Sitting of 3 May 2000

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

  CITY OF LONDON (WARD ELECTIONS) BILL (BY ORDER)
  Order for further consideration, as amended, read.
  To be further considered on Wednesday 10 May.

Oral Answers to Questions
  INTERNATIONAL DEVELOPMENT
  The Secretary of State was asked—
  INTERNATIONAL DEVELOPMENT

    Kosovo
    Dr. Norman A. Godman: When she last discussed with her colleagues from other member states of the European Union matters relating to the funding of training programmes designed to equip individuals and political parties in Kosovo to create local administrations and prepare for self-government for the province. [119351]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): The support that we are providing to Kosovo is principally directed at the development of capacity to enable Kosovars to run their own administration. We are providing support for the establishment of Radio Television Kosovo as an impartial public broadcasting service, for civic and voter education and for the training of election officials. The European Union has committed 360 million euros this year, focused on energy, water supply, housing and transport. The United Kingdom's share is 61.2 million euros, which is the equivalent of £35.5 million at today's exchange rates.
    Dr. Godman: I compliment my hon. Friend and his officials on the work that they are carrying out in Kosovo. However, there are conflicting views there on whether a Kosovo-wide election for an assembly should come before local elections. It would make good sense to hold local elections in the near future. Funding will be necessary, but at the heart of the setting up of such elections must be a guarantee of protection for minority groups throughout the province.
    Mr. Foulkes: I understand that there may be different views about the timing of elections. We are prepared to provide support for the administration of the election and
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    I am pleased to tell my hon. Friend that the Westminster Foundation has also provided support to the political parties in Kosovo. We hope that there will be free and fair elections at all levels.
    Madam Speaker: I call Mr. Pa—?
    Mr. Michael Fabricant: Fabricant. Ominous! That was very off-putting.
    Will the Minister join me in praising the work of the British Council in Kosovo and, indeed, elsewhere? Is he aware that although extra Government funds were made available to the British Council for education and training, those expired in March 2000? So far, no extra moneys have been allocated. Will the hon. Gentleman have an urgent meeting with the Foreign and Commonwealth Office and the Treasury to ensure that moneys are made available so that the British Council can carry on with its excellent work?
    Mr. Foulkes: I understand why the hon. Gentleman was disconcerted. Perhaps Madam Speaker does not regularly read The Guardian sketch.
    Mr. Fabricant: The writer is not in the Press Gallery.
    Mr. Foulkes: That means that I will not be in it, oh dear.
    We value the work that the British Council is undertaking here and elsewhere. The central core funding of the council is provided by the Foreign and Commonwealth Office and it is open for the council to compete with other organisations for the sort of work that we provide. It has been successful in a number of those bids. I would be happy to talk to Baroness Scotland about the role of the British Council in Kosovo, as the hon. Gentleman requests.

    Sri Lanka
    Mr. Simon Hughes: What are her Department's priorities in Sri Lanka for the financial year 2000–01. [119352]
    The Secretary of State for International Development (Clare Short): Finding a lasting solution to the long-running conflict is the major priority in reducing poverty in Sri Lanka. Our country strategy was published in September 1999. I will be happy to send the hon. Gentleman a copy. It commits us to a small programme focused on improving the quality of education, particularly at primary level, which is deteriorating I am afraid; improving the livelihood security of the very poor in conflict areas; and working for inter-communal reconciliation.
    Mr. Hughes: I am grateful for that answer. The Secretary of State will know that civil war is rapidly escalating, causing injury and death in Sri Lanka. In the light of that, will she consider providing further cross-Government, co-ordinated help with medicines, gaining access to people in war-torn areas and protecting civilians, many of whom are now trapped? Is there any possibility of an initiative by the British Government, together with others in the Commonwealth, to reduce the

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    conflict and get the two sides to back off, so that we can achieve some of the reconciliation and settlement that the right hon. Lady wants as much as we do? Will she give an absolute undertaking on behalf of the Government that none of the arms that we have sold will be used to repress or attack civilians in Sri Lanka?
    Clare Short: I agree with the hon. Gentleman. The long-running conflict is a disaster for the people of Sri Lanka and it has escalated recently, which is worrying. We are trying to provide help and support for the poor who are affected by the conflict. That work will continue and we remain committed always to providing humanitarian relief where it is needed and where we can. Sometimes that is difficult where there is conflict.
    The hon. Gentleman will know that the Norwegian Government are involved in an initiative to broker talks—it is not looking optimistic at the moment. The United Kingdom Government have made it clear that they will be more than willing to help, if both sides want that. We will only be useful in that way.
    On the hon. Gentleman's third question on arms, I am sure that the answer is yes, but I cannot say that with authority. I will check and write to him.
    Mr. Dafydd Wigley: Does the Secretary of State accept that a long-term solution in Sri Lanka can be secured only when the legitimate rights of all peoples there are respected? In any dealings with the Government in Sri Lanka, will she emphasise the need to ensure fair play for the Tamil peoples as part of their policy? Without that, there will not be long-term stability.
    Clare Short: I certainly agree with the right hon. Gentleman that peace always requires justice for all people, but I am afraid that, whatever the historical origins of the conflict, continuing fighting by the Tigers is bringing enormous suffering to all the people of Sri Lanka. It is time for peace.
    The right hon. Member for Upper Bann (Mr. Trimble) may be interested to know that we have set up links between schools in Sri Lanka and in Northern Ireland to try to learn from some of the reconciliation work in Northern Ireland, so that such matters can be included in the curriculum in Sri Lanka. All the people need peace—of course, with justice, but the conflict should be brought to an end.

    Debt Relief
    Mr. Malcolm Savidge: What progress was made on speeding up debt relief for heavily indebted poor countries at the spring meetings of the World Bank and the International Monetary Fund. [119353]
    The Secretary of State for International Development (Clare Short): At the spring meeting of the World Bank and the International Monetary Fund, agreement was reached to establish a joint World Bank-IMF committee to oversee the implementation of the enhanced heavily indebted poor countries initiative. The Chancellor and I have pressed for that, and hope that it will provide a focus for efforts to ensure that commitments made at the Cologne
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    G7 meeting—that three quarters of eligible countries would start to receive debt relief before the end of the year—are met. It looks as though that target is slipping.
    Mr. Savidge: Do the current World Bank and IMF estimates of the number of countries that will qualify for enhanced debt relief look as though they will reach the G7 target of three quarters, to which the Secretary of State referred?
    Clare Short: I am grateful to my hon. Friend for that question. I did not attend the meeting, because my voice—which is still croaky—collapsed completely when I was meant to be in Washington. I am sad to say that the communiqué the Development Committee stated that it was hoped that at least 20 eligible countries would start to receive debt relief before the end of the year. That is a reduction in the number in the Cologne commitment. All those who are concerned about debt relief—a concern shared widely throughout our society and across the world—should exert pressure to speed up the process. We are doing that as a Government, but other Governments are causing delays; that is a big worry.
    Mr. William Cash (Stone): Would the Secretary of State be good enough to tell us which countries are responsible for the delay? Does she accept that members of the Jubilee 2000 all-party group are extremely concerned about the situation? I pay tribute to her for the honesty with which she has just expressed herself on the subject—she, too, is obviously deeply concerned. How much debt has been paid off? What steps are being taken to liaise with the proposed summit on the matter which the Pope is organising towards the end of this year?
    Clare Short: I do not think that it would be wise for me to name countries that are causing delays. We need to exert that beautiful pressure that comes from civil society throughout the world on all the countries involved so that we can move forward. I ask the hon. Gentleman and all those involved in campaigning to do that. In the United States of America, there has been difficulty in obtaining the support of Congress for commitment to the multilateral debt fund. I know that the Administration are trying to get that support and that they would be grateful for any help to achieve that.
    So far, five countries are on track with enhanced debt relief. Uganda has gone through the process completely. The amount of debt relief on offer is $100 billion of the $145 billion that is owed. That is a considerable sum.
    I am aware that the Pope is holding a conference; that can only be good. I hope that it will contribute to keeping people to the commitments made at Cologne.
    Mr. Andrew Reed: Although it is important that we have made progress on this issue, there obviously remains much work to be done. I urge the Secretary of State to give us at least a hint as to which countries are holding matters up, so that those of us who are involved with the Jubilee 2000 coalition can encourage others around the world to apply pressure on their own Governments, if they are holding things up.

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    There is a feeling of real frustration that we have come so far, but have not yet delivered a real change for people in the third world.
    Clare Short: I am grateful to my hon. Friend for his offer of support. It would be invidious to have a list of guilty parties. Not many major countries were involved in the G7 meeting at Cologne. We are about to go to Okinawa. Pressure on all to speed up the process and to keep to their commitments should be exerted across the international system. The new unit in the bank and the fund gives us an opportunity to put the pressure on, which is important. One of the great achievements is the decision that debt relief should go behind poverty reduction strategies. Some countries are calling for absolute perfection in those strategies. We are saying that we should put broad poverty reduction strategies in place, so that initial debt relief can flow and then be strengthened as time goes on. That is the right way forward.
    Mr. Gary Streeter: I know that the Secretary of State will be as disappointed as many of us are at the lack of progress in this special year, the year of Jubilee, when we want to make unique progress on debt relief. I know that she will share the concern of Kofi Annan, who said in March:
    The deeper, faster and broader relief promised last year has yet to materialise.
    I know that the right hon. Lady is working hard on this matter and will be disappointed, but, apart from the joint implementation committee, what specific plans does she have to break through the current logjam?
    Clare Short: I am sorry to disagree, as usual, with the hon. Gentleman. There has not been a lack of progress. The most stupendous achievement has been made, primarily by the Church and faith groups across the world and by other parts of civil society, in pressing the leadership of the richest countries in the world to agree more generous debt relief to mark the year 2000. The enhanced heavily indebted poor countries initiative and the decision to put the focus on poverty reduction strategies are considerable achievements. Five countries are already on track and one has completed the process. So that is all good, and it is considerable progress.
    We are seeing some slippage in the number of countries coming through against the target set at Cologne of three-quarters of eligible countries on track by the end of 2000. I think that the situation is retrievable. With enough pressure, countries will get back on track, and that must be our shared objective.
    Mr. Streeter: I know that the Secretary of State is working hard on the matter, but I am sure that she will agree that the granting of debt relief to only five countries after all these years and after four months of the year 2000 is not a significant achievement. May I put a practical suggestion to her? Between now and the G8 summit in Japan in July, will she make debt relief her highest priority? Will she engage in a round of shuttle diplomacy with her counterparts in G8 countries, the IMF and the World Bank? Will she put every last ounce of effort into
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    the project between now and July so that, for all those living under the crippling burden of unpayable debt, the year 2000 really will be a year of delivery?
    Clare Short: I am grateful for the hon. Gentleman's concern, but he is wrong to suggest that, only this far into the year, to have five countries on track for the much more generous debt relief that has been agreed as a result of the international campaign is a disaster. It will be a disaster if we do not get three quarters of eligible countries through by the end of the year. Pressure from him and all of us, including me, could achieve that objective. I certainly promise him that I and my right hon. Friend the Chancellor will continue to exert all the pressure that we can. I am not in favour of shuttling around the world, as some politicians do, for its own sake, but I promise that I shall do everything in my power, as will my right hon. Friend the Chancellor. I hope that with the help of the hon. Gentleman and all hon. Members, we shall make sure that we keep to the Cologne commitment.

    Kosovo
    Mr. Roger Casale: What assessment she has made of the impact of her Department's work in Kosovo. [119354]
    The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We have recently reviewed our work in Kosovo, Albania and Macedonia. Our contribution last year totalled £110 million. As well as assisting refugees returning to Kosovo, we have supported the United Nations mission, mine action, human rights, health care and restoring basic services. We believe that our work has made a significant contribution to the process of getting life in the province back to normal after the conflict.
    Mr. Casale: I thank my hon. Friend for that reply. I visited Kosovo last year with Mr. Geoffrey Morris, on behalf of London and South East Direct Aid to Kosovo, and saw at first hand the excellent work of the Department. I am a patron of LASEDAK and we work alongside the Scottish Charities Kosovo Appeal on humanitarian relief and development projects in Kosovo. Is my hon. Friend aware of the concerns of such organisations about the relative scaling back of the work of his Department within the overall framework of the EU stability pact? Non-governmental and voluntary organisations working in Kosovo depend very much for their effectiveness on the work of the Department and, with 10,000 refugees returning to the region, in which LASEDAK and SCKA are involved, there is a real danger that next winter will be worse than last.
    Mr. Foulkes: I am grateful to my hon. Friend for the kind things that he said about my Department's work. The main burden of reconstruction should now rightly be taken on by the European Union and the new agency for reconstruction, which started its work at the end of February. As I said earlier, 360 million euros has been provided through the European Union and our contribution is £35.5 million. However, we are anxious to make sure that the operation is not hampered by Brussels bureaucracy. We want resident advisers and devolved

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    responsibility to make the operation effective and to ensure that there is quick and effective reconstruction in Kosovo.
    Mrs. Cheryl Gillan: Has the hon. Gentleman had a chance to study the United Nations Economic Commission report that was published today? It slams the aid efforts in the Balkans, saying that the big gap between funding pledges and disbursements delayed action and created disillusionment. The report also highlights poor co-ordination, the lack of coherent vision and the failure to place individual projects within a broader programme of development at national and regional level.
    Can the hon. Gentleman assure us that all the promised UK funds have been disbursed and that he is making every effort to ensure that the civil administration posts in Kosovo, some 55 per cent. of which remain empty, are filled by local people? Does he agree that, while more than half those posts are vacant, the region will continue to be run by western non-governmental organisations? Despite their best efforts, they could repeat the mistakes made in eastern Europe and remain open to the criticisms made in the report.
    Mr. Foulkes: The picture described by the hon. Lady is a travesty of reality. The Kosovo crisis saw the largest and fastest movement of population in Europe since world war two. The international community managed to get people under shelter in the winter, with heat, light and water, in spite of the dire predictions. The £110 million that we have provided is the largest humanitarian programme that DFID has ever undertaken, and 90 per cent. of operational targets were achieved on schedule and within budgeted costs. That is a great achievement, and the hon. Lady should recognise that.

    Arms Exports
    Dr. Vincent Cable: What evaluation she has carried out of the impact of export credit guarantees on arms exports to developing countries. [119355]
    The Secretary of State for International Development (Clare Short): My Department commissioned a review by Dr. Valpy Fitzgerald of Queen Elizabeth house, which found that export credit guarantees could promote sustainable development in poor countries, but expressed reservations about the appropriateness of ECGD support for arms exports to developing countries. The position paper of my Department to the ECGD review argues that we should be willing to support arms expenditure when it is part of a responsible and properly accountable security sector that is needed to create the stability necessary for development—but only then. Copies of the review and the position paper have been deposited in the Library. I am grateful to the hon. Gentleman for drawing attention to them.
    Dr. Cable: Is the right hon. Lady aware of the work of the Select Committee on Defence, which suggested that up to £250 million a year of taxpayers' money is provided in the form of subsidy for arms exports to developing countries through the ECGD? Does she regard that as a
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    useful additional flow of finance, or does she agree with the retiring director of the IMF that it seriously undermines development?
    Clare Short: I agree that excessive arms expenditure undermines development, but countries need stability. When there is an over-bloated security sector or no order and peace, one cannot achieve development. Therefore, a properly sized and democratically accountable security sector is what developing countries need. There have been no ECGD-backed arms exports to HIPC countries or to countries eligible under the International Development Agency, the most concessional arm of the World Bank, in recent years and 80 per cent. of the ECGD cover for arms expenditure in developing countries goes to Saudi Arabia and Oman. We have improved the record, but the hon. Gentleman raises an important point. I hope that more hon. Members will take an interest in the review of ECGD, because we could tighten up and improve it.
    Mr. Desmond Browne: Does my right hon. Friend agree that the conflict in many developing countries is exacerbated by the activities of arms brokers, who ply their trade from the United Kingdom, largely in an unregulated fashion? Indeed, there is evidence to suggest that, dealing through Uganda, arms brokers from this country are providing arms to both sides of the conflict in the Congo. In the context of the Government's review, will my right hon. Friend ensure that the voice of those who wish to see such activity licensed in this country is heard loud and clear?
    Clare Short: My hon. Friend raises an extremely important point. There have been worrying examples of arms brokers based in the United Kingdom brokering deals with disreputable sources for countries that do not need more arms. As I think my hon. Friend knows, the issue is under review. Unfortunately, I am not in a position to make an announcement this afternoon.
    Mr. John Wilkinson: Do the Government take pride in their banning of ECGD credits for arms acquisitions by 63 of the poorest countries in the world? Of those countries, only Kenya has been a recipient of such credits over the past 13 years. Would it not be a much more ethical foreign policy for the Government forthwith to ban all exports of British armaments to Zimbabwe, which is using them in a civil war in the Congo?
    Clare Short: As the hon. Gentleman knows, my right hon. Friend the Foreign Secretary will make a statement on Zimbabwe later this afternoon. He will probably have something to say of interest to the hon. Gentleman.
    I take considerable pride in the fact that the Government have tightened up considerably on the previous Government's record. None of the 63 poorest countries is in receipt of ECGD cover, including Kenya. It did not get any such cover for arms purchases. We have declared that there will not be such cover in future. We are trying to get international agreements so that others will take up our position. I think that that is right, and I hope that the hon. Gentleman will support the campaign.

    World Education Forum
    Mr. Bill Michie: What progress was made at the world education forum in Dakar on putting in place policies to deliver high-quality primary education for all children? [119356]
    The Secretary of State for International Development (Clare Short): The Dakar forum resulted in a strong political commitment by national governments and the international community for education for all and the development of national action plans, and agreement on the need for significantly enhanced investment by governments and donors for primary education. United Nations conferences cannot require sovereign Governments to prioritise primary education, but can encourage and monitor progress. I am confident that developing country Governments are now aware that educating a generation of children even to primary level, including girls, is the most effective development intervention that a country can make. I hope that we will be able to drive this commitment forward.
    Mr. Michie: I thank my right hon. Friend for that full and frank reply. In terms of her Department, what are the implications of the Dakar forum for the future? What steps does she think may be necessary to ensure that Governments of developing countries and donors fulfil the commitments that they made at Dakar, so that all children have the right to primary education?
    Clare Short: My hon. Friend will probably know that the bulk of the spending on education by most developing countries is directed to higher education. The reason is that elites are powerful in very poor countries. They live in the cities and they can usually pre-empt expenditure. It is a difficult political task to get a commitment to spending on the poorest children in rural areas.
    We are working hard on this task through the international system and by contributing more funds. We have committed £300 million over the past three years. The call at Dakar for a special international fund will not do the job—we must persuade Governments and their civil societies to prioritise the education of poor children. We are making progress and there must be sustained interest in doing so through to 2015.
    Mr. Andrew Rowe: Does the Secretary of State share my anxiety that in certain countries in sub-Saharan Africa primary education has become susceptible to charging for various elements of it, whether it be books, uniforms or whatever? This is proving a disincentive to families. Did the Dakar forum address that issue?
    Clare Short: The hon. Gentleman is absolutely right. Kenya, for example, is a big spender on education, but 98 per cent. of its expenditure goes on teachers, and there is nothing for books, chalk or anything else, so parents are charged and poor children do not go to school. That distortion applies throughout the system, which is why a special top-up fund will not do. It is important to get Governments committed to educating all children, including poor children—and particularly girls, who tend to be excluded. As the hon. Gentleman knows, countries
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    such as Uganda and Malawi, which is very poor, are giving a lead, and we must spread that commitment internationally.
    The World Bank's evidence is clear: educating a generation of children, including the girls, even only to primary level, is the strongest development intervention that any country can make. If countries want development, they must educate all their children.

  The Prime Minister was asked—
  PRIME MINISTER

    Engagements
    Ql. [119380] Sir Raymond Whitney: If he will list his official engagements for Wednesday 3 May.
    The Prime Minister (Mr. Tony Blair): This morning, I met Nelson Mandela, as well as having meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Sir Raymond Whitney: Does the Prime Minister accept that it is not enough for the international community to sit back until elections are held in Zimbabwe? If the present scale of killings and intimidation of political parties continues, the results of any such elections will be meaningless. Will the Government now do more, in collaboration with our international partners, to seek to restore the rule of law in Zimbabwe?
    The Prime Minister: I entirely agree that the situation in Zimbabwe is very serious, but the hon. Gentleman will have seen yesterday's statement by the Commonwealth ministerial action group, which made it clear that the elections should be free and fair and that the violence and killing must stop. He will also know from the negotiations that took place in this country last week that we have made it clear, as we have done throughout the situation, that we are prepared to help, but only if the violence and illegal occupations cease.
    It is necessary not only for the international community but for this country in particular to make that absolutely clear, and we have done so. We are working at every single level of the international community to get that point across, and we will carry on doing so.
    Mr. Richard Burden: My right hon. Friend will know that one of the meetings that he held this morning was with a delegation of stewards from the Longbridge plant in Birmingham. Is he aware of the strength of their feeling about safeguarding both the future of that plant and the future of car manufacturing in Birmingham? Will he comment on the fact that sales of Rovers have risen dramatically in the past two months and that the company's market share is now 12 per cent? Will he do all that he can to safeguard the future of

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    the plant, including providing tangible support for a credible business plan, so that we can retain the industry, which is strategically important for the west midlands?
    The Prime Minister: My hon. Friend is absolutely right, and the Rover is a good car, as sales show. It is essential that we put together a plan that will give Longbridge a viable future; that we safeguard as many jobs as possible, and that for those people who unfortunately lose their job we stand ready to help them through the process of change. I made it clear to the people from Longbridge whom I saw this morning that the Government stand willing to do whatever we can to safeguard the existing jobs and to make sure that anyone who does lose their job gets the best possible chance of a decent job in the future. We shall carry on, as we have been doing over the past few weeks, working night and day to bring about that solution.
    Mr. William Hague: Last year, vandals rioted in the City, destroying property and terrifying law-abiding people. On Monday, the same groups defaced the Cenotaph and dishonoured our war dead. The Prime Minister has said that such events cannot happen again, so will he now abandon the Government's wretched weakness on law and order? Will he support the call of mayoral candidate Steve Norris to do all in his power to see that annual display of violence banned for next year?
    The Prime Minister: As the Home Secretary indicated yesterday, and as I have said, of course we shall do everything possible to ensure that those appalling, disgraceful scenes do not happen again. I have to say to the right hon. Gentleman that his capacity to exploit any situation is absolutely unlimited. As for his mayoral candidate, I read his Evening Standard advertisement today, and there was one word missing, and its first three letters are "con".
    Mr. Hague: The right hon. Gentleman talks about exploiting the situation, but he is the one who went down to the Cenotaph yesterday, peeled an onion, and said, "It can never happen again." We want to know what he is going to do to make sure that it never happens again. After last year's events, the Home Secretary said that the Government would do everything possible to prevent a repetition; now, the Prime Minister says that it cannot happen again—but it has already happened twice. The violence of that demonstration was widely predicted and advertised; my right hon. Friend the shadow Home Secretary wrote to the Home Secretary about it. Why not say now that it should be banned next year?
    The Prime Minister: First of all, it is unfortunately not the first time that riots have occurred in London: some people remember a few in the 1980s and 1990s. Of course, we have to sit down sensibly with the police and other authorities to make sure that those disgraceful scenes do not happen again. That we shall do. Nothing is helped by the right hon. Gentleman, as ever, leaping on any passing bandwagon.
    Mr. Hague: We remember the 1980s, when the right hon. Gentleman was parading around with a CND badge—he knows all about what happened in the 1980s.
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    Do not these events require a change from utter weakness on law and order? Is he not soft on crime and soft on the causes of crime? What sort of signal does it send to rioters that he has released early more than 700 people convicted of violent disorder or affray, when the Home Secretary promised not to release serious offenders? Is it not time that we stopped releasing thugs before their sentences have been served?
    The Prime Minister: On the last point, I would cite the unanimous support of the all-party Home Affairs Committee, which at the time included the person who is now the Conservatives' Front-Bench spokesman on law and order. The fact is that it is the Labour Government who have introduced "three strikes and you're out" for burglars and toughened up the youth justice system; it is we who have put more money into law and order, when the right hon. Gentleman was pledged to cut the money going into law and order.
    Mr. Hague: At the time that that Committee expressed support for the policy, the Home Secretary said:
    We have no plans…whatever…to facilitate the early release of serious or sexual offenders…none whatever.—[Official Report, 29 November 1999; Vol. 340, c. 27.]
    Since that time, they have released early 19 sex offenders, 22 people convicted of cruelty to children and 2,500 convicted drug dealers. By releasing criminals early, preventing tougher sentencing and cutting police numbers, are not the Government weakening the fight against crime, and is that not a total betrayal of everything the Prime Minister promised the country?
    The Prime Minister: The fact is that, under the Tories, crime doubled—they never like to be reminded of it, but crime doubled. Under the Labour Government, crime has fallen. It is this Government who have introduced the measures on burglary and youth justice. What contribution did the right hon. Gentleman make to tougher sentencing the other day? He has now said that he rules out a mandatory life sentence for murder. Am I right, or am I wrong?
    Mr. Hague: For self-defence, as the Prime Minister knows full well.
    To fight crime and prevent future riots, would it not be a good start to elect tomorrow a mayor of London who will be on the side of the police, rather than on the side of the rioters? Since the right hon. Gentleman has now tried every other means of preventing the hon. Member for Brent, East (Mr. Livingstone) from becoming mayor of London, will he now join all his friends and supporters on The Mirror in saying, "Vote Conservative tomorrow"?
    The Prime Minister: Some of us recall the shadow Home Secretary talking about the riots yesterday. Whom did the right hon. Lady decide to attack? She attacked the police. We should support the police in this situation. We will take no lessons on law and order from the Conservative party, which doubled crime and, when the right hon. Gentleman was in the Cabinet, cut police numbers as well.
    Caroline Flint: Is my right hon. Friend aware that, as we sit in this Chamber, there is a count in the Conisbrough ward in my constituency, where there

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    has been a full postal ballot as part of our pilot scheme to modernise the way in which people vote? I am pleased to tell my right hon. Friend that we are looking at a 45 per cent. turnout. Will he extend his congratulations to the person who I know will be re-elected: Councillor Gerard McLister?
    The Prime Minister: I hope that my hon. Friend is right in her predictions. The point that she makes is serious. It is important that we raise the numbers of people participating in local democracy. Early results indicate that the experiment is well worth pursuing. We shall obviously have to evaluate results carefully, but if we get 10 or 15 per cent. higher turnouts as a result of the new system, it will be one reform that will hugely strengthen the whole of our democracy.
    Mr. Charles Kennedy: In condemning utterly the evil thuggery that we all witnessed in central London two days ago, may I turn the Prime Minister's attention to another form of evil in our society: the evil of racism? Does he agree that the appalling attack on the black care worker in Birmingham two days ago—he was racially abused and then set on fire—should act as an important pointer to every politician in this House that we should not conduct ourselves in a way that plays or panders to the worst fears of racial prejudice?
    The Prime Minister: I agree with every word that the right hon. Gentleman has said.
    Mr. Kennedy: Does the Prime Minister further agree that, when one is talking about issues such as asylum and immigration, particularly with elections approaching, to use saloon-bar language is nothing more than gutter politics?
    The Prime Minister: The right hon. Member for Richmond, Yorks (Mr. Hague) may laugh, but it is extraordinary that he has not from the Dispatch Box put the positions that he has been putting in the country. The reason that he does not do so is that he knows perfectly well that his arguments would not stand up in proper debate.
    Let me make one point. Asylum, and the growth in the number of asylum seekers is an issue, and we are trying to deal with that issue. However, one thing is a cruel deception: to go around the country telling people that all the problems of the health service and schools and old-age pensioners could be solved if only we locked up a few asylum seekers.
    Let me give the House the facts. The total cost of asylum is less than one fifth of 1 per cent. of Government spending. It is a problem, we are dealing with it, but we should not, any of us, exploit it—particularly not someone whose desperation is rather greater than his judgment.
    Mr. James Plaskitt: Three thousand pensioners in my constituency qualify for the minimum income guarantee. For a single pensioner, that means £16 a week—a 25 per cent. cash increase—more
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    than they were receiving at the general election. What can the Government do to ensure that those who qualify for the minimum income guarantee get it?
    The Prime Minister: We are trying to ensure that people who are entitled to the minimum income guarantee get it. Altogether, this Government will put in some £6.5 billion additional expenditure for pensioners. There is of course now the £150 winter fuel allowance and free eye tests and free television licences for those aged over 75.
    It was also very important that we dealt with the problems of the poorest pensioners first. That is what the minimum income guarantee does. For some couples, it will mean gains of up to £20 a week. I am proud that a Labour Government are tackling the issue of pensioner poverty. Pensioners—any of them—should not forget that the Conservative party would take those things off them again.
    Mr. Desmond Swayne: The right hon. Member for Holborn and St. Pancras (Mr. Dobson) has said that he does not know how to cast his second preference vote in the election for which he is the Labour candidate. This morning on the "Today" programme, the Secretary of State for Education and Employment announced that it was no good asking him how he would do so because he was opposed to the very electoral system. As that electoral system was designed by the Prime Minister, perhaps he would give us his advice on how he will cast his second preference vote.
    The Prime Minister: No.
    Mr. Eric Clarke: My right hon. Friend the Prime Minister should be thanked—[Interruption.]
    Madam Speaker: Order. Let the hon. Gentleman finish.
    Mr. Clarke: I thank my right hon. Friend on behalf of the miners who suffer from emphysema, bronchitis and white finger, but one group of people in the coalfields has been left out: the sacked miners, who suffered injustice, according to the inquiry conducted by the Select Committee on Education and Employment. May I suggest as a start the reinstatement of those miners to the miners pension scheme for them and their families?
    The Prime Minister: As my hon. Friend knows, the Department of Trade and Industry has undertaken a review of what happened with regard to dismissals and re-employment around the time of the 1984–85 miners strike, and will shortly announce its findings. I hope that those in the mining industry recognise that we have given support to the mining industry, most particularly for those people who suffered as a result of working down the pit. After years and years during which people fought and were not able to gain compensation, it is this Government who have come up with the compensation scheme. It is

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    taking time to push that through, but we are pushing it through, and I hope that over the next couple of years, people will see the benefits.
    Mr. Christopher Gill: Doubtless, the Chancellor of the Exchequer will have told the Prime Minister that more than half the Bank of England's gold and currency reserves are now held in euros. Will the Prime Minister take this opportunity of telling the House by how much the value of the nation's reserves has slumped since the decision was taken to sell off the nation's gold? On gold, is he aware that Germany has increased its holdings of gold threefold, from £10 billion 12 months ago to more than £30 billion today?
    The Prime Minister: I cannot work out the precise point that the hon. Gentleman is making, but I am sure that it is against Europe; of that we can be sure. The Bank of England has a diverse range of assets, as do other countries. Some countries have sold gold; some countries have not. I am entirely content with the way in which the Bank of England has handled the matter. I suggest to Conservative Members that they get a new obsession, as that one is wearing rather thin.
    Mrs. Alice Mahon: Is my right hon. Friend aware that the comments of the Leader of the Opposition on law and order will sound pretty hollow to the people of Halifax, where the Conservatives are fielding a would-be councillor with a long criminal record, some of it as recent as last September? [Interruption.] The Leader of the Opposition and the shadow Home Secretary recently visited Halifax and the local police station, and must be aware of that man's activity. Will my right hon. Friend comment on the message that that sends to the people of my constituency?
    Madam Speaker: Order. The Prime Minister has no responsibility for Conservative candidates.
    Mr. Martin Bell: Following his meeting with the Royal British Legion last month, will the Prime Minister give favourable consideration to the case for a gratuity to former far east prisoners of war? More than 7,000 of them still survive, British heroes every one. Is not such a gesture to the living the best answer to those who would deface our monuments to the dead?
    The Prime Minister: I have heard first-hand from former prisoners of war and from their relatives and friends about the appalling suffering that they endured when they were held prisoner in the far east. They are immensely brave people, to whom we owe a great debt. A few weeks ago, I, along with the Under-Secretary of State for Defence, met the chairman and secretary general of the Royal British Legion, and we agreed then that we would look again at the policy on the far east prisoners of war, including the question of compensation. That we are doing. I make no commitment at this stage, but we told them that we would consider carefully the points and the representations that they had made, and we will do so.
    Ms Sandra Osborne: After years of Tory dithering, the Prime Minister will be aware how pleased we were in my constituency when the new Scottish air traffic control centre was given the go-ahead.
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    However, in the light of recent suggestions that that will be put at risk in the longer term by the proposed public-private partnership for National Air Traffic Services, what further assurances can my right hon. Friend give me today about the security of the 700 jobs in my constituency?
    The Prime Minister: I know that my hon. Friend has campaigned long and hard on the issue and I can assure her that the strategic partnership agreement, which will be concluded under the NATS PPP, will guarantee the construction of the new Scottish centre at Prestwick and its continued operation as part of the two-centre strategy, and that construction will provide and guarantee the 700 jobs in Ayrshire.
    As for NATS and the PPP more generally, it is important to realise that the whole issue of safety regulation will be kept in the public sector. What is done in partnership with the private sector will be the investment in the necessary infrastructure. Conservative Members may shout, but no one should forget that their policy is to sell off NATS in its entirety, whereas our policy is to retain a 49 per cent. stake for the Government.
    Mr. Ian Taylor: As the Prime Minister is presiding over severe damage to the UK manufacturing base with the consequent harm to jobs, will he take the announcement of the welcome merger of the London and Frankfurt stock exchanges as an opportunity to give a clear signal of positive measures that he will take to bring the sterling crisis under control?
    The Prime Minister: There was a moment during that question when Conservative Members stopped cheering.
    We understand the problems caused by the strength of sterling, although that is more to do with the difficulties that the euro has had during the past few months. For example, the sterling-dollar ratio has barely changed. The worst thing that we could do is to try artificially to devalue the currency, and that we will not do. What we will do is carry on with the policies that provide stability in the long and medium term for Britain and its industry. I remind the hon. Gentleman that the last time a Government tried policies that failed to bring stability, in the late '80s and early '90s, we ended up with the loss of 1 million manufacturing jobs, a very deep recession and interest rates at 10 per cent. for four years or more, and I do not want to repeat that experience.
    Mr. Derek Twigg: Is not it unacceptable that decades of inequalities in health should continue, and should not the record expenditure announced recently in the Budget be targeted towards reducing that inequality? That is particularly important in areas such as mine which has the highest child mortality in England, and that is why it is so welcome to have the extra £1.5 million for Halton general hospital and the 8 per cent. increase in spending for the North Cheshire health authority, in stark contrast to the Opposition's policies.
    The Prime Minister: As a result of the extra money that has now gone into the health service, we shall be able not only substantially to increase funds in the next four years, but to bring about the necessary changes and modernisation to expand hospital service provision and to

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    deal with patients in a better way. Again, everyone should understand that that additional expenditure in the health service would immediately be taken away by a Conservative Government because the Opposition are committed to changing the tobacco duty and do not support that part of the health service funding plan, and their private medical insurance scheme would cause an immediate £500 million loss just for those who already have private medical insurance. Therefore, if ever there was a Conservative Government, there would be a £1 billion shortfall and the money that has gone to my hon. Friend's constituency would go out again.
    Dr. Vincent Cable: Does the Prime Minister agree that one of the contributory factors to the growth of xenophobia towards asylum seekers, after the Tory leader, is the impact on council budgets in London and the south-east of England? Why did the Government capitulate to the shrill right-wing populist campaign from Kent county council, reimbursing all its costs, while London boroughs of all three parties, which behaved calmly and responsibly, will have to pick up the bill which, in my borough, amounts to £30 on an average council tax bill?
    The Prime Minister: I do not accept the hon. Gentleman's comments about Kent. It was important for the Home Secretary to react in the way that he did because of the pressures on Kent county council. My right hon. Friend has made it clear that he is happy to see the hon. Gentleman to discuss the position in his constituency. There is a problem with the increasing number of cases, but we have dealt with that in the right way: by changing the system, making sure that the removals happen faster and that the cases are processed faster, and penalising those who bring people into this country illegally. That is the right way of dealing with the problem, not the wrong way, which is exemplified by the Conservative party.
    Mr. Ben Bradshaw: Is the Prime Minister aware that Labour-run Exeter city council levies a lower council tax but delivers a higher level of service than any of the surrounding Tory or Liberal Democrat-run councils? It is the only council in Devon to be awarded beacon status for excellence. Does not that show that people are better served and better off—locally and nationally—with Labour?
    The Prime Minister: I agree with my hon. Friend entirely.
    Mr. Nick St. Aubyn: In the final advertisement of the official Labour party candidate in today's Evening Standard, he asked people to "Vote Frank", not for the Labour party. Is that because the party to which he belongs has deserted him throughout this campaign, or because the appalling scenes in Parliament square and at the Cenotaph have led the candidate to desert his party?
    The Prime Minister: I do not think that the hon. Gentleman heard what I said earlier about the Conservative party candidate. The right policy for the tube is for the private sector to do what it does best: the building and construction work; and for the public sector
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    to do what it does best: running the service and being responsible for safety. The Tory party plans to privatise the tube. Nobody wants that.
    Mr. Ian Davidson: Is the Prime Minister aware that while unemployment in my constituency has dropped by about a third since the general election, it is still the highest in Scotland? Does he agree that the removal of assisted area status from most of my constituency is not likely to be helpful in those circumstances? Does he further agree that it would be best if Govan Shipbuilders was kept on the Clyde?
    The Prime Minister: Of course I believe that, but discussions are on-going about how the new map is allocated in the United Kingdom as a result of the changes that are happening all over Europe because of enlargement. My hon. Friend's point about unemployment is well taken: 800,000 or more jobs have been created since the general election, 200,000 of them through the new deal. Many people in every constituency throughout the country have managed to get work that they would not otherwise have got because of the new deal. [Interruption.] Conservative Members are trying to shout us down because people should know that the Conservative party is committed to scrapping the new deal and putting people on the unemployment scrap heap.
    Mr. Peter Brooke: With further reference to Monday's events, when will the Government raise the pay of both uniformed and civilian police staff, especially in London, to maintain recruitment and particularly quality?
    The Prime Minister: An offer is currently before the negotiating board. There is a real problem. It is difficult for many police officers to live in London because of the cost of housing here. My right hon. Friend the Home Secretary has put an offer before the police negotiating board, and we are in discussion about it. I hope that the right hon. Gentleman's question means that he will support us when we make additional public investment available for the police service.
    Mr. Peter L. Pike: While the Prime Minister rightly recognises that what is happening to the Rover Group is primarily a west midlands problem, does he acknowledge that it is causing major job losses throughout the motor components industry, including in constituencies such as mine, where 600 redundancies have already been announced? That is especially worrying at a time when we, too, are losing assisted area status. Will my right hon. Friend make it clear that whatever hope is given to the west midlands will ripple to other areas that are affected by job losses in the motor industry?
    The Prime Minister: Yes, we certainly see that as our task. When economic structural change affects people's jobs, it is our job as a Government to be on their side and to help them through that process of change. That type of economic and structural change is happening all over the western world and Europe. We cannot prevent some of that change, but we can try to help people through it, help them find new jobs when they lose their jobs and

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    help to support industry in any way we can. That is precisely what the Government are doing and will carry on doing.
    Mr. Tim Boswell: May I ask the Prime Minister personally to look into the case of Colin Hughes? He is well known to many of us as a BBC producer, despite the fact that he is a wheelchair user and
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    dependent on a carer for almost all his essential personal functions. His support from the independent living fund is being subjected to a means test, which will effectively halve his income. Does the Prime Minister think that that can possibly be fair?
    The Prime Minister: I do not know the facts of the individual case. I am perfectly happy to look into them, following the hon. Gentleman's question.

Zimbabwe
3.31 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): With permission, Madam Speaker—[Interruption.]
Madam Speaker: Order. Will hon. Members who are leaving please do so quietly? We have been waiting a long time for this statement.
Mr. Cook: Thank you, Madam Speaker.
With permission, I will make a statement on the situation in Zimbabwe. Yesterday, I attended the meeting of the Commonwealth ministerial action group. I am pleased to report to the House that the meeting endorsed all our concerns. In particular, it recorded "deep concern" over the continuing violence, the illegal occupations, the failure to uphold the rule of law, and the political intimidation. It demanded fair elections, within the time required by the constitution of Zimbabwe.
The meeting agreed that the Commonwealth Secretary-General should visit Harare urgently in to bring home to the Government of Zimbabwe, and to make clear to the people of Zimbabwe, the concerns of the Commonwealth. I spoke in advance to most of the Ministers present yesterday, and I am pleased by the universal agreement that they gave at the meeting to our concerns. The outcome exposes the efforts of President Mugabe to pretend that only Britain is critical of the conduct of his Government. All Britain's concerns have now been supported by a body representing all the Commonwealth, chaired by one of Zimbabwe's neighbours.
A major reason why we received ready support yesterday was the recognition that Britain had taken every reasonable step to find agreement with the Government of Zimbabwe on a fair programme of land reform. At my meeting last week with their ministerial delegation, I confirmed that Britain was ready to help fund land reform, and that we were willing to take the lead in mobilising funds from other partners, such as the World bank, the European Commission and the United States. However, neither Britain nor any other donor is going to fund a programme of land reform unless it is conducted within the rule of law, is based on a fair price to the farmer, and reduces poverty among the rural poor who have no land.
Ministers in Zimbabwe have complained that Britain is imposing colonial conditions. There is nothing new about the conditions. They were all in the conclusions of the 1998 land conference, which was hosted and chaired by the Government of Zimbabwe. Nevertheless, last week the Zimbabwe delegation failed to give a commitment to bring the farm occupations to an end. I made it clear that, in those circumstances, Britain could not take further any support for land reform. Since that meeting, I have briefed Morgan Tsvangirai, the leader of the opposition movement in Zimbabwe. I have also spoken to Mr. Henwood of the Commercial Farmers Union, which has welcomed the firm line that we took on conditions for any help with land reform.
If the Government of Zimbabwe are genuinely committed to land reform, the way is open for them to make progress with international support. I am sorry to
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say that the events of the past two weeks, and President Mugabe's inflammatory speech earlier today, suggest that the Government of Zimbabwe are interested in land reform only in so far as it creates a condition of crisis in which they can secure their re-election.
The whole House will deplore the mounting evidence of political intimidation of the people of Zimbabwe. Opposition campaigners have been ambushed and beaten up; commercial companies that display opposition posters have had their properties firebombed; rural communities have been threatened that it will be known which ballot box came from their village. By the end of the past month of election campaigning, 14 political activists had been murdered, all of them supporters of the opposition.
No election can be fair unless there is an election campaign free from intimidation. At our meeting yesterday we agreed that the Commonwealth should send election observers to Zimbabwe, and our statement stresses that they must be admitted as early as possible. At the weekend, I will be seeking the same demand from the European Union for early entry of European observers. Although the primary responsibility for ending the violence rests with the Government of Zimbabwe, the presence of international observers may help deter some of the brutality of recent weeks, and may give some confidence to those who want free expression for their views.
In the present circumstances of spreading violence, we have resolved that from today Britain will refuse all new licence applications for exports of arms and military equipment to Zimbabwe. That will include all licences for spare parts in connection with previous contracts, such as the Hawk aircraft contract. We are urgently reviewing all existing licences for exports to Zimbabwe.
Moreover, my right hon. Friend the Secretary of State for International Development has suspended the programme to support the supply of Land Rovers to the Zimbabwe police. As a result, the supply of the remaining 450 has been halted, and will not be resumed unless there is a clear determination by the Zimbabwe police to restore the rule of law.
Britain is willing to help, in the right conditions, with the economic and land problems of Zimbabwe. Britain has also taken the lead in mobilising international pressure for free elections—but no Member will want to approach our discussion on the basis of President Mugabe's claim that the solution to the problems of Zimbabwe lies in London. It does not. Zimbabwe has been independent for 20 years, and President Mugabe has been in power for every one of them. In that time, he has already received over £500 million of development aid from Britain.
It is Zimbabwe's choice what its future will be. However, that must not be the choice of the Government of Zimbabwe alone; it must be the free choice of the people of Zimbabwe, through fair elections without violence, without intimidation and without fear. That was the united message from the Commonwealth yesterday. I ask the House to send the same united message today to the majority of the people of Zimbabwe who want to live in a free democracy, and to be protected by the rule of law.
Mr. Francis Maude: I am grateful to the Foreign Secretary for his statement.

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Zimbabwe should be one of the jewels of Africa—rich in natural resources, with some of the most efficient farming in the world, and with a judiciary that has remained robustly independent throughout the recent descent into lawlessness. Its people, who—black and white together—have lived in great harmony, have a vibrant desire for democracy. I think that we all admire the courage and resilience of those in the opposition parties who seem quite undaunted by a ruthless and systematic programme of brutal intimidation that has been countenanced, if not actually organised, by the governing regime. It is intolerable that a country blessed with so much should be brought to its current pass by the savage acts of one man and his acolytes.
As the Foreign Secretary said, everyone accepts that land reform is important; but, as he also said, this is not about land. This is about an ageing despot clinging desperately to power. Can the Foreign Secretary give a categorical assurance that he will not agree to further financial support for land reform without guarantees of lawful and ordered change, and until elections have actually happened?
I welcome the Commonwealth's decision to send observers to the elections to ensure that they are open and fair, but does the Foreign Secretary not think that the delays that have occurred in organising that may already have seriously compromised any elections that take place? The Foreign Secretary is aware—he said it—that much of the violence is geared towards intimidating voters in advance of polling day. Should not observers go to Zimbabwe now, rather than later? Should they not be headed by a group of senior international figures to make it as difficult as possible for Mr. Mugabe to ignore the ordinary requirements of democracy?
The House will be relieved that the Commonwealth has at last been mobilised to the cause. Does the Foreign Secretary accept that his first move, which was to engage the European Union in pressurising Mugabe, was a false step? In many instances the European Union is the right vehicle for action, but it is hard to imagine anything more calculated to entrench Mugabe than the spectacle of all the former colonial powers ganging up together against him. It was always obvious that the Commonwealth was the right family of nations to take action. Why did it take so long for it to get involved?
We welcome the decision to suspend exports of military equipment. Again, why has it taken so long for that decision to be taken? Of course it is right to suspend the supply of Land Rovers; they are clearly not being used to protect the citizenry from intimidation—but why not stop all aid that goes to the Government of Zimbabwe? Obviously, we should not stop aid that goes to help people in communities, but we know that Government-to-Government aid has had a long record of being diverted by the Government to their own personal ends.
Does the Foreign Secretary not agree that yesterday the ministerial action group should at least have started the process of suspending the Mugabe regime from the Commonwealth to remove any veneer of respectability that still attaches to it, as many people in Zimbabwe, both black and white, wish? It is ironic that it was the Zimbabwean Foreign Minister who chaired the Commonwealth ministerial action group that suspended Nigeria from the Commonwealth in 1995.
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Fifty years after decolonisation began, do we continue to make excuses for African dictators based on some misplaced notion of post-colonial guilt, or should we not believe today that African leaders should share the same values that African people deserve no more and no less than people from other Commonwealth nations?
Mr. Cook: I welcome the broad tone of the right hon. Gentleman's approach to the discussion, which is an improvement on our previous exchange. It is important that we should send as united a message as we can to those who are listening to the debate on BBC World Service.
I fully agree with a number of the points that the right hon. Gentleman has made. I agree that Zimbabwe's tragedy is that it could be one of the wealthiest countries in Africa, yet currently has one of the greatest economic problems in Africa.
I greatly admire the opposition leaders who have shown such courage in recent weeks. I spoke, as the right hon. Gentleman did, to the leader of the opposition when he was in London. As he has spoken to him, he will be aware that Morgan Tsvangirai has strongly urged us not to take economic sanctions against Zimbabwe precisely because it would play into Mugabe's hands by reinforcing his claim that Britain, not his policies, is the problem. I strongly urge the right hon. Gentleman to accept that advice, as I have done, from someone who has shown great courage in taking on the authority of President Mugabe.
On the specific questions that the right hon. Gentleman asked, I can of course give him a categorical assurance that there will be no assistance for land reform without a return to the rule of law and without the 1998 conditions being met in full. Those, of course, require the existence of some form of democratic process and good governance within Zimbabwe. Therefore, I can also say that there will be no assistance this side of elections, which should in any event be held imminently; if they are to be held within the constitution of Zimbabwe, they must be declared by July.
Yesterday, we discussed in the Commonwealth ministerial action group the possibility of finding a senior, preferably African, figure to lead the observer team, who would carry authority within Zimbabwe and beyond it.
As for the engagement of the European Union, I know that Opposition Front Benchers have scant time for that body, but it is the natural and right place for Britain to start to mobilise the international community. If we cannot get the European Union behind us, who else are we going to get behind us? [Interruption.] I discussed the matter with the Secretary-General of the Commonwealth four weeks ago.
The unanimous nature of the decision that we reached yesterday demonstrates the degree of successful lobbying at all levels in the Commonwealth. Indeed, concern has been expressed about Zimbabwe throughout the world. I particularly appreciate the strong support of the United States, and I welcome the mission that the Southern African Development Community sent to Zimbabwe. Its leaders know the extent to which the situation there could destabilise the entire region.
The right hon. Gentleman raised again the idea of suspending aid. However, much of the aid that we provide goes to the most vulnerable people in Zimbabwe.

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The largest single projects that we support are those that combat the spread of AIDS. As 25 per cent. of the population of Zimbabwe is already HIV-positive, can it really be sensible to pull the plug on those projects, many of which are necessarily undertaken through the Government because they involve health matters? If we were to take that step, the only result that I can perceive is that we might convince the people of Zimbabwe that President Mugabe was right, and that, when it came to solving their problems, Britain was an enemy, not a friend.
Finally, the rules for suspension from the Commonwealth are well set out in the Millbrook action plan, a document adopted by the previous Conservative Government and endorsed at the most recent Commonwealth meeting. The rules make it quite clear that suspension becomes an option only if a Government becomes unconstitutional. Nigeria and Pakistan had unconstitutional military coups. Much as we deplore the nature of the policies of President Mugabe, his Government are in power constitutionally—although that will change if elections are not held within a specified time.
I end on a note of agreement with the right hon. Gentleman. I agree that the chief burden of bringing home to President Mugabe the damage that his policies could do to Zimbabwe and the rest of Africa must lie with African leaders. Many of them know that the situation in Zimbabwe could start trouble in other African countries. They all know that it is in danger of creating a threat to investor confidence not just in Zimbabwe but in Africa as a whole. That is why many of them have expressed to me and to President Mugabe their concern at his actions. It is important that we work with them, and demonstrate to them both that we are willing to help and that the failure to reach agreement was not our failure, but that of the Government of Zimbabwe.
Mr. Donald Anderson: The strong words of condemnation from the United Nations, the Commonwealth and the European Union are indeed most welcome, but does my right hon. Friend agree that the most effective pressure is likely to come from the creditors—both private and public—and from the region because, as he has rightly said, there is a real danger of destabilisation, a decline in investor confidence and a movement from the region of trained personnel who no longer see their future there, where their skills and that investment are desperately needed? Does he agree that at the forefront should be South Africa, which is the regional power that stands to lose most and is already a major creditor, particularly in terms of the debts owed by Zimbabwe to ESKOM, the power parastatal? Is he confident that President Mbeki is prepared to move from good offices and quiet diplomacy to rather harder and more effective pressure, given the likely adverse consequences for South Africa?
Mr. Cook: I welcome the recent statement by President Mbeki, well reported in the South African press, that there must be an end to the violence and the farm occupations. I have also noted the statement by the Deputy President of South Africa, Dr. Zuma, that the actions being taken in Zimbabwe are rather curious in that they are outside the constitution which President Mugabe himself helped to write. There is clearly growing pressure within South
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Africa, which is reflected in the statements of concern by its leading ministers about what is happening in Zimbabwe.
The situation in Zimbabwe is, of course, a powerfully legitimate national interest for South Africa. Zimbabwe is its major African export market. Already one car factory in South Africa has been closed, and collapse of the Zimbabwe market has been cited as the reason. It is very much in the interests of South Africa and of the other neighbouring countries that they assist us in resolving the political crisis in Zimbabwe, to pave the way for economic progress.
Mr. Menzies Campbell: I welcome not only the fact that the Foreign Secretary has made a statement, but the terms of that statement, particularly the announcement of the suspension of exports of arms and arms-related equipment. Perhaps I might acknowledge the creativity of the Government lawyers, who seem to have found a solution to the contractual obstacles that some weeks ago apparently stood in the way of such a suspension. That is entirely welcome.
Do we not have to recognise the unpalatable fact that the United Kingdom acting alone has less influence over events in Zimbabwe than we should prefer, which makes yesterday's statement by the Commonwealth all the more important? Was it not entirely sensible to invoke the interests of the European Union when it was expected to make a contribution to the funds necessary for the redistribution of land?
I also agree with the Foreign Secretary when he acknowledges the fact that realism dictates that the greatest influence over Zimbabwe will come from its neighbours, such as South Africa, whose economy is already feeling the adverse effects of instability in the region.
Is it not a terrible indictment of the Mugabe Government that they have embarked on that provocation of unrest when inflation is at 50 per cent., unemployment is at 50 per cent., and there are estimates that 25 per cent. of the population may be HIV-positive? Would not a responsible Government be turning their attention to those problems?
Mr. Cook: I yield to the right hon. and learned Gentleman concerning his expertise in lawyers' creativity, which never ceases to amaze me. He is right to say that acting alone is less effective than acting together. In the past month, we have therefore pursued a conscious strategy of seeking to mobilise international opinion. We have had universal support wherever we have turned for support and assistance in the matter.
I personally do not regret that acting alone we are less effective than when acting with others. That precisely underlines the fact that the problem is not Britain's alone, and that, primarily, it is not even the international community's problem. Primarily, it is the problem of the Government of Zimbabwe. It is their responsibility to resolve the crisis that they face.
The right hon. and learned Gentleman eloquently recited some of the telling figures and statistics of the Zimbabwean economy, and he was right on every point. I should add that Zimbabwe is totally bankrupt in foreign exchange, which is why it currently has an oil shortage and why—with the price of the Zimbabwe dollar set at

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a wholly unreasonable level in relation to international prices—it finds it difficult to persuade tobacco farmers to sell their tobacco. I agree with him that those are the real issues on which the election should be fought. I think that the truth is that President Mugabe and his Government are talking up the land reform issue precisely because they would rather not face those issues.
Mr. David Winnick: Did my right hon. Friend see the report in a Sunday newspaper that thugs from the ruling party went into a town, savagely beat five active members of the opposition, and displayed those five people before the town, obviously to intimidate others? Two of the five people are reported to have died. Those deaths and beatings are, of course, in addition to the murders and the intimidation of the press that has been occurring in the past five months.
Although I recognise what my right hon. Friend said about the Commonwealth, if the situation continues as it is, will there not come a time when it is totally unacceptable for that country to remain in the Commonwealth? If it does remain in such circumstances, inevitably the question will arise whether, other than in the case of a military coup, countries should be entitled to remain in the Commonwealth regardless of events such as those in Zimbabwe, with all the beatings, killings and intimidation that are occurring there.
Mr. Cook: I absolutely share my hon. Friend's concern about the beatings that have taken place against those courageous enough to identify themselves with the Opposition. There have been reports of teachers beaten up in front of their class and the pupils invited to go home and tell their parents what happens to those who support the Opposition. Actions such as those are wholly inconsistent with even the basic beginning of the concept of a free and a fair election campaign.
My hon. Friend raised the issue of the Commonwealth. Yesterday saw the first meeting that the Commonwealth has held since the crisis began. Therefore, decisions taken yesterday were the first decisions. Sending the Secretary-General of the Commonwealth to express our deep concerns is very high up the escalatory ladder of Commonwealth action. However, I assure my hon. Friend that Britain is certainly not alone in the Commonwealth in our concerns. All the eight countries present yesterday share those concerns. They are widely held by members of the Commonwealth outside those who attended yesterday, and I do not believe that the Commonwealth will accept an outcome if its observers report continuing intimidation when they arrive.
Mr. Nicholas Winterton: I have immense affection and regard for Zimbabwe and its people. It is a country which I know well, and I believe that it offers greater potential than perhaps any other country in Africa for progress in the southern part of Africa.
I endorse everything that the Secretary of State has said today. Would he not accept, however, that the holding of free and fair elections is already compromised, and that without the involvement of people such as police from other African countries or from South Africa, under the leadership of President Mbeki and his recently retired
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predecessor, the chances of holding free and fair elections are minimal? That would be a tragedy, and the result would not be to the benefit of all the people of Zimbabwe.
Mr. Cook: I welcome the hon. Gentleman's support, particularly as I know that he speaks from personal authority and experience. No reasonable person could disagree with the hon. Gentleman's proposition that a free and fair election has already been compromised by the events of the past month. We are anxious to deploy international observers as soon as possible to seek to deter further political intimidation and to see whether we can create fairer conditions in the run-up to an election. It will be for those observers then to report on what they see and on the conduct of the elections. They are very much wanted by the Opposition. I hope that we can deploy them as soon as we can get agreement from the Government of Zimbabwe, without which we cannot deploy them. I hope that the observers will produce a more balanced election campaign than the one that we have seen so far. They will be free to report on the outcome and we will consider their report very carefully.
Ann Clwyd: I, too, welcome what my right hon. Friend said about the sale of arms and associated equipment to Zimbabwe. How concerned is he about reports in African newspapers that the spares for Hawk aircraft sold by this country to Kenya are being re-exported from Kenya to Zimbabwe? Has he investigated this story and, if so, how does he propose to close that loophole?
Mr. Cook: I am not aware of the precise reports in the African newspapers to which my hon. Friend refers, but I shall certainly look into the matter and write to her about it. There is a serious problem that, in applying arms closures of the kind that we have previously applied to other countries, a black market springs up for the spares that already exist in large numbers around the world. I can therefore give no guarantee that the British Government can halt the supply of spares that are no longer within the control of the British Government or of British territory. However, I will happily look into the matter and consider whether a protest to the relevant Government would be appropriate.
Mr. Michael Howard: Further to the first point raised by the right hon. and learned Member for North-East Fife (Mr. Campbell), will the Foreign Secretary now acknowledge that his welcome decision to suspend the licences for the export of military equipment to Zimbabwe gives the lie to the assurances that he has previously given the House in relation to licences for the export of military equipment to other countries, including Indonesia, that he had no such power to suspend such licences?
Mr. Cook: A welcome from the right hon. and learned Gentleman is always warmly received, even if it is rather grudgingly given. On the parallel that he makes, the fact of the matter is that we halted new licences to Indonesia during the embargo. Today, I announced that we are to stop all new licences.
Mr. Howard: For spares?
Mr. Cook: All new licences, whether for spares or for new equipment, will be stopped. There are between a

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dozen and 20 existing licences only. Reviewing them is a totally different proposition from the 19,000 that we inherited from the previous Government when we took over at the general election.
Mr. Ted Rowlands: I, too, welcome my right hon. Friend's decision to ban any further exports of military equipment to Zimbabwe. Is he aware of any other country, in particular a European Union partner, that may be trying to sell Zimbabwe such arms or military equipment? If so, will he make representations to ensure that the embargo is as effective as possible?
Mr. Cook: I assure my hon. Friend, who has raised an important matter, that we will draw the attention of all our European Union partners to the decision that I announced today. Under the EU code of conduct, we would expect to be consulted by any partner country that is contemplating a sale to Zimbabwe, although I am not aware of any country that is doing so.
Sir Peter Emery: The right hon. Gentleman is right to want to ensure that the whole House speaks with one voice in condemning the action that President Mugabe is taking. I am certain that that is the case—on both sides of the House and in all parties—and it is important that Mugabe should realise that.
Will the right hon. Gentleman take action on two fronts? First, will he clear up one matter? Were certain Ministers pressing Zimbabwe to go ahead with, or press for, a loan from the International Monetary Fund only a few weeks ago? What is the Government's position on that and on any other IMF lending that might go to Zimbabwe? Secondly, will he try to ensure that when the election comes, we get an absolute assurance that monitoring will take place with no restriction? The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and I were involved in monitoring the original elections in southern Rhodesia, which brought Mugabe to power. He and I know that, unless there is complete co-operation from the authorities, it is too easy to stop a proper and full monitoring exercise during the elections. It is imperative that we get an assurance that monitoring can proceed without restriction.
Mr. Cook: I am grateful to the right hon. Gentleman for his bipartisan approach to the issue. On the question about the IMF, I must put it on the record—because there have been claims in Harare that are unfounded—that although it has been claimed that Britain is making the existence of an IMF package a pre-condition of our support for land reform, that is not the case. We are prepared to go ahead with land reform without there necessarily being an IMF package. Having said that, Zimbabwe plainly needs such a package. It has no foreign exchange reserves, so there is a severe fuel shortage, which is holding back harvesting and economic progress. Therefore, although it is certainly desirable that Zimbabwe should obtain a package, to do so it must meet the full conditionality of any IMF support.
Finally, on observers and monitoring, we must have two separate categories in mind: international observers to oversee and report what is happening; and independent monitors at polling stations throughout Zimbabwe, who should mainly be local residents. We are willing to help with their training. The United States has already offered
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a considerable sum to assist in training monitors. Working together, they may be able to create the free and fair conditions that are desirable, but, together, they will need to add up to significant numbers.
Mr. Peter L. Pike: Having led a Commonwealth Parliamentary Association delegation to Zimbabwe in 1998, I very much regret the rapidly deteriorating situation in that country. I also regret that my right hon. Friend has had to make this type of statement, although I obviously fully endorse and welcome everything that he said, given the unfortunate position. I am sure that he recognises that many people in ZANU-PF in Zimbabwe do not agree with the position that Mugabe is taking. Will he spell out a clear message that now is the time for those people to stand up against the leadership of the party and, perhaps, to lead a new party forward to fight the elections?
Finally, can my right hon. Friend be absolutely sure that the Commonwealth and European Union observers we send in will have the freedom and security to go all over the country—to rural and urban areas—to see that the election is free and fair?
Mr. Cook: I fully share my hon. Friend's concern on the latter point. On divisions in ZANU-PF, my hon. Friend is right to point out that, from the information available to us, many in that party understand that present policies will not restore the economic situation in Zimbabwe and are thus likely to contribute to further erosion of support for ZANU-PF among the people of Zimbabwe. Indeed, in the primary elections, the official candidate was deselected in eight constituencies. It says a lot for the style of ZANU-PF's leadership that they have ordered the primaries to be rerun until they get the right result.
Sir Teddy Taylor: The Foreign Secretary and his colleague, the Minister of State, Foreign and Commonwealth Office, the hon. Member for Neath (Mr. Hain)—who was busy elsewhere at the time—will recall the discussions 20 years ago. Does the right hon. Gentleman accept the simple fact that the power of the British Government to influence events is virtually nil and that the action he proposes will merely give Mr. Mugabe a feeling of importance and significance that he does not deserve? Does he agree that the best course we can take to help the people of Rhodesia—[HON. MEMBERS: "Oh."]—of Zimbabwe is to concentrate aid and assistance in the Republic of South Africa to help its people to build up their freedom, liberty and prosperity so as to protect them against the consequences of the serious problems in Zimbabwe? Does he accept that trying to be the emperor of the world will not solve the problems of Zimbabwe and its people? That is something which he and his colleagues should have learned a long time ago.
Mr. Cook: With great respect to the hon. Gentleman, I shall try to maintain the calm and measured tone of the discussion so far. In my statement, I said repeatedly that the responsibility for this problem lies in Zimbabwe. The country has been independent for 20 years and its Government must accept responsibility for its present state.
Had I not made a statement to the House, I should have been open to fair and justified criticism from the House. There is immense interest in what happens in Zimbabwe

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among the public and in the Parliament of Britain. Many people in Zimbabwe look with great care, and with some hope and anticipation, to see whether we share their concerns and whether we are worried about them.
Mr. Gordon Prentice: How many British passport holders are there in Zimbabwe? Are contingency arrangements being made to receive them in this country, should the situation in Zimbabwe spin out of control? Is it part of Mugabe's grand plan to get rid of non-Zimbabwe citizens from his country?
Mr. Cook: We cannot be certain how many there are—especially as we should have to take into account those who held dual nationality and were not solely British nationals—but the number is large.
When I heard President Mugabe's speech this morning, I was struck by one of the most purple passages, in which he leapt on press reports of evacuation plans for 20,000 British citizens. He told his rally that Britain was prepared to receive those people and invited ZANU-PF to show them how to leave the country. I ask the House to take that as a warning. It does not help to calm the situation in Zimbabwe or to defeat President Mugabe for us to engage in alarmist talk about evacuations. Of course, we shall take our position seriously and we shall consider what we should do, but no Member of the House should encourage alarmist statements about mass evacuation.
Mr. Julian Brazier: I welcome the Foreign Secretary's comments on co-operation from other Commonwealth countries and the particular emphasis that he put on trying to secure free and fair elections in Zimbabwe—if that is still possible. However, if there is a continuation of the present programme of ethnic cleansing on the farms and of intimidation on the scale that appears to be going on in the country, does he agree that we may have to consider options that go beyond words and the cancellation of a few contracts?
Mr. Cook: We will take every reasonable and responsible step to make sure that our concerns are forced home, but I will not take actions that will be counterproductive and I will not take actions that the Opposition in Zimbabwe have asked me not to take. I suggest that the House listens to that advice.
Dr. Norman A. Godman: I agree wholeheartedly with my right hon. Friend's view that a fair system of land reform must include, among other things, a fair price for the farmer and a reduction in rural poverty, but for the farmers living through deeply distressing times, more than that is demanded, is it not? Farmers who feel compelled to sell their home and farm should be allowed to take their assets and equipment with them if they wish to farm in another country. I urge my right hon. Friend to ensure that any funding agreement for land reform gives that protection to farmers who wish to emigrate from that bedevilled country.
Mr. Cook: My hon. Friend raises some reasonable points. To the extent that we find ourselves funding such a programme if the conditions and circumstances arise, we shall have to consider whether the money is paid within or
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outside Zimbabwe. Many of the farms are mortgaged to the banks in Zimbabwe. A policy of confiscation without compensation will rapidly produce further financial ruin for Zimbabwe, and not just for the farmers.
Mr. Gerald Howarth: As one who visited Rhodesia in 1967 and who has albeit distant relatives farming out there at this time, I share the Foreign Secretary's view that what is happening is an absolute tragedy. As my right hon. Friend the Member for Horsham (Mr. Maude) said, Zimbabwe should be the jewel of Africa. I press the Foreign Secretary on the question of British aid for what he calls land reform, which is no less than the seizure—with or without compensation—of commercial, white-run farms. Given that those farms constitute one of the most productive assets of the Zimbabwean economy, and that they provide employment and security for a great many people in rural areas, how does the right hon. Gentleman believe that another penny of British taxpayers' money will benefit the rural poor? Before he agrees to another penny going down that particular plughole, will he tell the House what happened to the last slug of £44 million of British taxpayers' money and how much of the land that was taken from white commercial farmers and redistributed to Mugabe's cronies is now in productive use, and how much is lying fallow?
Mr. Cook: I am advised that about 3 million hectares have already been purchased under the land reform scheme, including £44 million that was provided from 1980 to 1990.
There is a real problem of poverty in the communal areas where there are people without land and it is widely accepted, and was not contested by the previous Government, that the programme for tackling rural poverty should include land reform on a fair and reasonable basis. As for farmers being forced to sell, 100 farms are already for sale. To be frank, many of those farmers would welcome a programme of land reform in which they could receive a fair price. It is bogus for the Government of Zimbabwe to pretend that they need further powers to force farmers to sell. There are many willing sellers. In the right conditions, they would welcome a programme under which those farms could be purchased.
Mr. Ian Bruce: To probe a little further the subject of land reform, can the Foreign Secretary tell us of any country where large, privately owned, productive farms have been improved by splitting them up and giving them to small farmers? I suspect that he cannot. So why does he keep promising that, with the right conditions, he will spend millions of pounds of British taxpayers' money to ruin the farming economy in Zimbabwe? Surely he should say now that it is a failed policy which should not go ahead, and that we should put any aid into genuinely helping the rural poor rather than promise the kind of things that the Communist party used to promise.
Mr. Cook: I think that I have to remind the hon. Gentleman that the Government have not put in a single penny to land reform purchases whereas the Conservative Government whom he supported put in £44 million to the

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land reform programme. [Interruption.] As I hear from behind me, the landless poor in rural areas see that as the way forward.
I invite the House to step back for a moment. We have a perfectly proper international obligation to insist on the rule of law, to object when court orders are not carried out and to make sure that there is a free and democratic process for the people of Zimbabwe fairly to express their views. However, it not for us to say what the policies should be.
Mr. Graham Brady: President Mugabe first set this course of action a year ago and, last summer, I first raised the matter with the Foreign Secretary in the House. Why did it take until four weeks ago for the Foreign Secretary to meet the Secretary-General of the Commonwealth to discuss this issue, and why has it taken until today to suspend arms exports to Zimbabwe? Surely, the Foreign Secretary could have acted sooner and could have had a real effect on the situation before it reached the dreadful proportions that we now see.
Mr. Cook: On the question of when I saw the Secretary-General of the Commonwealth, I saw him four weeks ago, because he took up his post five weeks ago.
On arms exports, no licences have been granted by this Government for military equipment to Zimbabwe since the conflict in the Democratic Republic of the Congo began. We resumed, under strict conditions, licensing in February this year and we have again suspended it. I have to say that what we did in the period between October 1998 and February this year appeared to have no marked effect on the policy of the Government of Zimbabwe.
Mr. Nick St. Aubyn: We all recognise how the breakdown of human rights in Zimbabwe affects all its citizens, but those of us with family members in the country are naturally particularly concerned about their safety and their future. Do the Government recognise a responsibility to advise those who have a right of abode in this country as well that, if the point is reached when their safety is threatened, they should come to this country? In the event of such a situation arising, do the Government agree that the first call on taxpayers' money should be not a land reform programme that would finally assimilate those Zimbabwean citizens into their society, but help for those who are forced out of that country
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against their will and who would regrettably have to return to this country? They would need assistance from this Government first.
Mr. Cook: Of course, the British Government take very seriously, and know full well, their responsibility to British citizens wherever they are. However, I gently say to the hon. Gentleman that I can think of nothing more likely to incite President Mugabe further to persecute British citizens than to say that we are ready to take them if the circumstances arise and that we will financially support them. Of course we will carry out our obligations, but I suggest to the hon. Gentleman that we should not use language that President Mugabe will use in a speech tomorrow.
Mr. Robert Jackson: I warmly welcome the Foreign Secretary's statement, but will he continue to ensure that he does whatever he can to avoid enabling President Mugabe to turn this debate and controversy into a battle between Britain and himself, because that may help him in his election?
Mr. Cook: I very much share the hon. Gentleman's objective. In everything that I have said, I have sought to make it clear that, although we have problems with the policies of President Mugabe and in particular with his adherence to the rule of law and democratic process, we are a friend of the people of Zimbabwe. In all that we do, we want to make sure that we assist them.
Mr. John Bercow: What assessment has the Foreign Secretary made of the cost of Zimbabwe's external troop deployments, notably in Zaire? Was that matter discussed by Commonwealth Ministers and would it be a material factor in the thinking of the right hon. Gentleman in deciding whether the Government should support—and, if so, to what tune—land reform in Zimbabwe?
Mr. Cook: The cost of the Zimbabwean Government's actions in the Democratic Republic of the Congo is substantial. It is a point which we have repeatedly raised, and Britain was the only donor present at the 1998 conference in Harare to express concern about that and to say that the removal of that cost would assist in creating the economic and social conditions necessary for progress in Zimbabwe. I also raised the point with the delegation when it was here last week.

Point of Order
4.19 pm
Mr. Ian Bruce: On a point of order, Madam Speaker. I seek your guidance on whether Members of Parliament are exempt from the various electoral offences legislation. You will have noted that the hon. Member for Don Valley (Caroline Flint), when asking a question to the Prime Minister, sought to give the House information about an on-going count taking place in her constituency. We read every time that we go to a count that it is an electoral offence to give information about the number of people who voted, or how they voted, until the electoral returning officer has made a declaration. I seek your guidance on whether such information should be made available in the House.
Caroline Flint rose—
Madam Speaker: Order. It is a point of order for me. Let me deal with it. The comments to which the hon. Member for South Dorset (Mr. Bruce) refers were made as part of proceedings in Parliament.

Children's Rights Commissioner
4.20 pm
Mr. Hilton Dawson: I beg to move,
That leave be given to bring in a Bill to provide for the establishment of a children's rights commissioner to promote the rights and interests of children in England; to make provision for the powers and duties of the commissioner; and for related purposes.
Madam Speaker: Order. I believe that the hon. Member for South Dorset (Mr. Bruce) did not advise the hon. Member for Don Valley (Caroline Flint) that he was going to raise a point of order that concerned her, although she happened to be in the Chamber at the time. It is usual to tell an hon. Member that he or she will be referred to on a point of order.
Mr. Ian Bruce: Madam Speaker, I have been in my place throughout.
Madam Speaker: Order. The hon. Gentleman might have informed the hon. Lady on another occasion. He usually observes the courtesies of the House, and that is why I remind him of them on this occasion.
Mr. Dawson: On Monday, we had a gang of fools outside the House throwing around hate, obscenities and their weight. They were telling us how radical they are. It was pathetic nonsense. It is the Bill that is properly radical.
The Bill is founded on an understanding of something that all of us as adults are tempted to ignore, and that is that children are powerless and have no voice. It is easy to ignore children and put them aside. At best, we often treat them as objects of concern rather than human beings with rights and a developing sense of who they are and who they want to be.
Children are the hope of the world. There are good people on both sides of the House who care about their well-being and who want to help, but children are still ignored and abused in one of the richest countries on earth. Millions are undone by poverty. They are undermined by restricted opportunities, crummy services and poor and sometimes downright neglectful parenting. As a result, some die. Many prosper and do well, but many more just get by and get through. We could do so much more for all of them and with all of them.
It is a good Bill, but I had no hand in its creation. It was drafted by Peter Newell, a leading advocate for the human rights of children. Thanks to the National Society for the Prevention of Cruelty to Children and 100 children's organisations which support it, I am able to claim that this is the best supported ten-minute Bill of this Parliament, and perhaps of many previous Parliaments.
Thousands of people have contacted hon. Members about the Bill. Every hon. Member must have received at least one letter from a constituent asking him or her to support it. Its time has truly come. The Government have great ambitions for children and I believe that they could bring things about. This is a year of terrific progress because we now know what the Government are going to do in Wales. That is good for Wales, the Welsh Assembly and for Sir Ronald Waterhouse.

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I am delighted that the Government have said that they are to bring forward an amendment to the Care Standards Bill and introduce further legislation to ensure that all children in Wales have access to a commissioner for children. However, the issue is fundamental and of overwhelming importance to all children in the United Kingdom, as well as to the concepts of citizenship that the Government and every Member of this place should be keen to promote.
We shall fail all the 13.2 million children in the United Kingdom if we do not understand that rights and the necessity for an independent body to promote those rights are as important in relation to children as they are in relation to race, equal opportunities and disability.
Children are powerless by definition because they have no vote. The one simple message from the grim succession of child abuse inquiries is that children have no voice. Until we truly hear what children are saying to us and until we have a children's champion—a commissioner for children's rights—we shall continue disregarding them and repeating the mistakes of past.
As a social worker with children, I supported the proposal for many years and have continued to pursue the matter since arriving in the House of Commons three years ago. I am humbly aware that colleagues—many of whom are in the Chamber and have been here much longer than I have—have been assiduous in pursuing the matter over the past decade. The 1992 Labour manifesto proposed having a commissioner, and the post has been recommended by successive Health Committee reports, most recently in 1998. Whenever they can, colleagues on both sides of the House raise the matter.
The proposal for a children's rights commissioner is the epitome of joined-up Government and would be a proper foundation for modern services for children based on our commitment to the United Nations convention on the rights of the child. The commissioner would promote the participation of children and young people in society in future. He would analyse the impact of Government policies on children and would provide the ultimate backstop to ensure that systems designed to protect children do not let them down.
The commissioner would need real power to investigate and undertake public inquiries, produce his own reports and require that he is consulted. He would also need power to insist that Departments and other bodies issue child impact statements on policy proposals and to ensure that he is involved in the reporting obligations of Government under the UN convention on the rights of the child.
I have heard only one Government criticism of the proposal, which is that it would be bureaucratic. On the contrary, the post of children's rights commissioner would be exciting, challenging, enabling and empowering.
Ideally, a children's rights commissioner for England would have linked offices in Northern Ireland, Wales and Scotland. The post would be statutory and would have good links with Government at Westminster and in devolved areas. The commissioner would, above all, be known to every child in the land, and he would commission surveys and research and listen to children. He would help to develop structures at every level to enable children to participate in decision making.
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He would represent their views at the highest level, scrutinise the impact of proposed policies on children, consult them and ensure that their voices are heard.
The commissioner would have a small staff. It would be impossible and, indeed, inappropriate for him to take on the problems of every troubled child. However, he would have a crucial role in ensuring that existing systems work and that children do not fall through the net. He would have a good link to organisations such as Childline and could use his position as a figurehead to ensure that children who turned to him got the appropriate help at the proper level.
I congratulate the Government on the establishment in the Care Standards Bill of a children's rights director, who will have responsibility for the 55,000 children in local authority care and the 150,000 living away from home in residential and boarding schools. That is an important step, and the director will perform a vital role which, however, should not be confused with that of a commissioner for all children. Indeed, it should not be characterised as such.
All children need to be listened to and have their rights protected. That is not an attack on parents, all of whom should be firm advocates of children's right to question how we look at the world and assert their ideas of how things should be.
The Care Standards Bill will soon come before the House and, along with the necessary amendments and subsequent legislation, will ensure that children in Wales will be on a par with children in Austria, Denmark, Iceland, Norway, Spain, Sweden, Australia, British Columbia, New Zealand and South Africa. Why cannot that be the case in England and the rest of the United Kingdom?
A children's rights commissioner could help to change how we relate to children and engage with them properly as citizens of tomorrow rather than the passive objects of our concern. The Government have vision, and commitment to fundamental change would be praised by all those NSPCC letter writers, all the supporters of the 100 child care organisations throughout the land and millions of decent people across the United Kingdom. Even more important, it would be praised by those adults of the future who, having grown up with a children's rights commissioner, would look back on its creation as a great reform—one that equipped them to express themselves more articulately and to challenge more effectively than Monday's mob outside.
Question put and agreed to.
Bill ordered to be brought in by Mr. Hilton Dawson, Mrs. Llin Golding, Mr. Alan Simpson, Mr. David Drew, Mr. Paul Burstow, Angela Smith, Mrs. Betty Williams, Mr. Mark Todd, Mr. Ian Stewart, Mr. Russell Brown, Ms Julie Morgan and Charlotte Atkins.

Children's Rights Commissioner
  CHILDREN'S RIGHTS COMMISSIONER
  Mr. Hilton Dawson accordingly presented a Bill to provide for the establishment of a children's rights commissioner to promote the rights and interests of children in England; to make provision for the powers and duties of the commissioner; and for related purposes: And the same was read the First time; and ordered to be read a Second time on Friday 9 June, and to be printed [Bill 119].
Orders of the Day

  Finance Bill
  (Clauses 1, 12, 30, 31, 59, 102 and 113)
  Considered in Committee [Progress, 2 May].
  [MR. MICHAEL LORD in the Chair]

  Finance Bill
    Clause 31

      CHARGE AND RATES FOR 2000–01
      Question proposed, That the clause stand part of the Bill.
      4.30 pm
      Mr. Edward Davey: I rise to oppose clause 31, not only because the Liberal Democrats reject the clause, but because we reject the Government's whole strategy on the nation's income tax system. We want to use the debate both to focus on our long campaign for more investment in our schools paid for out of income tax, with which I shall deal later, and to argue that the Government's whole approach to the personal tax system lacks a coherent strategy.
      The Government need to go away and think again. They should not be given statutory cover to collect income tax in the coming year unless Ministers produce on Report a new clause or clauses that address three issues. First, they must revisit their policy of never raising the basic rate of income tax. The Government might say that that was an election pledge, but they did not pledge to cut income tax, which they have done, thus depriving our schools, hospitals and public services of much-needed funds. They should reject that policy, not only in the context of funding public services, but in the context of managing the economy—to enable investment to be made at a time when the economy is growing quite strongly.
      Secondly, we believe that the Government need to go away and think about how they are adding unnecessary complications to the income tax system. They promised to simplify that system, but they have done the opposite. That lays unnecessary burdens on business and on individuals, especially those who have low incomes, who are least able to understand the complexities of the system and least able to afford professional advisers to help them to fill in their tax return.
      Thirdly, we believe that Ministers must design the income tax system to help to produce a fairer society. The l0p tax rate set out in the clause is a gimmick. Without more serious reform of the tax system, at the bottom and at the top end of the scale, we shall not produce the sort of social justice that Labour talks about, but has done far too little to bring about. So, there are three major charges of failure in the approach to the income tax system that the clause fails to put right.
      I shall start with the charge that the Government are obsessed—in the way that the Conservatives were—with cutting the basic rate of income tax. There are three reasons why Liberal Democrats oppose the cut proposed in the clause. The first is our belief that more resources should be made available to schools.
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      The Government's record on investment in education is very poor. They promised—this was a pledge in their election manifesto—that
      Education will be our number one priority, and we will increase the share of national income spent on education as we decrease it on the bills of economic and social failure.
      However, assuming a spring or early summer election in 2001, the amount spent on education as a proportion of national income will have fallen by the end of this Parliament. On current projections, that spending will be 4.6 per cent. of gross domestic product compared with 4.7 per cent. in the last year under the Tories and 5 per cent. for the whole of the previous Parliament. How can the Government claim to be delivering on their education pledges when there will be a reduction in the amount that they have made available?
      The Government claim that they are providing a huge largesse of £19 billion in the first comprehensive spending review, but when one looks at that figure and takes account of inflation and of double and triple counting, one finds that the figure falls to a mere £6.1 billion. When one strips out the permissions to spend, which are not real resources provided by central Government, the figure falls to just £3 billion. That is not sufficient. It is outrageous for a Government who say that education is at the top of their agenda to be spending more in the coming financial year on income tax cuts than on extra resources for our schools.
      I have visited primary and secondary schools since the Budget asking how they look on the extra cheque that they have received from the Secretary of State for Education and Employment. Of course they welcome any extra funding—who would not?—but that money is filling the deficits that they have run up. It is not providing any new resources such as more books and teachers. That is not the sort of investment that people expected the Government to provide. It is no wonder that class sizes are going up.
      The Government talk about reductions in class sizes for five to seven-year-olds, but the average class size in secondary schools is now higher than at any time in the past 20 years—failing education. We find that schools are having problems recruiting teachers and that the number of teacher vacancies has risen by 15 per cent. since last year-47 per cent. higher than in 1997. Are the Government happy with that? Why are they not putting resources into that key area?
      In a survey by The Times Educational Supplement in January, seven out of 10 parents said that they were prepared to see income tax increase in order to fund improvements in schools. The people—the electorate—are saying to the Government that they have their priorities wrong in putting income tax cuts above the future of our children.
      The second reason why we are against the income tax cut in the clause is that it constitutes irresponsible economic management. On Budget day and in the Red Book, the Chancellor tried to pretend that he was not giving so much to public services and that there was not any extra money. He was trying to massage the figures so that they appeared lower by making them opaque. Although an extra £9 billion-worth of public spending is planned not for this coming financial year, but for the year after, the Chancellor was not happy to announce it. Why? The real reason why he was not prepared to sing the

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      praises of the ability to find that extra money—we believe that it was an achievement—is that he was worried about how the markets would react to greater public expenditure.
      The markets are of course right to be worried about a loosening of fiscal policy represented by public expenditure increases that are not covered by taxation. That is why income tax plays a crucial role in managing the economy. If, as we believe, vital investments are needed in our schools, colleges and universities, and if that is constrained by the markets' perception of the management of the economy—the fear that fiscal policy is becoming too loose—it is surely right not to cut income tax in such an economic climate. One must ensure that the extra expenditure to be directed into our schools will be covered by taxation. It is a political and economic choice, which the Government are failing to make.
      The third reason why we are against the income tax cut is that we believe that the Government are being dishonest about taxation. In fact, they have raised the tax burden substantially in this Parliament, but it is pointless to look for changes in the personal tax system to see where that increase has occurred. There has been no open, honest, up-front approach to raising taxes. The Government have found 101 wheezes, through indirect and corporation taxes, to hide the increases in the tax burden. That is plain dishonest.
      The Government ought to be making the political case for extra investment in our public services. They should not rely on stealth taxes, as the Conservatives are right, in part, to criticise the Government for doing. We believe that that devalues the vocabulary of politics, and that the Government should be more honest and use the income tax system to achieve their objective.
      Mr. Nigel Beard: I thank the hon. Gentleman for giving way. He says that more tax should be raised for public services. How much more? The Liberal Democrats always make the case for raising expenditure, but what is the limit? It seems to be an indefinite amount.
      Mr. Davey: The hon. Gentleman seems not to have seen the alternative Budgets that we publish every year. They set out our public expenditure plans in detail, covered by taxation. Of course, there is a limit on the amount of tax that can be taken from our electors.
      Mr. Beard: What is the limit?
      Mr. Davey: In each year, the amount will be different. That follows the logic of my argument.
      Mr. Beard: What is the amount this year?
      Mr. Davey: We published our alternative Budget this year, in which we stated that we would not go ahead with the 1p cut that is the subject of the clause, and that we would direct the resources into education, which would have meant up to £3 billion more going into education than the hon. Gentleman's Government are putting into our schools, colleges and universities. He should come over to our point of view, if he believes that education should be the top priority.
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      The second reason why we oppose the Government's income tax strategy is that they are making the system far too complicated. The complexity that they are introducing has a real cost. In the business sector, the compliance costs are going sky-high, particularly for small businesses. In the personal income tax system, the costs, which are more difficult to measure, are high on individuals.
      It appears from the clause that the income tax system is not particularly complicated. Three income tax rates are set out, which look relatively simple. However, when one takes into account the various income tax changes that the Government are making, one finds that there are six effective direct tax rates in the tax system. There is a 10 per cent. effective tax rate, a 20 per cent. rate, a 33 per cent. rate, a 23 per cent. rate, a 46.66 per cent. effective tax rate and a 40 per cent. tax rate.
      Mr. John Burnett: Let us not start on capital gains tax.
      Mr. Davey: My hon. Friend is wise to say that, as the rates are even more complicated. Just in terms of income tax, the Government have made the tax system far too complicated. Many people—small businesses, representatives of pensioner groups, the various tax professional bodies—are perturbed by what is going on. They see the tax system as an asset of this country, and realise that it needs to be managed carefully. By making it more complicated, one reduces and devalues the asset. In an era of self-assessment, when we should be moving in the opposite direction, the Government are making a huge error by complicating the tax system.
      4.45 pm
      First, the Government should reduce the number of rates. They could start by cutting the 10p rate to 0 per cent., paying for it with a higher rate on incomes above £100,000. People on those higher incomes can afford the professional advisers to assist them in filling out the forms, but pensioners and others on lower incomes cannot. If the Government want complexity, better that it should be at the higher than at the lower end. That would mean that we could simplify the Finance Bill by doing away with clause 32, which introduces a l0p rate on income from savings.
      The Government could also look again at a proposal that I made during the Report stage of last year's Finance Bill to help pensioners with no income tax liability who, under current legislation, are required to fill out self-assessment forms. Thousands of pensioners who are not liable to income tax have to worry about tax returns and the Government have to pay for the bureaucracy. It is ludicrous that the Government should be making the tax system more complicated.
      The Government should also push ahead with some of the reforms contained in the Taylor report which the Government rightly commissioned in their first year in office. That report considers how to integrate national insurance contributions with the income tax system. However, the Government have implemented only some of the reforms suggested by Mr. Taylor and his colleagues.
      Mr. John Bercow: The hon. Gentleman is right to inveigh against the Government for the tax

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      system's increased complexity, but I hope that he will not use that as a cloak to advocate higher income and other tax rates, given that the Liberal Democrats' notion that a 1p increase in the basic rate of income tax as the means by which to finance all their spending commitments has been comprehensively discredited. By how much does the hon. Gentleman believe that the top rate should be raised, and what overall increase does he propose in the already burdensome level of business taxation?
      Mr. Davey: I am rather surprised by the hon. Gentleman's intervention. He usually follows what is said with great care and does his homework with respect to other party's policies, but in this case he has failed to do so. I just mentioned that we advocated a 50 per cent. rate on incomes above £100,000, and I told the hon. Member for Bexleyheath and Crayford (Mr. Beard) that, before the Chancellor's Budget, we published an alternative budget detailing all our tax proposals. The hon. Gentleman should pay more attention.
      If the Government want to tackle the problems of complexity, they should consider some of the proposals from bodies such as the Institute of Chartered Accountants, which asks that some principles should underlie the direction of income tax and personal tax policy more generally. Its recent document contains 10 tenets and argues for a code of fiscal simplicity, perhaps to go alongside the Government's welcome code for fiscal stability, setting some real objectives to ensure that, year on year, the overall tax system is made more comprehensible for the ordinary personal taxpayer and the compliance costs for the personal sector are reduced.
      Mr. Burnett: Liberal Democrats will doubtless praise parts of the Finance Bill. On the whole, we are pleased to see the advent of the tonnage tax. But is my hon. Friend surprised that the Finance Bill has 44 pages on the introduction of the tonnage tax?
      Mr. Davey: My hon. Friend makes a good point. We debated that matter at some length on Second Reading. The Bill is littered with extra complexities. My point on clause 31 is that the Government are not reducing the complexity of the income tax system. They promised simplicity, but they have failed to deliver that.
      I shall outline my final reason for our opposition to the clause. The Government have argued long and hard, before and after the general election, that they believe in social justice. They argue that their reforms of the tax and social security systems are meant to promote social justice. Yet clause 31 provides for a tax cut, which will benefit the richest 20 per cent. of our population fifty times more than the poorest 20 per cent.
      A 1p cut in income tax gives far more to the wealthiest in our society. Perhaps it would be more acceptable if the Government had accompanied it with some sort of package to help the poorest pensioners and those who are less well off. However, the cut is accompanied by an increase of 75p a week in the basic state pension. It is therefore not surprising that pensioners throughout the country are incredibly dissatisfied with the Government. They do not believe that the Government are fulfilling the promises that they made to pensioners at the last election.
      Mr. Bill Rammell: To clarify matters, will the hon. Gentleman remind us of the Liberal Democrat
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      commitment in the party's general election manifesto on raising the basic pension? Was not it to increase the basic pension in line with prices—that is, by 75p a week?
      Mr. Davey: Again, I am surprised that hon. Members have not read our most recent publication, which is our alternative Budget. The proposals in the current Finance Bill were not in the Labour party's manifesto; all our current proposals did not appear in our manifesto. Time moves on. I am more than happy to take on the hon. Member for Harlow (Mr. Rammell) about that subject. Liberal Democrat Members and our colleagues on these Benches are determined to push the case for pensioners and for an increase in the basic state pension that is far greater than a measly 75p a week. Large increases should be made in the pensions of the most elderly people, the over-75s and the over-80s. We should target resources at the most elderly people, who need our support.
      Mr. Rammell: Will the hon. Gentleman give way on that point?
      Mr. Davey: No, I shall not. Let us consider the wider community. The Government claim that the lop tax rate, which the clause reaffirms, somehow helps the lowest paid. Yet every independent commentator, from the Institute for Fiscal Studies to the Institute of Chartered Accountants, can readily show anyone who is able to do basic arithmetic that cutting the 10p rate to 0 per cent. and setting a larger personal income tax allowance directs far more resources at the lowest paid.
      Again, the Government make a political mistake. They take the rhetoric of the Conservative party and play a political game with our income tax system. If they were more interested in social justice, they would focus resources, not rhetoric, on the lowest paid.
      Mr. Bercow: Despite the hon. Gentleman's rude remarks about me, I always enjoy listening to his speeches. A few moments ago, he said that relatively well-off wage earners had access and a desire to use accountants' services to minimise their tax burden. What assessment has he made of the likely use of those accounting services as a result of the proposed introduction of his 50 per cent. top rate, which would damage the tax take? While he deals with that point, will he confirm that because he believes that any cut in the basic rate of tax always disproportionately benefits higher wage earners, regardless of the basic rate of tax, he would always oppose any reduction in it?
      Mr. Davey: It has never been the Liberal Democrats' position to oppose any reduction in income tax. The key issue that we must debate as politicians is the balance between tax and expenditure and whether we believe that the people we represent have the services that they want. If the hon. Gentleman asked his constituents who use the health service and the state education system, and have to rely on the police services and the emergency services whether they were satisfied with public services, the answer would probably be no.
      We need to invest in the public services to achieve the quality that exists in some of our continental neighbour countries and other parts of the western world. There is appalling underinvestment in some of our public services. Public servants are trying their very best to provide

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      quality services and, because the previous Conservative Administration and the Government have failed to make that investment, my party favours putting investment ahead of tax cuts.
      Mr. Bercow: Raising taxes.
      Mr. Davey: We would not proceed with the cut from 23 to 22 per cent. under the clause. I do not think that I could make that clearer for the hon. Gentleman. He also mentioned the accountancy profession. It advocates some of our policies, which would make the tax system far simpler. If they could be implemented, the relatively few taxpayers who would have to face the 50p rate that we propose would not present a problem.
      Liberal Democrats reject the clause. We ask the Government to reconsider their income tax strategy and introduce proposals that would deal with the issues that we have discussed this evening: the need to ensure that investment in public services is put ahead of tax cuts; the need to make our tax system more comprehensible, simple and easy to use for the average citizen in an age of self-assessment; and to produce an income tax system that promotes social justice.
      Mr. Andrew Welsh: I agree with much of what the hon. Member for Kingston and Surbiton (Mr. Davey) says on a better general approach to fairer taxation and a proper rate of public investment. The debate is about three issues: the Government's approach to taxation and our tax structure in general, the proposed income tax rates and the balance between tax rates and public spending.
      On the tax structure, there is little doubt that there has been a shift towards indirect taxation by the Government. According to research from the Institute for Fiscal Studies, more than 40 per cent. of the changes in the Chancellor's previous Budgets were made to indirect taxation. As hon. Members will know, indirect taxation is regressive; it hits those on lower incomes disproportionately harder. What the Chancellor gives with one hand—for example, the welcome increase in child benefit—he takes away with the other in indirect taxes.
      The Government should pay particular heed to another element of the IFS report, which showed that changes in indirect taxation have had the most pronounced effect on those in lower income groups. The lowest income decile has lost almost 2.5 per cent. of its net income, compared with a 0.7 per cent. reduction for those in the highest income group.
      The Scottish National party asks the Chancellor to consider reversing the trend of holding a Dutch auction on income tax funded by stealth tax hikes towards making the tax structure fairer and more transparent. The SNP recognises the need for a clear strategic shift of the tax burden from indirect to direct taxation methods. Such a review is necessary to consider new ways in which to promote transparency, accountability and simplicity in the tax system.
      The Bill continues a dishonest tax policy, which was largely introduced by the Conservative party, but, like so much else, is now enthusiastically embraced by new Labour. The Government are trying to deceive taxpayers with a 1p cut in the basic rate of income tax on one hand and billions of pounds of invisible, indirect taxes on the
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      other. However, I am happy to report that recent by-election results show that, in Scotland at least, the voters are becoming wise to that trick. In Hamilton and Ayr, they made it clear that the time has come for Labour to start delivering its election promises and that they are frustrated by the Government's failure adequately to address the core issues—health, education and poverty. The message, which I pass on to the Government, is that spin is not enough; substance is required.
      The people of Scotland are making it clear that their priorities are for new resources for our public services, which have suffered from more than 20 years of under-investment. We in the SNP have nailed our colours firmly to the mast of fair taxes and real investment in vital public services. Today, I simply repeat our opposition to the needless cut in the basic rate of income tax proposed in the clause.
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      Our public services are still in need of substantial investment, and, although the spending increases announced in the Budget were welcomed by the SNP, they are insufficient to deal effectively with the significant problems affecting our crumbling schools, hospitals and infrastructure. The additional spending must be seen against a backdrop of spending cuts in the first three years of this Labour Government.
      Health spending in Scotland is due to increase by £173 million next year, but let me put that in context. Scottish hospitals are expected to be £50 million in deficit by the end of the current financial year, and nearly all trusts are expected to miss their waiting-list targets for this year. The Government's higher-than-inflation pay rises must be found from already stretched NHS budgets at a cost of some £449 million a year, which means that the additional money will just about allow the health service in Scotland to stand still, never mind move forward and provide improved services. In fact, it was reported today that Scotland's only heart transplant unit may be forced to close.
      According to the Secretary of State for Scotland, Scotland will receive £86.6 million of the additional £1 billion announced for education next year. That should be seen in the context of the cuts that Labour has imposed at local authority level. Next year, local authority education funding will be £540 million lower than it was even in the last year of the Conservative Government. All that stems from the Government's taxation philosophy, and the policies that they are imposing. Any increases in education spending will be swallowed by cuts already imposed on our schools.
      A total of £15.9 million is being allocated to Scotland's transport. That, too, must be seen against a backdrop of cuts in the transport budget, which next year will have £100 million less than it had in the last year of the Conservative Government. Scotland's road infrastructure clearly needs more investment. For example, full implementation of the strategic roads review in Scotland would cost £800 million a year, and the much-needed rail link between the Scottish borders and Edinburgh would cost £30 million.
      In short, this is not a time for tax cuts. Spending in Scotland as a percentage of gross domestic product is even lower than when the Conservatives were in government. That is not what those who voted Labour in

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      Scotland expected, but that is what has been delivered. Our pensioners must make do with a pathetic 75p increase in state pensions, and local authority budgets are being slashed year after year. The Government are pursuing a Tory tax-cutting agenda, at the expense of our nation's public services.
      What is required is a longer-term strategy much more suited to Scotland's actual needs, and built on a fairer, more open, accountable tax system—something that this new Labour Government, and the Budget in particular, do not deliver. There will be a cost to the Labour party in future years.
      Mr. Richard Ottaway: There could be no clearer contrast between the approaches of the Scottish National party and of the Liberal Democrats. Although I did not agree with a word of what was said by the hon. Member for Angus (Mr. Welsh), at least I was clear about what he stood for. However, when the hon. Member for Kingston and Surbiton (Mr. Davey) was asked what I considered a perfectly clear question—how much more would the Liberal Democrats like to be done in terms of public expenditure and taxation?—we were given no clear answer. The hon. Gentleman said repeatedly that we should know about that, because it was in Liberal Democrat manifestos and other publications. I must confess that I have never seen a Liberal Democrat Budget proposal, a Liberal Democrat manifesto or a Liberal Democrat policy document. Perhaps the Liberal Democrats will include me in their distribution lists in future, so that I have some idea of what they are talking about.
      Mr. Edward Davey: The Liberal Democrats publish their alternative Budgets at press conferences, which are often attended by a gentleman from Conservative central office. Can the hon. Gentleman tell us when, during the present Parliament, the Conservative party has published its tax and spending proposals as the Liberal Democrats have, and what spending cuts the Conservatives propose to meet their tax guarantee?
      Mr. Ottaway: We have not published a tax and spending programme. We will do so before the next election, but one thing is for sure: we will campaign on a tax-cutting agenda because, if a party has the will and commitment to cut taxes, it can do so. That is what will differentiate the Conservative party from the other three parties that are represented here today.
      Mr. Davey: Which of the public expenditures will the Conservative party cut to pay for those tax cuts?
      Mr. Ottaway: First, I do not accept that we have to cut spending to cut tax. Secondly, we will let the hon. Gentleman know in due course and with absolute clarity exactly what our plans are. He said that the Conservative party was obsessed with tax cuts. Frankly, it is a worthy objective to reduce taxation.
      Mr. Beard: Why is tax cutting such a worthy objective if it puts in jeopardy the national health service and state education for the coming generations?
      Mr. Ottaway: I do not accept that we have to reduce expenditure on the health and education services to cut
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      taxes. It is a worthy objective because Britain lives in a competitive world and, as we will find out in the next debate on IR35, it is Britain's competitive position that creates the prosperity that pays for the health service and education.
      Mr. Beard: When the hon. Gentleman's party was in government, it pursued an economic policy of competing internationally on the lowest costs. The present Government's policy is to compete through high added value and a highly skilled population, which demands high spending on education.
      Mr. Ottaway: I do not quarrel with that, but I do quarrel with the hon. Gentleman's assumption that the previous Government worked on the lowest possible cost. That is not true and he does not have the evidence to prove it.
      Basically, at heart, those who oppose the clause want the Government to tax more and to spend more. That is the clear position of both parties. The hon. Member for Angus accused the Government of engaging in a Tory tax-cutting agenda. Nothing could be further from the truth.
      The Committee would benefit from examples of tax-raising measures since May 1997. In the July 1997 Budget, mortgage tax relief was restricted to 10 per cent., stamp duty was increased for property transactions of more than £250,000 and payable tax credits on dividends were abolished. It introduced the windfall tax, abolished relief for private health insurance for the over-60s, increased road fuel duties by 6 per cent. in real terms, and tobacco duties by 5 per cent. in real terms.
      The 1998 Budget abolished advance corporation tax and introduced the quarterly payment of corporation tax, restricted the married couple's allowance to 10 per cent. from April 1999, increased stamp duty again for property transactions of more than £250,000, increased tobacco duties by 5 per cent., and road fuel duties by 6 per cent. and advanced the date of the road fuel duty increases.
      The 1999 Budget abolished the married couple's allowance for the under-65s from April 2000, abolished mortgage tax relief, increased insurance premium tax from 4 to 5 per cent., increased stamp duty for property transactions of more than £250,000, increased tobacco duties by 5 per cent., and road fuel duties by 6 per cent. It advanced the date of the tobacco and fuel duty increases, extended employers' national insurance contributions to all taxable benefits in kind from April 2000 and increased company car taxation.
      This year's Budget increased tobacco duties by 5 per cent. in real terms, increased stamp duty on property transactions over £250,000, introduced the aggregates tax from April 2002 and increased tax on wine by more than the rate of inflation. There have been no fewer than 26 tax increases since the 1997 general election, so the next time that Labour Members start hollering about 22 tax increases—most of which are fabrications—under the previous Government, I suggest that they take a close look at my list and the 26 tax increases over the past three years.
      Mr. Geraint Davies: Will the hon. Gentleman give way?
      Mr. Ottaway: No—[Interruption.] I did not catch what the hon. Gentleman said.
      Mr. Davies: I thought as much.
      The Second Deputy Chairman: Order. The hon. Member for Croydon, Central (Mr. Davies) has only just entered the Chamber. I remind the hon. Member for Croydon, South (Mr. Ottaway), who has just given us a long list of different kinds of tax, that the debate is specifically about income tax.
      Mr. Ottaway: I am pointing out that the Government can reduce income tax by 1 per cent. only because they have imposed 26 other tax increases. I did not give way to the hon. Member for Croydon, Central (Mr. Davies) first, because he has only just entered the Chamber and secondly, because every time I have given way to him, what he has said has been total and absolute rubbish, so it is not worth giving way to him.
      Mr. Davies: You are a small man.
      Mr. Ottaway: I am a bigger man than you.
      The Second Deputy Chairman: Order. Perhaps we might continue in a slightly more sensible way and address the important matter before the Committee.
      Mr. Ottaway: Of course I bow to your wishes, Mr. Lord.
      The list of taxes that I have just read out provides transparency in respect of the 1 per cent. reduction in income tax. The Liberal Democrats and the SNP have got what they wanted. They have got tax increases and increased expenditure, so it is nonsense for them to oppose the clause. For the same reason, we shall not oppose it tonight.
      The Paymaster General: In responding to this brief debate, let me turn first to the comments of the hon. Member for Kingston and Surbiton (Mr. Davey). I was not surprised that the hon. Gentleman does not agree with the Government as, presumably, if he did agree with us, he would be on the Government side of the Chamber, changing things, instead of sitting on the Opposition side of the Chamber, dreaming of irrelevancies.
      The hon. Gentleman went on about complexity and fairness, so I would remind him of a few points. He talked about complexity causing problems with the system and about self-assessment. Only 9 million out of 28 million taxpayers pay through the self-assessment system. He was not suggesting that everybody should complete a self-assessment form and he recognises that most people do not. He then complained about the complexity of the system and proposed that we should introduce a 50p rate of tax for income over £100,000 and that that would fund a zero-rated band rather than the 10 per cent. band in the clause.
      The Liberal Democrats and the hon. Gentleman who spoke on their behalf cannot complain about complexity and say that the tax system confuses people and then make such a proposal. It is difficult to see how a new rate of tax in addition to a personal allowance would make the system easier to understand.
      The hon. Gentleman then said that, if the 1p reduction were part of a package of measures in respect of fairness and help to the low-paid, perhaps the Liberal Democrats would take a different view. I shall return to that point.
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      The hon. Gentleman also said that the system should be fairer for pensioners. As I think that he will know, four out of 10 pensioners are able to pay tax. I think that he will also agree at least on the point that the Government should focus first on the poorest households. The Government's measures are dealing with precisely that point.
      5.15 pm
      The hon. Gentleman then prayed in aid 10 points on simplification of the tax system, and discussed whether we should have tax exemption certificates particularly for pensioners. We have considered carefully both that idea and the points that have been made. We have also acted on many of those points. However, I do not know how a tax exemption certificate could offer more than is already available. Pensioners who do not have to pay tax on their gross income are already able, when registering a savings account, to receive interest gross. Exemption certificates would seem to require such pensioners not only to have to apply for an exemption, but to supply more information. How would that make the tax system simpler? How would it remove complexity?
      I also remind the hon. Gentleman that the changes that the Government introduced in July 1999—taking precisely the type of action that he and other people have advocated—removed 200,000 pensioners from self-assessment.
      Mr. Edward Davey: Can the Minister tell the Committee how many pensioners who are not liable for income tax are still being required to fill out income tax self-assessment forms?
      Dawn Primarolo: I do not have that precise figure to hand. I am sure the hon. Gentleman did not really expect me to have it, but was simply making a debating point. Although I think that he will find that that information is available, I shall, nevertheless, in the tradition of the House, ensure that he receives it, if he does not already have it.
      The hon. Gentleman then said that we need a strategy to help those who are in the lower-income bracket. However, the Government's proposals are part of a package aimed at achieving precisely that objective. The package includes the working families tax credit—which Liberal Democrat Members have opposed and voted against every time the House has considered it—the national minimum wage, and the national insurance reforms.
      Additionally, the Government are examining precisely how best to tackle the issue of child poverty. Hence—as will be debated later today—we are introducing the children's tax credit; from next month, increasing the working families tax credit child rate; and developing the new integrated child credit. As the hon. Gentleman will know, because of the changes made in the Government's Budgets to date, by April 2001, 1.2 million children will have been lifted out of poverty.
      The hon. Gentleman is therefore trying to focus on a tiny piece of the Government's strategy, simply to repeat Liberal Democrat Members' usual mantra, "Give us 1p."
      Then, the hon. Gentleman and the hon. Member for Angus (Mr. Welsh)—whom I shall deal with later, in relation to health and education in Scotland—suggested

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      that the Government's taxation policy is regressive. The suggestion is ridiculous. Because of our policies, a single-earner family on average earnings with two children will be £2,600 per year better off. A family with one full-time worker will be guaranteed an income of £214 per week—which is more than £11,000 per year. Introduction of the 10p band will halve the marginal tax rate of 2.7 million people who are on low incomes. Moreover, as I said, our measures will lift 1.2 million children out of poverty.
      The hon. Member for Kingston and Surbiton then said that it would be better to increase the personal allowance than to introduce the 10p rate. That demonstrates yet again the total confusion of the Liberal Democrats—they tell us that we must not give too much to those on higher incomes, while advancing a policy that would do that. In isolation, increasing the personal allowance would give the biggest cash gain to the highest payers, a point which the hon. Gentleman does not accept.
      The hon. Member for Angus presented, if he will forgive me for saying so, the economic strategy of the Scottish National party worked out on the back of a fag packet, revealing yet again that the SNP's approach to taxation is to raise tax without considering the basis on which the economy is moving forward. The hon. Gentleman complains that Scotland does not receive its fair share of expenditure. Spending per head in Scotland is some 22 per cent. higher than in England—well above the United Kingdom average. Spending on health is 24 per cent. higher than in England and spending on education is 28 per cent. higher.
      The allocation of extra resources is based on the population and the allocation of resources between England, Wales and Scotland. Spending on health in Scotland is £1,197 per head; in England, the figure is £963. Spending on education in Scotland is £840 per head; in England, the figure is £636. So for the SNP to advance the argument that somehow Scotland is getting a bad deal from the Union is typically fanciful and untrue.
      Mr. Welsh: What is spent per head of population is only one way of measuring public spending. The Minister is continuing an old Tory tradition—Michael Forsyth tried the same game, but when he investigated it further, he found out that, when looked at in the round, spending worked out basically the same.
      Under-investment in the health service over decades has led to a massive problem in Scotland. Health trusts are running at a deficit, there are cuts and closures, and local government is again underfunded this year. What the Minister says may sound clever in this Chamber, but it will not sound so clever on the doorsteps when she and her colleagues have to face the electorate who are dealing with the effects of her policies.
      Dawn Primarolo: I agree with the hon. Gentleman that 18 years of Tory Government left our health, education and public services with massive under-investment. The scale of the task that the Government face in reversing that is truly phenomenal. The economic policies pursued by this Government are turning the tide.
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      The Budget gives an immediate boost of £1 billion to education, and an increase of £2 billion in national health service spending. Health spending is to increase by more than 50 per cent. over the five years from the beginning of the comprehensive spending review, from £45 billion in 1998–99 to £69 billion in 2003–04. if the hon. Gentleman is saying there is still a long way to go, Labour Members agree with him, but, instead of undermining our economic policy, he should be considering its elements and how to ensure investment in public services and economic prosperity.
      Mr. Welsh rose—
      Dawn Primarolo: I am coming to the end of my remarks, and I have dealt with the hon. Gentleman's points, so I hope that he will forgive me for not giving way again. This is supposed to be a debate about clause 31.
      The clause imposes income tax for the year 2000–01. It sets the rates for income tax at 10 per cent. for the starting rate, 22 per cent. for the basic rate and 40 per cent. for the higher rate. It implements the commitment of my right hon. Friend the Chancellor in his 1999 Budget to cut the basic rate of income tax by 1p. We have introduced a range of measures to make work pay better and to encourage people into work. We have cut the basic rate, benefiting 24 million taxpayers. The provision implements the measures already in place to help those on low incomes, such as the starting rate for income tax, national insurance, the working families tax credit and the national minimum wage. Cutting the basic rate cuts the marginal tax rate for the majority of employees. The introduction of the 10 per cent. starting rate halves the marginal rate for 2.7 million people.
      Of course we are not cutting taxes at the expense of public services, as both the hon. Members for Angus and for Kingston and Surbiton suggested. My right hon. Friend the Chancellor announced in his Budget the largest-ever increase in national health service resources. We are providing for a 35 per cent. real-terms increase in national health service spending over the five years from the beginning of the first comprehensive spending review, including the additional £2 billion for this year. On top of all of that, this Government are spending £7 billion per year extra on support for children—to lift children out of poverty by 2001.
      This is a Government who keep their promises, who have an economic strategy, and who can balance economic fairness, growth in prosperity and investment in public services. This is a Government who cannot be challenged on those points by Opposition Members. I commend the clause to the Committee.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 267 Noes 26.

