend think that health action zones will give information on the relationship between heart disease and poverty? By the way, the Sheffield hospital for women is on song, on target and on price.
    Mr. Milburn: As always, my hon. Friend brings good news.
    My hon. Friend mentioned coronary heart disease and the role of the health action zones. I can tell him that we consider dealing with the real problems that are intimately linked with deprivation—not just coronary heart disease, but cancer—to be one of the top priorities for those zones. I know that the local health improvement programme in Sheffield has prioritised the tackling of coronary heart disease, and I think that that is absolutely right.
    We are providing better treatment through extra operations, the fast-track chest pain clinics that are coming on line, and faster ambulance response times enabling those who have heart attacks to get to hospital and be treated more quickly. We need, however, to emphasise the importance of prevention as well as treatment. That is why we have invested significant amounts in smoking cessation clinics, and in the provision of nicotine replacement therapy on the national health service. For the first time, that therapy will be available free of charge. We have enabled some of the problems to be dealt with at source, rather than being picked up when they occur.
    Mr. John Wilkinson: The Secretary of State has identified a disturbing connection between poverty and the high incidence of heart disease. How can he justify the proposed closure of Harefield hospital in my constituency, which caused a petition with 100,000 signatures to be lodged at Downing street last Wednesday, and gave rise to a procession led by an eight-year-old former patient who had been given a double transplant? Does not a hospital such as Harefield—unlike one in central London such as the Paddington hospital that is proposed for the future—offer an ideal location for poorer people? Their families—

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    and they, as out-patients—can stay, at a reasonable price, in an accessible area. Harefield is the ideal locational hospital. Will the Secretary of State think again?
    Mr. Milburn: I think the hon. Gentleman knows that consultation is still taking place on the future configuration of acute hospital services in that part of London. Let me place on record my tribute to the part played by the hon. Gentleman's right hon. and noble Friend Lord Newton in leading some of the discussions about the best make-up of hospital services in the area. I can go no further than that today, but I will consider carefully the concern expressed by the hon. Gentleman and others.

    Mixed-sex Wards
    Mr. Tim Loughton: What additional funding is being made available to health authorities in the south-east of England to facilitate the ending of mixed-sex wards. [119067]
    The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): Nationally, we are aiming to invest a total of £2.6 billion in NHS buildings and equipment for this year, part of which will be used to address on-going work to eliminate mixed-sex accommodation. The south-east received about £191 million of the £1.9 billion allocated so far. Of that, about £4 million will be specifically invested this year to help to eliminate mixed-sex wards.
    Mr. Loughton: In August 1997, Lady Jay threatened:
    Any health authority which tells me it is unable to get rid of mixed sex accommodation within the next two years will have to have a very good reason.
    What is the reason for the Government's failure to meet their initial pledge to phase out mixed-sex wards within two years?
    Ms Stuart: Unlike the previous Government, who expressed the intention of phasing out mixed-sex wards, but never set any targets or introduced any monitoring to establish what was happening on the ground, we have set
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    the target of eliminating the number of such wards by 95 per cent. by 2002. There is no reason to assume that we will not meet those targets. We could not set a target of 100 per cent., because, as the hon. Gentleman will know, major capital projects involving huge investment and rebuilding in five hospitals in his area mean that that target must be met slightly later, which is right and appropriate. However, the 95 per cent. target—progress on which we are monitoring, and can prove—still stands, and we will meet it.

    Drug Rehabilitation Programmes
    Ms Karen Buck: What action he is taking to improve the delivery of drug rehabilitation programmes. [119070]
    The Parliamentary Under-Secretary of State for Health (Yvette Cooper): Action to tackle drug abuse is one of the key issues set out in the national priorities guidance for health authorities, which was issued last year. Drug rehabilitation forms part of our cross-government strategy on drug abuse. Better performance management and guidance on optimum models of care will ensure that more people get into treatment that really works, including residential rehabilitation. We are backing that with extra resources.
    Ms Buck: I thank my hon. Friend for that answer. Does she agree that one of the principal barriers to the effective working of drug rehabilitation units is the acute shortage of trained and experienced drug rehabilitation workers? What action are the Government taking to deal with the shortage of staff throughout the country, but particularly in some of our inner-city communities?
    Yvette Cooper: My hon. Friend is right. We are giving £70 million of additional resources to health authorities and local authorities over the coming three years, in addition to developing the national guidance to improve capacity, but one of the key issues is the work force, which is why we have launched a national recruitment campaign aimed at those who are not involved in drug treatment work. So far, we have received an extremely strong response.

Demonstrations (London and Manchester)
3.30 pm
The Secretary of State for the Home Department (Mr. Jack Straw): Madam Speaker, with permission I should like to make a statement on the violence and disorder associated with the so-called anti-capitalist demonstrations over the bank holiday weekend in London and Manchester.
Yesterday's shameful violence was the culmination of a loosely organised series of events that took place from Friday to Monday. Although all the events were broadly described as protests against capitalism, they were organised by a number of wholly disparate groups.
None of the organisers was willing to discuss preparations in advance with the police, who therefore had to make their plans on the basis of the best information obtained by them. The police response in London was a joint operation conducted by the Metropolitan police service, the City of London police and the British Transport police, using a joint command structure based in New Scotland Yard.
The events held by protesters on Friday, Saturday and Sunday passed off relatively peacefully, both in London and in other centres. As had been expected, however, the main challenge to public order occurred yesterday. In Manchester, up to 400 protesters caused damage to shops and disruption to the tram system. Twenty arrests were made.
The protests in central London began at around 10 am when about 500 cyclists made their way to Parliament square from Hyde Park corner. By 11 am, about 2,000 protesters were in Parliament square, many of them engaged in digging up the turf.
The first incidents of violence were reported at about 12.25 pm, when police and private vehicles were attacked by protesters close to Parliament square. About an hour later, 1,000 or so people moved into Whitehall from Parliament square and demonstrated outside Downing street, when missiles were thrown at police guarding the barriers. It was at around that time, I understand, that vandals desecrated the Cenotaph and defaced the statue of Sir Winston Churchill. [HON. MEMBERS: "Disgraceful."]
Shortly after 2 pm, the Whitehall branch of McDonald's was attacked by a crowd of about 80 people. Some injuries to the police were sustained, as was serious damage to the premises.
At about 3.15 pm, there was serious disorder and violence in Trafalgar square, including the throwing of missiles at the police. At that point, police in riot gear moved to control and to contain the crowds in the square, which they continued to do for the rest of the afternoon.
Separately, about 500 demonstrators crossed the river and congregated in Kennington park, about a mile south, where missile attacks were made on the police. From about 6.20 pm, police began a controlled dispersal of the crowd remaining in Trafalgar square. At around that time, about 150 protesters attacked commercial premises and vehicles, including police vehicles, in the Strand. The crowds in Kennington park were dispersed by 8.30 pm, and a crowd off Waterloo bridge, where protesters in the Strand and Trafalgar square had gone, was held at bay and finally dispersed by the police just before 9 pm.
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I regret to tell the House that nine police officers were injured, including one who was struck in the face by a brick. He was taken to hospital but, thankfully, there was no need to detain him. I understand that the police are aware of injuries to nine members of the public. Thankfully, those injuries were, I understand, all minor.
I am informed by the Commissioner of Police of the Metropolis that 97 people were arrested in the course of yesterday's events on charges including public order offences and assault. A major investigation by police to detect other offenders—including the perpetrators of the desecration of the Cenotaph and the defacement of the memorial to Sir Winston Churchill—is already under way.
Everyone in our democracy has a right to demonstrate peacefully, but no one has a right to demonstrate violently. Yesterday, there was a peaceful demonstration in London by more than 2,000 people: it was organised by the Trades Union Congress to commemorate international workers day and to campaign for the saving of jobs at Rover's Longbridge plant and elsewhere in the west midlands. However, those entirely peaceful demonstrators were physically denied their right to use Trafalgar square, as they had arranged, because of the mindless violence of the groups that were by then occupying the square.
What was witnessed yesterday in central London was criminality and thuggery masquerading as political protest. In our democracy, there is neither reason nor excuse for such appalling behaviour.
As the House has already indicated, a particularly shocking aspect of yesterday's events was the defacing of the statue of Sir Winston Churchill in Parliament square, and the desecration of the Cenotaph in Whitehall. Yet without the sacrifice of the millions who gave their lives in the service of this country to defend our freedoms, no one yesterday would have been enjoying any right to protest at all.
The fact that the statue of Sir Winston Churchill has already been cleaned up and, I am told, no lasting damage has been caused to the Cenotaph is of little comfort to the public for the huge affront caused by that vandalism. It will be of little comfort especially, but by no means exclusively, to those ex-service people who served and saw comrades killed in those wars.
Planning by police for the weekend's events occurred over many months and took account of all the contingencies that they could identify. The planning also took into account the lessons learned from the very serious violence that occurred in the City of London in June 1999.
The police devoted greater resources—5,500 officers—to yesterday's situation than they have done for any comparable situation in the past 30 years. Knowing the determination of some of those involved to perpetrate serious violence and disorder, the police had to make the fine judgment that it was better to contain the trouble—as they did—in confined areas than seek to bar people from those areas, with a high risk of wholly unpredictable outbreaks of even more serious violence affecting the public as well as the police and property virtually anywhere else in central London. Police had to make equally fine judgments on precisely when and where to deploy officers in riot gear.
In our system of policing, those decisions are properly ones made by chief officers of police. For the avoidance of any doubt, I make it clear that that will continue to

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be the situation in Greater London after the mayor, the Assembly and the Metropolitan Police Authority have come into office on 2 July.
I should like, however, to tell the House that the Commissioner had and has my full support and confidence in respect of the very difficult decisions that he and his colleagues had to take. As with any large policing operation, the Commissioner will be reviewing what happened yesterday and will be discussing those matters with me. I shall of course be ready to respond to any recommendations that he or his fellow chief officers make to me.
I am sure that I speak for the whole House in offering our thanks and gratitude to all those police officers in Greater Manchester and in London who dealt so professionally, diligently and courageously with the entirely inexcusable violence that occurred yesterday.
Miss Ann Widdecombe: I thank the Secretary of State for his statement and for his customary courtesy in letting me see it in advance. I should also like to associate the Opposition with his tribute to the police involved. I also add our best wishes to those innocent members of the public who were injured in yesterday's demonstrations.
I remind the Home Secretary of the letter that I wrote to him at the end of last week. In the second paragraph, I said:
I would he most grateful if you would state categorically that the Metropolitan Police will actively seek to protect both people and property once the protests begin and not, as some have suggested, allow illegal acts to be committed in order to contain the situation.
I acknowledge that fine judgments have to be made, but the Home Secretary will be aware that there is considerable public concern about the amount of activity and disorder that was allowed to take place before the police decided that it was the proper time for intervention. Did he have any discussions with the police about the proposed policing methods, including, for example, at his regular meetings with the head of the Metropolitan police? Many people will be perturbed by the contrast between the policing methods used during the visit of the Chinese President, when the mildest demonstration was restrained, and what happened yesterday, when there was considerable restraint before intervention took place.
Did English Heritage make any proposals to safeguard the Cenotaph before the demonstrations? If so, what consideration was given to those proposals? If they were rejected, why and on whose advice and authority?
Does the Home Secretary agree that all those who are charged with offences arising from yesterday's activity should face exemplary sentences? Does he agree with the proposal of the Conservative candidate for the London mayoralty, Steve Norris, who has called for a ban on that assembly in future years, given its record this year and last year; or does he incline more towards the views of the other candidate for the mayoralty and think that the reaction of the Livingstone camp to last year's City riots is nearer the mark? It is a straightforward question: does the Home Secretary agree with the Conservatives and Steve Norris that the demonstration should be banned in future?
When will the Home Secretary be ready to give us an assessment of the cost of yesterday's operation? Has he made any provisional estimates? Does he agree that any
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information held by anyone that would assist with the identification of persons not yet arrested, including film taken by broadcasters and members of the press who were present, should be made available to the police immediately? Would the groups concerned with yesterday's disorder be covered by his new definition of terrorists under his new terrorism legislation?
Mr. Straw: I thank the right hon. Lady for her good wishes to those who were injured and to the police officers who policed such a difficult demonstration. She acknowledges in passing that fine judgments have to be made about the policing of demonstrations, but she then suggests that, with the benefit of hindsight, she is in a better position to make judgments than the chief officer of police was. [Interruption.] I shall answer all the right hon. Lady's questions, as I always do, but I must tell her that if she acknowledges that it was a very difficult situation and that fine judgments had to be made, she has to acknowledge it after the event as well as before and to back the judgment of the chief officer of police and his colleagues, as I do.
The police did not allow illegal acts to take place. They had to make fine judgments to prevent worse disorder and violence taking place. No permission was sought for this demonstration; indeed, so far as Trafalgar square was concerned, permission had already been granted to the TUC for a demonstration, and those peaceful protesters were kept out of Trafalgar square by what amounted to a wholly unlawful occupation of the square by the violent protesters.
It would have been a matter for the police's judgment—they would have had to seek my permission in certain circumstances—but the police might have decided to bar the whole of Parliament square, Whitehall and Trafalgar square to the protesters. If they had done so, the information available to the police was that those protesters would still have come into central London. This was a day on which the shops were open across the west end. The judgment made by the police, which I backed fully, was that the risks of uncontrolled violence right across the west end to shoppers, tourists and children, as well as to the police and to property, were much greater than what actually occurred yesterday in an event that the police were able properly and effectively to police, despite the serious damage and violence that was done.
The right hon. Lady asked whether there were meetings with the Commissioner. Of course there were. The issue of the policing of the demonstration was raised by the Commissioner and me at a series of regular bilaterals, and at a special meeting about three weeks ago. I was concerned to ensure that the Commissioner had the full resources and powers available to him. I did not wish to second-guess his judgments, but I wanted to satisfy myself that proper preparations were in place and, in particular, that—as far as it was possible to learn them—lessons had been learned from the events that took place mainly within the City of London on 18 June last year. Many of those lessons had been learned, including the need for there to be a combined control. That combined control operated at New Scotland Yard, as I saw when I visited there yesterday afternoon.
The right hon. Lady referred to the visit of the Chinese head of state. That was a demeaning comment. There is no parallel between the difficulty of policing what happened yesterday and the visit of the Chinese head of state,

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nor is there a parallel in terms of methods. Yesterday, the police had to use riot gear which, happily, they did not in respect of the visit of the Chinese head of state. Moreover, the right hon. Lady knows that lessons have been learned from the Chinese demonstrations.
The statue of Winston Churchill in Parliament square is the responsibility of the Royal Parks Agency, and the Cenotaph is the responsibility of English Heritage. I understand that the police asked for both of those monuments to be boarded up, and decisions not to board them up were made by the agencies. I was not aware that those decisions were made, and the House will wish there to be more details about how they came to be made. However, the police told me this morning, in terms, that they had advised English Heritage and the Royal Parks Agency that the monuments should be boarded up.
The right hon. Lady referred to comments by the Conservative mayoral candidate. In the light of yesterday's events, this is not the occasion for swapping stories about candidates. That can be done outside the House. However, since the matter has been raised, I repeat that decisions of this kind will remain the responsibility of the chief officer of police. Whatever may have been said by candidates, the decisions of this House and the other place on the establishment of the MPA were clear. That is to say, the mayor's only power lies in proposing the budget—which has to go up, not down—for the Metropolitan police service. The MPA will replace my functions as the police authority for the Metropolitan police service, and it will operate in the same way as any other police authority.
Provision already exists in the law to ban processions, and other powers may be taken by the police. As for Greater London, the law makes it clear that a decision to initiate a request for any such ban lies with the Commissioner and the request goes, and will continue to go, direct to the Home Secretary. As with other requests for bans, if the Commissioner makes a request, I shall consider it with care.
Sir John Morris: As a former soldier, I deprecate the damage done to the Cenotaph and the Churchill statue. I recognise the fine distinction between the powers of my right hon. Friend as Home Secretary and those of the Commissioner, but I wonder whether, with hindsight, the right decisions were taken by the police. Will the matter now be further considered so that future difficulties may be avoided?
Ample statutory powers exist, but in well-organised demonstrations—I have taken part in some of them—proper liaison occurs between the organisers, the stewards and the police. It is not simply a question of damage in the west end, which my right hon. Friend mentioned, as opposed to damage in Parliament square and Trafalgar square. Demonstrations are successfully held in other places in London, such as Hyde park, with a minimum of damage, if any. With hindsight, does my right hon. Friend think that everything was done for the best yesterday?
Mr. Straw: It is my belief that the Commissioner and his colleagues had some extremely difficult judgments to make, and I back them fully on the decisions they made and continue to make in respect of the demonstrations. With respect, the sort of demonstrations that my right hon. and learned Friend mentioned are those run by people
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who want a peaceful demonstration and who have made stewards available. In such circumstances, it is easy, as it was yesterday with the event organised by the TUC, to persuade organisers who have control over their demonstration to move elsewhere in the interests of public order. Yesterday's gathering was called a demonstration, but we were dealing with people who were intent on rioting in London. They were organised, but the police were the last people those involved would tell of their plans.
I defer to, and back, the judgments made by senior police officers who had to make some extraordinarily difficult decisions. All such judgments would be much easier with the benefit of hindsight, but that is a luxury never available to the police in the heat of the operational moment. The way in which they policed the events yesterday was exemplary and a huge credit to the professionalism of the British police service. I might add that yesterday's events were better policed than similar events have been elsewhere in the world.
Mr. Simon Hughes: I thank the Home Secretary for his statement, and through him I thank the police and the other public services which did a good job in difficult circumstances yesterday.
Is the Home Secretary's information and analysis that the majority of people at events in both London and Manchester were peaceful, whatever the motives of organisers may have been, and that only a minority of people were set on being disruptive and criminal? As Home Secretary and as the police authority for London, has he had any success in identifying the troublemakers since June? In the case of football, the minority of thugs are targeted by the police and dealt with. Has there been success since last year?
The Home Secretary, again in his role as police authority for London, also endorsed and supported in advance the non-confrontational strategy. Are the right hon. Gentleman and the Commissioner of Police of the Metropolis satisfied that sufficient police officers were on duty in London adequately to police all the other May day events in the city's boroughs, as well as to cover what happened in the centre of the capital?
Finally, one matter is still troubling. The damage to the Cenotaph caused great affront to many people, especially to those to whom the monument is a tribute. Was the Cenotaph policed specifically, in an attempt to protect it?
Mr. Straw: I shall deal with the hon. Gentleman's questions in turn, and I shall also respond to the question from the right hon. Member for Maidstone and The Weald (Miss Widdecombe) about the cost of yesterday's events, which I omitted to answer earlier.
The hon. Gentleman asked whether a minority of people who took part in the demonstration were involved in the violence. The numbers of people arrested show that only a minority of people were violent, but I am sorry to say that a significant proportion of those who turned up in Trafalgar square understood what was likely to happen. Given that they knew people who were going to be involved in violence, those people should not have gone to Trafalgar square to engage in unlawful activities. However, the same does not appear to have been true about those who went to Parliament square.

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The hon. Gentleman will excuse me if I do not go into detail about the work of the police service in detection. I will say only that the police have arrested about 100 people already—significantly more than were arrested after the much more serious events of 18 June last year—and that they are engaged in a serious crime investigation into many of the offences committed yesterday.
The hon. Gentleman asked whether enough police were available. The answer is yes: 5,500 police officers were directly available to Gold command in New Scotland Yard for the operation, and sufficient officers were available elsewhere in greater London.
I am afraid that I cannot recall the other question that the hon. Gentleman raised.
Mr. Hughes: It was about the Cenotaph.
Mr. Straw: A great deal of effort was put into policing Whitehall. The House will know that, in certain areas, it was decided initially—and quite properly, in my judgment—not to use officers in riot gear. The hope was that protesters would act peacefully as a result, and to some extent that expectation was fulfilled. However, the events in Whitehall that I have already described meant that officers in riot gear had to be brought forward. I have already explained the police recommendation that the Cenotaph and the statue of Sir Winston Churchill should be boarded up. It is for the Royal Parks Agency and English Heritage to explain why they judged that neither monument should be so protected.
As to the cost of the operation, I understand that police overtime cost about £3 million. I shall give details of other costs as soon as they become available.
Mr. Gerald Kaufman: Is my right hon. Friend aware that the people of Manchester condemn to the utmost degree the disgraceful disfigurement of their city? In addition, they are appalled that police resources and manpower should have been distracted from the genuine law and order issues that I was discussing with my constituents only yesterday afternoon.
With regard to London, is my right hon. Friend aware that what took place is exactly the sort of direct action against capitalism that the hon. Member for Brent, East (Mr. Livingstone) has advocated and supported? Is he also aware that the Livingstone brand of approval would be given to such activities if the people of London were conned into voting for that smarmy charlatan?
Madam Speaker: Order. I must ask the right hon. Gentleman to withdraw his last remark.
Mr. Kaufman: I do so, Madam Speaker, at your instruction.
Mr. Straw: I had better not follow my right hon. Friend's latter remarks. I, of course, share his deep anger and concern at the disfigurement of his great city of Manchester by those who took part in the unlawful series of protests and the violence committed yesterday—and, I
28
am sure, the anger of the residents and business people of Manchester about the diversion of police resources as well.
Mr. Peter Brooke: I join in congratulating the police on their impressive conduct of yesterday's affairs in London. Pursuant to the Home Secretary's answer to the right hon. and learned Member for Aberavon (Sir J. Morris), if no plans have been submitted and no permission sought for a protest or demonstration, is an offence committed under the Public Order Acts by that very protest and demonstration taking place unplanned, unco-ordinated and with no permission sought? If there has been a forewarning of trouble, what principles govern the police in their plans, actions and decisions in response to the potential threat?
Mr. Straw: I am grateful to the right hon. Gentleman for his remarks about the impressive conduct of the police. He asks me to speculate about whether certain offences might have been committed by virtue of the fact that there was no permission for the demonstration. The position on bans and permissions is complicated. There is a power, which I have used on two separate occasions—upon application by the chief officer of police in West Mercia and in Norfolk in the past two weeks—to ban processions in certain circumstances. There is no power to ban assemblies which take place in public areas, although there are laws relating to obstruction if assemblies take place in the public highway. The right hon. Gentleman will forgive me if I do not speculate about whether particular offences may or may not have been committed yesterday.
The right hon. Gentleman also asks me what principles guided the police in their decisions as there was forewarning of trouble—of that there is no doubt. The principles that guided the police were the safety of the public, the safety of the police and the safety and security of the property of this great city—and, in particular, given the right hon. Gentleman's concerns following the events of 18 June last year, ensuring that the business life of this city could continue. The police made their judgments in the light of those principles and, as I have told the House, I think that they made the correct judgments.
Mr. Dale Campbell-Savours: As a veteran of many demonstrations in the 1960s, some of which my right hon. Friend will remember with great affection, may I say that what is happening now is characterised by a new brutality and ugliness that we never saw then? The use of balaclavas, helmets and masks shows that some people attend these rallies and demonstrations with only malice in mind. I hope that we never ban demonstrations, but the police must have the powers to deal with people who are basically criminals.
Mr. Straw: Like my hon. Friend, I went on many demonstrations in the 1960s—too many to name—and on many more recently, including those against the high levels of unemployment caused by the previous Government. Every demonstration that I went on was peaceful. We celebrated that fact, and ensured that we co-operated fully with the police, because such right of peaceful process is the essence of a democratic society.

29
My hon. Friend is entirely right about the new brutality, which none of us is used to, or wishes to become used to. It is wholly unacceptable—it includes using balaclavas and seeing the police as enemies. One of the many things that we were able to do in response to police requests as the Crime and Disorder Bill went through Parliament in 1998 was to give the police powers to require the removal of balaclavas and other face coverings in unlawful and violent demonstrations such as took place yesterday, and those powers have been used.
Mr. John Greenway: Like the hon. Member for Workington (Mr. Campbell-Savours), I am a veteran of the demonstrations of the 1960s—except that I was on the opposite side. In the anti-Vietnam demonstrations of both 1967 and 1968, police officers, of whom I was one, prevented desecration of property.
I agree with the Home Secretary that the current threat is completely different from those of the 1960s and others. The circumstances are difficult for the police, and I am willing to accept the right hon. Gentleman's explanation of what happened yesterday. However, the people of this country will never again accept the desecration of the Cenotaph. Following the right hon. Gentleman's confirmation that the mayor of London will not have powers to interfere, and that the Commissioner of Police of the Metropolis will have freedom of operation, does he agree that in the face of a similar threat in future, everything will be done to prevent such desecration?
Mr. Straw: The police service will be grateful for the hon. Gentleman's unequivocal support, not least because it is based on his service as a police officer. I should pick him up on one point; he said that he and my hon. Friend the Member for Workington (Mr. Campbell-Savours) were on different sides in the past, but I must say, with respect, that the point has often been made to me by police officers that in an entirely peaceful protest, the police and protesters are, in one sense, on the same side—that of democracy.
I accept what the hon. Gentleman said about the Cenotaph. Lessons must be learned from the experience of all these events. What happened was a deep and awful affront to the whole of our society and the public. We must make sure that the possibility of such desecration does not arise again.
Mr. Mike Gapes: Will my right hon. Friend confirm that anarchist behaviour of the type that we saw yesterday is nothing new? Anarchists throughout history have tried to prevent Labour movement peaceful marches such as that organised yesterday by the TUC. Does he agree that anyone—candidate for mayor of London or anyone else—who gives sustenance to anti-democratic behaviour by anarchists is not fit to hold public office?
Mr. Straw: I agree with my hon. Friend. This is the last occasion on which it is possible to equivocate. We either favour democracy and law and order, or we do not. Those who equivocate place themselves on the side of people such as the anarchists to whom my hon. Friend has referred.
Mr. Crispin Blunt: Does the Home Secretary share my concern at the reported remarks of Deputy Assistant Commissioner Mike Todd that:
Our plan was to make arrests only for the more serious offences. We had to ask ourselves whether it would be worth putting the public or our officers at risk by arresting protesters for minor crimes. We didn't want to be accused of inflaming the situation. The change in our tactics was forced on us by the demonstrators after the McDonalds incident.
If those reported remarks are correct, will the Home Secretary tell the deputy assistant commissioner that many millions of his fellow citizens—particularly ex-service men—will not regard the desecration of the Cenotaph as a minor crime? I visited the Cenotaph today, and have been told by officials of English Heritage that they wanted to board up the site, but did not do so on the advice of the police. Will the Home Secretary investigate the conflicting stories about the Cenotaph that are circulating? Is it not a sad fact that a demoralised police force felt unable to put in place a proper policing plan to protect Parliament square and the Cenotaph?
Mr. Straw: I am aware of the remarks of DAC Mike Todd. I do not have the record before me, but I do not believe that he was referring to the desecration of the Cenotaph as a minor crime. I have explained that the police take that desecration extremely seriously, as they do the despoiling of monuments in Parliament square, including the statue of Sir Winston Churchill. Those incidents are being fully investigated.
Policing is a discretionary matter. Every day we receive demands—not least from Conservative Members of Parliament and from newspapers—that the police should not fully enforce one aspect of the law in order better to enforce another; for example, with what are regarded as minor speeding infractions and so on. The matter is one of considerable discretion, as it is bound to be.
With the benefit of hindsight, it is easy to say exactly which decisions should have been taken—just as it is easy to win any battle when one knows what happened. We were dealing with an extremely fast-moving situation involving some anarchists, but also some extraordinarily well organised and determined criminal people who call themselves anarchists, who were not going to disclose their criminal plans to the police. I say again—without the equivocation that, regrettably, we hear from some Conservative Members as well as from some people outside this place—that I believe that, in Sir John Stevens and his colleagues, we have some of the finest and most professional police officers, not just in this country but in the world. We should back their judgment.
I completely refute the hon. Gentleman's comments on demoralisation. It is extremely silly for him to imply some sort of competition in the policing of such demonstrations. If he went through the record of disorder that occurred under Governments whom he supported, including serious rioting in several cities and the poll tax riots, to create a score sheet—I hope that he does not want to do so—he would find that the Conservative party was at the wrong end of it.
I am indeed aware of conflicting stories over responsibility for the Cenotaph memorial and for the statue of Sir Winston Churchill. I felt it right to give the House the information that became available to me. According to that information—although there is some conflict about the matter—the police are adamant that

31
they advised English Heritage and the Royal Parks agency, which are without doubt responsible for those two monuments, that it would be better for them to be boarded up.
Ms Joan Ryan: I thank my right hon. Friend for his statement; I am pleased about the measures that he has taken to deal with yesterday's deplorable events.
I am not surprised that several hon. Members have referred to the comments of the hon. Member for Brent, East (Mr. Livingstone)—it is right that those comments should be raised. If we are to condemn yesterday's events and to deal effectively with the perpetrators, the comments of Members of the House must be clear. Unfortunately, it is clear that the hon. Member for Brent. East advocates rebellion as a means of influencing Government. Does my right hon. Friend agree that it is incumbent on all Members to think carefully about, and to be responsible for, what they do and say, and that statements such as those that have been made can only encourage the behaviour that we saw yesterday? All Members of the House bar one—it seems—would condemn such behaviour.
Mr. Straw: I understand what my hon. Friend says. At the very least, such comments excuse and give licence to such behaviour, and therefore stand condemned.
Mr. William Ross: Given the contents of the Home Secretary's statement and his answers to questions today, it is plain that both he and the police were aware that yesterday's violence was carefully planned over a long period. As no one makes such detailed plans without a clear objective, why did the right hon. Gentleman describe yesterday's events as mindless violence?
Mr. Straw: I think that I am entitled to describe the violence as mindless, even though the planning was not.
Mr. Andrew Mackinlay: Will the Home Secretary clarify whether the statement that he made today to Parliament was in his capacity as the police authority for London, or what I call the residual Home Secretary, post-July 2000? Will he give an assurance that if there is a repetition of such events—which one hopes that there will not be—he will make a similar reportage to Parliament?
When the Home Secretary is reviewing this matter, will he revisit again the representations that he has received from the chief constable of the British Transport police and the representative organisations of the officers in the British Transport police, the Ministry of Defence police and the Royal Parks constabulary about the problem of jurisdiction that those people have outside the curtilage of a railway station, and outside the curtilage of the Ministry of Defence or of the Royal Parks, where they have no more competence or powers than he has—or than you or I, Madam Speaker, have? That matter has been referred to successive Home Secretaries and has been ignored. It is now time that it was addressed, because of the vulnerability of those police officers in such situations.
Mr. Straw: In answer to my hon. Friend's first question, I made my statement as Home Secretary.
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I would have made, and will make, similar statements in similar circumstances, regardless of whether I continue to be police authority for London. I point out that the main events that took place on 18 June last year took place in the City of London, whose territory is not covered by my remit as police authority for London, but by a separate police authority—the police committee for the City Corporation.
Of course, if matters were as grave as they were yesterday and I had received a request for a statement from my hon. Friend the Member for Manchester, Central (Mr. Lloyd) and my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), I would—if the House and you, Madam Speaker, had thought it appropriate—have made a statement.
My hon. Friend also asked a separate question, which I know has been concerning him, about the jurisdiction of the British Transport police and other so-called non-Home Office police forces. We are actively considering that matter, and we hope to make announcements in due course.
Dr. Michael Clark: Does the right hon. Gentleman agree that yesterday's violent chaos in our capital city was a disgrace, an affront to decent citizens, an abuse of taxpayers, who had to pay for the policing yesterday and are now paying for the clearing up, and above all, an insult to our war dead? Does he also agree that it is difficult for us to talk about mob behaviour in other countries when we have such behaviour in our own?
On television this morning, Deputy Assistant Commissioner Mike Todd said that he was proud of the way in which the police had contained the situation. Whereas I am proud of the way in which the police set about their work, I am not proud of the way in which the situation was contained, because it obviously was not. Does the right hon. Gentleman accept that unless we have some further statement about containment, that sounds like a complacent statement from the police, and that we want some reassurances for the future—as do those motorists who had their windows smashed on Waterloo bridge, the tourists whose families were frightened and the property owners whose property was violently vandalised?
Mr. Straw: Of course I agree with the earlier part of the hon. Gentleman's question, but I return to the subject of the policing decisions that were taken, which is, understandably, of concern to Members on both sides of the House. I say to the hon. Gentleman and to the House that when the police were faced with people of that kind, whatever tactics they had used, and whatever numbers and weaponry had been available to them, no policing arrangements in the world could have prevented those people from carrying out violence if they were determined to do so. There are many examples in other countries of occasions when the police have used greater force—weapons, cannon, water cannon, tear gas and much else besides—and greater damage, not less, has been caused to innocent bystanders, the police and property. That is, sadly, the reality that the police had to deal with.
Of course I very deeply regret the disorder that occurred. Obviously none of it affected me personally, but much of it affected friends and neighbours who live in or near the area where I live, in Kennington and elsewhere

33
in south London, so I am well aware of the disruption that was caused. I am aware of the fact that innocent members of the public were affected. Friends of ours who were shopping in the west end could not get home for one or two hours. I deeply regret the damage caused to people's motor cars and other property, including McDonald's and the memorials.
It is my judgment, and I cannot repeat it often enough, that from the Commissioner and his colleagues right down to the officers who were literally in the front line yesterday—most were wearing riot gear, but they were facing a frightening situation—we have police officers of the highest professionalism. After events such as those of yesterday, which I believe were properly and effectively policed, we should express our gratitude to those police officers for what they have done.
Mr. Martin Linton: Does not my right hon. Friend find it incomprehensible and inexcusable that a small minority of well organised anarchists—if that is not a contradiction in terms—should have resorted to violence to achieve their political objectives only three days before they will have a chance to test their opinions at the ballot box? They would have been better advised on Monday to gather support for their views among the voters of London than to engage in random acts of violence that did no credit to their cause.
Mr. Straw: I entirely accept what my hon. Friend says.
Mr. John Wilkinson: May I say how welcome is the Home Secretary's support for the Metropolitan police, particularly as many will have been drafted in from outer London and foregone their weekend and leave entitlement to serve in difficult circumstances? As for the future of policing in London, if by some mischance the Metropolitan Police Authority does not work well and does not provide sufficient support to the police service, will the Home Secretary reconsider the legislation, and if necessary return to the House to resume the powers that he currently holds?
Mr. Straw: I think that we ought to try the new arrangements first. My recollection is that the decision to establish a Metropolitan Police Authority had the approbation of hon. Members on both sides of the House. I make it clear again that the mayor will not be the police authority; the authority will be composed of 23 individuals. Twelve will be elected members of the Assembly, but they will be appointed proportionately to the party balance in the Assembly. Seven will be independents, one of whom will be appointed directly by me, six will come from a shortlist approved by the Home Office, and four will be justices of the peace appointed by a process that involves the Lord Chancellor.
Whoever is elected mayor, the police authority should be a responsible and realistic body. Of course, as with any other change in the law, if that turns out not to be the case, it will be for the House and the other place to decide on a change either backwards or forwards.
Mr. Tony Lloyd: I thank my right hon. Friend for making it clear in his statement that he was referring to the situation in Manchester as well. That sends an important message to people from outside
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London that the issues are of nationwide significance and do not relate to only one city, however important that city may be.
My right hon. Friend will be aware that people in Manchester yesterday, who were going about their lawful business of shopping and taking their families out, will have been grateful for the presence of the police, who were determined to ensure that criminality did not affect them more than was inevitable because of the actions of a minority who, like those in London, were determined to disrupt the city centre.
Like my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), I think that we should all condemn those who waste so much police time and so many police resources on such operations. As my right hon. Friend made clear, the answer to such demonstrations is adequate policing such as that in Manchester, not the knee-jerk reaction of an attempt to prevent demonstrations of any kind.
Mr. Straw: I am grateful to my hon. Friend for his remarks. I underline the fact that police outside London, as well as the service in London, had to bear some of the brunt of what happened yesterday. As well as paying tribute to the Metropolitan police service, the City of London police and the British Transport police, I pay particular tribute to the Greater Manchester police, who had to bear a serious burden yesterday and acquitted themselves very well.
Sir Sydney Chapman: I accept that the policing of demonstrations in London is kept continually under review by the Commissioner of Police of the Metropolis and by the Home Secretary, but when reviewing what happened 24 hours ago, will the right hon. Gentleman ask Sir John Stevens to consider especially the effect that the presence of extra police in central London had upon policing in other parts of London, and the possible consequences in terms of criminal offences being committed outside the area in question? I do not deny the Commissioner the right to decide how many police officers to employ, particularly in a demonstration that he was forewarned was likely to lead to violence, and I recognise what the right hon. Gentleman has said about some police being called in from outside the Greater London area, but will he consider the possibility of encouraging Sir John to have the power to appoint special constables to police normal areas when a big demonstration takes place in the centre of London, and to draw in more police from outside the Metropolitan area?
Mr. Straw: I should have said earlier to the hon. Member for Ruislip-Northwood (Mr. Wilkinson) that the overwhelming majority of the police officers available yesterday to the Commissioner were Metropolitan police officers, although there had been arrangements for mutual aid from some of the home counties. The hon. Gentleman's second point is an important one; I shall write to the Commissioner and take it up with him.
Mr. Vernon Coaker: Many of us will welcome my right hon. Friend's support for the police. Does he agree that it is important that we do not undermine their actions with hindsight? We should all bear in mind the courage that police officers showed on our streets yesterday in protecting both property and life.

35
It is important that we do all that we can—one of my constituents who was crying on the phone to my constituency office today would want reassurance on this matter—to catch the culprits behind the violence. We must put all our efforts into that. The wearing of masks can serve only to hide people's identities, and is not part of a normal demonstration.
Mr. Straw: As my hon. Friend says, hindsight is a wonderful commodity. However, it is never available to the police in situations such as yesterday's demonstration. As well as going to New Scotland Yard yesterday and talking to the Commissioner and all his senior colleagues during the operation, I saw the Commissioner this morning. He has assured me that he is devoting considerable resources to the criminal investigation into the offences that took place yesterday. He and all his officers understand the importance of securing the perpetrators of the offences, including the desecration of the Cenotaph and the damaging and daubing of the statue of Sir Winston Churchill.
We have already added considerably to the powers available to the police—that was one of the complaints made by some of the protesters yesterday. I make no apologies for adding to the powers of the police. If the Commissioner or the Association of Chief Police Officers puts forward proposals for additional powers, we shall consider them carefully.

Point of Order
4.28 pm
Mr. Tam Dalyell: On a point of order, Madam Speaker. Given the increasingly dangerous situation in Montenegro, and the difficulties that our forces in Kosovo are experiencing, have there been any requests from either the Ministry of Defence or the Foreign Office for a statement on the situation in the Balkans?
Madam Speaker: I have not been told today by either of those Departments that their Secretaries of State are seeking to make a statement on that issue.

WELSH GRAND COMMITTEE
Motion made, and Question put forthwith, pursuant to Standing Order No. 107 (Welsh Grand Committee (matters relating exclusively to Wales)),
That the matter of the Welsh Economy he referred to the Welsh Grand Committee for its consideration.—[Mr. Allen.]
Question agreed to.

Renewable Energy
4.29 pm
Ms Joan Walley: I beg to move,
That leave be given to bring in a Bill to require the Government to draw up a strategy for promoting non-convergent renewable energy technologies.
If I had my way, the House would spend the whole of today's business considering and legislating for an immediate strategy to support far-from-market technologies such as photovoltaics, offshore and onshore wind, tide technologies and biomass, such is the importance that I attach to the promotion of renewable energy.
I am mindful that this debate takes place halfway through this year's Reith lectures, which, fittingly for the first year of the 21st century, are on sustainable development. Contributions from this year's speakers—they include the European Commissioner Chris Patten, British Petroleum's John Brown and distinguished international speakers—and the follow-on studio and internet debates show the wide spectrum of people across the planet who care about and want to contribute positively to sustainable development. It is unquestionably the most pressing and fundamental challenge of our time. Parliament must be part of the on-going debate and the intention of my Bill is to focus our collective energy on what needs to be done.
I do not suggest for one moment that our Government have not acted or have failed to understand the issues. Indeed, I pay tribute to my hon. Friend the Financial Secretary who has done so much, along with his colleagues in the Treasury, to ensure that we have a green strategy. Our Government have led the international climate change negotiations and pushed through targets on carbon dioxide and greenhouse gas reductions. However, the pace of environmental devastation around the world demands that we act more quickly.
Our legislative and regulatory procedures can be cumbersome. Our need to modernise government and to bring together Departments of state with industry is understood. However, as the Environmental Audit Committee, on which I sit, has shown, it is not always a straightforward matter to put sustainability at the heart of Government policy where perhaps there are vested interests and traditional ways of doing things. Ministers and senior civil servants need a changed culture where they can show leadership, introduce cross-cutting policies and come up with workable solutions before it is too late. Nowhere is that more important than on the issue of renewables.
We are at the cusp of a policy change. In 1997, this Government inherited the position of bottom of the European renewable energy league table—Sweden topped the league with more than a quarter of its energy produced from renewables. We are now, as my hon. Friend the Member for Harrow, West (Mr. Thomas) and others have so eloquently set out, reached the point where the knowledge-based economy meets the environment, where market-based solutions deliver reductions in carbon dioxide emissions and where there are opportunities to modernise and enhance our industrial and manufacturing competitiveness by developing new technologies and expertise. My Bill seeks to exploit those opportunities.
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The Government are doing much through their response to the consultation paper on new and renewable energy, through changes in the Utilities Bill, through the further consultation on the precise nature of the obligation—I would like to see such an obligation in the Bill—and in the comprehensive spending review, and I direct those points to my hon. Friend the Financial Secretary. They are also doing much through the implementation of the climate change levy in the Budget, through the £20 million of the £50 million that is likely to come to renewables, through regional development agencies being asked to oversee regional strategies—I hope that they will do that in the west midlands—through changes to the planning system, through research and through the ALTENER European research project. However, are they doing enough and are the mechanisms in place to strike the partnerships with industry, local authorities and people across the United Kingdom that now need to be made?
The Government must champion and lead us to radical and streamlined policies, and do so quickly. We need a body to do that. I do not care whether it is a sustainable energy agency, a ministerial steering group or a Cabinet Office-led liaison group, but it must draw up deadlines and cross-cutting measures that will prioritise renewables, in particular energy technologies and non-convergent renewables.
I welcome the Government's commitment to the honouring of the non-fossil fuel obligation, but in the new world of renewable energy obligations we need flexibility as well—a fresh definition of renewables so that we promote clean technologies and a system of banding to give support when it is in our long-term interests to do so. Then, we must make sure that certain technologies do not get left behind. Suppliers are likely to target technologies that will cost the least, but that is not necessarily in our long-term interests.
A framework of support is required for specific technologies, especially as the only grant-aid framework resulting from the climate change levy is likely to be insufficient to provide the kick start that is needed. We need a forum over and above the process of consultation and a response that allows the Government to engage fully with renewable energy industries.
British Bioenergy points to the huge potential for non-convergent renewable energy technologies in terms of energy and jobs. In the UK, crops on 15 per cent. of agricultural land would supply 20 per cent. of the country's electricity. With Ministry of Agriculture, Fisheries and Food, Treasury and Department of Trade and Industry support for market stimulation, there could be £4 billion of investment and 36,000 new jobs within 10 years. As capital grants of £50 million to £60 million are needed to lever investment to £4 billion, it is clear that the estimated £20 million from the climate change levy is not enough.
Let us consider offshore wind. Britain has the largest resource in Europe, technically sufficient for three times the UK's total electricity needs. Last year, only 18 MW of wind energy capacity was brought on line, in contrast to 1,600 MW in Germany, 650 MW in Spain and 300 MW in Denmark. Despite the fact that we have 33 per cent. of the cost-effective wind resource in Europe, only 4 per cent. of capacity is based in the UK.
The UK has a thriving component supply industry. Marine renewable energy sources require exactly the world-leading maritime engineering skills that the UK has

39
acquired for its North sea fossil fuel resources. If the UK got 10 per cent. of its electricity from offshore wind by 2010, more than 30,000 jobs would be created.
Could the comprehensive spending review, which is now under way, embrace a final transitional offshore round of the non-fossil fuel obligation, to build on the experience gained in installing the UK's first offshore turbines at Blyth harbour, and so ease the transition between the existing pool price and the new electricity trading agreements? How about a maritime renewables centre of excellence to enable UK industry to capture a share of the vast global markets that those energies represent? That would assist manufacturing across the UK.
Potential solar power householders face an uphill struggle. To encourage solar power and other embedded sources of generation such as community wind projects, the electricity generator should have powers under the Utilities Bill to compel electricity companies to introduce net metering and premium price provisions.
Already, large companies such as BP are taking an interest in investment abroad. That is not altogether surprising, given the boost for renewable sources of energy from the new legislation introduced, for example, in the Berlin Parliament on 1 April. There, the Government have taken urgent steps to ensure that the price paid for electricity generated by using renewable sources of energy is high enough to allow various types of systems to operate on an economically viable basis, thereby enabling the mass production of such equipment and bringing about lower prices.
Germany also has a 100,000 roofs programme to make extensive use of photovoltaic technology. Germany's targets go well beyond 2010 to 2050, and it is investing
40
now for the long term. By comparison, solar power in this country is likely to become convergent only in the long term, after 2010. However, Eastern Energy, part of TXV Europe, has, in conjunction with Greenpeace, instigated a 1,000 roofs campaign through the introduction of net metering, so convinced is the company that net metering is vital to the nurturing of a major new solar industry. Solar power is an opportunity for the UK to capture a share of the jobs and money in the expanding global photovoltaic industry, which grew by 32 per cent. last year. Debates in the Standing Committee that is considering the Utilities Bill and replies to my questions suggest that net metering is still not part of our energy policy. I should like to see embedded generation back on the agenda and Eastern Energy's demonstration project adopted nationally.
I end with what led me to begin the debate. My constituency, Stoke-on-Trent, North, was part of the north Staffordshire coalfield, where now-abandoned collieries helped to make us the powerhouse and manufacturing base of the past. I hope that my Bill will help us to become the powerhouse of the future through our emphasis on renewable energy.
Question put and agreed to.
Bill ordered to be brought in by Ms Joan Walley, Mr. Frank Cook, Mr. Gareth R. Thomas, Mr. Tony Colman, Mrs. Helen Brinton and Valerie Davey.

Renewable Energy
  RENEWABLE ENERGY
  Ms Joan Walley accordingly presented a Bill to require the Government to draw up a strategy for promoting non-convergent renewable energy technologies: And the same was read the First time; and ordered to be read a Second time on Friday 21 July, and to be printed [Bill 120].
Orders of the Day

  Finance Bill
  (Clauses 1, 12, 30, 31, 59, 102 and 113)
  Considered in Committee.
  [SIR ALAN HASELHURST in the Chair]

  Finance Bill
    Clause 1

      RATE OF DUTY ON BEER
      4.40 pm
      Mr. David Heathcoat-Amory: I beg to move amendment No. 1, in page 1, line 19, at end add
      'but shall cease to have effect on 1st August 2000 unless the Treasury has published an independent report setting out the effect of the present alcohol liquor duties on smuggling.'.
      The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss the following: Amendment No. 8, in clause 12, page 7, leave out lines 7 to 15 and insert—

      'TABLE—

      1. Cigarettes

      An amount equal to 20 per cent. of the Retail price plus £55.95 per thousand cigarettes.

      2. Cigars

      £50.95 per kilogram.

      3. Hand-rolling tobacco

      £21.95 per kilogram.

      4. Other smoking tobacco and chewing tobacco

      £21.95 per kilogram.'.

      Amendment No. 2, in clause 12, page 7, line 17, at end add
      'but shall cease to have effect on 1st August 2000 unless the Treasury has published an independent report setting out the effect of the present tobacco products duty on smuggling.'.
      Clause 12 stand part.
      Mr. Heathcoat-Amory: The amendments deal with excise duties, on which the Government have an unsustainable and self-defeating policy. It creates rather than solves social problems, encourages criminality and sometimes leads to a fall in revenue.
      Alcohol and road fuel duties increased by a further 3.4 per cent. in the Budget. That is something of a fiddle. The Chancellor said in the Budget speech that those duties would increase only in line with inflation; the figure of 3.4 per cent. appears nowhere in the Budget document.
      Furthermore, the Government have changed the rules for calculating inflation. Contrary to what the Paymaster General told my hon. Friend the Member for Arundel and South Downs (Mr. Flight) on Second Reading, the rule was not inherited from the previous Government. They introduced the rule not to take the actual rate of inflation—or the historic rate—up to the date of the Budget but to predict an inflation rate. The arithmetic that is currently before the Committee is massively to the advantage of the Treasury.
      It is interesting that the Government have applied the figure of 3.4 per cent. only to uprating excise duties. When it suits the Treasury, the Government have used a lower inflation rate. All personal allowances have therefore been
      42
      uprated not by 3.4 per cent. but by 1.1 per cent. The idea of applying an overall indexation figure across the board has given way to an elastic concept of taking the inflation rate that suits the Treasury. That has netted the Government an extra £750 million. That is the difference between the actual inflation rate and that which the Government use when it suits them to uprate the indirect taxes that we are considering.
      There is also a more serious issue. To put it bluntly, the Government are up a gum tree on their excise duty strategy. The gap between United Kingdom and continental duty rates on road fuels, alcohol and tobacco products is wide and increasing in every Budget. In a single market, that is unsustainable. It leads to smuggling and a loss of revenue.
      Dr. Nick Palmer: I agree with the right hon. Gentleman that the widening gap is not sustainable in a single market. Does he agree that greater efforts should be made to promote tax harmonisation in the European Union?
      4.45 pm
      Mr. Heathcoat-Amory: Tax harmonisation through the European Commission is not necessary; all the Government need do is listen to what the market is telling them. Unlike the Labour party, we are in favour not of a bureaucratically imposed harmonisation policy, but of a market-driven single market. I think that the hon. Gentleman agrees that the market is clearly telling the Government that the present duty differential is unsustainable. However, he is right in that there is something truly bizarre about a Government who pursue tax harmonisation in Europe except for excise duties, which they are disharmonising. They are making the wide duty differential between ourselves and the continent worse. He would agree that that is the prime cause of the smuggling, criminality and loss of revenue.
      Dr. Palmer rose—
      Mr. Nigel Beard rose—
      Mr. Heathcoat-Amory: I give way to the hon. Member for Bexleyheath and Crayford (Mr. Beard).
      Mr. Beard: If the Government were to take note of what the right hon. Gentleman says and reduce duties to the level of those on the continent so that no such gap existed, how should they make good the loss of revenue?
      Mr. Heathcoat-Amory: That cannot be done all at once, but we faced up to the issue. We are not telling the Government to act on a problem that we did not recognise and do something about. When we faced a similar situation with the smuggling of beer and other alcohol products, we froze alcohol duties in our last two Budgets. We cut them in real terms precisely to start the long march downwards to a more sustainable indirect tax policy.
      We cut the duty on spirits, especially whisky, in our last two Budgets, despite the fact that we had to contend with a Budget deficit, and we responded in the only way in which a Government should: we considered the causes

      43
      of the problem rather than simply dealing with the symptoms. Regrettably, this Government ignored all the warnings and made a serious problem much worse.
      Mr. John Bercow: Does my right hon. Friend agree that Ministers are ignoring not only the warnings that he and others gave before the election, but their own statements? Does he recall that on 23 January 1995, the hon. Member for Bristol, South (Dawn Primarolo), now the Paymaster General, opposed swingeing increases in tobacco duty precisely on the ground that such increases would play into the hands of the smugglers? Clearly, she has committed a tergivisation. Should not we be told why that is so?
      Mr. Heathcoat-Amory: I wish the Paymaster General were here to answer that question. I strongly suspect that the Government have no answer. They recognised the problem in opposition; in government they have not only failed to deal with it, but have made it worse.
      Tobacco presents perhaps the most serious problem, but they have increased the price of legal cigarettes by 25 per cent. I refer to legal cigarettes because they cannot increase the price of illegal tobacco. They have piled the increases on to legally sold cigarettes and tobacco products so people have increasingly switched to illegal tobacco products. The average price of cigarettes bought in this country has probably fallen during that time. That has benefited not Treasury revenue and the legitimate trade, but the smugglers and criminal gangs. The result is more smuggling and more smoking. We face not only a failed law and order policy, but a failed health policy.
      The Financial Secretary to the Treasury (Mr. Stephen Timms): The shadow Secretary of State for Health, the hon. Member for Woodspring (Dr. Fox), has rightly said that tobacco duty increases send out the correct health message. Given the different view that the right hon. Gentleman has expressed, can he tell the Committee what discussions he has had with his hon. Friend?
      Mr. Heathcoat-Amory: I have just answered that point. I said that the Government had increased the duty, but that the average price of cigarettes had probably fallen because people were switching to illegally sold tobacco products. If it were somehow magically true that the Treasury could increase the price of all tobacco products, that might have a beneficial health effect, but it is not what is happening. An increasing number of people are obtaining cigarettes and hand-rolling tobacco from illegal, cheap sources. It is now estimated that 5 million smokers in this country routinely supply their everyday needs from the illegitimate market, in which the price has fallen rather than risen.
      Not only is that a failed health policy, because more people are taking up smoking, it is a policy which cheats the Revenue. The Government's own figures show that the revenue losses on tobacco alone as a result of smuggling amount to £2.5 billion a year. Moreover, the policy is massively regressive. In so far as people do buy illegal cigarettes, they tend to be members of lower-income groups. I do not think that Labour Members have given up caring about the regressive nature of their Budgets, but they ought to listen to their constituents.
      44
      In my area, certainly, I find that it is those who can least afford to buy cigarettes who appear to be smoking. I exempt my hon. Friend the Member for Arundel and South Downs, who is the only member of the shadow Treasury team who smokes. He is something of an exception: I think it is common knowledge that, in general, the poorer income groups smoke the most.
      We have a policy that hits the legitimate market and boosts the illegal market—and this from a Government who came to office boasting that they would be tough not only on crime, but on the causes of crime. In this instance, the cause of crime is a completely unsustainable tax and duty policy.
      Mr. Christopher Leslie: Instead of trying to justify and make excuses for smuggling and criminality, why does the right hon. Gentleman not commit himself to, say, spending more on Customs and Excise?
      Mr. Heathcoat-Amory: Because that will not work. I shall say more in a moment about the Government's failed policies. They are launching an initiative this year—it is not the first; they have launched others in the past—to do precisely what the hon. Gentleman suggests, and recruit more Customs and Excise officers and civil servants. Meanwhile, the situation continues to get worse because the Government are not dealing with the cause of the crime. Instead, they have come up with a new wheeze: they are trying to sound responsible and respectable by saying that the extra revenue from the tobacco tax will be spent on the national health service.
      Here again, the Government are in something of a muddle over exactly what sums they are talking about. The Chancellor of the Exchequer said that the increased revenue would amount to £300 million in the coming year. Not to be outdone, the Prime Minister said a few weeks later that it would amount to £400 million. Two weeks after that, the Chief Secretary to the Treasury said that it would amount to only £235 million. It is not surprising that the Government do not know how much extra revenue the policy will give them. Last year, the revenue from tobacco duty actually fell by £2.5 billion. It was lucky that the NHS was not dependent on that revenue.
      A report published by the Government at the time of the Budget refers to the huge number of people now engaged in illegal trade. Page 6 of that report states that
      the numbers of people involved in the buying and selling of smuggled goods has risen to many thousands, possibly millions.
      The report also says that smuggling is on a strong upward trend.
      Mr. Desmond Swayne: Over the weekend, I enjoyed the company of a house guest. On Sunday lunchtime, he went to the pub in a very prosperous part of Hampshire. Having expressed an interest in buying some cigarettes over the counter, he was approached by two potential salesmen offering to sell him 200. That was in rural Hampshire.
      Mr. Heathcoat-Amory: My hon. Friend is right. The problem is no longer confined to the channel ports and to the south coast, it is nationwide.
      An alarming development—to which perhaps my hon. Friend alludes—is that people are beginning to think that they are not doing anything wrong in buying smuggled

      45
      goods. Indeed, they are not committing a crime—there is nothing illegal about buying smuggled cigarettes; the illegality is only in selling them. Respectable and responsible people are increasingly saying that if the Government are so stupid as to defy common sense in that way, making a bad situation worse, is it really a crime? That is a worrying development.
      In addition, the Government's whole policy undermines the legitimate trade. Small shopkeepers are constantly being harassed by the police for selling cigarettes to under-age smokers. They are fined for selling cigarettes to people under the age of 16, but meanwhile the Government are implementing a policy that encourages under-age smoking because of the vast and growing illicit market operating throughout the country through uncontrolled outlets. Is it any wonder that smoking among young people is increasing again? The only response that the Government have to that very serious problem—the epidemic of smuggling—is to launch yet another campaign.
      Mr. Barry Gardiner: Will the right hon. Gentleman confirm that the Government are looking at the practice of forestalling in the industry, which has been responsible for a large amount of the drop in revenue? That practice by the manufacturers, whereby they clear a large amount of their product through pre-Budget prices and then only a very small amount of their product after the Budget, is one of reasons why there has been a loss to the Revenue and why an even greater loss is predicated for next year. It has little to do with smuggling. The Government are seeking to tackle that industry problem.
      Mr. Heathcoat-Amory: Again, the Government are tackling the wrong end of the problem. They are dealing not with the cause of the problem, but with its symptoms. Simply fiddling around with the forestalling problem will do nothing to stop the underlying illegality and smuggling. If the hon. Gentleman really thinks that some changes in the way in which tobacco manufacturers pay their tax will deal with the issue that I have described, he fails to understand not only the issue, but the Government's literature. Their own report described in graphic terms the scale of the problem facing the country because of smuggling.
      I was about to describe a previous Government initiative. They have just launched a new proposal to recruit and deploy almost 1,000 extra civil servants, but they have done all that before. On page 73 of the pre-Budget report of November 1998, they set out a great new initiative called the alcohol and tobacco fraud review, including extra resources, recruitment of new staff, tougher policies on the prosecution of offenders and on seized vehicles, the introduction of sentencing guidelines and the revocation of licences from businesses caught smuggling. What happened? The situation went on getting worse.
      I shall give perhaps the most eloquent example of that. Based on that previous initiative, the Government supposed that their revenue for 1999–2000 from tobacco products would be £8.9 billion. In fact, it was £5.7 billion. That is a staggering undershoot. They lost more than £3 billion because of the failure of their initiative to halt smuggling, so that is the answer to the hon. Member for Shipley (Mr. Leslie).
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      One can have all the anti-smuggling initiatives in the world, but they will not work until one tackles the root cause of smuggling. Exactly that point applies to the initiative that the Government are launching on the back of their just-published report. The seeds of the Government's failure is written into that report, in which their own figures show that smuggling will worsen in the next three years. Even Ministers say that the initiative will not solve the problem and that, indeed, the problem will worsen. If Ministers say that it will get worse, I think that we are entitled to believe them on that point.
      5 pm
      The Government are dealing with the symptoms of smuggling, not with its causes. Today, we should like to hear from Ministers a real report on the real causes of smuggling. They asked Mr. Martin Taylor, who is a distinguished business man, to do a report on that very issue. He reported to the Government, but that report is secret. We have previously heard from Ministers much waffle and windy rhetoric about openness, the public's right to know and accountability, and that everything would be published and in the open—but, although they have commissioned a report from an outside business man into the very issue of the causes and consequences of smuggling and what to do about it, that report is secret.
      Mr. Michael Fallon: My right hon. Friend has described the report as secret, but is he aware that Ministers, in their reply to the Treasury Committee's report, described the Taylor report as "personal"? How can a report commissioned by the Chancellor of the Exchequer be described as his personal property?
      Mr. Heathcoat-Amory: My hon. Friend is absolutely right—taxpayers paid for that report, and it is not personal at all. The report was not going to be personal until Ministers read it and realised that it was rather embarrassing. Suddenly, the report has become very personal and secret.
      It is widely known in the trade that Mr. Martin Taylor, being a man of common sense, included in a letter attached to the report the commonsense observation that if we really wants to do something about smuggling, we have to do something about the duty differential between the United Kingdom and the continent. As publication of that observation would be too embarrassing for the Government, they have suppressed it.
      There is a similar situation in the alcohol products market. I shall not repeat the points that I have already made, but they apply in very much the same way in that market—in which, for example, the licensed trade is being undermined by the Government. It took several hundred years to build up a responsible, licensed trade in the United Kingdom, so that people could drink in responsible surroundings in which alcoholic drinks should not be sold to minors. It is quite a considerable achievement. The Government, however, are putting at risk and undermining entirely that achievement by presiding over a disorderly market in which drink is sold in uncontrolled outlets to minors and others.
      The cause of that situation is staring the Government in the face: it is, again, a large and growing duty differential. The difference in beer duty between the United Kingdom and France, for example, is about 30p.

      47
      Other European countries have faced exactly the same problem. Historically, all of the Nordic countries and Ireland have, like the United Kingdom, had high alcohol duties. However, when those countries joined the single market and faced the demands that it imposed, all of them cut their duties on alcoholic products. Only the United Kingdom Government are defying logic and common sense by increasing duties in every Budget, making a serious problem worse.
      Mr. Dale Campbell-Savours: If Conservative Members believe that those duties should be cut, how would they compensate for the lost revenue?
      Mr. Heathcoat-Amory: If the hon. Gentleman had been listening, he would know that no compensation is necessary as the policy is costing the Government money. Last year, the duties received on tobacco products decreased. If he really wants to understand the issue, he should read the Government's own documents on the matter. The situation is crazy, undermining not only health and crime policies, but revenue policy.
      Of course, there are winners from the policy. They include the criminal gangs—which may well be operating in the hon. Gentleman's constituency—and the smugglers. There is a Treasury that benefits from the policy, but it is the French Treasury. There is a retail industry that benefits as well, but it is based in Calais. The losers are the legitimate outlets, including the retailers and traders and, when it comes to alcohol, the brewers and their suppliers—as well, of course, as the British taxpayer. We want to put an end to that.
      We are faced with the policy of a madhouse. We want an unvarnished independent review that sets out the link between the level of duty and the level of smuggling. If the Government believe that the high level of duty is not the cause of the criminality, let them show it by commissioning an independent report and being brave enough to publish the results.
      Mr. Bercow: Given that on average more than 80 per cent. of the cost of a packet of cigarettes finds its way to Treasury coffers, does my right hon. Friend agree that if Ministers regard that as a harmless phenomenon, they owe it to the House to tell us for what proportion of the total cost of a packet of cigarettes excise duties should ultimately account?
      Mr. Heathcoat-Amory: My hon. Friend is right. That could well be included in the report for which we are calling. We want a comprehensive look at the entire structure of alcohol and tobacco duties and the link between prices and smuggling. There are many examples from around the world on which to draw. Canada faced a similar problem and successfully stopped the smuggling by cutting its duties. The Nordic countries have done the same. There are plenty of examples and information available, but the Government are too scared to put the issue to the test of an independent review that they would then publish. Unless and until the Government come forward with the information that we want, we shall vote against the duty increases.
      Dr. Palmer: I was interested by the comments of the right hon. Member for Wells (Mr. Heathcoat-Amory). I have not yet fully understood whether the Conservatives are opposed to the duty levels because they feel that they are conducive to smuggling—that was the only argument that he advanced—or whether they wish for lower duties per se. If the Government's new initiatives with the tobacco industry on clearer labelling for duty-paid cigarettes succeed in reducing smuggling, will the Conservatives accept the health argument for high levels of taxation, or will they adopt the populist argument—a tactic that they seem to be flirting with in other policy areas—that cigarettes ought to be cheap?
      That goes to the heart of the amendment. If it stands or falls on the issue of smuggling alone, the Opposition are saying that they have no objection in principle to high rates of duty. It would be helpful if that could be clarified.
      Sir Michael Spicer: Another pertinent question might be whether the hon. Gentleman accepts and approves of the regressive nature of the taxes.
      Dr. Palmer: I am grateful for that intervention. Rather than looking at single taxes, where arguments could weigh one way or the other, we should consider the overall impact of direct and indirect taxation. One of the most welcome features of the current Government has been the substantial redistributive impact of taxation as a whole. I would be surprised to hear the hon. Gentleman welcome that, but if he wishes to join those favouring redistribution, he will be welcome on this side of the House.
      I was curious about the suggestion by the right hon. Member for Wells that taxation is set by a free market. That is an interesting concept, because there is no market in the usual sense of buying and selling. However, there is a good deal of international debate about the tendency of international free trade to encourage a movement of taxation to the lowest possible level that any country may choose to impose, just as there is a tendency to encourage movement to the lowest possible standards.
      When I lived in Switzerland, I saw embarrassing advertisements by the British Council, encouraging companies to move to Britain on the grounds that wages, taxes and Government interference were lower. I remember asking Swiss employers whether that was significant for them. They said that it was nice to pay less money, but that the primary factor for them was the relatively low level of education and infrastructure in Britain.
      The right hon. Member for Wells is attempting simultaneously to satisfy the more populist elements of his constituency, which favour low levels of indirect taxation, while attempting to remain on this side of respectability by disguising it as an attack on smuggling. He said that small shopkeepers are constantly harassed to prevent under-age smoking. Is he saying that he would prefer that small shopkeepers were not approached—I will not use the word harassed—to discourage under-age smoking? Is he saying that under-age smoking should be left to the free market? Is he saying that because there is a difficulty in discouraging under-age smoking when those concerned buy from smugglers, we should give up on attempting to persuade shopkeepers not to supply under-age smokers?
      Mr. Heathcoat-Amory: Before the hon. Gentleman wastes any more of the House's time by distorting

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      my argument, may I remind him that I was making the point that it is no good simply harassing small shopkeepers to prevent under-age smoking when it is the Government who ought to be addressing the problem? The Government should stop running a policy that encourages the distribution of tobacco products in uncontrolled outlets, which has increased and is increasing the incidence of under-age smoking. The Government should start by taking action themselves, rather than putting the problem on to small shopkeepers.
      Dr. Palmer: I am still struck by the repeated use of the word "harassment". The right hon. Gentleman is using his criticism of the rate of duty to side with the less responsible small shopkeepers who object to the police keeping an eye on them to discourage their sale of cigarettes to under-age purchasers. Is he willing to state clearly that the Opposition are strongly in favour of small shopkeepers being discouraged from selling to under-age children?
      Mr. Heathcoat-Amory: Of course we are, but the Government must play their part. It is no good simply expecting the legitimate trade to bear the full burden of preventing under-age smoking when the Government are pulling in the opposite direction—and hypocritically urging action against small shopkeepers—when the Government themselves are responsible for a policy that is increasing the incidence of under-age smoking, as is shown by the regrettable statistic that the number of people in the younger age brackets who are taking up smoking is increasing.
      5.15 pm
      Dr. Palmer: We may understand then that Conservative policy is to support what the right hon. Gentleman earlier called the harassment of small shopkeepers to prevent them from selling to under-age smokers, as long as the Government also take the action that he wishes to see.
      Mr. Gardiner: Does my hon. Friend agree that the right hon. Member for Wells (Mr. Heathcoat-Amory) has just undermined his own argument? He stated that the increased duties have caused an increase in illegal sales, which means that children are increasingly buying tobacco and cigarettes, but he also argues that that is cause for harassing legitimate outfits. If under-age consumers of tobacco are buying it on the black market, it makes no sense for him to urge the harassment of shopkeepers with legitimate businesses.
      Dr. Palmer: I am grateful to my hon. Friend for his well-expressed point, which shows the basic weakness of the Opposition's position. I do not wish to take up the House's time too much—
      Mr. Eric Forth: Go on.
      Dr. Palmer: I knew that that would please the right hon. Gentleman.
      As a Nottingham Member, I share the concerns of other hon. Members who represent cigarette producing areas about smuggling. We need to do more to eliminate the similarity of smuggled goods to legitimately produced
      50
      goods, and I welcome the joint Government-industry initiative on that, which the right hon. Member for Wells failed to mention. Tax harmonisation with the European Union on tobacco also makes sense, and the industry has repeatedly said that it would welcome that.
      The amendment is totally one-sided. It is selective and looks only at one aspect of the problem. As such, it is not a serious alternative to clause 1.
      Mr. Forth: This debate is rapidly becoming a combination of political correctness, economic illiteracy, wishful thinking and nanny-statism, all wrapped up into one bizarre package. We have what would appear to most people to be an obvious argument that, for reasons that I hope the Minister will explain when he replies to the debate, the Government are unable or unwilling to grasp. It is obvious to the Opposition, and to almost everybody outside the House. Smokers and non-smokers, people who buy legitimate or smuggled cigarettes, and small and large shopkeepers all know what is going on, and they cannot see the point of the exercise. However, the Government persist with their sterile and damaging policy. The Minister must give us a thorough explanation of what the Government think that they are doing, whether they accept what is happening, and where the Government think that their policy is leading.
      There is a peculiar analogy to be made for this debate, because it is all bound up in the politically correct policies that we have become more and more accustomed to from the Government. For example, an environmental argument is introduced when they seek to justify their swingeing increases in vehicle petrol duties. At the same time, they have reduced taxation on domestic fuel, which produces even more pollution than vehicle emissions. The Government have failed to justify that. In this case, taxation is allegedly used as part of health policy, but it is patently failing. Not only is it not yielding the revenues, but—as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) pointed out—the incidence of smoking is increasing. On every possible count, the policy is failing.
      We need a full explanation from the Government of whether they will accept amendment No. 8 and if not, why not.
      Mr. Beard: Is not there a paradox in the right hon. Gentleman's argument? He complains that the incidence of smoking is increasing, and especially among young people, yet Conservative policy is that the markets would somehow harmonise prices on the continent and in Britain. Is not that essentially the same as saying that we ought to harmonise taxes? However, if taxes were harmonised, the price of cigarettes would fall further. As a result, even more people would smoke, and even more children would acquire the habit. Does not that run totally contrary to any sensible health or revenue policy?
      Likewise, the right hon. Gentleman—
      The Chairman: Order. This is developing into a mini-speech. The hon. Gentleman should ration his remarks.
      Mr. Forth: I am delighted to have the opportunity to answer at length the points raised by the hon. Member for Bexleyheath and Crayford (Mr. Beard). I shall seek to do so while—I hope—staying strictly in order.

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      I am sure that the hon. Gentleman was here a moment ago when my right hon. Friend the Member for Wells took great pains to explain the matter. I am not in favour of tax harmonisation, in the European Union or anywhere else. However, I have just returned from the United States of America, where there is a single market and a single currency. There is no single currency in the North American Free Trade Agreement: Canada and Mexico proudly retain their own currencies while taking part in a very satisfactory free trade arrangement.
      As my right hon. Friend explained so eloquently a short time ago, there is in the United States a tendency for tax levels not to diverge so excessively as to give rise to a lot of cross-border smuggling between states. That is a perfectly natural, market-driven process, and it is worlds apart from the heavy-handed, bureaucratic, ideological process favoured by Labour Members. They want someone in Frankfurt or Brussels to impose tax rates and regimes on this country. We oppose that completely but, as my right hon. Friend said, we have no objection to the evolution of proper tax regimes in different parts of a single market, as long as that single market continues to function.
      Worse, the hon. Member for Bexleyheath and Crayford has not grasped that we used to have a proper market in these products. They were sold through properly regulated and supervised outlets, and there was a perfectly reasonable regime governing sales to under-age people, and so on. However, now that a growing proportion of the market is attributed to smuggled goods, we have no chance of regulating or supervising the market in any way.
      We want to find a way to restore an orderly market in these products. It is right that that market should be regulated with regard to under-age consumers, but I believe that the decision about using the product should be left to the mature judgment of people of a proper age, based on proper information from the Government.
      Mr. Campbell-Savours: The right hon. Gentleman is almost a convert. He expresses support for the principle that there is a tendency to equalise taxation, as happens in the free trade area in the United States of America, but does he see Europe in the same way? Does he believe that there should be a tendency to equalise all forms of taxation in the European Union? How would he justify that?
      Mr. Forth: Again, the hon. Gentleman must have fallen asleep temporarily when I drew my preferred analogy. I shall not use the analogy that he used, as I prefer my own, which concerns NAFTA. That arrangement is perfectly satisfactory to the Canadians, Americans and Mexicans, but has no single currency or overarching bureaucracy. However, I am watching you, Sir Alan, as I do not want to stray out of order.
      Sir Michael Spicer: Will my right hon. Friend give way?
      Mr. Forth: I will, but I hope that my hon. Friend will not tempt me much further down this line of argument. If he does, I shall blame him for what you might say, Sir Alan.
      Sir Michael Spicer: I am most grateful to my right hon. Friend, who does not need my help to cope with
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      mischievous questions from Labour Members. However, does he agree that, with cigarettes in particular, the differential between taxes in European Union countries and taxes in countries outside the EU is more important than tax differentials inside the EU?
      Mr. Forth: My hon. Friend makes a very proper point. It is at the root of what we are disputing.
      My right hon. Friend the Member for Wells eloquently set out these obvious and basic factors, and we await the Minister's reply. I have no doubt that he will want to set out in detail the Government's response to those points and explain whether they will accept amendment No. 8, which would be a significant contribution to solving the problem.
      Mr. Roger Casale: At the start of his remarks, the right hon. Gentleman referred to economic literacy. The economics of his proposed changes to discourage smuggling—a freeze, as I understand it, on the level of tobacco duty—mean that the overall tax revenue from tobacco duty would either go up or down. It might go up because there would be less smuggling and more people would buy cigarettes legally. Equally, if the rate of revenue received goes down, the amount of overall revenue would probably go down. If tax revenue were to increase, would he commit to spending that extra money on the national health service, as the Government are doing? If it goes down, how would he replace that money, or would it be taken out of the NHS, resulting in cuts to the service? Where would the money be spent if the revenue were to increase as a result of his proposals, and where would it come from to compensate for any reduction?
      The Chairman: Order. The hon. Gentleman is getting near to a peroration.
      Mr. Forth: These are helpful interventions. I will reply briefly to the hon. Gentleman's question. I do not believe in hypothecation, which is a self-defeating exercise. I can see why the Government have done it—for their usual populist, trivial, short-term reasons. As I do not agree with hypothecation, I do not need to answer the hon. Gentleman's question in the way in which it was put.
      My judgment is that were my amendment to be accepted, the reduction in tobacco product prices would regularise and restore the market to where it was some time ago. Revenues overall would probably go up, and products would be sold in a more orderly market rather than one which is becoming increasingly illegal and based on smuggling. That would have a number of consequences. At present, we cannot, as effectively as we would wish, seek to prevent under-age children from smoking. That purpose is shared across the House. I believe that we have a duty, as effectively as possible, to seek to prevent our young people from taking up smoking, but once they reach the age of, say, 18, our duty is properly to inform them of the dangers of consuming that product and then leave it to their judgment.
      Mr. Casale: I am grateful to the right hon. Gentleman for giving way a second time. Is he saying that he would like more money to be raised for the Exchequer through the sale of tobacco?
      Mr. Forth: I would be very happy if that were the case. That is the way it used to be, and I believe that my

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      amendment would lead us in that direction. That is why I hope that the Minister will consider it sympathetically and perhaps give a positive response.
      Mr. Bercow: If tax rises continue to depress revenues and to advance other countries' tobacco industries at the expense of our own, should we not be told by Ministers whether, on the strength of the evidence, they would be prepared to change policy, or whether they intend to continue with the existing foolhardy policy for fear otherwise of having the finger pointed at them by the politically correct fetishists?
      5.30 pm
      Mr. Forth: I am certain that that is uppermost in Ministers' minds, because these days it usually is. We know that the Government are driven almost solely by focus groups, opinion polls and probably by fetishists as well, as my hon. Friend suggests. The Government are not driven, regrettably, by economic literacy, cool analysis or a genuine desire to introduce policies that make sense. However, the Minister will have a chance to redeem himself and the Government when he seeks to catch your eye, Sir Alan, and we look forward to that very much.
      I want to introduce some figures into the debate to illustrate the extent of the problem. I have been told, and have every reason to believe the figures reliable, that a typical pack of 20 king size cigarettes costs £4.17 in the UK at full retail and with full tax paid. On the continent, the price varies from as low as £1.25 in Greece to £1.84 in Belgium. That huge differential explains the enormous and increasing propensity for smuggling.
      My hon. Friend the Member for New Forest, West (Mr. Swayne) described the kind of offer that most of us will have experienced. Smuggled tobacco and alcohol products are regularly and illegally, but temptingly, offered to people in every part of the United Kingdom. That explains the figures given earlier by my right hon. Friend the Member for Wells about the fall in revenue and the increasing proportion of the total market represented by smuggled product. Price differentials drive that process.
      I have heard anecdotally of prices as low as £1 a pack for 20 cigarettes. The tobacco industry suggests that the going rate on the black market is about £2.50. Even that price tempts the consumer and makes smuggling profitable. The Government are losing an increasing amount of revenue as a result, as well as losing any possibility of exercising regulatory control, particularly over the sale of products to under-age children.
      Mr. John Swinney: Does the right hon. Gentleman recall from his experience in the previous Government whether debates about the growing disparity between duty in this country and that in some of our European neighbours ever influenced the decisions then taken to increase fuel duty sharply ahead of inflation? I seem to recall that the Conservatives did that during their period in office.
      Mr. Forth: Many things happened during the glorious period of Conservative Government which I regretted at the time, or, frankly, regret with hindsight. As it happens, that policy was one of them. I never accepted the alleged environmental arguments or the effect that the policy was
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      supposed to have on the product. I am not aware that swingeing increases in tax on petrol for vehicles has led to any diminution in the mileage travelled by individuals or the propensity to buy vehicles that consume a lot of petrol. The policy has been a successful revenue raiser, but it has done damn all for the environment.
      Mr. Bercow: I can confirm the veracity of what my right hon. Friend has said about his attitude to excise duties. As long ago as 1989, at a conference in Nottingham, in an admirable speech made while he was a member of the Government, but in front of a private audience, he expressed his opposition to higher excise duties on tobacco and alcohol. I remember it well.
      Mr. Forth: I am grateful to my hon. Friend, whose memory in these matters is legendary. I defer to him totally in what he says.
      The Government's policy is disastrous from almost every conceivable point of view. Revenue is going down, smuggling is going up and our ability to regulate the product properly for youngsters is reducing.
      Liz Blackman: Is the right hon. Gentleman aware that countries such as Spain and Italy have their own smuggling problems despite having considerably less excise duty on their tobacco products than we do? Is not the logic of his point that combating the problem would mean the complete removal of excise duty? Is that what he really proposes?
      Mr. Forth: The countries mentioned by the hon. Lady must deal with their own markets and domestic policies in their own ways. That is a vital principle. However, as my right hon. Friend the Member for Wells said, they must, in doing so, have reasonable, sensible and proper regard to the effects of the single European market that allegedly exists. They would have to consider possible cross-border movements of products before they made up their minds. In fact, their problem is the reverse of ours. If, as the hon. Lady says, countries such as Spain believe that they have a health problem related to the consumption of tobacco, that is a matter for them.
      Liz Blackman: I was trying to make the point that their problem with smuggled tobacco goes well beyond the EU. That tobacco is also coming into this country. Logically, combating the price differential would require removing excise duty altogether. Is the right hon. Gentleman seriously proposing that?
      Mr. Forth: If the hon. Lady is saying that our European partners have lousy border controls and no grip on what goes into their countries from outside the EU, I should not dispute that for a moment. That is one of the factors that we should take into account when considering our relationship with the EU as a whole—whether on asylum and immigration or on the import of products from outside the EU. She and I probably do not disagree much on that. If she says that there is a huge problem, she is probably right. Let us discuss that, but not in the context of the amendment.
      I should be interested in holding a debate with the hon. Lady on the EU market in general, on whether the single market functions effectively and, particularly, on whether that EU market is properly protected from products from

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      outside that are harmful either to the health of our peoples or to our fiscal policies. Those are legitimate concerns, but not in relation to the arguments that I want to make today. I do not fear to make arguments on those interesting matters—countries would do well to consider them carefully.
      I do not want to prolong the debate because the points almost make themselves. However, despite that fact and even though my right hon. Friend the Member for Wells has made them in his way—as I have in mine—there is no evidence that Labour Members are prepared to accept them at all, so perhaps my hon. Friends will have to ram them home much more effectively than I could possibly do.
      I have a few questions for the Minister. I hope that he will answer them in his usual courteous, comprehensive and knowledgeable way. What is the Government's current estimate of the trend in smoking in this country, especially among young people? I should like that to be on record, so that we know what the Government believe the underlying trend to be.
      What is the Government's estimate of the smuggling of tobacco products by volume and by value? It is important for us to hear officially from the Minister the Government's current estimates. What is their estimate of the loss of revenue that they are suffering as a result of that smuggling?
      Those key questions face the Government and, indeed, all of us. Whether the money is hypothecated to health is an important factor, but it is not crucial. The crucial factor relates to the encouragement of illegal activities—widespread smuggling and purchase of smuggled goods. Many Labour Members have raised—legitimately—the loss of any control or regulation in the sale of those smuggled products, especially to under-age people. That is one of the key questions for the Government.
      When the Minister replies, I hope that he will tell the House that he accepts my amendment; if not, he will have to give some jolly good reasons why not.
      Mr. Campbell-Savours: I shall intervene only briefly; the right hon. Member for Bromley and Chislehurst (Mr. Forth) has provoked me into saying a few words.
      The right hon. Gentleman has not answered the point made by my hon. Friend the Member for Erewash (Liz Blackman). He should think clearly about the implications of what she was saying. If there are different tax regimes within Europe, under which a packet of cigarettes might cost 8 francs in France and 3,300 lire in Italy—a differential of about 20 per cent.—and if, moving from France to Italy, there is still a market, even with such a tight differential, does that not show that the amendment would not deal with the problem? We are doing so through this year's Budget. The right hon. Gentleman is not addressing the problem.
      If a differential of only 20 per cent. is enough to incite people to trade in cigarettes, because a profit can be made simply by walking through a frontier within the EU at night, or by driving across it in a van, the right hon. Gentleman's proposals will not work.
      I lived in Milan as a boy. When we were in the countryside, we used to go up to Como in the evenings, and if one stood on a bridge late at night, where the rivers
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      came down from the alpine villages, one could see men carrying sacks on their back—sacks of fags, coming in from Switzerland to Italy. The differential was very little, but it was sufficient. I remember vividly that, when I was a child, the differential was sufficient to ensure that street corners throughout the city of Milan, every day of every week of every year, were crowded with people selling cut-price cigarettes that had come in from other parts of what was then Europe, not the European Union. It is going on today. In Rome, one can find cigarettes that have come in from Greece. The differential is probably only 20 or 30 per cent.
      Mr. Oliver Letwin: Is the hon. Gentleman advancing the rather interesting argument that the size of the differential has no impact on the size of the smuggling market?
      Mr. Campbell-Savours: Yes; I think that there is an argument that, as long as there is the potential to make a profit, people will trade. In the event that that is the motive—simply that there is sufficient differential to make a profit—the only way to deal with it is to take far greater measures to affect the trade.
      Mr. Letwin: What reason does the hon. Gentleman advance for supposing that this is the unique case that disobeys the laws of economics and supply and demand in every other domain?
      Mr. Campbell-Savours: My own experience—what I have seen and what tourists from anywhere in the United Kingdom will experience if they go on holiday anywhere within the European Union—is of fags, which invariably come from other parts of the European Union, being sold on street corners.
      Sir Michael Spicer: How, then, does the hon. Gentleman explain the fact that when Canada, Switzerland and Sweden reduced their duties, smuggling fell dramatically?
      Mr. Campbell-Savours: I do not know the answer to that, but I am sure that there is an explanation that is consistent with the case that we are advancing in the Chamber today. I have not studied the evidence. All I know is what I have experienced and witnessed, over most of my lifetime, within the European Union. The hon. Gentleman may talk in terms of what we are seeing today being a phenomenon of today, but it is not. It has been going on since I was a child, throughout Europe.
      Mr. Swayne: I acknowledge that the hon. Gentleman is right to say that, as long as a differential exists, people will trade; but, obviously, the number of people trading will be determined by the size of the differential and the profitability. Is not the phenomenon that the hon. Gentleman describes something to do with the cultural background in Europe, which, as he said, stretches back a long way? Nevertheless, this type of trading is a relatively new phenomenon, at least in this country.
      Mr. Campbell-Savours: When the hon. Gentleman starts talking about cultural backgrounds, I tread a little warily, because I know roughly the area into which he is daring to venture.

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      There is one other aspect that I wanted to raise in my brief contribution.
      Mr. Bercow: Will the hon. Gentleman give way?
      Mr. Campbell-Savours: No. Let me go on, because I do not want to hog the debate.
      I have in my hand a brief that comes from the Treasury, which I believe is available to most Members. It says that the Treasury will invest in technology, including large-scale X-ray scanners that can look inside lorries and freight containers.
      I hope that, when the Minister replies to the debate, he or she will address the issue of these scanners, because I believe that that is an interesting development. I am told that such scanners already exist in the United States of America, and that they really work. I should have thought that if there is a technology that provides for the use of scanners in identifying large hauls of cigarettes in truck containers, it should be used.
      I am told that the revenue lost from a truck container can be as much as £1 million per container. If we have that technology, the trade will soon collapse. If scanners are in operation, transport operators who contract companies to carry such loads from other parts of the European Union know that they risk losing their tractor units and trailers—many of which are worth between £120,000 and £150,000 per unit—if they are found to be carrying cigarettes. I am told that we are to have a dozen scanners. I only wish that we were buying more; I would have 50, as they will be a particularly good investment.
      The trade is not made up entirely of the little guys who wheel their trolley off the P&O ferry at Dover and sell fags locally on the motorway. The real trade is the big 40 ft trucks crammed full of aluminium boxes, and people get away with it because we do not have the resources to check on such loads.
      5.45 pm
      Mr. Letwin: Does the hon. Gentleman think that smugglers' propensity to invest in materials such as lead to counteract the X-ray would be increased or decreased if the differential were reduced?
      Mr. Campbell-Savours: That is an interesting question. If one puts enough lead in a 40 ft truck-trailer to cover boxes full of fags, it will probably weigh down the whole vehicle, as will be evident from its axles. Regardless of that, it is extremely easy to develop technology capable of locating lead. If one wants to find people who are carrying fags, all one has to do is use a bit of equipment that can identify lead. Lead on top of someone's load means that they are carrying fags.
      We shall therefore introduce the necessary technology. I predict that the policy will work and will be extremely successful if we invest in such equipment. If we increase the quantity that is available for use for detecting cigarettes and other products at British ports, smuggling will be cut dramatically, so I hope that my hon. Friends will go down that route.
      Mr. Edward Davey: The whole Committee is grateful for the comments of the hon. Member for Workington (Mr. Campbell-Savours).
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      I cannot speak as eloquently as he does, but I support his argument that scanners are a key tool for the Government in tackling smuggling.
      Page 6 of the Government's document, "Tackling Tobacco Smuggling" gives statistics on tobacco smuggling in 1999, estimating that £1.4 billion of the £2.5 billion that was lost—or more than half of last year's lost revenue—was through freight consignment smuggling, which scanners are designed to tackle. The Government are quite right to go down that road, as the hon. Gentleman pointed out. However, he was a little too generous to the right hon. Member for Bromley and Chislehurst (Mr. Forth) who, in the final knockings of his speech, seemed to be suggesting that Spain should improve its physical controls on tackling smuggling, but that that was not the right policy for Britain. That was rather inconsistent and incoherent, and not typical of how the right hon. Gentleman usually argues his case.
      The right hon. Member for Wells (Mr. Heathcoat-Amory) said that the Conservatives are certain that the only solution to the matter is to cut duties. The hon. Member for Broxtowe (Dr. Palmer) asked why that is so and what motives lie behind Conservative policy. He suggested that the Conservative party may just want to cut smuggling and is not worried about the revenue. Perhaps it wants to promote drinking and smoking. We need to know the real reasons for Conservative policy, which, if I understood the right hon. Gentleman correctly, is based on the need to protect revenue.
      The Opposition are saying that, if duty is cut, there will be increased revenue. That is like applying the Laffer curve to indirect taxation. That seems to be the key to their argument. If they are saying that, by cutting duties, we shall cut cross-border smuggling, but that that might have a negative revenue effect, we might all agree. If we wanted to spend money solely on cutting cross-border smuggling, we could all agree that cutting excise duties on tobacco and alcohol would almost certainly have some impact on that smuggling. We are not sure of the scale, but it would certainly have an impact.
      When we consider the revenue impact of cutting duties, the analysis is rather more complicated. I refer to an article in "Fiscal Studies" of September 1999 by Crawford, Smith and Tanner, entitled "Alcohol Taxes, Tax Revenues and the Single European Market".
      Mr. Bercow: Riveting reading.
      Mr. Davey: It is an important read for this debate because it brings some economic literacy to it. It considers real numbers and models them properly. It focuses also on own-price and cross-price elasticities of demand for smuggled products. It works out the impact of cutting duties on demand and thus on the tax take. I accept that the study focuses on alcohol and the effect of cutting excise duties on it. The authors, in estimating the various price elasticities of demand in the mid-1990s in Britain for various alcohol products, show that, if we were to cut duties on beer and wine, the revenue would decrease. That is a clear and unambiguous conclusion in an economically literate study.
      Sir Michael Spicer: As the hon. Gentleman is so economically literate, he will know that the elasticities that are assumed by, or produced from, the report have been hotly disputed by other people.
      Mr. Davey: I am grateful for the hon. Gentleman's intervention. I have spoken to representatives of the

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      industries concerned about these matters. I have yet to see a detailed economic knock-down of the price elasticities. I have heard some anecdotal evidence against them, but not detailed economic facts. The debate should focus on the facts and not on pure dogma. We need to introduce into it some objective cool-headed studies, and I believe that the study to which I have referred is one.
      Dr. Palmer: Given the existence of the report from a respected independent body, does the hon. Gentleman agree that amendment No. 1 should fall? It merely demands an independent report on the effect of liquor duties on smuggling.
      Mr. Davey: The hon. Gentleman makes a valid point.
      In trying to explain the thinking behind the report and the analysis, the authors of the report consider two effects. First, they focus on the effects on revenue when we cut taxes. One effect is to raise demand as people who were consuming illegal goods start consuming goods with duty paid, which adds to the tax base. If we cut excise duties, we might find more people demanding the product. That is the ordinary demand curve effect. In those terms, revenue would be raised as a result of what the Conservatives are proposing.
      The effect that outweighs that, as set out in the study, is that the lower tax per unit of sale resulting from a cut in excise duties more than offsets the gain in tax revenue from the higher demand. Unless a cut in excise duty had a great effect in increasing sales and demand, the second effect would always outweigh it. Previous studies have backed up the findings of the Crawford, Smith and Tanner study and point in that direction.
      It is interesting that the report suggests that the duty on spirits is a revenue-maximising rate, so that, if duties were cut, we would see a fall in revenue. A distinction is made between different alcohol products but there may be a fall in revenue when duties reach a certain level, and the Government have recognised this.
      Liz Blackman: Is the hon. Gentleman aware that the Canadian experience revealed exactly the same effect? By cutting duty, Canada has forgone revenue on tobacco.
      Mr. Davey: I am grateful for the hon. Lady's intervention. I was not aware of the details of the Canadian experience, but perhaps I should have been.
      We need to know from the Conservatives what lies behind their argument. Do they want to cut cross-border smuggling? If that is their position, it is a valid one. When they add up their expenditures when preparing for the next election, they may want to say to the British people that a key priority is to spend £1 billion, or whatever the sum may be, on cutting cross-border smuggling by lowering duties, and that that priority goes before the health service, schools and the police. However, if they are saying that cutting duties on beer and wine will increase revenue, they have no case.
      Mr. Heathcoat-Amory: I shall summarise our position for the hon. Gentleman. We have a failed health policy and we want a successful one. We have a failed criminality policy and we want a successful one. We have
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      a failed revenue policy and we want a successful one. The Government's response is to make a bad situation worse by opening up the duty differential, which will make all those problems worse.
      Mr. Davey: For a second I thought that the right hon. Gentleman was in a time warp and was describing the record of the Conservative Government. I do not want to defend this Government's overall record on health. Indeed, my colleagues and I have criticised it. It is difficult to criticise overall their record on finances because there are huge surpluses which are growing by the day. Their record on criminality is certainly questionable, especially in terms of numbers of police officers. However, given the previous Government's record in these areas, the right hon. Gentleman has a nerve. He failed to address earlier whether the Conservative party is arguing that a cut in excise duties will increase revenue. If the Opposition are advancing that argument, the Committee is entitled to know on what basis they are doing so. The evidence from Canada and from the independent economically literate study produced by the Institute of Fiscal Studies suggests that what is being said by those on the Opposition Front Bench is completely wrong.
      One might be tempted to suggest that the Opposition are being slightly opportunistic and that, during a week when there will be elections, they are trying to be populist, as their Leader has tried to be populist on various other areas of policy. The Leader of the Opposition has failed, and I believe that the Opposition will fail tonight because they have failed to make their point.
      I do not have a study to quote from when we come to consider whether reducing duties on tobacco would increase revenue. I do not know of a study that has gone into the various own-price and cross-price elasticities that need to be computed if we are to work out the effect of reducing duties. Does the Minister know of a study that has considered own-price and cross-price elasticities and the effect of a cut in the duties on tobacco in terms of the overall tax yield from tobacco? If such a study does not exist, does the Treasury intend to commission one? Such an independent study would be important in informing the debate. If we have reached the top of the curve or gone beyond it in excise duties on tobacco, and if a cut would yield more revenue, my right hon. and hon. Friends and I might well reconsider our position. We are not dogmatic about it. If a cut in duties would have a beneficial effect all round for health policy and revenue raising, for example, we would be more than happy to support such a move, but there is no evidence to suggest that that would be the effect.
      Mr. David Ruffley: Will the hon. Gentleman clarify one point? Is he saying that the Government of this country should base their tax and excise duty policies on the work of Crawford, Smith and Tanner?
      6 pm
      Mr. Davey: I am certainly not saying that, but I am advocating that the Government base their tax policy on objective, independent, well-founded and economically literate analysis. We have not had that from those on the Conservative Front Bench.
      Dr. Palmer: Is the hon. Gentleman not being a little optimistic in thinking that a further study would help to

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      clarify the debate? As we have heard from the interventions of Conservative Members, even when there is an independent report, they do not want it. They want an independent report whose conclusions they like and, if they get one whose conclusions they do not like, they ask for another report.
      Mr. Davey: The hon. Gentleman has a point, but I do not want to rubbish independent and objective reports. We need more of them, because this is an important social, economic and fiscal issue. The Government, and the previous Government, reacted to the initial findings on the effect of cutting duties on alcohol by freezing the duty on spirits and by keeping the increases in excise duties on beer and wine to the rate of inflation. That is a sensible policy that evidence from independent and objective studies seems to back up.
      However, at the moment, I do not have to hand a similar study considering the price elasticities of demand for tobacco, and such a study is necessary for this debate. It could provide it with some rigour and a framework, so that we do not have to clutch figures from the air or make wild assumptions. Surely, given the brilliance of economists and the civil service in this country, we can try to obtain the facts and publish them, so that the debate focuses on the correct issues.
      Mr. Bercow: At the start of his speech, the hon. Gentleman appeared to suggest that he accepted that a large differential would tend to favour the smuggler. He therefore dissociated himself from the position advanced by the hon. Member for Workington (Mr. Campbell-Savours), whose continental meanderings were enjoyable but, I fear, no substitute for empirical evidence. The hon. Gentleman now appears to be telling us that he does not know what the empirical evidence is. Therefore, can we establish beyond doubt the Liberal Democrats exact position on excise duties on tobacco as of 2 May 2000? Does he think that they should be higher, lower or stay the same? When will he learn to play his cards right?
      Mr. Davey: The position is simple, and I will answer the hon. Gentleman directly. In the Lobby tonight, we will support the Government's position on increasing excise duties on tobacco and alcohol. I hope that that answer helps him with his troubles. However, he has mixed up two points. I agree with him that a larger price differential provides a greater incentive to smuggling. That is a law of economics, as the hon. Member for West Dorset (Mr. Letwin) said. However, it does not follow from that—the evidence is not yet forthcoming—that a reduction in duties would lead to an increase in revenue or that we should back an ill-thought-through and ill-considered policy that would be bad news for the health service, our schools and the police.
      Mr. Bercow: I am deeply disappointed by the hon. Gentleman's reply. I had hoped against hope—oh, naive soul that I was—that he was a genuine libertarian. The late John Stuart Mill, for one, would be ashamed of him.
      Mr. Davey: May I refer the hon. Gentleman to John Stuart Mill?
      If a study on the price elasticities of tobacco were carried out so that the debate was rather more informed than it has been in some quarters, we might find that a
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      cut in duties might increase revenue yields. However, we might still decide that we wanted to increase the duty because of other factors such as health policy. As the hon. Member for Erewash (Liz Blackman) pointed out, the evidence from countries with low rates of duty is that, because of sophisticated organised crime, smuggling will continue even if the differential is quite small. There is bound to be a differential with other countries, and particularly with those outside the European Union, and organised crime will arbitrage on the differential between the different tax rates and will try to exploit it.
      Whatever the policy on reducing duties, we might decide that our first priority should be to invest in anti-smuggling devices such as the national network of scanners to which the Government are rightly committed. We might decide that we need more Customs officers and that we would not want to cut their numbers as the Conservatives did when they were in power. We have not heard them apologise for doing that and for reducing the resources available to Customs and Excise, but perhaps they should have done so.
      Policies other than cutting duties can be used to reduce smuggling. If they are successful—we should all hope that they are—there might be an increase in the revenue yield. The policy of fiscal marks on cigarettes appears in clause 14, so I shall not dwell on it. However, it may be a useful aid in the attack on smuggling. It is possible that we shall want to debate the details of the policy's implementation, but properly marking the packs on which duty has been paid is a sensible way forward. Making the punishments for smugglers appropriate and seizing their assets is another approach. When organised crime is involved, custodial sentences should be available to punish the criminals properly.
      I have concerns about aspects of the Government's policy. In particular, I am concerned about the speed of implementation. Several reports have been produced, but we are waiting for more officers and for the scanners. The Government have been in power for three years and they should be getting on quickly with anti-smuggling proposals, monitoring their efficacy and helping the debate by producing objective reports that provide an economic analysis that is stronger than that we heard from those on the Conservative Front Bench. Such reports would enable us to assess the effect of cutting duties on the Exchequer.
      Liberal Democrats will, at least for this year, support the Government's approach to tackling smuggling. We support the measures that I have outlined and will ensure that the Revenue's tax base is protected. However, over the next year or two we want the Government to consider the duties' effects in more detail than they have to date, so that, when we revisit this issue this year and the year after that, the debate will be rather more informed than it has been tonight.
      Sir Michael Spicer: Successful or not, the increases in excise duties are an integral part of the Government's policy to raise the overall level of taxation as a percentage of gross domestic product. The fact that the Government are increasing taxation as a whole as a proportion of GDP is now an established fact in the Red Book, and even if, under the convention uniquely invented by the Government, one includes the working families tax credit as a tax deduction, taxes as a whole are going up.

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      To return to a point made by the hon. Member for Broxtowe (Dr. Palmer), the irony is that the burden of the overall level of taxation falls on indirect rather than direct taxes. As a Conservative, I have no particular objection to that—it fits in very much with my overall philosophy—but it must be a cause for shame among Labour Members. The process of increasing excise duties is part of that overall strategy.
      The strategy is necessary because of the explosion in the rate of increase in public spending and planned public spending that the Red Book also recognises. It is soaring—there is no question about that. The Select Committee on the Treasury recently established the facts. In 2000–01, public spending will rise by 6.7 per cent.; in 2001–02, it will rise by 6 per cent.; and in 2002–03 by 13 per cent. It is therefore not surprising that bodies such as the International Monetary Fund recently pronounced that Britain's economy was at risk of overheating and that the aim of Government policy ought to be to take the pressure off interest rates. The IMF stated that in these circumstances it would be ideal for fiscal policy to take the burden off monetary policy, and the fact that that has not happened is a matter to be regretted.
      All that is part of a context recognised by everyone outside the present Government. Expenditure is soaring and taxation policy is inevitably following it. It so happens that taxes are being raised through indirect taxation, particularly excise taxes.
      Mr. Edward Davey: Can the hon. Gentleman tell the House what expenditure he would cut in order to tighten fiscal policy?
      Sir Michael Spicer: I would take a totally different approach to public expenditure. There is the question whether private resources should be used for public services to a far greater extent than is the case. It is extraordinary that a Government who ostensibly support those most in need, but not so much those less in need, do not accept—they may do so secretly, but not publicly—the need for private resources in public programmes. That is inevitable and will have to be recognised one day.
      Mr. Davey: I am grateful for the hon. Gentleman's reply. Can he tell me whether it is in respect of pensions, police, schools or hospitals that he believes the private sector has most to do?
      The Second Deputy Chairman of Ways and Means (Mr. Michael Lord): Order. We are straying rather wide of the amendment.
      Sir Michael Spicer: I bow to your constraints, Mr. Lord, although I would be happy to debate the topic at length.
      The rise in excise duties is a matter of great interest. The rise in tobacco duty is self-evident. The change is 8.41 per cent. However, in the case of alcohol, as my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) mentioned, the so-called indexation to inflation is a strange phenomenon and will have to be explained by the Government.
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      Throughout the Red Book and throughout the discussions that we on the Treasury Committee have with the Monetary Policy Committee, the argument is that the rate of inflation—RPIX—is currently below the target level of 2.5 per cent. and is likely to remain so. Nevertheless, the Government say that indexed alcohol duty will go up by 3.4 per cent.
      There may be all sorts of calculations involved, but the basic inflationary index used to govern inflationary policy and thus to determine most of the UK's monetary economic activity—the RPIX index—continues to be well below the target level of 2.5 per cent., so it is extraordinary that an indexation device is suddenly introduced, whereby excise duties on alcohol are put up by 3.4 per cent. The Government will have to tell us more about that in the course of the debate. [Interruption.] I am glad that the Minister is sending his assistant scurrying away, presumably to get some answers.
      6.15 pm
      Amendments Nos. 1 and 2 highlight the importance of the independent analysis of the effect of excise on smuggling. The Treasury Committee, and especially the Sub-Committee which I chair, spent a great deal of time on the matter. It took evidence and on 8 February published its report on HM Customs and Excise. Paragraph 64 is directly relevant to the debate on the amendments. It states that in March 1999, in the pre-Budget report,
      the Chancellor of the Exchequer announced that there would be an "independent evaluation of the strategy and measures deployed to tackle excise duty and fraud and evasion …"—
      no mention there of it being a personal report.
      In the 1998 pre-Budget report, almost exactly the same promise was made. That is partly the answer to the hon. Member for Kingston and Surbiton (Mr. Davey), who spoke about physical constraints on smuggling. The 1999 announcement was an almost exact repetition of the offer of an analysis of physical constraints on smuggling in the previous year's pre-Budget report. In 1999 Mr. Taylor was put in charge of the report. The results of his evaluation apparently influenced the measures taken in the 1999 report and in the current Budget.
      Because of the importance of the report in determining Government strategy on excise duty, particularly in relation to smuggling, we—the Treasury Committee—
      requested sight of Mr Taylor's report to the Chancellor so that we could assess whether the measures announced by the Chancellor to deal with tobacco smuggling fully met the evaluation's recommendations. We were also concerned to investigate how Mr Taylor had undertaken his review, given that witnesses from several key alcohol and tobacco trade and retail associations told us that they had not been consulted by him. We were told—
      this is the point raised by my hon. Friend the Member for Sevenoaks (Mr. Fallon)—
      that the advice tendered by Mr Taylor was "personal and confidential" to the Chancellor and could not be made available to Parliament as a result.
      We continued:
      We consider it unacceptable that the Treasury should commission a review of an important area of Government policy, and announce policy measures apparently based on the outcome of that review,

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      without allowing Parliament access to the review's conclusions. We recommend that the Chancellor make available for Parliamentary scrutiny the results of Mr Martin Taylor's recent evaluation of Government policy to tackle tobacco smuggling.
      That is what lies behind the two amendments.
      Mr. Campbell-Savours: If the Taylor report included material that was based on intelligence, would the hon. Gentleman still be in favour of publishing it?
      Sir Michael Spicer: There are always issues associated with intelligence, but the Government were not prepared to consider publishing any part of the report, or to produce a summary of the analysis that led to the conclusions. They were not prepared to give Parliament any insight into an apparently substantive and significant contribution to Government policy which had been announced in public. Confidential matters relating to security and intelligence could have been deleted. Parliament accepts that when such reports are published, certain references to intelligence sources and techniques will not be disclosed.
      It is scandalous that the report was not published. I should have thought that that was common ground on both sides of the House. I should have thought that the hon. Gentleman, who feels strongly about parliamentary matters and speaks against the Executive on occasion, would consider it wrong that a major report which was publicly announced should not be a public document. Probably because it reached conclusions that the Government did not wish it to reach, the curtains came down. I do not believe that that had anything to do with information or intelligence. The fact that the report came to the wrong conclusions from the Government's point of view made it unacceptable in the public domain.
      Mr. Campbell-Savours: I do not know what was in the report. I do not know whether it dealt with intelligence matters, but I presume that it did. If, on a balance of judgment, Ministers decided that a document would be worthless unless it included that intelligence material, which it cannot include if it is to be published, how can one challenge that judgment? A similar decision would have been made by Ministers in the previous Government. I heard them say that when I used to sit on the Opposition Benches.
      Sir Michael Spicer: If the matter had such implications for national security and the intelligence services because of smuggling, the Government could have made that clear, but they did not. They claimed that the report was a personal matter for Mr. Taylor and the Chancellor. If the hon. Member for Workington (Mr. Campbell-Savours) is right—I suspect that he is not—the Government should say that the report had not been published for security reasons. We could have considered the matter and Parliament could have decided whether it had implications for national security. However, the Government never said that the report was sensitive because of national security or the way in which the intelligence services work; they said that the report was personal to the Chancellor. I believed that the hon. Gentleman would find that unacceptable.
      Mr. Forth: Does my hon. Friend believe that if the ill-fated, so-called Freedom of Information Bill ever reaches the statute book it will force the publication of such taxpayer-funded reports?
      Sir Michael Spicer: My right hon. Friend makes an interesting point. The report on Customs and Excise gives an example of another Government report that has been kept secret and unpublished, and specifically refers to the context that my right hon. Friend described. The reports states:
      It is extremely disappointing that, as the Freedom of Information Bill began its passage through Parliament, Customs and Excise refused us access to a six year old report on a matter of departmental organisation central to our present inquiry, far removed from party political controversy or national security—
      to answer the hon. Member for Workington—
      defence or foreign policy concerns.
      Mr. Campbell-Savours: How does the hon. Gentleman know that?
      Sir Michael Spicer: Because that is the clear implication. The report simply considered whether the Customs and Excise service could be made more efficient, perhaps by amalgamating it. No one has ever told the Select Committee that security or intelligence matters were involved. If that had been said, we could have considered it. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) is right to say that, despite the hoo-hah and hot air that surrounds the Freedom of Information Bill, six-years-old papers of no party political import are suppressed. Those papers were drafted by the previous Administration, and the Government probably believe that they reached the wrong conclusions.
      Such suppression is wrong and a good reason for accepting amendments Nos. 1 and 2, which are eminently sensible. They are not especially party political and they deal with the extent to which Parliament should be allowed to scrutinise the Executive.
      Mr. Michael Fallon: Before my hon. Friend leaves the point about whether the Taylor report can be construed as personal, can he explain to the Committee how a report which was commissioned by a Minister who is a public official and which was prepared for a public Department for public policy making, can be described as personal to the Chancellor of the Exchequer?
      Sir Michael Spicer: I cannot think of a reason. As my hon. Friend rightly says, the Taylor report is on a vital public issue. I cannot understand how it can be personal to the Chancellor.
      Mr. Letwin: Does my hon. Friend agree that the report might be construed as personal because it was personally embarrassing to the Chancellor?
      Sir Michael Spicer: My hon. Friend may be right, as he so often is.
      I want to consider the general thrust of the argument of the hon. Member for Kingston and Surbiton. He said that revenues would increase, and that the revenue take was necessary for all the projects that he wants to implement. He is a big spender and taxer; increasing revenue is therefore a good thing from his point of view. He said that all the Institute for Fiscal Studies reports on alcohol showed that that would happen and that, despite the leakage, the overriding thrust of policy would be to raise revenue.

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      The Institute for Fiscal Studies is undertaking a similar study on tobacco. Doubtless it will be as easy to pull apart as that on alcohol. The elasticity arguments in the report are highly subjective. No one knows from where they have been plucked. They are not empirically constructed because the IFS does not have the resources for that.
      Mr. Edward Davey: The hon. Gentleman criticises the Institute for Fiscal Studies, which is well respected. I did not realise that he believed that it was so bad. It took its data from the family expenditure survey of 1979–96.
      Sir Michael Spicer: When making a historical analysis of elasticity, one makes an assumption and includes it in the model that one is constructing. Assumptions based on historical data may not apply to the future. In the Canadian example, the assumptions applied to the future, but in the Swedish example they did not. Elasticity arguments are always subjective.
      Mr. Davey: If the hon. Gentleman reads the report, he will find that the research was controlled by, for example, ascertaining whether elasticity in the south-east of England was different from that in the rest of the country. That was achieved by ascertaining whether price elasticity was different before the single market began and after it was established. The elasticity was found to be the same. The hon. Gentleman's argument is therefore not borne out by the facts.
      Sir Michael Spicer: The hon. Gentleman is well versed in such matters. I am sure that he will accept that elasticity arguments in such studies, especially when based on historical data, are often highly subjective. That is especially true in the case that we are considering.
      In his contribution, the hon. Gentleman claimed that the beneficial—in his view—revenue effect of all the extra dosh and the great expenditure plans, which he will doubtless beat the Labour party to effecting because the Liberal Democrats want to spend even more money than the Labour party, were tremendous and not to be stopped. The only method therefore of dealing with smuggling was by physical means, such as X-ray scanners. The hon. Member for Workington wanted 50 and the Government want 12; doubtless the Liberal Democrats are somewhere in the middle.
      The hon. Members for Workington and for Kingston and Surbiton claimed that smuggling would be prevented by physical measures. That would be wonderful if the empirical evidence bore it out. However, in the 1998 pre-Budget report, the Government produced a list of physical measures such as X-ray screening, CAT marks, proposals for licences for pubs and related premises and provisions for punishing retailers for smuggled goods. That list was published in 1998 and repeated in 1999.
      Mr. Campbell-Savours: Do the measures work?
      Sir Michael Spicer: That is the whole point. During that period, smuggling has taken off.
      Mr. Campbell-Savours rose—
      Mr. Beard rose—
      Sir Michael Spicer: Many of the physical means have been implemented. We must grant the Government that. The Government and Customs and Excise have tried to increase—[Interruption.]
      The Second Deputy Chairman: Order. We cannot have continual interventions from a sedentary position. If the hon. Member for Bexleyheath and Crayford (Mr. Beard) wants to intervene, I should be grateful if he did it in the conventional way.
      Sir Michael Spicer: I shall give way shortly. However, I am trying to make the point—I hope calmly and collectedly—that the physical measures have been introduced and have been used increasingly. However, smuggling has increased much more quickly than the rate of the measures' introduction.
      Mr. Beard: The hon. Gentleman claims that the efforts to stem smuggling have been ineffective. However, it was revealed in the Treasury Committee's inquiry into HM Customs and Excise that the previous Administration cut by 300 the number of officers who dealt with smugglers. The previous Administration had given up trying to control smuggling.
      6.30 pm
      Sir Michael Spicer: There is no question but that both Administrations have tried to introduce new methods, methodologies and technologies to customs, but smuggling has increased rapidly even though more and more technology has been put in the system, particularly during the past two years over which, apparently, the Government have increased the physical resources going to Customs and Excise. There has to be at least a question mark over whether reliance on physical constraints and physical investigation as opposed to excise measures will be effective.
      Mr. Campbell-Savours: I understand that the hon. Gentleman chaired the Treasury Committee Sub-Committee that considered the issue, so can he give a clear answer to my direct question: do the scanners that we are to buy work?
      Sir Michael Spicer: I do not doubt that a scanner will scan effectively and will find—[Interruption.] We must deal with the question whether we will ever have enough scanners and whether the increased traffic—large vans from outside the European Union and the white van trade from inside—will swamp them, as is the case at present. The invasion flood of contraband articles is such that we cannot hope to control it physically. That is the argument. The hon. Gentleman may want more than 50 scanners, and he may have to have 500 or 5 million, but, given the massive differentials in cigarette duty, especially outside the EU, all the experience is that such measures are not effective or are at least questionable.
      Mr. Swayne: May I ask my hon. Friend about these scanners? If, as is increasingly the case, young men go to France for an agreeable weekend and buy, ostensibly legitimately, a large number of cigarettes—presumably for their own consumption—and then sell them in pubs in the south-east and parts of rural Hampshire, what will the scanners do to deter such trade? Very little, I suspect.
      Sir Michael Spicer: I am grateful to my hon. Friend, who makes a good intervention.

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      I put a question to the hon. Member for Workington, which he did not answer. Some countries have markedly reduced excise duties and, as a result, the position there has appreciated—smuggling has diminished considerably. Our country provides the example of increased reliance on technology accompanied by increased excise duties and a massive explosion in smuggling. We must properly ask whether there is substantive cause and effect between the rise in excise duty and the enormous increase in smuggling. That is why it is right for us at least to call for a proper investigation of the matter that should be made public so that we can debate it before determining whether the excise rate is correct.
      Mr. William Ross: I have opposed the year-on-year tobacco duty increases under Conservative and Labour rule, not least because Northern Ireland's tobacco industry suffers grievously as a result of them. I have also always opposed the constant ratchet effect in respect of road tax and the price of road fuel. We see Government policy on tobacco taxation as having three aims: increasing revenues, reducing consumption and preventing children from purchasing cigarettes. The Government's present approach is to increase tax by 5 per cent. above inflation, but that simply is not working; revenues have been undermined, tobacco consumption is rising and smugglers have no qualms about selling to children. For those reasons, we have put our names to some of the amendments and we certainly support the others.
      Despite what the hon. Member for Workington (Mr. Campbell-Savours) cheerfully told us, smuggling is not represented by someone walking across a border with a bag on his back; it is a vast organised criminal activity. This island has the advantage of a water barrier to the north, south, east and west, but Northern Ireland has the disadvantage of being tied in to an island with a land frontier. Therefore we have experience of fuel smuggling. Although that is not covered by the amendment, the same problems arise and we know the damage that has been done not only to revenues, but to the unfortunate individuals who try to run businesses selling that product in Northern Ireland when a much lower tax rate is in force a few yards away.
      The tobacco industry welcomes the Government's proposed measures to combat smuggling, including the 950 new Customs officers, but everyone in the industry in Northern Ireland believes that the tax rate will only encourage it. We are trying to stop smuggling, but we are also promoting a tax policy that encourages breaking the law, and even by the Government's own estimate, the new measures will reduce smuggling by only 10 per cent. at best.
      United Kingdom taxes are the highest in Europe. Sweden had the second highest until it made a 26 per cent. reduction because of smuggling. Denmark recently issued a statement pledging to reduce taxes by 2003 to bring it into line with its neighbours, and Hong Kong has issued a similar statement. The measures taken by Canada to change the economic environment in which its smugglers operate have already been referred to; legal sales fell to 1980 levels and smuggling all but disappeared. People may want a particular brand of tobacco or cigarettes as opposed to another. That is a question of personal choice. However, smuggling operates not on brand preference, but purely on price differential.
      Mr. Michael Clapham: The hon. Gentleman made a distinction between Ireland and Great Britain, saying that Ireland, which has a land border, is much more vulnerable to smuggling than an island with port facilities. Does he agree that an extra 1,000 officers and X-ray facilities may allow an island to control the racket to some degree, and that that would have an impact on tobacco sales inland? Will the X-ray scanners and the officers have an effect?
      Mr. Ross: One appreciates the fact that the increase in the number of officers and the new technology that is coming on stream will have an effect, but the tobacco industry in Northern Ireland does not believe that it will have the impact for which the Government evidently hope. Not all the tobacco that arrives in Great Britain necessarily comes across to Dover or even into England; some could come to Rosslare and go out through Larne. Gallaher's in Ballymena found that the hand-rolling tobacco that it had produced over many years went out of the United Kingdom legally and on to the continent. However, 10 days after it had left the factory, it was on sale on market stalls in and around Belfast. The Government know that, and we have been telling successive Governments about it for years.
      Smuggling is a big industry and we should not be under any illusions about what has happened. My information, which I am sure has been made available to other hon. Members, is that 3 million people in the United Kingdom smoke cigarettes on which UK duty has not been paid. I understand that the Government have admitted to losing £2.5 billion in revenue per annum; at least, that is what they stated in their pre-Budget report, published last November.
      Amendment No. 7, which has not been selected, would return taxes to pre-Budget levels. Amendment No. 8 would reduce the pre-Budget price of 20 cigarettes—if we assume that to be £3.92—by £1, to £2.92. It would also reduce the pre-Budget price of £8.05 for 50 g of hand-rolling tobacco to £3.50. In other words, it would bring retail prices down to levels that would remove the financial incentive for people to buy black market products. According to the industry, that, coupled with the £209 million worth of Government measures, would eliminate the black market altogether.
      As has been pointed out, owing to the substantial difference between United Kingdom and overseas tobacco prices, smuggling offers potentially high profits. The hon. Member for Workington mentioned the chap carrying a sack of tobacco products across the border from Switzerland to Italy. I suspect that if he did that seven days a week, he would have a reasonable wage at the end of the week, even given the relatively small price differential. How much would that be multiplied given the differentials between the Continent and the United Kingdom? It is worth the while of organised criminal gangs to become involved in such activity, and we believe that they have done so.
      Tax currently accounts for more than 80 per cent. of tobacco retail prices. Since 1997, the price of a typical packet of cigarettes in the United Kingdom has increased by more than £1. A typical packet of 20 costs the UK smoker well over twice what it costs his counterpart in Belgium or France, while the roll-your-own smoker pays nearly four times as much. The black market price is about £2.50, which enables large profits to be made from smuggling.

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      Revenue losses resulting from tobacco smuggling rose to some £2.5 billion between 1998 and 1999. According to the pre-Budget report, that amounts to about 25 per cent. of all tobacco revenue due. Since 1997 some £5 billion of tobacco tax revenue has been lost, and, as I have said, the retail price of a packet of cigarettes has risen by £1.
      Hon. Members have pointed out that the revenue fell last year, but as last year's Red Book will show, a fall was forecast not just for that year but for coming years. It all comes down to a simple tax problem that has plagued every ruler since taxes began. Once the amount of tax that people will pay relatively willingly has been exceeded, Governments encounter increasing resistance from taxpayers, who will therefore try to reduce their taxes.
      The really wealthy, of course, have always managed to reduce their taxes, not so much through tax avoidance schemes as by overseas trusts, for instance; that is perfectly legitimate. However, the small man—the ordinary citizen—will buy his petrol and pay the high price for it. He will grumble, because he will know that most of that will go into the Chancellor's pocket, but he will pay, because he can do no better. If you live in England, it is not worth your while to drive across to France to fill your car; if you live in Newry or Londonderry, it is worth going into the Irish Republic.
      Tobacco, however, is a great deal lighter, and a great deal more valuable than fuel in terms of volume. It is easier to transport and easier to hide, and the profits are vast. I do not know—although I am sure that if the Minister puts his mind to it, he can soon find out—how many packets of 20 cigarettes will go into a 40 ft container, but the revenue lost on that one container would probably go a long way towards paying for the lorry that is transporting the cigarettes. If someone could get a few loads through, even if he lost the lorries it might still be worth his while. I wonder what the economics really are; I am sure that the smugglers would take that into account.
      6.45 pm
      Let us be clear about the history. The smugglers began by importing hand-rolling tobacco. Currently, four out of five packets of hand-rolling tobacco consumed in the United Kingdom are smuggled in. Often, United Kingdom tobacco goes out and comes back again—tobacco that would normally have been sold in the UK. As I have said, much of it is prepared in Ballymena. In the United Kingdom, 50 g of hand-rolling tobacco costs £8.49; in Belgium, it costs only £1.70.
      Years ago, management and trade union representatives from Gallaher's factory came to the House and told us that the market for smuggled hand-rolling tobacco had reached saturation point. The next target, they said, would be cigarettes, and they were dead right. We told the officials of not just the present but the last Government that was the position, and events proved us correct.
      Our tax on cigarettes is the highest in the world. The legitimate cigarette market had decreased by 8 per cent. in 1998 and by 10 per cent. in 1999, yet cigarette smoking is increasing. Many millions of people are involved in the illegal cigarette trade, as suppliers and as buyers.
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      We believe that one packet in four consumed in the United Kingdom has been smuggled in, despite all the efforts to make smuggling more difficult by means of labelling and packaging.
      I think that the path we have been treading is counterproductive, and will not work in the future. It is time to look anew at what must be done. When smugglers can sell for between £2.20 and £2.50 a packet of cigarettes that costs £4.17 in the United Kingdom, they will find a market. That has a corrosive effect on society, and on people's honesty. More and more people go along with it, saying, "It is only a packet of fags; it does not really matter." That, however, amounts to supporting criminal gangs, and in criminal activity, one thing leads to another.
      We are talking not just about a loss of revenue, but about increased consumption, and easier availability of tobacco products to children. As we all know, smoking, drinking and drugs are the "in thing" among young people. That can be overcome only through education; the fact that a product is pricy, or the knowledge that it has been smuggled, adds an aura that will attract the young. There is a vastly increased level of criminality among millions of people. I think that activity of this kind will encourage non-compliance with other aspects of the law, contempt for the law and flouting of the law, and that that will have a damaging effect on the social fabric of the community.
      The Chancellor estimated that the yield from his 5 per cent. real increase would be £235 million in the current financial year, but previous forecasts have been unreliable, and have underestimated the rapid growth in smuggling. Consumption has increased by more than 5 per cent. since 1995, and by 4 per cent. since 1997; the trend is up, not down. I think that there has been too much "spinning" with regard to tax increases, in an attempt to make political capital.
      The Chancellor and the Prime Minister made great play of hypothecating £400 million of tobacco tax revenue to the NHS as part of the additional £2 billion that the Chancellor announced would be made available to it. I believe, however, that in a global tax system such as ours all the tax goes into one bucket, or pool, and all the spending comes out of that pool. The idea that it can be said that a particular element of taxation will benefit a particular spending Department is a nonsense—a swiz.
      As far as I remember, the original road tax started out as something designed to pay for roads. If that had continued, the whole of Britain would be covered in tarmac today. That is the lesson that every Member should learn. Hypothecated taxation is smoke and mirrors. It does not work. All the Government have to do is to say that they are putting in £400 million from tobacco, and two years later they take out £800 million or £900 million.
      Mr. Ruffley: The hon. Gentleman is developing a powerful argument. Is he aware that his arguments on the bogusness of hypothecation are strongly supported by the Institute for Fiscal Studies, a body that the Labour party, and, indeed, the Liberal Democrats, are so keen to pray in aid in these matters?
      Mr. Ross: I have read different comments by that body, but the hon. Gentleman is correct to say that it recognises the smoke and mirrors in the whole hypothecation argument.

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      Having said that about the Chancellor, I have to say that his figures are being contested. I understand—at least, my researchers tell me—that in the November 1999 pre-Budget report, he announced the hypothecation of tobacco receipts. He said that the yield of a 5 per cent. real increase would be £300 million. Just before the March Budget, the Minister for Public Health talked of £250 million. In his Budget, the Chancellor spoke of £300 million, and on 5 April the Prime Minister told the House that the figure was £400 million—a figure confirmed by the Chancellor the following day.
      In the light of the reliability of the statements by the people running the Government's finances, we need to view those figures with a certain caution. Few taxes are as counterproductive as those on alcohol, tobacco and road fuel. The policy that was embarked on a good many years ago has been shown to have run its course. It is time to think a new way forward.
      I am sorry that the right hon. Member for Bromley and Chislehurst (Mr. Forth) has left the Chamber—[HON. MEMBERS: "He is still here."] Oh, yes, so he is. He was attacked for what he said about the different levels of taxation across borders, but I wonder, as I am sure he does, whether open borders and different levels of taxation can really co-exist.
      Mr. Ruffley: In supporting amendment No. 1, I want to advance an argument from an important part of the British economy, the brewing industry—in particular, a distinguished company in my constituency, Greene King. I want to explore an argument that it has advanced. In its view and that of the analysts who advised it, their suggestions would reduce the pernicious effects of alcohol smuggling.
      The margins on smuggled beer are such that smuggling could rapidly become much less profitable were there to be a cut in beer duty. Greene King argues that a cut of about 2p per pint would be enough, at the margin, to ensure that fewer smugglers would be prepared to run the risk of smuggling beer from France to this country and, in particular, to East Anglia. It suggests an initial cut of 2p to reduce the profit element from bootlegging. That is a modest enough proposal, bearing in mind the fact that, as has been observed in the debate, the excise duty on a pint of beer in France is equivalent to about 5p, whereas in the United Kingdom it is about 33p.
      The tax regime for beer has not leapt into life since I May 1997. I am not inviting the Committee to believe that all the problems that beer producers are experiencing are due to policies set in the past three years or so. However, I am inviting it to recognise the clear fact that beer sales have declined over the past decade, which has led to closures of breweries and public houses. The figures do not make happy reading. Sixteen of the largest 85 breweries have either closed, or their closure has been announced, since May 1997. The Countryside Agency has recently warned of its concern on behalf of rural areas that, every week, six village pubs close.
      I need no convincing of the genuine fear that publicans and licensed victuallers in my constituency of Bury St. Edmunds have about their future if the tax regime is not amended by a modest 2p cut in duty. I have visited country pubs in my part of Suffolk and the message is loud and clear: the Government should listen and entertain the possibility of duty cuts.
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      I do not wish to get into an arcane but doubtless interesting debate with the hon. Member for Kingston and Surbiton (Mr. Davey). I do not wish to logic chop about what Crawford, Smith and Tanner did or did not say in volume 20, issue No. 3, 1999, of "Fiscal Studies" about own-price elasticities or cross-price elasticities, save to say that my hon. Friend the Member for West Worcestershire (Sir M. Spicer) threw some serious spanners in the works of the hon. Gentleman's argument by observing that, in different countries, the assumptions on elasticities can be subjective.
      It ill-behoves any hon. Member to base an indirect tax policy on one or two academic studies that do not prove to be conclusive. Intuition and basic economics suggest that there can be cuts in beer duty without necessarily seeing a decline in revenue.
      Mr. Edward Davey rose—
      Mr. Ruffley: I did not want to go down this avenue, but the hon. Gentleman tempts me.
      Mr. Davey: If the hon. Gentleman does not want to have the debate on price elasticities, how else does he want to decide the issue about whether the taxes should go up or down? Has he invented some new science?
      Mr. Ruffley: Because of time, I do not wish to go into detail. I do not accept the hon. Gentleman's argument that if Crawford, Smith and Tanner say that the policy will lead to a decline in revenue, it must be so. It is one academic study, doubtless backed by some Treasury economist. For the hon. Gentleman to say that for all time and in all cases one academic study proves the case is not realistic politics. He is not living in the real world. I would like an argument, but I say merely that I do not accept that we can base a whole tax system on one or two academic studies.
      The scale of the problem needs to be debated. The figures that the brewers and licensed retailers have produced on the volume of bootlegging into this country makes fairly depressing reading. For my region of East Anglia, I have figures on the destinations of white vans carrying beer. The estimate for the total number of vans travelling into London in 1999 was 12,690. Of the top 20 destinations, in my region the estimate for Chelmsford is 4,790 and for Peterborough it is 1,870. Those statistics are very real for publicans and licensed victuallers in my constituency. They think that the stuff is flooding into the centres of Chelmsford and Peterborough and percolating into market towns and surrounding areas in Bury St. Edmunds.
      The evidence—[Interruption.] If the hon. Member for Kingston and Surbiton wants to witter away from a sedentary position, he is welcome to do so, but does he want to intervene?
      Mr. Davey indicated dissent.
      Mr. Ruffley: The impact on the rural economy is such that Greene King must have a point. With beer duty set at the level that it is, it is a regressive tax hitting hardest those who can least afford to pay it. It impacts on the livelihood and viability of pubs, particularly those in villages. The rural economy, at the margin, is affected by that process.

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      7 pm
      As we have heard from the hon. Member for East Londonderry (Mr. Ross), the high beer tax increases introduced by the Chancellor since the Government took office are having a corrosive effect on the United Kingdom's law and order regime, and in influencing whether individuals obey the law or succumb to the temptations that have been created to break the law. The Government said that they would be tough on crime and tough on the causes of crime, so the effect of their tax increases should give them some pause for thought. They say that they are tough on inflation, but every 1 p increase in beer duty increases the retail prices index by 0.15 per cent.
      The Government are also happy to pray in aid the virtues—there are virtues—of the single-market regime, but their policy and practice on beer duty is deeply antipathetic to the European single market. The Committee will need no reminding of the Council of Ministers decision in 1992 that future beer duty changes should be directed towards achieving the common market rate of about 8p on an average pint of beer.
      Most European countries have made considerable progress towards achieving the common market duty rate. Since 1992, France and other low duty countries have doubled or trebled their duty rates. Conversely, Sweden, Denmark and Norway have made considerable reductions to achieve the target rate. Only one country—the United Kingdom—has moved significantly away from the target rate. Nevertheless, the Government claim to be at the heart of Europe.
      Although I do not agree with very much of what comes out of Brussels, I think that the United Kingdom Government should be taken at their word. If they are serious about the European single market and trying to make it work, they should listen to the voices of brewing and to people at Greene King. Ministers should intelligently examine the possibility of making modest cuts in beer duty—to save jobs in rural areas, to save our pubs and to maintain a vibrant village pub life in the United Kingdom.
      Mr. John Swinney: The hon. Member for Kingston and Surbiton (Mr. Davey) wondered what might be Conservative Members' central proposition in this debate. I believe, after much careful listening, that their basic argument is that a lower differential in tobacco and alcohol prices between the United Kingdom and our European partners would reduce smuggling. Although that point is clear, I think that it significantly over-simplifies the argument. Even if the point could be proven—today, the Committee has heard enough conflicting evidence on the point to debate it endlessly—it does not provide a full explanation.
      The decisions that a society makes on alcohol duty, tobacco duty, vehicle excise duty and road fuel duty—which the hon. Member for East Londonderry (Mr. Ross) dealt with in his speech—are based on a variety of perspectives and objectives. Revenue raising could be one of the Government's objectives in setting duty levels. Alternatively, duty levels could be set to try to generate a particular outcome.
      The present and previous Governments have increased road fuel duty well in excess of inflation in an attempt to reduce vehicle use. However, as any hon. Member
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      representing a rural constituency could tell any Government, increasing that duty to achieve that objective is an utter waste of time, because our constituents in rural constituencies have no alternative to using their cars. Increasing that duty to achieve that objective has therefore been particularly useless.
      Tobacco or alcohol duty may be increased to achieve other objectives, such as to improve public health, essentially by saying to people, "Smoking and drinking may not be terribly good for you, and you should think twice before spending your money on them."
      Sir Robert Smith: Does the hon. Gentleman think that although the declared intention behind increasing those duties may have been based on health or environmental factors, the Treasury had its eye on the fact that it could make much more money by increasing them?
      Mr. Swinney: That logic is absolutely irrefutable in relation to the road fuel duty increases that I have had to watch being approved by the House in my three years as a Member.
      Specific tobacco or alcohol duty increases may have a particular purpose other than to stymie increased smuggling or to extend the price differentials between the United Kingdom and our European partners, while sending a message to people in our community that excessive drinking and smoking may not be good for them. There has been some confusion in the debate about the ideal level for excise duties and about how to deal with smuggling.
      We have had some interesting exchanges on what could be done to reduce smuggling, and the hon. Member for Workington (Mr. Campbell-Savours) made a particularly lively comment on the number of scanners that could be used. However, in dealing with smuggling the starting point must be the maintenance of an effective Customs and Excise network properly to protect the access points to the markets in our community. As those of us who are familiar with the changes made by the previous Conservative Government will know, Conservative Members left the Customs and Excise network in tatters. I support this Government's attempts to try to restore some of that network, but I am sceptical that their action will be sufficient to tackle the problem.
      Today, Conservative Front Benchers have dealt with the matter of alcohol sales to minors as though the problem has been caused only by smuggling. In fact, the cause of the problem goes much wider than smuggling. Our community's regulatory and legal systems must enable us to protect minors from gaining access to alcohol and tobacco products.
      We have to ask ourselves two fundamental questions on the issue of excise duty. First, are we entitled to maintain duty differentials between this country and our European partners? I think that, unless we are all signed up to tax harmonisation—which I am not—we are entitled to maintain the differentials. Secondly, do we expect excise duties and the way in which they are determined to have a credible effect on the purchasing patterns of individuals in our society? I have been dismissive of the impact of road fuel duty on the fuel purchasing patterns of my constituents, who live in a rural area, because I do not believe that they have an alternative to using

      77
      their cars. However, I am fairly confident that excise duties could affect people's patterns of purchasing tobacco and alcohol products.
      The core of the fair parts of the amendments tabled by Conservative Members—and of the comments made by the hon. Member for West Worcestershire (Sir M. Spicer), who made a compelling case—dealt with why the Taylor report should be put into the public domain. Today, we shall have to hear from Ministers a new, different and very credible explanation of why that report has not been made public. If publicly commissioned and funded documents are not to be made public as we enter the freedom of information age, I wonder what on earth that freedom of information age is all about. What is the new age about if not to provide us with an opportunity to examine the issues?
      The heart of the freedom of information issue is whether the House will be able to have reasoned and measured debates that are based on evidence. We have to keep a very keen eye on the issue. If the Committee or the House refuses to look the evidence straight in the face, we shall not be serving the public particularly effectively. The Conservatives have not proved that there is an inextricable link between smuggling and levels of excise duty, but I should like more evidence to be in the public domain so that we can arrive at a proper judgment.
      Mr. Timms: We have had an interesting discussion on the amendments. I shall briefly explain to the right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for West Worcestershire (Sir M. Spicer) why the figure of 3.4 per cent. was used for revalorising excise duties this year. Every year since the general election, we have revalorised duties by the expected increase in the all-items retail prices index over the 12 months from the September before the Budget. Since the general election in May 1997, the forecasts have been lower than the outturn, so the duty increases have been less than they would have been if we had used the actual inflation figure. Last year, inflation increases in excise duties were 1.3 per cent., whereas this year they are 3.4 per cent. It is swings and roundabouts. The hon. Member for West Worcestershire referred to RPIX and the 2.5 per cent. target, but it is the all-items RPI figure that is used for revalorisation, not the figure excluding mortgage payments. That accounts for some of the difference. I do not recall any complaints from Opposition Members last year at the small inflation increases in excise duties and there should not be any about the 3.4 per cent. increase this year.
      Mr. Howard Flight: Will the Minister confirm that the Government moved to using the forecast because they had two increases in fuel duty in one year? Otherwise, they could have continued with past practice of using the same inflation index for taxes and allowances.
      Mr. Timms: That was not the reason. The reason was the timing of the changes. The decisions are now made at a different time of year.
      In 1998, the Government published the alcohol, tobacco and fraud review that we had commissioned. It examined fraud and smuggling in some detail, particularly issues relating to alcohol. That resulted in 90 recommendations to help stem and reduce levels of illegal activity. Customs
      78
      was allocated £44 million for the period to 31 March 2002 to take forward the key recommendations. It has been acknowledged in the debate that we have implemented the main recommendations. Customs continues to work closely with the trade on those that remain.
      Smuggling is a serious threat to our health and revenue objectives, but we have made it clear that we are not going to allow criminals to dictate our agenda or influence the levels of our duties. Following the 1999 Budget and the sharp rise in tobacco smuggling, my right hon. Friend the Chancellor appointed Martin Taylor to conduct an independent evaluation of tobacco smuggling last summer. His conclusions formed part of the new anti-smuggling strategy described in the Government paper, "Tackling Tobacco Smuggling", published on 22 March.
      Mr. Letwin: Will the Financial Secretary now commit the Government to publishing the Taylor report?
      Mr. Timms: There has been some discussion of that point during the debate. I was particularly interested in what the hon. Member for West Worcestershire said, but he was mistaken. My right hon. Friend wrote to the Chairman of the Treasury Committee on 26 January, saying:
      I am afraid that the advice which Martin Taylor gave to me contained matters that were recognised to be operationally sensitive, the release of which, even in summary form, would give smugglers a valuable insight into Customs' strategy for tackling tobacco smuggling.
      My hon. Friend the Member for Workington (Mr. Campbell-Savours) was right on that point. I would have thought that the Conservatives would have been aware of that letter.
      7.15 pm
      Mr. Heathcoat-Amory: That is why I asked the Chancellor if he would place a copy of the report in the Library, with excisions of matters of operational sensitivity to Her Majesty's Customs and Excise. We fully understand that any matters of national importance to do with the intelligence services should be excised. The reply made no reference to that point, saying simply that Martin Taylor's advice to the Chancellor was personal and confidential.
      Mr. Timms: I am glad that the right hon. Gentleman was aware of that; his hon. Friend the Member for West Worcestershire appeared not to be. The important point is that the recommendations on tackling smuggling were published in "Tackling Tobacco Smuggling" and have been fully implemented by the Government.
      Mr. Letwin: Will the Minister now commit the Government to publishing the Taylor report with all operationally sensitive elements excised, and if not, why not?
      Mr. Timms: My right hon. Friend's letter makes it clear why that would not be sensible. We have published the recommendations and are implementing them, as well as putting around 1,000 extra officers into tackling the problem, reversing the cuts in Customs under the previous Government. Our aim is to put cigarette smuggling into decline within three years. The additional staff dedicated to combating smuggling in the tourist lanes at the channel ports will yield important dividends in the fight against

      79
      alcohol smuggling as well, which featured particularly in the contribution of the hon. Member for Bury St. Edmunds (Mr. Ruffley).
      My hon. Friend the Member for Workington rightly put great emphasis on the importance of scanners and asked me to comment on the issue, which I am pleased to be able to do. He is right about the significance of what we have done. We have committed £44 million to the purchase of a national network of scanners. There will be at least a dozen. All the main freight ports will be covered. Some of the scanners will be mobile so that we can move them to where the risk is highest. He would not expect me to say precisely where they will all be, for obvious reasons, but the first scanners will be in operation before the end of this calendar year and the remainder will be introduced during the next calendar year, so we are moving rapidly.
      Mr. Heathcoat-Amory: If the scanners are going to be so quickly deployed and so successful, why does the Government's report say that the amount of smuggling will increase over the next three years?
      Mr. Timms: The scale of the smuggling problem is evident. We have been open and frank about that. The right hon. Member for Bromley and Chislehurst (Mr. Forth) asked me about the scale of smuggling. The figures are in "Tackling Tobacco Smuggling". It is a characteristic of this Government that we commit ourselves only to targets that we can deliver and we only make promises that we can keep. That is why we have committed ourselves to reversing the increase in smuggling within three years. Customs is confident that it can deliver that and I have no doubt that it will.
      Mr. Casale: I accept that smuggling is a threat to our health and revenue policies, but will my hon. Friend confirm that those policies are not being undermined completely by smuggling? Revenues from tobacco are going up and there is clear evidence of improvements in public health through people giving up smoking as a result of the increases. Will he further confirm that altering the price of tobacco is not the only possible anti-smuggling policy? Is it not a matter of regret that our increases in policing and controls are not supported by the Opposition?
      Mr. Timms: My hon. Friend is right about the importance of tobacco duty as part of an anti-smoking policy. Interestingly, the shadow Health Secretary agrees with him on that point. During the debates on last year's Finance Bill, the Opposition tabled amendments to freeze or reduce all tobacco duties on the grounds that the rises encouraged smuggling. To listen to some speeches from Opposition Members today—including Front Benchers—one might think that that was still their policy. In fact, the policy this year is to call for some reports.
      Three months after the Finance Bill debates last year, the shadow Health Secretary published a review of Conservative policy on smoking that dropped the previous Conservative opposition to the advertising ban, and reversed the Conservative party's opposition to tobacco tax increases.
      80
      The review stated, presumably, the view of all Opposition Front Benchers—that duty increases on cigarettes
      send out the correct health message.
      He is absolutely right.
      Mr. Forth: Rubbish.
      Mr. Timms: The right hon. Member says that that is rubbish, and he has put his name to a very different amendment from that tabled by his Front-Bench colleagues.
      In this debate, I was expecting to congratulate Opposition Front Benchers on a sensible policy U-turn. However, the right hon. Member for Wells still had the rhetoric of last year, even though the policy substance and the amendment are different.
      Mr. Flight: Will the Financial Secretary give way?
      Mr. Timms: No, I have to make some headway, tempting though it is to give way to the hon. Gentleman.
      I welcome the modest change proposed in the Conservative amendment, which recognises, as the shadow Health Secretary has done, that duty increases on cigarettes send out the correct health message.
      A couple of days ago, I replied to one of the many letters that I receive; this one was from Wakefield health authority, and was signed by the director and deputy director of public health and the director and deputy director of the Wakefield health action zone. The letter made the straightforward point that increasing the price of tobacco through taxation leads to a reduction in consumption and, most importantly, helps to discourage young people from becoming addicted. That is the overwhelming view of those who work in health care and are concerned about these issues. That has been recognised, rightly, by the shadow Health Secretary.
      On alcohol duties, there is a need to maintain the real value of Government revenue to help achieve all our objectives, such as strengthening the health service and education. Excise duty and value added tax on alcohol make a significant contribution to the Exchequer—more than £10 billion in 1998–99.
      This is the first increase in the beer, wine and main cider duty rates since January 1999. It is worth making the point that alcoholic drinks are now taxed less heavily than they were at the beginning of the single market. Compared with duty rates in 1993, excise duty on beer has fallen in real terms by more than 4 per cent. The proportion of duty in relation to the cost of an on-trade pint of beer has fallen from 38 per cent. of the retail selling price in 1982 to about 30 per cent. now.
      Some claim that high taxation is putting alcohol producers and pubs out of business, but that is not the case. There are lots of reasons why some businesses fail and others prosper. A significant number of breweries have reported extremely good or even record profits, such as Shepherd Neame, Young's, Belhaven, and Gales.
      Abandoning the duty increases along the lines proposed by the two amendments would cost £90 million in alcohol duty and £235 million in tobacco duty. Amendment No. 8, tabled by the right hon. Member for Bromley and Chislehurst, would significantly cut tobacco duty rates, and would be particularly damaging. It ignores the vital health implications

      81
      of consequent reductions in the cost of tobacco—some 94p off the price of a typical pack of 20 cigarettes—and would cost the Exchequer £1.8 billion. Public services, including the health service, would be deprived of essential funding, and future demands on the health service would be compounded by a significant growth in the number of smokers who would require treatment.
      Reference has been made to the work of the Treasury Committee in this area, and I refer hon. Members to the conclusions of its investigation into Customs and Excise, which was a worthwhile and important contribution to the debate. The Committee observed:
      academic evidence does not lend weight to the argument that reducing duty rates would discourage cross-Channel trade, legitimate or otherwise to the extent that government revenue would increase.
      The hon. Member for Kingston and Surbiton (Mr. Davey) rightly drew attention to that point. The Committee also noted that it did not believe that reducing duty rates
      would affect large-scale smuggling which appears to be the major problem.
      The Committee was right about that, and the important point was made by the hon. Member for West Worcestershire, but missed by his Front-Bench colleagues. The serious problem about cigarette smuggling is not duty-paid cigarettes from the rest of the EU being brought into the UK, but cigarettes being smuggled from outside the EU, frequently with no duty having been paid at all. A small variation in the rate of duty in the UK will not change that. That is why, as my hon. Friend the Member for Erewash (Liz Blackman) rightly said, there are serious smuggling problems in Italy and Spain, where the duty rate is much lower. It is not a problem of comparative duty rates within the EU, but of smuggling from outside the EU.
      In short, the Government do not intend to produce any further reports on smuggling to the timetable that has been indicated, nor do we intend to reduce tobacco duty rates. It would be quite wrong to make that reduction. I urge the House to reject the amendments.
      Mr. Letwin: Some elements of this debate have been positively surreal. We were treated to a disquisition on economics by the hon. Member for Workington (Mr. Campbell-Savours), in which he explained that changes in duty would have no effect on the propensity to smuggle. That was a unique contribution to the economics of welfare that will live in our memories.
      The hon. Member for Kingston and Surbiton (Mr. Davey) referred to some academic studies. He may be right that it remains the case, as the Treasury model assumes, that, in liquor and tobacco, we have not yet reached the crossover point—the point of diminishing returns. It may be right that reductions or stasis in duties will have a commensurate, or almost commensurate, effect on revenues. The Opposition amendments raise a different matter. I declared my interest in the register, as I suppose that there are some firms with which my bank has a relationship that would be affected.
      More important than that, millions of our fellow countrymen are being criminalised under present policy. The Financial Secretary is in possession of a valuable item in that connection—a serious report, commissioned with taxpayers' money from a distinguished business man who reported to the Chancellor, who is not an ordinary
      82
      individual. We have reason to believe that that report may contain important evidence and observations about the relationships—
      Mr. Campbell-Savours: The hon. Gentleman is guessing.
      Mr. Letwin: I am guessing, and I am doing so because a cover-up is going on. It is not in the interests of the Executive in the long run or of Parliament in the short term that such a cover-up should continue.
      The Minister and his colleagues are in possession of a report that may show a clear relationship between the level of duty and the duty differential currently obtaining on the one side, and the level of smuggling, which is having a huge and—as even the Government's own report admits—growing effect on the criminalisation of very many of our fellow countrymen. That is not a matter to be laughed off or dismissed by any study, however econometrically valid or otherwise, of the relationship between duty and revenue. We are dealing with a social crisis that will not be resolved by a few scanners. The Government do not think that and they do not say that in their report, and the issue has not been resolved after repeated attempts at administrative action.
      7.30 pm
      Mr. Timms: The hon. Gentleman mentioned people being criminalised. Will he confirm that people who indulge in criminal activity do so of their own will and that it is right that they should be caught and punished?
      Mr. Letwin: Yes and yes, and yet this is the Government who came to power under the slogan, "Tough on crime, tough on the causes of crime." This issue is a major cause of crime in this country and there comes a moment when the problem becomes so great that the social inhibitions against criminal activity that normally restrain decent individuals in our society begin to break down. If the Financial Secretary has not noticed that happening, he is less percipient than I gave him credit for.
      The Government know, and the report they commissioned made it clear—we suspect—that the main cause of the smuggling today is the duty differential. All the Opposition ask this evening is something that this Government, of all Governments, are bound to concede, being as they are so deeply devoted to the principle of freedom of information. We ask that they do not proceed with further duty increases until they bring before the House a clear and distinct report on the relationship between smuggling and duty.
      Mr. Andrew Stunell: I have been following the hon. Gentleman's argument with some care. Is he saying that there comes a point when the pressure towards criminal behaviour is such that the Government have to give way? Does he believe that that applies to cannabis and the widespread breaking of the law on its consumption?
      Mr. Letwin: I am amazed by the exceptional ability of the hon. Gentleman, who has been following our remarks with great care but has not been in the Chamber for almost the entire debate. I am not suggesting that the Government

      83
      should give up their attack, in this case or in others. I suggest that the Government should operate on a sensible and professional basis of sound evidence, and not conceal the evidence that they have from the House. That is a proposition so evident that I would have thought that Ministers, on reflection, will concede it.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 113, Noes 309.

      Division No. 174]

      [7.33 pm

      AYES

      Amess, David

      Lidington, David

      Ancram, Rt Hon Michael

      Lilley, Rt Hon Peter

      Arbuthnot, Rt Hon James

      Loughton, Tim

      Bercow, John

      Luff, Peter

      Blunt, Crispin

      Lyell, Rt Hon Sir Nicholas

      Boswell, Tim

      MacGregor, Rt Hon John

      Bottomley, Peter (Worthing W)

      McIntosh, Miss Anne

      Bottomley, Rt Hon Mrs Virginia

      MacKay, Rt Hon Andrew

      Brady, Graham

      Maclean, Rt Hon David

      Brazier, Julian

      McLoughlin, Patrick

      Brooke, Rt Hon Peter

      Malins, Humfrey

      Browning, Mrs Angela

      Mates, Michael

      Bruce, Ian (S Dorset)

      Mawhinney, Rt Hon Sir Brian

      Cash, William

      May, Mrs Theresa

      Chapman, Sir Sydney (Chipping Barnet)

      Moss, Malcolm

      Norman, Archie

      Clappison, James

      Ottaway, Richard

      Collins, Tim

      Page, Richard

      Cormack, Sir Patrick

      Paice, James

      Cran, James

      Pickles, Eric

      Curry, Rt Hon David

      Portillo, Rt Hon Michael

      Davies, Quentin (Grantham)

      Prior, David

      Davis, Rt Hon David (Haltemprice)

      Randall, John

      Dorrell, Rt Hon Stephen

      Redwood, Rt Hon John

      Duncan Smith, Iain

      Robathan, Andrew

      Fabricant, Michael

      Robertson, Laurence

      Fallon, Michael

      Ross, William (E Lond'y)

      Flight, Howard

      Rowe, Andrew (Faversham)

      Forth, Rt Hon Eric

      Ruffley, David

      Fowler, Rt Hon Sir Norman

      Sayeed, Jonathan

      Fox, Dr Liam

      Shephard, Rt Hon Mrs Gillian

      Gale, Roger

      Simpson, Keith (Mid-Norfolk)

      Garnier, Edward

      Spicer, Sir Michael

      Gibb, Nick

      Stanley, Rt Hon Sir John

      Gill, Christopher

      Steen, Anthony

      Gray, James

      Swayne, Desmond

      Green, Damian

      Syms, Robert

      Greenway, John

      Tapsell, Sir Peter

      Grieve, Dominic

      Taylor, Ian (Esher & Walton)

      Hague, Rt Hon William

      Taylor, John M (Solihull)

      Hammond, Philip

      Taylor, Sir Teddy

      Hawkins, Nick

      Townend, John

      Heald, Oliver

      Tredinnick, David

      Heathcoat-Amory, Rt Hon David

      Trend, Michael

      Hogg, Rt Hon Douglas

      Tyrie, Andrew

      Horam, John

      Waterson, Nigel

      Howarth, Gerald (Aldershot)

      Whittingdale, John

      Jack, Rt Hon Michael

      Widdecombe, Rt Hon Miss Ann

      Jackson, Robert (Wantage)

      Wilkinson, John

      Jenkin, Bernard

      Willetts, David

      Johnson Smith, Rt Hon Sir Geoffrey

      Wilshire, David

      Winterton, Mrs Ann (Congleton)

      Key, Robert

      Winterton, Nicholas (Macclesfield)

      King, Rt Hon Tom (Bridgwater)

      Yeo, Tim

      Kirkbride, Miss Julie

      Young, Rt Hon Sir George

      Laing, Mrs Eleanor

      Lansley, Andrew

      Tellers for the Ayes:

      Leigh, Edward

      Mr. Geoffrey Clifton-Brown

      Letwin, Oliver

      and

      Lewis, Dr Julian (New Forest E)

      Mr. Peter Atkinson.

      84

      NOES

      Abbott, Ms Diane

      Davey, Valerie (Bristol W)

      Adams, Mrs Irene (Paisley N)

      Davidson, Ian

      Ainger, Nick

      Davies, Rt Hon Denzil (Llanelli)

      Ainsworth, Robert (Cov'try NE)

      Dawson, Hilton

      Allen, Graham

      Dean, Mrs Janet

      Armstrong, Rt Hon Ms Hilary

      Denham, John

      Ashton, Joe

      Dobbin, Jim

      Atherton, Ms Candy

      Donohoe, Brian H

      Atkins, Charlotte

      Doran, Frank

      Austin, John

      Dowd, Jim

      Ballard, Jackie

      Drew, David

      Barnes, Harry

      Dunwoody, Mrs Gwyneth

      Battle, John

      Eagle, Angela (Wallasey)

      Bayley, Hugh

      Edwards, Huw

      Beard, Nigel

      Ennis, Jeff

      Beckett, Rt Hon Mrs Margaret

      Etherington, Bill

      Berth, Rt Hon A J

      Fearn, Ronnie

      Bell, Martin (Tatton)

      Field, Rt Hon Frank

      Bell, Stuart (Middlesbrough)

      Fisher, Mark

      Benn, Hilary (Leeds C)

      Fitzsimons, Lorna

      Benn, Rt Hon Tony (Chesterfield)

      Flint, Caroline

      Bennett, Andrew F

      Flynn, Paul

      Bermingham, Gerald

      Foster, Rt Hon Derek

      Berry, Roger

      Foster, Don (Bath)

      Best, Harold

      Betts, Clive

      Foulkes, George

      Blackman, Liz

      Gardiner, Barry

      Blears, Ms Hazel

      George, Andrew (St Ives)

      Blunkett, Rt Hon David

      George, Bruce (Walsall S)

      Borrow, David

      Gerard, Neil

      Bradley, Keith (Withington)

      Gibson, Dr Ian

      Brand, Dr Peter

      Godman, Dr Norman A

      Breed, Colin

      Godsiff, Roger

      Brinton, Mrs Helen

      Goggins, Paul

      Brown, Rt Hon Nick (Newcastle E)

      Golding, Mrs Llin

      Brown, Russell (Dumfries)

      Gordon, Mrs Eileen

      Browne, Desmond

      Griffiths, Jane (Reading E)

      Bruce, Malcolm (Gordon)

      Griffiths, Nigel (Edinburgh S)

      Buck, Ms Karen

      Griffiths, Win (Bridgend)

      Butler, Mrs Christine

      Grocott, Bruce

      Campbell, Rt Hon Menzies (NE Fife)

      Grogan, John

      Gunnell, John

      Campbell, Ronnie (Blyth V)

      Hain, Peter

      Campbelh-Savours, Dale

      Hall, Mike (Weaver Vale)

      Caplin, Ivor

      Hall, Patrick (Bedford)

      Casale, Roger

      Hamilton, Fabian (Leeds NE)

      Caton, Martin

      Hancock, Mike

      Chaytor, David

      Hanson, David

      Clapham, Michael

      Heal, Mrs Sylvia

      Clark, Rt Hon Dr David (S Shields)

      Healey, John

      Clark, Dr Lynda

      Heath, David (Somerton & Frome)

      (Edinburgh Pentlands)

      Henderson, Doug (Newcastle N)

      Clarke, Charles (Norwich S)

      Henderson, Ivan (Harwich)

      Clarke, Eric (Midlothian)

      Hill, Keith

      Clarke, Rt Hon Tom (Coatbridge)

      Hinchliffe David

      Clarke, Tony (Northampton S)

      Hodge, Ms Margaret

      Clelland, David

      Hoey, Kate

      Clwyd, Ann

      Hood, Jimmy

      Coaker, Vernon

      Coffey, Ms Ann

      Hoon, Rt Hon Geoffrey

      Colman, Tony

      Hope, Phil

      Connarty, Michael

      Hopkins, Kelvin

      Corbett, Robin

      Howells, Dr Kim

      Corston, Jean

      Hughes, Ms Beverley (Stretford)

      Cranston, Ross

      Hughes, Kevin (Doncaster N)

      Crausby, David

      Hughes, Simon (Southwark N)

      Cryer, Mrs Ann (Keighley)

      Humble, Mrs Joan

      Cryer, John (Hornchurch)

      Hurst, Alan

      Cummings, John

      Hutton, John

      Cunningham, Rt Hon Dr Jack (Copeland)

      Illsley, Eric

      Jackson, Ms Glenda (Hampstead)

      Cunningham, Jim (Cov'try S)

      Johnson, Alan (Hull W & Hessle)

      Dalyell, Tam

      Johnson, Miss Melanie (Welwyn Hatfield)

      Darting, Rt Hon Alistair

      Davey, Edward (Kingston)

      Jones, Rt Hon Barry (Alyn)

      85

      Jones, Helen (Warrington N)

      Prentice, Gordon (Pendle)

      Jones, Ms Jenny (Wolverh'ton SW)

      Prosser, Gwyn

      Purchase, Ken

      Jones, Jon Owen (Cardiff C)

      Quin, Rt Hon Ms Joyce

      Jones, Dr Lynne (Selly Oak)

      Quinn, Lawrie

      Jones, Martyn (Clwyd S)

      Radice, Rt Hon Giles

      Jowell, Rt Hon Ms Tessa

      Rapson, Syd

      Kaufman, Rt Hon Gerald

      Raynsford, Nick

      Keen, Alan (Feltham & Heston)

      Roche, Mrs Barbara

      Kemp, Fraser

      Rowlands, Ted

      Khabra, Piara S

      Roy, Frank

      Kidney, David

      Ruane, Chris

      Kilfoyle, Peter

      Ruddock, Joan

      King, Ms Oona (Bethnal Green)

      Russell, Bob (Colchester)

      Ladyman, Dr Stephen

      Russell, Ms Christine (Chester)

      Lawrence, Mrs Jackie

      Ryan, Ms Joan

      Laxton, Bob

      Salter, Martin

      Lepper, David

      Sanders, Adrian

      Leslie, Christopher

      Sarwar, Mohammad

      Levitt, Tom

      Savidge, Malcolm

      Lewis, Ivan (Bury S)

      Sawford, Phil

      Linton, Martin

      Sedgemore, Brian

      Livsey, Richard

      Sheerman, Barry

      Lloyd, Tony (Manchester C)

      Sheldon, Rt Hon Robert

      Llwyd, Elfyn

      Skinner, Dennis

      McAvoy, Thomas

      Smith, Rt Hon Andrew (Oxford E)

      McCafferty, Ms Chris

      Smith, Angela (Basildon)

      McDonagh, Siobhain

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      McDonnell, John

      McFall, John

      Smith, John (Glamorgan)

      McIsaac, Shona

      Smith, Llew (Blaenau Gwent)

      McKenna, Mrs Rosemary

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

      Mackinlay, Andrew

      Snape, Peter

      McNamara, Kevin

      Soley, Clive

      McNulty, Tony

      Southworth, Ms Helen

      MacShane, Denis

      Spellar, John

      McWalter, Tony

      Squire, Ms Rachel

      McWilliam, John

      Starkey, Dr Phyllis

      Mahon, Mrs Alice

      Steinberg, Gerry

      Marsden, Gordon (Blackpool S)

      Stevenson, George

      Marsden, Paul (Shrewsbury)

      Stewart, David (Inverness E)

      Maxton, John

      Stewart, Ian (Eccles)

      Meacher, Rt Hon Michael

      Stinchcombe, Paul

      Meale, Alan

      Stoate, Dr Howard

      Michael, Rt Hon Alun

      Strang, Rt Hon Dr Gavin

      Michie, Bill (Shef'ld Heeley)

      Straw, Rt Hon Jack

      Michie, Mrs Ray (Argyll & Bute)

      Stringer, Graham

      Milburn, Rt Hon Alan

      Stuart, Ms Gisela

      Miller, Andrew

      Sutcliffe, Gerry

      Mitchell, Austin

      Swinney, John

      Moonie, Dr Lewis

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Moore, Michael

      Moran, Ms Margaret

      Taylor, David (NW Leics)

      Morgan, Ms Julie (Cardiff N)

      Taylor, Matthew (Truro)

      Morley, Elliot

      Temple-Morris, Peter

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

      Thomas, Gareth (Clwyd W)

      Thomas, Simon (Ceredigion)

      Mullin, Chris

      Timms, Stephen

      Murphy, Denis (Wansbeck)

      Tipping, Paddy

      Murphy, Rt Hon Paul (Torfaen)

      Todd, Mark

      Naysmith, Dr Doug

      Tonge, Dr Jenny

      Norris, Dan

      Touhig, Don

      O'Brien, Bill (Normanton)

      Trickett, Jon

      O'Brien, Mike (N Warks)

      Truswell, Paul

      Olner, Bill

      Turner, Dennis (Wolverh'ton SE)

      O'Neill, Martin

      Turner, Dr Desmond (Kemptown)

      Organ, Mrs Diana

      Turner, Dr George (NW Norfolk)

      Osborne, Ms Sandra

      Turner, Neil (Wigan)

      Palmer, Dr Nick

      Tyler, Paul

      Pearson, Ian

      Tynan, Bill

      Pickthall, Colin

      Vaz, Keith

      Pike, Peter L

      Vis, Dr Rudi

      Plaskitt, James

      Walley, Ms Joan

      Pond, Chris

      Ward, Ms Claire

      Pound, Stephen

      Watts, David

      Prentice, Ms Bridget (Lewisham E)

      Webb, Steve

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      White, Brian

      Winnick, David

      Whitehead, Dr Alan

      Wood, Mike

      Wicks, Malcolm

      Woodward, Shaun

      Wigley, Rt Hon Dafydd

      Worthington, Tony

      Williams, Rt Hon Alan (Swansea W)

      Wray, James

      Wright, Dr Tony (Cannock)

      Williams, Alan W (E Carmarthen)

      Wyatt, Derek

      Williams, Mrs Betty (Conwy)

      Willis, Phil

      Tellers for the Noes:

      Wills, Michael

      Mr. David Jamieson and

      Wilson, Brian

      Mrs. Anne McGuire.

      Question accordingly negatived.
      THE CHAIRMAN, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, put forthwith the Question, pursuant to Standing Order No. 68, That the clause stand part of the Bill.
      Question agreed to.
      Clause 1 ordered to stand part of the Bill.
      Clause 12 ordered stand part of the Bill.

    Clause 30

      CLIMATE CHANGE LEVY
      Question proposed, That the clause stand part of the Bill.
      Mr. Heathcoat-Amory: In the absence of the clause having been moved, I think that I might make a few remarks about climate change, which is an important matter. It behoves the Government to explain the clause.
      The Temporary Chairman (Mr. Frank Cook): Order. For the benefit of the House, I ought to clarify a point that seems to be causing some confusion. The clause does not have to be moved in the normal fashion, as the Question proposed by the Chair is that the clause stand part of the Bill.
      Mr. Heathcoat-Amory: If the Government have so little confidence in the clause, I shall explain why the House should not incorporate it into the Bill. However, it would have been a courtesy to the House had the Treasury Front Bench explained why the Government wish to impose a new tax on the country. We will be interested in the Government's response in due course, but the debate would have proceeded in a more orderly manner if they had given their view of the merits of their energy tax.
      Opposition Members are used to dotty new tax proposals, but the energy tax is the stupidest to date. It is a completely unnecessary new tax. The environmental objectives that it purports to deliver could be achieved far more easily by several other means.
      The tax is also extremely complicated. The schedule attached to the clause is more than 80 pages long. We shall not debate that this evening, although we shall turn to it in due course in Committee Upstairs. However, I have already tried to understand it, as have the businesses that will be affected by it. The Government are still committed to their tax simplification project, but it has had no influence over the language and structure of the schedule, which describes the energy tax in detail.

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      That is a serious matter, as every business in the country, regardless of size, will have to try and make sense of the new tax and its provisions. The tax is unnecessary and complicated, as I have said, but it will also have a perverse effect on the industries and businesses affected by it.
      I have said that all businesses, of whatever size, will pay the tax. I declare an interest here: I am a director of two companies, and we will be paying the tax. I think that those businesses will in fact be net beneficiaries of the tax, so they are in an unusual position. In that sense, I have a negative interest to declare, but for the sake of good order, I remind the House of my registered interests.
      What is particularly striking about the new tax is the damage that it will do to manufacturing industry. The Labour party has long given up its traditional support for the manufacturing sector. There was a time when almost all Labour Members had at least some lingering attachment to the cause of manufacturing industry. New Labour, clearly desperate to sever itself from its past, has pretty well abandoned that mission and clearly regards support for manufacturing as something of an embarrassment. There is no other way of explaining away the succession of hammer blows that the Government have directed towards the manufacturing sector. We have already seen how diesel duty—diesel being the fuel of industry—has become the most expensive in Europe because of successive increases in duty. That has made the British haulage industry uncompetitive and raises the cost of every manufactured product that has to be physically transported.
      Furthermore, we have seen a mass of regulations. It has been reported to the House before that even according to the Government's own regulatory impact assessment, the cumulative costs of regulation have totalled more than £10 billion over the course of this Parliament. I am grateful to the British Chambers of Commerce for that information. The bulk of those regulations are directed towards the manufacturing sector.
      We will be debating other matters tomorrow, such as the changes to the double taxation relief. The Government pretended at the time of the Budget statement that such changes would levy an additional burden on British businesses of only £300 million. The Confederation of British Industry has given a figure today, estimating that the burden will be £750 million on only 40 member firms. The Government are in retreat on that issue. Again, such a change will damage British competitiveness and the attractiveness of this country for overseas investments.
      Perhaps the most stupid proposal is the new energy tax. Rebates will be available to some firms and industries, which can negotiate a rebate of up to 80 per cent. The catch is that only some privileged sectors and businesses will be eligible for those negotiated rebates. Some 40 per cent. of the energy used in manufacturing will not be eligible for rebates. The reason is that they are confined to those businesses subject to the European Union integrated pollution prevention and control directive. That directive was designed for a completely different purpose. It covers pollution control, but the Government are using it for another purpose—to decide the level of energy tax on business and industry.
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      Vehicle manufacturers, for example, will not be eligible for negotiated rebates. They will have to pay the full amount. That information comes from a parliamentary briefing on the energy tax produced by the CBI in the past few days. It points out that farming, micro-electronics, packaging, industrial films and brewing industries will all have to pay the full energy tax, regardless of their energy efficiency.
      A curious and rather damaging item has come to light. Each vehicle manufacturer in the United Kingdom will have to pay annually at least £1 million net in energy tax. That is a very unwelcome development because it affects Rover and its possible rescue. The Department of Trade and Industry is, in its clumsy way, now trying, along with the Prime Minister, to help the Phoenix bid for Rover, and it is talking about an emergency aid package. Meanwhile, the Treasury is planning to impose a new tax on that company of at least £1 million a year. So the new consortium is £1 million down even before it starts. That is another spectacular example of how one Department is working against the interests of another. One wonders whether they even talk to each other. It is no wonder that businesses are exasperated with the Government's pretended partnership with the business community.
      Mr. Tim Loughton: Is not the point that the energy tax pays no regard to all the investment and effort that companies have made in the past in improving their energy efficiency? There was virtually nothing in the Budget about capital allowances for re-equipping by companies that gave any advantage to environmentally friendly capital investment in new equipment by companies such as car manufacturers.
      Mr. Heathcoat-Amory: My hon. Friend, who knows a great deal about this, is spot on. Vehicle manufacturers in this country have already reduced carbon dioxide emissions by a quarter between 1990 and this year. My hon. Friend is absolutely right: they made great efforts to cut emissions, they are environmentally responsible, but there is no recognition of that in the design of the new tax. Not only that, they will be ineligible even for the reductions and rebates for which other industries may be eligible.
      Mr. Swayne: The situation that my right hon. Friend described is all the more unwelcome for being unexpected. Those of us who have been making representations to Ministers on this question for the past 18 months were informed that there would be negotiation on rebates. Only now do we discover that those industries are not eligible for the rebates. That point has been made recently and unexpectedly.
      Mr. Heathcoat-Amory: My hon. Friend is absolutely right. That is why the CBI briefing document also says about the proposals instanced by my hon. Friend:
      So far, all of these proposals have been rejected with little explanation.
      That is the point. It rankles with business and its representatives that these ideas are simply being dismissed without the Government even explaining why.
      There are many other lunatic things about the construction of the tax. I take as an example its treatment of combined heat and power. CHP has been of great

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      interest to me ever since I served in the Department of Energy. It makes business and environmental sense. CHP plants that produce electricity also use the heat that would otherwise go to waste. The most familiar CHP process is that of the motor car and its heater. Every time we switch on a car heater in the winter, we experience the productive use of waste heat from an internal combustion engine.
      8 pm
      On a larger industrial scale, the double use of energy brings great environmental benefits. One might have thought that it would be encouraged by the new energy tax, but it is not so. The Combined Heat and Power Association, a responsible and energetic body, states:
      The treatment of CHP under the Levy is causing grave concern both, among CHP developers and wider industry which seeks to utilise it…CHP has not yet been granted the fair access to this market that it was promised by Ministers.
      The House might ponder on the final few words. People have been led up the garden path. They were assured by the Government that CHP would be given fair access to the market, but that is not the case.
      Mr. Swinney: The right hon. Gentleman's final point has answered a question with which I was wrestling. A company in my constituency, which faces a particularly severe impact from the climate change levy, has been advised that going down the combined heat and power route would save it some costs. A briefing document from a firm of consultants says that CHP has exemptions to the levy. Does the right hon. Gentleman suspect that people have been encouraged to believe that and that that advice has been given to companies although it is not correct?
      Mr. Heathcoat-Amory: I am afraid that I must draw that conclusion. Various assurances have been given in principle, including perhaps to the hon. Gentleman's constituent company. The small print reveals matters to be different. I shall give way to the Minister so that he may give us an assurance to the contrary.
      Mr. Timms: The right hon. Gentleman is in danger of unintentionally misleading the House. The advice given to the firm referred to by the hon. Member for North Tayside (Mr. Swinney) is absolutely right. Combined heat and power systems will be exempted from the climate change levy. There has been a call for a wider exemption for power generated by CHP systems where it is sold from the firm that generates it to the grid. Our view is that the most generous arrangement for exemptions should apply to renewable energy sources, and that is what we propose in the levy. A firm using its own CHP will be free from the levy.
      Mr. Heathcoat-Amory: That will not do. Anyone who knows anything about CHP knows that only some schemes entirely use the power on the plant site without importing or exporting some electricity. Most bigger schemes rely on fluctuations: at some stages, they import electricity from the grid, and at others, they export it to the grid. Unless that process is exempt, the entire scheme will be in danger of being uneconomic.
      Let me give a specific example. British Sugar has made extensive use of CHP in the past. In fact, all nine of its factories use CHP, and have done so since the 1920s,
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      making the company something of a pioneer. British Sugar recognises the high energy efficiencies gained by those plants—about 80 per cent., compared with under 50 per cent. for conventional power stations. The company is anxious to renew and extend its CHP plants, but has written that
      despite Government assurances that the
      climate change levy
      would not apply to CHP, it is now clear that it will apply to electricity sales made to licensed suppliers and subsequently sold on to business consumers.
      It adds:
      this application of the CCL…will make further commercial investment in large projects to install new technology CHP uneconomic.
      British Sugar has therefore
      decided to defer our decision to proceed with investment for replacement CHP at our York and…(Norfolk) sites for which we already have Section 36 consents. We will also defer further feasibility studies.
      We deeply regret this outcome, as we firmly believe in the contribution that CHP can make to the reduction in CO2, emissions.
      The trade association has described the damage that the half-baked new tax will cause, and a possible user of a new generation of CHP plants is not going ahead with two planned sites and will not undertake further feasibility studies.
      Mr. Michael Jack: My right hon. Friend may be aware that the same company was encouraged in its endeavours by the Financial Secretary himself who has said that CHP can make a valuable contribution to achieving emissions reductions.
      Mr. Heathcoat-Amory: My right hon. Friend is absolutely right. It is appalling that companies have heard lots of warm words telling them that the levy would treat CHP helpfully and give a green light to new schemes when that is not so. When we read the small print and examine the clauses and schedules, we find that new plants will not be economic and will not happen.
      The Government are damaging an environmentally beneficial technology. They are taxing firms for using energy, but discouraging the very technologies that would enable the firms to reduce their energy consumption and avoid the tax. That is absolutely crazy. In fact, it is more than that—it is a political and economic crime.
      I do not know whether the muddle over the new tax, which has lasted more than a year, is due to ignorance or arrogance. I genuinely do not know whether the Government simply do not understand what they are doing, or understand but do not care. They have been told about the difficulties by many industries. One more example is the Engineering Employers Federation, which said:
      We are concerned that a sizeable proportion of EEF member companies will be substantial net 'losers' under the levy/NI rebate system. This will cause many UK engineering and manufacturing companies to become uncompetitive in international markets.
      Yet the Government waffle on about the need for productivity gains and competitiveness that will conquer world markets. It is all just talk. In reality, in a succession of badly designed taxes, they are reducing competitiveness.
      Mrs. Jackie Lawrence: Is the right hon. Gentleman aware of the Cambridge

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      Econometrics report that makes it clear that the climate change levy will benefit competitiveness in all sectors by increasing productivity with respect to energy inputs, by encouraging innovation, by improving energy management and by preparing relevant firms to exploit future markets?
      Mr. Heathcoat-Amory: I am afraid that that is just not the case. Firms who are in the best position to undertake an assessment are convinced that they will be made uncompetitive in world markets. I have given the House one example of a representative body which says so.
      Mr. Clapham: The right hon. Gentleman will be aware of the relationship with the new electricity trading arrangements that will come into being this autumn. There will be a change in the pool system, and the competitiveness of British industry will be stimulated because electricity will be cheaper.
      Mr. Heathcoat-Amory: Actually, the change in the pool system is specifically referred to in the representations to which I have referred, but I have not gone into it because it is not part of this debate. I assure the hon. Gentleman that those changes are fully taken into account in the overall assessment made by the firms and associations that the new and unwelcome tax will damage British competitiveness, a matter that should concern the whole House.
      What is particularly dotty is that the tax is not necessary on environmental grounds. There has always been an alternative route: to commit to more gas-fired electricity generation. That is another way to achieve reductions in carbon dioxide. Of course, when the tax was announced the Government were operating a moratorium; they had blocked 15 power station consents. We pointed out many times that, if they unblocked that moratorium, emissions could be reduced more efficiently and in a way that was less industrially damaging.
      The Government never denied that point, but they would not budge on their energy policy until two weeks ago, when the Department of Trade and Industry issued a statement that the gas moratorium had been lifted. The 15 power stations that were refused consent can now proceed. That is a welcome U-turn, but it means that the energy tax is completely unnecessary. Even though all those 15 power stations might not be built, it is nevertheless calculated that merely a proportion of them would deliver a carbon dioxide saving equivalent to the one that the energy tax is designed to make.
      It is clear that a policy mix of voluntary agreements, which were going ahead anyway, an emissions trading system, which is being designed, more combined heat and power and more gas-fired electricity generation would more than meet the required target for carbon dioxide reductions. We are committed to that internationally and the Conservative party certainly supports it.
      In summary, the tax is thoroughly bad. It gives a further twist to the regulatory spiral; it damages British competitiveness and deters inward investment. It has perverse and arbitrary effects on industry; some processes, businesses and industries qualify for exemptions or rebates while others do not. Furthermore—perhaps the most spectacular point—the tax is unnecessary on environmental grounds. That is why we oppose it.
      Mr. Stunell: I was rather disappointed that the Financial Secretary to the Treasury did not feel it necessary to introduce the debate on the clause. Other hon. Members can only take on trust—or as an expectation—the arguments that he will deploy when he winds up the debate.
      There is no doubt that the provision is extremely important, but it has a much broader context than the Bill. Although we welcome the Chancellor's commitment to tackling the environmental problems faced by our country, we have some deep reservations about the form in which the climate change levy is presented, especially in schedules 6 and 7.
      The Bill comprises 85 pages, which will make for interesting work in the Standing Committee. We shall be tabling amendments to change the overall design of the Bill, to improve its environmental effectiveness and to mitigate its impact on employment and investment.
      There is a bigger picture against which the tax should be judged. Despite some of the comments of the right hon. Member for Wells (Mr. Heathcoat-Amory), we should acknowledge that the UK must respond to climate change not only as a legal but as an environmental obligation, if we are to play an active part in the world as a mature democracy.
      8.15 pm
      We must acknowledge that climate change, as it affects our country and the whole planet, is largely human-induced. It has been produced mainly by the consumption of fossil fuels and also by the loss of absorption mechanisms—deforestation has had a major impact on the planet's capacity to absorb carbon emissions. Various industrial technologies and processes have contributed to the problem.
      That release of greenhouse gases is having a significant effect; it is changing the climate. Perhaps one problem is that the phrase "climate change" sounds rather neutral. In many cases, we are talking about climate degradation, not merely climate change. If we do not respond with effective policies, in this country and internationally, there will be severe consequences.
      I give credit to the Government for the spirited way in which they participated in the Kyoto talks, for their willingness to enter a Europewide agreement and for the broad consultations that they have set in hand during the past two years. Although I have criticised the slowness of the process, one cannot deny that much ground has been covered. The consequences of climate change have certainly been acknowledged in the Government's thinking and, to some extent, in the climate change levy.
      If there are no policy alterations in this country, in other EU countries and worldwide, we face the degradation of the planet's biodiversity, a worsening of the human condition in many parts of the world—to a considerable but, fortunately, not a major extent in this country—and economic disruption that could certainly spill over to affect this country directly.
      Mr. Andrew Tyrie: I support compliance with Kyoto, but I should be grateful if the hon. Gentleman could tell me where there is any evidence that an increase in the temperature of the planet would necessarily result in a reduction of biodiversity.
      Mr. Stunell: We are in danger of going wide in the debate. However, in a densely populated planet, a large

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      number of habitats are isolated communities. If the conditions in which those communities can exist migrated—for example, to the north—there would be no space that was not already occupied by human habitation to which the ecosystems could also migrate. That biosystem would thus be extinguished. I should be happy to provide the hon. Gentleman with more details, but you might rule me out of order, Mr. Cook.
      We welcome the provision in principle, but we have some criticism of the detail. We applaud the aims of the climate change levy. As we understand them, they are primarily to reduce greenhouse gas emissions. Secondly, they would put the UK at the leading edge of conservation technology; there is a large world market to be exploited if we can achieve that. A further aim is to safeguard employment and investment in the UK—that flows from the second point. The final aim is that the levy should be revenue neutral: that is rarely sought and even more rarely achieved in taxation proposals.
      Although those aims are laudable and we welcome them, the means to achieve them remain flawed. Despite the repeated fixes that have been applied to the proposal by the Departments of the Environment, Transport and the Regions and of Trade and Industry and, latterly, by the Treasury, the fact remains that the details are not satisfactory. I hope that the Liberal Democrats can play a constructive part in improving the climate change levy as it proceeds through the House.
      The first of our criticisms is that the levy is on the wrong thing at the wrong point. If the levy is designed to cut greenhouse gases, especially carbon dioxide, it would be better applied upstream, where the oil, coal and gas are first burned. If the aim is to save carbon dioxide discharges in particular, it would be more sensible to apply the climate change levy to just that—not, for instance, to electricity generated from hydro power—and, to take the point made by the right hon. Member for Wells, to make adequate provision for combined heat and power to flourish.
      Mr. David Drew: Would the hon. Gentleman like to add nuclear to his list?
      Mr. Stunell: No, I would not.
      I draw the attention of the Committee to the fact that the Government have proposed several ways in which combined heat and power can come to the market and be a significant part of the generating capacity. In fact, they have a target of 10,000 MW of installed CHP by the year 2010. The climate change levy will slow down that process. It will make it more difficult for combined heat and power projects to justify themselves in the pecking order of investment by companies that are looking at the options.
      I had the opportunity to attend a seminar that was addressed by the hon. Member for Leeds, West (Mr. Battle)—who was Minister for Energy and Industry before he moved to the Foreign Office—and by the leading exponents of CHP in the industrial community. Having received their public reward and award for installing CHP, they were then asked a direct question—would they proceed to install the next phase? They said that they would not—not just because it would not save them money but because, in a world in which enterprises compete for investment, CHP did not produce as good a
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      return for that company as some of the other things that it could do. A move like the introduction of the climate change levy in its present form will make the possibility of investment in CHP by that company that bit more remote.
      Therefore, our first criticism is that the climate change levy is a levy on the wrong thing at the wrong point. Our second criticism is that the levy is too rough and ready, when it should be smooth and progressive.
      Originally, the levy was published as being designed to raise £1.8 billion. That has wisely been scaled down to about £1 billion, but Liberal Democrats believe that that could well prove to be a damagingly large abstraction of money from manufacturing at a time when it can ill afford it. In many companies, profitability—even viability—is under severe threat, and we would prefer a climate change levy to be introduced at a lower rate but with a clear built-in escalator, so that progressively tougher targets are set during the period up to 2010.
      A low start-up rate will avoid the damage to companies that may occur with the abrupt introduction at the level that the Government propose. The announcement, well in advance, of a progressive escalator up to a higher value over the next 10 years will give the right signals for those who are planning investment and development within their companies, and would take account of the time frame that is needed for those investment decisions to be run in, installed and matured. We need a climate change levy that takes some account of the business cycle and of the speed of investment decision taking and installation.
      Our third concern relates to the recycling mechanism. Other hon. Members may want to explore how the national insurance reduction will impact on productive industry and on the service industries. The first, on average, would be losers; the second, on average, beneficiaries.
      The Minister may want to comment on the fact that the fastest growth sector in the use of energy is not manufacturing but the service sector, which, perversely, will get extra money to spend as a result of the introduction of the climate change levy although it is the most rapidly expanding and profligate user of energy.
      Mr. Timms: I look forward to responding to the hon. Gentleman's arguments, but I just say to him that—contrary to what he is suggesting—the levy package will be broadly neutral between the manufacturing and service sectors and, broadly speaking, bring about no fiscal shifts.
      Mr. Stunell: I shall follow, with great interest, the Minister's detailed explanation, as it might possibly justify that statement, although it is hard to credit at the moment.
      I did not want to focus on the national insurance issue tonight, because those matters could be well explored in Committee Upstairs, but I wanted particularly to deal with the green recycling element of the mechanism—the £150 million that the Government are making such a song and dance about. Initially that was to be £50 million, and a great deal of noise was made about the fact that it was being trebled to £150 million.
      I hope that the Minister will be prepared to acknowledge that the £150 million is "funny money". A hundred million pounds of that is simply bringing forward the investment allowances of companies in

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      conservation and efficiency measures. I understand that the cost to the Exchequer is anything but £100 million; it is more like £5 million.
      Mr. Swinney: I want to bring forward some further information on the constituency case that I raised with the right hon. Member for Wells (Mr. Heathcoat-Amory). The investment that that company has been recommended to make to improve its energy efficiency is £1 million, so, if that is to be a claim for one company out of this supposedly £150 million fund, there will obviously be a severe impact across a range of companies that are affected by the costs of such investment.
      Mr. Stunell: The hon. Gentleman makes an important point, which is perhaps about the overall size of the fund that is being made available. Leaving aside whether it is "funny money", is £150 million sufficient to trigger off the investment that is needed? I believe that experience has shown, over many years, that companies respond better to incentives to invest than they do to penalties if they do not invest, so there is every reason to consider whether £150 million is the right amount.
      However, whether or not £150 million is the right size for the fund, the Government should acknowledge and understand that what they propose is not actually £150 million of recycled money but simply capital allowances with very little public expenditure impact. I suggest that it will not be a sufficient spur for companies to invest.
      The right hon. Member for Wells commented on the so-called IPPC deals in the energy-intensive industrial sector. Those of us taking part in this debate are at a disadvantage, in that we have not seen the agreement that has been reached. We have heard rumours. We are told that we shall get an excellent deal—plenty of bangs for our bucks—and we are eagerly waiting to hear the outcome. However, even if the conclusion of the deals in those energy-intensive sectors means that enough money is recycled and available for those industries to achieve the efficiency improvements to which they are committed, the incentives to invest in the industries that are not included are not nearly sufficient.
      8.30 pm
      The right hon. Gentleman said that the tax is not necessary, but we do not agree. We need a levy or a carbon tax; we need a stick as well as a carrot; we need to give a clear signal to industry and to make a clear commitment internationally to fulfil our obligations.
      Letting gas generation take over from coal is not a let-out. Certainly, that will reduce carbon emissions in the short term, but as the hon. Member for Stroud (Mr. Drew) indicated, in what is a short time in the energy market, nuclear generation capacity will end, and, if we replace that with gas or coal, we will increase carbon emissions. We must have in mind the future beyond 2010 when we set our policy on the climate change levy. We need a policy that allows us to do more than reach the Kyoto target by 2010. If, on 2 January 2010, when we start to confront the targets that lie beyond the Kyoto limits, we have no policies on the stocks, no research, no investment
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      plans being developed, no export industries and no plans for beyond 2010, this country will find that it has failed the test.
      Liberal Democrat Members welcome the intentions behind the climate change levy, but we have deep concerns about much of the detail embedded in the massive schedules. We shall support the principle tonight, and fight to correct the all-important details later in the Committee proceedings.
      Mr. Jack: I hope that I do not do the hon. Member for Hazel Grove (Mr. Stunell) a disservice when I say that he sounds like a man who has not had to make hard decisions in business about how to save money and keep within one's budget. I declare my business interests, which have been properly lodged in the Register of Members' Interests, in that I maintain the interests in horticulture and fresh produce which I had before I entered the House. That industry would not exist today if it had not, by virtue of the fact that energy is a key factor in its activities—certainly in the protected horticulture sector—fought year in, year out to keep down its energy costs. The industry's track record on energy saving is second to none.
      The extent to which the Government have thought through the climate change levy is evident from the fact that in Budget 2000, the financial statement and Budget report, the best that we read is that the Treasury has, after many representations from the horticulture industry, produced a 50 per cent. reduction in the effect of the CCL on that industry. Only last Friday, the hon. Member for South Ribble (Mr. Borrow) and I attended a meeting with west Lancashire growers, who again made the point that all areas of the industry, including protected edible crops and the hardy ornamental sector, will be dealt another body blow if the CCL is imposed, even with the 50 per cent. reduction. At a time when there are cosy summits in Downing street between the Prime Minister and the fanning industry, it is ironic that this most vulnerable part of the agriculture sector is again being hit hardest by the Government.
      Horticulture has a disproportionate influence in certain parts of the country, such as the north-west of England and the west midlands. It is interesting that in the vale of Evesham horticulture employs many people, but the cross that the west midlands is bearing at the moment is the demise of the Rover car company. The Government say that they will fight for every job in the west midlands, but they are going about it in a strange way, because at the same time that Rover's problems are occurring, they are clobbering a major user of energy—the horticulture industry. That little cameo clearly demonstrates why we should not allow the clause to stand part of the Bill. The Government should think again about their objective of meeting the Kyoto target.
      I am in favour of saving energy, but I am deeply suspicious about the way in which the Government have decided to go about it. When they came to office in 1997, they were bequeathed perhaps the first working environmental tax—the landfill tax. When that was introduced by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), it was fiscally neutral and acknowledged as such. Shortly after coming to office, however, this Government started the process of creep. The landfill tax suddenly went up, but where was the parallel rebate? There was no rebate. As a former Treasury Minister, I am, perhaps, experienced enough to

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      know that once one has made the bridgehead, one can do much with the tax that has been established. This tax is a Trojan horse to give the Government another nice little earner.
      Mr. Loughton: Is not it true that for every £1 increase in the landfill tax under this Government, not a single penny has been hypothecated back to local community environmentally friendly schemes, as was the vast majority of the tax when it was introduced by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory)?
      Mr. Jack: My hon. Friend makes a powerful point that reinforces my own. We have heard nothing from the Government to indicate that they have any intention of sticking to what they say is broad fiscal neutrality for the climate change levy.
      The Financial Secretary tried in an intervention to carry the Committee in an argument for the measure on the basis that, broadly, there would be neutrality. I am intrigued by the number of representations—which I shall later describe—from companies which have been mentioned in the debate by my right hon. and hon. Friends. Company after company, in manufacturing, horticulture and other industries, has pointed out the inequalities in the proposal. In their judgment, the national insurance rebate does not touch their industry. It would have been interesting to see how this distribution of national insurance rebate worked out. In the words of a famous beer advertisement, it is a rebate that seems not to be reaching a vulnerable part of the economy, which is manufacturing—hence the representations that Members have received.
      Mr. Stunell: Does the right hon. Gentleman share my incredulity at the Minister's claim that there was complete neutrality within the sectors?
      Mr. Jack: I am grateful to the hon. Gentleman, who underscores my point. Perhaps the Financial Secretary will enlighten us on the bland statement of justification for the fiscal impact of the tax.
      I do not think that the Minister will respond to my next point, but I shall make it. Given the way that legislation is framed in government, little notes go around Whitehall inviting Departments to make their comments on proposals. I shall be grateful if the Financial Secretary will consider being candid with the House, lifting the veil a little and letting us know what exactly the Minister of Agriculture, Fisheries and Food said on behalf of the horticulture industry, and what exactly the Department of Trade and Industry said in its more candid moments about the burden on industry.
      The way in which an environmental tax has been half-inched by the Treasury is remarkable. It has suddenly become the great environmental arbiter of taxation. The Department of the Environment, Transport and the Regions is no longer in that position. The Deputy Prime Minister lost that battle a long time ago. In terms of environmental legislation, the Treasury is the powerhouse. We have not been told whether the rest of government, in a more candid moment, agreed with the proposal that we are discussing.
      Mr. Swayne: Over the past two years, I have had extensive correspondence with Ministers on the
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      disproportionate effect of tax on the protected horticulture sector. Appropriately and properly, I targeted the correspondence at the Minister of Agriculture, Fisheries and Food and the Secretary of State for the Environment, Transport and the Regions. It ended up being answered by the Financial Secretary.
      Mr. Jack: My hon. Friend makes the point. I think that we are owed a candid description of what happened.
      I read the "Financial Statement and Budget Report". Paragraph 6.25 on page 111 states:
      The Government recognises the case for giving special treatment to energy intensive sectors because of their high energy costs and their exposure to international competition.
      If ever there was a travesty of the English language, those two sentences are it.
      Only today I received a letter from the British Oxygen Company stating that the full effect of the levy on it will be £8.4 million in the first year. It says that it will receive only £500,000 from the rebating of national insurance contributions, so it is £500,000 down in the highly environmentally friendly activity of gas separation. Where are we at? Who are the gainers in achieving this degree of fiscal neutrality? I see that the Financial Secretary is looking rather bored in response to that remark. It is clear that he does not have a clue how to respond to my point.
      The British Oxygen Company went on to say:
      We are deeply concerned about the effect on the international competitiveness of British companies as a result of these proposals.
      I do not think that BOC is known as a whingeing company, but it is careful with its analysis.
      There are other inconsistencies. I draw attention to a representation that I received from Calor Gas Ltd. Before doing so, however, I shall refer to paragraph 6.33 on page 112 of the "Financial Statement and Budget Report". The Government, in a moment of reckless generosity, said that they proposed to halve the rate of the levy applying to liquefied petroleum gas. If that was supposed to be earth-shattering encouragement to those involved with one of the most environmentally friendly fuels in the land, why is it that Calor Gas has written to me and other colleagues who are members of the Finance Bill Committee to point out that, despite that proposal, there is serious distortion that will encourage people away from LPG to other hydrocarbon fuels?
      I shall not bore the Committee by going through all the arguments advanced by Calor Gas; perhaps that will be for another place at another time. However, it says:
      The Levy means LPG users paying an extra £5m/yr for the privilege of using
      a highly environmentally beneficial fuel. It is a strange tax that takes out such a fuel.
      My right hon. Friend the Member for Wells was kind enough to refer to some work that I undertook to illustrate that if the gas moratorium had been lifted there would be no need for the climate change levy. As a result of an analysis prepared for me by the Library and of answers to parliamentary questions, it was shown conclusively that a reduction of 13 per cent. in energy generation by coal and an increase of 14 per cent. in the production of electricity by gas-fired power stations would achieve the initial target of a reduction of 2 million tonnes of carbon dioxide. If that is the case and more gas-fired power stations come in over and above the number required to

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      remove the 2 million tonnes of CO2, why have the Government not factored in that point and made substantial changes at this juncture to the climate change levy? They are in grave danger of double or treble counting the effect when my analysis suggests that there is no need for the levy.
      8.45 pm
      I refer the Financial Secretary to a further scheme that is based entirely on the Government's analysis. Again, it would do away with the necessity for the climate change levy in a wholly environmentally friendly way. It would boost the prospects of British agriculture and would be entirely environmentally friendly and CO2, neutral. How, one may already ask, is that piece of magic to be achieved? The answer appears in a publication produced by the Department of Trade and Industry, which is entitled "Wood Fuel for Electricity and Heat". From it we learn that when we burn wood, CO2 is released. However, if one then replants, that same CO2 is locked up. In other words, there is a carbon-neutral cycle.
      I tabled a parliamentary question to the Minister of State, Ministry of Agriculture, Fisheries and Food, to inquire how much short rotational coppice would have to be planted to take up the full 2 million tonnes of CO2 that was the original target for the climate change levy. I received a letter in reply. I learned that 108,000 hectares would be required. That represents 0.58 per cent. of the cultivable land area in the United Kingdom. It so happens that the Treasury is funding the English rural development plan, and if we increase the hectarage from the current proposal in the plan by roughly a factor of four and spend about £120 million, we can subsidise farmers in the same way that the Government are already planning so as to produce the necessary 108,000 hectares of short rotational coppice.
      I then turned to the Government's advisers to find out how much it would cost to have sufficient power stations to deal with the resulting electricity produced by that proposal. It would cost about £375 million—which is £1.5 million per megawatt of electricity produced—to burn the short rotational coppice. The Government's proposals assume that electricity producers will produce electricity from recyclable and renewable sources, so we can see that a model exists that would effectively make self-financing any additional marginal costs of the power produced in the way that I have described. The figure of 108,000 hectares, which has been confirmed by the Ministry of Agriculture, Fisheries and Food and borne out by the DTI's analysis, would be sufficient to do away with the climate change levy in a wholly environmentally friendly and beneficial way.
      If I have managed to work that out, why has not the Treasury? If that scheme meant a marginal change in the cost of electricity to all users in the United Kingdom, everyone would feel that they were making their contribution to the reduction in carbon dioxide emissions. At that same time it would benefit farmers, be environmentally friendly and do away with all the complexity of the levy and the burden on manufacturing industry that it entails.
      If that idea is ignored and is not investigated, that will suggest what I have thought for some time—namely, the Treasury could not give a fig about the DTI's work on
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      renewables: all it wants is a nice little earner. I therefore urge the Financial Secretary to investigate the proposal that I have described. It is well thought out, well researched and backed by the Government's own analysis.
      Finally, I support what my right hon. Friend the Member for Wells said about combined heat and power. He spoke about the situation of British Sugar, the reduction in its investment and its fears about the proposal.
      I draw to the attention of the House a representation that I received from the Brunner Mond Company, which points out that although good-quality combined heat and power will somehow be exempt from the levy, in their wisdom the Government have not defined good-quality combined heat and power. A company could invest in beneficial technology only to find that, by a quirk of the rules, it is ruled ineligible for any benefits from the CCL. I shall certainly follow up the amendment proposals in Committee.
      In summary, Opposition Members have advanced sufficient well-argued points to persuade the Government to think again about whether they want the clause to stand part of the Bill. Industry would be badly affected by it, and good alternatives exist. Given the availability of environmentally friendly ways of generating electricity—through combined heat and power—the Government's proposal fails.
      Mr. Swinney: There is wide acceptance in the Committee of the importance of reducing greenhouse gas emissions, in line with agreements signed at the Kyoto summit. There is also a wide understanding of the importance of global climate change and a belief that every country should play its part in addressing the problem. However, there is considerable scepticism about whether the Government's policies of crude taxation on motorists or, in the case of the climate change levy, businesses, will satisfy those objectives. They seem to be crude measures for raising revenue, rather than sophisticated methods of tackling environmental problems.
      The danger that I see arising from the Government's proposals is that competitiveness will be damaged, without the environmental objectives being achieved. I shall provide more details and examples of the specific impact of the Government's proposals on companies in the locality that I represent.
      The levy has been a long time coming. It was first put out for consultation in March 1998. We must ask ourselves to what extent the Government have been listening to the results of the on-going consultation exercise. Undoubtedly, changes have been made to the original proposal since the pre-Budget report first touched on the subject, and some of the extremely harsh aspects of the levy have been watered down, but not sufficiently to meet the concerns that I shall raise tonight.
      The Government claim that the levy will raise £1 billion, but that will be countered by the support given to energy efficiency measures by the recycling of revenues through a reduction of employers national insurance contributions, and through the system of first year capital allowances being allocated for energy-saving instruments. The Government have made it clear that the measure will be revenue neutral. The Financial Secretary confirmed that on the record tonight. The hon. Member

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      for Hazel Grove (Mr. Stunell) gave a curious explanation of how the measure will be neutral, and we look forward to a more detailed explanation.
      Some of the Government's comments have been contradicted by fairly substantial advisers. The firm of accountants Deloitte & Touche, whose material on the subject I have seen, states:
      It cannot yet be known whether the amount raised from CCL and the amount to be handed back will be equal. Indeed it looks as though the amount to be raised will be considerably in excess, so it is not surprising that so many businesses are complaining that they will be net losers. In addition…there would be a redistribution between firms that was largely arbitrary, depending not only upon the amount and type of their energy consumption, but also on the structure of their wage bill.
      That gets to the nub of some anxieties about the bluntness of the instrument that the Government propose to use.
      I want to make several general points about the implications of the measure before citing some specific cases. First, let us consider competitiveness. The levy will significantly increase the energy bills of many companies and involve extra compliance costs for energy providers, thereby potentially placing them at a competitive disadvantage. Some substantial companies have been excluded from the exemptions from the climate change levy. They include glass, brick and paper manufacturers as well as the agriculture and whisky sectors. I shall say more about the latter sectors in a moment.
      The measure could also undermine this country's competitiveness as a location for inward investors. The cost of energy is one of the calculations that is most closely scrutinised by inward investors when they decide on the appropriateness of individual countries as a location for their manufacturing bases.
      My second general point is about red tape and bureaucracy. It is inevitable that the climate change levy will increase red tape and business costs. When the Government published their statement of intent on environmental taxation in 1997, one of the key criteria was that it
      must keep dead-weight compliance costs to a minimum.
      The hon. Member for Hazel Grove referred to schedules 6 and 7, which require a monumental amount of interpretation by individual companies in order to understand the full impact on their operation. When we take even a casual glance at schedules 6 and 7, the climate change levy cannot be described as a simple instrument. That will have implications for business costs.
      My third general point is about environmental consequences. The Government place great emphasis on the environmental nature of the provision, but a representative of the Energy Saving Trust recently said:
      Energy tax would have to be set at a politically unacceptable level in order to produce the required reduction in emissions
      that the Government envisage. The Government claim some environmental benefit, but organisations that support that agenda say that the structure and the levels that the Government currently suggest will not provide the expected savings.
      We should take note of the strength of opinion expressed in a report by the Select Committee on the Environment, Transport and Regional Affairs, which states:
      We do not believe that the Climate Change Levy meets the tests of good taxation. The system of exemptions, negotiated agreements and reduced rates has produced an extremely complex and cumbersome market instrument which will result in a relatively modest emissions reduction.
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      The report also suggests that small and medium-sized enterprises will experience deep problems because the way in which the scheme is devised means that it will concentrate on larger enterprises that can make pooling arrangements to negotiate deals. We ignore that Select Committee evidence at our peril.
      I shall comment on the specific implications of the measure for groups of businesses that are important to Scotland as a whole and to my constituency. The right hon. Member for Fylde (Mr. Jack) spoke about the measure's impact on the horticulture sector. Many of those who work in agriculture, such as dairy farmers and those involved in cereal production or the pig and the poultry sector, are heavy energy users. However, the agriculture sector now has relatively few employees. The beneficial impact of the reduction in employers national insurance contributions is therefore minimised because there are not many employees to compensate and benefit. The National Farmers Union has suggested a direct link between the imposition of the levy, the agricultural sector's competitiveness and further hardship. The Government should take close account of that evidence. I have mentioned the small business sector and the fact that many of the exemption agreements will exist between the Government and large energy-intensive sectors. It is difficult to understand how small businesses can gain such access.
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      The third general industry to which I shall refer is the Scotch whisky sector, which has vociferously lobbied Members of Parliament who represent Scottish constituencies about the implications of the levy. The industry has referred to its energy efficiency record and its support for achieving the Kyoto targets, making substantial points about the anomalies and distortions in the Government's proposals. It has said that although distilling operations are eligible for exemption, on-site bottling may qualify only if deemed to be "technically linked". However, the Government have not defined that term and we await further clarification. I hope that the Financial Secretary will explain, and tell us when the information will be provided.
      Off-site packaging operations without links to a distillery, which are common in the Scotch whisky industry, especially in relation to huge blending or bottling sites, will be ineligible for exemption from the levy. The industry estimates that that will increase its costs by approximately £400,000 per annum. It is also concerned that the Government can give no guarantee that the European Commission will give state aid clearance to the exemptions that are being discussed. This important sector is still awaiting clarification of those issues, so I hope that the Financial Secretary will say something about them tonight.
      I have mentioned a successful company in my constituency, and do so again. Don and Low has invested heavily in its operations in Forfar—a successful county town in Angus—and is about to open an entirely new plant that will bring all its production under one roof. It has specifically designed that plant to be energy-efficient. However, the company is in the textiles sector, which has not been included in the industries to be exempt from the levy.