      Division No. 176]

      [5.26 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Barnes, Harry

      Ainger, Nick

      Bayley, Hugh

      Ainsworth, Robert (Cov'try NE)

      Beard, Nigel

      Alexander, Douglas

      Beckett, Rt Hon Mrs Margaret

      Allen, Graham

      Bell, Martin (Tatton)

      Anderson, Donald (Swansea E)

      Benn, Hilary (Leeds C)

      Atherton, Ms Candy

      Benn, Rt Hon Tony (Chesterfield)

      Austin, John

      Bennett, Andrew F

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      Benton, Joe

      Gardiner, Barry

      Bermingham, Gerald

      George, Bruce (Walsall S)

      Berry, Roger

      Gerrard, Neil

      Best, Harold

      Gibson, Dr Ian

      Blackman, Liz

      Godman, Dr Norman A

      Blair, Rt Hon Tony

      Godsiff, Roger

      Blears, Ms Hazel

      Goggins, Paul

      Blunkett, Rt Hon David

      Golding, Mrs Llin

      Borrow, David

      Gordon, Mrs Eileen

      Bradley, Keith (Withington)

      Griffiths, Nigel (Edinburgh S)

      Bradshaw, Ben

      Grocott, Bruce

      Brinton, Mrs Helen

      Grogan, John

      Brown, Rt Hon Gordon (Dunfermline E)

      Gunnell, John

      Hamilton, Fabian (Leeds NE)

      Brown, Rt Hon Nick (Newcastle E)

      Hanson, David

      Brown, Russell (Dumfries)

      Harman, Rt Hon Ms Harriet

      Browne, Desmond

      Heal, Mrs Sylvia

      Butler, Mrs Christine

      Healey, John

      Byers, Rt Hon Stephen

      Henderson, Ivan (Harwich)

      Campbell, Mrs Anne (C'bridge)

      Hepburn, Stephen

      Campbell, Ronnie (Blyth V)

      Hill, Keith

      Campbell-Savours, Dale

      Hinchliffe, David

      Cann, Jamie

      Hodge, Ms Margaret

      Caplin, Ivor

      Hood, Jimmy

      Caton, Martin

      Hoon, Rt Hon Geoffrey

      Cawsey, Ian

      Hope, Phil

      Chaytor, David

      Howells, Dr Kim

      Clapham, Michael

      Humble, Mrs Joan

      Clark, Rt Hon Dr David (S Shields)

      Hurst, Alan

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hutton, John

      Iddon, Dr Brian

      Clarke, Eric (Midlothian)

      Jackson, Ms Glenda (Hampstead)

      Clarke, Rt Hon Tom (Coatbridge)

      Johnson, Alan (Hull W & Hessle)

      Clarke, Tony (Northampton S)

      Johnson, Miss Melanie (Welwyn Hatfield)

      Clelland, David

      Clwyd, Ann

      Jones, Rt Hon Barry (Alyn)

      Coaker, Vernon

      Jones, Helen (Warrington N)

      Coffey, Ms Ann

      Jones, Ms Jenny (Wolverh'ton SW)

      Colman, Tony

      Connarty, Michael

      Jones, Dr Lynne (Selly Oak)

      Cooper, Yvette

      Jowell, Rt Hon Ms Tessa

      Corbett, Robin

      Kaufman, Rt Hon Gerald

      Corston, Jean

      Keen, Alan (Feltham & Heston)

      Cranston, Ross

      Kelly, Ms Ruth

      Crausby, David

      Kemp, Fraser

      Cryer, Mrs Ann (Keighley)

      Khabra, Piara S

      Cryer, John (Hornchurch)

      Kilfoyle, Peter

      Cummings, John

      King, Ms Oona (Bethnal Green)

      Cunningham, Jim (Cov'try S)

      Ladyman, Dr Stephen

      Dalyell, Tam

      Lawrence, Mrs Jackie

      Darling, Rt Hon Alistair

      Lepper, David

      Davey, Valerie (Bristol W)

      Levitt, Tom

      Davidson, Ian

      Lewis, Ivan (Bury S)

      Davies, Rt Hon Denzil (Llanelli)

      Liddell, Rt Hon Mrs Helen

      Davies, Geraint (Croydon C)

      Lloyd, Tony (Manchester C)

      Dawson, Hilton

      Love, Andrew

      Dean, Mrs Janet

      McAvoy, Thomas

      Denham, John

      McCafferty, Ms Chris

      Dobbin, Jim

      McDonagh, Siobhain

      Donaldson, Jeffrey

      Macdonald, Calum

      Donohoe, Brian H

      McDonnell, John

      Doran, Frank

      McFall, John

      Dowd, Jim

      McGuire, Mrs Anne

      Drew, David

      McIsaac, Shona

      Dunwoody, Mrs Gwyneth

      McKenna, Mrs Rosemary

      Eagle, Maria (L 'pool Garston)

      Mackinlay, Andrew

      Edwards, Huw

      McNamara, Kevin

      Ellman, Mrs Louise

      Mactaggart, Fiona

      Field, Rt Hon Frank

      McWalter, Tony

      Fisher, Mark

      McWilliam, John

      Fitzpatrick, Jim

      Mahon, Mrs Alice

      Fitzsimons, Lorna

      Marsden, Gordon (Blackpool S)

      Flint, Caroline

      Marsden, Paul (Shrewsbury)

      Flynn, Paul

      Marshall, Jim (Leicester S)

      Foster, Rt Hon Derek

      Meacher, Rt Hon Michael

      Foster, Michael Jabez (Hastings)

      Michael, Rt Hon Alun

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      Michie, Bill (Shef'ld Heeley)

      Sawford, Phil

      Milburn, Rt Hon Alan

      Sedgemore, Brian

      Miller, Andrew

      Sheerman, Barry

      Moffatt, Laura

      Sheldon, Rt Hon Robert

      Moonie, Dr Lewis

      Simpson, Alan (Nottingham S)

      Moran, Ms Margaret

      Skinner, Dennis

      Morgan, Ms Julie (Cardiff N)

      Smith, Rt Hon Andrew (Oxford E)

      Morley, Elliot

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Mullin, Chris

      Murphy, Denis (Wansbeck)

      Smith, Jacqui (Redditch)

      Murphy, Jim (Eastwood)

      Smith, John (Glamorgan)

      Naysmith, Dr Doug

      Smith, Llew (Blaenau Gwent)

      Norris, Dan

      Snape, Peter

      O'Brien, Bill (Normanton)

      Soley, Clive

      O'Hara, Eddie

      Spellar, John

      Olner, Bill

      Squire, Ms Rachel

      O'Neill, Martin

      Steinberg, Gerry

      Organ, Mrs Diana

      Stevenson, George

      Osborne, Ms Sandra

      Stewart, David (Inverness E)

      Palmer, Dr Nick

      Stewart, Ian (Eccles)

      Pearson, Ian

      Stoate, Dr Howard

      Perham, Ms Linda

      Strang, Rt Hon Dr Gavin

      Pickthall, Colin

      Stuart, Ms Gisela

      Pike, Peter L

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Plaskitt, James

      Taylor, David (NW Leics)

      Pollard, Kerry

      Temple-Morris, Peter

      Pond, Chris

      Thomas, Gareth (Clwyd W)

      Pound, Stephen

      Tipping, Paddy

      Powell, Sir Raymond

      Todd Mark

      Prentice, Ms Bridget (Lewisham E)

      Touhig, Don

      Prentice, Gordon (Pendle)

      Trickett Jon

      Prescott, Rt Hon John

      Truswell, Paul

      Primarolo, Dawn

      Turner, Dennis (Wolverh'ton SE)

      Prosser, Gwyn

      Turner, Dr Desmond (Kemptown)

      Purchase, Ken

      Turner, Dr George (NW Norfolk)

      Quin, Rt Hon Ms Joyce

      Turner, Neil (Wigan)

      Radice, Rt Hon Giles

      Twigg, Derek (Halton)

      Rammell, Bill

      Tynan, Bill

      Rapson, Syd

      Vis, Dr Rudi

      Raynsford, Nick

      Ward, Ms Claire

      Reed, Andrew (Loughborough)

      Wicks, Malcolm

      Reid, Rt Hon Dr John (Hamilton N)

      Williams, Rt Hon Alan (Swansea W)

      Robinson, Geoffrey (Cov'try NW)

      Robinson, Peter (Belfast E)

      Williams, Mrs Betty (Conwy)

      Roche, Mrs Barbara

      Wilson, Brian

      Rooker, Rt Hon Jeff

      Winnick, David

      Ross, Ernie (Dundee W)

      Wood, Mike

      Rowlands, Ted

      Worthington, Tony

      Roy, Frank

      Wray, James

      Ruane, Chris

      Wright, Dr Tony (Cannock)

      Ruddock, Joan

      Ryan, Ms Joan

      Tellers for the Ayes:

      Sarwar, Mohammad

      Mr. Kevin Hughes and

      Savidge, Malcolm

      Mr. Mike Hall.

      NOES

      Allan, Richard

      Livsey, Richard

      Ashdown, Rt Hon Paddy

      Llwyd, Elfyn

      Ballard, Jackie

      Maclennan, Rt Hon Robert

      Berth, Rt Hon A J

      Michie, Mrs Ray (Argyll & Bute)

      Brand, Dr Peter

      Moore, Michael

      Breed, Colin

      Taylor, Matthew (Truro)

      Bruce, Malcolm (Gordon)

      Tonge, Dr Jenny

      Burnett, John

      Tyler, Paul

      Burstow, Paul

      Webb, Steve

      Cable, Dr Vincent

      Wigley, Rt Hon Dafydd

      Davey, Edward (Kingston)

      Willis, Phil

      Foster, Don (Bath)

      Harvey, Nick

      Tellers for the Noes:

      Keetch, Paul

      Sir Robert Smith and

      Kirkwood, Archy

      Mr. Bob Russell.

      Question accordingly agreed to.
      Clause 31 ordered to stand part of the Bill.

    Clause 59

      PROVISION OF SERVICES THROUGH INTERMEDIARY
      Question proposed, That the clause stand part of the Bill.
      Mr. Ottaway: This debate is about IR35 and its introduction. The Government entered office in 1997 on the back of a clear general election victory. They had the support of almost every age group, both sexes, the professional classes and, most important, the business sector. In my judgment, the influence of the business sector played a crucial role in the Labour party's victory. The small business man and the self-employed had much to look forward to. After all, the Labour party's business manifesto said:
      A new Labour Government will give Britain's entrepreneurs and small businesses the backing they deserve.
      What do they get in response? They get IR35.
      Not content with raising the burden of taxation on business by £5 billion a year, a £5 billion regulatory burden, a complete revamp of double taxation relief costing billions and imposing national insurance contributions on share options, the Government now want to clobber the heart of Britain's high-tech industry with IR35 at a cost of £900 million a year, which is a heck of a lot for Britain's self-employed to pay.
      Mr. Michael Fabricant: My hon. Friend is perhaps falling into the trap of at least giving credence to the idea that it was the Labour Government's idea to introduce IR35. Is he aware that the Treasury suggested that IR35, or its equivalent, be introduced in the early 1980s, in the late 1980s and then the early 1990s, but the idea was rejected three times by Conservative Chancellors of the Exchequer? They knew the effect that it would have on high-technology companies in the United Kingdom.
      Mr. Ottaway: My hon. Friend is right. We opposed IR35 because of its impact on the flexibility and operations of labour markets, and I shall make that point later.
      At least the leopard does not change its spots. In the 1960s, the Labour party nearly brought the economy to its knees and, in the 1970s, it tried to tax the service sector into oblivion. Now in the 1990s, as the high-tech era lifts off, it wants to hit those who make such a large input to the sector's success.
      Not content with treating the self-employed with contempt, the Government do it with offence. They accuse Britain's entrepreneurs of "disguised employment" as though they were somehow cheating. The Government fail to recognise that the world is changing. Labour patterns and methods of doing business are changing. Highly skilled staff no longer stay with employers for long periods. We have an increasingly mobile work force and trying to tax them in such a way will inevitably lead to difficulties.
      For decades, the self-employed have worked through service intermediaries. They form a business with themselves as its main asset.
      Mr. Michael Clapham: Is the hon. Gentleman suggesting that an employee of an intermediary who works for a client and is under the control
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      of a client and therefore engages as an ordinary employee would engage, should have benefits over and above those available to the employees of the client?
      Mr. Ottaway: I am grateful for that intervention. I am certainly not suggesting that and, what is more, it would not be the case. As I shall shortly point out, the self-employed caught by IR35 will still be worse off in terms of the benefits that they receive.
      The self-employed work through intermediaries not, as the Government would have us believe, to avoid national insurance contributions, but primarily because it is the most sensible way to arrange their affairs. It helps with the establishment of offices at home, with the purchase of specialised equipment to carry out their job and with travel and accommodation expenses. The Government, with a complete lack of vision, accuse such people as though they were somehow cheating the public. The very opposite is true. Contractors do not get such a good deal; they often do not receive such good benefits as the employed personnel with whom they work.
      If I can have the attention of the hon. Member for Barnsley, West and Penistone (Mr. Clapham) for a second, the Inland Revenue has confirmed that, even under IR35 and despite paying class 1 contributions, the self-employed will still not be entitled to rights such as sick pay and holiday pay and, what is worse, they will not be entitled to unemployment benefit when they are not contracted. In short, it is pain without gain.
      The national insurance element is being dealt with by delegated legislation shortly to be taken in Committee and against which the Conservative party has prayed in early-day motion 657. The other half of the Government's attack are the rules subjecting intermediaries to schedule E taxation. They are contained in schedule 12 and will be introduced by the clause that we are debating.
      Mr. Geraint Davies: Will the hon. Gentleman give way?
      Mr. Ottaway: No, I will not.
      In simple terms, the rules governing the employed—
      5.45 pm
      Mr. Dale Campbell-Savours: On a point of order, Mr. Martin. We have just heard a remarkable response from the hon. Member for Croydon, South (Mr. Ottaway). In Committee on the Floor of the House, we give way.
      The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin): Giving way is—[Interruption.] Perhaps the hon. Member for Workington (Mr. Campbell-Savours) will listen to my response. He might learn something. Giving way is up to the individual Member. It is not for the Chair to decide whether a Member should give way.
      Mr. Ottaway: I recognise the courtesies to which the hon. Member for Workington (Mr. Campbell-Savours) refers. I would give way to 658 Members. It happens that in the past the hon. Member for Croydon, Central (Mr. Davies) has intervened with offence. As a result, I will not be giving way to him.

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      I shall continue with the debate, and the important subject of IR35, which will attack many people.
      Mr. Bercow: Will my hon. Friend consider adding to his list of Members to whom he does not intend at any stage to give way the hon. Member for Workington (Mr. Campbell-Savours), who has just had the chutzpah to accuse the Opposition of defending tax dodging? He has therefore subjected 60,000 hard-working IT professionals to a calumny.
      The First Deputy Chairman: Order. The hon. Member for Croydon, South (Mr. Ottaway) was doing all right before the interventions.
      Mr. Ottaway: I am grateful to my hon. Friend the Member for Buckingham (Mr. Bercow). I would certainly give way to the hon. Member for Workington (Mr. Campbell-Savours). We do not agree with him on this side of the Chamber, but we treat him with respect.
      I shall return to IR35. In simple terms, the rules governing the employed and the self-employed are being changed. The self-employed person who looks as though he might be employed will be treated as employed, and will have to pay tax and national insurance contributions as an employee, not as a self-employed person. Expenses incurred in running a business will be taxed as income, and a mere 5 per cent. of turnover will be allowed as a genuine business deduction. That is not taxation of Britain's self-employed; it is discrimination against Britain's upwardly mobile work force. Those who will feel it hardest will be the high-tech sector, which is the sharp end of British industry. They are the people whom Britain can least afford to lose.
      I shall quote from the Electronic Telegraph. A software engineer at an aerospace-related corporation preferred to remain anonymous because his contract is not yet completed. When it is, he plans to work with a German partner, or possibly an Italian. He said:
      The Government is creating a brain drain like the one that happened in the 60s. Software is a peculiar thing which has produced a good income for Britain and lots of spin-offs but lots of other countries like Germany are not very good at it.
      He thinks that they will become good at it,
      and so take trade away from Britain, in addition to the tax loss from losing high-income experts.
      Another example is Mr. Steven Weaver, who says that he
      is ashamed to say that I voted for this business hostile Government…I have no wish to remain in a country that punishes enterprise instead of encouraging it. My company turned down six months' further work in the UK implementing e-commerce systems for our major telecommunications company, entirely because of IR35.
      At the general election, Alan McRae was a Labour voter. He said:
      I spent three months and about £50,000 of my company money to try to develop a marketable item of hardware. IR35 will stop this kind of enterprise. Under the new rules, I could not afford to work here. My outgoings in travel and living costs will be swallowed up in two months under the 5pc ruling for expenses.
      So he moved. In his case, the total take to the Government is now zero.
      I shall take another example. Would Laetitia Caster, the model chosen to represent the symbol of the French Republic, La Marianne, have come to the United
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      Kingdom if she had known about IR35? She almost certainly works through a personal service company, and she ran away from France to avoid 54 per cent. tax, but found that she would have to pay 52.2 per cent. tax here. It comes as no surprise to find that when she arrived and saw what was going on, she quickly announced that she would not be resident in the UK for tax purposes.
      Mr. Beard: Can the hon. Gentleman suggest a motive for people to leave full-time employment and set up a personal service company other than tax evasion?
      Mr. Ottaway: The hon. Gentleman must consider the complexities of the issue. Many of the self-employed incur expenditure on the tools of their trade, particularly in the high-tech sector when they buy computer equipment. Under the self-employed rules, that expenditure is tax deductible, but under IR35 it is not. Many people therefore prefer to be self-employed so that they can at least count expenditure on the tools of their trade as tax deductible.
      Mr. Desmond Swayne: I worked in the industry, and for most people it is not a question of giving up employment because most jobs are project-driven and contract staff are required, so more often than not full-time employment is not an option.
      Mr. Ottaway: My hon. Friend is right. As I was saying earlier, we have a mobile work force, and work patterns are changing. Fewer people are employed as regular staff for a long period. Individuals move frequently and are subject to a wide variety of circumstances.
      Mr. Beard: I understand the point that people who are employed on a casual basis may have a greater reward than those who are employed on a regular basis, but that should be given in their salary or payment. Why should it be given through the tax system?
      Mr. Ottaway: It is not a reward. Any business is entitled to tax deductions for its operations, such as capital allowances for large corporations. The Government are saying that if people are caught by the IR35 rules, their expenditure cannot be tax deductible, particularly if it is more than 5 per cent. That is perfectly straightforward.
      Mr. Campbell-Savours: There is one simple point that I cannot understand. Why should people want to relieve themselves of tax liability when the United Kingdom has some of the lowest income taxes in the whole of the developed world? Even the Tories kept telling us that in the last Parliament, and taxes are lower now.
      Mr. Ottaway: The hon. Gentleman misunderstands me: people are not trying to relieve themselves of taxes; they simply do not want to be taxed on the turnover of their business.
      Mr. Campbell-Savours: Some people say that it is tax evasion.
      Mr. Ottaway: It is not evasion; that is illegal.
      Mr. Campbell-Savours: It is avoidance.
      Mr. Ottaway: Avoidance is a much better word.
      Mr. Fabricant: I am grateful to my hon. Friend for giving way because I am conscious that he has faced a barrage of interventions. He mentioned tax relief on the purchase of equipment, but he should also make it clear that if the clause is passed, IR35 will mean that people will be unable to claim tax deductions for expenditure on travel and accommodation when they go out to seek work but are unsuccessful. That is a disincentive to go out and seek work.
      Mr. Ottaway: My hon. Friend is right, although he should be careful to note that the Inland Revenue has issued guidelines about what is self-employment and what is employment. As far as I can tell, the old rules are being changed, although how that interacts with case law is not yet apparent. Perhaps we shall explore that in the Standing Committee. The point applies to people who are caught by IR35 because they are considered to be employed.
      The Government say that the self-employed have nothing to fear from IR35, but how do we know whether someone is genuinely self-employed? As I said, the Government's guidelines will tell us, but those guidelines are applied by the Inland Revenue, which finds out who is self-employed by checking every single case. That is not means-testing, it is a witch hunt. Every person who thinks that, according to the Government's guidelines, he may be self-employed has the right to ask the Inland Revenue for verification.
      The Inland Revenue has let it be known, however, through leaks, that if someone is unsure whether they are self-employed, it will almost certainly tell them that they are employed. That means that a subjective judgment is made by the official considering the case. In two test cases put forward by the Professional Contractors Association, the two people in question were doing the same job, and one was told that he was employed and subject to IR35, and the other was told that he was self-employed and therefore not subject to it.
      What sort of encouragement to British industry is that? Someone may invest in equipment only to find that no tax relief is available. The uncertainty will be devastating to the high-tech sector, and it is no wonder that people are up in arms about IR35 and fleeing abroad. It is no wonder that Australia abandoned a similar scheme because of its complexities and the difficulty of introducing it.
      Mr. Edward Davey: I have been listening carefully to the hon. Gentleman and agree with almost every word. Does he agree that it is absurd to introduce a system that requires small businesses to check every contract with the Inland Revenue? Is not that bureaucracy gone mad?
      Mr. Ottaway: The hon. Gentleman is right. When, only a few weeks ago, the Australians realised how complex their scheme, which was very similar, would be, they abandoned it.
      Concerns have been expressed not only by the industry and Members on both sides of the Committee but by the Minister for Small Business and E-Commerce. She went to the United States to try to woo ex-pats back to this country, but considering the chaos that IR35 is about to cause, who in their right mind would want to return? It is not only Conservative Members who are saying that the Paymaster General is wrong, but her fellow Ministers. As usual, however, she refuses to listen.
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      The good news is that part of the Government have got the message. They announced yesterday that the time taken to process work permit renewals is to be cut to three months to help Britain to compete for overseas specialists in areas such as information technology. The Department for Education and Employment press release said:
      The processing time for work permit renewals is to be slashed by up to three months following the introduction of a new renewal system…by the Education and Employment Secretary David Blunkett. The move, together with new measures arising from the work permit review, will particularly help IT employers to address skills shortages.
      It continued:
      The modernisation measures include: a fast-track work permit route for employers in recognised shortage sectors, such as IT.
      The press release's notes to editors said:
      Examples of occupations on the fast-track applications route are included in Annex A.
      That annexe includes analyst programmers, software engineers, database specialists and IT managers. Part of the Government has got the message that there is a shortage of IT staff. The press release also said:
      We are listening to the needs of employers, and we are giving them what they need.
      I only hope that the message gets through to the Treasury.
      Mr. Davey: Will the hon. Gentleman speculate on whether that is an example of joined-up government or shambolic government?
      Mr. Ottaway: It is completely disjointed government. I hope that the Paymaster General will address the issue. Chamber debating banter aside, this is a serious issue because one Department is pushing a programme that is in complete opposition to what the Treasury is doing.
      Germany is seeking to recruit IT workers from India. The United States is introducing a high-tech Act, which will come into effect on 1 October. That will allow the US to increase the number of visas for IT consultants coming to the country by 200,000 over three years. I hope that the Paymaster General will get the message that there is a shortage of IT workers around the world. Yet the Treasury, in its obsession about so-called fair taxation, is driving IT specialists out of the country as fast as other Departments are trying to woo them in, and believe me, they have plenty of places to go.
      6 pm
      We now have a battle between Departments and between nations. We have the case of Mr. Richard Marriott, who says that, although the Government claim to favour small business, they are
      pouring weedkiller on the seed-bed of enterprise.
      He is a specialist computer consultant and is moving to New Jersey to avoid IR35. Stuart Ranson, a programming consultant, was worried when Labour came to power, but returned from an overseas contract none the less.
      Now, they have finally driven me away—
      says the programming consultant, now in Holland. He adds:
      It was totally as a result of IR35 and the uncertainty. I object to being taxed at 52 per cent. and being called a tax cheat. I cannot save any money in my company for the times when I don't get work

      189
      and the 5 per cent. expenses allowance doesn't go anywhere near to covering the cost of hardware, training, accounting and legal expenses.
      Dawn Primarolo: Before the hon. Gentleman digs himself into an almighty hole, I thought I might mention that, in the United States of America, IR35 rules are in force: someone earning £55,000 gross will have net earnings of £37,000, but, of course, has to pay health costs. There are also service company rules in the Netherlands: someone earning £55,000 will take home £29,000.
      Mr. Ottaway: The hon. Lady thinks that that is a reason to introduce IR35, but that is entirely in opposition to the vision of the Conservatives. If those are the conditions in the Netherlands and the United States, why does she not abandon the measure and so get IT consultants to come here and meet the requirements of the Department for Education and Employment?
      Mr. Campbell-Savours: Did the hon. Gentleman already know what my hon. Friend the Paymaster General has just told him?
      Mr. Ottaway: I shall be candid: no, I did not. However, the point is that we live in a competitive economy and we have to compete against other countries. It has been recognised that there is a shortage of IT consultants in this country, and we are going to have a problem unless we can attract more of them here. Introducing IR35 is not the way to do that.
      Mr. Beard: Is the gist of the hon. Gentleman's case that there is a shortage of computer industry workers, some of whom have gone abroad, so we should try to attract them back by making tax dodging easier?
      Mr. Ottaway: I am merely saying that we should leave the tax system as it has been since it was started, not introduce the new measure. That is not to make tax dodging easier.
      The Government must reassess their attitude to professional contractors in this country. They do not recognise that the use of freelance contractors provides businesses with skills that are not available in-house. They do not recognise that many contractors became freelances as the result of experiencing redundancy in their middle years and realising that they stood little chance of regaining permanent employment because of changes in working practice and age barriers. They do not realise that a limited company provides the only reasonable way in which to compensate for contractors' lack of job security.
      We support the Government in their objective of achieving fair taxation, but a system of taxation must be workable and the Government must be aware of its consequences. However, there are plenty of flaws in the Bill. Let us take the case of a professional musician who plays at a recording session in the morning, does a solo at a memorial service at lunchtime, rehearses in the afternoon with a group of friends with whom he occasionally fulfils engagements, and performs in the evening with his main employer, the orchestra with which he has a regular contract. The system is simply not workable in such cases: is the Revenue going to insist that
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      four separate contracts apply? For Ministers to defend such a ragbag of nonsense is bare-faced cheek and lacks credibility.
      One need only read a little further into the legislation to discover an even bigger nonsense. Paragraph 4 of schedule 12 extends the legislation to partnerships where the worker, as an individual or in combination with relatives, is entitled to 60 per cent. or more of the profits of the partnership. Its definition of relative refers to "husband or wife" and some other relatives. However, paragraph 21(4) states:
      For the purposes of this Schedule a man and a woman living together as husband and wife are treated as if they were married to each other.
      We have a double first. Hon. Members will have noted that the legislation does not apply, for example, to homosexual couples. We know that the Government are hostile to marriage, but that is the first time that common law relationships between a man and woman have been recognised in the tax system, and the first time that homosexuality has been treated as an exception under legislation. The Government must state whether that is intended or an oversight.
      It is clear that the measure has been introduced in a rush. As I said, the Conservative Government rejected it several times as unworkable and liable to erode Britain's competitive position and to destroy labour market flexibility, but the current Government clearly do not have the vision to recognise the implications. IR35 is a turnover tax which creates uncertainty. It is being introduced with minimum consultation, and those representations that were made have been ignored.
      We should ask whether it will produce the revenue that the Revenue expects or hopes for. A leading computer specialist, Gurcharanjit Sian, told the Electronic Telegraph:
      IR35 will cause the biggest brain drain since the 1970s when Labour taxed the rich until the pips squeak. Because of the large scale emigration, the estimates of extra tax revenue will also be wrong. The amount of tax my business and I paid last year was enough to finance a couple of Minister's salaries with some change left over for servicing a Jaguar. This year the amount of tax I pay will be nil.
      His emigration will mean that we lose his e-commerce expertise to another country. In addition, he is recruiting 100 Britons with similar expertise who have been hit by the same rules because they have similar businesses; they will go abroad with him. Mr. Sian adds:
      We have no British car industry left due to old Labour. Tomorrow there is a danger we will have no British e-commerce industry left either, due to new Labour.
      I conclude with the arguments advanced by Mr. Alan Broke, a former president of the Chartered Institute of Taxation. In last year's Hardman lecture, he suggested:
      most complexities come about when politicians depart from the objective of raising enough revenue to cope with their spending and insert measures that have nothing to do with raising revenue but everything to do with trying to engineer social change. All the evidence suggests that tax systems are spectacularly unsuccessful at doing this. However, that does not deter politicians from trying.
      I could not have put it better myself.
      The legislation is muddled. The measure breaches Labour's manifesto commitments, it is a bureaucratic nightmare, it erodes Britain's competitiveness, it will lead to a brain drain and it will not raise the revenue that the Government hopes for. The Government should delay

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      implementation to give them time to reconsider the damage they are causing. That is why we shall vote against the clause tonight.
      Mr. Edward Davey: I associate the Liberal Democrats with many of the remarks made by the hon. Member for Croydon, South (Mr. Ottaway). We shall vote against the provision because it is extremely pernicious and damaging to British industry's long-term wealth creating sector—the e-commerce sector. The Government came to power saying that they would champion the knowledge economy, and we have heard many speeches and read many publications in which they have said that they want to back the knowledge economy, the IT industry and e-commerce. However, the measure goes in precisely the opposite direction; it is a huge own goal for which our economy will pay dearly if the Government do not take the opportunity to change their mind.
      I could recount the saga of the shambles that the Government have created, but I shall not detain the House for too long exploring every detail. When the Chancellor of the Exchequer made the initial announcement in the 1999 Budget, the system was even dafter than the current proposals. We had an accreditation system, which would have placed responsibility on the client in various contractual relationships.
      The system was a nightmare and belatedly, in September, the Government were forced to do a U-turn on many of the original proposals. That U-turn was forced on them as a result not only of lobbying by the industry but of hard work, particularly by my hon. Friend the Member for Twickenham (Dr. Cable), whom I congratulate. He worked very hard with Members on both sides of the House in lobbying the Treasury to back down.
      Unfortunately, in its announcement of 23 September, the Treasury failed to go far enough. It has helped some groups in the IT industry. It has helped the large companies and larger partnerships which earn millions of pounds a year, but it has not helped the small business or contractor or the sole trader. In failing to help the small business, the Treasury has again misunderstood the nature of the new economy and how the IT sector works.
      The IT industry is very competitive and innovative, and relies on the small business—the one, two and three-person business—to generate the drive forward. Technology changes the parameters of the industry every three months; every month, there is a change. One cannot rely on larger companies and partnerships to remain on top of that. One needs the small business and the one-person contractor to provide the innovation and drive behind the new business. In failing to understand that, the Government have shown their ignorance of the way that the economy of this country and of the developed world is going.
      Mr. Beard: I am following the hon. Gentleman's argument, but I do not understand why he seems to believe that someone who is employed in a major company in a particular role should be able to leave to set up a personal service company—for all sorts of reasons; perhaps for some of those that have been mentioned—and
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      enjoy tax or national insurance privileges as a result. Surely the hon. Gentleman is arguing that there should be neutrality on either side of the boundary.
      Mr. Davey: The hon. Gentleman raises the issue of whether there is tax avoidance and abuse of the system. I think that all parties agree that some abuse has occurred. The question is how we stamp out that avoidance while allowing genuine contractors to go about their legitimate business and provide the country's wealth. If he looked at some of the correspondence that I have received, he would see that many businesses in my constituency—and, I imagine, in his—will be caught by the proposal. The Government are using a sledge hammer to crack a nut. There is no doubt that they know that but are failing to act. One must question their motives.
      Mr. Campbell-Savours: Is it not true that the Liberals' desire to raise the higher rate of tax by 10p would have exactly the same effect?
      Mr. Davey: I am more than happy to confirm that that is our policy, because we have just debated it under the previous clause, but it would not by any means have the same impact. [Interruption.] The hon. Gentleman asked me a question; he should have the decency to listen to the answer. Many of the people who are writing to me earn far less than the £100,000 threshold at which the Liberal Democrats want to impose a 50p top tax rate. Many of them earn £30,000 or £40,000. They work in genuine small businesses and have modest incomes. The hon. Gentleman's party want to shove an extra 10 or 20 per cent. tax on to people who are struggling to make a living.
      Mr. Fabricant: Are the Government not targeting the very people whom we need in this country—those who are not risk-averse, those who comprise the enterprise culture and those who work in high-tech sunrise industries? They are the very people whom we should not be driving abroad.
      6.15 pm
      Mr. Davey: The hon. Gentleman is absolutely right; I agree with everything that he has said.
      If we are to oppose the proposal constructively, we must debate how we would tackle the abuse that we agree has occurred—the "Friday evening, Monday morning" abuse to which the hon. Member for Bexleyheath and Crayford (Mr. Beard) rightly referred. The Liberal Democrats believe that that abuse could be tackled without hitting the legitimate contractor. One could consider past contractual relationships between employees of a personal service company and its main or sole clients; we could target that abuse and hone in on it to stop it. That is the approach that we recommend, but not the one in the schedule that the clause will implement.
      Mr. Rammell: Will the hon. Gentleman give way?
      Mr. Davey: I shall give way in a second; I wish to make the following key point.
      A survey of small contractors by the Professional Contractors Group, which represents the people targeted by the clause, showed that the main client of 4 per cent. of its members is the former employer. So it seems that

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      not only have the Government overestimated the abuse, but their measure is totally inadequate to capture the people whom they say they want to stop.
      Mr. Rammell: I heard the hon. Gentleman say that it would be wrong to criticise the proposition without offering an alternative. I then heard him say that he would hone in on abuse. Will he enlighten the Committee by telling us exactly what he means by that, or was the phrase simply vacuous?
      Mr. Davey: I am more than happy to do so; in fact I just did. Before the hon. Gentleman intervened, I talked about the past contractual relationship between an employee of a personal service company and its main or sole client, which constitutes the abuse that the Government said they wanted to tackle. The PCG has come up with more detailed tax proposals that would stop the abuse about which the Government say they are concerned without hitting legitimate business. If the hon. Gentleman is concerned about the people in his constituency who will be hit—they may have voted for him—he should be criticising the Government and asking them to think again, just as in Australia, where the Government proposed a similar provision but realised that it would harm the new economy.
      The far east and the Pacific rim are very competitive. Those countries realise that they must retain home-grown, skilled IT workers in order to develop businesses. Fortunately, the Australian Treasurer had the wisdom to back down. When the Australian Government changed their proposals, the Treasurer said:
      Originally the proposals aimed to set up a system whereby people who are really employees couldn't pretend that they were contractors and walk out of the PAYE system, but you had to protect genuine contractors who really are in business. And what we are trying to do here—
      by the change—
      is protect genuine contractors.
      That is what our Government should be doing, and that is what we are arguing for.
      Mr. Quentin Davies: The hon. Gentleman quoted the figure of 4 per cent. of contractors whose principal customer is a former full-time employer. Does he agree that for many of those contractors, the relationship will have changed at the initiative of the former employer? Those people will have been made redundant. The employer will have decided that he could no longer bear that individual as a fixed cost, but could do so as a variable cost. In other words, the individual who is pushed into being a contractor bears the economic risks of his activity in a way that he previously did not. It is perfectly right and economically rational that such people should be taxed on that basis, as self-employed.
      Mr. Davey: Although I agree with the thrust of the hon. Gentleman's point, in opposing the clause we must be careful not to give succour to employers who go down such a route. I agree with some of what the Government say about the Friday evening, Monday morning practice being wrong. Far fewer employers use it than the Government are trying to make out; none the less, we must not give succour to people who behave in such an appalling way. We are against such abuse of the tax
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      system. We are in favour of a different approach, which does not discriminate against small companies. The Government will be taken to the courts because of this measure, and rightly so. I do not know whether the Conservatives are pleased that it will be under European legislation that the Government are criticised in the courts—
      Mr. Bercow: Ends and means.
      Mr. Davey: It seems that some on the Conservative Benches want to have their cake and eat it. We will not let them do that.
      The Professional Contractors Group will seek a judicial review, because it believes that the Government's proposals represent anti-competitive measures that discriminate against small businesses, which are the bedrock of the economy. The measures favour the big boys, and that must be wrong.
      Mr. Bercow: I strongly agree with the hon. Gentleman's comments about discrimination against small firms. Should we not therefore be told by the Paymaster General whether, against all the evidence with which she will have been provided, she believes that the 5 per cent. expenses limit is, on average, adequate to cover accountancy, computer and training costs, or whether she knows perfectly well that it is not adequate, but that she does not care because the figure has been plucked arbitrarily out of the air, as a capricious means by which to raise taxes?
      Mr. Davey: The hon. Gentleman is right. The Government must justify the 5 per cent. figure, and I fear that they will be unable to do so. We pointed out to the Paymaster General that the figure does not represent the training cost that must be borne by contractors in the industry. They often find that within six months their skills are obsolete, because the industry changes so much. They will be out of business unless they spend heavily on investment in their skills.
      In response to that argument, the Government say that employees must fund their own training costs. The Government clearly fail to see the difference and the issue that we are trying to highlight. A self-employed business man or woman trying to build up his or her business needs to make that investment. In the new economy—the knowledge economy—such an investment in training and knowledge is comparable to an investment in machinery and plant in the old economy. If the Government fail to realise that, they will damage the cornerstone of the country's future wealth.
      The discrimination against small companies is of particular concern to Liberal Democrats. The Government have granted various exemptions to larger companies, which smaller companies will not enjoy. With such a bureaucratic system, as the hon. Member for Croydon, South described it, the compliance costs will be much higher for small companies. The Government are reinforcing the existing anti-small business features of the tax system. Small businesses already have higher compliance costs than larger companies. Again, the Government seem to be favouring the big boys.
      As for who will be caught by IR35 and who will not, the key issue is the definition of self-employment. No doubt we will debate that in detail in Committee.

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      The Government need to realise that, in the knowledge economy, self-employment is inevitably a more difficult concept to pin down.
      In the case of physical goods—say, rabbit hutches—it is easy to prove that one is a sole trader manufacturing rabbit hutches and selling them on. A sole trader running a shop can show that he has premises from which he sells his wares. However, if the goods and services that one is providing are in one's head, and those are provided to a number of clients, of course that will be more difficult to prove under the old rules fashioned two centuries ago.
      When the Minister replies to the debate, will she tell us of any case dealt with by the courts in which they have defined for the knowledge economy the criteria that constitute self-employment? Whereas there are a host of cases that define self-employment in many other industries, there is no such case law for the new economy and the IT sector. The Government and the Inland Revenue have to make it up as they go along. That leads to huge uncertainty and will result in people facing penal tax rates, which they should not have to do.
      Mr. Gerald Bermingham: I have been listening to the hon. Gentleman with great care, and I declare an interest as a practising lawyer. I have many clients; I have no single client. I am self-employed. I can offset the costs of going to my place of employment, and the costs of my chambers—what I have to pay towards the bill. I cannot offset anything else, except perhaps the odd course. What is the difference between me and someone in the IT sector? [Interruption.]
      Mr. Davey: There are many differences. If the hon. Gentleman looks at the details, he will see that the costs that self-employed people in many businesses can offset against their profits are much greater than those that he mentioned.
      Mr. Bercow: Does the hon. Gentleman agree that, as one of my hon. Friends lucidly observed from a sedentary position, one important distinction between the two individuals is that whereas there is no obvious shortage of lawyers, there is an obvious and worrying shortage of IT professionals?
      Mr. Davey: The hon. Gentleman makes a good point.
      I shall take head on one of the charges made by the Minister on Second Reading and in another forum—
      Mr. Campbell-Savours rose—
      Mr. Davey: No, I will not give way.
      The Minister made a comparison between an employed nurse and a self-employed IT consultant. That is like trying to compare apples with pears. A more correct comparison would involve a nurse working from a nursing agency. The Minister would find that under tax law, that nurse is seen as self-employed and would thus be subject to exactly the same tax rules as the self-employed IT contractor.
      If the Minister makes the precise and fair comparison, she will find that the people who are complaining about the legislation are on the side of nurses and teachers.
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      We argue that employees in the private sector and the public sector should be on the same tax system, and that the self-employed who work in the public sector and in the private sector should also be on the same tax system.
      That is the basis of our argument, and the Minister must not try to confuse it. I refer her to a case—Clark v. Oxfordshire Health Authority 1998—in which the Court of Appeal ruled that a nurse working for a nursing bank was indeed self-employed for tax purposes. Let us not have false arguments from the Treasury Bench tonight, please.
      A self-employed person—a nurse or an IT contractor—is subject to a different tax and benefits system from those who are employed. That is a straight fact, which the Government should acknowledge. The self-employed are liable to corporation tax if they make real profits, and they will not get the benefits that employed people get. The distinction between being employed and being self-employed is crucial and of long standing in our taxation system.
      The Government are trying to change that through a hidden tax increase. It will be more damaging to the economy in the longer term than any of the other tax increases that they have tried to impose, because it will damage the key sector of the future British economy.
      Mr. Frank Doran: The attack that we have heard from the two Opposition Front Benches is familiar to all of us who have been following the matter. The Liberal Democrat spokesman was a little more sensitive to what the Government are attempting to do, but we have just heard a recitation of all the claims made by the Professional Contractors Group, which most of us received in our mail bag, without any attempt at analysis or proper examination of the system.
      If the Government pursue their agenda to introduce a fair tax system, which we all support, and business taxes are progressively reduced to become the lowest in Europe, loopholes need to be closed. I support totally the principle behind the Government's aim, but I shall deal in detail with one aspect of the process that causes me concern in my constituency.
      6.30 pm
      Most of the debate on the issue so far in the Chamber and earlier has concentrated on the IT industry. That is developing into a global industry, and the reality of any global industry is that people will go where the work is. It is nonsense to suggest that hordes of IT specialists will uproot themselves and their families to go to other countries on the assumption that those countries do not charge tax. The hon. Member for Croydon, South (Mr. Ottaway) appeared not to be aware that such countries have similar legislation in place. People will go where the work is, and it is clear that much of the work is in Britain, which is spearheading a lot of development.
      Mr. Ottaway: I should clarify that the quotes that I gave were not from people who have not gone or may be going, but from people who have gone.
      Mr. Doran: I am questioning whether the Government's proposals are the sole reason for their going.
      During the past 14 months since the Chancellor made his announcement, I have received a substantial mailbag on the issue. My hon. Friends the Members for Aberdeen,

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      North (Mr. Savidge) and for Aberdeen, South (Miss Begg) and I organised two meetings in our constituencies to meet contractors affected. More than 180 people attended and we had full and frank discussions. [Interruption.] They were useful discussions. Those meetings brought to my attention the problem that I am about to raise and clarified a number of issues for me, making me even more supportive of the Government's position.
      The comments that have been made to me fall into two categories. There are the honest contractors who say, "Yes, this has been going on for years. We wondered when you would catch up with us," and there are the others who mouth the sort of comments that we have heard from the Opposition Front-Bench spokesman. We need a little reality and balance.
      I want to concentrate on a particular issue. I want to talk not about the IT industry, but about the oil industry. Aberdeen is the centre of the European offshore oil industry. As most hon. Members will know, oil is a global industry. It is also a volatile industry. For example, in 1985–86 there was a substantial downturn in the industry and the oil price went down from about $32 a barrel to $9 almost overnight. About 50,000 jobs were lost, but, because they were spread throughout the country, there was not quite the outcry that we have seen with other large-scale industrial closures or job losses. However, Aberdeen was seriously affected.
      The oil industry responded quickly, altering the basis on which work was carried out in Aberdeen. I cannot give percentages because each company varies, but a large proportion of people now employed in the oil industry are contracted. The industry uses them to provide flexibility for the bad times. For example, at the beginning of last year, when the oil price virtually halved overnight from about $20 a barrel down to $9 or $10, the redundancies were almost invisible because contractors were simply shaken out of the industry. Their contracts were terminated. All the contractors who stayed, from the large contractors employing hundreds, sometimes thousands, of people, down to the one-man bands that we have talked about tonight, were forced to take substantial cuts, some as high as 20 per cent., which were imposed by the oil companies across the board with no questions asked. That was the requirement if people wanted to keep a contract. Contracts are written in a way that ensures that oil companies have the power to do that. It gives the oil industry flexibility and that is the price that people who work in the oil industry have to pay.
      The oil industry is international. I am used to seeing in my surgery people who have just come back from contracts abroad—from Kazakhstan, the Gulf of Mexico, Australia and Indo-China. They work all around the world. We already have a global industry, and people are used to moving around in it. The oil industry is a mature industry. Some people say that it is in decline; it is, but it is a slow decline. However, it is clear that its future will depend on the sort of contracting arrangements that we have debated tonight.
      One of the issues that came up at the meetings that I had with contractors in my constituency was employment status. The hon. Member for Kingston and Surbiton (Mr. Davey) talked about employment aspects. One of my concerns about the Government's proposals is that there is a suggestion in the legislation that there is an element
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      of choice. Unfortunately, in my constituency, employees who are contracted by the oil industry do not have a choice. There is a chain of employment, and contractors are employed in the industry only through employment agencies, many of which specialise in the sort of skills that are needed offshore. Those employment agencies provide employees, either for the main contractors who provide the services directly to the oil industry or for the oil companies themselves, but usually for large contracting companies.
      When I discussed the issue with the oil industry and the employment agencies in my constituency, I asked why it was a requirement that employees who worked as contractors should establish companies. Only companies are accepted. All are forced to form personal service companies to provide the contracting skills that the oil industry wants. The simple reason is that the Income and Corporation Taxes Act 1988 places a liability on employers to pick up the tab for any failure on the part of an employee to pay national insurance or PAYE contributions. The oil industry, the contractors who work for the oil industry, and the employment agencies that are the direct line of employment for my constituents who work as contractors in the oil industry, are not prepared to take that risk, so my constituents are forced to form companies.
      In discussions with my constituents, collectively and privately, many have made it clear to me that their choice would be, first, obviously, to have a proper job with proper pay, paying PAYE and national insurance contributions like everyone else. That option is denied to them because of the nature of the oil industry. Their second option would be to be self-employed without the hassle of running a personal service company and having to make returns and employ accountants, and to obtain the reliefs to which they would be entitled as self-employed people. However, the system does not allow for that because the employing companies are not prepared to take the risk.
      My concern is that service companies in my constituency have no choice. Many see the advantage of self-employed status, but because of the effect of the 1988 Act, that option is not available to them. Therefore, while reiterating that I support the aims and principles of the legislation, I ask the Minister to consider that point.
      Sir Nicholas Lyell: In the past three years, there has rarely been a subject like this on which so many thoughtful and intelligent constituents have come to see me to discuss matters so deeply. Ever since the IR35 proposal was put forward by the Government, I have been visited by a series of constituents, mostly working in the IT industry, who are deeply concerned about the proposals and whose fears have not so far been assuaged by the answers that I have received from the Minister.
      The net point made by the Chief Secretary is that nobody will be caught by IR35 who would not be deemed to be an employee under existing employment law. That is stated in the letters that I have received in reply to the many letters that I have sent on behalf of constituents. However, my constituents are not satisfied that that is the case and, unless the Minister can satisfy the House that it is, the proposals should be removed. That is why I support the Opposition's proposal to delete clause 59.

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      The contractors in the IT sector who come to visit me make the point that they in no way seek to avoid tax; they seek to provide services to an industry that demands flexibility in a way that enables them and their employers—I do not use the word strictly, but those who use their services—to operate in the most effective manner. They point out that they always take a reasonable salary from their service companies, and that those service companies pay the usual tax and insurance on salaries. They say that they have no knowledge of the system whereby someone is an employee on Friday and self-employed on Monday morning. One of those who came see me is an experienced chartered accountant, who acts for many people in the IT sector. He, too, has never come across the Friday evening, Monday morning syndrome, that is part of the Government's case.
      Contractors point out that they either work for several companies that use their services, or for one company at a time, for periods that are not easy to predict. That requires the flexibility to be able to move out of a particular sort of employment and take the risk of seeking new employment. As I said earlier, the contractors use service companies, which means that they pay tax and national insurance. Those companies are similar to the examples, such as that of the nurse, that Ministers cite when pushing their case. It was rightly pointed out that an agency nurse would make a better comparison.
      The contractors stressed the unreasonableness of the 5 per cent. expenses limit. I should like to know whether the Paymaster General intends to stick to that. I am not sure whether she is catching my remarks. If we consider the costs of accountancy, purchasing and maintaining computers, and training, it is unrealistic to expect them to be met on 5 per cent. The Government should take note of that. One contractor said that his training costs regularly totalled £2,000 a year.
      It is not fair to treat those who work for a service company simply as employees. They are treated as employees without the benefits that ordinary employees receive. If the contractors whom we are considering were employed, an employer would pay his share of their national insurance contributions. if they were made redundant, they would receive redundancy payments. They do not receive such payments under the system that they use. If they were unemployed, they would receive jobseeker's allowance and the benefits attendant on that. As employees of their companies, they have to forgo those benefits. The Government therefore do not treat like as like.
      The Government claim that the proposals are tax neutral. For the reasons that I outlined, they are not. In an artificial way, a specialised IT provider will pay more tax than if he were an employee. The proposals are not, therefore, tax neutral.
      Mr. Bercow: Does my right hon. and learned Friend agree that, if the proposals turn out to be tax neutral, it will be the consequence not of a deliberate Government policy decision, but of several contractors ceasing to trade and thus not paying tax?
      Sir Nicholas Lyell: My hon. Friend makes a good point. It leads to a point that many hon. Members have
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      made and to which the Government would do well to pay heed. People are voting with their feet and leaving the country or seriously considering doing so. That is damaging to the country, and will lead to a reduction in the Government's tax take. Hon. Members of all parties have heard highly intelligent constituents, who plainly pay a fair proportion of their income in taxation, express revulsion at the Government's proposals. That would not happen unless there was a serious reason for it.
      6.45 pm
      Although in the past six months the Government have been pigheaded and refused to give ground, there is a chink of light. The letters that we receive from Ministers encourage people to discuss the matter with their tax inspectors to ascertain whether they can find a way through. Perhaps that means that the Government do not want to be seen to back down, but are giving a nod and a wink to tax inspectors.
      The proposals have caused genuine anxiety to a highly intelligent and undoubtedly modern sector in the business community, which the country badly needs. The Government use the expression "modernisation" so often that it makes many of us feel ill. They ought to reconsider the proposals carefully. Unless they are satisfied that those proposals will not do the damage that my constituents fear, they should revise them.
      Mr. Fabricant: The Government propose the measure for only one reason: not to close loopholes but to raise money for the Treasury. The clause is not tax neutral; it will raise £900 million. As I said earlier, it will raise that money from the companies, organisations and people whom we need to keep in this country. We need people who are not risk averse, who work in skilled high-tech, sunrise industries and know about computers. Unlike the Prime Minister, who, as a stunt, tried to show that he knew all about e-commerce, but failed to find the "T" for "Tony" on the keyboard, we are considering people who know how to generate not only software for computer companies but income for the nation.
      The Paymaster General simply does not care. I sent her 11 plastic bags, which contained more than 3,500 names of people who said that although they were not experts in tax, they were experts in computers and their companies. They said that they would leave the country or, even worse, remain in the country but invoice from abroad and thus deprive the Revenue of money if this nasty clause were passed.
      Mr. Barry Gardiner: Is the hon. Gentleman trying to undermine the arguments of Conservative Front-Bench Members? He pointed out that the Government will raise £900 million in revenue through the measure. However, Conservative Front-Bench Members argued that the very 350,000 people to whom he referred, and others, would leave the country and that the money would not be raised. Does the hon. Gentleman intend to undermine Conservative Front-Bench Members, or does he simply fail to understand their arguments?
      Mr. Fabricant: The hon. Gentleman would have made a good intervention if he had kept to the point. I realise

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      that he is only a new boy, but, in future, if he wants to make a killer point, he should make it short. Rambling on a bit gives one time to think.
      Mr. Gardiner: Answer the question.
      Mr. Fabricant: I shall answer. The hon. Gentleman is an opera singer and clearly creative. His mind wandered during my introduction. I mentioned earlier in an intervention that the figure of £900 million came from the Red Book, which makes a prediction. Perhaps the hon. Gentleman has recently appeared in the Chamber, or perhaps only his body has been present while his mind has been elsewhere, but as my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) and others, including me, said, the Government probably will not raise the money because people will go out of business or go abroad.
      The Government cannot claim ignorance because people have gone to see the Paymaster General. She has not always been in a particularly listening mood, but people have talked to her and she has not responded.
      Mr. Bercow: Is my hon. Friend aware that my constituent Mr. Mark Gillis, a software consultant, has just ceased to trade? At the beginning of April, I wrote to Treasury Ministers on his behalf. The Paymaster General signed a reply dated 26 April, which she appears not to have read and which shows no acknowledgement of the fact that that individual is one of her first victims.
      Mr. Fabricant: Mr. Mark Gillis may be one of the first, but I am sure that he is the first of many—[Interruption.] This is no laughing matter. He is one of the very people we need if this country is to succeed in the 21st century.
      Mr. Bercow: This is no laughing matter for Conservative Members or, in fairness, for Liberal Democrat Members. Does my hon. Friend agree that it is disgraceful that Labour Back Benchers find it hilarious that someone has ceased to trade, losing an invaluable business? Such is their intelligence.
      Mr. Fabricant: Such is Labour Back Benchers' understanding of business. Those who have spoken are barristers, solicitors or social workers. Those are all great careers in themselves, but such people are risk averse.
      Mr. Bermingham: You are joking.
      Mr. Fabricant: Perhaps not barristers. I exclude the hon. Gentleman from that remark, although I shall refer to a couple of inaccurate points that he made earlier. The Labour party is unfamiliar with what business men—even small business men—have to endure. If one is to be taxed at a particular level, there must be a benefit.
      Mr. Beard: Labour Members' derision had nothing to do with a person going bankrupt. It was prompted by the absurdity of attributing going out of business to legislation that has not yet been passed.
      Mr. Fabricant: As we say in the Chamber, the hon. Gentleman makes his point in his own way, and his own way is interesting indeed.
      Mr. Bercow: I am grateful to my hon. Friend for giving way again as he has given me the opportunity to elucidate
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      for the benefit of the hon. Member for Bexleyheath and Crayford (Mr. Beard). Does my hon. Friend understand that my constituent Mr. Mark Gillis is ceasing to trade now because he has the capacity to see ahead? He is aware beyond doubt that he will be clobbered by the Government's proposals and that remaining in business will not be worth his while. He is giving up the struggle against the Treasury leviathan.
      Mr. Fabricant: Either way, it is interesting to speculate: will Mr. Mark Gillis choose to stay in this country and claim from the state as unemployed or will he become an opportunity cost by going abroad to trade, thus reducing this country's status? That effect will be magnified many thousands of times as the high-technology and software writing position of rival countries improves.
      IR35 is nothing new. Such a measure was proposed by the Inland Revenue in the early 1980s, the late 1980s and the early 1990s as a tax-producing dodge—a way of raising money for the Treasury. Previous Conservative Chancellors rejected that method outright because they recognised the effects that it would have on small business men and sunrise industries in particular. What is new is that this Government, because they are unable to understand the requirements for producing a high-technology-oriented nation, have fallen for it hook, line and sinker, and 60,000 people will he affected. Perhaps they will all go abroad. Then the Government can say, "We've got 60,000 fewer people. That is why we are allowing so many asylum seekers into this country." [Interruption.] I shall not pursue that line, Mr. Martin, because you would rule me out of order, but there is no other logic to it. Surely the Paymaster General and the Chancellor are not naive enough to fall for a particular proposal even though previous Chancellors refused to do so. That would be absolutely wrong.
      Dawn Primarolo: I am sure that the hon. Gentleman did not want to make a gratuitous and unacceptable comment in referring to asylum seekers. May I help him? If he wants to criticise the Government on the fast-tracking of work permits, he is entitled to do so. However, every Member of the House recognises that pouring oil on the flames represented by the hysterical language that some Members use about asylum seekers has no place in the Chamber.
      The First Deputy Chairman: Order. I shook my head earlier to show that I would not allow a debate on asylum seekers. Points have been made by both sides so it will be best if we return to the debate on the clause.
      Mr. Fabricant: Thank you, Mr. Martin. I would not like to create a situation in which the Paymaster General can be even more pompous and patronising than usual.
      A couple of interventions on my hon. Friend the Member for Croydon, South (Mr. Ottaway) showed a lack of understanding of the effect of IR35, and the hon. Member for St. Helens, South (Mr. Bermingham) asked an interesting question of the hon. Member for Kingston and Surbiton (Mr. Davey): what is the difference between a lawyer and a worker in a high-tech software industry? Let me answer that. I put it to him that there are two clear differences. First, as a barrister, he is self-employed and already enjoys all the benefits of not being hit by IR35.

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      When the Bill is passed, he will retain those benefits, but people in high-tech industries will not. In effect, they will be on schedule E, while he is on schedule D.
      The second difference is more profound. As a lawyer, the hon. Gentleman does not have to invest quite so much in technology. He has to invest in books and needs access to the internet, but I am not convinced that he requires access to as much software and chip writing as those who work in the high-tech industries. He also does not have to travel to seek work. If he had to go to Aberdeen to represent an oil company, he would be retained by a solicitor and would already have the contract. People seeking a contract to write software may travel to Aberdeen, not win the contract and be unable to claim travel and accommodation expenses.
      Sir Nicholas Lyell: My hon. Friend points up another unfairness between IT contractors, on whose behalf we are speaking, and self-employed people such as myself and the hon. Member for St. Helens, South (Mr. Bermingham). I have returned to private practice and I know that barristers are spending a lot of money on IT as well as on books and retraining. However, they are not restricted to 5 per cent. of their gross earnings whereas IT contractors, who are at the cutting edge, are being so restricted. I want the Government to justify that. Can my hon. Friend help me?
      7 pm
      Mr. Fabricant: Sadly, I cannot help my right hon. and learned Friend—and, even more sadly, I doubt whether the Paymaster General will be able to help him either.
      It is clear that those who will be hit by IR35 will experience all the penalties and none of the benefits. We have already heard that they will receive no sick-pay benefit, no holiday-pay benefit and no unemployment benefit. They will not be able to charge equipment against tax; nor will they be able to charge their travel and accommodation.
      We are discussing a provision that was rejected by Conservative Chancellors, by Australia and Germany and, to an extent, by the United States. I ask the Minister to check with her officials after the debate to establish whether the information that she gives is wholly correct, because she will find that in some American states there is no IR35 provision.
      Yet again, Labour has demonstrated that it is no friend of business. Yet again, it has accepted tax-raising schemes proposed by the Inland Revenue and rejected by Conservative Chancellors. Yet again, Government spin doctors have been dragooned into demonising small high-tech businesses in sunrise industries by namecalling—by branding them tax-dodgers. Yet again, Labour has shown itself to be of the deepest red hue: while pretending to be "new Labour", it has driven those that are part of the enterprise culture into a new and more damaging brain drain.
      Mr. Bermingham: I did not intend to make a speech, but when I hear an argument so misused and language so abused in the making of terrible points that have no merit, I feel that I must deny my natural self-restraining principles.
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      The hon. Member for Lichfield (Mr. Fabricant) has done it again. I do not know whether it is the time of the month or the movement of the moon that produces the rants, but they occur with periodic frequency. The hon. Gentleman really is being rather silly—and I say that with the greatest respect.
      Let us suppose that I am an information-technology contractor, and an expert in the field. Let us suppose that I suddenly decide that the tax regime will be against me, and resolve to take myself to Paris, Frankfurt, Dublin or another European capital or major city and flog my services from there. In that event, I would find myself paying tax in Paris, Frankfurt or Dublin, where personal taxation is higher. Oh dear! It seems that that would not be a very wise move.
      I realise that, as a humble barrister, I do not live in the whiz-kid world of today; I live in the world of yesterday. Let me gently remind the hon. Member for Lichfield, however, that I was once a senior partner in a firm that employed hundreds and hundreds of people, and today employs thousands. I have just a little bit of knowledge about the running of large businesses with million-pound turnovers: I speak on the basis of experience rather than ignorance.
      Mr. Ottaway: That was a long time ago.
      Mr. Bermingham: Yes, but there is a funny thing about some of us. We may move to a different side of our profession, but we keep in touch with our former colleagues, and we therefore keep up to date with what is happening—shock, horror.
      Be that as it may, let us suppose that I am an IT consultant, or perhaps an engineer. Why do we not hear much about the Institution of British Engineers and the engineering consultants? Why do we not hear much about surveyors, chartered accountants, or, indeed, specialist pharmacists and forensic scientists who act as sole practitioners and consultants? We hear nothing about those people, who are all self-employed. That is because, when they set out to be self-employed, they set themselves up in a way that justified the tax allowances and expenses that they could claim. How do they do that? Well, they charge a fee for their services, and if they earn more than £60,000 a year gross—I think that that is the current turnover—they charge value-added tax, which is, of course, collectable and payable. They then find themselves in the interesting position of having to finance their own expenses and overheads. In my case, that will be chambers fees; in the case of pharmacists or forensic scientists, it may be laboratory fees. They will offset the costs against their incomes, which will result in a net figure on which they will pay tax in the normal way.
      There is, however, a risk in being self-employed. Self-employed people are not paid during their holidays. They are not paid when they are sick, so they cannot succumb to any illness unless they are insured against it. If they are made redundant—if they are no good, and are out of a job—they do not receive unemployment benefit. That is the risk.
      If IT consultants set themselves up in the same way, they must take the same risks as the rest of us who are self-employed. I am not here to say whether that is good or bad; but if there are dodges that mean that some people receive holiday and sickness pay and all the rest while

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      pretending to be self-employed, and if that is not open to those who are self-employed, should there not be a level playing field? Let me tell the hon. Member for Lichfield and the hon. Member for Kingston and Surbiton (Mr. Davey) that there are ways of organising one's affairs to ensure that one is genuinely self-employed and, as such, taxed genuinely. There are, however, risks and disadvantages in being self-employed, from a taxation and from a personal point of view.
      Mr. Edward Davey: The hon. Gentleman is completely misrepresenting the issue. The self-employed IT contractor does not receive the sickness and unemployment benefits that the hon. Gentleman is trying to claim that he would receive: the hon. Gentleman has misunderstood the tax change that we are debating.
      Mr. Bermingham: In fact, the hon. Gentleman has completely misunderstood what I am saying. I said that, for someone who is self-employed, those are the disadvantages. If the IT contractor is genuinely self-employed and consults an accountant, he will be in exactly the same position as others and there will be no problem. I do not understand the sudden assumption that there is a difference.
      Mr. Malcolm Bruce: I know that the hon. Member for Aberdeen, Central (Mr. Doran) has already raised this issue, but may I raise a specific point relating to contractors in the oil industry? They do not have the option of becoming self-employed, because the oil companies will not deal with them if they do. They must set themselves up as separate businesses, yet they are restricted to the 5 per cent. allowance. Many of my constituents say that their expenses constitute 10, 15 or 20 per cent., but that they cannot reclaim those amounts. Is that fair?
      Mr. Bermingham: That is exactly why I accept what was said by my hon. Friend the Member for Aberdeen, Central (Mr. Doran). I was about to refer to exceptional circumstances in which the nature of the industry—[Interruption.] Just one second. In such circumstances, the nature of the industry creates a climate in which a level playing field is not possible.
      I accept the concept that lies behind what the Government seek to do. Like my hon. Friend the Member for Aberdeen, Central, I also accept that there are exceptional circumstances that need to be dealt with. However, we must not throw out the baby with the bathwater; we must seek to rectify the situation, and perhaps that will happen later.
      That is why I was rude about the hon. Member for Kingston and Surbiton. In fact, when I intervened on him I was trying to be helpful. If he does not accept that, it is sad. Sometimes I try to be helpful even to Liberal Democrats, although it goes very much against the grain. It was, however, the speech of the hon. Member for Lichfield that prompted me to speak, because again it was the wrong point in the lunar cycle and we got a rant.
      Mr. Fabricant: On a point of order, Dr. Clark. Is it in order for one Member to make personal remarks about another?
      The Temporary Chairman (Dr. Michael Clark): I do not think that I heard any personal remarks.
      Mr. Bermingham: I agree with my hon. Friend the Member for Aberdeen, Central, who made a valuable
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      point. I hope that it will be taken on board, that eventually self-employed will mean self-employed, and that the advantages and disadvantages will be the same for all self-employed people, whatever their field.
      Sir Robert Smith: I welcome the contribution that we have just heard because it highlighted the problems of the oil industry and reinforced the point already made by the hon. Member for Aberdeen, Central (Mr. Doran). I too represent a constituency in the north-east of Scotland, where many constituents are concerned about how the proposals in IR35 will affect them. I reinforce the point that it is not just the one sector—the IT industry—that will be affected; several sectors are affected.
      When the Welfare Reform and Pensions Bill was going through the House last year, many Labour Members were completely blank as to whether there was a problem at all, or where it was coming from. It seems to be an issue that affects some constituencies very badly and does not touch other constituencies. Well over 60 constituents have raised the issue with me directly, yet I have talked to Members from other parts of the country and not a single constituent has raised it with them. That is why the understanding is perhaps deeper among some Members than others.
      I reinforce the point about the oil industry. I hope that if the Government cannot take it on board tonight, they will at least hint that they will take it on board later in the Standing Committee. People find themselves working through single-person companies not because they went to an accountant and said, "How can I minimise my tax take?" but because they lost their job, and setting themselves up to work through a single-person company was the only way they could get another.
      The Government must therefore look carefully at the arbitrary 5 per cent. costing and explain where it came from and how it was worked out. Why can they not recognise genuine costs that have been incurred by someone trying to operate a company, and look at the actual costs on a case-by-case basis, individual by individual?
      The other problem in the oil industry is the ageing profile of the people working in it. Many of them are getting near to retirement. They are trapped, having made their financial plans on the basis of the current arrangements. I wonder whether the Government could give them any hint, advice or certainty as to how they might sort out their pension arrangements and what their future plans should be if the Government push through their proposals unamended. Now that those people are so near to retirement, there is little scope for them to make adjustments. They have planned on the basis of a way of working and a tax regime that they understood, working towards retirement.
      Others may have made slightly better provision for retirement, but there is a threat of skill shortages. The downturn in the oil industry and the low prices have masked a serious recruitment problem. The next generation is not coming into the industry. Some people will look at the proposals, the way their life is going and what they have already sorted out and will say, "Perhaps early retirement is the way forward for me." There could be a loss of skills and a loss of work force.
      I hope that we will hear from the Government that they recognise that it is not just an IT problem, but one that affects other sectors in the economy—it affects many in

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      the north-east of Scotland in particular—and that the people coming to my surgeries who face 20 per cent. cuts in their contract income, as the hon. Member for Aberdeen, Central has already said, are not high-flying earners looking for a great tax avoidance regime. The industry is structured in a certain way, so they have worked in that way. They have now been hit by a sledgehammer and are looking for some reassurance from the Government that, finally, at the 11th hour, there will be an understanding that they have genuine costs that need to be met and recognised.
      Mr. Swayne: In view of the lucid exposition given by my right hon. and hon. Friends, from which we have all just benefited, and particularly in view of the robust contribution of my hon. Friend the Member for Lichfield (Mr. Fabricant), I shall not need to detain the Committee long.
      Like my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell), I have benefited from meeting many intelligent and articulate constituents who have brought their concerns about the measure to me, but they are not quite as clever as some of us might imagine. I had about 30 written representations and have met half the authors. About two thirds of them—let us say 10 of them—prefaced their remarks with the extraordinary and unprompted admission: "I did not vote for you. I am very sorry, Mr. Swayne. I voted new Labour for the first time at the general election." One cannot help having a slight smirk on one's face and saying, "Is it not a measure of your own contributory negligence that you now find yourself in the position that you are in?" They were warned that it would be like this and that is how it has turned out. However, one has to rise above that personal, selfish, unworthy reaction and consider the national problem that is being engendered by the measure, which will affect not only our own constituents.
      7.15 pm
      The Government's attitude has been given away by the terminology that they have used. They have spoken of disguised employment that should be otherwise—that should be proper employment. It is a Canute-like attitude. They do not like the world that they find but want it to be otherwise and introduced the measure to make it so.
      The world is different for a good reason. For 10 years before I was elected to the House, I worked as a systems analyst for a large bank. That 10 years spanned the change—
      Mr. Campbell-Savours: Who was analysing whom?
      Mr. Swayne: For the benefit of the hon. Gentleman, who comments from a sedentary position, I was analysing risk management systems and dealing rooms at the cutting edge of modern technology, so I know what I am talking about. Those 10 years spanned great change in the industry. When I started, the IT department of the bank was effectively the monopoly supplier of IT services to the bank, but the technology itself changed and became much more project driven.
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      We required skills that we did not have. Those skills had to be acquired from the marketplace, but, given the nature of technical change, they were necessary only for a short period so we found ourselves relying much more heavily on the contract market.
      Yes, we employed as contractors people whom we had previously employed full-time. That was not because we were a bogey employer who made people redundant and then tried to find a cheap way of employing them subsequently; it is the nature of the change in technology that has driven these things. The Government's attempts to turn back the clock by altering the tax system and the national insurance framework will fail, to the detriment of the industry as a whole and to our economy.
      Last night, the hon. Member for Workington (Mr. Campbell-Savours) seemed unable to appreciate the fact that—[Interruption.] I can remember. He seemed to be unable to appreciate the fact that people change their behaviour in response to economic stimuli. He will recall that in the debate on excise duty he would not accept that a large price differential would affect how much that people traded legally or illegally in a market. That is precisely the attitude that now seems to dog Labour Members.
      I accept entirely the force of the argument that has been made by Labour Members that if the IT high-tech contractor, who has largely been the focus of the debate, suffers certain disadvantages in respect of his employment conditions—the lack of sick pay, the lack of holiday pay or whatever—he will need to be recompensed through the pay packet, rather than through the tax system. That argument has force, but Labour Members fail to appreciate that we are, in effect, in a global market. Employees and companies can consider the conditions and the tax situation that apply elsewhere.
      People who have skills and are capable of moving elsewhere will do so if they perceive that the circumstances will benefit them. That was precisely what the hon. Gentleman could not understand last night about the sale of cigarettes. It is also precisely what he cannot understand about the IT industry and how people move in response to economic stimuli.
      Mr. Bercow: My hon. Friend is developing a powerful argument. Does he agree that for someone who ceases to be an employee of a company thereafter to become a consultant to that company is both commonplace and entirely unobjectionable? Is not the fact that it strikes Labour Members as so bizarre merely testimony to the fact that the great majority of them have only ever worked either in the public sector or for pressure groups and regard any other pattern of employment with incredulity?
      Mr. Swayne: I often found myself having to acquire specific skills in order to manage a particular project. If someone who had previously been in the employment of my organisation was available in the marketplace, that person would be my natural first choice because of his knowledge of the organisation; so it is entirely proper that such people should be so employed.
      Further to my point about economic stimuli, Labour Members fail to take account of the fact that we are desperately short of certain skills, and if we drive people with those skills abroad we will all suffer. Labour Members have continued to deny the fact that those

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      people will indeed move abroad. As my hon. Friend the Member for Croydon, South (Mr. Ottaway) pointed out, they have done so and are doing so simply in anticipation of the proposed changes. I know that it is extraordinary for some Labour Members to consider that anyone would uproot themselves from England and go to Holland, for example, and have to live with brass money and wooden shoes. However, the reality is that people will move overseas, despite the prejudices of Labour Members. It is an extraordinary little Englander attitude from a party that claims to be so communautaire.
      Dr. Vincent Cable: I should like to say a few words in support of my hon. Friend the hon. Member for Kingston and Surbiton (Mr. Davey), who originally called for this debate. The speeches that we have heard this evening have vindicated that request.
      Difficult though it may be, given the way in which the debate has proceeded, it might be useful to identify what are admittedly rather limited areas of common ground. There is some acceptance among Labour Members, at least formally, that there are people working in the IT industry and the offshore oil industry who are self-employed, even in the narrow terms defined in the Inland Revenue regulations and in tax law. I believe that the estimate is that something like 20 per cent. of the current IT contractor population will be given self-employed status. The phenomenon of the self-employed contractor is acknowledged to exist, but I am interested in why the figure of 20 per cent. has been used. It may be larger or smaller and I should like to know why it has been defined in that way.
      Conservative and Liberal Democrat Members fully acknowledge that there are cases of abuse and that there are people who are trying to avoid tax by creating single-person companies. It is absolutely right that any Government should try to deal with those cases. That is common ground among Members on both sides of the Committee. We are concerned about the others—it maybe a large group of people—who fall between the two categories. Essentially they fall into two groups, as the hon. Member for Aberdeen, Central (Mr. Doran) said. Some people are involuntarily working in the sector mainly because of their age. The IT industry is a very young industry in which anybody over 30 is considered old. Many people are forced out of organised employment and have to accept frequent and multiple contracts. They have to accept the risks, but they cannot define themselves as self-employed, as the hon. Member for St. Helens, South (Mr. Bermingham) argued they should, because of the nature of their work, which the hon. Member for New Forest, West (Mr. Swayne) explained. They mainly undertake project work, which means that they are likely to fail a control test as they work as part of a team under a project manager, probably for several months at a time. Such people are involuntarily in the position of self-employed service companies and they will be hit the hardest.
      The second category comprises people who have consciously chosen that life style. They are willing to accept the risks and the fact that they have no job security, no guaranteed employer contribution and no national insurance contributions. They take all the risks in order to enjoy the flexibility of that life style, but, because of the way the tax law operates, they cannot be classified as
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      self-employed. Those two groups of people, who are not tax avoiders, and who under no circumstances can be described as such, will be hit the hardest. That is why there is such strong feeling among Opposition Members.
      As it is such a grey area and the big arguments of principle have already taken place, many of us are looking for some sign that the Government recognise that a large number of people are on the margin, and are prepared to show some flexibility in dealing with them. They could do so in two main ways. First, they should recognise the force of the arguments about the limited nature of the 5 per cent. allowance. Many of the people to whom I have spoken can produce their accounts showing expenses of up to 20 per cent. Even if one discounts a little, expenses are generally considerably more than 5 per cent., for reasons that have been set out in some detail.
      In addition, the Government should show some flexibility in the way in which the Inland Revenue deals with individual cases. My understanding is that some people could face penal charges if, quite accidentally, they classified themselves as self-employed and were subsequently determined not to be. I believe that the Inland Revenue sets itself five years to determine whether the self-employment principle applies, and people who are subsequently found to be in the wrong category after a year face tax penalties. That seems absolutely wrong. If someone has made a genuine mistake, the tax that they have paid should be credited to their eventual account.
      Mr. Bercow: The hon. Gentleman and I agree that it would be better not to have these proposals at all. However, will he clarify whether he is advocating a larger blanket expenses limit to take account of the concern that the proposed limit is not adequate, or suggesting the operation of a taper, which might have some merit, but would be administratively highly burdensome?
      Dr. Cable: I take the hon. Gentleman's point that it would be burdensome. If I were making a recommendation, it would be for the former.
      Finally, one point that emerged from the discussion a few moments ago related to the total tax take, which is now estimated to be £900 million. When we discussed the matter six or nine months ago, the figure cited was £450 million. Will the Paymaster General explain why the estimate has changed so radically? Is it because, as I rather suspect, the conditions and exemptions will be much more narrowly drawn, so the tax base will be significantly higher? Is it based on some sort of calculation of how much leakage there will be in terms of people leaving the profession? This is a genuine question; I do not know the answer. It would be useful to know why this tax measure, which was initially introduced as having a modest tax take, is now approaching the £1 billion mark.
      Dawn Primarolo: I thank the hon. Member for Twickenham (Dr. Cable) for his calm approach to an important discussion. I know that he has worked hard. He has written to me and has come to see me to discuss the issues. That is in marked contrast to other speeches from Opposition Members. I hope that I will be able to deal with all the points that have been raised, but if I do not manage to do so, I am sure that the hon. Gentleman will intervene.

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      Let me start with the points on which we appear to agree. I shall quote from Computer Contractor—a magazine that seems to be very relevant to the debate, as we are talking about information technology contractors. Under the headline "Make hay while the sun shines", it states:
      The optimum salary to draw this year is £4,335, which covers your personal allowance…I know a lot of readers will be worried about the minimum wage. Although this does not apply to company directors…it is highly unlikely that any contractor will be served with a notification.
      Beg, borrow and steal to avoid paying higher rate tax this year. Next year you will not be able to avoid it. You should recognise your company for what it is, a tax haven.
      7.30 pm
      Many quotes have been given in the debate. I shall quote from a letter to The Independent written by someone who has worked in the IT industry for 27 years. He said:
      Although there are many honourable exceptions, the majority of—
      service company workers—
      were cynically taking the rest of us for a ride…They should admit defeat gracefully and be grateful for all the years in which they got away with their rip off on society. The Government is to be congratulated for making them contribute their fair share towards the funding of our hard-pressed public services. [Interruption.]
      Opposition Members can heckle as much as they like. Today, so far, all that they have done is repeat the well known arguments of one organisation—the Professional Contractors Group, which was established exclusively to campaign against the proposal. People in that organisation have a vested interest in not wanting the provision to be applied.
      Sir Nicholas Lyell: Will the Minister give way?
      Dawn Primarolo: If the right hon. and learned Gentleman will allow me to make this point, I shall happily give way to him.
      The points made in the debate have dealt with whether the companies are entrepreneurs; whether the definition of self-employment correctly reflects the labour market in the sector; whether the people concerned are entitled to benefits; whether there will be a brain drain; what Australia is doing in its legislation on the matter; whether the proposal is discriminatory in any way; whether there has been consultation; whether it is an attack on large business—
      Mr. Bercow: Small business.
      Dawn Primarolo: Yes. The points also dealt with whether small businesses are being assisted in meeting training costs; whether there will be a legal challenge to the proposal; and the issues that the oil industry has raised. The right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) also made some points on self-employment status and the 5 per cent. deduction for training costs. I hope to deal with all those points as calmly and clearly as the Committee will allow me to do. First, however, I shall be happy to give way to the right hon. and learned Gentleman.
      Sir Nicholas Lyell: I am most grateful to the Minister. Does she realise that the constituents who have come to
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      see me on the matter have all made the point that they pay themselves substantial salaries, on which they pay tax? Plainly, they do not fall into the categories described in the two quotations that she has given. They are deeply concerned about the 5 per cent. limit because, among other things, they have genuine expenses that are far higher than that figure.
      Dawn Primarolo: I am grateful for the right hon. and learned Gentleman's comments, as I wanted to deal with that point. The objective of some of the speeches made in this debate and of the arguments made by some vested interests has been to spread fear and misinformation about how the arrangements will work. Although I hope to deal clearly with those points in my speech, the Committee will have other opportunities to deal with them.
      In the past 12 months, much information has been published about our proposals for tackling tax and national insurance avoidance by service company workers and others who provide services to clients through intermediaries. I think that it is fair to say that the general objective of our proposals is pretty well understood now. We want to stop people who are really the same as employees from dressing up their working arrangements by setting themselves up as a service company to avoid paying the correct level of properly due tax and national insurance.
      As I said, individuals are not entitled to choose self-employed status simply because they fancy being self-employed. There are clear precedents and case law defining "self-employed" and "employee". The proposal seeks clearly to align rights, so that if someone is an employee, he or she is entitled to all the rights of an employee and will be defined as such. Conversely, if someone is self-employed, he or she will continue to receive all those other rights.
      I fear that many of the companies with which the right hon. and learned Member for North-East Bedfordshire has been in contact are under a misapprehension about how the rules will affect them.
      Sir Nicholas Lyell: If the Minister, by saying that those companies are under a misapprehension, means that they do not need to worry because they will be accepted in the status that they require, why are they to be limited to 5 per cent. expenses? Does she realise that those who have come to see me—like those who have gone to see most of my hon. Friends, I suspect—are highly intelligent people performing a function in which it is not open to them to be employees, because those for whom they work do not wish to employ them as employees? Those people can do the job only through the type of service company that we are discussing, and they are being badly and unfairly hit by the proposals.
      Dawn Primarolo: People who are employees will receive exactly the same treatment as every other employee in the tax system. However, we have agreed that, for those employees who seek to work through service companies, we shall allow a 5 per cent. deduction to help run those companies. Nevertheless, we are saying that they are employees. If they are self-employed, the 5 per cent. deduction will not apply to them because they

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      have access to all the other reliefs, as ably explained by my hon. Friend the Member for St. Helens, South (Mr. Bermingham).
      Mr. Ottaway: Can the Minister confirm that people who are caught by IR35 and end up paying class 1 national insurance contributions will not be in the same position as "an employee" as they will not be entitled to sick pay and other benefits that employees receive, and that they will not be entitled to unemployment benefit between contracts?
      Dawn Primarolo: If a worker is designated as an employee and is paying national insurance contributions as an employee—which is the whole purpose of the proposal—he or she will be entitled to the benefits to which any other employee paying national insurance contributions is entitled.
      Mr. Ottaway rose—
      Dawn Primarolo: I shall deal with the point in more detail later. If the hon. Gentleman will let me make some progress, and if he is still unclear on the point, I shall give way to him.
      Mr. Ottaway: It is on this point.
      Dawn Primarolo: The problem is that hon. Members have asked various questions, but are refusing to allow me logically to develop the answers and explain the procedure. Do they want to hear the answers or only to ask more questions?
      Mr. Ottaway: I was merely quoting from the Inland Revenue's own guide on the matter, not making up figures. Will the Minister confirm that, when someone has a relevant engagement that is caught by IR35, that person will not be entitled to the benefits of an employee?
      Dawn Primarolo: I cannot understand why the hon. Gentleman finds this point so complex. If employees pay national insurance because they are employed as employees, they will be entitled to the same rights as other employees. [Interruption.] Perhaps I should stop looking at Opposition Members, Dr. Clark, and focus my gaze on you. I hope that you will not misinterpret that; it is just that Opposition Members are really not a very attractive prospect.
      As I said, I think that the objectives are well understood now. It is true also that all right-minded citizens, business representatives, individual taxpayers and their advisers, Members of Parliament and those who are in the other place recognise—it is a matter of public record—that no one wants that type of avoidance to continue. Such avoidance simply is not fair to the rest of us, and we should deal with it.
      It is also true that, until 6 April 2000, people were perfectly entitled to obtain a tax and national insurance advantage by working in that way through service companies. However, it became apparent that many of the people doing so were acting against the spirit of the legislation, to their considerable personal advantage, and at a disproportionate cost to the Exchequer. In reaching this decision, we recognised that we were proposing to
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      remove what had been a legitimate way of reducing tax and national insurance bills. That is why we announced our intention to make this change a full year ago—to allow good time for preparation and consultation. The Government have taken extensive consultation on this matter. Even the PCG, which has been so extensively quoted, has said publicly that the Government consulted and listened on this matter. However, we have not gone as far as the PCG would have wished.
      People with a vested interest in continuing to avoid paying tax and national insurance, plus one or two powerful lobby groups, have been sowing confusion about what the measure does. Let me deal first with the point made by the hon. Member for Croydon, South (Mr. Ottaway) that IR35 is an attack on entrepreneurs. The tax system has a long-established method for distinguishing between employees and the self-employed entrepreneur. Some people have chosen to use service companies because they do not fit the definition of self-employment, but still want to benefit from the tax breaks available for self-employment. They are really only employees who want a better deal from the tax system than that to which their status entitles them. Those people will be targeted by the new rules.
      As I said on Second Reading, our intention is not to prohibit the use of service companies. Instead, we are telling those who are really employees that using service companies will not enable them to avoid paying their national insurance and tax at a fair level. The idea that people who are really employees are the same as self-employed people in taking risks, creating employment and seeing their companies grow simply does not stand scrutiny.
      We are not talking about all service companies or all IT contractors. The new rules will apply to people in service companies who would be employees of their clients if the service company did not exist. The usual case law tests will be used to determine whether someone would be an employee. Those tests have been used for all others in the tax system and are well known. I do not believe that it is beyond the intellectual capability of those IT consultants who are still protesting to get to grips with these rules.
      Mr. Malcolm Bruce: Will the hon. Lady explain how an employee who has travel and training expenses is treated in the same way as someone with a company who has those expenses? Is it not normal for the company's employer to pay those expenses and claim tax relief on them?
      Dawn Primarolo: If someone is employed by a company which provides training, there is no claim on a benefit in kind for the employee, but there is no relief—the employer gets it. An employee cannot claim his training expenses—nobody can. Training expenses for employees cannot be tax-deductible. If employees pay for their training, that is up to them.
      Sir Robert Smith: Will the Minister give way?
      Dawn Primarolo: No.
      Opposition Members must fix in their minds what employees are entitled to and what self-employed people are entitled to. We are ensuring that the rules in the tax system are properly aligned.

      215
      The next point was that there would be a brain drain—a massive exodus from this country. Many people have said that they will go abroad, but the IT industry recognises that that is just a lot of noise. Britain is still a low-tax country and there will still be good money to be made in the IT industry, even after IR35. The trade journals show what has been said by the profession. Computer Consultant said:
      Although many of the contractors questioned said they intended to look for work overseas, the feeling is that this is an expression of contractors' defiant anger rather than a true intention to migrate.
      Christine Little of the Recruitment and Employment Confederation said:
      I cannot believe the tax advantages of working in Germany or Holland are going to be enough to justify uprooting and moving abroad.
      7.45 pm
      The idea that IT consultants can go somewhere else where they will not have to pay tax on their earnings is interesting but incorrect. In some countries, workers will be worse off than if they had stayed in the United Kingdom and fallen within IR35. I have received some interesting postcards from someone who allegedly moved to Germany as a consequence of IR35. I have news for that contractor: on an income of £55,000 per year, his take-home pay in Germany will be £25,000. If he had stayed here, it would have been £34,000 under IR35. His friend, who apparently moved to Strasbourg, will be taking home £30,000 instead of the £34,000 that he would have taken home in the UK. In the United States, Norway, Belgium, the Netherlands, Germany—all the countries that contractors claim that they will move to—the liability to tax is higher than it is here.
      The next area is to do with the expenses and the 5 per cent. allowances proposed under this measure. The new rules will affect only income from engagements that would have been employment if entered into directly with the client. It is a question of whether an activity passes the employment test. Income from any other source within that service company is completely unaffected by the legislation and can be used by the company to meet running costs, make investments, make capital purchases, employ staff, pay dividends, or whatever.
      When a service company has income only from engagements that are caught by the legislation and nothing else, we do not think it right that the service company worker should be in a more advantageous position on tax and national insurance than a conventional employee. I really cannot understand why the Committee is struggling with that simple proposition.
      The 5 per cent. allowance, which is on top, is intended to cover the basic running costs of the service company, such as Companies House filing charges and accountancy fees. We have said that we will not inquire into how that money is spent, and also that the service company need not keep any records in support of the expenditure. As far as we are concerned, this is an automatic, flat-rate allowance. It is pretty generous, given that most of the work done by service companies would be as an employee.
      The hon. Member for Kingston and Surbiton (Mr. Davey) spoke on Second Reading about the compliance regime. He said that he would ask me again
      216
      about whether the position on IR35 would be flexible. I say to him, as I said to the Inland Revenue, that officials are to give the benefit of the doubt where businesses make genuine mistakes when trying to comply with the rules. That is only fair, given the change during this period. It is a light-touch approach. Of course, in the rare cases in which avoidance of tax and national insurance liability is deliberate and intended, the same compliance regime and penalties will apply as exist in the tax system for trying to avoid paying tax and national insurance.
      Contractors working for service companies will be entitled to statutory sick pay and maternity pay, like other employees. They may not get the benefits from their clients but they may, in the short term, from their companies. IR35 does not discriminate against anybody in terms of their relationships. The regulations make it clear that we must consider associates and how they work together.
      Hon. Members mentioned Australia and questioned whether it had withdrawn its legislation. It has not—it is going ahead with it and has made some amendments, as we have done, but in different areas.
      Anyone who meets the accepted definition of an employee should pay tax on the same basis as any other employee. This measure is not anti-competitive and it does not discriminate in favour of big business against small firms. It is simply not true to say that it does. Again, I will quote the industry, in a debate about the measure on "Accounting Web", in which it was stated:
      I find it laughable when people who have been using the veil of incorporation to hide what is fundamentally the relationship which would otherwise exist between an employer and an employee, claim that it is somehow going to harm British business. It is not—it's going to harm their pockets.
      That is what those affected are complaining about.
      Sir Nicholas Lyell: I have been listening carefully to the Minister and I have read the Chief Secretary's most recent letters to me on this important topic. My impression is that the sort of constituents to whom I referred in my speech, who are paying substantial tax but sometimes work for long periods for an individual company that uses their services, will not be regarded as employees and will not be caught by IR35. Will the hon. Lady confirm that only the blatant cases are likely to be caught? Or is she expecting to scoop up the lot, in which case my constituents and those of my hon. Friends and other hon. Members who have spoken will still be very worried?
      Dawn Primarolo: I have already answered that question in the debate. The question is whether the person is an employee or is self-employed. The terms and conditions of their contract with their client are the issue and those determine their status. If the relationship with the client is clearly that of the self-employed, as laid down in case law and in the Bill, the answer as to their liability to IR35 is clear.
      My hon. Friend the Member for Aberdeen, Central (Mr. Doran) and the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) asked a series of questions about the oil industry. If a worker in that industry works for a client in circumstances that meet the definition of employment, PAYE and national insurance should be paid. Until now, clients have been

      217
      able to insist that workers set up service companies—my hon. Friend referred to this—to enable the client to avoid liability for PAYE and national insurance.
      I listened carefully to my hon. Friend's comments and to those of the hon. Member for West Aberdeenshire and Kincardine. I think that they will find that that definition is the issue and that was the requirement for companies, but I will reconsider those decisions carefully. [Interruption.] I realise that Opposition Members find two things difficult. One is a woman speaking at the Dispatch Box, because they treat women appallingly in the House. The other is that although they ask questions, they do not want the answers because they know the weakness of their case. They can heckle me all they like, but I am putting the Government's case on the record and I intend to continue to do so.
      The final question asked by the hon. Member for Twickenham concerned the figures in the Red Book and the increase in the first year to £900 million. He will see from our original assessments that we estimated the number of companies that were using the loophole as we described. We were challenged about the estimate by the hon. Gentleman and a number of organisations. I asked the Inland Revenue to assess thoroughly through our network the number of companies that appeared to be using that mechanism, and which would therefore be affected. That is where the new £900 million figure came from. In truth, the avoidance mechanism is being used far more extensively than we had thought, and the Government have moved to close that loophole.
      I commend the clause to the Committee and I look forward to what I hope will be more good-natured debates on the same subject in the future.
      Mr. Ottaway: The problem is not that we do not listen to the answers; it is that the Paymaster General does not answer the questions.
      The Inland Revenue published a leaflet called, "Questions frequently asked about IR35", which makes it clear that an individual who works through a personal service company will not be in the same position as an employee while both are paying class 1 national insurance contributions. That person will not be entitled to benefits from the company or to unemployment benefit between contracts. The most honest thing that the Minister could do is admit that, rather than trying to mislead the Committee into thinking that people will be in the same position.
      The hon. Lady did not answer the question posed by my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) about the 5 per cent. Most importantly, she did not deal with the fact that the Red Book estimates that the measure will raise £900 million. Inland Revenue documents state that 60,000 companies will be affected. One does not have to be a genius to work out that every one of those companies will have to pay £15,000 a year extra in taxation.
      The hon. Lady did not deal with any of those issues, nor did she deal with the fundamental matters raised by hon. Members on both sides of the Committee, despite the objections of the hon. Member for Aberdeen, Central (Mr. Doran). That is why we will vote against the measure.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 252, Noes 147.