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      I quote a letter from the managing director of the wovens division of Don and Low. On 14 April, Mr. Stewart Baxter wrote to me to express the company's
      deep concern about the Government's proposals for the climate change levy. We note that the textile industry has been excluded from the list of industries that will receive a rebate on this levy.
      I enclose a report from our energy consultants which indicates that this levy will costs Don & Low an additional £197,390 per annum on our electricity.
      As a company that prides itself on its energy conservation programme, we find this hard to swallow. We trade in very competitive markets mainly in Europe and are being significantly disadvantaged through the strength of the pound and the cost of transport to our key markets.
      That is a triple whammy—the level of the pound, the cost of transport and the cost of the climate change levy—for one of the largest private sector organisations in my constituency.
      The company's energy consultants have considered the details of the climate change levy, and I am sure that they will take another look at schedules 6 and 7 to determine whether they can elicit any further details. [Interruption.] The schedules may be impenetrable, but I am sure that that is what the consultants will try to do. Their advice is that that company will not be eligible for the energy-intensive user rebate because it does not occupy a site covered by the integrated pollution prevention and control directive, and is not a member of a negotiated agreement sector.
      There is evidence that Don and Low will face difficulties as a result of the Government's proposals, and I urge Ministers to consider those details carefully. I have sent them to the Financial Secretary so that he may consider them, and the suggestion about making a full report. Such matters affect the competitiveness of some of the companies that will face the levy, and the Government ignore that evidence at their peril.
      Mrs. Lawrence: I shall not speak for long, because I know that Opposition Members are anxious to make all their points and I do not want to hold them up. Having heard their comments so far, however, I conclude that they are based on one principle—an outdated principle with which the British public do not agree, and which evidence increasingly shows to be wholly wrong.
      The Opposition's argument is based on the supposition that environmental protection measures cost jobs, but a company in my constituency proves the opposite by providing a wonderful example of the way in which, by adopting what could in business terms be described as "unnecessary" measures—in this instance, working for the benefit of the environment in a national park—it is possible for a company to gain a competitive advantage, and to secure its future in a highly competitive market.
      When the Tories came to power in 1979, there were five oil refineries in Pembrokeshire. When they lost power in 1997, there were two. Part of the site occupied by the one in my constituency—Elf, a French refinery—is in a national park, and as a consequence the refinery has had to make extra investment. For example, I understand that storage tanks in most refineries are made of a shiny metal, because it is the cheapest material. Elf has had to employ painting techniques to make the tanks blend with the
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      beautiful national park on the Pembrokeshire coast, and that has involved extra cost. It has also had to consult in detail on the placement of plant, chimneys and other items, and that too has meant additional expense.
      Having made the extra investment, the company maintained its forward-looking approach, and took advantage of the Government's changes in tax on ultra-low-sulphur fuel. Its investment then secured its future, at least in the medium term. Only two years ago, that future was very much in the balance. Elf provides a good example of how—contrary to what the Opposition say—investment in the environment creates jobs rather than destroying them.
      According to the 1998 Cambridge Econometrics document "Industrial Benefits from Environmental Tax Reform in the UK", it is estimated that the sectors that would experience either a reduction or no change in industrial unit costs as a result of a tax of the sort proposed by the Government currently account for 91 per cent. of employment in the UK. That includes manufacturing as well as service industries, and I think that, on both counts, it is a good illustration of what I said earlier—that environmental protection will preserve jobs, not destroy them.
      Mr. Jack: Can the hon. Lady explain why an industry such as horticulture, which is carbon neutral and has a marvellous record for saving energy in order to survive and to maintain jobs, should now bear the extra tax?
      Mrs. Lawrence: I thought that I had finished my speech when the right hon. Gentleman intervened, but now I shall add something. My point, although general, was nevertheless pertinent. The right hon. Gentleman has clearly had his own experience in his industry, but according to my experience the rules that the Government propose to protect the environment and work towards the Kyoto targets will increase productivity, and increase the ability of British industry to improve in the future.
      Mr. Christopher Gill: I preface my remarks by saying that, as someone who is interested in forestry and who has more than a passing interest in trying to ensure that there is a future for the countryside and a possibility of diversification, I hope that the Committee has listened carefully to the remarks of my right hon. Friend the Member for Fylde (Mr. Jack). He spoke a lot of good sense. Both Treasury and Agriculture Ministers would be well advised to make a further study of what he said.
      It was unfair of the hon. Member for Preseli Pembrokeshire (Mrs. Lawrence) to categorise Opposition Members as believing that environmental measures all cost jobs, when my right hon. Friend made such an excellent presentation illustrating how measures could be taken to improve the environment in a cost-free manner, to the benefit of the countryside and the rural economy. Nothing that we have heard in the debate so far has done anything to convince me that the climate change levy is not a thoroughly bad tax. I suppose that it is to the hon. Lady's great credit that she has been the only Labour Member to say something in its defence.
      I regret that we have not had the benefit of hearing from the Minister, who might at the beginning of the debate have explained why he feels that it is such a

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      thoroughly good measure, so that we could address our remarks to his points and specifically deal with them, as well as make our own points.
      My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) rightly pointed out that the climate change levy is an unnecessary measure and that the tax's objectives could be achieved by other means. It will not have escaped any hon. Members who are taking part in the debate that the tax occupies no fewer than 85 pages of the Bill. It is enormously complicated. That in itself will impose burdens on industry of every description: it will have to study the measure and try to find a way through. My right hon. Friend spoke about the tax's perverse and arbitrary effects and stressed the damage to the manufacturing industry. The tax's consequences will be higher prices for the product of industry, leading to a loss of competitiveness and inevitably, sooner or later, job losses too.
      At this point, it is perhaps worth pointing out that at the moment, British industry enjoys one great benefit, which I think we are all taking for granted: with sterling as strong as it is relative to other currencies, British manufacturing industry is able to import its raw materials at a relatively cheap price. In the normal course of events, that situation will not exist for ever more because currencies fluctuate—they go up and down. When our currency comes down, as inevitably it will do sooner or later—
      Mr. Drew: Is the hon. Gentleman buying euros, then?
      Mr. Gill: No, nor must we join the euro—[Interruption.] That would be catastrophic for the whole country.
      When our currency does depreciate, industry will find that the cost of its raw materials from abroad will be higher and a lot of the competitive advantage that allows the Government to impose taxes with a degree of impunity will no longer exist. In those circumstances, industry will find that the extra taxes imposed through, for example, the climate change levy and other measures, added to the increased cost of raw materials, will make our businesses very uncompetitive.
      As has already been mentioned in the debate, 40 per cent. of the energy used in manufacturing will not be eligible for rebate. I think that my right hon. Friend the Member for Wells was quite right to instance the very topical issue of the current situation—which we all know about—in the motor industry. My right hon. Friend the Member for Fylde also rightly highlighted the situation in horticulture.
      9.15 pm
      The hon. Member for North Tayside (Mr. Swinney) mentioned the situation in farming. He briefly mentioned the pig and poultry sectors, which will be very adversely affected by the integrated pollution prevention and control regulations charges. I must point out to Ministers the very real danger that the imposition of even greater overhead costs and burdens on those two agriculture industries will simply result in the export of those two industries. If that happens, the United Kingdom will be driven to import ever more pigmeat, egg and poultry products.
      The hon. Member for North Tayside also correctly said that the cut in employers national insurance in the agriculture industry will be but a drop in the ocean
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      compared with the charges that they will have to pay. The number of people employed in agriculture has been drastically reduced, especially in the past few years. Therefore, the scope for the industry to recover a reasonable sum by a cut in employers national insurance simply does not exist.
      In my constituency there is relatively little manufacturing industry. However, I do have one big employer—a most substantial manufacturer which is involved in converting aluminium. Two weeks ago, on Second Reading, I drew attention to the fact that aluminium converters will not be eligible for rebate, although aluminium smelters will be eligible. In much the same way, the hon. Member for Barnsley, Central (Mr. Illsley) was able to explain how glass manufacturers would be eligible for the rebate, whereas glass benders would not.
      In the past 48 hours another example has been brought to my notice. In metal forging, there is a process in which two types of equipment—a hammer or a press—can be used. Under the IPPC, sites using the hammer-based process will be eligible for a negotiated agreement, whereas those who use presses will not, although the latter process is more efficient and is used by 70 per cent. of the industry. Those are but three examples, but they demonstrate how nonsensical the situation will be in various industries.
      Mr. Loughton: Does my hon. Friend think that those nonsensical inconsistencies have anything to do with the fact that one of the United Kingdom's largest aluminium smelting plants is next to the Chancellor of the Exchequer's constituency?
      Mr. Gill: That is an interesting point. However, I think that aluminium smelters would be in the category of industry that I described a moment ago as currently benefiting from relatively cheap imported raw materials. That situation will change, and the climate change levy, on top of the overheads that that industry already bears, will be the straw that breaks the camel's back. I think that my hon. Friend would confirm that aluminium smelters in other countries—I think that Iceland leads the field—have many natural advantages that do not exist in the United Kingdom. The aluminium smelters, and therefore probably the converters as well, are already in a parlous situation without the imposition of this tax.
      The Government make great play of consultation. Whenever they face a difficult problem, they put it out to consultation. Talking to people, finding out their views and giving them an opportunity to be involved in the decision-making process may seem entirely reasonable, but it is all too evident in the Bill and many other aspects of the Government's work that, although an enormous amount of time and energy is spent on consultations, they are virtually disregarded when it comes to settling the Budget.
      There are three clear examples in the Budget of industries that have been ignored after a consultation process: the small brewing industry, the quarrying industry and the manufacturing industry, which is the subject of this debate. There was a lot of consultation, but the Government have done nothing to meet the representations from industry.
      This is a thoroughly bad tax. The basis for the eligibility for rebate is deeply flawed. It will exclude 40 per cent. of the energy used by manufacturing and will

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      lead to distortions between and within industrial sectors. I have illustrated that for the industries to which I have referred. For individual firms operating in highly competitive international markets, such as the aluminium converter in my constituency, whose margins have already been tightly squeezed by the value of sterling, the tax will mean increased costs and thus pressure on competitiveness and jobs. I heard what the hon. Member for Preseli Pembrokeshire said about that, but I disagree with her. If any business has its overheads increased, they eventually become unsustainable and either the business folds or it reduces its costs. The first cost to be looked at is generally the labour cost and if reductions are made, it means job losses.
      The Confederation of British Industry has pointed out that before the Budget, business made constructive proposals to the Treasury for modifications that would extend eligibility for the rebate, allowing more firms to help reduce emissions by signing up to legally binding agreements, delivering real energy efficiency improvements in return for the 80 per cent. rebate. So far all those proposals have been rejected with little explanation. Business is keen to bring forward revised proposals to address the concerns that the Government might have, but cannot do so without knowing fully the reasons for rejection. That is why it is regrettable that the Minister has not yet given us the Government's reasons for the tax. The CBI also believes strongly that the Government should give priority to explaining to sectors the detailed reasons why they have rejected business proposals for extending negotiating agreement eligibility. There is more that could be said on that subject, but others wish to speak.
      I conclude by saying that our proposal is the most appropriate change that could be made in the circumstances. This is a bad tax, and the only sensible thing for the Government to do is to withdraw it.
      Mr. Loughton: I am a member of the Select Committee on Environmental Audit, which produced a report on the energy tax and had the interesting experience of interviewing the Financial Secretary before the Budget. I found it odd that the Financial Secretary did not open this part of the debate with some words in support of the climate change levy. It was even more odd that so few Labour Members wanted to contribute to the debate, despite the fact that the proposal takes up more than 80 pages of the Bill.
      The history of the energy tax has been one of complete fudge for the last 18 months, when it first appeared on the radar screens. One of the worst examples of the fudge and muddled thinking was given by my right hon. Friend the Member for Fylde (Mr. Jack) in respect of the horticulture industry. That industry—which absorbs carbon dioxide and emits oxygen, and is one of the biggest contributors to the Kyoto targets on its own—is severely threatened. The Government have had to climb down, but only partly, in the Budget to prevent the horticulture industry from moving lock, stock and barrel to Holland, in particular, where the industry is exempt from energy tax.
      Another example concerns liquid petroleum gas, and we have all received memos from Calor Gas. Again, there was only a 50 per cent. climbdown by the Government on an environmentally friendly fuel. The Government
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      have been entirely inconsistent with last year's Budget, in which they recognised the environmental benefits of LPG by reducing fuel duty for vehicle LPG by 29 per cent.—only to clobber LPG for non-vehicular uses with the energy tax this year.
      The main point, which the Minister continues to duck, concerns competitiveness. A classic example is the effect of the tax on the British steel industry. We are at the stage where the majority of steel used in this country is imported from overseas, with a large quantity coming from countries such as Korea, South Africa and India, none of which is bound by the terms of the Kyoto protocol.
      Does the Financial Secretary seriously think that, under such uncompetitive terms, British steel production will remain in Britain when it can move to anywhere in the world, including the three countries to which I have referred where there is no energy tax on steel production and the costs are much lower? Closer to home—and much worse—the industry could move to the continent; in Belgium and Luxembourg, for example, there is a 100 per cent. exemption for steel production.
      In the Environmental Audit Committee, I pointed out that even after the full rebates on offer to the British steel industry, there will be a tax equivalent to £2.40 per tonne of steel produced in this country, which compares with 4p per tonne in Germany and an average for Europe as a whole of 40p per tonne. When I pointed out that that might just impact on the competitiveness of the British steel industry, the Financial Secretary said that he imagined that the industry was pleased with the much more favourable position in which it finds itself. That was woefully inadequate.
      Some 72 per cent. of car components used in new cars in the UK are now imported from overseas—a major component being steel. That is an increase of more than 10 per cent. over the last three years. Despite all the good work done in reducing fuel consumption by the British steel industry over a number of years and despite signing a memorandum of understanding with the Department of the Environment, Transport and the Regions on energy savings in December 1999, the British steel industry will be caned heavily.
      The Financial Secretary pretends that countries such as Korea, South Africa and India—which would benefit from the production of steel moving abroad—can exist in some sort of environmental dome; that the carbon dioxide emissions that they produce in a much less regulated system than that of this country can be contained within their own airspace. That is a complete nonsense, of course, and if the Government are serious about global environmental improvement, they need to take account of the competitive advantage they will give to less environmentally friendly countries on the other side of the planet.
      9.30 pm
      Mr. Timms: I am slightly concerned by the hon. Gentleman's line of argument. Does he believe that the UK should meet its Kyoto targets?
      Mr. Loughton: I agree entirely that this country should meet its Kyoto targets, if not the extended target as well. Those targets could be met by a raft of other measures that have already been put in place, many by the previous

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      Government. It could have been met even faster if we had not had the moratorium on gas-fired power stations that the Government introduced two years ago for no other reason than pandering to the coal mining lobby, regardless of the environmental impact. They were trying to have their cake and eat it.
      The other inconsistency in the Government's approach has been the use of the IPPC criteria for those companies that will be exempt. We are the only country in the EU which uses those criteria for determining who will be subject to an energy tax. It will be the non-polluting businesses which stand to suffer the most. I fail to see, despite the Minister's constant protestations, how the measure can be a sector-neutral tax. The same sectors will experience great divergences.
      One sector that will not be exempt is glass, but a major part of the glass industry produces double glazing, which has a great environmental benefit. It will still be 100 per cent. liable for the energy tax. Some two thirds of the energy bill of a supermarket chain such as Sainsbury's goes on chiller cabinets for chilled and frozen foods. That cannot be reduced by new technology. The textile industry in the east midlands has lost half its work force in the past 10 years and Coats Viyella has just announced the closure of another factory with the loss of 200 jobs. That industry will not benefit from the exemptions to the tax.
      BOC has already been mentioned, and it is one of the largest employers in my constituency. Some 78 per cent. of the cost of the industry is electricity, and it is one of the five largest users of electricity in the UK. It stands to lose £8.5 million through the energy tax charges, and will gain only £500,000 through the national insurance changes. What will happen to BOC, a company in the throes of a takeover by a European and American consortium? As the company itself has pointed out, it will be able easily to remove production of those gases to alternative countries or to increase the prices to the consumer, both of which will have knock-on effects on British manufacturing industry, including the steel and chemical industries, supermarkets and retailers who use its products. That is despite the fact that BOC has voluntarily improved its energy efficiency by some 13 per cent. over the past five years.
      So much of the detail of this new and harmful tax is still shrouded in secrecy. We have not seen the terms of the agreements. We have not seen how it can be sector neutral. We do not know how long the rebate will last after the initial few years. How will the second wave of companies to be exempt be decided? We have had no details of how the emissions permit trading system will operate. We have no further details—which were promised by the Minister when he appeared before the Environmental Audit Committee—on other possible criteria for exemption instead of the IPPC criteria. We also have no details about how the negotiated agreements will be monitored.
      The entire tax has been a fudge, a mess and a muddle for the past 18 months. The Government still do not know what they are doing, and the details in the Finance Bill are a triumph of quantity over quality. A red herring of green taxation is being used as an excuse for another revenue-raising power, which will destroy the competitiveness of so much of British industry, for which the Budget has done little indeed.
      Mr. Swayne: My hon. Friend the Member for Ludlow (Mr. Gill) spoke about how the effect of the tax might be
      110
      masked for a while by the competitive exchange rate enjoyed by companies that import a disproportionate amount of the raw products that they need. However, that will not be true of the protected horticulture sector, which will be exposed to the full force of this disastrous tax from the outset.
      I have raised the problems faced by the protected horticulture sector in questions, correspondence and debate for the past two years. Recently, my correspondence has focused on the industry's attempts to secure the 80 per cent. rebate that was to be available on detailed issues to do with the progress of negotiations, and on how agreements could be enforced technically.
      After all that correspondence, and all the words written to me by the Financial Secretary, we now discover that the protected horticulture industry is not eligible for any rebate because it is not covered by the European Union's IPPC directive. When he winds up the debate, I hope that the Financial Secretary will explain how that confusion, which has caused so much fruitless correspondence, arose.
      As it applies to the protected horticulture sector, this is a daft tax. As my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) said, the horticulture sector consumes carbon dioxide, and is therefore an environmentally friendly industry. However, it is highly exposed to competitive pressure from the rest of Europe, and from Holland in particular.
      The consequence of the industry's destruction would be that this country would have to import produce from elsewhere. Those imports, to a very great extent, would arrive by air and thus use aviation fuel—one of the worst forms of pollution, and one of the worst generators of greenhouse gases. That would be a ridiculous situation for this country.
      The Government acknowledge that competition abroad provides a generous regime for energy taxes, and have therefore agreed a temporary 50 per cent. rebate for protected horticulture. I have never believed that a rebate of 50 per cent. would be enough—from the start, I have argued that the rebate should be of 100 per cent—but why is it to be temporary? Why is a sunset clause to be built into the proposal to ensure that, as an absolute maximum, the rebate will last for only five years? Is it because the Government recognise that no protected horticulture industry will exist in five years? Is that why they consider that the arrangement can be discarded then?
      Mr. Tyrie: I shall be brief, as time is getting on. This proposed tax is extraordinary. I have seen nothing like it since the poll tax first appeared in the mid-1980s. [Interruption.] When I first saw the details of it, in 1985, the poll tax was called the residents' charge, and I fought a bitter—and, I am afraid, fruitless—battle against it. Some Labour Members laugh now, but they will wring their hands. I hope that they will do their best to fight this extraordinary levy when they start receiving complaints from manufacturing firms in their constituencies.
      I am not even sure that this is a tax. A tax, according to any definition of taxation, needs a degree of certainty, but there is no certainty built into this. The levy will be negotiated individually with firms. There is no precedent for a measure with so much uncertainty built in. I even wonder—and perhaps this would better be made as a point of order—whether it would qualify as a money Bill. The House of Lords might like to consider that at a later stage, if it has not been completely neutered by further reform.

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      The main objections to the tax have already been raised. It will not target the people who produce the CO2 emissions—if, indeed, the objective is to cut down CO2 emissions. Gas generation should be encouraged and coal-fired generation of electricity discouraged. The levy will not achieve that. To believe that a tax can be devised that is not only neutral overall but neutral with respect to manufacturing stretches credulity. I cannot believe that that is achievable. Officials must have been working overtime to think of a way of squaring that circle so that the Minister could say what he said a moment ago.
      For the tax to have the intended effect, there must be a massive restructuring of British industry. I do not believe that the Government have the stomach for that, but I believe that they have the stomach for tax increases. A measure cloaked in an environmental guise will turn into a revenue-raising measure that will have little, if anything, to do with Kyoto.
      The heart of the case is built around some of the points made by my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) and my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). The medium-term effect of the tax must be that a significant proportion of British industry will go abroad to places not covered by the Kyoto agreement. Its net effect may be to increase global emissions of CO2 overall. If the Government have not even estimated what the net reduction in global CO2 emissions would be as a consequence—and I have seen nothing on the Government's capacity to fulfil the Kyoto agreement—they should withdraw the measure.
      Mr. Drew: I am confused about how removing the climate change levy will convince countries that have not yet signed up to Kyoto to do so.
      Mr. Tyrie: I find it ludicrous that we should embark on a massive restructuring of British industry, with a possible huge economic disbenefit to many people in Britain, merely in the hope that other countries will finally sign up to Kyoto. If we are to reduce CO2 emissions globally, we must act globally. We must move forward with the main producers on board. The main producers of CO2 emissions are not on board: the United States will drag its feet, and China has given no indication that it is prepared to implement the Kyoto agreement.
      This is an extraordinary, ill-thought-out tax, and I sincerely hope that before it is too late, the Government will rethink the measure and get rid of the 83 pages of schedule 6.
      Mr. Timms: There was some procedural confusion among Opposition Members at the outset of the debate. We have not been debating an amendment—this is a clause stand part debate, which I am responding to in the normal way.
      In opening the debate, the right hon. Member for Wells (Mr. Heathcoat-Amory) made a series of wild and uncharacteristically ill-informed generalisations criticising the climate change levy. He made several inaccurate comments, and I look forward to putting them right in Committee.
      112
      9.45 pm
      Having made some wild generalisations, the right hon. Gentleman fastened on a couple of specific complaints, but no amendments have been tabled on combined heat and power, the integrated pollution prevention and control basis for negotiated agreements or any of his points. That is why I found his speech confusing. The hon. Member for Hazel Grove (Mr. Stunell) rightly said that the right hon. Gentleman did not refer to the seriousness of the problem of climate change, and nor did he refer to the Kyoto objectives, which we have a statutory obligation to meet. By those omissions, he reflected the Tory party's dreadful record on the environment.
      The hon. Gentleman was right to acknowledge those points and to support the principle of introducing the levy, which should be supported by everyone concerned about climate change and global warming. The levy is strongly supported by environmental organisations, and there has been a steady and encouraging stream of letters from constituents to Members of Parliament saying that the Government must stick to their guns on the climate change levy. That is what we shall do.
      Mr. Tyrie: Will the Minister give way?
      Mr. Timms: I will not give way at this stage.
      Climate change is the single greatest environmental threat facing the world today. Globally, average temperatures are rising by about 0.15 deg C per decade, and 1998 was the warmest year on record. The intergovernmental panel on climate change predicts that if no action is taken to limit greenhouse gases, global average temperatures could rise by up to 3.5 deg C by the end of the next century. That would cause extreme changes in weather patterns, rising sea levels, damage to agriculture and population displacement with potentially catastrophic effects in some parts of the world.
      Mr. Swayne: Will the Minister give way?
      Mr. Timms: I should like first to make some progress.
      At the Kyoto Summit in 1997, the developed countries agreed a legally binding commitment to reduce greenhouse gas emissions. The UK's contribution was set at a 12.5 per cent. reduction in emissions on 1990 levels. Following that agreement, in March 1998 my right hon. Friend the Chancellor asked Lord Marshall—then president of the Confederation of British Industry—to produce a report on economic instruments and the business use of energy. His report was published in November 1998 and said that there
      probably is a role for a tax if businesses of all sizes and from all sectors are to contribute to improved energy efficiency and help meet the UK's emissions targets.
      In the light of that report and further consultations, the Chancellor announced in the March 1999 Budget that we would introduce a climate change levy on business use of energy, to take effect from April 2001. The levy forms a key part of our climate change programme and our drive towards environmental modernisation. It will make a significant contribution to meeting our legally binding Kyoto target and, moving beyond that, towards our domestic aim of a 20 per cent. reduction in CO2 emissions. I was pleased to hear the hon. Member for East Worthing and Shoreham (Mr. Loughton) support that, even if I disagreed with much of the rest of his speech.

      113
      Revenues from the levy will be recycled to business through cuts in employer national insurance contributions and additional support to promote energy efficiency, including renewable sources of energy.
      Mr. Tyrie: Would the Minister substantiate the point that he made early in his remarks that the recycling of the money—implying fiscal neutrality—would be achieved within the manufacturing sector? How can that be ensured?
      Mr. Timms: It has been ensured. It was set out in the pre-Budget Report last November. I am surprised that more hon. Members were not aware of that. However, I shall address that point as several Members have referred to the matter.
      We made it clear that the climate change levy will be charged on the industrial and commercial use of energy. It is aimed at maximum environmental effectiveness while safeguarding the competitiveness of UK firms. We also wanted to make it as simple as possible to administer and, thanks to extensive consultation, we have achieved that. The tax is well designed as a result both of the wide discussions that have taken place since the Chancellor's announcement a year ago and of the changes that we made subsequently.
      For social policy reasons, the levy will not be charged on the domestic use of energy, because of our concern at the current high rate of fuel poverty. The existing rules used to establish which supplies of fuel and power are charged at the lower rate of 5 per cent. value added tax will be used to determine domestic consumption. As a consequence, the non-business use of energy by charities will also not be subject to the levy.
      Mr. Swinney: Will the Minister clarify whether local authorities, as public sector bodies, will be liable to pay the climate change levy?
      Mr. Timms: Yes, they will. They will also benefit substantially from the reduction in national insurance contributions. For that reason, the package is an attractive one for many local authorities.
      Several hon. Members referred to combined heat and power. As I pointed out in an intervention, the exemption from the levy for combined heat and power will create a favourable environment for the development of such systems. I anticipate that many firms—to some of which I have spoken—will invest in CHP as a result.
      I am aware of the case of British Sugar, which intends to defer decisions on a couple of CHP systems because it would prefer an even more favourable environment. However, it is right that the most favourable regime under the levy should be for renewable energy sources; renewable energy is much less well established in the UK and, critically, it produces zero emissions, whereas there are emissions from CHP.
      However, the levy will provide a significant boost for good-quality CHP systems. We shall certainly see many new schemes of that sort as a result.
      Mr. Stunell: Is the Minister assuring the Committee that the introduction of the levy in its current form will accelerate the achievement of the 10,000 MW target for CHP by 2010, or slow it down?
      Mr. Timms: The levy will provide a significant additional boost for investment in CHP—I think that is the point that the hon. Gentleman was making. It is good news for CHP.
      114
      The hon. Gentleman also suggested that some funny money was involved in the package of support for energy efficiency measures. That is not true. The 100 per cent. capital allowances are certainly not funny money; they will cost the Exchequer £100 million in year one and rather more in year two. Of course, the real incentive for extra investment and for extra effort to save energy is provided by the levy itself. It will increase the incentives for people to reduce energy usage. I can assure him that there is a genuine and substantial Exchequer cost in the capital allowance part of the energy efficiency fund as well as in the £50 million to which he also referred.
      Mr. Loughton: The Minister told the Select Committee on Environmental Audit that the £100 million was purely capital allowances that are now available in year one rather than later, so the actual amount of tax that companies will pay is no less—the matter relates only to the timing of the payment of the tax.
      Mr. Timms: I made the point that in year one there is a £100 million cost to the Exchequer as a result of that package of allowances. Of course, as the hon. Gentleman will know, capital allowances are extremely popular among firms and undoubtedly have a significant effect in encouraging investment of that kind.
      Mr. Stunell rose—
      Mr. Timms: I will not give way for a moment. I want to make some more headway.
      The right hon. Member for Fylde (Mr. Jack), in his customarily well-informed, engaging way, made a point about the strict consents policy that I have heard him make a couple of times now. The lifting of the strict consents policy has already been announced. It was only ever intended to be a temporary policy—that was always made absolutely clear—and the three years of its application will not have a measurable impact on emissions by 2010. Therefore I hope that we can dispose of that argument, ingenious although it is.
      The right hon. Gentleman made the slightly idiosyncratic suggestion that we should put all our eggs in one basket, the basket in question being short-rotation coppicing. I believe that there is a role for short-rotation coppicing. I have visited the first power station to make use of such coppicing; it is being developed by Kelda in the constituency of my hon. Friend the Member for Selby (Mr. Grogan). I do not know whether the right hon. Gentleman has been there; I recommend him to go if he has not been. It is an interesting visit. There are some issues surrounding the cost of producing energy in that way, but I believe that there is a role for it, alongside other renewable power generation methods. The levy will help; that perfectly illustrates its importance. The levy is precisely the type of measure that is needed to stimulate new and renewable energy generation methods, because they are completely exempted from the levy whereas conventional methods are not. That will provide an incentive effect.
      However, the right hon. Gentleman seemed to suggest that there was some easy, obvious, painless solution, which no one would ever notice, to address the problem of emissions in the United Kingdom. There is not. That is illusory, and I do not think that that view should be expressed.

      115
      My hon. Friend the Member for Preseli Pembrokeshire (Mrs. Lawrence) made some important points about the commercial opportunities for the UK in the development of these new techniques, and in environmental modernisation. She is absolutely right about that.
      The right hon. Member for Fylde asked me about the Treasury's work with other Government Departments. Unlike the Government he was a member of, ours is a joined-up Government, and that is certainly the case in this area, as in every other.
      Several hon. Members asked me to go into more detail—in fact, the hon. Member for Chichester (Mr. Tyrie) just asked me to do so—about revenue neutrality. All the proceeds of the levy will be recycled to business, but beyond that, the levy will indeed be broadly neutral between the manufacturing and services sectors. That means that the impact of the combination of payments under the levy, the reduction in employer's national insurance contributions and the additional support for energy-saving measures in the £150 million fund on the manufacturing sector or on the services sector will broadly balance each other out. That was spelt out in the pre-Budget report in November. Very many firms will be net beneficiaries from the package. I was pleased that the right hon. Member for Wells said that he was a director of two of them.
      Of course, the effect of a levy such as this, which is revenue neutral overall but shifts the burden on an unchanged overall sum in tax from employment to energy use, will be a further boost for employment in the UK. That is another reason why the levy is such good news.
      Finally, I want to respond to the points that the hon. Member for New Forest, West (Mr. Swayne) and others made on horticulture. The Bill would provide the horticulture sector with a uniquely favourable arrangement. Opposition Members should have welcomed that. It is a significant change on what was said in November. I did not notice much of a welcome. It is a very favourable step from the viewpoint of the horticulture sector. There will be a ring-fenced fund, within the wide range of the efficiency package, to help energy-efficient investments in horticulture. Thermal screens will be eligible for help from the fund. Finally, the levy will be set at the 50 per cent. rate for up to five years.
      10 pm
      By the time the levy comes into effect next year, it will have been two years since it was announced, and longer still since Lord Marshall's report. That long period of preparation was adopted to ensure that we could get the details right and to enable everybody involved to prepare adequately for the change. That has been achieved. It has been an impressive exercise, and I thank everyone who took part. I know that some would have liked more change, and I do not blame anyone for continuing to lobby for lower tax bills, which is everyone's prerogative. The great majority of the concerns that were expressed have now been wholly addressed and substantial changes have been made in response to the consultation. I commend this important clause to the Committee.
      Mr. Flight: We do not object to the Kyoto targets or our obligations, but as my hon. Friend the Member for
      116
      East Worthing and Shoreham (Mr. Loughton) has pointed out, the clause has a history of fudge, muddle and pork-barrel politics. This is a crackpot proposal. Its impact will be unfair and arbitrary. The 1PPC guidelines are not suitable, and the Kyoto objectives can be achieved by other means such as increased use of gas power and coppicing. It is nonsense not to exempt all combined heat and power processes, as almost all have to sell electricity to the grid and buy it back. As the hon. Member for Hazel Grove (Mr. Stunell) pointed out, the subject of the levy is wrong, and it should be targeted upstream on CO2 emissions.
      Conservative Members do not believe that the levy will be tax neutral. As hon. Members have pointed out, it is inevitable that it will become a nice little earner.
      BOC has been cited as an example of a sound, environmentally friendly British company that will suffer, and indeed it will. Its bill, net of its rebate, will be just under £8 million. It spends £60 million per annum, or 78 per cent, of its production costs, on electricity. Its air separation process is environmentally friendly, and it has spent a considerable amount on environmentally friendly investment in this country. It will be placed at a major competitive disadvantage to businesses in the Netherlands and Germany, where industrial gases companies are exempt from such taxes.
      The clause will cause enormous damage to British manufacturing, including the steel industry. We are grateful for the sop that has been thrown to horticulture, but I assure the Minister that present exchange rates mean that the substantial horticulture industry in my part of the world believes that it will not exist in a year and a half if the clause is passed.
      In the motor car industry, the Government are giving to Rover with one hand, and imposing a £1 million tax with the other. As the hon. Member for Preseli Pembrokeshire (Mrs. Lawrence) pointed out, environmental change produces jobs, but they will be nothing compared with the jobs that will be lost in British industry and engineering and in the heartland of Labour constituencies. The clause is absolutely typical of elitist, politically correct new Labour. The Minister calls it good news. He should tell that to British industry. This will be a disaster for British industry.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 309, Noes 122.

      Division No. 175]

      [10.4 pm

      AYES

      Abbott, Ms Diane

      Benn, Rt Hon Tony (Chesterfield)

      Adams, Mrs Irene (Paisley N)

      Bennett, Andrew F

      Ainger, Nick

      Bermingham, Gerald

      Ainsworth, Robert (Cov'try NE)

      Berry, Roger

      Allen, Graham

      Best, Harold

      Anderson, Janet (Rossendale)

      Betts, Clive

      Armstrong, Rt Hon Ms Hilary

      Blackman, Liz

      Ashton, Joe

      Blears, Ms Hazel

      Atherton, Ms Candy

      Boateng, Rt Hon Paul

      Atkins, Charlotte

      Borrow, David

      Austin, John

      Bradley, Keith (Withington)

      Ballard, Jackie

      Barnes, Harry

      Brinton, Mrs Helen

      Bayley, Hugh

      Brown, Rt Hon Nick (Newcastle E)

      Beard, Nigel

      Brown, Russell (Dumfries)

      Beckett, Rt Hon Mrs Margaret

      Browne, Desmond

      Beith, Rt Hon A J

      Bruce, Malcolm (Gordon)

      Bell, Stuart (Middlesbrough)

      Burstow, Paul

      Benn, Hilary (Leeds C)

      Butler, Mrs Christine

      117

      Campbell, Rt Hon Menzies (NE Fife)

      Hall, Patrick (Bedford)

      Hamilton, Fabian (Leeds NE)

      Campbell, Ronnie (Blyth V)

      Hanson, David

      Campbell-Savours, Dale

      Harman, Rt Hon Ms Harriet

      Caplin, Ivor

      Heal, Mrs Sylvia

      Casale, Roger

      Healey, John

      Caton, Martin

      Heath, David (Somerton & Frome)

      Chaytor, David

      Henderson, Doug (Newcastle N)

      Clapham, Michael

      Henderson, Ivan (Harwich)

      Clark, Rt Hon Dr David (S Shields)

      Heppell, John

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hill, Keith

      Hinchliffe, David

      Clarke, Charles (Norwich S)

      Hodge, Ms Margaret

      Clarke, Eric (Midlothian)

      Hoey, Kate

      Clarke, Rt Hon Tom (Coatbridge)

      Hood, Jimmy

      Clarke, Tony (Northampton S)

      Hoon, Rt Hon Geoffrey

      Clelland, David

      Hope, Phil

      Clwyd, Ann

      Hopkins, Kelvin

      Coaker, Vernon

      Howells, Dr Kim

      Coffey, Ms Ann

      Hughes, Ms Beverley (Stretford)

      Colman, Tony

      Hughes, Kevin (Doncaster N)

      Connarty, Michael

      Hughes, Simon (Southwark N)

      Corbett, Robin

      Humble, Mrs Joan

      Corbyn, Jeremy

      Hurst, Alan

      Corston, Jean

      Hutton, John

      Cox, Tom

      Iddon, Dr Brian

      Cranston, Ross

      Illsley, Eric

      Crausby, David

      Jackson, Ms Glenda (Hampstead)

      Cryer, Mrs Ann (Keighley)

      Jackson, Helen (Hillsborough)

      Cryer, John (Hornchurch)

      Jamieson, David

      Cummings, John

      Johnson, Alan (Hull W & Hessle)

      Cunningham, Rt Hon Dr Jack (Copeland)

      Johnson, Miss Melanie (Welwyn Hatfield)

      Cunningham, Jim (Cov'try S)

      Jones, Rt Hon Barry (Alyn)

      Dalyell, Tam

      Jones, Helen (Warrington N)

      Darling, Rt Hon Alistair

      Jones, Ms Jenny

      Davey, Edward (Kingston)

      (Wolverh'ton SW)

      Davey, Valerie (Bristol W)

      Jones, Jon Owen (Cardiff C)

      Davidson, Ian

      Jones, Dr Lynne (Selly Oak)

      Davies, Rt Hon Denzil (Llanelli)

      Jones, Martyn (Clwyd S)

      Dawson, Hilton

      Jowell, Rt Hon Ms Tessa

      Dean, Mrs Janet

      Kaufman, Rt Hon Gerald

      Denham, John

      Keen, Alan (Feltham & Heston)

      Dobbin, Jim

      Kemp, Fraser

      Donohoe, Brian H

      Khabra, Piara S

      Doran, Frank

      Kidney, David

      Drew, David

      Kilfoyle, Peter

      Dunwoody, Mrs Gwyneth

      King, Ms Oona (Bethnal Green)

      Eagle, Angela (Wallasey)

      Kirkwood, Archy

      Edwards, Huw

      Ladyman, Dr Stephen

      Ennis, Jeff

      Lawrence, Mrs Jackie

      Etherington, Bill

      Laxton, Bob

      Fearn, Ronnie

      Lepper, David

      Field, Rt Hon Frank

      Leslie, Christopher

      Fisher, Mark

      Levitt, Tom

      Fitzsimons, Lorna

      Lewis, Ivan (Bury S)

      Flint, Caroline

      Linton, Martin

      Flynn, Paul

      Livsey, Richard

      Foster, Rt Hon Derek

      Lloyd, Tony (Manchester C)

      Foster, Don (Bath)

      McAvoy, Thomas

      Foulkes, George

      McCafferty, Ms Chris

      Gardiner, Barry

      McDonagh, Siobhain

      George, Andrew (St Ives)

      Macdonald, Calum

      George, Bruce (Walsall S)

      McDonnell, John

      Gerrard, Neil

      McFall, John

      Gibson, Dr Ian

      McGuire, Mrs Anne

      Godman, Dr Norman A

      McIsaac, Shona

      Godsiff, Roger

      McKenna, Mrs Rosemary

      Goggins, Paul

      Mackinlay, Andrew

      Golding, Mrs Llin

      McNamara, Kevin

      Gordon, Mrs Eileen

      McNulty, Tony

      Griffiths, Win (Bridgend)

      MacShane, Denis

      Grocott, Bruce

      McWalter, Tony

      Grogan, John

      McWilliam, John

      Gunnell, John

      Mahon, Mrs Alice

      Hain, Peter

      Marsden, Gordon (Blackpool S)

      118

      Marsden, Paul (Shrewsbury)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Maxton, John

      Meacher, Rt Hon Michael

      Smith, John (Glamorgan)

      Meale, Alan

      Smith, Llew (Blaenau Gwent)

      Michael, Rt Hon Alun

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

      Michie, Bill (Shef'ld Heeley)

      Snape, Peter

      Michie, Mrs Ray (Argyll & Bute)

      Soley, Clive

      Miller, Andrew

      Southworth, Ms Helen

      Mitchell, Austin

      Spellar, John

      Moonie, Dr Lewis

      Squire, Ms Rachel

      Moore, Michael

      Starkey, Dr Phyllis

      Moran, Ms Margaret

      Steinberg, Gerry

      Morgan, Ms Julie (Cardiff N)

      Stevenson, George

      Morley, Elliot

      Stewart, David (Inverness E)

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

      Stewart, Ian (Eccles)

      Stinchcombe, Paul

      Mullin, Chris

      Stoate, Dr Howard

      Murphy, Denis (Wansbeck)

      Strang, Rt Hon Dr Gavin

      Murphy, Rt Hon Paul (Torfaen)

      Straw, Rt Hon Jack

      Naysmith, Dr Doug

      Stringer, Graham

      Norris, Dan

      Stuart, Ms Gisela

      O'Brien, Bill (Normanton)

      Stunell, Andrew

      O'Brien, Mike (N Warks)

      Sutcliffe, Gerry

      O'Hara, Eddie

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Olner, Bill

      O'Neill, Martin

      Taylor, David (NW Leics)

      Organ, Mrs Diana

      Taylor, Matthew (Truro)

      Osborne, Ms Sandra

      Temple-Morris, Peter

      Palmer, Dr Nick

      Thomas, Gareth (Clwyd W)

      Pearson, Ian

      Timms, Stephen

      Pickthall, Colin

      Tipping, Paddy

      Pike, Peter L

      Todd, Mark

      Plaskitt, James

      Tonge, Dr Jenny

      Pond, Chris

      Touhig, Don

      Pound, Stephen

      Trickett, Jon

      Prentice, Ms Bridget (Lewisham E)

      Truswell, Paul

      Prentice, Gordon (Pendle)

      Turner, Dennis (Wolverh'ton SE)

      Prescott, Rt Hon John

      Turner, Dr Desmond (Kemptown)

      Prosser, Gwyn

      Turner, Dr George (NW Norfolk)

      Purchase, Ken

      Turner, Neil (Wigan)

      Quin, Rt Hon Ms Joyce

      Tyler, Paul

      Quinn, Lawrie

      Tynan, Paul

      Radice, Rt Hon Giles

      Vis, Dr Rudi

      Rapson, Syd

      Walley, Ms Joan

      Ward, Ms Claire

      Raynsford, Nick

      Watts, David

      Rendel, David

      Webb, Steve

      Roche, Mrs Barbara

      White, Brian

      Rooker, Rt Hon Jeff

      Whitehead, Dr Alan

      Ross, Ernie (Dundee W)

      Wicks, Malcolm

      Rowlands, Ted

      Williams, Rt Hon Alan (Swansea W)

      Roy, Frank

      Ruane, Chris

      Williams, Alan W (E Carmarthen)

      Ruddock, Joan

      Williams, Mrs Betty (Conwy)

      Russell, Bob (Colchester)

      Willis, Phil

      Russell, Ms Christine (Chester)

      Wills, Michael

      Ryan, Ms Joan

      Wilson, Brian

      Salter, Martin

      Winnick, David

      Sanders, Adrian

      Wood, Mike

      Sarwar, Mohammad

      Worthington, Tony

      Savidge, Malcolm

      Wray, James

      Sawford, Phil

      Wright, Dr Tony (Cannock)

      Sedgemore, Brian

      Wyatt, Derek

      Sheerman, Barry

      Skinner, Dennis

      Tellers for the Ayes:

      Smith, Rt Hon Andrew (Oxford E)

      Mr. Jim Dowd and

      Smith, Angela (Basildon)

      Mr. Mike Hall.

      NOES

      Amess, David

      Bottomley, Peter (Worthing W)

      Ancram, Rt Hon Michael

      Bottomley, Rt Hon Mrs Virginia

      Arbuthnot, Rt Hon James

      Brady, Graham

      Bell, Martin (Tatton)

      Brazier, Julian

      Brooke, Rt Hon Peter

      Bercow, John

      Browning, Mrs Angela

      Blunt, Crispin

      Bruce, Ian (S Dorset)

      Boswell, Tim

      Cash, William

      119

      Chapman, Sir Sydney (Chipping Barnet)

      McIntosh, Miss Anne

      MacKay, Rt Hon Andrew

      Clappison, James

      Maclean, Rt Hon David

      Collins, Tim

      McLoughlin, Patrick

      Cormack, Sir Patrick

      Malins, Humfrey

      Cran, James

      Mates, Michael

      Davies, Quentin (Grantham)

      Maude, Rt Hon Francis

      Davis, Rt Hon David (Haltemprice)

      Mawhinney, Rt Hon Sir Brian

      Donaldson, Jeffrey

      May, Mrs Theresa

      Dorrell, Rt Hon Stephen

      Moss, Malcolm

      Duncan Smith, Iain

      Norman, Archie

      Faber, David

      Ottaway, Richard

      Fabricant, Michael

      Page, Richard

      Fallon, Michael

      Paice, James

      Flight, Howard

      Paterson, Owen

      Forth, Rt Hon Eric

      Pickles, Eric

      Fowler, Rt Hon Sir Norman

      Portillo, Rt Hon Michael

      Fox, Dr Liam

      Prior, David

      Gale, Roger

      Randall, John

      Garnier, Edward

      Redwood, Rt Hon John

      Gibb, Nick

      Robathan, Andrew

      Gill, Christopher

      Robertson, Laurence

      Gillan, Mrs Cheryl

      Ross, William (E Lond'y)

      Gray, James

      Rowe, Andrew (Faversham)

      Green, Damian

      Ruffley, David

      Greenway, John

      Sayeed, Jonathan

      Grieve, Dominic

      Shephard, Rt Hon Mrs Gillian

      Hague, Rt Hon William

      Simpson, Keith (Mid-Norfolk)

      Hamilton, Rt Hon Sir Archie

      Spicer, Sir Michael

      Hammond, Philip

      Stanley, Rt Hon Sir John

      Hawkins, Nick

      Steen, Anthony

      Heald, Oliver

      Swayne, Desmond

      Heathcoat-Amory, Rt Hon David

      Swinney, John

      Syms, Robert

      Hogg, Rt Hon Douglas

      Tapsell, Sir Peter

      Horam, John

      Taylor, Ian (Esher & Walton)

      Howard, Rt Hon Michael

      Taylor, John M (Solihull)

      Howarth, Gerald (Aldershot)

      Taylor, Sir Teddy

      Jack, Rt Hon Michael

      Townend, John

      Jackson, Robert (Wantage)

      Tredinnick, David

      Jenkin, Bernard

      Trend, Michael

      Key, Robert

      Tyrie, Andrew

      King, Rt Hon Tom (Bridgwater)

      Waterson, Nigel

      Kirkbride, Miss Julie

      Whittingdale, John

      Laing, Mrs Eleanor

      Wigley, Rt Hon Dafydd

      Lansley, Andrew

      Wilkinson, John

      Leigh, Edward

      Willetts, David

      Letwin, Oliver

      Wilshire, David

      Lewis, Dr Julian (New Forest E)

      Winterton, Mrs Ann (Congleton)

      Lidington, David

      Winterton, Nicholas (Macclesfield)

      Lilley, Rt Hon Peter

      Yeo, Tim

      Lloyd, Rt Hon Sir Peter (Fareham)

      Young, Rt Hon Sir George

      Llwyd, Elfyn

      Loughton, Tim

      Tellers for the Noes:

      Luff, Peter

      Mr. Geoffrey Clifton-Brown

      Lyell, Rt Hon Sir Nicholas

      and

      MacGregor, Rt Hon John

      Mr. Peter Atkinson.

      Question accordingly agreed to.
      Clause 30 ordered to strand part of the Bill.
      To report progress and ask leave to sit again.—[Mrs. McGuire.]
      Committee report progress: to sit again tomorrow.

  WELSH GRAND COMMITTEE
  Motion made, and Question put forthwith, pursuant to Standing Order No. 108 (Welsh Grand Committee (sittings)),
  That the Welsh Grand Committee shall meet on Tuesday 16th May at half past Ten o'clock and between Four o'clock and Six o'clock at Westminster to take questions under Standing Order No. 103, (Welsh Grand Committee (questions for oral answer)), and to consider the Welsh Economy, under Standing Order No. 107 (Welsh Grand Committee (matters relating exclusively to Wales))—[Mrs. McGuire.]
  Question agreed to.

  ADJOURNMENT (WHITSUN)
  Motion made, and Question put forthwith, pursuant to Standing Order No. 25 (Periodic adjournments),
  That this House, at its rising on Thursday 25th May, do adjourn till Monday 5th June 2000.—[Mrs. McGuire.]
  Question agreed to.

  BUSINESS OF THE HOUSE
  Mr. Deputy Speaker (Mr. Michael J. Martin): For the convenience of the House, I shall put together the motions relating to the Business of the House.
  Ordered,
  That, at the sitting on Thursday 25th May, the Speaker shall not adjourn the House until she shall have notified the Royal Assent to Acts agreed upon by both Houses.
  That on Thursday 25th May there shall be no sitting in Westminster Hall.—[Mrs. McGuire.]

  Mr. Deputy Speaker: With permission, I shall put together the motions relating to delegated legislation.
  Ordered,

  DELEGATED LEGISLATION
    NATIONAL HEALTH SERVICE
    That the National Health Service (Pension Scheme and Compensation for Premature Retirement) (Amendment) Regulations 2000 be referred to a Standing Committee on Delegated Legislation.
    COUNTY COURT FEES
    That the County Court Fees (Amendment No. 2) Order 2000 be referred to a Standing Committee on Delegated Legislation.—[Mrs. McGuire.]

  Welsh Economy (Cardiff Airport)
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]
  10.18 pm
  Mr. John Smith: I am grateful for the opportunity to address the House in the Adjournment debate, as it allows me to raise an important issue—the crucial role that Cardiff international airport in my constituency plays in the development of the Welsh economy. I am delighted to see that so many hon. Members have found time to stay behind and listen to the debate at such a late hour.
  I welcome the opportunity because of the timing. It is my belief, and the view of the overwhelming majority of the business community throughout Wales—not just in my constituency and not just in south Wales—that the future development of our only international airport is vital to the future economic success of our country.
  However, a number of decisions taken recently cause me concern. One is the decision to shelve the construction of phase 1 of the airport link road, which was taken by the National Assembly for Wales a couple of months ago, on good grounds. I understand the reasons why the decision was made. The road was considered to be extremely expensive but, sadly, there are no obvious alternatives to the provision of that road.
  I also believe that the timing of the debate is important and helpful because of the European Commission's recent rejection of the Government's concerted efforts to get Wales's only international airport on the assisted areas map for Wales. They were unfortunately rejected because of the European Commission's guidelines and rules.
  I fear that the enthusiasm for the growth and development of Wales's only international airport, its key role in the Welsh economy and, more important, ensuring the right infrastructure to serve it and thus facilitate growth, is waning. I hope that I am wrong. The most important reason for the debate is to get that airport, and road access to it, firmly back on the political agenda, especially in the light of recent decisions.
  My main reason for choosing Cardiff international airport as the subject of the debate is not the benefits that a positive decision would bring to my constituency, although it would benefit considerably; my prime motive is the benefits that the airport could bring to the whole of Wales. Together with objective 1 funding, such a decision would help us to bring Wales back on a par with the United Kingdom for wealth creation per head of population. In 20 years of Tory Government, gross domestic product per head sadly declined to 83.1 per cent. of the United Kingdom average. The gap continues to widen. All our energies must now focus on closing it.
  The airport is important because I am not convinced that we can achieve our objective even with objective 1 funding, which is vital for the valleys and mid and west Wales, unless we get our act together on the airport. There are several reasons for that. No region in the European Union has succeeded in regenerating its economy—even with European structural funds—without a first-class, viable international airport, which provides regular, scheduled business flights. Stuttgart airport in Baden-Wurttemberg is a major facilitator for business in that
  122
  region. Barcelona airport plays a crucial role in the success of Catalonia. It received a heavy injection of funding because of the Olympic games.
  Let us look a little closer to home and consider the fastest-growing economy in Europe, which is that of the Irish Republic. It has a population of between 3.7 million and 4 million; it has three major international airports, which cater for 16 million passengers a year. In Wales, our population is roughly three quarters that of the Irish Republic—between 2.7 million and 2.9 million—yet our international airport handles only 1.3 million passengers a year. We will not be taken seriously as a region if we do not develop a first-class regional airport which provides international flights, especially for our business community.
  My view, which, I believe, is shared by business throughout Wales—if not by decision makers of all political persuasions—is that air travel is the most important mode of business transport. It is at the cutting edge of business communications. If sophisticated air travel is not available to the business community, the right investment decisions will not be made in the interests of Wales.
  Key decisions, especially on overseeing major projects or the expansion of existing investment, may not be taken simply because those at the top of business organisations cannot fly to the region to observe projects and the investment location. A lot of people outside the business community do not understand that such a facility is crucial to business decision making. Nor do they realise—because of the advent of the internet, the telephone, video conferencing and all the rest of it—the importance of interpersonal contact and of decision makers being able to visit a site before recommending whether an investment should be made. Wales lost out on investment because it did not have such a facility.
  Time is money in business and the business community has told me that, if people cannot get to a location to assess the value of an investment, the chances are that the key decision makers will go elsewhere. Wales cannot allow that barrier to remain if we are to succeed over the next six or seven years in our endeavour to regenerate the Welsh economy. The role of business will be crucial and, in the foreseeable future and over the period in which European structural funds will come to Wales, air travel will become more important to business communication in a global economy.
  All the expectations are for large-scale growth in European air travel in general and exceptional growth in business travel across Europe. Air travel is the cutting edge of business communication in the United States, which is the most developed single market in the world. Walk on/walk off intra-continental business flights, which are increasingly becoming a feature of successful business, are available throughout the United States and, increasingly, in Canada and Mexico, which are part of the North American Free Trade Area.
  As the European Union continues to develop as a single market—Wales has a closer trading relationship and depends more on trade with Europe than does any other part of the United Kingdom—what will become domestic flights within the single market will grow in importance. Therefore, it is vital that we get the airport's development right. However, let me make it clear to the House that Cardiff international airport is one of the most modern

  123
  in the country and, although it handles only 1.3 million passengers a year, it has the capacity for more than 4 million.
  Those who have the privilege of visiting the airport will discover that it has a fast-track terminal facility, modern baggage-handling facilities, walk-on gangways that go straight to the aircraft, modern shops and restaurants—it is first class. I should not mention other areas, but I will on this occasion: Bristol does not get a look-in. It also has one of the most advanced air traffic control systems in the United Kingdom. Although it handles civilian aircraft—mainly charter planes, a limited number of scheduled flights and an even more limited number of business flights—it also deals with the considerable number of military aircraft at RAF St. Athan and en route transatlantic flights over Wales.
  A sophisticated modern facility could provide huge benefits for the area. There is a 100 acre business development site adjacent to Cardiff airport and, in a three mile radius, there is a 200 acre development site at the port of Barry, which my hon. Friend the Minister visited only recently. He recognised the huge potential for growth there. A 240 acre site at Rhoose point is also in striking distance. In short, Cardiff international airport's development potential is greater than that which existed at Shannon, which is one of the best examples of using an airport to drive forward investment and an enterprise zone, on the west coast of Ireland. We have seen how successful the Irish have been. Ireland is now the largest software exporter in the world apart from the United States, and part of that is due to the development and enhancement of its business communications.
  What, then, is the problem with the development of Cardiff airport? It is a very simple problem: how on earth are we to get between 3 million and 4 million extra passengers—for that is the number that we need if we are to have a successful airport—along the road that services it? First, they will have to negotiate the nightmare of the Culverhouse Cross junction, which is gridlocked between 8 am and 10 am and between 4 pm and 6 pm every day. That puts a stranglehold not only on the development of the airport, but on the western part of the capital city: commuter traffic is now so snarled up that it has become a local joke.
  A single carriageway, the A4050, is interspersed with roundabouts throughout its length. It can only be described as the sort of road that one might expect to see when approaching an international airport in a third-world country: that is how small it is, given the job that it is expected to do. Those 3 million or 4 million extra passengers will be competing with industrial traffic going to Barry docks, and with holiday traffic going to Barry island and the beautiful Vale of Glamorgan; they will also be competing with the commuter traffic that becomes snarled up daily at Culverhouse Cross.
  The Civil Aviation Authority tells us that the catchment area for the airport has the potential to contain 5 million air passengers. I have already said that the airport handles 1.3 million, and could handle more than 4 million. We are talking about achievable targets, but to ensure that they are met we must provide appropriate access.
  I am confident that, in the next two years, the Vale of Glamorgan railway line will be reopened as a result of the Government's excellent work. That will provide a station
  124
  within half or three quarters of a mile of the airport, which is welcome but should be seen in perspective: the station will cater for, at the best estimate, only 5 or 6 per cent. of airport traffic, or passenger access. The road is crucial; it is vital to the future development of Wales.
  It would be a tragedy if we did not do all that is humanly possible to ensure that Wales can exploit its additional funds to use this unique opportunity to rebuild its economy and return it to what it was some 20 or 25 years ago, when people were highly skilled and highly paid and Wales had a high percentage of the UK's average gross domestic product per capita. Twenty years of Tory rule saw us become a low-wage, low-skill economy with 83.1 per cent. of GDP. We must put that right—that is the challenge that we all face—and I think that we can put it right.
  Wales has enormous potential for economic development. The M4 corridor in the south is probably the most attractive investment location in the European Union. It is highly competitive, it has direct access to the core consumer markets in Europe for products and services, and it provides a high quality of life. The A55 corridor provides a splendid environment for commercial and service sector industries, and also provides access to a good airport: I will not name it, but we all know which it is. However, the same does not apply to the other three quarters of Wales and Welsh business.
  In central Wales and the valleys, we have enormous potential in terms of human capital. We have an enterprise culture. We have talents and skills. We can use objective 1 money to invest in and to exploit those, and to ensure that we get all the benefits out of the strategic advantages that Wales has, but the development of the airport is crucial. There is a direct correlation between the growth of the airport, the growth of business travel in Wales and the success of the economy, so I call on my hon. Friend the Minister to bear that in mind and to do whatever he can.
  I realise that the issue affects every level of government—not just the House, the National Assembly for Wales or the local authority, which has a big responsibility in the matter—but we must as a matter of urgency find an alternative access to that airport. If one has been rejected on cost grounds, and it was a bit of a belt-and-braces project, we must find an alternative and we must find it together quickly. We must have an open mind on the matter. We must consider joint ventures, partnerships with the private sector or whatever. As a nation, we must find a mechanism for providing that vital link to the airport, which will provide a vital engine of growth for the Welsh economy. I am sure that we can do that and I look forward to my hon. Friend remarks with anticipation.
  10.36 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. David Hanson): I thank my hon. Friend the Member for Vale of Glamorgan (Mr. Smith) for the excellent way in which he has championed Cardiff airport. He enthusiastically set out a strong case for the success of the airport, showing in great detail the way in which the Government, the National Assembly, the local authority and all the agencies that are concerned about the future of the airport and, indeed, the future economic prosperity of the Vale of Glamorgan, Cardiff and south Wales generally, can benefit from the airport's success.

  125
  I am particularly pleased to see such a good turnout for an Adjournment debate. I pay tribute to my hon. Friends the Members for Clwyd, West (Mr. Thomas), for Preseli Pembrokeshire (Mrs. Lawrence), for Cardiff, North (Ms Morgan) and, indeed, for Islwyn (Mr. Touhig) for attending the debate. I am also pleased to see the right hon. Member for Caernarfon (Mr. Wigley) and the hon. Member for Brecon and Radnorshire (Mr. Livsey) showing cross-party support. We briefly had a representative of the other main party in the House with us, but we certainly have all parties representing Wales in the Chamber. It is particularly important that we have such an interesting and lively turnout of Members to help with the debate.
  I am particularly grateful to my hon. Friend the Member for Vale of Glamorgan for drawing the House's attention to the importance of Cardiff international airport. As he has said, it is a valuable asset which adds greatly to the economic attractions of south Wales. He emphasised business, the links with business and maximising the opportunities of, for example, objective 1 status, which are important issues.
  There is no doubt that, with modern terminal buildings and the aircraft facilities that it has, Cardiff is one of the fastest growing regional airports in Britain. We should celebrate that fact. The airport already has scheduled services to Aberdeen, Amsterdam, Belfast, Brussels, Dublin, Edinburgh, Glasgow, Guernsey, Jersey, the Isle of Man and Paris, highlighting and illustrating the great European context of Cardiff airport, which my hon. Friend mentioned.
  The success is shown by the fact that the owner of Cardiff airport, TBI, was recently able to announce that 1999 had been a record year for the airport, with more than 1.3 million passengers using it, representing an increase of more than 6 per cent. on the previous 12 months. The new departure lounges and the arrivals hall mean that it now has the capacity to handle up to 2.5 million passengers per year. I was pleased to hear my hon. Friend mention a higher figure of, potentially, up to 4 million. I am sure that TBI is looking for further year-on-year growth.
  Cardiff airport houses one of the most modern aircraft maintenance facilities in Europe, providing more than 700 good-quality jobs, together with related training opportunities. However, I recognise that the airport has untapped potential, as my hon. Friend has said; he has emphasised that. It is fair to say that far too many people from within its catchment area have to travel further afield to find the air services that they require. Additionally, there is a considerable way to go in encouraging the growth of air travel between north and south Wales. I recognise that fact particularly as an hon. Member representing a north Wales constituency but speaking about an airport in Cardiff.
  As my hon. Friend will be aware, the Welsh regional air services study was commissioned in July 1998 by the then Welsh Office and the Department of the Environment, Transport and the Regions. Work will shortly be completed on the study, and I hope that the report will provide us with a clearer view on the role of airports in the Welsh economy.
  The study has not yet been published, but it was done on the basis of a remit from the former Welsh Office and DETR to examine the very point that my hon. Friend dealt
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  with in his speech—the links between air services and economic growth—and to explore the scope for developing new services and airport facilities, including the potential for north-south Wales links. Both the Government and the Assembly will now have to examine the conclusions—which we shall do shortly—that the consultants have reached. We hope to be able to develop future policy on airports and air travel on the basis of the report. Cardiff, as the major airport in Wales, will clearly figure highly in our considerations.
  One of the key points that my hon. Friend made in his speech was on access to the airport. The Government have made it clear that the development of sustainable integrated transport facilities is one of our major policy objectives. Examining the relationships between air and surface travel must form a key part of achieving that objective.
  As my hon. Friend said, the main access roads to the airport are the responsibility of various bodies, but principally of Vale of Glamorgan council. As my right hon. Friend the Secretary of State for Wales has previously told the House in reply to questions from my hon. Friend, the council has already allocated significant sums for design and preparation work for phase 1, between Culverhouse Cross and the Barry dock link road. However, I understand that, in the short to medium term, the scheme has been identified as too expensive to accommodate in the transport grant programme.
  Although I recognise the potential benefit to the airport of undertaking the project, the assessment of relative priorities is wholly a matter for the National Assembly for Wales to make, in consultation with local authorities and other interested parties. In considering the matter further, they will be able to take account of the outcome of the new study which I mentioned into the congestion problems at Culverhouse Cross. On 9 February, Peter Law, the Assembly Secretary, announced that the Assembly would commission that joint study—with Cardiff council and Vale of Glamorgan council—on the congestion problems at Culverhouse Cross.
  I understand that the owners of the airport—for reasons mentioned by my hon. Friend—also are anxious to improve access and have a proposed solution of their own. If they wish to proceed with the matter as a joint venture, they will need to develop a detailed business case for further consideration by the Assembly and the council. I therefore hope that, given the difficulties of which my hon. Friend is aware, there is the possibility of further developments on another access road.
  There are other possibilities for improving access. As my hon. Friend mentioned, reopening the Vale of Glamorgan railway line to passenger traffic could provide an additional access route to the airport—using a shuttle bus service between a new station, at Rhoose, and the airport terminal. Both Vale of Glamorgan council and Bridgend council are currently supporting design work on such a proposal as part of their development of a wider integrated transport proposal.
  I can certainly see the potential advantages that such a scheme would offer. However, in the first instance—I hope that my hon. Friend will accept this in the spirit in which it is said—it will be for the two councils to judge the priority that they accord to the scheme when submitting to the National Assembly their bids for a transport grant. I hope that positive action on that matter will be considered to help improve access to the airport.

  127
  My hon. Friend mentioned the matter of assisted area status in Vale of Glamorgan. I realise that there are certainly concerns about the omission of Barry and certain other areas from the new assisted areas map. However, I should like to pay tribute to his efforts on behalf of Barry and the whole of his constituency to try to secure assisted area status for the areas adjacent to the airport.
  I assure my hon. Friend that my right hon. Friends the Secretaries of State for Wales and for Trade and Industry are conscious of the points that he has made this evening and on other occasions about the importance of the local economy. It has been very difficult to include the areas that he wants in the assisted areas map because, as he knows, the European Commission requirements meant that we had to reduce the map considerably. Those requirements take account of a range of factors, including population and employment statistics. We have to take objective and rational decisions on where to draw the boundaries. My right hon. Friends have been keen to secure the best possible deal for Wales.
  Barry and the airport are currently excluded. Today is the closing date for consultation on the proposed map. I take the points that my hon. Friend has made as further representations. Any proposals for amendments will be examined thoroughly by my right hon. Friends before the map is finalised. For complex technical reasons, we have not yet found a way to include Barry and the airport in the map on the criteria set down by the Commission.
  My hon. Friend has made valuable points about the need to maximise objective 1 and employment opportunities for the airport. Employment and the
  128
  economy of Barry are linked directly to the success of the airport in many ways. I do not underestimate the advantages that assisted area status and development at the airport can bring to Barry. Next week my right hon. Friend the Secretary of State will have the pleasure of opening the major extension to the Dow Corning factory in Barry, which provides 200 new jobs for the area and demonstrates the continued commitment of major international employers to the vale of Glamorgan. The redevelopment of the old town hall site will begin shortly, greatly enhancing the appearance of central Barry, as well as providing new shops and other commercial outlets, while industrial units in the area continue to enjoy high occupancy rates.
  As my hon. Friend will be aware, the new waterfront residential development also promises significant benefits. I was pleased to take up his offer of an invitation to visit recently, when I saw at first hand the success of the waterfront area and the potential that it has for Barry and south Wales as a whole, when linked to the success of the airport. With or without assisted area status, it is important to build on those assets in promoting the attractions of the vale of Glamorgan and the Cardiff area for economic development. I have no doubt that encouraging greater use of Cardiff international airport can play a major role in achieving that. I pay tribute to the representations that my hon. Friend has made—
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twelve minutes to Eleven o'clock.

Preamble
[MR. MICHAEL LORD in the Chair]

Cyprus
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Jamieson.]
10 am
Mr. Tom Cox: I declare an interest. I chair the Commonwealth Parliamentary Association Cyprus group. The group has existed for many years, and its members come from both Houses and all political parties.
Three things need to be said. First, the Republic of Cyprus is a member of the Commonwealth. Secondly, the United Kingdom is one of the guarantor powers for Cyprus. Thirdly, it is nearly 26 years since the Republic of Cyprus was brutally invaded by the Turkish army and about a third of that Commonwealth country is still occupied by a foreign power.
My hon. Friend the Minister will be fully aware of all that has taken place during those 26 years—the United Nations debates, and the statements made by the Secretaries-General of the UN; the actions of Commonwealth countries; the debates in the European Union; the role of the Council of Europe, the only European parliamentary assembly of which the four countries directly involved—Cyprus, the United Kingdom, Greece and Turkey—are members; and the role played by Parliament.
Other than the House of Representatives in Cyprus, few parliaments have been more involved in Cyprus than that of the United Kingdom. During those 26 years, both Houses of Parliament have acted to keep the issue of Cyprus alive. Sadly, although we have kept in the forefront the injustice that Cyprus has suffered and still suffers, we have not made much progress towards a settlement.
The reason for that lack of progress—it has been said repeatedly by the Secretaries-General of the United Nations—is the attitude of Mr. Denktash, the leader of the Turkish Cypriots, and of his friends among the Turkish military, Turkish politicians and the Turkish Government. Mr. Denktash and his friends have never wanted a settlement other than on their terms.
I do not believe that the Governments of the United Kingdom and of the United States of America have really pressed Mr. Denktash or Turkey into meaningful discussions such as could have led to a settlement. One cannot say that, over the years, there have not been many attempts to achieve such a settlement. Hon. Members involved in the matter, of whatever party, have always stated clearly that we are as concerned for the rights and security of Turkish Cypriots as we are for those of Greek Cypriots. We are equally concerned about both communities because their home is in Cyprus. Sadly, what has happened over the years shows that we have not made much progress.
We all wish the current talks well. My hon. Friend the Minister knows that after Helsinki we were clearly told that the current talks would be the breakthrough. I will
2WH
make further points about the Helsinki discussions, which we genuinely believed would make a breakthrough. One hopes that one will be made now. As those of us who have followed the Cyprus issue over the years know only too well, our hopes have many times been built up and then caused to collapse by the attitude of Mr. Denktash.
Famagusta is a case in point. It was, and still is, one of the most beautiful towns in Cyprus. Before the invasion, it was occupied by both Greek and Turkish Cypriots. After the invasion, Mr. Denktash promised that the town would be returned to the Republic of Cyprus. Some years ago, I initiated a debate on the town in the House. Mr. Denktash clearly promised that the town would be returned and that Greek and Turkish Cypriots could once again start to live together there, as they had before the invasion. What happened then? Mr. Denktash decided that he was not prepared to allow the return of Famagusta, which is still a deserted ghost town some 26 years after the invasion. It is an utter disgrace that these circumstances have been allowed to continue. Neither the British nor the Americans did anything to pressurise Turkey or Mr. Denktash to honour the clear commitment that was given.
We know that the Republic of Cyprus is keen to become a member of the European Union. I put it to my hon. Friend the Minister that the credentials of the Republic of Cyprus are as good as those of many of the existing members and certainly as good as those of any of the applicants currently under consideration for membership. Not once, not twice, but repeatedly, President Clerides has invited Mr. Denktash to join him in the negotiations for membership of the Republic of Cyprus in the European Union. What does Mr. Denktash repeatedly reply? He says "No, no, no." Instead of participating, he makes demands and says that they must be fulfilled before he would even consider taking up the generous offer to be part of the Cyprus team and to take part in discussions for membership of the European Union. Mr. Denktash makes demands such as "Recognise my state"—a state that he created some years ago. After all those years, only Turkey recognises it. He also says that Turkey must be allowed into the European Union before Cyprus if he is to go along with President Clerides. Sadly, that demand is yet another example of what those of us who have long been involved in the Cyprus issue have seen over the years.
I am sure that my hon. Friend the Minister is aware of the Loizidou case. Mrs. Loizidou lived in Kyrenia, which is now in the occupied area of northern Cyprus. She took action in the European Court of Human Rights regarding the denial of the use of her property. The judges heard the case in Strasbourg as long ago as July 1998. They found by 15 votes to two in favour of Mrs. Loizidou. Repeated attempts have been made by the Council of Europe and by the chairman in office of the Committee of Ministers to persuade Turkey to honour that judgment.
My hon. Friend the Minister will be aware that, recently, in Strasbourg, the Irish Foreign Minister, Mr. Brian Cowen, was asked for the view of the Committee of Ministers of Turkey's continuing refusal to honour the Court's judgment. He left the Parliamentary Assembly of the Council of Europe in no doubt when he said that that refusal could not be allowed to continue indefinitely.

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What are the Government doing to impress on Turkey that, if it wants to be considered as a candidate for membership of the European Union, it must start to honour and follow certain actions, none more so than the judgment of the European Court of Human Rights, made by 15 votes to two?
All of us who have been involved with Cyprus, whatever party we belong to, have worked genuinely for a settlement in which the rights of both communities are considered and safeguarded. However, we have seen our hopes destroyed year by year because of Mr. Denktash's lack of will. I hope that my hon. Friend the Minister will offer us an example of an action by either Mr. Denktash or Turkey since the invasion nearly 26 years ago that would say yes, they have had concerns but, to their credit, they are making moves that suggest that they want a settlement. I hope that he will do that, because many of us have struggled in vain to find such an example in the actions of Mr. Denktash, the Turkish military or Turkish politicians.
No one can dispute that Turkey has great influence over Mr. Denktash—there is clear evidence of that. By using that influence to persuade him to take part in meaningful discussions, Turkey would help itself greatly in its aspirations for membership of the European Union.
Is my hon. Friend the Minister aware that the Turkish Prime Minister, Mr. Ecevit, has gone on record as saying that there is no Cyprus problem because it was solved by the invasion 26 years ago? I want a reply on that specific point. Do the Government support that view? If they do not, I hope that we will be told so clearly this morning.
All of us who have been involved with Cyprus have always been concerned about the rights of both Greek and Turkish Cypriots. What has concerned us enormously over the years—and many Members have genuinely tried to overcome this problem—is how difficult it is for Turkish and Greek Cypriots to meet to discuss the issues that concern them and their country. We are concerned at the lack of opportunity for people such as business people, trade unionists, farmers, teachers, doctors, ordinary men and women to meet in Cyprus and say that one day there must be a settlement to this issue. There must be such discussions in the buildup to what we hope will be an honourable settlement to this long-running tragedy. Why do these people never have the opportunity to meet in Cyprus? I have to say that Mr. Denktash is the cause of the non-meeting of the communities.
It would be interesting to hear from my hon. Friend the Minister what role he feels his Department can play in getting both Turkish and Greek Cypriots to meet and discuss their concerns. I would suggest that the best place to meet is Cyprus, but if that is not possible, London or some other venue could be an option. Is this something in which he believes that his Department can play a role?
As I have already said, the British Government and the United States Government have a major role to play in seeking a settlement. However, over the years, neither of the two Governments have ever done anything that has in any way concerned or worried either
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Mr. Denktash or his friends in Ankara. We can see that in the on-going criticisms of the Secretaries-General of the United Nations—which I am sure that my hon. Friend has read—about the lack of progress despite repeated attempts to find a settlement.
I refuse to believe those who say that Turkish and Greek Cypriots cannot live together. There are hon. Members here today who come from areas of London and other parts of the country where both Turkish and Greek Cypriots live, work and have businesses that flourish together. The communities can live together if they are given the opportunity to do so with the proper safeguards and securities that both have the right to expect. I hope that there will be meaningful discussion at last in the talks that are about to resume following the Helsinki negotiations. Experience has shown that if those talks are to be constructive and successful the responsibility will rest not with the president of the Republic of Cyprus, but with Mr. Denktash and his supporters in Turkey, and especially the Turkish military.
After 26 years, I believe that too much time has passed and too many opportunities have been missed. This is the opportunity to restore a united Cyprus where people can live together. I hope that the British Government will be at the forefront in trying to ensure that the talks are meaningful and constructive. We hope that the talks will be the beginning of the end of this long-running, 26-year tragedy of a Commonwealth country for which the United Kingdom is one of the guarantor powers.
10.19 am
Sir Sydney Chapman: Next month, the hon. Member for Tooting (Mr. Cox) will have represented his constituents for 30 years, and during that time he has taken an intense interest in the island of Cyprus. I pay tribute to him for that, as well as for initiating, once again, a debate on a very important issue. I remember the 30th anniversary because we both entered the House on the same day. Unfortunately, my political career has been a little less certain. After my first Parliament, I remember using the actor's phrase of being temporarily rested for five years.
The majority of Cypriots have been hopeful and patient for far too long. They are entitled to feel angry and frustrated because the panoply of diplomacy that has been trying to find a solution to the problem of the separation of that beautiful island has so far been unsuccessful. The United Kingdom has a special role to play as co-guarantor. The Commonwealth also has its responsibilities because Cyprus is an important member of the Commonwealth. The European Union, too, has responsibilities towards Cyprus, which is an applicant for membership. More certainly, we know that the United Nations has a responsibility to encourage peaceful settlements throughout the world, and it has committed troops to the island to defend the green line.
I can be brief because the hon. Member for Tooting touched on most of the issues that I wanted to mention. However, I emphasise the fact that successive Governments have tried and toiled to find a solution for Cyprus, so far without success. In another debate on Cyprus 18 months ago, I observed that, at that time, we were investing high hopes in three people: Sir David Hannay, a most distinguished permanent representative

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of the United Kingdom at the United Nations from 1990 to 1995, who had been appointed as a special representative; Mr. Richard Holbrooke, President Clinton's special adviser; and Ann Hercus, the special representative to the Secretary-General at the United Nations. I would appreciate the Minister's observations on what part he feels that those three special representatives have played and on what prospects he believes there are for that work to be continued to successful fruition. I have consistently held the view that the best prospect for the reunification of Cyprus will be as part of a wider political settlement in the region, and I believe that the United States Government have a critical part to play in that.
As has already been mentioned, Cyprus has applied to join the European Union. I can think of no country outside the European Union better qualified to become a member. Indeed, should Cyprus also want to join the single currency, I believe that its credentials are probably stronger than those of some other countries that have already joined.
Mr. Andrew Love: Does the hon. Gentleman agree that the European Community should not allow any outside country to have a veto over the decision whether Cyprus should be allowed to join?
Sir Sydney Chapman: It would perhaps be better for the Minister to answer that question—my understanding is that no country outside the European Union could veto the decision to allow any applicant country to join and it is entirely a matter for existing members—but the hon. Gentleman makes a good point.
Cyprus is well qualified; it could join tomorrow. I suppose that it will wait patiently until at least the end of 2002, but if ever there was a case for using the fast track, Cyprus is it. I pay tribute to the Cypriot high commissioner in London, Mr. Michael Attalides, the embodiment of patience and courtliness, who will soon leave his office to return to Cyprus. I pay tribute to him for listening to us and keeping us informed about the latest situation in his country.
I note that yet another intergovernmental conference of the European Union will take place in December in Nice. Whatever is discussed and decided at that conference, I very much hope that Cyprus's membership of the European Union will not be prejudiced or delayed. I leave the Chamber with the following thought: in the proposals to the preparatory group on institutional and other issues, the Cyprus Government expressed the belief that—I hope that, in quoting indirectly, I shall not affect the thrust of what was said—levels of decision making, at European Union and at national level, need to be clarified in accordance with subsidiarity. I do not claim to have put the Syd into subsidiarity, but on that issue at least, my views are entirely at one with those of the Cypriot Government.
10.26 am
Ms Linda Perham: Like the hon. Member for Chipping Barnet (Sir S. Chapman), I pay warm tribute to my hon. Friend the Member for Tooting (Mr. Cox), chair of the Commonwealth Parliamentary Association Cyprus group, for his tireless championing of a peaceful settlement in Cyprus. Only a
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short while ago, he introduced an Adjournment debate on the case of Mrs. Loizidou. whom he mentioned in his speech, the property owner in Kyrenia who, nearly two years ago, won her case against the Turkish Government at the European Court of Human Rights.
Before I was elected to the House of Commons, I confess that I was more interested in Cyprus's past than its future. Having studied for a degree in classics and having steeped myself in the glories of Greece, to me, Cyprus was the birthplace of Aphrodite, the goddess of love, and the repository of thousands of years of history—ancient places and buildings, some of which it was my great pleasure to visit during two family holidays, in 1991 and 1993. On that second holiday, the reality of the present situation in Cyprus was brought home to me on a visit to Nicosia, the last divided capital in the world. For me and my family, the pain of being faced with barriers of barbed wire, soldiers and guns, forcing apart the people of that beautiful city, the capital for 1,000 years, was palpable. We later journeyed to Famagusta, which my hon. Friend mentioned with great passion and anger, to look out on the ghost town of the once idyllic resort of Varosha, with its now abandoned towering hotels.
During my election campaign in Ilford, North, I received help from several Greek Cypriots. There are also several Turkish Cypriot families resident in the area. On my election to Parliament, the friends of Cyprus was one of the first all-party groups that I joined. I attended almost all its meetings and listened to a wide range of people who are working for peace on the island, including Mr. Attalides, who was mentioned by the hon. Member for Chipping Barnet. I, too, regret the fact that he is leaving his post. There is no substitute for witnessing the situation at first hand, so I was privileged to join the visit of the friends of Cyprus from 11 to 15 October 1998, which I have declared in the Register of Members' Interests.
We engaged in a hectic round of talks to discuss the future of Cyprus with the then special representative, Ann Hercus, the British high commissioner, the European Union ambassador to Cyprus, President Clerides, Foreign Minister Kassoulides, the EU negotiator, former President Vassiliou—who recently addressed a meeting of the friends of Cyprus—the mayor of Nicosia, the Chairman of the Foreign Affairs Committee, the director of the Cyprus question division at the Foreign Office and several Opposition leaders. The prevailing Greek Cypriot view was and is in favour of a bi-zonal, bi-communal federation on track to become part of the European Union in the next phase. That is also the UN Security Council's view: paragraph 11 of resolution 1251 of 29 June 1999 reaffirms its position that
a Cyprus settlement must be based on a State of Cyprus with a single sovereignty and international personality and a single citizenship, with its independence and territorial integrity safeguarded, and comprising two politically equal communities as described in the relevant Security Council resolutions, in a bi-communal and bi-zonal federation, and that such a settlement must exclude union in whole or in part with any other country or any form of partition or secession.
Greek Cypriots are also concerned about the presence in the north of the island of settlers from Turkey—who number about half the population—and about the 30,000 Turkish troops on the island. They are

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particularly worried about the cessation of bi-communal on-island contacts, which my hon. Friend the Member for Tooting mentioned.
During our visit, we met Turkish Cypriots across the green line and had talks with leaders of Opposition parties. In addition, we met two members of Mr. Denktash's ruling party, Mr. Olgun and Mr. Atun—the Speaker of the Turkish Cypriot Assembly—who strongly supported Mr. Denktash's proposal of 31 August 1998 to establish a confederation of two sovereign states on the island, with a special relationship between the Republic of Cyprus and Greece, and between the northern state and Turkey. According to the February 2000 edition of Kibris—the northern Cyprus monthly—that remains Mr. Denktash's position. We have no doubt about that.
We also met Turkish Cypriot leaders and representatives—business people, academics. lawyers and other professionals—and were left in no doubt about the fact that they saw themselves as living in a de facto separate state, saved by the Turkish army of occupation of July 1974 from annihilation as a community following 11 years of Greek persecution that started in December 1963. They saw any moves to reunite the island as a threat to their security and felt that they were being forced by lack of world recognition to rely increasingly on Turkey for support for their survival, economically and politically.
Despite my instinctive academic and cultural sympathies with Greeks and Greek Cypriots, I found it immensely valuable and informative to speak to Turkish Cypriots on the island, including women—particularly as I was the only woman Member of Parliament in the delegation—about their ideas, hopes and fears for the country's future, and to listen to their views about how they and the inhabitants of Muslim Turkey are treated by Christian-dominated, hellenophilic western Europeans, who are always conscious of their ancient debt to Greece for the roots of their civilisation and heritage.
At the end of our long day of talks in northern Nicosia, some of us were taken to meet a Turkish Cypriot Member of Parliament in the Famagusta area, and I was able to look—from the other direction from when I was on holiday five years previously—towards the forlorn facades, empty hulks of hotels and deserted sands that once swarmed with happy holidaymakers. Apart from the green line area, there is no more poignant reminder of the waste and misery of the divided communities.
It is all too easy to be pessimistic about prospects for peace in Cyprus. I think that the speeches by my hon. Friend the Member for Tooting and the hon. Member for Chipping Barnet showed that they are fairly pessimistic after such a long time, and I do not blame them. Although the tragic situation in Cyprus is unique, the seeds of conflict have religious and political parallels, ancient and modern. Some people say that we will never reconcile Catholic and Protestant, Christian and Jew, Muslim and Christian, Pole and Russian, Arab and Israeli, or Greek and Turk—the differences and divisions stretch back over centuries. Just two years ago, I, like many hon. Members and others, held a gloomy view of the prospects for peace settlements in Ireland
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and the middle east, but some of the players in those conflicts, in the countries concerned and internationally, have made determined and sustained efforts to find ways in which to forge forward. I hope that the same will be achieved in Cyprus.
Greek-Turkish relations have improved following the mutual assistance given after the earthquake of 17 August 1999 in north-west Turkey between Izmit and Bursa, and that in Athens in September 1999. At the Helsinki summit in December 1999, Turkey was accepted as a candidate for European Union membership, which was a significant step forward from the setback two years ago in Luxembourg, when Turkey's application was refused. That led to a worsening of relations between the two communities on Cyprus, and the ending of bi-communal on-island contacts.
At the beginning of December 1999, the proximity talks started at the United Nations in New York, and a second round was held from late January to early February in Geneva, aimed at preparing the ground for comprehensive negotiations on a settlement involving the leaders of both communities, Glafcos Clerides and Rauf Denktash, although they have not met face to face. The third round is expected to start on 23 May, three weeks today.
The Greek Minister George Papandreou and the Turkish Minister Ismail Cem met at the beginning of this year to sign agreements on environmental protection, tourism, crime and terrorism, and investment. They even discussed a proposal for a joint bid for the European football championships in 2008. As the late Bill Shankly said that football was more important than matters of life and death, that must give us serious hope of a lasting rapprochement between Greece and Turkey.
I look forward to returning with my family to the ancient and beautiful land of Cyprus when it is a prosperous, peaceful, united island where all Cypriots enjoy success and happiness.
10.36 am
Dr. Rudi Vis: Like my hon. Friend the Member for Tooting (Mr. Cox), I declare an interest, because I belong to various groups associated with Cyprus. It is always a bit of a shock to follow him in a debate, because he leaves little for others to say. He was followed by the hon. Member for Chipping Barnet (Sir S. Chapman), who is equally well informed, as is my hon. Friend the Member for Ilford, North (Ms Perham).
It could be argued that one becomes associated with an issue only when one becomes a Member of Parliament, but in the road in which I have lived for more than 20 years, there are about 80 properties, of which people from Cyprus occupy 25 per cent. Of those people, 23 per cent. are from the Greek Cypriot part, and only one family is from the other part of the island, but they get along fine. In north London, I see Greek and Turkish Cypriots at many meetings, and they get on fine. Their problem is not with one another but with Turkey—Anatolians, not Cypriots.
Turkey invaded in 1974. I think that my hon. Friend the Member for Tooting mentioned the occupied part, which constitutes 37 per cent. of the island. In 1974, far

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less of the population—18 per cent.—was Turkish Cypriot. It would appear that somebody just drew the green line on a map and stopped there. I believe that my hon. Friend got one thing wrong: Turkey is not alone in recognising the occupied territory as an independent republic, as it is in the fine company of North Korea, which I believe has also recognised the country.
However, the occupied land is not a generally recognised republic. I do not want to oppose the United Kingdom's freedom of expression, which is absolutely wonderful, but I become a little upset when I see several tents flying flags of the occupied part as I drive past No. 10 Downing street every day. We ought to do something about that, although that may be the wrong thing to say from the point of view of freedom of expression.
I am an optimist, but I can understand the people of Cyprus becoming pessimistic. There are several underlying causes of that pessimism. The Loizidou case in the European Court of Human Rights has already been referred to. It transpired about 20 months ago. Member states of the Council of Europe should listen to the court, but it appears that they have not done so and do not intend to. There are two interesting elements about the Loizidou case. First, the European Court of Human Rights pronounced not against Mr. Denktash or the occupied territory but against Turkey. Secondly, £340,000 was awarded not because that was the value of the woman's house, but because she did not have the benefit or the pleasure of being able to use her home. Even if it is settled, it still remains her property. I can understand people from Cyprus thinking that the Council of Europe, the United States and the United Kingdom do not listen, because Turkey has not been taken to task over the case. They must wonder what we are up to.
Another important issue is the Ilisu dam. As a country, we are to invest up to £200 million of taxpayers' money in a dam project in Turkey that will flood hundreds of Kurdish villages. Once again, we allow Turkey to get away with it. The wider Kurdish issue is another cause of pessimism. There have been many instances of human rights abuses, yet again we allow Turkey to get away with it. This country, in common with other western European countries, has to take hundreds if not thousands of asylum seekers from Turkey because Turkey, a member of the Council of Europe, treats people so badly.
Turkey is now an aspirant member of the European Union, following negotiations in Helsinki in November 1999. My hon. Friend the Member for Tooting suggested that those negotiations should not have started and that we should not have given the green light once again to the Republic of Turkey—a republic that follows none of the rules that should be followed in international quarters. I understand that we have not yet started negotiations or opened a chapter on EU membership. No chapter should be opened until the serious issues that have been discussed this morning have been resolved.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Before I call the next speaker, I note that three hon. Members have caught my eye and wish to speak before I call the Front-Bench winding-up speeches. If we are all responsible and succinct, I am sure that all those who wish to speak can do so.
10.43 am
Mr. Andrew Love: I will indeed try to be responsible this morning, Mr. Deputy Speaker.
I add my congratulations to my hon. Friend the Member for Tooting (Mr. Cox) on securing today's debate. Congratulations are also due to the high commissioner, who is going on to higher things. We shall doubtless meet him regularly in future. I declare an interest as someone who makes regular visits to Cyprus, all of which are declared in the Register.
Comparisons are often made between Cyprus and Northern Ireland. Although it would be invidious to take those comparisons too far, I will illustrate two aspects of the Cyprus situation. The achievement of the Good Friday agreement needed the undivided support of what I would call the guarantor powers—the Governments of Britain and the Republic of Ireland. Perhaps even more important to its success was the undivided support of the United States Government. There is no doubt that America's support would help in achieving agreement between the two sides in Cyprus.
However, there are many differences between Northern Ireland and Cyprus. Many people thought that it would be almost impossible to bridge the wide gap between the Unionist and nationalist positions in Northern Ireland. At the outset, no one knew how agreement would come about, but it happened through negotiation. Cyprus has been involved in negotiations for many years and the outlines of an agreement that could help to achieve a lasting settlement of the island's dispute are already there.
We spoke earlier about the United Nations' involvement in Cyprus going back to 1963. The UN became involved in negotiations following the invasion of Cyprus in 1974. The organisation played a role in the high-level agreements of 1977 and 1979, which were signed by Mr. Denktash on behalf of the Turkish Cypriot community, and the Presidents of the Republic of Cyprus at those times. We have spoken of the unity, independence and sovereignty of Cyprus and of its having a single personality. That is critical to any agreement, but we all realise that security for everyone is another critical issue. There is a role for the former guarantor powers and the European Community, and perhaps for the United States. Security is critical for not only Cyprus but the whole region. Therefore, the people must have confidence that security guarantees will hold if an agreement is reached.
Political equality was the second issue raised in subsequent negotiations, which were held mainly in the 1980s. Political equality is a concept rather than something that can be put together arithmetically, but it is an important concept in terms of giving both communities on the island confidence that an agreement can be reached. We all wish the UN well in the negotiations that will begin later this month in New York state. The organisation has been involved in negotiations over Cyprus for a long time. Often, when we thought that the negotiations were about to succeed, we were left disappointed. However, the outlines of an agreement, which could come about with the support of all the parties, are there.
We have spoken this morning about Cyprus's application for membership of the EC. My hon. Friend the Member for Tooting said that its credentials were