      Division No. 177]

      [7.57 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Dowd, Jim

      Ainger, Nick

      Drew, David

      Alexander, Douglas

      Dunwoody, Mrs Gwyneth

      Allen, Graham

      Eagle, Maria (L'pool Garston)

      Armstrong, Rt Hon Ms Hilary

      Ellman, Mrs Louise

      Atherton, Ms Candy

      Ennis, Jeff

      Austin, John

      Field, Rt Hon Frank

      Banks, Tony

      Fisher, Mark

      Barnes, Harry

      Flint, Caroline

      Bayley, Hugh

      Flynn, Paul

      Beard, Nigel

      Foster, Rt Hon Derek

      Benn, Hilary (Leeds C)

      Foster, Michael Jabez (Hastings)

      Benn, Rt Hon Tony (Chesterfield)

      Foulkes, George

      Bennett, Andrew F

      Fyfe, Maria

      Benton, Joe

      Gardiner, Barry

      Bermingham, Gerald

      George, Bruce (Walsall S)

      Berry, Roger

      Gerrard, Neil

      Best, Harold

      Gibson, Dr Ian

      Blackman, Liz

      Godman, Dr Norman A

      Blears, Ms Hazel

      Godsiff, Roger

      Blunkett, Rt Hon David

      Goggins, Paul

      Borrow, David

      Gordon, Mrs Eileen

      Bradley, Keith (Withington)

      Griffiths, Nigel (Edinburgh S)

      Bradshaw, Ben

      Grocott, Bruce

      Brinton, Mrs Helen

      Grogan, John

      Brown, Rt Hon Gordon (Dunfermline E)

      Gunnell, John

      Hain, Peter

      Brown, Rt Hon Nick (Newcastle E)

      Hall, Mike (Weaver Vale)

      Brown, Russell (Dumfries)

      Hamilton, Fabian (Leeds NE)

      Browne, Desmond

      Hanson, David

      Butler, Mrs Christine

      Heal, Mrs Sylvia

      Byers, Rt Hon Stephen

      Healey, John

      Campbell, Mrs Anne (C'bridge)

      Henderson, Doug (Newcastle N)

      Campbell, Ronnie (Blyth V)

      Henderson, Ivan (Harwich)

      Campbell-Savours, Dale

      Hepburn, Stephen

      Cann, Jamie

      Hill, Keith

      Caplin, Ivor

      Hinchliffe, David

      Caton, Martin

      Hodge, Ms Margaret

      Cawsey, Ian

      Hood, Jimmy

      Chaytor, David

      Hoon, Rt Hon Geoffrey

      Clapham, Michael

      Hope, Phil

      Clark, Rt Hon Dr David (S Shields)

      Howells, Dr Kim

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hughes, Kevin (Doncaster N)

      Humble, Mrs Joan

      Clarke, Charles (Norwich S)

      Hurst, Alan

      Clarke, Eric (Midlothian)

      Hutton, John

      Clarke, Rt Hon Tom (Coatbridge)

      Iddon, Dr Brian

      Clarke, Tony (Northampton S)

      Jackson, Ms Glenda (Hampstead)

      Clelland, David

      Johnson, Alan (Hull W & Hessle)

      Clwyd, Ann

      Johnson, Miss Melanie (Welwyn Hatfield)

      Coaker, Vernon

      Colman, Tony

      Jones, Rt Hon Barry (Alyn)

      Connarty, Michael

      Jones, Helen (Warrington N)

      Cooper, Yvette

      Jones, Ms Jenny (Wolverh'ton SW)

      Corbett, Robin

      Corbyn, Jeremy

      Jones, Dr Lynne (Selly Oak)

      Corston, Jean

      Jones, Martyn (Clwyd S)

      Cranston, Ross

      Keen, Alan (Feltham & Heston)

      Crausby, David

      Khabra, Piara S

      Cryer, Mrs Ann (Keighley)

      Kilfoyle, Peter

      Cryer, John (Hornchurch)

      Ladyman, Dr Stephen

      Cummings, John

      Lawrence, Mrs Jackie

      Cunningham, Rt Hon Dr Jack (Copeland)

      Lepper, David

      Levitt, Tom

      Dalyell, Tam

      Lewis, Ivan (Bury S)

      Darling, Rt Hon Alistair

      Liddell, Rt Hon Mrs Helen

      Davey, Valerie (Bristol W)

      Lloyd, Tony (Manchester C)

      Davies, Rt Hon Denzil (Llanelli)

      Love, Andrew

      Dawson, Hilton

      McAvoy, Thomas

      Dean, Mrs Janet

      McCafferty, Ms Chris

      Denham, John

      McDonagh, Siobhain

      Donohoe, Brian H

      Macdonald, Calum

      Doran, Frank

      McDonnell, John

      219

      McFall, John

      Ross, Ernie (Dundee W)

      McGuire, Mrs Anne

      Rowlands, Ted

      McIsaac, Shona

      Roy, Frank

      McKenna, Mrs Rosemary

      Ruane, Chris

      Mackinlay, Andrew

      Ryan, Ms Joan

      McNamara, Kevin

      Sarwar, Mohammad

      MacShane, Denis

      Savidge, Malcolm

      Mactaggart, Fiona

      Sawford, Phil

      McWilliam, John

      Sedgemore, Brian

      Mahon, Mrs Alice

      Sheerman, Barry

      Marsden, Paul (Shrewsbury)

      Simpson, Alan (Nottingham S)

      Marshall, Jim (Leicester S)

      Skinner, Dennis

      Meacher, Rt Hon Michael

      Smith, Rt Hon Andrew (Oxford E)

      Meale, Alan

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Michael, Rt Hon Alun

      Milburn, Rt Hon Alan

      Smith, Jacqui (Redditch)

      Miller, Andrew

      Smith, John (Glamorgan)

      Moffatt, Laura

      Smith, Llew (Blaenau Gwent)

      Moonie, Dr Lewis

      Snape, Peter

      Moran, Ms Margaret

      Soley, Clive

      Morgan, Ms Julie (Cardiff N)

      Spellar, John

      Morley, Elliot

      Squire, Ms Rachel

      Morris, Rt Hon Sir John (Aberavon)

      Steinberg, Gerry

      Stevenson, George

      Murphy, Denis (Wansbeck)

      Stewart, David (Inverness E)

      Murphy, Jim (Eastwood)

      Stewart, Ian (Eccles)

      Naysmith, Dr Doug

      Stoate, Dr Howard

      Norris, Dan

      Stuart, Ms Gisela

      O'Brien, Bill (Normanton)

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      O'Hara, Eddie

      Olner, Bill

      Taylor, David (NW Leics)

      O'Neill, Martin

      Temple-Morris, Peter

      Organ, Mrs Diana

      Thomas, Gareth (Clwyd W)

      Osborne, Ms Sandra

      Timms, Stephen

      Palmer, Dr Nick

      Tipping, Paddy

      Pearson, Ian

      Todd, Mark

      Perham, Ms Linda

      Trickett Jon

      Truswell, Paul

      Pickthall, Colin

      Turner, Dennis (Wolverh'ton SE)

      Pike, Peter L

      Turner, Dr Desmond (Kemptown)

      Plaskitt, James

      Turner, Dr George (NW Norfolk)

      Pollard, Kerry

      Twigg, Derek (Halton)

      Pond, Chris

      Tynan, Bill

      Pound, Stephen

      Vis, Dr Rudi

      Powell, Sir Raymond

      Ward, Ms Claire

      Prentice, Ms Bridget (Lewisham E)

      Wicks, Malcolm

      Prentice, Gordon (Pendle)

      Williams, Rt Hon Alan (Swansea W)

      Prescott, Rt Hon John

      Primarolo, Dawn

      Williams, Alan W (E Carmarthen)

      Prosser, Gwyn

      Williams, Mrs Betty (Conwy)

      Purchase, Ken

      Wilson, Brian

      Quin, Rt Hon Ms Joyce

      Winnick, David

      Radice, Rt Hon Giles

      Wood, Mike

      Rammell, Bill

      Worthington, Tony

      Rapson, Syd

      Wray, James

      Raynsford, Nick

      Wright, Dr Tony (Cannock)

      Reed, Andrew (Loughborough)

      Reid, Rt Hon Dr John (Hamilton N)

      Tellers for the Ayes:

      Roche, Mrs Barbara

      Mr. Robert Ainsworth and

      Rooker, Rt Hon Jeff

      Mr. Don Touhig.

      NOES

      Ainsworth, Peter (E Surrey)

      Brand, Dr Peter

      Allan, Richard

      Brazier, Julian

      Amess, David

      Breed, Colin

      Ancram, Rt Hon Michael

      Brooke, Rt Hon Peter

      Arbuthnot, Rt Hon James

      Browning, Mrs Angela

      Ashdown, Rt Hon Paddy

      Bruce, Ian (S Dorset)

      Atkinson, Peter (Hexham)

      Bruce, Malcolm (Gordon)

      Baldry, Tony

      Butterfill, John

      Ballard, Jackie

      Cable, Dr Vincent

      Berth, Rt Hon A J

      Campbell, Rt Hon Menzies (NE Fife)

      Bercow, John

      Blunt, Crispin

      Cash, William

      Boswell, Tim

      Chapman, Sir Sydney (Chipping Barnet)

      Brady, Graham

      220

      Clappison, James

      Madel, Sir David

      Collins, Tim

      Malins, Humfrey

      Cormack, Sir Patrick

      Maples, John

      Cran, James

      Maude, Rt Hon Francis

      Curry, Rt Hon David

      Mawhinney, Rt Hon Sir Brian

      Davey, Edward (Kingston)

      May, Mrs Theresa

      Davies, Quentin (Grantham)

      Michie, Mrs Ray (Argyll & Bute)

      Davis, Rt Hon David (Haltemprice)

      Moore, Michael

      Donaldson, Jeffrey

      Moss, Malcolm

      Dorrell, Rt Hon Stephen

      Nicholls, Patrick

      Duncan Smith, Iain

      Norman, Archie

      Emery, Rt Hon Sir Peter

      Ottaway, Richard

      Faber, David

      Page, Richard

      Fabricant, Michael

      Paice, James

      Flight, Howard

      Paterson, Owen

      Forth, Rt Hon Eric

      Pickles, Eric

      Foster, Don (Bath)

      Portillo, Rt Hon Michael

      Fowler, Rt Hon Sir Norman

      Prior, David

      Fox, Dr Liam

      Robathan, Andrew

      Gale, Roger

      Robertson, Laurence

      Garnier, Edward

      Robinson, Peter (Belfast E)

      Gibb, Nick

      Ross, William (E Lond'y)

      Gill, Christopher

      Rowe, Andrew (Faversham)

      Gillan, Mrs Cheryl

      Russell, Bob (Colchester)

      Gray, James

      St Aubyn, Nick

      Green, Damian

      Shephard, Rt Hon Mrs Gillian

      Greenway, John

      Shepherd, Richard

      Grieve, Dominic

      Simpson, Keith (Mid-Norfolk)

      Gummer, Rt Hon John

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

      Hamilton, Rt Hon Sir Archie

      Spicer, Sir Michael

      Hammond, Philip

      Stanley, Rt Hon Sir John

      Harvey, Nick

      Steen, Anthony

      Hawkins, Nick

      Streeter, Gary

      Heald, Oliver

      Swayne, Desmond

      Heathcoat-Amory, Rt Hon David

      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, Matthew (Truro)

      Jack, Rt Hon Michael

      Taylor, Sir Teddy

      Jackson, Robert (Wantage)

      Thomas, Simon (Ceredigion)

      Jenkin, Bernard

      Tonge, Dr Jenny

      Johnson Smith,

      Tredinnick, David

      Rt Hon Sir Geoffrey

      Trend, Michael

      Key, Robert

      Tyler, Paul

      King, Rt Hon Tom (Bridgwater)

      Tyrie, Andrew

      Kirkbride, Miss Julie

      Waterson, Nigel

      Kirkwood, Archy

      Webb, Steve

      Lansley, Andrew

      Welsh, Andrew

      Leigh, Edward

      Whitney, Sir Raymond

      Letwin, Oliver

      Whittingdale, John

      Lewis, Dr Julian (New Forest E)

      Widdecombe, Rt Hon Miss Ann

      Lidington, David

      Wigley, Rt Hon Dafydd

      Lilley, Rt Hon Peter

      Willis, Phil

      Livsey, Richard

      Wilshire, David

      Lloyd, Rt Hon Sir Peter (Fareham)

      Winterton, Mrs Ann (Congleton)

      Llwyd, Elfyn

      Winterton, Nicholas (Macclesfield)

      Loughton, Tim

      Yeo, Tim

      Lyell, Rt Hon Sir Nicholas

      Young, Rt Hon Sir George

      McIntosh, Miss Anne

      MacKay, Rt Hon Andrew

      Tellers for the Noes:

      Maclean, Rt Hon David

      Mrs. Eleanor Laing and

      Maclennan, Rt Hon Robert

      Mr. Peter Luff.

      Question accordingly agreed to.
      Clause 59 ordered to stand part of the Bill.

    Clause 102

      DOUBLE TAXATION RELIEF
      Question proposed, That the clause stand part of the Bill.
      Mr. Oliver Letwin: I should begin by declaring the interest that stands in my name in the

      221
      Register of Members' Interests, which apparently gives me the unfortunate and dubious advantage over some representatives of Her Majesty's Treasury of understanding the effect that clause 102 will have on British industry.
      Mr. Graham Allen: Is that a recommendation?
      Mr. Letwin: I do not know whether the hon. Gentleman will find by the end of my remarks that it is or is not a recommendation. It makes one so profoundly miserable about the process of our government when one understands the way in which the measure came to pass and what it contains that I am left regretting that I understand it.
      Mr. Allen: It makes one want to clear off back to the City.
      Mr. Letwin: It would be precious little use obeying the hon. Gentleman's usual sedentary animadversions, because if the measure were to have its way, a good part of the activities of the City would be removed at a stroke.
      It is surprising in many ways that we are having this debate, because the measures in clause 102 and schedule 30 have been the subject of probably the most sustained and intellectually effective destruction job on a tax measure of the past few decades. Yet we are having a debate because the measure still stands.
      The Committee will want to know the history of the measures. We are told something about them in the explanatory notes. I should say in defence of the Treasury, which I am otherwise about to excoriate, that the notes on clauses in this respect are an admirable example of clarity. The officials who wrote them deserve the thanks and congratulations of the Committee for making clear just what is going on in this noxious clause. Paragraph 42 of the notes on clause 102 and schedule 30 makes a statement which is as near to misleading the House as I suspect that parliamentary language will allow me to allege. The statement is:
      The measures contained in Schedule 30—
      and hence the subject of clause 102—
      have been drawn up after extensive consultation with business.
      That is an oddity. It is perfectly true that there was extensive consultation with business—one of the more extensive consultations that has been carried out in respect of any tax measure in the Bill. Unfortunately, it was consultation on a different proposition.
      It is an interesting concept of consultation that we have here. I might consult you, Dr. Clark, about the prospect of my giving you cornflakes tomorrow morning for breakfast. You might tell me that you prefer Frosties. But if my intention was to electrocute you, I might not have discovered everything that I wanted to know about your response to my proposition. The Government's consultation is a somewhat similar case.
      I may say also in defence of Inland Revenue officials that the consultation paper is a model of intellectual rigour and one of the loci classici of exposition of the advantages of export of capital neutrality. The document goes through in awesome detail systems of exemption, systems of
      222
      credit, systems of onshore pooling and systems of mixing. It comes to the view, in section 6.32 on page 29, that
      Mixer companies have been in use for a considerable number of years. Multinational groups have structured their overseas interests accordingly. Relief for underlying tax, which mixers facilitate, of around £4 billion a year is allowed each year. Both mixer companies and onshore pooling present a number of interesting and complex issues of both an economic and a technical nature. It will be important for the future to strike the right balance between them.
      So what the Inland Revenue said to British industry in one of the longest and most detailed consultation exercises in recent years was that it was important for the future to strike the right balance between mixer companies and onshore pooling.
      Looking round at some of the distinguished Members present, some of whom have served in Ministries and some of whom have been enormously important members of the Treasury, I am sure that they already understand the measure, but in case anyone has the slightest shade of doubt about what clause 102 and schedule 30 do, I inform them that they prevent the practice of mixing. In other words, they prevent the averaging of the rates of tax incurred in foreign jurisdictions by the subsidiaries of a multinational company, and thus, by means of such averaging, a greater offset against United Kingdom tax than would otherwise be the case. There are two methods of achieving that greater offset. One is through mixer companies, which are artificially established subsidiaries offshore, and the other is through the method of so-called onshore pooling, which achieves the same effect but within the United Kingdom tax jurisdiction.
      So two possibilities were put in the consultation exercise, either of which would serve admirably the purposes of British industry and of multinationals located and headquartered here. British industry was asked to reply to the consultation document and tell the Inland Revenue which of the two systems was preferable, or whether some other system that would roughly speaking achieve the same results was preferable. That was an admirable and sensible exercise—but what happened when clause 102 came along? Why, Dr. Clark, not the cornflakes but the electric shock. It turned out that the effect of clause 102 was not mixer companies, onshore pooling or something similar to them, but the opposite. It was to destroy at a stroke the system of averaging offshore tax rates, in order to clobber British industry headquartered here with multinational outlets and subsidiaries.
      In passing, I might mention that the process that I have described contravenes the Government's own code of practice. I do not think that the Government believe that codes of practice matter. They are prolific in producing codes of practice. When they came to power, they produced more codes of practice than probably all the Governments of that century put together—so many that Ministers probably cannot keep up with which codes of practice they issued or what those codes say.
      In December 1997, with a great flourish, the part of the Treasury for which the Paymaster General is responsible—the Inland Revenue and Customs and Excise—introduced a code of practice on consultation. I do not know whether anyone reads these codes of practice inside ministerial offices. I have no doubt that people read them inside the Inland Revenue; they probably they live by them as a kind of bible. I have no doubt that when Ministers conducted the consultation exercise, they

      223
      intended that it should conform to their code of practice on consultation exercises. So I suppose that when they asked people whether they would prefer mixing or pooling, Ministers genuinely meant to choose the one or the other.
      It would have been a good idea if they had done that, because page 6, section 3 of the code of practice tells the people consulting on behalf of the Inland Revenue that they ought to assess
      the likely effect on tax revenues
      of the measure being put forward. It is a little difficult for an industry that is being consulted to assess the likely effect on tax revenues or its tax payments of a measure about which it is not being consulted.
      You are learned in many respects, Dr. Clark, and I wonder whether you would find it easy to answer if I were to ask you what would be the tax effect of increasing your income tax by 5 per cent. when what I really wanted to know was what would happen if I increased your income tax by 50 per cent. You might be forgiven for giving me an odd answer. That is what happened in the case of British industry. As it was asked not what would be the effect of the measures in clause 102 but what would be the effect of some other set of measures that have not been implemented and are the opposite of the measures in the clause, it did not give the answer that is required in a consultation exercise. That is probably why the Government misestimated the effect of the measure on their tax revenues.
      When I say that the Government misestimated, I do not mean that they got it wrong by 5 per cent. or 10 per cent. Goodness me, no Opposition Member would be so ungenerous to the Paymaster General as to suppose that she could make an accurate forecast of tax revenue. No Chancellor of the Exchequer, no Paymaster General and no Financial Secretary has ever been able to do that. People get it wrong by 20 per cent., 30 per cent. or 50 per cent. All of those are accepted, but this is not a case of getting it slightly wrong. This is a positively heroic error. I cannot recall a time in recent history when such an error has been made. They got it wrong, roughly speaking, tenfold. If the Chancellor of the Exchequer got things wrong to that extent in general, he would bankrupt us and use up our gross domestic product about five times over. It was quite a mistake to make. If such mistakes were generally made about taxation, one could produce some interesting economic effects. Why did the Treasury make the mistake? It made it because it consulted on the wrong measure—the opposite measure. Therefore it did not have the slightest idea what the effect on taxpayers would be.
      I say all those things not just because they are important in themselves, but because they relate to the reason why we have a code of practice. Of course, Ministers may have intended the code to be just window dressing, but they sent some earnest officials away to write it. Those officials wrote it sensibly, got down to business and worked out what one should do if one is consulting. They worked out that if one is consulting about tax, it is jolly nifty to find out what the effects on industry will be. Therefore, they said that one should ask that question—but the Treasury and the Inland Revenue did not ask it because they asked a question about a set of measures that they were not proposing to introduce and did not
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      introduce. Perhaps the Inland Revenue intended to introduce them, but the Treasury did not; I shall come to that point shortly.
      Mr. Edward Davey: Will the hon. Gentleman confirm that the code on consultation allows the Government to introduce anti-avoidance measures without consulting, but that the Government have explicitly said that these measures are not about anti-avoidance?
      Mr. Letwin: The hon. Gentleman, as so often on these matters, is absolutely right. First, this is not an anti-avoidance measure. Secondly, it does not tackle avoidance. Thirdly, the Government have admitted that, and fourthly, as he rightly said, the code specifically exempts anti-avoidance and some other measures from consultation. For example, it exempts measures that would be evaded if consultation about them took place.
      However, this clause does not fall into that category. It is a classic case of a highly complex and important tax measure being introduced, about which there should have been consultation, and about which the code says there should have been consultation. There was no consultation, because the consultation took place about something else—the opposite measure.
      I have written today to the Cabinet Secretary to ask him what is to be done about a Department that breaks its own code of practice. I have asked him what administrative sanctions apply, what a Department should do when such a contravention comes to light, and how its accounting officer should behave.
      I have also asked the most important question. Hundreds of highly paid individuals in British industry—this is not my major point, but it is important—have spent a couple of years thinking about what the Inland Revenue has proposed, and they tried to answer its question. They spent a lot of time with their advisers, and that is expensive time. Perhaps it is some of the most highly paid time in the country, but all that was a total waste of time and money because they answered a question about cornflakes when they were facing electrocution.
      I have asked the Cabinet Secretary what administrative redress and what ex gratia payment the Treasury and the Inland Revenue will make to people who have wasted their time because of a consultation exercise about the wrong thing. If the answer to my question is, as it may be, that there is no such redress, my advice to those sections of British industry would be to bring a class action and to test in court whether there can be redress in such a case. There jolly well should be.
      I have outlined the history of the consultation exercise. I now come to the brilliant measure itself. How does it achieve its intended result? What is its intended result?
      Mr. Stephen Dorrell: What is the purpose of the measure?
      Mr. Letwin: That is exactly the right question. What is the measure's intended result? I admit to a profound perplexity on this matter. It is possible, although I hardly dare allege such a thing in such an august assembly as this, that the person or persons who invented the measure—I do not think that they are in the Inland Revenue at all—intended that it should raise a lot of extra money for the Exchequer. I hardly dare allege that,

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      because Ministers have denied it repeatedly and I know that they are honourable. However, someone somewhere in the Treasury—not a Minister, but certainly not in the Inland Revenue, because it consulted about the opposite change—had the brilliant idea that he could invent the most complicated and stealthiest tax of all time—a tax that he hoped no one at all would understand, which would raise a large sum of money. That is one possibility.
      The intervention of my right hon. Friend the Member for Charnwood (Mr. Dorrell) is particularly apposite to the other possibility, and my right hon. Friend the Member for Fylde (Mr. Jack) made the point forcefully on Second Reading. It is also possible that this is a simple case of a catastrophic administrative error, and the measure has no aim at all. The Government have not the slightest intention of achieving the results that it will achieve, or any other discernible results. They might simply be engaged on an acte gratuit to prove that one can be an existentialist Treasury. That is a possibility. Surely, we should follow the dictum that, when one has looked in all the possible places and not discovered the true answers—we know that they are not true because Ministers have denied them—we have to look in the impossible places. Therefore, I suggest that it is possible that the measure is an arbitrary action or a knee-jerk reaction. If so, it represents an interesting departure in administration. If tax policy is to be conducted on that basis—without warning and with or without consultation, but perhaps with consultation on the opposite—we may discover that all sorts of taxes are changed in the coming years. I rather look forward to that. It will be fun to stand at the Dispatch Box and watch them go by as one watches the symbols on a one-armed bandit.
      The Temporary Chairman (Dr. Michael Clark): We are captivated by the hon. Gentleman's hypotheses, but we would be even more engaged if he discussed the substance of the clause.
      Mr. Michael Jack rose—
      Mr. Letwin: Before I give way to my right hon. Friend, may I wholly accept your admonition, Dr. Clark? I shall return to discussion of the clause.
      Mr. Jack: I am grateful to have the opportunity to enable my hon. Friend to get back on track. He may recall that on Second Reading the Paymaster General gave us a hint of the missing reason for the proposal. In some way, it would have a remarkable effect in lowering high tax rates in other tax jurisdictions. Has my hon. Friend had a chance to consider the validity of that line of argument?
      Mr. Letwin: I am now about to come to something really astonishing. This point relates directly to the clause, but my right hon. Friend and I are both suffering from an important form of selective amnesia. I have exactly the same memory as him of what happened in an exchange on Second Reading, so I read the Hansard report of what the Paymaster General said in response to him on Second Reading. Strangely enough, the report appears to be slightly different from my memory. I know that Hansard is always accurate, so my right hon. Friend and I—I assure you that we have not discussed this with each other, Dr. Clark—must have suffered from a collective hallucination. I am glad of that. If the Paymaster General
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      had said what we mistakenly supposed—contrary to the Hansard record—that she had said on that occasion, she would have said something so manifestly ludicrous that it would have been impossible to imagine that it could have come from a Minister of the Crown.
      The Temporary Chairman: Is this hypothesis No. 2?
      Mr. Letwin: No, Dr. Clark, because I shall come on to what the Paymaster General said in Hansard, which is one of the arguments now being alleged for the clause.
      I hope that I can end this excursion simply by saying that I am unclear about what on earth the Government are trying to achieve by the clause. Therefore it is difficult to tell whether it will achieve its aim. However, it is clear what it will achieve. First, it will clobber British industry for about £4 billion a year—I may be wrong, but I am not wrong by the scale on which the Chancellor was wrong. It might be £3.5 billion—I shall grant the Paymaster General that—or it might even be £3 billion. There is not a serious set of accountants or business men in Britain today who think that the figure is much less than that.
      When Pricewaterhouse first referred to that effect of the clause, the Government did something that takes us beneath the level about which we should joke. Instead of answering the point and investigating it seriously—to do them justice, I think that they have begun to do that, and I shall discuss the reasons why shortly—they impugned on the Floor of the House the honour and professionalism of a serious professional who is one of the partners of Pricewaterhouse. I regard that as gross abuse of parliamentary privilege. The Paymaster General should take that back on behalf of the Government or repeat it outside the House of Commons, which would mean that she would be sued for a serious amount of money.
      Mr. Beard: Is the hon. Gentleman suggesting that when PricewaterhouseCoopers was asked for instances of companies that would suffer from the proposed legislation, it was not able to quote even one?
      8.30 pm
      Mr. Letwin: The hon. Gentleman, no doubt honourably and genuinely, is entirely misled about what happened within the Treasury. If necessary, I am prepared to go into the details of what happened, which I happen to know. I will not detain the Committee with that because I now propose to list those who have said exactly what the effects of the proposal will be—
      Mr. Beard: Subsequently.
      Mr. Letwin: The hon. Gentleman tries my patience. It is true that the responses were subsequent, but 24 hours subsequent to the visit and before the Paymaster General's statement in the House. If we were to get to the seriousness of the matter, things could become very uncomfortable for Ministers.
      We now have absolute clarity about what British industry thinks of the proposal. I will start with the

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      Institute of Directors. I suppose that Labour Members will think that it is prejudiced. However, it is pretty moderate on the subject. It states that it is
      a further blow to UK-based multinationals… The Government should withdraw this paragraph from the Finance Bill…and have a proper consultation prior to the Finance Bill 2001. The consultation in 1999 bears no relation to the UK system as amended by this paragraph, and is therefore worthless in this context.
      I know that the CBI will be dismissed by some Labour Members as a mere collection of capitalists. However, what does it have to say about the matter? It states:
      This clause introduces Schedule 30 containing a draft of radical and unheralded changes to the existing law on Double Tax Relief, particularly in relation to restriction of relief involving mixer companies. The biggest problem which business has with the provision is their adverse effect on the international competitiveness of businesses located in the UK.
      I shall return to that point in a moment. The CBI continues:
      Companies of different sizes across the sectoral spectrum, whose business is vital to the success of the UK economy, have raised concerns about the adverse impact of the proposals.
      Forty of the CBI's companies, a small fraction of those that will be affected, are estimated to be losing about £700 million a year.
      The CBI continues:
      Specific problems are discussed below but the overall effect of the adverse changes…has been to create a situation where a number of commentators, including companies which have contacted the CBI, are saying that the UK will now have one of the worst, if not the worst, double tax regimes amongst the G7 nations.
      What does the Association of Corporate Treasurers have to say?
      Mr. Jack: Before my hon. Friend departs from the point about foreign jurisdictions, will he note that in response to a parliamentary question that I tabled to the Paymaster General, inviting her to put on record what information the Treasury had about foreign tax jurisdictions in this context, she was unable to supply any?
      Mr. Letwin: I am grateful to my right hon. Friend. had noticed that. That is why later I shall supply the information for the Treasury; I think that he is already in possession of it. If it had looked into the matter, I am sure that it would have discovered what the Inland Revenue already knew. As the Treasury was introducing a measure, the opposite of that which the Inland Revenue had been consulting about, it is quite possible that it did not want to ask the Inland Revenue what the effect of the measure that the Inland Revenue thought that it was not introducing would be if it were introduced.
      The Association of Corporate Treasurers tells us that the announcement on 21 March
      of the sweeping and fundamental changes to the double tax relief … system took the entire business community by surprise …. these changes reduce the UK's competitiveness as a base for multinationals…The suddenness of the change and its fundamental nature is extremely disconcerting.
      I do not know whether the association is also regarded as a dangerous group of lunatic capitalists, but the Chartered Institute of Taxation really cannot be put into that category by the Paymaster General. She spends most of
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      her time in the House of Commons telling us how she will close loopholes, apparent loopholes or what seem to her to be loopholes, that will destroy other sections of British business, on the ground that the institute has told her to do so. The institute, her favourite body, tells us:
      In the discussion paper dated March 1999, and in discussions with the Inland Revenue International Division—
      that is an important point in itself because it mentions not just the paper but what was said after it was issued—
      the impression was given that offshore mixer companies were accepted and that, indeed, some form of onshore pooling was being considered. In the event, the proposals go in the opposite direction. This calls into questions the bona fides of the consultation process and the way in which the Revenue and the Treasury work together in relation to taxation policy decisions.
      We have begun to hear what will be the prolonged murmur of companies that are thinking of re-siting their headquarters away from the UK. Zurich Allied cited its reasons a few days ago; today, it is SmithKline Beecham. Whatever the Paymaster General may care to do to an innocent partner of a major accounting firm when he raises the truth, I doubt that even she will want to assert that those companies, which between them employ thousands of people in this country, are to be neglected, ignored or abused. We have the seeds of a serious malaise in our economy; they have been sown by a provision that is unheralded and unannounced, and about which there was no effective consultation.
      Why did it happen? Part of the reason, probably, was that the Inland Revenue was genuinely and honestly moving in an entirely rational direction. From what we can gather, an economic adviser in the Treasury then had a bright idea. It was suggested to Ministers that they could make a large amount of money very easily and quickly from a source that had not been the subject of the initial levy when the Government first came into power, but which was mighty rich. The Ministers were told that it would never be defended in public because no one would have the gall to do so. That was because the source was nasty capitalists coming from abroad called multinational companies. I think that that is what happened.
      Was the process by which it happened respectable? No, it was not. I have dealt with that already. Regardless of the merits of the measure, the process was disreputable. Much more important is the question whether it is substantively tolerable. What are the Government's arguments for taking £3 billion, £3.5 billion or £4 billion a year off the multinationals that are headquartered in the UK, and do they stand up to scrutiny? The first argument is that the figures are all wrong, and unfortunately that argument is right, but it backfired. As I have pointed out, the figures that are wrong are those of the Government, and the measure makes a huge hit on the multinationals headquartered in Britain.
      The second argument has not been made here, but I suspect that it has been made in some quarters in the Treasury, and it is rather more ingenious. The hon. Member for Kingston and Surbiton (Mr. Davey) will enjoy this argument, which is parallel to some of those used during the proceedings on the Government Resources and Accounts Bill. It runs as follows: multinationals currently headquartered in Britain are shackled by the ingenuity of the capital gains tax arrangements because they cannot move their headquarters abroad without crystallising a huge capital gain arising from the difference between the historic cost

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      of the subsidiaries that they have acquired and their current market value. We can therefore sting them for £3 billion, £3.5 billion or £4 billion because they will not be able to leave these shores and we will not suffer the adverse effects that would be caused by their doing so.
      That is a curate's egg of an argument—some parts are good and other parts are not so good. The bit that is good is that it is true. The ingenuity of the capital gains tax system means that existing multinationals with old acquired subsidiaries are shackled to this country. That is not an unusual arrangement; most countries have it. Those companies cannot get out because if they tried to do so they would have to pay the Chancellor a whopping bill—which would probably be greater than the one that we are discussing—all at once, and he would be a happy man. He could put away another several billion pounds to pay off national debt or to spend on the national health service, à choix.
      There are two slight problems with the argument. The first is that not all the major multinationals acquired their subsidiaries and assets abroad long ago. Some, such as Vodafone-Mannesmann, have recently acquired massive overseas subsidiaries. I pose as no expert on these matters, but it is not clear that they are shackled to this country. Vodafone-Mannesmann is the biggest company in Britain, the biggest company quoted on our stock market and the most important single element of the very market that the stock exchange today conjoins with markets in Frankfurt and New York.
      If the measure is passed, the company might move its headquarters abroad, and if it did, what would go with it? All the lawyers, accountants and consulting engineers, all the people in the City and all those who service all those people, from tea to printing, would lose out. We are not talking about thousands, millions or tens of millions of pounds; we are talking, over time, of hundreds of millions of pounds of economic value that will be lost to this country.
      Mr. Howard Flight: Billions.
      Mr. Letwin: In the long run, as my hon. Friend says, we could lose billions of pounds.
      The second slight problem concerns all the companies that are not yet headquartered here. I have personal experience of this matter, because at one stage I was restructuring INTELSAT, a satellite organisation that involves all 137 countries of the world. The question arose of where the organisation should locate the headquarters of its new privatised spin-off. The most extensive search was performed, ironically by Pricewaterhouse, on behalf of INTELSAT, to identify the countries where multinational companies would most like to have their headquarters. The two that came top of the list were the UK and the Netherlands.
      What would happen today? The UK would be at the bottom of the heap. For that reason, if clause 102 is passed, an intangible and unquantifiable economic value will be lost over the years because companies that would have brought their headquarters here will not do so. They will go to the Netherlands or other countries. The idea that the measure will have no real effect because companies are shackled is just true enough to be deeply misleading.
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      There is a third argument, which Ministers have used and to which my right hon. Friend the Member for Fylde alluded a moment ago. Ministers have tried to claim that we will have a highly competitive regime even after clause 102 has been passed. I am not now suffering from the selective amnesia to which, regrettably, my right hon. Friend and I are subject, because I was able to find this point in Hansard. On 17 April, the Paymaster General said:
      when we compare how we tax our multinationals and, in particular, the use of our controlled foreign company legislation, with the practice of our European partners—
      she may be thinking of places where there are many company headquarters such as Luxembourg or the Scilly Isles—
      we find that the Government's proposals are to bring us into line with the competitive practice of other countries.—[Official Report, 17 April 2000; Vol. 348, c. 758.]
      I mention the Scilly isles because the proposition is absurd. The USA has onshore pooling and uses a general basket of offshore credits. Japan has onshore pooling via a worldwide basket. Canada exempts dividends from trading activities worldwide. France and Germany exempt 95 per cent. of dividends from significant shareholdings. Italy does likewise, but only within the EU, although that is changing in 2001 and the exemption will be universal.
      Of the G7 countries, the UK, under clause 102, becomes the only one that does not have onshore pooling or exemption as a way of achieving the same effect. The Paymaster General brilliantly exposes us to be the sole candidate to be at the bottom of the heap, the one country that companies would want to avoid if they were seeking to site their headquarters in a major economy.
      I do not know what the Paymaster General thought that she meant when she said:
      when we compare how we tax our multinationals…we find that the Government's proposals are to bring us into line with…competitive practice,
      unless she thinks that bringing us into line with competitive practice means ensuring that we are last in the race. If that is the hon. Lady's general notion of how the UK should be competitive, we have grounds beyond the clause to worry.
      8.45 pm
      The fact is that the measure, which does not have the justification that it has no real cost, nor that it has no ill effect, nor that it leaves us competitive, has been given another basis by some of the Treasury's utterances: we have been told on various occasions that it is fairer. Only some companies can form mixer companies—how unfair, how wrong; therefore, we must prohibit that practice, which favours the mighty. However, a slight intellectual impediment afflicts that argument. The average fish-and-chip shop does not need to form mixer companies, because it does not have very many international subsidiaries. That point clearly eluded the Paymaster General during her investigation of the subject. It tends to be the case that, before a company has foreign subsidiaries, it becomes rather large—indeed, it becomes a multinational company. Therefore, the unfairness spotted by the hon. Lady is one that does not have the quality of existing.
      The next argument advanced is that the system produces capital export neutrality. The Paymaster General and almost everyone here in the Committee knows about

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      that, but, just in case anyone less informed is reading Hansard, I shall explain that capital export neutrality is an important principle: it is that we should have a tax regime that makes our companies when they invest abroad relatively indifferent to which tax regime they choose to invest under, so that they invest instead in the places where they can most efficiently produce, and that is to the advantage of our companies and their shareholders in the UK. It is an admirable aim, which the Inland Revenue consultation document states as an objective.
      However, it would be extremely odd if that were the aim that really explained why the measure is a proper one. First, the Inland Revenue's own consultation document makes it clear, in paragraph 1.6 on page 6, that the overriding objective should be "the national interest" of the UK economy. Whatever the measure does for capital export neutrality, it certainly is not in the interests of the UK economy to send all the multinational headquarters scuttling. Secondly, it is not a strong argument in favour of the scheme because paragraph 3.16, on page 12 of the consultation document, makes it clear that:
      The ordinary credit system adopted by the UK and a number of other countries has the twin advantages of going some way towards achieving…CEN—
      that is, capital export neutrality—
      for the United Kingdom economy.
      In other words, the Paymaster General's argument that the system needs to be got rid of because getting rid of it is necessary for the sake of capital export neutrality has the disadvantage that her own Department denies that fact.
      Finally, we come to the mystery guest—the item about which my right hon. Friend the Member for Fylde and I are suffering selective amnesia—the thing the Paymaster General never said. Contrary to the imaginings of my right hon. Friend and me, she did not say that the measure would induce foreign countries to adjust their tax rates—oh no. She said something entirely different—and I know she said it because it appears in the Official Report at precisely the moment that we thought she said what we thought she said. In fact, she said something quite interesting:
      The use of mixer companies has made UK investors more or less indifferent to the high tax rates in countries in which they invest—
      I note in passing that she thereby exposed the fact that the system did achieve the effect of capital export neutrality that she otherwise argued it did not achieve, but leave that lacuna as well. She continued:
      and we need to change that focus—
      I note in passing that she meant "We need to destroy the capital export neutrality that the Inland Revenue, in its consultation document, said we needed to create," but leave that lacuna. She said:
      we need to change that focus to ensure that we receive—
      now comes the seminal phrase that my right hon. Friend and I, through our imaginings and hallucinations, never heard—
      the correct amount of tax.—[Official Report, 17 April 2000; Vol. 348, c. 791.]
      Thus, at the end of a vast circle of imaginings, we come back to our beginning, and it turns out that the measure is, after all, a remarkable one that fits into the category
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      that we have come to know and love—that of the stealth tax. It is designed to create a means of collecting
      the correct amount of tax—
      that is, a large amount of tax. When I hear the Paymaster General and her colleagues in future talking of things that are "correct", I shall know that they mean elephantine, gargantuan, enormous. That is the amount of tax that the measure raises, and a brilliant way it is of doing so.
      Mr. Jack: I am grateful to my hon. Friend for focusing on the word "correct" because his analysis has alighted on a new principle of taxation. Has he by any chance in his assiduous research come across a definition of "correct" in taxation terms?
      Mr. Letwin: I would answer that most instructive intervention—except I know, Dr. Clark, that your beady eye is on me and that if I were to go into the wide-ranging lexicon employed by the Government, you would upbraid and stop me. I shall not be tempted down that line, although we must remember that
      the correct amount of tax
      will always henceforth mean in the Government's jargon a very enormous amount of tax.
      What will be the effect of that tax? It will be to charge those already in this country, to send some of the great new enterprises packing and to deter hereafter, virtually completely, all the highly mobile multinational companies from siting their headquarters in this country. It will try to undo the good work of today in creating our stock markets as a parallel with Nasdaq and Frankfurt; it will try to ensure that our great service industries in the financial services are destroyed; it will in fact try to destroy as much of the British economy as it can in pursuit of
      the correct amount of tax.
      I must quickly add one other comment. I apologise for detaining the Committee, but it is rather interesting. The debate is in fact wholly otiose. I have not noticed the Minister intervening or asking to make a statement today, but I have noticed, because somebody has passed it to me, that a statement has already been issued to the press about the matter. We already know the answer to the debate, only it is embargoed until 22.00 which, unless I am also suffering from a hallucination, is some little while from now.
      It is a strange—a passing strange—thing. We thought that Parliament was debating the matter because it might decide on it and instruct itself and because Ministers might pay attention to Parliament. No, it was not to be. Ministers decided at an earlier hour this evening how they would respond, issued a statement and embargoed it until—I regret to tell them that they may not be quite right—they imagined that we would have finished speaking. Although I shall certainly close my current remarks anon, I am slightly tempted to detain the Committee through the night so that we could read tomorrow morning the text of the statement in the newspapers, and would not have to rely merely on my possibly misleading and hallucinatory version of the release.
      It is interesting that the release is as ambiguous as could be. Ministers have told the press that they will keep the measure intact but that they will delay its introduction—mysteriously—from 1 July 2000 to 31 March 2001. With

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      your percipience, Dr. Clark, you may be able to detect a reason for doing that, but I must admit that, with my humble intellect, I am precluded. I have not the slightest idea why, if one is to retain the measure intact and not alter any major part of it, one would want to delay its introduction by nine months. If its purpose is to create a means of collecting
      the correct—
      we remember, that means an elephantine—
      amount of tax,
      why not introduce it early? What is the point of delaying the collection of this huge, correct amount of tax by nine more months? I cannot imagine that the Chancellor of the Exchequer has suddenly become generous in his old age.
      It may just be—I hesitate to speculate—that the Government's real intention behind the delay is to think again, to tear up this noxious, ludicrous, misguided measure and to start again without admitting that they are doing so. If that is so, we will not be ungenerous. We will not taunt them. We will acknowledge that that was the right thing to do. All the Paymaster General needs to do this evening is to remedy a wrong measure, wrongly introduced through the wrong consultation process, with the wrong estimates of its effects, and with the Government wrongly pretending that they are not undoing it while possibly undoing it.
      The Paymaster General can remedy all that at a stroke by saying tonight, in the House of Commons, where such things ought to be done, that she is sorry; that the Government made a mistake—we are all human—that they withdraw the measure; that they will table amendments to get rid of it; that obeying their own code of practice, they will carry out a proper consultation, consulting about the measure that they intend to adopt, rather than about the measure that they do not intend to adopt; and that they will eventually produce a sensible proposal that achieves whatever mysterious effect they were trying to achieve, other than to raise the correct amount of tax. If the Government do that, we shall thank them heartily.
      Dawn Primarolo: I shall begin by responding to the hon. Member for West Dorset (Mr. Letwin), who broke the embargo on information that we forwarded to the Liberal Democrat and Conservative spokespersons in order to keep those on the Front Benches fully informed of the Government's thinking on the matter.
      When the Finance Bill was published, it was announced that there would be further consultation on clause 102 between then and 19 April. Given that the debate had been called for this evening, it seemed appropriate to inform the House at the earliest opportunity of the Government's decisions in their consultations with industry. When I have dealt with that, I shall return to some of the points that the hon. Gentleman made in his opening remarks.
      On Budget day two years ago—
      Mr. Quentin Davies: Will the hon. Lady give way?
      Dawn Primarolo: I want to set out the argument, then I shall give way to the hon. Gentleman. When the Government try to ensure that representatives of the
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      Opposition Front Benches are kept fully informed on an important issue, it is not helpful when that is used as a debating point at the Dispatch Box.
      Mr. Davies rose—
      Dawn Primarolo: With all respect to the hon. Gentleman, no, I shall not give way.
      Mr. Letwin rose—
      Dawn Primarolo: I am not sure which part of the word "no" the hon. Member for Grantham and Stamford (Mr. Davies) and his hon. Friend are having difficulty with. It might be the N or the O. I shall not give way until I have responded to the points made by the hon. Member for West Dorset.
      On Budget day two years ago, the Chancellor announced that the Inland Revenue would carry out a review of the UK's system of double taxation relief for companies. That would involve a review of the functioning and the fairness of the existing system, its effectiveness in meeting the objectives of the relief, and business compliance costs, while having regard to the overall cost of the relief. I shall return to the question of cost.
      Following extensive consultation with business, the Inland Revenue published a discussion paper on Budget day last year. Comments were invited by 30 September on the matters discussed in the paper and on other issues concerning double taxation relief. The Government carefully considered the points that were made by business, tax advisers and representative bodies during the review. Our decisions, together with draft legislation giving effect to them, were published on Budget day this year. A further period of consultation was allowed and we invited comments.
      I note that the adviser to the Chancellor of the Exchequer under the previous Government, Mr. Troup, when giving evidence to the Treasury Committee on the double taxation changes, welcomed them. If hon. Members want chapter and verse for his remarks, I shall be happy to provide it.
      9 pm
      Having undertaken the consultation, the Inland Revenue and the Treasury have had a number of meetings with companies, tax advisers and representative bodies, such as the CBI. The Inland Revenue has addressed meetings that have been well attended, and a number of individual companies have discussed with the Treasury and the Inland Revenue how the double taxation relief changes will affect them. I cannot name them for reasons of confidentiality. To do so would mean identifying companies that have been using mixer companies in order to reduce their UK tax on low-taxed profits, or that have been planning to do so. The Inland Revenue and the Treasury have also received a number of letters from tax advisers and representative bodies.
      The Government have taken on board all the comments and have made the following decisions. It has always been the Government's intention to allow companies a period in which to bring dividends to the UK and to claim relief for the underlying tax under the old rules. That is why the draft legislation provides for a start date of 1 July. Several

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      companies have asked for a longer period. They have pointed out, for example, the difficulties with minority shareholders in foreign subsidiaries, or with foreign restrictions on when dividends can be paid. The Government do not want those companies to be disadvantaged compared with others that do not have the same problems. They have therefore decided that the restriction on the relief for the underlying tax should come in from 31 March 2001.
      Secondly, the schedule provides that, if a double taxation agreement expressly rules out credit relief for foreign tax, relief cannot be claimed under UK domestic law either. The amendment that we are making will ensure that provisions apply only in the case of future arrangements.
      The provision that clarifies how relief for underlying taxes is allowed when a group of companies is taxed as a single entity in another country will be amended so that it applies whenever the foreign group of companies is in the ownership chain below the UK company and not just, as the draft legislation allows, where one of the companies in the foreign group is owned directly from the UK.
      Finally, except in cases of abuse, the restriction of the amount of underlying tax for which relief may be claimed will not apply where the company that pays the dividends and the company to which it is paid are resident in the same country.
      The Government remain committed to stopping the use of mixer companies to avoid UK tax on low-taxed foreign profits. The change extends the period for paying dividends into the UK under the old rules. The CBI welcomes those changes and will say so publicly. The Government have listened and discussion will continue.
      Mr. Letwin rose—
      Dawn Primarolo: I wish to put the record straight with regard to the points made by the hon. Gentleman on consultation, cost, what has been advised on the consultation period and what we are doing with regard to the totality of the changes. When I have answered his initial questions he may intervene.
      The Opposition want to focus on one small measure, but that is part of a package of double taxation relief measures, which, in many areas, gives businesses exactly what they asked for. The relief for foreign tax has been extended when overseas companies merge, allowing foreign tax to be carried backwards and forwards for use in another year. The Government have legislated for a number of practices to improve transparency and certainty with regard to relief. Other changes undertaken by the Government—the reduction in the corporation tax rates, the extension of group rules for losses and chargeable gains, the abolition of stamp duty on intellectual property, the consultation on tax relief for the cost of purchasing goodwill, the consultation on rollover relief for gains on disposable substantial shareholdings—have all been welcomed by business.
      The accusation that the change to double taxation relief will make the United Kingdom uncompetitive does not stand up. Double taxation relief is only one consideration that companies take into account when they decide where
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      and when to set up their groups. The changes to double taxation relief need to be considered with the other elements in the package.
      Let us consider the proposals on mixer companies and the controversy that has grown around them, especially on the Opposition Benches. The Government regard it as wrong that a group that holds overseas investments through an offshore holding company—and is therefore able to mix its subsidiaries' high-taxed and low-taxed profits—should able to obtain more foreign tax credit relief than if it held its investments directly from the UK.
      The new rules will secure a fairer share of tax revenues for the United Kingdom; remove distortions in group structures, as groups will not be able to obtain more relief for foreign tax by adopting one structure rather than another; and remove distortions in investment decisions, as groups with low-taxed profits will be in the same position.
      The previous Government knew all about those distortions. They acted in 1996 to prevent specific actions.
      Mr. Letwin: Will the Paymaster General give way?
      Dawn Primarolo: I shall not give way to the hon. Gentleman until I have answered his first series of points.
      As soon as the previous Government shut the gate on artificially generated high-taxed profits, the avoidance industry was at work encouraging people to generate artificial low-taxed profits. In October 1998, in the full knowledge that the review of double taxation relief was in full flow, one adviser wrote an article in Accountancy, in which he referred to
      the eccentricities of the UK's double tax relief system, which encourages UK groups to gain tax efficiencies by using offshore intermediate holding companies.
      The writer expressed surprise that the take-up rate for such holding companies among UK multinationals was substantially less than 100 per cent. He noted that many groups earned most of their overseas income in high-tax jurisdictions. How, therefore, could a mixer system help them? The writer had the answer. He advised:
      Intermediate mixer holding companies are appropriate even for these multinationals since low-taxed income may be generated within the intermediate mixer holding company itself for blending with the high-taxed overseas dividend income received. The low-taxed income can be created through establishing a tax efficient financing operation within the mixer company, which then on-lends its funds to other group companies by way of intra-group loans.
      It is sad to say that we have evidence that some of the loudest opposition to the provision on mixer companies comes from companies that took that particular tax planning advice.
      The Government have decided that such tax-driven distortions, which generate artificial high-taxed income one year and artificial low-taxed income the next, should no longer be a feature of the system. The new rules will also level the playing field between groups that have mixers and those that do not.
      The current rules have the unintended effect of allowing other countries that maintain high tax rates to secure more tax revenues at the expense of UK taxpayers generally. They provide a subsidy from the UK to high-tax regimes.
      The change will also make the UK's controlled foreign companies rules work better. The rules are designed to prevent multinationals from avoiding UK tax by diverting

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      profits to companies in tax havens and preferential regimes. Companies are exempt from the CFC rules if they pay back at least 90 per cent. of their profits to the UK as dividends. The assumption behind the exemption is that UK tax will be paid on the dividends and so there is no need to apply the CFC rules. However, mixing means that UK tax is often not paid on the dividends.
      I cannot do better than to quote from an article published in the September 1998 edition of International Tax Review. It refers to mixer companies and says:
      It is much easier to repatriate low tax dividends to the UK than ever before and this has made something of a mockery of the CFC regime. What does it matter being forced to repatriate low tax dividends if no additional UK tax is payable on them?
      The far-sighted writer of that article was from PricewaterhouseCoopers.
      The Opposition have said that we did not consult properly, but business has known all along that mixer companies were being considered in the review. It cannot possibly have been under any illusion that that was not the case. The matter was freely discussed at meetings, as tax advisers and the Inland Revenue have said. To confirm that, in September 1998, an article in International Tax Review speculated that an outcome of the review of double taxation relief would be restrictions on the use of mixer companies. It stated:
      Those companies that are taking advantage of the famous "Dutch Mixer" are probably drinking at the last chance saloon. Legislation to seriously curtail the Dutch mixer could be on the statute books by 2000.
      Guess which company the far-sighted writer of that article came from—PricewaterhouseCoopers.
      Mixer companies were dealt with in the discussion paper that the Inland Revenue published 12 months ago. It identified all the issues that the Government have taken into account in announcing the change and noted that
      the effect of mixing is to allow a United Kingdom company to have relief for foreign tax which is paid at a rate above the United Kingdom tax rate.
      It stated that the principle of mixing
      can constitute a tax-driven distortion of the way in which groups would otherwise structure themselves for commercial reasons
      and added that mixing
      can also encourage a group which has highly taxed income to divert investment to low tax countries, and vice versa …
      As the hon. Member for West Dorset said, the paper concluded that mixer companies
      present a number of interesting and complex issues of both an economic and a technical nature. It will be important for the future to strike the right balance …
      The Government believe that the changes have achieved that balance.
      In July 1999, the Inland Revenue ran a workshop for business on double taxation relief. The hon. Gentleman sought to ridicule and undermine that consultation process, but many supportive letters on the approach that it had adopted were received. One person wrote that he would recommend the Inland Revenue to extend the approach to other areas of taxation under review. Another wrote that the workshop provided an excellent format for taxpayers to understand the Revenue viewpoint and to express their own views.
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      In 1999, the writer of an article in Tax Planning International Review said that an
      unusual feature of the review is the extent to which members of the Inland Revenue's international division have discussed it in open forum.
      Hon. Members might think that views have changed since then, but that point was repeated by a different commentator in Accountancy Age on 30 March this year—after the Budget announcement. In September 1999, the chairman of the CBI tax committee told the Treasury that the review had been extremely well organised and that the CBI had felt able to participate in a full and meaningful way. As I have said, it will welcome the changes that the Government have announced.
      I shall deal with the points about the Red Book, the calculations, whether the Revenue's figures are wrong and whether there is a dastardly plot in the Treasury. The total net yield from the double taxation relief changes is estimated at £100 million in a full year. The yield from the restriction on the use of mixer companies is estimated at £150 million to £175 million in a full year. I shall explain how the Revenue achieved that forecast; the hon. Gentleman is right that nothing is perfect, but it cannot be far off.
      The Inland Revenue identified 1,000 groups that claim relief for underlying tax. About 600 do not use mixer companies and so are unaffected by the change because they hold their subsidiaries direct from the UK or do not have low-taxed profits on which they want to avoid UK tax. Half the remaining 400 have mixer companies whose purpose is to mix high-taxed and low-taxed profits on their way into the UK.
      9.15 pm
      The Inland Revenue reworked about 200 double taxation relief claims from the companies that would most obviously be affected by the changes. Those claims involved £1.5 billion of relief from underlying tax. The Inland Revenue calculated what the effect of the changes would have been on the claims, and then applied the calculation. The Revenue has explained the methodology at meetings with business and tax advisers, and it has been agreed that that is the correct way in which to proceed.
      Mr. Letwin: Will the hon. Lady give way?
      Dawn Primarolo: No.
      Let us now consider the effect of widely varying high tax rates. We have not been allowed to see some of the calculations, or the assumptions on which they were based. We do not know where those concerned got their figures. I can, however, reveal some interesting facts relating to how much relief we already provide, which will put the amount that companies might lose into context.
      We suspect that those making the calculations are doing some double counting. Some companies may appear on the top ten client lists of more than one firm of accountants. We believe that the groups involved are deliberately adopting a worst-case scenario by assuming that they will in one fell swoop bring back to the United Kingdom all their past years' low-taxed profits, when they would never have done so in other circumstances. That is totally unrealistic. We also believe that they assume that the companies will bring back to the UK the entirety of

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      their offshore profits every year. That is another improbable scenario, as was pointed out in an article in The Economist as long ago as 1 April.
      It also appears that some companies are including in their projections tax that they would have expected to save as a result of schemes into which they had planned to enter, but which have not yet been established. We have seen examples of that over the last few weeks, and it confirms that the Government are right to act now.
      Some people's forecasts of the extra tax that companies will pay fail the most basic credibility tests. About £4 billion of relief for underlying tax is allowed each year. The figures in some estimates are reaching the truly absurd. I am not sure whether this has been repeated, but an estimate of between £8 billion and £10 billion has been attributed to PricewaterhouseCoopers, although it denied that quickly when challenged. The restriction on the use of mixer companies would take away more double taxation relief than is allowed in the first place, which is nonsense.
      PricewaterhouseCoopers claims to have identified 20 companies which, between them, will lose £2 billion a year as a result of the changes relating to controlled foreign companies and double taxation relief combined. As usual, we have not been told which companies are involved, or what assumptions were made in the calculations. Suffice it to say that the list alleges that five of the companies will lose £300 million each. That is remarkable given that, according to the latest figures available to the Inland Revenue, only two companies in the country—which may not even be clients of PricewaterhouseCoopers, and on its list—receive more than £300 million of double taxation relief in the first place. Alleging which will be the biggest losers and how much will be lost by referring to 20 companies when we know of only two that are receiving the relief puts the figures into perspective.
      Mr. Edward Davey: Will the hon. Lady give way?
      Dawn Primarolo: No, because I think it important for the figures to be put into perspective, so that hon. Members cannot distort the debate.
      On Second Reading, the hon. Member for Arundel and South Downs (Mr. Flight) said that the mean of the forecasts of all the leading accounting firms was that the change relating to mixer companies would raise at least £3 billion. I am not sure whether the hon. Member for West Dorset repeated that figure today, but it, too, defies belief. It is fanciful to say that the change can take away three quarters of the relief for underlying tax that is currently allowed each year.
      The fact is that the figures that have been quoted have not been substantiated. No methodology has been advanced. The figures that we have for companies claiming relief do not match those figures; a simple, straightforward attack is being made on the Inland Revenue and the Treasury.
      The clause makes it clear that the Government have an active policy of encouraging competitiveness, of ensuring fair relations in our tax system and, moreover, of ensuring that companies, national or multinational, are free to take decisions about their structures according to commercial
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      viability, and not tax. For those reasons, clause 102 is the right place to make the changes and this is the right Bill for them to be in. Hon. Gentlemen simply have not got their facts right.
      Mr. Edward Davey: That was one of the most defensive speeches that I have heard from a Treasury Minister. The Government realise that they are on the ropes on the issue. The U-turn that they have published tonight in the embargoed press release, from which the hon. Member for West Dorset (Mr. Letwin) read earlier, is only the first of the U-turns that I think they will be forced to make when they look at the damaging effects that the provision will have on British industry. If hon. Members sitting behind the Treasury Bench were taken in by the Paymaster General's arguments, let me throw some of those arguments back at her.
      For example, the Paymaster General said that Mr. Troup, the adviser to the previous Chancellor of the Exchequer, told the Treasury Select Committee that the proposals were sensible, but she quoted selectively from his evidence. As a member of the Select Committee, I was there. I do not recollect that he was as supportive of the Government's position as she tried to make out. He said:
      As far as the policy is concerned, there clearly was a mischief in what were called "mixer companies", which allowed companies with tax bills overseas effectively to buy in low-taxed income to shelter their profits,
      but he went on to say:
      Whether it is the right way of doing it I think is more questionable. I think that this can be characterised as a sledgehammer.
      He went on:
      The change in the behaviour is likely to be a reduced remittance of dividends to the UK—
      exactly the point that the hon. Member for West Dorset made. Mr. Troup concluded his remarks by saying:
      I am concerned as to the effects on investment decisions and on location decisions and I am concerned about the way this policy has been brought through.
      The Paymaster General tried to quote Mr. Troup in support of her arguments. If she had quoted from him extensively, she would have shown that he was against the policy that the Government have been advocating tonight.
      Mr. Letwin rose—
      Mr. Davey: I give way because I believe that this is a debate.
      Mr. Letwin: In contradistinction to the Paymaster General, the hon. Gentleman has no reason to fear giving way. Does he agree that it is not remarkable that she misquoted Mr. Troup, because she misquoted her own Inland Revenue consultation document?
      Mr. Davey: The hon. Gentleman is exactly right. There were many mistakes in what the Paymaster General said. We will look at Hansard, just as he looked at the Second Reading debate. Later, we will use her arguments against her and prove many of them to be totally fallacious. Again, the example that she gave with respect to the amounts of money that could be taken out of British

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      industry seemed to be deliberately misleading, or perhaps I should say unintentionally misleading, Sir Alan, to keep within your constraints.
      Mr. Beard: Will the hon. Gentleman give way?
      Mr. Davey: I will when I have made the point, if the hon. Gentleman will bear with me.
      The Paymaster General suggested that only two companies currently get the relief at an amount above £300 million per annum, but presumably she was using past data—data on tax returns for 1989–1999. Presumably, tax accountants are not using past data. They are examining the current tax year and future tax years, understanding their clients' business. That is why there are likely to be different estimates and, indeed, why those accountants cannot share that information with the Government; that would break the confidences of their clients. The Government must decide whether they will work with industry, consult properly and trust industry—which, they claim, they are trying to work with elsewhere—to build the economy, or whether they are trying to punish it.
      Mr. Beard: My right hon. Friend the Paymaster General has dealt with that point in detail. She said that the Inland Revenue undertook an exercise involving all companies to which the legislation would apply and that it had worked through half of those 400 companies to try to work out the implications of the legislation. That is the source of the figures that my right hon. Friend gave, which are orders of magnitude lower than those that have been quoted elsewhere. The Government have used a perfectly respectable method of approach to the problem. We have heard nothing of anybody else's approach and no reason why that approach should be objected to.
      Mr. Davey: I am afraid that the hon. Gentleman was not listening to the Paymaster General as carefully as others of us were. I understand that she was talking about historic data, not the projected data which are being quoted in the newspapers.
      Mr. Letwin: I am grateful to the hon. Gentleman for giving way. He may have noticed that at that juncture—one of many—I tried to intervene on the Paymaster General in order to ask her whether, at the meetings to which she referred, it was the case, as I have heard from people who were present, that it was pointed out to the Inland Revenue and the Treasury that the base year that they were using was exceptional and hence misleading. Does the hon. Gentleman agree that it would be useful if the Paymaster General answered that question? Was that pointed out to them?
      Mr. Davey: It would indeed be useful if the Paymaster General answered that question, but I fear that she will not, and that is a problem. It was very noticeable and should be on the record that the Paymaster General refused to take interventions from the hon. Member for West Dorset and myself, thereby reducing the quality of the debate and the ability of the House to get to the truth. If a Treasury Minister is not prepared to take detailed interventions on a matter of this importance, the House is
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      in a truly awful position. We need proper debate so that we can get to the truth. The Minister ought to be able to take cross-questioning.
      Mr. Beard: I thank the hon. Gentleman for giving way to me again. He has not said what criticism he has of the methodology that my right hon. Friend the Paymaster General has set out. We have heard only the vague comment that the Government picked the wrong starting date [Interruption.] The hon. Member for West Dorset (Mr. Letwin) is shouting from a sedentary position, but the sources that he quoted espoused figures ranging between £200 million and £8 billion. On what grounds does the hon. Member for Kingston and Surbiton (Mr. Davey) object to the methodology that my right hon. Friend has quoted as the basis of the Treasury estimates?
      Mr. Davey: We have touched on that. I am glad that the hon. Gentleman intervened for a second time to enable me to make the point yet again. Taking one exceptional year is not the best way of making the calculation. If the Government want to make the calculation properly, they should take several years and use averages and work with accountancy firms and the firms concerned to produce a more accurate figure—[Interruption.] Rather than shouting from a sedentary position, the hon. Member for Bexleyheath and Crayford (Mr. Beard) should let me finish.
      The Liberal Democrats are arguing that the Government should halt the progress of the legislation and engage in proper and full consultation with business to produce the exact and accurate calculations that the hon. Gentleman seems to want the Government to carry out. It appears from the way in which the debate is proceeding tonight that those figures have not been properly produced, and we need them. British industry needs them so that it is not penalised by the legislation.
      Mr. Beard: Will the hon. Gentleman give way?
      Mr. Davey: No. I have already given way to the hon. Gentleman twice, which is more than the Paymaster General did.
      We need to look at the wider implications of the measure. British and multinational companies are increasingly concerned about the way in which the Government go about tax legislation and consultation on potential tax changes. It is a serious matter. If we are to attract investment into the country, whether it is from companies operating in Britain or from Britain, we need to ensure that those companies can feel confident that they will be operating under a relatively stable and predictable tax regime, not one that will suddenly change without due consultation or proper analysis.
      Presumably, the objectives of achieving stability and ensuring proper analysis lay behind the code of consultation itself. That is why the code of consultation offers a very sensible way of improving our tax system. The problem—as the hon. Member for West Dorset so eloquently explained to the Committee—is that the Government have not abided by their own code.
      9.30 pm
      Mr. Letwin: The hon. Gentleman is making a serious point which I perhaps omitted to stress sufficiently. Does he agree that, even if the Government were to return with

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      the same damaging measure after a proper re-consultation of the type that he and I advocate, such action would at least do something to restore multinational corporations' now very damaged confidence in the Government and, much more importantly, in the United Kingdom?
      Mr. Davey: The hon. Gentleman is right—it would restore at least some confidence. I think, however, that that confidence has been quite badly shattered already, and that the damage has been caused after the introduction of other damaging measures, such as abolition of advance corporation tax, which I wanted to debate earlier. The Government's actions are beginning to suggest that there is something old Labour about the Administration. I was talking to one business man who described clause 102 as being akin to something that the hon. Member for Brent, East (Mr. Livingstone) might have wished to introduce. The measure is a deliberate attempt to target and attack multinational corporations.
      The hon. Member for West Dorset did the Committee a great service in his excellent speech, which was a tour de force on a rather complicated matter. He dealt with the matter with far greater precision than I feel that I am able to apply to it. However, although he analysed the possible motives behind the measure, he may have missed out one motive, which is that the measure is simply a knee-jerk reaction and ideological attack on a part of British industry. That would be particularly worrying. Nevertheless, the Government say that they want to talk to business and to understand business. The Labour party even says that it wants to be the party of business.
      I think that, if they have not already done so, the businesses that will be affected by the measure should contact No. 10 Downing street. I do not believe that the Prime Minister is particularly happy with this type of measure. As the architect of new Labour, he should be concerned that such measures will undermine everything that he has been attempting to do with the Labour party.
      Mr. Oliver Heald: He should be told.
      Mr. Davey: This is a very serious point. I hope that the Paymaster General will tell the Committee whether she has had proper and full discussions with the Prime Minister about the implications of clause 102 and schedule 30 for British industry, and perhaps for the relationship that British industry will in future have with the Labour party. British industry—composed of small, medium and large businesses—is increasingly fed up with the way in which the Government are going about their business. British industry has grave concerns.
      Ministers have to realise that capital is increasingly mobile, and that—despite the potential capital gains liabilities that the types of firm hit by the measure may have in one particular year—those firms will realise that, in the long run, it is cheaper to move abroad. Worse, the measure will alter the investment decisions made by those firms on all their portfolio. The measure really is profoundly affecting the way in which both British and multinational businesses are going about their work.
      I urge Ministers not simply to rush out a press release that looks as if it has been cobbled together not after a full consultation but after a rather short consultation,
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      saying that they will delay implementation of the measure, perhaps thereby helping a few firms. I hope that the Government will go much further and say that they will fully re-consult British industry, think again, and return to the House with other measures that will tighten up on abuse—if there is abuse; I do not think that the Paymaster General has very effectively made the case that there is—but not threaten the underlying health of many of the United Kingdom's greatest companies.
      Mr. Beard: I think that the quality of debate from Opposition Members tonight has been as low as I have ever heard it. That is well evidenced by the call for greater consultation on the basis of nothing more than tittle-tattle in back rooms which does not stand up against the analysis given by my hon. Friend the Paymaster General.
      Mr. Letwin: I am sorry to interrupt the hon. Gentleman so early in his speech, and it is gracious of him to give way at this point. However, I do so because he referred to tittle-tattle. Does he think that the commentary from the CBI, the Institute of Directors, the Chartered Institute of Taxation and six of the major world accountancy firms counts as tittle-tattle?
      Mr. Beard: We have already heard from my hon. Friend the Paymaster General the extent of the consultation that has taken place, including that with the CBI. The arguments put earlier by the hon. Member for West Dorset (Mr. Letwin), particularly those about the financial impact on these companies, were little more than tittle-tattle. He has not produced one scintilla of evidence in the whole debate to justify any of the excessive numbers that he mentioned. The nearest he came to a fact was to say that the starting date for my hon. Friend's analysis was not the one that he would have chosen.
      Mr. Jack: Could the hon. Gentleman assist my memory by citing either the document or the paragraph in a document in which the clause was the subject of detailed scrutiny and consultation?
      Mr. Beard: The document in which that appears is the Finance Bill, and it is also in the explanatory notes. There has been wide consultation. As my hon. Friend said, nobody who had considered the Inland Revenue document on double taxation relief for companies and other documents over a period of 18 months could have been unaware that such an issue would arise. My hon. Friend has outlined the discussions that have taken place in recent weeks and months.
      When Mr. Troup gave evidence to the Select Committee on the Treasury, he said that he believed that there was mischief involved in mixer companies, yet he has been quoted as though he were antagonistic towards the Government's proposals.
      Mr. Quentin Davies: Did the hon. Gentleman pay attention to the speech of the Paymaster General, whom he is now so gallantly trying to defend? If he did, he would have noticed that she cited a whole range of documents, newspapers, tax experts and some Inland Revenue documents, but not a single Government document that referred to the possibility of abolishing mixing relief.
      Mr. Beard: My hon. Friend was at that point quoting the people who had been consulted, and their responses.

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      She was therefore not likely to quote a Government document that outlined what had already been said. [Interruption.] The hon. Member for West Dorset has spent most of the evening convulsed with amusement. I cannot see that the joke is other than on him for having made such a to-do about something, when the nearest he has come to any serious purpose has been to talk Britain down. That seems to be the hallmark of those on the Opposition Front Bench. The hon. Gentleman spoke with some satisfaction about the number of companies that will be transferring their headquarters from Britain. He seemed to delight in talking Britain down. Earlier, he regaled the Committee with his own qualifications. If those qualifications are to be used to prop up his arguments, perhaps he should use those arguments to a more constructive end than trying to destroy a policy that is in the country's interests.
      The other allegation that the hon. Gentleman made was that the purpose of the measure was uncertain. As has been said, one purpose is to secure a fairer share of tax revenues for the United Kingdom, by more effectively limiting the relief available for foreign tax paid. There is no doubt that countries that maintain higher rates of tax revenue do so under the mixer arrangement at the expense of United Kingdom taxpayers. It is a strange party that, in the European debate, talks of sovereignty and of foreigners taking our sweets off us, but is willing to tolerate such a position on tax being refunded to the UK.
      Mr. Letwin rose—
      Mr. Beard: I will give way in a moment, but I wish to continue with my list.
      The pretence was that there was no purpose in the provision and that it was there merely to damage the United Kingdom, or almost; it was the red saboteurs—the parliamentary equivalent of the ones outside. That was the level of the speech, and it needs knocking.
      Another argument, which must be taken seriously, is that the present arrangements cause a distortion in group structures. Many companies are induced to have these pseudo-subsidiaries—the mixer companies—when they do not need them for any management purpose. There is no reason in logic, business or taxation why we should give preference to that sort of grouping, arriving at one sort of arithmetic, compared with the direct refunding of profits under the system that is proposed.
      Those distortions carry through to the investment decisions that British companies are taking. The tax system ought to be neutral in that respect. It ought not to be perverting investment decisions so that they go one way rather than the other, but that is one of the impacts of the present arrangements that my hon. Friend the Paymaster General discussed.
      Mr. Letwin: Does the hon. Gentleman agree that it would be of some advantage to the United Kingdom if it had a regime that was sufficiently competitive to enable some multinationals to be headquartered here so that they paid some tax here? Does he recognise that I was maintaining a certain level of humour because had I not done so, I might have expressed the anger that some of us feel about a measure that, because it is so misguidedly
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      trying to raise revenue, will have a lasting negative effect on the UK economy, which neither this Government nor their successors will be able to remedy for decades.
      Mr. Beard: The position that I detect from the hon. Gentleman's theme is similar to the one he adopted when he dealt with the previous theme—indeed, it resounds through the Opposition. It is to be on the side of anyone who is relieving businesses and other people of tax. In this case, we are seeing a last-ditch stand to defend a Government of 20 years who were lax on the tax system against a Government who have come in and are trying to put it right. The indignation of the hon. Gentleman and many of those who are complicit in the exaggeration of the impact of these measures is well summed up in, I think, George Bernard Shaw's aphorism that there is nothing more indignant than a vested interest masquerading as a moral principle.
      Mr. Dorrell: I begin by declaring an interest as a director and shareholder of a company that operates with foreign subsidiaries, some of them held through intermediate holding companies. I have some personal involvement in this issue.
      I congratulate my hon. Friend the Member for West Dorset (Mr. Letwin) on a skilful presentation of the case. The issue is important because of its possible impact on tax revenues. It is much more important because of the disincentive that it introduces into our tax system for large multinational companies to locate their head office functions and, importantly, intermediate head office functions on UK soil. So, for all the reasons advanced by my hon. Friend, I hope that the Government will withdraw this proposal, reconsider how to set about the taxation of foreign dividend flows into the UK and undertake a proper consultation on whatever proposals for legislation they then introduce.
      9.45 pm
      We all know that some anti-avoidance legislation needs to be introduced without consultation so that its effect is not nullified by people acting in advance of the effective date of the new law. However, the Government realise that this proposal is not one such. Today, they announced that the effective date of the new law is to be delayed until March next year, so there is no need to proceed without proper consultation on the proposal.
      It is crystal clear that there has not been sufficient consultation on the precise implications of the Government's proposal. Given everything that has been said, it is incumbent on the Government to reconsider the matter. They should then hold proper consultations on their precise proposals for legislation. I hope that that is the lesson the Government will draw not only from this debate but from the wide public discussion of this badly thought out proposal.
      Mr. Letwin: My right hon. Friend speaks with the authority of a former Financial Secretary to the Treasury. Does he agree that if there is an abuse such as that which has been identified on transfer pricing or cross-lending from low-tax subsidiaries, the appropriate method for dealing with it would be the onshore pooling that was the

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      subject of the consultation paper? There is a means to deal with any feared avoidance of that type; the Treasury could go back to that.
      Mr. Dorrell: I agree with my hon. Friend. Given the choice between the offshore mixers that have developed and onshore pooling, I should have a strong preference for the latter. One reason for that is because the one point made by the Paymaster General with which I agreed was that the combination of the controlled foreign companies legislation and offshore mixers is a genuine abuse. The Government are on strong ground if they want to address that aspect of the problem. However, their difficulty is that in dealing with that genuine abuse, they have created a much bigger problem than the one they set out to solve.
      It is important for the Committee briefly to remind itself that, in an increasingly globalised economy, not only huge multinational companies but a broad range of British companies have foreign operations in various parts of the world, trading under tax regimes whose rates are different from those in the UK. The question the Committee must address is whether British-based companies which earn profits in other parts of Europe or the world—including the developing world—and pay tax in those countries at rates determined by their national Governments, should, if the management choose to bring the after-tax profits back to the UK as dividends, pay an extra tax yield to the UK Exchequer.
      Some countries—Holland is a major one—make no claim whatever to tax dividends from earnings that are fully taxed in overseas territories. In a globalised economy, a strong case can be made that, if revenues have been taxed overseas, the repatriation of those revenues to the host country as dividends should lead to no further taxation obligation. That is the Dutch position.
      The traditional UK position has been that we claim to tax those flows, but we make that claim only if the average rate of tax paid overseas is lower than that paid in the UK. That has been the effect of the mixer company.
      What the Government have now moved to—uniquely among 67 countries, as my hon. Friend the Member for West Dorset rightly said—is the proposition not that we should allow that averaging process to take place through mixer companies, but that any British-owned company that earns revenue anywhere in the world, pays tax to the appropriate national Government at the rate that that Government deem sufficient and then repatriates the revenue to the UK ought to pay a marginal tax rate to the UK Exchequer if the tax paid where the profit is earned is lower than that set by the UK Government. I do not believe that that is correct as a matter of principle, but if the Government insist on legislating for such an arrangement it will be hugely damaging to the UK's role as a command control tower for international companies operating in different parts of the world.
      There has been a long discussion in the newspapers—we have heard more of it this evening—about whether the tax yield will be £175 million, as the Paymaster General said, or £3 billion, as PricewaterhouseCoopers has suggested. I draw two conclusions from that argument. First, as the hon. Member for Kingston and Surbiton (Mr. Davey) said, it underlines the case for a proper consultation. It is absurd that we can be discussing the
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      introduction of a new tax law when we, the people's representatives, do not know whether the effect will be to bring in £175 million or £3 billion.
      To be honest, the second conclusion reinforces the Government's position rather than some of the things that my hon. Friend the Member for West Dorset said. I simply ask myself what course of action the management of a company are likely to take when faced with a choice between bringing earnings from the place where they were earned back to the UK, and therefore paying a substantial tax bill to the UK Exchequer, and taking those earnings to an intermediate holding company in some other country where they will not have to pay tax. It seems overwhelmingly likely that unless the revenue is essential for paying further dividends to UK shareholders, companies will choose to take the revenues to overseas holding companies. That will not produce a huge tax revenue to the UK.
      Mr. Letwin: My right hon. Friend is advancing a serious argument that may be absolutely right for many companies. Does he agree that in respect of those about which, as an economy, we may be most concerned—market leaders quoted in the UK—the necessity to have dividend remittances here may be so great that they will none the less ante up?
      Mr. Dorrell: My hon. Friend is right to suggest that some companies will have no choice. The principal reason for that will be to pay dividends to UK shareholders. It is entirely possible that many UK shareholders, when faced with the choice between the company paying a substantial tax bill to pay the dividend to them and the company using the money for a different purpose, subject to a lower tax rate somewhere else, will be receptive to the argument that the money be paid to a holding company.
      I want to develop the argument a stage further. The likely result in the majority of cases will be that money will not come here and be subject to tax, but will be taken overseas into intermediate holding companies. People may say, "So there we are. That is the end of the story. No one is any the poorer." That is not how it is. If companies start to develop overseas holding companies to which they pay dividends, they will need to manage those dividend flows in those countries, and the holding company function that ought in British interests to be located and developed in Britain will be developed and built in other countries that have more benign treatment of foreign dividend flows.
      This Government are developing a policy that is the precise opposite of the intelligent tax policy that would be proposed by a Government who want to be competitive in attracting investment and high-value management functions into the UK, so that the UK becomes a holding company centre and plays a leading part in a developing market economy. They are creating a tax policy that will encourage the growth offshore of high-value management functions. It will relegate the UK to the margin so that it will simply be a responding economy to an overseas holding company function.
      That prospect will be hugely damaging in the long run. I do not pretend that it will produce dramatic, overnight damage to UK interests, but it is an important step in precisely the wrong direction. I very much hope that the Government will listen to the force of the argument that

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      has been made against the proposal, take the proposal away, and reconsider and consult on it properly this time before they bring it back for legislation.
      Mr. Jack: I am delighted to support my right hon. Friend the Member for Charnwood (Mr. Dorrell) and others who have spoken in the debate. One of the things that worried me about the Paymaster General's line of analysis was a somewhat scatter-gun passage in her defence of the proposal. She seemed to say that, because the Government had done everything that they had been asked to do on a whole range of domestic corporation tax and company tax issues, that made the proposal in the clause in some way okay.
      If we follow that argument, we reach the first line of weakness in the Government's substantiation of the proposal. In the justification of the Government's position on the clause, we have not been offered any overall economic impact analysis. They justify their position through an argument in which the tax tail appears to be wagging a big dog—and the tax tail is of uncertain size. We are told that the Inland Revenue has analysed 200 companies, but we have not been given for public view an anonymised report on that, so how do we know whether the Government's argument is realistic?
      During my time in the Treasury, some of the numbers that I was given about policy effects were questionable. Therefore, they were re-analysed and sometimes one agreed with them and sometimes one did not. However, one learned that there was an element of uncertainty in the forecasting process. I shall not indulge in saying which forecast is right or wrong, but I will say that an argument that comes from an uncertain sample of companies with no overall economic impact study is a dangerous point from which to start in, as my right hon. Friend rightly said, a world of highly competitive global capital flows.
      I sat down with a company that was exercised by the proposal, but I shall retain its anonymity because it shared with me confidences about its proposed retail expansion plans in mainland Europe. It explained to me how its investment proposals operate under the present arrangements and how they would be impacted upon by a measure that will end the mixing arrangements. It pointed out that a flow of initiating capital went from the United Kingdom to the foreign subsidiary company and was then deployed to develop profitable investments in different parts of Europe.
      Why did the company do that? It had its responsibilities to shareholders, but it was equally aware of the activities of its competitors in the same sector who deployed competitive measures not only in mainland Europe, but with the potential to develop them in the UK. To put it at its crudest, it was hand-to-hand fighting to develop competitive investment in Europe. The company deployed the mixing arrangement to ensure that it remained in parity with its European competitors in terms of the taxation on its dividend and interest flows, given the circular situation in Europe.
      10 pm
      We are talking not about some grand world tax jamboree but of a model of a United Kingdom-based company which was seeking to develop profitable investment in Europe to maintain its competitive position against its European competitors.
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      In the Paymaster General's analysis, she talked about the right or correct level of tax, as if a new equity concept, which I do not recognise, were being created. If the company to which I have referred is not able to be tax competitive with its competition, that will affect its overall viability, and potentially its overall tax condition. I see that the Paymaster General is starting to look somewhat bored. I listened with great care to what she had to say to justify her defence of the Government's position. I hope that she will be able, either tonight or in subsequent discussions in Standing Committee, to respond to these points.
      I am not talking about a gigantic multinational company. It is an international company that is seeking to trade competitively. Clearly, the Government's proposals will undermine its position. I accept that my example is perhaps one of many, but it comes from the real world and so far we have heard nothing from the Treasury Bench about how that world operates.
      I was glad that the Paymaster General was able to announce that the starting of the process would be delayed. The company that I have talked about and other organisations that have made representations to me, including the Chartered Institute of Taxation, agree that a delay is required. In praying in aid her position, the hon. Lady said that there had been a successful Inland Revenue-run workshop, in which many double taxation arguments had been discussed. I issue her a simple challenge. Is she prepared to authorise the Inland Revenue to arrange another workshop in the intervening period, so that the protagonists can have an open discussion with the Inland Revenue and the Treasury to explore the economic, practical and real-world impacts? [Interruption.] If I heard the hon. Lady correctly, she said from a sedentary position that she refuses to do that.
      Dawn Primarolo indicated dissent.
      Mr. Jack: I am delighted that the hon. Lady's body language is rather more positive than the words that I half overheard.
      If the hon. Lady is truly confident of her position and she believes that no damage will be done to the competitive position of British companies, which are merely seeking tax parity with European investment and competitive positions, she should have no hesitation in inviting companies to a workshop to explore the Government's proposal.
      The Government have a big majority and they know that, if they want to, they can have their way. That worries me. However, a big majority and a head-down and blinkers-on attitude towards tax do not make for good tax law. I should know because in certain instances when I was a Treasury Minister we wrote some bad tax law.
      Mr. Giles Radice: No!
      Mr. Jack: This may be the opportunity to respond to the brayings of the right hon. Gentleman. I admit that when we were having to do things in a rush, some things went wrong. We had to put them right. We now have an opportunity to stop wrong things being done by providing for a little more open consultation and discussion so that we can verify the economic impact of the Government's proposals on the United Kingdom, and put aside for one

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      moment the difficult debate on the moneys that may be raised from the revenue derived from the provisions in clause 102.
      Mr. Letwin: I thoroughly agree that making an economic impact assessment is much more important than the mere question of the fiscal effects, as my right hon. Friend the Member for Charnwood (Mr. Dorrell) mentioned. However, does my right hon. Friend accept that it is essential to talk to major companies deciding whether to site their intermediate or ultimate company headquarters here or elsewhere to discover how that would affect their choice?
      Mr. Jack: My hon. Friend makes a useful and powerful point that supports the remarks of my right hon. Friend the Member for Charnwood. In all sincerity, I ask the Government to consider the assessment, which is a simple and practical way of resolving a complex matter. I, for one, do not want large numbers of companies, whether small, medium, large or multinational to be significantly disadvantaged in the competitive world of international taxation as a result of the Paymaster General pursuing a concept of correct or right taxation to the exclusion of its competitive impact on British companies.
      Mr. Quentin Davies: I remind the Committee of my interests as declared in the Register. As far as I am aware—although I have been almost deliberate in not finding out—the firms with which I am associated are not directly at risk from the Government's proposals.
      I congratulate my hon. Friend the Member for West Dorset (Mr. Letwin), the shadow Financial Secretary, on a brilliant forensic devastation of the Government's case, which was suffused with Ciceronian irony. I am sorry that the hon. Member for Bexleyheath and Crayford (Mr. Beard) failed to grasp that, but the rest of us enjoyed it enormously—with the possible exception of the Paymaster General, who was the target of his devastating analysis.
      My hon. Friend made a case against the Government on three counts. The first is far and away the most important. The significance of it goes way beyond the issues that we are discussing this evening and the matter of tax law. My hon. Friend brought forth documentary proof, no less, of a matter that several of us have been raising for a long period—since the election. The Government are profoundly indifferent to Parliament and systematically treat it in a disdainful and frivolous fashion, documentary evidence of which can now be seen in the press release, apparently embargoed until 10 o'clock, in which the Government announce a series of changes—including some totally inadequate concessions—on the matter under discussion.
      That demonstrates a double contempt of Parliament. First, the press release makes it clear that the Government are not interested in what Parliament has to say on the matter. They had decided the matter and were going to make an announcement this evening, making plain that that announcement could not be influenced by what might be said in our debate. One cannot get much more contemptuous than that.
      Secondly, the Government clearly took it for granted that their proposals would be endorsed by the vote in Committee. That is as much—indeed, even more—of an
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      insult to Government Members and their docility as it is to the sovereignty of Parliament. We have seen many signs of the Labour Government's insidious attitude towards Parliament and the fundamental responsibility of the Executive branch to be accountable to Parliament. We have not seen before the sort of dramatic documentary evidence that my hon. Friend introduced in Committee this evening, for which we should all be grateful.
      Against that background, it is not surprising that my hon. Friend exposed, quite incontrovertibly, the Government's mockery of the consultation process. The Inland Revenue has clear rules for consultation and, apparently, a consultation process on the issue of double taxation relief and corporate taxation was launched. However, at no stage during the course of that proceeding did the Government reveal what they actually proposed to do. Therefore, a mockery of a consultation exercise was held in which all sorts of proposals were discussed except those that the Government intended to introduce in the Finance Bill. That was no consultation at all. The Government underestimate the intelligence of Members of Parliament and the public if they think that they can get away with that.
      Mr. Letwin: Does my hon. Friend agree that there is an even more remarkable aspect to the consultation? The final date for responses to the consultation process was, if memory does not deceive, September last year, and the measure was introduced in March this year. Therefore, even if, in the interim, the Government had changed their mind, there were some months in which the consultation exercise could have been repeated, on a new basis.
      Mr. Davies: The Government are clearly guilty as charged on this most serious allegation.
      The Paymaster General more or less accepted the charge against her when, in her speech this evening, she quoted various speculative press articles that apparently had succeeded in foreshadowing some of the measures the Government intended to present to the House. In no circumstances can a speculative press article be a substitute for consultation. If the Government of this country are in the process of consulting the public on a specific legislative proposal and it so happens, coincidentally, that The Sun, The Mirror or some other publication carries an article about a possible course of action that the Government might adopt, it cannot be argued retrospectively that that speculative article formed part of the consultation process and that those who were engaged in the process were supposed to respond to the speculative press article during their discussions with the officials who took part in the charade.
      Mr. Letwin: My hon. Friend reminds me of a point on which I attempted to intervene on the Paymaster General, although, with her customary graciousness, she failed to give way. Does he agree that it was pretty remarkable that, when the hon. Lady quoted one source as having congratulated the Government on their measures after—as she said and as I believe the record will show—the Budget was introduced, she referred to an article published in one of the journals on 30 March? Does he

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      agree that it is pretty unlikely that someone could get published on 30 March an article that was written after a Budget that was itself produced after 20 March?
      Mr. Davies: My hon. Friend's case is made. During our exchange, there has been complete silence on the Government Benches, and the Paymaster General herself has attempted to hide her embarrassment by sinking her head into her brief.
      Our case is a serious one whose importance far exceeds that of any decision that we are likely to take tonight about the taxation of corporations in this country. This evening, we have seen revealed, in all its hideous ugliness, the naked arrogance of Executive power. A low point has been achieved under the Government and the situation gets worse every day, but this evening we have witnessed the most dramatic demonstration yet.
      Let me now turn to the substance of the tax proposals before the Committee. One has to start by recognising that there is an apparent anomaly and unfairness in the system of double taxation relief in that, under double taxation agreements, residents of this country are given relief for foreign tax that they have already paid in countries with which we have such an agreement, provided that the rate of tax paid is equal to, or less than, the prevailing rate of tax at which they are assessed in this country, but if they are taxed abroad at a rate of corporation tax that is higher than the rate in this country, they receive no relief for that excess. One might think that that is not even-handed. However, if, under double taxation arrangements, a country were to relieve completely any tax paid under a foreign jurisdiction, it would not only lose revenue, but would be subsidising foreign countries that chose to establish higher rates of withholding or corporation tax, and that would be a perverse thing to do.
      10.15 pm
      I now come to a technical error that the Paymaster General made in her speech, which pales into insignificance when compared with the constitutional errors that I am afraid she and her Government have perpetrated tonight, but is important. She told the Committee that a system of offshore mixing to secure an average rate of taxation on which relief would be available in this country would itself induce, or provide a subsidy for, foreign countries to tax at higher rates. That is not true. She was confusing a situation in which we relieve all foreign tax with a system of pooling or of mixing, when the tax rates are averaged out.
      A British company that establishes an offshore mixing company clearly has an incentive to ensure that the average rate of tax that is incurred is as low as possible. Therefore, it has an interest in resisting investment in countries where the rate of tax is higher. So it is not true that, in an offshore mixing company, the present system—the status quo—creates an incentive or subsidy for foreign countries that tax more highly than we do. I hope that the Paymaster General will think through what she has said because that error may have led her seriously astray in drafting the proposals before us.
      Mr. Letwin: Does my hon. Friend agree that it is extraordinary that the Minister who made those remarks
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      chairs a committee on so-called harmful tax competition, in which she effectively takes exactly the opposite position—that tax competition is helpful and not harmful?
      Mr. Davies: I hope that my hon. Friend is right to say that the Paymaster General views tax competition as helpful and not harmful, because it is essential that, in the European Union or, indeed, generally in the world, we retain some competitive pressure on Governments to hold back their inclination to tax and to spend as much as possible. Tax competition seems to be an extremely benign force. I hope that he is right to say that the hon. Lady is fully persuaded of its importance.
      I do not want to sit down without having dwelt on the most important flaw and error in the Government's thinking on the matter. It is a rather naive error to discount entirely the behavioural consequences of such a major change. It does not make the slightest sense to anybody who has had the remotest experience of business life to suppose that one can change anywhere in the world the rules under which multinational companies are taxed without any consequence for their structure or organisation. There will of course be behavioural consequences.
      It is not possible for someone who is paid to run the tax department of a major multinational to receive the news that there has been such a significant change and not to recommend to his board any consequent changes in the structure or operation of that company. It is not possible for any director of that company who is doing a proper job for which he or she is paid not to respond to such a recommendation and not to do what rationally is in the interests of the company in the light of the changed circumstances.
      It is possible to distinguish between the possibilities that will be open to companies now that the opportunities of running an offshore mixing vehicle are about to be abolished. One would be not to repatriate dividends in order to pay a dividend from a UK company to UK shareholders when necessary, but to borrow instead. That of course implies extremely inefficient cash management and costs that any responsible company would be reluctant to incur. It implies a change in the gearing of that company, which would be resisted by professional managers in any company that is properly managed.
      It is fairly unlikely that that course will be adopted. Companies will find ways of not repatriating the dividends at all. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, the natural inclination will be to keep those profits offshore and use them to fund other investments. That means that the total dividend flow into the UK will be less than it otherwise would be. I draw the Government's attention to the fact that we have a current account deficit, which is growing. It will grow further if dividends are not repatriated to this country.
      Then there are the second-line effects to which my right hon. Friend the Member for Charnwood referred. Companies are accumulating more cash abroad and are making investments abroad. They will increasingly be drawn into setting up administrative structures abroad and perhaps incurring costs abroad, by switching research and development abroad or some other cost that can relatively easily be transferred. That will result in the loss of employment—possibly valuable employment—and the loss of high-value added activities to this country. That is not a good day's work for any Government.

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      Finally, what concerns me about the proposal is the opportunity costs. I have not heard that term used once this evening. It seems that the Government have not even considered the opportunity costs. I assume that, if the hon. Lady had asked the Revenue to do a study of them, we would have heard about that this evening in her long apologia. I assume that no one has examined opportunity costs, which are the essence of the matter.
      We are speaking about future decisions about the location of investment, the location of headquarters, and the right locus for the incorporation of companies. The debate is being conducted at a time of unprecedented international merger and acquisition activity. As we know, particularly within the single market but not limited to the single market, there have been an enormous number of major mergers between multinational companies. Some have been mentioned this evening. My hon. Friend the Member for West Dorset rightly drew attention to Vodafone Mannesmann, which is the biggest involving this country, and there have also been British Steel and Hoogovens, now called Corns; AstraZeneca; and SmithKline Beecham and Glaxo. In a few weeks, there may be Lafarge and Blue Circle.
      There is a list of such enormously momentous acquisitions or mergers in progress. On every such occasion, the decision will have to be taken by the two parties where to locate the new operation, where it should be headquartered, how it should be structured, who should hold the subsidiary companies, and through what vehicle. The Government have chosen this precise moment to make a destructive attack on the attractions of this country as a locus for the headquarters of such emerging multinational companies. There can be no worse incompetence than that.
      We have seen an amazing display this evening by the Government, on the one hand of arrogance and abuse of our constitution, and on the other hand of neglect of the fundamental economic duty of the Government to promote a framework in which future investment, employment and growth in this country are maximised.
      Mr. Letwin: I shall not long detain the Committee. I am sure that hon. Members are grateful for that.
      The hon. Member for Kingston and Surbiton (Mr. Davey) made clear in his speech much that is important about the wrongness of the process in which the Government are engaged.
      My right hon. Friend the Member for Charnwood (Mr. Dorrell), the former Financial Secretary No. 1, made a powerful case about the effect of the measure on the location of headquarters. My right hon. Friend the Member for Fylde (Mr. Jack), the former Financial Secretary No. 2—I do not suggest by that any order of priority, other than of speaking—made it clear that we needed an analysis of the economic impact of the measure. My hon. Friend the Member for Grantham and Stamford (Mr. Davies) made it abundantly plain that we are dealing with an abuse of process, an abuse of Parliament and an abuse of substance.
      In the Paymaster General's response to the debate, she made three arguments. Her first was that, although the text of the consultation document, which she proceeded to misquote, made no mention whatever of the proposal
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      that is hereby being enacted, and hence in no way was there any consultation on that proposal, it was nevertheless—I think I quote almost exactly—quite obvious to anyone engaged in the process that this would be, or might be, the measure that was forthcoming. If she thinks that it is quite obvious, it is odd that the CBI thought that it was unexpected, that the Institute of Directors thought that it was unheralded, that the Chartered Institute of Taxation thought that it was a surprise and that most of British industry is hopping up and down because it claims that it was never told about it. If it was obvious enough for the Paymaster General, she might have let some others into the secret. It would have been helpful.
      Secondly, the Paymaster General told the Committee that the yield would be minute, not enormous, and she told us that on the basis of Inland Revenue calculations. She did not see fit to give way to allow me to ask the question which I invite her to answer now. Was it pointed out to the Inland Revenue and to her economic adviser in a meeting with accountants when the issue was raised that the base year upon which the calculation was made was exceptional? She did not answer then and she does not answer now. The fact is that the calculations that she suggested are not substantiated, are probably inaccurate and are not reflected in the views of any of those who have commented on this, whether the CBI, the IOD, the major firms or the various firms of accountants. Not in one of those sources do we find a similarity of view about the amounts to be raised. It would be interesting to know whether the hon. Lady is willing to stake her continued career on the effect of the measure next year, or, if it is to be delayed by nine months, a year later.
      Thirdly, the Paymaster General claimed that the measure had been welcomed or heralded by a large number of people in various articles. It would be interesting to know whether it is generally the Treasury's practice to ignore the advice, after a proposal is put forward, of the big six accountancy firms, the CBI, the Chartered Institute of Taxation and the IOD, in favour of three or four academic articles, one of which was undoubtedly submitted for publication before the Budget and hence—although apparently it was quite obvious—before the writer had the slightest idea what the proposal in question would be.
      But all those things, as my right hon. and hon. Friends have pointed out, pale into utter insignificance when compared with what the Paymaster General did not say. In the whole of her speech, she never once mentioned whether the measure would substantially deter important companies from locating their headquarters in the UK, and, if so, whether that would have a huge and sustained knock-on effect on our economy.
      I can only conclude either that the Paymaster General does not care what happens to the UK economy, which is unlikely, or that she—this must be the more likely case—knows that there is a real problem here, but does not want to admit it or consult on it because she knows that it would entail admitting that the Government have, in this case, as Governments do because they are composed of human beings and we are all fallible, we as much as they—[Interruption.] My hon. Friends may disagree, but I admit on behalf of the Conservative party that we are human. So, too, are the Government. Unfortunately, Ministers and officials, in this case probably an economic adviser and a few Ministers, over against the Inland Revenue, have made a tremendous and signal error.