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good. They are indeed good. I understand that its negotiations on the acquis communautaire are almost complete. I have just returned from a visit to Poland, which has problems with the acquis communautaire. Such problems do not exist in Cyprus. We are often told that Cyprus already complies with the Maastricht conditions in terms of the development of its economy. Although we talk about the difficulties that an appreciating pound causes in Britain, in terms of parity with the Cyprus pound, our pound is depreciating.
The case for membership is strong and, in addition, some of us believe that the application for membership would act as a catalyst in the attempt to achieve an agreement on the reunification of the island. That can happen. The President of Cyprus has invited the Turkish Cypriot community to join in negotiations. It will be the major beneficiary of accession to the European Community. We hope that it will grasp with both hands that opportunity and the longer-term opportunity for Turkey to accede to membership of the Community. That offer, which we discussed during the President's recent visit, remains open. The Government should do what they can to persuade Mr. Denktash and the Turkish Cypriot community to become more involved in the European Union negotiations.
Two issues are critical to reaching an agreement on the reunification of the island. First, confidence-building measures, such as returning Varosha, a suburb of Famagusta, to the Greek Cypriot community and reopening Nicosia airport, have been suggested during the negotiating process. Perhaps those are too ambitious, but it is not too much to expect the United Nations and the British Government to sponsor contact between the two communities and achieve a dialogue. The lack of adequate contact and dialogue have stopped negotiations getting under way. Those factors might be critical in creating the right climate for successful negotiations.
The second critical issue is Britain's role. It is a guarantor power, which has been involved in Cyprus since 1878. It has exceptionally good relations with both communities and the many Cypriots who live in this country. Britain has a unique role because it is a member of the European Community, the Security Council and NATO—all the bodies that are crucial to finding a solution. The present situation cannot continue. The British Government need to play that critical role because of instability in the eastern Mediterranean. This is about, not just Cyprus but relations between the two states, Greece and Turkey. There needs to be a rapprochement between them to find a solution in Cyprus, but we cannot achieve that rapprochement without solving the Cyprus problem. Britain has a great role to play and the Americans also have a critical interest. If we work with the United States, in tandem with Greece and Turkey, that solution—although not possible in the next round of talks—will be open to us in future negotiations.
10.53 am
Mr. Roger Gale: I apologise to hon. Members for my late arrival—there were transport problems in Kent. I also have a registered interest to
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declare. I have travelled to Cyprus under the auspices of the municipality of Morphou and the Cypriot Brotherhood.
In my most recent visit to the Morphou rally last autumn, I was moved, on behalf of my many Greek Cypriot constituents, to meet a man whose home is just over the green line in the village of Morphou. He goes up every year before the rally to the Troodos mountains to look down on his home. He can see it but he cannot reach it because it is illegally occupied. After 26 years, that must be unacceptable internationally. There are people on both sides of that divide who cannot go home lawfully, and they ought to be able to do so.
I am the Conservative vice-chairman of the parliamentary friends of Cyprus; the Labour vice-chairman would agree that we consider ourselves to be friends of all Cypriots. We are regarded by some as spokespeople for the south, the legal regime and Greek Cypriots only, but that is quite untrue. We want Cyprus to be freely and fairly united, based on the three freedoms. We want people to be able to go home and to move freely about their homeland. We want them to seek and gain employment wherever in that homeland they choose to live or work.
An enormous amount of work has been put into seeking to achieve that settlement on just and fair terms, most significantly by President Clerides. Tribute has already been paid this morning to his excellency the high commissioner, Michael Attalides, who has done tremendous work both in Brussels and, most recently, in London. As has been said, he is going on, indubitably, to greater things. These people have a right to our support. They have a right to be backed by the guarantor powers in their endeavours to achieve a lasting and legal solution to the current hopelessly illegal situation.
The Loizidou case has been mentioned. Turkey is clearly in breach of the rulings of the European Court, which is unacceptable for a member of the Council of Europe and should be rectified. Confidence-building measures have been mentioned and some of us have been round that circuit in the past—I was going to say circus, and perhaps that is more appropriate. There is a grave danger that Varosha and Nicosia airport can be used to delay the solution, not to achieve it.
The time has come when we all, including the Government, must recognise that the situation that has prevailed in Cyprus for 26 years is not acceptable. We must stress that point as forcefully as we can in the international arena. The European Union must do that. I also believe that the Americans, who have given considerable support to Turkey, have a duty, in their own strategic interests, to recognise the wider international obligations, which, to be brutally frank, they have so far failed to do.
There are signs of hope, however. The frail and fragile rapprochement between Greece and Turkey that sprang from the earthquake has led to signs of positive movement between those two countries. The most recent medical emergency on Cyprus itself, when people were able to cross the green line to offer assistance, has helped. There is good will. President Clerides has stretched out his hand to say to the Turkish Cypriots, "We are negotiating. You will not stop us. We intend to join the European Union, but come and participate in

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those negotiations." The time has come for ordinary Turkish Cypriots to seize that hand of friendship—that is what it is—and to join the negotiations and become part of a process that must inevitably happen. Successive Foreign Office Ministers have made it clear that there is no right of veto. This situation has gone on too long: a world that respects legal government cannot allow it to go on any longer.
10.59 am
Mr. Jeremy Corbyn: I will obey your strictures, Mr. Deputy Speaker, and be brief, accurate and helpful. I apologise for missing the opening speech of my hon. Friend the Member for Tooting (Mr. Cox). Like many people, I am constantly surprised at the advent of teachers' training days after every holiday, but the lack of child care facilities in this building is no surprise to anyone.
I have been a Member of the House of Commons since 1983 and prior to that was a member of the council in the London borough of Haringey from 1974, representing Harringay ward, which includes Green lanes, which has the highest Greek and Turkish Cypriot population in the country. I represented the ward during the period of the invasion in 1974. The solidarity in the community was remarkable; people helped refugees from both sides to be rehoused and integrated into the community. There are good community relations throughout the borough and in north London generally.
It is sad that in the past there were three borders in Europe: the iron curtain, the border between Northern Ireland and the Republic of Ireland, and the green line in Cyprus. The first has gone, the second has been reduced, and the third, unfortunately, is very much still there. Parliament must recognise that and try to understand that although the invasion was a long time ago, in 1974, the sense of anger, anguish and betrayal in the Cypriot community in this country is very strong and does not diminish with the passage of years. It will not disappear; it will haunt every British Government until there is a solution to the problem, because, as my hon. Friend the Member for Edmonton (Mr. Love) and others pointed out, as a formal colonial power, we are one of the guarantors.
The Cypriot community in Britain is much more politically involved, politically astute and politically aware now than it has been at any time in the past. This country has a political imperative to ensure that a solution is found. I do not pretend that that will be simple, but the stark reality is that Cyprus was a united island and we are one of the guarantor powers. The Turkish troops invaded and established what they would claim to be a state of their own, which no country in the world recognises, although a few might wish to recognise it. The issue is what pressure is being put on Turkish Governments. Turkey went through a military period from 1980, and it still has a poor record on human rights, which are seriously abused, and a great many Kurdish people flee the country to seek asylum in Europe and Britain.
Why do Britain, the United States and other countries pursue supportive and friendly relations with Turkey? Why do we still sell large quantities of arms to Turkey which, I am convinced, support the military structure that represses the Kurdish people? Kurdish people in the
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northern part of Cyprus are denied human rights. I have met, and represent, Kurdish families who escaped from Turkey to northern Cyprus believing that they would be safe and find sanctuary, but who had to flee Cyprus because of abuse by Turkish military forces, finally ending up in this country.
What is it about Turkey that is so special that it can apparently evade any international sanction despite its illegal occupation of northern Cyprus? That happens because of Turkish membership of NATO and because of lectures from Turkish leaders who say that nationalist fervour in Turkey is so great that it cannot withdraw from Cyprus without a serious loss of face; but neither of those reasons should prevent us from having a much more robust attitude towards Turkey.
I ask the Minister to tell us exactly why we continue to sell large quantities of arms to Turkey and why we are still prepared to consider underwriting a major project such as the Ilisu dam, which, if nothing else, gives a sense of approval to what the Turkish Government do, not to mention the fact that it will destroy the livelihoods of large numbers of Kurdish people in that region.
We must tell the Turkish Government that it will not be the end of everything for them if they are prepared to join in serious international negotiations to bring about an agreed and negotiated settlement in Cyprus that respects the human rights, identity and integrity of all people in Cyprus but allows people to return to their own homes. There can be nothing more humiliating for an individual than to look across the green line and see the farm or home that he or she once occupied. It is a very depressing experience for Cypriot people and I hope that this debate will serve to encourage the Government to be far more robust in their attitude to Turkey and more determined to ensure that the United Nations achieves something in Cyprus. The UN has held the line there—it has held the ceasefire, and its presence has undoubtedly saved many lives—but it is time to move on. We must ensure that the green line disappears, and that we once again see a united Cyprus and an end to misery and anguish.
I repeat that the sense of grievance, outrage and anger of the Cypriot community in the United Kingdom is not diminished by the passing of those 26 years; if anything, the bitterness and tension have increased. It is up to this Parliament and this Government to try to ensure a settlement in the foreseeable future. It is not an intractable problem, but it requires a determined effort to solve it once and for all.
11.6 am
Mr. Richard Spring: I congratulate the hon. Member for Tooting (Mr. Cox) on securing this debate, and all those hon. Members who have spoken. Many of us approach the question of Cyprus with some trepidation. It is one of those contentious international issues that provoke passionate debate born of deep-seated feelings.
Cyprus and the United Kingdom have long-standing and historic ties. We are fellow members of the Commonwealth family of nations, and have ties in commerce, defence and tourism. Many Cypriots have settled in the UK, and they have greatly enriched our national life. As my hon. Friend the Member for North Thanet (Mr. Gale) observed, we can be at least a little

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optimistic about recent developments, despite the enduring impasse so correctly referred to by my hon. Friend the Member for Chipping Barnet (Sir S. Chapman).
Britain has long sought to do whatever it can to promote the interests of peace and stability on the island. A settlement would clearly be in the interests of the region. It would help Greece and Turkey to normalise their relationship. It would assist countries such as ours that have long-standing and well-established political and economic links with Cyprus. Such a settlement would clearly benefit all the communities on the island.
When Parliament has previously debated Cyprus, it has often been in the context of discouraging developments—for instance, the stand-off over the acquisition of missiles by the Government of Cyprus, and the Turkish Government's response, were disturbing. Fortunately, today's debate takes place in a somewhat warmer political climate. To some extent, that has been born out of tragedy. Last year's two devastating earthquakes helped to bring Turkey and Greece closer together, a development that had obvious repercussions for Cyprus. The genuine outpouring of concern and help among Greeks towards their Turkish neighbours was moving and praiseworthy.
The Chamber will welcome the UN initiative announced in September 1998, which was aimed at reducing tension and promoting progress towards a settlement, and resolution 1218, which endorsed the initiative. President Clerides's decision in December 1998 not to bring S300 missiles to Cyprus helped to reduce tension and to create the conditions for securing a just and lasting political settlement. The visit earlier this year of the Greek Foreign Minister to Ankara was the first such visit for 38 years. It culminated in the signing of a series of agreements on such matters as tourism, environmental protection, investment and the fight against crime and terrorism.
We are right to be cautious about expecting too much progress too soon. However, with the opening of the second round of UN-sponsored talks in January and further negotiations under UN auspices due to start in New York on 23 May, events are now moving in the right direction. Will the Minister update us on recent developments, bearing in the mind the discussions on Cyprus that took place between Kofi Annan and the Foreign Secretary during the former's visit to London in March?
The European Union has an increasingly important role to play. The Conservative party has long supported Cyprus's membership of the EU, as our European election manifesto last year made clear. Everyone wants a resolution to the division of the island, but that is not and should not be a precondition for EU membership. We also welcome the decision at Helsinki in December to grant Turkey candidate status for the first time, although also to delay formal negotiations until Turkey meets the political criteria for membership. Turkey's aspiration to join the EU is perfectly legitimate and must be judged by the same objective standards that we apply to any other candidate for membership. We are pleased that sufficient progress has been made for Turkey to be
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considered a candidate country and that recently Turkey was able to hold its first formal meeting with the EU in three years.
In many respects, the European Commission's latest accession report on Cyprus, published in October, is encouraging. The report showed that there had been good progress. It noted that Cyprus as a functioning market economy should be in a position to cope with the competitive pressures and market forces within the EU. It welcomed the reduction in tension in the region. It remarked on the rapid rate of economic growth combined with the containment of inflation. In the competition field, it commented on progress made on anti-trust legislation. The report also contained recommendations for improvement in areas such as structural reform and privatisation and alignment with aspects of the acquis communautaire and called for an intensive legislative programme, which has taken place in recent months.
Britain should continue to do all that it can to ease Cyprus's path into the European Union. The Conservative party welcomes the work of President Clerides in this respect and not least his introduction of market reforms. We are less concerned about progress on reform in the applicant countries themselves, including Cyprus, which is generally proceeding well, than with the EU's progress in preparing itself for enlargement. There is an urgent need for budgetary reform and recognition of the need for greater flexibility in an enlarged and diverse European Union, if such a European Union is to survive and prosper in the years ahead.
The British position on Cyprus has been clear for many years. Today, the UN's "set of ideas" for a bi-zonal, bi-communal federal government submitted in 1992 remains central to the discussion of the island's future. Only the two communities can ultimately decide what is acceptable and what is likely to last. Britain's role remains one of offering advice and providing support for the UN operations on the island and for the international attempts to mediate between the two sides. As one of the three guarantors of Cyprus, we have a special interest in the island's future. The Conservative party will continue to support the Government and the international community in attempts to bring about a lasting and peaceful settlement.
11.13 am
The Minister of State, Foreign and Commonwealth Office (Mr. Keith Vaz): I join other hon. Members in congratulating my hon. Friend the Member for Tooting (Mr. Cox) on securing this debate and on his choice of subject. The contributions that have been made demonstrate that this is a subject of great importance and relevance. I know of my hon. Friend's long interest in these matters. He has told the House that he is the chairman of the Commonwealth Parliamentary Association Cyprus group. He is also well known in the United Kingdom for his work on this issue within the Cypriot community. The hon. Member for Chipping Barnet (Sir S. Chapman) mentioned the fact that my hon. Friend has been in Parliament for 30 years. While he spoke, I counted up the years of parliamentary experience of hon. Members present. For the day after a recess, the turnout is impressive in terms of quality and

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years of service. I calculate more than 100 years of parliamentary service in Westminster Hall today, and we feel all the better for it.
I want to thank the hon. Members for Chipping Barnet and for North Thanet (Mr. Gale) and my hon. Friends the Members for Ilford, North (Ms Perham), for Finchley and Golders Green (Dr. Vis), for Edmonton (Mr. Love) and for Islington, North (Mr. Corbyn) for their highly relevant contributions. I cannot deal with every one of their points but I promise that if I do not cover them in my speech I will do so in writing.
Several hon. Members asked about the Government's position regarding Famagusta. As they will know, resolution 414 of the Security Council of the United Nations of 15 September 1977 made clear the concern that moves by Turkish Cypriots to settle Famagusta would harm the prospects for a lasting solution. That remains the position. We strongly endorse the resolution and call on those concerned to act responsibly.
The Loizidou case was raised by several hon. Members. With our partners in the Council of Europe, we continue to make clear to Turkey the need to implement the court's judgment. The chairman of the Council's Committee of Ministers' Deputies wrote at the end of March 2000 to follow up the Council's earlier interim resolution calling on Turkey to implement the judgment. We supported that action and look forward to an early response from Turkey.
The outgoing high commissioner for Cyprus is in Westminster Hall watching the proceedings. I echo the glowing tributes that he has received from hon. Members.
Mr. Deputy Speaker: Order. Hon. Members should not address remarks to anyone in the Strangers Gallery. They are technically not present for the purposes of the debate.
Mr. Vaz: Of course, Mr. Deputy Speaker—I take your point completely. Had the high commissioner been here, I am sure that he would have heard what we have said. When he reads Hansard, he will be aware of what we have said today. I look forward to seeing him later in the week.
I am glad to say that the outlook for Cyprus at the start of the new millennium is brighter than it has been for many years. As hon. Members have said, Cyprus is engaged in two extremely important processes—the United Nations talks on a political settlement and the European Union accession negotiations. Together, the processes offer Cyprus and the international community an important chance and a challenge. The Government's hope is that we will collectively have the courage to grasp the historic opportunity now open to us. Britain remains committed to doing all that it can to assist the bringing about of a just and durable resolution of the Cyprus problem. We want the tragedy of the division of Cyprus to be overcome and we want to secure a future in which all Cypriots can enjoy peace, security and prosperity.
We are involved in a major sustained effort towards securing a comprehensive settlement in Cyprus. Important progress has been made in the past
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15 months. In June 1999, the members of the G8 and the Security Council of the United Nations called for negotiations for a comprehensive settlement under the UN's auspices. That was a clear signal of the international community's desire to proceed. As hon. Members have mentioned, that led to the launch by the Secretary-General of the United Nations of UN proximity talks in December last year. The talks were aimed at preparing the ground for meaningful negotiations on a comprehensive settlement. The parties concluded a further round of talks in Geneva in February. We will be resuming discussions in New York on 23 May.
What goes on during those talks remains quite properly a matter for the United Nations and the parties involved. However, it is encouraging to have the United Nations Secretary-General's confirmation that the talks have addressed the substantive issues at the core of the Cyprus problem. We want to see a change of gear when the talks resume in May, moving towards continuous and sustained negotiations on the issues with both parties prepared to negotiate in a spirit of give and take. We have made it clear to Kofi Annan that the UK will continue to give him every support in the talks. We want decisive progress to be made in the months ahead.
I should also draw attention to the improvement of other relationships in the region, which have greatly changed from the position even a year ago. The improvements mean that discussions on Cyprus are occurring in a positive and forward-looking climate.
Hon. Members have rightly raised issues concerning Turkey. Those who read tomorrow's Hansard record of our proceedings may think that the debate has to some extent become a discussion of Turkey. There has been a clear rapprochement between Greece and Turkey. It has been reflected in ministerial contacts and visits and in the signature of a number of agreements on aspects of bilateral co-operation. On the very day on which I was in Athens, George Papandreou, the Greek Foreign Minister, set off after my meeting with him to go to Istanbul and Ankara to meet his opposite number, who then made the journey from Istanbul and Ankara to Athens. We in the UK and all the allies and friends of Greece and Turkey warmly welcome and support that development and we hope that it will be built on.
The decision made at the Helsinki European Council meeting by European Union partners to treat Turkey as a candidate for EU membership and to begin preparations for membership is already transforming the relationship between Turkey and the European Union. It means that all in the region are now working towards the common goal of EU membership. At the same time, Cyprus is continuing to make excellent progress in its EU accession negotiations. As we have heard today, that process is going well.
I noted the remarks of my hon. Friend the Member for Edmonton on Poland. I do not want to widen the debate to take in other countries that are applying to join the EU, but I should point out that of the 31 chapters of EU legislation in practice—the acquis communautaire—Cyprus has provisionally completed negotiations on 15. That is the greatest number of completions achieved by any candidate country. We expect negotiations on all the remaining chapters to have started by the end of the year. The Commissioner for Enlargement, G¨nter Verheugen, visited Cyprus in

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March. The visit enabled him to underline on behalf of all our European Union partners our desire for Turkish Cypriots to become a part of the process. I look forward to visiting Cyprus later this year to assess the state of the negotiations and to pay my first official visit there.
A number of hon. Members have focused on the question whether the continuing division of the island will be a bar to the EU accession of Cyprus. The British Government's position has always been clear. Like our EU partners, we have no doubts that the ideal outcome for Cyprus and for Europe would be for Cyprus to join the EU following a settlement. The European Union has always made it clear that accession should benefit Greek and Turkish Cypriots alike—that is why we strongly support the United Nations process to try to resolve the division of the island—but we do not accept that Cyprus's application should be held hostage to such a settlement.
No one would accept that a third country should have a veto over the accession of another. At the Helsinki European Council in December, Britain was successful in getting other EU member states to agree to a clear statement that a political settlement is not a precondition for Cyprus's membership of the EU. I can also confirm that Cyprus's EU accession is not linked to that of Turkey. I am happy to reaffirm that that is, and always has been, our position.
There is an enormous amount of work to do. Judging by the eloquent speeches, there is a great deal of concern among Members of Parliament and members of the community. My hon. Friend the Member for Ilford, North mentioned Aphrodite. We do not need to go that far back to know that the problem is one of the most difficult in the world. We all recognise the huge amount of preparation and careful negotiation that has to be done. The British Government are focused on supporting those who want to find a solution. As the Prime Minister, Tony Blair—
Mr. Deputy Speaker: Order. The Minister cannot refer to a Member of Parliament by name; he must use a constituency title. The Prime Minister is the right hon. Member for Sedgefield.
Mr. Vaz: I am sure that my right hon. Friend is delighted to know that he still has that title.
My right hon. Friend the Prime Minister told President Clerides that the UK will continue to support, with determination and energy, Kofi Annan and his special adviser, Alvaro de Soto, in their efforts towards achieving a settlement on the island. We will continue to work closely with Greece and Turkey and will provide our Cypriot friends with maximum encouragement and support. The Government look forward to welcoming Cyprus warmly into the EU. We hope that we will be welcoming a reunited island that ensures the future security and prosperity of all Cypriots. All hon. Members who care deeply about Cyprus will support that aim.
Mr. Deputy Speaker: We now come to the next debate. As the hon. Member for Totnes and the Minister are in their places, we can begin.

Social Services (Devon)
11.28 am
Mr. Anthony Steen: Mr. Deputy Speaker, you are right—I am in my place. In fact, I am always in my place; the question is whether the Speaker identifies me as being there.
I am glad that I am here today and that we have managed to start a little early. I thank the Minister for being here to respond. I also thank my hon. Friend the Member for Teignbridge (Mr. Nicholls) for attending the debate. As so often happens, his train, the Great Western—the gateway to the south-west—was 40 or 45 minutes late. The main line to Devon and Cornwall is often severely disrupted and delayed. If the Minister wants members of the public no longer to travel by car but to use the train, he must ensure that the service is reliable. The Great Western train service has a bad record. It has improved of late, and I am sorry to learn that my hon. Friend was, like so many of my constituents, inconvenienced by a poor rail service.
Mr. Deputy Speaker (Mr. Nicholas Winterton): Order. The debate is not about the lateness of a rail service, but about the withdrawal of social services provision in Devon. Bearing in mind that at least one other hon. Member—it may be two—wishes to speak, I hope that the hon. Gentleman will return to the subject of the debate.
Mr. Steen: Mr. Deputy Speaker, as it is not yet 11.30 I thought that you might allow me a couple of minutes to talk about the appalling train service to the west country. Now that we are approaching 11.30, I will, of course—
Mr. Deputy Speaker: Order. The Chair sticks to the subject under debate, regardless of the time. Perhaps the hon. Gentleman will come to the subject of the debate, to which the Minister will, in due course, reply.
Mr. Steen: You may have no doubt, Mr. Deputy Speaker, that as it is now 11.30, I will speak on the subject that is tabled in my name. I am delighted to see not only my hon. Friend the Member for Teignbridge but my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning). It is a delight to have such tremendous support from the Devon team on a subject of great importance to us.
The test of a civilised society is the way in which it treats the elderly, handicapped, sick and infirm. Devon county council is spending £108 million on social services this year. That is an increase of £5.5 million over the £102.5 million spend last year for social services, and it is good news. However, the council has cut its hot meals on wheels services for not only the old but the handicapped. It argues that frozen meals are more economical than hot meals. Perhaps they are, but they are unpleasant. As a result, there is less contact for those people. Keeping old people alive may meet statutory responsibilities but it takes no account of the fact that the old and infirm like to talk to the hot meals deliverers—a point which seems to have completely escaped Devon county council. The person who delivers the hot meal is as important as the meal itself.

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Devon county council has cut hot meals for 94-year-old Evelyn Bricknell of Staverton and 92-year-old Mr. John Merton of Kingsbridge. Effectively, they have been told that if they want a hot meal, they had better cook it themselves. Both Mrs. Bricknell and Mr. Merton were telephoned by a social services official and told that their hot meals entitlement would be withdrawn. Social services were to wash its hands of these frail elderly people. It cancelled Mrs. Bricknell's cleaners and her shopping help. The social services department argued that if she could manage for three days each week when hot meals were not delivered, she could jolly well cope for seven days. That was the department's logic.
Mr. Merton was told that he could have frozen meals to heat in the microwave. The snag is that he does not have a microwave. Other octogenarians have told me that they are so unsteady on their feet and, sadly, have hands that shake badly because of various illnesses, that they would not be comfortable doing what the social services department demands of them—using a microwave and cooking their own meals. If I ever make 90—which, after almost 25 years in this place, is highly unlikely—I should like to think that the least I could expect from social services would be a hot meal each day. People who have reached the age of 90 should be able to expect a little help, courtesy and support from their social services departments.
The disabled are also being targeted. Mr. Taylor of Totnes suffers from multiple sclerosis. His hot meals entitlement has been halved. Again, a Devon county council official told him, "Don't ring us, we'll ring you." They did just that, and told him that he was to join the frozen food gravy train. All that is from a county council that has an overall budget of some £500 million. We are talking not about peanuts—in fact we are talking about hot food—but about £500 million of public money, but Devon county council cannot look after its elderly. The elderly, the ill and the infirm are the victims of cuts, even though the county's social services budget has increased. I am told that the number of officials employed by Devon county council has not been cut, nor has the cost of running local authority nursing and residential homes. We do not need local authority nursing and residential homes. We need to fill private residential homes. The Liberal Democrats' priorities, however, are exactly as one would expect—like Humpty Dumpty, they are upside down and bottoms up.
The Liberal Democrats shout about increases in parking charges at railway stations, yet at the same time, they are removing cleaning and shopping help from those who have reached four score years and 10. Like the walrus and the carpenter, the Liberal Democrats shed tears profusely about the plight of the oysters and then tuck into them with relish. If the Liberal Democrats restructured services by better use of the private sector—particularly the residential and nursing homes—it could save tens of millions of pounds, but they continue to behave like old-style socialists, believing that everything run in the public sector is better, even if it costs twice as much.
The belief that the council knows best is also well illustrated by its reluctance to fund respite care. Some 250 parents in south Devon look after children with severe physical, mental and physiological difficulties. They are devoted and caring parents and, as full-time carers, they are on call 24 hours a day, seven days a
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week. All they ask is to be given the opportunity to devote a little more time to their partners and other children, yet social services refuses to pay a few hundred pounds per family to give those hard-pressed parents any relief.
About £750,000 was raised in Dartington from private sources to build a magnificent private home, the Robins, to offer somewhere for these handicapped children to go at weekends—provided Devon county council paid for that provision. Sadly, Devon county council has allowed the Robins to be only 10 per cent. full because it will not provide the funds for those disadvantaged children to go there at weekends to be properly looked after, to enjoy the friendship of their peer group and to allow their parents some time off. Most parents ask for only two or three weekends off a year, yet they cannot even secure that. If the children were fostered, it would cost around £40,000 a year and there is a statutory responsibility for foster parents to be given time off. It is all part of the Humpty Dumpty culture of the Liberal Democrats that everything is topsy-turvy and bottoms up.
The county council's social services department has also hit people with learning difficulties. Some such people, who do a 35-hour week in Kingsbridge, working on projects ranging from recycling to making cards, have had their £3 a week pocket money taken away. A county council that is supposed to be committed to caring for the elderly, the handicapped and the ill and to funding respite care has now removed the pocket money from kids with learning difficulties. Yet not one official has been removed and not one residential or nursing home has been cut. It is always those who are less able to cope or to look after themselves—the most vulnerable, who will not make a noise—who suffer. That is why today's debate is so important and why we should make a loud noise.
The previous Conservative Government introduced community care, which was aimed at encouraging the elderly to stay in their own homes as long as possible and to provide whatever help was needed by the local authority. Devon county council has started to withdraw its central community support facilities, displaying an appalling and devastating disregard for human life. What is even more sinister is that the county council realises that the frail and the elderly cannot survive in their own homes with no support and little human contact. Such isolation may lead to admission to a long-stay bed in a local hospital, which is funded, of course, by the Government and the national health service, not by the county council. That brings corresponding savings to the county council budget.
What is needed now is for an individual or group committed to the welfare of the elderly to take Devon county council to the High Court and to request an order for mandamus demanding that the judge directs the county council to carry out its statutory duties to provide for the old, the infirm and the handicapped. I am appalled to be a Member of Parliament in an area whose county council is privy to such neglect and heartlessness.
11.39 am
Mr. Patrick Nicholls: I have been involved in the politics of the county of Devon—as a Member of Parliament and, before that, as a local

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councillor—for more than a quarter of a century. However, I have never before come across such a situation. We are talking about a council that is incapable of balancing its budget, but which attempts to do so by cutting back support services and, in some cases, removing them from some of the most frail and vulnerable people in our society.
If time allowed, I could give a string of examples of where that had happened. I could talk about parents who have been told that they must give up their respite care. I could talk about centres that provide human contact for people with severe learning disabilities, but which find that their funding is being cut. Those cuts are made not for professional social work reasons, but because that is how the budget is to be balanced. It is thought that people will be in no position to complain if it is done that way.
I cannot go through all the cases because time is short, but I shall mention the case of Simeon Hayes, which can stand as an example for them all. Simeon is a young man who has been in the Larkby psychiatric unit since August 1999. He was diagnosed early on as suffering from Asperger's syndrome, which means that that psychiatric unit is not an appropriate place for him—that is no reflection on the unit. Simeon's father then tried to take up the issue of an appropriate care package for his child with Devon county council.
The correspondence in this case has been extraordinary. A letter to me stated that Simeon Hayes's father was using his connections to raise matters with me—he is a journalist. He also happens to be a constituent of mine, and I know of no rule that says that constituents cannot contact their Members of Parliament simply because they are journalists. In a letter to the Minister for School Standards, the right hon. Member for Birmingham, Yardley (Ms Morris), the county council said that Mr. Hayes was "regularly threatening judicial review". However, he mentioned it only once. Given his lack of success in bringing about action otherwise, he might well have mentioned it.
Mr. Hayes became so concerned and frustrated that he instructed a firm of solicitors who specialised in taking recalcitrant county councils to court. The firm had already successfully sued Devon county council once, and apparently believes that the council is the worst authority of its type in the country when it comes to the behaviour that we are discussing. Only when Mr. Hayes provided the county with a copy of the statement of claim and the writ drafted by counsel did it look as if there would be action.
Finally, after all that pressure, several Members of Parliament—including the hon. Member for Exeter (Mr. Bradshaw) and myself—received a letter from Devon county council on 11 April. First, it denied that the care package that Mr. Hayes had identified as being right for his son was appropriate, but it finally conceded that the package was appropriate. Mr. Hayes was informed that, on 12 April, he would be told the date on which his son could move to the Devon and Cornwall Autistic Community Trust. That is where he should have been throughout, because that was the correctly identified care package. I telephoned Simeon Hayes's father this morning to find that, even today, the right thing has not been done for Simeon Hayes. He has no
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date for when he will go to the appropriate placement and remains in a psychiatric unit. His father tells me that he fears the long-term effects on his son of being deprived of the correct medication and of having to take other drugs in the meantime. My hon. Friends and I have taken up individual cases and have achieved results, but that is not good enough. It should not be necessary to take up individual cases to make the county council fulfil its responsibilities. For every case that I take up, there will be 10, 100 or 1,000 more. I should like to think that one thing will become clear as a result of today's debate. The Minister is entitled to say that the issue is primarily the responsibility of Devon county council, but Ministers know that they are ultimately responsible for everything. When it takes a journalist with the style and determination to threaten to take a county council to court to protect the life of his son, something must be done—and only Her Majesty's Government can do it.
11.44 am
Mrs. Angela Browning: I congratulate my hon. Friend the Member for Totnes (Mr. Steen) on raising this important matter. As Devon Members of Parliament, we are concerned about what is going on with the social services in our county.
I begin by pointing out that, although there has been an increase in the social services budget this year, under Liberal Democrat control, council tax payers in Devon have faced an increase in the county rate of 34 per cent. in three years. The council's constant bleating that it has not got enough money does not hold water.
My hon. Friend the Member for Teignbridge (Mr. Nicholls) has given me permission to mention his constituent Simeon Hayes, whose parents also sought my advice. I, too, have a son with Asperger's syndrome, a condition on the autistic spectrum, and I am a member of the national council of the National Autistic Society. Mr. Winterton—
Mr. Deputy Speaker: Order. The hon. Lady should know that occupiers of the Chair in Westminster Hall are addressed as Mr. Deputy Speaker or Madam Deputy Speaker.
Mrs. Browning: I apologise, Mr. Deputy Speaker.
For a 14-year-old boy with Asperger's syndrome to be admitted to a psychiatric unit is an indication of his overlying mental health problems; it is outrageous that his 15th birthday was while he was in the unit. As my hon. Friend the Member for Teignbridge said, there are alternative services that can deal with that type of specialised condition in the west country; the Devon and Cornwall Autistic Community Trust in Truro, with whose services I am extremely familiar, provides exactly that sort of specialist support, yet, time and again, Devon county council social services kicked the case into the long grass, seeking another report here and another there, just to waste time. My hon. Friend said that the parents had to go to court; I recommend that they take the monstrous county council to court for the way that it has treated a 14-year-old boy.
My hon. Friend the Member for Totnes raised the matter of the elderly. It is interesting that this year, as it is pleading poverty and not being able to provide

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services, Devon county council increased the fees in its residential nursing homes while at the same time expecting the private sector nursing and residential homes in Devon to survive on a 2 per cent. increase in their fees. It is all right for Devon social services to uplift its fees by some £29 a week, but not the private sector.
The whole of the Liberal Democrat-controlled council in Devon, not just the social services department, spends valuable resources on every pilot scheme, every partnership scheme, every make-work type of project that comes on to its desks, rather than focusing on delivering sharp-end services to our constituents. It is outrageous that the council produces glossy brochures to tell us about this partnership scheme or that pilot scheme when elderly people are being asked to take delivery of a month's supply of frozen meals, and to pay for them in advance, rather than on a weekly basis.
In Silverton, a rural village in my constituency in mid-Devon, one elderly gentleman took his meal at the pub every day, because the social contact was deemed to be good for him. That has now been stopped. Instead of having the support of personal contact and the appropriate package of provisions, elderly people will now have a month's supply of frozen food, and a freezer and microwave if they want it.
As my hon. Friend the Member for Totnes said, the human contact provided by someone popping in in the middle of the day with a few friendly words makes all the difference to elderly people, enabling them to stay in their own homes. Loneliness and isolation are two of the main reasons why many elderly people, as they become more frail, have to move out of their own homes and into care. Yet Devon county council is replacing that small amount of human contact in the middle of the day with a package of frozen food once a month. It is outrageous.
11.49 am
The Minister of State, Department of Health (Mr. John Hutton): Like other hon. Members, I congratulate the hon. Member for Totnes (Mr. Steen) on securing the debate. Later, I shall address specific issues relating to the financial situation in Devon and the provision of social services in the county raised by hon. Members. First, however, I shall put in context social services funding generally and Government funding for modernising social services.
As the hon. Member for Totnes rightly said, social services provide crucial support for vulnerable people, whether they be children, disabled people, the very old or the very ill. They provide a range of services to protect them, to prevent problems and to enable people to have the best possible quality of life. Nationally, some £10 billion of public money is spent on social services every year and we want to ensure that it is spent effectively. The Government's best-value policy will ensure that that happens.
The Government made the funding of social services a priority in the comprehensive spending review two years ago, the settlement for which was announced in July 1998. For the first time, we guaranteed that the funds available nationally would increase in real terms over the following three years so that local councils could plan ahead, knowing what resources would be
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available. Every hon. Member who spoke in the debate said that spending on social services in Devon was increasing and I shall say something about that in a moment.
In November 1998, our White Paper "Modernising Social Services" clearly set out how we expected fair, consistent and fast services to be delivered with those additional resources in partnership with local government. Both Government and councils want extra funds to have demonstrable benefits for the most vulnerable and to help people to stay in their own communities and homes for as long as possible. To achieve that objective we have introduced four new, specific grants and increased the mental health grant substantially to ensure proper support for those whose mental health problems pose the most risk to themselves and to society. We have also introduced the quality protects grant, designed to improve children's social services. We have increased the training grant for staff to carry out those essential modernising tasks in social services.
Mr. Steen: In spite of that wonderful statement, it has not worked in the Devon county council area.
Mr. Hutton: If the hon. Gentleman will be patient, I shall address the constituency issues that he raised in a moment.
The extra grants that we introduced mean that this year Devon received more than £6 million in addition to its standard spending assessment for social services. We are closely monitoring how the resources are being used in Devon and elsewhere to improve social services.
This is the second year covered by the comprehensive spending review settlement; local councils will receive an additional £492 million for social services which represents an increase of 5.6 per cent. in cash terms and more than 3 per cent. in real terms. Those substantial additional resources enabled us to increase the personal social services standard spending assessment by £425 million or 5.1 per cent. this year. The quality protects grant for children's services increased by 60 per cent., the mental health grant by £13 million and the training grant by more than £3 million. All local councils with social services responsibilities, including Devon, have benefited from those significant increases in funds.
In the time available to me, I shall address hon. Members' specific concerns. Many hon. Members raised constituency cases and if hon. Members want to raise those cases with me, I shall be more than happy, at any time, to consider them in detail. I am aware of the case of Simeon Hayes and anxious about what hon. Members said about him. I shall take a personal interest in the case and see it through.
Devon is a large council which provides social services in a large geographical area. I know that at first hand because I recently visited the county and saw the excellent work being done at the Exbank Reablement Centre, which may be in the constituency of the hon. Member for Teignbridge (Mr. Nicholls)—if it is not, I apologise to him. It is a good example of interagency working and of the type of service that should be more widely available throughout the country.
Nearly three-quarters of a million people live in Devon, mainly in a rural environment in small, diverse communities. There are eight very different district

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councils; Exeter city is the main conurbation and areas such as Dartmoor and Exmoor are sparsely populated. In April 1998, local government organisation created two new, additional unitary authorities, Torbay and Plymouth, which are separate from Devon county council. Devon county council fared slightly better than the national average this year in its standard spending assessment, receiving an increase of 5 per cent. compared with 4.4 per cent. nationally. Similarly, Devon's personal social services element of the standard spending assessment has increased by 5.2 per cent., slightly above the national average of 5.1 per cent.
As hon. Members have pointed out, Devon has had budgetary difficulties over a number of years. They did not all start this year or last year. The total social services budget for Devon for 1999–2000 was £111 million, not the £108 million to which the hon. Member for Totnes referred, which is its biggest social services budget ever. An overspend of between £4.5 million and £4.9 million was projected for 1998–99, but management action within the authority reduced it to £2.5 million. The reasons for the overspend were multiple. They included the complexity of the populations in Devon, excessive demand and the impact of local government reorganisation. The joint review undertaken in 1999 by social services and the Audit Commission described Devon county council as a traditional organisation with evidence of many high-quality innovative services that were not strategically joined up or consistently and equitably distributed. Those are substantial and important criticisms.
Devon has a new director of social services who arrived as the joint review findings were being reported. He reviewed Devon social services in the light of those findings. His report to the council in January identified the action that he proposed should be taken, which included a strategic financial plan to curb the projected escalating budget deficit of £9 million this financial year and to address the future budget over a three to four year period. His financial plan was agreed by all the political parties on Devon county council, including the Conservative party, which acknowledged that remedial action needed to be taken.
Mr. Nicholls: The Minister is correct that the action that had to be taken because of the maladministration of the budget received all-party support, but in no sense was all-party support given to the way that the available resources were distributed among our constituents. That is an entirely different point.
Mr. Hutton: No, I understand the difference. I said at the beginning of my remarks that I would be happy to look into individual cases that have been brought to our attention this morning. We must recognise that there were problems in the county council and all three political parties signed up to the action plan to try to address them. The plan also aimed to protect the most vulnerable people in the community. Field social work and direct service staff are not being reduced and the main cuts, as I understand it, are being directed at headquarters staff.
Mr. Steen: The Minister's speech is what one would expect. He says that the Government are giving more money to everybody, that the Liberal Democrats and Devon county council should be spending it more wisely and that all parties agreed that there would be an overspend if something drastic was not done. I pay tribute to the new director of social work who is trying to knock a few heads together, but I am concerned about the hot meals that are not being delivered to elderly people. I am concerned about the cleaning contracts that have been discontinued. I am concerned about elderly people who will be driven into the local hospital because the social services are not carrying out their duty. The Minister has not dealt with that point.
Mr. Hutton: Conservative Members took up the majority of the time in this debate and I am trying to respond to the points that were made. That is the second time that I have given way to the hon. Gentleman and I have also given way to the hon. Member for Teignbridge. I have tried to be generous, but it will almost certainly mean that I cannot deal with all the specific points that Conservative Members have made. I am more than happy to look into the hot meals service. My officials will find out exactly what the position is.
I cannot, in the remaining minutes, go into all the nooks and crannies of the arguments advanced by Conservative Members, but let me make it crystal clear that we take these criticisms seriously. We want to have high-quality services right across the country and Devon is no exception. Local people are entitled to expect that. I am concerned to hear about the low level of fee increases negotiated with the private residential care home sector. I should be very concerned if that resulted in any loss of provision or reduction in the quality of care services available to older and frail people in Devon and in the constituencies represented by the hon. Member for Totnes and his hon. Friends. We will have to see what happens there.
The introduction of the new best value arrangements will make a significant difference and will have a substantial impact on local authorities that wish to continue to preserve their role as a director. They will have to ensure that their services are directly comparable, in terms of cost and quality, to those being provided in the private sector. Unlike the hon. Members who have contributed to the debate and who want everything to be in the private sector, we take no ideological view: we believe that the quality of care, not who owns the institutions, is what matters. That is in line with people's local expectations.
I have heard the concerns expressed today about Devon's social services and I will examine them further. The hon. Member for Teignbridge is right that, at one level, these decisions are to be made by local social services managers. Councillors are accountable for those decisions. On the basis of this morning's comments, one certainly gains the impression that local elections may take place in Devon this week.
Mr. Deputy Speaker: Order. We must pass on to the next debate.

Policing (West Norfolk)
12 noon
Dr. George Turner: I wish to bring to hon. Members' attention some of the lessons on police resourcing that should be learned, in a calmer debate, from the events surrounding the Tony Martin case and the public response to it. Tony Martin is one of my constituents, albeit living right on the border of my constituency. I am fully aware that the case is under appeal and therefore sub judice and I have had to revise my speech as a result. I shall make no comment now about the events at Bleak house or the legal case that followed. More importantly, I have censored the views of my constituents on those events and on what should happen next.
The Tony Martin case has done much to highlight police resourcing, the problems of crime in rural areas and, even more importantly, the fear of crime, which has become endemic. My personal concern about resourcing in Norfolk is, like the problem itself, of long standing. As a member of the county council for 20 years, including a period on the police authority, I witnessed first hand the way in which the previous Government consistently underfunded the police and presided over a doubling of crime. It has been particularly galling for me over recent weeks to hear those who had direct responsibility for so many years making cheap party political points, largely distorting the real issues and encouraging a disproportionate lack of confidence in the Norfolk police constabulary.
The Norfolk police force covers more than 2,000 sq m and a residential population of about 708,000 people. It is the fourth highest staffed police area in England, currently employing some 1,400 officers. However, that amounts to 1.97 police per 1,000 residents—the lowest ratio in England.
Taking shift patterns and officers on leave into account, about 107 uniformed patrol officers are on duty—one officer for every 19 sq m of the county—and officers tell me that they are unable to spend all their time outside the police station. Occasionally, they have to spend half their time in the police station. It is a thin blue line. I can confidently assert from my long experience and interaction with the police that they should be applauded and supported for their work on behalf of the people of Norfolk. They should not be lampooned as we have seen too often of late. The lampooning has not been confined to the tabloid press.
Crime statistics can be a minefield. Norfolk has had to accommodate changes in the national rules for reporting and changes in beat patterns as a result of recent reorganisation. In preparing for the debate, I took the opportunity to examine not just the crime figures for the whole of Norfolk, but those for my region of west Norfolk and the detailed DO6 beat figures, which included Bleak house within their ambit during most years. The statistics are not very revealing. There were 49 burglaries in dwellings in 1996–97. The number dropped to 37 but rose again to 56. In 1994–95, there were 95 burglaries in that beat patch.
Available figures do not justify anything like the atmosphere of crisis that has been created in recent weeks. In my division, crime is higher in density and, more importantly, higher still in relation to the number
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of residents in rural communities. Norfolk is not at the top of the list for crimes per head of population. Claims of a recent dramatic rise in crime in rural areas are unjustified, although I can say with confidence that the figures remain a cause for considerable concern—which has escalated recently. As rural communities have become less close knit than when I went to Norfolk—the decline in agriculture ensured that that would happen—the fear of crime has risen steadily, outstripping the pace of crime itself. I know that this fear can be every bit as damaging as crime itself.
Before setting out my thoughts on what the Government ought to do, and in anticipation of the Minister's response, I want briefly to acknowledge the fact that in the past three years the Government have at least begun to listen to what is being said in rural Norfolk and to tackle the problems of constituencies such as mine. I arrived five or 10 minutes early for my first constituency meeting and could hardly get through the doors. I had known that crime was an issue immediately after being elected. Following that meeting, I invited the Home Secretary to my constituency. I was delighted that he came early in the life of this Parliament to address a meeting at which I had invited wide representation—including the 63 or 64 parishes in my constituency. Although parliamentary sketch writers found it a source of fun, the Home Secretary admitted that the fact that 600 people turned up on a wintry Friday night to listen to, and question, him, left him in no doubt that crime was an issue for the Labour party in its new heartlands as well as its old.
More recently, the Minister came to a crowded meeting in King's Lynn town hall, and heard for himself the strength of feeling. I acknowledge that, for the first time in many years, we have a Government who are in listening mode and who have made a start. I and other honourable Members from Norfolk constituencies welcomed especially the commissioning of a study on the impact of population sparsity on the cost of policing.
The study was completed in May 1999 and is the main issue that I press on the Government today. There is a genuine need, which I vocalise on behalf of every constituent in North-West Norfolk, for the speedy implementation of the clear recommendations that arose unambiguously from the study. The simulation model that was used demonstrated a significant sparsity effect and showed that it was caused not only by the most obvious feature—officers having to travel greater distances to crimes—but because greater availability was essential in rural areas for crews to meet reasonable expectations for response times.
For the benefit of hon. Members whose constituencies have no rural hinterland I should emphasise that people living in more isolated rural areas could not, and will not, expect the same response times as those that can be expected in built-up urban areas. The study assumed that a response of 10 minutes in urban wards for urgent cases should be matched by only a 20-minute response in rural areas. However, Norfolk police strove for a 15-minute response in rural areas, and it is not clear to me that we should abandon that higher objective. Even if we accept the lower standards that are most common nationally, the study revealed an underfunding of £2.4 million in the past financial year. There can be no doubt that additional funding on that scale would significantly improve the service to my constituents. In fairness, the

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Government must ensure that that study is acted on, and that the long-standing underfunding of police forces, such as Norfolk police force, is addressed by no later than the spending review, which is expected to be announced later this summer.
In recent years, Norfolk police authority has been encouraged by the inspectorate
to remove its focus away from maintaining a minimum police establishment towards a business case approach of achieving agreed levels of performance.
In normal parlance, the authority is saying that too much attention has been paid to a simple head count of officers—I agree. The problem is that Norfolk police have suffered for far too long from inadequate support. Last week, I travelled with one police officer on the beat, who was driving a two-door Vauxhall Astra with 118,000 miles on the clock. I was assured that the car was due to be replaced, but what use is such a car for chasing one of the all too familiar car thieves on Norfolk roads? What use is a two-door vehicle in trying to apprehend criminals and escort them to the police station?
The beat base of the patrol in Terrington St. John was opened in 1998, one of the significant achievements of the past three years. However, on my visit, I discovered that the base did not even have a computer with a modern link to headquarters, so that transmitting information was unnecessarily outmoded and time consuming. Poor IT equipment has been a hallmark of the Norfolk police for too many years. The constables with whom I talked said that other issues of resourcing also need to be addressed. I was told that, following the arrest of a criminal, the police offers involved would need to spend a further five hours at the police station. We must deal with the issue of paperwork and provide IT systems to take the load from those who work at the sharp end of policing.
I was also asked why only the cars of the traffic police are properly equipped with stingers, which are thrown in front of cars that refuse to stop. Stingers are used in west Norfolk because of the relatively large numbers of car thefts, but the only police cars likely to be equipped with stingers are those in pursuit. Some officers asked why they, too, could not be trained to use stingers, which they could use to head off criminals and stop them from in front. Those resourcing issues in relation to cars and what is carried in them must be addressed, in addition to issues of IT equipment and back-up services for police on the beat.
In addition, I want to stress to the Minister that we must carefully consider the implications of the additional cost for rural areas of the new national communications radio system. In such a vast rural area, which covers many square miles, the cost of implementation will be substantially higher than in urban areas because of the need for extra relays. I want to know that Norfolk police will be able to afford not only the core of the new system—the minimum requirement—but the add-ons to make the system appropriate for the rural beats on which it will be used. I was disappointed recently to hear the new chairman of the police authority say that it is uncertain whether it will be able to afford those additional costs.
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In dealing with the outcome of the Tony Martin case, particularly the response of the tabloid newspapers, we must give some thought to the resourcing necessary to allow us to achieve our objectives. I hope to hear my hon. Friend the Minister make a clear statement, which I can take back to my constituents, that the Government will address the police numbers game. I also press my hon. Friend to assure my constituents that that will not be done at the expense of the police being properly equipped with sensible cars, appropriate radio equipment, proper information technology and reduced paperwork. Will he assure me that, having listened and studied, the Government will now act? I want to assure my constituents that Norfolk constabulary will do an even better job for the citizens of Norfolk.
12.16 pm
The Minister of State, Home Office (Mr. Charles Clarke): I congratulate my hon. Friend the Member for North-West Norfolk (Dr. Turner) on securing this important debate. Hon. Members will know that the policing of rural areas was raised on 3 February in the police grant debate and in other debates on policing, including an Adjournment debate by the right hon. Member for South-West Norfolk (Mrs. Shephard), on 19 October 1999. I regret that the right hon. Lady cannot be here, although I am glad to see that that the hon. Members for Mid-Norfolk (Mr. Simpson) and for North Norfolk (Mr. Prior) are present.
I contrast the approach taken by my hon. Friend for North-West Norfolk with the appalling intervention made during the recess by the four Conservative Members who represent Norfolk. They issued a statement saying that, as a result of recent events, people had no confidence in Norfolk police. I take this opportunity to place on record my confidence and the confidence of the Government and of the people of Norfolk in Ken Williams, the chief constable of Norfolk and his officers. I was delighted to hear my hon. Friend pay tribute to him. I believe that he speaks also for his constituents and the people of Norfolk.
Mr. Keith Simpson: Having welcomed my presence and that of my hon. Friend the Member for North Norfolk (Mr. Prior), the Minister proceeded to attack us for our press statement. I wish to make it clear that we have no lack of confidence in the hard work that our police force is doing in Norfolk. We were reflecting on the fact that, during the past three years, the number of police has declined by 50 and, even with the promised additional manpower, we shall get only 16 back. That is what our constituents tell us. I hope that the Minister will be able to respond to that.
Mr. Clarke: I certainly acknowledge the problem of numbers, which has been discussed in the House at some length. I shall return to the matter later. I am glad that the hon. Gentleman made it clear that he was not seeking to express a lack of confidence in Norfolk constabulary, although that is how that statement was reported. I am delighted that he has put the record straight.
I place on record my total confidence in Ken Williams, the chief constable of Norfolk, and his officers. I believe that the recent criticisms of the force, which included offensive telephone calls being made to

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police officers, were uncalled for. The force is a professional body that undertakes a difficult job, and it does it well and in a just and fair way. Norfolk constabulary has proudly held the charter mark for the past six years, which is a sign of the high standard of policing that they provide. Hon. Members should bear in mind the chief constable's guidance; his remarks are well considered and welcome.
I am very much aware of the concerns of those who live in rural areas. The Government recognise that rural communities can feel overlooked when it comes to setting plans for tackling and reducing crime. There is a perception that there is little or no crime in rural areas and that police and other interested agencies do not need to respond to events in the manner they need to in urban or inner-city areas. That perception is wrong. It is true that there is not the same volume of crime as is found elsewhere, but rural communities have different needs that must be taken into account. In the Norfolk policing plan 2000–01, the chief constable stated:
National comparisons show that Norfolk enjoys lower crime rates and higher detection rates than two-thirds of the remaining 42 policing areas in England and Wales. It is pleasing to note that we have achieved this despite having lower levels of funding than any other force.
Nevertheless, we all—whether we live in an urban or rural area—expect to be able to live our lives free from the worry of having our person threatened, our property damaged, our freedom of movement restrained, our public spaces wrecked and our peace of mind destroyed by criminal or anti-social activity.
In order to provide some context, it might be helpful to refer to the comments of the Countryside Agency, which published a report on this recently. Mr. Ewen Cameron, the chairman of the Countryside Agency, said in an interview at the time of the report's release that he was
Playing down this whole business of crime as an issue. It doesn't seem to me to be a real issue for rural communities. There is fear of crime—
that is the point my hon. Friend the Member for North-West Norfolk referred to a second ago—
But there are many bigger issues.
When asked what those were, he named them as
Transport, housing and in some areas the rural economy.
He continued:
Rural crime is rising, but is small compared with urban crime, so one should not make too much of it despite the recent case in Norfolk.
The Countryside Agency's report quoted figures from the 1996 British crime survey for offences in 1995, when 3.9 per cent. of rural households were burgled compared with 6.3 per cent. in urban areas and 10.3 per cent. in inner-city areas. From those statistics, the report argued that people living in rural areas are less concerned about being the victims of crime than those living in other parts of the country and feel safer on their streets. Public confidence in the police is higher in rural areas than elsewhere, as is satisfaction for the service provided by the police to victims reporting crimes. The report also pointed to conflicting evidence for the belief that crime is rising in rural areas and for a sense of heightened vulnerability, especially to property crime committed by people from outside the immediate area. I mentioned
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the report because it is important to set the current concerns—which are real and which the Government need to address—in a reasonable context.
I now turn to the point about funding, which was raised by my hon. Friend the Member for North-West Norfolk. The Government announced their overall spending plans for the three years from April 1999 following the comprehensive spending review in July 1998. Government-supported funding for Norfolk police for the year 2000–01—the current year—will be £86.5 million, an increase of 3.6 per cent. on the previous year. Under the budget set by Norfolk police, the increase in their estimates of net revenue spending is 5.3 per cent. The provisional increase in total police spending for England and Wales as a whole is 4 per cent.
Police numbers were raised by my hon. Friend and by the hon. Member for Mid-Norfolk. We acknowledge that police numbers are an important part of a comprehensive package of measures to ensure a modern and efficient police service. The public rightly feel reassured by the visible presence of police officers on our streets, and this perception helps to reduce the fear of crime. As the hon. Member for Mid-Norfolk said in his intervention, there has been a decline of 49 in police numbers in Norfolk since March 1997, to a total of 1,382 in September 1999, but it is important to set that against an increase of 57 in the number of civilian staff during the same period.
It is important to acknowledge—as I am sure all hon. Members will—the statements made by my right hon. Friend the Home Secretary, who announced the Government's intention of allocating another 5,000 officers through the crime fighting fund. Those will be over and above the existing number of officers that would otherwise have been recruited over the next three years from April 2000. As a result of the extra £285 million provided by the Chancellor in this year's Budget, the recruitment programme will be accelerated with the aim of delivering 5,000 officers over two years rather than three. We are currently discussing with the police services and the police authorities precisely how we can best achieve that. Under that scheme, Norfolk is to receive 66 extra posts during the next two years, which is 73 per cent. of its bid. It is for the chief constable to decide how to use those extra officers. As the professional head of the police service in Norfolk, it is right that he should do so. He is extremely aware of the rural policing issues that are being raised.
My hon. Friend made a specific point about sparsity, about which there are genuine concerns. Chief constables and police authorities want the recommendations of the research report on the cost of policing rural areas to be implemented. Chief constables and police authorities have also expressed to the Home Secretary and me their desire to see the report's conclusions implemented.
Earlier this year, I met a delegation of representatives of the rural authorities that are concerned with sparsity, including my own in Norfolk. My hon. Friend the Member for North-West Norfolk will have seen my letter to the editor of the Eastern Daily Press, in which I emphasised my belief that Norfolk police authority is right to make the case for the cost of policing sparse areas to be taken into account in the police funding formula. The Government arranged independent research when they came to power, and, as my hon.

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Friend said, they published the results last year. As I have said in the House and elsewhere, the case has great force and is being fully considered. The findings of the research report were considered by a Home Office-led group, including representatives of the police in their various forms. There was no single view on its conclusions, but there was general agreement that a sparsity factor had been detected in respect of the resources and police time needed to respond to calls for service and that it had arisen for the sorts of reasons described by my hon. Friend. Perhaps unsurprisingly, as redistribution of the resources would be at the expense of metropolitan forces, there was less agreement about how to include it appropriately in the police funding formula.
I cannot give hon. Members a timetable today for changes to the funding formula to accommodate the recommendations of the research report. We are considering the report and we will consider carefully the best way of responding to the needs of rural areas as part of our wider review of local authority funding arrangements and in the context of the comprehensive spending review. We want to get the funding distribution mechanism right and we want it to be seen as a fair and equitable way of funding the police service in England and Wales. We are committed to doing what we can to achieve that.
In the short time that remains, I should like to comment on the importance of focusing on partnership in fighting crime. It has been suggested that the police should bear sole responsibility for all matters related to fighting crime, but the Government do not believe that that is right. We believe that local authorities and even individuals also have responsibilities to develop the right partnerships. We advise people in various ways to increase home security, which is aided by installation of alarms, provision of alarms to pensioners, locks, security systems and a variety of neighbourhood and community watch schemes. We encourage citizens to involve themselves in such initiatives, which will enhance their security and which are an important part of individuals' obligations to the society of which they are a part.
We also seek to encourage crime reduction partnerships more generally. I noticed that the west Norfolk community safety strategy, which covers the area represented by my hon. Friend, identified specific
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aspects of that approach in the targets set in its document for the years 1999–2002. First, it referred to target hardening and property marking to deal with burglary in isolated areas and suggested a number of initiatives that could be undertaken to deal with such problems. Secondly, it suggested a series of specific initiatives to deal with rural isolation and the effect that crime and the fear of crime have on rural communities. Thirdly, it identified the need to deal with mobile criminals and suggested the target outcomes of controlled and structured information exchange about convicted and active criminals and seamless communications with neighbouring police forces, councils and other key agencies, which is an important consideration in my hon. Friend's constituency in respect of the relationship between Norfolk, Cambridgeshire and Lincolnshire.
Mr. David Prior: Will the hon. Gentleman give way?
Mr. Clarke: I shall not give way as I have only a minute or two left. I apologise to the hon. Gentleman for not doing so.
The strategy also pointed to the need to publicise detection of crime and convictions in respect of such criminals. Fourthly, it referred to farm crime and the widespread use of overt property marking of farm equipment. Such initiatives are an important part of the crime reduction partnership, and I pledge the Government to doing whatever we can to support them. We must address the partnership between individuals responsible for their own security and the police and local authorities with their respective responsibilities. That aspect has not had sufficient attention in the debate that has taken place in recent days. I want to use the opportunity today to highlight those points.
I conclude by congratulating my hon. Friend on securing the debate and by assuring all hon. Members that the Government are determined to address the issues by the sharpest and most direct means so that we can ensure that the problems of rural crime and rural safety are solved in the most effective way.
Mr. Deputy Speaker: Order. We now come to the last debate in Westminster Hall today. It concerns the Government's decision to approve the closure of Ashford hospital's accident and emergency and intensive therapy unit.

Ashford Hospital
12.30 pm
Mr. David Wilshire: As you rightly say, Mr. Deputy Speaker, the debate concerns Ashford hospital. To get the record straight, I hasten to say that that is Ashford in Middlesex. The debate is part of a last attempt to prevent the closure of the hospital's accident and emergency department and the scrapping of its intensive care beds. It is a plea to the Minister to change her mind.
My case for asking the Minister to scrap the proposed cuts is this: the overwhelming majority of the people whom I represent oppose them. They would lead to poorer national health service provision for my constituents and would make the current intensive care bed shortage even worse. The case for the cuts and the assessments of the consequences are flawed. The financial cuts being insisted on are no longer necessary following the recent Budget.
The other part of my final attempt to halt the planned cuts at Ashford is the delivery to Downing street tomorrow of more than 6,000 letters addressed to the Prime Minister from my constituents urging him to change the Government's mind. In case the Minister or anyone else is tempted to try to dismiss that as a party political stunt, I should make it crystal clear before I proceed that I speak for all my 70,000 constituents, irrespective of for whom they voted. One of the letters that I will deliver to the Prime Minister tomorrow says it all far better than I can. It reads:
My husband and I…have voted Labour all our lives as did our parents before us. Never, never again will we be doing so, we feel so let down by Labour over our hospital in our town that we feel physically sick.
That is not a Conservative point of view; it is a Government supporter's point of view.
I have no doubt that, once I finish my speech and the Minister comes to reply, she will again churn out the same claptrap that West Surrey health authority has been churning out. She will try to pretend that the cuts are not cuts and that they are not about to happen. Let me spell out the truth so that there can be no doubt. After the cuts have been made, Ashford hospital will no longer have an accident and emergency department and all its intensive care beds will have been scrapped. Those are cuts pure and simple, whatever the Minister says and however she tries to disguise them.
Should the cuts happen, they would fly in the face of the propaganda recently pumped out by the Secretary of State and the Prime Minister, both of whom keep saying that every accident and emergency department in the country is being improved and that more intensive care beds are being provided. The Prime Minister's recent appearance on "Breakfast with Frost" was a classic example of the propaganda that we hear week after week. He promised us all more funds for hospitals, improved accident and emergency facilities and more intensive care beds. However, that is not what is happening in my constituency. There, the exact opposite is happening. This debate is a plea to the Minister to keep the Prime Minister's promises by reversing her decision.
If the Minister follows the line taken by my local health authority and by the hospital trust concerned, I suspect that we will hear the same absurd claims that the
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cuts are actually service improvements. I heard that claim on the radio this morning from the chief executive of the hospital trust. Such claims are total nonsense. The truth in my constituency is that front-line services are being cut for a simple reason. The Government have ordered West Surrey health authority to make cuts worth £20 million over the next three years. The real purpose of the cuts at Ashford hospital is the saving of £3.6 million. There can be no nonsense about service improvements and no claptrap about what will happen. The truth is simple—the cuts are being made to save £3.6 million. It is madness to try to pretend that one can improve services while making cuts of that magnitude. It is nonsense.
If I read my crystal ball correctly, the Minister may again treat us to the spurious claim that the Royal College of Surgeons is refusing to recognise Ashford's accident and emergency department. That is not true. That is not what was said when it conducted an inspection recently. The story is pure speculation with no facts to back it up.
According to the claims made in this year's Budget speech, cuts in the NHS should no longer be necessary. I think that that is what we heard said in the House. I had a letter boasting that my local health authority was to receive an additional £7.5 million, but a string is attached to that: the Secretary of State insists that all the money goes to primary care groups for new services. My plea to the Minister today is for her to rescind that decision and to allow West Surrey health authority to use the additional money to stop the cuts at Ashford hospital.
Mention of the Budget leads me to consider the timing of the Minister's announcement that the cuts will go ahead. She made the announcement on Budget day, which was deeply cynical. It was a cynical attempt to try to hide the cuts behind the publicity bound to be given to the Budget. My reading of that cynical manoeuvre is that it confirms that the Minister knows perfectly well that what is really happening at Ashford is something to be ashamed of, something to be hidden behind other news. That is the politics of the gutter in my book.
Fortunately for us and for Spelthorne, I and my constituents cannot and will not be spin doctored into silent acquiescence. The 6,000-plus letters that have arrived in a matter of a few days are proof that we will fight on while there is hope. We will expose the truth as we fight. I have a plea to make to the Minister and to the Prime Minister tomorrow. If they are not prepared to listen to the pleas of a Conservative Member, I ask them please to listen to my constituents, 19,000 of whom voted for the Government.
Let us turn to what has happened since the Minister approved the cuts. Not only have the Government been trying to hide the truth behind the Budget but my local health authority and local hospital trust have been telling lies, pure and simple. Adverts were placed in a local newspaper that cost close to £6,000. That money could and should have been spent on providing services to my constituents, not on putting lying propaganda in newspapers.
In letters to me and others, the health authority and the trust have deliberately tried to mislead my constituents. I have therefore reported their advert to the Advertising Standards Authority, which has launched a formal investigation.

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The advert says that
Ashford's A&E Will Not Close.
That is a lie. The Royal College of Surgeons and the Audit Commission confirm that a hospital cannot have an accident and emergency department without an on-site intensive care unit. All Ashford's intensive care beds are being scrapped. There will be no accident and emergency department and it is a lie to claim that there will be. Curiously, the entire full-page advert, through all its propaganda and lies, forgets to mention that all the intensive care beds are being closed. I can only speculate as to why that little oversight took place.
The advert tries to pass off the downgraded replacement facility as an A and E department in all but name. That is another lie. The facility cannot be that, for the reason that I gave, and it will not be. The Minister's decision letter to me, and the NHS executive's press release, both dated 21 March, make it crystal clear that Ashford's A and E department will be closed and replaced by an urgent treatment centre. That is the truth that the local health authority is not prepared to admit.
Another lie is doing the rounds. In an open letter to me, which found its way into the press, the health authority's chief executive said that the proposed replacement for Ashford's A and E department was "tried and tested". However, in a subsequent personal letter to me, she said that there was
nothing absolutely comparable with the planned Ashford model.
How can the service be tried and tested if there is nothing with which to compare it? That is another lie. My plea to the Minister is that she tell her officials and managers to cut out the lies and stick to the truth.
I met the Minister before she decided to approve the cuts and told her that the health authority had got it wrong and that its proposals were flawed. Clearly, she did not believe me, because she approved the proposals. I hope that she will change her mind after she hears what I have to say.
When we met, I told her that my constituency already had too few intensive care beds. Spelthorne has since endured a crisis caused by insufficient intensive care beds, as have many other constituencies. It would be churlish of me not to welcome the Minister's decision to provide two new intensive care beds at St. Peter's hospital, but one can do the simple arithmetic: four beds closed and two beds opened means fewer beds. My hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) and I face a 25 per cent. cut in the number of intensive care beds available to our constituents.
I said to the Minister that the estimates of the number of people using the proposed urgent treatment centre were too high. I presume that she did not believe me. The London ambulance service has since confirmed that it will not take patients who might need surgery to Ashford. Therefore, the centre will not be used as much as is claimed. I also said that public transport provision from Spelthorne to St. Peter's hospital was poor and worsening. Since then, Arriva has notified the traffic commissioners that it proposes to pull out of the bus route from Staines, in my constituency, to St. Peter's. The situation was bad when we met, but it is worse now.
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I do not take the expectation that a free bus service might be provided very seriously. It is only a hope; there is no proof that it will happen.
When the Minister and I met, I pointed out that the cuts would inevitably lead to more cuts, but I was pooh-poohed. I have since been given a letter, dated 27 March, addressed to a constituent of mine from the health authority's chairman, in which he confirms exactly what I predicted. My guess, for what it is worth, is that the next round of cuts at Ashford is not far away and that I shall be back ere long with an Adjournment debate about the withdrawal of all in-patient mental health facilities from the Ashford site. Yet again, my constituents will be forced to go elsewhere to receive much-needed treatment.
I have given a few examples of what has been going on since the Minister and I last met, but there are many more. If we had more time, I could continue and reinforce the facts that I explained to the Minister and that were clearly dismissed. However, even the events that have happened since we met add up to an enormously powerful case for the Minister changing her mind and scrapping the cuts, instead of services.
I will give the reasons why the Minister should take this 11th-hour chance to change her mind and stop the cuts. Despite all the attempts to mislead people, the truth is that the cuts will lead to poorer NHS services for my constituents. In spite of the extra two intensive care beds at St. Peter's, the cuts will result in fewer local IC beds, which will make the recent crisis even worse. Despite all the reassurances from the health authority, its case for the cuts and its assessment of the consequences are fatally flawed. The Government continue to demand that £20 million worth of cuts are made in west Surrey, but they are no longer necessary since the Budget.
If all that is not enough to persuade the Minister to change her mind, I suggest that she listens to the voice of the people. She claims to be part of a listening Government, but she has ignored our pleas. If she ignores them again, it will prove beyond doubt that the Government are all mouth and no action.
Before Christmas, I presented to the House a petition opposing the cuts, signed by more than 25,000 of my constituents. Since then, our local community health council has lodged a formal objection to the cuts. To date, none of that has made a blind bit of difference. Therefore, I will end with the description given by one of my local accident and emergency consultants—whom the Minister has met—of the consequences of the Minister's actions. Talking about the cuts, the consultant said:
People will suffer, and some will die.
That is a statement of fact; he did not use the word "might". If the Minister will not listen to my constituents or me, will she please listen to an expert, or is she happy to have the deaths of some of my constituents on her conscience?
12.49 pm
The Parliamentary Under-Secretary of State for Health (Ms Gisela Stuart): I congratulate the hon. Member for Spelthorne (Mr. Wilshire) on securing this debate on what he chooses to call—I note this with some sadness—the Government's decision to approve the

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closure of Ashford hospital's accident and emergency department and ITU. Of course, a Member of Parliament has a responsibility to represent his constituents' interests and concerns and respond actively to the proposed reorganisation of health services. I therefore congratulate the hon. Gentleman on his interest in a subject that touches the lives of so many people in all walks of life. I congratulate him also on his detailed submission on the proposed changes, and note his continued interest since the decision to modernise health services at Ashford and St. Peter's hospitals was approved.
However, having heard the hon. Gentleman today and after reading the local press account of what he said, I say only that he has simply been scaremongering. He is also in danger of doing great disservice to the NHS locally if he continues his present attack on the effect of the changes to acute services in Ashford and St. Peter's hospitals NHS trust.
This is not the first time that Opposition Members have damaged the NHS. I remind hon. Members of the position that we were in when we took office in May 1997. Record waiting lists were rising faster than ever. More importantly, and of particular relevance to the health economy in that area, the debts run up by the NHS in the year before we took over amounted to £450 million. The NHS in west Surrey alone overspent by some £18 million. The number of nurses in training had been cut and investment in buildings was at its lowest for 10 years. I will not go on.
The basis for the proposed changes to services in west Surrey—which I suspect the hon. Gentleman knows—was expert clinical advice and sound financial judgment that questioned the existing configuration.
I need to explain briefly the background to the acute services review because the hon. Gentleman seems to have conveniently forgotten to mention the main drivers of those changes—or, if he did mention them, he merely cast aspersions on the soundness of the judgments. Current and future medical developments require complex, modern and comprehensive models of health care. The modern health service is responding to demands from doctors and other health professions for skills requiring greater specialism. There is a need to deliver well-equipped hospitals with appropriate numbers of staff. Our aim is to provide the best clinical service for all the people, including the hon. Gentleman's constituents. The changes to services to Ashford and St. Peter's hospitals were therefore about the supply of doctors and their training needs and working practices. They are of the essence in the delivering of high-quality health care.
It has again been suggested that the main driver of the changes was the need for financial cuts. That was not so, although I understand the hon. Gentleman taking that line with his constituents, given the financial mess that we inherited in the NHS. The suggestion is without foundation. Money was one factor in the decision but it was not a driver. Even with the extra investment over and above that provided by the previous Government, with an allocation of more than £400 million—a cash
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increase of £30.2 million or 8.3 per cent—changes would still have been necessary because there was a genuine threat to the accreditation of junior doctor training posts in Ashford hospital. It had already lost accreditation for the training of junior doctors in some specialties and there was a genuine risk to others. In addition, the trust was unable to meet the requirements of the new deal for junior doctors. Without proactive measures to ensure that services were reconfigured appropriately, the position could have been critical, with unplanned changes to services having to be made. We propose a proper, planned reconfiguration which continues to meet the needs of the local population.
Mr. Philip Hammond: Will the Under-Secretary give way?
Ms Stuart: I will not give way, for two reasons. First, time is limited and, secondly, it is important to put a number of issues on record. I am delighted to see the hon. Gentleman in the Chamber. However, I understand that he did not respond formally to the consultation process. I will take this time to put a number of simple facts on record, for the simple reason that we have heard in this Chamber such terms as "nonsense", "claptrap", "propaganda" and "the politics of the gutter." I would like to put some facts on the record because such language does not help anyone.
The consultation process was set in place in 1998 with the public discussion document "Setting the Scene". Over three months we sought the views of the public, health professionals and others. The document set out clearly the reasons for change and the opportunities that it would provide for improving services locally. The health authority took account of the representations and commenced formal consultation with the launch of the document "Modernising Local Health Services" in June 1999. Consultation was undertaken at 47 public meetings and the health authority also worked closely with Ealing, Hammersmith and Hounslow health authority throughout the planning and consultation process. Some 70,000 leaflets were distributed and there were a number of briefings and meetings with borough councils, local MPs and other key stakeholders. That is consultation, not propaganda.
Mr. Hammond: The community health council objected to those proposals and many people are cynical about the attention the Government pay to them. How many times have the Government upheld CHC objections to reconfiguration plans instead of riding roughshod over them?
Ms Stuart: If the hon. Gentleman listens to the end of my speech, he will find that some changes were made as a result of that representation. The real issues here are not the assertions that have been made but how people will be affected by the changes at Ashford and St Peter's. The reasons for change were clear. At the end of the consultation, the community health council objected formally and that is why it came to Ministers. There was no doubt about the strength of local feeling. I met a large number of the stakeholders. We ended up with a configuration that we believe will serve the community well.

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Let us examine what will happen to patients requiring urgent treatment for an emergency or an accident. Ashford will continue to have a consultant-led emergency service. Most medical emergencies will continue to be treated at Ashford hospital. The reference to the Advertising Standards Authority and the terminology was pure sophistry. It was asserted that the model has not been tested, but there is a similar model in Solihull at the Birmingham Heartlands hospital. I know that that works.
Ashford hospital will continue to deal with well over 80 per cent. of those patients who currently visit the A and E department. Those requiring admission will be admitted through the medical assessment and admissions unit on the Ashford site, which will be open 24 hours a day. Ambulances will also be able to get to the medical admissions unit and patients will be assessed and admitted promptly without going through A and E, which is an improvement. Ashford hospital will continue to receive non-trauma patients. That small number of patients who have suffered major trauma will be seen at St Peter's or other hospitals such as West Middlesex. In recognition of the extra travelling time involved, there will be additional investment in local ambulance services, with crews having additional training for pre-hospital trauma.
I turn now to the provision of intensive care. Six coronary care and high-dependency beds at Ashford hospital will provide critical care. There will also be the capability of ventilating patients on a life support machine for up to 36 hours. Patients would be stabilised if transfer were necessary. Arrangements are in place so that out-of-area transfers will no longer be needed. We listened to representations and agreed that there was insufficient critical care and that there should be two additional ITU beds at St Peter's hospital. Critical care facilities will be developed at Ashford as an integrated service. I refer the hon. Member for Spelthorne to the
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Audit Commission report, which made important observations, not just about the number of critical care beds, but how they are used.
Mr. Wilshire: Will the hon. Lady give way?
Ms Stuart: No, I will not.
The transfer of trauma and surgical emergencies to St Peter's or other hospitals will not only prevent the cancellation of operations but will allow far more planned services at both hospital sites. Furthermore, the improvements to the admission systems in both hospitals will mean that patients will receive a much more predictable and reliable service. It is about choice and greater certainty. We must also look at who is attending A and E departments. Some of the improvements in community services are to ensure that people do not have to go to A and E any more.
It is disingenuous to describe the changes as a loss of service. They take account of the appropriate response to emergencies. When I announced the decision I stated that transport services would be improved too. That will happen. The hon. Gentleman was wrong when he said that these changes are all about money. He was wrong when he said that Ashford hospital was under threat. He was wrong when he said that Ashford hospital would not be able to deal with emergency cases. He was wrong when he said that patients would have to wait longer for treatment and he was wrong when he said that local hospitals would not be able to cope in an emergency.
The changes are intended to ensure that patients are treated in modern, safe and appropriate surroundings. The hon. Gentleman should stop scaremongering. He is demoralising the staff and causing his constituents unnecessary anxiety. He should get behind the local NHS. He should support the reorganisation and be convinced that this will be a better and more responsive service that is more reliable and clinically effective.
Question put and agreed to.
Adjourned accordingly at One o'clock

LORD CHANCELLOR'S DEPARTMENT

  Marriage Counsellors
  Mr. Gerald Howarth
  To ask the Parliamentary Secretary, Lord Chancellor's Department how many marriage counsellors funded(a) partly and (b) wholly by the Government, there were in the UK in (i) 1970, (ii) 1980 and (iii) 1999; and what was the cost. [120660]

  Jane Kennedy
  In the financial year 1999–2000 the Lord Chancellor's Department spent £3.2 million on marriage and relationship support. Grant-in-aid is given to the central bodies of the main marriage support and research organisations towards expenses incurred in the development of training and support to local services, including the selection, training and supervision of counsellors, and administrative costs.

  In line with Sir Graham Hart's recommendations in his report on Marriage Support Funding (November 1999), the allocation is being increased to £4 million in 2001–01; £4.5 million in 2002–02; and £5 million in 2002–03. Figures for 1970 and 1980 are not readily available and could be provided only at disproportionate cost.

SOLICITOR-GENERAL

  EU Withdrawal
  Mr. Bercow
  To ask the Solicitor-General, pursuant to his oral answer of 13 April 2000,Official Report, column 498, what was the basis of his statement concerning the policy of the organisation Conservatives Against a Federal Europe toward withdrawal from the EU. [119836]

  The Solicitor-General
  I understand that until recently the CAFÉ website stated that if certain ends were not achieved by negotiations, quite unrealistic in my opinion, the UK must withdraw from the EU.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Sellafield
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the extent to which the site ion exchange extraction and the enhanced altinide removal waste filtration plants servicing the thermal oxide reprocessing plant facility at Sellafield have met their planned operational functions. [119134]
  2W
  Mr. Meacher
  The Environment Agency monitors and assesses the performance of the various effluent treatment plant on the Sellafield site including the site ion exchange extraction plant (SIXEP) and the enhanced actinide removal plant (EARP).

  During 1998 the Environment Agency report concluded that the Enhanced Actinide Removal Plant (EARP) performed satisfactorily in the removal of plutonium and other actinides from liquid effluent streams. In addition, the report considered that the plant has been reasonably effective for the removal of strontium-90 (Sr-90) and caesium-137 (Cs-137). The Agency considers there is scope for optimising the performance of EARP in line with the best practicable means. The Agency will continue to press for improvements in the effectiveness of EARP in reducing radionuclide discharges.

  The Agency also judges that the Site Ion Exchange Plant (SIXEP) has continued to operate satisfactorily in 1998 and has achieved high efficiencies for the removal of both Sr-90 and Cs-137 from the fuel storage pond effluents. The Agency notes that BNFL has made progress in the research and development programme for the optimisation of SIXEP.

  Electrical Goods
  Mr. Gummer
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to phase out stand-by systems on electrical goods. [119288]

  Mr. Meacher
  The approach which the Government have followed, with other EU countries, is not to prevent the inclusion of stand-by systems in such products. In future, more equipment will communicate automatically with other equipment, users and service providers, and this will involve stand-by systems. Therefore, our approach is to ensure that these features incorporate good energy efficiency technology and do not encourage waste. We have been supporting EU initiatives in this field, which recently led to an agreement with manufacturers to reduce stand-by power consumption of new televisions and video cassette recorders. Further initiatives are in hand to reduce stand-by energy consumption in the fast growing areas of "set-up boxes" and power supply packs.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for the Environment, Transport and the Regions for what purposes his Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120320]

  Ms Beverley Hughes
  A birth certificate or similar documentary evidence may be required for one or more of the following reasons:

  proof of identity

  proof of eligibility under the civil service nationality rules

  proof of age.

  In addition to the purposes listed, the Driver and Vehicle Licensing Agency requires applicants for their first photocard driving licences to produce either a birth certificate or a passport in support of their application.

  Deprivation (Funding)
  Mr. Coaker
  To ask the Secretary of State for the Environment, Transport and the Regions what funding sources are available to small pockets of deprivation outside the inner cities. [120124]

  Ms Beverley Hughes
  The Single Regeneration Budget (SRB) is the main source of government funding for tackling the most deprived areas in England, regardless of whether or not they are in inner-city areas, amounting to some £679 million in 1999–2000. However, 20 per cent. of the SRB resources goes to significant pockets of deprivation in areas which are not in the most deprived areas, such as rural areas, market towns, the former coalfield areas and coastal towns.

  In addition, substantial amounts of European Structural Funds will be available for the period 2000–06 amounting to £1,867 million for Objective 1 areas and £2,370 million for Objective 2 areas. A wide range of Government funding is also available, both as match funding and more generally, and this is set out in the DTI booklet, "Match Funding for European Structural Funds", published in March 2000.

  Waste Management
  Mrs. Brinton
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the Government's strategy for waste management. [120089]

  Mr. Meacher
  The Government published "A Way With Waste", the draft waste strategy for England and Wales, in June 1999. The draft strategy described the need for substantial changes in the way we manage our waste, and the range of actions needed to deliver that change. We will publish the final version shortly.

  Seat Belts
  Mrs. Ray Michie
  To ask the Secretary of State for the Environment, Transport and the Regions what action he is taking to encourage the fitting of seat belts on minibuses and coaches; and if he will make a statement. [120261]

  Mr. Hill
  Since 1998, all minibuses and coaches used to carry groups of three or more children on organised trips, including home to school transport, have been required to have seat belts fitted. The DETR is currently conducting a public consultation exercise on draft regulations which will require seat belts to be fitted to all new minibuses, coaches and buses which do not carry standing passengers. I understand that many minibus and coach manufacturers are already fitting seat belts as standard equipment to their new vehicles.

  Mrs. Ray Michie
  To ask the Secretary of State for the Environment, Transport and the Regions what is the Government's policy on the introduction of compulsory wearing of seat belts on minibuses and coaches transporting children; and if he will make a statement. [120262]

  Mr. Hill
  All minibuses and coaches carrying children on organised trips must provide a forward facing seat and a lap belt as a minimum. On minibuses with an unladen weight of 2,540 kgs or less, the law already requires that seat belts be worn where fitted.
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  The Government currently have no plans to introduce compulsory seat belt wearing in minibuses above 2,540 kgs unladen weight and in coaches transporting children. The Government recognise the attractions of such a step but problems arise over enforcement and the legal liability of a driver in respect of children under 14. Moreover, the police would not be able easily to enforce seat belt wearing regulations in such large vehicles. Nevertheless, we are keeping this matter under review.

  Road Maintenance
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish the results from each local highway authority that were used in the 1998 National Road Maintenance Condition Survey. [120734]

  Mr. Hill
  The National Road Maintenance Condition Survey is designed to produce estimates at the national level but not at the individual local authority level. Accordingly information is collected from local highway authorities on the basis that it is for statistical purposes only and will not be published by the DETR in an identifiable form.

  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions when the results of the 1999 National Road Maintenance Condition Survey will be published. [120733]

  Mr. Hill
  The Report was published on 26 April (this was the publication date announced in "National Statistics Update" on 29 February). Copies of the Report are available in the House of Commons Library.

  Whitley Way, Hampshire
  Mr. Oaten
  To ask the Secretary of State for the Environment, Transport and the Regions (1) what representations he has received on the building of Whitley Way in Hampshire; [120271]

  (2) what estimate his Department has made of the costs of purchasing land to build Whitley Way in Hampshire. [120270]

  Ms Beverley Hughes
  As the Whitley Way is proposed as a local distributor road it is for the local planning and highway authorities to decide whether it should be built. This Department has therefore made no estimate of the associated costs. The Department has received a small number of representations about this road.

  Traffic-free Areas
  Mr. Bill O'Brien
  To ask the Secretary of State for the Environment, Transport and the Regions what procedures his Department has laid down to be followed when local authorities intend to introduce traffic into pedestrian areas or town centres; and if he will make a statement. [120386]

  Mr. Hill
  Local authorities have powers under the Road Traffic Regulation Act 1984 to regulate traffic on local roads by making traffic regulation orders. These powers can be used to allow traffic into pedestrian areas or town centres. Access can be restricted to certain classes of vehicles and/or times of day. Local authorities are required to follow statutory procedures laid down in "The Local Authorities' Traffic Orders (Procedure)
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  (England and Wales) Regulations 1996", which include consultation with interested parties and publication of their proposals in a local newspaper. The Department has also published guidance on introducing pedestrian zones in Local Transport Note 1/87 titled "Getting the Right Balance—Guidance on Vehicle Restriction in Pedestrian Zones".

  Royal Train
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer of 19 April 2000,Official Report, columns 489-90W, on the Royal Train, what steps are being taken to increase the non-royal use of the Royal Train. [120615]

  Mr. Hill
  Under the arrangements establishing the Royal Travel grant-in-aid in 1997, the Royal Household and the Department decided to consider proposals for alternate use of the Train, when it was in the national interest to do so and as part of the ongoing policy of reducing the cost of official Royal travel. Government Departments were duly advised that the Train, when not being used for official Royal travel, was available for use on a reimbursable basis. To date, the FCO is the only Government Department to have used the Train.

  Both the Department and the Household have received preliminary inquiries from several organisations about using the Train but none of these has yet put forward any firm proposals.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions how many times the Royal Train was used by(a) Her Majesty the Queen, (b) the Prince of Wales and (c) other members of the Royal Family in the last 12 months. [120616]

  Mr. Hill
  In the year ended 31 March 2000, the Royal Train was used(a) eight times by Her Majesty the Queen accompanied by the Duke of Edinburgh, (b) 14 times by the Prince of Wales, and (c) twice by the Duke of Edinburgh and once by the Princess Royal. All these journeys were in support of official Royal engagements.

  House Building (Flood Plains)
  Mr. Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions what is the national planning guidance regarding the building of houses on flood plains; and if he will make a statement. [120219]

  Ms Beverley Hughes
  My hon. Friend the Minister for Housing and Planning announced on 13 April 2000,Official Report, columns 249-50W, the publication of a consultation draft of a new Planning Policy Guidance Note 25, "Development and flood risk". This sets out proposals for a strengthening of the existing policy, which seeks to avoid inappropriate development in flood plains or development that increases flood risk. It gives specific guidance on the approach to new housing development. It recognises, however, that there will be occasions when other considerations outweigh flooding issues in favour of development proceeding. In such cases, it emphasises the need for development to be made safe through the adoption of appropriate protection or mitigation measures.

  Wembley Stadium
  Mr. Bob Russell
  To ask the Secretary of State for the Environment, Transport and the Regions if he will make a statement on the proposals for improvements to the road and rail links to Wembley Stadium and the costings for such improvements. [120634]

  Mr. Hill
  The Wembley Task Force is in the process of developing proposals for road and rail improvements to Wembley Stadium, in conjunction with the local authority, rail operators and Wembley National Stadium Ltd.

  Regional Development Agencies
  Mr. Stevenson
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to his answer to the hon. Member for Manchester, Central (Mr. Lloyd) on 17 April 2000,Official Report, column 317W, on regional development agencies, for what reason the West Midlands regional development agency received no increase in funds. [120500]

  Ms Beverley Hughes
  The West Midlands Development Agency received an increase in funds of £1.0 million between 1999–2000 and 2000–01. Six of the Agency's seven main budgets have increased, by a total of £12.4 million. The seventh, for Land and Property, has decreased by £11.4 million as a result of year-on-year variation in legally-committed expenditure and in income derived from sales.

  Pet Cremation
  Mr. Todd
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the impact on pet cremation services of current and proposed waste incineration and animal waste rules. [120605]

  Mr. Hill
  Expert consultants reported to my Department on the impact of the proposed waste incineration directive, including for pet crematoria, at the beginning of 1999. The report, "Regulatory and Environmental Impact Assessment of the Proposed Waste Incineration Directive" (Entec UK Ltd.) is in the House Library.

  Mr. Todd
  To ask the Secretary of State for the Environment, Transport and the Regions what consultation has taken place with those offering pet cremation services on the implementation of the Waste Incineration Directive Common Position 7/2000. [120606]

  Mr. Hill
  As part of the preparation of their report to my Department on the impact of the proposed waste incineration directive, expert consultants at the end of 1998 consulted two pet crematoria direct, including a site visit, and consulted the UK Private Pet Cemetery and Crematoria Association. A copy of the report, "Regulatory and Environmental Impact Assessment of the Proposed Waste Incineration Directive" by Entec UK Ltd. is in the House Library.

  We now expect the proposal to be adopted as a Directive in the autumn, subject to the progress of the final stages of negotiation. The deadline for transposition into UK law will be two years after adoption. The proposal is therefore likely to apply to new plant from autumn 2002. Existing plant will not, however, have to comply until 5 years after adoption, ie autumn 2005.
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  We are looking at implementation options, which will minimise the burden on pet crematoria while ensuring that there are appropriate environmental safeguards.

  Parish Councils
  Ms Ward
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to change the role and powers of parish councils. [120625]

  Ms Beverley Hughes
  Parish councils are an essential part of the structure of local democracy. They will continue to play a key role in the governance of many of our towns and villages. As part of the preparation for our forthcoming Rural White Paper we are looking at ways of strengthening the contribution that parish councils can make.

DEFENCE

  Prisoners of War
  Mrs. Lait
  To ask the Secretary of State for Defence when he will announce his decision on a special gratuity for former Far East prisoners of war or their widows. [120033]

  Dr. Moonie
  I met with representatives of the Royal British Legion, along with the Prime Minister, on 10 April to discuss this issue. The matter is being given careful consideration; however, no decision has yet been made.

  Atomic Weapons Establishment
  Mr. Alan Simpson
  To ask the Secretary of State for Defence what assessment he has made of Lockheed Martin's safety record in nuclear work undertaken in the United States; and if he will list the identified shortcomings. [116240]

  Mr. Spellar
  In the assessment process for the AWE contract, bidders were required to provide information to demonstrate their safety record. AWE ML provided full information on its parent companies including Lockheed Martin. This information was assessed not only by the Department but by the independent regulators, the Nuclear Installations Inspectorate (NII) in the context of AWE' s existing safety regime, and by the Environment Agency (EA). The NII confirmed before the contract was signed that it was satisfied. The EA confirmed its satisfaction on 9 March when it issued revised discharge authorisations for the AWE sites.

  After the contract was placed on 1 December, there was an incident at the Oak Ridge Y12 facility in Tennessee which resulted in the publicity of a number of alleged shortcomings in Lockheed Martin's safety record in the US. As a result the Secretary of State asked the Chief of Defence Procurement to carry out a further review to ensure that none of the Lockheed Martin nominees to AWE ML was connected with the criticisms made. In addition, the Department consulted with the US Department of Energy concerning Lockheed Martin's safety performance, and both of the UK's regulatory
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  authorities were again consulted about the suitability of Lockheed Martin to act as a shareholder in AWE ML.

  Mr. Alan Simpson
  To ask the Secretary of State for Defence if he will list the criticality non-compliances recently reported to his Department for which Lockheed Martin was responsible in the USA which his Department deemed significant. [116243]

  Mr. Spellar
  Incidents at nuclear facilities in the US are the responsibility of the US regulators and therefore are not routinely reported to the Department. However, as part of the bidding process for the contract to manage and operate AWE, each consortium had to provide information to demonstrate the safety performance of their parent companies, including Lockheed Martin. Furthermore, the Nuclear Installations Inspectorate (NII) routinely review significant safety events even if they take place outside the UK to see if there are any implications for safety at UK nuclear facilities. The Department also took account of the opinions of the US regulators in assessing the review of policies and procedures at the Oak Ridge Y12 plant carried out by Lockheed Martin.

  I would like to add that following the incident at the Oak Ridge facility in early December, an amendment was inserted into the new AWE contract by which Lockheed Martin, and its partners in AWE ML, are required to notify MOD of occurrences that might have a bearing on operations at AWE within 48 hours.

  Mr. Alan Simpson
  To ask the Secretary of State for Defence on what date he was informed of Lockheed Martin's safety record at the sites it managed for the Department of Energy in the USA. [116241]

  Mr. Spellar
  As part of its bid for the new contract to manage and operate AWE, the AWE ML consortium provided the Department with evidence on the safety record of each of its parent companies, including Lockheed Martin. Each bidder was required to demonstrate a proven and successful track record with specific relevant experience in, inter alia, licensed nuclear site operations. Lockheed Martin provided this information to the Department on 1 June 1999.

  Mr. Alan Simpson
  To ask the Secretary of State for Defence what plans he has to reconsider the decision to award the Aldermaston and Burghfield contract to AWE Management Ltd. [116245]

  Mr. Spellar
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Reading, West (Mr. Salter) on 29 March 2000,Official Report, columns 159-60W.

  Departmental Property
  Mr. Don Foster
  To ask the Secretary of State for Defence what(a) number and (b) percentage of properties in his charge are empty; and what steps are being taken by his Department to reduce the number of such properties. [116917]

  Dr. Moonie
  [holding answer 3 April 2000]: At 1 April 1999 there were a total of 13,962 unoccupied properties within the Services married quarters estate in the United Kingdom and Northern Ireland. This represented some 21 per cent. of total stock.
  9W
  At 1 April 1999 the Defence Housing Executive held a stock of 62,420 married quarters in England, Scotland and Wales, of which 48,852 were occupied and 1,999 were in the course of disposal. Of the balance of 11,569 properties, 2,559 were under offer to Service families and were likely to be occupied within the next two months; 1,035 properties were vacant awaiting future Unit deployments or use as decant accommodation during the refurbishment programmes; 1,931 properties were empty awaiting modernisation and 6,044 were routine empty properties, i.e. a working management margin for some 22,000 family moves each year.

  The majority of empty Service quarters are only temporarily so. The large number of Service family moves a year requires a management margin of empty stock ready for incoming occupants. Additionally, an ongoing modernisation programme and Defence reorganisation also demand that a considerable number of properties are empty while work is undertaken and future plans are clarified. Some 2,000 properties were released in 1999 and some 6,500 properties are planned to be released over the next two years.

  The majority of the MOD housing stock in England and Wales is owned by Annington Homes. Properties identified as having no long term requirement to the Department are released to that company. Surplus MOD-owned properties are sold through Defence Estates.

  In Northern Ireland a further 3,054 Service families quarters were owned by the Ministry of Defence at 1 April 1999 of which 394 were empty.

  Mr. Hancock
  To ask the Secretary of State for Defence how many properties in the United Kingdom earmarked for Army officers, Naval officers, and RAF officers are empty; how many have been empty for more than six months; what the figures are for Hampshire; and if he will make a statement. [118700]

  Dr. Moonie
  Service Families Accommodation (SFA) is managed on a tri-Service basis and is made available according to entitlement, i.e. by rank and family size. A breakdown by individual Service is not available. At 31 March 2000 there were 2,288 unoccupied officers' SFA in England, Scotland and Wales. Of these, 1,161 have been empty for more than six months. There were 234 unoccupied officers' SFA in Hampshire at 31 March 2000 of which 96 had been empty in excess of six months.

  Overall, 6,500 properties are planned for disposal during the next two years. Most of the MOD housing stock in England and Wales is owned by Annington Homes and underleased by MOD. Properties identified as having no long-term requirement to the Department are released to that company. Surplus MOD owned properties are sold by Defence Estates.

  In Northern Ireland 50 officers' quarters were empty at 31 March 2000 of which 12 had been empty for over six months.

  Principal Anti-air Missile System
  Mr. Hancock
  To ask the Secretary of State for Defence what is the cost of the UK's participation in the Principal anti-air missile system. [117848]
  10W
  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. Michael Hancock, dated 2 May 2000:
  I am replying to your question to the Secretary of State for Defence about the cost of UK participation in the Principal Anti-Air Missile System (PAAMS). 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.
  As I said in my letters to you of 15 and 21 December 1999, the total programme cost for the twelve currently planned Type 45 warships (including weapon systems) is approximately £6Bn. This includes approximately £1.2Bn for the development, design and build of the first of class ship and £1Bn for the development and initial production of PAAMS. The balance of £3.8Bn contains funding for additional missile procurement and allows for the incremental acquisition of the combat system.

  Troop Strengths
  Mr. Key
  To ask the Secretary of State for Defence if he will list the(a) trained strength and (b) trained requirement of the UK (i) regular armed forces, (ii) reserve forces and (iii) Territorial Army. [118789]

  Mr. Spellar
  The latest available figures on a consistent basis across all services are as follows:

  (a) UK Regular Forces trained strength and trained requirement as at 1 February 2000:

  UK Regular Forces1 trained strength—186,317

  UK Regular Forces2 trained requirement—194,661

  (b) UK Volunteer Reserve Forces strength and post-SDR establishment as at 1 February 2000 (all figures include trained and untrained personnel):

  UK Volunteer Reserve Forces3 current strength (includes Territorial Army strength4 of 44,387)—50,224

  UK Volunteer Reserve Forces5 post-SDR establishment (includes Territorial Army post-SDR establishment of 41,204)—48,288

  1 Excludes trained strength of 3,259 Gurkhas.
  2 Excludes trained requirement of 2,945 Gurkhas.
  3 Includes volunteer reserve forces only. These comprise the Royal Naval Reserve, the Royal Marine Reserve, the Territorial Army and the Royal Auxiliary Air Force.
  4 Excludes strength of 1,408 non-regular permanent staff.
  5 See note3.

  Defence Evaluation and Research Agency
  Mr. Sheerman
  To ask the Secretary of State for Defence what consultation process has been carried out involving staff of the Defence Evaluation and Research Agency on its future. [119033]

  Mr. Hoon
  Following the announcement in 1998 of a Public Private Partnership (PPP) for the Defence Evaluation and Research Agency (DERA), consultation has been an important and regular feature of the process.
  11W
  We have consulted directly with staff on a formal and informal basis and also through trade union representatives, and will continue to do so.

  The mechanisms for PPP consultation to date have included:
  DERA PPP Consultation Documents, published in May 1999 and April 2000, which invited staff, and other stakeholders to comment on the Ministry of Defence's proposals for a PPP structure.
  Regular senior management briefings.
  Team briefings conducted on a monthly basis by departmental managers.
  DERA News, a monthly in-house publication, which regularly updates staff on the progress of the PPP.
  DERA website, which again provides regular updates.
  Informal departmental briefings.

  In addition to direct consultation with staff, Ministers have met on a number of occasions with trade union representatives to discuss the progress of the PPP. Officials have also met with union representatives on a regular basis to discuss their specific issues and concerns.

  Following the announcement in the House, 17 April 2000, Official Report, columns 366-67W, we are now engaged in a period of formal consultation on our revised proposals for the PPP. A consultation document has been made widely available with comments invited by 9 June 2000. A copy of this document has been placed in the Library of the House.

  During this consultation period presentations and discussions with staff and trade unions will also be arranged in order to address any issues and concerns regarding the PPP proposal prior to a final decision being made.

  Mr. Sheerman
  To ask the Secretary of State for Defence what recent consultation he has carried out with private sector defence contractors on the future of the Defence Evaluation and Research Agency. [119034]

  Mr. Hoon
  Following the announcement in 1998 of a Public Private Partnership (PPP) for the Defence Evaluation and Research Agency (DERA), consultation has been an important and regular feature of the process. We have consulted with a wide range of key stakeholders, including private sector defence contractors. This has focused on formal industry bodies such as the National Defence Industry Council (NDIC) and Association of Independent Research and Technology Organisations (AIRTO), although there have been direct representations from individual companies. Last year's consultation exercise on a potential PPP solution produced valuable responses, which have informed the most recent phase of work.

  The current consultation exercise, which I announced in the House on 17 April 2000, Official Report, columns 366-67W, will give all stakeholders the opportunity to submit their views on our revised proposals for the DERA public private partnership. We also plan to
  12W
  hold various consultation events with key stakeholders. I can assure my hon. Friend that views expressed will be taken into account before a final decision is made.

  Mr. Simon Thomas
  To ask the Secretary of State for Defence what percentage of shares in New DERA plc he expects the Government to hold(a) on flotation of the new company and (b) as a minimum public holding. [120502]

  Mr. Hoon
  At this stage of the public private partnership (PPP) process it would be premature to determine the extent of a Government stake in the NewDERA company.

  It is however the Government's objective that the company would be floated on the Stock Market as soon as its potential is judged to be suitably developed, which could be during 2001.

  Initially, MOD is likely to retain a significant financial stake in NewDERA to ensure that taxpayers receive full value for their investment. However, retention of this stake would not be a long term position.

  Mr. Baker
  To ask the Secretary of State for Defence (1) what plans are in place to ensure that information on experiments and the welfare of animals held at DERA will still be accessible when DERA is part-privatised; and if he will make a statement; [120131]

  (2) what plans are in place to ensure that the welfare of animals held at DERA for experiments will be protected when it is part-privatised; and if he will make a statement. [120134]

  Mr. Hoon
  Animal Welfare within DERA is conducted strictly in accordance with the requirements of the Animals (Scientific Procedures) Act 1986 under which the Home Office licenses and oversees all such activity. These regulations, of course, apply to all private sector organisations, and will therefore continue to govern the welfare of any animals in defence research, whether in the public or the private sector.

  Information held on defence research using animals within MOD will continue to be available as it is at present. However, subject to meeting all the requirements of the Animals (Scientific Procedures) Act 1986, access to information on any such research carried out by the new private sector company will be a matter for that organisation to determine.

  Regulation of Investigatory Powers Bill
  Mr. Cohen
  To ask the Secretary of State for Defence if he will make a statement on his policy in respect of the use his Department, its agencies and public bodies will make of the powers relating to the authorised obtaining of communications data in Part I, Chapter II of the Regulation of Investigatory Powers Bill once the Bill is enacted. [119522]

  Dr. Moonie
  I refer my hon. Friend to the answer given to him on 19 April 2000,Official Report, column 509W, by my right hon. Friend the Secretary of State for the Home Department.

  RAF Staxton Wold
  Mr. Greenway
  To ask the Secretary of State for Defence (1) when RAF Staxton Wold was first identified as a radar station suitable for downgrading to remote operation only; [119161]

  (2) when he was first advised that RAF Staxton Wold should be downgraded to remote operation. [119162]

  Mr. Spellar
  [holding answer 18 April 2000]I understand that formal consideration of the possibility of remote operation of the radar at RAF Staxton Wold was first given during the Departmental budgetary planning process which culminated in February 1997. This option was not pursued because a wider review of the then UK Air Defence Ground Environment (UKADGE) was started during the Strategic Defence Review.

  Ministers in this Administration have never been advised that the radar at RAF Staxton Wold should be downgraded to remote operation. My predecessor was, however, advised in July 1998 that it would be possible to draw down the Station to minimum manning. Since the overall review of the UKADGE (now Air Surveillance and Control System—ASACS) was still being carried out at the time, he wished to await the outcome of this work and consider any wider implications before making a decision. I wrote to the hon. Gentleman on 9 August 1999 as soon as I had taken a decision (subject to consultation) on our plans for RAF Staxton Wold.

  Balkans
  Mr. Hancock
  To ask the Secretary of State for Defence what is the total cost so far for United Kingdom operations in(a) Bosnia and (b) Kosovo, since forces entered the region; and if he will make a statement. [119166]

  Mr. Spellar
  The additional expenditure incurred each year by my Department in Bosnia and Kosovo is as follows:

  £ million

  Year

  Bosnia

  Kosovo

  1993–94

  26.6

  0

  1994–95

  33.9

  0

  1995–96

  91.0

  0

  1996–97

  247.3

  0

  1997–98

  196.5

  0

  1998–99

  147.1

  13.9

  1999–20001

  c.105

  c.340

  1 Estimate

  Fatal Accident, Mr. Konjic Grad
  Mr. Swayne
  To ask the Secretary of State for Defence what satellite photographs exist of the fatal accident that took place on 7 July 1997 involving a Foden Thompson Carmichael MWD near Mrkonjic Grad. [118431]

  Dr. Moonie
  [holding answer 17 April 2000]: The Department does not have any satellite photographs of the accident. However, a number of aerial photographs exist and I am arranging for these to be placed in the Library of the House.

  Relocation
  Mr. Hunter
  To ask the Secretary of State for Defence what relocation companies his Department uses when relocating civil servants and armed forces personnel. [119856]

  Dr. Moonie
  The Department uses Countrywide Mobility (HCR plc) to provide Service personnel with rented family and single accommodation in Great Britain on those occasions when there is a shortage of publicly funded accommodation. The Department uses three relocation companies, Cendant Relocation UK Ltd., Countrywide Mobility (HCR plc) and Morton Fraser Relocation to provide assistance to civil servants who have an entitlement to a move of home at public expense.

  Helicopters
  Mr. Martin Bell
  To ask the Secretary of State for Defence (1) if he will list the causes of the uncommanded flying control movements that have been reported on Chinook aircraft since 1994; [120103]

  (2) what visual flying rules applied to support helicopters in June 1994. [120102]

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

  Serle's House
  Mr. Oaten
  To ask the Secretary of State for Defence what public access conditions have been agreed in relation to the sale of the remembrance garden at Serle's House. [119822]

  Dr. Moonie
  [holding answer 20 April 2000]: At present, none.

  Plutonium Transfers
  Mr. Llew Smith
  To ask the Secretary of State for Defence if he will list the authorities in the United States which his Department consulted in order to draft paragraph 12 on United Kingdom-United States barter arrangements for plutonium transfers, contained in the report "United Kingdom's Defence Nuclear Programme", published on 14 April. [120253]

  Mr. Spellar
  The US Department of Energy was consulted on this report prior to publication.

  KFOR
  Mr. Donald Anderson
  To ask the Secretary of State for Defence what financial contribution each NATO and EU country has made to the cost of KFOR. [120087]

  Mr. Spellar
  My Department does not hold the information requested. The UK's costs are estimated to be £342 million for the financial year 1999–2000.

  MOD Police (Sickness Absence)
  Mr. Kidney
  To ask the Secretary of State for Defence what was the rate of staff absences due to sickness for his Department's police for the last three years; and what assessment he has made of the rate relative to that of other public services. [120631]
  15W
  Mr. Spellar
  Ministry of Defence Police (MDP) sickness figures have been collected in hours since 1 April 1997 in order to give a truer measure of lost output. Since then the figures have been:

  Per annum

  Average number of sickness hours per officer

  1997–98

  1113.08

  1998–99

  114.86

  1999–2000

  120.85

  1 The figures for 1997–98 includes civilian staff. The police and civilian support staff figures were collected separately only from 1 April 1998

  The figures for 1998–99 and 1999–2000 are equivalent to 14.4 and 15.1 respectively days absence per officer per year. In 1998–99, the last year for which complete figures are available, the average number of working days lost to sickness per Home Department Police Officer in England and Wales was 11.7. It should be noted, however, that comparisons between forces are problematic owing to differences in methods of counting sick absence.

  In recognition of the level of sick absence within the MDP, a sickness strategy was put into place early last year aimed at significantly reducing productive hours lost through sickness.

NORTHERN IRELAND

  Regulation of Investigatory Powers Bill
  Mr. Cohen
  To ask the Secretary of State for Northern Ireland if he will make a statement on his policy in respect of the use his Department, its agencies and public bodies will make of the powers relating to the authorised obtaining of communications data in Part I, Chapter II of the Regulation of Investigatory Powers Bill once the Bill is enacted. [119521]

  Mr. Ingram
  I refer my hon. Friend to the answer given by the Secretary of State for the Home Department on 19 April 2000,Official Report, column 509W.

  Asylum Seekers
  Mr. Evans
  To ask the Secretary of State for Northern Ireland how much his Department spent (i) directly and (ii) indirectly on asylum seekers in(a) 1995, (b) 1996, (c) 1997, (d) 1998 and (e) 1999; and what estimate has been made of expenditure in the year 2000. [119488]

  Mr. Mandelson
  The Home Office will be responding to this question on behalf of the Government as a whole, using information that we have provided to them.

  RUC/Army Base (Fermanagh)
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what the estimated repair cost is in respect of damage to the joint RUC/Army base at Annaghmartin, Roselea, County Fermanagh, as a result of the attack on 2 April. [119030]
  16W
  Mr. Spellar
  I have been asked to reply.

  We estimate that £70,000 is the minimum amount necessary to repair the damaged base.

PRIME MINISTER

  Active Aging
  Ms Perham
  To ask the Prime Minister when he intends to publish the report on Active Aging. [118008]

  The Prime Minister
  The Performance and Innovation Unit's report "Winning the Generation Game" was published on 27 April. Copies of the report have been placed in the Vote Office and the Libraries.

  Cabinet Joint Consultative Committee
  Mr. Gordon Prentice
  To ask the Prime Minister, pursuant to the oral statement by the Secretary of State for the Home Department on 5 April 2000,Official Report, columns 1021–29, concerning advice to Ministers, what impact the statement will have on the availability of information about the Cabinet Joint Consultative Committee, with particular reference to the dates of future meetings; the names of those invited to participate; and the topics to be discussed. [118930]

  The Prime Minister
  In the passage referred to, my right hon. Friend was speaking about factual and background information which has been used, or is intended to be used, to provide an informed background to decision-taking. In particular he clarified that further amendments would be made to clause 13 to ensure that there was a significant route for the release of such information.

  The Joint Consultative Committee (JCC) is a deliberative committee. It does not have a decision-making role within collective Cabinet responsibility.

  The release of information relating to discussions of the JCC would be subject to the proposed exemption in Clause 34 2(b) (ii) of the Bill, if its disclosure would inhibit the free and frank exchange of views for the purposes of deliberation. It would then have to be considered, under clause 13 of the Bill, whether the public interest in disclosing the information outweighed the public interest in maintaining the exemption.

CULTURE, MEDIA AND SPORT

  World Athletics Championships
  Mr. Faber
  To ask the Secretary of State for Culture, Media and Sport if it remains his policy that a venue suitable for staging the World Athletics Championships would require a capacity of about 60,000. [114146]

  Kate Hoey
  [holding answer 14 March 2000]: My right hon. Friend does not have such a policy. UK Athletics have confirmed their key aims as being a stadium of 45,000-50,000 seats with support facilities to stage the World Athletics Championships.

  Wembley Stadium
  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport what assessment he made of Brent Council's policy in respect of transport infrastructure investment associated with the planned redevelopment of Wembley Stadium at the time that bids were submitted for the new National Stadium project. [119113]

  Kate Hoey
  None; bids for the new National Stadium project were submitted and consideration of the bids was entirely a matter for Sport England.

  Mr. Peter Ainsworth
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 24 March 2000,Official Report, column 708W, on Wembley Stadium, when he expects to receive confirmation from Sport England that they are happy with the appointment process in relation to the contract to build Wembley National Stadium. [119158]

  Kate Hoey
  [holding answer 14 April 2000]: Sport England will not be able to confirm that they are happy with the appointment of a contractor under the terms of the Lottery funding agreement until that appointment has been made. I understand that Wembley National Stadium Ltd. is unlikely to appoint the contractor until planning permission has been secured.

  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport (1) what discussions he has had with ministerial colleagues in the DETR about the desirability of new transport infrastructure projects in association with the proposed redevelopment of Wembley Stadium; [119120]

  (2) what advice he has received from the Wembley Task Force about the (a) desirability and (b) cost of new transport infrastructure investment in association with the proposed redevelopment of Wembley Stadium. [119116]

  Kate Hoey
  [holding answer 17 April 2000]: Neither I nor my right hon. Friend have discussed Wembley issues with DETR colleagues as this is a matter under active consideration by the Wembley Task Force. Given that the new Wembley Stadium is playing a major role in the regeneration of the Wembley Area, the Task Force has assessed the infrastructure requirements needed to support a world-class stadium, in a world-class environment, and is holding discussions with interested parties, including the London borough of Brent and Wembley National Stadium Ltd. to find ways in which a package can be put together to secure a successful development. These discussions are continuing.

  No recommendations, views or proposals have been submitted by the Task Force to the Department on these infrastructure issues to date.

  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport if he will place in the Library a copy of the Brent Council planning brief referred to in paragraph 13.4 of the Memorandum of Evidence provided by Sport England to the Culture, Media and Sport Committee in respect of the Committee's Fourth report of Session 1999–2000 (HC 164). [119117]

  Kate Hoey
  [holding answer 17 April 2000]: I am placing a copy of the London Borough of Brent's planning brief in the House Library, today. Copies are also available at www.brent.gov.uk/wembley.
  18W
  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport what advice he has received from Sport England on whether transport infrastructure investments were required as a condition of their grant of £120 million towards the redevelopment of Wembley Stadium. [119118]

  Kate Hoey
  [holding answer 17 April 2000]: Sport England advises that transport infrastructure requirements were not required as a condition of the Lottery grant to Wembley National Stadium Ltd.

  Mr. Greenway
  To ask the Secretary of State for Culture, Media and Sport when(a) he and (b) officials in his Department were informed of the likely demand by Brent Council for a section 106 agreement for a £30 million transport infrastructure investment in connection with the granting of planning consent for the redevelopment of Wembley Stadium. [119119]

  Kate Hoey
  [holding answer 17 April 2000]: The London Borough of Brent has consistently and publicly made clear its concern on transport and other infrastructure issues relating to the redevelopment of Wembley Stadium. DCMS Ministers and officials have been aware that the London Borough of Brent is seeking up to £30 million in a section 106 agreement for more than two years.

  Athletics Stadium
  Mr. Faber
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 24 March 2000,Official Report, column 707W, on what date copies of the brief submitted by UK Athletics were placed in the Library; and if he will make a statement. [119042]

  Kate Hoey
  [holding answer 14 April 2000]: I apologise to the hon. Member that owing to an oversight within my Department copies of UK Athletics brief were placed in the Library only on 7 April.

  National Lottery
  Mr. Fearn
  To ask the Secretary of State for Culture, Media and Sport (1) what discussions he has had with the National Lottery concerning proposals for a National Endowment Fund for Sport and the Arts using reserve lottery funds; [119664]

  (2) what discussions he has had with the Lottery Promotion Company Ltd. concerning their proposal for a National Endowment Fund for Sport and the Arts; [119665]

  (3) what discussions has he had with the Lottery Promotion Company Ltd. concerning their proposals for allocation of moneys held in reserve. [119666]

  Kate Hoey
  I met Denis Vaughan, Executive Director of the Lottery Promotion Company, on 7 October 1999, to discuss the Lottery Promotion Company's proposals for the use of Lottery funds, including the establishment of a National Endowment for Sport and the Arts. Neither I, nor the Secretary of State, have discussed these proposals with the National Lottery Commission, the National Lottery distributing bodies, or the National Lottery operator, Camelot Group plc.

  Tourism
  Mr. Fearn
  To ask the Secretary of State for Culture, Media and Sport what recent discussions he has had with the English Tourism Council over its(a) inspection charge fees to small hotels and (b) charges made for inclusion in handbooks, directories and other advertising materials. [119719]

  Janet Anderson
  I have not discussed this directly, but I am aware the ETC have reviewed their pricing structure to ensure it strikes a fair balance between charges for large and small hotels. The inspection fees and other charges the ETC levies against small hotels for joining their accommodation grading scheme are operational matters for the ETC, which aims to break even and not make a profit. The hotelier receives back some of the fee when the inspector pays for an overnight stay.

  The ETC's contractors and the other inspecting bodies (the AA and the RAC) now all inspect properties in England to precisely the same standards but each operates an independent inspection operation with its own scale of fees and package of benefits. It is for customers to choose the most appropriate service provider.

  Sports Funding
  Mr. Fearn
  To ask the Secretary of State for Culture, Media and Sport how much was spent in the United Kingdom on sports provision per capita in 1999. [119724]

  Kate Hoey
  In the financial year 1999–2000, exchequer funding for sport in the United Kingdom, channelled through UK Sport and the four home country sports councils, totalled £69,779,000. In addition, Lottery sports funding drawn down by the five distributing bodies was £316,689,340 during this period. Using the 1998 population census, this amounts to per capita expenditure of £6.52 in 1999–2000.

  Digital Broadcasting
  Mr. Luff
  To ask the Secretary of State for Culture, Media and Sport if he will set a target date for complete digital television coverage in England; and if he will make a statement. [119759]

  Janet Anderson
  The Government believe that it is possible that as early as 2006, and no later than 2010, all those who currently receive the free-to-air channels on analogue television will be able to receive those services digitally.

  Turf Football Pitches
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Culture, Media and Sport, pursuant to his answer of 17 April,Official Report, column 321W, what size of population each (a) full-size and (b) half-size (or 5-a-side) synthetic turf pitches is expected to serve. [119988]

  Kate Hoey
  Sport England's initial analysis of gaps in synthetic pitch provision is based on each pitch serving a population of 60,000, within a 20 minute drive time. No work has yet to be carried out, nor is any planned, on the demand for half sized synthetic turf pitches.

  TV Licences
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport if he will examine the(a) practicability and (b) cost of collecting TV licence fees with the council tax. [119818]

  Janet Anderson
  [holding answer 20 April 2000]: We have no such plans. It is not clear what benefits would accrue from collecting the licence fee locally which would outweigh the cost of establishing and running licence fee collection arrangements in each local authority area.

  Mr. Willetts
  To ask the Secretary of State for Culture, Media and Sport what will be the cost of establishing the free television licence scheme for people aged over 75 years; and how much it will cost to administer in the first full year of operation. [119939]

  Janet Anderson
  [holding answer 20 April 2000]: We estimate that in 2000–01, the cost of the concession will be £344 million, with an additional £23.4 million in administration costs in the first year.

  Mr. Salmond
  To ask the Secretary of State for Culture, Media and Sport how much(a) in total and (b) in addition to currently planned expenditure it would cost in (i) the UK and (ii) Scotland to give free TV licences to households headed by someone aged over 65 years. [119983]

  Janet Anderson
  [holding answer 20 April 2000]: The information requested is not immediately available. I will write to the hon. Gentleman as soon as it is available and will place a copy of the letter in the Library. However, the figure will be for the UK in its entirety as no separate figures are kept for Scotland.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for Culture, Media and Sport for what purposes his Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120324]

  Mr. Chris Smith
  As one of its pre-recruitment checks, my Department requires new employees to the Civil Service either on permanent or short-term contracts to provide birth certificates or similar documentary evidence for one or more of the following purposes: proof of identity, proof of eligibility under the Civil Service nationality rules and proof of age. Contractors are required to produce them only if there are questions about identity.

  Locomotives
  Mr. Gordon Prentice
  To ask the Secretary of State for Culture, Media and Sport when locomotives based in the National Railway Museum were last out on the Colne to Preston line. [120326]

  Mr. Alan Howarth
  The National Railway Museum's locomotive "Green Arrow" hauled a special train over the Preston to Blackburn section of the route on 29 December 1999 en route to Carlisle via Settle.

  Film Council
  Mr. Ian Stewart
  To ask the Secretary of State for Culture, Media and Sport when the Film Council will announce its strategy. [120792]

  Mr. Chris Smith
  The Film Council is today announcing it strategy for the development of film culture and the film industry in the UK. I have arranged for copies of the strategy document to be place in the Library.

TRADE AND INDUSTRY

  Minimum Wage
  Mr. Matthew Taylor
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact of the minimum wage on summary measures of inequality, with particular reference to the gini coefficient and Atkinson index; by what method the assessment was made; and if he will make a statement. [119826]

  Mr. Alan Johnson
  The Low Pay Commission looked in depth at the impact of the minimum wage on inequality and income distribution. As it says in its second report The impact of the national minimum wage on household incomes is complex, being affected by the way that statutory wage increases interact with the tax and benefits systems.

  The issues of poverty and inequality are explored extensively in the Commission's Occasional Paper 2, published in June 1999. Overall, it found that the minimum wage, together with other tax and benefit changes, should prove a powerful tool in tackling in-work poverty.

  Mr. Alexander
  To ask the Secretary of State for Trade and Industry how many employers have been reported by inspectors for paying less than the national minimum wage in(a) Britain, (b) Scotland and (c) the relevant area of record, which includes the constituency of Paisley, South. [120394]

  Mr. Alan Johnson
  The number of instances of employer non-compliance identified by minimum wage officers for the year ended 31 March 2000 is as follows:

  (a) 1,280 employers in the UK, including Northern Ireland

  (b) 105 employers in Scotland

  A more localised disaggregation of these figures is not available.

  Websites
  Mr. Maclennan
  To ask the Secretary of State for Trade and Industry what his Department's policy is on(a) advertising and (b) acknowledging company sponsorship on the websites of his Department, agencies and non-departmental public bodies; which companies (i) have placed advertisements and (ii) are acknowledged as sponsors on those websites; how much revenue has been received for each financial year since 1997 from such advertisements and sponsorship; and if that revenue has been retained within the budget of his Department, agencies and non-departmental public bodies. [119542]

  Ms Hewitt
  [holding answer 19 April 2000]: The Department of Trade and Industry's policy on advertising on websites follows the guidance in the Central IT Unit's
  22W
  "Framework policy and guidelines for the use, management and design of public sector websites" (published last December as part of the e-government strategy). These state:
  Government sites are permitted to carry advertising. In designing pages, departments and agencies should ensure that advertisers' branding does not detract from the effectiveness and appearance of their own branding or that of government as a whole. Particular attention should be given to avoiding any implications of endorsement of products or services or of contradiction between government messages and those of contractors.

  On sponsorship, the DTI also follows Cabinet Office guidance. The same policy is applied to websites as is applied to other forms of publication. In summary, sponsorship support can be sought where there is going to be a significant net benefit to the Department, at no detriment to the public interest. Any sponsorship arrangements are dealt with in ways that are even-handed and open, and on the basis that they must not conflict with the Department's regulatory and enforcement functions or appear to endorse a particular company, product or service.

  In applying these policies, a number of DTI sites have been prepared in partnership with private sector organisations in return for acknowledgement of this sponsorship on the site. In a number of cases, sites delivering the objectives of the Department are run and financed by private sector companies which are allowed to enter advertising and sponsorship arrangements with others. Compiling a comprehensive list of companies which have been involved in such arrangements to date would incur disproportionate cost.

  No direct revenue has been received to date from either advertising or sponsorship.

  None of the non-departmental public bodies for which the Department is responsible has accepted advertising or acknowledged sponsorship from companies on its website. I have asked the Chief Executives of the Department's agencies to write to the hon. Member separately where they have a substantive reply.

  Letter from J. S. Holden to Mr. Robert Maclennan, dated 2 May 2000:
  I have been asked to reply to your recently tabled Parliamentary Question to the Secretary of State for Trade and Industry in respect of Companies House Executive Agency.

  (i) It is Companies House policy not to carry advertising on our web site.

  (ii) Companies House web site is not sponsored.

  (iii) As we have no advertisements or sponsors on our web site, I confirm we have received no revenue from this source for retention within our budgets.

  Letter from Alison Brimelow to Mr. Robert Maclennan, dated 2 May 2000:
  In the Patent Office, the policy is not to accept advertising or company sponsorship on The Patent Office website. No companies therefore have placed advertisements or been acknowledged as sponsors on the website, and no revenue has been received.

  Letter from Peter Joyce to Mr. Robert Maclennan, dated 2 May 2000:
  The Secretary of State has asked me to reply to your question about advertising and company sponsorship on The Insolvency Service web site.

  23W
  The Insolvency Service does not have any advertising on or company sponsorship of its web site. This has been the case since the launch of the web site.

  Letter from Ian Jones to Mr. Robert Maclennan, dated 2 May 2000:
  You tabled a Parliamentary Question on 13 April 2000 to the Secretary of State for Trade and Industry concerning the policy on sponsorship, advertising and any resulting revenue, for web sites operated by the department and its executive agencies. I have been asked to reply in respect of the Employment Tribunals Service (ETS) which is an executive agency of the DTI.
  The Employment Tribunals Service provides the administrative support to the Employment Tribunals and Employment Appeal Tribunals. As such, no advertising would be permitted, nor any sponsorship sought, for any site maintained or contributed to by the agency.
  The agency has a small entry on the main DTI web site. The only web site directly maintained by the agency is that of the Employment Appeal Tribunal although a parallel site for the Employment Tribunals is under consideration.
  I hope this information is helpful, please let me know if there is any further information that you require.

  Letter from David Hendon to Mr. Robert Maclennan, dated 2 May 2000:
  The Secretary of State for Trade and Industry has asked me to reply on behalf of the Radiocommunications Agency to your Parliamentary Question about advertising and company sponsorship on the RA website.
  It is the policy of Radiocommunications Agency not to accept advertising or company sponsorship on its website.
  No such advertisements or sponsorship have been placed on the RA website and no revenue for such services has been received by the Agency.

  Letter from Seton Bennett to Mr. Robert Maclennan, dated 2 May 2000:
  The Secretary of State for Trade and Industry has asked me to reply on behalf of NWML to your question regarding advertising/sponsorship on our web site.
  The NWML website currently does not carry any sponsorship or advertising. The site has been set up to transfer knowledge to NWML's stakeholders-Trading Standards Officers, weighing and measuring equipment manufacturers, DTI, other customers and interested parties.
  If in the future NWML was approached by a potential sponsor or advertiser, the idea would be thoroughly considered because it may provide an opportunity to raise additional revenue, however it would not be at the detriment of the quality of information provided to NWML's stakeholders.

  Letter from David Irwin to Mr. Robert Maclennan, dated 2 May 2000:
  I have been asked to reply in respect of the Small Business Service to your recently tabled Parliamentary Question to the Secretary of State for Trade and Industry, about advertising and sponsorship on Departmental websites.
  The SBS website has no plans to allow advertising at present and no adverts have been placed on the site. The site does not carry any references to sponsorship.
  The Enterprise Zone website is a gateway to business information for SMEs. It narrows down the mass of information available on the Internet to the most relevant, providing a single point of access to useful information. Launched in 1997 by the DTI and supported by Business Links, it is maintained and operated by the Dialog Corporation plc. DTI's agreement with Dialog allows the company to enter into normal, commercial arrangements with advertisers—to which the Department is not a party. The financial details of such arrangements are subject to commercial confidentiality.

  Post Offices (London)
  Mr. Cox
  To ask the Secretary of State for Trade and Industry how many(a) post offices and (b) sub-post offices have closed in the Greater London area during the last five years. [119845]

  Mr. Alan Johnson
  The Post Office tell me that it does not hold historical data by region, including Greater London, for the numbers of post offices which have closed or opened.

  Land Rover
  Miss Kirkbride
  To ask the Secretary of State for Trade and Industry, pursuant to his answer of 14 April 2000,Official Report, column 288W, if discussions on the purchase of Land Rover from BMW by Ford were commercially confidential. [119843]

  Mr. Alan Johnson
  I made clear in my earlier reply that my right hon. Friend the Secretary of State has many contacts with companies including the Ford Motor Company. The issues discussed are often commercially sensitive and the company's requests for confidentiality respected.

  Council for Science and Technology
  Dr. Starkey
  To ask the Secretary of State for Trade and Industry, pursuant to his answer of 18 April 2000,Official Report, column 433W, about new appointments to the Council for Science and Technology, what the gender balance is on the new council and whether the gender balance of the expanded council is in line with Government targets for the representation of women on public bodies; how many women candidates (a) were considered for appointment to the Council and (b) met the criteria for appointment to the council; what steps his Department took to increase the pool of women candidates for appointment to the council; when he will next have an opportunity to improve the gender balance on the council; what steps he is taking in other parts of the scientific advisory system to compensate for the low representation of women on the Council for Science and Technology; and what consultation he has had with the Minister for Women on ways to increase women's participation in his Department's scientific advisory system. [120305]

  Mr. Byers
  Of the 16 independent members of the Council for Science and Technology, three are women (19 per cent.).

  Of the 23 candidates considered for appointment to the Council during the most recent round, five were women, two of whom subsequently decided not to pursue their candidacy.

  In identifying these candidates and making the appointments, my Department complied with the guidance of the Commissioner for Public Appointments. We canvassed widely, both internally among other Government Departments and externally among such organisations as the CBI, IoD, TUC, the CVCP, the Research Councils and the Higher Education Funding Councils. Nominations from existing members of the Council were also sought.
  25W
  The next round of appointments to the Council is due to commence in September 2000, when we will continue to seek to increase the proportion of women on the Council, in accordance with my Department's published goal of reaching 33 per cent. representations of women by 2002 in making appointments to our non-departmental public bodies.

  Companies House
  Ms Julie Morgan
  To ask the Secretary of State for Trade and Industry what guidance he has given to(a) Government agencies and (b) Companies House about the hospitality managers may accept from companies with which they are outsourcing contracts. [120190]

  Dr. Howells
  The guidance contained within the Department's Procurement Manual which is available to DTI Agencies including Companies House, sets out advice regarding gifts and hospitality in respect of dealings with contractors. A copy of the Manual is in the Library of the House.

  Ms Julie Morgan
  To ask the Secretary of State for Trade and Industry what evaluation he has made of Capita's performance in Companies House, Cardiff. [120212]

  Dr. Howells
  Evaluation of Capita's performance is carried out systematically against a range of service levels and targets defined in the contract under which they provide telephone inquiry and search services on behalf of Companies House.

  Export Licences
  Mr. Berry
  To ask the Secretary of State for Trade and Industry what changes have been made in the last three years to the guidelines on end-use assurance required for companies and individuals applying for single individual export licences for strategic goods. [120205]

  Dr. Howells
  There have been some amendments made to the guidelines on end-use assurance in the last three years with regard to information requirements for certain chemicals listed in Schedules to the Chemical Weapons Convention. Other changes have been ones of format rather than substance.

  Mr. Berry
  To ask the Secretary of State for Trade and Industry if Export Control Organisation guidelines detailing end-use assurance required for export licence applications apply to open individual export licences for strategic goods. [120203]

  Dr. Howells
  The end-use assurance requirements for an open individual export licence are included in the conditions of such a licence. Guidance is provided for compliance with these conditions.

  Disabled People (New Technologies)
  Dr. Cable
  To ask the Secretary of State for Trade and Industry what plans he has to draw upon the experience of internet companies in providing disabled people with(a) access to and (b) training in, new technologies. [120197]

  Ms Hewitt
  As a response to the Social Exclusion Unit's 1998 report, the Prime Minister set up a series of high level action teams to devise a new national strategy for neighbourhood renewal. Policy Action 26W
  Team 15 (PAT15), which was led by DTI, looked at how information and communication technologies (ICTs) can help.

  PAT15's main task was to improve the access to and uptake of ICTs by the most disadvantaged in society. It carried out an in-depth study of projects already operating in poor neighbourhoods to identify best practice which may be replicable elsewhere. It also commissioned papers to examine how issues associated with disability can be addressed. The consultation process included input from the private sector, particularly through representatives from ICT companies working as PAT members.

  Their report indicates that public access facilities, the training provided and the content used should take into account the needs of different audiences, including people with disabilities. The recommendations from the report are being taken forward by the DfEE. The final report is available on the PAT15 website (www.PAT15.org.uk).

  Much work, however, is already under way. £252 million of Capital Modernisation Funding (CMF) has been promised to set up around 700 ICT learning centres within the 2000 most deprived council wards and other areas with special needs, such as isolated rural areas. These centres will be set up from September 2000, to provide hands on learning for people for example with disabilities or from ethnic backgrounds with little or no ICT skills or access to ICT. They will provide a local place for local people and will give people the opportunity to gain ICT skills.

  The development of this initiative has included input from the private sector through externally commissioned work or through representatives of ICT companies sitting on the project's management board.

  More details about the initiative can be found on the ICT Learning Centres website on www.dfee.gov.uk/ict-learning-centres.

  Social Exclusion (Internet)
  Dr. Cable
  To ask the Secretary of State for Trade and Industry what initiatives he will implement to encourage internet businesses to assist in tackling the problems of deprived areas. [120198]

  Ms Hewitt
  Following the Social Exclusion Unit's (SEU) 1998 report on deprived neighbourhoods, 18 high level action teams were set up to help devise a new national strategy for neighbourhood renewal. Their main conclusions have now been drawn together in a framework document for consultation (available on the SEU's website: www.cabinet-office.gov.uk/seu).

  The report identifies that business has a crucial role and much to contribute in helping to turn around deprived neighbourhoods. It also points out that businesses need recognition and encouragement to become actively involved in projects which aim, for example, to raise education standards, improve health, tackle crime, and help to build communities in deprived areas. The Government are keen to see an increase in the number and range of businesses, including internet businesses, which are actively engaged in addressing the problems of deprived neighbourhoods. The consultation paper seeks views on what the Government could do to encourage business engagement in the community.
  27W
  There are, however, a number of initiatives already under way. In particular, the DTI has:
  Established a Ministerial Champion for Corporate Social Responsibility, to improve Whitehall understanding of what this means and how it can best work. This role has been added to the portfolio of the Minister for Consumer and Corporate Affairs in DTI;
  Sponsored the Business in The Community Examples of Excellence Awards, which highlight outstanding achievements in the field of CSR;
  Sponsored a project on 'Innovation Through Partnership'. This project will analyse how through engagement in partnerships with the voluntary and public sector, businesses can become more innovative organisations;
  Undertaken a project to identify the benefits to businesses from forming a relationship with a local school or college; and
  Examined the intangible assets of business including the role of ethics in contributing to value creation in companies of all sizes;
  Committed itself to providing enhanced business support for the disadvantaged through the Small Business Service; the Business Volunteer Mentors Association; and the Community Finance Initiative Challenge.
  Working with Business in the Community's 'community' programme to engage business in supporting the community's use of information and communication technologies (ICTs).

  Ilisu Dam
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry if he will make a statement on progress made on the full environmental impact assessment report for the Ilisu Dam. [120264]

  Mr. Caborn
  Work is proceeding on the Environmental Impact Assessment Report; however the Report is now not expected to be complete until July 2000 at the earliest. The overall project timetable is similarly delayed.

  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with the Turkish Government concerning consultations with those directly affected by the Ilisu Dam. [120265]

  Mr. Caborn
  While I have had no direct contact with the Turkish Government concerning the consultations, I understand that consultations are on-going with those who are affected by the Ilisu Dam and that detailed surveys of the local population are to take place.

  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with Balfour Beatty concerning the provision of export credit for the Ilisu Dam. [120272]

  Mr. Caborn
  I have had no discussions, although my officials do continue to discuss details of the case with Balfour Beatty and the other interested Export Credit Agencies concerning the provision of export credit for the Ilisu Dam. No decision has been taken regarding the availability of ECGD support for this project.

  Regional Assistance
  Judy Mallaber
  To ask the Secretary of State for Trade and Industry how many applications have been submitted in each of the years since 1993 to date for(a) regional selective assistance and (b) enterprise grant in each region; and how many have been successful. [120653]
  28W
  Mr. Caborn
  This information is published in the Industrial Development Act 1982, Annual Report, copies of which are available in the Library of the House.

  Employment Tribunals
  Mr. Jon Owen Jones
  To ask the Secretary of State for Trade and Industry how many(a) women and (b) black people applied to be lay advisers in the last round of appointments for the employment tribunals in England and Wales; and how many of those in (i) and (ii) applied to serve on the Cardiff tribunal. [120374]

  Mr. Alan Johnson
  In the 1999 exercise to recruit new lay members to the employment tribunals in Great Britain, applications were received from 3,728 women and 336 people who described their ethnic origin as black-African or black-Caribbean. No separate figures are available for England and Wales. There were 85 women and three black-African or black-Caribbean applicants to serve on the Cardiff employment tribunal.

  Mr. Jon Owen Jones
  To ask the Secretary of State for Trade and Industry how many(a) women and (b) black people serve on employment tribunals in England and Wales; and how many serve on Cardiff tribunals. [120373]

  Mr. Alan Johnson
  644 women and 51 people who describe their ethnic origin as black-African or black-Caribbean serve on the employment tribunals in England and Wales. 43 women and one black-African/black-Caribbean serve at the Cardiff employment tribunal.

  P. W. Allen and Company
  Mr. Robertson
  To ask the Secretary of State for Trade and Industry when he will make a decision on whether to allow Export Licence Application QX 96/00 to P. W. Allen and Company in Tewkesbury. [120614]

  Dr. Howells
  Export licence application QX 96/00 has been approved, and the licence was issued on 20 April 2000.

  Milk Marque
  Mr. Ruane
  To ask the Secretary of State for Trade and Industry what assessment he has made of the prospects for vertical integration available for the three organisations that replaced Milk Marque. [120327]

  Mr. Byers
  Following the voluntary decision by the members of Milk Marque to break up into three independent successors, I asked the Director General of Fair Trading (DGFT) to monitor the operation of the market this winter, and report his conclusions by Easter.

  That advice has now been received. The DGFT has advised that Milk Link, Axis and Zenith, the three successors to Milk Marque, have been operating independent arrangements for the marketing and selling of their members' milk this winter.

  I can announce today that, on the basis that the assurances given last year of independent operation will continue to be observed, I can see no reason why Milk Link, Axis and Zenith should not establish or extend their processing activities if they choose to do so.
  29W
  The assurances given were that all policy making and selling of milk would be carried out independently by each of the successors with no joint ventures between the new businesses in marketing or processing milk, with no common directors and no shareholdings by any one of the new businesses in either of the others. Milk Marque also stated that they would not supply to the successor bodies, after 31 March 2001, central services which could not be split prior to the reorganisation which took place last year. Should the new businesses choose to extend their processing activities through acquisition they will of course be subject to the merger provisions under competition law in the same way as any other company. In addition, Milk Link, Axis and Zenith must, like all undertakings, operate their businesses in accordance with both domestic and European competition law.

  Gordon and Innes Ltd.
  Mr. Salmond
  To ask the Secretary of State for Trade and Industry when the financial accounts for Gordon and Innes Ltd. of Huntly, Aberdeenshire were due for filing; and if they have been received. [120647]

  Dr. Howells
  The accounts due to 31 October 1998 for Gordon and Innes Ltd., now registered at 8 West Street, Fochabers, IV32 7DJ, were due to be filed by 30 November 1999, but to date they have not been received.

  The company has been reminded of its obligations to file its accounts and the consequences if they are not received.

  Sudan
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with BP Amoco concerning its investment with Talisman Energy and the China National Petroleum Corporation operating in Sudan. [120269]

  Mr. Caborn
  My right hon. Friend the Secretary of State for Trade and Industry has not had the opportunity to meet with BP Amoco to discuss their investment with Talisman Energy and the China National Petroleum Corporation operating in Sudan.

  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with(a) Weir Pumps of Glasgow, (b) Allen Power Engineering of Bradford and (c) Angus Fire of Oxfordshire concerning the manufacturing of parts for oil exploration in Sudan. [120268]

  Mr. Caborn
  My right hon. Friend the Secretary of State for Trade and Industry has not had the opportunity to meet any of the aforementioned companies to discuss the oil industry in Sudan.

  My Department, in conjunction with our colleagues at the Foreign and Commonwealth Office, have offered, and will continue to offer, full and frank advice to British companies who are interested in the oil industry in Sudan.

  Internet
  Mrs. Ray Michie
  To ask the Secretary of State for Trade and Industry what plans he has to protect the names of cities, towns, villages and private houses from being registered as Internet domain names by 30W
  commercial organisations for trading purposes without permission of the legitimate bearers; and if he will make a statement. [120263]

  Ms Hewitt
  Domain Names in the UK are managed by Nominet UK, an independent not-for-profit body. The Government are discussing with Nominet the way forward on this issue. Nominet is consulting with the Scottish Parliament on this subject, and will shortly be consulting with other regional bodies. Civic organisations and other non-profit groups who wish to register domain names incorporating place names should be able to do so in the org.uk Second Level Domain. They can do this by contacting an Internet Service Provider or if necessary they can contact Nominet directly at www.nominet.org.uk.

TREASURY

  Tax System
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what(a) initiatives relating to and (b) reviews of, the tax system he has launched since May 1997; on what dates each (i) was completed and (ii) is expected to be completed; and if he will make a statement. [118857]

  Dawn Primarolo
  [holding answer 17 April 2000]: The information has been placed in the Library.

  Cancer Statistics
  Dr. Tonge
  To ask the Chancellor of the Exchequer if he will(a) list and (b) make a statement on the incidence of and death rates from (i) cervical cancer, (ii) breast cancer, (iii) prostate cancer and (iv) testicular cancer in each of the last three years in each health authority. [119728]

  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 Alan Goldsmith to Dr. Jenny Tonge, dated 2 May 2000:
  The Director for the Office for National Statistics (ONS) has been asked to reply to your recent question asking for a statement and list of death rates for (a) cervical, (b) female breast, (c) prostate and (d) testicular cancer by health authority for the three latest years available. I am replying in the Director's absence.
  The data relates to all the 99 health authorities in England, the tables are very large and so will not appear in the Official Report. I will arrange for a copy to be made available in the House of Commons Library.

  Personal Services Companies
  Sir Brian Mawhinney
  To ask the Chancellor of the Exchequer what factors account for the change from the initial estimate of annual forecast revenue receipts from IR35. [120329]

  Dawn Primarolo
  I refer the right hon. Member to the answer I gave to the hon. Member for Croydon, South (Mr. Ottaway) on 5 April 2000,Official Report, column 494W.

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer what estimate he has made of the additional amount of tax that will be collected in each of the next three years as a result of the introduction of IR35; and if he will make a statement. [120366]
  31W
  Dawn Primarolo
  The estimate of extra tax and National Insurance Contributions generated from the pre-announced measure to tackle avoidance through the use of personal service companies is provided in Table A2.1 of the March 2000 "Financial Statement and Budget Report".

  Mr. Paul Marsden
  To ask the Chancellor of the Exchequer if he will make a statement on the development of a database of small businesses who breach IR35 rules. [120365]

  Dawn Primarolo
  We expect intermediaries involved in contracts affected by the legislation to comply with the rules, and the Inland Revenue will provide information and support to enable them to do so. Those who do not will be identified and reviewed by Inland Revenue compliance officers using existing compliance methods.

  A separate database of intermediaries who breach the rules will not be needed.

  Double Taxation Relief
  Mr. Jack
  To ask the Chancellor of the Exchequer (1) if he will publish details of the methodology used by the Inland Revenue to calculate the increase in tax yield that will result from the proposed changes in tax legislation as it affects offshore mixer companies; [120291]

  (2) if he will publish details of the calculations undertaken by the Inland Revenue to determine the level of tax yield arising from his proposals in the Finance Bill dealing with controlled foreign companies and tax mixing arrangements. [120290]

  Dawn Primarolo
  The expected yield from these changes as set out in Table A.13 of the 2000 "Financial Statement and Budget Report" is based on accepted methodology used by all Governments.

  Mr. Jack
  To ask the Chancellor of the Exchequer if he will make a statement on the feasibility of tax mixing onshore. [120288]

  Dawn Primarolo
  The issues concerning a system of onshore pooling were fully discussed in the paper "Double taxation relief for companies" published by the Inland Revenue in March 1999.

  Mr. Jack
  To ask the Chancellor of the Exchequer which G7 and OECD countries allow tax mixing to take place. [120285]

  Dawn Primarolo
  Just as overall tax systems vary from country to country, so do their respective mechanisms for relieving double taxation. It is not likely that any two countries will have double taxation relief systems that are identical. Direct comparisons are therefore of limited value and can be misleading.

  Unfair Tax Competition
  Mr. Redwood
  To ask the Chancellor of the Exchequer what the policy of(a) the Government and (b) the European Commission is on the level of (i) income tax and (ii) corporation tax which should be treated as constituting unfair tax competition. [120359]

  Dawn Primarolo
  General rates of corporation tax and income tax do not constitute unfair tax competition.

  Family Benefits
  Mr. Field
  To ask the Chancellor of the Exchequer, pursuant to his answer of 3 April 2000,Official Report, column 340W, on family benefits, how many of those families claiming working families tax credit in each month since its introduction would have been entitled to family credit. [120617]

  Dawn Primarolo
  I refer my right hon. Friend to the answer I gave him on 19 April 2000,Official Report, column 580W.

  VAT
  Mr. Redwood
  To ask the Chancellor of the Exchequer what the Government's policy is on the proposal for VAT to become an EU levied tax. [120356]

  Dawn Primarolo
  In July 1996 the Commission published a programme for creating a common system for EC VAT. The Government see no case for VAT reform along those lines, and such a system could not be agreed without the UK's consent.

  Insurance
  Dr. Cable
  To ask the Chancellor of the Exchequer what plans he has to(a) repeal and (b) amend the Industrial Assurance Act 1923. [120211]

  Miss Melanie Johnson
  I refer the hon. Gentlemen to the answer given by the Financial Secretary to the Treasury to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) on 18 April 2000,Official Report, column 438W.

  Small Hotels (VAT)
  Mr. Fearn
  To ask the Chancellor of the Exchequer what assessment he has made of the advantages and disadvantages of introducing a graduated VAT threshold for small hotels. [120627]

  Dawn Primarolo
  Customs and Excise has been working with small businesses and representative bodies, including representatives of the tourist industry, to explore ways to ease the impact of VAT for all small businesses once their turnover reaches the VAT registration threshold, including graduated VAT relief.

  Family Statistics
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer what is the life expectancy of someone whose parents have(a) been divorced and (b) remained married. [120668]

  Miss Melanie Johnson
  The information requested is not available.

  Retired People
  Mrs. Lait
  To ask the Chancellor of the Exchequer what percentage of people retiring in(a) 1985, (b) 1990, (c) 1995, (d)(e) 1997, (f) 1998 and (g) 1999 have taken a tax-free lump sum from (i) defined contribution schemes and (ii) defined benefit schemes; and how much tax revenue was forgone as a result. [120361]

  Miss Melanie Johnson
  The information requested is not available.

  Child Support
  Mr. Woolas
  To ask the Chancellor of the Exchequer what plans he has to include CSA payments in calculating eligibility for working families tax credit. [120656]

  Dawn Primarolo
  Maintenance payments, claimed through the CSA, are not currently included in calculating eligibility for the Working Families Tax Credit. There are no plans at present to alter this treatment.

  Tax Law Rewrite Project
  Mrs. Lawrence
  To ask the Chancellor of the Exchequer what further progress has been made on the Tax Law Rewrite project. [120795]

  Dawn Primarolo
  I am pleased to be able to tell the House that the Tax Law Rewrite project is continuing to make very good progress. The Inland Revenue have today published the project's tenth Exposure Draft, containing draft rewritten clauses on trading income of individuals. Copies of the Exposure Draft will be placed in the Libraries of the House.

  Climate Change Levy
  Dr. Starkey
  To ask the Chancellor of the Exchequer what is the estimated cost of extending the 80 per cent. discount on the climate change levy to horticulture for the financial year 2001–02. [119916]

  Mr. Timms
  The 80 per cent. discount on the climate change levy is available only to sectors covered by the Integrated Pollution Prevention and Control Directive (IPPC) who enter into negotiated agreements to deliver additional improvements in energy efficiency. This reflects the additional regulatory burden on such firms, who must implement all cost-effective energy saving measures in order to qualify for a discount.

  The horticulture industry is not covered by IPPC and is therefore not eligible for the 80 per cent. discount. Nevertheless, the Government recognise the unique position of horticulture as an energy intensive sector exposed to international competition, and where there is scope for energy savings to be made.

  The Government therefore intend to give a package of support from the £50 million 'energy efficiency' fund to improve the sector's energy efficiency, and have included thermal screens, which are used in glasshouses, in the list of technologies eligible for the enhanced capital allowance. And the Government intend to offer a temporary 50 per cent. discount to protect the competitiveness or horticulture firms while these energy efficiency measures take effect.

  Initiatives started on or after May 1997—Benefits Agency (BA)

  Initiative/project

  Cost (£ million)

  Start date

  End date

  AQLAD (ABR/QST)

  0.2

  April 1999

  Continuing

  ABR

  16.24

  September 1997

  Continuing

  BA/CSA

  1.6

  1997

  Continuing

  BA/LA Liaison

  1.0

  1997

  Continuing

  Card Fraud Investigation

  0.04

  1997

  February 1999—Cancellation of the payment by card process

  Child Benefit Initiatives

  2.4

  1997

  Continuing

  34W
  Final decisions on the exact design of the package of support to horticulture have yet to be taken. It is therefore not possible to quantify exactly the cost of the package.

  Mr. Jack
  To ask the Chancellor of the Exchequer if he will place in the Library the economic impact studies which he has conducted on the climate change levy. [120287]

  Mr. Timms
  Copies of the Regulatory Impact Assessment of the climate change levy are available in the Library.

  Mr. Welsh
  To ask the Chancellor of the Exchequer what estimate he has made of the cost to local authorities of the climate change levy with particular reference to(a) street lighting, (b) leisure services and (c) housing; and what support he plans to make available to local authorities to meet such costs. [120630]

  Mr. Timms
  The Government believe that all sectors of the economy must play their part in helping meet the UK's targets for reducing greenhouse gas emissions.

  It is not possible to say with precision what the effects of the climate change levy on local authority services will be since that will depend on, among other things, future energy use in this sector. However, local authorities will be overall net gainers from the climate change levy package, since they will gain more from the associated cut in employer NICs than they will pay in climate change levy.

  Public Bodies (Overpayments)
  Mr. Robertson
  To ask the Chancellor of the Exchequer if he will assess the practicability of introducing a 90-day limitation period for the recovery of overpaid sums by public bodies. [120353]

  Mr. Timms
  We have no plans to review the current rules on recovery of overpayments. The rules are designed to protect the public purse while also ensuring that the recipients of overpayments are treated fairly.

SOCIAL SECURITY

  Fraud Savings
  Mr. Field
  To ask the Secretary of State for Social Security, pursuant to his answer of 7 April 2000,Official Report, column 627W, on fraud, if he will list (a) the cost and duration of each initiative since 1 May 1997, (b) estimate the contribution in fraud savings each initiative has made and (c) estimate the fraud savings for each of the last three years for each benefit affected by such initiatives. [119216]

  Mr. Rooker
  The information is in the table. I refer my right hon. Friend to the written answer on savings I gave on 7 April 2000,Official Report, column 627W.
  35W

  Initiatives started on or after May 1997—Benefits Agency (BA)

  Initiative/project

  Cost (£ million)

  Start date

  End date

  Closer Working with East of Scotland

  0.1

  April 1999

  Continuing

  FAMC London Project

  0.23

  1997

  October 1999—Migrated to IR

  Habitual Residency Test

  0.3

  July 1999

  November 1999—Recommendation for full implementation across the Agency

  Housing Benefit Matching Service

  2.35

  1997

  April 1999—Now part of BA core

  IS/JSA Premiums

  0.04

  July 1999

  Continuing

  JSA Initiatives

  0.02

  April 1999

  Fixes implemented

  NCA/TR Central Team costs

  2.5

  1997

  April 1999—Now a core activity

  NCA/TR Training

  0.4

  1997

  April 1999—Now a core activity

  Operation Rattle

  0.18

  1997

  Continuing—As a Child Benefit initiative

  Overpayment of Legal Aid

  0.22

  September 1999

  Continuing

  Potential Debt

  0.11

  1997

  August 1999—Continuing as the Strategic Debt solution

  PPE measurement

  0.79

  1997

  April 1999—Contributed to the performance indicators

  Production of regs 113 by electronic media

  0.02

  July 1999

  Continuing

  Professionalism in Security

  2.88

  July 1998

  Continuing

  Programme Expenditure Analysis

  0.16

  April 1999

  Continuing

  Risk management

  1.46

  1997

  Continuing

  RMS

  0.42

  1997

  31 March 1998—Now part of core

  SAST

  0.10

  1997

  Continuing

  Search by address enhancements

  0.13

  1997

  Continuing

  Securing Family Credit

  1.23

  1997

  October 1999—Migrated to IR

  Security Projects Group

  0.27

  1997

  April 1999—Transferred into core MIDAS function

  Social Fund—off Benefit recovery

  0.22

  August 1999

  Continuing

  Chilterns Secure Payments Initiative

  0.74

  May 1997

  Continuing

  National Fraud database

  0.30

  June 1999

  Continuing

  Gateways

  0.52

  Oct 1998

  March 2000—Migration papers under development

  Payroll Cleanse

  0.82

  April 1998

  April 2000—Migrated into core

  Customer Account Security (Operational)

  0.85

  October 1998

  Continuing

  Construction Industry Scheme

  0.36

  May 1998

  March 2000—Migrated into core

  National Intelligence Unit

  0.51

  October 1998

  Continuing

  Controlled Risk Self Assessment

  0.06

  April 1999

  March 2000—Now operating Certificate of Conformance

  Fraud and Security Strategy

  1.5

  April 1999

  Continuing

  LA Verification Framework

  34.50

  March 1998

  Continuing

  Weekly Benefit savings

  0.002

  12 January 2000

  Continuing

  Electronic Transfer of Data

  0.83

  August 1999

  Continuing

  Remote Access Terminals

  7.00

  August 1998

  Continuing

  LA Prosecution Pilot, England and Wales

  0.04

  November 1998

  Continuing

  Scampion

  0.09

  February 1999

  Continuing

  National Housing Benefit Accuracy Review

  2.0

  April 1997

  October 1998—Findings published by GSS

  Large Scale Local Review project

  2.0

  April 1997

  Continuing

  Child Support Agency
  Ms Oona King
  To ask the Secretary of State for Social Security what budget the CSA allocates towards welfare assessment; in which of the last six years there has been an underspend; and how much. [119570]

  Angela Eagle
  The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to my hon. Friend.

  Letter from Mrs. Faith Boardman to Ms Oona King, dated 2 May 2000:
  I am replying to your Parliamentary Question to the Secretary of State for Social Security about the Child Support Agency.
  You ask about the Agency's budget allocation towards welfare assessments and I have taken the term 'welfare assessment' to mean child maintenance assessments. Unfortunately the information you require is not available.
  The main role of the Agency is the accurate assessment and collection of child support maintenance and we aim to do this in the most efficient and cost effective way and to ensure that children receive the financial support to which they are entitled.
  The Agency is funded on outputs that reflect our targets and focus on customer service. The Secretary of State requires the Agency to live within its allocation of cash resources and this has been
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  achieved. In addition, over the past three years the Agency has improved overall efficiency by 48 per cent. and expects to exceed this figure by 1999–2000.
  I hope this is helpful.

  Mr. Gerald Howarth
  To ask the Secretary of State for Social Security what was the cost of running the Child Support Agency in each year since its establishment; and how much money was recovered in each year from absent parents. [119765]

  Angela Eagle
  The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to the hon. Member.

  Letter from Mrs. Faith Boardman to Mr. Gerald Howarth, dated 2 May 2000:
  I am replying to your Parliamentary Question to the Secretary of State for Social Security about the Child Support Agency.
  You asked for details of the cost of running the CSA since its establishment. Details of running cost expenditure are summarised in the attached annex. These figures are based on the Appropriation Account for the Administration and Miscellaneous Services Vote (Vote 3) for each year.
  You also asked for details of maintenance recovered in each year from non-resident parents. Details of the amount of maintenance collected and arranged are also summarised in the annex. These figures take into account maintenance collected from non-resident

  37W
  parents and maintenance assessed by the Agency but paid directly by the non-resident parent to the parent with care. You will see that we have been unable to provide figures for 1993/94 and 1994/95. This was because in those years the focus of the Secretary of State's targets was upon annual benefit savings and the total amount of maintenance collected and arranged was not then a target.

  CSA running costs (from inception)

  £ million

  Financial year

  Gross amount

  Net of VAT

  Collected and arranged

  1993–94

  104

  —

  —

  1994–95

  169

  —

  —

  1995–96

  180

  —

  301

  1996–97

  205

  203

  400

  1997–98

  209

  208

  574

  1998–99

  201

  —

  661

  Notes:

  1. All figures include an element for repayment to DHSS Northern Ireland in respect of Belfast CSAC.

  2. Figures for 1996–97 and 1997–98—in accordance with HM Treasury instructions information was reported in the Appropriation Account net of VAT but for information both gross (which compare year on year) and net figures have been provided.

  Civil Servants (Relocation)
  Mr. Hunter
  To ask the Secretary of State for Social Security which relocation companies his Department uses when relocating civil servants. [119857]

  Mr. Rooker
  This Department has, since June 1998, had a three year contract with Cendant Relocation UK Limited to provide a homesale service to employees. When a transfer attracting relocation expenses has been agreed it is the officer's decision to use the homesale service or try to sell their properties themselves.

  Inter-ministerial Group on Countering Fraud
  Mr. Field
  To ask the Secretary of State for Social Security, pursuant to his answer to the hon. Member for Crosby (Mrs. Curtis-Thomas) of 17 April 2000,Official Report, column 403W, on the Inter-ministerial Group for Older People, if he will publish the same information for the Inter-ministerial Group on Countering Fraud. [120243]

  Mr. Rooker
  The membership of the Inter-Ministerial Group on Welfare Fraud is as follows:The right hon. Jeff Rooker—Minister of State, Department of Social Security
  Nick Raynsford—Minister of State, Department of Environment, Transport and the Regions
  The right hon. Tessa Jowell—Minister of State, Department for Education and Employment
  The right hon. Richard Caborn—Minister of State, Department for Trade and Industry
  Mike O'Brien—Parliamentary Under-Secretary of State for the Home Department
  Lord Hunt—Parliamentary Under-Secretary of State for Health
  David Lock—Parliamentary Secretary, Lord Chancellor's Department
  Dawn Primarolo—Paymaster General, Her Majesty's Treasury
  Brian Wilson—Minister of State, Scotland Office
  David Hanson—Parliamentary Under-Secretary of State for Wales.
  38W
  The Group's remit was set out in the Green Paper "Beating fraud is everyone's business" published in July 1998.

  We do not routinely reveal dates of meetings or the content of discussion between groups of Ministers as this could inhibit the necessary free and frank exchange of views within Government. However, we will do so where such an exchange of views would not be inhibited.

  I refer my right hon. Friend to my Written Answer on 17 April 2000, Official Report, columns 403-04W.

  Housing Benefit
  Mr. Salmond
  To ask the Secretary of State for Social Security what the cost would be of increasing the earnings disregard for people in work claiming housing benefit by(a) 10 per cent., (b) 15 per cent. and (c) 20 per cent. in (i) Scotland and (ii) the UK. [119979]

  Angela Eagle
  [holding answer 20 April 2000]: The information is not available in the format requested. Such information as is available is in the table.

  Cost in 2000–01 of increasing the earnings disregard for people in work claiming Housing Benefit by 10 per cent., 15 per cent, and 20 per cent, in Scotland and Great Britain

  £ million

  Per cent.

  Scotland

  Great Britain

  10

  2

  18

  15

  3

  27

  20

  3

  37

  Notes:

  1. Based on the 1997–98 Family Resources Survey and Housing Benefit Administrative data for May 1998.

  2. The figures are rounded to the nearest £1 million. The level of rounding reflects the fact that some of the figures are based on small samples and may be subject to a high degree of variability.

  3. The Family Resources Survey only covers households in Great Britain, so figures which include Northern Ireland cannot be provided.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for Social Security for what purposes his Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120313]

  Mr. Rooker
  This Department and its Agencies require new employees to provide proof of identity and their date of birth, and the provision of their birth certificate is one means of doing this. However, a birth certificate is only required in the absence of other documentation, usually a passport. The Department and its executive Agencies do not ask for birth certificates from contractors or from those seeking a contract.

  The Benefits Agency does not insist on seeing birth certificates of new claimants of Social Security benefits to verify their identity, except when they are claiming certain benefits such as Retirement Pensions and Child Benefit. For other Social Security benefits, other forms of documentation are also acceptable.

  The Child Support Agency will ask for sight of a qualifying child's birth certificate where there is a paternity dispute to establish whether or not the nonresident parent is shown on the birth certificate. It is

  39W
  unlikely for the Agency to request a birth certificate in any other circumstances, as the dates of birth for qualifying children are verified for the purposes of Child Benefit.

  Benefit Payments
  Mr. Dobbin
  To ask the Secretary of State for Social Security how many recipients of benefits have them paid(a) into a bank account and (b) through the Post Office. [120098]

  Mr. Rooker
  As at November 1999, 9.1 million (about 36 per cent.) of all benefit recipients were receiving payment directly into a bank account, and 16.1 million (around 63 per cent.) were collecting payment by order book or girocheque at the post office. The remaining 1 per cent. was paid by other methods of payment into banks, for example, payable orders and a small proportion of girocheques paid into bank accounts.

  Inter-Ministerial Groups
  Mr. Field
  To ask the Secretary of State for Social Security if he will list the names of those Inter-Ministerial Groups whose(a) membership and (b) dates of meetings have been withheld in response to parliamentary questions. [120241]

  Mr. Rooker
  Social Security Ministers chair two Inter-Ministerial Groups; the Inter-Ministerial Group on Older People and the Inter-Ministerial Group on Welfare Fraud. The membership and remit of both these groups are in the public arena.

  We do not routinely reveal dates of meetings or the content of discussion between groups of Ministers as this could inhibit the necessary free and frank exchange of views within Government. However, we will do so where such an exchange of views would not be inhibited.

  Pensions
  Mr. Field
  To ask the Secretary of State for Social Security what is the(a) number and (b) proportion of pensioners who at the point of retirement had weekly income from pensions and other sources greater than their basic state retirement pension (i) 30 years ago, (ii) 25 years ago, (iii) 20 years ago, (iv) 15 years ago, (v) 10 years ago, (vi) five years ago and (vii) at the point when the latest available data were collected. [120240]

  Mr. Rooker
  I regret the information is not available.

  Mr. Coaker
  To ask the Secretary of State for Social Security what recommendations have been made by the Retirement Income Working Party; and if he will make a statement. [120202]

  Mr. Rooker
  The Retirement Income Working Party is an independent body and has no links with Government. We welcome this report and are studying its recommendations. We understand that both full and summary versions of this report are available on the internet at www.bbk.ac.uk/res/pi/reports.

  Mr. Coaker
  To ask the Secretary of State for Social Security what advice he is giving to people who have no record of a phone-call made reassuring them about future SERPs entitlement in respect of the compensation scheme. [120127]
  40W
  Mr. Rooker
  As our right hon. Friend the Secretary of State said in his statement to the House on the 15 March, we shall put before the House full details of the inherited SERPS scheme, including what information we will require from those wishing to claim and the procedures that will be followed to scrutinise those claims.

  We fully accept the report of the Parliamentary Commissioner for Public Administration into inherited SERPS, which concludes at paragraph 32 that the burden of proof in the scheme rests on this Department.

  Mr. Salmond
  To ask the Secretary of State for Social Security how much it will cost in(a) the UK and (b) Scotland to increase the basic state pension for the (i) over 70s and (ii) over 80s by (1) £2, (2) £3, (3) £4, (4) £5 and (5) £10 a week. [119970]

  Mr. Rooker
  [holding answer 20 April 2000]: The information is not available in the format requested. Such information as is available is in the table.

  Estimates for Great Britain and Scotland

  £ million

  Great Britain

  Scotland

  Annual cost of increasing basic state pension

  Over 70s

  Over 80s

  Over 70s

  Over 80s

  £2

  Gross

  650

  250

  50

  1—

  Net

  500

  150

  —

  —

  £3

  Gross

  1,000

  350

  100

  50

  Net

  700

  250

  —

  —

  £4

  Gross

  1,300

  500

  100

  50

  Net

  1,000

  300

  —

  —

  £5

  Gross

  1,600

  600

  150

  50

  Net

  1,200

  400

  —

  —

  £10

  Gross

  3,250

  1,200

  250

  100

  Net

  2,400

  800

  —

  —

  1 Indicates less than £25 million.

  Notes:

  1. Costs are rounded to the nearest £50 million and are at 2000–01 benefit rates

  2. Costs do not include other benefits whose rates are linked to the rate of basic Retirement Pension

  3. Gross costs are estimated by the Government Actuary's Department. Costs net of means-tested benefit savings have been estimated using the Policy Simulation Model

  4. Net costs are not available for Scotland

  Fiona Mactaggart
  To ask the Secretary of State for Social Security (1) how many pensioners in the last three financial years have switched from weekly cash payments to four-weekly automated credit transfer; and what assessment has been made of the amount that has been saved in administrative costs as a result; [120195]

  (2) what was the average annual cost of administering the payment of retirement pension by cash to pensioners who receive their payment in cash on a weekly basis, in each of the last three years for which figures are available; [120193]
  41W
  (3) what was the average annual cost of administering the payment of retirement pension by automated credit transfer to pensioners who receive their payment by ACT on a four-weekly basis, in each of the last three years for which figures are available. [120194]

  Mr. Rooker
  Information is not available in the format requested. Such information as is available is in the table.

  The estimated customer shift to four-weekly payments

  Year ending April:

  1997

  1998

  1999

  UK Pension Caseload1

  9,545,508

  9,412,145

  9,478,168

  Percentage paid by ACT 4 weekly

  33

  35

  39

  1 Figures exclude pensioners who are in receipt of Income Support and receive a combined payment, or receive payment abroad.

  Note:

  Approximately 2.3 per cent. of pensioners receive payment by ACT 13 weekly or annually.

  The information on administration costs and savings is not available to the detail required. Information on the total annual cost of administering the payment of Retirement Pension is collated but not split by method of payment.

  For information, the total annual cost of administering Retirement Pension in the last three years currently available is:

  £ million

  1996–97

  302

  1997–98

  312

  1998–99

  314

  Mortgages
  Mr. David Stewart
  To ask the Secretary of State for Social Security what plans he has to draw up regulations to disregard the value of ISA funds backing a mortgage, where someone with an ISA mortgage has to claim(a) Income Support and (b) income-based Jobseeker's Allowance in the same way the value of an endowment policy backing a mortgage is exempted. [120227]

  Mr. Rooker
  We have no plans to do so.

  Domestic Violence
  Ms Moran
  To ask the Secretary of State for Social Security what statistics are collected by his Department on evidence of domestic violence in reports prepared by social workers for courts considering issuing child contact orders. [119576]

  Mr. Hutton
  I have been asked to reply.

  Reports on evidence of domestic violence would be prepared by court welfare officers, social workers and other relevant staff at the direction of the judge considering applications for child contact orders. As such, the reports would be documents of the court, and therefore not routinely available (unless at the judge's discretion) for wider circulation or statistical analysis.

HEALTH

  Patient Representation
  Mrs. Butler
  To ask the Secretary of State for Health what steps he is taking to strengthen the system of representation of patients' views in the NHS. [119071]

  Ms Stuart
  I refer my hon. Friend to the reply I gave earlier today to my hon. Friend the Member for Portsmouth, North (Mr. Rapson),Official Report, column 8.

  Hospital Hygiene
  Dr. Cable
  To ask the Secretary of State for Health if he will make a statement on the Government's plans for improving standards of hygiene in hospitals. [119072]

  Mr. Denham
  Trust Chief Executives are responsible for ensuring that there are high standards of cleanliness and hygiene in hospitals. The infection Control Nurses Association and the Association of Domestic Mangers have recently produced new "Standards for Environmental Cleanliness in Hospitals", which National Health Service Estates will be publishing shortly and sending to all NHS trusts. The controls assurance framework, published on 22 November 1999 has a section relating to infection control, including special reference to cleanliness.

  Commission for Health Improvement
  Mr. Casale
  To ask the Secretary of State for Health if he will make a statement on the role of the Commission for Health Improvement. [119073]

  Mr. Denham
  The Commission will provide independent scrutiny of local National Health Service systems to assure and improve clinical quality; provide an expert resource to ensure rapid action is taken to address serious or persistent problems that have not responded to local efforts, and monitor NHS progress in tackling variations in standards of services.

  Health Spending
  Sir Sydney Chapman
  To ask the Secretary of State for Health what his policy is in respect of the proportion of gross domestic product that should be spent on health. [119075]

  Mr. Denham
  In his recent Budget statement, the Chancellor announced the largest ever increase in funding for the National Health Service in England. Over this year and the next three, NHS Expenditure will grow on average by 6.3 per cent. a year over and above inflation. This is nearly twice the historic rate of growth.

  Based on our latest projections total United Kingdom healthcare expenditure will reach around 7.6 per cent. of Gross Domestic Product by 2003–04

  Harefield Hospital, Middlesex
  Mr. Wilkinson
  To ask the Secretary of State for Health how many letters his Department has received about the proposed closure of Harefield hospital, Middlesex. [119077]

  Mr. Denham
  Between 14 February and 18 April 2000 the Department of Health received a total of 54 letters about the proposals for the future of Harefield hospital.

  Community Hospital
  Mr. Chidgey
  To ask the Secretary of State for Health which community hospitals have closed since May 1996, and how many beds have been lost as a result; and if he will make a statement. [119079]

  Mr. Denham
  The information requested is not available centrally.

  Assertive Outreach Teams
  Dr. Lynne Jones
  To ask the Secretary of State for Health how many assertive outreach teams have been established since May 1997. [119080]

  Mr. Hutton
  Information about assertive outreach teams was first collected in 1998–99. Sixty-six teams were in existence by March 1999. Data for the year ending March 2000 have not yet been finalised but health authority plans indicated that a further 57 teams were to be established in 1999–2000.

  In the National Priorities guidance for 2000–01 we have set a target for a further 50 teams to be established bringing the total to over 170 teams.

  Local Authority Adoption Services
  Mr. Colman
  To ask the Secretary of State for Health what plans he has to reduce variations in the performance of local authorities in providing adoption services. [119082]

  Mrs. Ann Cryer
  To ask the Secretary of State for Health what plans he has to reduce variations in the performance of local authorities in providing adoption services. [119084]

  Mr. Hutton
  We have already put in place the Quality Protects programme to transform the performance of local authority children's services. This includes investing in improved adoption services, in support of our aim of making maximum use of adoption with minimum delay. In addition, my right hon. Friend the Prime Minister is, with ministerial colleagues, conducting a review of adoption policy, looking at how to improve all aspects of the service.

  NHS Trusts (Board Appointments)
  Mr. Amess
  To ask the Secretary of State for Health what the timetable is for reviewing the way in which board members of NHS trusts are appointed. [119083]

  Ms Stuart
  I am looking carefully at the best way to implement the new procedures and I hope to have a more detailed timetable in the next few months.

  Waiting Lists (Northamptonshire)
  Mr. Boswell
  To ask the Secretary of State for Health if he will make a statement on current hospital waiting lists in Northamptonshire. [119085]

  Mr. Denham
  At the end of February 2000, the total number of patients on hospital waiting lists in Northamptonshire (inpatient and day case admissions) was 13,503—a 20 per cent. reduction from the total in April 1998.

  Hospital Beds (Worcestershire)
  Mr. Gill
  To ask the Secretary of State for Health (1) how many hospital beds will be available in Worcestershire after the current hospital reorganisation; [119086]

  (2) how many hospital beds he estimates will be available in Worcestershire following hospital reorganisation there. [109844]

  Yvette Cooper
  The important issue for the health service in Worcestershire is the number of patients who need to be treated and the appropriateness of their care. In line with this, the current estimate is that following hospital reorganisation there will be approximately 1,400 acute and community based beds available across Worcestershire. In addition, there will be more High Dependency Unit and Intensive Care Unit beds in the new acute hospital for Worcester owing to the investment the Government has made to modernise services in Worcestershire.

  The report of the Government's National Beds Inquiry, set up to review assumptions about the demand for inpatient care and the implications for hospital bed numbers, was published for consultation on 10 February 2000. Consultation will focus on how health services, and specifically hospital beds, should be developed over the next 10-20 years.

  The National Beds Inquiry consultation will enable the Government to get the right number of the right sort of beds in the right places.

  Community Health Provision
  Mr. Pond
  To ask the Secretary of State for Health what measures he proposes to improve community health provision. [119087]

  Mr. Hutton
  We have already introduced primary care groups and primary care trusts to provide more integrated services and to ensure local decisions about community healthcare services are led by local clinicians. We have introduced new flexibilities through the Health Act 1999 to enable better partnership working between the National Health Service and local councils. And we are developing a new tier of intermediate care services to build effective bridges between home and hospital.

  Primary Care
  Liz Blackman
  To ask the Secretary of State for Health what action he is taking to deliver more services in primary care settings. [119088]

  Ms Perham
  To ask the Secretary of State for Health what action he is taking to deliver more services in primary care settings. [119093]

  Mr. Denham
  Our aim is that, in time, all patients will be able to access expanded primary care services. Primary care groups and, particularly, primary care trusts have a key role in developing such services and making them more convenient, faster and responsive. The additional health resources, which the Chancellor announced in the Budget Statement, offer the opportunity to begin to deliver this aim sooner. We intend to work with the professions and others to grasp that opportunity. Accordingly, improved access to services is one of the
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  main themes of the work of the modernisation action Teams, which my right hon. Friend the Secretary of State launched on 12 April.

  Domiciliary Care Agencies
  Mr. Dobbin
  To ask the Secretary of State for Health if he will make a statement on his plans to regulate and inspect domiciliary care agencies. [119089]

  Mr. Hutton
  We are committed to introducing a regulatory framework for home care services, and proposals for this are included in the Care Standards Bill, which was recently introduced in this House.

  All domiciliary care agencies will be required to register, if they provide personal care services, and be inspected annually by the National Care Standards Commission. This will not apply to those supplying solely domestic services, which do not involve personal care, nor to those who provide personal care single-handed.

  A core steering group and a wider reference group have developed draft national minimum standards and a user forum was held in January 2000. A consultation version of the proposed regulations and standards should be published later this year.

  National Institute for Clinical Excellence
  Mr. Burgon
  To ask the Secretary of State for Health if he will make a statement on the work of the National Institute for Clinical Excellence. [119090]

  Mr. Denham
  The National Institute for Clinical Excellence announced its work programme in November 1999. NICE has an agreed work programme of appraisals, clinical guidelines, clinical audits, and GP referral protocols. So far NICE has completed one fast-track appraisal, on the flu drug Relenza, and full appraisals on wisdom teeth and hip prostheses. We are expecting shortly the results of its appraisals on coronary artery stents and taxanes.

  Waiting Lists (Consultants)
  Mr. Ruffley
  To ask the Secretary of State for Health how many patients are waiting for a first appointment with a consultant. [119091]

  Mr. Denham
  The Department has never collected data on the total number of people waiting for a first appointment with a consultant. The number of people waiting more than 13 weeks after referral by their general practitioner for a first outpatient appointment fell by 16,000 (3.2 per cent.) between September 1999 and December 1999 to 496,000.

  NHS-prescribed Drugs (Access)
  Mrs. Brinton
  To ask the Secretary of State for Health what plans he has to remove regional variations in access to NHS-prescribed drugs. [119092]

  Ms Stuart
  We recognise and will tackle unacceptable variations in access to care and treatment. That is why we have set up the National Institute for Clinical Excellence (NICE). NICE will reduce post-code variations by issuing authoritative national guidance based on evidence of the clinical and cost-effectiveness of treatments.

  NHS Dentistry
  Mr. Gordon Prentice
  To ask the Secretary of State for Health when he intends to publish his Green Paper on NHS dentistry. [119062]

  Mr. Hutton
  We intend to publish our proposals for modernising National Health Service dentistry this summer, in conjunction with the National Plan for the new NHS.

  NHS Treatment (Access)
  Mr. Ben Chapman
  To ask the Secretary of State for Health what action he is taking to deal with regional variations in access to NHS treatment. [119069]

  Mr. Denham
  We are setting standards through the National Institute for Clinical Excellence and the National Service Framework programme; ensuring local delivery through clinical governance; and monitoring delivery via performance assessment framework, the Commission for Health Improvement and a national patient surveys programme. I will be working with relevant parties, utilising the record increases in National Health Service funding announced in the Budget, to improve NHS performance.

  Health Statistics
  Mr. Sheerman
  To ask the Secretary of State for Health what steps he is taking to collate comprehensive health statistics on a constituency basis. [119078]

  Mr. Denham
  We have no plans to develop comprehensive data on a constituency basis. For many sets of health data an analysis by constituency is not possible; sub-national analysis reflects either local or health authority responsibilities as appropriate. An extensive range of local health statistics is available and following consultation on the Social Exclusion Unit's report on 'Better Information' this may be further extended.

  Long-term Care
  Mr. Burstow
  To ask the Secretary of State for Health on what date he will announce his complete response to the report of the royal commission on long-term care. [119081]

  Mr. Hutton
  I refer the hon. Member to the statement made by my right hon. Friend the Secretary of State for Health on 2 December 1999,Official Report, columns 444-54.

  Dystonia
  Mr. Hancock
  To ask the Secretary of State for Health how many people have died of dystonia or dystonia-related complications in each of the last five years. [119833]

  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.
  47W
  Letter from John Kidgell to Mike Hancock, dated 2 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question asking how many people have died of dystonia or dystonia-related complications in each of the last five years. I am replying in the Director's absence.
  Information on the numbers of death certificates on which dystonia was mentioned and the number for which it was the underlying cause is given in the Table below.

  Deaths with a mention of dystonia1 occurring in 1994 to 1998, England and Wales

  Year of death

  Total mentions

  Dystonia as underlying cause

  1998

  20

  9

  1997

  18

  5

  1996

  17

  5

  1995

  21

  7

  1994

  10

  2

  1 International Classification of Diseases, Ninth Revision, codes 333.6, 333.7 and 333.8

  Genetic Data
  Mr. Cohen
  To ask the Secretary of State for Health what assessment he has made of the compatibility of his Department's data matching in respect of fraud in the NHS with(a) Article 8 of the Human Rights Act 1998 and (b) medical confidentiality; what representations he has received on this subject; and if he will make a statement. [119523]

  Mr. Denham
  No such assessment has been made since the Department has not used data matching in respect of fraud.

  Mental Health Services
  Mrs. Lait
  To ask the Secretary of State for Health how much money he has given(a) Bromley Health Authority and (b) Oxleas Dental Health Trust from the modernisation fund for use in mental health services in Bromley in (a) 1999–00, (b) 2000–01 and (c) 2001–02. [119466]

  Mr. Hutton
  The following funds have been allocated to Bromley Health Authority from the Modernisation fund for mental health services:1999–2000
  £35,000 for adult mental health (£15,000 for new atypical anti-psychotic medication and £20,000 for improved 24 hour access to services)
  £56,000 for child and adolescent mental health
  2000–01
  £25,000 for child and adolescent mental health

  In addition to this, nationally £21.7 million of mental health modernisation fund money was allocated as part of unified allocations to all health authorities

  Further allocations will be made during 2000–01.

  Allocations have not been announced for 2001–02.

  We do not make revenue allocations direct to National Health Service trusts. NHS trusts receive most of their income through service agreements with health authorities and their primary care groups.

  Cerebral Palsy
  Mr. Paul Marsden
  To ask the Secretary of State for Health what assessment he has made of the effectiveness of Dysport in the treatment of cerebral palsy. [119467]

  Ms Stuart
  Dysport ("Clostridium botulinum" toxin, marketing authorisation holder Ipsen Limited) has been investigated over a number of years for use as an injection into spastic muscles of children with cerebral palsy, to relieve the muscle spasticity. Cerebral palsy can result in calf muscle spasticity, causing the foot to turn outwards and so interfering with gait and sometimes with the ability to walk. When used in the appropriate dose, injection of botulinum toxin into the calf muscles can improve gait and enable walking.

  The Medicines Control Agency undertook a full assessment of reports of these studies, to evaluate the efficacy and safety of Dysport used in this way, in November 1999. On the basis of this assessment the licence for Dysport was varied to allow marketing for the indication
  'Treatment of dynamic equinus foot deformity due to spasticity in paediatric cerebral palsy patients, two years of age or older, only in hospital specialist centres with appropriately trained personnel.'

  Dynamic equinus foot deformity is the result of spasticity in the calf muscle.

  Domestic Violence
  Ms Moran
  To ask the Secretary of State for Health what plans he has to propose amendments to the Protection of Children Act 1999 to offer greater protection to children subject to child contact orders where there is a history of domestic violence. [119281]

  Mr. Hutton
  We have no plans to amend the Protection of Children Act 1999 in this way because it is aimed at a different set of issues; primarily at preventing those considered unsuitable to work with children from doing so.

  Contact orders are granted under the Children Act 1989 and when there is a history of domestic violence, greater protection may be offered to children through the court specifying that contact takes place within a contact centre. Additionally, contact may take place in such centres on a supervised basis. An inter-departmental group is looking currently at the funding arrangements and provision of child contact centres as part of the Government's programme on domestic violence—documented in "Living Without Fear (1999)".

  The operation of the Children Act is kept under close review and serious consideration is given to any changes that might provide greater protection to children with violent parents.

  Hospital Food
  Mr. Robertson
  To ask the Secretary of State for Health what was the cost of providing food to hospital patients, broken down by(a) staffing costs, (b) food costs and (c) other costs, in the last 12 months; and if he will make a statement. [119660]
  49W
  Ms Stuart
  Costs for provisions and kitchen and contract hotel services are collected from the trust financial returns and the latest firm information is for the 1998–99 financial year; this is shown in the table.

  Information on staffing costs and food costs for providing food to hospital patients is not collected centrally.

  £

  Provisions and Kitchen1

  257,633,466

  Contract Hotel Services2

  246,267,545

  1 Provisions and kitchen includes the purchase of provisions, hardware and crockery.

  2 Contract hotel services contains contract catering and laundry contracts.

  Nursing Home Care
  Mr. Robertson
  To ask the Secretary of State for Health what plans he has to change the way in which nursing home care is financed; and if he will make a statement. [119661]

  Mr. Hutton
  We are considering all the Royal commission recommendations on the funding of long-term care in the context of the Government's Comprehensive Spending Review. Decisions will be announced later this year.

  Aventis T25 Maize
  Joan Ruddock
  To ask the Secretary of State for Health, pursuant to his answer of 5 April 2000,Official Report, column 502W, on Aventis T25 maize, what was the voluntary scheme under which the application was made; how the application was (a) processed and (b) determined; who were the animal feed experts who advised him on the safety of T25 GM maize for animal feed; and if he will place in the Library a copy of the application, together with copies of the correspondence relating to the animal feed application between himself, his advisers and the company. [119304]

  Ms Stuart
  [holding answer 17 April 2000]: I am advised by the Food Standards Agency that the voluntary scheme related to novel food safety assessment and was operated by the Advisory Committee on Novel Foods and Processes (ACNFP). Although there was no equivalent scheme for novel animal feeds, the dossier of information was also considered by officials with expertise on animal feed matters. However, at this time, in the middle of 1996, the application from France under Council Directive 90/220/EEC for European Community marketing consent began to be considered. I am placing in the Library a copy of the advice from the European Commission's Scientific Committee on Plants. This explains, among other things, the animal feed issues considered prior to the granting of EC marketing consent for this crop. I am also placing in the Library copies of correspondence between the Ministry of Agriculture, Fisheries and Food and the applicant company culminating in the then Parliamentary Secretary's letter which was based on advice from the ACNFP.

  Air Ambulances
  Mrs. Fiona Jones
  To ask the Secretary of State for Health what representations have been made to him regarding the central funding of emergency air ambulances, with particular reference to the one operating in Lincolnshire and Nottinghamshire. [119758]

  Ms Stuart
  While a number of representations have been made on the use of helicopters in the National Health Service, none have been made about the central funding of an air ambulance service in Lincolnshire and Nottinghamshire.

  Community Nurses
  Dr. Tonge
  To ask the Secretary of State for Health (1) what recent discussions he has had with health trusts and local authorities concerning parking arrangements for community nurses; [119734]

  (2) what recent discussions he has had with the Chancellor of the Exchequer regarding tax levels on lease cars used by community nurses; [119732]

  (3) what discussions he has had with health trusts regarding mileage rates for community nurses; [119733]

  (4) what plans he has to improve the lease car arrangements for NHS community nursing staff. [119731]

  Ms Stuart
  Mileage and travelling entitlements for National Health Service staff on national contracts are determined by an agreement of the General Whitley Council. A working group of the Council which includes representatives from trades unions and employers is reviewing existing provisions with the aim of recommending new arrangements which are fair to staff, meet service needs and reflect our wider environmental policies. The Inland Revenue have been consulted as part of this review.

  As part of the consultation process for Department of the Environment, Transport and the Regions' "Planning Policy Guidance 13", a number of NHS acute and community trusts were contacted to ascertain the likely implications of the proposed maximum car parking standards being applied to NHS hospitals.

  "Fit for the Future?"
  Mr. Waterson
  To ask the Secretary of State for Health when he expects to announce his conclusions based on the responses received to "Fit for the Future?"; and if he will make a statement. [119738]

  Mr. Hutton
  We intend to publish the finalised standards for care homes for older people later this year.

  We are still considering the comments we received on "Fit for the Future?" before finalising the standards and the timetable for implementing them. However, we indicated our initial thinking in some key areas on 15 February 2000, Official Report, column 176WH.

  We believe that some of the 260 proposals in "Fit for the Future?" may only have a marginal impact on the quality of care and it is highly unlikely that this many standards will be needed.
  51W
  We do not accept that fixed ratios are the best means of specifying the number and qualifications of staff to be employed in a nursing home. For qualified nurses, numbers should relate to the assessed needs of residents at any one time. We are considering what models of assessment should be recognised by the National Care Standards Commission for this purpose and how nursing needs are defined so that nurse staffing levels can be set accurately and realistically.

  We are looking very carefully at the proposed standards on the physical environment of care homes. These must take account of the high levels of physical frailty that many older residents in care homes have. In determining room size it is important to bear in mind aspects such as quality of life and safety for residents and staff. However, we do not intend to impose unreasonable physical standards on existing homes. Physical standards will be set at a level already being met by some providers and which other providers should be able to meet over time.

  None of the standards will be introduced until at least 2002 when the Commission takes on its regulatory function. Some of the more challenging standards will not be implemented until some time after that. Providers will be given realistic timescales in which to meet any new standards.

  Mental Health
  Mrs. Lait
  To ask the Secretary of State for Health what plans there are for primary care groups to commission mental health services. [120032]

  Mr. Denham
  Health authorities are able to delegate to their primary care groups responsibility for commissioning most hospital and community health services, including mental health services. The range of services which each primary care group is responsible for commissioning is a matter for agreement between it and its health authority. As primary care groups develop, we expect them to take on responsibility for commissioning more services, including mental health.

  Mrs. Lait
  To ask the Secretary of State for Health how much of the planned increase in health spending in each of the next three years will be spent on mental health(a) in total and (b) in each region (i) in cash terms and (ii) as a percentage of the planned increase. [120031]

  Mr. Hutton
  Last year we announced our vision for mental health services, "Modernising Mental Health Services", with an additional £700 million of funding for health and social services during the comprehensive spending review period (1999–2000 to 2001–02). Since then, in the last budget, significant extra resources were made available to the NHS in each of the next four years. Decisions on the disposition of these resources have yet to be finalised.

  It is therefore not possible to identify all of the additional resources that will be available for spend on mental health over the next four years.

  Primary Care Group Board
  Mr. Austin
  To ask the Secretary of State for Health how many Primary Care Group Board members are from the Professions Allied to Medicine. [120064]
  52W
  Ms Stuart
  [holding answer 20 April 2000]: The composition of primary care groups governing boards reflects the need to ensure that general practitioners and nurses are in the driving seat for the shaping of local health care services. Professions Allied to Medicine may become co-opted members on the boards of local primary care groups but that information is not held centrally.

  Mr. Austin
  To ask the Secretary of State for Health, pursuant to his answer of 16 March 2000,Official Report, column 306W, for what reason the completion of equal opportunities forms by primary care group board members is not compulsory; and if he will make their completion compulsory. [120061]

  Ms Stuart
  [holding answer 20 April 2000]: Committees of National Health Service organisations are not statutory bodies and therefore members of such committees are not subject to the same requirements to submit equal opportunity information as are board members of NHS organisations. A primary care group is a committee of a health authority.

  There are no plans to introduce compulsory equal opportunity forms for primary care group board members.

  Mr. Austin
  To ask the Secretary of State for Health how many primary care group board members are nurses, midwives or health visitors from ethnic minority backgrounds. [120062]

  Ms Stuart
  [holding answer 20 April 2000]: Based on the information provided by primary care groups last year, there are 12 primary care group board nurse, midwives or health visitor members from ethnic minority backgrounds. This information is currently being updated to reflect any changes in primary care groups and the creation of 17 primary care trusts from 1 April 2000.

  Nurses and Health Visitors
  Mr. Austin
  To ask the Secretary of State for Health (1) how many(a) health visitors and (b) district nurses are aged 55 years old and over; and what proportion of the current workforce in each case they represent; [120006]

  (2) how many (a) health visitors, (b) school nurses and (c) district nurses are currently in training; and what numbers in training are planned for 2001–02. [120060]

  Ms Stuart
  [holding answer 20 April 2000]: The available information is shown in the tables. 2000–01 training figures are forecast and 2001–02 are not available.

  NHS Hospital and Community Health Services (HCHS): All health visitors and district nurses, who are 55 years of age and over, within England, as at 30 September 1998

  Whole-time equivalents

  Health visitor

  District nurse

  Staff 55 years of age and over

  1,330

  1,270

  Percentage of staff 55 years of age and over

  13

  11

  Total staff

  10,070

  11,430

  Notes:

  1. Figures are rounded to the nearest 10.

  2. Figures exclude learners and agency staff.

  3. Percentages were calculated from numbers of staff expressed as whole-time equivalents.

  Source:

  Department of Health Non-Medical Workforce Census
  53W

  NHS funded pre-registration training commissions forecast figures for 2000–01

  Commissions

  Health visitor

  662

  School nurses

  162

  District nurses

  619

  Sources:

  Department of Health Financial and Workforce Information return

  Year

  Total

  White

  Black

  Asian

  Other

  Unknown

  1995

  100

  69

  18

  4

  5

  4

  1996

  100

  68

  20

  4

  5

  3

  1997

  100

  63

  22

  4

  7

  3

  1998

  100

  59

  26

  4

  5

  6

  Notes:

  1. Figures are expressed as percentages.

  2. Information as at 30 September each year.

  3. Percentages were calculated from numbers of staff expressed as whole-time equivalents.

  Source:

  Department of Health Non-Medical Workforce Census.

  Speech Therapists
  Dr. Brand
  To ask the Secretary of State for Health how many speech therapists are employed by region; and how many vacancies there are for speech therapists. [120308]

  NHS Hospital and Community Health Services (HCHS): All speech and language therapy staff by Regional Office Area, in England as at 30 September 1998

  Whole-time equivalent

  All speech and language therapy staff

  Manager

  Therapist

  Tutor

  Student/trainee

  Helper/assistant

  England

  4,130

  100

  3,730

  1—

  1—

  300

  Northern and Yorkshire

  480

  20

  430

  0

  0

  30

  Trent

  360

  10

  330

  0

  0

  20

  Anglia and Oxford

  380

  1—

  350

  0

  0

  20

  North Thames

  700

  10

  640

  1—

  0

  40

  South Thames

  650

  10

  590

  0

  0

  50

  South West

  490

  10

  450

  0

  1—

  30

  West Midlands

  480

  10

  420

  0

  0

  50

  North and West

  590

  10

  520

  0

  0

  50

  Other

  1—

  0

  1—

  0

  0

  0

  1 Five or less and greater than zero

  Note:

  Figures are rounded to the nearest ten

  Source:

  Department of Health 1998 non-medical work force census

  Department of Health Recruitment, Retention and Vacancies Survey—total and three month vacancies in NHS Trusts by region—speech and language therapy staff at 31 March 1999

  Whole-time equivalent

  Total vacancies

  Three months vacancies

  England

  180

  50

  Northern and Yorkshire

  20

  10

  Trent

  20

  1—

  Anglia and Oxford

  10

  0

  North Thames

  40

  10

  South Thames

  30

  10

  South West

  20

  1—

  West Midlands

  10

  1—

  North and West

  30

  10

  1 Five or less and greater than zero

  Health Visitors (Ethnicity)
  Mr. Austin
  To ask the Secretary of State for Health what the breakdown was by ethnic origin of health visitors employed in London by NHS trusts in each of the last four years. [120063]

  Ms Stuart
  [holding answer 20 April 2000]: The data requested for each of the last four years for which information is available are given in the table:

  Mr. Denham
  Information on how many speech therapists are employed by region; and how many vacancies there are for speech therapists are set out in the tables.

  Notes:

  1. Figures are rounded to the nearest ten.

  2. Total vacancies are the total posts that Trusts were actively trying to fill at 31 March 1999.

  3. Three month vacancies are those posts that had been vacant for three months or more at 31 March 1999.

  4. All figures rounded to the nearest whole number.

  Dr. Brand
  To ask the Secretary of State for Health how many speech therapists are employed by the NHS by region who have special training in communication aids. [120309]

  Mr. Denham
  The information requested is not available centrally.

  Dr. Brand
  To ask the Secretary of State for Health how many speech therapists are in training. [120307]
  55W
  Mr. Denham
  There are currently 825 National Health Service funded speech and language therapists in training. This figure reflects those who have entered training since 1 September 1998 (the date on which the Department assumed responsibility for supporting new entrants on pre-registration speech and language therapy courses). Students who started their training prior to this date are funded under mainstream student support arrangements, which are a matter for the Department for Education and Employment.

  Nurse Consultants
  Mr. Austin
  To ask the Secretary of State for Health what the breakdown is by(a) gender and (b) ethnic origin of the newly-appointed nurse consultants. [120005]

  Ms Stuart
  [holding answer 20 April 2000]: On 18 January approval was given for National Health Service bodies to establish 141 new nurse, midwife and health visitor consultant posts. The appointment process is under way but has not been completed. Data on the gender and ethnic origin of those appointed are not yet available.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for Health for what purposes his Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120318]

  Ms Stuart
  All those working for or on behalf of the Department may be called upon to produce a birth certificate, or other similar documentation, to prove their identity, eligibility under Civil Service nationality rules or age.