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      The easy way to deal with those errors is to withdraw the proposal by letting the clause fall and to return later with one of the options described in a perfectly reputable Inland Revenue consultation document, and discussed the length and breadth of British industry—either the mixer companies or the onshore pooling. We could all then rest easy that the Government will not go down in history as having destroyed a large chunk of our economy. As things stand, that is exactly what is likely to happen and it will be a disgrace if the Government do not withdraw the clause.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 254, Noes 123.

      Division No. 178]

      [10.29 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Corbyn, Jeremy

      Ainger, Nick

      Corston, Jean

      Ainsworth, Robert (Cov'try NE)

      Cox, Tom

      Alexander, Douglas

      Cranston, Ross

      Crausby, David

      Armstrong, Rt Hon Ms Hilary

      Cryer, Mrs Ann (Keighley)

      Atherton, Ms Candy

      Cryer, John (Hornchurch)

      Austin, John

      Cummings, John

      Banks, Tony

      Cunningham, Rt Hon Dr Jack (Copeland)

      Barnes, Harry

      Bayley, Hugh

      Dalyell, Tam

      Beard, Nigel

      Darling, Rt Hon Alistair

      Benn, Hilary (Leeds C)

      Davey, Valerie (Bristol W)

      Bennett, Andrew F

      Davidson, Ian

      Benton, Joe

      Davies, Rt Hon Denzil (Llanelli)

      Dawson, Hilton

      Bermingham, Gerald

      Dean, Mrs Janet

      Berry, Roger

      Denham, John

      Best, Harold

      Donohoe, Brian H

      Blackman, Liz

      Doran, Frank

      Blears, Ms Hazel

      Dowd, Jim

      Boateng, Rt Hon Paul

      Drew, David

      Borrow, David

      Eagle, Maria (L'pool Garston)

      Bradley, Keith (Withington)

      Edwards, Huw

      Bradshaw, Ben

      Ellman, Mrs Louise

      Brinton, Mrs Helen

      Ennis, Jeff

      Brown, Rt Hon Gordon (Dunfermline E)

      Field, Rt Hon Frank

      Fisher, Mark

      Brown, Rt Hon Nick (Newcastle E)

      Flint, Caroline

      Brown, Russell (Dumfries)

      Flynn, Paul

      Browne, Desmond

      Foster, Rt Hon Derek

      Butler, Mrs Christine

      Foster, Michael Jabez (Hastings)

      Byers, Rt Hon Stephen

      Foulkes, George

      Campbell, Mrs Anne (C'bridge)

      Fyfe, Maria

      Campbell-Savours, Dale

      Gardiner, Barry

      Cann, Jamie

      George, Bruce (Walsall S)

      Caplin, Ivor

      Gerrard, Neil

      Caton, Martin

      Gibson, Dr Ian

      Cawsey, Ian

      Godman, Dr Norman A

      Chaytor, David

      Godsiff, Roger

      Clapham, Michael

      Goggins, Paul

      Clark, Rt Hon Dr David (S Shields)

      Gordon, Mrs Eileen

      Clark, Dr Lynda (Edinburgh Pentlands)

      Griffiths, Nigel (Edinburgh S)

      Grocott, Bruce

      Clarke, Charles (Norwich S)

      Grogan, John

      Clarke, Eric (Midlothian)

      Hain, Peter

      Clarke, Rt Hon Tom (Coatbridge)

      Hall, Mike (Weaver Vale)

      Clarke, Tony (Northampton S)

      Hanson, David

      Clwyd, Ann

      Harman, Rt Hon Ms Harriet

      Coaker, Vernon

      Heal, Mrs Sylvia

      Colman, Tony

      Healey, John

      Connarty, Michael

      Henderson, Ivan (Harwich)

      Cooper, Yvette

      Hepburn, Stephen

      Corbett, Robin

      Hill, Keith

      Hinchliffe, David

      Hodge, Ms Margaret

      Hoey, Kate

      258

      Hood, Jimmy

      Perham, Ms Linda

      Hoon, Rt Hon Geoffrey

      Pickthall, Colin

      Hope, Phil

      Pike, Peter L

      Howells, Dr Kim

      Plaskitt, James

      Hughes, Kevin (Doncaster N)

      Pollard, Kerry

      Humble, Mrs Joan

      Pond, Chris

      Hurst, Alan

      Pound, Stephen

      Hutton, John

      Prentice, Ms Bridget (Lewisham E)

      Iddon, Dr Brian

      Prentice, Gordon (Pendle)

      Jackson, Ms Glenda (Hampstead)

      Prescott, Rt Hon John

      Johnson, Alan (Hull W & Hessle)

      Primarolo, Dawn

      Johnson, Miss Melanie (Welwyn Hatfield)

      Prosser, Gwyn

      Purchase, Ken

      Jones, Rt Hon Barry (Alyn)

      Quin, Rt Hon Ms Joyce

      Jones, Helen (Warrington N)

      Radice, Rt Hon Giles

      Jones, Ms Jenny (Wolverh'ton SW)

      Rammell, Bill

      Jones, Dr Lynne (Selly Oak)

      Rapson, Syd

      Jones, Martyn (Clwyd S)

      Raynsford, Nick

      Jowell, Rt Hon Ms Tessa

      Reed, Andrew (Loughborough)

      Keen, Alan (Feltham & Heston)

      Reid, Rt Hon Dr John (Hamilton N)

      Khabra, Piara S

      Roche, Mrs Barbara

      Kilfoyle, Peter

      Rooker, Rt Hon Jeff

      Ross, Ernie (Dundee W)

      Rowlands, Ted

      Ladyman, Dr Stephen

      Roy, Frank

      Lawrence, Mrs Jackie

      Ruane, Chris

      Lepper, David

      Ruddock, Joan

      Levitt, Tom

      Ryan, Ms Joan

      Liddell, Rt Hon Mrs Helen

      Sarwar, Mohammad

      Linton, Martin

      Sawford, Phil

      Lloyd, Tony (Manchester C)

      Sedgemore, Brian

      Llwyd, Elfyn

      Sheerman, Barry

      Love, Andrew

      Simpson, Alan (Nottingham S)

      McAvoy, Thomas

      Skinner, Dennis

      McDonagh, Siobhain

      Smith, Rt Hon Andrew (Oxford E)

      Macdonald, Calum

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      McDonnell, John

      McFall, John

      Smith, Jacqui (Redditch)

      McGuire, Mrs Anne

      Smith, John (Glamorgan)

      McIsaac, Shona

      Smith, Llew (Blaenau Gwent)

      McKenna, Mrs Rosemary

      Snape, Peter

      Mackinlay, Andrew

      Soley, Clive

      McNamara, Kevin

      Spellar, John

      MacShane, Denis

      Squire, Ms Rachel

      Mactaggart, Fiona

      Steinberg, Gerry

      McWilliam, John

      Stevenson, George

      Mahon, Mrs Alice

      Stewart, David (Inverness E)

      Marsden, Paul (Shrewsbury)

      Stewart, Ian (Eccles)

      Marshall, Jim (Leicester S)

      Stoate, Dr Howard

      Marshall-Andrews, Robert

      Strang, Rt Hon Dr Gavin

      Meacher, Rt Hon Michael

      Stuart, Ms Gisela

      Michael, Rt Hon Alun

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Milburn, Rt Hon Alan

      Taylor, David (NW Leics)

      Miller, Andrew

      Temple-Morris, Peter

      Moffatt, Laura

      Thomas, Gareth (Clwyd W)

      Moonie, Dr Lewis

      Thomas, Simon (Ceredigion)

      Moran, Ms Margaret

      Timms, Stephen

      Morgan, Ms Julie (Cardiff N)

      Tipping, Paddy

      Morley, Elliot

      Todd, Mark

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

      Touhig, Don

      Trickett, Jon

      Murphy, Denis (Wansbeck)

      Turner, Dennis (Wolverh'ton SE)

      Murphy, Jim (Eastwood)

      Turner, Dr Desmond (Kemptown)

      Naysmith, Dr Doug

      Turner, Dr George (NW Norfolk)

      Norris, Dan

      Twigg, Derek (Halton)

      O'Brien, Bill (Normanton)

      Tynan, Bill

      O'Hara, Eddie

      Vis, Dr Rudi

      Olner, Bill

      Ward, Ms Claire

      O'Neill, Martin

      Welsh, Andrew

      Organ, Mrs Diana

      Wicks, Malcolm

      Osborne, Ms Sandra

      Wigley, Rt Hon Dafydd

      Palmer, Dr Nick

      Williams, Rt Hon Alan (Swansea W)

      Pearson, Ian

      259

      Williams, Mrs Betty (Conwy)

      Wright, Dr Tony (Cannock)

      Wilson Brian

      Winnick, David

      Wood, Mike

      Tellers for the Ayes:

      Worthington, Tony

      Mr. David Clelland and

      Wray, James

      Mr. Graham Allen.

      NOES

      Amess, David

      Kirkwood, Archy

      Arbuthnot, Rt Hon James

      Lansley, Andrew

      Atkinson, Peter (Hexham)

      Leigh, Edward

      Ballard, Jackie

      Letwin, Oliver

      Beith, Rt Hon A J

      Lewis, Dr Julian (New Forest E)

      Bercow, John

      Livsey, Richard

      Blunt, Crispin

      Lloyd, Rt Hon Sir Peter (Fareham)

      Boswell, Tim

      Loughton, Tim

      Brady, Graham

      Lyell, Rt Hon Sir Nicholas

      Brand, Dr Peter

      McIntosh, Miss Anne

      Brazier, Julian

      MacKay, Rt Hon Andrew

      Brooke, Rt Hon Peter

      Maclean, Rt Hon David

      Browning, Mrs Angela

      Maclennan, Rt Hon Robert

      Bruce, Ian (S Dorset)

      Madel, Sir David

      Bruce, Malcolm (Gordon)

      Malins, Humfrey

      Burstow, Paul

      Maples, John

      Butterfill, John

      Maude, Rt Hon Francis

      Campbell, Rt Hon Menzies (NE Fife)

      Mawhinney, Rt Hon Sir Brian

      May, Mrs Theresa

      Cash, William

      Moss, Malcolm

      Chapman, Sir Sydney (Chipping Barnet)

      Nicholls, Patrick

      Norman, Archie

      Clappison, James

      Ottaway, Richard

      Collins, Tim

      Page, Richard

      Cormack, Sir Patrick

      Paice, James

      Cran, James

      Paterson, Owen

      Curry, Rt Hon David

      Pickles, Eric

      Davey, Edward (Kingston)

      Portillo, Rt Hon Michael

      Davies, Quentin (Grantham)

      Robathan, Andrew

      Davis, Rt Hon David (Haltemprice)

      Robertson, Laurence

      Dorrell, Rt Hon Stephen

      Rowe, Andrew (Faversham)

      Duncan Smith, Iain

      Russell, Bob (Colchester)

      Emery, Rt Hon Sir Peter

      St Aubyn, Nick

      Faber, David

      Shephard, Rt Hon Mrs Gillian

      Fabricant, Michael

      Simpson, Keith (Mid-Norfolk)

      Flight, Howard

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

      Forth, Rt Hon Eric

      Spicer, Sir Michael

      Fowler, Rt Hon Sir Norman

      Stanley, Rt Hon Sir John

      Fox, Dr Liam

      Steen, Anthony

      Gale, Roger

      Swayne, Desmond

      Garnier, Edward

      Syms, Robert

      Gibb, Nick

      Tapsell, Sir Peter

      Gill, Christopher

      Taylor, Ian (Esher & Walton)

      Gray, James

      Taylor, John M (Solihull)

      Green, Damian

      Taylor, Matthew (Truro)

      Greenway, John

      Taylor, Sir Teddy

      Tredinnick, David

      Grieve, Dominic

      Trend, Michael

      Hamilton, Rt Hon Sir Archie

      Tyler, Paul

      Hammond, Philip

      Tyrie, Andrew

      Harvey, Nick

      Waterson, Nigel

      Hawkins, Nick

      Webb, Steve

      Heald, Oliver

      Whitney, Sir Raymond

      Heath, David (Somerton & Frome)

      Whittingdale, John

      Heathcoat-Amory, Rt Hon David

      Widdecombe, Rt Hon Miss Ann

      Hogg, Rt Hon Douglas

      Willetts, David

      Horam, John

      Wilshire, David

      Howard, Rt Hon Michael

      Winterton, Mrs Ann (Congleton)

      Howarth, Gerald (Aldershot)

      Winterton, Nicholas (Macclesfield)

      Jack, Rt Hon Michael

      Yeo, Tim

      Jackson, Robert (Wantage)

      Young, Rt Hon Sir George

      Jenkin, Bernard

      Key, Robert

      Tellers for the Noes:

      King, Rt Hon Tom (Bridgwater)

      Mrs. Eleanor Laing and

      Kirkbride, Miss Julie

      Mr. Peter Luff.

      Question accordingly agreed to.
      Clause 102 ordered to stand part of the Bill.

    Clause 113

      RATES: CONVEYANCE OR TRANSFER ON SALE
      Question proposed, That the clause stand part of the Bill.
      Mr. Flight: Clause 113 introduces—if I may put it thus—a much more naked and transparent stealth tax. It will raise stamp duty by a further 0.5 per cent.—for the third year running—making tax on property sales in this country one of the highest in the developed world. The clause is in part IV, which deals with stamp duty in general. Clause 116 empowers the Treasury to change the rules merely by statutory instrument, and we shall object to that strongly as well. Other proposed changes exclude property transfers to social institutions from stamp duty, and tighten coverage in the case of companies and leases.
      The Government say that they expect to derive a yield of some £290 million over the tax year to next April. In due time, we shall ask what the yield is: given the cyclical increase in property transactions, we suspect that it will be substantially above the predicted figure.
      The proposed tax is mainly a stealth tax on business. We particularly object to the contradiction between the Prime Minister's entirely correct support for the flexible Anglo-Saxon system—the Anglo-Saxon economies have been successful here and in the United States—and the proposal for a tax that will damage corporate restructuring, prevent improvements in productivity and discourage investment. Members may recollect the Chancellor extolling the McKinsey report on how to improve productivity in this country and the damage done to productivity improvements by our system of taxing property and by some of our planning laws.
      10.45 pm
      How much will stamp duty cost in the Rover restructuring? Whatever the cost is, another 0.5 per cent. will be added as a result of the Bill. It is particularly damaging for small businesses because property is their main asset. It is the asset against which they go to banks to borrow money. The main effect of the rise in stamp duty—up some 400 per cent. since the Government came to power—for businesses is to increase the volatility of prices, particularly in down cycles. For that reason, the banking sector will be less willing to lend to small business.
      I have referred to clause 116. The Government have implicitly already accepted that they have hiked the tax to the limit because they are looking to give themselves discretionary measures to try to attack the mitigation that they expect, particularly from businesses seeking to save on such a high level of tax when they want to restructure.
      The tax obviously bears on individuals, too. It is both unfair and economically damaging. It hits the more enterprising in society. How often has the House heard the Chancellor say that his policies are driven by fairness and encourage entrepreneurship? Here we have something that points in the other direction.
      Some Labour Members have been gloating that the tax will soak the rich, as it soaked rich people such as the Prime Minister when he sold his house in Islington, but, in reality, it is a tax on middle England. Since the last data were produced, property prices in the southern half

      261
      of England have risen by between 20 and 50 per cent. Some 25 per cent. of the property market in the south-east is represented by houses costing about £250,000—it is the average price of three and four-bedroom family houses—which will bear the new rate of stamp duty of 3 per cent.
      Who moves? Who wants to move? It is people who have to move because of their jobs. It is people who produce children and need larger houses. This is a tax on job mobility and yet another stealth tax on families.
      The measure causes more subtle damage. There are problems with potential over-building in the southern half of the country. Senior citizens are already often reluctant to move from the houses that they have lived in to smaller accommodation. That will discourage yet more such senior citizens from vacating larger family houses.
      It is the increase in volatility that we are particularly concerned about. When the downturn comes and when the Chancellor realises that he has not abolished the economic cycle, the greater volatility will increase opportunities for negative equity in two ways. First, when there is a much higher tax on buyers and when the market is bad, buyers retreat. Secondly, many families will have used up their capital in paying significant amounts of stamp duty when buying their properties.
      The excuse that the Government will give is that the measures are designed to contain property overheating. When the deputy Governor of the Bank of England gave evidence to the Select Committee on Education and Employment recently, he reported that such fiscal measures were not an effective tool in determining prices, particularly domestic property prices, during up cycles. As I have said, such measures worsen the volatility in down cycles, but do not constrain upward movement in up cycles.
      In summary, this is another extremely cynical stealth tax that was designed purely to raise revenue. Its economic effects will be bad. They will be particularly damaging in the very areas that the Chancellor claims that he wants to improve.
      Mr. Matthew Taylor: I shall not detain the House long, but I wish to raise a significant issue in respect of stamp duty, which this and previous Governments have avoided tackling—one that becomes more serious as the rates increase.
      If we are to have such a system, it makes sense that the Government should attempt to close any loopholes. Indeed, it is surprising that they have not gone further in tackling the use of companies as a tax shelter in respect of property transactions. Presumably, that is why they have left open the opportunity to make further changes by order. Although I do not consider that to be the appropriate mechanism, I hope that the Government will attempt to create a system whereby people pay according to the value of the transaction and not according to how much they can afford to pay specialists to help them avoid paying tax as that tends to mean that big companies avoid paying tax and small companies and individuals end up paying it.
      The Government have not addressed the fact that stamp duty is an unusual tax in that different banded levels increase with the value of the transaction, yet the increases apply to the entire transaction. That leads to a simple form of avoidance in that people try to keep the price just below the relevant threshold. As the duty increases on
      262
      transactions over £250,000, a difference of just £1 in the price of a property makes a difference of £5,000 on the tax that falls on the individual or company. As a result, people try to avoid tax, not always through legitimate means, such as by selling fixtures and fittings at an inflated price while reducing the notional price of the property.
      Research that I have undertaken through the Land Registry shows that as stamp duty has increased, there has been a decrease in the number of properties sold at just over £250,000 and an increase in the number sold at just under £250,000. The difference widens as the tax incentive increases. The Secretary of State for Northern Ireland benefited from that by coming in just under the threshold. It cannot be right to have prices bunching just under the break levels so that purchasers avoid tax. Whatever any particular individual may have done, I have no doubt that some people are deliberately avoiding tax. That is not good for the Treasury or the tax system and it makes no proper sense.
      Other taxes operate so that the increase applies only to the part of the transaction that is above the break point. It would be possible to make that reform on a revenue-neutral basis, if that were what the Government wanted to do, and it would have exactly the same effect in terms of dampening down the property boom. The tax burden would fall more fairly. Such a reform would remove the incentive to try to avoid tax. Surely, making such a reform would also be infinitely simpler than trying to use Inland Revenue checks to determine whether the fixtures and fittings have been overvalued and the property undervalued. Not only is it pretty difficult to resolve such arguments, but it could cost an awful lot to get a result.
      I have tried, consulting the Library and tax experts, to research why we have our peculiar tax banding structure, but answer came there none. The answer was simply, "That's historically how it's been done." I do not think that the current Government feel particularly tied to doing things in a certain way simply because they have always been done that way. I should therefore like to hear from the Minister why that reform has not been pursued, whether it might be pursued, and whether it might not be a more sensible approach than that being pursued by the Government.
      Additionally, if the Government are proposing the increases to dampen the residential property boom, why have they not considered creating a divide between commercial and residential property? Such a divide exists in many other countries and has not caused major tax avoidance problems. I think that that, too, would he a sensible measure.
      I hope that the Government will consider making those simple reforms, which would help to create a more progressive tax structure and remove the incentive to cheat that the current system undoubtedly presents.
      The Economic Secretary to the Treasury (Miss Melanie Johnson): In his opening remarks, the hon. Member for Arundel and South Downs (Mr. Flight) most amusingly alleged that the measure was some type

      263
      of "transparent stealth tax"—which is a new Tory contradiction in terms, to add to all the many other contradictions that they have recently offered us.
      Mr. Flight: Will the Minister give way?
      Miss Johnson: I have barely uttered a full sentence, but I shall give way to the hon. Gentleman.
      Mr. Flight: The word "stealth" has two applications in this context. It applies, first, because the increase is a significant but unexpected tax on business. It applies, secondly, because people do not necessarily think about tax when they have to change houses after changing jobs or relocating, or when their family has grown. The tax therefore sneaks up on them.
      Miss Johnson: I think that the hon. Gentleman has just accepted that his point was not very meaningful.
      The hon. Gentleman dealt with the measure's effect, in the residential sector, on families. I should like to explain how the Government's actions are helping families. In our Budgets since the general election, we have done a huge amount to help families. We have reduced tax on the average family, so that for a single-earner family on average earnings with two children, tax is at the lowest rate since 1972. [Interruption.] The right hon. Member for Wells (Mr. Heathcoat-Amory) can say that he does not believe it, but it is a fact. In these matters, there is nothing as unarguable as a fact.
      We also have incredibly low mortgage rates—which are particularly low in comparison with the mortgage rates that applied at their peak in the 1990s. Therefore, on average, people will be paying £300 less per month because of the Labour Government's economic policies and platform, the stability that we have created, and the low inflation and low interest rates that we have managed to generate. Householders are much better off.
      We should also consider how many people will pay stamp duty on residential transactions. The fact is that more than one third of transactions incur no stamp duty at all—they never have incurred stamp duty. Moreover, 95 per cent. of sales will be completely unaffected by the Budget's provisions. Those are the facts that the House should consider. The hon. Gentleman gave us scarcely any facts in favour of his hypothesis. There is no evidence that the measures on stamp duty in this or earlier Budgets have had any effect on house prices or the number of transactions carried out in the residential property market.
      11 pm
      The same is true of commercial sales. We have a healthy commercial sector, which has enjoyed good growth. A large number of transactions take place and there is no evidence of any problem. In last year's Budget debate, Conservative Members put forward hypotheses that there would be damage as a result of last year's measures. Well, we have this year's figures, and I notice that the hon. Gentleman has not referred to the implications of last year's arguments. It is clear that the problems that Conservative Members referred to then have not materialised, and that the Government have been proved right. Stamp duty presents a fair and progressive system of taxation, which is why we have made these proposals.
      264
      The hon. Gentleman referred to loan collateral and the possible harmful effect on business. There is no evidence that a stamp duty increase of 0.5 per cent. reduces property values significantly, if at all. In fact, commercial property is not usually of primary importance as collateral, so on neither count is there evidence of a problem. It was suggested that the measure might have been taken to help stabilise the housing market. That is not its main purpose; its main purpose is to put in place a fair and progressive structure for stamp duty. Our macro-economic framework is the main measure to stabilise the housing market. That is working to the benefit of the economy, businesses and families—people right across the country are benefiting from our management of the economy.
      The hon. Member for Truro and St. Austell talked about the loopholes that are being closed. There are a number of such loopholes, some of which we have considered for some time. They include a revised definition of "group" for the purposes of stamp duty relief for transfers of property between associated companies. I hope that the hon. Gentleman will give us his full support on our measures to close those loopholes.
      I was distressed to hear that the hon. Member for Arundel and South Downs will not be supporting clause 116. That measure will enable us, when we discover avoidance techniques, to close loopholes in the middle of a year between Finance Bills. People will be able to discuss the way in which that is being done, but the measure will stop off revenue outflows that should be going to the Exchequer because people are finding loopholes in the system.
      I cannot comment on the Rover restructuring. There are many issues that are still, unfortunately, unresolved, and although the hon. Gentleman invited me to comment, it would not be appropriate for me to do so.
      The hon. Member for Truro and St. Austell remarked on the way in which we might change to what is called a slice basis for stamp duty. The full-year cost would probably approach £1.5 billion, or more than a third of the current yield from the duty. Higher rates of duty would then be needed to maintain the yield. It would be interesting to hear what measure the hon. Gentleman would propose to stop up the gap—the money that would be missing from the Exchequer—as a result of that suggestion.
      Mr. Matthew Taylor: I was talking about a revenue-neutral basis. The hon. Lady has suggested how that can be done. Is she aware that under the present system, before the Chancellor started to raise the differentials for more valuable property there was virtually no difference in the number of transactions just above and just below the £250,000 band. After the first increase, 139 properties were sold just under the £250,000 band for every 100 above it. Now, 151 are sold at just under £250,000 for every 100 above it. There is clear evidence of avoidance and of loss of revenue to the Exchequer as a result. Therefore, there is clear evidence that we have created a system that favours the cheat over the honest person.
      Miss Johnson: I cannot agree. There are different ways to structure stamp duty, but other methods, in particular the slice basis, cause problems of their own. That method would cause a significant loss to the Exchequer.
      The sort of problems that the hon. Gentleman describes are not apparent. We are still collecting the revenue that we have always expected to collect from stamp duty. Indeed, last year, we met the expected target for the collection of stamp duty revenues. The case that he put forward is not borne out by the facts.
      Mr. Campbell-Savours: Is it not true that the phenomena that the hon. Member for Truro and St. Austell (Mr. Taylor) mentioned show that the measure is probably having a deflationary effect on house prices?
      Miss Johnson: That could indeed be so. There is a danger in changing the basis of something that has always worked well. Stamp duty was introduced in 1694. [Interruption.] I am conscious of the fact that many hon. Member would like to leave the Chamber to go home to their beds.
      Stamp duty is an extremely efficient tax. The measures that we are introducing are giving a fairer and more progressive structure to the tax. There is no evidence that we need to change the basis for the duty on commercial or residential property, or indeed shares. It brings revenue into the Exchequer and we are, in fact, in a beneficial position. I urge hon. Members to support the proposal. It is working well and will continue to do so.
      Mr. Flight: I shall be brief. First, do the Government intend to continue with their policy of increasing stamp duty by 0.5 per cent. per annum, or do they believe that the level that the duty has reached represents some form of ceiling?
      Secondly, the Minister seemed to argue that extra charges on transactions have no economic impact. For the past three years, for a variety of reasons, property prices have been rising continuously. Bank of England studies have found that increased transaction costs have an impact when the market goes down—the increase in volatility and the fall in prices tend to be exaggerated by rising transaction costs. Then, families really suffer if it takes them into negative equity. Independent data show that families are already paying about £670 more in tax per annum, so they are not better off in tax terms. Furthermore, they have lost their mortgage interest relief at source.
      I pointed out the objections to clause 116; they were echoed by the hon. Member for Truro and St. Austell (Mr. Taylor). In essence, they are that the clause lacks clarity—if there is a problem to be dealt with, it does not help the marketplace if matters are not clear and certain. It would be better if there were specific clauses to address any problems that the Government believe are outstanding.
      I rebut the assertion that 95 per cent. of transactions will not be affected. As I pointed out, those data were produced before the rise in house prices that has taken place over the past year or so; in the south-east, that has certainly been in the order of 20 per cent. The Economic Secretary to the Treasury herself commented—presumably she was including commercial property—that only a third of transactions paid no form of stamp duty.
      266
      I repeat that this tax is predominantly levied on business. The Minister did not reply to my points on that issue. Business pays the most stamp duty. It is a tax on businesses that relocate and set up new operations in different parts of the country. It is a tax that will apply in situations such as that of Rover, where major changes must be made in order to survive.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 242, Noes 50.

      Division No. 179]

      [11.12 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Dawson, Hilton

      Ainger, Nick

      Dean, Mrs Janet

      Ainsworth, Robert (Cov'try NE)

      Denham, John

      Alexander, Douglas

      Donohoe, Brian H

      Allen, Graham

      Doran, Frank

      Anderson, Donald (Swansea E)

      Drew, David

      Armstrong, Rt Hon Ms Hilary

      Eagle, Maria (L 'pool Garston)

      Atherton, Ms Candy

      Edwards, Huw

      Austin, John

      Ellman, Mrs Louise

      Banks, Tony

      Field, Rt Hon Frank

      Barnes, Harry

      Fisher, Mark

      Bayley, Hugh

      Flint, Caroline

      Beard, Nigel

      Flynn, Paul

      Benn, Hilary (Leeds C)

      Foster, Rt Hon Derek

      Bennett, Andrew F

      Foster, Michael Jabez (Hastings)

      Benton, Joe

      Foulkes, George

      Berry, Roger

      Fyfe, Maria

      Best, Harold

      Gardiner, Barry

      Blackman, Liz

      George, Bruce (Walsall S)

      Blears, Ms Hazel

      Gerrard, Neil

      Boateng, Rt Hon Paul

      Gibson, Dr Ian

      Borrow, David

      Godman, Dr Norman A

      Bradley, Keith (Withington)

      Godsiff, Roger

      Brinton, Mrs Helen

      Goggins, Paul

      Brown, Rt Hon Nick (Newcastle E)

      Gordon, Mrs Eileen

      Brown, Russell (Dumfries)

      Griffiths, Nigel (Edinburgh S)

      Browne, Desmond

      Grocott, Bruce

      Butler, Mrs Christine

      Grogan, John

      Campbell-Savours, Dale

      Hain, Peter

      Caplin, Ivor

      Hall, Mike (Weaver Vale)

      Caton, Martin

      Hanson, David

      Cawsey, Ian

      Harman, Rt Hon Ms Harriet

      Chaytor, David

      Heal, Mrs Sylvia

      Clapham, Michael

      Healey, John

      Clark, Rt Hon Dr David (S Shields)

      Henderson, Ivan (Harwich)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hepburn, Stephen

      Hill, Keith

      Clarke, Charles (Norwich S)

      Hinchliffe, David

      Clarke, Eric (Midlothian)

      Hodge, Ms Margaret

      Clarke, Rt Hon Tom (Coatbridge)

      Hoey, Kate

      Clarke, Tony (Northampton S)

      Hood, Jimmy

      Clwyd, Ann

      Hoon, Rt Hon Geoffrey

      Coaker, Vernon

      Hope, Phil

      Colman, Tony

      Howells, Dr Kim

      Connarty, Michael

      Hughes, Kevin (Doncaster N)

      Corbett, Robin

      Humble, Mrs Joan

      Corbyn, Jeremy

      Hurst, Alan

      Corston, Jean

      Hutton, John

      Cox, Tom

      Iddon, Dr Brian

      Cranston, Ross

      Jackson, Ms Glenda (Hampstead)

      Crausby, David

      Johnson, Alan (Hull W & Hessle)

      Cryer, Mrs Ann (Keighley)

      Johnson, Miss Melanie (Welwyn Hatfield)

      Cryer, John (Hornchurch)

      Cummings, John

      Jones, Rt Hon Barry (Alyn)

      Cunningham, Rt Hon Dr Jack (Copeland)

      Jones, Helen (Warrington N)

      Jones, Ms Jenny (Wolverh'ton SW)

      Dalyell, Tam

      Darling, Rt Hon Alistair

      Jones, Dr Lynne (Selly Oak)

      Davey, Valerie (Bristol W)

      Jones, Martyn (Clwyd S)

      Davidson, Ian

      Jowell, Rt Hon Ms Tessa

      Davies, Rt Hon Denzil (Llanelli)

      Keen, Alan (Feltham & Heston)

      267

      Khabra, Piara S

      Pickthall, Colin

      Kilfoyle, Peter

      Pike, Peter L

      Ladyman, Dr Stephen

      Plaskitt, James

      Lawrence, Mrs Jackie

      Pollard, Kerry

      Lepper, David

      Pond, Chris

      Levitt, Tom

      Pound, Stephen

      Liddell, Rt Hon Mrs Helen

      Prentice, Ms Bridget (Lewisham E)

      Linton, Martin

      Prentice, Gordon (Pendle)

      Lloyd, Tony (Manchester C)

      Prescott, Rt Hon John

      Llwyd, Elfyn

      Primarolo, Dawn

      Love, Andrew

      Prosser, Gwyn

      McAvoy, Thomas

      Purchase, Ken

      McDonagh, Siobhain

      Quin, Rt Hon Ms Joyce

      Macdonald, Calum

      Rammell, Bill

      McDonnell, John

      Rapson, Syd

      McFall, John

      Raynsford, Nick

      McGuire, Mrs Anne

      Reed, Andrew (Loughborough)

      McIsaac, Shona

      Reid, Rt Hon Dr John (Hamilton N)

      McKenna, Mrs Rosemary

      Robinson, Geoffrey (Cov'try NW)

      Mackinlay, Andrew

      Roche, Mrs Barbara

      McNamara, Kevin

      Rooker, Rt Hon Jeff

      MacShane, Denis

      Ross, Ernie (Dundee W)

      Mactaggart, Fiona

      Rowlands, Ted

      McWilliam, John

      Roy, Frank

      Mahon, Mrs Alice

      Ruane, Chris

      Marsden, Paul (Shrewsbury)

      Ruddock, Joan

      Marshall, Jim (Leicester S)

      Ryan, Ms Joan

      Meacher, Rt Hon Michael

      Sarwar, Mohammad

      Meale, Alan

      Sawford, Phil

      Michael, Rt Hon Alun

      Sedgemore, Brian

      Milburn, Rt Hon Alan

      Sheerman, Barry

      Miller, Andrew

      Skinner, Dennis

      Moffatt, Laura

      Smith, Rt Hon Andrew (Oxford E)

      Moonie, Dr Lewis

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Moran, Ms Margaret

      Morgan, Ms Julie (Cardiff N)

      Smith, John (Glamorgan)

      Morley, Elliot

      Smith, Llew (Blaenau Gwent)

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

      Snape, Peter

      Soley, Clive

      Murphy, Denis (Wansbeck)

      Spellar, John

      Murphy, Jim (Eastwood)

      Squire, Ms Rachel

      Naysmith, Dr Doug

      Steinberg, Gerry

      Norris, Dan

      Stevenson, George

      O'Brien, Bill (Normanton)

      Stewart, David (Inverness E)

      O'Hara, Eddie

      Stewart, Ian (Eccles)

      Olner, Bill

      Stoate, Dr Howard

      O'Neill, Martin

      Strang, Rt Hon Dr Gavin

      Organ, Mrs Diana

      Stuart, Ms Gisela

      Osborne, Ms Sandra

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Palmer, Dr Nick

      Pearson, Ian

      Taylor, David (NW Leics)

      268

      Temple-Morris, Peter

      Wigley, Rt Hon Dafydd

      Thomas, Gareth (Clwyd W)

      Williams, Rt Hon Alan (Swansea W)

      Thomas, Simon (Ceredigion)

      Timms, Stephen

      Williams, Alan W (E Carmarthen)

      Tipping, Paddy

      Williams, Mrs Betty (Conwy)

      Todd, Mark

      Wilson, Brian

      Touhig, Don

      Winnick, David

      Trickett, Jon

      Wood, Mike

      Turner, Dennis (Wolverh'ton SE)

      Worthington, Tony

      Turner, Dr Desmond (Kemptown)

      Wray, James

      Turner, Dr George (NW Norfolk)

      Wright, Dr Tony (Cannock)

      Twigg, Derek (Halton)

      Tynan, Bill

      Tellers for the Ayes:

      Vis, Dr Rudi

      Mr. David Clelland and

      Ward, Ms Claire

      Mr. Jim Dowd.

      NOES

      Arbuthnot, Rt Hon James

      Jack, Rt Hon Michael

      Atkinson, Peter (Hexham)

      Kirkwood, Archy

      Ballard, Jackie

      Leigh, Edward

      Boswell, Tim

      Letwin, Oliver

      Brady, Graham

      Lewis, Dr Julian (New Forest E)

      Brazier, Julian

      Lyell, Rt Hon Sir Nicholas

      Bruce, Malcolm (Gordon)

      McIntosh, Miss Anne

      Burstow, Paul

      Mawhinney, Rt Hon Sir Brian

      Campbell, Rt Hon Menzies (NE Fife)

      Paterson, Owen

      Portillo, Rt Hon Michael

      Cash, William

      Robertson, Laurence

      Collins, Tim

      Russell, Bob (Colchester)

      Cran, James

      Simpson, Keith (Mid-Norfolk)

      Davey, Edward (Kingston)

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

      Davies, Quentin (Grantham)

      Stanley, Rt Hon Sir John

      Steen, Anthony

      Dorrell, Rt Hon Stephen

      Swayne, Desmond

      Emery, Rt Hon Sir Peter

      Syms, Robert

      Flight, Howard

      Taylor, Matthew (Truro)

      Garnier, Edward

      Tredinnick, David

      Gill, Christopher

      Tyler, Paul

      Gray, James

      Webb, Steve

      Greenway, John

      Whittingdale, John

      Harvey, Nick

      Yeo, Tim

      Heath, David (Somerton & Frome)

      Heathcoat-Amory, Rt Hon David

      Tellers for the Noes:

      Horam, John

      Mrs. Eleanor Laing and

      Howarth, Gerald (Aldershot)

      Mr. Peter Luff.

      Question accordingly agreed to.
      Clause 113 ordered to stand part of the Bill.
      Bill (Clauses 1, 12, 30, 31, 59, 102 and 113) reported, without amendment; to lie upon the Table.

  Land Drainage
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
  11.27 pm
  Mr. David Heath: I am grateful for the opportunity to raise a matter of great importance to my constituents—land drainage in the Somerset levels. I thank the Minister for seeing my hon. Friend the Member for Taunton (Jackie Ballard), the right hon. Member for Bridgwater (Mr. King) and myself yesterday and for his helpful comments on that occasion.
  As the Minister knows, the Somerset levels are a valuable area for many reasons, including not only their scenery and wildlife but the particular way of life there. The one thing that cannot be said about the levels, however, is that they are dry; indeed, they are extremely wet. I do not intend to blame the Government for the fact that it rains in Somerset, because it has done so for a very long time. Nevertheless, flooding is an ever present threat in the area, and in recent years it has been a reality for too many people, with extremely serious consequences for their livelihood and living arrangements.
  There are several different categories of interest that coincide on the levels. There are those of the people who live there and those of the communities, and the two sets of interests are not identical because there are individual concerns as well as those of villages and wider areas. There are the problems of agriculture, which is not defined by a single category. As well as small dairy farmers, we have people who are trying to use the land for arable purposes. We also have withy growing and practices that are unique to our area of Somerset. Some of the land is marginal and some is taken up by smallholdings that are difficult to maintain as viable. Some of the land is of high quality, and the concerns do not apply.
  The other important factor, which is never to be forgotten, is the great environmental value of the area, which is recognised nationally and internationally as a wetland of great importance.
  Each of those interests has different expectations. Individual residents' primary expectation is to be able to enjoy their homes without the water bursting in and ruining it. Communities expect that their businesses will be able to carry them through the winter months, and that they will not have to be cut off because their only road is under water and remains so for long periods. Essentially, they want to feel that the outside world is interested in the continuation of their way of life.
  Agricultural interests present a more difficult equation. They have learned to live in balance with the environment; many schemes are designed to support that balance and maintain the equilibrium. Having said that, and although farmers in lowland areas realise that they will occasionally experience winter flooding, they do not expect substantial summer flooding. They do not expect water to be allowed on to their land, to remain there until deoxygenation occurs and they lose the grass hay or crops that they planted; nor do they expect to have to move cattle into buildings during the summer because no pasture is available for long periods.
  On the environment front, the expectation is that the water table will be maintained at a reasonably high level. Equally, however, it makes no sense in environmental
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  terms for large areas of land to be covered in water for long periods, because that destroys the very environment that we want to protect and is not the traditional way to maintain the natural habitat.
  The experience is, in some ways, contrary to expectations. I remember the flooding that occurred in my constituency in 1997—the Minister might recall our correspondence at that time. West Moor and South Moor were flooded, quite unexpectedly, when a substantial inundation occurred in August. For various reasons, the Environment Agency chose to leave the water on farmland for a long time, and the result was serious problems for the farmers affected. However, in recent years, flooding in winter months has been more severe than many people expected. Last winter, it was mostly moors in the Taunton and Bridgwater constituencies, not my constituency, that were the worst affected. Nevertheless, communities were cut off, property was damaged and many people experienced considerable difficulty.
  The reason why that has happened in successive years is a matter of conjecture. Some say that it is a result of global warming. Yesterday, the Minister said that the result of that should actually be drought in Somerset, but he would not survive long if he came down to the levels and told the people there that they are experiencing drought. However, it is possible that the flooding is a product of climate change.
  The problems might also be an effect of maintenance procedures and the flood defence regime that is currently being worked on. That gives rise to particular concern not only because we are experiencing difficulties in lowland areas—to a certain extent, we expect that, although criticism has been voiced about whether the Parrett is providing the required drainage and the rhines are being cleared out regularly—but because there are problems on more elevated land. That is not marginal land or lowland, but prime dairy pasture that has never flooded—land that is not flood plain.
  Recently, I went to the Cary valley to inspect the state of the River Cary near Somerton and Castle Cary. In that area, land that historically has not normally flooded has being lying under water. Those who farm the land and know it best are suggesting that something has changed. They suspect that the problem is due to lack of maintenance and clearing, but we cannot be sure that that is so. It may be a contributory factor among many.
  Does the Minister accept that there is a fragility to the consensus that many of us have tried to build over the years in that area of the county? That consensus was built on a very difficult genesis. When we first started looking at the need to protect the habitat of the Somerset levels, there was, as the Minister knows, great dissension between the agricultural community and the environmentalists. There was a feeling that neither side understood what the other was trying to do. Eventually, those forces came together and a modus vivendi was accepted. My worry is that that will break down.
  I hear the same suspicions expressed today by the conservation and environmental bodies that I heard 10 or 15 years ago—that there is somehow a continual effort to raise the water table and that that ignores the interests of local people. That is of course against the economic backdrop of the crisis in agriculture and the effect that even a small reverse can have on a farm that is only

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  marginally viable. People are rightly worried about their livelihoods and the effect that such a change will have on them.
  Are the flood defence structures still the most appropriate? That was addressed comprehensively by the Agriculture Committee report on the issue, which I commend. Having re-read the report, I find it complete and helpful. Some of its conclusions are far reaching. Is the tiered structure—regional and local flood defence committees and internal drainage boards—providing the confidence that local communities might expect? Are all the people who need to be involved—the players, the partners—sitting around the same tables? Do we have a co-ordinated approach? Are the financial arrangements sufficient to the task?
  In Somerset, the precept for flood defences has steadily risen. It is now up to £5.978 million. Over the past two years, it has increased by 11.5 per cent. and 8.2 per cent. respectively. It is the highest per person for any area of England and Wales. Somerset is not a particularly affluent county—it is not the poorest either—yet it is paying that very high share for the defence of land that might be considered a national and international resource. That cost is largely met by local council tax payers.
  The other major factor is the diversion of precepted funds to coastal defence. I do not for one moment decry the need for coastal defence but, considering that the Minehead sea defence cost £12.5 million, such defences take a very large chunk out of the precepted amount, diverting funds from internal land drainage, which prevents flooding on the levels, to the task of keeping the sea out. We need both, and it is hard to understand how the cake can be so divided.
  I want the Minister to consider whether there is a need to develop not just a response to individual flooding problems but a properly managed strategy for the Somerset levels and, indeed, beyond to the rivers that feed them from the higher ground surrounding the basin. I say that because I do not believe that it is simply a matter of resources or of providing more and more money for engineering work. I do not think that that will have the desired effect.
  The desired effect will be achieved by ensuring that maintenance is carried out and that the dredging of channels, rhines and the major rivers, especially the River Parrett, is done effectively. New ways must be found to ensure that water is retained in places where it is environmentally helpful and, so far as possible, does not damage local communities and agricultural interests.
  We need to find new ways to diversify agriculture in the areas where flooding cannot be avoided in the long term. New ways to prosperity must be found for the people who farm that land, who have known no other way of life, and who have a reasonable expectation that they can still derive some sort of livelihood from the land. We need to consider both the social and the economic costs of continued flooding. That is not sufficiently addressed in the present funding formula.
  If a village is cut off for three weeks, which is not an unreasonable suggestion—I remember that at one time Muchelney was cut off from the outside world for three to four weeks—that has an enormous social cost for the
  272
  people living there, who are trapped in their village and find it difficult to get out. That is not recognised in the way in which resources are applied at present.
  If we could move towards a more co-ordinated and more forward-looking strategy for the levels area and the Parrett basin, we would be making a significant advance. Does the Minister believe that the Government could and would support such a move? Would they encourage local interests to do so? Will the Minister work with colleagues to make sure that the funding is available to make it happen if solutions can be found, no matter how incomplete they may be?
  A solution will not come directly out of the precepted amount or from a central Government grant specifically for flood defence. It must be attracted from a variety of sources dotted around various Departments. If the Minister undertakes to examine solutions to the problems of the Somerset levels, I know that local people are prepared to sit around a table and work together to try to find solutions that will be satisfactory for them. The aim must be not to destroy the environment of that precious area, and not to destroy the legitimate social and economic expectations of the people and communities there and of the agricultural areas surrounding the levels and on them.
  11.43 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on obtaining the Adjournment debate, and on the thoughtful and sensible way in which he has made his case and analysed the situation relating to the Somerset levels, which he clearly knows well.
  There is no doubt that concerns exist about the funding of flood defences on the Somerset levels and moors. It is not just a matter of resources, as the hon. Gentleman rightly said. The right balance must be struck between the various interests in the area, meeting the needs of the agricultural community and taking into account the internationally recognised conservation value of the Somerset levels, which have been designated as a special protection area and an environmentally sensitive area. It must be acknowledged that farmers depend on the area for their living and that the communities living there can be severely affected at times of flood, as the hon. Gentleman made clear.
  The Somerset levels are a natural flood plain, and flooding is part of the natural cycle of events. As the hon. Gentleman rightly said, many people who live and work in the area are used to that natural cycle, and farming patterns have traditionally been based on the need for sustainability, particularly in relation to summer grazing and pastures.
  Over the years, there have been changes—for example, arable crops have been introduced—and that has meant a high level of pumping, which has required much investment. We have also had some exceptionally wet winters, so the Somerset levels have been subject to more flooding than people have hitherto been used to. That may well be the result of climate change due to global warming. We certainly seem to be entering a period of wetter winters and drier summers, which has implications for areas such as the Somerset levels, water level management and the Government's allocation of resources for investment programmes. However,

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  the problems of the Somerset levels are a local matter. Local people must come together to assess the flood defence needs of the area and to determine their priorities.
  The Ministry of Agriculture, Fisheries and Food has promoted the production of water level management plans, particularly in environmentally important areas, as a means by which the different needs, including farming and conservation, can be identified, balanced and integrated. Such plans are in place throughout the Somerset levels and moors.
  MAFF also recognises that, because of the particular restrictions under which farmers may have to work in environmentally sensitive areas, there is a case for agri-environmental payments. In that regard, farmers in the Somerset levels receive £2.7 million per annum. That is also reflected in the production and agreement of water level management plans.
  With regard to community involvement and proposals to deal with the particular problems of the Somerset levels, I support the drawing up of catchment plans. In the Somerset levels, that involves the River Parrett catchment area. There are local proposals to bring together local bodies, such as the Environment Agency, regional flood defence committees, drainage boards, councils and so on, to develop a catchment plan, which may well have implications for determining what needs to be done and arriving at a strategy bearing in mind the available resources. Once the local agricultural and environmental priorities have been determined, local people must consider the various ways in which they can be supported, whether through traditional funding, through precepts raised locally by the regional flood defence committees and capital grants from MAFF, or through the new regional development programme, recognising the unique nature of the Somerset levels and their importance to local communities and nationally.
  I am more than willing to consider those issues once the strategy has been drawn up, but I emphasise that such a strategy should be drawn up by local bodies through local representation and the local structures which are in place.
  The Government have increased funding for flood and coastal defence by £23 million to a total of £230 million for the three years from the financial year 1999–2000. We will have to take account of the implications of rising sea levels and global warming in our future budgets and the money that we allocate.
  I understand that there are proposals for the implementation of major schemes on the lower River Tone at Stanmoor, Baltmoor and Hook bridge in the next three years. They may tackle some of local residents' anxieties about flooding.
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  The hon. Gentleman asked about funding for the area. It is a tribute to Somerset that the regional flood defence committee has taken its precept duties seriously. In contrast to other parts of the country, especially in the south-west, Somerset has not reined in the resources that have been made available to local councils through the standard spending assessment for flood defence, or refused to pass them on to the regional flood defence committee.
  The Government have made more resources available. There was an increase in the standard spending assessment of 6 per cent. in 1997–98, 5.1 per cent. in 1999 and 6.3 per cent. in 1999–2000. The overall grant earnings ceilings—grant rates that are set for Somerset and constitute approved capital expenditure—have been exceeded. The original agreement in 1997–98 was for £3.2 million. Actual expenditure was £4.8 million. The agreement in 1998–99 was for £2.7 million and actual expenditure was £4.5 million. The agreement for 1999–2000 was for £2.6 million and the current estimate of expenditure is £3.7 million. I accept that, as the hon. Gentleman said, expensive coastal defence works, especially in Minehead, are mainly responsible for that spending. They have absorbed much of the budget.
  The Government recognise that we have a responsibility for flood and coastal defence. We take it seriously in relation to the money that we have allocated. We are allocating an increasing amount of money for flood and coastal defence, and we take account of the needs of areas such as the Somerset levels.
  We must balance the needs of the communities in the area that the hon. Gentleman represents with our international obligations to an important and fragile conservation area. We will play our part in supporting local communities and responding to the recommendations that have been made to us by the regional flood defence committee and the Environment Agency.
  The hon. Gentleman made legitimate and important points. However, I stress that local people should come together and agree a long-term management plan based on river catchments. Once the plans have been agreed, the issues identified and the priorities decided, I shall be only too willing to examine the proposals and respond as positively as I can.
  Question put and agreed to.
  Adjourned accordingly at seven minutes to Twelve midnight.

Preamble
[MR. MICHAEL J. MARTIN in the Chair]

Police Numbers
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]
9.30 am
Mr. John Randall: This is the first time that I have been successful in the ballot for Westminster Hall and I am delighted to initiate a debate on a subject that is important for not only my constituents, but the general population. I regret that the venue is Westminster Hall and not the main Chamber, and I hope that the relevance of what we have to say today will not be lost.
The more cynical amongst us might think that Westminster Hall, which is hidden away from the glare of publicity, has been provided as an escape valve to allow those Back Benchers who are boiling away with frustration to let off steam quietly and unobserved. I also issue a plea to the Minister to hold the annual debate on policing in London, which is overdue. There are serious questions on that issue to which the many hon. Members who represent London constituencies want answers.
The subject of police numbers is fundamental and much in the news. Crime is rising and that is of great concern to all of us. On a day when the bastion of Labour support, The Mirror, urges its readers to vote Conservative, the Government would do well to listen to the increasingly loud demands for action, not words, and for an end to the intolerable amount of spin emerging from the Government.
I shall begin with some general observations and then turn to the crisis in the Metropolitan police, particularly the Hillingdon division, which affects my constituency. Police numbers are falling. Between 31 March 1997—I acknowledge that that was a couple of months before the Government came in—and 31 March 2000, the total number of officers in England and Wales fell by 2,358, which represents a decrease of 1.85 per cent. Police funding is falling. The settlement for 2000–01 constitutes a small increase of £202.6 million, but police funding in real terms has fallen since 1997.
Crime is rising under the Government. Between March 1997 and March 1999, recorded crime fell from 4,545,337 to 4,481,817 incidents: a fall of 1.4 per cent. However, in the year to September 1999, the total of reported offences was 5,234,211, an increase of 2.2 per cent. on the previous year's figure.
I am not a great one for bandying such statistics around because we all know that figures can be used to give different results. However, it is worth pointing out that, under the previous Conservative Government, the total strength of the force increased by almost 15,000 between March 1979 and March 1997—an increase of 14 per cent. Sadly, between March 1997 and September 1999 there has been a decrease of 1.6 per cent. The
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overall fall in police strength in the year to March 1999, including seconded officers, was 0.6 per cent. That is the biggest annual fall since 1990.
Cuts in police numbers have created a real crisis in the police service. That crisis continues, and I should like to quote a few examples. In Merseyside, twice as many officers are leaving as are being recruited. In Staffordshire, there is a recruitment freeze, and there are warnings that 250 jobs will be lost as a result of a cut in the annual budget of £8 million.
A survey conducted by The Sunday Telegraph found that
an area the size of an entire police force has been wiped off the map due to cuts in police numbers and budget pressures under Labour's term of office.
The worries of many people were given voice by a senior officer in a northern English city, who was reported as saying:
We could not possibly publicise the numbers. It would destroy public confidence and would be an invitation for every criminal and his dog to come here.
My predecessor as Member of Parliament for Uxbridge, Sir Michael Shersby, was for many years the parliamentary adviser to the Police Federation. I remember attending Police Federation meetings at successive Conservative party conferences and listening to the speakers. They always gave a view of events that reflected the feelings of officers. Fred Broughton, the chairman of the Police Federation, has said:
The hard fact is, despite Government reassurances that the fight against crime is still a top priority, the police service has witnessed the largest fall in actual police numbers since the crisis days of the mid-1970s.
That worries me. Mr. Broughton continued:
Every police station in this country is facing anger from its community.
We in Hillingdon echo that feeling. He also said:
Fewer officers, a rising workload and high levels of crime are combining to make the state of policing the worst I have ever known.
Between March 1992 and March 1997, the number of officers in the Metropolitan police fell by 1,477. Between March 1997 and March 2000, officer numbers fell, approximately, by a further 1,132. Under a recent funding settlement, the Metropolitan police's budget will be cut in both cash and real terms. In 1999–2000, it received £1,743.9 million. In 2000–01, it will suffer a cut in cash terms of 0.7 per cent.—a real-terms cut of 3.13 per cent.
Crime in London is rising. Between October 1997 and September 1998, and between October 1998 and September 1999, the number of recorded crimes rose by 80,285, or 8.7 per cent. In January 2000, London street crime was more than twice the January 1999 level. Muggings rose by more than a third over the past year in comparison with the previous year.
It is not only the cut in budgets that is causing the problem. All London Members of Parliament will recognise that the Metropolitan police has a real problem with regard to recruitment and retention. The financial pressures of living in London are incredible, and low morale is also detrimental to recruitment. If police numbers are to be increased, it will be necessary to help police officers with the cost of living in London—not only through London weighting and

47WH
accommodation, but through a real increase in salary. The Association of Chief Police Officers now appreciates that the Metropolitan police must be regarded as a special case.
The Police Federation has warned that a significant proportion of police officers are taking second jobs to boost their incomes. Some work as adult education teachers or nurses, while many others work as minicab drivers, couriers and pizza delivery drivers. That situation cannot continue.
I turn to Hillingdon, my local borough. The Hillingdon division of the Metropolitan police has an excellent record, for which I pay tribute to the previous borough commander, Alan Shave, and the current commander, Alan Matthews. The community is working well with the police and, for the first time in many years, there is a good working relationship with the local authority. We have an active and constructive police consultative group. All three Members of Parliament, who represent two political parties, work on an all-party basis and are highly supportive of the police's work. Yesterday, when the three of us met the Metropolitan police Commissioner to lobby him about local problems, it would have been difficult to tell that we were from different parties.
What is happening in Hillingdon is similar to what is happening in the rest of London. A look at the Hillingdon crime trends for the period from 1 April to 31 July 1999 gives some idea of the position. Street crime was up by 19 per cent. Motor vehicle crime was up by 18 per cent. All violent crime was up by 11 per cent. Burglary was up by 8 per cent. Total crime was up by 15 per cent. Clearly, more police personnel are needed to combat the current increases in reported crime. But what do we have? We have more reductions, with more planned.
The council tax payers of Hillingdon want to know why, in the past three years, their precept for the Metropolitan police has gone up by 36.29 per cent., yet they are getting fewer and fewer police officers for their money. Four police stations in Hillingdon are now closed to the public or operate restricted schedules, with opening hours that generally do not include weekends, bank holidays or any hour after 6 o'clock in the evening on any day. Only Uxbridge police station is open to the public for 24 hours a day.
In my constituency and the rest of the borough, there is more than a perception that police levels have become unacceptably low. There is an argument that a decrease in police numbers does not necessarily lead to an increase in crime, and that was true for a while in Hillingdon. Various measures, such as getting officers on sick leave back to work more quickly, meant that there could be some cuts without an increase in crime figures. However, it is now felt that enough is enough.
On the subject of sick leave, it would be a mistake to give the impression that many members of the police service are sitting at home when they should be at work. Last week, I called on a police unit in Hillingdon that is doing excellent work. The officer in charge is waiting for a kidney transplant. He is seriously ill and in a great deal of pain, yet he remains at his desk, working hard. We must dispel the myth that there are many more savings to be made by getting ill police officers back on duty.
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The problem is that Hillingdon is regarded as a leafy suburb, and is not given priority. Other hon. Members may wish to raise the subject of rural crime, which has its own problems. I shall speak up for the suburbs, because they are inevitably squeezed in between the inner cities and the rural populations. We are told that the suburbs can be left alone to get on with it, and that they have no problems. However, they do have great problems, and if we are not careful, they will become worse.
It is easy to be glib and we, as politicians, can come out with glib expressions from time to time. It is easy to trot out well-worn phrases such as, "We have the best police force in the world". If we really believe that—as I do—we must give the police our support. There are people who nurture strong anti-police feelings. It would be timely to remind such people in the capital that, if they want more effective policing, they should take note of the advice given in The Mirror today. Just under three years ago, that newspaper gave different advice, when it urged the voters of Uxbridge to vote Labour. I hope that it will have more influence today than it did then.
Mr. Deputy Speaker, I can see that other hon. Members wish to speak, so I shall conclude by quoting the chairman of the Police Federation, Glen Smyth, who has said:
There is now a crisis. This has got to be solved, and if it is not solved, our ability to deliver is not going to be there. If the Prime Minister and the Home Secretary really want to arrest the rise in crime, they must first arrest the dramatic fall in police numbers.
9.48 am
Mrs. Gillian Shephard: I am grateful for the chance to take part in this important debate, Mr. Deputy Speaker. My hon. Friend the Member for Uxbridge (Mr. Randall) may have described Westminster Hall as a backwater in the maelstrom of House of Commons activity. However, I believe that it is a useful debating Chamber, in which issues can be debated sensibly and rationally. There can be an exchange of views, and we can lay out our concerns in the excellent manner shown by my hon. Friend. I congratulate him on securing the debate, in which he has skilfully raised the problem of police numbers with an appropriate emphasis on its impact on his constituency.
The issues of police numbers, police effectiveness, public confidence in the police and public confidence in the legal system have been given a great deal of prominence over the past two weeks following the trial of Mr. Tony Martin, the Norfolk farmer convicted of killing a 16-year-old burglar and given a sentence of life imprisonment. Mr. Martin's property straddles the border between my constituency, South-West Norfolk, and that of the hon. Member for North-West Norfolk (Dr. Turner).
When the incident took place last August, an enormous impact was felt in the local community of Emneth in south-west Norfolk. I was given the opportunity to describe that in an Adjournment debate that I was granted in October. It was and is impossible to overstate the volume and intensity of the impact. In the wake of the reaction to the outcome of Mr. Martin's trial, Ministers and other hon. Members have had the opportunity to judge whether what I said in October was an exaggeration.

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Since August, I have avoided commenting on the case, the trial or the verdict. I have been a magistrate since 1973 and would be unlikely to make any comment on a case that may be the subject of an appeal and so may be sub judice.
Mr. Deputy Speaker: Order. I can perhaps help the right hon. Lady. The matter is sub judice because there is an appeal.
Mrs. Shephard: Thank you, Mr. Deputy Speaker. I want to make it clear that it has not been my intention today or in the past to comment in the media on the case. For the avoidance of doubt, I add that the Norfolk police's handling of the matter was rapid and effective at a time when the force's resources were severely stretched by two other high-profile murder cases, one of which led to a conviction and another to an arrest. One of them took place a few miles from the site of the Tony Martin incident.
My argument throughout has been that if the public perceive that the police lack the resources to protect them and their property, they may be tempted to take the law into their own hands. I received a letter last month from the Swann family of Stowbridge. They stated:
If the police cannot protect us (and the Chief Constable admitted that last night)—
that was a reference to a television interview—
then we must protect ourselves.
Mr. Martin's case illustrates why that state of affairs and state of mind must be avoided.
That view is illustrated by one of many reports in the local and national press. The Eastern Daily Press of 26 April stated:
in the PC's view, the shooting at Martin's…farm…could have happened within any Norfolk village because the policing cover was simply too thin to prevent it.
Mr. Kevin Allen, a retired police officer, was quoted in the article as saying that
The aftermath of what happened at Emneth Hungate poses a fundamental question about the way in which the force is run…do we want to police rural areas or don't we?…There is no police presence to act as a discouragement, and that's the issue in West Norfolk.
Mr. Oliver Heald: Does my right hon. Friend believe that closures of police stations at night and the reliance on hotlines to towns that are often a long way away adds to the anxiety of people in rural areas? Is it right that Wisbech police station no longer opens in the evening?
Mrs. Shephard: I cannot comment on Wisbech police station, which is not in my constituency; indeed, it is in a different county. However, the public are not reassured when making 999 calls to find that their calls are routed around a county, and that the people to whom they subsequently speak are not necessarily clear about the location from which the call is made. That is not reassuring.
As I said in the Adjournment debate last October, the problem has not arisen overnight. Criminals are more mobile and have improved communications. The volume of traffic has increased, and, paradoxically, the
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success of CCTV in many of our market towns has driven crime into the countryside. Those are some of the factors involved. However, there is no doubt that there has been a reduction in police numbers under this Government over the past three years.
My hon. Friend the Member for Uxbridge cited the reduction of 2,358 officers in the past three years which, translated into Norfolk terms, means that we have 50 fewer officers than three years ago. Norfolk has the smallest number of uniformed officers of any force in England. They do a good job with what they have, but they do not have the resources that they need.
Three times, to date, the Government have announced an increase in police numbers. They initially disputed the fact that numbers have fallen since they have been in power, but they now seem to accept what is an indisputable fact. I wonder whether the Minister will announce today that he intends to take notice of the report that his Department commissioned on rural sparsity in policing. As he knows, that is what rural police authorities, including Norfolk, are pressing for. For Norfolk, it would mean an additional £2.4 million for police on the beat.
In a letter to me, the new chairman of the Norfolk police authority states:
The Home Office's own consultants indicated as far back as 1998 that the funding formula which distributes central Government grant to Police Authorities underestimates the true cost of patrolling rural areas.
He refers also to the point that my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) made:
It fails to take into account the additional expense of maintaining sufficient resources available to respond to urgent calls speedily enough to bring a sense of safety and security to people living in isolated villages…Norfolk bid for 90 further officers in the recent Home Office "challenge funding" but we were only allocated 66 over a three-year period, now possibly reduced to two years. Since 1997 total officer strength has fallen by 50.
That is the view of the chairman of Norfolk police authority. The chief constable of Norfolk goes further. He is worried about perception. The Minister will say, and up to a point I agree with him, that no crude correlation exists between police numbers and the reduction of crime. He will also say, and we would all agree with him, that the management of police resources and the modernisation of their use are also vital. However, so is perception. The chief constable of Norfolk expressed his dilemma thus:
The real difficulty for me is handling the fear of crime issues and confidence in local police. No matter how hard I try to describe how we allocate scarce resources, people are going to be sceptical because all they see are scarce numbers of police officers on the ground.
That widely accepted perception is not confined to individuals. At the end of last month, Swaffham town council in my constituency contacted me, saying:
We write to you to express our greatest concerns…Police presence is inadequate. We are told that there are 10 constables covering our area. This has to be stretched to allow for four shifts over each 365 days of the year.
The Fenland Citizen, a newspaper based in Wisbech that covers a large area of my constituency, recently asked its readers two questions. One concerned the outcome of the Tony Martin trial, and I shall not quote it. The other question was, "Do you feel safe in your

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own house?" to which 1,050 people have responded to date—a respectable figure by MORI poll standards. Of those who replied, 91 per cent. said that they did not feel safe in their own house. In the 21st century, such a response does not show a satisfactory state of affairs. Whatever the Minister's response, I am sure that he shares that view.
The Government will say that the Opposition want to spend more on this and more on that, and that we must be aware of the implications that that would have on public spending. However, it is a matter of priorities. Norfolk is asking for an additional £2.4 million. Recently, the Government gave £100 million to help former mining communities. If that is the Government's priority, so be it, but let them say what their priorities are. If policing in rural areas and an increase in police numbers are not their priorities, let them be open about it.
I have described events in my constituency, but I have received hundreds of letters from people throughout the country, one of which was from a serving police officer in the Devon and Cornwall constabulary. He wrote:
Whilst I can't condone the use of "More force than is necessary", this incident—
the Martin case—
was bound to arise, I would suggest anywhere in the country.
It may or may not surprise you to know that such a large area as Okehampton has been in the past, solely policed by one officer, even Probationary female and male officers. Night and day patrols subjected to all that it implies, compounded with radios that can't be guaranteed to function due to the undulating countryside…It would appear to the rank and file officers, that senior management's time is occupied by constant appeasement to the Home office for good results figures. keeping the pressure groups that are constantly shouting that the Police are not Politically correct…happy…I hope that you do not think that I am an old embittered Police officer writing to you. I am not. It is my intention to extend a further two years beyond my time, but we lower rank officers feel so helpless at being unable to rectify the elementary shortcomings of the police service.
I swore an oath for the "Protection of life and property, Prevention and detection of crime". It is becoming ever more difficult for me and my colleagues to keep that oath.
I hope that somebody in your position can alter the wrong road the best Police Service in the world is now sadly taking.
I am not in any position to change that road. The Minister is.
10.4 am
Mr. Dafydd Wigley: I am glad of the opportunity to take part in the debate, as the matter of police numbers is not devolved to the National Assembly in Wales, unlike the situation in Scotland. I congratulate the hon. Member for Uxbridge on raising the subject, which it is appropriate to focus on at this point.
I represent a scattered rural area; there are 93 villages, hamlets and towns within my constituency. Therefore, the rural dimension to which the right hon. Member for South-West Norfolk (Mrs. Shephard) referred is high on our agenda when considering the availability of police resources and police numbers. The rural dimension of the police service has recently received a considerable amount of attention, partly owing to the
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case that the right hon. Lady mentioned from her area. Therefore, it is appropriate that we give some time to that aspect, while recognising the equally important problems that arise in urban areas.
There is a strong feeling in the villages in my constituency that they do not enjoy the benefits of a truly community police service that they enjoyed a generation ago. That is not a criticism of the police; it is in some ways an inevitable consequence of the change in the patterns of life and, not least, of the rightful expectations of change that police officers have for their working patterns. In the old days, a police officer would live in the village and might be on call virtually 24 hours a day. That was unfair on the individual, who, as a consequence, might not have been able to buy his own house as he wished.
To address rightfully changing expectations, we need a significantly larger number of officers to give the same cover. We might need four or five officers to give the cover that one officer used to give in village police stations in the past. That clearly has a significant bearing on resources, and presents a challenge to police forces as to how to distribute their resources.
In my area, as in that of the right hon. Lady, we have seen the closure of village police stations. Villages, and small towns such as Nefyn in my constituency, are concerned about the possible loss of their police stations. If the Nefyn station is closed, there will not be a single police station on the northern side of the Llyn peninsula, from Caernarfon to Ynys Enlli—Bardsey island, for a distance of around 45 miles. There will not be a police station between Caernarfon and Bardsey island, and there is no station on Bardsey island either. That is clearly a matter of concern to Nefyn town council, but it is of equal concern to those who live in the area and to those who go there on holiday—the population of that area expands tremendously in the summer. One needs a police presence that is in line with the summer as well as the all-year-round demand.
There is a basic problem with sustaining locally based services and police numbers in areas such as mine. In north Wales—although technically it is in mid-Wales—Dolgellau is a centre for the police service, and yet the staffing levels are so inadequate that an appropriate inspector cannot be available 24 hours a day. Those who are arrested in the Dolgellau catchment area are taken up to Caernarfon, which is more than 40 miles away, and are held there overnight. That means that they are taken away from their families and, perhaps, held for two or three nights away from them and from the solicitors to whom they would normally turn in their communities. Their basic human rights are contravened as a direct consequence of the inadequate levels of staff available in centres such as Dolgellau and the smaller villages to which I referred.
The question of rurality has been placed on the political agenda because of recent events. The right hon. Lady referred to a report that I, too, wanted to bring to the attention of hon. Members in Westminster Hall. An independent report from ORH Ltd. was commissioned by the Home Office and was published on 30 April 1999, more than 12 months ago. That report considered the question of the additional costs associated with policing sparsely populated areas, and its conclusions were that a sparse population meant that costs were higher,

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because of the need for greater police numbers. The costs can be quantified and the current funding formula can be amended.
If I understand it correctly, the report set out three options. In the North Wales police force area, an additional £1.9 million would be needed to provide adequate strength for the police force to deal with the rural dimension. In the Dyfed Powys police force area, the figure would be £3 million. As the right hon. Lady mentioned, the report referred also to various English areas and specifically to Norfolk, which clearly suffers from the same kind of problems.
Will the Minister clarify whether the Government's recent comments on providing more resources for rural policing imply a full acceptance of the consultants' report? If so, has a decision been taken on how to amend the financial formula for distributing resources to take into account sparseness and rurality? When will the resources be available to the police forces that desperately need them?
If we are to avoid encouraging people in rural areas to resort to guns—heaven forbid, none of us wants that—we must build up their confidence in the police force's ability to protect them. That means giving police forces the resources that they need to do the job that we, as a community, ask them to do. It also means putting resources into schemes such as neighbourhood watch, which the police force in my area greatly appreciates. Incidentally, it is worth noting that the use of firearms in robberies dropped from 11.7 per cent. in 1991 to 4.8 per cent. in 1997. That is an acceptable trend, about which we are glad. We do not want that to be reversed as a consequence of the kind of tragic incident that occurred recently.
The fear of burglary is substantial. It is twice as high in Wales and England as it is, for example, in Spain. It is three times as high here as in Sweden, and five times as high as in Switzerland. That is the size of the challenge to build up the confidence that is needed. We know that notifiable offences have gone up by 50 per cent. from 1991 to 1998. Despite the increase in crime and the changing social patterns to which I referred, the police force in Wales and England has increased in size by only 25 per cent.—from 97,000 in 1971 to 126,000 in 1998. If we are to have the police presence that we need in rural and urban areas, we must be prepared to put our money where our mouth is. I hope that the Minister will make a positive statement when he winds up this debate.
10.12 am
Mr. Simon Hughes: I am pleased that the hon. Member for Uxbridge (Mr. Randall) was able to secure this debate, and I want to echo the central message of the contributions of the right hon. Members for South-West Norfolk (Mrs. Shephard) and for Caernarfon (Mr. Wigley).
Hon. Members representing all kinds of different communities—rural, urban or suburban—are saying that unless the public have confidence in the police force, they will believe that they must act independently. The letter to which the right hon. Lady referred epitomises the increasing perception across the country. I know each of the right hon. and hon. Members' constituencies to some degree—I know the constituency of the right
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hon. Member for Caernarfon better than the others—and, although I represent an entirely different kind of community, the same feeling is abroad. Unless we respond to that, we will be in severe difficulty. There will be much more crime because people will act in a criminal way to protect themselves.
I want to start by making one critical comment. I shall follow the right hon. Lady's example by not going into the details of the specific case. As a lawyer, I know that it would be unwise to discuss the merits of a particular case, which is now the subject of an appeal. I have been troubled to discover that, in response to the wider debate, people have given foolish and simplistic answers, including the leader of the Conservative party, who said the other day that the police should be freed from bureaucracy—we would all agree with that—and from race awareness seminars to spend more time catching criminals. I can see how that might appeal to the majority, and even how it might appeal to some of the police. However, if that is the leader of the Conservative party's idea of a responsible attitude in the light of all the recommendations of the Lawrence inquiry, his definition of "responsible" is not one that most people would share.
There is every argument to say that we must have enough police—I shall address that in a moment—but to believe that good policing can be achieved without an understanding of the whole community is not appropriate. There is probably no community in England and Wales that is not racially mixed to some degree, although the degree is greater in areas like mine than it is in Norfolk or north Wales.
The issue does not distinguish between urban and rural communities. I was brought up in rural Cheshire. We then moved to rural Glamorgan and then to rural Herefordshire, and I spent much of my family time in rural Meirionnydd. I understand the needs of those communities, but suburban Uxbridge or inner-city Southwark and Bermondsey are made up of communities—some small and some large—which all need to feel that they have their own policing. They all want to relate to the police service and feel that it is close to them.
The history of police strength over the past 10 years is not a comfortable subject. The right hon. Member for South-West Norfolk rightly criticised the present Government; the last five years of the Tory Administration were equally uncomfortable on that issue. Before then, police numbers had risen. The Tory Government's final years were the precursor to what we have seen since then. In 1995, the then Prime Minister, the right hon. Member for Huntingdon (Mr. Major), promised 5,000 extra police officers. By 1997, the number was lower than at the time of the general election in 1992; instead of 5,000 extra, there were hundreds fewer.
Last year, at the Labour party conference, we had the famous speech from the Home Secretary, promising 5,000 extra police officers. However, when examined, the figures showed immediately that, because recruitment levels are, sadly, so low, police numbers at the next election will not even be back to what they were at the last election.
I accept that the Labour party did not come to office promising a specific number of extra police officers. Its specific pledge was to put more officers back on the beat,

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but that has not happened either. The Audit Commission—not politicians—makes it clear that the number of police officers on the beat has gone down. Its last report said that there were 1,000 fewer. That is where the public often perceive, in the first instance, whether there is satisfactory policing.
Mr. Heald: Does the hon. Gentleman agree that the Audit Commission's point was that constable numbers had increased throughout the period of the Government from 1992 to 1997? It said:
It is significant that over the last year this trend of increases in constable numbers has begun to reverse.
If the hon. Gentleman wants to be serious about the 1992–97 period, will he agree that the number of specials was up by 4,000 in that period, civilians by 2,000 and constables by 4,000?
Mr. Hughes: I shall not take issue with the hon. Gentleman on the fact that the numbers moved in that direction. He is right. I am simply saying that the public have seen two major trends—a reduction in police officers across the country and a reduction in constables on the beat. They want more police officers and more constables on the beat.
The difficulty is evidenced by figures published in The Observer on 9 April, in an article headed "Britain's hardest hit police force". In Suffolk, the number leaving from March to October 1999 was 46 and the number joining zero; in North Yorkshire, leaving 42, joined two; in Cleveland, leaving 80, joined nine; in Merseyside, leaving 85, joined 39; in Staffordshire, leaving 39, joined 20: in Sussex, leaving 178, joined 100; in Hampshire, leaving 145, joined 92; and in Greater Manchester, leaving 277, joining 169.
We are not recruiting to fill the gaps and, unless we address that question, people in the village communities of Norfolk or Hampshire, in suburban Uxbridge and in inner-city north Southwark and Bermondsey will not have the policing that they feel they need. The situation was reflected by the right hon. Member for Caernarfon, and I want to make some suggestions.
In the six months before September 1999, police numbers fell in 29 of the 43 forces in England and Wales, including the Met—in which there was a huge fall—and the forces in Hampshire, Devon and Cornwall, Merseyside and North, South and West Yorkshire. Rural and urban areas alike have been affected. The number of volunteer special constables went down by 3,300 between March 1997 and March 1999. If we exclude police pension money, which eats into the money available for policing, we find that 14 police forces had a cut in funding, in real terms, in the last financial year: Bedfordshire, City of London, Cleveland, Cumbria, Essex, Hertfordshire, Humberside, Lincolnshire, Merseyside, Sussex, Warwickshire, West Mercia, West Midlands and West Yorkshire.
The Audit Commission made it clear that, although the rate of public satisfaction is about 50 per cent. in terms of mobile police patrols and about 95 per cent. in terms of police responses to emergency calls, the rate for police foot patrols is 23 per cent. Less than a quarter of the public is happy with the bobby on the beat.
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The Government allocated an additional £35 million for recruitment this year, but the policing of the millennium celebration cost £33 million, and that was not compensated. The money was eaten up in just one set of events throughout the country. There is no simple equation that states that we can reduce crime simply by adding more police but, for the reasons that the right hon. Member for South-West Norfolk, the hon. Member for Uxbridge and I have given, if the police presence is not increased, the public will lose confidence in the police. I have never heard anyone argue that having fewer police means that we have a better chance of catching criminals. Having more police may not help us to do better, but having fewer is certainly not the way either.
We need to reverse the cuts and increase strength. Every community—in villages, towns and cities—ought to have its dedicated police officers. The Church of England, to use a rather odd example, serves the whole country and people in every parish know who their priest is. In the same way, there ought to be permanently dedicated officers who are always accessible and not distracted from that job.
When researching for this debate, I discovered a bizarre figure in an Audit Commission report from 1996, showing that, round the clock, only 5 per cent. of police strength is deployed on the streets, in cars or on foot. Only 5 per cent. of on-duty police officers are out and about in the community. That is not acceptable. We could increase the number of retained officers just as, in parts of the country, there is a retained fire service. Ministers should allocate more money to police services to increase the number of retained officers, as well as special constables. I agree with the hon. Member for North-East Hertfordshire (Mr. Heald) about that.
There is no simple separation between rural and urban issues. Of course, there should be a better service for those rural communities that are not being properly served at present, but the figures show clearly that more than half of property crimes and one third of the victims of those crimes come from one fifth of the population of England and Wales. That part of the population lives in lower-quality social housing where people are three times more likely than owner-occupiers to be the victims of personal crime and twice as likely to be the victims of property crime. Victims of repeat crime are most likely to be found where crime is concentrated.
I was recently in Dewsbury and Doncaster, parts of which were like the third world. They were derelict and it was as if no police had ever been there. The housing and community estates were strewn with rubbish and litter and felt abdicated, particularly the part of Doncaster that I visited. I met the police in Dewsbury who spend a huge amount of time dealing with the drug problem, but many people feel that they do not receive much service in their communities.
We must be realistic about the use of plant and resources, including police stations. Some good Audit Commission work has suggested that we should think more imaginatively about where we have a police presence. I was brought up in north Wales and the police house at Maentwrog was available to the community 24 hours a day. That may not be appropriate now but,

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in village communities, the police could be available not just where the shop or post office is but where the vicar or the pub is—
Mrs. Shephard: Or where the bank was.
Mr. Hughes: Absolutely, or in the village hall or parish hall. There are ways of sharing resources and plant, and the Audit Commission made some sensible recommendations. That is the route to take with the confidence of the public. I have never taken the view that police stations should never close, because that is unrealistic. Some police stations are now in the wrong place because communities have developed a long way away. The Minister is right that we need always to reduce paperwork, which is the bane of police officers' lives. The more paperwork that can be given to civilians, the better. Sickness must also be reduced.
I am sure that there is a future for sponsorship schemes. People used to be recruited to the services and to large companies such as ICI by payments to enable them to go to college in return for a specific number of years working in the services or for the companies. The police are ready for that and many youngsters could be recruited from all communities if they had that incentive.
I am completely clear that we must develop the community constabulary and warden scheme, as the Government have started to do. We need two tiers of policing. We need local community policing based on the local authority and people who work as park keepers, caretakers, school patrol people, traffic wardens and so on. They are the eyes and ears of neighbourhood watch and business watch. We also need police to deal with regional crime issues, the big dealers and so on. Unless we have both, the public will not perceive that anything is being done.
The transport police could be developed and transport providers could be given more responsibility to ensure that stations are safe. In London now, Mr. Grieve is examining murder and other serious crime and we need also some police to concentrate on persistent criminals. As in the Norfolk case and others, some people's names are always on the books with a list of charges and histories as long as your arm.
On London, the Minister should remove Metropolitan police funding and support from the general structure of Government funding, as the hon. Member for Uxbridge suggested. As the police service for the capital city, the Metropolitan police has a wholly different set of needs and obligations. It would be helpful to London's police and to the other 43 forces if London was not part of the same funding formula, but was funded separately. I support that argument for all sorts of reasons, of which the May day events are only the most recent.
We must allow for the greater cost of living and working in a capital city. That is not an argument against the rest of the country, but it is a fact that, whatever public service people work in, it costs more to buy a home in London. I know from where I live how prices are rising.
I am conscious that tomorrow is London election day. I hope that the voters of London will elect a mayor who does not want to be mayor of the world, as certain
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people seem to want to be. Some people want to take on global capitalism and to try to solve the Irish problem, as well as every other world problem. I hope that the people elect someone who wants to concentrate on London issues only. The candidates of the three main political parties, but not the independent candidate, come into that latter category, and Susan Kramer would do the job best.
I hope that London voters do not elect someone who will be continually distracted from the issues facing the electors of this great city; that would not be a service to London or to the London communities which, like rural communities, want a larger police service in which they can feel greater confidence.
10.30 am
Mr. Oliver Heald: I was going to congratulate my hon. Friend the Member for Uxbridge (Mr. Randall) on having secured the debate, but I am not so sure now that it has given the Liberal Democrats a platform to make an election broadcast. To be serious, it was a good debate to instigate. The problems experienced by cities and by rural areas have been highlighted; I am not sure that they are so different.
I know the constituency of the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) quite well—not least because he trounced me in the 1987 general election—as I have friends there. There is concern that the Rotherhithe police station will be put on to short hours and that policing will be based at Walworth. That is the sort of problem that one gets in areas such as Cambridge or south-west Norfolk; the police station at Wisbech closes in the evening, for example, and people have to telephone a distant place to get the police to come. It all creates an atmosphere of concern, lack of confidence and genuine fear.
I suppose that the Government have to put on a bold face—the Minister has delivered sweet words on the subject—but what my hon. Friend the Member for Uxbridge said about Hillingdon, and what my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) said about her constituency, should give the Government pause for thought. The public are not stupid, and when they read headlines like "Demoralised Met Can't Fill 400 posts", "Met Shuts 23 Police Stations at Night", "Tax Strike as Police Cuts Anger Residents"—that refers to Finchley—and "Huge Rises in Street Crime", they ask themselves whether that is just media sensationalisation. They then go down to the local police station and find that it is not open in the evening, or they notice that there are not the numbers of police out and about that there used to be. That creates a climate in which people are genuinely worried.
We cannot discuss the details of the Martin case, but I have spoken to people in my constituency—it is not the kind of rural area that the right hon. Member for Caernarfon (Mr. Wigley) represents, but it still has pretty remote spots—and people there are worried that a 16-year-old will burgle their property late at night and that the police will not be able to get there on time. It is not electioneering or politicking to point out that that is happening because the Government have made a terrible mistake in allowing police numbers to run down.
Between 1992 and 1997, the Conservative Government stripped out some of the middle ranks of the police service, and the overall numbers of police can

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be said to have fallen. However, as the Audit Commission recently pointed out, the number of police constables rose year on year. The front-line crime fighters who were seen to be doing the job increased throughout the years of the Conservative Government, as did the number of specials. Specials are very important in terms of dealing with crime on Friday nights and at times of pressure.
The number of civilian staff also increased, enabling police to get out and about. In 1992–97, the number of specials was up 4,000, the number of civilians was up 2,000, and the number of constables was up 2,500. The Government have reversed that situation, and the Audit Commission is right to criticize that. The number of police has fallen by 2,300 which includes, for the first time since 1990, a fall in the number of constables out and about. The number of civilian staff has remained at 53,000 throughout the period, and the number of specials has fallen by 3,500. It is not surprising that people are beginning to notice that there are fewer officers.
There is a problem with the recruitment of officers, especially in London where 400 officers for whom there is funding have not been recruited. Hendon needed 1,300 new recruit officers in the past year but did not have anything like that number. It had only two out of every three officers that it needed. The problem may be about money, but it is also about the fact that officers feel insulted and demoralised. They feel that criminals who are let out before the end of their minimum periods then re-offend.
The Government have turned the job of policeman from one that was held in high regard to one that people have concerns about. Even officers who join the Metropolitan police do not stay. The number of probationers—officers in their first two years with the Metropolitan police—has fallen by 353 in the past nine months. The position in London is of great concern, but the rural situation is also worrying. The Minister knows the eastern region well, and the number of officers there has fallen by 357 since his Government took power. There are 46 fewer officers in Bedfordshire and 30 fewer in Cambridgeshire. In Norfolk, numbers are down 50; in Lincolnshire, 85; in Suffolk, 20; and in Essex, 126. The number of officers needed can be judged easily from the recent crime-fighting fund bid for the extra numbers that the Government are prepared to fund. Nationally, 8,220 were requested and only 5,000 were given. In the Eastern region, 397 were given but 556 were wanted, so 160 officers fewer than needed were provided in that region alone. The result of that is fear in rural areas.
People are worried also about the spin and fiddling of the figures that the Government go in for. The Government often say that they shall provide 5,000 extra officers. At first, we all thought that there would be an extra 5,000 police, but it does not mean that at all. It means that they will recruit 5,000 on top of the existing plans. All the arithmetic was blown to pieces after the Home Secretary's conference speech.
If the Government keep saying that police numbers do not matter and have no direct relationship to the detection of crime, why are they so desperate to persuade us that their 5,000 extra officers over the next two years will make all the difference? The reason is that
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they have made a terrible mistake in running down police numbers and are now trying to rescue the situation.
We know that 6,000 officers a year are lost through natural wastage, and that the police wanted to recruit 12,000 officers over three years. They have added another 5,000 over three years, which is a net loss of about 1,000 officers over the period. Recently, the police have said, "No, it will not be three years. We intend to recruit those 5,000 officers over two years." We have asked for the revised number of recruits for each force, because we want to know where they will go over the next two years. But what happens? We are just told, "We are having discussions. We shall make a further announcement as soon as details of the accelerated scheme have been finalised." Why are the Government announcing a scheme when they have not finalised the detail? When will the details be published?
I come now to the Milburn letter. The Minister will remember that the then Chief Secretary wrote a letter shortly before the Labour party conference when the recruitment of the 5,000 officers was announced. He said that police training schools would be operating at more than full capacity and he was worried that they would not be able to train that number of officers over three years. The Government are now saying that they will produce those officers over two years, but how on earth will they manage that? Will the Minister say whether the training schools have that extra capacity? How will it be achieved?
My other worry concerns the third year. If the new officers are to be provided over two years, there will still be the natural wastage—6,000 officers will be gone in the third year. What will happen then? Or is such intended action just a gimmick running up to the next general election? Will the Government put in a few extra officers in the two-year period and then, after the election, have a situation like a cliff face, with numbers going right down again? Is it true that, in the third year, wastage will outstrip recruitment and the numbers will fall back again?
When the Minister announced that he would allow the recruitment of the 5,000 officers over three years, he said that £35 million would be provided in the first year for the first tranche of officers. Yet the Budget statement suggested that, in order to double recruitment in the year 2000–01, the Govt would provide a further £11 million. How can they obtain a doubling in the figures for half the money?
Mrs. Shephard: Ask the spin doctors.
Mr. Heald: Yes. The fact is that the public have rumbled the Government and they want real action. They want delivery, not more words.
The chief constable of Humberside explained how he felt after only 29 per cent. of the officers that he wanted in the crime fighting fund bid were granted. He said that it was a "body blow" for the force and that the announcement meant fewer officers to provide the service that the public want. He said that, in slashing the budget, the Government had ignored the views and concerns of local people. Glen Smyth made the simple point that we must have feet on the beat to put hands on collars. I cannot put it much simpler than that.

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The Government should take seriously the recent survey of 6,000 police officers that showed that more than three quarters of them felt that morale was low. The same survey found that 71 per cent. would take another job if it were offered to them. That survey compares well with the survey carried out by the Fenland Citizen, to which my right hon. Friend the Member for South-West Norfolk referred, which showed that 1,050 people—91 per cent. of the respondents—did not feel safe in their own homes.
Is it not time that the Government restored the numbers to the level that they inherited, took away from police officers many of their time-wasting jobs and looked at imaginative initiatives—such as that being launched today by the shadow Home Secretary—which would allow police officers in rural areas to work in shops? The hon. Member for Southwark, North and Bermondsey agreed that that was a good idea.
Why are the Government not coming up with such imaginative ideas? Are they stuck, enjoying the Whitehall world? Are they not considering how to protect people and meet the essential contract that the citizen has with the state to be protected and free from fear?
10.44 am
The Minister of State, Home Office (Mr. Charles Clarke): First, I congratulate the hon. Member for Uxbridge (Mr. Randall) on securing the debate, which has generally been constructive and positive. I welcome it and I hope to respond in that spirit.
We have debated these issues on the Floor of the House, such as in the debate on police funding on Thursday 3 February, in which several hon. Members representing London constituencies spoke. A full discussion of the issues involved has taken place. I agree with the right hon. Member for South-West Norfolk (Mrs. Shephard), who approved the Westminster Hall style of debate. That was right and positive.
I shall respond to the debate by making a couple of points about funding overall, and I will then deal specifically with the point about London. I shall deal specifically with rural sparsity, and I will then make some general points in response to the hon. Member for North-East Hertfordshire about police numbers and bobbies on the beat.
The Government's overall spending plans for the three years beginning April 1999 were announced in July 1998. Under our plans, an extra £1.24 billion is being provided for police in England and Wales between 1999 and 2002. For the year 2000–01, the current year, the total amount of police authority spending to which the Government are prepared to contribute their share of funding will be £7.35 billion. That represents an increase in police funding of £212 million, or about 3 per cent., over the year 1999–2000.
I acknowledge the point that the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) made—I made the point in the debate on police grants—about how pensions take a significant chunk of spending, and that that varies among different authorities. He is right to raise that issue. We are actively considering the matter at the moment, because not only does it take a chunk of spending away from police authorities, it impacts on different police authorities in
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a highly variable way, simply because of the percentages involved. I have received several representations from hon. Members, chief constables and police authorities about pensions. I shall not dwell on the matter, but I wanted to acknowledge the point.
We recognise the costs of the Metropolitan police and, in this year's funding settlement, the force was allocated an extra £182 million. I pay tribute to the work of the Commissioner, Sir John Stevens, who has put support for front-line policing at the heart of his plans to reorganise the Metropolitan police. The decision to streamline the Met and remove the area tier of management is enabling the Met to transfer resources and to maintain police numbers managed locally. Those officers are in turn supported by all the other officers who provide pan-London and specialist services.
The hon. Members for Southwark, North and Bermondsey and for North-East Hertfordshire (Mr. Heald) mentioned Southwark. I met the Southwark division a few weeks ago, and discussed in detail issues such as Rotherhithe police station. The changes being effected in Southwark will increase local police presence throughout the borough. Some proposals have aroused controversy, especially in the constituency of the hon. Member for Southwark, North and Bermondsey, but the general effect is part of the overall drive to have more policing on the front line.
During this year, the Commissioner intends to transfer funding for 445 posts from central Metropolitan police budgets directly to those responsible for divisional policing, thus moving people into the divisions of London. Priority will be given to filling divisional vacancies. That will put an additional 300 officers on the street by the end of the financial year. Specific increases resulting from the crime fighting fund will be targeted at boroughs that face the most serious challenges in terms of burglary and street crime.
Target numbers for police officers for 23 borough commands will be unchanged, although that will enable many to increase their numbers by filling vacancies. The initial allocation of funding under the crime fighting fund will enable an additional 242 officers to be utilised in the London boroughs that most need them.
Although this debate is about police numbers in general, I shall refer briefly to the points made about recruitment issues in London. As a result of what my right hon. Friend the Chancellor of the Exchequer announced in his Budget statement, Metropolitan area pay issues are being considered through the standard structures and procedures, about which I cannot comment here.
Mr. Randall: The Minister said that resources would be targeted on those boroughs in most need. Was he referring to boroughs with the largest number of incidents, or those with the largest increase in incidents such as burglary?
Mr. Clarke: I cannot answer that question directly, as it is a matter for the Commissioner. However, I am happy to write to the hon. Gentleman on how that will be defined. The Commissioner will seek intelligently to focus on those areas in greatest need. I shall discuss whether they are defined by the increase point or by the level point, and write to the hon. Gentleman in due course.

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Rural issues were raised by the right hon. Members for South-West Norfolk and for Caernarfon (Mr. Wigley). I am familiar with those issues. Although my constituency is not rural, it is in the middle of a rural county in which the issues raised by the right hon. Lady have been current, as she is more than aware, in the media and more generally. As she said, she raised the issue in an Adjournment debate on 19 October last year. Perhaps I could apologise to her, as I did at the time, for not being able to respond to that debate. I am delighted to do so now.
Much of the subject was discussed yesterday in an Adjournment debate secured by the hon. Member for North-West Norfolk (Dr. Turner). I do not intend to go over the whole territory again. I want to pay tribute to the right hon. Member for South-West Norfolk for stating so clearly that she has confidence in the Norfolk constabulary. As I said yesterday, I felt that the statement by the right hon. Lady and the other Conservative Members representing Norfolk—which implied a lack of confidence in the constabulary—was damaging and wrong. I am delighted that she has put the record straight, and focused on the important political issues.
Mrs. Shephard: The Minister must not be carried away by the spin that is put on specific words. In the statement to which he refers, I and my three colleagues from Norfolk made it absolutely clear that we were worried—as, clearly, were our constituents—that the police do not have the resources to do the job, and therefore are at risk of losing the confidence of the public. It is not because of the police, but because they are perceived to be thinly resourced. I have made that clear this morning, and that is what we sought to highlight in our press release.
Mr. Clarke: I am grateful for that clarification, which repeats what the right hon. Lady said in her speech. I am responsible for spinning many things, but I am certainly not responsible for the spin put on the statement made by the right hon. Lady and her colleagues to the media in Norfolk and elsewhere. All I can say is that a perception is abroad, which she has helpfully knocked on the head, that a lack of confidence in the Norfolk constabulary might have been expressed. I am delighted by the absolute clarity that she offered in her speech and her intervention.
On sparsity, I shall not repeat what I said yesterday, except to say that I take it extremely seriously. I have met authorities and discussed the issue fully. The argument has power and force, which was expressed in both speeches on the matter this morning. It is being addressed in the context of the comprehensive spending review, the first year of effect of which—in answer to the question posed by the right hon. Member for Caernarfon—is 2001–02. I cannot prejudge the conclusions of the comprehensive spending review; that is a matter for the Chancellor and for the Government as a whole. However, as I have often said before, the argument has force, and those who make the argument on the basis on which it has been made today are justified in doing so.
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The Government will publish a White Paper on rural communities later this summer, and I am optimistic that there will be a chapter in it specifically on rural crime. Several significant issues raised in the debate need specific attention. I agree that there are points of common experience that are shared across the country, but I believe, too, that there are issues specific to rural areas that need to be addressed specifically.
The hon. Members for North-East Hertfordshire and for Southwark, North and Bermondsey referred to what Glen Smyth said about a feeling abroad. In my view, that relates to the colloquial phrase "bobbies on the beat", or the extent to which there is a police presence in a community.
There are four factors to the question of bobbies on the beat, the first of which concerns police numbers. The Government have never taken the view that numbers do not matter; they do, but that is only one factor in terms of police presence. The second factor is technology, the third is the abstractions of the criminal justice system and the fourth is the development of partnership. Those are matters for the chief constable of each area and his authority, but they are all important considerations in increasing the numbers of bobbies on the beat.
I will deal with those factors briefly, one by one. Police numbers have fallen in five of the last six years, despite what is said. Overall police numbers fell under the previous Government from 128,290 to 127,158 between March 1993 and March 1997, which represents the loss of more than 1,000 officers. We are responding to that situation, and the Home Secretary announced in his Labour party conference speech last year the recruitment of 5,000 officers. We have more recently announced that that recruitment will be brought forward from a three-year period to a two-year period, as a result of the additional resources announced by the Chancellor in his Budget.
I can tell the hon. Member for North-East Hertfordshire that the original proposal before the Budget was that, for the three years beginning 2000–01, we would have 1,000 officers, and then 2,000 and 2,000. Now, the total of 5,000 will be spread over two years instead of three and, so far, we think that the number of officers will be doubled in the first year. That would mean that there would be 2,000 officers in the first year and 3,000 in the second.
To be frank, we want to increase that first-year number from 2,000, and we are actively considering the number to which we can increase it. Instead of 2,000 officers in the first year, followed by 3,000 in the second, there might be 2,500 in each year or 3,000 in the first and 2,000 in the second. For exactly the reasons that the hon. Gentleman mentioned—training facilities and resources—we are discussing recruitment with the chief constables, the police authorities and the training people. We intend to make an announcement on those discussions shortly. The effect will be to accelerate significantly the recruitment of extra officers in every force, which will be widely welcomed.
The point that the hon. Member for North-East Hertfordshire made about the third year will be discussed as part of the overall comprehensive spending review for 2002–03. We are discussing what the appropriate levels of funding for extra officers will be, in

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the context of that review. However, I know he will understand that I cannot say anything about that until the comprehensive spending review is concluded.
Another important question is that of civilian numbers. As the right hon. Member for South-West Norfolk said, in Norfolk there was a reduction of 49 police officers between March 1997 and September 1999, although there was an increase over the same time of 57 civilians. That is not untypical; such a distinction has occurred in many forces, precisely because of the operational decisions taken by the police about the best way in which to use their resources. The previous Government rightly decided to take those responsibilities away from the Home Secretary and give them to chief constables.
I agree with the points made about retained and special officers; we are considering that for the comprehensive spending review. I must conclude because my time is short, but I would like to continue on another occasion. It is important to recognise also that the issues of technology, the criminal justice system and the hon. Member of developing partnerships all have a massive impact on the number of bobbies on the beat. We should give those issues at least as much attention as police numbers.

Non-Proliferation Treaty Review
11 am
Mr. David Chaytor: I am grateful for the opportunity to open this debate on the review conference of the non-proliferation treaty. The conference opened on 24 April and will continue until 19 May, so the timing of the debate is highly appropriate.
This debate follows an Adjournment debate on the wider topic of weapons of mass destruction and the implications for global security that took place in Westminster Hall a few weeks ago, which was timed to coincide with the launch of the all-party group on global security and non-proliferation. It also follows a very interesting visit to the United Kingdom by the United Nations Secretary-General's special envoy for peace and disarmament, Mr. Michael Douglas, who addressed a well-attended meeting in this Chamber some weeks ago. He called on the UK to use its particular influence in international negotiations to ensure that the NPT review conference was a success and that nuclear weapons states and non-nuclear weapons states reaffirmed their commitment to achieving global nuclear disarmament.
The UK's attitude to nuclear weapons is not typical of most countries. The national Governments and peoples of most countries long ago rejected nuclear weapons as the cornerstone of their defence policies. The overwhelming majority of states are now strongly committed to seeking the complete elimination of nuclear weapons.
In the post-cold war era, the debate about nuclear weapons is very different from 20 years ago. There is now a consensus among nuclear weapons states and non-nuclear weapons states that the disarmament process must continue. The United States and Russia have taken major steps forward in that direction, although they have not yet gone far enough. The debate now centres on the means by which the commitment to global nuclear disarmament, as enshrined in the non-proliferation treaty, can be achieved.
The non-proliferation treaty was signed in 1968 and came into force in 1970. Originally, it was signed by 182 countries, which agreed not to acquire nuclear weapons. Some of them abandoned the nuclear programmes that they had already started. The treaty allowed the five current nuclear weapons states to continue to hold their weapons on condition that they promised to end the arms race and work towards nuclear disarmament. The treaty now has 187 members, at least two of which have unfortunately violated their treaty obligations. Four states remain outside the treaty, three of which—India, Pakistan and Israel—are now nuclear weapons capable.
The treaty was initially agreed for a 25-year period. At the 1995 review conference, after some debate, it was extended indefinitely. Significantly, the 1995 conference also agreed to three further measures: first, to conclude a comprehensive test ban treaty by the following year, secondly, to commence negotiations on a fissile material cut-off treaty—that is, a treaty banning the production of fissile material—and thirdly, to increase efforts to pursue nuclear arms reduction.

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At the heart of the non-proliferation treaty is article 6, which makes it clear that the treaty is about the commitment to nuclear disarmament, not just arms control or reduction. It says:
Each of the Parties to the Treaty undertakes to pursue negotiations in good faith on effective measures relating to the cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a Treaty on general and complete disarmament under strict and effective international control.
Since 1995, there have been many worrying trends in global politics. In May 1998, two major countries that have fought a number of wars and engaged in continuing conflict since their formation tested nuclear weapons. The tests conducted by India and Pakistan have changed the international climate on nuclear weapons, placing a question mark over the capability and willingness of the international community to continue to seek their complete elimination. In October 1999, the United States Senate rejected ratification of the comprehensive test ban treaty, which had been agreed at the 1995 Europe review conference.
Two new states, Iraq and North Korea, are suspected of developing a nuclear weapons capability and have resisted international efforts to monitor and supervise their weapons programmes. NATO has reaffirmed its strategic doctrine, which puts nuclear weapons at the heart of its defence policy. In recent weeks, the new president of Russia, Mr. Putin, has also engaged in a new form of rhetoric, stressing the importance of Russia's nuclear weapons. Ratification of the START 2 treaty in Russia was seriously delayed, although—thankfully—it has been ratified in the past few weeks. At the conference on disarmament in Geneva, negotiations on the fissile material ban have resulted in deadlock. We have also learned of the United States' intention to seek an amendment to the 1972 anti-ballistic missile treaty to allow it to extend its anti-ballistic missile defence capacity beyond a single city and a single intercontinental ballistic missile site—as envisaged in the 1972 treaty—to the whole of the United States.
In that respect, the past five years have led to pessimism about the willingness of the international community to implement the principles of article 6 of the non-proliferation treaty. However, not everything has been pessimistic; there have been positive moves. The Russian Duma's recent ratification of the START 2 arms reduction treaty will pave the way for ratification by the United States Senate and negotiations on the START 3 treaty. START 2 cut the United States' nuclear weapons capability by approximately 60 per cent. If agreement is reached on START 3, it will cut Russia's nuclear arsenal by approximately 80 per cent. compared with the peaks of the cold war period.
There has been greater co-operation between the United States and Russia in respect of financial help for Russia's disarmament and nuclear clean-up programme. I pay tribute to the efforts of the United Kingdom Government and Lord Robertson, the former Secretary of State for Defence, in particular. His strategic defence review of July 1998 announced a significant cut, from 300 to 200, in the UK's warhead stockpile. That is equivalent to a nearly 70 per cent. cut in potential explosive power. The Trident patrol cycle has been relaxed, so that only one boat is on patrol at
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any time. The alert status of Trident has been reduced, so that missiles can now be fired only at several days' notice. The United Kingdom's stocks of fissile material have been cut, and a welcome new transparency of information about those stocks has been introduced. Earlier, the decision was taken to end the use of the RAF's WA 177 free-fall nuclear bombs.
On the international front, there has been a most interesting development by the non-nuclear weapons states, eight of which formed a new alliance, known as the new agenda coalition, in 1998. Brazil, Egypt, Ireland, Mexico, New Zealand, South Africa and Sweden published a major declaration in 1998 calling for a general convention banning nuclear weapons. They put their statement to the United Nations in December 1998 and obtained the support of 114 states, with only 18 states voting against the proposal and 38 abstaining. Significantly, one of the abstentions was from China, which is one of the five nuclear weapons states.
The review conference opened at the end of April. I shall focus on the two main arguments put forward at that conference to date: the position statements made by the nuclear weapons states and the new agenda coalition. The nuclear weapons states, represented by the spokesman from France, published a major document providing welcome reassurances about their continued commitment to the NPT process, from which I shall quote selectively. The French spokesman said unequivocally:
We remain committed to fulfilling all our obligations under the Treaty…We reiterate our unequivocal commitment to the ultimate goals of a complete elimination of nuclear weapons and a treaty on general and complete disarmament under strict and effective international control.
The French spokesman also cited the many significant multilateral, bilateral and unilateral developments since 1995, and reassured the conference of the determination of the nuclear weapons states to ensure that the comprehensive test ban treaty was
a universal and internationally and effectively verifiable treaty
and to secure its early entry into force. That early entry is dependent on ratification by the United States Senate. The statement also reaffirmed the importance of a ban on the production of fissile material and urged the conference on disarmament in Geneva to agree on a programme of work to secure one as soon as possible.
In emphasising the importance of co-operation between the non-weapons states and the weapons states, the French spokesman also declared that none of the nuclear weapons held by the five weapons states is targeted at any other state. In respect of the START 2 and 3 arms reduction treaties, he said:
We look forward to the conclusion of START III as soon as possible while preserving and strengthening the—
anti-ballistic missile treaty—
as a cornerstone of strategic stability and as a basis for further reductions of strategic offensive weapons, in accordance with its provisions. We are committed to placing as soon as practicable fissile materials designated by each of us as no longer required for defence purposes under IAEA or other relevant international verification.
Reference was made to the creation of the two new nuclear weapons-free zones since 1995 in south-east Asia and Africa, and support was expressed for the continued establishment of further nuclear weapons-free zones, especially in central Asia.

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In conclusion, the French spokesman said on behalf of the nuclear weapons states:
We are determined to take a forward-looking approach to nuclear non-proliferation and nuclear disarmament. The NPT provides an indispensable framework for future efforts against nuclear proliferation and towards nuclear disarmament. We fully acknowledge our particular responsibility and key role in ensuring continued progress in the implementation of the NPT.
The rhetoric of the nuclear weapons states was extremely encouraging and positive, but, 30 years after the treaty came into force, the world still has the capacity to destroy itself many times over with its existing stock of nuclear weapons.
I want to focus on the position of the states represented by the new agenda coalition and their efforts to persuade the nuclear weapons states to treat the disarmament process more seriously and specifically to ensure that when the next review conference takes place in 2005, there can be no doubt that the world is on its way to total nuclear disarmament.
The Foreign Minister of Mexico, Ms Green, was the spokesman for the new agenda coalition. In her opening remarks she said:
This…Review Conference offers us a unique opportunity to move definitively forward in the achievement of a world without nuclear weapons. We have reached the juncture when more far-reaching action must be decided upon.
It has been a theme of many contributors to the conference so far that this is the year when the world must choose whether to embark on a serious programme of global nuclear disarmament or find itself drawn down the road of further proliferation, with nuclear weapons being seen by more and more states as a normal part of their defence policy.
Ms Green quoted the example of other categories of weapons of mass destruction that have already been subject to reduction and, in some cases, elimination by international treaty. She was critical of the statements by some countries, which she described as
re-statements of policies and postures which reaffirm the central role of nuclear weapons in strategic concepts and the possibility of fighting war with the use of nuclear weapons.
That rhetoric is not the prerogative of any one country or group of countries. Countries and military alliances in all parts of the world have been guilty of it in recent years.
Ms Green was concerned about the
re-rationalization of nuclear weapons in an age when the context which gave rise to the original proliferation of nuclear weapons among the five nuclear weapon states has long disappeared.
As the cold war is now long over and, in spite of the many difficulties that face the world and the many global and regional conflicts that still take place, the original rationale of mutually assured destruction has long since become obsolete, the use of nuclear weapons as the central plank of defence policy is equally obsolete.
Ms Green acknowledged the various unilateral measures undertaken by two of the five nuclear weapons states, but called for
the early involvement of all five nuclear weapon states in bringing about the elimination of their respective nuclear forces. We consider that the principle of irreversibility should be applied to all disarmament measures. We look to greater transparency as the nuclear disarmament process gains pace.
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The new agenda coalition has been consistently critical of the nuclear weapons states' failure to take detailed action to set in motion the 1970 treaty commitment. Time and again Ms Green, on behalf of the coalition, has called for a commitment to specific policies, such as no first use. Of the five nuclear weapon states, only China has committed itself to a no-first-use policy. Another example is de-alerting nuclear weapons and separating warheads from delivery vehicles. Another is the withdrawal of non-strategic nuclear weapons from deployment. The United Kingdom has done that, but other nuclear weapons states have not. The coalition also wants legally binding security assurances to the non-nuclear weapons states, so that they feel secure without nuclear weapons.
The comprehensive nuclear test ban treaty was referred to as an essential building block in the nuclear disarmament agenda and the onus remains on the United States Senate to ratify it. It was agreed in 1995 that a fissile material ban would be an important next step forward, but there has been little if any progress on that in Geneva since 1995.
The new agenda coalition is also convinced that the establishment and gradual extension of nuclear-free zones is an important part in the wider confidence-building measures of the global disarmament programme and calls for additional nuclear-free zones in areas of tension such as the middle east and south Asia.
Finally, the new agenda coalition endorses the call by the United Nations Secretary-General in his report to the millennium assembly last year to convene a major international conference that would help to identify ways of eliminating nuclear danger. Ms Green stated:
We consider that an international conference on nuclear disarmament and nuclear nonproliferation, which effectively complements efforts being undertaken in other settings, could facilitate the consolidation of a new agenda for a nuclear weapon free world.
I do not want to underestimate the task facing the states that are party to the treaty, but there is now general recognition that the world is at a critical turning point and there is a choice to be made at this year's conference. Do we allow what I referred to earlier as the re-rationalisation of nuclear weapons in the strategic concepts of the major military blocks or the defence policies of individual states, or do we unequivocally set in motion the detailed mechanisms to bring about the complete global nuclear disarmament to which the treaty commits its signatory states?
I recognise that my hon. Friend the Minister has a strong commitment to securing the continuation of the process and the achievements of the United Kingdom Government in recent years, particularly following the strategic defence review. Is the Minister sympathetic to the detailed programme of the new agenda coalition set out in its statement to the treaty review conference? Does he agree that attempts by the United States to amend the anti-ballistic missile treaty and to go ahead with a national missile defence system would contradict the spirit of the non-proliferation treaty? Do the Government intend to co-operate with the United States by allowing the use of British military facilities, particularly Menwith Hill, which the United States would need if were to implement its plans? Do the Government support the principles enshrined in the new

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agenda coalition? What is their position on the adoption of a strategy of no first use, to which China has already agreed, the decoupling of warheads from delivery systems, the further development of nuclear-free zones and the urgency of the need for a fissile material cut-off treaty? What will the Government do to ensure that by the end of the review conference on 19 May, the mechanisms for establishing the fissile material cut-off treaty are in place?
Our Government can take justifiable pride in their international leadership during past three years on many complex issues that were considered to be intractable. I am thinking specifically of their work on the climate change problem, and that of my right hon. Friends the Chancellor and the Secretary of State for International Development on debt relief for the poorest countries. The Chancellor has also worked on the reform of international financial institutions.
This more complex and intractable problem provides an opportunity for our Government to show international leadership. As the United Nations special envoy on peace and disarmament said in this Chamber shortly before Easter, the Prime Minister must recognise that the future of the planet depends on this issue above all others. If we cannot negotiate an international commitment on it in the next few weeks, the opportunity could be lost for ever. We could then face a future in which the commitment of the NPT conference gradually weakened, more and more states currently without nuclear weapons violated their commitments under the treaty, and the acquisition of nuclear weapons again became seen as a normal part of national defence policies.
The Government have an opportunity to confront the complexity rather than shying away from it. They could make an unequivocal commitment to give the same international leadership on global nuclear disarmament as they showed in resolving the climate change difficulties in Kyoto and in the settlement of international debt for the poorest countries.
To conclude, I shall quote the South African representative at the conference, who said a few days ago that if the international community cannot free itself from nuclear weapons,
We will never be liberated from the unspeakable destruction and human suffering which these weapons can cause.
11.26 am
Mr. Tony Colman: Thank you for calling me so early in the debate, Mr. Deputy Speaker. I apologise that I shall be unable to stay until the end of the debate, as I have a prior engagement at a question and answer session at a school in my constituency at 12.30. I declare an interest, as I have visited Pakistan with Lord Avebury in the past two weeks. It might be interesting to mention some of the discussions that took place on that visit.
My Labour predecessor in my constituency was Lord Jenkins of Putney, and I am pleased to see the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Neath (Mr. Hain), who is somewhat jet-lagged. He has also been a Labour
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candidate for Putney, so I am pleased that I can speak in a continuation of my constituency's tradition of interest in nuclear disarmament.
I pay tribute to Rebecca Johnson from the Acronym Institute. If I had more time I would speak at length from her extremely good briefing, which is available every day on www.acronym.org.uk. It details almost every speech made in the NPT review conference, giving full coverage of the new agenda coalition and interesting anecdotes and details, such as British comments on the Egyptian position in the middle east. The briefing states that
Britain reiterated its call to Israel to adhere to the NPT as a non-nuclear weapon state and to place all its nuclear facilities under full-scope IAEA safeguards.
My hon. Friend the Minister may want to respond on that issue, which my hon. Friend the Member for Bury, North (Mr. Chaytor) did not mention in his excellent speech.
Rebecca Johnson points out that the additional protocol 93/2 has not featured highly in debate. I had the privilege to introduce it in a private Member's Bill last year, and it is now completing its final stages in the House before the protocol's ratification. Has my hon. Friend the Minister been able to urge any other states at the conference to sign and ratify the protocol, which would be a major move towards making the world safer? I regret that I shall have to read his reply in Hansard rather than hearing it.
In Pakistan I met General Musharraf, who is the chief executive of the country. I also met the foreign minister and nuclear weapons experts. President Clinton has called Pakistan the most dangerous place in the world, given the line of control in Kashmir. I strongly urge Pakistan to attend the NPT conference, primarily as an observer. Lord Avebury and I have raised the issue of the comprehensive test ban treaty and we should push for India and Pakistan to become signatories. I spent a significant amount of time urging Pakistan, on a bilateral basis with the IAEA, to sign the 93/2 additional protocol on safeguards on its nuclear weapons, particularly in terms of nuclear weapon technology becoming available to neighbouring states. That is an important initiative and I strongly urge the Minister to take it up with the Pakistani high commissioner in London to see whether a dialogue could be created. I realise that such an initiative is outside the scope of the NPT review conference, but as a measure that would make the world a safer place, it is obviously within its spirit.
It may be strange for a Back-Bench parliamentarian, but I have been concerned over the past two years to raise the issue in several countries that I have visited. It is important to ensure that nuclear weapons, wherever they are, are safeguarded and do not leak out further. I condemn both India and Pakistan for having gone ahead with nuclear tests. During any visits under the auspices of the Commonwealth Parliamentary Association or the Inter-Parliamentary Union, I strongly urge that the issue of non-proliferation of nuclear safeguards under the new agenda coalition be taken forward in every possible way. The review conference will continue until 20 May, so there is some time in hand. I hope that other countries will sign and, if possible, ratify the treaty; South Korea, for example, signed and ratified it on the same day when I was there last May.

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To conclude my brief intervention, I wanted to update the House on the interesting situation of Pakistan being willing to consider a bilateral agreement with the IAEA, on the basis of the 93/2 additional protocol.
11.32 am
Mr. Jeremy Corbyn: I wish my hon. Friend the Member for Putney (Mr. Colman) well in his school question and answer session. He can watch the rest of the debate on video tomorrow morning. I also thank the hon. Member for Bury, North (Mr. Chaytor) for initiating the debate. It is slightly disappointing that there are fewer hon. Members present than there were for the debate on police numbers in England and Wales. The issue of police numbers is obviously important for security, but this debate raises matters of security for the whole planet. We should bear the dangers in mind.
Debates on disarmament sometimes get bogged down in obscurantist language about obscure conferences taking place all over the world. It is easy to fall into that trap and miss the big picture—and I should know, as a life-long member of CND and a member of its national council. I sometimes get lost in all the acronyms and the endless references to conferences, and think, "Hang on a minute; we are here to discuss the thirst for peace around the world."
A year ago, I attended the Hague convention on peace, which attracted 8,000 delegates from all over the world. Many people came at considerable personal expense from island states in the Pacific and from elsewhere, because they were determined that at the end of the 20th century there should at least be an opportunity to discuss a peaceful future in which the world spent rather less on weapons of mass destruction, in particular nuclear weapons, and rather more on the redistribution of wealth and power around the globe and ensuring some kind of peaceful future. The world court has seriously questioned the legality of nuclear weapons, although the Foreign Office takes a somewhat different view. I shall be interested to hear what the Minister says, but I believe that the opinion of the world court on nuclear weapons should be taken extremely seriously, as should the decision of the Scottish court on their legality.
Before moving to the main burden of the debate, I wish to reflect for a moment on the world situation. There are 30,000 nuclear weapons in existence. We do not know the location of all of them or whether they are all stored safely—a fact to which my hon. Friend the Member for Putney drew attention. Given that there are 30,000 weapons throughout the world, the danger of leakage or proliferation is enormous. If the current non-proliferation conference misses the opportunity to achieve a lasting settlement on decommissioning, disarmament, no first use and ultimately the abolition of nuclear weapons, the danger of proliferation will be writ large.
My hon. Friend the Member for Putney has just returned from Pakistan. Anyone who imagines that no country would seriously use nuclear weapons should bear in mind the tension and the rhetoric between India and Pakistan and the nationalist fervour in both countries. At some point, a politician somewhere will bow to that fervour and press a button—albeit to release
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a less powerful nuclear weapon than those held elsewhere. The consequences of a nuclear explosion set off in anger anywhere in the world and its knock-on effects are too horrific to think about. That is why the non-proliferation conference is so important.
This country can do a lot by example. We have access to the Trident nuclear submarine system. Various vessels are on patrol at any one time. Anyone who says that the acquisition and development of the Trident fleet is not nuclear proliferation is wrong. It is an enormous proliferation. On any one submarine, Trident carries 48 warheads. It could carry more. Each warhead has a capacity of 100 kilotonnes, and is the equivalent of five Nagasaki bombs. We now face a nuclear weapons capability that will make what happened in Hiroshima and Nagasaki—on 6 August each year we commemorate the 60,000 or more people who died in each of those two cities—look like a minor firework explosion.
Will the Minister respond to my point about the legality of nuclear weapons? Many non-nuclear weapons states or those with nuclear capability that do not admit to holding weapons draw comparisons with those nuclear weapons states that say that they want disarmament, while at the same time increasing their nuclear capability. We must also take into account the United States' use of Fylingdales for its development of a national missile defence strategy. Are we to become once more a nuclear aircraft carrier for the United States, which so many of us spent much of the 1960s, 1970s, 1980s and 1990s opposing? The closure of Greenham Common and its restoration as a public open space is a source of great pride and triumph to many people, but will not a massive American facility at Fylingdales be just as dangerous as Greenham Common was—if not more so—for the people of this country?
The conference has an opportunity to bring about a solution to the problems, but it means that the nuclear weapons states will have to make a big move. I understand that the Government are opposed to nuclear weapons and want massive disarmament throughout the world, but they keep holding them in the mean time while there is a threat or danger in the world. Some countries have given up nuclear weapons. For example, during the apartheid regime, South Africa clearly had a nuclear weapons capability. It is to the eternal credit of President Mandela that one of the early actions of the ANC Government was to end all nuclear weapons research and to declare South Africa a nuclear-free state. It can be done and South Africa has provided an example and a way forward.
Mrs. Cheryl Gillan: Is the stance of the Government in line with the current aims and objectives of CND, of which the hon. Gentleman is a council member?
Mr. Corbyn: I can pass the hon. Lady a vast amount of CND documentation. Clearly, CND does not agree with everything that the Government say. Nobody—neither the Government nor CND—would pretend otherwise. However, CND is involved in a process of constructive engagement with the Government. Meetings take place with representatives of CND and many Members of Parliament. I am a member of parliamentary CND, as are other colleagues who are

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present in this Chamber. I am not sure what point the hon. Lady is trying to make. If she is trying to say that the Labour party is in the pocket of CND, all I can say is that I wish it were. Unfortunately, it is not.
Mrs. Gillan: I am not trying to make a particular point. I understand that the Minister replying to the debate is a member of parliamentary CND, and I merely wonder how that is compatible with being a member of the Government, with whom CND does not agree.
Mr. Corbyn: I invite the hon. Member for Chesham and Amersham (Mrs. Gillan) to meet CND—it is not far to come on the Metropolitan line. She would then understand that it is not in the mould of a democratic centralist organisation, with an all-powerful central committee that sends out edicts to every one of the thousands of CND members around the country, who religiously carry out those exact instructions. It is a wondrous affair, which encompasses Christian CND, trade union CND, Labour CND, and lots of other groups from lots of traditions, including pacifists, and ex-service CND. It is a peace movement in which a great deal of deal of debate and discussion takes place. Policies are arrived at and promoted. Many people who are in CND do not accept every tenet of everything that CND says or does. That is not a great problem; it is a peace movement that advances the cause of peace and has made a major contribution. The quality of its research and contribution to debate about Government statements is widely respected.
Mr. Chaytor: Does my hon. Friend find it unusual that, apart from the Front-Bench spokesperson, not a single Conservative Member is present in this Chamber? Not long ago, it would have been impossible to have a debate on this subject without a flood of Conservative Members rushing to be the first to denounce any attempt to suggest that the elimination of nuclear weapons might be good, or even possible. Does he agree that that change is highly significant? Does it not reflect a newfound consensus? The old debate, with those who believed in unilateral action and those who believed in multilateral action but did not have to do anything about it, is behind us—
Mr. Deputy Speaker (Mr. Frank Cook): Order. Interventions should be brief rather than repetitive speeches.
Mr. Corbyn: I think that my hon. Friend the Member for Bury, North was trying to allude to arguments that various absent friends would have made if they had been in this Chamber this morning. I miss them, because I miss the ritual denunciation of anyone who has ever been in CND, and the McCarthyite language that surrounded it. Nevertheless, I hope that they will read the debate in Hansard or watch the video.
May I move on, Mr. Cook, and take fewer interventions—
Mr. Deputy Speaker: Order. It might be helpful if I were to remind all hon. Members that this is a sitting of
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the House and not a Committee. The House, in its wisdom, decided that the Chair should be addressed as in the parent Chamber.
Mr. Corbyn: Mr. Deputy Speaker, I beg your pardon. You said that so well that you lost me along the way.
When Michael Douglas came here for a meeting, I was unfortunately unable to attend. I was at a far more glamorous affair in Islington—a tenants association meeting. Although I was unable to hear him, I read what he said and about his work, so I am aware of the efforts being made by the United Nations. It has drawn attention to the urgency of the situation.
The hon. Member for Putney spoke about the danger of war between India and Pakistan over Kashmir. There certainly is a danger of those two countries developing a further generation of nuclear weapons and a delivery system capable of setting them off. There is a dispute over Kashmir. Both Governments are attempting to stoke up nationalist rhetoric to divert attention from the unremitting poverty of so many people living in those countries. It is regrettable and deplorable that both India and Pakistan—though the criticism applies to many countries in the world—spend far more on defence and weaponry than on education or health. We must do all that we can to bring about a solution to the Kashmir problem and to persuade both India and Pakistan to sign up at least to the comprehensive nuclear test ban treaty as a prelude to full involvement in the non-proliferation treaty discussions.
There are other countries that are either nuclear weapons states or on the threshold of being so. Some are undeclared, but Israel, for example, is now fairly open about its nuclear weapons. The threat in that region of other states such as Iraq having access to nuclear weapons is terribly dangerous. In Israel, the prisoner of conscience Mordecai Vanunu has spent 11 years of his sentence in solitary confinement. He is now out of solitary confinement and living in more general prison conditions, but he remains in Ashkelon prison. I attempted to visit him a couple of years ago, but I was denied access.
We must recognise that Vanunu, a nuclear scientist, is a prisoner of conscience, attempting to draw the world's attention to the danger of nuclear proliferation. I hope that the Minister will continue the policy of this and previous Governments in putting pressure on Israel to ensure that Vanunu is properly treated and attempting to secure his early release from prison. In my view, he has committed no crime other than drawing the world's attention to the dangers of nuclear proliferation.
Nuclear weapons states can continue to operate as a club, to develop their own nuclear capability and to ignore the reality of the dangers all over the world. I want our Government to declare that we are serious about arms negotiation talks, that we are prepared to advocate a no-first-use policy, that we are prepared to decommission nuclear weapons and to put pressure on the United States to do the same and that we will continue to develop the encouraging rhetoric of the past few weeks about the real prospects for the peace process.
I shall quote from a CND document, which provides a summary of the UK's record on nuclear disarmament:
The Campaign for Nuclear Disarmament believes that the UK, as a permanent member of the UN Security Council and one of the five declared Nuclear Weapons States under the NPT, is well

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placed to take the lead on the path of global nuclear disarmament. The end of the Cold War and the election of a Labour Government raised expectations, so far unfulfilled. Thirty years after it entered into force on 5 March 1970, the Treaty on the Non-Proliferation of Nuclear Weapons is in danger of being universally perceived as enshrining the privileges of the few to retain nuclear weapons indefinitely against the needs of humanity to achieve their abolition, sooner rather than later.
If we miss this opportunity, proliferation will continue and irresponsible will people get hold of nuclear weapons. If somebody sets one off, God knows where that catastrophe will lead us. This is perhaps the most serious debate of the present Parliament. It provides a chance that we must seize with both hands in order to bring about the worldwide abolition of nuclear weapons.
11.49 am
Mr. Malcolm Savidge: I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on securing the debate and introducing it so comprehensively. I join my hon. Friend the Member for Putney (Mr. Colman) in thanking and congratulating Rebecca Johnson of the Acronym Institute, whose e-mails must have informed many of us, judging by how people smiled when he referred to them.
The sixth review conference of the nuclear non-proliferation treaty is crucial because of our failure to take advantage of the end of the cold war in the past decade, because of the growth of unofficial nuclear weapons states, because we have reached a watershed, and because of the unimaginable horror if it ever goes wrong even on a small scale, let alone on a cataclysmic scale, as my hon. Friend the Member for Islington, North (Mr. Corbyn) movingly described.
Various crucial issues are involved, such as the future of the test ban treaty, nuclear weapons-free zones, the fissile materials ban and the future of the anti-ballistic missile treaty, to which my hon. Friend the Member for Bury, North referred. I join him in welcoming the statement from the five recognised nuclear weapons states—perhaps more because they achieved a joint statement than because it contained especially ground-breaking comments. Achieving unity is important. I welcome the fact that all the states involved were able to show at least some progress. It would be fair to say, as my hon. Friend the Member for Bury, North did, that Britain has achieved rather more than other states.
I share the pleasure expressed by my hon. Friend the Member for Putney about the reference to the middle east and the importance of all states signing up to the non-proliferation treaty. Only one state now needs to do so, but it is perhaps the most important—Israel. I welcome the fact that Britain advocates sending a special envoy to encourage the development of a nuclear weapons-free zone in the middle east. I also welcome the support expressed in the statement for nuclear weapons-free zones, and the reference to India and Pakistan.
The statement also strongly welcomes the comprehensive test ban treaty. Now that the Russian Duma has signed up to the treaty, it must be the desire of the vast majority of hon. Members that it should be ratified by all major states, including China and the United States of America. Of the 155 signatories, 56 have now ratified. The Government and the Opposition
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Front Bench want the comprehensive test ban treaty to be brought into force, and they have the overwhelming support of Back Benchers from all parties, as was shown by early-day motion 929.
I welcome the statement that the anti-ballistic missile treaty should be preserved and strengthened, but I fear that an ambiguity may lie behind it. I suspect that the different parties have different opinions about exactly what is meant by "preserved and strengthened", but I welcome the fact that it seems to put down the idea of unilateral action by the United States of America. The unilateralist position was vigorously expressed last week by a leader writer in The Times, Michael Gove, who argued not only for the United States adopting national missile defence, but for developing all possible aggressive and defensive technologies and scrapping all arms control agreements. In common with some of the more rabid sections of the United States right, Mr. Gove seems to believe that the more nuclear weapons there are, the safer we shall all be. As I have said before, some people in the United States hold a similar view about guns, and believe that if everyone had guns, no one would be killed. However, that does not seem to work.
Adopting national missile defence and scrapping the ABM treaty would be devastating. It would undermine all other treaties, especially if, as some Republicans have implied, the Republican party would abrogate the treaty, even though it was originally signed under a Republican president. Whatever assurances were given to Russia and China that the missiles were not intended to be used against them, how would they know that some future Administration would not simply abrogate those agreements, too? There would be a grave danger that Russia might be encouraged to start re-expanding its nuclear capability rather than continuing with reductions.
Even if the ABM treaty is renegotiated with Russia, there will be a grave need for the United States to consider the position of China and other states. As far as I am aware, almost no other state at the negotiations strongly supported the idea of the national missile defence system, and there has been strong support for maintaining the ABM treaty. I hope that the United States will take account of that.
How far is NMD relevant to Britain, since we are not party to the ABM treaty? As has already been mentioned by my hon. Friend the Member for Islington, North, if the system were developed, we would be expected to supply tracking stations at Menwith and Fylingdales, and the people there would automatically become likely targets, but under present circumstances they would not be afforded any cover. Even if there were offers of cover from the system or extra local contracts and employment, it would be inappropriate to dice with the safety of our planet and our people.
We should examine the extent of the danger posed by rogue states, which is genuine, but it is a little unrealistic for states that claim to believe in deterrence, and have several thousand times more weapons that any rogue state could develop, to say that they also need a massive missile defence system. Tactical capacity has been vastly overestimated. It is easy to say that one suspects that a state may have a missile delivery system capability, or is close to achieving it, or that it may have the capacity to produce a nuclear weapon, but that would probably be far too large for the purposes of their missile delivery

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system. There is often a tendency to exaggerate such threats. In any case, other means of delivery are available to such states, such as bringing in a weapon on a lorry or by boat. That could apply to nuclear, biological or chemical weapons.
National missile defence threatens to undermine our arms control system, yet we have no guarantee that it would actually work. So far, the only tests that have been carried out have been unsuccessful, and it is unlikely that there could be any tests even suggesting that it might be successful before 2001. I suspect that the push to adopt the system is partly electoral and partly the result of financial inducements—that is, pork barrel politics, with politicians claiming that billions of dollars would be spent in different parts of the United States. While I do not expect Britain to take a public stance on the issue, I hope that we could employ private diplomacy to try to discourage the United States from taking precipitate action that might undermine the whole arms control and disarmament process. It is vital that we try to make progress with START 3, now that START 2 is likely to be confirmed.
In his article, Mr. Gove—using the slightly extravagant language that appeared to make my hon. Friends nostalgic—described my hon. Friend the Minister as one of the KGB's "useful idiots". If it is any consolation to the Minister, he used the same phrase to describe the United Nations Secretary-General, Kofi Annan. By Mr. Gove's definition, even his own icons, Baroness Thatcher and President Reagan, must also have been useful idiots, as they engaged in arms control negotiations. Like the cartoon of the Japanese soldier on the desert island who was unaware that the second world war was over, Mr. Gove appears to be similarly unaware that the cold war ended more than a decade ago. I say that not only to poke gentle fun at him, but because it illustrates part of the problem that we face. Einstein said that nuclear weapons had changed everything except the way in which people think, and the end of the cold war seems to have changed everything except the way in which some people who pontificate on defence matters think.
The statement by the five nuclear weapons states, which contains
an unequivocal commitment to the ultimate goals of the complete elimination of nuclear weapons and a treaty for general and complete disarmament under strict and effective international controls
has caused concern. We all agree that general disarmament is crucially tied up with the effort to reduce weapons of mass destruction. The new agenda coalition and the movement of non-aligned states said:
the total elimination of nuclear weapons is an obligation and a priority and not an ultimate goal, and even less a goal that is linked, subject or conditioned to general and complete disarmament.
The phrase, "total elimination" is sometimes used by starry-eyed idealists and hardened cynics—I am reminded of the decommissioning situation in Northern Ireland. Positive statements are good, but timetabled reductions are better.
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We face a race against time. To put the point in simplistic but dramatic terms, this century's challenge is to establish whether human beings can eliminate nuclear weapons before nuclear weapons eliminate human beings.
12 noon
Mrs. Cheryl Gillan: I start by echoing the comment that was made in an intervention by the hon. Member for Bury, North (Mr. Chaytor)—I, too, am disappointed that there are not more hon. Members present. Today is the eve of the local elections, the London mayoral elections, in which our candidate, Steven Norris, is fighting a good fight, and the by-election. Presumably, that explains why there are no Liberal Democrat Members in the Chamber. The hon. Gentleman made some good observations, but he failed to point that out. I hope that I can make up for the absence of support from the Opposition Back Benches by making a brief contribution from the Front Bench. This subject has been debated for some time, but it is apposite to discuss it today in view of the start of the review conference.
The likelihood that threats to European security will become a reality has increased rather than diminished during the past few years. Today's global security environment is characterised by the same complex mix of political, economic, military and social factors that undermined stability during much of the 1990s. There are uncertainties regarding Russia, China, the middle east and eastern Europe, as well as various rogue states—to which hon. Members have alluded this morning—groups and individuals. There are also growing disparities in global wealth and source distribution and there has been an unwelcome spread of ethnic and religious conflicts.
For this country, one of the most obvious and disturbing features of the post-cold war order is the proliferation of ballistic missiles and the weapons of mass destruction with which they are armed. Between 35 and 40 countries have such a missile capability and, according to a report from Lancaster university, 18 countries have nuclear, chemical or biological weapons warheads with which to arm those missiles.
The post-cold war environment has proved to be increasingly open to proliferation activities. New alliances have formed, providing pooled resources for developing those capabilities. Technology, expertise and the hardware with which to build ballistic missiles are proliferating rapidly. That process has been instigated by advances in information technology. Foreign assistance is a universal characteristic of the contemporary ballistic missile development environment.
It is widely recognised that the key suppliers include China, Russia and North Korea. China has provided missile-related items, raw materials and assistance to several countries, including, I believe, Iran. It has also provided support to Pakistan's weapons of mass destruction and ballistic missile programmes.
Russia has provided a variety of ballistic missile-related goods and technical know-how to Iran, and it is expanding its assistance to countries such as Syria and India. Iran's earlier success in gaining technology and materials from Russian companies accelerated the development of its Shahab 3 medium range ballistic missile, which was first flight-tested in July 1998.

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North Korea continues to export ballistic missile-related equipment and missile components, materials and technical expertise to countries in the middle east and Africa. The export of ballistic missiles and related technology is one of North Korea's major sources of hard currency.
It is against that background that the hon. Member for Bury, North has initiated this debate. He referred to the meeting in this Chamber that was attended by Michael Douglas, the United Nations peace ambassador, to which the Minister and I were privileged to contribute. I am not sure what that visit achieved. I know that Michael Douglas hoped to capture the imagination of the man in the street and raise the profile of the review conference, but I doubt whether that has happened. If a visit to Parliament by Michael Douglas cannot raise the profile on a lasting basis, I wonder what can. The man in the street is less concerned about such issues than in the 1960s, 1970s, 1980s and 1990s. Closing my eyes during the speech of the hon. Member for Islington, North (Mr. Corbyn), I could have been back in those decades, but I acknowledge that he has held those views consistently for many years.
The hon. Member for Bury, North welcomed the Russian Duma's ratification of the START 2 treaty, as do I. He quoted from position statements by the nuclear weapons states and the new agenda coalition. I would like to add to his questions on the Minister's attitude towards that coalition. The Minister must make the Government's policy clear, because we are getting mixed messages. The hon. Member for Islington, North rightly pointed out that CND and parliamentary CND do not currently agree with the Government. Nevertheless, the Minister, who is putting forward the Government's policy, remains a member of CND. That is incompatible with his ministerial duties, so perhaps he can tell us whether he feels that he should resign from CND. If he does resign, we shall feel better about his stance.
At the same time, and building on questions asked by the hon. Member for Bury, North, we need to know the Minister's attitude towards the American missile defence programme. The hon. Member for Bury, North mentioned Menwith, and the hon. Members for Islington, North and for Aberdeen, North (Mr. Savidge) referred to Fylingdales. What exchanges have taken place between the Minister and the Americans? Has he confirmed our support for the missile defence programme, or has he said that he has some difficulty in that regard? What is the Government's exact position? What has the Foreign and Commonwealth Office done to reassure the Americans of our continuing support? Today's debate has cast some doubt on the support expressed by certain members of the Government earlier this year.
Mr. Savidge: What is the position of members of the Opposition Front Bench? Some have spoken strongly in favour of national missile defence, but some prominent and experienced members of the Conservative party oppose it.
Mrs. Gillan: I thank the hon. Gentleman for that intervention. If he reads my speeches, he will see that I have always been extremely supportive of the
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Americans, and I do not seek decoupling of the defence arrangements between the United Kingdom and the United States.
The hon. Member for Putney (Mr. Colman) asked the Minister about Pakistan. We would be pleased to have an Adjournment debate on Pakistan, particularly as it is currently suspended from the Commonwealth. As was evident from what the hon. Member for Putney said, dialogue with Pakistan is continuing. I hope that the Minister will tell us what recent contact there has been, what diplomatic work has been done on proliferation and whether the issue of nuclear weapons was raised at the meeting of the Commonwealth Ministerial Action Group earlier this week.
The review conference is a process. The Minister should tell us what impression he has of the progress made to date. Does he perceive any problems in the process? Has he suggested how that process might be changed? What is his assessment of the effectiveness of the process? The hon. Member for Aberdeen, North hopes that a solution to the problem might be found at the conference, but it is obvious that it will be a continuing process. The Minister should tell us what the next stages will be, not only for this country, but for the five nuclear weapons states.
The four countries outside the process are just as important, and I would like to hear the Minister's assessment of the positions of Cuba, India, Israel and Pakistan. The hon. Member for Putney and others have sung the praises of Acronym and Rebecca Johnson, and I am happy to do likewise. I quote from Acronym 13:
How the NPT parties address the nuclear capabilities of India, Israel and Pakistan may determine the future credibility of the regime as far as some significant non-nuclear weapon State Parties are concerned. The Treaty cannot admit new members without amending the definition of a NWS in its 1968 text (where a nuclear weapon state is defined as one which has manufactured and exploded a nuclear device prior to January 1, 1967).
What suggestions has the Minister made concerning those countries and about the problems associated with admitting new members under that definition? What progress has been made on that issue?
Many questions have been raised about Pakistan and India, and I would like to ask the Minister what comments have been made about China's role, specifically its support for Pakistan's nuclear programme. There seems to be general assistance to India and Pakistan to improve the safety of their nuclear-related command, control and communication systems. Does the Minister approve of that assistance, or does he believe that it legitimises the nuclear status of those two countries? What is the position of Her Majesty's Government?
I read on a website the Minister's contribution to the NPT review conference in New York on Monday 24 April. I was delighted to see that, significantly, he referred to three achievements. The first was
the completion by no later than 1996 of the negotiation in the Conference on Disarmament for a Comprehensive Nuclear-Test-Ban Treaty (CTBT).
The second achievement, which was
identified as particularly important by the parties to this Treaty at the 1995 Conference
was
the negotiation of a treaty banning the production of fissile material.

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The third was identified as
the determined pursuit by the nuclear-weapon States of systematic and progressive efforts to reduce nuclear weapons globally.
I was pleased to note that they were all agreed under the last Conservative Government, so I find it odd that he claimed that the Labour Government had transformed Britain's role in the nuclear disarmament process. That is slightly disingenuous of him, because great progress was made under previous Conservative Governments. It is a sad shame that that is rarely acknowledged in any arena.
The non-proliferation treaty process may not be perfect, but it has survived and fared well over the years. Certainly over the past five years nine new states have joined and only four remain outside. We must now move forward, building on the progress made on disarmament and peaceful co-operation, and make more progress on preventing proliferation, which has been such a serious challenge to the entire process. However, we must never forget that these weapons have helped to secure the peace. We must all support the international co-operation that enables us to work continuously to ensure that the world is safer and more secure.
12.15 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Peter Hain): I am grateful to my hon. Friend the Member for Bury, North (Mr. Chaytor) for giving us the opportunity to debate this important review conference on the nuclear non-proliferation treaty. I pay tribute to my hon. Friend the Member for Putney (Mr. Colman), who worked energetically on his private Member's Bill and deserves a great deal of credit for its achievement in nuclear safety regimes across the world.
My hon. Friend the Member for Islington, North (Mr. Corbyn), who has a long and honourable record of interest in and campaigning for nuclear disarmament, made a number of points, which I shall come back to, although I thought that he was audacious in inviting the hon. Member for Chesham and Amersham (Mrs. Gillan) to CND's offices. I do not want to intrude on private grief, but I think that it would be an enlightening experience for both of them.
My hon. Friend the Member for Aberdeen, North (Mr. Savidge), who contributed in his normal expert fashion, continues to enjoy my support for his work in chairing the all-party non-proliferation group.
In relation to the questions asked by the hon. Member for Chesham and Amersham, in our bilateral contacts with the new regime in Pakistan we have repeatedly stressed that it is in its interests to sign up to the non-proliferation treaty requirements and, in particular, to the comprehensive test ban treaty, and to adopt controls on the proliferation of nuclear weapons, which are undoubtedly a concern both to and from Pakistan. The visit of the Chief of Defence Staff, at our request, in early January, provided the vehicle for delivering that message firmly.
The NPT remains the main instrument for preventing the proliferation of nuclear weapons, and it is vital that the review conference succeeds. As my hon. Friend the
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Member for Bury, North said, there have been positive achievements during the past five years: nine states have become new parties to the treaty over that period; agreement has been reached on how to strengthen the safeguards system of the International Atomic Energy Agency; a number of new conventions relating to nuclear safety have come into force or have been opened for signature; and the United States and Russia have been busy implementing the START 1 reductions in their nuclear forces, while a comprehensive nuclear test ban treaty has been concluded and signed by all five of the NPT's nuclear weapons states, none of which has carried out a nuclear explosion since signing. Two nuclear weapons states—the United Kingdom and France—have ratified as well, while, in a welcome move, the Russian Duma recently approved ratification of the treaty. I congratulate it on so doing.
The United Kingdom, especially under this Labour Government, has been a leading force for nuclear disarmament. I acknowledge that some of it started before we came to power. In the past few years we have completed the dismantling of the maritime tactical nuclear weapons that we withdrew from service some time ago; we have withdrawn from service and dismantled all our air-delivered nuclear weapons so that now they are only submarine-based; and we are currently dismantling the Chevaline warheads from our old force of Polaris submarines.
As for Trident—Britain's only remaining nuclear system—we have reduced the number of operationally available warheads to fewer than 200. We have stated that only one submarine may be on patrol at a time, that it will carry 50 per cent. fewer warheads than the previously announced ceiling, and that it will operate at a reduced state of readiness. Furthermore, all our missiles have been de-targeted since May 1994.
The British Government have taken a number of other important steps over the past five years. We have signed and ratified the comprehensive nuclear test ban treaty, strongly supported efforts to establish the treaty's verification system—a crucial objective—and taken a leading role in efforts to persuade others to sign and ratify the treaty.
My hon. Friend the Member for Bury, North asked about the fissile material cut-off treaty. We have pressed hard for negotiations on such a treaty at the conference on disarmament in Geneva, and, despite the highly regrettable absence of progress there, we have taken steps to ensure that all British reprocessing and enrichment operations are now under Euratom safeguards and are either inspected or liable to inspection by the IAEA. We have also made it clear that when we are satisfied with the progress towards the global elimination of nuclear weapons, British nuclear weapons will be included in multilateral negotiations.
Furthermore, we have been transparent about the size of our stocks of nuclear material, military as well as civil. We have declared some of our previous military material as surplus to our defence requirements and taken steps to place it under safeguards arrangements. We have also carried out some initial work to account for our past production of fissile material for defence purposes, and begun to develop a pool of expertise in verifying the reduction and elimination of nuclear weapons that we are working to achieve.

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Hon. Members who keep an eye on the Foreign Office website will know that I had the privilege of making many of those points at the NPT review conference on its opening day last month. Following my discussions in New York I believe that there is a widespread recognition that the United Kingdom is second to none among the nuclear weapons states in trying to move these matters in the right direction, but the path to nuclear disarmament is not one that we can walk alone.
Over the next five years, we will work towards securing universal adherence to the NPT treaty by pressing the only remaining non-parties—Cuba, India, Israel and Pakistan—to join the 187 countries that have already signed up to the NPT. We shall deal robustly with countries that renege on their commitment to the NPT, including Iraq and North Korea. We shall also play a leading role in making progress towards nuclear disarmament.
Central to further progress towards nuclear disarmament is the continuation of the strategic arms reduction process between the United States and Russia. I welcome the news that the Russian Duma and the federation council have now approved ratification of the START 2 treaty and its 1997 protocol. We urge the US Senate, which gave its consent to ratification of the treaty in January 1996, to give its consent to ratification of the 1997 protocol. We also urge progress in the current talks between the US and Russia on a START 3 treaty and the anti-ballistic missile treaty.
That brings me to the concerns expressed by several hon. Members about the potential impact on nuclear disarmament efforts of American interest in the establishment of a national missile defence system. A number of Members have expressed the fear that the deployment of such a system could set back the strategic arms reduction process between the United States and Russia, and could also be used by China as a justification for expanding her nuclear forces. Those are legitimate concerns, which the US also recognises. I had discussions on the matter in New York and Washington last week. Also legitimate are the concerns, felt not only by the United States, about the acquisition of long-range ballistic missiles by countries of concern. No responsible Government can afford to ignore that potential threat.
National missile defence raises thorny issues that require calm and measured dialogue. That is why we welcome the intensive discussions on these matters in which the US and Russia are currently engaged. Despite the obvious differences between the two sides, highlighted by the Russian Foreign Minister in his speech to the review conference last week, we hope that they can ultimately reach an agreement that will strike an appropriate balance between the competing considerations. We have made it clear to both sides that we continue to attach great importance to the strategic stability that the anti-ballistic missile treaty provides, and that we wish to see it preserved alongside global reinforcement of the nuclear non-proliferation regime. I made those points personally in the course of my recent visit to the United States.
Some hon. Members have asked about the Government's position on meeting any potential American requests to use facilities in this country for national missile defence purposes. Let me make it clear, once again, that the United States has not yet decided to
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deploy any NMD system, and has, therefore, not put a formal request to us to use facilities in this country for such a system. If such a request is made, we shall naturally consider it carefully, taking into account all the circumstances.
I have tried to be as frank as possible and I will not disguise the fact that the future of the nuclear disarmament process and the anti-ballistic missile treaty raises difficult and complex issues. I assure the House that the Government are working hard to encourage the United States and Russia to find a way forward that will meet the legitimate interests of all concerned and allow the positive progress made in reducing nuclear weapons during the past few years to continue. We hope that at the review conference the other parties to the nuclear non-proliferation treaty will not forget the vital need for early entry into force of the comprehensive nuclear test ban treaty and for an immediate start to negotiations on a fissile material cut-off treaty.
My hon. Friend the Member for Bury, North referred to the new agenda coalition. I welcome the contribution made by some non-nuclear weapons states, including that coalition, to the debate on measures that might be pursued in the next five years. We are studying closely the speech made by the Mexican Foreign Minister on behalf of those countries. I assure hon. Members that we are ready to engage in constructive discussion of those and other ideas. I held such discussions with the Irish and New Zealand Foreign Ministers, and with the South African delegation in New York.
I have instructed my officials still at the NPT in New York to discuss with the leading countries involved in the new agenda coalition—including New Zealand, South Africa and Ireland—amendments that would enable the UK to support their proposals to the conference. We agree with the vast majority of their proposals, but there are some sticking points, one of which is the proposal to demate warheads from delivery systems. In Britain at least, that is impossible, because our weapons are submarine based. I hope that we can obtain an agreement with the non-nuclear weapons states, because we overwhelmingly share their aims for nuclear disarmament. I ask my hon. Friend to think again about the need for an international conference. I do not want detract from the important NPT process.
We recently marked the 30th anniversary of the treaty's entry into force. It remains vital. We hope that all parties will recognise that the treaty continues to be overwhelmingly in their interests and those of the international community. As a nuclear weapons state that complies fully with the non-proliferation treaty, we want this important conference to take a giant leap forward, to curb the current threat of a new nuclear arms race and achieve our ultimate objective of a nuclear-free world.
The Labour Government have placed Britain in a unique pivotal role. We are a key member of the P5 nuclear weapons states, but also a country that the non-nuclear states can see as a friend in court, advancing our common objectives to reduce nuclear weapons proliferation. We agree with many of the non-nuclear weapons states that want faster progress towards nuclear disarmament, and we have tried to lead by example.

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When the cold war ended, many thought that the planet would be a safer place. The recent unblocking of the stalled disarmament discourse between Washington and Moscow has renewed that hope. I am pleased to tell the House that in a common statement made in New York on Monday, as a result of British efforts, all five nuclear weapons states declared that none of their nuclear weapons was targeted at any other state. That statement also contained an important confirmation of our unequivocal commitment to the ultimate goal of the complete elimination of nuclear weapons.
There is almost universal agreement that we need a united and vigorous response to tackle the problems of global insecurity and ensure that we have proper controls on the proliferation of nuclear, biological and chemical weapons. We must do all that we can to ensure that humankind does not jeopardise its own future and that of the planet. However, some states continue to challenge the objectives of the global non-proliferation regime. Although Iraq and North Korea are parties to the NPT, they have attempted to acquire nuclear weapons. India and Pakistan have carried out nuclear weapons tests. Israel's nuclear stance is seen by the non-nuclear states in the region as a factor complicating the middle east peace process, as my hon. Friend the Member for Putney said. There is a great deal of work to do, but Britain is leading the way in accomplishing it.
Mr. Deputy Speaker (Mr. John McWilliam): Hon. Members who do not wish to stay for the next debate, which looks absolutely fascinating, please leave quietly now so that we can get on.

Diastasis Symphysis Pubis
12.30 pm
Dr. Stephen Ladyman: This is my first experience of Westminster Hall. I was a strong supporter of the experiment when it started, but I did not realise that it would be as difficult to be drawn out of the hat as it is to get six winning numbers on a Saturday night in the national lottery. This is my first opportunity to open a debate here, and I am delighted that it is to be a debate on the subject of diastasis symphysis pubis. I have discovered that if one wants to attract the interest of colleagues and journalists in a debate, it is a good idea to have a title that nobody understands; I have had dozens of calls from people who wanted me to explain it to them.
If my persistence in seeking the debate has paid off, it has been nothing like the persistence of my constituent Mrs. Angie Lambert, who suffered chronic pain during and subsequent to her pregnancies in 1992 and 1994. She received no adequate support to deal with that pain, no explanation of it and no suitable treatment, but she would not accept that it was the norm and that pregnant women must put up with it. She was told that pregnant women must face that sort of pain and had to grin and bear it, and that it went with the job of having children.
Mrs. Lambert began to research the subject and came across an article entitled "Mind the gap" by Margaret Polden, then the superintendent obstetric physiotherapist at Hammersmith hospital. When Mrs. Lambert read the article she realised that she had been suffering from one of a group of conditions called symphysis pubis dysfunction, or SPD. In particular, she was suffering from the condition known as diastasis symphysis pubis, or DSP. She found that there was no organisation to provide care for that condition, or advice about its treatment. Having been encouraged to do so by Mrs. Polden, she set up the British DSP support group, which has subsequently been renamed the British SPD support group. So far as I am aware, it is the world's only support group for the condition. It is based in my constituency in an office in Ramsgate.
The group is responsible for raising awareness of the condition, among other things. As part of that process, and for the benefit of all the parliamentary colleagues who have, I hope, switched on monitors around the Palace of Westminster to find out what diastasis symphysis pubis means, I will briefly describe the condition.
There are three major bones in the pelvic girdle. The one at the centre is called the sacrum, to which the backbone is attached at the base of the spine. To the side are two curved bones, which join the sacrum at the back and curve forward and are jointed at the front. The joint at the front is called the symphysis pubis; the bones are held together by ligaments, and the gap in the joint would usually measure around 4 mm to 5 mm. The ligaments soften as a result of the hormones produced during pregnancy, and the joint moves apart slightly, possibly by another 2 mm to 3 mm, to facilitate the delivery of the baby. A gap of 9 mm would be considered normal during pregnancy, but if that gap gets too large or if after birth the ligaments do not toughen up and the gap does not close down again, problems arise. The condition known as diastasis symphysis pubis occurs when the gap has grown beyond 10 mm.

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The consequences of the condition are chronic back pain, shooting pains in the legs, suprapubic pain, sacroiliac or lumbar pain, radiating pains to the buttocks, groin and legs, and tenderness. The woman will often walk with a waddling gait because she cannot walk normally. She will find it difficult to walk with normal long strides and will have difficulty in moving her legs. She will be unable to get in and out of a car, turn over in bed and climb the stairs. She will find it difficult to do the shopping and normal household activities. Sexual intercourse becomes difficult, and the woman often experiences loss of self-esteem and depression. Many women find that the quality of their lives is severely affected by SPD.
Many women cannot lift their babies out of their cots to cuddle them, which can be distressing for a mother with a newborn baby. A woman will find it difficult to sit on the carpet and play with her new baby, which is one of the pleasures of close bonding. She will feel cheated out of that experience and will consequently often face depression. Her marriage may be affected, and family relationships often suffer. Her sex life and social life can be affected. Women who intend to return to work can find employment difficult, and obvious financial problems result. Depression, resentment, anger, lack of self-esteem, frustration and lack of confidence are all common.
On top of that, the medical profession finds it difficult to recognise the condition and to provide appropriate levels of support, because awareness of the condition is not high. The woman will therefore often find that nobody believes in her. She is almost told to go away and pull herself together, with the words, "This is normal—it's just a bit of backache, which will disappear. Take a couple of aspirins." In fact, the condition is anything but normal. Once it has been recognised, it can be managed very well and treated, but it is seldom recognised.
As the Member of Parliament for the constituency in which the support group is based, I have had many telephone calls from men throughout the country who have said, "My partner has had this condition for months. My life has been made a misery because of the difficulty that she has been having. Nobody told her what she was suffering from or what to do about it. We have just found out about it by accident. Somebody has introduced us to the support group, and we are now getting help. What are you doing as the MP to make people aware of the condition?" One thing that I hope will come out of today's debate is that people will become aware of the condition and the Department will start to follow that up.
There are slightly more than 700,000 pregnancies each year in the UK. About one woman in 250, or close to 3,000 women will probably suffer from SPD in one form or another. Of those 3,000 women, only 45 per cent.—or 1,300 women—are ever put in touch with the SPD support group. It is the only group that supports such women, so one must assume that 1,700 other women who suffer from the condition are never given appropriate counsel.
Doctors still are not taught about DSP and SPD. During training, they receive only a basic knowledge of ligament pain and are not given specific details about the condition. Many hospital trusts have no specialists who can spot it, and many women suffer for months without
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it being recognised. Once you know that you have the condition, your lifestyle can be assessed and you can be given advice to help you manage the pain and the condition and to bring about comfort, if not a cure.
Mr. Deputy Speaker (Mr. John McWilliam): Order. The hon. Gentleman is using the word "you". When he uses it, he refers to me, and, in the circumstances, I am physiologically incapable of having the condition.
Dr. Ladyman: My great apologies, Mr. Deputy Speaker, but I am sure that you will now be able to counsel appropriately constituents who come to you with this problem.
Once the condition is recognised, an individual can be counselled to address the matter. Postural advice is especially important. Osteopathy and chiropractic treatment can bring a great deal of relief, as can the Alexander technique. Generally, a plan can be put in place to manage the condition and the pain associated with it. The first step is for doctors to recognise the condition and for the woman to be put in touch with people who can help and advise her.
I have various questions that I want my hon. Friend the Under-Secretary to address. I know that she has addressed the first, which is an issue that gives weight to the support group's view that nobody is taking the condition seriously. The group wrote to Her Majesty the Queen some months ago, to bring the matter to her attention, and Her Majesty wrote back to say that she would bring it to the attention of the Secretary of State. The Secretary of State did not respond. The group wrote directly to the Secretary of State, but he still did not respond. It wrote to me and asked me to obtain a reply from the Secretary of State. I wrote to him, and, lo, no response came. The letter still has not received a reply. I understand that my hon. Friend the Under-Secretary has managed to track down that correspondence, and she assured me that there will be a response. However, I am sure that she will understand that that has added to the feeling that nobody really cares about the condition.
Why are doctors still not being taught about the two conditions? What steps can the Government take, presumably through the Royal College of Obstetricians and Gynaecologists, to ensure that such study is included in doctors' training? We would like the Under-Secretary to consider making osteopathy and chiropractic treatment available on the national health service to women who have been identified as having the condition. The Department of Health should consider an awareness campaign, not only within the medical profession but in clinics that women attend for check-ups. Consequently, if a woman should start to experience such chronic pain, before or after her baby is born, she will at least know that there is a group that can advise her. Alternatively, she can ask her general practitioner whether he has considered that she might have SPD or DSP, and ask him to put her in touch with the support group. It is likely that the condition is often made worse by midwives using a technique called lithotomy, whereby a woman gives birth with her feet in stirrups or on the hip of the midwife. The support group believes that midwives should give serious consideration to the use of that position, given the possibility that women might suffer from SPD or DSP following the birth.

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Those are key points, but I would like my hon. Friend the Under-Secretary to consider a further point, on which she does not need to take immediate action, but which she should start to think about—the future funding of the support group. It has been funded for three years on a generous lottery grant, which the group was thrilled to receive. However, that funding runs out next year. Prior to the lottery grant, grants were made available through the Department of Health for the group's work. We must consider what will happen if there is no renewal of the lottery grant, because the group provides a vital service to women suffering from the condition. Will the Under-Secretary also consider whether the Department might fund a lecturer to tour medical colleges and hospital trusts to raise awareness of the condition. It is a debilitating condition for many hundreds—probably thousands—of women. It can absolutely ruin what should be the greatest experience of a woman's life: having a baby and looking after that child in its first months. Not only can the condition destroy that experience for many women, it can destroy their family and social life. We must start taking it much more seriously. I congratulate Mrs. Lambert and her excellent team in my constituency for their work. I wish to encourage my hon. Friend the Minister to pick up the baton carried by that group of people and ensure that the Department of Health carries it forward.
12.45 pm
The Parliamentary Under-Secretary of State for Health (Yvette Cooper): I congratulate my hon. Friend the Member for South Thanet (Dr. Ladyman) on securing this debate on diastasis symphysis pubis and on the care with which he is representing his constituents' interests in such matters. He gave a powerful description of the problem and of the health, emotional and social consequences of the condition. As my hon. Friend described, diastasis symphysis pubis—DSP—and the more common condition, symphysis pubis dysfunction—SPD—are conditions that occur in pregnancy and affect the front joint of the pelvis, which can cause considerable pain. It can take some time for that pain to relieve completely after the birth, and physiotherapy is often helpful in managing the condition. My hon. Friend has made very clear the extent to which DSP and SPD are misunderstood, can remain undiagnosed and cause considerable misery and distress for sufferers and their families.
SDP and DSP are characterised by pain over the symphysis pubis joint. They can cause considerable pain in the hips, groin, lower abdomen and inner thighs. The extent and the severity of the condition vary from woman to woman, but there is no doubt that it can have a significant impact on the physical and emotional well-being of sufferers. I assure my hon. Friend that I take seriously and have listened carefully to the points that he raised about the condition. I want to deal now with some of matters to which he referred, and I shall later follow up some of his other points in my Department.
I agree that raising awareness of the condition is important. SDP and DSP may be difficult to diagnose and raising the issue more widely will make more health professionals aware of the symptoms and better placed to respond speedily and appropriately. I share my hon.
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Friend's concern and that of his constituents to see services for women who suffer from such conditions continuing to develop and improve.
We are aware of the concerns of various patients' groups. I wish to take this opportunity to apologise to my hon. Friend's constituent, Mrs. Lambert. We cannot find her original correspondence in the Department of Health. I apologise for the delay in replying to my hon. Friend's letter, a copy of which we have. After receiving his letter, to which he attached the correspondence from Mrs. Lambert and the support group, we have asked the Royal College of Obstetricians and Gynaecologists to consider the issue further and, if necessary, to reinforce its advice to members.
I understand that the college's scientific advisory committee has put the issue on the agenda of the meeting to be held on 16 June and I am sure that any guidance forthcoming from the college will help the medical profession better to recognise those women who are in need of specialist care. We are also aware of concerns about the low level of interest and awareness of DSP among health professionals, particularly general practitioners, and the wide variation in referral habits. We recognise that the pain and disability accompanying DSP and SPD can be minimised through early diagnosis and appropriate management, as my hon. Friend described. It is clear that such conditions will require expert knowledge.
It is encouraging to note that a small, but steadily increasing, number of health professionals are developing an interest in DSP and SPD. For some GPs, that has led to developing competence in diagnosis, changing and adjusting treatment and providing support and advice. A number of midwives are also taking an interest in DSP and SPD, and specialist obstetric physiotherapists are making a valuable contribution to the development of expertise in treatment. Much can be learned from their experiences. It is unlikely that individual health professionals will see more than one or two cases of DSP a year, if that—though they may see considerably more cases of SPD—so it is vital that they receive help to enable them to identify more easily women who present with symptoms.
The Government have done much to promote and disseminate good practice that has been built up in maternity care, and in health services generally. The national health service learning network, for example, has been designed to help the NHS to modernise and to boost the spread of good practice in service delivery and management. The network combines the best of bottom-up learning from the service with practical help and know-how from national initiatives. We must see how we can use the learning network to disseminate best practice further in such areas as DSP and SPD.
The Government continue to provide central funding to support maternity service liaison committees, which facilitate the sharing of information about good practice and local initiatives. The committees embody the type of patient-professional partnership that we want to flourish, giving service users the opportunity to work with health professionals to develop appropriate and responsive local services that put the patient at the heart of NHS services.

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The development of primary care groups will present an opportunity to explore new models of care delivery, and people with conditions such as DSP and SPD will be able to influence change as the new NHS unfolds. Service users and voluntary groups such as my hon. Friend's constituents' organisation will play a special role in that process.
My hon. Friend is right that people are better informed today, but they also expect better information. The case that he described of his constituent seeking more information about her condition is typical: people increasingly, and rightly, want to know about their illnesses and the services that they need to manage them. That is why the starting point for a modern care system in the NHS is as a provider of information as well as a provider of treatment. In maternity services as in any other aspect of health care, communication and information are key aspects of good quality and effective care. We welcome the development of self-help groups, and I pay tribute to the work of the DSP support group—the SPD support group, as it now is—and its valuable role in raising awareness and helping sufferers of this distressing condition. I shall look into my hon. Friend's points about raising awareness of the support group and about its long-term future.
Concern has been raised in some quarters that women may be denied access to elective caesareans as a preventive measure. I take that point seriously, because a fundamental principle of "Changing Childbirth" and the Government's approach to maternity services is that women should be free to choose the care that they feel is most suitable. The woman must be the focus of maternity care and feel that she is in control of what is happening and able to explore and discuss her wishes regarding the birth with those who care for her.
The Government are funding a national audit on caesarean sections by the Royal College of Obstetricians and Gynaecologists to develop standards and monitor the wide variations across the country in the number of caesarean sections carried out. We hope to learn lessons from that audit.
My hon. Friend mentioned other issues relating to maternity care, including the position in which women give birth. I shall respond by reflecting on the broader principles that guide our approach to maternity services.
We have made it clear that the ethos of women-centred care, with the emphasis on appropriate, effective and accessible care, must drive all maternity services. Since the publication of "Changing Childbirth" in 1993, Government policy has consistently and successfully promoted that ethos. We remain committed to those principles and to ensuring that women receive the clear and unbiased information that they need to make informed choices about their care.
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Huge advances have been made in changing women's experience during pregnancy and childbirth. Women are more actively involved in making decisions about the maternity services that they receive and no longer have to make do with what is decided for them by others. That clearly includes the position in which they give birth, which is even more important for women suffering from DSP or SPD. We expect midwives to discuss with women the most comfortable position for them. Giving birth with one's feet up in stirrups or lying flat on one's back is considered to be old-fashioned by modern midwifery and obstetric practice.
The overriding expectation of pregnant women, their partners and families and the health professionals who care for them is a safe pregnancy and delivery and a healthy mother and baby, but childbirth is about more than safety. Maternity services exist to support the whole family, not simply during pregnancy and childbirth, but after the birth too. That must include managing conditions such as the DSP and the SPD to which my hon. Friend referred.
My hon. Friend also mentioned the availability of osteopathy and chiropractic, and other additional support and treatment for women suffering from SPD. The decision to commission services is a local one and must carefully balance clinical priorities with cost-effectiveness as well as taking into account the local population's needs. We are examining the commissioning of alternative therapies, and osteopathy and chiropractic treatment must be considered in that context.
My hon. Friend raised some crucial issues in this morning's debate. He deserves credit for initiating it and for raising awareness of this subject. We know that we have a long way to go to improve maternity services and care for patients with all kinds of conditions; we must not be complacent about the care and support provided by any part of the NHS. I commend the work done by the support group mentioned by my hon. Friend. I hope that referral of the issues to the Royal College and the consideration that it will give to them will help to take this matter further. I shall also consider the additional issues raised by my hon. Friend about extending awareness and about the future of the support group.
I hope that my remarks emphasise the Government's on-going commitment to the principle of good-quality, women-centred maternity services and support for all the conditions that women may experience during pregnancy, labour and childbirth. The initiatives that I have described today can make a difference in improving awareness, prevention, treatment and swifter diagnosis and can spare many women the misery and discomfort of DSP and SPD.

Mental Health Services (Sutton)
12.58 pm
Mr. Tom Brake: I welcome the opportunity for this Adjournment debate and am grateful for the chance to speak about important issues surrounding mental health services in the London borough of Sutton and beyond. I shall keep my comments relatively short, to enable my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) to make some comments.
The timing of the debate is fitting, as it follows the "Saving Lives" debate at St. George's hospital on 25 February. That debate focused on the Government's target to reduce the rate of suicide in the mental health service and explored people's vulnerability when they feel unwell, raising many issues relevant to Sutton that are worthy of debate.
It may be helpful if I provide a brief history of developments in mental health services in Sutton over the past 12 months. In 1999, Sutton's services merged with Springfield university hospital to found the South-West London and St. George's Mental Health national health service trust. The trust's geographical boundaries encompass Wandsworth, Merton and Sutton.
The Minister will be aware of the cuts—euphemistically termed efficiency savings—that threaten many mental health services, and the pressure that they put on trusts to limit services. Our local trust needs to make efficiency savings of about £200,000. Since the merger, the trust has concerned itself with making savings in respect of day care in Sutton. Of the three boroughs covered by the trust, Sutton is at a disadvantage. That is ironic, given that it is thought to be rich in services. Services in Sutton could therefore be seen as an easy target for money-saving schemes. The trust has no deficit, so it will not benefit from the first tranche of new NHS money.
After a lengthy day care review, the closure of Chiltern day hospital was proposed. The hospital often provides out-patient care for people with acute mental health problems as an alternative to in-patient treatment, or following discharge from hospital. The therapeutic community treatment programme consists of sociotherapy, psychotherapy, occupational therapy and drug treatment. Many people, including professionals and clients, campaigned against the threat of closure because the hospital provides an invaluable service. Indeed, my hon. Friend the Member for Sutton and Cheam and I campaigned on that very issue.
I am pleased that the proposal to close the hospital has been withdrawn. The trust is taking a holistic view and reviewing mental health adult care services in Sutton as a whole. However, the need remains to identify savings of £200,000. It is clear that savings on that scale will leave mental health services in Sutton depleted, and cast doubt on the future of Chiltern day hospital and the Wallington and Cheam resource centres.
The "Saving Lives" debate to which I referred revealed sobering facts that highlight the importance of appropriate after-care. The 1999 report, by the national inquiry into suicide and homicide by people with mental illness, stated that
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24 per cent. of suicides occurred within three months of discharge from in-patient care…These post-discharge suicides were at a peak in the first week after leaving hospital; within the first week, the highest number occurred on the day after discharge…41 per cent. of post-discharge suicides occurred before the first follow-up appointment.
It will be clear to the Minister that those are worrying statistics. If we are to achieve the Government's targets for reducing suicide rates, we need services that provide community care for people at the vulnerable time immediately after discharge.
On that issue, I want to raise the tragic case of 30-year-old Kevin Thadani, who was diagnosed as a paranoid schizophrenic. Mr. Thadani was found dead on Mitcham common six weeks after being discharged from the Jasper ward of Sutton hospital. He died from hypothermia, and the coroner recorded a verdict of misadventure. Mr. Thadani had a long medical history, and the Minister will note from the diagnosis that he was a vulnerable man.
After only a few weeks of in-patient care, Mr. Thadani was discharged into an unsupported bed-and-breakfast in Streatham, despite indications that he needed supported accommodation. Although Mr. Thadani had asked to be closer to London to increase his chances of getting a job, the bed-and-breakfast was unsuitable in other respects. Apparently, it is in a well-known red light district of Tooting Bec common. The Minister will agree that that is not the most suitable place for a person who is feeling unstable. As far as I am aware, no provisions were made for Mr. Thadani, apart from breakfast at the bed-and-breakfast, and presumably he spent considerable periods of time isolated in his room.
Mr. Thadani's absence was not reported immediately, and his appearance after death suggested that he had been living rough for several weeks. Clearly, he was a man who needed continuing care and support to maintain his mental health. Appointments with his community mental health team were not enough for him to sustain his health.
I know that that is not an isolated case of a person with mental health difficulties being discharged into an unwelcoming and possibly frightening situation, which results in a relapse. That raises the question of why tragedies like Mr. Thadani's death occur. The Government are rightly keen to emphasise the importance of community care, but this case represents an example of the failure of community care.
Could the mental health services and the local authority have done more to support Mr. Thadani? The answer must be yes. An ideal, but not unrealistic, alternative to his follow-up care would have been supported accommodation and a referral to one of the day care services in Sutton or a neighbouring borough, if that was where he was resident. That would have ensured that someone had continuing responsibility for Kevin's care.
The Minister will remember the sobering statistics that I mentioned earlier about the high risk time for suicide, and therefore relapse, in the first 24 hours. The Chiltern day hospital, which was under threat of closure, provides an assessment within 24 hours of discharge from hospital, thereby acting as a safety net for many vulnerable people.

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Other valuable day care services in Sutton—Wallington resource centre and Cheam resource centre—provide continuing care for people with acute and long-term mental health problems. The centres' treatment is similar to that of the Chiltern day hospital. They integrate activities within the wider community and in educational and employment services, and treatment is provided in a non-clinical environment.
The majority of people with mental health problems receive little appropriate support from families and live isolated lives, thus increasing the risk to their health. Services such as the resource centres and Chiltern day hospital are invaluable in providing people with a regular routine and social interaction. As we have seen from the case of Kevin Thadani, the lack of effective and regular community support can result in tragedy. I therefore ask the Minister not only to support the concept of day care services in Sutton and elsewhere, but to invest nationally in preventive and containing community treatment.
It is worrying that neither Mr. Thadani's absence nor missed appointments were apparently followed up. I would be grateful if the Minister could comment on that. The case of Mr. Thadani also reflects the importance of appropriate housing for people with mental health problems. It raises the question of whether the council should be made more aware of the needs of people with mental health problems, which is necessary for better liaison between clinicians and the council. Bed-and-breakfast accommodation is rarely sufficient for a vulnerable person and is often an isolating and insecure experience. Many good supported housing associations operate in Sutton, such as Croydon Churches and Sutton Community Development Trust, which provide supported flats for people with mental health needs. Support includes practical help, monitoring of health, emotional support, social interaction and liaison with clinical services. Finding appropriate housing is extremely difficult, and is becoming more so, yet it is a fundamental necessity. If a person's housing is not right, their mental health often deteriorates.
A further concern is the emergency procedure that is available in respect of Sutton's local NHS trust. People in crisis or feeling unwell either have to contact their general practitioner or go to St. Helier accident and emergency unit for a referral to the on-call psychiatrist. Out of hours, it is extremely difficult to contact a GP, especially one who is familiar with the patient's case. A patient who chooses instead to go to the A and E unit may face a very long wait. A constituent of mine in a suicidal state had to wait six hours to see the casualty doctor before the psychiatrist was called. She said that psychiatric emergencies are often treated with a degree of ignorance or derision, which often deters people from asking for the help that they need. A and E procedure needs to be changed to make the mental health services more easily accessible to people who are at their most vulnerable.
I want to raise several further points to which I hope the Minister will respond either in this debate or in writing. Will he comment on the practice of placing in appropriate housing homeless people who have been discharged from hospital and who have a history of mental health difficulties? What action will be taken? I appreciate that supplying all types of housing is a major
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problem, but supplying affordable, supported or appropriate accommodation to people who have mental health problems is an even greater problem. What action will be taken?
What steps will the Minister take to prevent tragedies such as that involving Mr. Thadani's death, and to lower the risk of suicide in Sutton and elsewhere? The case to which I referred is just one among many. There is only one course of action that the local mental health services in my constituency could adopt to prevent tragedies such as that involving Mr. Thadani, and help to meet the targets for reducing the suicide rate—they should continue to invest in mental health services locally, and not attempt to make efficiency savings.
I ask for the Minister's support in raising the profile of mental health issues in the health service generally. The need for that was put to me forcefully when I discussed the matter with people on the trust. There may be a reluctance to talk about mental health issues, and Members of Parliament may be reluctant to support that valuable service. What action will the Minister take in that regard?
Finally, I express my gratitude to Kevin Thadani's brother, Joe, and his parents, for allowing me to refer to Kevin Thadani's case. That enabled me to highlight my concerns about mental health services. I am aware that this is a painful issue for Joe and his family, but if firm action is taken—it cannot guarantee that such a tragedy will never reoccur, but it could reduce the risk—Joe may feel that Kevin did not lose his life in vain.
1.12 pm
Mr. Paul Burstow: I thank my hon. Friend the Member for Carshalton and Wallington (Mr. Brake) for initiating this debate.
My hon. Friend referred to the review that the South-West London and St. George's Mental Health NHS trust undertook last year in relation to day care—it proposed closing the Chiltern day hospital. Hon. Members will not be surprised to learn that that proposal went down like a lead balloon with service users, carers and staff, who felt that the trust failed to understand the hospital's role of assessing, containing and treating people with acute mental health problems. Users of the service and staff told me that the system works like a safety valve, because it prevents the need for in-patient admissions. Closing the hospital represents a false economy for service users and perhaps for the trust's budgets. Closure would have an impact on acute mental health patients and on the resource centres that provide day care services in Sutton. There are two centres in the borough—Wallington resource centre, which is in my hon. Friend's constituency, and Cheam resource centre, which is in mine. The closure of the day hospital would dilute their work and convert them into an integrated service. They would lose their client focus and client-centred approach to those who suffer from chronic mental health problems. Staff at the resource centres were worried that the case management systems that they had established would have been undermined by such changes. An audit of the work of resource centres was undertaken in Wallington and revealed their considerable value in reducing re-admission rates into the acute sector. There is great concern that service changes would have been to the detriment of many of

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the service users instead of for their benefit. One concern about the closure was that it would lead to a focus on acute mental health problems at the expense of chronic mental health patients.
The staff told me that they had a sense of déjà vu because, 10 years ago, the service was configured to integrate acute and chronic mental health service users under the same provision. A review found that service was not being delivered to the satisfaction of either group and was not providing the best outcome for either group. We are seeing the recycling of old ideas that have failed previously but are being brought back into service. That seems to be due, at least in part, to financial imperatives in the trust's budgets.
As part of the review, I visited Cheam resource centre and Chiltern day hospital. As a consequence of my discussions, I asked 14 questions in letters to the trust management. I have not yet received replies to those questions, but, as my hon. Friend rightly said, thanks to the campaigning of service users and others, the plans have been abandoned or put on the shelf. We hope that they will gather dust for many years.
We now have a review of the trust's services and the remit has been widened, which is welcome. The local authority is about to start a best value review of its mental health services. That provides an opportunity to consider the concerns of my hon. Friend by widening it to examine issues affecting housing and the integration of services. They work well together, but, as my hon. Friend's case demonstrates, they do not work well enough. More needs to be done to ensure that the national service framework is being properly implemented and that the new emerging mental health strategy in Sutton is fully implemented. Those should be the key criteria for developing services in Sutton, and I hope that the Minister will be able to give some assurance on that.
1.17 pm
The Minister of State, Department of Health (Mr. John Hutton): First, I congratulate the hon. Member for Carshalton and Wallington (Mr. Brake) on securing this debate on mental health services. It is unusual for hon. Members to have the opportunity to discuss mental health services, which is a shame given their importance to millions of citizens. It is not often appreciated that mental health problems are as common as asthma in our society and at any one moment 6 million people in Britain may need support from the NHS or local authorities to help them to deal with mental health problems. Anything that we can do in this Chamber to raise the profile of mental health services would be welcome.
The hon. Gentleman asked me to take more steps to encourage the development of mental health services and to provide some leadership. We are trying to do that. We have made mental health services our top priority for the NHS and I shall say more about that shortly. It is important in this debate to be honest with each other. Mental health services have been neglected and undervalued for decades in the NHS and we must put that right because those services are crucial to many vulnerable people. The hon. Gentleman referred to the
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specific and tragic case of Mr. Thadani in his constituency. The history of mental health services is littered with such tragic cases in which things could be been done differently with a better outcome for patients and their families.
We must make a big change in the quality and consistency of mental health services and we are trying to do that. The hon. Gentleman may be interested to know that later this year I shall visit every part of the country to talk to chief executives and chairs of trusts and others about implementation of the national service framework. The hon. Member for Sutton and Cheam (Mr. Burstow) asked us to do more to implement the national service framework, but it came into operation on 1 April, so it is only a month old. We must be realistic. There is a lot of work to do to ensure that all the standards identified in the national service framework are translated into front-line services. Some health authorities are starting from a different position and are further advanced in developing the standards. There may be a significant need to do more in the hon. Gentleman's constituency and that of his hon. Friend the hon. Member for Sutton and Cheam and I shall not argue about that. The hon. Gentlemen have put forward strong arguments for change and improvement and we would certainly encourage that. However, I would like to pick up on the impression that they gave, perhaps inadvertently, that health services in Merton, Sutton and Wandsworth are experiencing a contraction of funding. That is not the case. The health authority in that area is receiving more than £30 million in additional funds in this financial year.
I believe that the hon. Member for Carshalton and Wallington has served on a local authority—the hon. Member for Sutton and Cheam certainly has—and I am sure that he would argue that there is always a justification for ensuring that money is being used efficiently and effectively. Best value for money should be a principle that unites everyone in the House, rather than causing divisions and arguments between us. There is a strong case for ensuring that services are provided efficiently and effectively, but it would be wrong for the hon. Gentlemen to give the impression, albeit inadvertently, that mental health services are having their money cut in Merton, Sutton and Wandsworth. That is most definitely not the case.
Mr. Brake: I checked my facts yesterday, and had a discussion with Duncan Selby, the chief executive of the trust. He thought that the trust would be required to make savings of £200,000—he used the euphemism "savings"—and he was worried about the impact that that would have.
Mr. Hutton: I am grateful to the hon. Gentleman for making that point. However, what he and the hon. Member for Sutton and Cheam failed to point out was that the situation needs to be set in the context of £30 million of additional money going into the health authority of which his constituency forms a part. The NHS is growing in his constituency. Its capacity to provide better quality front-line services is increasing in Sutton, and I am sure that the hon. Gentleman will welcome that as everyone else does.
The hon. Gentleman made two more points to which I would like to respond briefly. He is right on these points, and I would not wish to take issue with him over

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them. He stressed the need for better partnership working between local authorities and the NHS in relation to mental health services. There is a strong need for closer, better integration of services between local authorities and health authorities and trusts in providing services for people with mental health problems.
I cannot think of a better example of the need for better partnership working, because the needs of people with mental health problems will not be met simply by the NHS. They will be met by a combination of services and different providers, not necessarily under the local authority umbrella, in relation to housing, social support and other services that are not the preserve of the national health service. If people with mental health problems are to recover as we want them to, and to lead normal, fulfilling, natural lives, they will need a range of other support services that the NHS cannot provide. We recognise the need for the networks of social support and proper housing that the hon. Gentleman mentioned and we are taking steps to improve them.
The hon. Gentleman also made the important point that in Sutton, as elsewhere, there is a strong need for round-the-clock access, especially to services for people with severe mental illness. He referred to his constituent Mr. Thadani in that context. We are making significant investments—I shall spell out in more detail in a moment the areas to which they will apply—to ensure that mental health services are available round the clock. People with mental health problems do not have them only from 9 to 5.
Mr. Burstow: Does the Minister agree that, in view of the fact that we are to have two reviews of mental health services—the best value review by the local authority and a review by the trust—it would be desirable to have either one review or two very closely integrated reviews?
Mr. Hutton: Yes, I agree with the hon. Gentleman on that point. As partnership working in mental health services becomes the norm, there is an obvious case—especially in relation to pooled budgets and integrated service provision—for the best value regime to be common to both parts of the services. We are not quite at that point yet in relation to services in Sutton, but I hope that we shall get there sooner rather than later.
Leaving aside those general points, I should like to return to some of the specific points raised by the hon. Member for Carshalton and Wallington. I was sorry to hear of the tragic case that he described, and I offer my sympathy to those who knew Mr. Thadani at what must be a sad and difficult time for his family. The hon. Gentleman will appreciate that it would be inappropriate for me to go into detail today about the circumstances of the case, or to draw any conclusions from it. South-West London and St. George's Mental Health NHS trust and the London borough of Sutton social services department are conducting an investigation into the circumstances leading to Mr. Thadani's death.
I offer my sympathy to those who knew Mr. Thadani at what must be a sad and difficult time for his family. As the hon. Gentleman will appreciate, it would not be appropriate for me to talk in detail today about the circumstances of the case or to draw any conclusions
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from it. As he will be aware, an investigation by the South-West London and St. George's Mental Health NHS trust and the London borough of Sutton housing and social services department is being carried out into the circumstances that led to the death of Mr. Thadani. Both organisations have agreed to an independent membership of the joint investigation team. The investigation's objective is to establish the circumstances and the reasons for the tragedy. I hope that the hon. Gentleman agrees that that is the best way to ascertain the facts and, by learning from the problems of individual cases, to avoid repetition in the future. We are determined to ensure that service failures are not followed by tragedies in individual cases. We want to ensure that services are comprehensive and effective and to learn any lessons that need to be learned from this terrible case.
I shall refer to the points made by the hon. Members for Carshalton and Wallington and for Sutton and Cheam on mental health services generally before I consider the specific circumstances relating to Sutton. A number of problems have been identified in mental health services: not enough joint working between health and social care; inadequate investment; problems with professional demarcations; problems brought about by a lack of effective, integrated services. Those problems mean that despite the strong commitment and invaluable hard work of those delivering the care services, we have not always managed to deliver the seamless, accessible and effective services that people want, need and deserve. Yes, there are continuing problems; there is much room for significant improvement. Things are not entirely as we and the hon. Member for Carshalton and Wallington and his hon. Friend would wish. It would be foolish to pretend that things are perfect and I shall not do so.
I can say with confidence, however, that although there is a long way to go, the Government, the national health service, social services and the other stakeholders are rising to the challenge. In the national service framework, we produced one of the most widely welcomed statements on the development of mental health services in many years. Mental health services will no longer be the Cinderella service of the national health service; improving mental health services is one of the Government's top priorities for the NHS. The national service framework provides us with a unique opportunity to build on examples of good and innovative practice throughout the country. That will benefit the hon. Gentleman's constituents in Sutton as it will people in other parts of the country.
Every health authority is developing its local implementation plans for ensuring that the national service framework becomes operative and effective locally. Significant amounts of additional investment are going to improve mental health services. We have identified £700 million in the existing comprehensive spending review period to invest for that purpose. A significant amount of that investment will go into the areas to which the hon. Gentlemen referred: improving access to round-the-clock services, more assertive outreach teams, greater access to 24-hour staff care, a different mix of beds and secure accommodation for people with mental health problems and, most importantly, we are investing significantly to ensure that

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there is greater use of the atypical anti-psychotic drugs, a matter that I know interests the hon. Gentleman and the hon. Member for Sutton and Cheam.
I have stated some of the priorities in terms of investment in mental health services nationally. Although he did not refer to it, the hon. Member for Sutton and Cheam will be aware of the new mental health strategy document for London, "Health Services in London—A Strategic Review". It is an important context in which to discuss mental health services in Sutton.
This is the first time that a Government have attempted a comprehensive mental health strategy for any of the regional offices in the United Kingdom and the first one that we have been able to prepare, develop and launch covers London. It is a strategic blueprint; it is not about individual boroughs and their health plans, but it provides us with a context in which future mental health services in Sutton can be expanded, developed and enhanced.
There are some good news stories in Sutton mental health services; for example, there is better access for Sutton residents to specialist drug and alcohol services and a dedicated in-patient unit on the Springfield site. I hope that there will be better use of mental health beds in Sutton, which will mean that residents will have access to services locally and do not have to travel to other parts of London for treatment. Clients on an enhanced care programme approach—the seriously mentally ill—will have better access to services 24 hours a day all year round and to a duty psychiatry system which can be addressed at either Springfield university hospital in Tooting, or at Sutton hospital. Significant additional investment of hundreds of thousands of pounds has gone into improving mental health services at Sutton. These include funds to develop Derby ward at Sutton hospital and turn it into a secure unit. There is now a single team for children's services in Sutton which has received more than £100,000 in funding. An additional £175,000—
Mr. Deputy Speaker (Mr. John McWilliam): Order. Time is up.

Swale Crossing and Queenborough Roundabout
1.30 pm
Mr. Derek Wyatt: I welcome this opportunity for a further debate on the second crossing of the Swale and the vexed problem of the proposed Queenborough roundabout or traffic lights. It is particularly important to the people of north-east Kent and especially so to my constituents, who have waited far too long for the second crossing—I was tempted to say the second coming—at Swale.
The House may be familiar with some of the issues that I raise. I had an Adjournment debate about the second crossing two years ago, which led to the scheme being included in the 1998 review. I welcome my hon. Friend the Minister to the debate and look forward to explaining once more the reason that the new crossing is so important to Sheppey's industry, economy and local community. I hope to make it clear to my hon. Friend that I place great store by the Government's road safety strategy, which was published recently by my noble Friend Lord Whitty. I hope, as do other hon. Members and our constituents, that his vision of making the roads safer for everyone is realised.
For that reason I am leading the campaign for a roundabout at the Queenborough corner junction, in which I have the support of many constituents. I am supported also by Bob Eatwell, head of the governors of the local school, and many major businesses, which have had the courtesy to write to me. They include: Jonathan Fowler of ASW Sheerness Steel Limited; Del Monte's managing director, Mr. Peter Miller; Neil Fenn of Abbott's Laboratory in Queenborough, one of the great pharmaceutical companies in the world; David Cottam of Coolchain in Tenham-which is not in my patch but close to it; he has a huge road haulage company; and Les Harris, the managing director of Kent United Contractors Limited, on the island.
At present there is only one way across from the mainland to the island—the single-lane lifting bridge. Built in 1960, the crossing is not suitable for traffic flows today or for the needs of the economy for the 21st century. A growing population of 40,000 often doubles during summer weekends, because there are between 30,000 and 40,000 weekend caravans. Congestion is a perennial problem for my constituents, and especially for local businesses. We have acknowledged that the existing bridge cannot cope. Only last Friday, a major accident close to the bridge resulted in traffic flowing back almost three miles on either side of the bridge. Indeed, it so upset Mr. Peter Cooper, the managing director of Britannia, who was in the queue on the bridge, that he faxed me that day to ask when the bridge would be coming and whether we could have a roundabout. Little did he know that I was caught in the same queue.
The single-span lifting bridge has to go up every time a smallish yacht passes underneath. Thus the problems faced by those who use the bridge are greatly increased by the flow of traffic on the Swale itself. It has always been my contention, but I have not always won the debate, that the bridge and the new A249 link from the M2 have been built back to front. We wanted to enable Sheerness port and the people of Sheppey to connect to

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the mainland, but instead we built a dual carriageway from the M2 to the bridge and did not change the infrastructure on the island at all. We still have not solved the dilemma of how to gain access to the island. That is just one vexed problem in the argument of the traffic lights versus the roundabout.
However, the lack of an adequate link to the mainland only exaggerates the problems of social exclusion felt by my constituents, who refer to themselves proudly as islanders. In fact, we have the highest rate of home births in the United Kingdom. People are nervous about coming off the island. It is not that they necessarily feel that they need a passport, rather that they prefer to have their children at home. I am sure that hon. Members will agree that the term "islander" does not reflect the reality of an area so close to the heart of Europe. Sheppey should be able to share in the prosperity of the rest of south-east England, one of the top 10 areas in Europe.
Public transport on the island is unreliable and inefficient. If that is to improve, the infrastructure needs to be in place before the operators can be expected to deliver an improved service. Improved infrastructure is the carrot with which to persuade public transport operators to improve their services. That is why the bridge is important.
I am confident that, with a second crossing, we can manoeuvre our way around those obstacles; without it, I fear that those obstacles will only increase in number and size. The local economy needs a second crossing and, as I have shown, local industry rightly demands and deserves it.
Sheppey has high long-term unemployment, and some of our wards are among the poorest in the United Kingdom. However, matters are looking better. Economic prospects are much more positive and unemployment has reduced for the first time in many years. Much credit for that must go to the Government's new deal initiatives and single regeneration budget funding.
Medway port, in Sheerness, is the fifth largest port in the United Kingdom. If it is to be developed into the fourth largest, it needs the bridge. Those who visit the island say, "What a fantastic port", but we consistently lose contracts because people cannot leave the island when the bridge is raised. We need to resolve such problems, but the issue of the traffic lights versus the roundabout contributes to them.
I am pleased that we have a major port, but we also have a number of professional small businesses and leading international companies, to which I have referred. The previous Government failed to provide them with the infrastructure that they need to develop. The White Paper "A New Deal for Trunk Roads in England", published by this Government in 1998, included the second crossing in its targeted programme of improvements. But two years later, my constituents expect to know when the Labour Government will make good that provision. Businesses have had to endure uncertainty not merely for the past two years, but for the 40 years since the last bridge was built.
Without a second crossing, the Isle of Sheppey cannot prosper. It would be wonderful if, for a change, we could be a plus in the Treasury's notebook, rather than a minus. With access to a second crossing, the island's
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potential for economic growth could be realised, and businesses would be better able to attract further investment. That would also create new jobs, which we badly need.
In the light of my comments, I hope that the Minister and other hon. Members have no doubts about my commitment to the new crossing, which I want to see built as soon as possible. Nevertheless, having waited for decades, I want us to get the crossing right. That is the core of my argument. My constituents are entitled to a scheme that does not repeat the errors of the 1970s, but reflects the best design techniques of the 21st century. As I have said, the design of the M2 system was fundamentally wrong—it was back to front.
I turn to the proposal for the Queenborough corner roundabout. The current Highways Agency scheme for the second crossing proposes a complex junction of traffic signals at the Queenborough corner junction that will require pedestrians and cyclists to negotiate seven sets of lights. Although I welcome the fact that the Government instructed the Highways Agency to look again at proposals for the second crossing—I hope that completion of the public inquiry is a positive sign for the scheme—I am not yet convinced that the agency has put forward the best possible design for the junction at Queenborough corner. My concerns about the design are reflected in a supplementary report produced by Ove Arup and Partners, which, hon. Members will recognise, is one of the world's leading consultant engineers.
The layout of the junction proposed by the Highways Agency poses a direct threat to the future of the local service station and family pub. Those two small businesses, which each employ 20 people from Queenborough, play a significant role in our community by providing different but important services. My constituents want the new road to bring new jobs to the area. Without a roundabout, the opportunity for the pub to be developed into a hotel and conference centre will be thwarted, and we see no reason why existing jobs should be sacrificed.
In response to the threat to the service station that it owns and operates, George Hammond plc commissioned the further work by Ove Arup, which examined an alternative roundabout scheme to the Highways Agency model. George Hammond commissioned that work because it was properly motivated by concern for its business and employees. It has done a service to the local community by identifying a design that is better than that currently proposed. I am grateful to the company for that, and in particular for highlighting safety issues.
The report from Ove Arup and Partners stated that safety at Queenborough corner junction would be greatly enhanced by constructing a roundabout instead of creating a monstrous network of traffic lights. The traffic signal layout proposed by the Highways Agency will require cyclists and pedestrians to navigate seven sets of signal-controlled crossings to travel from one side of the road to the other.
I have a copy of the safety audit response to the Highways Agency's proposal, which was produced by the agency's own safety auditors. I do not want to take too much time, but it stated:
The traffic signal controlled Queenborough Junctions are considered to compromise a very severe safety hazard … Pedestrians are to be provided with complex routes requiring a

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number of crossings which may well prove dangerous. Cyclists are also likely to experience safety problems in crossing the wide junctions …Complex multi phase traffic signals on high speed roads can have a poor accident record.
The key recommendation was that
an alternative form of junction be adopted. In particular it is recommended that consideration be given to the use of a traffic signal controlled gyratory system.
That comes from the horse's mouth.
The Highways Agency ruled that the safety auditors' recommendation be rejected and that the view of the designers, Mott Macdonald, be accepted because
The safety auditor has taken a very subjective view that the form of junction will be inherently unsafe…the route is not complex and the crossings are controlled…Had there been a more suitable form it would have been adopted…no change in the form of the junction is proposed.
There is a difference of opinion between two sets of contractors.
In its conclusion, the Highways Agency stated that the safety audit team had been slightly alarmist in its language when describing the problem, that some issues are subjective and that different engineers have different views on the acceptability of a design. The view of the Highways Agency was that its scheme, although not an ideal solution, provided a perfectly adequate design. We know all too well that when accidents happen, complacency is often the cause, and I am sure that the Chamber will agree that "adequate" is not good enough when referring to public safety, especially for our children. The Government make it clear in their road safety strategy that safety is the number one priority in transport. That is a commendable objective and many of the practical measures that they want to implement are designed to achieve that objective.
My concern is that the current layout at Queenborough corner will not meet those objectives. That is particularly important because the local school is located at the junction. Can we seriously expect young children to wait patiently to cross seven sets of traffic lights to get from home to school and the same seven sets again on the way home? I am sure that I am not alone in believing that we would all fail if we exposed children to such a risk. That is why I am campaigning for the alternative.
The Ove Arup report sensibly supports a reduction in the number of crossings because the potential for children to take risks will be reduced. Parents, staff and governors at Queenborough school all recognise the safety improvements that the roundabout would bring and have written to Lord Whitty supporting the design. I hope that the Government will listen to those people Many local businesses have also written in support of the roundabout. The Government's strategy states that there must be recognition that good engineering reduces the risk of accidents. The Ove Arup design does that and it is important that the Government consistently stand by their safety objectives.
A secondary consideration is that the Ove Arup design is £350,000 cheaper than the Highways Agency's proposal. Not only is it safer, it is cheaper and I am sure that that will not be lost on the Minister. That is due primarily to a reduced land take requirement, and I urge the Minister to think again about the scheme.
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In the House next Monday evening I shall hand in a petition signed by 850 local residents urging the Government to adopt the alternative roundabout scheme. This is a serious local issue for all of us.
I should be grateful if my hon. Friend the Minster would confirm that there is nothing in principle to stop my right hon. Friend the Secretary of State for the Environment, Transport and the Regions from issuing a letter stating that he is minded to approve the road project in total, subject only to modifications to the proposed layout at Queenborough corner. I understand that that process need not be lengthy.
I urge my hon. Friend to do what he can to help me in my campaign for the new road, but, primarily, to ensure that the safety issues at Queenborough corner are understood. I realise that he has a quasi-judicial role and will not commit himself this morning, but he might give us a clue as to his intentions.
I hope that I have done my constituents a service by making the case for the second crossing. Percy Wells, whom I have described in the past as our best-ever Member of Parliament for the old Faversham constituency, began the campaign for a new crossing in 1945, but it is only since the election of the new Labour Government in 1997 that any progress has been made. However, we need to move on. I urge my hon. Friend the Minister to do all that he can to offer my constituents something concrete to reassure them that we will get the road and that it will be the safest possible road.
In my maiden speech, I mentioned that after the 1997 general election, some mischievous islanders erected an eight-foot sign saying, "Scotland, Wales and the Isle of Sheppey: A Tory-free Zone". I would dearly love to return to this Chamber to inform my hon. Friends that islanders had erected a 10-ft sign saying, "New Labour; New Crossing; New Roundabout".
I hope that under the Freedom of Information Bill that is currently being considered in the other place, my constituents will soon have access to all the Highways Agency's work on the issue, so that we can better understand how it reaches decisions on the basis of the overall advice that it is offered.
We are moving to three-year spending reviews. The 1998 roads review said that the second crossing scheme would be spread over seven years. Will the Minister consider putting into the public domain, at the appropriate moment, not only the scheme bit by bit, but the whole scheme—that is, its approval, funding mechanism and build date?
1.45 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Mr. Wyatt) on his success in securing the debate. I fully appreciate that it is an important matter not only for him, but for all the people who live and work on the Isle of Sheppey.
Naturally, I listened carefully to my hon. Friend's points, especially to his arguments in favour of the second crossing and the roundabout. With regard to the latter, as he knows, the inspector's report on the local inquiry into the scheme that took place last November is before the Secretary of State awaiting a decision.