  Working Time Directive
  Mrs. Dean
  To ask the Secretary of State for Health what progress has been made in implementing the working time directive within the NHS. [120237]

  Mr. Denham
  Good progress is being made. Agreements have been reached with the General Whitley Council and the British Medical Association, to cover all National Health Service staff on nationally negotiated terms and conditions, other than junior doctors who are currently exempt from the working time regulations. The aim of these agreements is to make maximum use of the available flexibilities to allow local arrangements to be established so that the Directive can be implemented smoothly without adversely affecting service provision.

  In addition, the NHS Executive issued supporting guidance in November 1998 (Health Service Circular 1998/204). Further advice was issued on 20 December 1999, to clarify certain legal aspects, and continued support and advice is available to help local managers resolve practical issues that arise.

  We expect all NHS employers to be in a position to implement the regulations in their entirety shortly.

  Children (Physical Punishment)
  Mr. Redwood
  To ask the Secretary of State for Health what steps he has taken to ensure public awareness of his document, entitled "The Physical Punishment of Children". [120186]

  Mr. Hutton
  We launched the consultation paper "Protecting Children, Supporting Parents: A Consultation Paper on the Physical Punishment of children" at a press conference on 18 January. It received extensive media coverage that day, and was widely reported in the media subsequently. The document was also made available on the DH website.

  In addition, a number of children's organisations have run campaigns associated with the consultation throughout the consultation period and a number of publications with specialist and family interests have featured articles about the issues involved.

  Mr. Redwood
  To ask the Secretary of State for Health if the Government will allow a longer time for public response to their consultation on the document, entitled "The Physical Punishment of Children". [120185]

  Mr. Hutton
  The consultation paper "Protecting Children, Supporting Parents: A Consultation Paper on the Physical Punishment of Children" was issued on 18 January and responses were asked for by 21 April.

  While we are not proposing any formal extension to the consultation period we will take account of any responses received before the analysis of the responses is completed.

  Residential and Nursing Homes
  Mr. Curry
  To ask the Secretary of State for Health what financial provision is made to local authorities in respect of residents who have placed themselves in residential or nursing homes and whose capital has declined to £16,000. [120073]

  Mr. Hutton
  Residential and nursing home care services are funded through the Revenue Support Grant. We do not make any specific financial provision in respect of residents who have placed themselves in residential or nursing homes and whose capital has declined to £16,000. At this point the local authority can undertake an assessment and, if necessary, step in to take over arrangements to ensure that the resident is not forced to use up capital below £16,000 beyond his assessed level.

  Mr. Curry
  To ask the Secretary of State for Health how many residents in residential or nursing homes in each shire county in England, who placed themselves in such homes, are now funded by the local authority; and if he will estimate the cost to each local authority in the current financial year. [120075]

  Mr. Hutton
  Information in the form requested is not collected centrally. However, the number of residents supported by local authorities is at Table S3 in the Statistical Bulletin "Community Care Statistics 1999 Residential Personal Social Services for adults, England". Copies of this publication are available in the Library.

  Aspartame
  Mr. Baker
  To ask the Secretary of State for Health what mechanisms are in place to monitor the number of people suffering an adverse reaction to aspartame. [120498]
  57W
  Ms Stuart
  The scientific data on aspartame are kept under continual review by scientific experts within the Food Standards Agency and, when necessary, independent expert advice is sought. In fact the safety of aspartame has been extensively reviewed by independent experts both in the United Kingdom and other European Member States and is considered safe to use for the general population. However, it is a legal requirement for all foods containing aspartame to be clearly labelled as containing a source of phenylalanine.

  Correspondence
  Mr. Beith
  To ask the Secretary of State for Health when he plans to reply to the letter from the right hon. Member for Berwick-upon-Tweed of 4 January, concerning the length of time a constituent is waiting for treatment for angina. [120591]

  Ms Stuart
  My right hon. Friend will reply to the right hon. Member's letter as soon as possible.

  NHS Appointments
  Mr. Brady
  To ask the Secretary of State for Health (1) on how many occasions since the publication of the Fritchie report on NHS appointments hon. Members have been asked to comment on shortlists for appointments to(a) health authorities, (b) NHS trusts and (c) primary care trusts; [120283]

  (2) how many councillors of each party affiliation have been short-listed for appointments to (a) health authorities, (b) NHS trusts and (c) primary care trusts since the publication of the Fritchie report on NHS appointments. [120284]

  Ms Stuart
  Since 22 March when the Fritchie report was published, 56 submissions for 101 posts have been received by Ministers.

  These included recommendations for 11 chairs and shortlists for non-executives which included 24 councillors.

  The selection process at regional level had already been largely completed before 22 March so it is fair to assume that hon. Members were consulted on all 11 chair appointments in the usual way.

  Drug Companies
  Mr. Flynn
  To ask the Secretary of State for Health what checks he makes on the financial contributions made by drug companies to organisations that make representations to him. [120376]

  Ms Stuart
  It is neither practicable nor appropriate to check on the sources of income of every organisation that makes representations to the Department. In cases where the Department is contemplating financial support for an organisation, checks of this kind are made. It should be noted that the pharmaceutical industry offers support to organisations or their objectives in various ways other than direct financial contributions, and these must also be taken into account.

  Nurses
  Dr. Lynne Jones
  To ask the Secretary of State for Health how many qualified nurses left the profession 58W
  within one year of completing their initial training in each of the last five years for which figures are available; and if he will make a statement on the impact of this loss of trained nurses on patient care. [120398]

  Mr. Denham
  This information is not collected centrally. We recognise the contribution nurses make to patient care and we are therefore committed to encouraging them to stay in the National Health Service once they have qualified. NHS employers are becoming more flexible with the working patterns they are offering, thus allowing nurses to balance their lives at work and home. The number of qualified nurses working in the NHS increased by over 5,500 between September 1998 and September 1999.

  Health Authority Allocations
  Mr. Lidington
  To ask the Secretary of State for Health if he will list for each health authority in England in rank order its allocation for 2000–01, including the expenditure announced on 28 March, expressed(a) per head of population, and (b) per household. [120274]

  Mr. Denham
  The average allocation per household in England for 2000–01 is £1,631. The number of households in each health authority is not available.

  The allocation per weighted head of population in each health authority is given in the table.

  All figures include the additional £660 million announced on 28 March.

  £

  Health authority

  2000–01 allocation per weighted head of population

  Isle of Wight

  736

  Bexley and Greenwich

  729

  Redbridge and Waltham Forest

  714

  Wirral

  710

  Morecambe Bay

  710

  Camden and Islington

  710

  Sefton

  709

  Gloucestershire

  708

  Kingston and Richmond

  706

  West Surrey

  706

  East Kent

  705

  East Sussex, Brighton and Hove

  705

  Lambeth, Southwark and Lewisham

  705

  Manchester

  704

  Brent and Harrow

  704

  East Surrey

  703

  Liverpool

  702

  South Lancashire

  702

  Wiltshire

  702

  Salford and Trafford

  701

  Dorset

  701

  South Humber

  701

  Cornwall and Isles of Scilly

  701

  Merton, Sutton and Wandsworth

  700

  Warwickshire

  699

  Sheffield

  698

  South and West Devon

  698

  North and East Devon

  697

  Newcastle and North Tyneside

  696

  Leeds

  694

  North Cheshire

  694

  West Kent

  694

  Northamptonshire

  694

  59W

  £

  Health authority

  2000–01 allocation per weighted head of population

  Barking and Havering

  694

  Suffolk

  694

  South Cheshire

  694

  North and Mid Hampshire

  693

  Birmingham

  693

  Wakefield

  693

  Worcestershire

  692

  Enfield and Haringey

  691

  Somerset

  691

  West Hertfordshire

  691

  Stockport

  691

  North Cumbria

  691

  Barnet

  691

  Solihull

  690

  East Riding

  689

  North West Lancashire

  688

  Southampton and South West Hampshire

  688

  Bromley

  688

  Doncaster

  688

  Ealing, Hammersmith and Hounslow

  688

  Portsmouth and South East Hampshire

  688

  Norfolk

  688

  Northumberland

  687

  Bury and Rochdale

  687

  North Essex

  687

  Calderdale and Kirklees

  687

  South Staffordshire

  686

  Herefordshire

  685

  West Sussex

  684

  North Derbyshire

  684

  Hillingdon

  684

  North Yorkshire

  684

  St. Helens and Knowsley

  684

  Sandwell

  684

  Bradford

  684

  East Lancashire

  683

  Sunderland

  682

  Gateshead and South Tyneside

  682

  Rotherham

  682

  Tees

  682

  Lincolnshire

  681

  Croydon

  681

  Avon

  681

  Walsall

  679

  East and North Hertfordshire

  679

  Shropshire

  678

  North Staffordshire

  678

  Wolverhampton

  677

  Dudley

  677

  South Essex

  677

  South Derbyshire

  677

  West Pennine

  676

  County Durham

  674

  Nottingham

  673

  North Nottinghamshire

  672

  Oxfordshire

  672

  Cambridgeshire

  671

  Leicestershire

  670

  Coventry

  669

  Barnsley

  669

  Buckinghamshire

  668

  Wigan and Bolton

  667

  East London and the City

  666

  Berkshire

  666

  Bedfordshire

  663

  Kensington, Chelsea and Westminster

  637

  England total

  688

  NHS Savings
  Mr. Lilley
  To ask the Secretary of State for Health what are the net savings made from replacing the NHS internal market by the arrangements introduced in April 1999. [120330]

  Mr. Denham
  Savings from replacing the National Health Service internal market have played a major part in ensuring that the Government are on course to achieve their commitment to save £1 billion from the cost of bureaucracy in the NHS. Savings have accrued through a series of measures including:abolishing the internal market and ending competition;
  introducing new primary care groups in place of general practitioner fundholding;
  replacing yearly contracts within the NHS with long-term agreements;
  abolishing the wasteful "extra-contractual referral" system pooling services and functions;
  merging NHS trusts to save at least £500,000 in each case.

  These and other savings related to abolition of the NHS internal market and other cost reducing measures have contributed to an overall saving in management costs of £0.5 billion up to the end of March 2000.

  Mr. Lilley
  To ask the Secretary of State for Health what steps he has taken to(a) monitor and (b) measure the net savings arising from replacement of the NHS internal market. [120331]

  Mr. Denham
  The cost of managing the National Health Service has been monitored in a consistent way since 1995–96 and change in the quantum of management costs is used as the basic measure of savings accrued. No additional steps have been taken to monitor and measure the net savings arising specifically from replacement of the NHS internal market.

  Monitoring of NHS management costs is carried out quarterly and annually for health authorities and primary care groups. Monitoring of management costs in NHS trusts is carried out annually.

  Savings in total management costs are calculated annually from the information supplied by individual HAs and NHS trusts. Information to identify the level of savings accrued from mergers of NHS trusts is collected separately.

  Electronic Health Records
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on the progress made by(a) health authorities in Shropshire and (b) nationally to develop Electronic Health Records as set out in the report, "Information for Health". [120367]

  Ms Stuart
  The information strategy for the Modern NHS 1998–2005 "Information for Health", called for a number of demonstrator sites to be set up to explore the issues associated with the creation of electronic records. The setting up of these sites is a key component of supporting the delivery of electronic health records throughout the National Health Service.

  I announced the names of the four Electronic Health Record (EHR) demonstrators on Monday 17 April during my visit to Burton hospitals, South Staffordshire. The

  61W
  sites chosen are Cornwall, South Staffordshire, County Durham and Tees. Work will commence once the deliverables have been agreed with each of the sites, on developing the concept of longitudinal care and 24-hour emergency access to clinical records. The sites will also consider emerging issues such as areas of personal rights to control over medical information (European context) and e-health agenda.

  A larger number (up to 12) of Electronic Patient Records (EPR) demonstrators will start working in June on specific areas that have been identified as priorities by their local health community. These will include how information can be shared more effectively among members of the primary health care teams and between different organisations for the benefit of patient care. They will also closely support the concept of how information will actually support the delivery of the local Health Improvement Programme. The names of the successful sites will be announced in the next few weeks.

  The demonstrator sites will be subject to national evaluation and will run for two years.

  Shropshire local health community has developed a full Local Implementation Strategy for Information for Health. This was submitted to the Regional Office on 31 March 2000 and is currently being evaluated. It sets out a clear vision of the way in which the Shropshire local health community will achieve the targets set out in "Information for Health" in the period between 2000–05. The vision is supported by detailed investment proposals for the organisations involved in the planning and delivery of health and social care services to patients and the public in Shropshire.

  Medical Laboratory Science Officers
  Mr. Ruane
  To ask the Secretary of State for Health what is the average amount of(a) paid and (b) unpaid time a medical laboratory science officer is expected to set aside for studying for a continuing professional development certificate. [120337]

  Mr. Denham
  The information requested is not collected centrally. Health Service Circular 1999/154, "Continuing Professional Development: Quality in The New NHS", supports National Health Service employers to develop locally managed arrangements for continuing professional development (CPD) to ensure that CPD programmes address the personal and career development needs of individuals and meet local service objectives and the needs of patients.

  Mr. Ruane
  To ask the Secretary of State for Health what progress has been made in allowing medical laboratory science officers to join the Pay Review Body; and if he will make a statement. [120335]

  Mr. Denham
  Our proposals for modernising National Health Service pay, which were published in February 1999 in "Agenda for Change", include bringing some groups of highly qualified staff within the scope of the Nursing Pay Review Body, without changing its fundamentally professional character.

  Initial discussions with NHS trade unions on pay modernisation resulted in a joint Framework of Principles and Agreed Statement on the Way Forward which was published on 8 October 1999, Para 7.2 of the joint
  62W
  Framework sets out the following starting point for more detailed discussions with trade unions on the qualifying criteria for groups to come with the scope of the NPRB:
  Professions with a minimum entry requirement of three years educational study (or equivalent) to diploma level or higher, in a health specific area (other than medicine or dentistry) and which are state registered and have a substantial majority of members employed in health care.
  Exceptions might be agreed for staff groups which met the majority but not all of these conditions.
  Staff groups which support professions added to the NPRB remit, and who have a direct connection with the transferred groups similar to that between nursing auxiliaries and registered nurses, would also need to be considered for transfer.

  I am sure my hon. Friend will appreciate that, as this is part of continuing confidential discussions with NHS unions aimed at reaching agreement by summer 2000, I am unable to comment further at this stage.

  Mr. Ruane
  To ask the Secretary of State for Health what records are kept by his Department of death rates among medical laboratory science officers. [120338]

  Mr. Denham
  Information on death rates among medical laboratory science officers is not collected centrally, but may be held locally by individual National Health Service employers.

  Health Workers
  Mr. Ruane
  To ask the Secretary of State for Health if he will make a statement on(a) recruitment and (b) retention among health workers not covered by the Pay Review Body. [120334]

  Mr. Denham
  We recognise that National Health Service staff are the key to delivering its ambitious programme to modernise the service, and we are taking a number of steps which will help to address the issue of recruitment and retention of all NHS staff.

  We are modernising services and modernising employment practice in the NHS: developing more supportive, flexible and family friendly working practices; extending and improving investment in lifelong learning and professional development; tackling violence and racism in the workplace; involving staff in the way services are delivered and in the changes and developments that affect their working lives. Pay is also being addressed.

  In addition, we are developing the interactive service "NHS Careers" which will cover all NHS staff in due course.

  Psychologists and Child Psychotherapists
  Mr. Ruane
  To ask the Secretary of State for Health if he will make a statement on the recruitment of clinical psychologists and child psychotherapists. [120328]

  Mr. Denham
  We recognise that National Health Service staff are the key to delivering its ambitious programme to modernise the Service, and we are taking a number of steps which will help to address the issue of recruitment and retention of clinical psychologists and child psychotherapists.
  63W
  The recently published National Service Framework for mental health demands concerted local action through health improvement programmes, using local mechanisms for workforce planning, education and training, and continuing professional development and lifelong learning. The standards set out will require properly trained and supported additional staff across all groups to provide modern health care.

  The Department has established an action team, chaired by Sue Hunt, an experienced mental health services chief executive, to deliver a nationally co-ordinated programme of support to help local health and social services authorities meet their complex workforce needs.

  We are modernising services and modernising employment practice in the NHS: developing more supportive, flexible and family friendly working practices; extending and improving investment in lifelong learning and professional development; tackling violence and racism in the workplace; involving staff in the way services are delivered and in the changes and developments that affect their working lives. Pay is also being addressed.

  In addition, we are developing the interactive service "NHS Careers" which will cover all NHS staff in due course.

  GP Lists
  Mrs. Spelman
  To ask the Secretary of State for Health for what reasons United Kingdom nationals are removed from their GP's list following periods of work abroad exceeding three months. [120377]

  Ms Stuart
  General practitioners' lists need to be kept up to date in order to reflect accurately the numbers of patients that they are responsible for. GPs have duties to provide continuity of care to their patients, and also to be able to visit them outside the surgery should the need arise. These responsibilities cannot be fulfilled if patients are resident abroad.

  Appointment Waiting Times
  Mr. Stephen O'Brien
  To ask the Secretary of State for Health what is the average waiting time for patients from first referral until their first appointment with a consultant. [119074]

  Mr. Denham
  The average waiting time for patients from general practitioner referral to being seen by the consultant for their first appointment is seven weeks.

  European Food Authority
  Mr. Redwood
  To ask the Secretary of State for Health if the proposed European Food Authority will be able to overrule the UK's Food Standards Agency. [120496]

  Ms Stuart
  No such formal role has been proposed. The relationship between the proposed European Authority and agencies in member states is not clearly defined in the Commission's communication. However, we expect any recommendations from the proposed Authority to be based on full consultation and careful analysis of the best available scientific information. The United Kingdom's Food Standards Agency will wish to be involved at an early stage and to participate closely in the work of the Authority.

  Beef Imports
  Mr. Todd
  To ask the Secretary of State for Health what tests are undertaken to ensure the safety of beef imported into the United Kingdom from countries where BSE infections have been notified. [117708]

  Ms Quin
  I have been asked to reply.

  There are no tests available for the detection of BSE in meat. The three tests recently approved by the European Commission have been approved for the purposes of surveillance and are not suitable for testing imported beef.

FOREIGN AND COMMONWEALTH AFFAIRS

  Regulation of Investigatory Powers Bill
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his policy in respect of the use his Department, its agencies and public bodies will make of the powers relating to the authorised obtaining of communications data in Part I, Chapter II of the Regulation of Investigatory Powers Bill once the Bill is enacted. [119508]

  Mr. Robin Cook
  I refer my hon. Friend to the answer given by my right hon. Friend the Home Secretary on 19 April 2000,Official Report, column 509W.

  Online Services
  Mr. Robert Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the services which(a) his Department and (b) the executive agencies responsible to his Department (i) provide on-line and (ii) expect to be deliverable on-line by 2002. [119441]

  Mr. Hain
  We are currently collecting data on our progress on delivering 25 per cent. of Government services electronically by 2002 to be included in the Cabinet Office's Spring 2000 report monitoring progress towards delivery of all Government services electronically by 2005. We currently provide a range of services electronically via our websites, including country Travel Advice notices, seven separate visa application forms, consular services and embassy contact details. Over 60 British diplomatic missions also offer a range of information and services via their own websites, linked from the main Foreign Office website. In the future, it is hoped to set up regional electronic 'contact centres' for British consular and visa services abroad.

  "Your Britain, Your Europe"
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason the "Your Britain, Your Europe" campaign includes events commemorating UK participation in the Council of Europe; for what reason the questionnaire from the roadshow refers to Europe rather than specific European institutions; and what is his policy on clearly identifying EU institutions in this campaign. [119813]

  Mr. Vaz
  My engagement at the Council of Europe on 1 December had nothing to do with the "Your Britain, Your Europe" roadshow. The aim of the questionnaire was to pose general questions about Europe rather than focus on the specific institutions of the European Union.
  65W
  During the "Your Britain, Your Europe" campaign I will want to cover all aspects of our involvement in the EU, including its institutions.

  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 22 March 2000,Official Report, column 601W, on the European Union, if he will list those companies and educational institutions to which the "Your Britain, Your Europe" leaflet was distributed; and if he will make a statement explaining the basis for their selection. [119838]

  Mr. Vaz
  We distributed 7,000 copies of the leaflet during the week to passers-by and those at the establishments we visited. It is impossible therefore to measure how many educational institutions and companies may have received copies of the leaflet. During the roadshow I called on the following schools and universities: Woodham Comprehensive School (County Durham), St. Joseph's Secondary School (Tyne and Wear), the University of Hull, De Montfort University (Leicester), Queen Elizabeth Hospital School (Bristol), Bath University, Kings Edward VI College (Nuneaton) and St. John's Primary School (Birmingham). I called on the following companies: Nissan Motor Manufacturing (UK, CORUS Engineering Steels and Kwik Strip Eco Solutions.

  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will estimate the proportion of(a) serving and (b) former (i) FCO and (ii) DFID Ministers' constituencies as part of the total number of constituencies visited by the first "Your Britain, Your Europe" tour; if he will list those constituencies so visited; and if he will make a statement. [119812]

  Mr. Vaz
  I visited 13 constituencies during the "Your Britain, Your Europe" roadshow. Two of these (Gateshead and Warrington, East, and Birmingham, Ladywood) are held by recent or current FCO and DFID Ministers. Information about former MPs in each constituency is not held centrally. As it is information about former Ministers, I suggest the hon. Member utilises the excellent facilities of the Oriel Room.

  Fundamental Rights Charter
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress made regarding preparation of the Charter of Fundamental Rights, with special reference to its(a) contents (b) justiciability and (c) inclusion in the Treaty of Rome. [119816]

  Mr. Vaz
  The Charter Convention drafting body has now met seven times. There has been a first discussion of draft articles covering civil and political rights, citizens' rights (ie rights from the EU and EC Treaties), and some economic and social rights. Some civil and political rights have been discussed a second time. The next meeting on 27-28 April will include hearings of non-governmental organisations and continue the discussion of economic and social rights. The question of justiciability will depend upon the Charter's legal status which, together with inclusion in the Treaties, are beyond the Convention's mandate and will be considered by heads of government at the Nice European Council in December.

  Gibraltar
  Dr. Marek
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he proposes to take in response to the refusal of the Spanish authorities to allow Commonwealth Parliamentarians access to Malaga Airport from Gibraltar on Friday 14 April as a result of the closure of Gibraltar Airport owing to bad weather. [119808]

  Mr. Vaz
  Spain, like other EU member states, is obliged to impose visa regimes on nationals of countries listed on the EU Common Visa List. Beyond this, the visa policy of other member states is not a matter for the UK.

  In response to the problems faced by six members of the Commonwealth Parliamentary Association on 14 April, as a result of their lack of a Schengen visa, our Embassy in Madrid asked the Spanish Ministry of Foreign Affairs for assistance in ensuring that these CPA members could travel to Malaga to catch the later flight if that, too, was diverted. Once apprised of the problem, the Foreign Ministry took the necessary action with the Spanish regional authorities. In the event, their assistance was not needed as the flight was able to land in Gibraltar.

  Parliamentary Answers (BNFL)
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list each of the(a) oral and (b) written parliamentary answers Ministers in his Department have provided since May 1997, which were based on (a) information and (b) a draft provided by British Nuclear Fuels. [120045]

  Mr. Hain
  Internal advice and the source of such advice is not made public in line with exemption 2 of the Code of Practice on Access to Government Information.

  DTI Staff (Secondment)
  Dr. Starkey
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many Department of Trade and Industry staff are currently on secondment to his Department; from which sections in the DTI they have come; and in which sections in his Department they are working. [119915]

  Mr. Hain
  There are 51 Department of Trade and Industry staff currently on loan to the Foreign and Commonwealth Office.

  These staff were deployed from the following DTI Directorates: Consumer Affairs, Communications and Information Industries, Communications, Deregulation, Environment, Employee Relations, Invest in Britain Bureau, Management Best Practice, Nuclear Industries, Office of Science and Technology, Trade Policy, Warren Spring Laboratory, Export Control and Non-Proliferation and several regional Government Offices.

  Since May 1999, British Trade International (a joint FCO/DTI Department) has had lead responsibility within Government for trade development and promotion on behalf of British business. This joint operation covers UK and overseas activity. Many of the DTI staff on loan to the FCO are deployed in British Trade International posts overseas. The majority of these staff took up their postings from what are now British Trade International UK operations.
  67W
  Of the 51, there are currently 38 DTI staff in the following FCO and British Trade International posts overseas: Almaty, Amman, Bonn, Budapest, Buenos Aires, Cairo, Chicago, Dhaka, Gibraltar, Hanoi, The Hague, Houston, Johannesburg, Karachi, Kuwait, Lagos, Los Angeles, Moscow, Munich, New Delhi, Oslo, Ottawa, Paris, Peking, Seoul, Tokyo, UKMis Geneva, UKRep Brussels, Washington.

  In London, the remaining 13 DTI staff are working in the following FCO departments: Aviation, Maritime, Science and Energy; Latin America and Caribbean; Near East and North Africa; North America; Resource Planning, and the Diplomatic Service Language Centre (undertaking full-time language training).

  Iraqi Oil Sanction Breaches
  Dr. Starkey
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what assessment he has made of whether the Governments of(a) Iran, (b) Turkey and (c) Jordan have acted to stop the sale in breach of UN sanctions of Iraqi oil through their territories; [120041]

  (2) if he will make a statement on his Department's assessment of the volume of oil sold by Iraq in violation of UN sanctions (a) during 1999 and (b) since the start of the current year; [120039]

  (3) what assessment he has made of which countries Iraqi oil is being smuggled through in breach of UN sanctions. [120040]

  Mr. Hain
  We remain concerned at the large amount of Iraqi oil being smuggled through the Gulf and across Iraq's land borders in breach of UN sanctions. That oil should be funding food, medicine and other humanitarian relief for the Iraqi people through the UN programme, not going into the pockets of the regime and middlemen. We therefore regularly stress the need to crack down on sanctions-busting in contacts inside and outside the region, most recently with Turkey, Iran and the UAE. We ourselves remain committed to the Multinational Interception Force in the Gulf. I welcome Iran's recent action against a number of vessels containing smuggled Iraqi oil. We want Turkey to do more: last year we proposed that the trade across its borders be brought into the UN humanitarian programme. The Jordan/Iraq oil/trade protocol, which is acknowledged by the UN in recognition of the importance to Jordan of trade with Iraq, allows Jordan to import Iraqi oil at half the market price in exchange for Jordanian civilian goods. Excluding oil sold under this Jordanian protocol, we estimate that in 1999 Iraq sold approximately 3.2 million metric tonnes of oil in breach of sanctions; for this year we estimate the figure to be approximately 2.2 million metric tonnes.

  European Union
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 10 April 2000,Official Report, column 77W, on the European Union, if he will list the responses referred to in his reply to question 118022; how many leaflets have yet to be distributed; what was the printing cost for the undistributed leaflets; and what analysis he has made of the cause of the small number of responses. [119863]
  68W
  Mr. Vaz
  [holding answer 20 April 2000]: As we received only a small number of replies to the questionnaire, we did not keep a record of responses. We have distributed most of the leaflets and will distribute the remainder over the next few months. We have not drawn any conclusions about the small number of responses.

  The Gambia
  Mr. McDonnell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of The Gambia with regard to the recent deaths of demonstrators in pro-democracy marches. [120303]

  Mr. Hain
  The High Commissioner in Banjul called the Secretary of State for the Interior on 11 April to express our concern at the high number of casualties and urged the Government to ensure the security forces exercised maximum restraint, and not to fire on demonstrators. He stressed the need to maintain full respect for human rights.

  On the initiative of the UK, the EU issued a declaration on 17 April seeking assurance from the Government of The Gambia that the incidents leading to these disturbances are dealt with through dialogue and in a peaceful and orderly manner. The President of The Gambia ordered a Commission of Inquiry later that same day.

  The UK and the EU will continue to urge the Government of The Gambia to restrict the use of force; ensure persons detained as a result of these disturbances enjoy the protection of the law and that their rights are respected; and ensure that the inquiry is transparent, independent and free from political interference.

  Israel
  Dr. Starkey
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Israeli Government concerning their obligations under the UN Convention on the Rights of the Child and their arrest and imprisonment of Palestinian children aged under 15 years. [119917]

  Mr. Hain
  My right hon. Friend the Secretary of State has made no representations to the Israeli Government about their obligations under the UN Convention on the Rights of the Child. The Red Cross have confirmed to our Embassy in Tel Aviv that Israel does not hold any children under the age of 15 in prison.

  British Embassy Vehicles (Germany)
  Mr. Baker
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the(a) cost, (b) make and (c) model was of the motor vehicles purchased for use by the British Embassy in Berlin since 1 May 1997. [120550]

  Mr. Vaz
  Neither the British Embassy in Berlin, nor (prior to September 1999) the British Embassy in Bonn, nor the British Embassy Berlin Office, have purchased any motor vehicles since 1 May 1997. All vehicles acquired in recent years have been leased.

  EU Business
  Mr. Ernie Ross
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list(a) the forthcoming business in the Council of the European Union for May and (b) the major European Union events for the next six months. [120680]

  Mr. Vaz
  The information is as follows:

  Monthly Forecast of EU Business: May 2000
  This calendar is primarily concerned with European Union matters, but certain other relevant events are also included. Events and dates quoted are based on the information available on the date of issue.

  May 2000

  2 May—Brussels—Telecommunications Council

  1. Adoption of the agenda

  2. (poss.) Approval of the list of "A" items

  3. Commission communication entitled "The European positions for the World Radiocommunications Conference 2000 (WRC-2000)"

  Council conclusions

  6981/00 ECO 54 AVIATION 7 TRANS 37

  7788/00 ECO 89 AVIATION 14 TRANS 58

  4. Conference on Digital Terrestrial Television (DVB-T) on 17 and 18 February 2000 in Lisbon

  Presidency briefing

  7527/00 ECO 72 AUDIO 13

  5. Review of the electronic communications regulatory package: outcome of the public consultation

  presentation by the Commission

  policy debate

  7754/00 ECO 87

  6. (poss.) Postal services

  Commission briefing

  7. Other business

  (a) Outcome of the public consultation on the "EU" Oral presentation by the Commission

  5971/00 ECO 26

  (b) Commission communication on the organisation of the management of the Internet

  Presentation by the Commission

  (c) Recommendation and communication from the Commission on access to the local loop, including local loop unbundling

  Presentation by the Commission

  Date

  Venue

  Event

  May

  2

  Brussels

  Telecommunications Council

  3-4

  Brussels

  European Parliament Plenary

  5-7

  San Miguel, Azores

  Informal Meeting of Foreign Ministers

  8

  Brussels

  ECOFIN Council

  8

  Lisbon

  EU/New Zealand Ministerial

  11

  Brussels

  Health Council

  15-16

  Brussels

  Agriculture Council

  15-16

  Oporto

  WEU Council

  15-19

  Strasbourg

  European Parliament Plenary

  16

  Brussels

  Culture Council

  17

  Moscow

  EU/Russia Summit

  18

  Brussels

  Industry Council

  70W
  3-4 May—Brussels—European Parliament Plenary
  (poss.) Proposal for a Council Decision on the conclusion on behalf of the European Community on the Food Aid Convention 1999
  (poss.) Proposal for a Council regulation laying down certain control measures in respect of vessels flying the flag of non-contracting parties to the Northwest Atlantic Fisheries Organisation (NAFO)
  (poss.) Proposal for a Council regulation amending the fifth time Regulation (EC) No 850/98 of 30 March 1998 for the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms
  Codecision procedure

  First reading
  (poss.) Proposal for a European Parliament and Council regulation (EC) amending Regulation 5EEC No 3528/86 on the protection of the Community's forests against the atmospheric pollution
  Proposal for a European Parliament and Council regulation (EC) extending Regulation (EC) No 443/97 on operations to aid uprooted people in Asian and Latin American developing countries

  8 May—Brussels—ECOFIN Council

  Commission recommendation on the broad economic policy guidelines—Orientation debate

  (poss.) Amendment to the UCITS Directive

  (poss.) Amendment to the Money Laundering Directive

  (poss.) Directive on the reorganisation and winding-up of credit institutions

  Draft EU budget 2001—Orientation debate

  Any other business

  11 May—Brussels Health Council

  15-16 May—Brussels—Agriculture Council

  15-19 May—Brussels—European Parliament Plenary

  16 May—Brussels—Culture Council

  17 May—Brussels—EU/Russia Summit

  18 May—Brussels—Industry Council

  18 May—Brussels—Development Council

  22-23 May—Brussels—General Affairs Council

  23 May—Brussels—EEA Council

  23 May—Brussels—Association Councils With Slovakia and Slovenia

  23 May—Brussels—Peace Implementation Council

  25 May—Brussels—Internal Market Council

  29-30 May—Brussels—Justice and Home Affairs

  30 May—Brussels—Energy Council

  No agendas currently available

  European Calendar: May-October 2000
  This calendar is primarily concerned with European Union matters; but certain other relevant events are also included. Events and dates quoted are based on the information available on the date of issue.
  71W 72W

  Date

  Venue

  Event

  18

  Brussels

  Development Council

  22-23

  Brussels

  General Affairs Council

  23

  Brussels

  Association Councils with Slovakia and Slovenia

  23

  Brussels

  EEA Council

  23

  Brussels

  Peace Implementation Council

  25

  Brussels

  Internal Market Council

  25-26

  Lisbon

  EuroMed Foreign Ministers Meeting (Informal)

  28-30

  Evora

  Agriculture Council (Informal)

  29-30

  Brussels

  Justice and Home Affairs Council

  30

  Brussels

  Energy Council

  June

  5

  Luxembourg

  ECOFIN Council

  6

  Luxembourg

  Social Affairs Council

  7

  Fiji

  ACP/EU Ministerial

  8

  Fiji

  Signing of post Lomé convention

  8

  Luxembourg

  Education Council

  13-4

  Luxembourg

  General Affairs Council

  13-6

  Strasbourg

  European Parliament Plenary

  15

  Luxembourg

  Research Council

  16

  Luxembourg

  Fisheries Council

  19-20

  Luxembourg

  Agriculture Council

  19-20

  Sta. Maria da Feira

  European Council

  21-3

  Cyprus

  3rd Euro-Mediterranean Conference of the Ministers of Industry

  22-3

  Luxembourg

  Environment Council

  26-27

  Luxembourg

  Transport Council

  28

  Lisbon

  EU/India Summit

  July

  3-7

  Strasbourg

  European Parliament Plenary

  6-7

  Lille

  Culture Council

  7-8

  Paris

  Social Affairs Council (Informal)

  10-11

  Brussels

  General Affairs Council

  15-16

  Paris

  Environment Council (Informal)

  17

  Brussels

  ECOFIN Council

  17-18

  Brussels

  Agriculture Council

  24

  Brussels

  Budget Council

  27

  Bangkok

  ASEAN Regional Forum (AFR) Ministerial

  28-29

  Bangkok

  ASEAN Post Ministerial

  28-29

  Arles

  Justice and Home Affairs Council (Informal)

  August

  There are no Councils scheduled for this month

  September

  1-2

  Evian

  Gymnich

  3-5

  Biarritz

  Agriculture Council (Informal)

  6

  New York

  EU/Ukraine Summit

  9-10

  Paris (tbc)

  ECOFIN Council (Informal)

  18

  Brussels

  Telecommunications Council

  18-19

  Brussels

  General Affairs Council

  25-26

  Brussels

  Agriculture Council

  28

  Brussels

  COFIN Council

  28

  Brussels

  Internal Market Council

  28-29

  Marseilles

  Justice and Home Affairs Council

  October

  2

  Luxembourg

  Transport Council

  9-10

  Luxembourg

  General Affairs Council

  10

  Luxembourg

  Environment Council

  13-14

  Biarritz

  European Council

  16

  Paris

  EU/S Ministerial meeting

  16

  Paris

  EU/Canada Ministerial meeting

  17

  Luxembourg

  ECOFIN Council

  19

  Luxembourg

  Fisheries Council

  19-21

  Seoul

  Europe/Asia Summit

  23

  China

  EU/China Summit

  23-24

  Luxembourg

  Agriculture Council

  25

  Luxembourg

  Education Council

  India
  Mr. McDonnell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Indian Government concerning the recent caste-related violence aimed at the Dalit community. [120300]

  Mr. Hain
  We deplore all forms of discrimination, including that based on caste. We are also concerned by incidents of caste-related violence. We and our High Commission in New Delhi continue to follow this issue closely.

  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he received about Kashmir prior to his visit to India. [120556]

  Mr. Hain
  We are aware of the concern of many people in the UK regarding the current situation in Kashmir. We hope that India and Pakistan can resume their dialogue and find a just and lasting solution to this issue.

  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he had in India about the Comprehensive Test Ban Treaty. [120554]

  Mr. Hain
  We take every opportunity to urge India to sign and ratify the Comprehensive Test Ban Treaty, including during the Foreign Secretary's visit to India last month.

  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about India's bid for a permanent seat on the UN Security Council. [120555]

  Mr. Hain
  The Government are committed to early enlargement of both the permanent and the non-permanent membership of the UN Security Council, including the creation of a new permanent seat for the Asian regional group. It would be for the Asian group to decide who would occupy any permanent seat allocated to them. India would clearly be a contender.

  Mr. Spring
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he had about defence exports while in India. [120553]

  Mr. Hain
  Defence exports were among a wide range of issues discussed during the Secretary of State's visit to India.

  Sudan
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received concerning violence near the Heglig oilfield north of Bentiu, southern Sudan; and if he will make a statement. [120266]

  Mr. Hain
  We continue to receive reports of fighting around and south of Bentiu in Unity State. We will maintain our efforts to push for a peace settlement which would end the suffering of those in the Sudan.

  Export Controls (Macau)
  Mr. Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs what strategic export controls the United Kingdom will apply to the Macau Special Administrative Region. [120681]
  74W
  Mr. Battle
  Following the return of Macau to Chinese sovereignty, we have reviewed our policy on the control of strategic exports to the Macau Special Administrative Region (MSAR).

  We shall consider applications for licensing strategic exports to the MSAR on a case-by-case basis. We will not, however, issue licences for strategic exports to the MSAR for goods which we do not licence for export to mainland China. Our policy on strategic exports to mainland China is as set out by my late right hon. Friend, Derek Fatchett, on 3 June 1998, Official Report, columns 246-47W.

  The Department of Trade and Industry will be removing Macau as a destination for Open General Licences which allow the export of Military List goods. Transhipment of goods on the Military List to the MSAR via the United Kingdom without a licence will also be prohibited. Schedule 3 of the Export of Goods (Control) Order (1994) will be amended accordingly.

  HM Government's policy on strategic exports to Hong Kong remains as announced by my late right hon. Friend on 14 January 1998, Official Report, column 221W.

  Iraq
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what recent representations he has received concerning the bombing of non-military targets in Iraq; [120610]

  (2) what recent representations he has received concerning the bombing of military targets in Iraq; [120273]

  (3) what plans he has to assess the effects of the continued bombing of Iraq; and if he will make a statement. [120611]

  Mr. Hain
  As I have told the House on many occasions, we are not conducting a bombing campaign against Iraq. UK and US aircraft continue to patrol the No Fly Zones, established in 1991 and 1992 in response to a situation of overwhelming humanitarian necessity, and in support of UN Security Council resolution 688 which called on Iraq to end its repression of the civilian population. They stop Saddam Hussein using his aircraft against his own people, as he did with such horrific consequences in the past. Since late 1998, Iraq has waged a systematic campaign to shoot our aircraft down. Direct threats against our aircrew have included missile attacks and heavy anti-aircraft fire. Our aircraft only take action when they are forced to do so to defend themselves. I am aware of claims, chiefly from the Iraqi Government, that our aircraft deliberately target civilians and civilian facilities. That is a lie. Only military targets clearly connected with the threat to our aircraft are targeted, and even then only when we are wholly satisfied that the associated risks are minimal. I am confident that our patrols prevent Saddam Hussein from adding yet more crimes to his appalling human rights record.

HOME DEPARTMENT

  Sex Offenders
  Miss Widdecombe
  To ask the Secretary of State for the Home Department, pursuant to his answer of 6 April
  75W
  2000, Official Report, columns 599-600W, (i) how many prisoners released on the Home Detention Curfew scheme were released on the scheme before the end of the requisite period referred to in Section 34A(3) of the Criminal Justice Act 1991 as inserted by Section 99 of the Crime and Disorder Act 1998, (ii) if any of these prisoners have been recalled to prison to serve the remainder of the requisite period, (iii) if any of these prisoners committed a further offence (a) between the date of their release and the end of the requisite period and (b) subsequently while on the scheme, and (iv) if he will place in the Library the procedure laid down by Ministers for the release of sex offenders on the Home Detention Curfew scheme. [118806]

  Mr. Boateng
  [holding answer 12 April 2000]The available information shows that, since the Home Detention Curfew scheme commenced in January 1999, 12 prisoners have been released in error before their Home Detention Curfew eligibility date. This figure includes the sex offender subject to the Sex Offenders Act 1997 referred to in the reply given to the right hon. Member by my right hon. Friend the Home Secretary on 6 April 2000,Official Report, columns 599-600W.

  I deeply regret all of these errors, but the right hon. Member should note that they represent only 0.06 per cent. of the total of 18,736 prisoners who have been released on the scheme as of 31 March 2000.

  All but one of these errors occurred before the introduction in October 1999 of the new improvements to the local inmate data system on which Home Detention Curfew eligibility and release dates are recorded by establishments. In five cases, the early releases were due to an error in manual calculation. In seven cases they were due to the prison's failure to amend the original eligibility date to take account of additional days awarded as a result of a prisoner breaching the prison disciplinary code.

  Only one of these prisoners was recalled to prison to serve the remainder of the requisite period. The Prison Service has not been notified of any further offence committed by any of these prisoners either between the date of their release and the end of the requisite period or subsequently while on the Home Detention Curfew scheme.

  The procedures for dealing with sex offenders subject to the Sex Offenders Act 1997 and other sex offenders are set out in paragraph 2.4 of the current Home Detention Curfew Prison Service Order 6700, issued in January 2000, a copy of which is available in the Library.

  Kosovan Refugees
  Miss McIntosh
  To ask the Secretary of State for the Home Department what representations he has received on reimbursing local authorities for the stay of Kosovan refugees. [119220]

  Mrs. Roche
  We have had a number of meetings and exchanges of correspondence with local authorities over the reimbursement of additional costs related to the care of refugees evacuated from Kosovo. Local authorities were consulted on the provisions of the Special Grant (the mechanism by which we make reimbursement payments) and all who put in their interim claims (for the period to 31 December 1999) by the due date have now been paid.

  Extradition
  Mr. Donaldson
  To ask the Secretary of State for the Home Department if he will list the legal causes upon which consent certificates were granted in extradition proceedings on account of(a) the extradited person making known an outstanding offence not known to the requesting authority, (b) the requesting authority discovering an offence which was not known to them at the time of the initial extradition request and (c) other reasons, in the past three years. [119715]

  Mr. Straw
  It is very rare to depart from the rule of specialty in respect of extradition proceedings. Formal certification to waive the rule is required only in relation to our extradition arrangements with Ireland. In the past three years I have signed four certificates. The details are as follows:specialty was waived to allow an individual to be questioned in relation to a suspected murder following return for possession of offensive weapons. The Irish authorities had insufficient information to include it with the other offences listed in the request for the individual's return;
  in the same case, a second specialty consent certificate was signed to allow the individual concerned to be proceeded against for murder, intent to rob, entering as a trespasser with intent to steal and false imprisonment:
  in another case, specialty was waived to allow for an individual to be proceeded against for sex offences following return in respect of larceny and fraud-related offences. The Irish authorities had insufficient information to include it with the other offences listed in the request for the individual's return; and
  specialty was waived to allow an individual to he proceeded against for a number of summary offences, following his return for causing death by dangerous driving. The summonses for these lesser offences were transmitted at the same time as the warrant for the offences of causing death by dangerous driving however they were not served on the individual for operational reasons.

  Figures relating to other countries are not recorded. It is estimated that there have been three or four specialty waivers in the past three years, but exact numbers, and the reasons for them, could be obtained only with disproportionate cost.

  Sopley Camp, New Forest
  Mr. Swayne
  To ask the Secretary of State for the Home Department what plans his Department has to make use of Sopley Camp in New Forest District. [119720]

  Mr. Straw
  [holding answer 19 April 2000]My Department holds no legal interest in Sopley Camp in New Forest District and has no plans to acquire it.

  Errol Flynn
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will make available to the public in the Public Record Office the intelligence files relating to Errol Flynn; and if he will make a statement. [120048]

  Mr. Straw
  It is long-standing Government policy neither to confirm nor deny whether the security or intelligence agencies hold records on any individual.

  The Security Service is systematically reviewing and where appropriate releasing historical records in accordance with the criteria agreed with the Public Records Office and endorsed by the Advisory Council. The Security Service has now reviewed and released all

  77W
  its files from its archive covering the period of the First World War. The second phase of the programme of release relates to the Security Service's records covering the Second World War. The third tranche of files from this period has just been made public. The Security Service will also be reviewing in due course its inter-war records in preparation for further releases. If there was a Security Service intelligence record relating to Errol Flynn it would be reviewed as part of this process.

  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, in a Written Answer on 12 February 1998, Official Report, column 324W, confirmed that the records of the Secret Intelligence Service are not released and set out the reasons for this.

  Animal Experiments
  Mr. Flynn
  To ask the Secretary of State for the Home Department how many tests were carried out using(a) animals and (b) mammals in each of the last five years; and what is the expected number for the next two years. [120292]

  Mr. Mike O'Brien
  Table 1 of the annual Statistics of Scientific Procedures on Living Animals Great Britain records the number of scientific procedures by species of animal and primary purpose of the procedure. Figures are given for the number of procedures using birds, reptiles, amphibians, fish, cephalopods and octopus vulgaris as well as the number using mammals, listed by species. Overall figures for procedures using animals and mammals are as follows:

  Year

  Number

  1998

  2,659,662

  1997

  2,635,969

  1996

  2,716,587

  1995

  2,709,631

  Figures for procedures using mammals are:

  Year

  Number

  1998

  2,381,712

  1997

  2,380,287

  1996

  2,450,138

  1995

  2,420,944

  Figures for 1999 are in the process of being collated and are due to be published in July.

  It is very difficult to project the number of animals to be used for the next two years. Numbers depend on the type of project licence applications that will be made to progress on current project licences. However, in general terms, there was a slight increase in the number of animals used during 1998 and it is possible that there could be another such increase in the 1999 figures. The main reason for this might be the increase in the use of genetically modified animals owing to current scientific advances. The downward trend in the use of conventional animals is expected to continue.
  78W
  We will continue to ensure that animals are used only where fully justified—where there are no valid alternatives and where the benefits outweigh the costs to the animals involved.

  Mr. Robertson
  To ask the Secretary of State for the Home Department what recent research he has commissioned on carrying out experiments on animals for the purposes of research into cosmetics; and if he will make a statement. [120215]

  Mr. Mike O'Brien
  The Home Office itself does not commission scientific procedures involving the use of protected animals. In applying the regulatory regime set out by the Animals (Scientific Procedures) Act 1986, it assesses applications submitted.

  In November 1997, we announced that no more animals would be used in this country for the testing of cosmetic products and ingredients, and we have not issued any new licences for such testing. We have no proposals to do so.

  David Rocky Bennett
  Dr. Gibson
  To ask the Secretary of State for the Home Department what plans he has to publish the police report to enable the inquest to be held into the death of David Rocky Bennett in the Norvic Clinic, Norwich. [120137]

  Mr. Charles Clarke
  The Coroner has requested a police report to assist him in carrying out the inquest and any decisions about releasing the contents of such a report will be for him to make. The police investigation is still continuing.

  Election Leaflets
  Mr. Hawkins
  To ask the Secretary of State for the Home Department if he will consult the Direct Marketing Association on the form of words in the leaflet accompanying electoral application forms at the same time as he consults it on the draft regulations covering full and edited electoral registers. [120135]

  Mr. Mike O'Brien
  We are committed to full consultation on both documents. The draft regulations will appear on the Home Office website as soon as they are ready. When the regulations have been finalised but before they come into effect we will consult on the wording of any publicity leaflet.

  Liquor Licensing
  Miss Kirkbride
  To ask the Secretary of State for the Home Department what plans he has to provide additional funding to local authorities in relation to licensing functions which at present are the responsibility of magistrates; and if he will make a statement. [120651]

  Mr. Straw
  The White Paper on the reform of the licensing laws, published on 10 April, makes clear that any new licensing regime should be resourced on the basis of full cost recovery from the fees and charges levied. We intend consulting closely with representatives of the local authorities about the resourcing of the system.

  Mr. Robertson
  To ask the Secretary of State for the Home Department if he will make a statement on his plans to transfer the responsibility of liquor licensing from magistrates' licensing committees to local authorities. [120220]
  79W
  Mr. Mike O'Brien
  The arguments for this change are set out in Chapter 11 of our White Paper, "Time For Reform", which was laid before Parliament on 10 April. We shall welcome and take into account comments on the White Paper in working up legislative proposals.

  Efficiency Unit
  Mr. Lidington
  To ask the Secretary of State for the Home Department if he will place in the Library the Cabinet Office Efficiency Unit Comprehensive Spending Review report submitted to the Home Office in 1998. [120275]

  Mr. Straw
  The Comprehensive Spending Review, which set out the Government's new public spending plans 1999–2000, was published in the White Paper 'Modern Public Services for Britain: Investing in Reform', in July 1998. This document is available in the Library.

  Challenging targets were set by this document for a number of key services including the Police and the Fire Service. These included efficiency targets and annual efficiency plans. The Home Office is also committed to meeting a number of efficiency targets as set out in the Public Service Agreements, 'Public Services for the Future: Modernisation, Reform, Accountability—Comprehensive Spending Review: Public Service Agreements 1999–2002'. This document is currently available in the Library.

  The Public Service Agreements and the Output and Performance Analysis for the Home Office are published in the annual Business Plan. The most recent Home Office Business Plan is also available in the Library.

  Electronic Tagging
  Mr. Lidington
  To ask the Secretary of State for the Home Department, pursuant to his answer to the right hon. Member for Maidstone and The Weald (Miss Widdecombe) of 17 April 2000,Official Report, columns 375-76W, if he will list the offences that are committed by prisoners who are at the lower end of the offending scale within the category of prisoners eligible for parole, and who will be released earlier than at present, under the provisions of the Criminal Justice and Court Services Bill, how many prisoners received sentences of four years or more for such offences in each of the last five years; and if he will make a statement. [120293]

  Mr. Straw
  There are no provisions in the Criminal Justice and Court Services Bill which require any prisoner to be released earlier than at present. The Bill makes no changes to the date on which any prisoner becomes eligible for release.

  The judgment as to whether a particular prisoner is regarded as being at the lower end of the offending scale within the category of prisoners eligible for parole cannot be determined simply by reference to the index offence. The details of the offence, the length of the sentence, the previous convictions of the prisoner, the impact on the victim (if any) and other factors will all be relevant. It is therefore not possible to list the offences that are committed by prisoners who are at the lower end of the offending scale, nor to list how many prisoners have received sentences of four years or more for such offences in each of the last five years.
  80W
  Equally, it is not possible at this stage to predict which of these prisoners might he granted parole following implementation of the Criminal Justice and Court Services Bill who would not otherwise have received parole. The use of the new licence conditions will be subject to piloting before full implementation. Evaluation of the pilots will include consideration of the impact of the new licence conditions on discretionary release decisions taken by the Parole Board and by the Prison Service, on behalf of the Secretary of State.

  Coroners Courts
  Mr. Robertson
  To ask the Secretary of State for the Home Department if he will make a statement regarding his review of the workings of coroners' courts. [120217]

  Mr. Straw
  The current Home Office review of death certification procedures includes consideration of a role for coroners in monitoring the proper procedures after death. The work of the review is to be made available later this year to Lord Laming's Inquiry into the issues arising from the trial of Dr. Shipman. There may consequently be a need in due course to review coroner arrangements more widely.

  Asylum Seekers (Torbay)
  Mr. Steen
  To ask the Secretary of State for the Home Department what extra provision he plans to make for accommodating asylum seekers in the Torbay Unitary Authority; how many asylum seekers he estimates will be placed in that area in the next 12 months; and if he will make a statement. [120342]

  Mr. Straw
  Since 3 April 2000, any local authority that signs a contract with the National Asylum Support Service (NASS) to provide accommodation for asylum seekers will submit an invoice for payment. The local authority will be reimbursed by the Home Office in accordance with the terms of the contract.

  Although Torbay is considered a potential cluster area to accommodate destitute asylum seekers and their families, there are no immediate plans to disperse asylum seekers to Torbay. The National Asylum Support Service is unable to consider dispersal to a particular area until there is suitable accommodation available.

  City Status
  Mr. David Stewart
  To ask the Secretary of State for the Home Department if he will make a statement on the timescale of the award of city status in the UK. [120225]

  Mr. Mike O'Brien
  Thirty-nine applications have been received for the Millennium grant of city status from towns in the United Kingdom. Each application is being considered on its individual merits and in the light of all information submitted in its support. No date has yet been set for the announcement of the new city.

WALES

  Regulation of Investigatory Powers Bill
  Mr. Cohen
  To ask the Secretary of State for Wales if he will make a statement on his policy in respect of the use his Department, its agencies and public bodies will
  81W
  make of the powers relating to the authorised obtaining of communications data in Part I, Chapter II of the Regulation of Investigatory Powers Bill once the Bill is enacted. [119520]

  Mr. Paul Murphy
  I refer my hon. Friend to the reply given by my right hon. Friend the Home Secretary on 19 April 2000,Official Report, column 509W.

  Knowledge-based Economy (Deeside)
  Mr. Barry Jones
  To ask the Secretary of State for Wales what recent discussions he has had with the First Secretary concerning the development of the knowledge-based economy in Deeside. [118186]

  Mr. Paul Murphy
  I have regular meetings with the First Secretary and discuss a wide range of issues including the knowledge economy.

  The Government and the National Assembly for Wales recognise the importance of putting to productive commercial use more of the knowledge and technologies that lie within our universities and colleges. For example, Wales leads the rest of the UK in introducing the Colleges and Businesses in Partnership scheme, under which businesses undertake strategically important developments with the benefit of access to relevant academic expertise from the further education sector.

  Artefacts
  Mr. Flynn
  To ask the Secretary of State for Wales what plans he has to seek the return to Wales of historical Welsh artefacts that are located elsewhere. [120294]

  Mr. Hanson
  I have no plans at present to seek the return of historical Welsh artefacts that are located elsewhere. However I am pleased that the people of Wales will have the opportunity over the next few months to see the Pennal letter which is on loan to the Owain Glyndwr Exhibition at the National Library of Wales in Aberystwyth.

INTERNATIONAL DEVELOPMENT

  Drought (Kenya and Ethiopia)
  Mr. Streeter
  To ask the Secretary of State for International Development what estimate she has made of the number of people affected by drought in(a) Kenya and (b) Ethiopia. [118818]

  Clare Short
  The World Food Programme estimate that 1.6 million people in Kenya and eight million in Ethiopia may require emergency food assistance owing to drought.

  Ethiopia
  Mr. Robertson
  To ask the Secretary of State for International Development what recent discussions she has had with her counterparts in European Union member states regarding the provision of food and other aid to Ethiopia; and if she will make a statement. [120216]

  Clare Short
  The EU is the largest single donor of food aid to Ethiopia—more than 400,000 metric tonnes (MT) has been pledged for this year; almost 47,000 MT has already been delivered to Djibouti. Britain contributes 17 per cent. of the cost of this food. My officials are in 82W
  close contact with EU officials to monitor the delivery and distribution of EU food and non-food assistance in the current crisis.

  Mr. Robertson
  To ask the Secretary of State for International Development if she will make a statement on how the food aid she is providing to Ethiopia will be distributed. [120213]

  Clare Short
  Our food aid is targeted at those populations most affected by recurrent rain failures, food insecurity, conflict and environmental degradation. This year we have provided over 22,000 metric tonnes of food aid bilaterally for vulnerable people in both the north and south of the country. This has been channelled through international non-governmental organisations who often work in partnership with the regional offices of the Disaster Prevention and Preparedness Commission.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for International Development for what purposes her Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120316]

  Clare Short
  I refer my hon. Friend to the written answer given by my hon. Friend the Under-Secretary to the hon. Member for Richmond Park (Dr. Tonge) on 6 May 1999,Official Report, column 463W.

CABINET OFFICE

  Websites
  Mr. Maclennan
  To ask the Minister for the Cabinet Office which companies have placed advertisements on websites funded by her Department, agencies and non-departmental public bodies; how much revenue has been generated in each financial year since 1997 from such advertisements; and to what use the revenue raised has been put. [118844]

  Mr. Stringer
  No revenue has been received for advertising or sponsorship on the Cabinet Office website or that of its current agency—Government Car and Despatch Agency (GCDA); or on that of the Central Office of Information (COI). The Cabinet Office has no executive NDPBs and the figures for its NDPBs are included in the Department's return. The Cabinet Office does not take advertising on its departmental website (www.cabinet-office.gov.uk) and currently has no plans to do so.

  Birth Certificates
  Mr. Caton
  To ask the Minister for the Cabinet Office for what purposes her Department requires a birth certificate to be furnished by(a) employees, (b) contractors, (c) those applying for employment and contracts and (d) other persons. [120323]

  Mr. Stringer
  A birth certificate or similar documentary evidence may be required to be furnished by any of the above for one or more of the following reasons:

  proof of identity;

  proof of eligibility under the Civil Service nationality rules;

  proof of age.

  Departmental Running Costs
  Mr. Lansley
  To ask the Minister for the Cabinet Office what meetings she has had with ministerial colleagues to discuss the increase in the overall running costs of Government Departments. [119955]

  Marjorie Mowlam
  I refer the right hon. Member to the answer given by my hon. Friend the Chief Secretary to the Treasury on 20 April 2000,Official Report, column 638W.

  Anti-drugs Strategy
  Mr. Lansley
  To ask the Minister for the Cabinet Office what progress the Government are making on their targets for reducing drug abuse by young people. [119975]

  Mr. Ian McCartney
  Young people are the main focus of the Government's anti-drug strategy. One of our key objectives is to reduce the incidence of drug misuse among the under-25s in order that they can achieve their full potential in society. The Cabinet Office, through the UK Anti Drugs Co-ordination Unit, is working with the relevant Government Departments to ensure that young people receive the help and advice they need to resist drug misuse.

  For example, £7.5 million from the Standards Fund is spent each year on drugs education in primary and secondary schools and new DfEE guidance on effective drugs education was published in November 1998. Almost nine out of 10 secondary schools now have anti-drugs policies in place. In April 1999 the Drugs Prevention Advisory Service was created to provide expert advice and support to Drug Action teams and in November 1999 the Drugs Prevention Board was established to help co-ordinate prevention work at a national level. In March a new joint initiative between UKADCU, Sport England and the Youth Justice Board was announced, using money seized from convicted drug dealers and traffickers to fund projects which aim to prevent vulnerable young people from becoming involved in drugs and crime.

  Progress against the targets will be measured through the British Crime Survey (16 to 24-year-olds) and the Office for National Statistics schools survey.

  Mr. Lansley
  To ask the Minister for the Cabinet Office what progress is being made by the Government in establishing a baseline figure from which progress in meeting its targets on reducing drug abuse among young people can be measured. [119958]

  Mr. Ian McCartney
  Baseline figures for the number of young people using drugs will be taken from the British Crime Survey and the new national survey of drug use among young teenagers, which started in September 1999. Baseline figures will be published in the UK Anti-Drug Co-ordinator's annual report in the summer.

  Monitoring Unit
  Mr. Lansley
  To ask the Minister for the Cabinet Office what the cost of the Government Information and Communications Service Media Monitoring Unit was in 1999–2000. [120013]
  84W
  Mr. Stringer
  £535,000, subject to final reconciliation of outstanding invoices. These costs are recovered from a large number of Departments out of their existing funds. The Cabinet Office contribution is £25,000.

  Rural Banking and Postal Services
  Mr. Lansley
  To ask the Minister for the Cabinet Office what representations she has received in relation to her role as Chair of the Ministerial Group on Rural Affairs concerning the loss of banking and postal services in rural areas. [119981]

  Marjorie Mowlam
  On the issue of banking I refer the hon. Member to the reply given by my hon. Friend the Economic Secretary on 20 March 2000,Official Report, column 445W. I have received a number of representations, which I have discussed with ministerial colleagues as appropriate.

  Centre for Management and Policy Studies
  Mr. Lansley
  To ask the Minister for the Cabinet Office what the cost or net revenue of the International Consultancy Group within the Centre for Management and Policy Studies is planned to be in the current financial year. [120023]

  Mr. Stringer
  In the financial year 2000–01, the International Consultancy Group (ICG) plans to generate a revenue of £2,300,000. The direct cost of the ICG for the same year is planned to be £1,961,000. The contribution to the costs of the Centre for Management and Policy Studies by the ICG will therefore be £339,000.

  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will make a statement on the role of the International Consultancy Group within the Centre for Management and Policy Studies. [120022]

  Mr. Stringer
  The International Consultancy Group (ICG) was established in 1996 to co-ordinate the Civil Service College's developing portfolio of international public service assignments. The current role of ICG, now within the Centre for Management and Policy Studies (CMPS), is to work internationally to help create sustainable capacity for the modernisation of public administration.

  ICG' s current priorities include the need to develop the skills and capacities of senior civil services in Accession States as they negotiate with and join the European Union; and technical assistance to emerging democracies and democracies in transition as they seek to strengthen central co-ordination and service delivery in public administration.

  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will make a statement on the work of the Centre for Management and Policy Studies. [119935]

  Mr. Stringer
  The Centre for Management and Policy Studies (CMPS), which was established in June 1999 and incorporates the Civil Service College, is integral to the process of modernising government. The CMPS works to ensure that the Civil Service is cultivating the right skills, culture and approaches to perform its task; to ensure that policy makers across government have access to the best research, evidence and international experience; and to help government to learn better from existing policies.
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  Examples of recent CMPS activity include programmes of joint seminars for Ministers and officials; developing a Resource Centre to support policy making, through the use of evidence and research; and comprehensive programmes of training reflecting all aspects of the Modernising Government agenda delivered by the Civil Service College.

  Departmental Targets
  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will(a) list the targets set by her Department and (b) make a statement on her Department's work to meet the targets. [119951]

  Mr. Stringer
  The targets set for my Department are all listed in the publication "Public Service Agreements 1999–2002" (CM 4181) which is available in the Library.

  The work carried out by my Department to meet these targets during 1999–2000 is described in Chapter 2 of the Cabinet Office's annual report to Parliament "The Government's Expenditure Plans 2000–01 to 2001–02" (CM 4618) which was laid before Parliament on 10 April 2000. This report also contains summary information of the performance of COI and my Department's only agency, the Government Car and Despatch Agency (GCDA).

  Full details of performance targets for COI, and its progress against them, can be found in COI's annual reports. The last report was published in July 1999 by the Stationery Office (ISBN: 0-10-273199-3).

  Similarly, full details of performance targets for GCDA, and its progress against these targets, can be found in GCDA's annual reports. The last report was also published in July 1999 by the Stationery Office (ISBN: 0-10-280899-6).

  Accommodation
  Mr. Lansley
  To ask the Minister for the Cabinet Office what the objectives are of the Cabinet Office new accommodation project. [120026]

  Mr. Stringer
  The objective of the new accommodation project is to accommodate the great majority of Cabinet Office staff in 70 Whitehall and one other central London building. The inter-connected Admiralty Arch, Ripley Building and Kirkland House will thus become the Department's second London home. Cabinet Office staff are currently accommodated in a number of central London buildings, some of which are on leases nearing expiry.

  The project is an integral part of Sir Richard Wilson's review of the Cabinet Office announced by my right hon. Friend the Prime Minister on 28 July 1998. As well as providing modern office accommodation, the project also brings into beneficial use three Government-owned buildings (two of which are Grade 1 listed) which had become empty and were in danger of falling into disrepair.

  Departmental Staff
  Mr. Lansley
  To ask the Minister for the Cabinet Office what proportion of Cabinet Office Staff at Grade 7 and above are(a) women, (b) from ethnic minorities and (c) disabled. [120027]
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  Mr. Stringer
  The proportion of Cabinet Office staff at Grade 7 and above who are(a) women is 29 per cent., (b) from ethnic minorities is 2.06 per cent and (c) disabled is 0.3 per cent. Information on whether staff are from an ethnic minority background or are disabled is collected on a voluntary basis.

  "Modernising Government"
  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will publish the departmental action plans for corporate human resource systems intended to follow up the "Modernising Government" White Paper. [120007]

  Mr. Ian McCartney
  The "Modernising Government" White Paper does not mention departmental action plans for corporate human resource systems.

  The White Paper noted that the Government would publish a substantial progress report on modernising the Civil Service later in the year. Sir Richard Wilson's report to the Prime Minister on Civil Service Reform was then published on 15 December 1999.

  A progress report covering the whole Civil Service Reform programme will be published in autumn 2000.

  Advertising
  Mr. Lansley
  To ask the Minister for the Cabinet Office how much money was spent on advertising by the Cabinet Office in(a) 1995–96, (b) 1996–97, (c) 1997–98, (d) 1998–99 and (e) 1999–2000. [119974]

  Mr. Stringer
  The Cabinet Office, including its Agencies, spending on advertising over those years is as follows:(a) £114,145 (b) £222,714 (c) £143,870 (d) £138,400 (e) £262,237.

  Expenditure for 1999–2000 does not include advertising by Cabinet Office/Action 2000 on co-ordinating the Millennium Bug Information programmes.

  Ministerial Group on Rural Affairs
  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will list the meetings she has had in pursuance of her role as Chair of the Ministerial Group on Rural Affairs. [119964]

  Marjorie Mowlam
  Rural issues are discussed during a great many of the meetings I have, including meetings of the Cabinet Committee on Rural Affairs (MISC 8), meetings with national organisations, such as the Council for the Preservation of Rural England and the Countryside Agency, meetings with officials, and meetings with individuals and local organisations in the course of visits.

  Civil Service
  Mr. Lansley
  To ask the Minister for the Cabinet Office if she will list the additional functions to be carried out consequent upon the planned increase in Civil Service staff in her Department between 1999–2000 and 2000–01. [120012]

  Mr. Stringer
  The planned average manpower figures for my Department and Agencies are detailed in table 6.4 (page 90) of the Cabinet Office's annual report to
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  Parliament (The Government's Expenditure Plans 2000–01 to 2001–02) (CM 4618) which was laid before Parliament on 10 April 2000

  1999–2000

  2000–01

  Change

  Percentage

  Cabinet Office

  1,401

  1,457

  56

  4.0

  Security Facilities Division

  426

  136

  -290

  -68.1

  Centre for Management and Policy Studies

  240

  284

  44

  18.3

  Government Car and Despatch Agency

  305

  307

  2

  0.7

  Total

  2,372

  2,184

  -188

  -7.9

  Central Office of Information

  361

  400

  39

  10.8

  The table in the annual report also included information on the Agencies that transferred to the new Office for Government Commerce (HM Treasury) on 1 April.

  The reasons for the planned 4 per cent. increase in manpower in the central groups of the Cabinet Office, include:
  The establishment of the new Office of the e-Envoy to co-ordinate the Government in leading the UK in its drive to be the best place in the world for e-commerce.
  The development of the Regulatory Reform Bill which was announced in the Queen's Speech and published on 18 April 2000.
  The need to find ways to reduce the regulatory burden on the public sector. Four key areas have been identified, Criminal Justice, Health (GPs), Education (Schools) and local authorities.
  A small additional resource to drive through the Civil Service Reform programme—in particular, a new Mobility Unit to broker interdepartmental moves. The new Senior Adviser on Diversity and Equal Opportunities. And support to the new House of Lords Appointments Commission.
  The development of excellence in public sector websites by developing and implementing the Government Website Guidelines under the E-Government Strategy. Including the development and management of the Citizen Portal programme.
  Additional policy development work arising from the publication of the E-government strategy and the need to embed its provisions and the development of e-business strategies across government and the wider public sector.
  Specialist project management teams to supervise a series of cross-cutting technical projects to be funded by the Capital Modernisation Fund. These projects include the development of gateway and portal facilities to support UK Online and to develop the range of services available and wider interoperability on the Government Secure Intranet business solutions, handling public inquiries and correspondence, IT services, etc.)
  More effective support to Cabinet Committee business, and to continue the Cabinet Committee business, and to continue the Cabinet Secretariat's traditional role of supporting policy development by Cabinet and Cabinet Committees.

  The reduction of 68 per cent. in the planned manpower at the Security Facilities Division is due to the continued run down of this former Agency. The major reduction is due to the contracting out of the Custody Services, the transfer of Assessment and Development Staff to the Home Office and a reduction in Special Services Group (Operations).
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  Between the years 1999–2000 and 2000–01 these show the following planned changes to be:

  The Centre for Management and Policy Studies (CMPS) was formed in 1999–2000 and its manpower was only planned to be fully established with the merger of the Civil Service College from 1 April 2000. The new functions provided by CMPS from this year will include:
  Ministers' Programmes: the design and delivery of induction and development opportunities for Ministers.
  Corporate Development Strategy: the creation and implementation of a strategy for the development of senior civil servants, with an expanded range of programmes.
  Departmental Peer Review: reviews of Government departments by external teams of departments.
  Policy Seminars: the design and delivery of joint seminars with Ministers and senior officials to examine policy issues.
  Policy Evaluation: the identification and promotion of best practice in the construction, development and implementation of policy.
  Policy Research: the design and production of 'Knowledge Pools', drawing together the evidence on which policy is based from diverse sources.
  Policy Resource Centre: delivering an entry point to a government wide knowledge centre drawing upon departmental resources.
  Knowledge Network project; the design and delivery of a system to deliver fast, accurate flows of knowledge, facts and figures on policy across government.

  The number of staff are increasing at the Central Office of Information due to significant increases in the volume of work. The numbers of staff reflect the increased business levels over the last two years. Manpower resources have been trailing behind this increase and the forecast for 2000–01 therefore assumes a similar level of increased business.

  Ministerial Red Boxes
  Mr. Gray
  To ask the Minister for the Cabinet Office when she last reviewed the guidance concerning the security of ministerial red boxes on public transport. [120748]

  Mr. Stringer
  Ministers are given security briefings which include guidance on the secure handling of all sensitive Government information. All guidance is kept under continuous review.

  Hotel and Catering Industry
  Mr. Fearn
  To ask the Minister for the Cabinet Office when Lord Haskins' report on regulations in the hotel and catering industry will be published. [120379]
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  Mr. Stringer
  The Better Regulation Task Force's report on regulation and enforcement in the hotel and restaurant sector will be published in June.

EDUCATION AND EMPLOYMENT

  School Spending (Cumbria)
  Dr. Jack Cunningham
  To ask the Secretary. of State for Education and Employment what estimate he has made of spending per pupil in real terms in(a) primary schools and (b) secondary schools in Cumbria in (i) 1997–98, (ii) 1998–99 and (iii) 1999–2000; and if he will make a statement. [115068]

  Ms Estelle Morris
  [holding answer 20 March 2000]: The following table shows the education standard spending assessment (SSA) per primary and secondary pupil and the DfEE special and specific grant allocations per primary and secondary pupil for the years 1997–98 to 2000–01 for Cumbria Local Education Authority. The special and specific grant totals include the money for schools announced in the Budget on 21 March.

  £

  Standard Spending Assessment

  Special and Specific Grants

  per primary pupil

  per secondary pupil

  per primary pupil

  per secondary pupil

  1997–98

  2,022

  2,644

  36

  29

  1998–99

  2,133

  2,774

  84

  69

  1999–2000

  2,255

  2,887

  143

  98

  2000–01

  2,357

  3,032

  275

  209

  Asylum Seekers
  Mr. Evans
  To ask the Secretary of State for Education and Employment how much his Department spent directly or indirectly on asylum seekers in(a) 1995, (b) 1996, (c) 1997, (d) 1998 and (e) 1999; and what estimate has been made of expenditure in the year 2000. [119486]

  Ms Hodge
  [holding answer 17 April 2000]: The Home Office will be responding to this Question on behalf of Government as a whole, using information that we have provided to them.

  Schools Funding
  Dr. Cable
  To ask the Secretary of State for Education and Employment if he will list the separate ringfenced schemes for funding schools directly from his Department. [119744]

  Ms Estelle Morris
  Most ringfenced funding, including the Standards Fund and funding for capital work, is paid via Local Education Authorities, not directly to individual maintained schools. Non-maintained special schools and voluntary-aided schools do receive some capital funding direct from the Department. For 2000–2001, around 75 per cent. of the £1.6 billion expenditure supported 90W
  through the Standards Fund must be devolved to schools. In addition, schools will receive a share of the £290 million funding increase announced in the Budget and of the £50 million for general support of school budgets. These additional amounts will be paid to Local Education Authorities but must be fully passed on to schools.

  Special Educational Needs
  Mr. Boswell
  To ask the Secretary of State for Education and Employment what the current average cost is of preparing a statement of special educational needs. [119323]

  Jacqui Smith
  [holding answer 19 April 2000]: Information on the cost of preparing a statement of special educational needs is not collected centrally. The Code of Practice on the Identification and Assessment of Special Educational Needs sets out that LEAs must identify and make a statutory assessment of those children for whom they are responsible who have special educational needs and who may need a statement. However, LEAs and schools do not account separately for special educational provision, including specific information on preparation of statements. The differential between local practices means any estimated costs would be based on assumptions and cost apportionments.

  St. Gregory's, Cheltenham
  Mr. Nigel Jones
  To ask the Secretary of State for Education and Employment when he expects his Department to make a decision on the disposal of school property at St. Gregory's in Cheltenham. [120038]

  Jacqui Smith
  I am considering this case and expect to be able to make a decision shortly.

  Age Diversity in Employment
  Ms Perham
  To ask the Secretary of State for Education and Employment when he plans to publish the preliminary report on monitoring the effectiveness of the Code of Practice on Age Diversity in Employment. [119844]

  Ms Hodge
  We will shortly be receiving the results from the second wave of research which was carried out earlier this year. We will be publishing the interim findings of the evaluation in early June.

  Teenage Girls Report
  Mr. Lansley
  To ask the Secretary of State for Education and Employment when the Women's Unit will publish its report on teenage girls. [120010]

  Ms Jowell
  [holding answer 20 April 2000): I refer the hon. Member to my answer of 10 April 2000, Official Report, column 41W.

  Nursery Education
  Mr. Coaker
  To ask the Secretary of State for Education and Employment what plans he has to increase the funding of education for three-year-olds in areas of need outside the inner cities. [120122]
  91W
  Ms Hodge
  Between September 1999 and April 2001 we have allocated £140 million to provide an additional 83,000 free early education places for three-year-olds, on the basis of each Local Education Authority's position on the Government's Index of Local Deprivation. A further £250 million has been allocated for 2001–02 to take the total number of new free places created to 190,000 by March 2002.

  The methodology that will be used to allocate these places in 2001–02 will be decided once we have had an opportunity to evaluate the progress of the scheme across all authorities this year. However, those authorities who have so far received low levels of funding are likely to see increases in their allocation in 2001–02.

  Mr. Coaker
  To ask the Secretary of State for Education and Employment what assessment he has made of the availability of funding from his Department for three-year-olds in(a) the maintained and (b) the voluntary sectors. [120138]

  Ms Hodge
  The Government are making available grants of £390 million over three years (from September 1999–March 2002) to almost double the number of three-year-olds in free early education places. In 1999–2000, the first tranche of Local Education Authorities which benefited from £40 million of this new money funded over 80 per cent. of the new free places in the private, voluntary and independent sectors.

  Prior to this new funding being available, as of January 1999, 37 per cent. of three-year-olds were receiving free early education in the maintained sector funded from each Local Education Authority's Standard Spending Assessment budget.

  Children outside Mainstream Education
  Dr. Cable
  To ask the Secretary of State for Education and Employment how he intends to make further use of information and communication technologies in the education of children unable to attend mainstream schooling through(a) disability, (b) illness, (c) behavioural problems and (d) neglect. [120196]

  Jacqui Smith
  Information and communication technologies (ICT) can facilitate effective communication and give access to resources regardless of the learners' location and individual needs. The Government are committed to exploiting the benefits and advantages of ICT in developing learning in a range of settings, as described.

  The developing National Grid for Learning (NGfL) has a specific remit to encourage the inclusion of all pupils—in particular, those with Special Educational Needs (SEN), the disadvantaged, and any children who, for whatever reason, are not being educated at school. Recent developments include the new Inclusion website which is currently focusing on SEN and provides teachers, parents and other professionals with a catalogue of on-line resources.

  My Department encourages Local Education Authorities to use ICT in supporting sick children. We have also made £95,000 available in 1999–2000 to provide lap tops for hospital and home tuition services.
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  Using the Standards Fund, a number of LEAs are piloting innovative ICT projects to support inclusion and reduce exclusions and the incidence of difficult behaviour. We will be evaluating these projects and will aim to disseminate good and best practice arising from them.

  The Department is sponsoring a pilot project (Notschoolnet) on the use of ICT to support groups of pupils excluded from school. The pilot includes the provision of ICT equipment and facilitators providing on-line support for students at home or other locations. We have also funded major trials of digital broadcast material, which have been taking place in schools and with independent learners over the last few months.

  Dr. Cable
  To ask the Secretary of State for Education and Employment if he will consult internet companies about providing educational assistance for children unable to take part in mainstream education. [120199]

  Jacqui Smith
  The Government are investing over £1.7 billion in their information and communications technology (ICT). My Department and the British Educational Communications and Technology agency (BECTa) are in regular contact with all those involved in the provision of ICT education materials.

  We have issued a challenge document, "Open for Learning, Open for Business", which calls for a national effort to develop content for the Grid under a framework offering access and education resources for both mainstream and special schools. On 10 April we held a major conference which focused on the ICT content (software) industry to discuss the way forward with companies who are linked to the National Grid for Learning.

  New Deal for Schools
  Mr. Hesford
  To ask the Secretary of State for Education and Employment how many schools will benefit from the New Deal for Schools in 2000–01. [120084]

  Jacqui Smith
  Over 6,000 schools will benefit from the £600 million of New Deal for Schools funding announced on 11 April. We would expect most of these schools to benefit in 2000–01.

  Grant-maintained Schools
  Mr. Clappison
  To ask the Secretary of State for Education and Employment how many(a) teachers and (b) classroom support staff have been employed by (i) former grant-maintained primary schools and (ii) former grant-maintained secondary schools in each of the last five years. [120258]

  Ms Estelle Morris
  The available information on numbers of teaching staff and educational support staff in former grant-maintained primary and secondary schools is shown in the table.

  The Department is currently collecting information on teaching and education support staff in maintained primary and secondary schools for January 2000. These data will be published in a statistical volume in September.
  93W

  Number of schools, full-time equivalent1 number of teachers and education support staff for grant-maintained primary and secondary schools for 1995–99 in England

  Position as at January

  Grant maintained primary

  Grant maintained secondary

  Number of schools

  Number of teachers

  Number of education support staff2

  Number of schools

  Number of teachers

  Number of education support staff2

  1999

  511

  6,141.0

  2,100.7

  668

  39,270.9

  6,003.2

  1998

  508

  6,017.2

  1,925.8

  667

  38,759.4

  5,697.4

  1997

  483

  5,722.4

  1,689.1

  652

  37,527.1

  5,210.2

  1996

  448

  5,266.4

  1,434.2

  642

  36,175.1

  4,725.6

  1995

  410

  4,824.5

  1,173.7

  622

  34,896.2

  4,286.6

  1 Includes full-time and full-time equivalent of part-time staff

  2 Includes nursery assistants, special needs support staff, librarians and technicians

  Education Spending (Stoke-on-Trent)
  Mr. Stevenson
  To ask the Secretary of State for Education and Employment what was the(a) standard spending assessment and (b) total estimated spending per head in Stoke-on-Trent local education authority in each of the years 1998–99 and 1999–2000; and what estimate he has made of comparable figures for 2000–01. [120397]

  Ms Estelle Morris
  The table shows the total education standard spending assessment (SSA), the education standard spending assessment (SSA) per pupil and the DfEE special and specific grant allocations per pupil for the years requested for Stoke-on-Trent local education authority. The special and specific grant totals includes the money for schools announced in the Budget on 21 March.

  Total SSA (£ million)

  SSA per pupil (£)

  Special and specific grant per pupil (£)

  1998–99

  95.93

  2,437

  68

  1999–2000

  99.48

  2,560

  122

  2000–01

  104.17

  2,703

  241

  Ofsted Inspections
  Mr. Winnick
  To ask the Secretary of State for Education and Employment (1) what measures he has in place to reduce the stress to teachers caused by Ofsted inspections; and if he will make a statement; [120221]

  (2) what complaints his Department has received in the last two years from (a) unions and (b) individuals about Ofsted inspections; what response has been made by Ofsted to these complaints; and what changes in inspection practices have been made as a result; [120222]

  (3) what lessons have been learned by Ofsted regarding the suicide of Ms Pamela Relf; and if he will make a statement. [120223]

  Ms Estelle Morris
  These are matters relating to the responsibilities of Her Majesty's Chief Inspector of Schools, Chris Woodhead. I have asked him to write to my hon. Friend and to place a copy of his letter in the Library.

AGRICULTURE, FISHERIES AND FOOD

  Abattoirs
  Sir Peter Emery
  To ask the Minister of Agriculture, Fisheries and Food what measures he is taking to assist small and specialist abattoirs in Devon. [118501]

  Ms Stuart
  As responsibility for food safety and standards matters has now passed to the Food Standards Agency (FSA) which reports to Parliament through Health Ministers, I have been asked to reply.

  I am advised by the Food Standards Agency that it recognises the difficulties faced by the meat industry, especially small businesses, as a result of increased veterinary supervision levels and the associated costs. Equally, it understands very well the importance of local slaughtering facilities and it is certainly not its intention to put out of business smaller operations, particularly those specialising in a high quality product.

  A number of measures have been put in place to help small and medium sized abattoirs. These include the freezing of Meat Hygiene Service hourly rates in 1999–2000 at 1998–99 levels (worth £7 million) and restricting the increase in 2000–01 to no more than the rate of inflation (2.2 per cent.), and the deferment of charges for SRM controls for a further two years until 2002–03 at the earliest (worth £44 million). Following advice received from the European Commission, the Meat Hygiene Service is reviewing its levels of inspection in individual low throughput (permanently derogated) premises. In the meantime, no increases in veterinary supervision levels in such premises have been made since the Commission's advice was received last May, nor will there be any changes made until that review has been completed.

  We have accepted, or are giving further consideration to, 32 of the 35 recommendations of the Meat Industry Red Tape Working Group and, as my right hon. Friend the Prime Minister confirmed at the agriculture summit on 30 March, the Government are pressing on urgently with their implementation. Steps are being taken to secure changes in the European Union meat hygiene and charging legislation in line with the Group's recommendations but this will inevitably take time to achieve. In the meantime, a small independent task force has been set up, as recommended by the Group, to explore all the issues surrounding a "capping" approach to meat

  95W
  hygiene inspection charges for low volume abattoirs. The task force, chaired by Colin Maclean, former Director-General of the Meat and Livestock Commission, held its first meeting on 6 April and is due to report by 31 May.

  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what representations he has recently received concerning the future of small abattoirs; and what action he is taking to ensure their survival. [116251]

  Ms Stuart
  As responsibility for food safety and standards matters has now passed to the Food Standards Agency (FSA) which reports to Parliament through Health Ministers, I have been asked to reply.

  Since publication of the Government's response to the report of the Meat Industry Red Tape Working Group, the Minister of Agriculture, Fisheries and Food and, from 1 April, the Food Standards Agency, has received a number of representations from a wide variety of sources about the future of small abattoirs. The Minister of Agriculture, Fisheries and Food recently replied to an open letter from 136 organisations about the impact of meat inspection charges on small and medium sized abattoirs, copies of which are available in the Library.

  I am advised that the Food Standards Agency recognises the difficulties faced by the meat industry, especially small businesses, as a result of increased veterinary supervision levels and the associated costs. We also understand the importance of local slaughtering facilities.

  A number of measures have been put in place to help small and medium sized abattoirs. These include the freezing of Meat Hygiene Service (MHS) hourly rates in 1999–2000 at 1998–99 levels (worth £7 million) and restricting the increase in 2000–01 to 2.2 per cent., in line with the rate of inflation and the commitment made by us last year. Charges for enforcement of specified risk Material controls have been deferred until 2002–03 at the earliest (worth £22 million). Following advice received from the European Commission, the MHS is reviewing its levels of inspection in individual low throughput (permanently derogated) premises. No increases in veterinary supervision levels in such premises have been made since the Commission's advice was received last May. No changes will be made until that review has been completed.

  In addition, we have adopted, or are giving further consideration to, 32 of the 35 recommendations of the Meat Industry Red Tape Working Group. We are pressing on with their implementation as was confirmed by my right hon. Friend the Prime Minister at the agriculture summit on 30 March. Steps are being taken to secure changes in the European Union meat hygiene and charging legislation in line with the Group's recommendations and discussions are underway in Brussels. The Food Standards Agency has also acted on the Group's recommendation and has set up a small task force to explore all the issues surrounding a 'capping' approach to meat hygiene inspection charges for low volume abattoirs. Its membership and working arrangements were announced in a Food Standards Agency press release on 11 April, copies of which are available in the Library.
  96W
  Mr. Luff
  To ask the Minister of Agriculture, Fisheries and Food for what reason the "Action Plan for Farming", published on 30 March, contains no proposals to assist the re-establishment of abattoir facilities in areas that have lost such facilities; and if he will make a statement. [117697]

  Ms Quin
  Assistance for the re-establishment of abattoir facilities was not included in the "Action Plan for Farming" published on 30 March because the Government have already put in place a number of measures to help this sector.

  Veterinary supervision levels in low throughput (permanently derogated) abattoirs have been frozen at May 1999 levels pending completion of a review of supervision levels in such plants following advice from the Commission (published by the Government in October 1999). The introduction of charges for cattle passports and MHS enforcement of SRM controls has been deferred until at least 2002–03 (worth £44m). Meat inspection charges for 1999–2000 were capped at 1998–99 levels (worth £7m) and will rise by only 2.2 per cent. in 2000–01, in line with the rate of inflation as previously announced by my right hon. Friend the Minister. As recommended by the Meat Industry Red Tape Working Group (the Pooley Report) a small task force has been set to urgently explore alternative ways of recovering the costs of inspection work, within the framework of Community law. This will report and make recommendations to the Food Standards Agency who now have responsibility for meat hygiene.

  Beef
  Mr. Pickthall
  To ask the Minister of Agriculture, Fisheries and Food if he will set a date for the lifting of the ban on over-thirty-month cattle entering the food chain where they are subject to full traceability. [118667]

  Ms Stuart
  [holding answer 11 April 2000]: I have been asked to reply.

  The ban on over-thirty-month cattle entering the food chain is one of a number of BSE controls to be reviewed by the Food Standards Agency (FSA). This was announced by my right hon. Friend the Prime Minister at the agriculture summit on 30 March. The FSA has been asked to consider the controls to ensure that they adequately protect the consumer, and their proportionality to the assessed risk. The FSA will submit a published report to UK Health and Agriculture Ministers by the end of October or as soon as possible afterwards taking account of the report of the BSE Inquiry. Ministers will then consider whether there should be any change in the ban on over-thirty-month cattle entering the food chain in the light of the FSA's report.

  Inverdale Gene
  Mrs. Fiona Jones
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the risks from the importation of the Inverdale Gene to the UK, with particular reference to its possible role in causing infertility [118199]
  97W
  Ms Quin
  No formal assessment has been made. The hazard of infertility associated with the Inverdale gene is well understood. It is for the sheep breeding industry to assess whether the benefits of introducing the gene into UK breeding flocks through the importation of semen or animals outweigh the risks of infertility.

  Livestock Compensatory Allowances
  Mr. Llwyd
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received on the question of modulation in relation to livestock compensatory allowances; and if he will make a statement. [118401]

  Ms Quin
  The only livestock compensatory allowances paid in the UK are paid under the Hill Livestock Compensatory Allowance Schemes. These are to be replaced by new schemes under the EC Rural Development Regulation. As such they would not be subject to modulation and I have received no representations on the issue.

  Sheep Farming
  Mr. Paul Marsden
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the effects on sheep farming of(a) the Groundwater Directive, (b) abattoir closures and (c) the costs of the proposed identification scheme. [118332]

  Ms Quin
  The information is as follows:(a) Under the Groundwater Regulations 1998, which implement the Groundwater Directive, sheep farmers wishing to dispose of any listed substance (including sheep dip containing such substances) to land will normally require a groundwater authorisation from the Environment Agency. Under the agriculture strategy package announced recently it is proposed to restrict charges to a single application fee (currently £92) for the first four-year period of an authorisation, rather than for farmers to have also to pay an annual charge. This will result in an estimated saving for sheep farmers of £428 at 1999 prices in respect of the annual charge.

  (b) None. There remains considerable over-capacity in the mainstream sheep-slaughtering sector and as a result there is unlikely to be any measurable effect of abattoir closures on the majority of producers.

  (c) We estimate that the initial cost of tagging all sheep in Great Britain will be a maximum of £12 million; in subsequent years this falls to £6 million. For around 80 per cent. of sheep holdings in Great Britain the cost of tags for the entire flock will be less than £200 in the first year.

  Live Animal Exports
  Sir Richard Body
  To ask the Minister of Agriculture, Fisheries and Food which member states of the European Union have introduced legislation to give effect to the Live Transport Directive 95/29/EC. [118589]

  Mr. Morley
  Information made available by the European Commission, whose responsibility it is to ensure that EU legislation is implemented, indicates that all member states have implemented Council directive 95/29/EC amending directive 91/628/EC on the protection of animals during transport.

  Lavender Industry
  Mr. Brake
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on support for the UK lavender growing industry. [118590]

  Ms Quin
  The Ministry supports non-food crops through its Agri-Industrial Materials Branch disseminating information, organising events and supporting research and development, although no specific activity relating to lavender is currently taking place.

  Organic Food
  Mr. Tyler
  To ask the Minister of Agriculture, Fisheries and Food what recent research he has carried out on the impact on biodiversity of(a) organic and (b) conventional farming methods. [118570]

  Ms Quin
  A number of comparative studies have been funded by the Ministry. A desk study was completed in 1998 which compared the effects on biodiversity of conventional, organic and integrated farming systems. This summarised the results of previous field-based research, and concluded that organic regimes showed an overall benefit for biodiversity at the farm level. A new field-based project started in 1999 to determine to what extent any biodiversity differences between organic and conventional farms are caused by differences in non-crop habitats.

  Other recent research includes projects to assess the impact of conventional agriculture on farmland bird populations, the effects of pesticides on non-target species (including indirect effects on birds), the causes of changes on botanical diversity on farmland, and the causes of changes in brown hare populations. The Ministry is also co-funding the Countryside Survey 2000 project which focuses on an assessment of the extent of changes in botanical diversity on farmland.

  Food Stores
  Mr. Cox
  To ask the Minister of Agriculture, Fisheries and Food what foods and in what quantities were in storage within the European Union on 1 March. [118832]

  Ms Quin
  The following foods and quantities were in storage within the European Union on 1 March 2000.

  Amount (000 tonnes)

  Beef

  25

  Wheat

  4,106

  Barley

  5,021

  Maize

  59

  Rice

  495

  Rye

  3,184

  Butter

  57

  Skimmed Milk Powder

  157

  Olive Oil

  25

  Wine

  193

  Research and Development
  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food what was his Department's budget for Research and Development in(a) 1998–99 and (b) 1999–2000. [119007]
  99W
  Ms Quin
  The figures were(a) £139.8 million; and (b) £139.3 million.

  Land Holding Statistics
  Mr. Gordon Prentice
  To ask the Minister of Agriculture, Fisheries and Food how many landowners in England and Wales have land holdings in excess of(a) 25,000 acres, (b) 20,000 acres, (c) 15,000 acres and (d) 10,000 acres. [119038]

  Ms Quin
  This information is not available. MAFF holds information on the land area related to agricultural holdings.

  Spongiform Encephalopathies
  Dr. Lynne Jones
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of recent studies on maternal transmission(a) of the BSE infective agent in cattle and (b) of related infections in other mammalian species. [119035]

  Ms Quin
  MAFF have funded a large-scale experiment to assess whether embryos collected from cows in the late stages of BSE infection and then transplanted into TSE-free recipient cows from New Zealand, go on to develop BSE later in life. Offspring will be observed for seven years for the development of BSE. The study is due to end next year but so far none of the offspring have shown any signs of BSE. This provides experimental evidence to indicate that BSE is not transmitted to embryos by the maternal route.

  Similar studies have been performed in sheep infected with scrapie but results have been difficult to interpret because of the complex genetic factors that influence scrapie susceptibility in sheep. Epidemiological work is ongoing to investigate the natural routes of transmission of scrapie, however, it is too early to make an assessment of the results obtained so far.

  EU Farming Regulations
  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food what recent discussions he has had with his European counterparts on ensuring uniformity of farming regulations in the EU. [118943]

  Ms Quin
  My right hon. Friend the Minister and I regularly meet colleagues from the other member states and the Commission to discuss agricultural legislation. Most recently I attended the Agriculture Council on 17 April to discuss a number of issues including Beef Labelling. It is the responsibility of the Commission to ensure that member states meet their obligations to administer EU legislation properly but that does not necessarily in all cases require complete uniformity as there is scope to apply the principle of subsidiarity where appropriate.

  Milk Imports
  Mr. Robertson
  To ask the Minister of Agriculture, Fisheries and Food what was the(a) quantity and (b) value of milk imported into the UK from non-EU countries in the last three years for which figures are available; what tariff such milk attracts; and if he will make a statement. [119656]

  Ms Quin
  The information requested is set out in the table:

  Imports of milk from third countries

  Volume (tonnes)

  Value (£000)

  1997

  2.1

  6.3

  1998

  0

  0

  1999

  6.0

  2.7

  Source:

  HM Customs and Excise

  The import duty paid on imports of skimmed milk in January and February 1997 was 18.9 ecus per 100 kg. The import duty paid on imports of whole milk in October 1997 was 29.1 ecus per 100 kg. The import duties paid in July 1999 on imports of skimmed milk and whole milk were 15.1 euros per 100 kg and 24.8 euros per 100 kg, respectively. These are the only months in the years concerned in which imports were recorded.

  Correspondence
  Mr. Lidington
  To ask the Minister of Agriculture, Fisheries and Food what target he has set for Ministers in his Department to reply to letters from hon. Members; in what proportion of cases since 1 October 1999 he has met those targets; in how many cases it has taken his Department(a) more than eight weeks and (b) more than 16 weeks to reply to letters from hon. Members; and if he will make a statement. [118933]

  Mr. Nick Brown
  [holding answer 13 April 2000]: Ministers in my Department aim to answer letters from hon. Members within 15 working days. Between 1 October 1999 and 31 March 2000, Ministers in my Department answered 3,098 letters from hon. Members, of which 987 (32 per cent.) were answered within 15 working days. A total of 562 letters took over eight weeks to answer: of these, 27 took longer than 16 weeks. In 1999 as a whole Ministers in my Department answered 60 per cent. of letters from hon. Members within 15 days.

  The number of staff processing correspondence has been increased to improve our performance in responding to letters from hon. Members.

  Sir Brian Mawhinney
  To ask the Minister of Agriculture, Fisheries and Food when the right hon. Member for North-West Cambridgeshire will receive a reply to his letter of 8 March on behalf of his constituent, Miss Marvin. [119747]

  Mr. Nick Brown
  [holding answer 19 April 2000]: I replied to the right hon. Member for North-West Cambridgeshire on 19 April.

Preamble
Reassembling after the Easter Recess, the House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Bradford.

Lord Gueterbock
Anthony Fitzhardinge Lord Berkeley, having been created Baron Gueterbock, of Cranford in the London Borough of Hillingdon, for life, took the oath.
Lord Lyttelton of Aldershot
Thomas Orlando Viscount Chandos, having been created Baron Lyttelton of Aldershot, of Aldershot in the County of Hampshire, for life, made the solemn affirmation.