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The inspector's report was received in my Department on 21 October 1999. In the normal course of events, we would have issued the decision on the scheme before now. However, post-inquiry correspondence arguing for the introduction of new evidence was received from an affected party while the inspector's report was being considered. We therefore decided, in the interests of fairness and natural justice, that the views of all interested parties should be sought before reaching a final decision on the published orders for the scheme.
On 5 April, my Department wrote to some 60 parties with a direct or indirect interest in the matter, enclosing a copy of the report. They were given until 26 April to comment. The Secretary of State is considering those comments and the conclusions and recommendations in the inspector's report. My hon. Friend will be interested to learn that the Secretary of State's decision on the scheme will be issued later this month.
The Secretary of State and his Ministers act in a quasi-judicial role when taking decisions on schemes and orders authorising trunk road proposals that have been the subject of a public inquiry. My ministerial colleagues and I must therefore be seen to be even-handed in dealing with all interested parties, scrupulously following the statutory procedural rules and having regard to the rules of fairness and natural justice, as developed by the courts. Failure to observe any of those principles carries the risk of making decisions vulnerable to legal challenge. At worst, that can result in schemes or orders authorising a road proposal being quashed by the High Court.
The period between the close of an inquiry and the announcement of a decision is especially sensitive. Ministers must avoid giving the impression that the decision might have been influenced by private representations or factors that were not put before the inquiry. My hon. Friend will appreciate that I am bound by that legal framework, and cannot discuss the merits of the scheme or any issue that the Secretary of State will need to consider in making the decision.
I am able to say, however, that on 2 April 1998 my hon. Friend made a powerful case in the House for a second Swale crossing. As he knows, the A249 Iwade bypass to Queenborough improvement scheme, which includes the proposal for a new crossing at the Swale, is in the Government's targeted programme of improvements announced in the 1998 roads review. At that time, a commitment was given that all schemes in the programme would definitely start within the next seven years, subject to satisfactory completion of the statutory procedure. The importance of the scheme to the Isle of Sheppey is fully understood. That is why its primary objective is given in the roads review as regeneration and integration.
The A249 Iwade bypass to Queenborough improvement scheme was one of the 37 schemes in the targeted programme of improvements, or TPI. A previous Transport Minister, my right hon. Friend the Member for Hamilton, North and Bellshill (Dr. Reid), announced the programme on 31 July 1998, at the time of the publication of the roads review report, "A New Deal for Trunk Roads in England". In the roads review, the Department carefully scrutinised what my right hon. Friend described at the time as a "vast, unfunded 'wish list"' of 150 schemes, most of which would never have
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been built. They were inherited from the previous Government's programme, which had already been scaled down from more than 500 schemes, the time scale for which was never specified and for which the necessary money was never guaranteed. The schemes included in the TPI had to be robust, ready to be taken forward quickly and consistent with the five criteria that were drawn up for the new approach to appraisal, or NATA—safety, the environment, the economy, integration and accessibility.
"A New Deal for Trunk Roads in England" sets out a radical new approach, designed to deliver a road network capable of meeting the challenge of the 21st century, bringing the policy on building and operating roads into line with the Government's integrated transport White Paper, "A New Deal for Transport: Better for Everyone". There were seven schemes that were not sufficiently advanced to be considered for the TPI at the time, but which addressed serious and pressing problems, to which there were no realistic alternative solutions. Those schemes were to be taken through their preparatory stages and statutory processes so that, if they passed assessment under NATA, they could be taken forward.
On 24 March, my noble Friend Lord Macdonald of Tradeston announced how the transport fund of £280 million in the Chancellor's March Budget would be spent. He announced four more schemes—two of which were from the list of seven to which I referred earlier—to be added to the TPI. There are now 41 schemes on the TPI, although that will be reduced to 40 when the Mayor of London takes over responsibility for most of the trunk roads in Greater London on 3 July.
All 40 schemes in the TPI are important to the Government. It is a realistic, focused programme of schemes, all of which can be started in the next seven years. The schemes will help to create an integrated transport network in a manner that is environmentally sound, as safe as possible and which can help to develop the economy and promote an integrated and accessible transport network.
The Government wish the road proposals to proceed as soon as they have completed the remaining statutory procedures. However, what the Government want is not the only matter for consideration. Like the majority of road schemes and other major development proposals, the schemes must undergo a process of independent scrutiny by an inspector nominated by the Lord Chancellor and appointed by the Secretary of State. The inspector's duty in a local inquiry is to listen to all the evidence and submissions and ask questions, as necessary, in order to obtain a full understanding of all the matters raised. The inspector will submit a report, containing the salient points of the cases and a recommendation to the Secretary of State on whether the published orders for the scheme should be made. All major road schemes must pass that statutory procedure before the Secretary of State can give the go-ahead.
That is the stage that we have reached with the A249 Iwade bypass to Queenborough improvement scheme. The inspector's report on the local public inquiry held at the beginning of September is with the Secretary of State, and the inspector's conclusions and recommendation will be considered alongside the post-inquiry representations. The Secretary of State will make a decision on whether the published orders should

111WH
be made, taking into account the inspector's recommendation and all the available evidence. That decision gives the go-ahead to the scheme.
I noted my hon. Friend's earlier debate, when he explained most eloquently that the Isle of Sheppey, although part of the United Kingdom, has been detached from mainland Britain for more than 1,000 years. That creates unique problems for its full-time population of 40,000 and its weekend population of almost 80,000. I appreciate that those problems are not helped by the current inadequate transport link with the mainland. As my hon. Friend has said, it prevents industry and commerce on the island from expanding and developing as easily as they would like. I acknowledge that a new crossing of the Swale would assist regeneration of the Isle of Sheppey. That is why the A249 Iwade bypass to Queenborough improvement scheme is in the TPI and has been given the primary objective of regeneration and integration in the roads review.
The scheme would also deal with the problems that are caused by the Kingsferry bridge, which has a central lifting span and carries a single-track railway. Earlier, my hon. Friend said that raising the bridge on demand for shipping on average six times a day causes long delays and congestion for vehicles. The A249 is an important link between Maidstone and Sheerness, and it shares junctions with the M20, M2 and A2. In October 1996, a 9 km stretch of the M2 to Iwade was opened.
In response to a parliamentary question in December 1998, Lord Whitty announced that, subject to the successful completion of the relevant statutory procedures, the A249 Iwade bypass to Queenborough improvement scheme was one of three major trunk road schemes in north Kent that will be taken forward under the proposed Kent design, build, finance and operate contract. Final decisions are yet to be taken on the procurement process. Such public-private partnerships remain central to our plans for modernising the way in which vital public sector projects and services of the highest quality are delivered more cost effectively.
Mr. Wyatt: On a point of clarification, does the Minister mean that we need to wait for the other two
112WH
schemes to be approved before the Queenborough-Iwade development is approved, or will that project be independently funded?
Mr. Hill: I assure my hon. Friend that we do not have to wait for the other two schemes to be approved. I hope that that gives him some comfort.
The Government have revitalised the private finance initiative. Only three weeks ago, on 12 April, we awarded a £200 million design, build, finance and operate contract for managing and improving the A13, which will boost jobs and improve the environment in east London and docklands. Under that arrangement, the Government are building improved roads and purchasing miles of properly maintained and operated highways that deliver the best possible service to users. The public-private partnership encourages contractors to keep traffic lanes, footways and cycleways open, to improve facilities for public transport and goods vehicles and to minimise the disruption that is caused by utilities' work.
I appreciate my hon. Friend's desire to give a firm date for the start of work on the Iwade-Queenborough scheme. However, for the reasons that I gave, I am unable to do so while the matter is still subject to the statutory processes. I do not want to prejudice the outcome of those procedures. My hon. Friend has my assurance that, subject only to the satisfactory outcome of the outstanding statutory procedures and the need to provide a solution that offers the best value for money to the taxpayer, we are committed to providing improved accessibility between mainland Kent and the Isle of Sheppey at the earliest possible moment.
I believe that the Prime Minister will soon respond to my hon. Friend's letter of 4 April. If my hon. Friend's constituents needed it, that is yet another demonstration of his assiduous pursuit of their interests in this regard.
I am sure that my hon. Friend appreciates the legal constraints that have required me to be somewhat guarded in my response to his representations. I am grateful to him for raising this matter, which is of urgent concern to the people of the Isle of Sheppey. I congratulate them on electing to Parliament such a zealous advocate of their interests as my hon. Friend the Member for Sittingbourne and Sheppey.
Question put and agreed to.
Adjourned accordingly at two minutes to Two o'clock.

CHURCH COMMISSIONERS

  Church Repairs (VAT)
  Miss McIntosh
  To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what progress has been made in respect of repairs to churches under the EC Directive adopted by the Council of Ministers on 22 October 1999 authorising member states to apply a reduced rate of VAT on a temporary basis for certain labour-intensive services. [119828]

  Mr. Stuart Bell
  Originally there was a suggestion that the directive might be applied to allow a lower rate of VAT on repairs to all historic and listed buildings including churches. Unfortunately the list adopted did not extend to these and the Churches will continue to press for this to be reviewed at the earliest opportunity.

  Miss McIntosh
  To ask the hon. Member for Middlesbrough, representing the Church Commissioners, what plans he has to seek to ensure that VAT costs are reduced for repairs to existing church buildings and to ensure that VAT is charged exclusively on the construction of new church buildings. [119846]

  Mr. Stuart Bell
  The Churches continue to press the case for VAT relief on repairs to church buildings. The hon. Lady will know that I raised this at a recent meeting with my hon. Friend the Minister for the Arts in the context of the current review of policies relating to the historic environment.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Biodiversity Action Plans
  Jackie Ballard
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to provide a statutory framework for the UK biodiversity action plans. [120210]

  Mr. Mullin
  The Biodiversity Action Plan is part of the Government's response to the Convention on Biological Diversity which, as an international treaty, does not require national legislation to give effect to it. Article VI of the Convention specifically requires the preparation of a national strategy. However, the Government are reviewing the need for a statutory basis for the Plan process in the light of representations they have received.

  They would in any case wish to avoid breaking down the current highly successful delivery partnerships of statutory, business and voluntary sectors.

  Fifth Freedom Carriers
  Mr. Hancock
  To ask the Secretary of State for the Environment, Transport and the Regions how many foreign Fifth Freedom carriers operate from the UK to the US; and if he will make a statement. [120085]

  Mr. Mullin
  Four non-UK carriers currently operate scheduled passenger services from the UK to the US using fifth freedom rights. These are Air India, Pakistan International Airlines, Olympic and Kuwait Airways. An additional four non-UK carriers operate scheduled cargo services from the UK to the US using fifth freedom rights. These are Air France, Cargolux and Lufthansa through Prestwick and El Al through London.

  National Air Traffic Services
  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions what payments regime applies in respect of airlines using the National Air Traffic Services; what changes to such payments are proposed in advance of the Transport Bill being enacted; and if he will make a statement. [120325]

  Mr. Mullin
  The Civil Aviation (Route Charges for Navigation Services) Regulations 1998 (S.I. 1998/1537 and 2999) made under section 73 of the Civil Aviation Act 1982 require the operator, and on notice the owner, of any aircraft in the Flight Information Regions of Eurocontrol Member States to pay Eurocontrol a charge for air traffic services.

  These are collected by Eurocontrol and a sum in respect of the services provided by the service provider in each Contracting State is paid by Eurocontrol to the Contracting State. Under article 20 of the Multilateral Agreement, National Air Traffic Services Ltd. (NATS) has been nominated by the UK as being entitled to receive the United Kingdom's share of the route charges.

  By directions made by the Civil Aviation Authority under Article 79 of the Air Navigation Order (No.2) 1995 it is the responsibility of the owners or operators of specified aerodromes to procure appropriate services for the control of air traffic in their vicinity. Usually the owner or operator of the aerodrome would include the costs incurred in acquiring these services in his charges to the owners or operators of aircraft using the airport. In some cases, however, contracts have been negotiated by NATS that specify that they will charge the aircraft owners and operators direct.

  The duty on the owners and operators to pay the charges is set out in the Civil Aviation (Navigation Service Charges) Regulations 2000 (S.I. 2000/599).

  No changes to the current charging arrangements are proposed in advance of the Transport Bill being enacted.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Environment, Transport and the Regions (1) how many people are employed by National Air Traffic Services; and what the basis is of the share allocation under the public private partnership; [120603]

  (2) if employees of National Air Traffic Services will be able to sell their shares in the NATS public private partnership without restriction. [120619]
  103W
  Mr. Mullin
  NATS employs 5,372 people as at 31 March 1999. The final form of the employee share scheme, including the allocation to NATS' staff, and any restrictions on sale will be worked up in due course following consultation with NATS' employee representatives and, when selected, the Strategic Partner.

  However, the Government are keen to ensure that the share scheme is designed to ensure that NATS' employees hold a long-term equity stake in their company and that all employees are entitled to participate on an equal basis.

  Hazardous Waste Imports
  Charlotte Atkins
  To ask the Secretary of State for the Environment, Transport and the Regions how much hazardous waste was imported into the United Kingdom during 1999 for use as fuel in cement kilns; and what were the countries of origin of that waste. [120341]

  Mr. Mullin
  [holding answer 2 May 2000]: The estimated quantity of hazardous waste imported into the United Kingdom in 1999 for use as fuel in cement and lime kilns, broken down by country of origin, is as follows:

  Tonnes

  Guernsey

  13

  Ireland

  6,720

  Jersey

  18

  Accurate information about imports solely for cement kilns, rather than for cement and lime kilns, could be provided only at disproportionate cost.

  Final figures for 1999 will not be available until the summer since, under European law, the kilns have 180 days following receipt of the waste to provide the UK enforcement authorities with a certificate of recovery confirming the actual quantity of waste used as a fuel.

  CITES Delegation (Nairobi)
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the members of the UK CITES delegation to COP XI in Nairobi with a financial interest in the trade and supply of endangered species; and if he will make a statement. [120132]

  Mr. Mullin
  [holding answer 2 May 2000]: No member of the UK Delegation to the Convention on International Trade in Endangered Species' 11th Conference of the Parties in Nairobi has a financial interest in the trade and supply of endangered species. One member of the Delegation is seconded from the Cayman Islands Government Civil Service to the Cayman Turtle Farm, a Crown Corporation wholly owned by the Cayman Islands Government, as the Farm's Research Officer.

  Simian Herpes B
  Mr. Baker
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to deal with the potential public health risks from the transformation of the simian herpes B virus from macaques held in zoos and safari parks; and if he will make a statement. [120133]
  104W
  Mr. Meacher
  [holding answer 2 May 2000]: The Government are aware of the potential health risks of simian herpes B virus. Under health and safety legislation, as well as ensuring the health and safety of employees, employers also have to ensure that others, eg members of the public, are not exposed to risks arising from the work. Local authorities are responsible for health and safety in zoos and safari parks. The Health and Safety Executive has alerted local authority enforcement officers to the potential health risks and has given guidance on action to take should any subsequent cases arise.

  Cowboy Builders
  Dr. Cable
  To ask the Secretary of State for the Environment, Transport and the Regions what response he has made to the recommendation of the Cowboy Builders Working Group for a mandatory requirement for builders securing a Government-backed quality mark to provide financial protection for customers. [120551]

  Ms Beverley Hughes
  I announced on 6 December 1999 that the Government accepted the key recommendations of the final report produced by the Cowboy Builders Working Group, including the requirement that all quality marked builders must provide an approved third-party warranty to protect the consumer in the event that he/she experiences difficulties with the completion of the job or standard of workmanship.

  Pilots of the quality mark scheme are being run in Birmingham and Somerset. The Birmingham pilot was opened to applications from builders last month, and will open to the public in June or July. The Somerset pilot will be opened to builders later this month and to the public in September or October. The aim of the pilots is to test and develop the arrangements before we take a decision on a national scheme.

  Capital Receipts (Worcester)
  Mr. Michael J. Foster
  To ask the Secretary of State for the Environment, Transport and the Regions what was the value of capital receipts released to Worcester City Council for each financial year since May 1997. [120595]

  Mr. Mullin
  The table shows the capital allocations made to Worcester City Council under the Capital Receipts Initiative (CRI). Allocations were made in the form of Supplementary Credit Approvals.

  £

  Year

  Allocations

  1997–98

  213,000

  1998–99

  678,000

  1999–2000

  685,000

  There has been no separate allocation of resources under the CRI since 1999–2000, following the introduction of the single housing capital pot from 2000–01.

  Bellwin Flood Relief Scheme (Worcestershire)
  Mr. Michael J. Foster
  To ask the Secretary of State for the Environment, Transport and the Regions how much money was refunded to(a) Worcester City Council and (b) Worcestershire County Council under the Bellwin scheme of flood relief, for each financial year since May 1997. [120596]
  105W
  Ms Beverley Hughes
  A "Bellwin" scheme of emergency financial assistance may be activated to help a local authority with uninsurable clear-up costs following a disaster or emergency that involves destruction of, or danger to, life or property. Grant is normally paid at a rate of 85 per cent. of an authority's qualifying expenditure above a threshold. The threshold is the provision that a prudent authority might reasonably be expected to make for contingencies and emergencies (approximately 0.2 per cent. of its revenue budget).

  In the financial years 1997–98, 1998–99 and 1999–2000, Worcestershire County Council did not incur qualifying expenditure above its threshold. Grant was paid to Worcestershire City Council as follows:

  £

  1997–98

  0

  1998–99

  7,164

  1999–2000

  6,874

  Housing (Additional Demand)
  Mr. Gerald Howarth
  To ask the Secretary of State for the Environment, Transport and the Regions how many extra(a) houses and (b) flats he estimates have been built in the last 30 years in order to meet additional demand created by divorce. [120671]

  Mr. Mullin
  The specific data requested are not available.

  Rail Regulator
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions what is the annual budget of the Rail Regulator in the current year; and what plans he has to increase it. [120607]

  Mr. Hill
  [holding answer 2 May 2000]: The Rail Regulator's final budget for 1999–2000 was £13.1 million, of which £9.3 million was recovered from licence fees. For 2000–01, the Rail Regulator is currently consulting on a proposed budget of £13.2 million.

  Health and Safety Executive
  Helen Jones
  To ask the Secretary of State for the Environment, Transport and the Regions how many inspectors there were(a) in the Field Operations Directorate of the Health and Safety Executive and (b) in each of the bands 1-4 in each of the last five years. [120389]

  Mr. Meacher
  [holding answer 2 May 2000]: The number of inspectors in the Field Operations Directorate of the Health and Safety Executive in each of the last five years is as follows:

  Number

  April 1996

  892

  April 1997

  813

  April 1998

  815

  April 1999

  837

  April 2000

  828

  106W
  The number of inspectors in the Field Operations Directorate of the Health and Safety Executive in each of the last five years by band is as follows:

  Band 1

  Band 2

  Band 3

  Band 4

  April 1996

  42

  185

  606

  59

  April 1997

  34

  165

  522

  92

  April 1998

  35

  161

  527

  92

  April 1999

  35

  156

  512

  134

  April 2000

  34

  171

  507

  116

  Note:

  Between April 1996 and April 1997 80 staff were transferred, during an internal reorganisation, to the new Chemical and Hazardous Installations Division.

  Source:

  PARIS (Personnel Administration and Records Integrated System) live data as at 26 April 2000

  Helen Jones
  To ask the Secretary of State for the Environment, Transport and the Regions what recent research his Department has commissioned on the effectiveness of unannounced preventive inspectors by the HSE in preventing accidents at work. [120387]

  Mr. Meacher
  [holding answer 2 May 2000]: HSE has recently initiated a research project entitled "Proving Inspection Works". The aim of the project is to develop a methodology by which HSE can progressively evaluate the impact inspectors achieve in their various regulatory encounters with duty holders in order to maximise their effects.

  It is hoped that "Proving Inspection Works" will demonstrate the value of unannounced preventive inspections, but it may be optimistic to say that a direct link can be proved between such an inspection and a reduction in accidents at a particular workplace. The project is looking to measure the promotion of positive risk management behaviours as well as reducing specific hazards and risks.

  Traffic-free Areas
  Mr. Bill O'Brien
  To ask the Secretary of State for the Environment, Transport and the Regions if he will publish planning guidance notes for local authorities to maintain and introduce traffic-free and pedestrian-only areas for town and city centres. [120385]

  Ms Beverley Hughes
  The Government published a revised public consultation draft of Planning Policy Guidance Note 13 on Transport in October last year which encourages local authorities to give greater priority to walking using measures such as pedestrianisation schemes in town and local centres where vehicle access is restricted or prohibited. We intend to publish the final version of PPG13 later this year.

  Family Statistics (Homelessness)
  Mr. Gerald Howarth
  To ask the Secretary of State for the Environment, Transport and the Regions how many people classified as homeless there were in(a) 1970, (b) 1980 and (c) 1999; and how many came from (i) intact families, and (ii) broken families. [120676]

  Mr. Mullin
  Data on homelessness activity reported by local authorities in England include the number of households accepted as homeless and in priority need
  107W
  under the homelessness provisions of the Housing (Homeless Persons) Act 1977, and subsequent legislation. 57,850 such households were accepted in 1980 and 104,770 in 1999. These figures are not comparable because of legislative changes since 1977.

  Local authority homelessness responsibilities under earlier legislation were significantly more limited, and data for 1970 are not available.

  Information is also reported about the main reasons for loss of the household's last settled home, including "Breakdown of relationship with partner". In 1980 this accounted for around 20 per cent. of all cases, and 24 per cent. in 1999.

  Telecommunications Masts
  Mr. Yeo
  To ask the Secretary of State for the Environment, Transport and the Regions what assessment he has made of the effect on farmers of planning restrictions on mobile telephone masts. [120577]

  Ms Beverley Hughes
  Government policy on the development of telecommunication masts is to encourage and facilitate the roll-out of a modern national telecommunications system while protecting the environment. This is reflected in the current framework of law and guidance on planning for such development.

  As we said in the Action Plan on Farming launched recently by the Prime Minister, we recognise the benefits of mobile phones for rural communities and will consider ways of fulfilling the roll-out of mobile phone networks in rural areas while keeping environmental intrusion to a minimum and taking account of the recommendations of the forthcoming report of the Independent Expert Group on Mobile Phones.

  Redundant Building Grant Programme
  Mr. Yeo
  To ask the Secretary of State for the Environment, Transport and the Regions what proportion of the increase in the Redundant Building Grant Programme will be dedicated to farm-based enterprise. [120575]

  Mr. Mullin
  We have made clear to RDAs our intention that the whole of the £4 million increase should be targeted at farm enterprises, and to that end have removed for farmers the area-based limitation and widened the employment test.

  Farm-based Horse Enterprises
  Mr. Yeo
  To ask the Secretary of State for the Environment, Transport and the Regions how the extension of rate relief to farm-based horse enterprises will be funded; and what effect such an extension of rate relief will have on central Government funding. [120573]

  Ms Beverley Hughes
  Farm premises used for the breeding and rearing of horses already receive a rate concession. The Prime Minister announced on 30 March 2000 that the Government would consult on proposals to extend rate relief to other horse enterprises linked to farm premises. We are currently considering the options along with other preparatory work for the Rural White Paper and will consult on these proposals later this year.

NORTHERN IRELAND

  Omagh Bombing (Police Investigation)
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many RUC detectives are engaged(a) full-time and (b) part-time on the Omagh Bomb. [114936]

  Mr. Ingram
  The number of officers actively engaged in this investigation has varied at different times to meet the needs of inquiries. All appropriate resources have been made available throughout the investigation. I am advised that there are currently 20 detective officers working full-time on the inquiry team, all on a full-time basis.

  Social Fund
  Mr. David Stewart
  To ask the Secretary of State for Northern Ireland what the Northern Ireland social fund discretionary budget will be for 2000–01. [120910]

  Mr. George Howarth
  I am pleased to announce that the social fund gross discretionary budget for 2000–01 will be £45.95 million. £10.06 million will be allocated to grants; £35.79 million to loans and £0.1 million will be held as a contingency reserve. The new allocations represent an increase of £3.13 million over the initial gross budget set at April 1999.

  The Community Care Grant (CCG) budget has been increased by £0.2 million to £10.06 million. This will provide more help to CCG applicants, in particular families with children and the disabled.

  The loans budget has been increased to £35.79 million, an increase of £2.93 million on the initial 1999–2000 loans budget. To improve the fairness of the scheme budgets will be allocated in a way that will, over time, achieve greater consistency of outcome for applicants wherever they live.

  Details of the individual District budget allocations, together with a note explaining the basis on which they have been made, have been placed in the Library today.

  Patten Proposals
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if, when he publishes his Implementation Plan for the Patten proposals, he will list those items on which the Chief Constable has already started out. [120648]

  Mr. Ingram
  The Implementation Plan will show the items where the Chief Constable has the lead responsibility for taking work forward and any progress which has already been made.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if, when he publishes his Implementation Plan for the Patten proposals he will indicate those proposals which have human rights and equality implications that have been referred to the Human Rights and Equality Commissions and their replies in each case. [120649]

  Mr. Ingram
  The Implementation Plan will set out for each recommendation which has been accepted, the programme of work required and who has the lead responsibility for taking the work forward. It will be for
  109W
  those with the lead responsibility to consult and work with the Human Rights and Equality Commissions, as appropriate, in taking the work forward.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if on the date he publishes the proposed legislation to implement the Patten report and the implementation plan he will name the Oversight Commissioner and the Commissioner's assistants. [120644]

  Mr. Ingram
  The search for a suitable candidate for appointment as Oversight Commissioner is in hand. The Government will make an announcement in due course.

  Police Services
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if he will promote a competition between the schools and colleges of Northern Ireland to design a politically neutral new badge and insignia for the Police Services of Northern Ireland. [120650]

  Mr. Ingram
  No.

  Elections
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what steps have been taken to introduce a proportional representation system of voting for parliamentary elections in Northern Ireland; and if he will make a statement. [119564]

  Mr. Mike O'Brien
  I have been asked to reply.

  We have made it clear that any change to the voting system used for elections to the House of Commons would first require the endorsement of the people of the United Kingdom in a referendum.

PRIME MINISTER

  Engagements
  Mr. Martlew
  To ask the Prime Minister if he will list his official engagements for Wednesday 3 May. [119396]

  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Wednesday 3 May. [120345]

  The Prime Minister
  This morning I met Nelson Mandela as well as having meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

  Performance and Innovation Unit
  Mr. Lansley
  To ask the Prime Minister what the Government have done to implement the findings of the Performance and Innovation Unit in respect of(a) the rural economy, (b) e-commerce, (c) management of cross-cutting policies and (d) analysis and modelling in central Government. [119952]

  The Prime Minister
  [holding answer 20 April 2000]: The Government take the implementation of the conclusions of Performance and Innovation Unit reports very seriously. Where appropriate, project reports contain implementation plans, including lead responsibilities and timetables for action.
  110W
  In respect of each of the reports the hon. Member refers to:

  (a) Rural economies—the report, "Rural Economies", was published in December 1999 and invited comments on a number of issues for discussion. These are being considered as part of the work on the Rural White Paper;

  (b) e-commerce—the report e-commerce@itsbest.uk was published in September 1999. The e-Minister and e-envoy are charged with taking forward the recommendations. A detailed implementation plan is published on the e-envoy's website (www.e-envoy.gov.uk) and updated monthly.

  (c) cross-cutting policies—the report "Wiring it up: Whitehall's Management of Cross-cutting Policies and Services" was published in January 2000. My right hon. Friends the Chief Secretary to the Treasury and the Minister for the Cabinet Office have been asked to submit a progress report by early 2001;

  (d) analysis and modelling—the report "Adding it up: Improving Analysis and Modelling in central Government" was published in January 2000. A group chaired by the Head of the Government Economic Service is overseeing progress with implementation.

  Copies of these reports are available in the Libraries of the House.

  Mr. Lansley
  To ask the Prime Minister what subjects are currently being examined by the Performance and Innovation Unit. [119954]

  The Prime Minister
  [holding answer 20 April 2000]: The Performance and Innovation Unit (PIU) is currently undertaking the following projects: the Post Office network; Trade and Social, Health and Environmental Objectives on the Global Stage; the Pursuit and Seizure of Criminal Assets; Strategic Options for the Electronic Delivery of Government Services; and Effective Leadership in Delivering Public Services. The PIU is also providing support to the review of adoption. The completed project on Active Ageing was published on 27 April.

  Social Exclusion Unit
  Mr. Lansley
  To ask the Prime Minister what work is currently being done by the Social Exclusion Unit. [119957]

  The Prime Minister
  [holding answer 20 April 2000]: In December 1999 I announce the findings of the review of the Social Exclusion Unit (SEU) and I set out the following priorities for their work programme: to complete the current programme work to develop the national strategy for neighbourhood renewal, including oversight of the 18 policy action teams; to be closely involved in establishing the arrangements for implementation of the strategy after it is announced in the summer of 2000, and to work closely with HM Treasury and other Government Departments to ensure that the 2000 Spending Review reflects the priority the Government give to tackling poverty and social exclusion.

  At the same time I asked the Minister for the Cabinet Office to chair the Ministerial Network on Social Exclusion, which was given a new remit to chase progress across Government on implementation of past SEU reports, as well as acting as an informal sounding board for the unit's future work programme.
  111W
  On 12 April, the SEU published a framework version of the National Strategy for Neighbourhood Renewal, for consultation. The framework sets out proposals which aim to arrest the wholesale decline of the most deprived neighbourhoods; reverse it; and prevent it from recurring. The SEU will be consulting on those proposals until the end of June. Then, following the publication of the results of the Government's Spending Review in July, the unit will set out the final strategy and give details of how it will be taken forward.

  The SEU is working closely with the implementing Departments on ensuring that the action arising from the reports is carried out, to time. The SEU is regularly reviewing progress against action plans and works with the teams to unblock obstacles to progress both inside and outside of Whitehall.

  The unit is also undertaking initial scoping of possible topics for a future work programme, which I will announce in the summer.

  Prisoners of War
  Mr. Paul Marsden
  To ask the Prime Minister if he will make a statement about the Royal British Legion's request for a special gratuity for former Far East prisoners of war or their widows. [120072]

  The Prime Minister
  I refer my hon. Friend to the answer given to him by my hon. Friend the Under-Secretary of State for Defence on 2 May 2000,Official Report, column 7W.

  Serbia
  Mr. Dalyell
  To ask the Prime Minister what exemptions have been made to the sanctions against Serbia for humanitarian reasons, with particular reference to equipment needed for(a) de-mining and (b) dealing with depleted uranium. [119349]

  The Prime Minister
  The EC regulations providing for the flight ban (now suspended), the oil embargo and the imposition of financial sanctions in Serbia all provide for humanitarian exemptions.

  Although the UN Security Council Resolution (UNSCR) 1160 (1998) imposed an arms embargo on the FRY, UNSCR 1244 (1999) provides that prohibitions imposed by UNSCR 1160 shall not apply to the sale or supply of arms and related material for use by the international civil and security presence in Kosovo. The UK has approved a number of applications for the export of demining equipment to the FRY where such activity is taking place under the auspices of the international civil and security presence.

  The export to Serbia of equipment for dealing with depleted uranium would not be covered by sanctions. However, an export licence would have to be obtained from the Department of Trade and Industry if the equipment in question was covered by the UK's strategic export controls on dual-use goods which apply to all destinations.

  Staff
  Mr. Lansley
  To ask the Prime Minister what estimate he has made of the total staff costs for No. 10 Downing street in(a) 1996–97, (b) 1997–98, (c) 1998–99 and (d) 1999–2000. [112076]

  The Prime Minister
  [holding answer 28 February 2000]: The staff costs for No. 10 Downing street were £3.4 million in 1996–97; £4.1 million in 1997–98; and £4.9 million in 1998–99. The provisional figure for 1999–2000 is £5.9 million.

DEFENCE

  Trident Programme
  Mr. Alan Simpson
  To ask the Secretary of State for Defence what role BNFL will play in maintaining the UK's Trident programme at AWE. [116244]

  Mr. Spellar
  BNFL and other members of the AWE ML consortium will be seconding a small number of middle and senior managers to AWE in the short-term, parent company nominees will reduce to only a handful of board members early in the new contract. On the exact responsibilities to be carried out by the nominees from BNFL, I refer my hon. Friend to the answer given to the hon. Member for Newbury (Mr. Rendel) on 15 April 2000,Official Report, column 487W.

  Chinook Crash, Mull of Kintyre
  Mr. Martin Bell
  To ask the Secretary of State for Defence if he will provide details of the indicated airspeed of RAF Chinook ZD576 during the last 40 seconds of flight as it approached the Mull of Kintyre on 2 June 1994. [120101]

  Mr. Spellar
  The Board of Inquiry considered data extracted from the aircraft's systems, the Air Accident Investigation Board technical report, the flight path simulations from Boeing Helicopters and a separate investigation from Defence Research Agency Bedford, together with witness evidence. The Board concluded that it was most likely that while coasting in at the Mull of Kintyre the aircraft was established in a steady climb, with an airspeed of about 150 knots, until approximately four seconds before impact.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for Defence 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. [120322]

  Dr. Moonie
  The Ministry of Defence usually requests a birth certificate from prospective employees, both Service and civilian, and individuals undertaking work for the Department, to establish proof of identity. Other official documents, however, such as a full 10-year passport, may be furnished as proof of identity and, normally, are acceptable.

  Minimum Wage
  Mr. Welsh
  To ask the Secretary of State for Defence if he will estimate the cost to salaries paid by his
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  Department of an increase in the national minimum wage to all age groups to (a) £4, (b) £4.20 and (c) £4.50 an hour. [120234]

  Dr. Moonie
  The estimated annual cost of increasing basic pay by the amounts requested is(a) £0.6 million, (b) £1.8 million and (c) £4.5 million respectively.

  Aircraft Maintenance
  Mr. Welsh
  To ask the Secretary of State for Defence what was the total cost of RAF aircraft maintenance and spares for the last year for which figures are available. [120277]

  Dr. Moonie
  The information is not held centrally and could be provided only at disproportionate cost.

  RAF Combat Aircraft
  Mr. Quentin Davies
  To ask the Secretary of State for Defence if he will list the front line combat aircraft operated by the RAF; what is the complement of trained pilots required to operate each type; and how many trained pilots are available to fly each type. [120409]

  Mr. Spellar
  The information is shown in the following table:

  Number of trained pilots at 27 April 2000

  Aircraft type

  Pilot establishment

  Pilot strength

  Tornado GR1/4

  133

  123

  Tornado F3

  111

  103

  Jaguar

  57

  59

  Harrier

  63

  62

  Sea Harrier

  34

  28

  Veterans Advice Unit
  Mr. Miller
  To ask the Secretary of State for Defence when the internet e-mail facility for the Veterans' Advice Unit will become available; and if he will make a statement. [120837]

  Mr. Spellar
  I am pleased to announce that the Veterans' Advice Unit is, from today, linked to the internet and may be contacted on-line by e-mail at the following address: veteransadvice@veterans.mod.uk.

  The Veterans' Advice Unit has been operating successfully as a telephone helpline for 18 months and this important enhancement to the service will open the Unit up to a wider audience. In addition to the millions of ex-Servicemen and women resident in the UK, veterans living abroad, often in different time zones, will now be able to contact the Unit at their convenience and at minimal cost, using the e-mail facility.

  Royal Navy Discharge Regulations
  Ms Perham
  To ask the Secretary of State for Defence what plans he has to alter the current discharge regulations for new recruits joining the Naval Service. [120838]

  Mr. Spellar
  With effect from 1 June 2000, all new recruits, other than re-engagements, will have a statutory right to apply to leave the Naval Service during a six 114W
  month period from date of entry, subject to having completed four weeks' effective service. Recruits will be entitled to be discharged no later than 14 days from the date of submitting notice in writing to their Commanding Officer. Currently, recruits have a period of three to six months, depending on their age at entry, during which they may exercise their right to leave the Service.

  Additionally, discharge fees applicable to Royal Navy Ratings and Royal Marine Other Ranks aged 17½ years or over on entry, who take up their right to leave within the six month period, are to be discontinued from 1 June 2000.

  The two changes in Terms of Service will harmonise the Naval Service's discharge regulations for new recruits and mean that all new recruits, irrespective of their age on entry, will have an equal right to leave the Service in future.

  HMS Phoenix
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence, pursuant to his answer of 8 March 2000,Official Report, columns 708-09W, what was the (a) purpose, (b) nature and (c) outcome of the experiment involving 13 military volunteers at HMS Phoenix. [117078]

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

  Letter from John Chisholm to Mr. Matthew Taylor, dated 3 May 2000:
  I am replying to your parliamentary question about the study undertaken by the Chemical and Biological Defence (CBD) sector of the Defence Evaluation and Research Agency (DERA) at HMS Phoenix.
  The purpose of this study was to determine whether existing or proposed control methods were effective in preventing nuclear contamination of a designated toxic free area (TFA). Subjects wearing full individual protective equipment were exposed to harmless particles to simulate nuclear fallout. They were then processed through the entry system under evaluation into the TFA, replicating the undressing and decontamination procedures appropriate to that system. The effectiveness of the entry system was tested using air sampling techniques in the TFA. None of the volunteers who took part in the trial experienced adverse effects. The results will be used to revise entry and exit procedures to reduce the potential for the transfer of nuclear contaminated material.
  I hope the above is helpful.

  MOD Accommodation
  Mr. Hancock
  To ask the Secretary of State for Defence how many properties earmarked for naval officers have been built by his Department(a) in total and (b) in the Portsmouth area in each of the last four years; at what cost; and if he will make a statement. [118652]

  Dr. Moonie
  The Defence Housing Executive (DHE) is the MOD agency responsible for managing Service housing in England, Wales and Scotland and, as a Tri-Service organisation, it does not build properties specifically for any one Service.

  53 officers' quarters were built in Putney between 1995 and 1997 at a cost of £4.6 million, a small majority of which are occupied by Naval officers. At Taranto Hill, Ilchester, 34 officers' quarters are in course of

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  construction as part of a larger project, at an approximate cost of £2.7 million. The majority of occupants will be Naval officers based at RNAS Yeovilton.

  Four Private Finance Initiative contracts have been placed by DHE covering requirements for new officers' accommodation for Lossiemouth, Shawbury, Glasgow (at Paisley) and Yeovilton, of which only those at Yeovilton will be mainly occupied by Naval officers. These PFI houses will not be owned by DHE and the cost will be paid through a monthly payment by DHE to the owners for the properties required. Payment will be dependent on the quality of service provided.

  Two further PFI contracts are planned, one to cover accommodation requirements at Waddington and one to cover requirements at Bristol, Bath, Shrivenham and Portsmouth, of which the 70 houses for Portsmouth will be mainly occupied by Naval officers' families. Because of land ownership issues, some 15 of the 70 may be built with MOD capital and be MOD owned. Firm costs are not yet available and are likely to be commercially sensitive.

  Mr. Hancock
  To ask the Secretary of State for Defence how many naval officers in the greater Portsmouth area are living in privately rented accommodation and awaiting

  Charter costs 1996–97 to 1999–2000

  Ser.

  FY

  Number of ships

  Annual cost (£000)

  Task/Destinations1

  1

  1996–97

  249

  18,040

  (a) Operations (11)—Split

  (b) Exercises (29)—USA, Spain, Norway, Germany, Turkey

  (c) Resupply (13)—Antwerp and Zeebrugge (for BAOR, Germany), Gibraltar, Cyprus, Kenya, Falkland Islands (inter-island)

  (d) Training (3)—Marchwood

  2

  1997–98

  266

  13,491

  (a) Operations (10)—Split

  (b) Exercises (32)—Germany, Spain, Turkey, Norway, Sardinia

  (c) Resupply (39)—Antwerp and Zeebrugge (for BAOR, Germany), Gibraltar, Cyprus, Canada, Falkland Islands (inter-island)

  (d) Training (7)—March wood

  3

  1998–99

  346

  16,107

  (a) Operations (16)—Split, Thessaloniki

  (b) Exercises (18)—Germany, Norway, Spain, Poland, Turkey

  (c) Resupply (32)—Antwerp and Zeebrugge (for BAOR, Germany), Gibraltar, Cyprus, Canada, Falkland Islands (inter-island)

  (d) Training (4)—Marchwood

  4

  1999–2000

  359

  21,552

  (a) Operations (43)—Thessaloniki, Split, Corsica

  (b) Exercises (19)—Germany, Norway, Egypt, Jordan, UAE, USA, Scotland

  (c) Resupply (22)—Antwerp and Zeebrugge (for BAOR, Germany), Canada, Gibraltar, Cyprus, Kenya, Falkland Islands (inter-island)

  1 Figures indicate number of tasks carried out

  2 Number includes 1 × Joint Rapid Reaction Force (JRRF) RoRo on bare boat charter

  3 Number includes 2 × JRRF RoRos on bare boat charter

  Warship Construction
  Mr. Hancock
  To ask the Secretary of State for Defence (1) what measures his Department is taking to ensure that the UK retains the capacity for warship construction; [119335]

  (2) if he will instruct the UK Defence Procurement Agency to ensure that UK suppliers are not disadvantaged in relation to foreign competition in respect of contracts for warship construction; and if he will make a statement. [119405]
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  MOD accommodation; how many of them have been waiting for more than six months; and if he will make a statement. [118655]

  Dr. Moonie
  106 naval officers and their families are presently accommodated in non-Service family quarters in the greater Portsmouth area. Forty-two have been resident over six months. New applicants are allocated Service accommodation as it becomes available so that mid tour moves should not be necessary.

  There are no naval officers being provided with single rented accommodation in the greater Portsmouth area at the present time.

  Ferry Charter Costs
  Mr. Hancock
  To ask the Secretary of State for Defence how much has been spent on charter costs for ferries to transport military assets in each of the last five years; on how many occasions and to what locations equipment was moved; and if he will make a statement. [119165]

  Dr. Moonie
  The information requested is not available on a consistent basis prior to Financial Year (FY) 1996–97. The following table shows the number of ships, excluding tankers, chartered from FY 1996–97 to FY 1999–2000 to transport military assets.

  Dr. Moonie
  Government policy, which is followed by the Defence Procurement Agency, is for warships to be built in the UK. UK warship builders are not, therefore, disadvantaged in relation to foreign competition.

  The shipbuilding programme that has emerged from the Strategic Defence Review represents a considerable commitment and provides UK Shipbuilding Industry with a firm basis to invest, and modernise.

  Taken together, the policy for warship building and the future requirements for warships should ensure that the UK retains the capacity for warship construction.

  Websites
  Mr. Maclennan
  To ask the Secretary of State for Defence 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. [119543]

  Dr. Moonie
  [holding answer 19 April 2000]: My Department's policies on advertising and sponsorship of its Departmental websites come under the existing conventions on Government publishing and advertising as set out in the Guidance on the Work of the Government Information Service, which can be found at http://www.cabinet-office.gov.uk/central/1999/workgis/index.htm. The Department's websites are subject to the policy guidelines issued by the Cabinet Office on the use, management and design of Government websites. These guidelines are available at http://www.iagchampions.gov.uk/guidelines/websites. They permit the use of advertisements and sponsorship on Government websites.

  No advertisements and no sponsorship acknowledgements which generate revenue appear on the Department's principal websites, nor have there been any in the past. To the best of my knowledge this applies also to the websites maintained by individual Defence Agencies, units and non-departmental public bodies.

  Where a company has sponsored a major Service event and a related web page exists on one of the Department's websites, that page has on occasion included the company's logo which in some cases links to the company's own website. This has been the case with some events announced on the Royal Navy and British Army websites, but no revenue has been generated by the appearance of logos. The websites for the Red Arrows and Blue Eagles aerobatic teams have been provided at no cost by commercial web designers Deltaweb, who provide a link to their own site. Some other sites, designed under contract, include acknowledgements and links to their designers' own websites.

  The Ministry of Defence's main website includes a search facility provided free of charge by the International Relations and Security Network and Eurospider Information Technology AG, under the auspices of NATO's Partnership for Peace initiative. The Met. Office website similarly uses free search facilities provided by Excite.com. Links are provided to their websites. No revenue has been generated in the process.

  The British Defence Staff (Washington) has a specific responsibility to promote UK defence exports to the United States. In pursuit of this objective, the BDS (W) website promotes specific items of defence equipment and its manufacturers. In addition the site search facility is presently advertiser-supported but provided free of charge by freefind.com.

  Of the Department's non-departmental public bodies, the Royal Navy Submarine Museum currently includes links to BAE Systems to recognise sponsorship of
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  museum exhibits. However, no revenue has been generated by the appearance of the relevant logos and links on the website.

  Entry Licences
  Angela Smith
  To ask the Secretary of State for Defence who issues licences to enter his Department's land on Salisbury Plain. [119928]

  Dr. Moonie
  Licences to enter Salisbury Plain Training Area are issued by Defence Estates once approval has been given by the Commandant Army Training Estate Salisbury Plain. I refer my hon. Friend to the answer which the then Under-Secretary of State for Defence, my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) gave to her on 17 January 2000,Official Report, column 280W, on the licensing procedure.

  Angela Smith
  To ask the Secretary of State for Defence (1) how many licences to enter his Department's land have been issued in(a) 1996, (b) 1997, (c) 1998, (d) 1999 and (e) 2000 to date; [119926]

  (2) how many licences to enter his Department's land have been (a) revoked and (b) curtailed in (i) 1996, (ii) 1997, (iii) 1998, (iv) 1999 and (v) 2000 to date; [119927]

  (3) who has responsibility for ensuring that conditions on licences to enter his Department's land are adhered to; [119929]

  (4) what action can be taken against (a) bodies and (b) individuals who contravene the terms and conditions of licences to enter his Department's land. [119925]

  Dr. Moonie
  The information on the number of licences issued to enter Ministry of Defence land and also how many of these have been revoked or curtailed is not held centrally and could be provided only at disproportionate cost.

  Once licences are issued, however, licence holders are required to operate within the terms of their licence. Responsibility for ensuring that this occurs rests both with Defence Estates (an agency of the Ministry of Defence) and the establishment where the activity occurs.

  Action on the contravention of any licence is dependent both on the activity involved and in what way the agreement has been contravened. For example, if damage has occurred the licence holder can be asked to pay for any repairs that may be necessary.

  Procurement Programme Studies
  Mr. Keith Simpson
  To ask the Secretary of State for Defence if he will list the occasions since May 1997 when alternative studies have been initiated for procurement programmes once a preferred supplier has been selected, indicating the cost of those studies in each case. [118971]

  Dr. Moonie
  [holding answer 17 April 2000]: Information of this sort is not held centrally and could be provided only at disproportionate cost.

  Tritium
  Mr. Llew Smith
  To ask the Secretary of State for Defence, pursuant to his answer of 3 April 2000 to the hon. Member for Angus, (Mr. Welsh),Official Report,

  119W
  column 303W, on tritium, for what reason disclosure of tritium production details would be contrary to national defence and security interests. [120065]

  Mr. Hoon
  The Government are committed to being as open as possible about Britain's nuclear forces. However, disclosure of tritium production details could provide the means to assess nuclear weapon design data, offering an unwelcome insight into our nuclear capabilities. In addition, when answering questions on defence nuclear issues, we must observe our obligations under the terms of Article 1 of the 1970 Nuclear Non-Proliferation Treaty. It is on these grounds that I am withholding this information under Exemption 1 of the Code of Practice on Access to Government Information.

  Defence and Clothing Research Establishment
  Mr. Bob Russell
  To ask the Secretary of State for Defence (1) how many staff were employed at the Defence and Clothing Research Establishment at Colchester; when the decision was taken to transfer all the operations to Bicester; and how many staff it is estimated will be transferring to the new site; [120592]

  (2) when the Defence and Clothing Research Establishment at Colchester was due to transfer to Bicester; what is the current anticipated date when the transfer will be completed; what is the cause of the delay; and if he will make a statement. [120593]

  Mr. Spellar
  When DCTA was formed in November 1994, the intention from the outset was that the different elements would collocate to Caversfield. This would generate efficiencies by rationalising technical facilities at the Agency's Didcot and Colchester sites and by reducing the number of staff required to run one site as compared to three. However, it was not until July 1996 that a firm date of November 1998 was decided for the transfer of the Colchester Science & Technology Department (S&TD) element. At that time, the establishment of S&TD comprised a total of 147 staff was expected to increase by 1998 to 156. The current estimate of the number of staff from Colchester intending to transfer to the Caversfield site is 84, although all staff at Colchester still have the offer of a job at Caversfield, should they decide to move.

  The original date for the transfer has been affected by a number of studies into the future of DCTA. However, none of these studies raised any point which significantly altered the original plan and the then Minister for the Armed Forces, my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson), confirmed the collocation on 1 April 1999.

  The Collocation is now expected to be completed by February 2001, which represents a total delay of some two years and three months over the original date. The causes are as follows:

  (a) Private Finance Initiative (PFI) Study 1997: delay incurred one year.

  (b) McKinsey Study (SDR) 1998 recommending S&TD/DERA Study into what elements (if any) should go to DERA on Value for Money grounds: delay incurred 11 months.

  (c) English Heritage—Proposed listing of Caversfield Buildings; its impact upon refurbishment proposals, necessitated some redesign: delay incurred four months.

  120W
  Despite the various delays, we now fully expect that the revised date for completion will be met. DCTA is currently evaluating the various tenders that have been received for the refurbishment of the remaining buildings on the Caversfield site, and the programme is expected to be undertaken during Summer/Autumn 2000.

FOREIGN AND COMMONWEALTH AFFAIRS

  Lord Levy
  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the cost to public funds of Lord Levy's visit to Morocco, broken down by(a) expenses and (b) other costs. [118791]

  Mr. Hain
  [holding answer 12 April 2000]: I refer to the answer given by my right hon. Friend the Prime Minister on 22 February 2000, Official Report, column 852W. This was also the case in relation to the Morocco visit.

  Mr. Maude
  To ask the Secretary of State for Foreign and Commonwealth Affairs whom the Prime Minister's special envoy met on his recent trip to Morocco. [118794]

  Mr. Hain
  [holding answer 12 April 2000]: Lord Levy met a range of senior figures, including King Mohammed VI, to whom he delivered a personal message from the Prime Minister.

  Amsterdam Treaty
  Mr. Bercow
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what reason no fines have been imposed under Article 228(2) of the Amsterdam Treaty; and what representations he has made calling for such fines be imposed. [119811]

  Mr. Vaz
  Article 228(2) applies if a member state fails to respond to a Court judgment. The vast majority of cases is settled well before this stage. Over the last three years, the Annual Report on monitoring the application of Community law records that the Commission has referred 14 cases to the European Court of Justice for a second time, recommending fines in each case. The fact that no penalties have yet been imposed by the Court does not indicate that the system is not working. On the contrary, it shows that member states have responded to the possibility of a fine by rapidly coming into line with EC law, either before the case is referred to the ECJ for a second time or shortly afterwards.

  Plutonium Exports (United States)
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what communications have been received by the(a) scientific and (b) Atomic Energy Counsellors in the British Embassy in Washington DC since May 1997, from the (i) United States Department of Energy and (ii) other US nuclear authorities, in respect of the agreements affecting plutonium exported from the United Kingdom to the United States and the use to which that material has been put. [120252]

  Mr. Hain
  There is no Atomic Energy Counsellor at the Embassy in Washington. Since May 1997 the Science, Technology, Environment and Energy Counsellor has received routine communications from the United States
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  Government on the movement of nuclear material exported from the United Kingdom to the United States, and the use to which that material has been put. These have formed part of the normal process of consultation between our two Governments.

  Entry Clearance (Islamabad)
  Mr. Gerrard
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) with reference to the operation of the interim appointment system in Islamabad for applicants seeking entry clearance(a) by what criteria an application is judged to be straightforward, (b) by whom this decision is made, (c) how an applicant is informed that the application is regarded as straightforward, (d) what types of visa application can be considered under this system and (e) if an existing applicant awaiting interview can take advantage of the scheme; [120487]

  (2) how many applications for entry clearance have been considered under the interim appointment system in Islamabad; and of these, how many were (a) accepted and (b) refused, for each type of visa application. [120488]

  Mr. Vaz
  There is no interim appointment system in operation at Islamabad. There is, however, a fast-track scheme for spouses in the settlement queue, whereby they can present themselves for interview on any Tuesday. Applicants who meet the relevant criteria of the Immigration Rules without the need for any additional inquiry are granted entry clearance. Those who do not are invited to return for further interview on the date of their original appointment.

  No statistics are kept for those granted entry clearance, or deferred to their original appointment, during this process. All of those who attend have their applications considered by an Entry Clearance Officer.

  Iraq
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what oil revenues are available to Iraq for purchasing(a) food and (b) medical supplies under UN sanctions; and if he will make a statement. [120363]

  Mr. Hain
  Under the UN "oil for food" programme, Iraq can export unlimited amounts of oil to fund the purchase of food, medical supplies and other humanitarian relief. With Iraq now among the world's largest oil producers again, and given that its oil reserves are second only to those of Saudi Arabia, more than $10 billion a year should be available for the humanitarian programme. It is, however, for Iraq to decide how much of that money will be spent on essential food and medicines for the Iraqi people.

  Valerie Davey
  To ask the Secretary of State for Foreign and Commonwealth Affairs what goods on the UK Military List have recently been approved for export to Iraq. [120839]

  Mr. Hain
  Following consultation with the Foreign and Commonwealth Office and the Ministry of Defence, the Department of Trade and Industry recently approved a licence to export de-mining equipment to Iraq for use by UN personnel in a humanitarian de-mining programme. The export of the equipment was approved by the UN Sanctions Committee under the Oil for Food programme.
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  International Criminal Court
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs when the United Kingdom will ratify the Rome Statute of the International Criminal Court. [120355]

  Mr. Hain
  The UK requires legislation before we can ratify the Rome Statute of the International Criminal Court. This legislation will be published in draft form in the current Parliamentary session and introduced as soon as the Parliamentary timetable allows.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent progress being made to establish an International Criminal Court. [120354]

  Mr. Hain
  To date the Rome Statute of the International Criminal Court has been signed by 96 States and ratified by eight. The Court will be established once 60 States ratify. A Preparatory Commission is making good progress and is expected to complete the drafting of two important subsidiary documents to the Statute during its next session in June.

  Visa Correspondence Unit
  Mr. Leslie
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress he has made in reducing the backlog of correspondence in the Visa Correspondence Unit. [120911]

  Mr. Vaz
  I am pleased to inform the House that the Visa Correspondence Unit's backlog of correspondence with Members has been reduced so that there are now only 45 letters from Members which have not been answered within the 15 working day target, compared to 851 on 27 January. Forty-five is, of course, still too many and we will continue to work to improve our performance.

SOCIAL SECURITY

  Winter Fuel Payments (Gosport)
  Mr. Viggers
  To ask the Secretary of State for Social Security when residents of Gosport will receive their winter fuel payments. [119840]

  Angela Eagle
  The administration of benefits is a matter for Alexis Cleveland, the Chief Executive of the Benefits Agency to answer. She will write to the hon. Member.

  Letter from Alexis Cleveland to Mr. Peter Viggers, dated 2 May 2000:
  The Secretary of State has asked me to reply to your recent Parliamentary Question asking when residents in Gosport will receive their winter fuel payments (WFP).
  Our records show that 10.2 million WFPs were issued in November 1999. Of these, around 5 million were issued directly to Post Offices, the remainder were issued to customers home address or direct to their bank accounts. For security reasons, Post Offices were advised to return any uncollected girocheques to the Benefits Agency by 21st December 1999. Approximately 85,000 were returned by the Post Office. My staff have been contacting customers whose payments were returned to ascertain the reason for non-collection and re-issue payments where possible. All payments were made before the end of March with the exception of those where the customer has still not responded to our enquiries.

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  Following the ruling in the case of Taylor, the age at which Winter Fuel Payments can be made was to be equalised at 60, and the need to be in receipt of a qualifying benefit is removed. As before, these payments are intended for people who are ordinarily resident in Great Britain.
  In order to meet the requirements of the European Court of Justice ruling it was necessary to identify the new beneficiaries from people aged 60 and over and build processes to ensure that this year's payments, and payments for past winters, could be made as soon as possible.
  The Secretary of State for Social Security wrote to all MPs on 11 April setting out the planned delivery arrangements to make these payments. As he indicated, the current plan is to begin making payments for past winters from the end of June onwards and to make this coming winter's payments before Christmas.
  I hope this is helpful.

  Disability Living Allowance
  Mr. Steen
  To ask the Secretary of State for Social Security what the guidelines are in respect of comments by the Chief Executive of the Benefits Agency on decisions by Benefits Agency decision makers on claims for Disability Living Allowance. [120088]

  Mr. Rooker
  The administration of Disability Living Allowance is a matter for Alexis Cleveland, the Chief Executive of the Benefits Agency, who will write to the hon. Member.

  Letter from Alexis Cleveland to Mr. Anthony Steen, dated 2 May 2000:
  The Secretary of State for Social Security has asked me to reply to your recent Parliamentary Question asking what guidelines there are in respect of comments by the Chief Executive of the Benefits Agency (BA) on decisions by BA decision makers on claims for disability benefit living allowance.
  Decision makers in the BA make decisions fairly and impartially on behalf of the Secretary of State. No one, including myself, can interfere with the decision making process.
  This is a long-standing principle designed to ensure that all claims and questions put before decision makers are treated equitably.
  I am responsible for monitoring the quality of decision making within the agency and am advised on the quality of decisions taken by an independently chaired Standards Committee.
  There will be an annual published report on the quality of decision making in agencies.
  I hope this is helpful.

  Vaccine Damaged Children
  Mr. Tony Clarke
  To ask the Secretary of State for Social Security when the Government will announce a financial settlement for vaccine damaged children. [120727]

  Mr. Bayley
  The results of our review of the Vaccine Damage Payments scheme are in preparation but have not yet been finalised.

  Sure Start Maternity Grant
  Mr. Willetts
  To ask the Secretary of State for Social Security how many people received Sure Start Maternity Grant in 1999–2000; and how many are expected to receive it in(a) 2000–01 and (b) 2001–02. [119948]

  Angela Eagle
  [holding answer 20 April 2000]: Sure Start Maternity Grant (SSMG) was introduced from 27 March 2000 to replace the £100 Maternity Payment, and is payable for children expected, born or adopted on or after 11 June. Maternity payments will continue for
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  children expected, born or adopted before 11 June. Since both Maternity payments and SSMG payments will be made during 2000–01, figures for the two benefits are in the following table for the relevant years.

  Number of people receiving Sure Start Maternity Grant and Maternity Payment

  Sure Start Maternity Grant

  Maternity Payment

  1999–2000

  1—

  171,827

  2000–01

  2165,000

  230,000

  2001–02

  2192,000

  0

  1 Not yet available

  2 Projected figure

  Child Poverty
  Mr. Webb
  To ask the Secretary of State for Social Security when his Department first announced plans to halve child poverty in 10 years and eradicate child poverty in 20 years; and when these targets are due to be met. [120238]

  Mr. Bayley
  My right hon. Friend the Prime Minister announced our aim to end child poverty in 20 years in the Beveridge Lecture on 18 March 1999. Following this, we published "Opportunity for all" (Cm 4445, September 1999) placing tackling poverty and social exclusion at the heart of this Government's agenda. Reinforcing our commitment to ending child poverty, my right hon. Friend the Chancellor of the Exchequer announced our ambition to halve child poverty "by the end of the next decade" in his 1999 Pre-Budget Report.

INTERNATIONAL DEVELOPMENT

  Child Labour
  Dr. Gibson
  To ask the Secretary of State for International Development what steps she has taken to address the problem of child labour in the developing world. [119360]

  Clare Short
  Our Government played a key role in brokering the agreement on the Elimination of the Worst Forms of Child Labour at the International Labour Organisation (ILO) in 1999. We have contributed $1 million per annum for the last two years to support ILO programmes to eliminate child labour and are working with the ILO on projects to eliminate child labour in India and Tanzania, and to restrict trafficking in children in South-East Asia.

  Gap-year Students
  Mr. St. Aubyn
  To ask the Secretary of State for International Development if she will make a statement on the role of her Department in appointing year-out students on development projects overseas. [119362]

  Clare Short
  The Department for International Development does not appoint year-out students on development projects overseas. Developing countries require access to know how to build local capacity. Our volunteer schemes such as Voluntary Service Overseas and British Executive Services Overseas provide volunteers with skills in areas needed by developing countries.
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  Debt Relief
  Mr. Luff
  To ask the Secretary of State for International Development what recent representations she has received from Christian Aid about third-world debt. [119363]

  Clare Short
  On 4 April, the Chancellor and I met a number of faith leaders and directors of voluntary organisations, including Christian Aid, at one of our regular seminars on debt and poverty reduction. I continue to receive many letters on debt, including from Christian Aid supporters.

  Mr. Webb
  To ask the Secretary of State for International Development what steps her Department is taking to ensure that the amount of debt relief granted to the world's poorest countries is increased. [119377]

  Clare Short
  We were instrumental in securing the revision of the Heavily Indebted Poor Countries (HIPC) Initiative, which provides faster, wider and deeper debt relief for the poorest countries. The new framework will deliver $50 billion in debt relief. In addition, the Government have announced that they will provide 100 per cent. bilateral relief on all remaining export credit debt for qualifying HIPC countries. Some other countries, including the rest of the G7, have agreed additional debt relief beyond the HIPC framework.

  At the Spring Meetings of the World bank and IMF last month, the international community agreed to set up a joint World bank/IMF Committee to oversee the implementation of the enhanced HIPC framework, and to provide regular progress reports to the two Executive Boards. I welcome this measure.

  The financing for the revised Initiative has yet to be identified in full. The UK has made the largest commitment to date to the HIPC Trust Fund—over $350 million, including our share of the European Community contribution.

  Ethiopia
  Mr. Russell Brown
  To ask the Secretary of State for International Development what is the total amount of emergency assistance that her Department has committed to Ethiopia in response to the current famine. [119364]

  Clare Short
  We have responded quickly and appropriately to emerging emergency needs in Ethiopia. Since June 1999 we have committed some £9.3 million in food and non-food relief. The food aid element is over 30,000 metric tonnes. In addition, we contribute about 17 per cent. of the cost of EC food aid; estimated to be some 432,000 metric tonnes this year. We are ready to commit more funds if new needs emerge.

  Mr. Robertson
  To ask the Secretary of State for International Development if she will make a statement about the aid she is providing to Ethiopia. [119370]

  Clare Short
  We have responded quickly and appropriately to emerging emergency needs in Ethiopia. Since June 1999 we have committed £9.3 million in food and non-food relief. The food aid element is over 30,000 metric tonnes. In addition, we contribute about 17 per cent. of the cost of EC food aid: estimated to be some 432,000 metric tonnes this year.
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  Because of the war with Eritrea we, like other donors, have reduced long-term development aid because we are not confident that the resources would be used to benefit the people of the country.

  India
  Mr. McGrady
  To ask the Secretary of State for International Development what her policy is on linking aid to India with good governance; and if she will make a statement. [119365]

  Clare Short
  Our "Country Strategy for India", published in 1999, stresses the crucial importance of good governance to India's development. One of the five strategic objectives for our programme in India is to promote accountable government delivering pro-poor reform and growth and effective services.

  A key element of the Strategy is the focusing of our effort and funding on the governments of selected Indian states which have high concentrations of poor people. The criteria for choice of states include:
  a commitment by the government to reduce poverty, including a willingness to make radical shifts in fiscal priorities, tackle difficult social issues, overhaul the delivery of public services and decentralise more power and money to local government; and
  a desire to improve standards of governance.

  We intend to increase substantially the proportion of its bilateral development assistance to India devoted to improving governance at national and state levels.

  Africa
  Mr. Swayne
  To ask the Secretary of State for International Development if she will make a statement about development aid to east Africa. [119366]

  Clare Short
  British bilateral development assistance to Kenya, Tanzania and Uganda totalled about £130 million in 1999–2000. Assistance to Tanzania and Uganda is set to increase substantially over the next three years in support of Government-led efforts to strengthen economic management and reduce poverty, which are being pursued further through the preparation of Poverty Reductions Strategy Papers (PRSP). In Kenya, the Government are seeking to negotiate a new economic reform programme with the IMF, in preparation for which it is preparing an interim PRSP. We are ready, if Kenya reaches agreement on a credible poverty reduction programme with the international financial institutions, substantially to increase development assistance.

  Sir Sydney Chapman
  To ask the Secretary of State for International Development if she will make a statement about aid to the Horn of Africa. [119368]

  Clare Short
  Planned expenditure in countries in the Horn of Africa is shown at Annex 1, Table 5 of the DFID Departmental Report 2000.

  Overseas Development (Expenditure)
  Mr. Bradshaw
  To ask the Secretary of State for International Development what progress has been made towards meeting the Government's target for expenditure on overseas development as a proportion of gross domestic product. [119367]
  127W
  Clare Short
  DFID assistance to developing countries in the last financial year is estimated at £2.212 billion, an increase of 8.5 per cent. in real terms over the expenditure of £1.987 billion in 1998–99. This increase reflects the first year of the Comprehensive Spending Round settlement in 1998, as part of which an extra £1.6 billion was allocated for development spending. Under this, DFID' s budget will increase by £365 million in the current financial year and by a further £307 million in 2001–02.

  I should also inform the House that we have today submitted to the OECD our provisional figures for official development assistance for the 1999 calendar year. We estimate that net ODA for the calendar year will be £2.03 billion. This results from the different time-frame of our financial year and the Development Assistance Committee's use of the calendar year and is largely the consequence of the timing of the deposit of promissory notes in respect of IDA and the African. Development Fund, lower than predicted spending by the EC, and the timing of bringing to book expenditure on Kosovo. This will produce an anomalous calendar year ODA/GNP ratio of 0.23 per cent. We expect that ODA in 2000 will be 0.29 per cent. of GNP, rising in 2001 to 0.30 per cent. of GNP.

  Zimbabwe
  Mr. Wilkinson
  To ask the Secretary of State for International Development what assessment she has made of the effectiveness of British development aid to Zimbabwe. [119371]

  Clare Short
  The effectiveness of development assistance to Zimbabwe is kept under regular review. Projects are professionally appraised, monitored and evaluated to assess their impact on poverty. We also review the impact of the wider political and economic environment on progress. Our present assessment is that our portfolio so far has been broadly effective, but that new government-led projects would not be less effective until current governance and economic management issues are resolved. New projects are therefore channelled largely through civil society organisations.

  Mr. Nicholas Winterton
  To ask the Secretary of State for International Development if she will make a statement on her Department's aid to Zimbabwe. [119372]

  Mr. Robathan
  To ask the Secretary of State for International Development if she will make a statement on her Department's programme in Zimbabwe. [119374]

  Mr. Stephen O'Brien
  To ask the Secretary of State for International Development if she will make a statement on the future of the aid programme to the Government of Zimbabwe. [119358]

  Clare Short
  We are continuing to monitor events in Zimbabwe very closely, and are keeping programme activities under review to ensure that they can still be effective. We are particularly concerned about the failure of the police to uphold court orders against farm invaders; to provide protection under the law; and to act impartially in policing demonstrations. I have therefore suspended DFID support to an Aid and Trade Provision project supplying Land Rovers to the Zimbabwe Republic Police.
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  Iraq
  Mr. Dalyell
  To ask the Secretary of State for International Development what aid in the form of water pumps she has sent to Iraq via the United Nations. [119373]

  Clare Short
  In the centre and south of Iraq we have committed £5.3 million to Care International for water and sanitation projects and £3 million to the International Committee of the Red Cross whose programme includes rehabilitating water and sanitation services. In northern Iraq we have supported a number of water and sanitation projects over recent years through NGOs. We are not providing water pumps to UN agencies. These are being imported into Iraq through the oil-for-food programme, and where practicable, our programmes make use of them.

  South Asia
  Mr. Gordon Prentice
  To ask the Secretary of State for International Development what steps she is taking to help end the system of bonded labour in south Asia. [119375]

  Clare Short
  The Government are working for the elimination of bonded labour in several ways. We played a key role in discussions to draw up the International Labour Organisation's (ILO) Declaration on Fundamental Principles and Rights at Work (1998) and the Convention for the Elimination of the Worst Forms of Child Labour (1999) which both outlaw bonded labour and provide international standards and monitoring mechanisms. The UK has provided $2 million over the last two financial years to ILO' s International Programme for the Elimination of Child Labour (IPEC). Many child labourers in south Asia work under bonded conditions.

  At country and regional level we are working with the ILO, national Governments, trades unions and other civil society organisations to promote labour rights and tackle the poverty which usually underlies abuses. One of the causes of bondage is indebtedness to landowners. We are supporting micro-credit schemes which aim to provide alternative sources of affordable finance to poor people.

  In the UK we are supporting the Ethical Trading Initiative (ETI), a consortium of business, trades unions and non-governmental organisations which encourages companies, many of whom have suppliers in south Asia, to adopt codes of conduct including labour standards throughout their supply chain.

  Malaria
  Mr. Beard
  To ask the Secretary of State for International Development what steps her Department is taking to help developing countries combat malaria. [119376]

  Clare Short
  The World Health Organisation (WHO) estimates that malaria kills one million people a year, mainly in Africa. We are strongly supporting the WHO-led Roll Back Malaria (RBM) initiative to achieve the goal of reducing the malaria burden by half by 2010. The RBM initiative provides the vehicle for concerted action by partners, especially in Africa, to deliver more widely the benefits of currently available methods of malaria control to the poorest. Overall UK developmental programme spending on malaria control activities has increased tenfold in the last five years. We are also
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  supporting public-private partnerships to develop the new generation of affordable drugs required for malaria control in developing countries, both by direct funding to WHO through such initiatives as the Medicines for Malaria Venture (MMV), the Lapdap product development programme and the Malarone donation programme.

  Kosovo
  Mr. Cox
  To ask the Secretary of State for International Development what help her Department is giving in the clearing of land mines in Kosovo. [119378]

  Clare Short
  We have provided over £7 million during the 1999–2000 financial year for the clearance of mines and unexploded ordnance in Kosovo. So far we have committed a further £6.6 million during 2000–01. The great majority of this funding is going to four mine clearance organisations. We have also supported the UN Mine Action Co-ordination Centre through contributions in cash and in kind.

  Famine Relief
  Mr. Kidney
  To ask the Secretary of State for International Development what famine relief operations are being undertaken by(a) her Department and (b) UK aid agencies in Ethiopia and Eritrea. [119379]

  Clare Short
  (a) Details of the emergency interventions we have funded in Ethiopia between June 1999 and April 2000 are outlined in the DFID Background Briefing on Ethiopia, April 2000, a copy of which has been placed in the Library of the House. In addition, we are also providing £1 million to the International Committee of the Red Cross to cover food and transport costs and some £1.3 million to Farm Africa for work in Konso. Britain also contributes about 17 per cent. of the cost of EC food aid for Ethiopia; estimated to be some 432,000 metric tonnes this year. In Eritrea this year, we have provided £200,000 to Oxfam for emergency water/sanitation interventions for people displaced by the conflict. In addition, we also provide 17 per cent. of the cost of EC interventions in Eritrea.

  (b) We do not maintain records of interventions by NGOs and other aid agencies.

  Burma and Thailand
  Rev. Martin Smyth
  To ask the Secretary of State for International Development what representations she has received from non-governmental organisations working in Burma and Thailand about her Department's policies towards those countries. [119350]

  Clare Short
  We have not had any representations from non-governmental organisations working in Burma and Thailand about our policies, but we have consulted non-governmental organisations about the situation in Burma in preparing a Country Strategy Paper that we shall publish shortly.

  Commonwealth Development Corporation
  Mr. Martlew
  To ask the Secretary of State for International Development what progress has been made on the change in status of the Commonwealth Development Corporation. [119369]
  130W
  Clare Short
  On 8 December 1999 Commonwealth Development Corporation was transformed from a statutory corporation into a public limited company registered under the name of CDC Group plc. It now operates within the framework designed for the Public/Private Partnership. This entrenches an investment policy focusing on investment in poorer countries. For the time being CDC remains wholly Government-owned.

  Palestinian Authority
  Dr. Starkey
  To ask the Secretary of State for International Development if she will make a statement on UK development aid to the Palestinian Authority. [119361]

  Clare Short
  Our bilateral development assistance for the West Bank and the Gaza Strip is focused on co-operation with the Palestinian Authority to build a nation through support for the peace process (eg improving Palestinian administrative systems and analytical resources); institution and capacity building (eg improving health and education services); and empowering civil society (eg through non-government organisations working on gender and law issues). We currently spend some £8 million a year on the programme. In addition we contribute a similar sum to the United Nations Relief Works Agency for Palestinian Refugees in support of its core activities and to assist in improving service delivery. Our share of European Community and other multilateral programmes for the Palestinians takes our average annual contribution to over £25 million.

  Poor Countries
  Mr. Ben Chapman
  To ask the Secretary of State for International Development what proportion of her Department's budget was spent in the world's poorest countries in the last financial year. [119359]

  Clare Short
  Our Government have committed themselves to increase the focus of our aid spending on the poorest people and the poorest countries. The proportion of our country programmes spent in Low Income Countries in the last financial year rose to 71 per cent. from 63.2 per cent. the previous year. We are on course to reach a proportion of around 80 per cent. this year.

TRADE AND INDUSTRY

  Export Licences
  Mr. Berry
  To ask the Secretary of State for Trade and Industry in what circumstances an item on the military list can be exported without the requirement of an end-use certificate. [120236]

  Dr. Howells
  All applications for Standard Individual Export Licences (SIELs) for the permanent export of goods subject to strategic export control must be supported by appropriate end-user documentation. Where the intended consignee is a Government body, and the application is not for a licence to export chemicals listed in Schedule 2 or 3 to the Chemical Weapons Convention (CWC) to a state which has not ratified the CWC, a copy of the official Government purchase order or a copy of the relevant part of the Government contract covering the order is normally sufficient. An end-user undertaking is
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  not usually required for Standard Individual Export Licence (SIEL) applications for the temporary export of goods subject to strategic export control.

  An Open Individual Export Licence (OIEL) is specific to an individual exporter and covers multiple shipments of specified goods to specified destinations and/or, in some cases, specified consignees. The exporter must obtain from each consignee an appropriate written undertaking for each export before the export takes place, or not later than one month after the date of exportation. Where the exporter intends to make more than one exportation to the same consignee in any period of one year, an annual written undertaking may be obtained in fulfilment of this requirement.

  As with SIELs, where goods are being consigned direct to a Government body, we will normally accept a copy of the Government purchase contract order, or the relevant extracts from the contract.

  An Open General Export Licence (OGEL) allows the export from the UK of goods specified in the goods coverage of the OGEL to specified destinations. In such circumstances, end-user undertakings are not required. Copies of OGELs are routinely placed in the Library of the House.

  Birth Certificates
  Mr. Caton
  To ask the Secretary of State for Trade and Industry 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. [120312]

  Dr. Howells
  In the DTI and some of its agencies a birth certificate is one of a variety of documents which applicants for jobs may choose to offer as proof of identity and of age, for pension purposes, prior to or at recruitment. In the event of the death of a departmental employee in service, his or her children's full birth certificates are required in order to verify dates of birth for dependants' benefits under the relevant pensions arrangements. Contractors are responsible for establishing proof of the identity of their employees. Birth certificates are not required routinely for any other departmental purposes, although they can be offered by claimants under the Empty Property Compensation Scheme to help establish the validity of such claims in particular lines of inheritance, and they may, in very limited circumstances, be demanded under a number of statutory powers of investigation, for example under Section 434 of the Companies Act 1985.

  BNFL
  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry if he will instruct the Health and Safety Executive to conduct an investigation into quality control data problems associated with MOX fuel supplied by British Nuclear Fuels to Swiss and German utilities. [119674]

  Mrs. Liddell
  No. The Health and Safety Executive's (HSE) Nuclear Installations Inspectorate reported on the data falsification issues in the MOX demonstration facility (MDF) in its report published on 18 February. HSE's132W
  priority now is to assess BNFL's responses to its reports, published on 18 April, and to monitor the implementation of BNFL's action plans.

  I understand that HSE has briefed the Swiss and German nuclear regulators on the findings of their report.

  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry what plans he has to investigate further allegations made by Mitsubishi Heavy Industries about BNFL's ability to manufacture MOX fuel pellets to meet the required specification; and if he will make a statement. [119680]

  Mrs. Liddell
  I am not aware of the allegations made by Mitsubishi Heavy Industries apart from those relating to the falsification of data on secondary pellet diameter checks.

  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry if MOX fuel pellets which should have failed the secondary checks at the Sellafield MOX Demonstration Facility were erroneously approved. [119679]

  Mrs. Liddell
  The falsification of data occurred at a secondary manual stage of checking, the fuel pellets already having been subject to 100 per cent. automated checking.

  The Health and Safety Executive's (HSE) Nuclear Installations Inspectorate reported on the data falsification issues in the MOX Demonstration Facility (MDF) in its report published on 18 February. The report confirmed that some pellet diameter data had been falsified; four of the affected fuel assemblies are in Japan; and the fuel would be safe in use.

  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry if he has received a copy of an English translation of a report by the TUEV agency produced for the Ministry of Environment of the Government of Lower Saxony on MOX production and quality control standards at Sellafield. [119673]

  Mrs. Liddell
  I have not received a copy of the report.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry (1) 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 (i) information and (ii) a draft provided by British Nuclear Fuels; [120046]

  (2) how many letters have been sent by Ministers in his Department to (a) hon. Members, (b) Members of the House of Lords and (c) foreign parliamentarians since May 1997, which were drafted (i) in full and (ii) in part by British Nuclear Fuels. [120050]

  Mrs. Liddell
  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.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry if he will appoint to the board of British Nuclear Fuels a suitably qualified representative from a non-governmental organisation. [120282]

  Mrs. Liddell
  The BNFL Chairman, Hugh Collum, is looking to refresh and strengthen his board so that the company can tackle the challenges ahead. That will
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  include recruiting people of a high calibre with a proven track record to contribute, and be committed, to the success of the business.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry if he will instruct British Nuclear Fuels to replace Lloyds Register Quality Assurance Ltd. as quality verifiers of BNFL activities. [120248]

  Mrs. Liddell
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Bury, North (Mr. Chaytor) on 28 March 2000,Official Report, column 105W.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry if he will make it his policy in answering questions from hon. Members to indicate where British Nuclear Fuels helped to draft the reply. [120304]

  Mrs. Liddell
  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.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry if he will list the(a) safety management and (b) quality control matters that remain to be addressed by British Nuclear Fuels which were mentioned in the two BNFL reports on 18 April. [120247]

  Mrs. Liddell
  The BNFL reports published on 18 April included action plans to address each of the 43 recommendations in the two HSE reports on MOX fuel data falsification and on the control and supervision of operations at Sellafield. These action plans show that a number of HSE's recommendations have already been addressed and there are deadlines against each one that BNFL has still to complete. While the HSE has indicated that BNFL's responses provide a good foundation to deliver the necessary safety improvements at Sellafield, it has said that it will be monitoring BNFL's implementation of the action plans and that it will not hesitate to use its enforcement powers if it sees any signs of significant failure by BNFL to deliver on its commitments. Copies of two BNFL reports are available on BNFL's web site at www.bnfl.co.uk.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry what is the reason for the delay in BNFL's response to the report issued on 18 February by the Nuclear Installations Inspectorate on the storage of liquid high level waste at BNFL, Sellafield. [120250]

  Mrs. Liddell
  There has been no delay. The Health and Safety Executive (HSE) report on the storage of liquid high-level waste at Sellafield set no deadline. HSE has agreed with BNFL that the company should respond by the summer.

  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry if he was consulted by BNFL in respect of the new management and board member appointees announced by the company on 18 April. [120249]

  Mrs. Liddell
  I was consulted about the board changes which the company announced on 18 April.

  Power Plants
  Mr. Llew Smith
  To ask the Secretary of State for Trade and Industry what information his Department 134W
  collects on (a) gas-fired and (b) combined heat and power plants, and on planning applications made for such plants in (i) England and (ii) Wales. [120051]

  Mrs. Liddell
  In relation to any new power station with a capacity of more than 50 megawatts (whether gas fired or combined heat and power plant), the Secretary of State's consent is required under section 36 of the Electricity Act 1989. If, having followed the procedures set out in the Electricity Act, the Secretary of State decides to grant consent, planning permission is deemed to be granted under section 90 of the Town and Country Planning Act 1990. All applications have to provide information as required under the Electricity and Pipeline Works (Assessment of Environmental Effects) Regulations 1990.

  Stations with a capacity of more than 10 MW which are fuelled by natural gas require approval under section 14 of the Energy Act 1976 and my right hon. Friend the Secretary of State for Trade and Industry will be supplied with factual information for him to form a judgment as to whether energy policy clearance should be given.

  Decisions under both the Electricity Act and the Energy Act are announced by way of Parliamentary Answer, Press Notice and informing interested parties direct.

  The Digest of United Kingdom Energy Statistics, copies of which are available in the Library of the House, is published annually and contains a chapter on combined heat and power. The Digest for 2000 is due to be published at the end of July and will give annual data on capacity, fuel and output from combined heat and power schemes in the UK for 1999 and earlier years. The Digest also contains a chapter on electricity which gives the latest statistics on the total generating capacity of gas-fired stations, the volume of gas used for generation, and electricity generated and supplied by gas fired stations.

  Gas Industry
  Mr. Gibb
  To ask the Secretary of State for Trade and Industry (1) if he intends to reopen the application of the gas-fired power station proposals which he refused as a result of the stricter consent policy; [120116]

  (2) what his policy is regarding granting permission to construct gas-fired power stations under section 36 of the Electricity Act 1989. [120115]

  Mrs. Liddell
  My right hon. Friend the Secretary of State for Trade and Industry announced on 17 April that he intends to lift the stricter consents policy as soon as the new electricity trading arrangements are in place, which he expects to be by October this year. The lifting of the stricter consents policy will mean that the existing presumption against new gas-fired power generation will no longer apply. The initiative for proposals for new power stations will remain with private sector companies to consider, to meet the evolving needs of the energy market. That market will be influenced by measures such as exemption from the climate change levy for CHP and enhanced capital allowances. It will also be influenced by the implementation of the Integrated Pollution Prevention Control (IPPC) Directive which emphasises that installations are operated in such a way that energy is used efficiently, and by the draft Large Combustion Plants Directive, which if adopted in its present form will
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  require the technical and economic feasibility of providing for the combined generation of heat and power to be examined.

  The Government strongly support CHP and, consistent with the above measures, will expect developers to be able to show that they have explored opportunities to use CHP, providing heat for business and the community, although it is recognised that that may not always be practical. The Department will be discussing with developers the information which needs to be submitted as part of the notification under section 14 of the Energy Act and applications under section 36 of the Electricity Act.

  The Department will also be contacting the promoters of the 15 proposals put on hold since October 1998, with a view to seeing whether those developers wish to proceed with their proposals and what updating of information is required of them.

  Until the stricter consents policy is lifted, it will continue to play a part in the energy market.

  Mr. Gibb
  To ask the Secretary of State for Trade and Industry what assessment his Department has made of the likely future reserves of North Sea gas, taking into account the proposal to lift the stricter current policy from October. [120108]

  Mrs. Liddell
  The Department of Trade and Industry publishes estimates of remaining recoverable reserves of gas on the UK Continental Shelf (UKCS) in its annual "Brown Book", the next edition of which is due for publication in May 2000. The UKCS includes the Irish Sea and Atlantic Margin as well as the North Sea. The lower and upper ends of the ranges of the Department's estimates of remaining recoverable reserves of natural gas, in billion cubic metres, at the end of 1999 are given in the table in cubic metres:

  Lower end of range

  Upper end of range

  Discovered

  760

  1,755

  Undiscovered1

  355

  1,465

  1 "Yet-to-find"

  The impact on remaining recoverable reserves of the proposed lifting of the stricter consents policy from October 2000 is not likely to be significant. Higher demand for gas could advance the pace of reserve depletion or it could increase the reserve base if it leads to an increase in exploration activity.

  Mr. Gibb
  To ask the Secretary of State for Trade and Industry when Britain will become a net importer of natural gas. [120107]

  Mrs. Liddell
  The date on which the UK will revert to being a net importer of natural gas will depend on a number of variables, such as the timing of commencement and cessation of production from particular fields and the rate of growth of demand (which can influence the pace of exploration and development of discoveries). It is likely that the UK will again become a net importer of gas during the present decade. There is, however, infrastructure in place to permit imports as and when they are needed.
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  Mr. Redwood
  To ask the Secretary of State for Trade and Industry (1) what legal advice he received concerning the legality of imposing a moratorium on gas-fired power stations; [120183]

  (2) when the Government changed its moratorium on new gas-fired power stations to a strict consents policy. [120493]

  Mr. Byers
  None. No moratorium has been imposed.

  Mr. Redwood
  To ask the Secretary of State for Trade and Industry if he will estimate how much coal capacity is lost for each additional 1MW of gas-fired electricity generation, assuming electricity demand and the import level stay the same. [120184]

  Mr. Byers
  I refer the right hon. Member to my reply on 25 May 1999,Official Report, column 109W.

  Coal Division
  Mr. Redwood
  To ask the Secretary of State for Trade and Industry for what reason two officials have recently been moved from his Department's Coal Division. [120358]

  Mr. Byers
  [holding answer 2 May 2000]All changes reflect normal career moves.

  Patent Office
  Ms Christine Russell
  To ask the Secretary of State for Trade and Industry if he will make a statement about the quinquennial review of the Patent Office. [120982]

  Mr. Alan Johnson
  The Government are committed to achieving better public services that are of higher quality and are more responsive to the needs of the people who use them. The services and functions provided by Executive Agencies and non-Departmental Public Bodies (NDPBs) are at the heart of this programme of continuous improvement and their effective delivery is a key element in the success of Modernising Government. Regular Agency and NDPB reviews are an important element in ensuring that we have in place the right structures to deliver the Government's agenda effectively and to provide a strong focus on improving their future performance.

  The Quinquennial Review of the Patent Office, which forms part of that programme of review and continuous improvement, was launched on 27 April. Its terms of reference are:
  To consider and to make recommendations regarding:
  First, the organisational status which would be most appropriate for the policy work and operation of the Patent Office in the future, taking into account its contribution to the objectives of the Department and of the Government as a whole, including the Modernising Government agenda, developments in the national and international legislative, regulatory and commercial environment, and the views of customers, staff, consumers and other interested parties; and
  Second, whether any changes should be made to the way in which the Patent Office operates, including its aims and objectives, targets and financial controls; the scope of the activities undertaken; and whether its activities could be done more effectively.
  The review is to be undertaken in accordance with the latest Cabinet Office guidance, published in January 2000.

  The Review will be carried out by officials in the Department of Trade and Industry, with specialist advice as appropriate. The Review Team will report to a Steering

  137W
  Group which will include two independent members and be chaired by Dr. Catherine Bell, the Director General of Corporate and Consumer Affairs. The aim will be to complete each stage of the review within three months, as recommended in the Cabinet Office guidance.

  As indicated in the terms of reference, the Review Team is seeking the views of interested parties. A consultation paper is available from:

  The Patent Office Review

  Team Room 875

  96 Victoria Street

  London SW1E 5JL

  Tel: 020 7215 1097

  Fax: 020 7215 2987

  e-mail: cca.comments@lond02.dti.gov.uk

  Comments should be sent to the same address by 19 May 2000.

  Wind Energy
  Mr. David Stewart
  To ask the Secretary of State for Trade and Industry if he will make a statement on his Department's policy on offshore wind farms. [120226]

  Mrs. Liddell
  [holding answer 2 May 2000]I refer the hon. Member to my reply to my hon. Friend the Member for Harrow, West (Mr. Thomas) today.

  Mr. Gareth R. Thomas
  To ask the Secretary of State for Trade and Industry what actions are being taken to promote the development of a UK manufacturing, supply, installation and maintenance industry relating to wind energy, with particular reference to offshore wind energy; and if he will make a statement. [119923]

  Mrs. Liddell
  Support provided under the Non-Fossil Fuel Obligation (NFFO), the Scottish Renewables Obligation (SRO), and my Department's research and development programme for renewable energy has contributed to the development of the wind industry. The first two UK offshore wind turbines are to be installed this year and developers are now looking to see how wind energy can be deployed more widely offshore.

  The Government are taking powers in the Utilities Bill currently before Parliament to promote the development of renewable energy through a new Obligation on electricity suppliers. The intention is that this would include both onshore and offshore wind and would create a market for renewable energy until 2025. Support under existing NFFO and SRO contracts will be maintained. There will be no new rounds of NFFO and SRO contracts.

  The Government are also looking at the possibility of some limited additional support for offshore wind and energy crops. However, Government acting alone will not be sufficient to meet the challenge ahead and industry is expected to play an important part.

  Marine Renewable Energies
  Mr. David Stewart
  To ask the Secretary of State for Trade and Industry what recent discussions he has had with offshore engineering companies on marine renewable energies. [120224]
  138W
  Mrs. Liddell
  [holding answer 2 May 2000]I have frequent contact with representatives of the oil and gas companies, for example in chairing the PILOT initiative. Matters covered in discussions include opportunities for diversification in the companies' offshore activities.

  Congo
  Dr. Tonge
  To ask the Secretary of State for Trade and Industry what recent representations he has received concerning(a) British pilots and (b) air charter service air cargo companies supplying weapons to both sides in the civil war in the Democratic Republic of Congo. [120267]

  Dr. Howells
  [holding answer 2 May 2000]The answer is as follows:

  (a) None and (b) none.

  Miners' Pension Fund
  Mr. Alan W. Williams
  To ask the Secretary of State for Trade and Industry how many representations he has received calling for a review of the arrangements for the distribution of surpluses from the miners' pension funds between Government and miners, and from whom. [120357]

  Mrs. Liddell
  I have received in the region of 160 representations on this issue. These have come from a range of parties including local authorities, Members of Parliament and private individuals.

  Bronchitis and Emphysema (Test Centres)
  Mr. Cummings
  To ask the Secretary of State for Trade and Industry when he expects the second test centre for claimants for compensation for chronic bronchitis and emphysema to be established in Durham; and if he will make a statement. [120399]

  Mrs. Liddell
  There is currently a spirometry test centre based at the Miners Offices in Durham City. The centre is fully resourced and equipped to perform assessments for the Medical Assessment Process. There are no plans at present to open a second centre in Durham. The situation will be kept under review.

  Rover/BMW
  Mr. Redwood
  To ask the Secretary of State for Trade and Industry what communications he has received from Mr. Towers concerning the timing of his final bid to BMW. [120495]

  Mr. Byers
  [holding answer 2 May 2000)Mr. Towers is now in negotiations with BMW. I shall be meeting him in due course.

  Mr. Redwood
  To ask the Secretary of State for Trade and Industry what assessment he has made of whether public money would be needed for the Towers consortium to outbid Alchemy Partners for Longbridge. [120494]

  Mr. Byers
  [holding answer 2 May 2000]No request for public money has been received from the Towers consortium.
  139W

AGRICULTURE, FISHERIES AND FOOD

  Regional Offices
  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food what recent representations he has received regarding the proposed restructuring of his Department's regional offices; and from which organisations. [120405]

  Mr. Morley
  The Department has received a number of representations about the future of the Ministry's Regional Service Centres following the recent review of CAP scheme administration. The majority of representations have been from, or on behalf of, staff of the RSCs.

  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food (1) what models for restructuring regional offices he has considered; and if he will make a statement; [120403]

  (2) what plans he has to restructure his Department's regional offices; and if he will make a statement. [120404]

  County

  Total sheep

  Unfit sheep

  Dead sheep

  Removed for other reasons

  Hereford

  65,257

  2

  6

  26

  Kent

  688,364

  49

  0

  17

  North Yorkshire

  57,111

  1

  2

  87

  Somerset

  597

  1

  0

  0

  Worcester

  2,904

  3

  0

  0

  Denbighshire

  157,182

  16

  4

  0

  Powys

  73,406

  6

  2

  0

  Wrexham

  40,827

  1

  0

  0

  Other counties in England and Wales

  16,254

  0

  0

  0

  Journeys starting outside of England and Wales

  13,181

  3

  1

  30

  Total

  1,115,083

  82

  15

  160

  Marine Animals (Nets)
  Mr. Baker
  To ask the Minister of Agriculture, Fisheries and Food when he will bring forward proposals to reduce the number of(a) porpoises and (b) other marine animals caught in nets, as required by the 1992 European Habitats Directive; and if he will make a statement. [118827]

  Mr. Morley
  Under the provisions of the EC Habitats Directive, the UK has an obligation to monitor the incidental capture of Annexe IV (a) species (which include all cetaceans) and take further research and conservation measures, as required, to ensure this capture does not have a significant detrimental impact on these species.

  My Department has been monitoring the incidental capture of cetaceans through a number of research contracts with the Sea Mammal Research Unit. In addition, a number of mitigation measures are currently being trialled with a view to reducing marine mammal bycatch generally. If these prove effective, the UK industry will be encouraged to adopt them. Furthermore, if appropriate, the European Commission will be approached, with a view to them being applied at Community level.

  The UK Government, in consultation with environmental NGOs, have also prepared a draft strategy on the protection of the harbour porpoise in UK waters. The aim of this strategy is to address the potential decline.
  140W
  Mr. Morley
  I refer the hon. Member to the reply given on 27 March 2000,Official Report, column 37W, by my right hon. Friend the Minister of State to the hon. Member for Ludlow (Mr. Gill) which sets out the latest position.

  Live Animal Exports
  Mr. Prosser
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to his answer of 1 March 2000,Official Report, column 286W, on live animal exports, from which counties in England and Wales the sheep removed from consignments of slaughter/further fattening sheep in 1999 by his staff at Dover port originated; and how many originated from each of those counties. [120077]

  Mr. Morley
  The counties in England and Wales from which animals removed from consignments of slaughter/further fattening sheep by staff at Dover port in 1999 started their journeys, and the total number of animals starting their journeys in those counties were:

  in numbers of this species. It is anticipated that the document will be published by DETR in the near future, with a view to it being submitted to the Agreement on the Conservation of Small Cetaceans of the Baltic and North Seas (ASCOBANS) Meeting of Parties in Bristol in July.

  English Rural Development Plan
  Mr. Breed
  To ask the Minister of Agriculture, Fisheries and Food who will administer the English Rural Development Plan at the regional level. [119006]

  Mr. Morley
  The Ministry of Agriculture, Fisheries and Food is the competent authority designated by the member state with overall responsibility for administering the England Rural Development Plan. At regional level, Regional Programming Groups involving partners from Government Departments and agencies will oversee the implementation and administration of the Programme. A full description of the proposed administrative arrangements is available in Section 12 and Annexe IX of the Plan.

  BSE
  Dr. Lynne Jones
  To ask the Minister of Agriculture, Fisheries and Food what assessment he has made of the studies on the presence of the BSE infective agent in cattle(a) under 30 months of age and (b) older than 30 months. [119036]
  141W
  Ms Quin
  Between January and March 1999, brain tissue was collected from approximately 4,163 randomly selected cattle, over five-years-old, passing through the Over Thirty Month Scheme (OTMS) and examined for the presence of BSE infection. The purpose of the study was to assess if cattle carry any detectable BSE infection before clinical symptoms are seen.

  Of the brains removed, a total of 3,951 were in a suitable condition for examination and initial results showed that 18 cattle had signs of BSE infection. The remaining 3,933 were negative and showed no signs of infection. Taken in isolation these results could indicate that approximately 0.5 per cent. of the remaining cattle over five years and older may be infected. It will not be possible fully to interpret the data until the results from other diagnostic tests and a statistical analysis of the age structure of cattle slaughtered under the OTM Scheme is complete.

  A similar study of cattle under thirty months of age has not been undertaken because it would be very unlikely that brain pathology would have developed in such young animals if they were infected. In experimental conditions when calves were orally challenged with relatively high doses of BSE infected cattle brain, the first stage at which signs of BSE infection could be detected in the brains of these challenged cattle was at 32 months after dosing. No signs were seen prior to this at 26 months post challenge.

  Harbour Grant Scheme
  Mr. Moss
  To ask the Minister of Agriculture, Fisheries and Food which of the projects under the harbour grant scheme which had formal approval in May 1999 have been granted their grant allocation; and which of the projects in respect of which only applications had been submitted at that date,(a) have been allocated grant and (b) are being processed. [118828]

  Mr. Morley
  Of the 10 applications for harbour grant which were formally approved to receive grant at 21 May 1999:projects at Amble, Hartlepool, Mevagissey, Polperro and Scarborough (two projects) are now complete and have received their grant in full;
  projects at Cadgwith Cove, Grimsby, Scarborough and Whitby have so far received part payments.

  Of the 22 projects in respect of which applications had been submitted at 21 May 1999:
  projects at Bridlington, Grimsby, Mevagissey, Padstow and Whitehaven have since been given formal approval to receive grant;
  projects at Amble, Brixham, Gosport, Hull, Leigh on Sea, Looe, Margate, Newhaven, Newlyn, Poole (two projects), Port Isaac, West Bay and Yarmouth are still under consideration.

  Since the closure of the scheme on 21 May 1999 the applications for projects at Calshot, Hole Haven and Langstone have been withdrawn by their sponsors.

  Waste Incineration
  Mr. Stunell
  To ask the Minister of Agriculture, Fisheries and Food what representations he received on the draft EU Directive, Air Pollution: Incineration of 142W
  Waste (Merging with Directive 94/67/EC Hazardous Waste), prior to its adoption; and if he will make a statement. [119676]

  Mr. Morley
  I have received representations on this Directive, for which DETR has responsibility, from the National Pig Association, the Countryside Alliance, the National Farmers Union, a veterinary clinic, three companies and 15 private individuals. The Directive has not yet been adopted.

  Fisheries
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what is his policy on the continued use of fisheries regulation 3760/92 after 2002. [119701]

  Mr. Morley
  Council Regulation 3760/92 is the basic framework regulation for the Common Fisheries Policy (CFP) and is due to be reviewed before the end of 2002. The Government are seeking to maintain highly valued features of the present arrangements, such as the national quota system based on relative stability and restrictions on access within national 6 and 12 mile limits, and believe that this will be achieved. At the same time, we will want to explore opportunities to improve the CFP to make it a more effective instrument for conserving fish stocks.

  GM Crops
  Joan Ruddock
  To ask the Minister of Agriculture, Fisheries and Food if he will publish the results of the GM trials involving grainseed; and if he will make a statement. [119785]

  Ms Quin
  [holding answer 20 April 2000]The results of the GM trials supporting the proposed National Listing of Chardon LL are publicly available, and copies have been placed in the Library of the House. The Grainseed Ltd. data relate to those columns headed "Ches" (Cheshire).

  Veterinary Medicines Directorate
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Veterinary Medicines Directorate for 2000–01. [120979]

  Mr. Nick Brown
  I have set the Veterinary Medicines Directorate the following performance targets for 2000–01:

  Safety and Quality

  (1) To provide high quality scientific assessment work.

  (2) To provide high quality policy advice to Ministers.

  (3) To comply with the timetables for entering Suspected Adverse Reactions (SAR) reports set out in the Plan and to report to the Veterinary Products Committee each quarter reviewing trends in SAR reports and identifying areas requiring evaluation.

  (4) To meet, in full, the requirements of the National Residues Surveillance Plan.

  Standards of Service
  (5) To comply with the timetables for handling applications under the centralised, decentralised and UK procedures set out in the Plan.

  Efficiency
  (6) of collect data for 2000–01 as the base year that will enable efficiency changes to be calculated in 2001–02.
  143W
  Financial Control
  (7) To recover from industry and Government the full economic cost (calculated according to resource accounting principles) of its main business activities of:

  licensing and surveillance

  policy work

  residue monitoring

  as a whole, without cross subsidy between these activities.

  (8) To operate within 95 per cent. to 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.

  Plan

  Suspected Adverse Reactions Surveillance Scheme reports:

  enter human reports on to the database within two working days

  enter serious animal reports on to the database within two working days

  enter non-serious animal reports on to the database within 10 working days

  Centralised Procedures

  All assessments (including Maximum Residues Limits) to be submitted within timetables agreed with the European Medicines Evaluation Agency.

  Decentralised Procedures

  All authorisations to be determined within the regulatory timetables.

  UK Procedures

  93 per cent. of new marketing authorisations to be determined or referred to the Veterinary Products Committee within 120 clock days; all to be determined within 210 clock days.

  95 per cent. of valid variation applications to have first assessment within 70 clock days; all to be determined within 150 clock days.

  95 per cent. of valid renewal applications to have first assessment within 85 clock days; all to be determined within 180 clock days.

  Farming and Rural Conservation Agency
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Farming and Rural Conservation Agency for 2000–01. [120976]

  Mr. Nick Brown
  I have set the Farming and Rural Conservation Agency the following performance targets for 2000–01:

  PLAN

  New Substances and Reviews

  Application type

  Planned receipts

  Planned completions

  Processing time (weeks)

  New Active Substances:

  Sift

  15

  12

  6

  Evaluation:

  —full

  13

  12

  52

  —resubmission

  7

  6

  52

  Reviews—UK

  UK anticholinesterase review programme—full reviews

  2

  7

  —

  Other UK review activity

  10

  16

  —

  Reviews—EC

  EU rapporteur reviews position on Annex 1 decisions

  11

  10

  —

  Total

  58

  63

  190

  1 Overall targets—90 per cent, of applications with a stated processing time must be completed within that time

  Note:

  The figures for New Substances and Reviews are based on work in hand and forecasts from Industry and the Commission
  144W
  Efficiency
  (1) To deliver a 3 per cent. saving compared to 1999–2000.

  Delivery of Services
  (2) 92 per cent. of work completed on time.
  (3) 90 per cent. of work completed to an "acceptable" or better standard as measured by a structured quality assessment process.

  Financial Performance
  (4) To recover from Government Departments and Agencies the full economic cost (calculated according to resource accounting principles) of its services.
  (5) To operate within 95 per cent. and 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.

  Pesticide Safety Directorate
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Pesticide Safety Directorate for 2000–01. [120977]

  Mr. Nick Brown
  I have set the Pesticide Safety Directorate the following performance targets for 2000–01:

  Quality of Service

  (1). To deliver the throughput of applications and processing times set out in the plan.

  (2) To deliver high quality policy advice to Ministers and respond positively to their policy objectives.

  (3) To deliver high quality scientific work.

  (4) To respond positively to the results of the Customer Satisfaction Survey.

  Efficiency
  (5) To meet the efficiency indicator targets in the agreed Efficiency Plan.

  Financial Performance
  (6) To recover from industry and Government the full economic cost (calculated according to the resource accosting principles) of its services.
  (7) To operate within 95 per cent. and 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.
  145W

  Technical Secretariat

  Application type

  Planned receipts

  Planned completions

  Processing time (weeks)

  Normal

  320

  350

  39

  Departmental Normal

  10

  10

  48

  Experimental Permit

  5

  5

  26

  Departmental Experimental Permit

  5

  5

  48

  Extrapolated Experimental Approval

  10

  10

  13

  Emergency Off Label

  25

  25

  10

  Non-emergency Off Label

  40

  40

  32

  Fast

  220

  220

  13

  Parallel Imports

  50

  50

  10

  Administrative Fast

  550

  550

  4

  Post Annex 1 Approvals

  55

  55

  —

  Mutual Recognition

  5

  5

  26

  Other

  5

  30

  —

  Total

  1,300

  1,355

  —

  Total of tables 1 & 2

  1,358

  1,418

  190

  1 Overall targets—90 per cent. of applications with a stated processing time must be completed within that time

  Veterinary Laboratories Agency
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Veterinary Laboratories Agency for 2000–01. [120978]

  Mr. Nick Brown
  I have set the Veterinary Laboratories Agency the following performance targets for 2000–01:

  Efficiency
  1. To deliver the efficiency savings in the Efficiency Plan.

  Service Delivery
  2. To achieve 85 per cent. of ROAME R&D milestones.
  3. To deliver 90 per cent. of export tests to published turnaround times.

  Service Quality
  4. (a) To achieve UKAS accreditation for appropriate export testing in Laboratory Testing Department.
  (b) To maintain the current accreditation programme.
  (c) To improve the VLA teamscore under the EFQM Excellence Model.

  Financial Performance
  5. To recover the full economic cost (before exceptional items and calculated in accordance with resource accounting principles) of its services.
  6. To operate within 95 per cent. and 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.

  Central Science Laboratory
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Central Science Laboratory for 2000–01. [120980]

  Mr. Nick Brown
  I have set the Central Science Laboratory the following performance targets for 2000–01:

  Efficiency
  1. To deliver the efficiency targets set out in the Business Plan.
  146W
  Quality and Delivery of Science
  (2) To review the methodology used for assessing customer satisfaction and undertake a survey in spring 2001 based on the review results.
  (3) To achieve a minimum of 85 per cent. of project milestones in MAFF commissioned projects.

  Financial Performance
  (4) To recover the full economic costs (calculated according to resource accounting principles) of its services, after allowing for relocation costs.
  (5) To operate within 95 per cent. and 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.

  Centre for Environment, Fisheries and Aquaculture Science
  Helen Jones
  To ask the Minister of Agriculture, Fisheries and Food what targets he has set the Centre for Environment, Fisheries and Aquaculture Science for 2000–01. [120981]

  Mr. Nick Brown
  I have set the Centre for Environment, Fisheries and Aquaculture Science the following performance targets for 2000–01:

  Delivery of Service
  (1) To give satisfaction to its customers in the way that outputs are provided taking account of the relevance, timeliness and value for money of outputs and the achievement of ROAME milestones.

  Quality of Science
  (2) To make satisfactory progress with the Action Plan resulting from the 1999–2000 Science Audit.

  Efficiency
  (3) To achieve the savings forecast in the Efficiency Plan

  Financial Performance
  (4) To recover from Government Departments and agencies and external customers the full economic costs (calculated according to resource accounting principles) of its services.
  (5) To operate within 95 per cent. and 100 per cent. of allocations by the MAFF Management Board for running costs, capital and receipts.

TREASURY

  Energy (Domestic Users)
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer if he will list the recent studies(a) undertaken, (b) commissioned and (c) reviewed by his Department that assess the elasticity of demand of domestic users of energy with respect to the price they pay; and if he will make a statement. [120413]

  Mr. Timms
  "Energy Projections for the UK, Working Paper, March 2000", made available by the Department for Trade and Industry alongside the Government's draft Climate Change Programme, implicitly includes within its projections updated estimates of the price elasticities of demand for domestic fuels. Previous to this, the Institute for Fiscal Studies produced a working paper for Customs and Excise titled "The Simulation of Indirect Tax Reforms: The IFS Simulation Program for Indirect Taxation (SPIT)" which also looked at the elasticity of demand for domestic fuel and power.

  Labour Market Data
  Mr. Fallon
  To ask the Chancellor of the Exchequer if he will list the pre-release recipients of labour market data from the Office for National Statistics. [120228]

  Miss Melanie Johnson
  [holding answer 2 May 2000]In accordance with long-standing practice, this information is provided to a tightly restricted group of officials on a strict "need-to-know" basis.

  MEP Pension
  Mr. Wigley
  To ask the Chancellor of the Exchequer what was the cost to his Department of funding the pensions of Members of the European Parliament in each of the last three years; to how may beneficiaries these payments are made; and what estimate he has made of the future annual liability for making such pension payments. [119585]

  Mr. Andrew Smith
  Expenditure on pensions is met from the EC budget.

  Sustainable Development
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer if it is the Government's policy that each government Department should give equal priority to promoting social progress, effective protection of the environment, the prudent use of natural resources and the maintenance of high and stable levels of growth in the second comprehensive spending review; how many times the Chairman of the Green Ministers Group has met the Chief Secretary to the Treasury to discuss integrating sustainable development in the second comprehensive spending review; how many of the draft public service agreements submitted to the Treasury explicitly refer to the promotion of sustainable development; and if he will make a statement. [119784]

  Mr. Andrew Smith
  At the start of the Spending Review last autumn, sustainable development was identified as a common issue for all Departments to take into account when drawing up their spending proposals. The Government's approach to sustainable development is set out in "A Better Quality of Life", published in May 1999.
  148W
  The Treasury asked that Green Ministers in Departments be closely involved in the preparation and conduct of Departmental contributions to the Review, to ensure that proper consideration is given to sustainable development issues. All Departments have now made their submissions, and the Treasury is assessing them to determine the extent to which further work is needed. Significant points are included in my Spending Review meetings with colleagues.

  The Financial Secretary acts as the Green Minister for the Chancellor's departments and as such attends Green Ministers meetings with the Chairman of that Group.

  Single Flights
  Mr. Welsh
  To ask the Chancellor of the Exchequer what is the taxable position of single flights(a) from and (b) to regions designated in section 19 of the Finance Bill. [120629]

  Mr. Timms
  [holding answer 2 May 2000]The effect of Clause 19 will be that passengers on flights from airports in the Scottish Highlands and Islands will be relieved of air passenger duty. Flights to the Scottish Highlands and Islands from other parts of the UK will not be covered by the exemption. However, the provisions of Clause 18 will mean that the duty on economy flights to the Scottish Highlands and Island will be halved to £5 while the duty on non-economy flights will remain at £10. Flights between airports in this region will be entirely exempt from duty.

  National Insurance
  Mr. Willetts
  To ask the Chancellor of the Exchequer what plans he has to increase the level of interest paid on backdated national insurance contribution rebates. [119940]

  Dawn Primarolo
  [holding answer 20 April 2000]The Department has paid, automatically, an additional 0.5 per cent. for each month of delay beyond October 1998. These payments are continuing, with Age Related Rebate payments due to be paid on 2 May 2000, increased by 9.5 per cent.

  The Department's compensation scheme is regularly reviewed and any changes to current arrangements will be published in the normal way.

  Region (Definition)
  Mr. Welsh
  To ask the Chancellor of the Exchequer what is his definition of "region" as used in section 19 of the Finance Bill; and how this relates to local government area and ward boundaries. [120628]

  Mr. Timms
  [holding answer 2 May 2000]Clause 19 introduces a provision which will allow passengers on flights from airports in certain regions to be exempt from Air Passenger Duty (APD). The regions will be defined by Treasury Order and it is the Government's intention that the order will name the Scottish Highlands and Islands. This region includes the local authority areas of Orkney, Shetland, Western Isles, Highland, Argyll and Bute, part of North Ayrshire and part of Moray.

  Climate Change Levy
  Mr. Hawkins
  To ask the Chancellor of the Exchequer what provision he has made to take account of the
  149W
  anti-competitive impact of relief from climate change taxes or levies made by environmental ministries in other EU countries as applied to gas companies. [120100]

  Mr. Timms
  The Government have sought to design the climate change levy in a way that maximises its environmental effectiveness while protecting the competitiveness of UK firms. This has involved taking into account developments in other EU countries.

  In total, seven European Union countries have introduced carbon or energy taxes since 1990. The European Commission considers compliance with state aids rules for any reliefs from these taxes.

  On current projections, most OECD countries will need to introduce new measures of one form or another if they are to meet their Kyoto targets for reducing greenhouse gas emissions.

  Educational Qualifications
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer how many of those in(a) 1980 and (b) 1999 in the lower quartile of earners had no educational qualifications. [120665]

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

  Letter from John Pullinger to Mr. Gerald Howarth, dated May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question on the number of people in the lower quartile of earners who had no educational qualifications. I am replying in the Director's absence.
  The Labour Force Survey (LFS) is the ONS's main source of labour market data on individuals. It can provide information on the earnings and qualifications of employees. However, no LFS data on earnings are available prior to winter (December-February) 1992/3.
  In Great Britain in autumn (September to November) 1993, 1,611,000 employees aged 16 and over in the lower quartile earnings group (based on gross weekly earnings) had no qualifications. This was 30.2 per cent. of all employees aged 16 and over in this earnings group. In autumn 1999, the corresponding figures were 1,140,000 and 91.4 per cent. The figures are not seasonally adjusted.

  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer how many of the long-term unemployed in(a) 1970, (b) 1980 and (c) 1999 had no educational qualifications. [120666]

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

  Letter from John Pullinger to Mr. Gerald Howarth, dated 3 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question on long-term unemployed people with no educational qualifications. I am replying in the Director's absence.
  Estimates of economic status and educational qualifications are available from the Labour Force Survey (LFS). Non-seasonally adjusted estimates from the spring (March-May) 1999 quarter for the UK show that 33 per cent. (170 thousand) of long-term unemployed people of working age had no educational qualifications. This compares with 59 per cent. (882 thousand) in the same period in 1984 (the earliest date for which a comparable estimate can be provided.).
  150W
  The measure of unemployment derived from the LFS is defined on a consistent and internationally recognised basis set out by the International Labour Organisation (ILO). It counts as unemployed people who are a) without a paid job, b) available to start work within the next two weeks and c) have either looked for work in the last four weeks or are waiting to start a job already obtained. Long-term unemployed are those who have been ILO unemployed for one year or more.

  Teenage Suicides
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer how many teenage suicides there were in(a) 1970, (b) 1980 and (c) 1999; and what percentage of teenage suicides occurred in homes at a time when (i) one parent and (ii) both parents were present. [120663]

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

  Letter from John Pullinger to Mr. Gerald Howarth, dated 3 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question on teenage suicides in (a) 1970, (b) 1980 and (c) 1999; and the percentage of teenage suicides occurring in homes at a time when (i) one parent and (ii) both parents were present. I am replying in the Director's absence.
  Figures for the number of suicides for 1970, 1980 and 1998, the latest year for which figures are currently available, are given in the attached table.
  For adult deaths our usual practice is to define suicides as including both suicides and deaths from injury and poisoning undetermined whether accidentally or purposely inflicted. It is likely that most undetermined deaths (open verdicts) among adults are cases where the harm was self-inflicted but there was insufficient evidence to prove that the deceased deliberately intended to commit suicide. This is not necessarily the case for children and the categories are therefore separately presented here.
  Information is routinely collected on the place of death, but not on the place of occurrence of the suicide attempt. In many cases where the initial attempt was at home, the patient would ultimately die in hospital. Any statistics on suicide deaths at home would therefore understate the real level. Information on persons present at a death is not routinely recorded.

  Suicide and undetermined injury deaths for teenagers (ages 13 to 19), England and Wales

  1970

  1980

  1998

  Suicide and self inflicted injury1 Injury undetermined whether

  79

  126

  110

  accidentally or purposely inflicted2

  31

  62

  81

  1 International Classification of Diseases, Eighth and Ninth Revisions, codes E950-E959

  2 International Classification of Diseases, Eighth Revision (1970), codes E980-E989, Ninth Revision (1980 and 1998), codes E980-E989 excluding E988.8

  Family Statistics
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer if he will estimate the average fall in income arising from divorce for a divorced(a) father and (b) mother with their children in (i) 1980 and (ii) 1999. [120661]
  151W
  Miss Melanie Johnson
  The information requested falls within the responsibility of the Director of the Office for National Statistics. I have asked him to reply.

  Letter from John Pullinger to Mr. Gerald Howarth, dated 3 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question asking for an estimate of the average fall in income arising from divorce for a divorced (a) father and (b) mother with their children in (i) 1980 and (ii) 1999. I am replying in the Director's absence.
  The ONS does not make estimates of this kind. One non-government source that allows this type of analysis is the British Household Panel Study, funded by the Economic and Social Research Council (ESRC). This survey has followed a sample of households each year since 1991 and has information about the incomes and marital status of household members in each of these years. The Institute for Social and Economic Research (ISER, formerly the ESRC Research Centre on Micro-Social Change) published an analysis showing the effect of marital splits on income between 1991 and 1994. This was published in 1997 as 'Marital splits and income changes: evidence for Britain' (Working Paper 97–4). You can obtain a copy from the information officer at the ISER, tel: 01206 872938.

  Divorce
  Mr. Gerald Howarth
  To ask the Chancellor of the Exchequer how many of(a) the total unemployed and (b) the long-term unemployed in (i) 1970, (ii) 1980 and (iii) 1999 were divorced. [120667]

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

  Letter from John Pullinger to Mr. Gerald Howarth, dated 3 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question on the numbers of unemployed people with were divorced. I am replying in the Director's absence.
  Estimates of economic and marital status are available from the Labour Force Survey (LFS). The table gives non-seasonally adjusted LFS estimates of the unemployed who were divorced in the spring (March-May) quarter of 1999 and the same period in 1984 (the earliest date for which a comparable estimate can be provided).
  The measure of unemployment derived from the LFS is defined on a consistent and internationally recognised basis set out by the International Labour Organisation (ILO). It counts as unemployed people who are a) without a paid job, b) available to start work within the next two weeks and c) have either looked for work in the last four weeks or are waiting to start a job already obtained. Long-term unemployed are those who have been ILO unemployed for one year or more.

  Divorced persons by length of ILO unemployment UK, 1999 and 1984, Spring (March to May) of each year

  All persons (000)

  Divorced person (000)

  Divorced (%)

  1999

  All ILO Unemployed

  1,752

  170

  10

  Unemployed one year or more

  522

  68

  13

  1984

  All ILO Unemployed

  3,216

  167

  5

  Unemployed one year or more

  1.540

  99

  6

  Source:

  Labour Force Survey, ONS

HOME DEPARTMENT

  Animal Experiments
  Mr. Wyatt
  To ask the Secretary of State for the Home Department if tobacco smoke is used as an agent in research on animals under the Animals Scientific Procedures Act 1986; and if he will make a statement. [119718]

  Mr. Mike O'Brien
  The Government stand firmly by their ban on the testing of tobacco products announced in November 1997. There will be no approval for any such tests.

  Two recently approved applications are for programmes that do not test the effects of tobacco smoke, which are already widely known, but enable the development of treatments for chronic obstructive pulmonary diseases such as bronchitis and emphysema which seriously debilitate many people. These health problems derive mainly from smoking, including passive smoking, as well as occupation-related lung diseases, such as those caused by the inhalation of coal dust. Tobacco smoke is the only test material to model reliably the effects that will enable a better understanding of the disease processes and improved medical treatments. The licensed research programmes are to investigate medical treatments, not the safety of tobacco products.

  The Inspectorate and the Animal Procedures Committee have advised that the licences are justifiable and that the benefits to man and animals would outweigh the costs to the animals involved. As with all project licence applications, these two licences were issued only after a full and careful assessment including whether there were alternatives which replace animal use, reduce the number of animals needed or refine the experimental design to minimise suffering.

  Cannabis
  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department what has been the total number of(a) convictions and (b) police cautions for possession of cannabis in each year since 1980. [119921]

  Mr. Charles Clarke
  The information requested for the period 1980 to 1998, the latest year for which figures are currently available, is given in the table. Separate breakdowns are not available for cautions and convictions prior to 1982.

  Cautions and convictions for possession of cannabis, UK 1980 to 1999

  Number of cautions

  Number of convictions

  1980

  1—

  212,450

  1981

  1—

  213,074

  1982

  422

  14,856

  1983

  1,078

  16,628

  1984

  1,948

  15,914

  1985

  3,328

  14,885

  1986

  4,014

  12,421

  1987

  5,747

  12,833

  1988

  8,307

  14,921

  1989

  11,781

  18,249

  1990

  16,282

  19,804

  1991

  19,583

  18.874

  1992

  22,113

  15,330

  1993

  30,871

  14,495

  1994

  39,248

  25,850

  153W

  Cautions and convictions for possession of cannabis, UK 1980 to 1999

  Number of cautions

  Number of convictions

  1995

  41,155

  27,447

  1996

  38,318

  26,636

  1997

  45,362

  32,150

  1998

  48,480

  40,119

  1 Not available

  2 Total number of cautions and convictions

  Source:

  Home Office Research, Development and Statistics Directorate

  Stop and Search
  Ms Buck
  To ask the Secretary of State for the Home Department what the breakdown was by percentage of stop and searches for each police borough in the Metropolitan police area under section 1 of the Police and Criminal Evidence Act 1984 by(a) ethnic appearance and (b) reason for search, in 1998–99. [119830]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis has provided the information requested which I have placed in the Library.

  These statistics update those published by the Home Office, under section 95 of the Criminal Justice Act 1991, in 'Statistics on Race and the Criminal Justice System', in December 1999.

  Prisoners (Progressive Moves)
  Mr. Gerrard
  To ask the Secretary of State for the Home Department on what date Quayyum Raja, currently detained at HMP Long Lartin, was convicted; what was his sentence; how long he has been detained at Long Lartin; and when he is due to be released. [120035]

  Mr. Boateng
  Quayyum Raja was sentenced to life imprisonment on 7 February 1985. He was given a tariff of 25 years which expires on 1 February 2009. His readiness for release or transfer to open conditions will be considered by the Parole Board for the first time in 2006. He has been detained at Long Lartin prison since 17 February 1992.

  Mr. Gerrard
  To ask the Secretary of State for the Home Department how many prisoners detained at HMP Long Lartin were offered progressive moves to other prisons in each of the last three years, and in the current year to date, and of those how many(a) accepted and (b) declined the transfer; and of those who declined the transfer, how many were placed in segregation. [120004]

  Mr. Boateng
  This information is not readily available and cannot be provided in the form requested except at disproportionate cost. It is known, however, that during the last 30 months Long Lartin prison has offered progressive moves to approximately 50 category B life sentence prisoners.

  A minority of prisoners do indicate a reluctance to comply with initial transfer instructions, but in almost all cases do move following representations to Prison Service headquarters.

  Prisoners are not placed in segregation for refusing a progressive move.
  154W
  Mr. Gerrard
  To ask the Secretary of State for the Home Department if prisoners who undertake a progressive move normally become eligible for home leave or parole prior to release. [120036]

  Mr. Boateng
  Life sentence prisoners become eligible for escorted absences to towns near their establishments after having completed six months in category C conditions. They are not eligible for any form of unsupervised home leave or any other form of temporary release until they have reached open conditions.

  All prisoners sentenced to determinate sentences of four years or more are eligible to be considered for parole once they reach the halfway point of their sentence. Moves between prisons and recategorisation do not affect their eligibility for parole.

  Mr. Gerrard
  To ask the Secretary of State for the Home Department for what reason Mr. Quayyum Raja was placed in segregation at HMP Long Lartin after refusing a progressive move to HMP Swaleside; and whether(a) he and (b) his officials were informed of this prior to the segregation taking place. [120037]

  Mr. Boateng
  Mr. Quayyum Raja has never been placed in segregation as a result of refusing a progressive move from Long Lartin to Swaleside prison.

  Mr. Raja's refusal to move to Swaleside was in contravention of his sentence plan, a crucial part of his progress towards eventual release. This led to him being downgraded to basic level on the Prison Service incentives and earned privileges scheme and moved to the basic regime wing at Long Lartin prison.

  The Prison Service has now re-considered Mr. Raja's case in the light of recent changes in the availability of accommodation at Gartree prison and Mr. Raja has now accepted a move to Gartree.

  Black Box Recorders
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department when the Metropolitan police expects to install black box recorders in its police vehicles; and if he will make a statement. [120000]

  Mr. Charles Clarke
  The Commissioner of the Police of the Metropolis has informed me that the tendering process for the supply of black box recorders for police vehicles is under way and it is hoped that a contract will be awarded shortly. A phased installation programme will then take place.

  Illegal Drugs (Lancashire)
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department how many convictions there were in Lancashire in each year since 1995 for(a) offering to supply or supplying and (b) possessing (i) cannabis and (ii) ecstasy. [119848]

  Mr. Charles Clarke
  The information requested for the period 1995 to 1998, the latest year for which figures are currently available, is given in the table.
  155W

  Convictions in Lancashire for supply and possession of cannabis and ecstasy, 1995–98

  1995

  1996

  1997

  1998

  Supply

  Cannabis

  56

  53

  49

  67

  Ecstasy

  10

  17

  15

  9

  Possession

  Cannabis

  678

  720

  1,010

  1,338

  Ecstasy

  38

  49

  38

  25

  Note:

  Offering to supply and supply of drugs are both caught by Section 4(3) of the Misuse of Drugs Act 1971 and are not differentiated for statistical purposes.

  Source:

  Home Office Research, Development and Statistics Directorate

  Lord Archer
  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department what is the estimated cost to date of the Metropolitan police investigation into the allegations of perjury made against Lord Archer of Weston-Super-Mare. [120001]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis has informed me that up to 19 April, the staffing cost of the Organised Crime Group investigation into allegations of perjury made against Lord Archer is approximately £31,000.

  Asylum Seekers
  Mr. Cox
  To ask the Secretary of State for the Home Department how many applications for political asylum in the UK in 1999 were(a) approved and (b) refused. [119280]

  Mrs. Roche
  The information requested is given in the table. The latest information on asylum is available on the Home Office internet site at http://www.homeoffice. gov.uk/rds/index.htm. This information is updated on a monthly basis.

  Applications received for asylum in the United Kingdom, excluding dependants, by location of application, and decisions, 19991 United Kingdom

  Annual total

  Applications received:

  Total applications

  71,160

  Applied at port

  29,455

  Applied in country2

  41,700

  Decisions:3,4

  Total decisions

  532.330

  Cases considered under normal procedures:

  Recognised as a refugee and granted asylum

  57,075 6(36%)

  Not recognised as a refugee but granted exceptional leave

  52,110 6(11%)

  Refusals:

  Total refused

  510,685 6(54%)

  Refused asylum and exceptional leave after full consideration

  57,735 6(39%)

  Refused on safe third country grounds

  1.830 6(9%)

  Refused on non-compliance grounds7

  51.120 6(6%)

  Backlog clearance exercise:

  Granted exceptional leave under backlog criteria8,9

  11.230 6(90%)

  Refused on non-compliance grounds under backlog criteria8,10

  1,230 6(10%)

  Applications withdrawn:

  730

  1 Figures (other than percentages) rounded to the nearest five.

  2 This excludes some cases lodged at Local Enforcement Offices and some postal applications.

  156W
  3 Decisions do not necessarily relate to applications made in the same period.

  4 Information is of initial determination decisions, excluding the outcome of appeals or other subsequent decisions.

  5 Provisional figures.

  6 Percentages for cases considered under normal procedures and those within the backlog clearance exercise, are calculated separately.

  7 Paragraph 340 (paragraph 180F prior to I October 1994) of the Immigration Rules, for failure to provide evidence to support the asylum claim within a reasonable period, including failure to respond to invitation to interview to establish identity.

  8 Cases decided under pragmatic measures aimed at reducing the pre 1996 asylum application backlog.

  9 Includes a small number of cases where asylum has been granted.

  10 Includes a small number of cases where the application has been refused on substantive grounds.

  Notes:

  1. Decision figures for January to March 1999 are low due to significant interruption to the casework operation during the transition of IND staff to Integrated Caseworking. This interruption also effects a small proportion of in-country applications in January 1999 which have been estimated.

  2. Port figures for January 1999 are estimated and subject to revision.

  Probation
  Jackie Ballard
  To ask the Secretary of State for the Home Department what was the average length of time from breach of a probation condition to the offender's appearance in court for each probation service in England and Wales in the last 12 months for which figures are available. [120191]

  Mr. Boateng
  There is currently no centrally held data on this. We are trying to ascertain the national picture and are in the process of obtaining information which may provide an indication of the average time lapse between the service instigating breach action with the court and the breach sentence hearing. The results are not yet available, but I will write to the hon. Member as soon as the position is clearer.

  Jackie Ballard
  To ask the Secretary of State for the Home Department how many unexecuted warrants for the arrest of offenders in breach of probation conditions are held by each police force in England and Wales. [120192]

  Mr. Charles Clarke
  The information requested is not available centrally. However, the Government are concerned that warrants in respect of breaches of community sentences should be executed as soon as possible, and we are currently undertaking some research to determine the current position. I shall write to the hon. Member when the results are available.

  Special Constables (Ethnic Minorities)
  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women from ethnic minority communities living within Greater London were special constables on 1 April. [120071]

  Mr. Charles Clarke
  The Commissioner of Police of the Metropolis informs me that on 1 April 2000, 92 men and 28 women from ethnic minority communities were serving as special constables with the Metropolitan police.
  157W

  Passports
  Mr. Gibb
  To ask the Secretary of State for the Home Department how many foreign passports the Passport Office holds which are currently unaccounted for. [120119]

  Mrs. Roche
  The Immigration and Nationality Directorate (IND) is, at present, holding some 300 foreign passports for which there is no current address for the owners. Arrangements are being made to return the documents to the appropriate embassy or High Commission in the United Kingdom.

  Disabled Prisoners
  Ms Ward
  To ask the Secretary of State for the Home Department what assessment he has made of the impact of the Disability Discrimination Act 1995 on facilities for disabled prisoners. [120612]

  Mr. Boateng
  The Prison Service has developed policies that reflect the requirements of Part III of the Disability Discrimination Act 1995 (Goods, Facilities and Services) at each of its implementation stages.

  A working group has been established by the Prison Service to assess the impact of the next stage of the Act, due in 2004, and to develop policies that will enable it to meet those requirements.

  Prisons (Mother and Baby Units)
  Sir Peter Lloyd
  To ask the Secretary of State for the Home Department how many mothers with young babies sentenced or remanded to prison were admitted to mother and baby units in the most recent 12 month period for which figures are available. [120622]

  Mr. Boateng
  There are 64 places in total available in the four prison mother and baby units. On 17 April 2000. there were 51 mothers and their babies in the units.

  The information requested is given in the table.

  Number of mothers admitted to prison mother and baby units for the period 5 April 1999 to 4 April 2000

  Remands

  Convicted awaiting sentence

  Sentenced

  Total

  Askham Grange

  0

  0

  10

  10

  Holloway

  3

  2

  34

  39

  New Hall

  5

  0

  20

  25

  Styal

  4

  0

  20

  24

  Total

  12

  2

  84

  98

  Sir Peter Lloyd
  To ask the Secretary of State for the Home Department what efforts are made to inform women received into prisons that they may apply for a place in a mother and baby unit if they already have a baby. [120621]

  Mr. Boateng
  The Prison Service Order on "The Management of Mother and Baby Units and the Application Process", which was published in February, requires all women's prisons to appoint a named liaison officer to be responsible for ensuring that all women, sentenced or unsentenced, who are pregnant or have a child under eighteen months are identified and informed 158W
  of the arrangements for applying for a place on a mother and baby unit. All women's prisons now have a named liaison officer.

  A new prisoner information booklet "All About Mother and Baby Units" was published and widely distributed to all women's prisons in March. Any eligible woman prisoner who expresses an interest in applying for a place for her child must be provided with the booklet which contains the standard application form.

  Internet Voting
  Mr. Paul Marsden
  To ask the Secretary of State for the Home Department what plans he has to introduce voting via the Internet in(a) local, (b) national and (c) European elections; and if he will make a statement. [120368]

  Mr. Mike O'Brien
  The Representation of the People Act 2000 allows local authorities to make applications to run pilot schemes involving innovative electoral procedures. Five local authorities will be piloting electronic voting or counting at the local elections on 4 May 2000 though none of these schemes involves internet voting.

  Women Prisoners (Maternity Pay)
  Sir Peter Lloyd
  To ask the Secretary of State for the Home Department if women prisoners who have been employed inside prisons and give birth are paid maternity pay. [120620]

  Mr. Boateng
  Women prisoners who have been employed within prisons and give birth are paid an allowance under regulations set out in the Prisoner Pay Manual 1992 and Standing Order 6 regulations 1993. Under these regulations, scope exists for establishments to set their own rates of pay in addition to the prescribed minima. Women prisoners are entitled to child benefit if their babies remain with them. Consideration is currently being given to introducing specific maternity pay where a woman prisoner is unable to work as a consequence of pregnancy, childbirth or caring for a child.

CABINET OFFICE

  Online Services
  Mr. Robert Jackson
  To ask the Minister for the Cabinet Office if she will list the services which(a) her Department and (b) the executive agencies responsible to her Department (i) provide online and (ii) expect to be deliverable online by 2002. [119446]

  Mr. Ian McCartney
  So that the Cabinet Office can publish the spring 2000 report monitoring progress towards delivery of all Government services electronically by 2005 we are currently collecting data which will include our progress on delivering 25 per cent. of Government services electronically by 2002. I do not want to pre-empt that report; however, I have included examples of the electronic services we provide, or are planning to provide, in the table.
  159W

  Name

  Services currently provided online

  Services expected to be deliverable by 2002

  Cabinet Office, including: (www.cabinet-office.gov.uk)

  Central Secretariat

  None at present

  The Civil Service Guidance Directory will be put on the internet which will have an Access search database for people to find their way around the document.

  Civil Service Pensions

  Roll-out of full computerised pension administration system PenServer (August/September 2000). Electronic access for pensioners introduced (autumn 2000).

  Internet access for employers/scheme members to access personal data planned through Pen Web (December 2002).

  New Civil Service pension arrangements will be web-enabled, with communications strategy designed in that context (January 2002).

  Fast Stream, European and Recruitment Division

  Civil Service Recruitment website gateway. Vacancy gateway established with departments December 1999. Site currently under reconstruction.

  Fast stream recruitment (May 2001). New contracts are currently being tendered. The new arrangements will involve a mix of in-house and external service delivery, all linked via a single communications portal and IT/IS support facilities.

  Finance being sought for further development similar to that of the award-winning Army site by December 2000.

  The new arrangements will provide the option for electronic application handling; and will replace paper-based testing at sift stage (12,000 candidates) with computer-based testing.

  Government Information and Communication Service (www.gics.gov.uk)

  Website already established (July 1999) to replace paper versions of recruitment material and provide additional information about the workings of GICS to potential new recruits.

  Work now under way to establish a system which will enable candidates to receive application forms and complete them electronically for postal return of signed hard copy, by mid 2001.

  The intention is to establish a system where all stages of the recruitment process can be completed electronically—the timing of our ability to receive completed application forms electronically will depend or progress towards a widely accepted form of electronic signature.

  Her Majesty's Stationery Office (www.hmso.gov.uk)

  In June 1999 an electronic order form was introduced to enable MEPs to order official publications via HMSO over the internet. Inforoute gateway at prototype stage. Most Departments in early stages of developing their Information Asset Registers. Work is under way to ensure seamless access via the web, streamlined procedures for creating records, and close co-ordination with other information management initiatives.

  Future plans are for Standard Licence Terms for reproduction of extracts from Crown and Parliamentary copyright protected material—apply and receive electronically.

  Submitting application to reproduce Crown and Parliamentary copyright protected material Database of full-text copies of UK legislation

  Information Division

  1. Press Notices—Issue of Press Notices (in association with COI) to journalists. Version 4.0 in place which allows us to e-mail press notices to COI-NDS who process file and fax to a specified list (which we maintain). Possible for press notice to be on 999 recipients fax machines approximately two minutes after the transfer of the file to COI is complete.

  Version 5.0 of the software will allow the same process to be carried out but the delivery will also be available by e-mail.

  2. Cabinet Office Research and Briefing System—The system is in a prototype form at present. A project plan has been written and is being implemented. A staged roll-out will take place, which when completed will allow all divisions in the Cabinet Office to access and input information.

  Initial 1" phase roll-out by the end of March—full roll-out to be agreed, but probably no later than the end of May.

  Modernising Public Services (www.servicefirst.gov.uk)

  Spreading Best Practice database—Online database established in July 1999, and copies of most Cabinet Office best practice publications are contained in a virtual library.

  The best practice website will be extended to provide a gateway to best practice material across the public sector by 2003.

  CharterMark Assessment—Considering the possibility of allowing Charter Mark applicants to apply for the Award online. No firm plans yet.

  Procurement Unit (www.cabinet-office.gov.uk/purchasing/index.htm)

  None at present

  The Unit will be expanding its electronic communications with suppliers, but cannot predict the extent to which that will have been achieved by 2002. The Unit is dependent on developments being undertaken by others, particularly the Office of Government Commerce.

  Public Appointments Unit (www.Public-appointments -directory.gov.uk)

  The placing on the GSI of the Public Appointments Unit 'Central List'. This is a database which contains details of approximately 5,500 people seeking a public appointment. Work is continuing with COI on a tendering exercise for the 'Central List' to be placed on the GSI.

  The Unit is also planning to put their PAU Application form on.

  It is anticipated that the 'Central List' will be available via the GSI by the end of 2000.

  160W 161W

  Name

  Services currently provided online

  Services expected to be deliverable by 2002

  The QUANGO website (www.Quango.gov.uk)

  The 'Quango' website on the Cabinet Office internet site is being developed and enhanced. It is planned that the website will have links to all advertisements for public appointments; an electronic application form for the 'Central List'; and news of public appointments for candidates. Work is under way to establish links to OGDs websites. COI has been commissioned to produce the new application form, which will be put on the 'Quango' website.

  The Unit is dependent on OGDs websites. However, it is anticipated that most departments will have a Public Appointment website that we will be able to link with by the end of 2001.

  Regulatory Impact Unit (www.cabinet-office.gov.uk/regulation/index.htm)

  In order to improve the quality of regulation enforcement, the Cabinet Office (Regulatory Impact Unit) commissioned external consultants to set up a web called INFOSHOP. The INFOSHOP System is designed to answer queries on food safety, health and safety, building control and planning regulation.

  Pilot January 2000 to April 2000. Pilot report May 2000–02–28. 2000, server based system rolled out to local authorities. 2000, web-based version rolled out; likely to be by Small Business Service.

  Social Exclusion Unit (www.cabinet-office.gov.uk/seu/index.htm)

  The Social Exclusion National Strategy for Neighbourhood Renewal consultation report published recently invites members of the public to send their responses through via the internet link to an e-mail address within the Unit. The Unit will provide this online service for all future consultation exercises.

  The Unit is also proposing a complete re-design of its existing website. This re-design will seek to incorporate Chat Forums, a Newsgroup Bulletin Board and as many up to date facilities as possible to enable individuals and organisations to obtain and exchange information with the Unit.

  Agencies

  Government Car and Dispatch Agency

  GCDA does not currently have an internet site. They are targeted to have their own presence by April 2001.

  GCDA expect to be trading online with customers by April 2002.

  Central Office of Information (www.coi.gov.uk/coi

  COI does not provide services to the public. As part of its service to other Government Departments, COI issues Government press releases through its dedicated News Distribution Press Release website, which can also be accessed via a link from COI's general website.

  There are no plans to introduce further online services through the COI websites.

HEALTH

  Health Facilities (Shropshire)
  Mr. Peter Bradley
  To ask the Secretary of State for Health if he will list by constituency the(a) GP surgeries, (b) dental practices, (c) pharmacies and (d) cottage hospitals serving rural communities in Shropshire which (i) closed and (ii) opened (1) between 1979 to 1997 and (2) since May 1997. [118550]

  Yvette Cooper
  The information requested is not available by constituency for general practitioner surgeries, cottage hospitals and pharmacies—the figures for Shropshire as a whole are available. Information for dental practices is listed by constituency but is only available for the earlier period between January 1988 and April 1997.

  1979–1997

  GP Surgeries

  There were no main surgery closures during this period, although a small number of branch surgeries or outlying consulting facilities did close. A new main GP surgery opened in Telford.

  Dental practices

  Period between Jan 1988 to Apr 1997

  Constituency

  Practice closed

  Practice opened

  Ludlow

  2

  1

  North Shropshire

  1

  6

  Shrewsbury and Atcham

  5

  3

  Telford

  2

  4

  The Wrekin

  1

  2

  Total

  11

  16

  162W
  Dental practices may include not only those in the General Dental Service but also practices for the Emergency Dental Service and Personal Dental Service. Some closures and openings are for the same location where the practice has reopened under a different name. Also, a number of dental practices did cease to treat some or all of their patients as National Health Service patients during this period.

  Cottage Hospitals

  The following eight cottage hospitals closed during the period 1979–1997:

  Broseley Hospital

  Wellington Cottage Hospital

  Ellesmere Cottage Hospital

  Much Wenlock Cottage Hospital

  Oswestry and District Hospital

  Market Drayton Cottage Hospital

  Newport Hospital

  Whitchurch Cottage Hospital.

  During this period, the following hospitals were also closed:

  Wrekin Hospital (geriatric unit, but GP maternity inpatient service remains)

  Crosshouses (geriatric unit—currently used as NHS trust offices)

  The Beeches (geriatric unit—now an independent sector nursing home)

  Monkmoor (geriatric unit).

  Pharmacies

  During the period 1979–1997, three pharmacies closed.
  163W
  May 1997 to date

  GP Surgeries

  There have been no GP surgery closures since May 1997. One new surgery in Telford has opened which is a personal medical services pilot project.

  Dental practices

  Period between May 1997 to Jan 2000

  Constituency

  Practice closed

  Practice opened

  Ludlow

  0

  2

  North Shropshire

  1

  1

  Shrewsbury and Atcham

  0

  4

  Telford

  1

  2

  The Wrekin

  0

  4

  Total

  2

  13

  Many of the opening practices have been due to investing in dentistry and personal dental service schemes.

  Cottage Hospitals

  There have been no cottage hospital closures since May 1997. Extensive development is taking place at Bridgnorth Community Hospital.

  Pharmacies

  There have been two community pharmacy closures and one pharmacy opening since May 1997.

  Free School Milk
  Mr. Breed
  To ask the Secretary of State for Health (1) what recent representations he has received regarding the reintroduction of free milk for school children; [119008]

  (2) what recent discussions he has had with the Secretary of State for Education and Employment regarding the reintroduction of free milk for school children; and if he will make a statement. [119010]

  Yvette Cooper
  Policy on school milk is a matter for my right hon. Friend the Secretary of State for Education and Employment and representations on this matter are passed to him for consideration. One representation has been received as part of the consultation on the scientific review of the welfare food scheme. It is being considered along with all the other responses received.

  My right hon. Friend the Secretary of State for Health has not had any recent discussions with my right hon. Friend the Secretary of State for Education and Employment regarding the reintroduction of free milk for school children.

  Taxol and Taxitere
  Mr. Fabricant
  To ask the Secretary of State for Health if Taxol and Taxitere are available free of charge to NHS cancer patients in the South Staffordshire Health Authority area. [119179]

  Yvette Cooper
  Taxanes, a group of cancer drugs including Taxol and Taxitere, are funded on the National Health Service in the South Staffordshire Health Authority area. Each case is assessed on an individual basis as to the potential benefits of using this particular group of drugs.
  164W
  Nationally, the efficiency and effectiveness of taxanes is currently being assessed by the National Institute of Clinical Excellence. The process is still continuing, but we expect the guidance to be issued shortly.

  Cancer Services
  Dr. Gibson
  To ask the Secretary of State for Health (1) what guidelines he has issued to(a) GPs and (b) health authorities regarding the diagnosis guidelines issued in the paper entitled, "Beating Bowel Cancer"; and if he will make a statement; [118959]

  (2) what assessment his Department has made of the diagnosis guidelines issued by the paper entitled "Beating Bowel Cancer"; and if he will make a statement. [118960]

  Yvette Cooper
  "Beating Bowel Cancer" aims to raise awareness of the symptoms of colorectal cancer. The Department published cancer referral guidelines, including those for suspected colorectal cancer, on the NHSWeb and the internet on 31 March. We are also sending copies to all general practitioners in England as well as to health authorities, National Health Service trusts and primary care groups. These guidelines will help GPs to identify more easily those patients with suspected cancer so that they can be referred promptly and appropriately for specialist investigation.

  Dr. Gibson
  To ask the Secretary of State for Health how much the NHS spent on supportive care treatments for cancer for each of the last five years; broken down by tumour type. [118963]

  Yvette Cooper
  Supportive treatments for cancer sufferers are important for maintaining quality of life for cancer patients by alleviating pain, countering the side effects of other treatments and for secondary prevention.

  Information on spend on cancer treatment in supportive care is not currently available.

  The Department has commissioned work to improve overall National Health Service information, including national statistics on hospital prescribing, which will give us a more accurate method of recording hospital expenditure in cancer treatment.

  Dr. Gibson
  To ask the Secretary of State for Health what representations he has received regarding the Medical Research Council's proposed CR08 trial into the treatment of colorectal cancer; and if he will make a statement. [118958]

  Yvette Cooper
  The Medical Research Council are still finalising the details of this trial to assess the role of two new agents in the management of advanced colorectal cancer.

  The arrangements for National Health Service support for the trial will be handled through the existing mechanisms laid out in the "Concordat Between the Health Departments and the Medical Research Council, 1997", and "Health Service Guidelines, HSG (97)32", copies of which are available in the Library.

  Osteoporosis
  Dr. Kumar
  To ask the Secretary of State for Health what funds have been allocated and to which projects for research and development on osteoporosis; and if he will make a statement. [119152]
  165W
  Yvette Cooper
  Our funding for research is provided through a number of routes.

  The Medical Research Council (MRC) is the main agency through which we support research on the causes and treatment of disease. The MRC receives most of its income via grant-in-aid from the office of my right hon. Friend the Secretary of State for Trade and Industry. The Department funds research to support policy development in health and social care, and to support effective practice in the National Health Service. The Department also provides NHS support funding for research commissioned by the MRC and charities that takes place in the NHS.

  The MRC spent £2.7 million in 1999–2000 on research of direct relevance to osteoporosis. It has a wide portfolio of work ranging from a number of epidemiological studies at the MRC Environmental Epidemiology Unit to more basic work on bone density being carried out at a number of other institutions.

  The Department is funding the following projects: "A Systematic literature review of technologies for the diagnosis and monitoring of osteoporosis"—Cost: £55,770, and "Treatment of established osteoporosis"—Cost: £77,704.

  In addition, the Department of Health provides support for research commissioned by charities and the Medical Research Council that take place in the NHS. Project details of work directly funded by the Department or supported through NHS research and development funding can be found on the National Research Register (NRR). This is available in the Library and most medical libraries on CD Rom, and on the internet: http://www.doh.gov.uk/nrr.htm. The NRR contains many details of projects/trials relating to osteoporosis.

  Priorities for departmental research and development support for the development of policy are determined through discussion with policy colleagues, the Departmental Research Committee and Ministers. In the NHS research and development programme, priorities take account of widespread consultation with those using, delivering and managing services, within a framework overseen by the Central Research and Development Committee for the NHS. In all cases, priorities for our budgets reflect analysis of the burden of disease, potential benefits, our priorities, and take account of the responsibilities and work of other funders.

  Teenage Pregnancy
  Ms McCafferty
  To ask the Secretary of State for Health what steps he is taking to reduce the number of unplanned teenage pregnancies; and if he will make a statement. [119186]

  Yvette Cooper
  I refer my hon. Friend to the reply given by my right hon. Friend the Prime Minister on 14 June 1999,Official Report, column 17W.

  The Social Exclusion Unit's report on teenage pregnancy, published on 14 June 1999, sets out a thirty point action plan working across Government. It highlights two main goals:
  Reducing the number of teenage conceptions, with the specific aim of halving the rate of conceptions among under-18s by 2010; and
  166W
  Getting more teenage parents into education, training or employment to reduce their risk of long term social exclusion.

  Copies of the report are available in the Library.

  BCG Vaccine
  Mr. Pickles
  To ask the Secretary of State for Health what is the size of his Department's stock of BCG vaccine. [119107]

  Yvette Cooper
  As at the end of March 2000, stocks of BCG vaccine in its various presentations available to the National Health Service were as follows:

  Intradermal 10 dose (without diluent)—zero

  Intradermal 10 dose (with diluent)—17,729 packs × 5 vials

  Intradermal 50 dose—1,079 packs × 5 vials

  Percutaneous—zero.

  The percutaneous presentation of the vaccine is used when administering vaccine by an alternative (multiple puncture) method applicable only in babies and young infants. In the absence of this presentation of the vaccine, the intradermal 10 dose (with diluent) presentation has been diverted for use in this important group.

  Mr. Pickles
  To ask the Secretary of State for Health if he will make a statement on the future of BCG vaccination programmes in schools. [119106]

  Yvette Cooper
  We are advised on all matters concerning immunisation by the independent expert committee, the Joint Committee on Vaccination and Immunisation. The committee keeps all immunisation policies under review. Recommendations on the use of BCG vaccine were last reviewed by the committee during 1996 and they advised that the schools immunisation programme should continue. This recommendation remains unchanged although, due to problems with supply of BCG vaccine, the schools part of the BCG programme is currently in suspension.

  Tuberculosis
  Mr. Pickles
  To ask the Secretary of State for Health if he will list the number of reported cases of TB in(a) 1970, (b) 1980, (c) 1990 and (d) each of the last five years for which figures are available. [119105]

  Yvette Cooper
  The information requested is given in the table:

  Number of reported cases of tuberculosis, England and Wales

  Year

  Number

  1970

  11,901

  1980

  9,142

  1990

  5,402

  1995

  5,606

  1996

  5.654

  1997

  5,859

  1998

  6,087

  1999

  6,144

  Source:

  Public Health Laboratory Service data

  Mr. Pickles
  To ask the Secretary of State for Health what was the average cost to the NHS of treating a patient with TB in the last financial year for which figures are available. [119155]
  167W
  Yvette Cooper
  The average cost to the National Health Service of treating a patient with tuberculosis is not available. However, information on the national average cost for the inpatient treatment of an individual patient with tuberculosis for the 1998–99 financial year is available from the National Schedule of Reference Costs and is as follows:

  £

  Elective inpatient

  Non elective inpatient

  Day case

  Pulmonary or pleural tuberculosis

  1,770

  1,676

  295

  Other tuberculosis

  1,400

  1,800

  293

  Note:

  Costs are the national average for inpatient treatment for patients with tuberculosis calculated from the individual NHS trust figures provided on an annual basis.

  The length of inpatient stay for patients with tuberculosis varies. It should be noted that treatment for tuberculosis can last for six months or more and for most of this time the patient will not be hospitalised.

  Mr. Pickles
  To ask the Secretary of State for Health which health authorities have abandoned the school immunisation programme for TB. [119108]

  Yvette Cooper
  I refer the hon. Member to the reply given to the hon. Member for New Forest, West (Mr. Swayne) on 11 January 2000,Official Report, column 144W.

  Mr. Pickles
  To ask the Secretary of State for Health which health authorities have reported cases of TB in each of the last five years. [119103]

  Yvette Cooper
  I refer the hon. Member to the reply given to my hon. Friend the Member for the Vale of Clwyd (Mr. Ruane) on 28 February 2000,Official Report, columns 70-71W.

  Mr. Pickles
  To ask the Secretary of State for Health how many people died from TB in the(a) 1970s, (b) 1980s and (c) 1990s. [119109]

  Yvette Cooper
  Information provided by the Office for National Statistics shows that, between 1970 and 1979, there were 8,781 reported deaths from tuberculosis in England and Wales; between 1980 and 1989 there were 5,028 reported deaths from tuberculosis; and, between 1990 and 1998 (the latest available date for which data are available) there were 3,621 reported deaths from tuberculosis.

  Notes:

  Data are for England and Wales.

  Tuberculosis is defined by ICD (8) and (9) 010-018.

  Data from 1970 to 1992 are by date of registration; those from to 1998 are by date of occurrence.

  Mr. Pickles
  To ask the Secretary of State for Health what plans he has to review the programme of immunisation against TB among school age children. [119104]

  Yvette Cooper
  We are advised on all matters concerning immunisation by the independent expert committee, the Joint Committee on Vaccination and Immunisation. The committee keeps all immunisation policies under review.
  168W
  Mr. Breed
  To ask the Secretary of State for Health for what reason there was a shortage of tuberculosis vaccinations between October 1999 and April 2000; and what steps his Department has taken to improve the supply of vaccinations. [120401]

  Yvette Cooper
  I refer the hon. Member to the replies given to the hon. Member for Brentwood and Ongar (Mr. Pickles) on 11 January 2000,Official Report, columns 143-44W and on 13 April 2000,Official Report, column 282W.

  Mr. Breed
  To ask the Secretary of State for Health what recent discussions have taken place between Ministers in his Department and the NHS Purchasing and Supply Agency regarding the restoration of tuberculosis testing within secondary schools. [120370]

  Yvette Cooper
  The National Health Service Purchasing and Supply Agency (formally NHS Supplies) provides a procurement service for the Department and does not make recommendations on the use of the vaccines.

  The programme to test for tuberculosis and to immunise with BCG vaccine continues for people in higher risk groups, whatever their age. Only the routine BCG immunisation programme in schools is in suspension at present.

  Fibreglass Insulation
  Mr. Wigley
  To ask the Secretary of State for Health what evidence his Department has assessed concerning the dangers to health from fibreglass used for insulation purposes; and if he will make a statement. [118950]

  Yvette Cooper
  The Committee on Carcinogenicity of Chemicals in Food, Consumer Products and the Environment have considered the carcinogenicity of those man made mineral fibres (glass, rock and slag wool) used for insulation purposes on a number of occasions since 1984. Their advice is that domestic exposures arising from infrequent or short-term do-it-yourself installation do not pose a carcinogenic risk. It was their view that these materials do not meet the European Union's criteria for classification of compounds as carcinogens. However there was limited evidence that occupational exposure was associated with lung cancer, although no definite conclusions could be drawn because there was a lack of information about confounding factors, such as tobacco smoking. It would be prudent, however, to act on the basis that sufficient occupational exposure may increase the risk of lung cancer.

  National Vaccination Programme
  Mr. Burden
  To ask the Secretary of State for Health how clinicians, general practitioners and primary care staff are kept updated on vaccine availability, and what plans he has to improve the arrangements. [119258]

  Yvette Cooper
  Vaccine Update is a monthly newsletter produced by the National Health Service Purchasing and Supply Agency (formally NHS Supplies). It is the primary source of advice for health professionals on vaccine availability. About 7,000 copies are centrally distributed each month and further copying occurs locally.
  169W
  There is a contact name and telephone number on this newsletter for inquiries. The central distributor, Farillon, also answers inquiries.

  Plans are in hand to alter the format of this newsletter to allow it to be available via the Internet. Any urgent communications can also be made to health professionals via the Public Health Link system, Chief Medical Officer (CMO) letters and the CMO Update.

  Mr. Burden
  To ask the Secretary of State for Health what representations he has received concerning the distribution arrangements for the national vaccination programme and the performance of Farillon. [119257]

  Yvette Cooper
  The contract to provide centralised storage and distribution of vaccine to support the childhood immunisation campaign is currently held by Farillon Ltd.

  The NHS Purchasing and Supply Agency (formally NHS Supplies) monitors all aspects of this contract as an agency of the Department.

  Any representations from those involved in the vaccine programme are directed to Farillon and brought to the attention of NHS PSA. A monthly meeting is held between the Department, the National Health Service Purchasing and Supply Agency and Farillon to review performance. Any concerns are dealt with at such times.

  Mr. Burden
  To ask the Secretary of State for Health what plans he has for improving the distribution system for the national vaccination programme. [119259]

  Yvette Cooper
  Farillon Ltd. currently provides the storage and distribution of vaccine to support the childhood immunisation programme.

  A recent example of a new initiative in distribution has been the allocation model used to supply the new Meningococcal C conjugate vaccine. This has enabled over 10 million doses to date of this vaccine to be distributed equitably across the country in line with the roll-out of the campaign. No other country in the world currently has the facility to provide such a service with direct delivery to general practitioners on a weekly basis through a guaranteed cold chain computerised service. GPs are now able to review their future supplies through Internet access. The distribution arrangements are kept under continual review.

  Live Animal Experiments
  Mr. Dalyell
  To ask the Secretary of State for Health, pursuant to his answer of 5 April 2000,Official Report, column 509W, on live animal experiments, if he will introduce a legal requirement that labels on medicines for use on humans and animals include a statement that the medicine has been tested on animals. [119231]

  Yvette Cooper
  I refer my hon. Friend to the answer I gave on 5 April 2000,Official Report, column 509W, in which I explained that the labelling of medicinal products is governed by European law. Therefore the United Kingdom cannot unilaterally introduce additional national statutory requirements in this area and the Government have no plans to propose such an amendment to European law.
  170W

  Health Authority Reorganisation
  Mr. Hammond
  To ask the Secretary of State for Health what percentage of health authority reorganisation proposals objected to by community health councils and referred to him since 1 May 1997 he has(a) approved and (b) rejected. [119472]

  Ms Stuart
  Of the 21 objections referred by community health councils to my right hon. Friend the Secretary of State since 1 May 1997 14 per cent. were accepted, 57 per cent. were rejected, 14 per cent. resulted in amendments to health authorities' proposals, 5 per cent. were withdrawn following a change in circumstances and 10 per cent. are still awaiting a decision.

  HIV
  Mr. Gill
  To ask the Secretary of State for Health what are the identifiable causes of human immunodeficiency virus. [119703]

  Yvette Cooper
  There is international scientific consensus that the Human Immunodeficiency Virus (HIV) causes the Acquired Immunodeficiency Syndrome (AIDS). HIV infection is a communicable condition which is transmitted by a number of routes but predominantly by unprotected sexual intercourse. It is not possible to identify the origins of the human immunodeficiency virus itself. There are a number of possible hypotheses concerning its origin which are the subject of current scientific debate.

  Flu Vaccine
  Mr. Sheerman
  To ask the Secretary of State for Health how may hospital beds were occupied by influenza victims in November and December 1999 and January and February 2000 by patients who had not been vaccinated against flu. [119667]

  Yvette Cooper
  Figures for hospital activity during the winter period will not be available until the autumn this year, but information on whether or not these patients have been immunised against influenza is not collected.

  Mr. Sheerman
  To ask the Secretary of State for Health what steps he is taking to ensure that(a) at-risk groups, (b) essential service workers and (c) all those over 65 have flu vaccine available for next winter. [119669]

  Yvette Cooper
  The Department is committed to improving influenza vaccine uptake in the recommended risk groups this year and an implementation group is currently considering the steps needed to deliver these improvements.

  Mr. Sheerman
  To ask the Secretary of State for Health what plans he has to reduce the age at which flu vaccine is made available. [120097]

  Yvette Cooper
  The Department is committed to improving influenza vaccine uptake this year. Ministers are currently considering the Joint Committee on Vaccination and Immunisation's advice on the age above which flu vaccine is recommended as national policy.

  NHS Dentistry
  Mr. Hammond
  To ask the Secretary of State for Health when he expects to publish his strategy on NHS dentistry. [119753]
  171W
  Mr. Hutton
  I refer the hon. Member to the reply given to my hon. Friend the Member for Pendle (Mr. Prentice) on 2 May 2000,Official Report, column 46W.

  Dispensing Doctors
  Mr. Bob Russell
  To ask the Secretary of State for Health (1) what choice is open to patients to have prescriptions dispensed by a dispensing doctor; [119725]

  (2) if he will amend the terms of the NHS (Pharmaceutical Services) Regulations 1992 to enable patients living within one mile of a pharmacy to have the choice of having prescriptions dispensed by a dispensing doctor; and if he will make a statement. [119726]

  Ms Stuart
  Patients may have their prescriptions dispensed by their general practitioner if they live in controlled localities (that is to say, rural areas), more than one mile from the nearest pharmacy and the practitioners have been granted permission by their health authority to dispense prescriptions. Other patients may also apply to the health authority for their doctor to dispense their prescriptions if the patients experience serious difficulty in obtaining their medicines from a pharmacy due to the distance involved or lack of transport. We have no plans to permit doctors to dispense to other patients.

  Prostate Cancer
  Dr. Tonge
  To ask the Secretary of State for Health what legal advice he has taken on the failure of some health trusts to ensure referral within three weeks for patients with possible prostate cancer. [119735]

  Yvette Cooper
  The White Paper "The new NHS—Modern, Dependable" set the standard that everyone with suspected cancer will be able to see a specialist within two weeks of their GP deciding that they need to be seen urgently and requesting an appointment. These arrangements were introduced for women with suspected breast cancer from April 1999 and are being put in place for all other cases of suspected cancer during 2000. The standard will be introduced for prostate cancer in December. We have published referral guidelines to assist GPs in determining those patients who need to be referred urgently within two weeks to see a specialist. The referral guidelines are not mandatory but represent guidance on best available evidence. Clinical judgment will, in addition to the guidelines, play an important part in reaching any clinical decision.

  Dr. Tonge
  To ask the Secretary of State for Health what plans he has to increase funding for research into prostate cancer. [119729]

  Yvette Cooper
  The latest figure available for annual Government expenditure (Department of Health/National Health Service, Medical Research Council and other Government Departments—principally devolved health departments) on prostate cancer is £1.55 million. This figure underestimates the total Government research and development expenditure in this area, as detailed estimates of NHS support funding are not collected routinely.
  172W
  Since 1997 we have committed over £800,000 to new research projects on prostate cancer, through the Medical Research Council and through the Department. The Department has actively sought to support such work in prostate cancer, and has not rejected any high quality proposals for work in this area.

  The Department recently announced £1 million additional new funding for urgent research studies into prostate cancer as a mark of its concern over this disease.

  Following the seminar last year at No. 10 a "Cancer Research Funders' Forum" has been established to help improve the co-ordination of cancer research in the UK. It is being run by the MRC and includes DH representatives and the major cancer research charities. At the Department's request, the Forum considered the issue of prostate cancer at its first meeting on 10 January. They agreed to set up an expert group on prostate cancer, which will identify gaps in current research and suggest ways of filling them. The expert group met for the first time on 25 February, and expects to report within months.

  We have recently appointed a National Cancer Director, Professor Mike Richards, who will spearhead our concerted drive on cancer. He will work in partnership with doctors, nurses, general practitioners, other health professionals and the voluntary sector to improve prevention and modernise cancer services to help ensure equitable access to high quality cancer care. This will include a close interest in the development and progression of research.

  MMR Vaccine
  Mr. Coleman
  To ask the Secretary of State for Health if his Department will release the underlying data used to compile the study his Department commissioned for publication in The Lancet into the effects of the MMR vaccine. [120029]

  Yvette Cooper
  The epidemiological study published in The Lancet in June 1999 was an independent study commissioned by the Medicines Control Agency. This study was designed to investigate a possible association between measles, mumps and rubella vaccination and autism and found no evidence for a causal association. A copy has been placed in the Library. The study was accepted for publication in The Lancet following a process of rigorous independent peer review in the normal manner. It is not usual for peer-reviewed data to be subject to reanalysis by third parties. The Department therefore does not propose to ask the independent investigators to release their data.

  Dystonia
  Mr. Hancock
  To ask the Secretary of State for Health how much money has been spent on researching dystonia in each of the last five years. [119834]

  Yvette Cooper
  The main Government agency for research into the causes of, and treatment for, disease is the Medical Research Council (MRC) funded via grant-in-aid from the Office of my right hon. Friend the Secretary of State for Trade and Industry.
  173W
  The MRC has spent the following amounts on research related to dystonia:

  Year

  £

  1994–95

  1,435,000

  1995–96

  1,702,000

  1996–97

  1,784,000

  1997–98

  1,731,000

  1998–99

  1,769,000

  In addition, the MRC funds related research into related movement disorders such as Parkinson's, Huntington's and Multiple Sclerosis.

  The Department of Health provides support funding for research commissioned by Research Councils and charities which is undertaken in the National Health Service. It is not possible to calculate how much of this support funding is spent on projects related to Dystonia. The Department also funds research to support policy development in health and social care, and to support effective practice in the NHS.

  Project details of work supported by the Department can be found on the National Research Register which is available in the Library and on the internet: www.doh.gov.uk/nrr

  Mental Health
  Mrs. Lait
  To ask the Secretary of State for Health how much money there was in the Mental Health Research and Development budget in each region(a) at the end of the financial year 1999–2000 and (b) at the beginning of financial year 2000–01. [120034]

  Mr. Hutton
  Government funding for research is provided through a number of routes.

  The Medical Research Council (MRC) is the main agency through which the Government supports research on the causes and treatment of disease. The MRC receives most of its income via grant-in-aid from the office of my right hon. Friend the Secretary of State for Trade and Industry. The Department funds research to support policy

  OPCS4R codes used/Procedure

  1989–90

  1990–91

  1991–92

  1992–93

  1993–94

  1994–95

  1995–96

  1996–97

  1997–98

  1998–99

  K40–46/CABGS

  12,483

  14,070

  16,046

  18,352

  20,394

  23,533

  22,922

  22,694

  22,181

  23,663

  K01–70/A11 heart ops

  1—

  83,065

  106,374

  120,394

  130,502

  148,797

  153,736

  162,146

  161,890

  177.650

  1 Data for 1989–90 for all heart operations is currently unavailable.

  Notes:

  1. Data in this table is grossed for both coverage and unknown/invalid clinical data, except for 1997–98 and 1998–99 which are ungrossed.

  2. An FCE is defined as a period of patient care under one consultant in one health care provider. The figures do not represent the number of patients, as one person may have several episodes within the year.

  3. These figures represent a count of all FCEs where the procedure was mentioned in any of the four operation fields in the HES data set.

  Source:

  Hospital Episode Statistics (HES), Department of Health.

  Asylum Seekers
  Mr. Coleman
  To ask the Secretary of State for Health what amounts each London borough claimed in excess of the maximum grant available from his Department for(a) single asylum seekers and (b) asylum families with children for (i) 1997–98 and (ii) 1998–99; and if he will make a statement. [120028]
  174W
  development in health and social care, and to support effective practice in the National Health Service. The Department also provides NHS support funding for research commissioned by the MRC and charities that takes place in the NHS.

  Research is commissioned from the organisations best able to undertake high quality work. Funding is not allocated on a regional basis.

  The MRC spent approximately £63 million in 1999–2000 and estimates that it will spend £66 million in 2000–01 on neuroscience and mental health research.

  The Department invests approximately £40 million per year on research directly relevant to mental health, £7 million on directly commissioned projects, and £33 million to support work on mental health funded by research councils and charities which is undertaken in the NHS. Management of the research supported by NHS research and development funding in trusts is devolved and details of expenditure at the project level are not currently collected routinely by the Department. It is not therefore possible to give accurate details of expenditure year by year.

  Project details of work directly funded by the Department or supported through NHS research and development funding can be found on the National Research Register (NRR). This is available in the Library and most medical libraries on CD Rom, and on the Internet: http://www.doh.gov.uk/nrr.htm. The NRR also contains many details of projects/trials funded by the MRC and other funders.

  Heart Operations
  Mr. Waterson
  To ask the Secretary of State for Health how many heart operations were performed in each of the last 10 years. [119991]

  Yvette Cooper
  The table shows the number of finished consultant episodes where a heart operation was performed, and the number of finished consultant episodes where a coronary artery bypass graft was performed, in National Health Service hospitals in England for the years 1989–90 to 1998–99.

  Mr. Hutton
  The table shows the maximum amounts that local authorities were eligible to claim per week for single adults and families with children in 1997–98 and 1998–99.

  Local authorities could not claim in excess of these sums. Although a local authority's total relevant expenditure may have exceeded the maximum grant

  175W
  payable, any excess expenditure incurred above that sum would have to be met locally and not by central government.

  The maximum amount payable in respect of each grant was as follows:

  Amount payable

  1997–98

  Adults

  £140 per week

  Families

  80 per cent. of relevant expenditure above relevant local authority threshold

  1998–99

  Adults

  £165 per week

  Families

  £230 per family per week, or £240 in the case of any family of asylum seekers provided with services in Inner London prior to 23 November 1998

  Squalene
  Mr. Hancock
  To ask the Secretary of State for Health what adverse reactions there have been as a result of the use of squalene in vaccines. [120200]

  Yvette Cooper
  None. There are no licensed vaccines in the UK which include squalene as an adjuvant.

  Mr. Hancock
  To ask the Secretary of State for Health if squalene is authorised for use in vaccines in the UK. [120105]

  Yvette Cooper
  Squalene is not authorised for use in vaccines in the United Kingdom.

  Mr. Hancock
  To ask the Secretary of State for Health what monitoring his Department is undertaking of patients who have been given squalene vaccine. [120301]

  Yvette Cooper
  Squalene is not itself a vaccine, but has been licensed in Italy as an adjuvant to influenza vaccine. Monitoring of all vaccines given in the United Kingdom is performed by the Medicines Control Agency and the Committee on Safety of Medicines.

  Mr. Hancock
  To ask the Secretary of State for Health what recent research he has(a) commissioned and (b) evaluated on the use of squalene as an adjuvant in vaccines. [120104]

  Yvette Cooper
  No research has been commissioned on the use of squalene as an adjuvant in vaccines.

  As for any new medicinal product, evaluation of research on the use of squalene as an adjuvant in vaccines, presented as part of a marketing application, would be performed by the Medicines Control Agency under conditions of commercial confidentiality.

  European Food Authority
  Mr. Redwood
  To ask the Secretary of State for Health if the planned European Food Authority will replace the UK Food Standards Agency. [120188]

  Ms Stuart
  No it will not replace the United Kingdom Food Standards Agency. The White Paper clearly states that the proposed European Food Authority must be a "value-added structure" which will work in close co-operation with national agencies and institutions, thus making the best use of existing structures and resources.
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  We envisage that the planned European Food Authority will work in close co-operation with our own agency which, in any case, has a wider remit than the proposed Authority.

  Mr. Redwood
  To ask the Secretary of State for Health what is the estimated first full year cost of running(a) the UK Food Standards Agency and (b) the European Food Authority. [120189]

  Ms Stuart
  The gross budget for the Food Standards Agency in its first full year (2000–01) is £148 million including £8 million for the executives in the devolved administrations, and £70 million for its executive agency, the Meat Hygiene Service. (The £148 million is net of internal transfers between the Food Standards Agency headquarters and the Meat Hygiene Service).

  The Commission has proposed that the European Food Authority has a budget of only 100 million ecus (£62.5 million). We will have to be clear about whether this is an additional cost or total funding. Clearly most of the functions of the EFA are already performed elsewhere within the EU framework and we must be careful to avoid duplication of effort.

  Food Safety White Paper
  Mr. Redwood
  To ask the Secretary of State for Health which of the proposed measures in the EU White Paper on food safety in the EU will be opposed by Her Majesty's Government. [120209]

  Ms Stuart
  The Government believe that consumer concerns and the complexity of current arrangements demand urgent action to develop a coherent European Union policy for the foodstuffs sector based firmly on the fundamental importance of consumer protection. We welcome the White Paper and share the objective it outlines.

  We look forward to more detailed proposals on which discussion can take place once individual measures are brought forward.

  Mr. Redwood
  To ask the Secretary of State for Health what amendment of the law he plans to comply with the programme outlined in the EU White Paper on food safety. [120187]

  Ms Stuart
  The proposed legislative programme contains many individual initiatives which the Government have been pressing for and some have been expected for some time. In a number of cases the legislation proposed is amending existing legislation. We await individual, more detailed, proposals to be brought forward by the European Commission.

  Mr. Redwood
  To ask the Secretary of State for Health what estimate he has made of the additional costs to(a) the British food industry and (b) farmers of the proposals set out in the EU' s White Paper on food safety. [120208]

  Ms Stuart
  None. The Commission has consulted widely on the White Paper and the Food Standards Agency has discussed various issues with key organisations, including those representing farmers and the food industry. They have been encouraged to respond direct to the Commission.
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  Once individual proposals have been produced all interested stakeholders will be consulted. The United Kingdom will be pressing for proportionality, bearing in mind the need to safeguard the interests of the consumer.

  Data Storage
  Mr. Sayeed
  To ask the Secretary of State for Health what advice his Department gives to hospitals and others to(a) back up their data frequently and regularly and (b) install circuit breakers. [120699]

  Yvette Cooper
  National Health Service organisations have already received best practice guidance on a wide range of information security matters including data back-up and power supplies and these are contained within the NHS Information Authority publication "Ensuring Security and Confidentiality in NHS Organisations". Copies of this guidance will be placed in the Library.

  AIDS Care Education Funding
  Mr. Clappison
  To ask the Secretary of State for Health when he expects to reach a decision on section 64 funding for AIDS care education training. [120372]

  Yvette Cooper
  I will be making an announcement shortly.

  Fostered Children
  Mr. Gerald Howarth
  To ask the Secretary of State for Health what was the cost of providing foster homes and their equivalent in(a) 1970, (b) 1980 and (c) 1999. [120664]

  Mr. Hutton
  Information on the unit cost of providing foster homes and their equivalent is not available for 1970 and 1980. Provisional data taken from "Social Services Performance in 1998–99—The Personal Social Services Performance Assessment Framework" indicate that the unit cost of foster care for 1998–99 was £199 per child per week.

  Toxicology Teaching
  Mr. Baker
  To ask the Secretary of State for Health if he will make a statement on the teaching of toxicology to medical students. [120499]

  Yvette Cooper
  [holding answer 2 May 2000]Individual university medical schools determine their own undergraduate medical curricula in the light of the recommendations from the General Medical Council's (GMC) Education Committee, which has the statutory responsibility to determine the extent of knowledge and skill required for the granting of primary medical qualifications in the UK. The Committee's most recent recommendations were published in the 1993 report "Tomorrow's Doctors".

  University medical schools are in the process of implementing the recommendations contained in the report and the GMC is monitoring progress.
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EDUCATION AND EMPLOYMENT

  Sure Start
  Mr. Coaker
  To ask the Secretary of State for Education and Employment when the Sure Start Plus scheme will start; and if he will make a statement. [120120]

  Yvette Cooper
  I announced the 20 Sure Start Plus pilot areas on 1 March 2000. Further guidance on Sure Start Plus will be issued in early summer inviting programmes to draw up plans for implementation in the autumn.

  Mr. Coaker
  To ask the Secretary of State for Education and Employment when the next round of applications for Sure Start schemes will be announced. [120121]

  Yvette Cooper
  Sure Start is committed to establishing at least 250 local Sure Start programmes in areas of greatest need by the end of 2001–02. Of these, 121 have already been announced. A further round will be announced in the summer.

  Teachers (Early Retirement)
  Mr. Gerald Howarth
  To ask the Secretary of State for Education and Employment how many teachers took early retirement in(a) 1970, (b) 1980 and (c) 1999; if he will list the most frequently cited reasons for taking early retirement; and what was the cost to public funds of granting such early retirement. [119770]

  Ms Estelle Morris
  Early retirement falls into two categories: ill-health and premature retirement. Full-time teachers taking early retirement from the maintained nursery, primary, secondary and special sector in England in 1980, 1990, 1997 and 1999 are as follows:

  Calendar year

  Ill-health

  Premature

  Total

  1980

  1,000

  3,700

  4,700

  1990

  4,000

  8,100

  12,100

  1997

  4,400

  14,100

  18,500

  1999

  2,100

  2,700

  4,700

  Note:

  Totals may not add to component parts because of rounding

  Retirement data are not available for 1970; premature retirement was not introduced until 1977. The number of teachers taking ill-health and premature retirement was much higher during the 1990s than in previous years. The conditions for awarding an ill-health or premature retirement were changed during 1997 and as a result the numbers of early retirements had fallen by 1999.

  Premature retirement can be awarded because of redundancy or employer efficiency gains; ill-health retirement includes reasons of injury or illness (physical and mental).

  The capitalised additional cost of an ill-health retirement was recently estimated to be on average in the order of £50,000-£60,000 when compared with preserved benefits if the individual had simply resigned. The figure for premature retirements is estimated to be in the order of £30,000-£40,000.

  School Leavers
  Mr. Gerald Howarth
  To ask the Secretary of State for Education and Employment how many pupils who left
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  school in (a) 1970, (b) 1980 and (c) 1999 with no educational qualifications came from (i) intact and (ii) broken families. [120659]

  Ms Estelle Morris
  The numbers of pupils in England with no educational qualifications, either by the end of their final year of compulsory schooling or when they left school, are shown in the table. Data on pupils' family background are not collected.

  Numbers and proportion of pupils1 with no educational qualifications in England

  Total pupils1 (Thousand)

  Total with no qualifications (Thousand)

  Proportion with no qualification (Percentage)

  1970

  614.2

  275.9

  45

  1980

  750.7

  91.4

  12

  1999

  581.0

  35.0

  6

  1 The figures for 1970 and 1980 are based on the numbers of school leavers of any age and the numbers of those leavers that had no qualifications. The figures for 1999 are based on pupils in their final year of compulsory schooling, whether they left school or not.

  New Deal
  Mr. Allan
  To ask the Secretary of State for Education and Employment what (i) amount and (ii) percentage of the proceeds of the windfall tax allocated in the 1999 Budget to(a) the New Deal for 18 to 24-year-olds, (b) the New Deal for the long-term unemployed, (c) the New Deal for lone parents and (d) the New Deal for the
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  sick and disabled, for expenditure during the 1999–2000 financial year were (1) spent during that year and (2) carried forward for future years, indicating the reasons for any underspend. [120411]

  Mr. Blunkett
  The information requested will not be available until June when outturn expenditure is confirmed and agreement reached with the Treasury on amounts to be carried forward. Table 4.1 of the Financial Statement and Budget Report March 2000 sets out the latest published allocations for 1999–2000.

  Racial Discrimination
  Mr. Woodward
  To ask the Secretary of State for Education and Employment on how many occasions in the past 10 years the Secretary of State for Education and Employment has used his powers to give directions under sections(a) 496 and (b) 497 of the Education Act 1996 (i) in relation to individual complaints of racial discrimination in education referred under section 57(5) of the Race Relations Act 1976, (ii) following findings of unlawful discrimination in a formal investigation by the Commission for Racial Equality and (iii) to enforce the general duty under section 19(1) of the Race Relations Act 1976. [120640]

  Jacqui Smith
  In 1999–2000, 33 complaints of racial discrimination in education were received by the Department. None of these were referred to the Secretary of State. Information for previous years is not held centrally and could not be obtained except at disproportionate cost.

Preamble
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 Brennan
Daniel Joseph Brennan, Esquire, QC, having been created Baron Brennan, of Bibury in the County of Ciloucestershire, for life—Was, in his robes, introduced between the Lord Williams of Mostyn and the Baroness Scotland of Asthal.
Baroness Cohen of Pimlico
Janet Cohen, having been created Baroness Cohen of Pimlico, of Pimlico in the City of Westminster, for life—Was, in her robes, introduced between the Lord Paul and the Baroness Goudie.

Insulin-dependent Drivers
2.49 p.m.
Lord Harrison Lord Harrison asked Her Majesty's Government:
Whether the licence regulations banning insulin-treated diabetics from driving vehicles over 3.5 tonnes should be replaced by a system of individual assessment of fitness to drive.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, Her Majesty's Government have the task of assessing for fitness to drive people who suffer from this and other medical conditions. Our general approach was reviewed in a valuable report by the House of Commons Select Committee on Science and Technology. We have today published the Government's response to that report. Our response confirms that we will review the scope for more individual assessment, subject to advice from the Advisory Panel on Diabetes and Driving.
Lord Harrison: My Lords, that is a very encouraging reply. However, does my noble friend agree that the blanket ban and the current regulations are arbitrary, illogical and inconsistent, as detailed in the recent report by the House of Commons Select Committee? Does he agree that the blanket ban represents an offence against the human rights of 100,000 of our fellow citizens? Further, does my noble friend accept that such unwarranted discrimination could be remedied by the introduction of a regime of individual assessment for those insulin-dependent diabetic drivers who wish to test their fitness to drive Class 2 vehicles?
Lord Whitty: My Lords, the prime consideration, from the Government's point of view, must be fairness
1012
to all road users in terms of road safety. That must be our central concern. There are still a number of accidents which occur to people with diabetic conditions. It is not true to say that there is a blanket ban. Car drivers can obtain a licence for up to three years, and renewal depends on medical assessment. However, the Select Committee made some valuable points, particularly in relation to small commercial vehicles where there is a degree of inconsistency in the regulations and probably a degree of unfairness. That is why I referred in my original Answer to a review to look at the possibility of greater scope for individual assessment.
Earl Attlee: My Lords, is the Minister aware that I am experiencing a severe case of gold-plated déja vu? Is it the case that an insulin-dependent driver from the Netherlands would be able to drive in the UK while a UK driver with the same medical condition would automatically not be able to do so?
Lord Whitty: My Lords, I do not think that it is a question of gold-plating. There are EU regulations on the matter and each member state carries out administratively the means to comply with those regulations. I do not have the precise details of the Dutch provision, but so far as concerns small commercial vehicles it depends on medical assessment. Therefore, it is not the case that any driver with this condition who has a Dutch licence can drive over here. Drivers with a Dutch licence will have been subject to a degree of medical assessment, which is more or less what the Select Committee in another place recommended for this country. There is no blanket permit anywhere in the EU.
Lord Morris of Manchester: My Lords, I too am grateful to my noble friend for his original reply, but what assessment has he made of what constitutes high and low risk in relation to individual fitness to drive? In particular and specifically, does he agree with the finding of the Select Committee on Science and Technology in another place that a key criterion is whether licence applicants are able to spot the warning signs of hyperglycaemia and are in good control of their blood sugar levels and that those with good control and awareness may be considered low risk?
Lord Whitty: My Lords, in general terms I agree with that assertion. The area of contention relates to driving vans and minibuses where there is greater danger to others than there is in driving a car. In this area the Select Committee recommends individual assessment. The EU regulations relate to "exceptional circumstances" for this class of vehicle. We have hitherto interpreted that to mean people having a proven record of driving frequently and regularly before they can be considered for exemption. It may well be that that rather blunt identification of exceptional cases needs to be replaced by something closer to an individual assessment. It is not by any

1013
means certain that individual assessment would lead to larger numbers being permitted to drive, but it would relate more directly to an individual's condition.
Lord Addington: My Lords, following on from the question put by the noble Lord, Lord Morris, does the Minister agree that the statistics should be broken down to indicate those who collapse at the wheel as a result of hyperglycaemia so that we can act on that information? I have heard a figure of 120 for those collapsing at the wheel as a result of the condition. Has the Minister any idea what the statistics are, as they would give some idea of the magnitude of the problem?
Lord Whitty: My Lords, there are significantly more cases of people collapsing at the wheel due to hyperglycaemia. Not all such incidents result in accident injuries—I believe the noble Lord is referring to injuries—but all have the potential to cause injury and therefore present a problem. Research on the matter is not robust, as the Select Committee pointed out. We are about to commission substantial research which will give a very much better indication of the size of the problem and, therefore, it is to be hoped, scope for a solution.

Modern Language A-levels
2.55 p.m.
Lord Watson of Richmond Lord Watson of Richmond asked Her Majesty's Government:
What steps they are taking to reverse the decline in the numbers of British students taking German and French at A-level.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the post-16 curriculum reforms we are introducing in September are designed to enable students to opt for a wider range of subjects while maintaining current standards. I expect many young people to use the new advanced subsidiary qualification, representing the first half of the full A-level, as a way to continue studying at least one modern language at advanced level. A number of universities have already indicated that they will be giving credit to broader programmes of study in selecting candidates for entry from 2002.
Lord Watson of Richmond: My Lords, I thank the Minister for that reply. However, I wonder whether Her Majesty's Government will consider the proven impact over a long period of time of youth and student exchanges between countries. Over the years, for example, the Franco-German exchange has resulted not only in an enormous enhancement of linguistic ability in both languages and in both countries, but also in an understanding of the culture that lies behind the language. Given the importance of our relations with those countries, will the Government consider actively enhancing the level of youth and student
1014
exchanges, not only between France and Germany and the United Kingdom, but between this country and other members of the European Union?
Baroness Blackstone: My Lords, there is no better way of learning a modern foreign language than going to the country where it is spoken and using the language there. The Government strongly endorse everything that the noble Lord says about the value of such visits and exchanges. Indeed, the Government support the work of the agency that promotes such exchanges between schools. I accept that even more can probably be done. Under the new Socrates programme which has just been agreed right across the European Union, more work will be done to promote visits by young people, not just in France and Germany but in other European countries also.
Lord Quirk: My Lords, as the Minister will doubtless know, just one week today we shall have the report of the Nuffield language inquiry that was chaired by Sir Trevor McDonald and Sir John Boyd. Will the Government seize this moment to make a fresh onslaught on our deplorable monolingualism, so that we can start approaching the educational levels achieved apparently effortlessly by our continental neighbours, along with the cultural values that flow therefrom?
Baroness Blackstone: My Lords, the Government greatly look forward to the report of the Nuffield languages group. I have had one meeting with some of those who are involved in it; however, I cannot anticipate exactly what they will say. An onslaught on monolingualism is more difficult in a country whose own language and mother tongue has become the lingua franca around the world. But we do need to encourage as many young people as possible to study a modern language beyond the compulsory school leaving age of 16, up to which time they do have to study a modern language. Since young people choose what subjects they take at A-level and AS-level, it is a matter of promoting a climate in which young people think it worth their while to study these subjects rather than of forcing them down their throats.
Lord Campbell of Alloway: My Lords, does the noble Baroness agree that it is not so much a question of creating a climate as the cultural richness of being able to converse with and understand people in a foreign country?
Baroness Blackstone: My Lords, an understanding of modern foreign languages makes it easier for young people to become more aware of the cultures of our neighbouring countries and those far beyond.
Lord Jenkins of Putney: My Lords, does my noble friend agree that it is time to stop referring to a language that is widespread throughout the world as "the lingua franca"?
Baroness Blackstone: My Lords, that phrase is often used all over the world, but I apologise if my noble friend does not like it.
Earl Russell: My Lords, has the Minister ever been to an international meeting where more of the British people present can speak the foreign language concerned than the foreign people can speak English? If not, I hope that she can look forward to such an occasion.
Baroness Blackstone: My Lords, no, except for one occasion when, as my noble friend reminds me, he and I visited Cardiff prison.

Roadworks: Piccadilly
3.1 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
For what reasons traffic in Piccadilly is to be reduced to one lane each way for a further 12 months and whether they will use their best endeavours to speed things up.
Lord Whitty: My Lords, cabling work begun earlier this year in Piccadilly is now complete. Transco and British Telecom are now due to carry out limited work. I understand that as the highway authority Westminster City Council is doing all that it can to minimise inconvenience and disruption.
Lord Peyton of Yeovil: My Lords, it is not just Piccadilly. Does the noble Lord recall that 84 telecommunications companies have recently added their names to a list of those who can, at will, muck up the highway? Does the Minister agree that they are free to delay, daily, damage and upset others at what is becoming known as a gentlemanly pace; in other words, they are not in a hurry and take a good deal of time off in the middle of the work? Does the noble Lord agree that the time has passed for doing nothing and that the chairmen and chief executives of those companies should be reminded that they are behaving with an almost unique blend of incompetence, arrogance and slovenliness? As they are inconveniencing members of the public who pay for the use of the roads, is it not a good idea that, as a matter of urgency, they should be made to pay a heavy charge?
Lord Whitty: My Lords, by now I am quite clear that the noble Lord and several others are upset by this activity, and that a number of members of the public share their views. As my noble friend Lord Sainsbury pointed out recently in a debate initiated by the noble Lord, it is important to recognise that this is part of a process of modernising and liberalising the telecommunications system of central London. Therefore, this will benefit businesses and the citizens of London. It is true that there are inconveniences, some of which would probably have been avoidable had greater co-ordination been achieved. Westminster City Council, in relation to Piccadilly and Westminster, together with the City of London—the noble Lord, Lord Levene, spoke in
1016
the same debate—and other local authorities are attempting to bring together the various bodies with the right to lay cable and pipelines to try to co-ordinate the work better. As we also indicated in that debate, the Government intend to trigger Section 74 of the New Roads and Street Works Act which will enable us to charge for overstay. We do not rule out further measures to ensure that this is effective in limiting the amount of time spent on such works and ensuring that they are co-ordinated efficiently.
Lord Jenkins of Hillhead: My Lords, is the Minister aware that I agree with every word uttered by the noble Lord, Lord Peyton, except that I believe that he spoke excessively moderately? The random digging up of roads is becoming something between a farce and a national scandal, and some control must be exercised. At present one cannot turn right out of your Lordships' House. Is the Minister aware— I do not see why he should be—that my late father-in-law when town clerk of Westminster for many decades refused to allow any roadworks in the City of Westminster when Parliament was in session? He might start with that. This is a national not just a parliamentary or London issue. Some control over this matter must be exercised by the noble Lord's department, even before a London mayor gets to grips with it.
Lord Whitty: My Lords, as the reference to the noble Lord's father-in-law implies, in most cases the responsibility rests primarily with the local authority. However, local authorities have limited powers. In response to the noble Lord, who is such a constitutionalist, I hate to suggest that his relative might well have been exceeding his powers in preventing the utilities digging up the roads. The problem is that, as the noble Lord, Lord Peyton, indicated, today we are not dealing simply with the traditional utilities, but also with a whole range of cable companies which require access to what is a very intensive commercial base in central London. I hesitate to say that the big wave of such activity is beginning to die down. I suspect that central London has largely been cabled, although we have not reached the end of it. The noble Lord is right to say that this will arise in other parts of the country. For that reason we propose to trigger Section 74 of the legislation. We are looking at other means of imposing a cost—and therefore an incentive to carry out this work in a more sensible way.
Lord Berkeley: My Lords, does my noble friend agree that there is another side to it" Will the Minister congratulate the contractors on demonstrating that one lane in Piccadilly is quite sufficient? Will he go further and suggest that that should be converted into a bus lane and that the pavements should be widened, as should those on Regent Street?
Lord Whitty: My Lords, the greater provision of bus lanes within our inner cities is primarily a matter for Westminster City Council, which will look at

1017
Piccadilly, and for other authorities in line with their own, and our, integrated transport approach, of which I approve.
Baroness Oppenheim-Barnes: My Lords, is the Minister aware that his description of the disruption as an "inconvenience" is a total understatement? Does the noble Lord agree that such works bring intolerable chaos to the roads of London which harms the environment and has many other adverse side effects? Is the Minister aware that, for example, only today I passed three sites where in each case roadworks had been completed days and weeks before and yet no one had uncovered the parking meters which had been out of use during that time? Therefore, due to lack of coordination people were unable to park in those areas for many days, sometimes weeks, longer than would otherwise have been the case.
Lord Whitty: My Lords, the noble Baroness rightly refers to the issue of co-ordination both among the utility and cable companies and between them and the highways authorities. The central London boroughs and the City of London are taking initiatives in this respect. The powers to which I have referred should give them a stick as well as a carrot in relation to the companies. The noble Baroness is right that there is significant inconvenience. However, I stress the other side of the equation: London needs a first-class worldwide communications system, and the liberalisation of telecommunications provides that. Therefore, one must strike a balance here.
Lord Bruce of Donington: My Lords, in answer to a Written Question published yesterday in Hansard, the Minister admitted that the department has no statistics available centrally on which it can make an estimate of the alterations proposed to date. How does the Minister equate that with regard for the whole of the British economy, outside the information technology sector? In the debate on 5th April, his noble friend Lord Sainsbury indicated that this strategy was well worth while because it contributed to the technical updating of the entire communications system. Will the Minister be frank at least and agree that it is high time that the matter was brought under the control of the DETR rather than the Department of Trade and Industry?
Lord Whitty: My Lords, I am advised on these occasions that the delineation of departmental responsibility is a matter for the Prime Minister.
I recognise that problems are caused by the profusion of cable companies. Nevertheless, my noble friend would be wrong to dismiss the technological advance in communications that this action brings. It was underlined by my noble friend Lord Sainsbury. The Government intend to give powers in this area to highways authorities, including the Greater London Authority and the London boroughs. We need to take a balanced approach. It may have gone too far one way, but I hope that noble Lords will not push the Government too far in the opposite direction.
Lord Peyton of Yeovil: My Lords, the Minister has a reputation, which he has earned, for good sense, fairness and general helpfulness. Can the noble Lord say whether it is his colleagues or his advisers who are restraining him on this occasion from using those admirable qualities?
Lord Whitty: My Lords, I am always restrained, I hope, by various forces in this House in order to give a balanced view. That is what I was attempting to do.
There are things wrong with the system. We are addressing them. I ask noble Lords and the citizens of London for a little more patience. We shall have in place very soon the powers for local authorities and the Greater London Authority.
Lord Skelmersdale: My Lords, the Minister announced the future commencement of Section 74 of the New Roads and Street Works Act. Can the noble Lord tell us when that will occur?
Lord Whitty: My Lords, regulations are required to be drafted; therefore, it will probably be in the autumn.

Prostate Cancer
3.12 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
Whether, at a time when the number of late diagnosed and often untreatable cases of prostate cancer in the United Kingdom is rising, they will introduce routine screening for men over 50 by PSA blood test.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the UK National Screening Committee does not currently recommend prostate cancer screening based on the prostate specific antigen (PSA) test as with existing technology for treatments and testing there is no evidence that a screening programme would save lives, and evidence that it could cause large numbers of cases of impotence and incontinence. However, we believe that that this issue is of such importance that we have asked the committee to keep it under review and consider any new evidence.
Baroness Gardner of Parkes: My Lords, I thank the Minister for his reply which is contrary to the press reports this week as regards Mayor Giuliani. Does the Minister agree that there is a major difference between the level of screening of women for breast cancer and men for prostate cancer? Is that sex discrimination, a lack of men's awareness of the availability of tests, or simply the traditional unwillingness of macho man to address health issues?
Lord Hunt of Kings Heath: My Lords, colorectal screening for men is being piloted at present. We shall keep under review the issue of screening for prostate

1019
cancer. As the national committee advised Ministers in 1997, there are real problems in this area. There is no consensus of medical opinion on how to treat the disease. The test has a limited accuracy and could lead to a positive test for those without the disease.
Lord Clement-Jones: My Lords, the Minister described how the Government intend to proceed. The National Screening Committee has advised against universal application of the PSA test. However, Britain has one of the worst records for prostate cancer in terms of outcome. Its record is worse even than that of Estonia and Poland. Does the noble Lord have a prescription for future improvement of prostate cancer services?
Lord Hunt of Kings Heath: My Lords, it is good to hear the name of Estonia back in your Lordships' House. I assure the noble Lord that the Government are far from complacent about the impact of prostate cancer. It is important that the decision on action to be taken is made on the best available evidence. The evidence from the committee advising Ministers is that it would not be appropriate to extend testing in the way suggested. We are anxious to do all we can. We have announced that an action plan will be developed over the next few months which will take in research, diagnosis and care. We are anxious that as much information as possible is available to men so that they are able to make informed choices.
Baroness Sharpies: My Lords, will the Minister say where the pilot scheme is taking place and how many patients are involved?
Lord Hunt of Kings Heath: My Lords, I assume the question relates to colorectal cancer. I do not have the information to hand but I am happy to write to the noble Baroness.
The Countess of Mar: My Lords, how many research projects are in hand at present which are considering not only treatment but also causation? Has the Medical Research Council plans to fund any more?
Lord Hunt of Kings Heath: My Lords, since 1997 the Government have directly committed more than £800,000 to new prostate cancer research projects. In addition, the department provides support to the NHS for research commissioned by the medical charities and the Medical Research Council. Over £60 million of that funding supports cancer research overall, with £16 million going to the Royal Marsden Hospital. The Royal Marsden Hospital estimates that nearly £1 million of that Department of Health support funding relates to work on prostate cancer.
Earl Howe: My Lords, I acknowledge that there is still uncertainty about the most effective treatment for men with early stage prostate cancer, but what role do the Government envisage for the technique known as
1020
radioactive seed implantation for the treatment of prostate cancer? Are there any plans to make it more widely available in the UK than at present?
Lord Hunt of Kings Heath: My Lords, the National Screening Committee will keep the matter under constant review. As and when they arise, potential new tests will be considered on their merits. The National Screening Committee is charged with discussing again the whole issue of screening at its next meeting. Alongside that, the development of an action plan by the department in the summer will enable us to keep pace with developments in the UK and other countries and ensure that we keep up to date with the best available evidence. I assure the noble Earl that we shall take into account any new developments which come onstream in other countries.
Baroness Gardner of Parkes: My Lords, has the Minister seen the report in the medical column of The Times this week? It stated that there is proven evidence of a great decline in deaths from prostate cancer in the United States whereas in this country the figure is described as soaring.
Lord Hunt of Kings Heath: My Lords, I have not seen the article. However, as I said, we shall ensure that any new research which becomes available is fully considered. My figures suggest that the incident rates of prostate cancer in this country are expected to level off in future years. At the same time, it is essential that we develop screening programmes only when we have advice that it is effective to do so. That will remain the Government's policy.

Business
Baroness Farrington of Ribbleton: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Scotland will, with the leave of the House, repeat a Statement which is being made in another place on Zimbabwe.