Tiger Conservation
2.37 p.m.
Lord Hardy of Wathasked Her Majesty's Government:
What action they are taking in the international community to ensure the survival of the tiger both in India and in Sumatra.
Baroness Farrington of Ribbleton: My Lords, last year the Deputy Prime Minister announced government funding of £50,000 for tiger conservation which went to projects in India to support direct action against poaching and illegal trade in tigers, and to Indonesia to help to save the Sumatran tiger. We plan to match this in the coming year in support of tiger conservation projects, bringing spending on tigers over three years to over £150,000.
Lord Hardy of Wath: My Lords, I thank my noble friend the Minister for that reply which appears to confirm that the Government remain in strong support of the Convention on International Trade in Endangered Species. However, will the Government join in efforts to persuade the governments of Asian countries to advise their populations that tiger parts have no value as aphrodisiacs?
Baroness Farrington of Ribbleton: My Lords, this January the United Kingdom became the first non-range state to join the Indian-based Global Tiger Forum. We hope that this will encourage other countries to join. As chair of the Convention on International Trade in Endangered Species Standing Committee, the UK earlier this year led high-level missions to tiger-range and consumer countries. My noble friend may be pleased to hear that through DNA testing it is now possible to trace where tiger parts have
922
been used illicitly. My noble friend will, of course, be aware that those who may in the past have felt the need to rely on tiger parts may now in certain circumstances benefit from Viagra prescribed through the National Health Service.
Baroness Gardner of Parkes: My Lords, have any of the tigers in the areas we are discussing been bred in captivity? I have read that tigers from zoos in certain countries have been reintroduced into the wild. Has the UK been involved in any such project?
Baroness Farrington of Ribbleton: My Lords, London Zoo is involved in such a project. We seek to do everything we can to help in this matter. At best, between 5,000 and 7,000 tigers remain in the wild, of which between 2,000 and 3,000 are in India. Any appropriate tiger project will receive government support.

Prisons: Female Population
2.40 p.m.
Lord Hurd of Westwellasked Her Majesty's Government:
How many women were in prison in England and Wales in March 1996; how many in March 2000; and what plans they have to forestall a further increase.
Lord Bach: My Lords, in March 1996 the number of women in prison in England and Wales was 2,120 In March 2000 the figure was 3,392. The size of t he female prison population depends on the individual sentencing decisions of the courts, in which the Government cannot, of course, intervene. However, the Government take seriously the needs of women in the criminal justice system, and keep them under review in the context of sentencing policy and when considering new initiatives.
Lord Hurd of Westwell: My Lords, I thank the Minister for that reply, but is not this a thoroughly dismal increase? Does he agree that there is something particularly sad and destructive about a women's prison with its air of families destroyed and children abandoned? Instead of spending millions of pounds on two new prisons for women which are planned For England and Wales, will the Government look again at this whole subject in the light of the fresh ideas set out in Professor Wedderburn's recent report and focus in particular on the possibility of devising effective means of punishment outside prison which would avoid some of these disastrous consequences?
Lord Bach: My Lords, we welcome the Prison Reform Trust's report, Justice for Women and the Need for Reform as a major contribution to the thinking on the treatment of women in the criminal justice system. As the noble Lord will know, the Prison Service and

923
the Home Office supplied the trust inquiry with data about women in the criminal justice system and information on regimes in prison.
The noble Lord will know, too, that a working group has been established to develop a strategy in regard to the treatment of women in prison which will provide an opportunity for wide consultation on this issue. Its next meeting will be on the 15th of this month.
The serious recommendations made in the report will be considered extremely carefully by the Government. The noble Lord would not expect me at this stage—it being less than a month since the report was first published—to say which proposals may or may not be accepted. The noble Lord's record in this field is extremely well known and his remarks are taken very seriously.
Baroness Masham of Ilton: My Lords, how many girls under the age of 17—particularly 15 and 16 yearolds—are still in prison? Does not the Minister agree that they would be better off in full-time education rather than learning more criminal skills before they come out of prison?
Lord Bach: My Lords, I cannot give the noble Baroness the exact figure. She will know that at present females under the age of 18 are held in a number of young offenders' institutions. But, under the detention and training order, from April of this year we have begun to place them in non-Prison Service accommodation. That is a step which I believe the noble Baroness and the whole House will consider to be progress.
Lord Dholakia: My Lords, does the Minister accept that the proportion of women with no or few previous convictions who are sentenced to imprisonment is higher than for men in similar situations? Does he further accept that most women do not commit serious violent crimes and that more than 8,000 children are affected by the number of women in prison today? Will he look back at the 1991 report of the Probation Inspectorate which stated that women would benefit more from intensive probation and community service orders rather than imprisonment?
Lord Bach: My Lords, it is important that we bear in mind that sentencing women to prison presents particular problems, largely to do with children. A large proportion of women sentenced to prison are the mothers of often very young children, so the noble Lord makes a good point. However, there are offences that women commit, alas, which are dangerous to the public, even if they are not violent offences. For example, a large part of the increase in the offences for which women are sent to prison is connected with drugs. That does not mean possession of drugs but the selling of drugs, dealing in drugs and, sometimes, the importation of drugs. There can often be some mitigation for women—they can, for instance, be
924
under pressure from male partners—but these are serious offences which are a danger to other women and to other people in general.
The Lord Bishop of Bradford: My Lords, is the Minister aware of the excellent report published last summer by the Catholic Agency for Social Concern, with the support of the Church of England and other Churches? Does he agree that ensuring the best possible care for the children of mothers serving custodial sentences should be firmly on the Government's agenda, as recommended by the report? Does he further agree that sometimes there are unsatisfactory arrangements for the children of women in prison, partly because the mothers do not think they will receive a custodial sentence and do not make any provision for them? Would it not be a good idea to look at the Dutch proposal for deferring sentence for a few days to ensure that proper care is in place?
Lord Bach: My Lords, the answer to all the right reverend Prelate's comments is "Yes". These are all matters that need to be looked at seriously and with speed. As I said, there are particular problems involved in sending women into custody which revolve around children. The children of course suffer—but sometimes the courts are left with no alternative.
The Earl of Longford: My Lords, does the Minister agree that the Government cannot absolve themselves of all responsibility for the level of sentencing, whether of women or of men? In the era of the former Home Secretary, Michael Howard, the prison population went up by 50 per cent in four years because of his pronouncement that prison works. Will the Minister look again at his answer that the Government are not accepting responsibility for the level of imprisonment of women or of men?
Lord Bach: My Lords, I spoke only the truth. Individual sentencing decisions are, and must be, for the courts to decide. My noble friend is right to the extent that governments have a role in setting out the parameters of sentencing policy—this Government will be no different from any previous government—and that what Home Secretaries say and do plays a part in sentencing patterns. But—and this is critical—it is up to the court to decide in each individual case what the appropriate sentence should be.
Lord Avebury: My Lords, further to what the Minister said about the number of women in prison for drug offences as a result of being influenced into offending by partners, does he think that an amendment to the legislation is required so that where a woman is convicted but the court is satisfied that she committed the offence because of the influence of an undesirable or criminal partner, there should be provision for a lower sentence?
Lord Bach: My Lords, it does not need the law to say that. I speak from some years of experience in the

925
courts in this field. Any self-respecting defence lawyer would raise the issue that the woman had been influenced by the man—it is not always that way round but mostly it is—and, in my experience, any judge who did not take some notice of that, if it was established, would be successfully appealed against.
Baroness Carnegy of Lour: My Lords, the noble Lord rightly explained that many women are in prison because of dealing in drugs in some way, but many, many more are in prison because of the effect of taking drugs or of drinking too much. For those people, we know perfectly well that prison is neither a disincentive to their behaviour nor a cure. Do not the Government have it in their heart to say that they will come to Parliament with a measure that will lead to fewer people going to prison? They should not shuffle this matter off onto those who carry out the sentencing. It is not good enough simply to say that the Government have a role. Something must happen. The figures are disgraceful. I am very glad that my noble friend has raised the matter.
Lord Bach: My Lords, the Government, too, are glad that this subject has been raised because it is a very important and worrying one. I remind the noble Baroness that under the provisions, which still apply, of the Criminal Justice Act 1991 an offence has to be so serious that only a custodial sentence is appropriate. That is still the law. At the same time, it is right to say that a good deal is going on in terms of rehabilitating drugs offenders, both women and men. But the noble Baroness is quite right to say that a large number of women are in prison first and foremost because they are drug addicts. It is vital that, whether it is inside prison or, it is to be hoped, outside prison, something positive is done about that.
The Lord Bishop of Wakefield: My Lords, is the Minister aware that New Hall prison in Wakefield is designated as an officially overcrowded women's prison? One of the particular problems concerns sanitation. Women are put together in cells which were not designed to be shared. They are locked up for 12 to 14 hours at night and have to share the one lavatory between them, which is unpleasant and degrading. Is the Minister able to give any indication as to whether that can be avoided in the future?
Lord Bach: My Lords, I do not know the answer to the right reverend Prelate's question. However, I promise to look into the issue to see whether there is a solution and write to him.
Baroness Blatch: My Lords, is the Minister able to account for the more than 50 per cent increase in women prisoners? Is it that women are committing more crimes or that the crimes they are committing are more serious?
Lord Bach: My Lords, the short answer to the noble Baroness is "both". The population has nearly doubled over the past number of years and the reasons
926
given in the report mentioned by the noble Lord, Lord Hurd, are accurate. More women have been going through the courts and a higher proportion are receiving custodial sentences, and for longer periods. But I point out again that 50 per cent of the rise in the past five years is due to drug offences. So the answer to the noble Baroness's question is "both reasons".

New Deal: Intermediate Labour Markets
2.53 p.m.
Lord Sheppard of Liverpoolasked Her Majesty's Government:
How, after two years of the New Deal, they assess the potential offered by intermediate labour market projects to ease the period of transition for those furthest from the labour market.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, we believe that, especially when linked to jobs with employers in a given area, intermediate labour markets have an important role to play in moving long-term unemployed people from welfare into work. We are using intermediate labour markets within the New Deal, and in other programmes, all of which are being, and will continue to be, fully and independently evaluated.
Lord Sheppard of Liverpool: My Lords, I thank my noble friend the Minister for that very encouraging answer. Does she agree that the New Deal is the most determined and serious attempt yet to get third-generation unemployed people into work? Does she agree with me that there are areas where unemployment is still high and where the New Deal will be discredited, as earlier training programmes have been, if programmes such as, for example, the Sheffield intermediate labour market, warmly praised by David Blunkett, are not created and pay a proper wage? Are they to be part of what the 15 new employment zones are to offer?
Baroness Blackstone: My Lords, I am most grateful to my noble friend for his support of the New Deal. It is the most determined and serious attempt to tackle the problems to which he referred. Long-term unemployment is at its lowest for nearly 20 years. While I agree that there are blackspots where unemployment is still high, the spread of unemployment around the country at regional level is relatively even compared with the position in the 1980s. My noble friend mentioned the New Deal intermediate labour market in Sheffield. That provision is certainly helping New Deal participants to gain valuable work experience in a whole range of skills. It will be looked at within the overall evaluation of the New Deal. On my noble friend's final point, I reiterate that local intermediate labour markets will be used in the new employment zones to help those

927
who have limited chances of getting a job to do so. It is part of a pathway to helping them to become more employable.
Baroness Miller of Hendon: My Lords, given that most people taking part in the New Deal are involved with the employment and training sector, does the Minister share my disappointment that, according to the latest figures, only one in 10 of those involved in that sector complete the course and that only 8.5 per cent go on to get full jobs as opposed to going into the other three sectors? Can she say what the Government will do to motivate more of them to take full advantage of the scheme?
Baroness Blackstone: My Lords, I certainly would be very disappointed if the figures given by the noble Baroness were accurate and correct, but I do not believe that that is what the figures show. Around 42 per cent of those who are on the education and training option go into jobs. That is what the statistics collected by the Government indicate. I would accept that even 42 per cent is a lower proportion than should be the case. It is important that we continue to work on evaluating this option and that we provide rather more help to young people with regard to the kind of jobs they can get and how to get them. In other words, it should not be an option that simply provides employment and training; it should provide good guidance and proper preparation for work.
Baroness Miller of Hendon: My Lords, the information I gave was information given in answer to parliamentary Questions in the other place. Perhaps we need to look those up.
Baroness Blackstone: My Lords, I am happy to check the source but I think that what the noble Baroness is describing is a slightly different figure. I am advised that 42 per cent of those who come through that option find employment. However, I accept what lies behind the noble Baroness's question: that those on the education and raining option have to be given more help and preparation in terms of getting a sustainable job.
Lord Brooke of Alverthorpe: My Lords, on the subject of statistics, can my noble friend the Minister advise us just how much youth employment has fallen since the Government came to power? What further plans and ideas are being considered by the Government to ensure that this trend is maintained, especially in the pockets of high unemployment which were mentioned earlier?
Baroness Blackstone: My Lords, the number of JSA claimants aged 18 to 24 has fallen by 21 per cent over the past two years. Youth unemployment is now at its lowest level for 25 years. That is a substantial achievement. However, we cannot be complacent about it. We have to continue to invest in the New Deal and continue to make sure that the maximum number
928
of young people come out of the New Deal, get a job and sustain that job, so that they stay in the labour market. It is also important to make sure that those young people are employable over the long term. That is why the acquiring of skills is so important and why the Government are investing a great deal of additional funding in further education and intermediate skills levels right across the UK.
Baroness Sharpies: My Lords, how much has the New Deal cost over the past two years?
Baroness Blackstone: My Lords, the average cost of a New Deal place is £2,000. The average cost of a young person getting a job through the New Deal is £4,000.
Baroness Sharp of Guildford: My Lords, is the Minister aware that the New Deal has been least successful in some of the inner London boroughs in bringing young people back into stable employment? Has she any explanation for that?
Baroness Blackstone: My Lords, I do not quite know what the answer is, or why youth unemployment in London has proved to be more intractable than in some other parts of the country. Youth unemployment is particularly high in London, as is unemployment generally. It is sometimes thought that unemployment is especially high in the north-east, for example, but London is one of the blackspot areas. The situation is being evaluated and examined. I shall be happy to write to the noble Baroness if we have any further information about the specific case of London and why the problem is greater there.

Combined Universities in Cornwall
3.1 p.m.
Lord Alexander of Weedonasked Her Majesty's Government:
Whether, following the European Union designation of Cornwall for Objective One funding, they will support the establishment of the Combined Universities in Cornwall by providing the necessary matching funding.
The noble Lord said: My Lords, I beg to answer the Question—ask the Question—standing in my name on the Order Paper.
Baroness Blackstone: My Lords, the noble Lord might have an answer to the Question too!
We welcome the collaborative approach taken by higher and further education institutions within the Combined Universities in Cornwall initiative. I understand that the CUC partners are in consultation with the Higher Education Funding Council for England in developing their plans for a higher education hub in Falmouth or outside Falmouth linked to developments in further education colleges. Match funding from all potential

929
sources, including the private sector, can only be properly addressed when there are fully developed project proposals.
Lord Alexander of Weedon: My Lords, I thank the noble Baroness for most of that Answer. My interest is as Chancellor of Exeter University—of which the admirable Camborne School of Mines is a part—and which, together with Plymouth University and the Falmouth College of Art, is a leading partner in the project. Do the Government accept that the combined universities are a core project for Objective 1 funding for Cornwall—a county which has no university—in order to "dynamise" education as a catalyst for business? In view of the last part of the Minister's Answer, do the Government recognise that a proportion of the Objective 1 funding needs to be allocated in each year of the planning period, and that it is therefore crucial that a decision by the Government on match funding is taken early, preferably in the comprehensive spending review this July?
Baroness Blackstone: My Lords, I accept that Objective 1 funding for Cornwall can, and should, be used for a project of this kind. There are rules and regulations regarding the application of Objective I funding and some aspects of the overall proposals made by the CUC may not be eligible for Objective 1 funding; but from a general point of view, there is no reason why it should not be used, and indeed the Government welcome its use.
On the noble Lord's point about funding from elsewhere, funds may be raised from a whole range of different sources: from the private sector and from local organisations of one kind or another, as well as possibly from government. It is difficult for the Government to make any commitments until there is a carefully worked out proposal as to exactly what the capital funding in particular will amount to.
Baroness Wilcox: My Lords, does the Minister agree that many major companies seeking to invest in the UK require a location close to an established higher education centre, in order to have access to well qualified staff and an appropriate range of people, before they will even invest? I admit to an interest as a governor of Plymouth University and as one who is hopeful about the project going forward. One difficulty already established is that, as a very poor county, Cornwall has been accorded Objective 1 status because it cannot raise funding locally. Will the Minister therefore think specially of Cornwall in this case? The county will find it very difficult to raise any private investment funding, given that it does not already have an educational establishment.
Baroness Blackstone: My Lords, I entirely accept that universities can have an important role in helping to provide highly skilled graduate employees for an area where the private sector may wish to invest. However, many young people go to university in an area where they have no intention of remaining.
930
We cannot assume that all graduates from a university in any part of the country will remain there. At the same time, the Government are grateful to the University of Plymouth, Falmouth College of Art and the University of Exeter for the work that they are doing. I think that funding must be a matter for those institutions, for local interests and for the private sector, as well as for the Government It would not be right for me to make a commitment that Cornwall should receive more favourable treatment than some other parts of the country which also do not have a local university.
Lord Roberts of Conwy: My Lords, why are the Government so reluctant to commit themselves to match funding for Objective 1 areas when they are ready to commit themselves to increased spending in the future for departmental areas such as health and education? Surely Objective I status and the money that flows from it are of value to those areas.
Baroness Blackstone: My Lords, the Government do not in any way deny the value of Objective One funding for the areas that are eligible for it. However, they also believe it right that the areas concerned should attempt to raise match funding from a variety of different sources rather than automatically assuming that the money should come from the taxpayer via central government.
Baroness Nicholson of Winterbourne: My Lords, I congratulate the Minister on her work in regard to Objective 1 funding and the joint university project in Cornwall. She is, of course, aware that the Open University is another growth area of which the United Kingdom has great reason to be proud. Will she support the Open University's push to assist the enlargement countries of the European Union by bringing the very real benefits of the Open University to extremely poor countries such as Romania?
Baroness Blackstone: My Lords, I have long been an admirer of the work that is done by the Open University, not just in the UK but overseas. The OU has an international reputation, and it is extending its overseas work. If it can operate in countries such as Romania, where there is a desperate need for higher-quality higher education, that is all to the good, not just of the UK but of Romania.

Business
3.7 p.m.
Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Bach will, with the leave of the House, repeat a Statement that is to be made in another place on the demonstrations in central London.

European Union Committee
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Lord Grenfell be appointed a member of the Select Committee.—(The Chairman of Committees.)
On Question, Motion agreed to.

Postal Services Bill
3.9 p.m.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that this Bill be now read a second time. This Bill is a key element in the Government's programme for the modernisation and reform of public services. The Postal Services Bill will ensure that the country has both a Post Office and postal services fit for the nation's needs in the 21st century. The Bill will establish a modern Post Office that is able to develop its business and grow as a significant global player so that it can meet the enormous challenges and take advantage of the opportunities which now arise in the rapidly changing national and international markets. It will provide a firm basis for greater competition in the postal services market and a better deal for all consumers. All this will ensure that we have a strong Post Office that is better able to serve each of its customers in all parts of the country.
The Post Office has for too long been denied the opportunity to develop and modernise itself. The plans of the previous administration to modernise the Post Office and postal services came to naught. All that the previous Conservative government did was to extract greater sums from the Post Office to support the debts that they had incurred. The Post Office was denied the opportunity to invest and grow, in marked contrast to the way in which the Dutch Post Office has been given the opportunity to buy one of the world's leading carriers, TNT, and the German Post Office has been allowed to acquire the shares of several important businesses, notably 25 per cent of one of the other major carriers, DHL.
The Government are determined that the Post Office should have the opportunity to compete with the leading players in the market so that this country can benefit from having one of the leading postal operators in the world. This is vital not just for the Post Office in its own right but for the country as a whole because of the way in which so much of our business and social life is highly dependent on efficient postal services. This Bill will enable us to complete the package of reforms which I outlined to the House in December 1998 and described in greater detail with the publication of the White Paper Post Office Reform in July of last year. We have already taken steps to allow the Post Office to invest more, having reduced the "dividend" that the Government effectively take out of the organisation to 40 per cent of post-tax profits from
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the 75 to 90 per cent taken by the previous government. In addition, we have allowed the Post Office to borrow up to £75 million without specific permission from the Government with further sums to be approved on a case-by-case basis.
We have already seen the benefits of these changes in the acquisitions made by the Post Office since the end of 1998. It has acquired 100 per cent stakes in German, Austrian, Irish and Dutch parcel companies and the US company Citipost. This will help the Post Office to grow its business by entering new markets. The Bill will give the Post Office greater commercial freedom without removing it from public ownership. We have seen this model adopted successfully elsewhere. Sweden and Denmark have shown that it is possible to give post offices commercial freedom, while keeping them in the public sector. At the same time, the new independent regulator will increase competition and guarantee a universal service.
The Bill before your Lordships has four main objectives. It will put consumers first by establishing a new independent regulator and a new consumer council, both with strong powers to protect and promote the interests of the users of postal services. The Bill will also further consumer interests by placing duties on the regulator, first, to ensure the provision of the universal postal service and, secondly, otherwise to promote the interests of the consumer wherever practicable through greater competition. This can be achieved by reductions in the scope of the licensed area or by the granting of licences to compete within the licensed area. The Bill will give the Post Office scope to modernise and run a fully commercial business in the 21st century. We shall achieve this by converting it from a statutory public corporation to a public limited company with ownership remaining with the Crown. A plc is a well understood commercial structure which is more appropriate to a forward looking business; and it will also complement the greater financial flexibility that we shall give the Post Office. Lastly, the Bill will reinforce the Government's commitment to a modern counters' network, with powers to ensure reasonable access to Post Office counter services.
Part I of the Bill creates a new independent regulator, the postal services commission. This part also creates a new consumer council, to which I shall refer later. It will be the duty of the commission, as detailed in Clause 3, to ensure the provision of a universal postal service at a uniform tariff, as set out in Clause 4, and to look after the interests of consumers. It will do this wherever possible by promoting effective competition. The commission will be responsible for a new licensing regime for postal services within the reserved area. The arrangements are detailed in Part II of the Bill. Through this licensing regime the commission will regulate prices, enforce high quality standards and improve choice through greater licensed competition.
It is anticipated that the first licence will be granted to the Post Office company, but others will be able to apply for licences to carry out services within the reserved area, as described in Part II of the Bill, in what is at the moment effectively a monopoly area for the

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Post Office. In addition to being able to promote regulated competition, the commission will be able to propose reductions in the scope of the reserved market area. Such changes will be subject to approval by a resolution of both Houses. By introducing competition in this way, we shall stimulate greater innovation, lower prices and promote better services for customers.
In passing, perhaps I should say that in all the changes that we make we shall endeavour to ensure that the Post Office meets the needs of all its customers. Much of its business will come from large-volume users, and the organisation needs to be free to provide services which are commercially attractive to them. But the needs of individuals must also be fully provided for, and under the provisions of Clause 5 in performing its duties the new regulator will be required to have regard to the interests of those who live in rural areas, the disabled or chronically sick, pensioners and those on low incomes. In addition, under Clause 43 we shall issue social and environmental guidance of which the regulator will be required to take account. That will help to ensure that the benefits of a modern post office are available to all users throughout the UK.
In Clause 41 the Bill also gives the Secretary of State power to direct the commission to impose a licence condition which requires the licensee to provide free postal services for blind and partially-sighted people. This will ensure the continuation of existing non-statutory practice by the Post Office to convey certain items free of charge for blind and partially-sighted people, known as "articles for the blind".
Where competition does not provide effective protection of consumer interests the Bill will give the regulator new duties and powers to promote consumer interests, regulate prices and ensure a high level of service to all users. Part I of the Bill thus imposes a duty on the new regulator to ensure the delivery of the universal service at a uniform tariff. The postage will be the same regardless of the distance of delivery within the UK. Whether one is talking of the Isle of Dogs, the Isle of Wight or the Isle of Skye, the cost will be the same and will be guaranteed in law. Through a licence condition the Post Office will be required to provide the universal service which will include daily delivery to all addresses at an affordable, uniform tariff.
The commission will have responsibility for setting quality standards and regulating prices. To police these the commission will also be given powers of investigation and enforcement, including the power to impose monetary penalties for breach of licence conditions. Licensees will be required to achieve quality of service standards or risk being fined by the regulator.
Part III of the Bill provides further protection for consumers through the replacement of the Post Office Users' National Council with the new consumer council for postal services. This will be given the same powers as the new consumer council that is being established in the energy market, including wider access to relevant information from the Post Office to
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enable it to do its job effectively. For the first time there will be a single national body for postal users. Within that national framework the Bill also requires the consumer council to set up separate committees for Wales, Scotland and Northern Ireland and allows for regional committees to be set up in England. These measures give consumers the powerful watchdog that they have lacked for so many years.
Part IV of the Bill will provide a modern framework to enable the Post Office to deliver a world-class service and compete with overseas competitors. The time has come to give the Post Office more freedom and enable it to meet the challenges and opportunities of the changing market, increasing competition, technological change and substitution and changing customer needs.
Britain's Post Office has great achievements to its credit and it is one of the country's most recognised and valued brands. But to build on these achievements in the future the Post Office will need to meet four major challenges. It will need to respond to the growth of e-mail and other forms of electronic communication as an attractive alternative to the traditional letter. It will need to meet the challenges of the liberalisation of postal markets in Europe and elsewhere. It will need to meet the growing competition for the business customers who provide the most profitable parts of the Post Office's business and who will increasingly look to service providers to offer them a full range of express, parcels and logistic services as well as the traditional delivery of letters. And it will need to adapt to the emergence of new business opportunities as e-commerce expands.
All postal administrations face these challenges and each of them faces the need to become more commercial, to improve its productivity and working practices, to establish new alliances or joint ventures, to make strategic acquisitions to link up with other logistics and express carriers and to offer a wider range of services. Throughout Europe change is now taking place and the pace is likely to accelerate rapidly in the next few years.
Already the Post Office faces competition in the UK from overseas postal administrations and delivery companies, some of whom are ahead of the game. This Bill will provide the freedom to enable the Post Office to develop to its full potential while maintaining it within the public sector and delivering our promises about share disposals.
The provisions of Part IV of the Bill reinforce our manifesto commitment to give commercial freedom to the Post Office within the public sector. They will convert the Post Office into a public limited company, able to be more responsive to market developments and customer demands.
The plc model is widely understood and clearly sets out the duty of directors to the company; it helps establish the clear separation of the functions of ownership and management; and also enables Government to receive a proper dividend rather than the Post Office having to build up cash deposits on its balance sheet. The new Post Office company will be

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governed by normal company law, making much clearer the responsibilities of Government, as owner, and the Post Office Board, as managers of the business. Any special arrangements that the Government may need to make to protect the public investment in the Post Office company will be entirely transparent.
The Bill delivers, through Clauses 65 and 66, our promise that there would be no general sale of Post Office shares without primary legislation. Disposals may be made only in the limited circumstance where the Post Office company enters a joint venture or other working arrangement, and the disposal is part of that deal. Such a disposal must be in the commercial interests of the Post Office company.
The commercial future of the Post Office depends on its being able to compete effectively with other global players. The Post Office must be equipped, therefore, to develop its business, and this may well involve forging alliances and commercial partnerships with those having complementary skills and franchises. We need to ensure that the Post Office has the freedom and commercial flexibility to do this. But under Clause 67 any share sale or swap, to cement a commercial alliance between the Post Office company and a partner, requires approval from both Houses of Parliament. Similar restrictions apply to the disposal of shares by the Government or the Post Office company in any subsidiary company engaged in providing the universal postal service. These provisions underline the transformation of the Post Office into a more commercial, though publicly owned, organisation. They will enable the Post Office to realise its ambition to become one of the top global distribution companies.
The new framework for the Post Office will put it in a position to develop all aspects of its business, including the counters' network. We fully recognise that the network of post offices has never been static, and over the past 20 years it has slowly reduced in size as people's lifestyles and buying habits have changed. But the network of post office counters is a cherished and socially valuable national asset, performing a vital role in local communities especially in rural and deprived urban areas. We are therefore making some specific provisions in the Bill to help ensure the maintenance of the network, and the continuation of the important community and social role played by post offices.
In the first place, the social and environmental guidance that the Government will issue to the regulator, in accordance with Clause 43, provides the vehicle for ensuring reasonable access to postal services. The regulator and consumer council will closely monitor the network against this guidance and advise the Government on the accessibility of public post offices. The regulator will be required to take account of the social and environmental guidance when carrying out its duties, in particular its duty to monitor and advise on the number, location and accessibility of public post offices.
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The Government are helping the Post Office develop the counters' network. We are investing nearly half a billion pounds towards equipping all post offices—over 18,000 of them—with a modern on-line computer system, called Horizon, to enable them to provide a wider and better range of services. This will enable the Post Office to extend substantially its arrangements with banks and building societies which should greatly extend the banking facilities available to bank customers generally, especially in rural and some urban areas from which the banks have withdrawn. The Horizon platform should also enable the Post Office to improve the service it gives to existing customers and open up exciting opportunities for attracting new business.
This new on-line system will enable post offices to attract new business and improve their commercial viability. The Post Office is an under-utilised resource. Its services need to be enhanced and more widely advertised.
Already the Post Office is changing. The provision of 3,000 new cash machines at post offices up and down the country is indicative of the new opportunities the business is exploiting. In addition, a bureau de change service is available at all post offices throughout the country. Over 4,000 post offices have National Lottery on-line terminals, including 1,500 in rural areas. The number of post offices providing vehicle licences has doubled in the past 20 years. And mobile phone pre-payment cards are available from nearly 5,000 post offices—rising soon to over 6,500.
We are also taking a radical look at the viability of the post office network so that it can face the future and no longer have an unhealthy over-reliance on Benefits Agency work. That is why the Prime Minister, last October, asked the Cabinet Office to carry out a special study of the network, reporting directly to him. But in case this is not sufficient, the Government have, as a safeguard, made provision, in Clause 102, for financial assistance if this should prove necessary at some point in the future. It is an enabling provision, which is not intended to presuppose that financial assistance will be needed. But it would have been irresponsible of us not to make provision in this Bill for the possibility of some sort of Government intervention at some time during the lifetime of this legislation.
The Bill modernises much of the existing body of law relating to the Post Office—and in Parts V, V1 and V11 we are updating many of the provisions of the 1953, 1969 and 1981 Acts which will still be needed in future.
This is a comprehensive piece of legislation which is designed to enable the Post Office to move boldly into the 21st century in such a way that it can win new business, expand into new markets and create jobs and wealth in Britain while maintaining high standards of service and protecting disadvantaged groups and communities.
The Bill provides for strong consumer protection, wherever possible through competition, and ensures that the benefits of a competitive, modern postal

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service are available to all. The Bill provides for a Post Office with a modern, commercial structure without removing it from public ownership. It provides the commercial freedom, backed up with greater financial freedom, which will enable the Post Office to become a major global player, while ensuring that we retain the important social obligations that make the Post Office such an important part of the social fabric of our country. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Lord Sainsbury of Turville.)
3.30 p.m.
Baroness Miller of Hendon: My Lords, I thank the Minister for the careful way in which he explained the Bill, even though at the beginning he was somewhat selective in glossing over the opinion of his party when it was in opposition. However, that is politics and therefore I shall excuse him!
At the headquarters of the postal workers' union, there is on display a silver salver presented by me on the occasion of the delivery of the 5 millionth package on behalf of my former United Kingdom mail order business. When I decided to move my posting department from Lewes in Sussex to Newport, the district postmaster came to see my co-director to ask what he had done wrong—absolutely nothing, as it happened.
In Newport, those working for the Post Office helped me with the design of my factory to ensure that its vans could drive right inside the building. They did their sorting inside the building and many a time when a van was full they drove off with an extra sack or two on the lap of the driver's mate. I tell your Lordships that to show that I appreciate at least as well as anyone in the Chamber both the value of an efficient Post Office which puts service to its customers high on its list of priorities and also the hard work of the postal workers.
We give the Bill a cautious welcome. The reform of the Post Office, giving it commercial freedom to compete in the marketplace, is an objective which we fully share, especially the continuing commitment to the universal delivery. Indeed, we wanted to bring in suitable legislation as long ago as 1994, but we were thwarted in our aims by our thin parliamentary majority and, as I said, by the implacable opposition of the party now in government. However, we recognise the key reforms set out in the White Paper and agree in part with some of them. I notice that the noble Lord, Lord Razzall, who will forgive me for saying so, is again starting on me as soon as I get to my feet.
In the midst of the conflicts between government departments and the U-turns, such as over the level of the monopoly, there seems to be a recognition that restructuring is the only way to improve the efficiency and competitiveness of the Post Office. The Bill creates a new Post Office regulator and a new consumer council for postal services, but this is the first time that a 100 per cent government-owned industry has had both a regulator and consumer body. It is therefore essential that their relationship with the Post Office is clearly defined.
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However, we are concerned that the powers given to the commission, especially over the production of documents, will result in creeping regulation of the unlicensed area. Similarly, the Bill provides for the consumer council to have power to make proposals to businesses operating outside the licensed area. It is our view that minimal interference in the intended new commercial freedom of the postal services is absolutely essential.
The Bill presents two main objectives. One is to enable the Post Office to adapt itself to modern methods of delivery of communications and to compete not only with the quicker and cheaper faxes and e-mail, but also with private commercial firms and some foreign post offices, particularly the German and Dutch. The commercial activities of the Post Office include providing services at commercial prices to the Government, including the Benefits Agency and various organisations such as the BBC and the DLVA via Post Office Counters.
The other objective is to run the vast network of privately owned and operated sub-post offices spread across the country, which not only provide all the services of Post Office Counters, but in many cases are the focus of the local communities. I refer to the 18,500 local shops to which no doubt many references will be made during today's debate.
One-third of their income is derived from the services they provide for the Benefits Agency and the DSS, and a large part of the remaining two-thirds comes from the customers who spend some of the money in the shop while they collect their pensions or allowances. They represent an investment by their owners of some £2 billion. During the Third Reading debate in the other place, the Minister for Competition and Consumer Affairs disputed that figure and suggested that it was only £1 billion. Well, £2 billion divided by 18,500 is about £108,000 per unit. Taking into account the value of the buildings, stock and goodwill, I suggest that £2 billion is probably closer to the mark.
That is the kind of money that is at risk in the Government's proposals to take the profitable business of the payment of benefits from the sub-post offices and make a present of it to the banks. I wonder what your Lordships think of the possibility of a sub-postmaster who wants to retire getting a decent price for his business today. That aspect is the single greatest cause of concern among Members of the other place and I have no doubt that it will be of concern to many of your Lordships.
I want to deal first with the so-called "solution" which the Government came up with at the 12th hour of the matter being before the other place. Despite promising the Opposition that provisions would be introduced at the Committee stage to provide a subsidy for sub-post offices, the Government failed to do so until the final stages of the Bill. In introducing it, the Secretary of State had the good grace to apologise for the fact, saying that they did not have the opportunity to introduce the amendment in Committee. The more likely reason was that there was a furious argument between the DTI and the Treasury.

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The Secretary of State went on to say that some honourable Members might criticise him for that. He got that right! He claimed that he deliberately chose to delay the new clause (Clause 102 in the Bill before us today) so that it could be debated by the whole House instead of only by its Committee—and, naturally, I believe him—and that it was nothing at all to do with preventing the clause receiving the scrutiny that its vagueness, loose drafting and ambiguities demanded. I can assure the Minister that your Lordships' House will take the opportunity to give it the attention it absolutely requires.
In order to help the Minister—as he knows, I always try to do so—I shall indicate the matters in the clause that need to be clarified so that he may prepare himself to deal with them either today or, I suspect more likely, as the Bill progresses through the House.
The subsidy is a discretionary one, which I believe makes the whole exercise completely meaningless. We do not even know whether the subsidy is to be permanent or transitional; we do not know the criteria for providing it; and we do not know whether it will be automatic according to some transparent and uniform arm's-length formula. We do not know who is the mysterious person, referred to in Clause 102(2), who shall decide to make the payments, or who is the other person, referred to in subsections (3) and (4)(c), who shall pay the money, or whether they are one and the same other person. The Ministers in the other place failed to explain that. Who are the persons to whom such subsidies will be paid? How are we to ensure that the subsidies will not be used as another piece of political bribery—perish the thought? We especially do not know how much the subsidy will be.
The Secretary of State was not able to say how much is available to save about 9,000 sub-post offices which are likely to go to the wall and deprive their communities of what he described as their,
"important community and social role".—[Official Report, Commons, 15/2/00; col. 808.]
I should like to offer him a suggestion. The interest on the interest on the incredible windfall of £22.5 billion from the sale of digital telephone licences would produce more than £80 million a year. We shall most certainly want a detailed reason for the final subsection (6), requiring Treasury consent, which makes the whole ramshackle scheme even less plausible and lifts the art of gesture politics to new heights.
It is obvious, really. If the Treasury saves £400 million, somebody else will have to lose it. The whole problem of the sub-post offices is caused by the Treasury's desire to grab an extra £400 million a year—not just a one-off—from the pockets of the sub-postmasters at the expense of the whole social structure of our small communities. It is not yet clear how the Treasury's overriding sanction is to be operated; whether there will be a blanket consent or a case-by-case award. If the sub-post office of Mudbank-on-Sea needs £1,000 a year to keep going, is the whole panoply of interdepartmental consultation
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going to be gone through by two bands of civil servants while in the mean time the problem solves itself because the poor sub-postmaster goes bankrupt?
The Secretary of State could provide no answers in the other place. All he could do was to offer discussions with interested parties, including the representatives of sub-postmasters and sub-postmistresses. Who else does he consider is interested? There is no movement by customers to close sub-post offices.
It was impossible for the other place to examine Clause 102 properly because of the late stage at which it was introduced. It is equally impossible for your Lordships to do so unless the Government clearly spell out the detail of what they have in mind, and unless the report of the Performance and Innovation Unit is published at an early stage of the Bill's progress through your Lordships' House. The sub-postmasters want income, not subsidies, and we support them. But of course in this case subsidies are the last resort.
The whole scheme is nothing but a sticking plaster to attempt to patch up the gaping wound that will be inflicted by the Government if they introduce the automatic credit transfer system. On the one hand, the scheme will certainly save the Treasury money, but another department will have to find that money in order to pay the dole and income support to thousands of people who will lose their jobs and businesses as a result.
I make one final point before I leave the important subject of subsidies. I should like the Minister, either in replying to the debate or, if he cannot do so, by writing to me, to give me an assurance that any subsidy will not fall foul of EU rules.
I make no apology for having spent so much of my time on the issue of sub-post offices. It is absolutely no use to promise, as the Bill does, a universal postal delivery if the customer has nowhere to go to buy a stamp. That is the essence of the whole matter. The dilemma faced by the Government has been to find a way to give the Post Office the greater commercial freedom that everyone agrees it urgently needs. The solution that we favoured—privatisation of 51 per cent—has been rejected by this Government because of the continuing objections of the unions. This is certainly not the time and place to rehearse that debate again.
However, perhaps I may touch on some of the other problems that your Lordships will be asked to solve. The status of being a publicly-owned company will do little, if anything, for the commercial freedom of the Post Office. The Times' City commentary describes the proposals as granting the Post Office,
"bogus new commercial status within the state's maw".
That article was written—and I wrote my speech (or, at least, thought about it)—before it became politically incorrect to use the word "bogus", and I saw noble Lords' concern.
The bogus status is emphasised by the Post Office's limited borrowing powers: a derisory £75 million a year without extra Treasury approval. I, in common with the rest of your Lordships, regard £75 million as

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more than pocket money. However, in the world of the communications industry, that sum is peanuts when the kind of deals that are done involve, if noble Lords will excuse the pun, telephone numbers—hundreds of millions of pounds at a time. The Post Office was given permission to spend £300 million on German Parcel. The Dutch Post Office bought a mere 25 per cent of DHL for a secret figure that we can assume was well above £75 million. The Secretary of State has power to make loans to the Post Office or its subsidiaries from the national loans fund. But the question is: at what rate of interest? The Government assured the other place that it would be at commercial rates, but that is not set out in the Bill.
A problem also exists in that, if the Post Office borrows from outside sources, the Government will be seen as a guarantor and that would also give an unfair commercial advantage. Then there is the question of VAT. Pursuant to EU directives, the Post Office does not have to charge VAT on its parcel service but its competitors do. Sweden and Finland charge VAT on parcel services. I ask the Minister to tell us in his reply how the Government propose to level the playing field for the Post Office's commercial competitors in this area. The Post Office itself is profitable, but Parcel Force is less so. The EU directive on postal services requires the keeping of separate accounts to enable cross-subsidy between the reserved and the non-reserved areas to be detected. The regulator has given a welcome assurance that the licence will contain a provision to that effect. Indeed, I understand that a draft licence has been circulated, although the DTI has certainly not sent me a copy. The Minister for Competitiveness told the Committee in the other place:
"We want to ensure that there is no cross-subsidy between reserved and non-reserved areas".
However, again, that is not in the Bill, and I ask the Minister why not.
My honourable friend the Member for Rutland and Melton raised the same issue in Committee in the other place but was persuaded by the Minister to withdraw his amendment. He did so, as he said, in order to give the matter further consideration. Well, we have done so carefully and are convinced that this is a matter which must not be left to the possible changing view of the licensing authority. It must be enshrined in the Act. Therefore, this is an area that we shall certainly wish to probe as the Bill continues through the House.
Your Lordships will have noticed that during this rather long speech I have not yet mentioned the Horizon project for automatic credit transfer, although I dwelt on the disastrous effect that it will have on local sub-post offices. The problem that will hit the post office network is generated by the activities of two other departments that are not really involved in this Bill; namely, the Treasury and the DSS.
However, two questions as yet have not been answered by the Government. First, how will pensioners and recipients of benefits collect their money if there is no local post office or, indeed, no bank? In other words, physically what will they have to do, where will they have to go and what
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identification will they have to produce once the benefit books are phased out? The Minister of State for Social Security admitted as recently as 29th March in the other place that the Government did not have the answers to all the questions.
Secondly, to the extent that the Government hope to involve the banks in handing over the cash by one means or another, how can we be sure that the banks will be persuaded to be benevolent enough to provide that service for nothing and that they will not be a major recipient of the proposed subsidies?
The Government have rushed this Bill be fore Parliament before the effect of ACT and the access aspect have been evaluated fully. The report of the Cabinet Office's high-sounding Performance and Innovation Unit is long overdue, and I await its findings with considerable impatience.
I began by giving a cautious welcome to the objectives of the Bill. I conclude by saying that we have considerable misgivings about some o f the details, and we shall explore them very carefully in Committee. However, I can assure the Minister that we shall explore them not only carefully, but also constructively, during the remaining stages of the Bill.
3.46 p.m.
Lord Razzall: My Lords, I join the noble Baroness in thanking the Minister for the clear way in which he explained the Bill. I am sorry that the noble Baroness is sensitive with regard to the apparent opposition from the Liberal Democrat Benches to some of the remarks that come from the Tory Benches. I can assure her that that has nothing whatever to do with her personality, which I have always found exquisite; it is entirely to do with the fact that very often she says things with which I disagree.
For her elucidation, when she became slightly oversensitive on the novel constitutional doctrine that she seemed to be putting forward, I was commenting to my colleagues that in 1994 the then Tory government did not see fit to bring forward the legislation to regulate the Post Office that they would have liked to do because they did not have the necessary majority. It was my belief that in those circumstances the natural constitutional doctrine was that a government resigned and tested the opinion of the electorate as to who should be running the country. But there we are!
Again, like many noble Lords, I am sorry that what is, on many issues, an important Bill has to some extent been side-tracked by the issue of sub-post offices. Both the Minister and the noble Baroness addressed most of their remarks to the issue of sub-post offices. I am second to none in recognising that it is a most significant issue. However, it is only part of the very important debate on which we in this House are now embarking with regard to the future of the Post Office.
It is particularly unfortunate that the debate regarding sub-post offices has coincided with the events that are to take place on 4th May. I suspect that a number of the comments made by all political parties on this issue have been dictated more by electoral necessity than determining the right solutions for the

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sub-post offices network. I do not wish to spend a great deal of time discussing that issue on Second Reading. The subject has been well debated. At a very late stage the Government introduced recommendations for a subsidy. Like the noble Baroness, we on these Benches wish to test exactly what the Government have in mind with regard to the importance and detail of what we had believed would be Clause 1 but is now Clause 102. Clearly, a number of decisions taken both by the previous government and this Government have had a seriously deleterious effect on the sub-post office network. I know that several of my noble friends will wish to touch on that matter in more detail.
The fundamental issue enshrined in the Bill, which has been the subject of debate and lengthy battles with governments of various political hues for a number of years, is how to reconcile the Post Office having the commercial freedom, which all parts of this House recognise it should be given, and public ownership. I suspect that the Tories consider it an easy issue and that, if only they had had the votes, privatisation would have taken place in 1994. The issue for the present Government, as I expect will be demonstrated by a number of speeches from members of the government party today, is finding a satisfactory compromise between giving the Post Office the commercial freedom which everyone recognises is essential and the factors of ownership, control and democratic accountability. It seems to many on these Benches that the compromise, as reflected in the Bill, is an uneasy one.
First, we have a plc, with its connotations for the financial community. But, of course, there is no ownership change. That remains with the Government. The Bill proposes that the external finance limit under which the Post Office currently operates should be replaced, as the Minister indicated, by a new, commercially-based shareholder dividend at an agreed percentage. That, of course, is not a dividend which is subject to the commercial realities of the Post Office. It is a dividend imposed on the Post Office plc by the Government.
The Government also propose that the Post Office should have the freedom to borrow—but only up to £75 million per annum. In reality, does that represent commercial freedom and commercial freedom to borrow? The Government are proposing that if a subsidiary supports the universal service obligation, the Post Office can conduct a future share sale or swap. Is that commercial freedom? Is it commercial freedom to say to a subsidiary, "You can do a share sale or a share swap"—some form of disguised privatisation—"provided it comes into Parliament for approval"?
On this fundamental issue, it seems to many of us that we have a structure under which the Government are edging forward three steps towards privatisation but taking two steps backwards. That is perhaps an uneasy compromise on the face of the Bill. A number of commentators, particularly the report of the Trade and Industry Select Committee of September 1999, have raised a number of questions that must lie
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uneasily with the Minister if his argument is that total financial freedom has currently been given to the Treasury.
First, the case made by the Minister is that, with new borrowing facilities at commercial rates and the Treasury forgoing the excessive dividends previously taken, the Post Office will be adequately funded. However, the Trade and Industry Select Committee suggested that no case had been made that by these mechanisms the Government were providing vast sums of extra money for the Post Office.
Secondly, to reiterate points made when the Government brought forward the White Paper for consideration by this House, if the Post Office is being given proper commercial freedom, is it to be permitted to create a salary structure for its executives that is commensurate with international companies operating on a world scale, or are the Government saying, as they are perfectly entitled to, that those salary structures need to be in line with Civil Service salary structures and approved by the Treasury?
Thirdly, the Government are giving the Post Office the power to borrow £75 million per annum. Is it seriously suggested that £75 million per annum will give the Post Office the commercial freedom to compete on the major scale that your Lordships' House would want?
Finally, on this issue, if the Post Office is to be given commercial freedom to conduct its activities, are those activities to be conducted according to the obligations to which commercial organisations are subject? For example, will there be the transparency, under this Bill, that would apply to any multinational company? If a multinational company in the private sector were to make a major acquisition overseas, it would be subject to the transparency and the approval process in the public arena to which all multinational companies are subjected. The Post Office, under this Bill, as was seen in its recent major acquisition in Germany, would not be subject to that scrutiny and transparency—another unhappy compromise between public accountability and public ownership.
We on these Benches are entirely clear that what has led to this uneasy compromise is the Government's mistake in having failed to accept the original recommendation of the Trade and Industry Select Committee that the Post Office should have been transferred into an IPOC, an independently publicly owned corporation, with complete commercial freedom but also 100 per cent public ownership. The uneasy compromise that has emerged as a result of the Government's mistake is demonstrated by all the difficult circumstances that I have outlined and the contrast between what should happen and what will happen in the future.
I have two important points of detail to make before I ask the Minister two very fundamental questions on the Bill. The first—and no one has referred to it—concerns the role of the postal services commission. With regard to the Government's perceived role vis-à-vis the Post Office, there is a major issue with regard to whether the monopoly on postal services is to be left to

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the regulator or to the Government. Are the Government simply going to leave to the postal services commission the question of whether the monopoly will come down from £1 to 50p, or are they going to lead the debate? As we know, the Post Office would like a move in line with European practice. Are the Government simply going to say to the regulator, "We have no view. You, the postal services commission, will decide on the extent of the Post Office monopoly in this area"?
Secondly—a fundamental point to which the noble Baroness referred—are the Government going to let us see at some stage, before the Bill passes through this House, the report of the Performance and Innovation Unit? In another place, Mr Byers promised that that report would be available before the Bill was sent to the Lords. Is it proposed that we in this House should see the report before the legislation passes through this House? It appears to be yet another example of the Government's problem in getting through 32 or 33 Bills without taking into account promises made in order to ensure that the legislation is correct. The Performance and Innovation Unit report was promised in another place. We need it in this House before we can pass the Bill.
In conclusion, I ask the Minister to give an unequivocal undertaking that, whatever happens to Clause 102 dealing with subsidies to the Post Office, this Government are committed to operating a policy that will ensure the basic maintenance of the sub-post office network. That is what people in the country and your Lordships want to hear. Forget the detail. Will he say that the Government are committed to maintain the sub-post office network in more or less its current form?
Secondly, will the Government give a categorical assurance that the Post Office is to remain in public hands? Again, that is the assurance which noble Lords and the public require. They want to know that this Bill is not the first step to privatisation of the Post Office.

Demonstrations in Central London
4 p.m.
Lord Bach: My Lords, with the leave of the House, I shall repeat a Statement made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, I should like to make a Statement on the violence and disorder associated with the so-called anti-capitalist demonstrations which took place over the Bank Holiday weekend in London and elsewhere.
"Yesterday's shameful violence was the culmination of a loosely organised series of events which took place from Friday to Monday. While all the events were broadly described as protests against capitalism, they were organised by a number of wholly disparate groups.
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"None of the organisers was willing to discuss their preparations in advance with the police, who therefore made their plans on the basis of the best information obtained by them. The police response in London was a joint operation conducted by the Metropolitan Police Service, the City of London Police and the British Transport Police, using a joint command structure based in New Scotland Yard.
"The events held by protesters oil Friday, Saturday and Sunday passed off relatively peacefully, both in London and in other centres. As had been expected, however, the main challenge to public order occurred yesterday. In Manchester up to 400 protesters caused damage to shops and disruption to the tram system. Twenty arrests were made.
"The protests in central London began at around 10 a.m. when about 500 cyclists made their way to Parliament Square from Hyde Park Corner. By 11 a.m. about 2,000 protesters were in Parliament Square, many of them engaged in digging up the turf.
"The first incidents of violence were reported at about 12.25 p.m., when police and private vehicles were attacked by protesters close to Parliament Square. About an hour later 1,000 or so people moved into Whitehall from Parliament Square and demonstrated outside Downing Street, when missiles were thrown at police guarding the barriers. It was around this time, I understand, that vandals desecrated the Cenotaph and defaced the statue of Sir Winston Churchill.
"Shortly after 2 p.m. the Whitehall branch of McDonald's was attacked by a crowd of about 80 people. Some injuries to the police were sustained, as was serious damage to the premises.
"At about 3.15 p.m. there was serious disorder and violence in Trafalgar Square, including throwing of missiles at the police. At that point police in riot gear moved to contain and control the crowds in the square, which they continued to do for the rest of the afternoon. Separately, about 500 demonstrators crossed the river and congregated in Kennington Park, about a mile south, where missile attacks were made on the police at about 6 p.m. Meanwhile, from about 6.20 p.m., police began a controlled dispersal of the crowd remaining in Trafalgar Square. At around this time about 150 protesters attacked commercial premises and vehicles, including police vehicles, in the Strand. The crowds in Kennington Park were dispersed by 8.30 p.m. and a crowd off Waterloo Bridge was finally held at bay and dispersed by the police just before 9.00 p.m.
"I regret to have to tell the House that nine police officers were injured including one who was struck by a brick in his face. He was taken to hospital but thankfully there was no need to detain him. I understand that the police are aware of injuries to nine members of the public, all thankfully minor.

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"I am informed by the commissioner that 97 people were arrested in the course of the day, on charges including public order offences and assault. A major investigation by the police to detect other offenders, including the perpetrators of the desecration of the Cenotaph and the defacement of the statue of Sir Winston Churchill, is already under way.
"Everyone in our democracy has a right to demonstrate peacefully but no one has a right to demonstrate violently. Yesterday, there was a peaceful demonstration in London by over 2,000 people. That was organised by the TUC to commemorate international workers' day and to campaign for the saving of jobs at Rover's Longbridge plant and elsewhere in the West Midlands. But those peaceful demonstrators were physically denied their right to use Trafalgar Square by the mindless violence of the groups by then occupying the square.
"What was witnessed in central London yesterday was criminality and thuggery masquerading as political protest. In our democracy there is neither reason nor excuse for such appalling behaviour.
"A particularly shocking aspect of yesterday's events was the defacing of the statue of Sir Winston Churchill in Parliament Square and the desecration of the Cenotaph in Whitehall. Yet without the sacrifice of the millions who gave their lives to defend our freedoms, no one yesterday would have been enjoying any right to protest at all.
"The fact that the statue of Sir Winston Churchill has already been cleaned up and, I am told, that no lasting damage has been caused to the Cenotaph is of little comfort to the public for the huge affront caused by this vandalism especially, but not only, to those ex-servicemen who served and saw comrades killed in both world wars.
"Planning by the police for the weekend's events took place over many months, and took account of all the contingencies which they could identify. The planning took into account the lessons learned from very serious violence which took place in the City of London in June last year.
"The police devoted greater resources-5,500 officers—to yesterday's situation than they have done for any comparable situation in the past 30 years. Knowing the determination of some of those involved to perpetrate serious violence and disorder, the police had to make a fine judgment that it was better to contain the trouble, as they did, in confined areas than seek to bar people from these areas, with a high risk of wholly unpredictable outbreaks of serious violence to the public as well as to the police and property virtually anywhere else in central London. The police had to make equally fine judgments as to precisely when and where to deploy police in riot gear.
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"In our system of policing, these decisions are properly ones made by chief officers of police. For the avoidance of doubt, that will remain the situation after the Metropolitan Police Authority, the Greater London Authority and the mayorship come into being in early July. I want, however, to tell the House that the commissioner had and has my full support and confidence in the very difficult decisions which he and his colleagues had to take. As with any large policing operation, the commissioner will be reviewing what happened yesterday and will be discussing this with me. I shall, of course, be ready to respond to any recommendations he makes.
"I am sure that I speak for the whole House in offering our thanks and gratitude to all those police officers who dealt so professionally, diligently and courageously with the violence which occurred yesterday".
My Lords, that concludes the Statement.
4.9 p.m.
Lord Mackay of Ardbrecknish: My Lords, I am sure that the whole House is grateful to the noble Lord for repeating the Statement made by his right honourable friend the Home Secretary in another place. Over the weekend, yet again, we saw the police having to deal with mindless thuggery. At least, that was what I thought at first, but it was not mindless thuggery. The people were well minded in what they did and it was highly politically motivated thuggery.
I am sure that I speak for all noble Lords in saying that I am pleased to hear that the injuries incurred by the police and those suffered by a number of members of the public were not serious. I doubt that any noble Lord can fail to be moved by the picture in many of today's newspapers—it was on the front page of the Daily Express—of five year-old Charlotte Rose, in the arms of a policeman, after being hit by a bottle. Not only did the police and their families have their May Day disturbed, but also many people who thought that they could come into central London to enjoy a day out had their day badly disturbed.
I hope that the press and television companies will make available the many pictures and film footage that they have taken so that the police can identify those criminals whom they have not yet identified and arrested. Perhaps the Minister can assure me that approaches will be made to those companies. It may also be worth while the police asking whether any members of the public, who took photographs on their day out in central London yesterday, have any photographs that may help the police to identify the culprits.
On the lead up to yesterday's events, were there discussions between the police authorities and the Home Secretary as to what kind of tactics should be undertaken? Did discussions take place on whether a "softly, softly" approach should be taken, at least at the beginning of the disturbances, in order, as the Minister said, to contain the demonstrators in small areas?

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I noticed a contrast with the way in which the police dealt with demonstrators during the recent visit of the Chinese president.
Is it true that English Heritage advised in favour of protecting the Cenotaph, but that that was rejected as likely to be inflammatory? I do not believe that the demonstrators needed anything to inflame them in their vandalism. Perhaps we should learn some lessons from that. Like everybody, last week I saw some footage of people saying what they would do in Parliament Square. Digging up a bit of turf does not matter one way or the other, although it seems to be an odd way to improve the greenery around us.
Clearly, yesterday's events were bound to be attended by a degree of violence. On the vandalism to the statue of Sir Winston Churchill, I do not suppose that Sir Winston would be bothered because he dealt with the greatest thug in the previous century. I do not suppose a few ghastly people demonstrating how badly behaved they can be would bother him too much.
Do the Government accept that the public will expect the courts to deal very severely with those who come up before them in regard to offences that took place over the weekend? How many of them, I wonder, are in receipt of benefits from the capitalist society and from the workers who pay their taxes against whom they demonstrated and whose day they so badly disturbed? Perhaps the Benefits Agency will look at the photographs to decide whether what certain people were doing comes within the definition of availability for work.
We have seen a number of such civil disobediences. Clearly, protest is part of democracy, but violent protest is not part of democracy. Stopping people by violent means from doing what they legally and legitimately can do is quite simply wrong and has to be stamped upon.
This is the second time that this kind of incident has taken place in London. In a big way we saw a similar disturbance in Seattle and in a more minor way— although just as serious—we have seen another anti-capitalist demonstration even more recently in America. Does the Minister agree with my right honourable friend Steve Norris—as I understand it, the only man who stands between the Prime Minister and Mr Livingstone—who today said that as mayor he simply would not permit such an event to become annual? Next year it should not be a matter of discussing tactics or containment, but whether such a demonstration of this kind should take place at all.
Quite clearly, the people who organised the event—it seems a bit of a contradiction to say that anarchists organise anything—had no intention of it being peaceful. They had every intention that it should be violent. Perhaps the Minister will consider saying that, "Two strikes and you are out; you have done this twice in London in recent times and should not be allowed to do it again".
4.14 p.m.
Lord Harris of Greenwich: My Lords, I, too, thank the Minister for repeating the Statement. It is right that
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we should spend some time discussing the activities of the vicious thugs who were involved in yesterday's totally unacceptable behaviour.
Although I shall try to avoid the response of all too many of us in the past of trying to make recommendations for changes to the law, one or two questions arise. First, is there a requirement to announce, in advance, what demonstrators propose to do? I recognise that yesterday a number of disparate groups were involved, but somebody organised the 500 cyclists who pedalled their way from Hyde Park Corner to Parliament Square. Clearly, that was organised, so should there be some form of statutory requirement that people who seek to take action of that sort should give several days' advance notice to the police?
Secondly, on the attitude of the courts—a point touched on by the noble Lord, Lord Mackay of Ardbrecknish—it is not for us to say what should happen in individual cases when particular persons appear before the courts. However, I believe it would be helpful if the Home Secretary were to ask the Crown Prosecution Service to report to Parliament on the scale of penalties imposed on people convicted of public order offences yesterday and in the previous disturbances in the City of London, so that we can be aware and so that future potential demonstrators can be aware of the penalties to which the) could be subjected.
Thirdly, I am sure that all noble Lords are gratified that there were not more police casualties and casualties among innocent members of the public. Will the Minister pass on to the Commissioner of the Metropolitan Police our congratulations to the police on what they did yesterday and good wishes to those police officers who were injured?
4.17 p.m.
Lord Bach: My Lords, I thank both noble Lords for their helpful and generous comments and for sharing with me their praise of the police for the way in which they conducted themselves yesterday. I shall do my best to answer the important questions that were asked.
The noble Lord, Lord Mackay of Ardbrecknish, asked whether a request would be made for television and media companies and the public to give up photographs so that those responsible for these outrages can be identified. I am happy to say that the answer is yes, and I am also assured that the police themselves took great pains to ensure that there was video coverage of the demonstration. As we know, there is no better evidence than that of photographs or video, from which it is hard to escape.
On discussions between the Home Secretary and the commissioner, there were bilateral discussions and a special discussion some weeks ago. However, I am not in a position to be able to tell the House exactly what was discussed on those occasions.
With regard to the Cenotaph and the protection of monuments, discussions were held with the police about the protection of nationally important monuments in the area covered by the protests. I am

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sure that the bodies responsible for their upkeep will have taken full account of police advice in reaching their decisions on what to do.
In relation to the reference made to one of the candidates in the mayoral election—I do not want to go into the election this afternoon—it will not be up to whoever is successful on Thursday as to whether or not a protest march should take place. As the noble Lord knows well, the current law enables the commissioner and, outside London, district councils to apply for marches to be prohibited when serious public disorder is anticipated and to attach conditions to public assemblies. Whether or not to use the powers is an operational matter for the commissioner or the chief of police in any county.
The noble Lord, Lord Harris, is right that we have to be careful in relation to the courts. It is important that those who are convicted of committing offences are not only rightly convicted, but also rightly punished. However, as we discussed earlier this afternoon, under our system that must remain a matter for the courts to lay down and not for Parliament or the Home Secretary or the Government. I am sure that we all have our own feelings as to what should happen. I hope I have covered all the questions asked.
Lord Harris of Greenwich: My Lords, one specific question I asked was whether or not a report could be obtained from the Crown Prosecution Service as to how the courts dispose of offenders who appear in relation to yesterday's events and also in relation to those who appeared in the previous riots in the City of London.
Lord Bach: My Lords, I thank the noble Lord for repeating the question. The answer is yes; but the independence of the Crown Prosecution Service will also be observed.
4.21 p.m.
Lord Mishcon: My Lords, this matter has not only brought shame upon the perpetrators of this horrible behaviour, but also the fact that we have in our midst, calling themselves subjects of this country, people who can behave in this dreadful way, is a slur upon the nation.
Perhaps we can look a little more closely at the question raised in regard to the courts and the way in which they deal with these matters. Obviously, we cannot dictate what the courts should award those who are found guilty by way of punishment, but what the public may recognise as being a slight improvement is this. Knowing that violence was to be perpetrated, and knowing that for some considerable time, should not courts be pre-convened to deal with those matters, so far as they can, consistent with our systems of justice? In other words, why do we not set up courts whereby, instead of after a long delay when all these matters have been investigated and then for the very first time the perpetrators of the violence come before the courts, at the outset the people whom the police had seen behave in this violent way could be
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dealt with immediately. The courts would then decide what cases ought to be adjourned in order for a defence to be properly put. And, again, I hope that they would consider it proper to treat this as an emergency and allow short periods of time consistent with justice when there is a question of remand. The courts could decide immediately, in very bad cases, whether or not to remand in custody.
What is troubling in this matter is that we will go away after this discussion; Parliament will have dealt with it in both Houses and we will hear about cases brought before the courts in three, four or six weeks' time. Is that good enough?
Lord Bach: My Lords, the House knows that my noble friend speaks with tremendous experience and wisdom on these matters. I want to be careful what I say in response and he will understand why. As I understand it, the 97 who were arrested yesterday will have been brought before the court at some stage today. Whether or not the court has dealt with any who admitted guilt, I do not know. But, if they protest their innocence, they must be entitled, as my noble friend knows better than anybody, to prepare their defence. But I agree that it is important, from everyone's point of view, whether these cases are heard eventually in the magistrates' or the Crown Courts— much will depend on the charges laid by the Crown Prosecution Service—that they are dealt with as quickly as possible.
Viscount Cranborne: My Lords, first, when the Home Office is in a position to tell us, will the Minister undertake to advise us as to how much those vandals cost the taxpayer during the past 48 hours and in the run-up to the demonstration yesterday? Secondly— this is a matter for information—is he able to inform the House as to whether or not Mr Ken Livingstone expressed an opinion about the events of yesterday? If so, was that opinion supportive of the vandals or of the forces of right?
Lord Bach: My Lords, the first question is easier to answer than the second. Of course, once the cost is known—that may take a little time—I shall write to the noble Viscount and place a copy in the Library. There may be other ways of circulating that information to other noble Lords.
In relation to Mr Ken Livingstone, I have only read the press reports. But it matters not to me one way or the other what he had to say about this issue; his previous opinion was well known.
Lord Clinton-Davis: My Lords, I have tremendous regard for my noble friend Lord Mishcon because he was my tutor. But is not the Minister concerned at his suggestion that there should be a separate entitlement to trial for those people? Should not the persons concerned be treated as equal before the law? That being so, is it not better for existing magistrates to determine whether or not they should be tried? They are entitled to put their cases before the bench, where there is sufficient reason so to do. That being so, does

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not my noble friend agree that the people concerned should attend before the magistrates; that the magistrates should determine whether or not they should be tried before that bench or somebody else; and the magistrates have the right at the present time to determine whether or not the case should be heard at that time or at some other stage?
Lord Bach: My Lords, I agree with my noble friend and nothing anyone has so far said is against his premise. It is, of course, right that the more the public are affronted by an offence, the more essential it is that the law should take its proper course. That must happen in this as in every other case. I am sure that the courts of this country, whether magistrates' courts, Crown Courts or wherever the perpetrators end up, will ensure that those charged with offences receive a fair trial. It would be a disgrace if they did not.
Lord Mackie of Benshie: My Lords, will the Minister give the House an assurance that in future the Cenotaph will be protected against any acts of violence or desecration by such people? The Cenotaph is important to practically every family in the land. Whether or not it offends certain groups of protestors, it should be protected from damage.
Noble Lords: Hear, hear!
Lord Bach: My Lords, the noble Lord is quite right. Of all the violent offences committed yesterday, speaking personally, I felt that the attack on the Cenotaph was the worst. I shall be careful in choosing my words here, but discussions were held beforehand on what should be done between those responsible for the Cenotaph and the police. My understanding is that advice was given by the police that the Cenotaph should have been fenced or boxed in. I am quite sure that if such a situation is ever again reached, the Cenotaph will be protected.
Lord Simon of Glaisdale: My Lords, what is the situation as regards my noble friend Lord Carnarvon's proposal that it should be an offence to wear a mask with the objective of wrongfully evading identity in public?
Lord Bach: My Lords, as always the noble and learned Lord has asked a pertinent question. Under the provisions of the Criminal Justice and Public Order Act 1994, as amended this year by the Government, that Act has now been strengthened by the inclusion of new powers to enable the police to remove face coverings when a Section 60 order made under the Act is in force. Perhaps I may remind the noble and learned Lord that a Section 60 order empowers the police to stop and search for weapons and dangerous implements without the need to suspect particular individuals once the order has been invoked. I realise that that does not answer the noble and learned Lord's question about the suggestion that the wearing of masks should be an offence in itself, but greater powers are now in place. I understand that
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those powers were used yesterday in an attempt to identify many of the miscreants who were wearing balaclavas at the time they committed their offences.
Lord Eden of Winton: My Lords, the Minister has referred twice to the bilateral discussions which took place between the police authorities and the Home Secretary. Can the Minister assure the House that no direction or request of any kind was made by the Home Secretary or anyone acting on his behalf which in any way persuaded the police authorities to desist from taking action or putting in place remedial measures that might otherwise have been implemented?
While I am sure that all noble Lords share the words of praise that have already been expressed by several speakers for the police on their skill and careful tactical planning, everyone—not only in this House but throughout the country—feels a sense of absolute disgust and shame at the desecration of the Cenotaph, the attack on the statue of Sir Winston Churchill and the destructive digging in Parliament Square. Those acts were deliberately designed to provoke and attack the established attitudes and adopted views of the people of this country.
In the light of what has taken place, will the forthcoming review endeavour to answer one most important question: where does the protection of public property end and the appeasement of anarchy begin?
Lord Bach: My Lords, I believe that I can give the noble Lord the assurance that he sought at the beginning of his contribution. We all share in the noble Lord's feelings about the offences that have taken place. However, I feel that it is important to stress that in not the slightest way has there been any move to give in to the forces of anarchy expressed yesterday. The police did a very professional job and the position could have been infinitely worse if they had not taken all the right decisions. I believe that the House is generally of the view—it has certainly been expressed today—that the police behaved admirably. Nothing was given to the anarchists and nothing will be given.
Lord Acton: My Lords, is my noble friend aware of a report in The Times today stating that the McDonald's in Whitehall was closed after a police warning and that the handful of staff present had to flee to safety through the rear of the building as chairs flew through the air? My noble friend cannot possibly be aware that I had breakfast in McDonald's in Whitehall yesterday morning—long before the violence took place—and that, as ever, I found all the staff to be extremely helpful, attentive and courteous. Will the investigation into the attack on McDonald's be pursued with the greatest possible vigour?
Lord Bach: My Lords, I am grateful for my noble friend's contribution. I can assure him that the

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investigation into what happened at McDonald's in Whitehall will be pursued with the greatest vigour, as will all other parts of the investigation.
Lord Northbourne: My Lords, perhaps I may ask the Minister whether it is still the Government's policy to be tough on crime and to be tough on the causes of crime? If that is the case, while addressing the judicial matters that have been discussed in your Lordships' House this afternoon, will the Government also look behind these events—along with violent incidents of football hooliganism such as that which took place in Istanbul—and question the reason why so many young people behave so badly, whether they are young men or women? Furthermore, will the Government look closely at the reasons why so many incidents of violence are taking place in our society today?
Lord Bach: My Lords, in response to the noble Lord I can assure him that of course the Government continue to believe in being tough on crime and tough on the causes of crime. However, I am not sure that on this occasion the noble Lord has chosen the best example. Certain youngsters, both male and female, get into trouble and then need help rather than punishment. However, I do not believe that that applied to those who were involved at the front of yesterday's demonstration.
Baroness Park of Monmouth: My Lords, can the noble Lord clarify one point for me? I have read that, before the march began, the police were not able to secure from one particular group a degree of information about its intentions and plans. Normally the police would expect to receive such information. Is that the case, and if it is, can anything be done about it?
Lord Bach: My Lords, the noble Baroness is quite right. As I said when I repeated the Statement of the Home Secretary, none—I repeat, none—of the organisers was willing to discuss their preparations in advance with the police. That of course goes against all the normal procedures followed by demonstrators of all kinds who have held their protests peacefully over many years in our society. Usually discussions between the organisers and the police take place, whatever their standpoint may be. However, these people were not prepared to hold advance discussions with the police. That might suggest to some that they were looking for trouble.
Lord Hoyle: My Lords, as one who in the past has participated in many non-violent demonstrations, whether in relation to jobs, the environment or peace, like my noble friend, I regret that those who wanted to occupy Trafalgar Square to make their protest about the situation at Rover were not able to do so. Perhaps I may also say that I join with all noble Lords in condemning those who committed acts of violence yesterday and caused injuries to the police. I am sure that the House will agree with me when I say that I hope that those police officers who were injured—in
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particular one officer who was hit in the face with a brick—will soon be fit and back on duty protecting the public once more.
Lord Bach: My Lords, I am grateful to my noble friend and I know that he has spoken for the whole House.
Baroness Carnegy of Lour: My Lords, in view of the fact that no one was prepared to discuss such arrangements with the police, could not the Government suggest to the in-coming mayor of London, when we know who he or she will be, that if such a situation arises again it would be desirable to close Whitehall altogether because the Cenotaph is there? I do not believe that anyone wants to see it boxed in whenever there is a demonstration. Further, bearing in mind the fact that 1st May seems to have been an inflammatory date in this matter, would the Government consider changing that holiday and perhaps granting an extra one at Whitsun?
Lord Bach: My Lords, I must remind the noble Baroness that this issue has nothing to do with the mayor. It is a matter for the commissioner and the Home Secretary, but operationally for the commissioner alone. With respect, I do not agree with the noble Baroness about 1st May. It is a day upon which many peaceful people wish to celebrate what they believe in. The behaviour of certain people on that date is an insult to those who want to celebrate May Day in a way that has been practised for many years.
Baroness Harris of Richmond: My Lords, the noble Lord has already undertaken to provide information regarding the cost of yesterday's demonstrations, but can he confirm that all police leave in London was cancelled to enable the force to police the crowds? Will he further undertake to publish for the people of London the cost to them of just the policing element because the people of London will lose out in that respect as regards the funding for their police service? Yesterday was quite disgraceful and the people of London deserve an answer to that question. They will lose policing because of yesterday's demonstrations and they need to know that.
Lord Bach: My Lords, I am grateful to the noble Baroness who has great experience in such matters. Yes, I can confirm that all police leave was cancelled and that in due course the public can expect a response in terms of the cost involved.

Postal Services Bill
Second Reading debate resumed.
4.41 p.m.
Lord Dearing: My Lords, in rising to speak I must declare an interest as a Post Office pensioner and as someone who has many friendships and much regard for people in the Post Office and in sub-post offices. We are discussing today an issue that concerns all of

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us; namely, the excellence and cost-effectiveness of our postal services, as well as the long-term well-being of what has over the past two centuries been a major national asset in a world where no business, whether public or private, however much regard it has been held in by the public and however illustrious the service it has given, can look to the future with confidence.
My concern is that this Bill should provide a framework that will give the Post Office an opportunity to emerge in a very uncertain world as one of the main players in Europe. The Minister was my predecessor at the University for Industry (the UFI). We dedicated ourselves to the service of people and in equipping them to be effective throughout life in terms of work in a rapidly changing world. The latter affects the Post Office very much. The Minister referred to four factors in that change. The one that comes immediately to my mind is the awesome advance of information technology and, equally awesome but even more surprising, the ability of people to use it.
In this world of change, I am very much aware that there is a movement in the Commission to liberalise postal services across Europe. I am concerned that Britain should emerge as one of the successful nations in providing postal services to Europe.
I have had a particular worry about this matter which goes back 20 years. I have in mind the uncertainty that has, to my knowledge, persisted during that period about the framework within which the Post Office will be able to operate. This was highlighted by the Trade and Industry Select Committee in the other place when it criticised that uncertainty and referred to the damage that it was causing to the prospects of the Post Office. Therefore, even though it has taken them a little time, I am grateful to the Government for seeking to resolve that uncertainty.
However, in expressing that appreciation, I have nevertheless a few points to make. Whether the Post Office is able to be successful in this new environment depends very much, as I said, on the framework within which it will operate. Fundamental to that is the strength of its balance sheet when it is set up as a company. For example, will it have the resources to enable it to be a major player, or will the Treasury play it careful and thereby ensure that it is not?
I noted with interest the provisions in Clauses 68 and 69 for government loans and guarantees. I should be much happier if they were not there and if the Post Office's balance sheet made such provisions unnecessary. I say that because all my experience in working on public corporations is that the more arm's length the relationship with a government, the more the latter are concerned purely with creating a framework and in discharging those functions that are proper to a shareholder, the better for government, the better for the public and the better for the organization—in this case the Post Office. Therefore, could the Minister tell us, if not this afternoon then perhaps on a future occasion, what the Government have in mind for this balance sheet?
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I note that Clause 67, for reasons that I totally understand, provides that there shall be no disposal of shares or share swops without the approval of both Houses of Parliament. However, as the Minister knows well, decisions often have to be made swiftly in the commercial world. Those who are in the front-line must be able to act with confidence and conviction. When these matters are brought before Parliament, I urge the Government to do so swiftly and not to spend ages working out a position with the Treasury. In those circumstances, Parliament will respond decisively with either a yes or no to the proposals. So much for what I see as the big issue for the Government. I say to them, "The more you stand aside and discharge your responsibility as the setter of a framework and as shareholder, the better for everyone".
I turn now to Clause 102, which deals with subsidies to what are called "public post offices". I did not note a definition in Clause 117 of "public post offices", which is a new term to me. I noticed a definition of "post offices", but I imagine that what I used to call "post office counters" is what is meant by that term. I realise why the Government are introducing this provision, but I very much regret the need for it. I assume that it comes from the decision that social security benefits will in future be paid through automatic credit transfers. I believe that that came from the calculation by the DSS that the cost to it of such transactions could be reduced, so I am told, to one penny as compared to 48 pence, thus making a saving of £350 million. I have no doubt about: the accuracy of any such calculations. However, I learnt long ago that it is not the arithmetic that matters; it is the thinking that underlines the arithmetic.
What worries me is whether those responsible for taking that decision have done a total cost-benefit analysis regarding the cost to society as opposed to the benefit to the DSS in making this change. Did the Government calculate those sums? If so, can the Minister tell the House the outcome? Did the Government ask the banks whether they wanted this business? Further, did the banks say that they would do it for nothing, or is it possible that they will charge? Is it not the case that bank charges are no light matter? In making such savings, could it be that the DSS is transferring the costs to people who can ill afford them—for example, pensioners or families with children who draw family benefits—or is it transferring them to the Post Office? There will be costs, and they will be big costs.
I am pleased to know that the PIU has been invited to look at the future and at how the future might be secured for the network of post offices, but I wonder whether it has also been asked to do the total sum, because it is the validity of that total sum which should first concern the House before we move on to the issue of subsidy. There is no security in subsidy. I would say to the Minister, for whom I have a warm regard, that I understand why he should have referred in his speech to an unhealthy reliance on the payment of benefits, but perhaps the 8,000 sub-post offices that have that unhealthy reliance might see it rather differently.

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I referred earlier to the regard and respect in which I hold many people in the Post Office. I had particularly in mind the courage shown by many postal workers and especially lonely sub-postmasters and sub-postmistresses who have had to resist with great courage armed attacks which, in my time as chairman, sometimes occurred at a rate of 10 or 20 per week: little people, old people, mature matrons, pillars of the Church, wrestling on the floor of the post office to safeguard public moneys. I remember the immense courage of people in Northern Ireland. I remember going into a sub-post office at the entrance to a housing estate in Belfast. When I entered I was faced with a one-way mirror as protection for the staff in that sub-post office, which had been raided 10 times. Behind the counter was a ladder so that they could shin up to the loft if they were attacked again. The courage of these people was awesome. In a recent letter to the Minister I quoted Mark Anthony:
"The good [that men do] is oft interred with their bones;…"
Let us just remember, in taking these decisions, the good service that these good people have given.
To sum up, I ask the Minister about the balance sheet. I ask him to give great public service by using his energies and knowledge as a businessman to ensure that the Government, in the administration of this Act, are "hands-off". I ask the Government to reserve their role to that of a shareholder. I also ask the Minister to tell the House about the total costs and benefits of the change regarding social security benefits. I would also like to ask the Minister, as he was asked by the noble Baroness, Lady Miller, how the subsidy scheme will work and if we can be sure that it will work in a way that will help to re-establish the competitiveness and the ability to get business of these sub—post offices and Crown Offices. We would all wish it to operate in a way that is uniform throughout the land and is not subject to local decisions which will impair it. It is a great national service—a mass provision of post offices throughout the land in the service of the common people.
4.53 p.m.
Lord Clarke of Hampstead: My Lords, in my view this Bill signals the beginning of the end for our world renowned postal service. Let me declare at once my interest. It began 54 years ago when, at the age of 14, I joined the GPO, as it was then, as a telegraph boy. That interest continued throughout the following 51 years until I retired as a trustee of the Post Office pension funds. The period in between included employment as a postman and a sorter and for 36 years I was a representative of the Union of Post Office Workers. I spent the last 14 years as a national officer of the union and served for 10 of those years as its deputy general secretary. I am in receipt of an occupational pension from my union.
I was reminded earlier by the noble Baroness, Lady Miller of Hendon, of the silver salver that she presented to the staff of the Post Office. That salver was placed in a cabinet in my office at the union's
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headquarters, and it was not until I entered this House that I realised the connection. I just hope that my successor is looking after the salver as well as I did.
I am sure your Lordships will understand that speaking in this Second Reading debate is a sad and painful experience for me—painful because of what I firmly believe will happen to our great Post Office and the service it provides to every part of our islands and abroad. It is particularly painful for me to criticise my party in public for the first time in my life.
When the Government published the Bill earlier in the year, many people, both inside and outside the Post Office, welcomed the fact that at long last commercial freedom was to become a reality. The noble Lord, Lord Dearing, mentioned the long period of indecision leading to the problems that have been faced by the Post Office. At the time the Bill was published I had my doubts about the method being suggested to bring about that freedom. I believed, and still believe, that the proposed creation of the plc will eventually lead to private shareholding in the Post Office at some future date.
Of course commercial freedom is essential to the future of the Post Office. That has been glaringly obvious for many years. In my maiden speech on 1st December 1998, I said:
"Commercial freedom will allow the Post Office to plan outside the Government's public expenditure cycle. It will give it freedom to borrow and invest, freedom to enter into acquisitions, joint ventures and strategic alliances, and freedom to allow the workforce to share in the success of the Post Office".—[Official Report, 1/12/98; col. 410.]
I firmly believe that all these freedoms would have been possible without the need to create the plc. I shall say more on that point later.
The Bill will replace the old-fashioned EFL, the external finance limit, with the new, commercially based shareholder dividend. It will give freedom to borrow at commercial rates up to £75 million per annum for acquisitions, joint ventures and business investments, for the fast-track process for investments in excess of this amount. These measures are to be welcomed.
The inclusion of the universal service obligation for letters and parcels to all the 26 million addresses in the United Kingdom at a uniform price is also to be welcomed. However, it will require some safeguards for the Post Office when the question of a monopoly limit is addressed. The regulator will be charged with reviewing the scope of the letter monopoly and reporting to the Government within one year. If that report does not fully accept that the universal service obligation will need a reasonable monopoly limit, then I am afraid that the excellent service now provided by the Post Office will be put at risk. We shall have to wait and see what the newly created regulator recommends.
This House needs to know the exact role and powers of the new postal services commission. It is essential that the House be made aware of the level at which the regulatable recommended monopoly is to be set. Commercial freedom and exposure to greater competition will require a sensible, gradual and controlled liberalisation of postal services, not just in

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the United Kingdom but throughout the European Union. Perhaps my noble friend the Minister can give the House an assurance that the Government will take steps to ensure that this will happen. I am confident that the Post Office and its dedicated staff will meet whatever challenges are set by the new regulatory machine in respect of the collection, distribution and delivery of letters.
The Bill has a very important bearing on the future of the Post Office Counters network. We await the report of the Government's Performance and Innovation Unit. The unit was asked to identify the contribution made by post offices to the vitality of local communities and to consider how the Post Office can best contribute to the Government's objectives in the future and, in the process, formulate objectives for the Post Office network.
During the Third Reading debate in another place on 18th April, the Secretary of State for Trade and Industry expressed his regret that the PIU report was not available for Third Reading. I also regret that. The Secretary of State said that he hoped the report would be given to the Prime Minister soon after Easter. Following that, an announcement would be made on his view of the PIU's work. There is not a Member of this House or of the other place who could not quickly have given the answer to the first part of its remit. I refer to the identification of the contribution made by post offices to the vitality of local communities. Their role is essential to community life. The value of the Post Office network has been well rehearsed in your Lordships' House. We have heard today from the noble Baroness, Lady Miller of Hendon, about the vital part it plays in our community. At times of crisis, such as the passport fiasco last year, the closing by Barclays Bank of some of its branches, and on many other occasions, the Post Office has fulfilled an essential role— a role that is not confined to rural sub-offices. Crown offices are also vital to the communities they serve.
The Post Office has been able to meet these needs simply because it was there when needed. Any further reduction in the network can only go against the interests of communities which the Post Office has served for centuries. Perhaps my noble friend the Minister will today give the House an assurance that the Government are determined to maintain the network at its present level. Perhaps the Minister can give the House more detail about the subsidy proposed at the time of Third Reading in the other place.
Members of this House, myself included, have from time to time sought assurances from the Government that arising from the decision they have taken to pay benefits directly into claimants' bank accounts from 2003 instead of over the counter in cash at post offices, no one who wants to retain the ability to receive his or her benefits in cash will be denied this facility. A number of assurances have been given. I again ask my noble friend whether he will give a guarantee that no pressure advertising will take place in an attempt to woo claimants away from their chosen method of payment.
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Last September the Trade and Industry Select Committee said that the decision to pay benefits into bank accounts would mean the Counters business facing annual losses of £ 100 million. In a Statement in another place, and repeated by my noble friend the Minister in this House, the Secretary of State asserted:
"Taken together, our proposals for greater commercial freedom will bring over £600 million into the Post Office over the next three years".—[Official Report, 8/7/99; col. 1028.]
That statement was repeated at his press conference on publication of the Bill. I would appreciate it greatly if my noble friend the Minister could confirm that the figure of £6 million is made up of two elements.
Am I correct in assuming that the £125 million per year reduction in the negative EFL together with the £75 million per year borrowing accounts for the £6 million over three years? Am I also correct in saying that the £75 million is not money available to improve services but will constitute loans to fund acquisitions and will need to be repaid with interest?
Set against this extra money will be substantial financial drains on the Post Office's resources. Will my noble friend confirm that the revised Horizon project—the automation of Counters offices—is likely to cost the Post Office £100 million per year and that the estimated loss on accumulated EFL surpluses amounts to £107 million per year in 1998–99? Will my noble friend also confirm that if the monopoly was reduced to 50p (and 150 grams) it would lead to the Post Office facing a further reduction of profits of approximately £100 million? Following the recent merging of the two Post Office pension funds, does the Minister agree that the contributions holiday that the Post Office has enjoyed for many years is unlikely to continue? If my understanding of the situation is correct—I am confident that I shall be told its that is not the case—the seemingly advantageous position is not quite so attractive as one might have been led to believe.
I am conscious of the length of my speech. As I said, I am fearful for the future of the Post Office. So, too, I am sure, are other noble Lords. I wish therefore to return to the part of the Bill that causes me great distress and not a little disappointment; namely, the whole question of the plc status and the shareholding concept that will allow a partial share sale in Post Office plc in order to further a joint venture or partnership. I believe that by creating a plc and introducing the concept of shareholding the Government have made a grave mistake. The benefits to the Post Office contained in parts of the Bill, especially those that provide the much needed commercial freedom, could have been obtained by the creation of an independent publicly owned corporation (IPOC), as mentioned by the noble Lord, Lord Razzall.
On 8th July last year, I asked my noble friend the Minister where, in the Labour Party's manifesto for the 1997 general election, I would find any reference to making the Post Office a plc. My noble friend replied:
"I do not think the question of a plc was covered in the Labour Party manifesto, but things do happen in this world that were not covered in that manifesto".—[Official Report, 8/7/99; col. 1033.]

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Today, in referring to share ownership, the terms "plc" and "shareholding" were linked together by the Minister in almost the same sentence. Of course the question of a plc was not included in the manifesto. No one in their right mind would have thought that the Labour Party would make such a proposal. After all, the Labour Party, the public, many institutions and the trade unions had campaigned vigorously against the previous government when it was suggested that the Post Office should be privatised. Therefore I was not surprised that the question of a plc could not be found in the manifesto. I am surprised, however, that the matter has appeared in the form now before us.
I respectfully suggest that if the proposals contained in the Bill, as they refer to the creation of a plc, had been proposed by a Conservative government, the Labour Party would again be campaigning against such a proposal. Those within the Government who are determined to have their way will say that the proposals in the Bill do not constitute privatisation. I agree that they do not at this stage but I believe that this Bill, if enacted in its present form, will make it a simple exercise for the shares to be sold at some future date.
The warm words of comfort that say, "Trust us, we do not intend to sell private shares", are meaningless unless there is an unequivocal statement that we shall never sell private shares. Of course, my noble friend cannot commit future governments for ever. He can, however, say that a Labour government will never come back to this House and another place with proposals to go further than the Bill as at present drafted allows. So far such a statement has been missing. My noble friend can assure the House that the words of the Secretary of State for Trade and Industry on Monday 7th December 1998, repeated in this House by my noble friend on the same day, are no longer part of the Government's thinking. I refer to his comment:
"I should make it clear that we certainly do not rule out the possibility of introducing private shareholding into the Post Office—for example through the sale of a minority stake in it—at a later stage".—[Official Report, 7/12/98; col. 744.]
Today I respectfully ask my noble friend to say unequivocally that there is no suggestion, now or in the future, that a Labour government will ever sell private shares in the Post Office. Of course my noble friend cannot bind any future government to this principle. The Bill makes it only too easy for a future Conservative government to have in place the means for secondary legislation to be swiftly introduced that would effectively kill the publicly owned Post Office. Or, perhaps, has my party reached the stage where it believes that it will remain in power for ever? I should like to think so. However, history tells us that all good things come to an end. I cannot believe that we, in my party, are so arrogant that we believe that there will never be another Conservative government.
Any reading of the provisions of Clause 67 shows that the Treasury will always hold the ace cards in any share dealings with prospective partners in any joint venture. It is also clear that there is to be no limit or cap
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on the disposal of shares. At present, unless it is amended, there is an open ended provision which in itself brings into question the oft-repeated statement that the Post Office will remain publicly owned. I suggest that my noble friend gives consideration to introducing a statutory limit of 10 per cent of the total share capital of what will be Post Office plc. By providing such a cap on what can be disposed of, or swapped, or traded in a joint venture, some credibility could be restored and the public would see that the Government's statements about keeping the Post Office in public ownership might be better believed. It would certainly help me to believe what is being said.
I expect that someone will ask, "What if the prospective partner with whom we want to go to bed wants 10.5 or 11 per cent?" That argument could be pursued up to the 50 per cent plus figure that would take the Post Office out of public ownership altogether. It would be better to introduce a limit in the first instance and then examine any problems that may arise if the cap is found to be too low. To my knowledge there is no experience anywhere in the world of a "share swap" arrangement between operators in the postal business. That is not surprising given that so few postal operators are at present in the private sector or have plc status. There is evidence of such deals in the field of telecommunications. There is the case of the deal between France Telecom and Deutsche Telecom. In that case each company has given the other 2 per cent of its shares. If it ever came to pass that the Post Office were to enter into a similar arrangement, 10 per cent of shares available for such dealings would be more than sufficient to arrange such a marriage.
What is more common within the telecommunications industry is the establishment of a joint venture for a particular range of services. In such cases some of the assets of the two partners may be transferred into the new joint venture. A good example of how the arrangement could work for the Post Office in the future is the announcement made in early March that the Post Office had signed heads of agreement with TPG in the Netherlands and Singapore Posts. The form of the alliance is a global joint venture in which TPG will hold a 51 per cent stake with the British Post Office and Singapore Posts each taking a 24.5 per cent stake. What is significant in this case, which will provide cross-border mail services, is the fact that the alliance does not involve any assets of the three respective partners. I am sure that my noble friend is aware of these facts. I believe that the Government should look at providing for a limit as I have suggested.
The word "democracy" and the concept of democracy are often heard in this House. Along with countless thousands of ordinary Labour Party members, I value and have worked hard for democracy within the Labour Party—a democracy

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that gave its support for a resolution at the 1999 party conference which stated that the Post Office should remain a 100 per cent publicly owned service. It also stated that,
"there must be no uncertainty or ambiguity both now and in the future about the commitment of a Labour Government to the continued public ownership of the Post Office".
The resolution also urged that,
"a commitment to full public ownership of the Post Office is clearly contained in the Labour Party manifesto for the next General Election".
Some parts of the Bill are welcome but, in my view, a number of clauses stand the decision of that democratic conference on its head.
I said at the beginning of my remarks—I apologise for the length of them—that this is a sad day for me. To misquote a phrase made famous by my good friend Neil Kinnock,
"The sight of a Labour Government, a Labour Government, bringing forward proposals that will eventually destroy a valuable public service, a public service that has served our country so well for over three and a half centuries. fills me with great concern".
I hope that before the Bill leaves this House it will be amended in a way that gives some comfort to the Post Office, its staff and the public that it serves.
5.11 p.m.
Baroness Byford: My Lords, the Postal Services Bill is a compromise to allow the Post Office some of the freedoms of privatisation while, at the same time, maintaining ultimate government control and ownership of the parent company.
At this stage, I should declare an indirect interest as a member of VIRSA, an organisation which is working with the Government and sub-post offices to try to promote their future.
In her opening speech, my noble friend referred to the many concerns that we have on these Benches. I should like to add my weight to three in particular. My first concern relates to the relationship between the regulator, the consumer body, the post offices and the Government. This is an issue we shall certainly discuss at Committee stage. My second concern relates to the £75 million limit—which, as other noble Lords have said, sounds like a huge amount but which, in today's business world, is very small. Again, we shall have to return to this issue if we are to make some sense of it. My third concern relates to the discretionary subsidy, an issue which many noble Lords have already mentioned and to which, I suggest, others will speak later. I am concerned about how it will work, whether there will be even-handedness and whether it will enable all areas to work within the same framework—a theme to which I shall return later.
While I share these worries, my main concerns today are much narrower and centre on the effect of the Bill and on the associated pronouncements made, for instance, in the July 1999 White Paper on low income communities in rural areas and in towns and cities.
My most serious concern is in relation to the effect of the intention to abandon the Horizon smartcard system in favour of payment of benefit through the
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automated credit transfer system into bank accounts. The situation was confused—I think it still is—and I, like many others, have continued to table Questions about it. Only recently, the Minister responded to a debate in the House on the issue. I hope that when he responds to the debate he will refer to the matter again.
For the people out there, the situation is still very confused. The information given by the Government has been provided in a series of statements which contain no actual conclusion. On 2nd February the Prime Minister stated that:
"We should … modernise so that benefits are paid into bank accounts for people who want that, but we shall make arrangements for those who do not want that to enable them to continue collecting in cash".—[Official Report, Commons, 2/2/00; col. 1036.]—
not necessarily at post offices, but in cash.
However, Mr Rooker had stated in January:
"Following the move to ACT from 2003 customers will have their benefits paid into a bank account but will continue to have a choice of where they access their cash, with those who wish to collect at post offices still being able to do so".—[Official Report, Commons, 24/1/00; col. 83W.]
Mr Rooker had earlier stated in October:
"As at August 1999, about 65 per cent. of all benefit recipients were receiving payment in cash by order book or girocheque at the Post Office".—[Official Report, Commons, 26/10/99; col. WA 842.]
In his evidence to the Trade and Industry Select Committee, Alistair Darling said:
"About 85 per cent of those who receive benefits have bank accounts".
If only 15 per cent of those who receive benefits do not have a bank account, but 65 per cent of benefit payments are claimed at the Post Office by giro or order book, it appears to me that 50 per cent of benefit recipients prefer not to use banks, for whatever reason. There are many reasons for that and perhaps I may mention some of them.
Banks reserve the right to apply monies entered into a customer's credit to the overdraft. Trite but true. Many benefit payments result from the payee's financial distress caused by circumstances such as job loss, which tends to result in overdrafts. Secondly, many recipients have shared bank accounts and at times of financial stress they need the facility to apply benefit payments to their own needs. Thirdly, one of the most difficult times for many people is the breakup of a marriage or of a long-standing relationship. Whichever parent has responsibility for caring for children, he or she may need to have a source of ready cash which does not involve using family bank accounts which may not be immediately available to them.
Other noble Lords have spoken eloquently on the subject. I look with great admiration at the noble Lord, Lord Dearing, and wish that I could speak without a note.
Alistair Darling also quoted to the committee the comparative costs of paying benefits, and other noble Lords have referred to this. Giro cheques cost 79p per

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payment; order book costs 49p per payment; the payment card would have cost 6'7p; to pay by ACT costs about a penny.
It may cost the Government one penny under whatever system they plan to operate, but I beg leave to doubt that it costs one penny in toto. I am left wondering where and how the remaining cost elements will be recouped by those providing the service. Bank accounts are notorious for accumulating charges—just as banks prefer to operate in areas not noted for the presence of benefit claimants.
I turn now to my other major worry, which is the effect on sub-post offices of the loss of government revenue from servicing the benefit payments system. We should remember that many small, privately-owned sub-post offices have been bought by people who have left their careers early, either through redundancy or early retirement. They have been relying on the sale of those businesses to top up their interrupted pension provision. If the Government's moves threaten the viability of those businesses, it is unlikely that they will be readily saleable. I pose these questions to the Minister: have the Government kept this matter in mind? What will they do about it?
The Government have responded to the worries of the sub-post office franchisees by proposing a subsidy. We await, as other noble Lords have said, the report of the PIU. Even for this modernising government, the length of time they have taken to bring this report to light beggars belief; it should have reached us earlier. Still we await the report on the detail of how the subsidy will work, but in the interim I should like to quote from the press release of the General Secretary of the National Federation of Sub-Postmasters, Colin Baker, following an amendment at Third Reading in another place. It states:
"We are however encouraged that the Government are looking for ways of supporting a network of post offices and if matters get to such a point then clearly subsidies particularly temporary ones may help to get the network through a very difficult phase. We would set our face completely against local authorities giving or administering subsidies because we think that we would rapidly lose control over the network as different local authorities will most certainly deal differently when faced with the need to subsidise and we must not forget that different local authorities may be under different political control"—
and have different vices and different hopes.
"We cannot therefore work up any enthusiasm for that prospect.
"We would say the answer to the network is investment, not subsidy allowing us time to get through this difficult period and out the other end".
It wants to see a long-term prospect of business success.
It is worth noting that so many of our people, whether or not they have bank accounts, choose to claim their money through post offices. It is also worth noting that 95 per cent of the population live within one mile of a post office compared with 60 per cent living that close to a bank. I am sure that I do not need to say anything further about the level of bank closures in rural areas and towns. Indeed, a bank closure was recently announced which we hoped would not take
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place, but it has now taken place. In rural areas, only 9 per cent of villages have a bank but 60 per cent have a sub-post office.
I shall not go into greater detail today because Second Reading is not the time so to do. But Second Reading is the time to make clear to the Government the fears held by many vulnerable and frail people. Such people are hardly able to get to post offices, let alone to banks—which may no longer be there. They are extremely concerned about the future of their local sub-post offices. If something is not forthcoming from the PIU report, the 8,000 post offices that are likely to be closed will be under a great threat.
I have three questions for the Minister. Is the suggestion of subsidies just one option? If it is, perhaps he will enlarge on that a little more. If it is not, and although we do not have the PIU report, will he enlarge on what some of the other options for the survival of these sub-post offices might be? Finally, can he give us a greater indication of when the report will be available?
These are difficult times for those whose livings are very much under threat. I, like, I am sure, other noble Lords, went to the rally at Central Hall which followed the presentation of a petition of 3,128,000 plus signatures. This is not a small item. I know that it is a small item by comparison with the whole Bill but it is extremely important. The Bill should not be just about making the framework work for the Post Office's sake. It should also serve the people who will be using the Post Office. I hope that when the Minister comes to reply he will be able to do so positively rather than say, "We will hear, we will hear, but we do not know when".
5.22 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I wish to touch on two issues with regard to post offices and sub-post offices, particularly in rural areas. The first concerns reasonable access and the second concerns how small sub-post offices will be kept going when they face a 40 per cent cut in their income.
If I were a cynical person, I would think that the PIU report had been delayed deliberately. I am sure that the Government did not intend that, but it is regrettable that the PIU report and the White Paper have both been so delayed. No doubt the reason is that some of the questions that need to be answered before the Bill passes through the House are particularly difficult. The question of access to services is one of them. I looked recently at the attempt of the Index of Local Deprivation to define what access means. In an extremely good and jargon-free report it said that it is very difficult to define access to services,
"because it may not necessarily be a question of physical proximity to services. For example, someone without a car and with poor public transport options could have more difficulty reaching a post office that is one mile away than someone with a car or good public transport options who lives five miles away from the nearest post office. Range, cost and frequency of public transport are a key".
Unfortunately, the best measure that the Index of Local Deprivation can come up with is an "as the crow flies" measure. When the Post Office comes to look at

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how reasonable access will be measured, I fear that it will have no greater success than the Index of Local Deprivation.
Noble Lords have touched on the issue of access to small sub-post offices and the services that they offer. The Third Reading debate in another place also concentrated on post office services. For rural areas and many urban neighbourhoods, the post office is a means of delivering a wide range of services, not all of which are post office services. I wish therefore to move to the question of subsidy. How much of the subsidy will be for post office services? That is clearly what the Government must intend as it is in a Postal Services Bill. But if it is okay to subsidise government services, how is that not an unhealthy reliance on one form of government service? How is it that, suddenly, a subsidy for providing information through small sub-post offices is permissible and is not to be regarded as unhealthy?
How will this form of subsidy deal with multifunctional premises where perhaps the sub-postmaster also runs a garage? He may be receiving a healthy income from the garage, but he may have to deal with much paper work in the evening and spend much time in order to run what is very much a charitable service for his community as the sub-post office would not provide a meaningful income without the subsidy. How will the Government begin to test sub-post offices for viability?
In endeavouring to put the question of post office services into one small pocket and look at a subsidy for that—and in advance of the White Paper on rural matters and the PIU report—the Government will struggle. I hope that the PIU report will be available before the Bill completes its passage through this House. From which pocket of money is the subsidy likely to come? The Treasury, so it thinks, has made a large saving of £400 million. In order not to spend vast amounts of its now saved money, will it think of taking the subsidy for rural post offices out of its matched funding for the rural development regulation money, thereby diminishing that pot? Perhaps it is thinking of taking it out of some other pot earmarked for rural areas. I should be interested if the Minister believed that the subsidy would come out of new money. The history of Treasury subsidies for rural areas does not lead me to think that that is in the slightest way likely. What stage have the discussions with the Treasury reached? What understanding is there with the Treasury as to whether this money will be found by regions or areas from money already allocated to them, or will it be genuinely new money?
5.27 p.m.
Lord Harrison: My Lords, where Heseltine hesitated, Labour has acted. Where the second-class Tory plans for the Royal Mail were lost in the post for 18 years, Labour has delivered. This first-class Bill has arrived on time and on form to match the challenge of rapidly changing national and international markets; above all, the single European market.
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Labour is modernising the Post Office in a sensible and reasoned way; providing a firm basis for greater competition in the industry; giving the new plc greater financial freedom to expand and innovate, while retaining this much loved institution in public ownership—because that is what the public wants—and so producing a better deal for consumers, including the blind and the socially disadvantaged. This Bill has the stamp of authority and, I might add, of common sense.
Pleasing, too, is the Government's response to two decades of rural neglect, inherited from the previous government. The sub-post offices of Britain are being updated and transformed by the Horizon Programme, giving our loyal sentinels in the countryside sub-post offices the weapons to defend rural values while opening up new horizons in expanding a panoply of new services: 3,000 new cash machines installed; 1,500 rural lottery ticket sales points started; vehicle licence transactions doubled; and 6,500 sub-post offices, selling telephone pre-payment cards, delivered this month. These rural post offices, the quintessence of satisfying public/private partnerships, will be the focus of further commercial opportunities. The Government's announcement of the possibility of subsidy to retain such post offices for social need, determined against new statutory assessment criteria, is a master-stroke entirely unforeseen by the philosophers on the Benches opposite. Your Lordships might be readier to listen to the collective wisdom of the Opposition if the hue and cry for rural post offices were matched by a complementary concern for sub-post offices in inner-city areas. Isolated communities are not found solely in the wide, open spaces of rural Britain.
Baroness Byford: My Lords, I hesitate to intervene, but the noble Lord follows me quite closely. I mentioned the inner cities as well, so I hope that he does not think that we do not equally consider the problems of inner-city post offices, as we do the problems of those in rural areas.
Lord Harrison: My Lords, I am glad to have that reassurance. However, when colleagues opposite speak on the issue a little more balance might be welcome.
In addition, I welcome the introduction of ACT, which will eliminate losses of £200 million through theft and fraud. Does the party opposite?
My principal remarks relate to the origins of the Bill, which enacts the provisions of the 1997 EU postal services directive. The attempt to establish a single European market in postal services is wholly laudable. The 1997 directive points the way, not only in supporting a gradual and orderly liberalisation of postal services, but also in insisting on a universal postal service delivered at a uniform tariff. That must be right if we are to implement the twin objectives of establishing an efficient and effective market to support British and European business and commerce, while at the same time providing our citizens with the medium to communicate with family, friends and

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fellow citizens from addresses right across the Continent—from Lapland's Father Christmas to Greece's farthest climes. This is another practical step in making Europe work for each and every one of us.
However, perhaps I may express my regret that the first-class stamp in Britain can no longer be used to send letters to other parts of the EU. Having a uniform rate was part of a building block of a Europe of the people, by the people, for the people. The present E-stamp compensates in some measure, and makes people's lives easier. While I am speaking of a people's Europe, let me repeat that I hope the use of the E-stamp will continue to expand as a complementary service for the convenience of customers. However, I should be sorry indeed to lose national stamps, whose variety, colour and display wonderfully illustrate the splendour and diversity of Europe. We should celebrate such diversity, which, culturally and commercially, is Europe's secret weapon.
But on Europe, as ever, the party opposite is divided and disparaging—none more so than Mr Peter Lilley, who, in debating the Bill in another place on 15th February, attacked the Government thus:
"Labour's main bogey is the threat of international involvement in our Post Office, or its involvement overseas. No group is more xenophobic than the Labour Party. Mr. Haider could take lessons from it. By contrast, the Conservatives believe that free trade and free investment maintain and build links between countries"— [Official Report, Commons, 15/2/00; col. 825.]
Your Lordships may excoriate such racy language and, even more, toy with the challenging thought that the Conservative Party, in contrast to Labour, vies to be part of an international brotherhood. But Mr Lilley's main thrust is that the liberalisation of the EU postal market should be total and immediate. Even single market commissioner Frits Bolkestein is not so daft or dogmatic. But in proposing to open up the market to letters and material weighing 50 or 75 grams and above, he is playing with fire. He and Mr Lilley should note that Sweden, in liberalising its market too precipitately in 1993, has seen the cost of the standard stamp rise by 60 per cent. Everywhere else in the European Union the cost of the standard stamp declined during the same period by 2 per cent under a regime of state-owned mail delivery.
Last month, in Lisbon, EU leaders rightly called for the speeding up of postal liberalisation. But a 50-gram limit would be breaking the speed limit. The European Commission estimates that national post offices would lose 38 per cent of profits if 50 grams were the threshold. I believe that the revenues lost would be even greater if attractive mail flows were cherry-picked commercially and the universal service obligation remained the duty of governments. A 150-gram limit, to come in by 2003, is a more equitable ambition; 50 grams would be to gild the lily.
I conclude on a positive note, and one that illustrates Europe and its postal services at their best. I refer to Letternet, a scheme to get school students across the European Union to exchange letters with each other by finding new pen-friends quickly and easily. My 14 year-old daughter was offered the
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opportunity to participate in Letternet at a school in Chester. She and her friends have successfully done so, and now letters are winging their way par avion and Luftpost to and fro between Britain and Germany. Tellingly, the innovation was the idea of Deutschepost, the German post office. I am sure that our own postal authorities will be as imaginative as our continental colleagues in creating a Europe for all its citizens, young and old alike. This is the time and the Bill by means of which to sound the "Last Post" on Euro-scepticism, which serves only to separate people and not to bring them together—the complete antithesis of a modern, vibrant postal service which allows citizens to speak peace unto citizens across the face of a United Kingdom and a uniting Europe.
5.37 p.m.
Lord Skelmersdale: My Lords, listening to the noble Lord, Lord Harrison, I was reminded of a prep school jingle, which went:
"If Moses supposes his toeses are roses;
Moses supposes erroneously"
While on the educational theme, the fourth Starred Question today was on tertiary education in the West Country. Listening to the Minister's speech, I rather wondered how, if I were an academic, I should mark it, or what comment I should make on it. I found it long on "what", medium on "how", and very short indeed on "why".
That said, the noble Lord, Lord Razzall, is right in his view that it is hardly surprising that much of the debate on the Bill, both today and in another place, has surrounded the issue of post offices, especially sub-post offices, urban or rural. This is, of course, a serious issue. It is so serious that in the time I have been connected with the retail mail order business—in which I declare an interest which I hope the rules of the House, and indeed your Lordships, will allow to last through all stages of the Bill—I have seen them decline from 22,672 to 17,255. That is a reduction of nearly 24 per cent, roughly 1 per cent a year. That is serious indeed.
There are many reasons for the reduction. Changing patterns of rural life, the growth of supermarkets—one wonders whether the noble Lord the Minister is a poacher turned gamekeeper—and more and more commuting to work are some of them. Governments, and to some extent the Post Office corporation itself, have failed to appreciate that they are a service industry: they need to provide services that people want, and to be open when people need them to be open. The Horizon project will help a little. But why is it, for example, that one does not find a post office counter open after five o' clock in the afternoon? Perhaps the Minister can tell us. I had a suspicion that this was a matter of government regulation, but I have been informed recently that it is part of the rules of the Post Office. It is certainly the fault of the Government that one cannot get a passport application form in any but a Crown or franchised post office.
The Government are also at fault in their mishandling of the issue of the payment of social security benefits and pensions. having given the

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impression that they will enforce payment by direct automated credit transfer into bank accounts rather than in cash over the counter. As I understand it, this is simply untrue. Like my noble friend Lady Byford, I hope that the Minister will confirm that when he comes to wind up. Whatever his answer, it comes out as a muddle, as did the proposed, and short-lived, reduction of the monopoly ceiling. It is quite likely that the intensive restructuring and promises about the corporation's financing will turn out the same way.
However, the issue of rural post offices, important though it is, had little if anything to do with this Bill. As my noble friend Lady Miller pointed out some time ago, the outcry has provided us with Clause 102. I do not want to drop boulders in tranquil ponds, but it is, after all, quite possible to run a mail service without a single post office. All one needs are collection depots, which do not even have to be in the United Kingdom. One of the reasons why the corporation has lost out in recent years is that more and more British businesses have sent their mass printing abroad. That material is then posted to individual customers in this country from foreign countries.
I agree with all noble Lords that it is high time that the Post Office was given more commercial freedom. I welcome the Bill if it works as intended. One of the current proposals is share swaps. The noble Lord, Lord Clarke of Hampstead, commented on that proposal in a very brave speech. What he did not say might well be encompassed by the phrase "his worst fears"; namely, what happens if, say, the French or German post offices, which own a chunk of British Post Office shares, are themselves privatised? In those circumstances, what happens to the shares under the Government's proposals?
None the less, joint ventures should be performed with foreign post offices. I argued for that in an article that I wrote some two years ago. I went considerably further than today's Bill and asked for a partial privatisation of 49 per cent of the shares. No government have been brave enough to go even that far, although at least on one occasion during a postal strike they went as far as to suspend the Post Office's monopoly, quite rightly. But it did not happen during the postal strike in 1971, when I was engaged to be married. I had to undergo all kinds of contortions to get letters to my future wife in Zambia. One of my friends who was a pilot posted my letters from wherever he landed. I had another friend in Ireland to whom a third would take my letters for onward transmission. I am glad that in extreme circumstances the Secretary of State can suspend the monopoly again under Clause 10.
This brings me to universal service provision. I am surprised that, as the Government claim, this Bill enshrines it in law for the first time. The Royal Mail works effectively only if there is cross-subsidisation. I doubt that anyone would send a letter to, say, the island of Colonsay in the Inner Hebrides if he was forced to pay the full cost, which I am told is about £10, but that is no reason why there should be a monopoly. I am glad that the principal job of the regulator will be to introduce competition into the current market of
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under 350 grammes. The £1 level is a total nonsense as it is eaten away by inflation, even in these days of low inflation. The only true point of reference is weight. Weight is equally important to Parcelforce, where there is already competition.
In passing, in my experience, that competition has not improved the service very much. My noble friend Lady Miller pointed out the continuing loss to the Post Office accounts as a result of Parcelforce. I am not clear whether the regulator is to become involved here. Will existing competing carriers have to be licensed? Will the universal service obligation apply? If the service is regionalised will it be able to apply different rates to different areas, for example the West Country as compared with the Highlands and Islands? Will an entrepreneur be able to set up a service covering only one region? These latter questions apply equally to letters and small packets as they do to parcels.
With the regulator in mind, can he prevent the total abandonment of second-class post, as an article in today's Evening Standard suggests could happen? There is to be an independent check on these matters, and many more, by the consumer council for postal services which is to replace POUNC, with which we are all familiar. But what necessitates this change? Why not simply extend its brief and give it teeth, which I fully admit are somewhat lacking in its present existence? The Explanatory Notes give no guidance on this matter or in relation to Schedule 9, which relates to repeals.
I am glad that the Minister referred to e-mail. He will recall that I have a long-running interest in Subscription Services Ltd, the Post Office's comparatively new telemarketing business. I understand that since its inception it has been prohibited by the telecommunications Acts from distributing its incoming data by electronic means; in other words, firms can send their information to the company by electronic means but the latter is not allowed to distribute it other than in printed form. Is this not now "obsolete or unnecessary" (to quote the Explanatory Notes)? It is possible—I shall discover in Committee, if not today—that that restriction is in Section 63 of the British Telecommunications Act 1981, as amended by paragraph 78 of Schedule 4 to the 1984 Act. If so, I welcome its disappearance; if not, at some point we must discuss whether the time is now right for that business to compete on a level playing field with existing businesses in the private sector. After all, Clause 110 makes clear that the corporation must make the Post Office address file available to anyone who wishes to use it. The clause does not say that it must be used for addressing mail. In this day and age that is more than a little out of date. Faxes and e-mails are just as likely to be used, or indeed required.
Despite those quibbles, the Bill is 'very definitely a step in the right direction, especially as it will, one hopes, inhibit the Secretary of State of the day from interfering as much as he has to date with the activities of the Post Office. The noble Lord, Lord Dearing, is absolutely right, and, given his experience, that is hardly surprising. "Hands off" is most definitely the

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cry. However, it is worrying that the scope for interference has not disappeared. The Secretary of State still has far too great an opportunity to take action by orders, only a few of which require the consent of Parliament. I hope that the Delegated Powers and Deregulation Committee will have something to say about those particular clauses of the Bill.
The history of government corporations of all kinds shows that governments run businesses extremely badly. If the Post Office must be a wholly state-owned public corporation, in the opinion of many commentators this is the way to go about it, although many who have spoken today are, to say the least, somewhat suspicious. Of course, it does not have to be. However, as my noble friend Lady Byford said in relation to another subject, that battle is for another day.
5.50 p.m.
Lord Brightman: My Lords, perhaps I may take up a moment of your Lordships' time to turn away from the substance of the Bill to the manner in which it is drafted. I refer to Clause 118, "Index of defined expressions". I congratulate the draftsman on including in the Bill this invaluable device which saves the reader so much time and trouble. He can discover immediately from the first column of the index whether a simple word such as "employee" has a special meaning or the dictionary meaning. If it has a special meaning, he can discover immediately from the second column where that meaning is to be found among the 123 clauses in the Bill.
This most user-friendly practice featured in four Bills during the 1997–98 Session; and not in one single Bill during the last Session. I submit that the device deserves more frequent consideration by the Office of Parliamentary Counsel than perhaps it receives at present. When used, it is quite invaluable.
5.51 p.m.
Baroness Sharp of Guildford: My Lords, it is my task to wind up from these Benches. Having spent part of the holiday reading the debates on the Bill in another place, I am struck by the good humour and constructive criticism of the speeches in this House in contrast to the highly politicised atmosphere in another place. As my noble friend Lord Razzall made clear, we on these Benches extend a broad welcome to the Bill. It helps to bring a major institution into the 21st century. It keeps it—as we on these Benches think fitting—as a public sector institution providing a universal postal service across the country at a uniform rate, but gives the commercial flexibility needed to compete in the age of modern digital communications, and the power to borrow directly from the market and to pursue mergers and joint ventures within limits.
In return for its public service obligation to provide a universal postal service at a uniform price, the Post Office retains, for the moment at least, the monopoly for all postal services under the £1 limit; and given the
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retention of that monopoly it is appropriate that this new semi-private sector organisation should be subject to regulation in that reserved area, and that there should be not only the establishment of a regulatory body—the postal services commission—to oversee competition in these areas, but also a reinvigorated voice for consumers—the new consumer council for postal services—referred to by the noble Baroness, Lady Byford.
All that we welcome. The Bill brings to an end an era of extended uncertainty for the Post Office which has already done a great deal of harm to that body and to the extended network of sub-post offices. As the noble Lord, Lord Dearing, made clear, 20 years ago when British Telecom was separated from the Post Office it was clear that if the Post Office were to compete in the new age of digital communication it needed investment and commercial freedom to pursue new markets. Far from giving such opportunities, the Conservative Party shackled it firmly within the public sector, limiting its freedom to borrow or develop its services, interfering in its pricing decisions, dictating its internal structure, milking its profits to the tune of over £1 billion and, finally, holding the threat of privatisation over it for a full five years between 1992 and 1997.
In the process it shut down 974 Crown post offices between 1979 and 1997 down from 1,508 to 606—and 3,482 sub-post offices. It was a record number of closures, the maximum, nearly 400, being between 1984—85. While we share the Conservative Party's concern about the network of sub-post offices, its defence would sound to these Benches a little less hypocritical if its record in office had demonstrated earlier more appreciation of the value of that network. It was the Conservatives who initiated the disastrous Horizon project. They were responsible for its original specification which is the cause of much of the aggro that the system faces.
Nevertheless, one cannot blame the previous government for all that has happened to the Post Office. The present Government have hardly helped matters. They dithered and dallied for over two years over this Post Office decision, finally producing their White Paper in July last year when the Select Committee to review it had been set up the previous November. In the meantime, we have again seen sub-post offices being closed at a record rate.
We think that the proposals are timid. They do not give the freedom of manoeuvre that governments in other countries have given their post offices. Let us take Holland, Germany or New Zealand. There are many examples of public sector institutions which have been given much greater commercial freedom than the Government propose to give the Post Office now. Freedom to borrow remains highly constrained. Other noble Lords have mentioned that £75 million is not a large sum these days, particularly when the chief executive officer of the Post Office has estimated that a minimum of £3 billion of investment is required. So one has to go cap in hand to the Treasury and say, "Please may we have a little more?"; and we know perfectly well what the Treasury answer will be.

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It is all too apparent that substantial constraints have been put on all aspects of borrowing. As the noble Lord, Lord Dearing, mentioned, the opportunities for joint ventures and acquisitions are constrained not only by the Treasury but also by the need for affirmative resolution before the House. While we applaud that—we like open Government; we like the fact that the democratic part of the legislature will be asked to approve such matters—one must echo the reservation of the noble Lord, Lord Dearing, about the time that that may take. Such matters should not he stopped en route by the departments concerned, but brought as rapidly as possible before the House so that quick decisions can be made.
On top of those timid moves towards commercial freedom, the Government then dropped another bombshell. I refer to their decision last May to accelerate the payment of social security benefits directly through banks through the automated credit transfer system. If pursued, with one blow it effectively wipes out one-third of a staple source of the income of sub-post offices. That decision is a prime example of the lack of joined-up thinking by Government. The noble Lord, Lord Dearing, asked whether a full cost benefit analysis had been done. The situation smacks of the Treasury and the Department of Social Security being only too anxious to make savings at the expense of rural and urban sub-post offices. At a time when one of the Government's main issues relates to social exclusion, it is extraordinary that they should allow such a decision to be taken.
Having launched the Bill in another place, the Government dramatically changed course by introducing at Third Reading new Clause 102. The new clause changes the nature of the Bill, giving the Government the power to introduce subsidies to maintain the Post Office network. One cannot help but suspect that late in the day the Government have come to realise how disastrous were their decisions about the ill-fated Horizon project and the payment of benefits through the automated credit transfer. During the Third Reading in the other place, our spokesmen reiterated that time and time again.
What is promised in the new clause is vague in the extreme. We have no idea how the subsidy is to be paid, to whom it is to be paid, or how far it will help to keep open small rural and urban sub-post offices. We greatly welcome the fact that the Government accept that they may well have to pay subsidies, but that is where the transparency ends.
It is disingenuous for people to say that there have never been subsidies in the Post Office. Implicit in the whole concept of a universal provision at a uniform price is the concept of cross-subsidy. I am told that it costs eight times more to deliver a letter in rural areas than in urban areas. There has constantly been a process of cross-subsidisation and we are well used to that in all our public utility services. Telephones in rural areas are subsidised by the use of telephones in the urban areas. The same principle applies to gas and electricity.
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The decision was, and remains so with the regulator, to use cross-subsidisation as a form of providing the social services, rather than having an explicit subsidy. As an economist, I have a preference for an explicit transparent subsidy, where people are subsidised for social purposes, rather than hiding that subsidy. Equally, our only example of an explicit subsidy for a public utility service is the rural bus service. Our local authorities must now pay an explicit subsidy. I do not believe that that is a happy example because one sees precisely what one fears might happen within the Post Office; namely, despite subsidies, the total collapse of rural services. However, I make that point as an aside.
My colleagues here and in another place have consistently argued in favour of retaining the universal public service obligation for the Post Office because we recognise the importance of the postal services to all communities in the country. We have been consistent in arguing to retain the higher £1 limit on the monopoly, at least until the regulator has had an opportunity to assess the situation. We have been consistent in arguing that the payment of all benefits through ACT should be delayed until the completion of the Horizon project and that the sub-post offices are linked into the system through which benefits can be paid. Like the noble Lord, Lord Skelmersdale, my reading of the situation is that there is no need for people to receive their benefits by automatic payment. As the Minister in the other place reiterated several times during the debates, it is open to people to continue to have their benefits paid directly to them at the local post office. Therefore, it is up to people who claim benefits to keep their post offices open and it is important that that is made known to them.
We on these Benches have been consistent in arguing that the whole process should be delayed until sub-post offices can play an active part in the new financial services network. We have been consistent in supporting the role of the sub-post offices in both rural and urban communities as focal points of community activities. Therefore, I join my noble friend Lord Razzell in asking the Minister to reassure us that this Bill is not the beginning of the slippery slope towards privatisation; that the Post Office will be kept in the public sector; and that within its framework we shall retain our network of sub-post offices.
6.4 p.m.
Lord Northbrook: My Lords, the Postal Services Bill provides for the Post Office to be converted from a statutory corporation to a public limited company, ownership remaining with the Crown. The Bill introduces a new system of licensing arid regulation for postal services or providers operating in the area of the market currently reserved largely as a monopoly for the Post Office.
The Bill gives the independent regulator, the new postal services commission, new duties and powers to protect the interests of users of postal services. In particular, it enshrines the universal service obligation in primary legislation and makes it the duty of the commission to ensure the delivery of this service at a uniform tariff.

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Subject to that duty, the commission is required to further the interests of users, wherever appropriate, by the promotion of greater competition in postal markets. The Bill states that the commission will be able to promote competition through recommending changes to the scope of the reserved area and by permitting licensed competition within it.
The commission will also have responsibility for setting quality standards and regulating prices. Consumers are in theory given greater protection through replacing the Post Office Users National Council with the consumer council for postal services. The creation of that body brings consumer representation in the postal services market in line with the provision for other utilities.
We on this side of the House, while giving the Bill a cautious welcome, believe that it offers a confused half-way answer. The Government have failed to give the Post Office the freedom it needs to compete against its international rivals. Without full commercial freedom, the Post Office cannot take advantage of being the most efficient postal service in the world. We welcome the decision to grant plc status but regret the 100 per cent retention of public ownership.
We believe that the Government should have sold at least 51 per cent of the shares, enabling the Post Office to compete, particularly with Dutch and German post offices, on a level playing field. As was stated in the Economist last year, in a commentary on the White Paper which laid the foundations for the Bill:
"The results are an uneasy and probably unworkable political fudge. The Post Office is to be converted into a public limited company but with only one shareholder: the Government. Inside the Blair administration there is a split on whether this should or should not lead to privatisation".
In addition, the Government have backtracked on plans to reduce the Post Office's legal monopoly over deliveries from £1 to 50p. The noble Lord, Lord Harrison, mentioned the Lisbon summit which asked for greater freedom for national postal services. The Government started out on that path, but they have backtracked. The saga was quite extraordinary. In December 1998, Peter Mandelson proposed the phasing out of the Post Office's monopoly over letters costing less than £1.
The 1999 White Paper proposed that the Post Office's legal monopoly over deliveries costing less than £1 should be reduced to 50p and in July 1999 a statutory instrument was laid on that. However, in October 1999, a second statutory instrument was laid, the effect of which was to reverse the first. The decision on the future of the reserved area will now be taken by the new postal services commission. We believe that the failure to privatise fully and go below £1 on the monopoly is due to worries about the reaction of the Post Office workers' unions.
Another of our concerns—and I echo the comments of my noble friend Lady Byford—is that the Bill offers little comfort to those threatened with losing their livelihood following the decision to switch benefit payments to automatic credit transfers. That threatens
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the future of 18,500 sub-post offices and has caused the introduction of the new clause, Clause 102. As my noble friend Lady Miller of Hendon and the noble Lord, Lord Dearing, stated, we do not know how the subsidy will work or whether it will be permanent or temporary. We support the National Federation of Sub-Postmasters in its desire for income, not subsidies, for sub-post offices. As the noble Lord, Lord Dearing, stated, there is no security in subsidy.
As has been stated, benefit payments account for approximately £400 million of income—one-third of Post Office Counters' turnover. Of the 18,500 sub-post offices, only 10,000 are commercially viable. At this point, with regard to the comment of the noble Baroness, Lady Sharp of Guildford, about sub-post office closures under the previous Conservative administration, perhaps I may set out the figures for the record. Between 1979–80 and 1996–97, an average of 143 sub-post offices closed annually. Between 1992 and 1997, 99 sub-post offices closed annually. However, in the first two years of this Government the annual figure was 235 closures a year. This year, that number will exceed 500.
The change to the benefit payment system will alter the finances of so many sub-post offices. I do not believe that the Government will subsidise each and every one that experiences financial difficulty. Closures will result and due to those will be lost a focus of the local community. People go to their sub-post offices not only to buy stamps but also to shop for other items. Therefore, as other noble Lords have done, I ask the Minister to explain how the subsidy system will operate in detail in order to reassure those sub-post offices whose livelihoods may be threatened.
I should also be grateful for a response from the Minister regarding other financial considerations. First, can he assure the House that there will be transparency in the accounting structures to ensure that there is no undue hidden cross-subsidy from monopoly to non-monopoly areas within the Post Office? Secondly, how will it be possible for the Post Office to enter into a joint venture or strategic alliance with another company by way of a limited sale or exchange of equity, as detailed in Clause 67? The Bill would seem to allow for such a disposal, but how would it work in practice? Thirdly, what will be the rate of interest, mentioned in Clause 68, charged on loans taken out by the Post Office? Will it be a commercial rate, as the noble Lord, Lord Clarke of Hampstead, stated? Clause 68(2) states that it will be,
"at such rates as the Secretary of State may, with the approval of the Treasury, direct".
In summary, we give the Bill a cautious welcome, but in particular we are concerned about the effect of the switch to ACT, which threatens the survival of thousands of sub-post offices across Britain, and which, as the noble Lord, Lord Dearing, said, is a cost to society.
Finally, as many noble Lords have said, we wait for the PIU report.
6.13 p.m.
Lord Sainsbury of Turville: My Lords, it has been a privilege for me to listen to what has been an extremely interesting and, indeed, well-informed debate. Once again, I believe that it has proved the strength of feeling that exists in this country with regard to the valuable service provided by the Post Office. This debate concerns how we ensure that it continues to provide that valuable service while at the same time responding to the major challenges and opportunities that confront it.
I am particularly grateful for the many comments from noble Lords who welcome the introduction of the Bill. I now deal with some of the points raised. I am delighted that the noble Baroness, Lady Miller, feels able to give the Bill a cautious welcome and, indeed, will approach it in a constructive manner. I felt that her criticisms were somewhat half-hearted, but I attribute that to the excellence of the Bill.
I deal, first, with the question of what I believe is currently called "regulatory creep"; that is, the issue of information required by people who are not in the licensing system. We have been concerned to provide for the regulator to have all the necessary powers to ensure the delivery of the universal service and, indeed, to promote competition and the interests of consumers. Many of those powers will simply replicate those previously exercised by the Secretary of State or the Post Office in relation to the monopoly area. There are only minor requests about information with regard to the area outside the licensing area. Therefore, I believe that there is no need for concern on that particular front.
One of the major themes of the debate has been the impact of the new ACT system. However, that does not form part of this particular Bill. The reason that we have had to take action on that matter is to clear up what has, rightly, been pointed out to be an entirely misconceived system which the previous administration introduced in a great hurry. It was well behind schedule and was believed by most people to be undeliverable.
Baroness Miller of Hendon: My Lords, perhaps I may say that we are talking about the Horizon project, to which I assume the Minister refers. On several occasions, until the last minute, government Ministers said that it would be delivered and that it was a very good service. In the end, they found that they could not deliver it. That is all. When the Minister says "misconceived", I say that it was equally misconceived by Ministers on the other side. However, I do not accept that it was misconceived.
Lord Sainsbury of Turville: My Lords, I believe that it is now generally considered to have been misconceived. The Select Committee in another place was very clear about that. Perhaps we should have spotted earlier that it was in trouble. However, it is now generally considered that it was undeliverable and would not have worked.
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In that connection, I wish to make the point that we have a simple choice with regard to the Post Office systems of updating them to ones which are based in the end of the 20th century and using those systems to replace ones which were appropriate to the first half of the 20th century. The idea that we should allow the Post Office to go forward in the future with the paper-based systems which currently exist seems to me to place the Post Office in a totally defensive arid unacceptable position, particularly with regard to gaining new business.
Of course, one can always effectively subsidise a business by keeping and continuing to fund totally antiquated and labour-intensive systems. However, with all due respect to many noble Lords who have spoken on that issue, I hardly believe that that is a way to provide Post Office Counters with the means to deal with the future. We must give it modern systems which enable it to obtain new business and play a new role in the rural communities. As the noble Baroness, Lady Miller, said, it is not a question of taking away the profitable business and giving it to the banks; it is a question of bringing it up to date with the kind of systems that we should have in the 21st century.
I turn to a matter which, again, I believe has dominated this debate; that is, Clause 102. I believe that it had been made very clear that this is an enabling clause which will enable us, if necessary, at a suitable time in the future to produce a scheme to subsidise the post office network. It is not proposed to use i t at present and we have not tried to put in place a system of subsidy which would not be appropriate at this stage.
Finally, the noble Baroness, Lady Miller, raised the question of the Post Office's structure. We have put forward a structure which is necessary to enable the Post Office to compete in this new world of international competition, rather than searching for ideological purity which means that we must have at least 51 per cent in the private sector.
The question of transparency of accounts is covered by the European Postal Service Directive. That will cover the question of cross-subsidy. There will, therefore, be total transparency on that issue. A final point needs to be made in this context. It has been pointed out that Treasury consent is necessary for the borrowings. This is a simple and uncomplicated provision. Most financial provisions have it in one form or another.
I turn to the comments of the noble Lord, Lord Razzall, who described very well all the issues that need to be covered in considering the kind of structure that is appropriate for the Post Office in the future. The noble Lord suggested that the way to resolve all these issues is effectively to keep it within the public sector and with a public sector structure. I find it difficult to see how that would resolve the problem of how to keep a public sector influence in a body which also has a commercial one. Therefore, while his description of the issues was extremely good. I am by no means convinced by his argument. He certainly did not put forward any reasons to suggest that this would

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resolve any of the tensions which inevitably exist in such an organisation and which are reflected in structure between the public sector aspects and the purely commercial ones.
The noble Lord, Lord Razzall, raised two fundamental issues with which I shall deal. The first concerned the question of the national network. We are determined to maintain a national network. This Government have, for the first time, publicly laid down the criteria for access which will enable that statement to be properly judged. It is a major step forward. It is, of course, very easy to say, "We support a national network", without knowing what it means. For the first time, we are laying down criteria as to what it means.
Another theme that has run through this debate is the status of the Post Office and the question of privatisation. I again make it quite clear that the Government have no plans to privatise the Post Office. It will remain publicly owned. When publishing the White Paper, the Secretary of State promised that the Government would not seek to dispose of Post Office shares without further primary legislation, except where limited sale or exchange of equity would be in the interest of the Post Office to cement a joint venture or strategic alliance with another company, in which event the approval of the Houses of Parliament would be required. That is a very clear and unequivocal statement about where we stand on that particular issue.
I turn to some of the points made by the noble Lord, Lord Dearing. The noble Lord, Lord Dearing, knows more than anyone in this House about the Post Office and, moreover, played an enormous part in reinvigorating the organisation when he took over as the chairman. I can assure him that we will make certain that the balance sheet of the Post Office is commercially sound. Indeed, there is no point in having a plc unless we give it that strong balance sheet as a basis for going forward. As was announced in the Statement to the House in 1998 and restated in the White Paper in July 1999, the Post Office's balance sheet will be restructured by 1st April 2002, in order to place the Post Office company on a more commercial footing so that it can be better benchmarked against its competitors. We are employing advisers to help us make that transition. However, I certainly take the noble Lord's point, of which the DTI is very conscious, that we have to make certain that commercial decisions are taken speedily and that the whole basis for the relationship will depend on a hands-off stance being taken by Ministers.
In relation to the question of cost of ATC, there is no question of cost being transferred to those who receive the benefit. People will, in exactly the same way, be able to get payments at their post offices in cash, without deductions from them. That obviously
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will depend on them not using any of the other banking services. They can continue to get benefits from the Post Office in cash in the normal way.
Baroness Byford: My Lords, perhaps I may press the noble Lord on that issue. I appreciate his response to the many questions that we have raised. The question that has been raised relates to how people will get their money. If there is to be no book or giro, how can they get hold of the cash? That is the unanswered question. If I have interrupted too early, I beg the Minister's pardon.
Lord Sainsbury of Turville: My Lords, there may be a question of how the identification is established. However, as I understand the system, the money will simply be transferred into an account at the relevant post office. In that sense, they will simply have to go and draw it from that account. It is a system by which the payment is sent out to them and they can claim it at the Post Office. In case I am in any way wrong about this, I will check that point and write to the noble Baroness. It is a point which appears to cause a lot of concern. As I understand the system, it will be possible to withdraw the cash from the Post Office, in the same way as is possible at present by using a book. However, I will check that point and confirm it by letter. It is clearly a point of considerable interest and concern to people and it would be helpful if that point were established.
The savings which will accrue from this system, as was mentioned, will be very substantial. Indeed, the ability to control fraud, which is calculated to cost £140 million per year, will also result in a substantial saving from this system. I cannot see any way in which those very substantial savings could be lost in other aspects of the system. The question that has been raised is whether the pressure on the finances of the post offices that we seek to close might have a social cost which has to be taken account of in relation to this system. I still feel that it is inappropriate, in those circumstances, to say that we shall maintain what is seen to be an inefficient system involving a lot of work in post offices and that supports their finances. That is simply another way of effectively giving them a subsidy. It is inefficient and not very cost effective.
I turn to the comments made by my noble friend Lord Clarke. We have made it clear that pensioners and people in receipt of benefits will get them in cash. As far as I can establish, the figures that he presented are essentially correct. However, I do not want to comment on the question of the pension holiday for the post office, because that clearly would depend on actuarial valuations. Many of the questions that he raised will have to be taken account of in the final structuring of the balance sheet. It is, of course, difficult to make comparisons without looking at the final balance sheet, which obviously is unlikely to include the strange arrangement of a lot of government gilts which are earning interest for the Post Office. That will have to be accounted for in the restructuring of the balance sheet.

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I believe that there are huge advantages to having the Post Office as a plc, if it is to maximise opportunities abroad. In many cases, it will be dealing with foreign companies and with bankers who are used to the concept of a plc and are not necessarily aware of all the ramifications of what a state-owned enterprise will be. Therefore, the fact that it is a plc will make much easier any investment and banking arrangements. It makes a great deal of difference in clarifying the relationship between government and the plc, if it is a plc, because that has very clear responsibilities which are understood by everyone on the board.
As regards the cap, we need to maintain the maximum flexibility to enable the Post Office to develop its business in the most commercial manner appropriate. It is quite likely that if there were to be joint ventures, they would take the form which my noble friend Lord Clarke mentioned; namely, putting together assets which would not necessarily involve the holding company's shares being sold.
My noble friend is correct in wondering whether 10 per cent or 11 per cent is the better figure. I do not believe that we should get into that kind of auctioning of figures. This proposal is very carefully constrained. The Post Office must come forward with a proposal and that must be agreed by both Houses of Parliament. That provides a tight control over the situation.
The noble and learned Lord, Lord Brightman, made some complimentary remarks about the work of parliamentary counsel which I shall happily pass on. It is not a channel of communication which is overflowing with compliments and I am sure that they will he delighted that their excellent work has been noted by such a distinguished lawyer.
The noble Baroness, Lady Sharp, referred to reaching agreement for borrowings. In most commercial situations, if companies are borrowing large sums of money, they have to go to talk to people—rating agencies, bankers and others. Even in the world of commerce, some discussions must take place before large sums of money are raised. The Government have given an extremely clear assurance in the White Paper that there will be a fast-track 28-day approach to approval of large investments of over £75 million. That was employed for the approval of the purchase of the German parcel operation. So it is quite clear that that can be done if the will is there to do it.
I turn to the points raised by the noble Lord, Lord Northbrook, about the structure. I see no reason why there is anything magic about 51 per cent of the shares being sold. If it can be done on the basis of 100 per cent ownership by the Government, I am not sure why 51 per cent in the private sector enables it to compete better; for example, against the Dutch post office.
As regards the reduction of the Post Office monopoly, the Select Committee in another place suggested, after the Government made their announcement, that that should be the first job of the regulator. We listened and agreed to that.
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Finally, the interest rates will be commercial rates, but they will take account of the fact that there is government backing for the Post Office.
The Government believe that they have chosen the best way forward for the Post Office and its customers and, indeed, for the country. They are seeking to implement the reforms as quickly as they can. The greatest disservice and damage we could do to the Post Office is to cause further delay.
By implementing the reforms set out in the Bill, the Government are confident that they will put in place the means to deliver a Post Office which meets the needs of its UK customers, both business and private consumers, effectively and efficiently; a Post Office that can compete in international markets as a major overseas postal service provider; a Post Office that can develop its business and invest for the future; and most important, a Post Office which protects its social obligations and the principles of universality, accessibility and affordability, providing a world-class service throughout the United Kingdom.
Lord Skelmersdale: My Lords, before the Minister sits down, various points were made by noble Lords which he has not had time or, perhaps, the inclination to answer this afternoon. Will he give us an assurance that he will write to noble Lords on those points?
Lord Sainsbury of Turville: My Lords, certainly. If noble Lords feel that I have not covered any points which they have raised and would like me to do so before the Committee stage, perhaps they will let me know and I shall write to them about those matters. I shall certainly read the debate in Hansard and try to pick up any points which I have not dealt with. I commend the Bill to the House and ask it to give it a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Tourism and the Euro
6.35 p.m.
Lord Harrisonrose to ask Her Majesty's Government whether the introduction of the euro will be good for the British tourism industry, regardless of whether the United Kingdom adopts the euro.
The noble Lord said: My Lords, over the weekend, my family and I, as tourists, visited the Royal Crown Derby visitors' centre. My wife bought a vase there and I am elated to say that its sale price was expressed in euros as well as pounds on the receipt. That 250 year-old firm is looking to the future while celebrating the past; so must we, as a country.
Tourism is the vanguard industry of the euro and tourists its stormtroopers. It is the industry which best illustrates the advantages of Britain adopting the euro, not only for Britain's tourism businesses but also for the man and woman in the street. After all, why is it that every year, each and every one of us who travels to an EU holiday destination chooses to give away a

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proportion of our holiday spending money before we have set foot on foreign shores? In swapping pounds for pesetas at the local Thomas Cook's, we offload cash that might otherwise purchase us better accommodation, tastier meals out or more exotic presents to bring home to loved ones? The commission charged and the hedging against the exchange rate fluctuation costs holiday spending money.
Let me put it another way. Would you not be breathing fire out of your nostrils if, in electing to holiday in Wales, you were obliged to exchange pounds sterling for Welsh dragon notes and coins? But that, in effect, is the burden placed on British holidaymakers now travelling to the Continent. In contrast, domestic tourists within Euroland now enjoy the fruits of eliminating currency fluctuations and reduced or banished commission rates.
And, of course, what is good for the tourist in Euroland is also of immense benefit to businesses in the tourism industry, which no longer see their profits eaten away by the necessity of changing currencies. Small firms in particular, which compose the vast majority of businesses populating the tourism industry, gravitate to that slashing of red tape.
Secondly, the euro introduces transparency of prices and costs. That will make holiday shopping an even more stimulating experience for the tourist. No longer will there be a need for the callisthenics of mental arithmetic in converting lira to pounds. The true comparison between a pair of shoes espied in modish Milan and nice boots in no-nonsense Northampton will be a cinch for the euro window-shopper.
In addition, the euro will shoehorn in a new era of competition within the single market to the benefit of the customer. And what is true for him or her is even more relevant to tourist businesses. In an already internationalised industry, the euro will facilitate cost-based comparisons, thereby driving down prices to the consumers' benefit. None should fear such increased competition except the entrepreneur who fails to travel with the times.
I offer noble Lords an example of how that will work. Recently the Observer revealed how booking the same package holiday to Majorca through a travel agent in Dublin, rather than one in Britain, could cut the price of the holiday by 67 per cent. Imagine, now, the situation in which Britain enjoyed the single currency. Such a comparison would be made even plainer, no longer subject to the prism of converting the Irish punt to pounds.
Thirdly, the tourist and the tourism industry will stand to benefit from the stable economic climate which is achieved and likely to be the enduring characteristic of Euroland. Since its inception, commentators have concentrated on the descent of the euro against the pound and the dollar, forgetting the remarkable internal stability which Euroland is experiencing. Low interest rates, a function of low inflation, mean that the cost of money is cheaper. In turn, that provides the stable and predictable economic climate in which business can plan and
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invest long-term. Of course, such business stability works its way through to the consumer in the form of cheaper holidays.
The elimination of exchange rate fluctuation benefits consumers in other ways. The current strong pound may have benefited Britons on the Continent over the Easter break, but there has been an offsetting and an upsetting pressure on our domestic tourism industry. We find ourselves uncompetitive at the whim of an over-priced pound. How much better the secure climate of Euroland would be, where the British traveller going abroad can plan an annual holiday sensibly rather than confront the carousel of a rising and dipping pound. Moreover, fluctuating currencies distort consumer choice of holiday destinations when selected according to favourable exchange rates, rather than by the intrinsic worth of holidays offered by the industry. Inevitably, such havoc in the market translates further down the line into costlier holidays for the consumer.
Fourthly, the euro is spreading as a currency of exchange beyond Euroland. That benefits the tourism industry in particular. Because of its international character, the industry is already finding all kinds of savings in cross-border transactions, whether buying forward purchases or eliminating needless hedging to reduce exposure from such purchases. Savings in seigniorage will accrue and, as the euro becomes a rival currency of exchange to the dollar, such rivalry will, of itself, promote beneficial currency competition.
In turn, third countries will elect to deal in the euro, as they now barter in the dollar, to the distinct advantage of the tourist industry with its global character. Indeed, we should remind ourselves that tourism is the world's largest industry and it is set to double in size over the next decade. In my view, that makes it all the more reprehensible that we should shy away from the concept of being proud of the euro as Europe's common currency, and still manifest obeisance to a foreign currency, the American dollar.
Last week, on Radio 4, there was a report on the Japanese tourism industry, concerning the deadly delicacy of poisonous fish eaten in tourist restaurants. For the life of me, I cannot see the attraction of eating fish that, if wrongly prepared by the chef, may be one's last supper. However, I regret that the BBC reporter told us the price of the delicacy in dollars. Why give the price in dollars in a report to a British audience? I yen for the day of the euro, unpoisoned by our negative media. As a patriot I am proud of the pound, but I shall be proud of the euro when Britain adopts it as its domestic currency.
Fifthly, and perhaps most importantly, the euro will reinforce the drive to complete the single market. Some commentators opine that a single market does not require a single currency. That is true, but it is pretty daft not to have one. The single market and its wise tourist guide, the single currency, will provide tourism with its biggest kick and fillip. My philippic to your Lordships this evening is that completing the single market is ours and Europe's quickest route to jobs and prosperity.

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So far I have set out the economic reasons that benefit tourists and the tourism industry in Euroland. Let me add one other argument that confers a compelling social advantage. I refer to the blind and visually-handicapped, of which there are some 7 million citizens in the European Union. They, too, want to travel and enjoy themselves as tourists, but they fear being cheated through unfamiliarity with foreign currencies. For them, the euro is a godsend; it is their passport around Europe.
The new euro notes and coins are designed to be user-friendly to the blind and the visually-handicapped by the nature of their shape, size and sharp colours as well as by the distinctive embossments currently featured on many continental currencies. Such aids to the blind are absent from the pound sterling and the US dollar. Indeed, the greenback is the worst conceivable design of a currency note for the blind, lacking as it does embossed markings and possessing a uniform size, shape and colour. In contrast, the euro will offer a competitive advantage to the dollar and, for that matter, to the poorly designed sterling notes. The euro notes and coins will help the blind to see their way around Europe as well as offering the industry a new untapped source of custom. Remember, once learnt in your home country, the euro is portable throughout Euroland. For the blind, the old and the young, familiarity with the new currency will breed "content".
Principally, I have set out to explain the advantages of the euro to tourists, the industry and all those within Euroland. Let me now dwell on the consequences of Britain staying too long outside the euro. I believe that the strong pound, plus exclusion from Euroland, will begin to affect Britain's tourist industry. I shall give just one example. The existence of Euroland will indisputably encourage tourists from the rich nations of the world, such as the USA, Japan and Korea, to come to Europe. The red tape of 14 currencies, currently slowing down Europe, will be slashed and burnt by the onset of the euro.
As many inbound tourists buy multi-destination packages, increasingly tour operators will plan packages exclusive to Euroland. To a degree, Britain will be shunned. Indeed, the European Tour Operators Association has suggested that some 3 per cent of inbound American tourists may avoid London as a result of Britain being isolated from the euro. If one has to use a second-hand currency instead of euros in a second-hand bookshop in Notting Hill, even a Julia Roberts may be tempted to take her custom straight to the Continent, handsome Hugh Grants notwithstanding.
Will not the euro enter Britain in 2002 in note and coin form in a whole variety of informal ways? First, British tourists will return from continental and global holidays clutching superfluous euro coins and notes. In turn, they will resent being landed with excess currency and look for outlets to unload them. Inevitably, certain commercial outlets will attempt to steal a competitive advantage on their rivals by offering such facilities for spending euros.
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Already Marks & Spencer has scheduled new tills capable of expediting euros and is training its staff to handle that new custom. Its competitors will have to follow suit. New outlets will appear to receive payments in euros. A London taxi driver, with an even larger brain than some of his colleagues, gave me the knowledge. He told me that he would happily charge in euros for foreign travellers passing through London, but I do not know how impressed our putative Julia Roberts will be when charged a large commission in her euro fare to Notting Hill. That will not reflect well on London or on Britain's readiness to accept overseas tourists.
Nor should we consider this to be merely a metropolitan problem. Tourist towns, like my own Chester, and countryside attractions will perforce have to deal with euros if the punters bring them into hinterland Britain. Will Britain's post offices be ready for that kind of change? They should be if we are serious about tourism and diversification in Britain's rural areas.
One other special case is Northern Ireland. For years tourism has been underachieving in Northern Ireland because of the Troubles. Despite it being a wonderful tourist destination, Northern Ireland's tourist take is well below that of its southern neighbour, the Republic. Imagine our peripatetic Julia Roberts as an American tourist researching her Irish roots on the island of Ireland. How much easier that research would be if the euro operated on both sides of the border. After all, 12 American presidents can trace their ancestry back to Northern Ireland itself and not just to the Republic. What a market for the euro to tap—the greenback returning home!
The Northern Ireland Tourist Board and the other national tourist boards join with the British Tourist Authority in believing that the euro will be good for the British tourism industry if we enter,
"at the correct level and in the near future".
In their recent briefing on the subject they highlight the particular and unique opportunity offered to Britain's small businesses were we members of Euroland.
I have tried dispassionately to offer the economic reasons why Britain should join the euro for the wellbeing of its domestic tourism industry and also for the benefit of all of us who holiday outside the United Kingdom. I shall not attempt to rebut some of the non-economic arguments that no doubt will be forwarded in this debate and which may be characterised under the general heading of fear of the loss of sovereignty and the particular gripe of losing the Queen's head from our currency. It is therefore a compelling paradox to note that, with the acceptance of the euro, the Queen's head will be more widely broadcast throughout Britain than is currently the case. How can this be so? Noble Lords will be aware that at the moment the Queen's head appears on only two of the nation's banknotes circulating in the United Kingdom. When Britain joins, euro coins bearing the Queen's image will achieve blanket coverage of our own country, something that has never occurred before in our history and for which we shall be

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beholden to the European Union. The EU is the true and only begetter of European peace and prosperity. Touristically speaking, are we ready to coin it?
6.51 p.m.
Lord Lea of Crondall: My Lords, I congratulate my noble friend Lord Harrison on introducing such a topical debate. Only last week the director-general of the CBI described the euro/sterling exchange rate as,
"a major threat to the UK's position in the world tourism league".
Until recently the UK has maintained a broad balance between the growth of inward tourism and the growth of outward tourism, whether in numbers or in value. Not surprisingly, that growth has been above the growth of real GDP—roughly double—at 6 to 7 per cent per annum, as compared with a GDP growth of, let us say, 2½ or 3 per cent. However, over the past two or three years, there has been a disturbing change in the balance of the "in" and the "out".
Value and volume figures are quite tricky in this field, but the broad position over the past two years has been that inward growth has moved down to around 3 per cent whereas outward growth has surged ahead to the order of 10 or 12 per cent. The absolute figures therefore show a gap. We are spending over £25 billion a year abroad while visitors spend around £15 billion here.
I can remember the time, along with many other noble Lords, when £10 billion here or there on the balance of payments was not peanuts. Indeed, one can recall the issue of one jumbo jet entering the trade figures, causing major political havoc during the 1970 general election.
Evidence is growing to show that a serious problem is developing. A number of tourist bodies are now putting together that evidence. Perhaps I may quote parts of it. Some tour operators say that the strong pound/weak euro relationship is most likely to affect certain groups of visitors, such as young travellers whose budgets are limited to start with, or day trippers coming over for shopping. As one would expect, there is a direct correlation between currency fluctuations and our visitors' average daily spend. In contrast, business tourism is very resilient, as is the sector for people coming here to visit family and friends.
Evidence can be seen in the estimated figures for the first three-quarters of 1999 when the number of business visitors increased by over 6 per cent while holiday visitors decreased by around 5 per cent. Fortunately, in recent years the advent and growth of low-cost airlines in Europe, along with competitive air fares and increased capacity on transatlantic routes, have substantially reduced the cost of reaching Britain and, to some extent, have offset the effect of the higher value of sterling.
However, if one looks at Britain's performance as a tourism destination against other European destinations, there is evidence to suggest that we are losing out. Had tourism to Britain continued to grow at the same rate as tourism to the rest of Europe in
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recent years, this would have generated an additional £2 billion in revenue, which in turn could have supported the equivalent of 70,000 jobs.
Perhaps I may cite some views from Ireland which, as my noble friend Lord Harrison pointed out, is an interesting and special case. The relationship of the punt to the pound and to the euro will be watched with particularly close interest. One Irish tour operator stated:
"Britain is far too expensive because of sterling. Tour numbers are slightly down, although prospects for 2001 are better. Seven nights in Ireland for eight people in a group costs the same as four nights in Britain".
Another operator from Ireland stated:
"Over the last 12–18 months, Paris, which has historically been second to London by a substantially less number of bookings, has gained market share and is now almost on a par with London. The value of sterling is the only reason for this and until the rate of sterling improves, Britain is likely to lose further bookings to other destinations".
A third operator said:
"The first quarter of 2000 has shown a reduction in bookings to London of around 10 per cent and a reduction to other parts of Britain of around 20 per cent. This is purely the result of the increase in the value of sterling against the punt. Paris, Amsterdam and Budapest are fast gaining market share on city breaks in Britain. I predict this slump is likely to continue until the price of sterling is reduced".
I turn now to some views from the United States. Britain is losing market share of European travel, in particular to Italy and France due to the euro's value to the dollar, which has made both destinations 15 to 20 per cent cheaper in dollar terms than last year, and in comparison to Britain. The relatively high value of the pound has meant that London has been widely reported in the media as one of the world's most expensive cities.
A view expressed from Sweden states that the recent decrease in numbers is due to the strength of the pound. Over the past five years it has grown 40 per cent more expensive against the Swedish krona. The Swedes are still visiting Britain because of budget airlines and the surge in Nordic stock markets, creating wealth and disposable income.
Finally, a view from France states that the problems are undoubtedly the pound versus the franc, the feeling that Britain is an expensive destination and that London is losing some of its initial "in vogue" feeling. Overall, unless sterling begins to depreciate again and the group market returns in force, growth cannot be predicted, but rather a small reduction in numbers in the short term. Much of this is down to the exchange rate. Clearly, we now find ourselves in the position of having an unsustainable rate. Whether the extent of this against the rest of the euro-zone is 10 per cent or 15 per cent is a matter for debate.
What is now needed on that front—my submission is the same as that advocated by Sir Samuel Brittan in the Financial Times and repeatedly urged by others, including the TUC—is for the Chancellor to make an opening bid for the range of conversion rates at which he would like sterling to enter the euro, obviously on present evidence and if the other conditions are met. Otherwise, we shall all have to go on repeating the

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mantra about the conditions with no idea of how they are being addressed or how the exchange rate relates to them. The drift of confidence for exposed sectors will continue.
The Americans are often portrayed as implicit euro-sceptics. But one point is often not noticed about the value of the euro. It is nearly the same as the value of the dollar. The Americans will be very comfortable seeing prices set out in euros. Indeed, recently I was speaking to someone in the retail business who said that in their stores in Antwerp and Amsterdam, it is already clear that it is the Americans who are taking to the euro like a duck to water. This will be true not only of tourism. As a consequence, the euro will become the dominant cultural and industrial reality across the board.
An example of the dramatic impact of the euro and of UK non-membership is perhaps worth describing. Let us take the example of a conference organiser in one euro-zone country. He will be able to secure comparative quotes for a range of hotels in a range of euro-zone countries and easily compare them to see which one is offering the best value. However, that will not be so with Britain. In fact this illustrates three points.
First, even to be in the competition one has to be in the frame. The prima facie answer is that we may not be in the frame at all. It will be in the euro-zone—Euroland, as described by my noble friend, and indeed as the press now call it—where those kinds of comparisons will be made. Such brochures will circulate on a euro basis.
Secondly, even if the hypothetical organiser takes the trouble to bring a foreign currency—for example, the pound—into this world of continental comparisons, he will find that UK prices are well out of line with euro prices, given the exchange rate changes I described earlier. Thirdly—this flows directly from the second point—he will not know, he will not be able to say, what the exchange rate will be when the conference takes place and will find that not many UK hotels are ready to give a fixed price in euros.
It is only that last point which is under the control of the UK bidder, if he gets that far in the tendering process. But it emphasises the importance of at least considering how to make it more attractive to quote in euros from the end of next year, and that means starting the planning now. Others on the Continent are already getting on with the training and so forth.
I shall return briefly to that theme at the end of my remarks; but that may be where we should conclude this debate. There is a difficulty for the individual hotelier in doing the market research and getting feedback on the question of quoting prices in euros. I have been away from London over recent days and found it noticeable how the prices in brochures for France and Italy and so forth were all in euros, as my noble friend said.
I appreciate that some people may use a totally different line of objection to everything that I and my noble friend have said. It may be said that it has
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nothing to do with the Government; that they should keep their nose out of it; that business is business and business knows best what is in its own interest. That may sound a bit like a caricature, but not overly so. The theme, "What is good for General Motors is good for America" comes too near the truth for comfort as describing one approach to the public debate on this matter in Britain. But it is uniquely wrong. It is a precise example of an issue where public policy has to give a lead; where people look to the Government. In my saloon bar, it is said, "It is up to the Government to suggest what we ought to do. The Bank of England or someone higher up the hierarchy of policy-making than us should give a lead and make the position clear." Can we imagine the French 'authorities standing around and saying, "We will wait and see how it plays in Antibes or La Rochelle"? Of course not.
What is our national stance in face of the overwhelming evidence now before us? Of course, we could adopt the pre-set of the person who wrote, in a letter to the Daily Telegraph: "We do not need any more tourists. We have enough already". That is one point of view. But taking that view seriously for a moment, we had better be clear that, on that argument, we in this country ought to stop going abroad as well. That is what the issue amounts to. There is a massive world growth in tourism and we had better be part of it. If we are not, how long can we continue being at a unique disadvantage in the big tourism league, whether euro-tourism or other sorts of tourism?
We have done surprisingly well in some aspects of tourism. And it cannot be the weather! The facts are that over 50 per cent of Brits (that now seems to be the term) have now been to France at least ono.! and only 15 per cent of the French have been here. Twelve million Brits last year went to France while 3 million French came here. And last year we received approximately 26 million tourists from abroad, yet 53 million of us—that is double and pretty much all of us—went abroad. Even if we ignore the double counting, that is a lot.
There is nothing wrong with making hay while the sun shines. But the trend of an ever-widening gap cannot go on for ever, especially if other parts of the balance of payments are going the same way. There are those at the present time who, in the famous words of Lord Whitelaw, seem to go about stirring up apathy. One variation of that is to say that plastic money is what everybody uses these days, so what is all the fuss about? But that is only true up to a point. We must be careful to identify what is fallacious about that argument.
It is true that approximately 50 per cent of tourist payments are in scriptural (that is, non-cash) form and the other 50 per cent in notes and coin. But whichever bit goes in which price index at the end of the day the whole lot is affected by the most fundamental change of 2002, the end of next year in case anyone had not noticed. That is when our credit cards and so forth will have to go from Britain through a foreign exchange charge on top of a handling charge. And it does not

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matter whether we are talking cash or non-cash. But others on the Continent will not have to do that and are getting on with matters very thoroughly.
So we must look to our laurels. If I were running the British tourist industry, I should be saying, like the old town crier, "Oyez! oyez! Start quoting your prices in euros". Two million jobs are involved and they are not there because they have a God-given right to be there. In conclusion, therefore, will my noble friend take delivery of a suggestion that a specific remit be taken on board by the Treasury to consult with the tourism industry and other relevant sectors to draw up recommendations as to measures that could facilitate pricing in euros? That should be as a trial run in the year 2001 and be fully up and running when the euro comes into full effect in 2002.
7.6 p.m.
Lord Gordon of Strathblane: My Lords, I thank the noble Lord, Lord Harrison, for introducing the debate. Although all our newspapers have been full of the plight of the Rover car plant—there is understandable concern in that regard and in the Financial Times on Saturday there was a leading article on the role of the high price of sterling in the fate of Rover—nonetheless, we should remember that tourism employs five times as many people as the entire car industry in this country. It is right therefore that we should look at the effect on tourism of our absence from the euro.
Can we look at the facts? It is undoubtedly true that it is harder to win business from Europe than ever before. The British Tourist Authority—of which I am a member, and I should therefore declare that as an interest, though as I do not entirely agree with the BTA line on the euro there is no danger of me trying to brainwash your Lordships—points out that it reduced its estimates of the growth in tourism expenditure vis-à-vis numbers this year, principally from euro-zone countries.
We are not just talking of euro-zone countries. In France, day trippers were down 9 per cent last year on the previous year. That is a factor of the exchange rate; there is no point in denying that. The point has also been made that mainland Europe is a more attractive destination for the American market than the UK in price terms. The problem is what we can do about that. It should console some noble Lords that the American travelling to Europe might be reassured to find the euro worth roughly the same as the pound; but he will not be reassured that his hotel in Paris costs him 1.8 times the cost of an hotel in New York.
We must also bear in mind that the exchange rate is low compared with 20 or 25 years ago. We have a "strong" pound only compared with the disaster after our withdrawal from the ERM. The other factor that needs to be borne in mind—this is not just semantics—is that it is not so much a strong pound as a weak euro. In fact, the pound has marginally depreciated against the dollar in recent months. What happened? We must bear in mind in this regard that the conference
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organiser who booked his conference in Europe when the euro was launched, would now find that he could have bought 15 per cent more euros today if he had waited until now to pay. Regrettably—and I say this in no sort of euro-sceptic mood of jubilation—the euro is in freefall. Rightly or wrongly, world markets do not want to buy the euro; they want to buy the pound and there may be reasons for this.
For what it is worth, I believe that the world markets, rather like the stock market in this country, always overvalue success and downsize failure slightly too much. The pendulum may swing back. After all, the actual performance of countries in the euro-zone in terms of growth in GDP is better than it is here. Inflation is pretty low, though not as low as here, and interest rates stand at about half the level of those in this country. There are many good signs. But one way or another, try as the European Central Bank may, people do not want to invest in the euro. It has fallen by 15 per cent since it was launched on 1st January 1999.
Therefore, when we ask whether the euro is good for British business, it really is quite difficult to work out whether the exchange rates would have been as bad as they are had we not had the euro. I would find it impossible to prove that one way or the other. My guess—and this is only a guess—is that the countries in the euro-zone have depreciated against the pound rather more because they are in the euro than they would have done if they were still independent economies. That is only a guess and an unprovable one, but world markets tend to look on the euro with disfavour. In many cases, they do so wrongly. However, it is a fact and that is what determines exchange rates.
I ask noble Lords to recall the last time that this country tried to fix its exchange rate; namely, when we went into the ERM. The rest of the world thought that we had got it wrong. We had a panic and spent £6 billion of our reserves trying to prop up sterling—then, after a day, we gave up and instead of the pound standing at 2.85 to 2.95, it dropped to about 2.30 within months. World markets determine the value of sterling and the value of the euro. We need to consider exactly what the present Government can do to reduce the value of sterling. Are we saying that the Bank of England has been wrong in all the decisions it has taken about interest rates? There is an argument in that respect; but if these independent economists shorn of political bias from the Government decided that interest rates at those levels were necessary to curb inflation, were they so totally wrong? I rather doubt it.
The benefits of a fixed rate were admirably stated by noble friend Lord Harrison. Of course, I concede that tourism is almost tailor-made for the euro. Tour operators, book 18 months ahead. The stability of exchange rates is a great idea for tourism. The fact that you cut out this business of the banks taking about 10 per cent of your cash every time that you change money is a wonderful idea for the tourist. It will undoubtedly increase travel and reduce operating costs. That is good for tourism. However, the problem is at what level you go in. That is something with which both this and the previous government have wrestled.

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I wish that the debate on the euro in this country would move a little above the black and white sloganising that tends to characterise such debates. We need to recognise that we are talking about different shades of grey and that it genuinely is a very difficult decision to make. There is no one right, easy solution.
In my television days I was once asked to present a programme entitled "What is a Budget?" for schools. It was by far the most difficult television programme that I ever had to present. If it involves politicians, it is easy: you just talk about inflation, the touch of the accelerator, the brake, and so on. No one knows what he is talking about but it is part of the great conspiracy of politicians and commentators that we talk about these things as though they are economic certainties. In fact they are not; otherwise, we would have been able to cure inflation a long time ago.
I often wonder what I would do if someone asked me to present a programme on the euro—that is unlikely, thank goodness—and whether we should join. I believe that my first response would be to plead a previous engagement. However, I think that I might start with the question: what is there against having a stable currency exchange rate for every country in the world? Of course, there is a good deal against it. But by asking the question we would at least indicate what the conditions are for having a fixed exchange rate between countries in a group. Clearly it would be unfair to some of the developing countries if the exchange rate were fixed at their current level of development, because they will improve quite markedly and, indeed, faster than some developed countries. So the maturity of the economy is one factor to be considered. The development of raw materials in a country can also have a dramatic effect in this respect. For example, the whole of the Middle East was transformed in terms of economic prosperity because of oil.
So what are the conditions? We need to ensure that the countries in question are broadly at the same level of economic maturity and are moving pretty well in step with one another. That is the great problem. Is it a case of one size fits all in Europe, even for Europe as it is, let alone with Britain? I suspect that we may get some interesting evidence on this point during the next week or so and from not very far away. I say that because, rather like Britain, Ireland is booming, while a lot of the rest of Europe is stagnating. Ireland is at a stage where the head of the European Central Bank has said that its economy is overheating and something must be done about it. But what can Ireland do about it? It cannot change its interest rate, which might have the normal effect of dampening down demand, because that is decided in Frankfurt. Moreover, Frankfurt will be rather more concerned at present with a stagnating German economy and with trying to get it booming again than it is with Ireland.
As my noble friend Lord Mackay will know, similar complaints are often made in the UK that interest rates are set at a level—here I am parroting the nationalist line— that suites the south-east of England and ignores parts of rural Scotland, while forgetting that parts of Scotland, like Aberdeen, are much more akin
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to the south-east of England in terms of economic prosperity than they are to other parts of Scotland. But the areas over which you try to impose a fixed interest rate must be ones that are liable to move in step with one another. I do not believe that to be true at present, although I rather wish it were. I am a great believer in the concept of Europe, but I should like to see that happen.
The answer lies not in doing something about the pound; it lies in the European governments doing something about the euro. I strongly suspect that one of the reasons for the euro's unpopularity is that successive governments in this country have at least tried to start grappling with the problem of providing for pensions. Some European countries simply have not done so. Therefore, their currencies in the world market are being badly devalued.
The Irish situation is interesting for other reasons: they are out of step with Europe and require a form of action that the rest of Europe does not need. In the absence of the power to do anything about their exchange rate, what will the Irish do? During a debate on Northern Ireland, I heard the noble Viscount, Lord Brookeborough, talking about the effect of petrol prices in the Republic on petrol stations and shopping in his part of the world. As I see the noble Viscount in his place, I shall leave it to him to develop that point; indeed, he will do it so much better. If you lose control over your exchange rate, you have a situation where you have lost a safety valve. That may be a price worth paying. I happen to think that it is in terms of Scotland and the Union. However, I am not yet convinced, although I hope to be in time, that it is a price worth paying in terms of the euro.
I have a few further points to make. I concede that the pound is overvalued. The Economist recently produced an economic index based on the value of a McDonald's big burger. On that basis, we are overvalued against the dollar by about 20 per cent. It sounds a very rough-and-ready method of doing economics, but the economics editor of the Economist said that the burger chart—the purchasing power/ parity chart—has a remarkable success rate in determining exchange rates over the longer term.
The question is: what do you do? In my view, regrettably, you interfere with the market at your peril. The last time we did it, George Soros could see off the British Government; and so we have to be careful. There have been suggestions that instead of using the windfall from the sell-off of the third generation of mobile phones we should be investing in the euro, trying to prop it up and then pick up the capital gain and so on. Equally, I have seen other suggestions that we should do a gilts issue, raise £20 million and again invest in the euro; then pick up the capital gain and the euro would improve. If the world market does not want to do it we could be throwing our money away. Therefore I strongly suspect that we are going to be a prisoner of a weak euro until Europe starts putting its own house in order, as I very much hope it will.
In the meantime there are some things that the Government can do. I think we could ameliorate the effects of an adverse exchange rate by doing something

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about our taxation of tourism industries in the United Kingdom. It is not often realised that most European countries charge differentially lower rates of VAT on hotel accommodation than we do. In Paris, for example, it is 5.5 per cent and in Rome it is 6 per cent. The Government need to take another look at that. We are being priced out of the market. But for low cost air traffic, we would have been priced out of the market even more demonstrably. I think we need to look at that. We also need to look at—I am glad to note that the Chancellor did this—keeping high taxation on petrol. We are becoming markedly uncompetitive. Parts of the world, like mine, are out of the reach of people who have to pay current petrol prices.
I was also glad to note that the Chancellor took a very sympathetic view of the air passenger duty issue. I think he deserves applause for that. It is dawning on the Treasury that tourism is a very important issue and should not be adversely affected if we can possibly avoid it.
I end on an optimistic note. If people's main holiday abroad is costing them less—which it is—then they will have more left of their disposable income to take a second holiday in the United Kingdom. We must place at least some of our faith in that for the future.
7.22 p.m.
Viscount Brookeborough: My Lords, first, I must declare an interest in that I am involved in tourism in Northern Ireland. After being stifled by terrorism, Northern Ireland should see the dawn of a dramatic expansion of tourism. However, we have exchange rate problems like everyone else. The value of our currency, as the BTA say, may be only part of the story in the decision-making process of potential tourists. However, the BTA's publication to the trade, Market Issues, only gives statistics up to 1998, and a great deal has happened since then with the introduction of the euro and its decreasing value.
I would like to give the Government and the BTA an alarm call—a wake-up call perhaps—to take a look at our experience. We in Northern Ireland are at the coalface with the euro: the only land-based border with the euro-based currency of the punt. During the past 30 years the number of mainland European visitors has remained robust, even with our well publicised troubles. However, in the last two years a dramatic change has been showing. Due to the peace dividend, inquiries are up but bookings from continental Europe are down by some 40 per cent in crucial areas such as hire cruisers, bed and breakfast accommodation and hotels. The disparity between the currencies is fluctuating between 20 and 30 per cent and euro-zone visitors are increasingly going south of the border.
Even touring by car is more expensive because our fuel prices are 30 per cent higher in real terms, not just punt per pound. Although I accept that the Government cannot do a great deal very quickly about exchange rates, I think that they could give us a more level playing field. They could reduce the disparity in our tax regime compared with mainland Europe. For
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example, as we have heard, we have fuel tax and airport tax and we have also heard another example on VAT. This tax, especially in service areas such as hire cruisers, is very harmful. In the Republic it is 5 per cent, as opposed to our 17.5 per cent: that is an extra 12.5 per cent on top of our currency disparity. I appeal to the Government to become more pro-active than reactive and to tackle a worsening situation in Great Britain before the mainland European traveller flies to alternative destinations.
7.24 p.m.
Lord Wallace of Saltaire: My Lords, there have been occasions during this debate when I have wondered whether I was actually taking part in the wrong debate. I had understood the Motion to be asking whether the introduction of the euro would be good for the British tourism industry, regardless of whether the United Kingdom adopts the euro. My own conclusion on that was that the introduction of the euro will impose costs on the British tourist industry, and indeed the British Tourist Authority has already made it clear that those costs are already being incurred by the British tourist industry. If we nevertheless stay out of the euro, those costs will be incurred by the tourist industry, which will not reap any of the offsetting benefits. That seems to me to be an appropriate conclusion to the Motion, as raised.
We have heard, as I hope the noble Lord, Lord Mackay, will duly note, some very strongly Europhile speeches—the sort of speeches he loves to attack—and I hope he will on this occasion give credit to the fact that the Europhilia has flowed more strongly from the Labour Benches than from the Liberal Democrat Benches which he also so loves to attack. I regret in some ways that we have missed the usual suspects who wish to attack the abomination of European cooperation. Indeed, the noble Lord, Lord Pearson of Rannoch, left us halfway through the debate. I hope that the noble Lord, Lord Mackay of Ardbrecknish, will therefore do his best, although I have been sitting here worrying about his many Italian relations, of which he has often told us so much. They will not only incur additional exchange costs on their visits to Britain, but they will also find it more expensive to visit Britain while the pound is so much higher against the euro. However, it does of course help the noble Lord, Lord Mackay, to go to Italy more cheaply than he used to be able to.
There are many nonsenses in this whole debate about Britain and the euro. The noble Lord, Lord Harrison, touched on the question of the Queen's head on the coin. My German friends often remark that it is a wonderful symbol of English nationalism that the preservation of the current head of House of Saxe-Coburg-Gotha is regarded as essential to Englishness in its own way.
The noble Lord, Lord Gordon of Strathblane, said that the rest of Europe is stagnating. I saw an OECD report the other week which suggested that the prospects for Euroland in 2001 are estimated to be a rate of growth between 3 per cent and 3.5 per cent. That does not seem to me exactly like stagnation. We

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all accept the importance of tourism in the United Kingdom. We are the fifth largest tourist recipient in the world. It is a major part of the British economy, and it is not just a case of including London, Oxford and Cambridge but increasingly also the regions.
I remember well 20 years ago when Bradford started promoting Bradford as a tourist region and various newspapers ran jokey pieces about it. I also remember walking up from Howarth to the farm on the top of the Pennine Way some years ago in February, in fog. The farm there was the origin of Wuthering Heights. I noticed that the path is signposted all the way in two languages: English and Japanese. One in four of those walking on a very cold and foggy February day was indeed Japanese, appropriately clad for the occasion. I note that Barnsley is now doing its best to follow the Bradford region. If I may make a small plug for Saltaire, I am extremely happy that Saltaire is part of this trend, much helped by David Hockney's efforts in promoting the village, and that last year Saltaire was accepted as a candidate for world heritage status. It makes it harder for those of us who like to spend weekends there to walk down the main street in dirty jeans and dirty trainers, as we used to, but at least it does a lot for the local economy.
However, I know there is tough global competition. David Quarmby, a good Yorkshireman who is head of the British Tourist Authority, said only last month that the tourist environment is tough for Britain at the moment and that we are going to have to work very hard to maintain our current position. I also note what was said at the tourism summit in March—and I quote:
"the UK will only keep its position of fifth in the world in terms of tourism receipts, let alone improve that position, with effort".
Europeans account for two-thirds of visitors and half of the inbound spend in tourism. However, it was also stated that,
"tourism is very price elastic".
That sets the context in which one has to discuss whether or not the introduction of the euro provides costs and benefits and how we balance those for Britain.
The margins of cost on currency exchange are a relevant cost which tourists will take into account. If tourism is price elastic, that is one of the issues which we have to bear in mind. As I said at the outset, we all know from the briefings we have received that the British Tourist Authority is actively engaged in encouraging the tourist industry to adapt to the euro, whether or not Britain takes a later decision to join the euro. Therefore the costs are already being incurred.
Different categories of tourists raise different issues. Tourists from within Europe, who form the predominant number of tourists to Britain, now treat Britain as part of their domestic market. I have some association with Westminster Abbey as a former chorister there. One of the reasons that Westminster Abbey introduced charges some two years ago is that staff there had begun to notice that 20 minutes after each Eurostar arrived at Waterloo there was a noticeable surge in people with backpacks or whatever entering the abbey through the west door. That is one
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way in which the Channel Tunnel and the ease of cross-Channel travel have transformed the relationship between Britain and the Continent, many of us think for the better but a few perhaps think for the worse.
Over 10 years ago I chaired a meeting on European police co-operation in which a number of chief constables took part. The chief constable of Kent asked how he would fund training in the French language which an increasing number of members of his police force needed. The chief constable of Dyfed said that he needed a certain number of Dutch-speaking, members of his police force to cope with the number of Dutch tourists who visited north Wales each summer. I also have a wonderful memory of walking Hadrian's Wall with my children three or four years ago when I discovered that a high proportion of the tourists visiting Hadrian's Wall were Italians. They had chosen a different destination because of the war in Yugoslavia. Some of them even had cars with Rome number plates.
That is the context in which we now operate. Intra-European tourism is fundamentally different from what it was 20 or 30 years ago. The world has not stood still over the past generation. Dutch people have second homes in southern England and English people, including Eurosceptics, have second homes in France and Spain. The case for having a single currency within that market is therefore extremely strong. It matters to Britain, to British tourism companies, to British airlines and to British airports that Britain should remain the first stopping point for those who come from the United States and Japan to "do" Europe. If we stay out of the euro, London Airport, British Airways, Virgin and others risk being adversely affected by people choosing a different first stopping point.
We also need to distinguish between the high value of sterling at the moment and the overseas costs of staying out of the euro. The pound is strong at the present moment. If the dollar goes down and the European economy begins to expand further, we may switch from a strong to a weak pound, and the Italian relations of the noble Lord, Lord Mackay of Ardbrecknish, may once again find that visiting this country is cheap. However, the exchange rate costs will remain.
There is not just a European but a global trend towards more common currencies. Some weeks ago I was fascinated to discover that there is a debate within North America about whether or not NAFTA needs to move towards a single currency. My Conservative noble friends will recall that many people within the Conservative Party would prefer Britain to leave the European Union and join NAFTA. Indeed Conrad Black and others have actively promoted that. A delegation from the United States came over here only the other week.
I was also fascinated to discover that there is within Canada a debate about whether or not Canada and Mexico would benefit from a common currency with the United States. Indeed I read about that in Canada in some Hollinger-owned newspapers of Mr Conrad Black's consortium. Therefore the question of national sovereignty being maintained with one's own national

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currency is all part of the mythology which still reverberates around Britain and with which one defends national sovereignty. However, one also thinks of how many Conservative former Ministers have found jobs in international companies or in many cases have even managed to assist in selling British companies into foreign ownership, whether that be German, American, Swedish or whatever. The mythology of the British national currency has somehow become one of these great totem poles for resisting globalisation.
However, the world does not stand still. Tourism in Britain has become an increasingly important industry, not just for Britain but for many areas in the north of England which used to be the old industrial heartland. Tourism is a tough market. We have many international competitors. It is a vital employer in the regions and in rural areas. The British tourist industry, like the rest of British industry, will prosper best within a fully integrated European market. I suggest that full integration includes a single currency.
7.36 p.m.
Lord Mackay of Ardbrecknish: My Lords, noble Lords may wonder why I am taking part in this debate. The reason is terribly simple; namely, I have decided that the noble Lord, Lord McIntosh, needs some competition as regards the number of departments he covers. I am not sure whether I shall win that competition. However, I stop short of taking over the Deputy Chief Whip's job, not only debating and arguing but then going into the Lobby to count the names to see whether I have won the argument! I shall not go that far, but I do not mind making an effort to compete with the vast number of departments that the noble Lord manages to cover.
I am grateful to the noble Lord, Lord Harrison, for making his speech. But, frankly, it must win the competition for the speech that contains the greatest number of dreadful puns I have heard since I was a schoolboy. Perhaps the noble Lord intended that. If he did, he certainly succeeded. However, he clearly came across as an absolute fanatic for the single currency. His noble friend Lord Lea was not far behind. Indeed I thought at one stage that they put the poor noble Lord, Lord Wallace of Saltaire, almost in the wet and wimpish category!
There was no qualification in the speech of the noble Lord, Lord Harrison. I suggest to the noble Lord that he advises his right honourable friend the Prime Minister to enter the euro immediately. Having heard the noble Lord's speech, I assumed that if we did not enter the euro now everything would end in disaster. According to the noble Lord everything about the euro—including, I presume, its current rate—is just heavenly. It is amazing that anyone is in the least bit sceptical or even a little frightened of joining the euro with the pound at its current rate against the euro.
It is worth reminding ourselves—as I did by reading today's newspaper–just exactly what the pound's value is vis-á-vis European currencies. It is valued at 11
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French francs and 3.25 deutschmarks. That is an enormously strong rate of exchange against the deutschmark. It is valued at 276 pesetas. As the noble Lord, Lord Wallace of Saltaire, mentioned my Italian relations, the pound is valued at 3,200 lira. I can indeed afford to buy a better bottle of Italian wine than I would normally buy without spending any more money. I think that is marvellous, and so does my daughter, provided that I am still paying for it!
I have never really thought of myself—I am sure that most tourists have not thought of themselves in this way—as a stormtrooper, as the noble Lord, Lord Harrison, put it. The only stormtroopers that I should have thought we have in the tourist industry are those ghastly thuggish football hooligans who so besmirch the name of—dare I say quietly?—English football when they travel abroad. The idea of tourists being stormtroopers is a little misplaced. As for the idea that somehow or other people will want to traipse round the world with a fistful of euros in order to have a comfortable life, I have news for the noble Lord. People prefer to traipse round the world and visit various countries outside the euro-zone with a fistful of those dreadful American "greenbacks". If the noble Lord saw—
Lord Harrison: My Lords, would the noble Lord care to take a bet on that—perhaps in euros?
Lord Mackay of Ardbrecknish: My Lords, the noble Lord should check the number of countries where the dollar is considered to be equal to the local currency. Frankly, I suspect that the American tourist in Europe will often be told the price of things in dollars. The reality is that the dollar is the major world currency, and will remain so. It is a very poor argument in favour of the euro to suggest that it may replace the dollar. There are many other arguments for the euro, but that one is a total non-runner.
I shall not get into the territory of suggesting that the noble Lord was offering the euro as a quick solution to the Northern Ireland problem, but his speech began to get a bit like that and I wrote down a note to say so.
The subject of Ireland brings me to the noble Lord, Lord Lea. He was answered—as I would expect him to be—by the very thoughtful speech of the noble Lord, Lord Gordon of Strathblane. He made a much more balanced speech about the problems of the euro for this country than either of his two noble friends. Ireland may look very good at the moment but, frankly, if it does not do something about its 4.6 per cent inflation, the advantages—if they are there—will rapidly disappear and it will not be able to do anything about it in the traditional way. It has no control over its own bank rate. It will be interesting to watch how the government in Ireland react over the next few months to the problems of a severely over-heating economy and increasing inflation rate when they do not have control over the traditional mechanisms for dealing with them. Inflation at 4.6 per cent will rapidly remove any competitive advantage that the current euro/pound rate gives. We have to be careful when looking at that.

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The noble Lord, Lord Lea, suggested that the euro/pound link had something to do with the fact that more people from this country went to France than French people came here. The simple fact is that the French holiday in France, by and large; they are not very good at going to other countries. I cannot say that I blame them for that. They seem to prefer to holiday in France. Most people steer clear of France in August because all the French are holidaying there. They are very nationalistic from that point of view. I know that the noble Lord, Lord Wallace, thinks that is a dreadful thing when it comes to being British; he dismisses everything that is British, as we heard again this evening. The French do not take that view at all; they are very patriotic. Good luck to them and more power to their elbow when it comes to resisting some of the silliness that comes out of Brussels. I see that some of the splendid street markets in France are about to be abolished by rules from Brussels. That will make France a bit less French and it may not do its tourist industry a lot of good.
No one needed to get up early this morning to realise that the value of the pound against the euro—and therefore against the currencies of other euro-zone countries—is at such a high level that it will affect the tourist industry adversely, just as it affects manufacturing business adversely. The noble Lord, Lord Paul, said on television at the weekend how damaging the pound/euro rate was to manufacturing industry. We all know that that is one of the reasons why BMW, with all its skills and resources, has found it impossible to turn Rover round.
Of course the tourist industry is important, as a number of noble Lords have mentioned. It creates perhaps up to 2 million jobs. In many parts of Britain it is the major employer. We do not mention these matters often, but when I was a Member of another place the constituency I represented was heavily dependent on tourism. I suspect that it was perhaps its major industry. It was not big businesses—although there were one or two of them—which made up this very important industry, but, by and large, lots and lots of very small businesses.
I suspect that the corporate sector is pretty robust and will not be much affected by exchange rates. It is used to exchange rates and working within them. If those within it want to go to a grand conference in Britain, they will go to Britain; if they want to go to Barbados, they will certainly go there. Noble Lords will understand the different attractions. So I do not think that the corporate sector will be greatly affected.
However, as regards the domestic sector, where we British go on holiday will be affected by the value of the pound. It is undoubtedly much more attractive to go to Spain or to any of the countries in the euro-zone because of the exchange rate. Many British people go to America—where the currency has not fluctuated much in many years—for the simple reason that they want to go to the United States on holiday. People will certainly find it more attractive to holiday abroad, which will of course have an effect on the domestic market—although, as the noble Lord, Lord Gordon of Strathblane pointed out, if their foreign holiday is a
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bit cheaper than it might otherwise have been they might have some money left over for a two or three-day break in this country. I have no doubt that the various bodies which advertise holidays in Britain will look at that market and try to target it.
The other side of the issue concerns the overseas tourists who come to Britain. It stands to reason—I think it was Just William who devised that phrase to explain things—that if the value of our currency is high, as it is, people from abroad—the European part of abroad, of course— will find it more expensive to come to this country than to go to other parts of the European Union. But they will also find it quite expensive to go to the United States or to other parts of the world because the euro is very weak against a lot more currencies than the pound only.
It may well be worth asking—but not ton ight— why the euro is so weak. It is a serious problem for the euro that it continues to decline. I did not think it would ever reach the level it has reached now, but who can forecast how much lower it will go? That is quite a serious matter for the currency. I saw last week that some of the economic advisers to the German Government are having second thoughts about the exchange they have made of a strong mark for a weak euro.
There is already evidence of a fall in the number of tourists coming from southern Europe to Britain—one noble Lord mentioned that—and it is beginning to show in those coming from northern Europe. But I do not think anyone has offered any solution—apart from the noble Lord, Lord Harrison, who maybe thinks that we should join the euro immediately. I do not know whether or not that was his solution, but we have been very thin on the ground for solutions to this problem. Perhaps the only one is to tell our European friends that they should start getting their act together and improve the relative position of the euro.
Tourism is an import/export business, so to speak, and when I looked at the statistics for the past few years I noticed that in 1995 the balance of payments was £3.5 billion in deficit—in other words, we spent more abroad than we earned from abroad—and that in 1996 the figure was just under £4 billion; in 1998 it had reached almost £7 billion; in the first eight months of 1999 it stood at £5.6 billion. These figures were given by Janet Anderson in the other place on 25th October; perhaps the Minister will be able to tell the House what were the year-end figures for 1999. On my calculation, they must have been something like £9 billion—I do not know—by the end of the year if they were £5.6 billion for eight months. I accept that the tail-end of the year is not a vigorous time for tourism here, but I suspect it may be a vigorous time for people deserting this country to look for a bit of sun. I suspect that things would have got worse as the year advanced and as the position of sterling improved so far as British tourists going overseas were concerned.
It would be very interesting to know whether one of the effects of a Labour government is that the balance of payments for tourism has gone badly against us and

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perhaps more than doubled in the past four or five years. I almost promised myself not to make any political points, but I cannot resist that one.
It has been an interesting debate. Just as manufacturing is important, tourism is an important industry. In fact, manufacturing is more important because if we do not have a manufacturing industry—whether it be old-fashioned manufacturing or new manufacturing and computer technology and so on—people will not have the wealth with which to go on holiday. In my view, the manufacturing industry is perhaps more important because without it we will not have the wherewithal to have tourism at all.
In both those industries, the position of the euro against the pound is serious. I have not heard a solution to this problem. Frankly, I do not believe that there is an easy solution, because, as the noble Lord, Lord Gordon of Strathblane, explained, the market determines the rates of currencies, not, I regret to say, Chancellors, not, I regret to say, the Monetary Policy Committee of the Bank of England, and not even the European Central Bank.
7.50 p.m.
Lord McIntosh of Haringey: My Lords, in expressing my gratitude to my noble friend Lord Harrison for introducing the debate, I base my gratitude on the quality of the speeches made in the debate. I am particularly pleased that he flushed out the noble Lord, Lord Mackay of Ardbrecknish, who seems to have set himself a target of following me around. If in the future he intends to make from the Dispatch Box after-dinner speeches like that one, I shall be even more grateful to him. It is the one kind of speech that I am totally terrified of making myself. The noble Lord, Lord Mackay, can make after-dinner speeches at any time of the day or night. I cannot make them after dinner, not even when I have had enough drinks to make it possible. I listened to the noble Lord with great envy and great admiration. I was very glad that he resisted almost to the very end the temptation to allow politics to enter his speech.
The subject of the Question is whether the introduction of the euro will be good for the British tourism industry, regardless of whether the United Kingdom adopts the euro. That is the theme which I propose to take for my speech. In other words, I shall not talk about the strong pound, because that is not an issue in whether or not we adopt the euro. The Chancellor and the Prime Minister have made very clear the economic conditions for our adoption of the euro. I shall not talk about the timing of entry. I shall certainly not follow the noble Lord, Lord Lea, in his suggestion that we should declare an entry rate or a range of entry rates now. As he well knows, that should be the result of whether or not we achieved the economic conditions for entry, not the determinant of them. Perhaps I shall not make a political speech either. I shall certainly not make the wider political speech which some speakers would have wished me to
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make. But I am going to talk about tourism. I am going to talk about what the Government intend to do, because that is what I was asked to do in the Question.
I want to confirm what all speakers have said, that tourism is an important industry for the United Kingdom. It employs 1.8 million people, which represents 7 per cent of all employment in this country. Perhaps I may say to the noble Lord, Lord Gordon, who made similar comparisons, that it is larger than construction or transport. Although the final figures are not in—I cannot give the noble Lord, Lord Mackay, the final figures on the balance of payments in tourism for the end of last year—we estimate that more than 25.5 million overseas visitors spent over £12.6 billion in the UK last year. Total tourism expenditure in the United Kingdom in 1999 is thought to be in excess of £63 billion. As the noble Lord, Lord Wallace, said, the UK currently ranks fifth in the world in terms of earnings from visitors. The good news is that the provisional figures for the two months of 2,000 already show increases in both overseas visitor numbers and in the amount of money that they are spending. I hope that that will encourage the noble Lord, Lord Lea, who feared that the strong pound had already resulted in a reduction of visitor numbers, although he took some comfort from the existence of and the increase in the numbers of low fares.
Visitors from European countries which make up the euro-zone are important customers of our tourism industry. The British Tourist Authority reports that in 1998, which is the last year for which figures are available, we received 14 million visitors from the euro-zone and they spent £4.3 billion. As the noble Lord, Lord Wallace, said, that represents two-thirds of the visitors and roughly half of the expenditure. But we do not need only facts and figures to tell us that tourism is important. In this part of London, except yesterday, one has only to listen to the languages spoken outside the House to recognise the importance of tourism to this country.
However, we cannot rest on our laurels. Tourism is an intensely competitive industry. All of our tourist establishments, whether guest houses, hotels, museums or visitor attractions, are bound to be in competition with those in Germany, France or other countries. I am not sure that I understand what the noble Lord, Lord Wallace, was saying about tourism being price elastic. It is not easy to make direct comparisons of price between this country and other countries when standards are so difficult to achieve.
Lord Wallace of Saltaire: My Lords, I was quoting from the minutes of the tourism summit of 1st March 2000 which the Library kindly provided for me. One of the points made is that for every 1 per cent increase in prices the level of tourism is thought to go down by 1.5 per cent. As a very limited economist, that seems to me to be a good definition of price elasticity.
Lord McIntosh of Haringey: My Lords, I am grateful for that definition and I am grateful for the source of the definition, which I should have read and had not noticed. What that means—I acknowledge the

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truth of what the noble Lord, Lord Wallace, says—is that at that level of price elasticity we have to be particularly cautious about additional unnecessary costs which, as the noble Lord, Lord Harrison, said, could be imposed on us by any failure to adapt to the existence of the euro, whether or not we adopt it.
I have never thought that the transaction costs are a prime reason for British entry into the euro-zone. The issue of competition and many other issues are more important than transaction costs, but there is no doubt that they are particularly important in the tourism industry. I rather doubt whether preparations in the 11 euro-zone countries are advancing as fast as the governments of those countries would wish. I have been in France, Spain and Portugal in the past three months. Other than the fact that by law price tickets must be declared in euros, I have never heard anyone mention a euro at any time. Although I am pleased to have a euro chequebook, I use it only to pay my bills rather than to pay for things on a day-to-day basis. I think that there will he quite a considerable shock in the euro-zone, let alone in this country, when we come to the very last days of December 2001. If we overestimate the speed at which they will adapt, we may cause ourselves too great concern about the extent to which the euro will be demanded in this country before that time.
However, UK tourism businesses need to ask themselves whether that means that their customers may find travel in the euro-zone more attractive. That will happen even without the adoption of the euro. It will happen simply because of the fixed rates of exchange. Some parts of our tourism industry may say that there will be little or no impact. That is fine. But they will need to develop the ability to deal in euros, just as many of them have already developed the ability to deal in dollars in order to maintain and expand their markets. The point for the tourism industry is that if a tourism business is to succeed, it has, just as with any other business, constantly to meet and exceed its customers' needs and expectations. If its customers want to pay in euros, it risks losing them if it cannot accept those euros.
Let us briefly consider the practicalities. Credit cards can be used anywhere, in any currency, and the entry simply appears on a bank statement on one's return. But if people coming to this country want certainty, I can see the difficulty about declaring in a tourist brochure in advance what the equivalent in euros to pounds may be. But surely we could very soon be in the position to say, when someone arrives at a hotel, that the price for a night's stay will be £60 or 95 euros; it will appear on a display board in the hotel and will be the basis on which, in 2002, the tourist can pay in his own home currency, in cash if he wants to do so. The same will be true of shops and restaurants. There is no reason why we should not adapt in that way. Even though I do not think that anything very much has happened on the ground, and no one is
1010
thinking very much in terms of euros. Next year French civil servants, for example, will start to be paid in euros and will want to start to use the currency.
Like all business changes, the introduction of the euro presents threats and opportunities. For businesses that are customer-focused there will be opportunities; those that fail to take the consequences will lose out. We have been active in making sure that businesses understand what the introduction of the euro means. We have produced and distributed factsheets on a range of strategic and technical issues. The forums we have set up in each English region and in Wales, Scotland and Northern Ireland bring together all those organisations that are interested in business support. Advisers from the euro preparations unit in the Treasury are frequent speakers at conference events. We have produced a series of case studies setting out how real businesses are meeting the challenges presented by the introduction of the euro, on the basis that I find to be sound: that people a re much more likely to believe what other businesses say than they are to believe government lecturing on the subject. We shall soon be publishing case study material on the tourism industry—small firms that a re typical of the sector: a small hotel chain, a bed-and-breakfast in Wales, a shop selling tourist souvenirs.
To answer my noble friend Lord Lea directly, we have set up the Euro Preparatory Working Group, co-ordinated by the Department for Culture, Media and Sport, working closely with the industry, seeking to raise awareness of the impact of the euro on tourism businesses and to disseminate information to the industry. The British Tourist Authority is working closely with that group and the national tourist boards produced a guide to assist small tourism-related businesses to prepare for the introduction of the euro last year.
A number of noble Lords, notably the noble Lord, Lord Gordon, and the noble Viscount, Lord Brookeborough, talked about the need to tackle the taxation of hotels. We have debated the matter at length in this House in recent months. I have pointed out that the balance of taxation benefiting tourism in this country is very much greater than would appear from the fact that we have taxation on hotels. The fact that we do not have VAT on public transport, food and children's clothing very much outweighs the cost of taxation on hotels. I gave the figures and am happy to send a copy of Hansard to anyone who doubts them.
We have run out of time. If I have missed any points to which I ought to have responded, I shall gladly write to noble Lords. I hope that I have convinced those who have taken part in this valuable debate that the Government do not in any way under-value the importance of the tourist industry or the importance to the industry of adapting to the existence of the euro, whether or not the United Kingdom adopts the euro.
House adjourned at four minutes past eight o'clock.

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