Essential Local Services
3.20 p.m.
Lord Rodgers of Quarry Bankrose to call attention to the provision of essential services to communities in particular need, including banking, post office facilities, transport and health; and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. This is a debate about two nations, but not as conventionally understood. It is not a debate about the distribution of income and wealth, although I have to say that I find it deplorable that in today's affluent Britain the gap between rich and poor is widening.
Nor is the debate about north versus south. The problems of economic and social deprivation are common to communities throughout the United

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Kingdom. It is not even about town versus country because people living in both suffer from exclusion for one reason or another. Nevertheless, it is a debate about the haves and have-nots, particularly about those whose quality of life is diminished and seems likely to be diminished further by the absence of or inadequacies in the provision of those essential services which most of us take for granted.
The Social Exclusion Unit in the Cabinet Office recently published a report on neighbourhood renewal. In his foreword to it, the Prime Minister set out what he called four imperatives for successful regeneration. They were, first, to revive the economy. In this case, that is poor neighbourhoods. Secondly, to revive and empower the community. Thirdly, to improve key public services, particularly schools, health and the police, as well as re-engage private services such as shops and banks. Fourthly, underpinning all those, said the Prime Minister, was the need for leadership.
The Social Exclusion Unit report is concerned with the urban problem, particularly how to deal with run-down estates. Almost word for word, the Prime Minister's four imperatives could be applied to the problems of today's countryside. Reviving the economy has an immediate echo for everyone struggling with the consequences of the current disastrous farming crisis. Without a flourishing agriculture, life in rural areas as we know it will perish.
As regards improving key public services and re-engaging private ones, that is precisely the subject of today's debate. Under the umbrella of the Motion before the House, I expect my noble friends on these Benches to refer to all the matters on the Prime Minister's list and also to others, including transport. That is a notable omission when considering rural problems. I am pleased that noble Lords in most parts of the House will bring their experience and authority to the discussion, although I say with regret that judging by the speakers' list there is a startling lack of interest on the government Back Benches about these matters. We can always hope that one noble Lord from that side of the House will choose to speak in the gap.
In the past week, the Countryside Agency published its second The State of the Countryside report. I find it a fair-minded and balanced report. Its tone is calm and it does not campaign, although campaigning would be justified. The report states that the countryside is still a good place to live and mentions, for example, that people living in rural areas are as healthy as or healthier than their urban counterparts.
However, it also states that while:
"the affluent and the mobile may enjoy a good quality of life — a significant minority suffers serious disadvantage".
It continues:
"Average weekly wages are lowest in rural counties such as Cornwall. Northumberland and Shropshire. To make matters worse, many essential services are either closing or face the threat of closure. This creates particular problems for the less well-off trying to get basic services if their post office, doctor's surgery or village shop has disappeared".
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The report refers to homelessness and rising house prices which make it difficult for young people, even those in work, to continue to live in rural areas. It also refers to the amount of traffic on rural roads rising faster than in towns, which came as a surprise to me. It also refers to crime, with vehicle crime rising by 24 per cent between 1991 and 1995, much faster than in urban areas; faster even than in inner cities.
The report does not reflect—and given the timescale for publication it could not do so—the debate on rural crime that has followed the Tony Martin case. In an article in The Times 10 days ago, the noble Lord, Lord Rees-Mogg, spoke of the manifest and total failure of the Norfolk police. I am not in a position to judge whether that was a fair comment or a hasty one. We should certainly be careful about drawing instant conclusions of whatever kind from those events. The noble Lord was perhaps prudently more cautious in his description of his local police force in Somerset, which he says has a good reputation for professional conduct. As I cannot judge that from my direct experience, I, too, shall be cautious about it.
However, the noble Lord, Lord Rees-Mogg, was right to say that,
"in the English countryside generally, burglary no longer seems to be taken seriously … zero policing has resulted in a climate of fear [which affects] the old most of all".
We all know that police houses in many villages stand empty, if they were not sold years ago. The local policeman, who everyone knew and who knew everyone, with his knowledge of how to reach outlying houses and farms, is becoming part of folk history. The local policeman was never off duty. But now, if you think you are being burgled, you may have several telephone numbers to call, some of which may be connected to voice mail. The nearest police station could be 10 miles away and open only from 10 a.m. to 1 p.m. So if you think you are being burgled, you must hope that the burglar will take his time because there could be a half-hour wait before the police arrive in response to a 999 call.
It is not just—or mainly—the incidence of crime that causes fear in the countryside, but the extent to which the forces of law and order have apparently disappeared altogether from view. Of course, the picture is not all black. Some areas are better and more openly policed than others, but there is an urgent need to rethink and to explain rural policing in order to give the reassurance that country people deserve. And if that means more resources, so be it.
Last week, under the heading of "More Money to Cut Local Crime", the Home Office invited bids for a share of £30 million in the next round of its "Reducing Burglary" initiative. It would be helpful if the Minister could confirm that bids for policing in rural areas will be encouraged.
One of the persistent and worsening problems in rural areas is public transport for those who do not own their own cars. More than 20 years ago, the government of the day published a White Paper on transport policy, for which, I confess, I had some responsibility. A chapter on rural areas stated that

1023
more than two-thirds of those living there had a car even if they could not afford one. A consequence was that bus services were less used and more infrequent. That increased the isolation of households without cars and other members of a household when the use of the car was reserved for the breadwinner.
That figure of over two-thirds 20 years ago is now as much as 83 per cent and the isolation of those without cars is even greater. The White Paper of 1977, which proposed increased bus revenue support, simplified licensing procedures and rural bus experiments with new legislation to facilitate community schemes. However, despite those experiments and despite that legislation, public transport in rural areas has been allowed to languish for two decades.
In the course of the debate, my noble friends will refer further to rural policing and transport. Among other things, they will also mention problems of access to healthcare, the role of public libraries, rural housing, the threat to sub-post offices (much debated in this House yesterday) and the disappearance of local banking.
With regard to local banking, in closing 171 of its rural branches on 8th April, Barclays only followed more brutally a trend which has been apparent for a long time. Gone are the days when, in the absence of a branch, representatives of a high street bank arrived at least once a week to make its facilities available for half a day at the back of the local shop. For that matter, the local shop may have gone as well., together in some cases with the local pub. They do it better abroad. In Italy, for example, there are few hill villages without banking facilities. I do not know why their banks can provide a service which seems to be beyond the capacity of ours.
As the Countryside Agency says, for many people the countryside is still a good place to live; nor is the argument from these Benches against all change. It is certainly too easy to romanticise the past when living and working conditions for the majority of those in the countryside were often harsh and the quality of life restricted.
For the comfortably-off incomers to the countryside and, even more, the affluent weekenders with a second home, there are few problems. The incomers may run small businesses from their houses or, for those with two family cars, commute 10 or 20 miles or perhaps much further to work. They have chosen where to live and generally have the means to reach all the facilities and services that they require. They have the best of both worlds.
I even recall seeing recently an advertisement for "new executive town houses in delightful rural setting"—an estate agent's oxymoron if ever there was one‡ As for the weekenders, they can load up the family 4x4 at Tesco's or Sainsburys and hurry home to Islington if it begins to rain. I have no complaint whatever against incomers or weekenders—I was once one myself—except where they push up the price of housing. However, they do not face the problems of those born and brought up in rural areas; those who are anchored there and cannot really choose another way of life.
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Finally, I return to the paradox that rising standards of living and a better quality of life for most people in our country can further impoverish the lives of an isolated or otherwise disadvantaged minority. Poverty itself is relative, but absolute standards can also be affected by the decline of essential services that most of us take for granted. We cannot allow the two nations of haves and have-nots, as I have defined them, to grow farther and farther apart. That means that in a market economy business must exercise social responsibility if it is to justify its freedom and not simply satisfy its shareholders and overpay its bosses. It means an active role for government, which must be ready to redistribute resources to meet the cost of public services that are inadequate or under threat.
Rural decline can be stopped, just as run-Clown neighbourhoods can be saved. As the Prime Minister said, that needs leadership. In this case, leadership should start with the government of the clay. My Lords, I beg to move for Papers.
3.35 p.m.
Lord Kimball: My Lords, the noble Lord, Lord Rodgers of Quarry Bank, has certainly struck a very opportune note with his choice of subject for the debate today. He made a point about the haves and the have-nots. I hope that some of the have-nots in parts of Hampshire, at whom, I suspect, this debate is aimed, may take some note of what is said today.
I speak as deputy president of the Countryside Alliance. The Countryside Alliance recently commissioned an NOP poll which confirmed a great deal of what we already knew. The April. NOP poll confirmed that only 4 per cent of all postmasters believe that the Government are doing a good job. The previous poll taken in July 1999 found that 27 per cent believed that the Government were not doing too had a job. The drop in the past nine months from 27 per cent to 4 per cent is quite substantial. Well over half the people who run local post offices know perfectly well that the Government are doing a bad job, and 87 per cent know and believe that the Government do not understand the value of local post offices, despite what may have been said yesterday.
There are nine other elements in the rural economy. It is a question not only of the post office, but also of the pharmacy, the physician, the parson, the priest, the publican, the primary school teacher, the petrol pump attendant and the policeman. Like the noble Lord, Lord Rodgers, I should like to dwell in particular on the latter two important members of the rural community who are so essential in providing the full range of services: the petrol pump attendant and the policeman.
The rural areas are worst affected by the fuel tax. The motor car supplies the basic needs of every single person who wants to live and work in the countryside. It would be churlish not to welcome what the Government have done with regard to the fuel tax escalator. However, they may have given up the principle but they do not seem to have abandoned the practice. The Countryside Alliance's April survey also

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shows that the much-vaunted rural bus scheme has made no perceived difference to the people who live in the countryside. Like all government schemes, it is badly run, and a high percentage of the grants under the Rural Bus Challenge seems to have been spent in the metropolitan areas. It is quite extraordinary that the moment the Government start to give a grant, socialist authorities are very apt at diverting the money their way.
As the noble Lord, Lord Rodgers, said, policing is the next most important problem in the countryside. Independent research for the Countryside Alliance has shown that crime is a concern equal to transport and housing for people who live in rural areas. As the noble Lord, Lord Rodgers, so rightly said, the unique element of rural crime is the terrible fear that help is unlikely to arrive in time. That is something that we in the countryside all know. Worse still is the admission by police forces in the counties that I know best—certainly in Leicestershire, Lincolnshire and Norfolk—where the police tell you that if you can identify the criminals and want to press charges, the police cannot be responsible for any subsequent action against your property. That is a really serious situation.
Lord Mackie of Benshie: My Lords, can the Government do something about the noise?
Baroness Farrington of Ribbleton: My Lords, I was seeking to be as fair as possible to the noble Lord, Lord Kimball. He may prefer to adjourn during pleasure to discover the cause of the noise. We now understand the cause of the noise, but it will take a few moments to rectify it. I am not sure whether the Leader of the House will agree that it is in order to adjourn during pleasure for five minutes, after which we shall be able to listen to the noble Lord properly. I beg to move that the House do now adjourn during pleasure until 3.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 3.40 to 3.45 p.m.]
Lord Kimball: My Lords, it seems that even in a central metropolitan area it takes some time for the experts to arrive and fix these problems. That reflects exactly what I was saying about crime in rural areas—help is unlikely to arrive on time.
The police in the counties of Norfolk, Leicestershire and Lincolnshire will tell you that if you can identify the criminals and wish to press charges, the police cannot be responsible for any subsequent action against your property. It is a very serious situation to receive that sort of advice from a district superintendent in your own area.
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Many noble Lords will have seen the "Countryfile" programme, which is one of the few programmes on television that is worth watching. It has a very good weather forecast, which is not normally done by a lady, so it is usually right‡ "Countryfile" recently produced the facts that 55 per cent of all farms have been burgled; 45 per cent of all farmers in rural areas have suffered vandalism; 20 per cent have suffered arson, which is a very serious crime; and 10 per cent have suffered physical abuse. In my own parish in Leicestershire, every single farm toolshed and store has been attacked. The perpetrators have not yet succeeded in gaining access to them, but every single one has been attacked. The reason for that, as the noble Lord, Lord Rodgers rightly said, is that even the Home Office has had to admit that there is a very serious shortfall in police funding. They admit to a figure of £30 million per year because of the inadequate calculation of the sparsity funding factor. That cannot be put right overnight. It is all very well for the Government to say that they will make the money available, but they have to recruit and train the police officers and revamp the structure of the country forces.
In addition to the list of problems in the rural parishes all beginning with `p', I should like to add to petrol and policing two others that were not in the original list; namely, planning and Poundbury. The health of the rural economy today depends on diversification. Several times this Session we have debated the sad state of agriculture and the rural economy in decline. I shall not develop that further today. But what I should like to point out to your Lordships is the fact that we can no longer succeed in developing diversification on the farms of this country. Grants for adapting farm buildings for other uses have now been withdrawn.
I know many cases, certainly in the wilds of rural Lincolnshire, where more money is brought in on the rent roll from the diversification of farm buildings than is brought in from the actual business of farming. I know that we have the engine of Grimsby and Scunthorpe, leading to a demand for office accommodation and other uses for farm buildings. But what did the Government do in that sphere? They set up the Countryside Agency and stripped it of its grant-making powers. The noble Lord, Lord Rodgers, referred to the Countryside Agency's report, which is a very serious indictment of the Government's failure to do anything for the rural countryside. Will the Government look seriously at restoring grant-making powers to the Countryside Agency? When it was the Countryside Development Agency, we saw the immense effect it had on rural areas.
One other way of restoring rural prosperity can be achieved through the planning authorities. I should like to make it compulsory for every planning authority in England to visit Poundbury to see what the Duchy of Cornwall has done there. It is the most brilliant example of how to sustain, revive and maintain a rural community. It is a wonderful mixture of housing. I am depressed today by the fact that when there is a new bypass round a village, the land within

1027
its compass is sold off and one particular housing contractor builds a number of desirable modern homes. They are just another modern slum. But at Poundbury, there is a brilliant development which has a mixture of all types of housing. Do not let anybody be deluded into thinking that the Duchy of Cornwall is subsidising that in any way. It is a straight, practical commercial development, thanks to the supervision of a really powerful and brilliant architect.
The other important aspect of Poundbury is its acceptance of the motor car. The motor car is digested; it is not a nuisance at all. It is hidden away and the areas above the garages are used properly. Of course, Poundbury is the product of a farmer's mind.
I believe that we all know that the market towns of Great Britain, and of England in particular, are in serious financial trouble. I believe that many of those market towns could be sustained by proper development, in the same way as Poundbury has been developed. After all, all those shops which are going bust in the market town high streets were once houses. They should be put back into the affordable rural housing sector, and linked to proper out-of-town shopping centres. That is the way in which the countryside should develop. Like many other noble Lords, I am grateful to the noble Lord, Lord Rodgers, for giving us the opportunity to discuss those issues in this debate.
3.53 p.m.
The Lord Bishop of Portsmouth: My Lords, like many noble Lords, I welcome the opportunity afforded by this debate to consider the correlation between services which are regarded as essential with the extent to which they are a reality among communities in particular need. I am grateful to the noble Lord, Lord Rodgers, for initiating the debate. In particular, I look forward to the contribution of my friend, the right reverend Prelate the Bishop of Hereford, whose rural experience is considerably greater than mine.
I want to concentrate on aspects that are part of my day-to-day experience. The Portsmouth diocese comprises south-east Hampshire and the Isle of Wight, an area which contains great social variations—inner urban, urban, suburban, suburban-rural, rural—much of which scores highly for mention now. However, I want to confine myself to two areas: banking and post office facilities on the Isle of Wight and health in inner urban Portsmouth.
It is a fact that 23 per cent of the population on the Isle of Wight are over 65 years of age and in the view of the county council it is unlikely that many of them will be using the Internet for their banking facilities in the near future. Local leaders are therefore extremely concerned about central government's proposal to pay pensions into bank accounts in order to avoid fraud and to increase security. That has implications for post offices, 40 per cent of whose business is paying out pensions to people who are purchasing goods at the same time.
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Existing arrangements for customers to access their banks through the post offices are good but that does not help those who do not have a bank account in the first place. Niton is a village in the south-east of the island, comprising 550 households, 25 per cent of which have no car. It has a population of 1,300, 32 per cent of whom are pensioners. At one time Niton had two banks and a variety of shops. People used to plan to retire there. Now it has few businesses and services and only a small post office with a small shop as part of it. If that were to disappear, the community would suffer even further. The ease of collecting cash and paying bills over the counter is not the only consideration. The post office remains a place of contact where people meet and keep in touch with each other. The scenario I have just described could be replicated elsewhere. It is a symptom of our inability to manage change in an effective and flexible way. We are often told in banking terms that we are becoming a cashless and faceless society. Perhaps that is where the future lies. But it is not here yet.
Many rural communities are increasingly suspicious of the high street banks which appear to them to be driven by what are seen to be their own economic priorities which are gradually replacing face-to-face contact. I am not against the cashless society. That is but a development from turning gold into paper in monetary terms and almost logical with our current technology. The faceless character of our society, however, has far more serious consequences. Computerisation and the Internet are causing a revolution, much of it good in terms of speed and efficiency. As chair of a steering committee for IT skills bases in the regeneration areas around Portsmouth, I have seen for myself children from deprived communities in inner urban Portsmouth being helped in basic English language skills by a computer programme in a way that would have been unthinkable in years past.
But there is a human price to pay. However clever the software, it cannot teach wisdom and the value of human relationships.
One of the answers to the island's problems is a more flexible approach, one which does not discriminate against those who are not computerised as well as one which provides a low-cost banking facility, particularly for the disadvantaged and the socially excluded. I want to ask the Minister what steps the Government will take to enable a credit union to deliver such financial services to vulnerable people.
I turn now to the City of Portsmouth and to inner urban Portsmouth, to be precise, which has the poorest postcode in the south of England. There are five of what we call urban priority area parishes. In three of those, 35 per cent of households depend on benefit. The area has twice the level of unemployment of the rest of the city. Seventy per cent of 17 year-olds are no longer in full-time education; 22 per cent of the population are in serious debt. I know those communities. The clergy working in their parishes are

1029
performing a heroic task, usually in partnership with community workers of various kinds. The work of all of them—not just the work of the clergy—is characterised by small results from great resources, such is the degree of deprivation among the people.
Life styles are unhealthy with high levels of smoking, alcohol drinking above sensible limits, and problems of overweight. A high proportion die of coronary heart disease or from cancer, including lung cancer, and 56 per cent are reported to suffer from stress caused by neighbourhood problems of one kind or another but different from that which interrupted us earlier.
In such a community, access to primary care is vital. But reality shows a different picture. In those communities general practitioners have a greater workload with a significantly higher proportion of night visits. There is a decreasing proportion of district nurses per 1,000 practice population aged 65 years and over. Moreover, the caseloads in those deprived areas include high numbers of children with special needs. Statistics reveal a consistently lower uptake for facilities such as cervical and breast screening.
The problems are typical of many of our inner cities, but Portsmouth scores highly indeed. Many of the reasons for what we face today lie deep in history as quick-fix solutions repeatedly reveal. Anyone who has lived and worked in those communities in Portsmouth knows that we are in for a long haul, whether in relation to health or education or even, in some places, housing.
I want to ask the Minister what the Government are prepared to do to persuade the Portsmouth and South-East Hampshire Health Authority to ensure the provision of equitable access to effective healthcare in relation to needs. Can he reveal the adequacy of primary healthcare provision in the deprived areas of the city so that financial allocations to primary care groups take account of differences in health needs and so that staffing levels of GPs, district nurses and health visitors can match needs in the most deprived areas? In conclusion, I call for what has been referred to by someone who, I believe, is a professional colleague of the noble Earl, Lord Russell, as "a real cultivation of the moral imagination". That will help us to bridge the gap between the grand strategy on the one hand and the problems that are with us on the other, so that we can find ways of thinking, analysing and imagining that are in every sense attainable.
Baroness Farrington of Ribbleton: My Lords, before we move to the Statement on Zimbabwe I take the opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

Zimbabwe
4.2 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, with the leave of the House, I shall repeat a Statement on the situation in Zimbabwe which is being made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:
"Yesterday I attended the meeting of the Commonwealth Ministerial Action Group. I am pleased to report to the House that the meeting endorsed all our concerns. In particular the meeting recorded 'deep concern' over the continuing violence, the illegal occupations, the failure to uphold the rule of law and political intimidation. It demanded fair elections within the time required by the constitution of Zimbabwe.
"The meeting agreed that the Commonwealth Secretary-General should visit Harare urgently in order to bring home to the Government of Zimbabwe and to make clear to the people of Zimbabwe the concerns of the Commonwealth.
"I spoke in advance to most of the Ministers present yesterday and I am pleased at the universal agreement they gave at the meeting to our concerns. The outcome exposes the efforts of President Mugabe to pretend that only Britain is critical of the conduct of his government. All Britain's concerns have now been supported by a body representing all of the Commonwealth and chaired by one of the neighbours of Zimbabwe.
"A major reason why we received ready support yesterday was the recognition that Britain had taken every reasonable step to find agreement with the Government of Zimbabwe on a fair programme of land reform. At my meeting last week with the ministerial delegation, I confirmed that Britain was ready to help to fund land reform and that we were willing to take the lead in mobilising funding from other partners such as the World Bank, the European Commission and the United States.
"However, neither Britain nor any other donor is going to fund a programme of land reform unless it is conducted within the rule of law; it is based on a fair price to the farmer; and it reduces poverty among the rural poor who have no land.
"Ministers in Zimbabwe have complained that Britain is imposing colonial conditions. There is nothing new about these conditions. They were all in the conclusions of the 1998 Land Conference which was hosted and chaired by the Government of Zimbabwe itself.
"Nevertheless last week the Zimbabwean delegation failed to give a commitment to bring the farm occupations to an end. I made clear that in those circumstances Britain could not take further any support for land reform.
"Since that meeting I have briefed Morgan Tsvangirai, the leader of the opposition movement. I have also spoken to Mr Henwood of the

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Commercial Farmers' Union, who has supported the firm line we took on conditions for any help with land reform.
"If the Government of Zimbabwe are genuinely committed to land reform, the way is open for them to make progress with international support.
"I am sorry to say that the events of the past two weeks, and President Mugabe's inflammatory speech earlier today, suggest that the Government of Zimbabwe are interested in the issue of land reform only to create a condition of crisis in which they can secure their re-election.
"The whole House will deplore the mounting evidence of political intimidation of the people of Zimbabwe. Opposition campaigners have been ambushed and beaten up. Commercial companies which display opposition posters have had their properties firebombed. Rural communities have been threatened that it will be known which ballot box came from their village. By the end of the past month of election campaigning 14 political activists had been murdered, all of them supporters of the opposition.
"No election can be fair unless there is an election campaign free from intimidation. At the meeting yesterday we agreed that the Commonwealth should send election observers to Zimbabwe, and our Statement stresses that they must be admitted as early as possible. At the weekend I will be seeking the same demand from the European Union for early entry of European observers. While the primary responsibility for ending the violence rests with the Government of Zimbabwe, the presence of international observers may help to deter some of the brutality of recent weeks and may give some confidence to those who want free expression for their views.
"In the present circumstances of spreading violence we have resolved that from today Britain will refuse all new export licence applications for arms and military equipment to Zimbabwe. That will include all licences for spare parts in connection with previous contracts such as Hawk aircraft. We are urgently reviewing all existing export licences to Zimbabwe.
"Further, I can inform the House that my right honourable friend the Secretary of State for International Development has suspended the programme to support the supply of Land Rovers to the Zimbabwean police. As a result, the supply of the remaining 450 has been halted and will not be resumed unless there is a clear determination by the Zimbabwean police to restore the rule of law.
"Britain is willing to help, in the right conditions, with the economic and land problems of Zimbabwe. Britain has also taken the lead in mobilising international pressure for free elections.
"But no Member of the House would want to approach our discussion on the basis of President Mugabe's claim that the solution to the problems in Zimbabwe lies in London. It does not. Zimbabwe has been independent for 20 years and President
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Mugabe has been in power for every one of them. In that time he has already received over —500 million of development aid from Britain.
"It is Zimbabwe's choice what its future will be. That must, though, not be the choice of the Government of Zimbabwe alone. It must be the free choice of the people of Zimbabwe through fair elections without violence, without intimidation and without fear. That was the united message from the Commonwealth yesterday. I ask this House to send the same united message today to the majority of the people of Zimbabwe who want to live in a free democracy and to be protected by the rule of law."
My Lords, that concludes the Statement.
4.11 p.m.
Baroness Rawlings: My Lords, I thank the Minister for repeating the Statement made in another place about the shocking situation in Zimbabwe.
Zimbabwe should be one of the jewels of Africa. The country is fertile and rich in natural resources. It has an intelligent and educated population, some of the most efficient farming in the world, a judiciary that throughout the recent descent into lawlessness has remained robustly independent in its adherence to the law and the constitution, and a vibrant desire among the people for democracy and for the control of their own destiny.
We have all admired the courage of those in the opposition parties who have remained undaunted by a ruthless and systematic programme of brutal intimidation by murder and violence that at least has been countenanced, if not organised, by the governing regime. It is intolerable that a country that has been blessed with so much should be brought to its current pass by the savage acts of one man and his acolytes.
Although everyone accepts that land reform is important and that Britain should play its part, this is not about land, but an ageing despot who is clinging to power. Does the Minister agree that. Britain certainly should not give further financial support for land reform without guarantees of lawful and ordered change and before receiving a full account of where the £10 million of taxpayers' money given to the Harare government last year has gone? We welcome the Government's refusal to issue further licences for military exports.
The overwhelming priority is that the elections should be held as soon as possible and that they should be open and fair. We welcome the decision of the Commonwealth to send observers to oversee the election process. However, what does the phrase, "Observers should be admitted as soon as possible" actually mean? Does the Minister not think that the delays so far have already seriously compromised any elections, as my noble friend Lord Blaker wrote in The Times this week? Furthermore, does the Minister agree with the two supporters of the Movement. for Democratic Change who were quoted in today's Independent calling for the observers to come now, and not just on election day when it will be too late? Everyone knows that much of the violence is geared

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towards intimidating future voters. To show the seriousness with which the Commonwealth views these events, will the Minister support an international group of "eminent persons" to head the observers' mission?
Noble Lords will be pleased to learn that at last the Commonwealth has been mobilised to this cause. Does the Minister accept that the Foreign Secretary's first move to engage the European Union in pressuring Mugabe was a false step? There are many instances where the European Union is the right vehicle for action, but it is hard to imagine anything more calculated to entrench Mugabe than the spectacle of all the former colonial powers ganging together against him. It was always obvious that the Commonwealth was the right family of nations to take action here. Why did it take so long to get involved? Does the Minister agree that yesterday the Ministerial Action Group should at least have started the process of suspending the Mugabe regime from the Commonwealth, as many people in Zimbabwe, both black and white, would wish?
Surely it is ironic that it was the Zimbabwean Foreign Minister, Stan Mudenge, who chaired the Commonwealth Ministerial Action Group which suspended Nigeria in 1995. That decision removed the veneer of respectability from a dictatorial regime and helped to bring that country back to democracy and the rule of law.
I hope the Minister will agree that all people have the right to a democratic government. I am sure that she will recognise the fact that any policy which showed double standards in tolerating different levels of legitimacy would be both condescending and unacceptable.
4.15 p.m.
Lord Avebury: My Lords, perhaps I may thank the Minister for repeating the Statement and say that we on these Benches warmly approve of the policies of Her Majesty's Government. The Foreign Secretary has handled this issue as well as he possibly could by giving the Zimbabweans a chance to comply with the conditions which they themselves had set. The Minister pointed that out in the Statement. That was the right course of action and it was not until after that meeting that it was appropriate and proper for the matter to be laid before the Commonwealth Ministerial Action Group. In any case, the UK did not arrange the timing of yesterday's CMAG meeting. It was organised some time ago and it was fortuitous that the meeting took place just before a ministerial Statement could be made.
However, that was no reason why the Foreign Secretary should not have taken up these matters with the European Union as well. Surely we should seek for the world community to back the moves now being made. Although we should be pleased with the steps taken at the CMAG meeting yesterday, that should be without prejudice to any further steps that the Foreign Secretary may decide to take in enlisting the support of
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the European Union for the same policies; that is to say, we should continue to support any measures as regards land reform that comply with the conditions laid down in 1998. If those conditions are satisfied, we should help Zimbabwe to lay a case before the international financial institutions in support of a much larger programme than could be achieved if Zimbabwe tries to undertake the entire task on its own.
Perhaps I may turn to the matter of the election. I, too, welcome the intention of Mr Don McKinnon to go to Zimbabwe to assess the position. However, can the Minister say whether it would be possible for the Commonwealth to do what it has done on previous occasions; namely, to form an opinion beforehand as to whether the conditions exist in which free and fair elections can take place? That happened in the case of the presidential election in Cameroon after a mission had been sent by the secretariat to observe the parliamentary elections. It was concluded, from observations of the conditions under which those elections were held, that it was impossible for the presidential election to be free and fair. I do not wish to prejudge what might be said about the conditions in Zimbabwe. However, two separate statements have been issued, the first from Amnesty International—the noble Baroness has probably seen it already—in which it comments that the failure to condemn and curb acts of violence has led to a state of affairs where people's freedom of expression and freedom of assembly have been seriously constrained. Secondly, the committee for the protection of journalists has produced a similar statement about the lack of freedom of the press in Zimbabwe and the intimidation of the non state-owned press.
If it is found that it is no longer possible for people to express themselves or for the MDC to campaign freely and to hold election meetings—the Minister referred to the 14 members who have already been murdered—then it would not be right for us to send a mission simply to look at the mechanics of polling day. By then it would already be too late. Can the Minister ensure that this point is made to Mr Don McKinnon so that during his visit, or in any further inquiries he may make, he can ensure that the Commonwealth should now form an opinion about whether the right conditions exist in Zimbabwe for free and fair elections to be held? If not, we should not endorse the process by sending observers simply to watch what happens on polling day.
4.20 p.m.
Baroness Scotland of Asthal: My Lords, I thank both noble Lords who have spoken in support of the Statement and say straightaway that the Commonwealth clearly understands the acute nature of the problem with which it is faced. The fact that the Secretary-General, Mr Don McKinnon, is going to Zimbabwe this month sends a strong message from the Commonwealth. We hope that that gives us an opportunity to see and understand exactly what is happening on the ground.

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In answer to the noble Baroness, Lady Rawlings, as to how soon the observers will go to Zimbabwe, "as soon as practicable" means exactly that. We are going a s fast as we can. It is a matter of great urgency and importance. The necessary vigour is being applied with great energy.
The noble Baroness also mentioned aid. It should be understood that we want to make it clear to the people of Zimbabwe that it is Mr Mugabe and his actions at which the international community feels anger and distress, not the people of Zimbabwe, who are suffering greatly. Large sums in aid go to relieve the poverty which exists in the country. The noble Baroness will know that 25 per cent of the people of Zimbabwe are HIV positive. A huge amount of the money given is to relieve that acute situation. Cutting off such aid will serve only to feed Mr Mugabe's rhetoric that Britain is interested only in the politics and not in the people. So we shall not go down that road.
But I say this also: this Government have looked for support in responding to Zimbabwe's needs from wherever we could obtain it. We have excited support from the Commonwealth, from the EU, from our US partners and others. We express gratitude for the support that has been given internationally to Zimbabwe. I do not accept for a moment that my right honourable friend the Foreign Secretary was wrong to ask for EU support. I remind the House that we seek its support in relation to the observer status; we shall seek its support in relation to land reform, and we need to take all our friends with us. Therefore, in making overtures to the EU, we in no way impeded the similarly strong overtures (which have borne great fruit) which were being made simultaneously to our Commonwealth partners. It was a multi-pronged approach and, with the grace of God, it bore fruit. That is something for which I give thanks, not criticism.
There is still much to do. I should like to take this opportunity to acknowledge all the efforts made by those in opposition in Zimbabwe who have shown great courage. Zimbabwe is lucky that it has people of worth both in its opposition and in its judiciary who still understand the meaning of democracy and the rule of law. We shall give them our support.
4.25 p.m.
Lord Shore of Stepney: My Lords, I welcome the Statement made by my noble friend. In particular I welcome the announcement that the Secretary-General of the Commonwealth is to go to Harare and, further, that efforts are to be made to ensure that a Commonwealth team is there as soon as possible.
All of that is good news. But my noble friend's response on when we approached our Commonwealth colleagues is far from satisfactory. I am all for mobilising, in support of democracy anywhere, those who can help; in particular, I have no objection to the European Union helping if we feel that that is the most appropriate forum, or, for that matter, international monetary and other organisations as mentioned in the
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recent letter of the noble Baroness, Lady Park. But it takes a bit of explaining as to why the, Commonwealth was the last, rather than the first, of the international organisations to be approached when it has the unique advantage (from our point of view and that of Zimbabwe) in that we are both members of the Commonwealth.
The ministerial advisory committee was set up at the last CHOGM deliberately to keep an ongoing watch on threats to democracy and human rights in Commonwealth countries. Why then have we been so slow in turning to what is undoubtedly the best bet?
Baroness Scotland of Asthal: My Lords, I understand my noble friend's anxiety but can only repeat what I said earlier. Our Commonwealth partners were by no means the last to be approached.
My right honourable friend the Foreign Secretary and my honourable friend Mr Hain have been vigorous in the moves they have taken and the conversations they have had in relation to our partners within the Commonwealth. We approached a plethora of people at the same time and if it has been inferred that the Commonwealth was the last to be approached, I regret to say that that is the wrong inference; it was not.
Lord Swinfen: My Lords, can the Minister tell the House what the position of the British military training team is?
Baroness Scotland of Asthal: My Lords, the British Military Advisory Training Team is based in Harare. It focuses on regional peacekeeping training within the southern African development community countries. The training strengthens African forces' capacity to participate in all aspects of peacekeeping operations. Courses include modules on conflict prevention and dispute resolution; human rights and international humanitarian law; the rights of the child; democratic control of armed forces; the structure of the UN and civil/military co-ordination; for example, with the ICRC. The modules also include training in democratic policing. The courses have been held across southern Africa and are of great value.
Lord St John of Bletso: My Lords, I join in welcoming the Statement repeated by the Minister and, more particularly, the Commonwealth's statement yesterday. On the subject of land reform, is the Minister aware of why the land that has already been bought by the Zimbabwean Government for redistribution to the peasant farmers has so far been distributed to President Mugabe's personal friends and senior civil servants?
The Minister said that Zimbabwe has received in excess of £500 million in aid. My understanding is that Her Majesty's Government have so far given in excess of £45 million for land reform since independence. Is the Minister aware of where that money has gone? Is there any way in which President Robert Mugabe's foreign assets can be frozen?

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Finally, there is no doubt that the current instability in Zimbabwe has had a knock-on effect on the entire region of southern Africa. Are any measures being taken to appoint an African leader to mediate in this crisis?
Baroness Scotland of Asthal: My Lords, perhaps I may deal with the last point first. It is right to tell your Lordships that that position is being looked at. We have been warmed by the whole-hearted support that we received from our African colleagues. It is essential that they are part of the lead in responding to Zimbabwe's need.
It is right also that to date we have contributed £44 million to a land reform programme. One of the hot issues currently between Mr Mugabe and ourselves is how that money has been expended and who now occupies that land. There are pressing questions about why members of his government and others seem to have acquired a lot of the land. This Government have been absolutely clear that no more money will be given until we have a transparent system that guarantees that the land goes to those who most need and deserve it. That is one of the challenges with which Her Majesty's Government and all our international partners who are joining with us are faced and now have to deal.
Lord Tomlinson: My Lords, I should like warmly to welcome the Statement repeated by my noble friend and to do so without the rather grudging, carping criticism that was attached to the welcome extended by the noble Lord, Lord Shore. Does my noble friend agree with me that the response is necessarily proportionate to the indolence of President Mugabe in the face of the deteriorating circumstances and that, therefore, having tried reasonable argument, the Government are quite right proportionately to increase their response?
I turn briefly to the question of elections. Is my noble friend aware that a number of Members on this side of the House will be predisposed to agree with the view expressed by the noble Lord, Lord Avebury, regarding the necessary pre-conditions for free and fair elections? It is all very well having the incantation of free and fair elections, but if there has already been so much intimidation, is my noble friend satisfied that the Commonwealth Secretary General will be able to establish whether we are in a state to have those free and fair elections? Is she equally satisfied that the necessary steps for getting constituencies and registers to enable those elections to take place have been finalised? When my noble friend last repeated a Statement a few weeks ago, that was an issue upon which she was not able to assure the House absolutely.
Baroness Scotland of Asthal: My Lords, I welcome everything said by my noble friend and understand his concerns. Of course, we need to establish what the facts are on the ground. I should not like to pre-judge what the Secretary-General, Mr McKinnon, will find when he visits the area. However, I can say that he and
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all those who participated in the CMAG meeting have a very clear understanding of the position in Zimbabwe to date. They will be looking with a keen eye to see what needs to be done hereafter. They are judgments, and the concerns that have been expressed are valid. But those judgments will have to be made. I am sorry that I cannot give a clearer expression in that respect, but the issues are not clear in themselves.
We have not been advised of a final position in relation to those elections. However, we are receiving a clear steer from the Opposition, who are in agreement with the process that we are adopting. They are also in agreement with the strategy that has been adopted in the Commonwealth and elsewhere and have given their assent to this being the most appropriate way forward. That lead is something upon which we seek to rely.
Lord Howell of Guildford: My Lords, does the Minister accept that the deployment of the Commonwealth resource at this stage is extremely welcome, although, in my view, a little belated? I cannot help but share the view of my noble friend Lady Rawlings that the involvement of the EU is not perhaps so appropriate and that we would be wiser to listen to the advice of those who say that this matter should be settled in an African context. Indeed, wise voices are saying so. I believe that we should listen to them most carefully.
Does the Minister also agree that, after the farmers and the poor, tragic state of Zimbabwe, the worst loser in this whole tragedy could be South Africa; indeed, the whole of southern Africa and its development? We could see such a situation because, first, global investors are rushing to take their money out of the whole region; and, secondly, the habit of land reform by violence could spread to neighbouring countries. Therefore, can the noble Baroness reassure us that the Secretary of State is in constant and continuous dialogue with leaders like Thabo Mbeki and other African leaders, but particularly those in South Africa, to bring home the point that, whatever the divided opinions on land reform may be, the rule of law is their friend and the rule of anarchy is their deadly enemy?
Baroness Scotland of Asthal: My Lords, I agree with the noble Lord. As was said in the Statement, I should emphasise that the major reason for our receiving support yesterday was the recognition that Britain had taken every reasonable step to find agreement with the Government of Zimbabwe on a fair programme of land reform. That was very important with our African colleagues. They recognised that we had behaved absolutely properly and with integrity.
Our African colleagues also understand the possibilities of the ricochet effect of things happening in Zimbabwe adversely affecting the rest of Africa. That has led to real understanding. It is of course important that this matter should be settled in an African context. However, I should emphasise that that must happen with the help and support of their international friends, including the EU, ourselves, America and anyone else who will support them in this

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endeavour. Africa must have, and, indeed, seeks, those friends. The work that we are doing is in unison with them. We believe that that is a way in which we shall be able to garner support together and, it is to be hoped, bring this matter to a successful conclusion.
Viscount Waverley: My Lords, on the timing issues, does the Minister agree that one of the important aspects of a Commonwealth observer group is the in-depth analysis and pointers for the future which make an independent opinion so vital under all circumstances? Having said that, is the Minister aware that the army's absentee vote is already being placed into urban constituencies where the greatest opposition lies?
Baroness Scotland of Asthal: My Lords, I understand the noble Viscount's concerns. It is important for the observers to have an in-depth, independent view in relation to this matter. We are fortunate in knowing that there are many people who have a great deal of experience in this regard. We are hoping that they will join us and help to fashion the most appropriate observer group. As my right honourable friend said when delivering the Statement in another place, we are also looking to the EU and others to send observers. We hope that we will garner enough support and strength to ensure that the observers are able to do their job properly.
Lord Clinton-Davis: My Lords, is it not extremely important to obtain the support of all people—that is to say, those in the Commonwealth and in the United States, as well as those in the EU? From the point of view of President Mugabe, is it not also extremely important for him to understand that the world is horrified by what has happened in Zimbabwe? Further, is it not equally wrong for my noble friend to upbraid my noble friend Lord Shore, who, like the rest of us who are friends of the people of Zimbabwe, is angered by what has happened?
Baroness Scotland of Asthal: My Lords, I certainly understand all noble Lords in this House who feel passionately on the subject. Indeed, that demonstrates the warmth and compassion for which this House is known. I should applaud and commend all those who express that view. I understand entirely the anger and irritation sometimes expressed that more cannot be done and more swiftly. But I wholeheartedly endorse what my noble friend said: everyone must work together. We have had very few things to be warmed by in this debate, but one of the most warming aspects is the fact that there is international consensus on this issue; and we are working together.
Lord Elton: My Lords, I have spoken to friends in Zimbabwe over the past few days and they have made two things very clear to me. The first is their sense of the urgent need for the early appointment of outside observers. I was a member of the team that was sent from this Parliament to observe the elections in Zimbabwe in 1979. To begin with, we had to tell the
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government of the day that they were not responsible for choosing what aeroplane we travelled in and what destination we took. Can the noble Baroness assure the House that we shall ensure that any organisation undertaking outside observation will be sufficiently independent, mobile, secure in its communications and numerous to cover the whole country and give an independent view?
The second thing they bore in on me was a growing concern among black and white communities that the presence of foreign media observers—not political observers—was being used to incite some of the acts of violence so that they would have them to report. Will the noble Baroness use what offices she has through diplomatic channels to bring to the notice of the employers of those teams that this is unsatisfactory conduct? Will she answer the question of my noble friend on the Front Bench about the possible suspension of Zimbabwe from the Commonwealth? What does it have to do before it is suspended?
Baroness Scotland of Asthal: My Lords, in relation to the noble Lord's first point, of course we understand the importance of independence, transparency and efficacy. Those issues will be key when trying to put together an effective observer force. They will be taken fully into account.
Secondly, of course I acknowledge what the noble Lord says about the behaviour of the media. Unfortunately, we have some difficulty controlling our media here. Whether we shall have any greater effect elsewhere I cannot say, but the point is well understood.
As regards suspending Zimbabwe from the Commonwealth, noble Lords will know that before a country can be suspended from the Commonwealth it has to be demonstrated that that country has behaved unconstitutionally. Although we are horrified by what is happening in Zimbabwe, unless and until the elections are proven not to be constitutional and Zimbabwe is proven not to have a constitutional government, we would not be able to suspend it. The rules are rigid and frustrating in terms of the current situation. However, noble Lords will remember that Nigeria was suspended because it had an unconstitutional government. Zimbabwe is not yet in that position. It is certainly our hope and aspiration that it never will be; that fair elections will take place and that Zimbabwe will return a democratic, effective government who are able to express the will of the people.
Baroness Park of Monmouth: My Lords, will the Minister—
Lord Davies of Coity: My Lords, I welcome the Government's efforts to try to bring stability to Zimbabwe and a return to democracy there. I think that all noble Lords on all sides of the House ought to welcome those efforts and do all that they can to complement them. It seems to me that the sole, certainly the primary, objective of President Mugabe is to keep his grip on power in Zimbabwe. His secondary

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interests—if he has secondary interests—are the people of Zimbabwe, the country of Zimbabwe and, a long way down the line, the white farmers of Zimbabwe.
Given those circumstances, it seems to me that President Mugabe does not care what happens in the part of the world we are discussing unless he has the complete power that he has enjoyed for so long. The worst thing that we, the Commonwealth, the Americans or the Europeans can do is to make a difficult situation that much worse. We should all try to solidify our position in as much as we want a return to democracy. We should demonstrate clearly that President Mugabe is completely isolated and we should ensure that there is a return to democracy. That is all that we want.
Baroness Scotland of Asthal: My Lords, that is quite clearly a hope and aspiration.
Baroness Park of Monmouth: My Lords, will the Minister—
Baroness Farrington of Ribbleton: My Lords, I am sorry but we have tried to allocate the available time between the different Benches.

Essential Local Services
4.44 p.m.
Debate resumed.
Lord Bradshaw: My Lords, I address this question in the context of bus services. Like the right reverend Prelate the Bishop of Portsmouth, I want to define two categories of communities in particular need: first, those who live in cities and larger towns, mostly along radial roads, particularly in areas of dense housing—what is known in public transport circles as "good bus country"—and, secondly, those who live in the further suburbs and smaller centres and in rural corridors.
I intend to leave out of account those living in deepest rural areas where frequent bus services are unlikely to be a viable proposition. Those areas require different treatment. I refer here to the remarks of the noble Lord, Lord Kimball, who said that the rural bus service grant was a waste of money. I believe that he also said that it was wasted principally by socialist councils. I am a member of a county council whose Labour members do not, I believe, describe themselves as "socialists". The money is not wasted—at least not where I live. I travelled by bus to the station this morning in company with quite a lot of other people. Some foolish restrictions are imposed on the way in which the rural bus service grant is spent, but I imagine that the Government will address those as time moves on.
Apart from those who need buses, who are the major target of my remarks, there is a further important group of people who need to be attracted to
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bus use. Getting those people to switch to public transport has two beneficial effects. First, it reduces car traffic and, secondly—and more importantly—it improves the viability of the bus service which has the potential to create a virtuous circle of greater frequency and more investment in modern buses.
The Transport Bill will shortly arrive in your Lordships' House. This debate provides a useful opportunity to indicate to the Minister some of the concerns felt on these Benches and elsewhere and how we believe concerns for those in need may best be addressed. We must remind ourselves that 80 million journeys a week are made by bus, the vast majority by people who have no alternative.
In the 14 years since bus services were deregulated, we have seen costs in the bus industry reduced to an absolute minimum. We have seen staff numbers and the number of vehicles cut. We have seen management and central workshops disappear in many areas. Indeed, in the bus industry cost inflation now ranges between 4 and 6 per cent. That is driven mainly by rising fuel costs and drivers' wages. Most companies are having to raise drivers' wages substantially in order to attract people to take up a pretty unsociable job. This cost inflation of between 4 and 6 per cent compares with inflation in the economy as a whole of between 2 and 2.5 per cent.
That disparity would normally mean that bus fares would have to rise in real terms. However, we have learned from recently published research—I believe that it was funded by the DETR and carried out mostly by Joyce Dargay of the ESRC Transport Studies Unit—that if you raise bus fares above the level of inflation, there is a sharp drop in the number of people using buses. If you raise fares by 10 per cent, at the end of the first year 4 per cent of passengers will have disappeared. However, 30 months after the fares increase 7.5 per cent will have disappeared. Shortly you find that almost all the revenue gained from the fares increase has been lost.
So if fare increases are not an appropriate response to rising costs, there are two alternatives. These are what is called greater scheduling efficiency which, put simply, means that one achieves more miles from every bus, more hours driven by every driver, and better marketing, which appears to mean stable, regular interval services, good publicity, co-ordinated timetables and fares which are seen to be good value for money.
The greatest help which government at national and local level can give to the bus industry, and to those many people who depend on it, is a clear, unobstructed highway and clear access to bus stops. I stress that this is important both to urban and rural dwellers because most rural bus services start in towns. If they cannot get in and out of the towns, they cannot give a decent service to those who live in rural areas.
There is ample evidence that unobstructed highways lead to the efficient use of resources, reduced journey times and reliability. Today I have been to Harlow in Essex to open a very extensive bus priority system, which has been funded by Essex County

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Council, Harlow District Council and the developers of a large housing development, the latter having contributed £3 million towards the scheme. It is the kind of thing that we want to see spread very widely.
However, it is a pity that so little real commitment is shown to developing extensive bus priorities and the enforcement which is necessary to make them effective. The Transport Bill provides relatively little hope in this area. Most police forces have abandoned effective enforcement, slashing the number of traffic wardens and traffic officers. We have already heard, and we shall hear again, about the pressures on the police force.
In turn, the Home Office appears to be woefully slow in approving the use of camera technology as a substitute for police enforcement. Fixed penalty fines are often derisory and regarded as a business expense by those who obstruct the highway and the efficient operation of buses. In London, the red routes are enforced because there is what is called a "service level agreement" between the Traffic Director and the Metropolitan Police, which in plain English means that the taxpayer funds the extra traffic wardens necessary.
It is reported that on the priority bus network outside the red routes enforcement is pretty ineffective. The selfishness of the few who obstruct the highway inflicts delay and costs on bus users who have no alternative. Delaying buses makes the service unattractive to potential users and can lead only to a spiral of decline.
I look forward to hearing from the Minister that funds allocated to local transport plans will be concentrated on those authorities which show real determination in implementing bus priorities and have enforcement policies to back them up. I am not speaking about the odd bus lane along the wider sections of the road, but about priority measures which tackle the bottlenecks and give real benefit. I also hope that the Minister will say something about enforcement and give us some hope that the Home Office will quickly give the necessary approval to camera technology for the enforcement of bus lanes, yellow box junctions and banned right turns.
The Government's consultation paper on the bus industry, From Workhorse to Thoroughbred, refers in paragraph 11.4 to extending bus lane enforcement across London by 2003. It also states that they are keen to see the lessons learned extended more widely. I sincerely hope that we shall not have to wait until 2003.
The bus industry needs that help now so that it can get on top of rising costs without increasing fares and provide an efficient service. There appears to me to be no technical reason why camera use should not be widely extended.
The bus industry, very correctly, is being obliged to buy new buses so that compliance with the Disability Discrimination Act is achieved. The industry takes that obligation seriously, but, I ask the Minister, how seriously do the Government take the issue of bus stop
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abuse, with people parking in bus stop bays? Unless buses can pull alongside kerbs, the benefits of low-floor buses are entirely negated.
Bus companies will feel the full force of the law if they do not comply with the Disability Discrimination Act. It really is time that those who park at bus stops felt that the Government sufficiently disapproved of their selfishness by, for example, adding penalty points to any fine. The rush towards decriminalisation, while it relieves the police of work, should not mean that serious and particularly repeat offenders—people who accumulate 70 or 80 parking tickets a year—should go unpunished.
As well as efficient operation, the bus industry must of course improve all aspects of its marketing. Research shows that simple timetables, giving frequent or at least regular departures, are important. The same research states that 67 per cent of car users would consider using a frequent bus service and that 22 per cent would consider using a regular service. Only 7 per cent said that they would consider using anything else. It is very clear that simple information, network ticketing and co-operation between operators are needed by both the existing users and those whore companies seek to attract.
However, the shadow of the Competition Act hangs over the industry. I believe that the Office of Fair Trading is making progress on the issue of a block exemption for the industry as regards Joint and through tickets. However, I was told today that in Southend, where the local authority wishes to buy block travel on the buses for eligible school children, the two bus companies which would be involved believe that they cannot consider the matter together because if they do so they would be in breach of the Competition Act.
Guidance is needed quickly for the industry on issues such as joint timetables, joint liveries and other things which the public find useful. But the OFT says that it is going to charge £5,000 to give guidance on each particular case and £13,000 if a company wants a decision. That is what one has to pay the OFT. It does not cover one's own costs in briefing one's own lawyers to argue the case.
I hope that the Minister will be able to persuade his colleagues that the OFT should offer some general guidance. Many people believe that the OFT takes the attitude that all the present talk about transport integration is a passing fad and that the real idol to be worshipped is the Competition Act itself which states that market sharing is always anti-competitive.
There is a real dilemma here for all transport operators who are told to co-operate by one government department and by their own customers and by another government department and its agent, the OFT, that to do so risks penalties which, as the Minister well knows, are draconian in the extreme. They are 10 per cent of the turnover not of the local company, but of the whole group.
The final issue to which I want to refer is concessionary fares. Bus fares are very expensive. They rose in the decade after 1986 by 20 per cent Mille at the

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same time the cost of motoring rose by only five per cent. We very warmly welcome the Government's decision that all pensioners will qualify for a half-fare bus pass which will be issued free of charge. We have some doubts as to whether the £25 million set aside to fund it will meet the costs, but at least we are grateful that we are moving that way. When we come to debate the Bill, we hope to persuade the Government that all persons over 60 years of age should qualify and not men at 65 and ladies at 60. It will cost very little to make that change and it would add significantly to the reduction of social exclusion among those most in need.
I ask the Minister whether the Government will make urgent inquiries about the cost of extending half-fare travel to young people up to the age of 18 years. My contacts in the bus industry suggest that the cost will be very low. This group of people comprises those who want to get out and about, have limited means and are most likely to go out and buy an old car. Often in rural areas young people can be very isolated indeed. More reasonable fares would go some way to meeting the transport needs of that group.
We know that the Government will not welcome amendments to the Transport Bill, but as a regular bus user I know that there will not necessarily be another Bill along for some time. We believe that bus users deserve from the Government at least a fraction of the attention they appear to be willing to lavish on the motoring lobby. Many bus users are poor, isolated and less articulate than other members of the community, but that does not mean that their needs are any less important than the needs of those who have the choice of using a car. I hope that our attempts to improve the Bill in the interests of bus users will be sympathetically received.
It is not my place to advise the Minister on which policies are likely to assist the Government's reelection, but addressing the issue of the cost of bus fares will be cheap and popular, particularly among those groups of the population with which the Government are reported to have lost touch.
5 p.m.
Baroness Harris of Richmond: My Lords, I chair a police authority in a huge rural area—North Yorkshire—and I am also a deputy chair of the Association of Police Authorities, so I hope that your Lordships will accept my credentials for speaking on rural policing issues today.
I should first like to address the problems of sparsity. The noble Lord, Lord Kimball, has already referred to this matter, but I want to tell your Lordships of the practicalities of the sparsity factor on rural police forces.
Research has been carried out which has found that higher levels of officer availability are required to attend to and deal with incidents in rural areas because they happen across vast distances. The number of officers required per incident in rural forces is approximately three times that required in most urban
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forces and, because of the vast distances which need to be covered in rural areas, vehicles and resources are thinly spread.
Consequently, officers are vulnerable because backup is generally a long way off. With the introduction of the public safety radio communications project (PSRCP) next year, we all hope that better technology will be beneficial to all our officers. However, in North Yorkshire it will cost us more than £3 million to set up and more than £1 million a year to sustain, which will be taken directly from our core police funding. All this will, of necessity, reduce our ability to fund extra officers or other staff throughout the force area.
A lone officer doing a rural beat out on the moors and stopping a suspect vehicle will still have difficulty summoning help, even with the best equipment; colleagues will still take a longer time to reach him or her than would be the case for an urban officer. This is simply a fact of life. Crime investigation costs are increased by travelling costs, and in rural areas we need more vehicles to travel to remote incidents or scenes of crime.
People living in rural areas are as entitled as their urban counterparts to feel that they have equality of police resources, yet this is barely recognised in the present funding formula. It is to be hoped that this issue will be addressed in the next spending review. For instance, in my own force—the North Yorkshire police—£101 per head of population is spent compared with the provincial average of £115. We drive 8 million vehicle miles a year. A minor increase in fuel prices has a major impact on our operational budget.
The police often provide the only 24-hour public service in rural areas, and we know how important it is for a community to identify with its own officers. Local knowledge and intelligence does not just happen; it must be continuously worked at. My noble friend Lord Rodgers of Quarry Bank referred to the closure of many small rural police stations. I am happy to tell him that in North Yorkshire we have recognised the importance of having police stations in rural communities and we are opening them deep in the heart of the Yorkshire Dales. In an innovative move, in Hawes we have done so in partnership with a "one-stop shop", where the local community are able to take their concerns and report crime in a much more accessible way than have been able to do previously.
If the police are not visible in our communities, two things happen: first, people feel that there is no point in reporting crime; and, secondly, fear of crime increases. We have seen graphic proof of that in the past few weeks. Chief constables, through their police authorities, must be given sufficient funding in order that they can address these concerns.
New legislation, of course, means pressure on all forces, but changes in practices and procedures can have a disproportionate effect on small rural ones. Indeed, in North Yorkshire we have had to take four officers from their front-line policing duties to review all the force policies to ensure compliance with the Human Rights Act. This is a necessity—one with

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which I have no quarrel—but it demonstrates, I hope, that an already small force has no "fat" from which to draw extra officers to undertake what are essentially government orders.
So how do we begin to reassure our rural communities and begin to return a sense of safety and security? In North Yorkshire we have a targeted approach; solving crime problems through tasking and co-ordinating units and the proposed multi-agency problem solving units (MAPS). Crime and disorder strategies, now embedded firmly in community safety partnerships, are beginning to see successful outcomes and are reducing the number of incidents of crime. In North Yorkshire in the past year, the total number of crimes recorded was 53,554—a reduction of 1,755 crimes from the 1998–99 figure of 55,309. This is a 3.17 per cent reduction. Domestic burglary was down 9.9 per cent and auto crime was down 10.5 per cent—and yet there is still a persistent cry for every village to have its own police officer because of the fear of crime. So much more needs to be done.
It would be helpful if the Government could give more financial support for Neighbourhood Watch schemes—I must declare that I am its patron in North Yorkshire—and for neighbourhood wardens. I know that the Government support these schemes and that they are providing some funding for the various pilots of neighbourhood warden schemes throughout the country—I wholeheartedly agree with this action—but we need to ensure that sufficient funding is put in place in order that they might succeed. I am not at all sure that the present funding will be sufficient.
Neighbourhood wardens could make a real difference to the quality of life of whose who live in fear of crime by helping to combat a range of anti-social behaviour. The fact that they will be partnership based will help their acceptance into the community in which they will work. What we do not want, however, is to have to jump through never-ending bureaucratic hoops in order to fund such schemes adequately, as we have to do with most other government-sponsored initiatives.
We need to look further still. We need to look at providing retained officers. The Fire Service has long existed with these officers, why not the Police Service? Retained officers would be fully trained and equipped and put to work in those areas in most need at specified times. Such a person could be nominated to look after a rural community and, even on a part-time basis, would become recognised and accepted, providing the "comfort factor" so sadly lacking in rural areas today.
Finally, the Government could and should be starting a campaign to reduce the fear of crime in rural areas and they should explain that it is the fear of crime which far exceeds the actual risk. Heightening the fear of crime by using emotive and ill-considered language is of no help to anyone, and it harms and frightens people unnecessarily. Living in a rural area has many concomitant problems, as we have heard, but with greater support for our services, especially those which go to the very heart of a secure and safe community,
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we can begin to redress the balance and return confidence to the people in our isolated towns and villages.
5.10 p.m.
The Lord Bishop of Hereford: My Lords, we are much indebted to the noble Lord, Lord Rodgers of Quarry Bank, for introducing this debate on a subject which is of increasing concern to those of us who live in deeply rural areas and also to many people who live in deprived urban areas. I am glad that my right reverend friend the Bishop of Portsmouth was able to speak from his experience of urban areas in Portsmouth itself. I want, naturally, to speak about rural areas, as I come from an extremely rural diocese.
I am sorry that I was not in your Lordships' House yesterday for the Second Reading debate of the Postal Services Bill. I have skimmed through Hansard for yesterday and I know that some assurances were given by the noble Lord, Lord Sainsbury of Turville, at the end of that debate. I apologise in advance if today I make remarks about local post offices which were also made in yesterday's debate.
There is a fundamental philosophical issue to do with the provision of essential services in rural Britain. Is it right to try to make better provision for people to travel to where the services are provided—for example, by better bus services—or should we try to maintain and even improve a system which takes essential services to where people live by means of various forms of mobile outreach or of a decentralised, locally provided system of services? This debate has been going for a very long time and for many years there has been an increasing need for people in rural areas to travel to a main centre for many purposes: most obviously for work in offices or factories, for hospital care, for secondary schooling, for cultural or sports activities of many kinds and even to go to the jobcentre. No one can deny that some services, particularly the more sophisticated and complicated services, must be delivered in that centralised way. That presupposes, of course, the provision of adequate public transport services, even in remote rural areas.
My knowledge of bus services does not begin to compare with that of the noble Lord, Lord Bradshaw, who spoke in great detail and with great skill about them, but from my own experience in our area, I believe that there have been encouraging improvements in local bus services in rural areas, particularly on Sundays when in the past buses never ran at all. What I want to urge is that those services and the financial help that makes them possible are maintained for long enough for them to pick up the customers, who will take some time to recognise that the services exist and then to start using them. The real danger is that the subsidy is offered and the bus service is put on, but, "Oh dear, no one is using the bus", so it is taken off again. It needs to be left running for a long time to build the custom. That may be expensive in the meantime, but it is absolutely vital.
The relentless decline in the local provision of the most basic services is alarming, especially as it affects elderly people, the disabled, the poor and those who,

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despite frantic efforts to keep an old car going, cannot have their own transport. Village shops and post offices are the most essential services and are under severe pressure, as everyone knows, but there are many of the simpler medical and social services which can also well be taken to people in the country. I have been involved in helping to fund, through a local charity of which I am a trustee, the excellent scheme of mobile day centres, run by Help the Aged. A specially equipped van, based in a market town, goes out in turn to various villages and parishes and stops outside the village hall or community centre. And, thank goodness, village halls are among the more encouraging aspects of rural life, with some very welcome help available for restoration or replacement projects.
From that location in front of the village hall, services such as hairdressing, chiropody or minor medical care can be offered to people within walking distance of where they live or, in the case of the very isolated and disabled, at a place to which they can be brought by a very short car or minibus journey. People's lives are made very much easier and more pleasant. Much time, worry and expense of travel are saved and an excellent social atmosphere is created for an hour or two while the mobile service is in the village.
It is a splendid system, but it is expensive. Without able and willing volunteers and without the financial help—in our case, from the charity with which I am associated—it simply could not operate. It is an excellent example of social inclusion at work in a way which is very much valued and appreciated by all those who benefit from it. But it has required energy and imagination to provide it and it would, in the absence of the charitable funding, need considerable input from overstretched and underfunded social services. That issue raises the matter of the standard spending assessment, which is notoriously weighted against deeply rural areas, although I acknowledge that there has recently been some improvement, especially in respect of the cost of maintaining domiciliary care for elderly or disabled people. Can the Minister give us some indication of whether social service funding might be increased to provide this excellent form of mobile outreach to those in the deepest country?
But it is village shops and post offices which are bound to be the main focus of our concern. I particularly want to draw attention to what I believe is a remarkable success story about a village shop and post office and to try to draw some conclusions from that story. Let me take your Lordships for a moment to the village of Dorstone in the Golden Valley, west of Hereford, under the Black Mountains. It has a population of about 250 in the village centre and also in farms and cottages scattered far up into the hills. Its village shop closed just over five years ago. The post office, which had been located in a private house, had closed before that. There was a general sense of gloom, as in many villages.
But a small and enthusiastic group of people would not give up. They were determined to get back their post office and a shop as well if it was humanly
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possible. By making ingenious and imaginative use of a range of funding sources, they managed to achieve their ambition, and last year a brand-new purpose-built shop and post office with disabled access and proper parking was opened with due ceremony by one of the oldest inhabitants of the village. Money for that came from the Rural Development Commission, as it then was, from the village focus budget of Herefordshire council, from local contributions in £15 shares and £25 debentures, non-returnable and paying no dividend, bought by local people who made up the Dorstone Village Shop Association, which is in legal terms a provident association. But most of the money—around half at least—came from the European Objective 5b fund.
The shop and the post office are open from eight o'clock in the morning until two o'clock in the afternoon, six days a week. They provide employment for a local young man who combines running the shop with a part-time catering business and for a part-time post mistress. It has proved to be of immense benefit to the community and is very much appreciated. But its economic base is fairly fragile. Just as it required a complex package of interrelated funding to provide it in the first place, so it requires a continuing interrelationship of these three activities—the shop, the catering business and the post office—for it to survive at all. If any one of those three were to fail, the whole project would fail. That is why the threat to the post office posed by the possibility of the ending of cash payments over the counter of pensions and allowances is so deeply serious.
The Country Landowners' Association has estimated that 40 per cent of village post office business depends on those cash payments. That figure has already been mentioned today. But the Dorstone post mistress believes that in her particular case it is 90 per cent of the post office business. People come to collect their money. They then pay a good deal of it back over the counter in contributions towards electricity, council tax, water rates, television licences and telephone bills. Cash payments make it possible for pensioners in particular, who can just get by financially, to manage their money carefully and well. Any other system, involving as it would bus fares to a bigger centre and bank charges of various kinds, even if people would or could open a bank account, would severely disadvantage them. And if they did not come to the post office, they might well not come to the shop, or enjoy the modestly priced fish and chip supper provided one evening a week by the shopkeeper.
It is a delicate balance. It works well: it fosters friendship and mutual care, and it keeps people in touch with one another. It is a model for what might be achieved elsewhere. But in the village I have mentioned, that balance depended on the presence of some willing, public-spirited, able, articulate and determined people to make it happen, and such people simply do not exist in many areas of serious deprivation. The village was extremely fortunate to have a retired building society chairman living in it who took charge of the financial side of things—and even he had to go on a course to learn how to get

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money out of Europe. I cannot emphasise too strongly that the whole operation depends on the post office functions continuing as at present in terms of cash payments—although, of course, further extensions and improvements to the role of the post office would also be welcome.
Perhaps I may make four brief final points. First, I have a "good news" story about policing. The new divisional police superintendent in Hereford has been in touch with the Church authorities about his plans to provide a beat manager for every cluster of villages and to enlist local support in the work of policing. We find an uncanny resemblance between the Church's plan of developing local ministry teams under the rural dean and the paid incumbent and keen, trained, able, responsible lay people not just being given jobs to do but sharing leadership and responsibility. The policing plan is to recruit such people, not as vigilantes but as a kind of mobile extension of the neighbourhood watch scheme: people undertake to travel round the district on a regular basis noting strange people, vehicles or activities and feeding information back to the beat manager at the police station.
Secondly, continuing rate relief for the sole village shop is vital to its survival. I shall be grateful if the Minister will assure the House that such rate relief will continue to be available.
Thirdly, there should be a basic presumption against the granting of planning permission for change of use from retail to residential for the last retail outlet in any rural community.
Fourthly, I hope that consideration might be given to a change in charity law to enable a village shop, despite the fact that it is a trading outlet, to be registered as a charity, provided that no profit accrues to shareholders but any profit is ploughed back into the community. That may not apply in many cases even with the most precarious village shops, but it certainly does in some cases, and, in view of the financial fragility of the village shop, it could make a critical difference between its survival and the withdrawal of yet another of those essential services on which rural communities depend.
5.23 p.m.
Viscount Falkland: My Lords, I should like to talk about the role of the public library system in our country and its relevance to the important dissemination of information. It has always been one of the aims of the British public library system to make information available to the widest number of people. That is one of the most important features of a democratic and prosperous society. Those who disturbed the peace on London last weekend should perhaps have borne that in mind. Conversely, one of the first actions of a totalitarian regime, when it gains a foothold on power, is to prevent the dissemination of information. The seizure of radio and television stations in coups in all parts of the world is familiar to us, together with the closing of newspapers, the destruction of books—that remains in the memory of those of us who have reached a certain age—and the
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persecution of journalists, film-makers and all those who are a threat to the power of undemocratic and authoritarian regimes.
The public library system in Britain was a product of that great rush of mid-19th century philanthropy which resulted in the libraries Act which allowed for a halfpenny rate from local councils to make collections of books available free to all who needed them. That has become one of the fundamental pillars of culture and education in our society. It has been very successful, and continues to be so. However, changes are taking place quickly, and there are alarm signals of which we must be aware.
Apart from providing an opportunity for citizens to borrow books in order to entertain, educate and improve themselves, one of the great benefits of the public library system is that it is of particular value to the deprived in our society, as was mentioned by my noble friend Lord Rodgers of Quarry Bank. In passing, perhaps I may remind your Lordships of the enormous value of libraries in the prison system. They help some of the most deprived people in our society. The admirable attempt to get those who find themselves behind bars to progress down a road of learning and information within the libraries in those institutions is one of the most useful ways to lead those who have indulged in criminal activities towards a productive and useful life.
Libraries are not just places where people go to learn. Unhappily, communities are under threat, and libraries are places within the community where those who suffer in some way—apart from the very old and very young, who are particularly vulnerable—can find peace and quiet and can interact with others and find solace in a friendly, calm environment. That is essential—a view which I am sure is shared by other noble Lords. Through peace and war, the public library has become a familiar institution, and one that is viewed with affection. You can always tell when an institution is viewed with affection because it is taken up as a means of comedy. Scenes in plays, films and television programmes where the silence of the library is broken by some well-expected disturbance and the rather unfairly portrayed schoolmistress-type librarian casts stern, censorious looks on the offenders have become as familiar as those of the policeman with his helmet knocked off (perhaps an unhappy subject to mention today after the weekend's events) or the mother-in-law joke. The public library plays an important part in our culture and in the structure of civic life.
Parents and their children, the elderly and the unemployed are particular beneficiaries of the library system. The closure of libraries is perhaps inevitable because an economically advanced society such as ours, with all the controls over budgets and taxation that that implies, always examines the economic effectiveness of institutions and the services provided to the taxpayer.
My experience in the area where I live is that the rush towards the modernisation and rationalisation of libraries, although in some ways admirable, does not

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take sufficient account of the effect on, and the shock to, certain people in our society as a result of closures. Without naming particular authorities, several take the same view as the financial controller—having worked in business for many years, but not being an accountant, I share it—that in their present state a number of libraries are not economically viable because they have too many branches which do not provide the benefit expected of them. There is a quick rush to reduce the number of branches and consolidate in large new buildings where the latest technology can, it is true, be presented in a more appropriate way, together with the books, videos and other items that are presently available.
The idea is an attractive one, but the sudden removal of a familiar institution in this way has had an effect on people. In some areas there is evidence that the enthusiastic support of the accountant's mentality (without seeking to offend noble Lords who have been accountants) has meant that libraries have been deprived of new books on a gradual basis. When, consequently, less use is made of the libraries it is said that the public do not want to use the facilities. They do not use them because they cannot find the books that they want. The books are not available because the libraries have not purchased the requisite books. That situation arises where reform is urged without proper account being taken of the effect on what are, usually, the most deprived in our society. I suggest that the two outstanding groups are the very old and the very young.
As expected, there has also been budgetary pressure in local government on opening hours. Opening hours have reduced steadily over the past 20 years or so. Twenty years ago the majority of public libraries opened for 60 hours a week. I am informed by a very effective briefing document supplied by the Library Association that over the past 20 years opening hours have reduced substantially. Over 200 libraries fall into the category of those which have reduced their hours substantially. There have also been many closures. All of that must be viewed against a scenario in which supermarkets move towards 24-hour opening. Supermarket shopping is now becoming a leisure activity as well as a necessity. In many small towns a good deal of the architecture with which we are most familiar, such as the church, the school hall, sometimes the cinema—sadly, not often these days—the small theatre and the pub is often overshadowed by a supermarket. I am aware that the Government are taking steps to ensure that the indiscriminate proliferation of supermarkets does not take place any more than is necessary. However, this development has changed the profile of the community in a dramatic way.
The Government funded the excellent initiative People's Network with the aim of connecting public libraries with the information super-highway by the year 2002. Libraries have always been in the vanguard of new technology and have never resisted it. They were the first institutions to use microfilms and bar codes. In 1995 Internet access was taken up in a big
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way by both the young and old. I have not yet been coaxed into that activity. However, I am informed that there are wonderful opportunities around the country, albeit in a patchy way, where talented people are able to instruct the old. I am told that when they get the hang of it they become obsessed by the new horizons which the Internet opens up to them. That is a wonderful development, and I congratulate the enlightened and imaginative people who have made this possible. Public libraries have been, appropriately, the first to react to such matters as the BBC's campaign "Computers Don't Bite", with which many of your Lordships are familiar.
I return to one of the most important matters: children. I do a considerable amount of work with one of the play group charities. By statute pre-school children are provided with various facilities in public libraries. Those are increasingly used by single parents and their children. Therefore, closure of those facilities would cause particular harm to that group. In those areas where there is no nursery school or play group provision and a lone mother or father and child are deprived of public libraries the effects on the family unit are absolutely disastrous. Provision is made for schoolchildren in public libraries as long as the necessary expert teaching is available. That expert teaching is disappearing with budgetary constraints. While able volunteers come forward, one needs a nucleus of trained teachers to work with young children. One needs to provide information on parenting, opportunities for story-telling and so on. The holding of a library card by young children is a civic right. A library card is perhaps the first document that a child is likely to hold. School visits to public libraries are also useful. In inner-city areas libraries are particularly valuable to children whose first language is not English. There is no better place for them to go, perhaps without parental interference, than their local library in order to become proficient in a language other than the first language spoken at home.
I do not wish to say any more about library closures. I hope I have made the point sufficiently well that we have here a facility—I referred to the ability of the elderly to keep sharp of mind—which will continue apace. A library is, or should be, a reassuring place. The library has been a familiar part of the town and village landscape and it will be a pity if it disappears. I only hope that the new buildings, some of which may be excellent but may require to be improved, are also attractive and reassuring places for all those who use them. Modernity is good. The Government are keen on modern things but, when rushed, modernity can be intimidating. I hope that architects bear that in mind. The community as we know it is under attack. I suggest to noble Lords that the library is an essential part of the community and must be retained at all costs as effectively as, if not better than, in the past.
5.39 p.m.
Lord Selsdon: My Lords, I am most grateful to the noble Lord, Lord Rodgers of Quarry Bank, for raising these important issues and for allowing me to be a form of unpaid mercenary alongside the Liberal

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partisans as they seek to defend the hills and valleys of rural England—not for the benefit of the people but for their own political benefit.
Noble Lords: Oh!
Lord Selsdon: My Lords, it is like a little operetta, with cast and orchestra singing off the same hymn sheet, but with different hymns orchestrated like some form of conference. However, I have great appreciation for their objectives and the points raised. It is probably the only time during my attendance in your Lordships' House that I have felt that we have been outnumbered by the Liberals but never outgunned.
It may be strange but people have political motives for speaking. I have a hereditary motive. My grandfather was postmaster general—a very great and important title, and an important job in those days. He sought desperately to extend the postal services and the sub-post offices into rural England. While others have sought to encourage decline, it is on his behalf that I speak.
For many years I was with the Midland Bank. It had 3,000 branches. One could always find a Midland Bank branch because it was always near a pub. There was no point in giving the address; the branch was always in the middle of the city and the community. Every day each branch received one application for charitable funds, with a further 10 per cent at head office. The bank manager was part of the community. Many managers would resist promotion in order to retain their position in the branch. I have often thought that I would like to have retired to a rural Midland Bank branch (if one exists any more) and be a lay preacher.
I have three reasons for speaking today. One relates to the speech of the right reverend Prelate the Bishop of Portsmouth. When I was at school—I see one of my school colleagues, the noble Lord, Lord Greenway, in his place—we had always to support a charity—I think that it was the church of St John in Portsmouth. When I joined the Navy I became a Portsmouth rating. I still remember my number: PJ963040. When I sailed in the Solent and around the Isle of Wight my lifeline in storm and calm—I was not the most brilliant of navigators—was Niton radio. Therefore I have a great affection for Niton.
I am not sure what the term "essential services" means. Services usually have to support something that is desirable or viable. As recent debates on agriculture have demonstrated, in rural England grade three land is no longer viable. Therefore the decline of rural England as an economic entity today is inevitable; perhaps it has already taken place. I would hate to say that the failure of any noble Lord from the Back Benches opposite to speak in the debate is indicative that the Labour Party has no interest in the rural community or people. We have, to an extent, become a country of corporate communists. Everything is corporate; everything is controlled.
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The community and the individual have been destroyed to some extent by circumstances and by events that we have failed to foresee.
When the Prime Minister recently visited the west country—he would have been more openly attacked had he not fled from one destination to another—it was strange to hear him say, "We must modernise. That is the solution". As the right reverend Prelate pointed out, one cannot modernise in one go. There has to be a period of gestation and change.
I was brought up to believe that the pillar of the community was, first, the Church. One had to go to church. But I find now that the first to close the church buildings is the Church itself because its flock has diminished. As do others in rural communities, the churches have to lock their doors because they may be robbed. It is an amazing change. Because I sometimes had to read lessons in church, I used to panic—as I may do when having to make a speech in your Lordships' House—but the Bible was always there to read in churches. I was brought up on the old edition of the Bible; I do not like the new edition. The role of looking after one's neighbour within the community is good; the Church always undertook that. We were grateful for the vicar. (I have always referred to everyone, including important people like bishops, as the vicar.)
The role of the policeman has been mentioned today. When a youth—a term no longer used—had committed a misdemeanour the policeman might put into the bottom of his glove a few coins and give the youth a clip round the ear. That was a known discipline. Within the community people knew "whodunit".
Then we come to the landowner. My grandfather on my mother's side taught me that one had to look after anyone sick or ill who had worked on the farm. I remember, with an old nanny who stayed with my family for 90 years, being made to walk on my own, sometimes returning at dusk, with a basket containing a bottle of port, a chicken and some eggs, for those on the farm or within the community, perhaps in tied cottages—which others tried to get rid of later.
Then there was school, and the school teacher, respected by society, who often received recognition for work outside the school in the community. That was another part of the community.
However, it was the banks and post offices which became an essential part of life. One needed communication and money. Money oiled the wheels and made the world go round. The closure of banks destroys many historic ingredients which cannot be replaced within a community. The presence of building societies in town centres to replace shops is another matter. And we add to that the closure of the post office, seeking to replace the service through bank accounts. I had the privilege of being involved with the launch of the original Giro system, introduced many years ago. In those days, only 30 per cent of people had bank accounts. Some said that no more than 30 per cent should have bank accounts. Bank accounts cause anxiety today; and the

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banks have forgotten the one basic principle of a bank manager: "Know thy customer". It is almost a legal requirement within banking that one should not do business with people one does not know. Nowadays it is impossible for a manager (if such he is called) to know anyone. He is protected by systems which take the relationship back to a branch or centre miles from the community.
We have found that economic circumstances have destroyed the community environment. How can that be corrected? Let us take the Church. It is part of the community whatever one's religious beliefs. It is a meeting ground. More people now go to church at Christmas than at Easter. On the continent of Europe the attendance at many churches, Catholic or non-Catholic, is relatively high.
The post offices should not be closed unless there is a suitable alternative. People with pensions do not want to have money transmitted electronically to bank accounts. There are many fears. Recent reports have indicated that the security services will examine the Internet. We know that electronic transfer systems are not perfect. We know that anything electronic is not perfect. There is no human element; and some people believe that nothing exists unless one can touch and see it. Payments to people through post offices have been invaluable throughout history. To remove those is a major mistake.
We have to consider why these things have occurred. Let us take transport, an issue which noble Lords beside me support strongly. I wonder why, when we have North Sea oil, we have the highest transport costs in the whole of the European Union. We have the highest prices for petrol, the highest prices for cars, the highest bus fares, the highest train fares and, until recently, the highest fares for internal air transport. That may be accidental or the political demands of government to tax the motorists and receive as much revenue as possible from the transport sector. That does not make sense.
Why do we penalise the old who have less money? A transaction within the Post Office costs about 70p. If it is for only £2 or £3, 70p is a large proportion of it. For breadwinners and earners, the costs of banking and making financial transfers are not as proportionally high. When we are over 60, we receive various kinds of support; for instance, from British Midland Airways when we fly abroad. Why should we not consider providing support for the old and retired people in urban areas, as we do in inner cities and other areas?
I do not want to criticise noble Lords opposite or their Government, but I believe that the Government have forgotten how to care for people. The Ministers care for people, but their hands are tied. The debate has raised issues which, as regards services, may not be financially essential or desirable, but the removal or destruction of such services destroys a large part of our country. That is something that we cannot afford.
5.51 p.m.
Lord Phillips of Sudbury: My Lords, I do not know how to respond to the strictures of the noble Lord, Lord Selsdon, about these Benches. Perhaps it is best to pass over them and treat the matter with good will.
I want to remark briefly on topics that have been raised. First, I refer to the suggestion made by the right reverend Prelate the Bishop of Hereford that village shops should attract charitable status. I have been pursuing that rather hopeless task for a long time and I know that the problem is that village shops are not exclusively charitable because they serve the needs of all the inhabitants of their catchment area, not merely the poor and needy. That is the stumbling block.
I turn briefly to the predicament of village shops. First, I must declare an interest as a patron of a charity called VERSA, the Village Retail Services Association. The noble Baroness, Lady Byford, who is also a patron, will speak about the charity, too. Village shops and institutions are making a vigorous attempt to preserve and better themselves. One such attempt is SAVE, Sainsbury's Assisting Village Enterprises. It is an imaginative partnership in which Sainsbury allows village stores to stock its standard products at standard prices. Thus, it does good to both the local inhabitants and the stores. It is an imaginative effort and is to be commended. About 200 stores are utilising it and I suspect that many more will do so.
As regards rural police, we have heard a great deal of informed comment not least from my noble friend Lady Harris. My home town of Sudbury in Suffolk is a thriving market town—it no longer has a live market—of 20,000 people and serves at least 30,000 more. Its local police force has been so reduced in numbers and competence that last week, at an incident in one of the town's off-licences in which a gang of rowdy and, I am happy to say, not-too-brutal youths was causing trouble for the manager, it took an hour for the police to arrive. They came from Bury St Edmunds. Indeed, it took them one and a half hours to arrive at the site of an accident in a village just outside the town. They came from Felixstowe, which is 40 miles away.
I want to raise briefly the issue of rating relief. It is utter nonsense to allow second home owners rating relief. Where that derived from and the justification for it is, I suspect, beyond modern understanding, but surely we can abolish it.
I now turn to the main purport of my comments tonight: law and justice locally. I do not confine myself to villages or market towns because the subject of the debate is communities, which exist also in the larger cities. Where they do not, it is vital that we encourage them to coalesce and to revive. I am sad to say that legal aid, which I am sure noble Lords will agree is a crucial pillar for the poorer sections of our communities, particularly where they are not thriving, is not in good fettle. We had long and anguished debates on the Access to Justice Bill and I have to tell the House that the Legal Aid Practitioners Group, which is the front line of legal aid service providers, is in a state of alarm at the degree to which the new

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regime discourages solicitors from making their services available to legal aid clientele. Only this morning, an inner London solicitor told me that each day he is turning away between 30 and 50 individuals seeking legal aid. That is not even being done on a carefully considered individual basis; people are simply being turned away in shoals. That is the story across the country.
The simple reason is that this year legal aid rates of remuneration have been frozen for the eighth year running. I am not talking about real remuneration rates; I am talking about absolute remuneration rates. The level of remuneration for legal aid has fallen eight years in a row and it is now a serious issue in terms of maintaining communities of all kinds at a point of the greatest pressure.
I should like to spend five minutes talking about the position of local courts with regard to the strength and health of local communities. Perhaps I may again refer to my home town of Sudbury. Since the war it has lost its Quarter Sessions and county court, and its magistrates' court is now under threat. In 1998, Suffolk got rid of five magistrates' courts, leaving five in existence. We are already one of the most, if not the most, underserviced counties as regards magistrates' courts facilities in the country. The basis on which closures are undertaken is a matter which I am sure your Lordships will want to contemplate and which I hope that the Government will want to review. It is common ground that local justice is important in all manners, aspects and dimensions. One cannot have justice of the people, by the people and for the people if it becomes a distant enjoyment.
The main reason given for the closures, which are occurring in large numbers all over the country, is on grounds of efficiency, particularly on grounds of better facilities as regards premises. Perhaps I may refer to an Answer which the noble and learned Lord the Lord Chancellor gave to a Question that I asked on 7th February (col. 385 of Hansard) about court closures. I asked whether there would be taken into account the extra travel costs and time spent by users of courts when, after local court closures, they had to attend more distant, alternative premises. The noble and learned Lord answered that it was important that facilities were not substandard. He said that the use of,
"satellite courts, for example parts of local council chambers which lacked essential facilities"—
although he did not say what "essential" might mean—should be terminated. He talked of "secure accommodation", although where a prosecution case involves someone in custody whom the police consider to be particularly dangerous there is no problem about having him transferred to a larger court complex. He also talked about,
"waiting areas for victims and witnesses away from defendants; consultation rooms; and access for the disabled".
He referred also to the lack of "'reasonable staff accommodation" and to "unsound" courts in terms of structure. He went on to refer to a variety of other reasons for closure.
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There is a heavy preoccupation, if I may express it in that way, with premises. I am bound to say t hat it is not a preoccupation which most users of the courts share and it can go far too far in the balance which must be struck between keeping open a rather old and old-fashioned court and closing it and moving to a shiny new complex 20 miles up the road.
Perhaps I may refer to the case of Haverhill, a town whose court was one of those closed in 1998. It has a population of 20,000 and is one of the fastest-growing towns in Britain. It has serious problems which are not typical of the county of Suffolk; for example, at the last council elections it had a turnout (I believe I am right in saying) of 7 per cent. It has a higher than average crime rate. The report which provided the basis for the recommendation by the Magistrates' Courts Committee for its closure referred to the court's premises in these terms:
"There are no roads signs to the court".
It added that there was no private access to a telephone for solicitors.
"There are no refreshment facilities",
it opined; and,
"There is no security guard at the court".
Oh dear! Then, the crowning criticism:
"The women's toilet was observed to be in an untidy state with the paper towel dispenser being too small for the towels so that it could not be closed properly".
My Lords, one cannot have courts where dispensers are too small for the paper towels which need to be dispensed from the same! The whole matter is lunatic and ludicrous.
The consultation which is carried out with regard to court closures is grotesquely inadequate. The solicitors who use the court were not asked what they felt about it; nor were the users. Above all, in coming to their finale as to the financial savings which would accrue (we are talking about employee, premises and facilities cost savings), the total saving for the Haverhill court would be—believe it or not!—the princely sum of £11,160 a year. The saving of that, dare I call it, "piddling" sum set against all the other non-financial aspects relevant to the closure of that court is beyond my understanding. In relation to the £11,000 saving, the report stated:
"It does not account for any additional expenditure that may be placed upon other organisations/individuals as a result of such [closure]".
The expense to the public of Haverhill of now having to go to Bury St Edmunds, which I believe is 15 miles up the road, or Sudbury, 'which is further than that, is enormous. It involves delay, bus costs and frustration. One-fifth of households in that town and vicinity do not have a car, and the residents suffer from the paucity of travel services in the countryside. I do not need to go on; others have said it.
Finally, I urge the Government to practise what they preach in terms of joined-up government. Other parts of the governmental establishment are saying things that are not consonant with some of the things now taking place in the countryside. I refer in particular to court closures. Because I believe that it is

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so good, perhaps I may read quickly from this year's Report of the Policy Action Team on Community Self-Help:
"self-help is an end in itself, as well as a means to an end. It is at the core of the empowerment of communities … It is about involvement and consultation, but also about moving towards self-sufficiency. It is, in its purest form, about communities shaping their own destiny—doing, not being done to".
How absolutely true that is.
I know that other noble Lords have referred to the matter, but it cannot be too strongly said that one cannot continue to salami-slice from outer communities the services that they are able to provide for themselves without having a catastrophic impact on those communities. That is particularly the case in terms of the leadership of the communities. I give as an example the courts. If one takes away from a town the solicitors, police, social workers and others who service the courts, those people will go to the nearest large or larger town. One is therefore inflicting body damage on the ability of that community to help itself out of its particular problems.
Leadership is all; self-sufficiency is all. As do many other noble Lords who have spoken in this debate, for which we are so grateful to my noble friend Lord Rodgers, I hope that the Government will take back that message and relay it across the departments so that it has real impact in other areas of government.
6.5 p.m.
Lord Clement-Jones: My Lords, in responding directly to the noble Lord, Lord Selsdon, the part of the hymn sheet from which I intend to speak today is that which deals with the question of access by the public to primary healthcare services; that is, those which are essentially the first port of call, such as GP surgeries and accident and emergency services. Therefore, I hope that the Minister is relieved to hear that I shall not go on at length about the Government's record on waiting lists and waiting times, as those relate effectively to secondary care.
To date, access to and quality of health services have formed an important part of the campaign for the London mayor. It is rather ironic that in the Bill there is so little formal power for the mayor over health matters, despite considerable pressure on the Government during the passage of the Bill. However, I have great confidence, particularly as a result of the London mayor campaign, that in practice the mayor and assembly will have a major influence on health policy.
London has a disproportionate number of people who can be considered to be in particular need of primary healthcare services. We have some of the worst areas of deprivation in this country. A recent survey carried out by the NHS last October showed that the universal complaint by those surveyed in central London was that they had too little time with their GP, it took too long to obtain an appointment and there were major difficulties in arranging home
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visits. London certainly has particular groups with whom we should be concerned, particularly in the inner city.
There are old people. There is growing evidence that the elderly are being discriminated against and are now the victims of a concerted rationing of treatments by the NHS. There are the poor. There is now evidence that the poor are being penalised unfairly by the health service. Noble Lords may have seen reference to a survey of 26,000 Scottish heart patients conducted between 1986 and 1997 and published recently in the BMJ. It showed that poorer patients and younger female patients in particular were less likely to be classified as urgent and, as a result, had to wait an average of 24 days longer for surgery—24 days longer!
Then there are ethnic minority groups, particularly in the inner city, and also those who suffer from mental health problems. Again, the number is disproportionately high in the inner city. However, as noble Lords have spoken so eloquently today about the problems of isolated rural communities, we must not underestimate the problems in those communities. Recent figures from the Royal College of Nursing indicate that over 80 per cent of rural parishes do not have their own GP. Also, we must not forget that on average there is a greater proportion of older people in rural areas rather than in urban areas.
In the name of modernisation, the Government are implementing sweeping changes across the NHS, from the patient-practitioner interface to the authorities responsible for providing primary care. Those changes are having, and will continue to have, a profound effect on the structure and delivery methods of the health service in this country. It is vitally important that those most in need of the support services are catered for by these changes and are not left trailing in their wake.
Perhaps the most high-profile example of the health service front line is accident and emergency departments. Recently, the Government announced a £115 million capital investment in accident and emergency, designed to enable improvement schemes to be carried out in 182 hospital trusts in England. Yet, although we welcome that level of capital investment, there must be doubts as to whether the investment will solve current problems. The recent survey by the Royal College of Nursing and the Association of Community Health Councils highlighted a number of horrendous situations: an elderly woman with a broken pelvic bone left on a trolley for 40 hours in the accident and emergency department of Northwick Park Hospital, Harrow; an elderly man left to wait on a trolley for over 30 hours at the same hospital; an 83 year-old woman who died of burns after being left to lie by a boiling radiator at the Royal Surrey County Hospital. Those are just a few of the horror stories revealed by that survey.
The announced investment in the infrastructure is therefore welcomed, but surely a large part of the battle concerns investment in staff and their recruitment, as that survey made absolutely clear.

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The survey clearly demonstrated that the lack of staff beds elsewhere in the hospital is the major cause of bed blockages and delays in accident and emergency departments. What workforce planning assumptions are the Government making to go alongside the bricks and mortar improvements? Will the Government's new proposals for local workforce planning achieve what is necessary to increase the number of doctors in accidents and emergency departments?
There is also a very worrying tendency for the left hand not to know what the right hand is doing in NHS planning. The NHS is in the process of closing 80 accident and emergency departments nation-wide, while figures for emergency cases have steadily increased from 3,700,000 in 1997–98 to 3,900,000 in 1998–99. These closures are already creating major problems of access for the public in both rural and urban areas. This, added to the widespread closure of community and cottage hospitals, represents a massive loss of amenity and access to the Health Service. How do all these closures square with the Government's commitment to improving health and tackling health inequalities, which was one of its key health objectives in the public health White Paper, Saving Lives: Our Healthier Nation.
One of the key issues before us all, recently highlighted by the BMA in their publication Shaping Tomorrow: issues facing general practice in the new millennium, is the future of GP practice. Demand for primary care in the future will need to be met in a variety of ways. I welcome many of the innovations that are taking place, such as NHS Direct. According to the consumer surveys, NHS Direct is garnering high praise among its users—in some cases as much as 97 per cent. But there are issues surrounding NHS Direct, especially in its relationship with the voluntary sector specialist helplines for the mentally ill who need access to those specialist helplines, and that interface is not yet coherent.
It is also not clear whether adequate provision is being made for the needs of ethnic minorities, in particular with regard to the language barriers that they face. Neither is it clear what impact NHS Direct will have on GP workloads. There are some very divergent views, with statistics being quoted on all sides, as to exactly what the impact will be. Claims are made that it will reduce the workload of GPs. It is far from clear whether that is actually the case.
In principle, I also welcome the introduction of walk-in centres. They will certainly meet a need for much better access to primary care services. But the location of some of the existing and forthcoming walk-in centres, which will total 36 in the pilot schemes, casts some doubt on the Government's commitment to improve health in the most deprived areas. Part of the Government's argument for walk-in centres is that they will provide a filter for hard pressed GP practices in deprived areas. Yet newly-opened sites, such as Fulham, Soho, and forthcoming locations including Bath, Loughborough, Manchester Airport and the Wirral, are hardly in the most deprived areas. By what criteria are the Government deciding the location of these centres?
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Whatever the innovations, I am convinced that the backbone of primary care will continue to be the GP practices. That is why I welcome the 300 or So personal medical services pilots which are now being developed throughout England. These, in some cases, involve developing existing practices and setting up new practices with salaried GPs who can concentrate solely on the provision of medical care without the need to concern themselves with running the infrastructure of a practice. A notable example of one of these PMS schemes is the Pennywell estate in Sunderland, where PMS has provided primary care when none previously existed. That particular practice now has 2,000 registered patients, and that is a testimony to what can be done if proper innovation is applied. There is now on site a team of doctors, nurses and other health workers, catering for some of the poorest and most socially disadvantaged estates in the country.
I also welcome some of the NHS beacon examples, such as the rural downlands practice in Berkshire, which covers 13 villages, with which I am familiar, where they are developing a model of patient partnership. Their response to the rural isolation of their patients is to run a mini-bus service in which they can bring their patients to surgeries and deliver medicines to their patients. There is little doubt, however, that these new initiatives are tolling the bell for the traditional single practitioner doctor. In the BMA publication, Shaping Tomorrow, there is a general consensus that the traditional family GP to whom one goes throughout the course of one's life is very likely to disappear. Calls for on-demand appointments, and particularly out-of-hours services, make this practically inevitable. Single GP practices simply cannot provide these services. There is a likelihood with a multi-partner practice of patients seeing many faces rather than one familiar face.
Some doctors are concerned that easy access to medical care may well result in a deterioration in the quality of care provided. I am not persuaded, however, that this will result in a deterioration. One of the problems that besets primary healthcare in London, particularly in east London, is the number of single practitioners who cannot provide the level and range of care provided by the larger practices to a clientele who desperately need better primary care.
I also welcome the fact that the recent development of the past few years may well mean that the front line for patients in the future will soon be a trained nurse potentially with the ability to prescribe and administer a wide range of medication, rather than the GP or accident and emergency doctor. I believe that this has the potential to provide much better access to healthcare and a better use of scarce medical skills for the benefit of patients. It will also help to ease the current intolerable workload on doctors. I noted that the right reverend Prelate the Bishop of Portsmouth referred particularly to this point.
In this context, the removal of barriers to nurse prescription is of enormous importance. Perhaps I may ask, therefore, why the Government are not pushing further and faster ahead with this than they have to date. District nurses and health visitors, with

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appropriate training, now have limited rights to prescribe. Why are practice nurses in particular not being given prescribing rights? Surely they are in the front line. We should be ensuring that they do, with sufficient training, have the right to prescribe. The Government's intentions in this respect need urgent clarification.
Although many of the changes that I have mentioned are welcomed, there is an important issue surrounding the potential loss of continuity of care, particularly for the elderly, those with chronic complaints and the mentally ill, where multi-practices are involved. The management of these multi-practices and a very close relationship with patients will be absolutely crucial, and I very much hope that the PMS pilots and the NHS beacon schemes will provide some of the answers. However, I believe that one of the key areas in which we can find answers is the area of community pharmacies. I believe that part of their role should be to provide that level of continuity. They have a very important role in the community, but yet again we see no strategy on the part of this Government. The Government promised a community pharmacy strategy about two years ago and we are still waiting for that strategy. We need urgent clarification of the Government's proposals in relation to community pharmacies, not just in urban areas but also in terms of the pattern of community pharmacies in under-served, rural areas, where the current subsidy scheme is of great importance.
There is no doubt that the NHS needs to modernise and embrace change, and it is heartening to see that willingness not only in the NHS but also among other health professionals. It is heartening, too, to see that the resources are, after three years of this Government, finally beginning to make themselves evident. Above all, we need to ensure that those resources are used in the most effective way and directed towards those in need of support, so that they can be provided with the services that they need.
I believe that the Government have begun to recognise the needs of those deprived communities, both in rural and urban areas. But it is not yet clear that they have pulled that together in a coherent strategy. They need to share their strategy with us, perhaps through the six task forces that were recently set up by the Prime Minister. But at all events the Government need to assure us that there is an integrated strategy and that the necessary resources will be provided.
There are a number of great changes taking place with important implications in all those new initiatives. Professionals are worried about the level of resources. Indeed, there is competition for resources between rural and urban areas. All those matters need to be resolved. The Government must make their intentions much clearer than currently is the case.
6.20 p.m.
Lord Newby: My Lords, I wish to concentrate on the provision of financial services to communities and individuals in particular need. In that regard, the emphasis is equally on urban communities and rural communities. Indeed, it is worth bearing in mind that the very poorest communities in the UK are all in urban areas. There are very poor pockets of rural deprivation but the major concentration of poverty in this country is in the inner cities and urban areas.
Estimates of the number of adults in the UK without access to any form of bank account currently varies between 2½ million and 3½ million people. Most of those people are on very low incomes and their main source of income is likely to be state benefits. Without a bank account, people cannot receive or make electronic payments; they cannot deposit cash or cheques; they cannot obtain cash from cash machines or use retail cash-back facilities at the supermarket.
A lack of access to a bank account is not simply a problem in terms of not being able to plan your finances very well, to make savings or gain access to affordable credit. It is also extremely costly. Research by the Joseph Rowntree Foundation and Don Cruickshank's report on the banking industry both demonstrate that, for example, paying energy bills by standing order or direct debit could, or indeed, would, save a low income household some £50 per year, a figure which rises to £75 per year if pre-payment methods are used.
Given that there are substantial financial benefits in having a bank account, why is it that so many people do not have one? First, many people are simply refused them because they are seen as bad credit risks. Research by the Office of Fair Trading in 1999 showed that up to one-quarter of all applicants for a current account were refused and the main reason was the fear by the bank that the account might become overdrawn, remain overdrawn and the bank literally would not get its money back.
Secondly, many poor communities simply do not have banks. Therefore, why would anybody go to great trouble to open an account when there is no easy access to it? As noble Lords have already said, that situation has become worse over recent years as over 25 per cent of retail bank branches have closed and branches are concentrated increasingly in more prosperous areas.
There was an extremely interesting article in the Sunday Times last week about the situation in Skelmersdale, which no longer has a single bank branch. It used to have two or three. Therefore, not surprisingly, it has become an entirely cash-based economy and increasingly a black economy. Therefore, the lack of banking brings with it social costs which go well beyond the immediate cost to individuals who do not have access to the bank.
In that regard, I welcome the commitment by Lloyds not to close any further branches which are the last branches in that community. I only wish that other banks would follow suit.

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The third reason why people do not open bank accounts is that they often have little access to information about the type of banking products which may be available. No doubt many of your Lordships are bombarded, as I am, by mail shots inviting me to open yet another bank or credit card account, the last thing I need. The poor do not receive those mail shots. Nor are they regular subscribers to Which?, to Moneyfacts or to any of the magazines which give comparative information about financial services.
That high degree of non-banked adults can and must be addressed in a number of ways. The first and most important is the Government's plans, now well advanced, for basic bank accounts. Those accounts would not offer or allow overdrafts and that would overcome the poor creditworthiness problem which has excluded many poorer people in the past. The main banks are all committed to introducing those accounts by October. They are eagerly awaited and long overdue.
The Post Office is also looking at what it calls a universal bank, funded by the large commercial banks, which run in parallel with the basic accounts operated by the commercial banks. I am not quite sure whether that proposal is as welcomed by the commercial banks as it is by the Post Office but it too deserves serious consideration.
As regards lack of information among low income groups, the citizens advice centres have been grappling for years with inadequate resources in order to bring information on basic financial facts to those who seek it. Their resources are inadequate to the task. Yet when the Financial Services and Markets Bill is enacted, the FSA will have squarely in its remit a responsibility to promote awareness of financial products to consumers. It will need to do that vigorously and imaginatively among poorer communities. In my view, it should pay particular attention to educating teenagers, not only because they will then open bank accounts themselves but because they will also encourage their parents to do so.
All those positive steps will, however, be undermined if people do not have proximate physical access to banking facilities. That is where the Post Office comes in. Here, the Government's proposals on the automatic payment of benefits have threatened many post offices and cause many potential short-term problems.
But there are also major longer-term opportunities to use the Post Office network to deliver financial services to those without bank accounts. Of course, the short-term problem is that automated benefit payments threaten the livelihood of sub-post offices. In turn, that poses a threat to the viability of many communities, particularly rural ones, as many noble Lords have already described, in which post offices remain the focus of community life.
It poses a problem also for recipients of state benefits who not only do not have a bank account but who, for one reason or another, should not be forced to open one against their will.
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There are two major roles which the Post. Office can play in dealing with those issues. The first is in providing financial services. Already, it is possible, if you are a Co-op bank account holder, to cash Co-op cheques at post offices. That facility should be extended to encompass more banks and building societies. The Post Office has already put out to tender to various banks a proposal to provide cash machines of the traditional kind in many of its branches. Again, that should be pursued vigorously.
Secondly, there remains the question of benefit payments. Here, an extremely sensible proposal for dealing with the problem has come from what at first sight is an unlikely source; namely, the Link network. As noble Lords will recall, Link sprung to notoriety a couple of months ago in connection with the row over banks charging for the use of cash machines. Link is the computer network which links all the cash machines owned by individual banks. The banks and building societies in turn, between them, own Link.
The Link proposal is that all those receiving benefits but without a bank account would receive a card, like a credit card, which could be used at any cash machine and would give the user access to, in effect, their own state benefits account. The account would receive all the benefits paid to an individual from whatever source; would be accessed like a bank account; and account holders could draw out money as and when they needed it. The scheme would be based, in large measure, on the existing cash machine infrastructure so there would be a low cost attached to introducing the system.
Such a scheme could also assist the Post Office. Link has been in discussion with the Post Office about introducing a simplified variant of the cash machine in which benefit claimants will be able to gain access to their accounts but instead of getting cash from the machine they would get a slip that they would take to the Post Office counter to cash as though it were a cheque. That would give post offices more business and would help to deal with the underlying problem of automatic benefit payments which could take away their business.
One desirable precondition for such a joint venture would be for Link to free itself from its current bank and building society owners. As the Cruickshank report has already proposed, Link should be restructured into a private sector company. That would enable it to raise the substantial funding needed if it is to engage in the new activities that I have described. It would also free it from any potential conflict of interest with the banks as owners and users of the network. In my view, at least the banks could facilitate such a restructuring of Link.
Enabling post offices to provide some degree of banking service along those lines is likely to be a key to their survival in many places, although in many cases that may not be enough. The Government have acknowledged in Clause 102 of the Postal Services Bill that subsidies may be needed. The question is when and under what circumstances such subsidies may be paid.

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Yesterday, the noble Lord, Lord Sainsbury of Turville, said of that clause 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 it at present and we have not tried to put in place a system of subsidy which would not be appropriate at this stage".—[Official Report, 2/5/00; col. 982.]
Why not? Post offices are closing every day. How many will have to close every day, every week, every month before the Government feel that it is appropriate to consider putting in place a scheme that will allow subsidy to be paid? Can the Minister explain to the House what cataclysmic event within the sub-post office network would be necessary before Clause 102 in the Postal Services Bill may be triggered?
To sum up, I have described four matters that will go a considerable way towards combating financial exclusion: basic bank accounts; a high intensity awareness campaign; a greater use of post offices for day-to-day banking services; and benefit payments by personalised accounts at existing cash machines and new terminals at post offices.
Indeed, there will be a role for credit unions, as the right reverend Prelate the Bishop of Portsmouth mentioned. There will also be a role for LETS (local exchange and trading schemes) but the main progress to be made in this area will involve the principal banks and the post offices.
Financial exclusion has not had as high a profile as other forms of exclusion have had in the past. However, sorting out the problem is vital to building thriving communities. I believe that much action is now under way, although the Government are overdue in regard to giving high priority to the issue of access to financial services for communities that are in particular need.
6.33 p.m.
Lord Tanlaw: My Lords, listening to the previous 11 speakers has been rather depressing. I feel that underlining each speech has been a yearning for the good old days of times past: the time when the vicar and the bobby did their rounds in the parish and the village, the squire was in his mansion and the workers were at the doors of their tied cottages waiting for largesse. In the speech of the noble Lord, Lord Selsdon, one could almost hear the clang of the blacksmith's hammer on the anvil and of leather against willow at the village cricket match. Noble Lords have said that those were the good old days and they have asked what has happened. The House has heard nothing but a tremendously long whinge from one noble Lord after another about where this is leading us and that there seems to be no hope for the future.
In fact, that is quite right in some areas. It is debatable how much longer noble Lords like myself will be able to continue to declare their interest in hill farming. The future of hill and upland economies in the remoter parts of Britain must remain uncertain unless some new element is introduced which can
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retain the existing rural populations while creating fresh sources of income to subsidise farming and the other traditional businesses of the countryside.
My hill farm is situated in one of the remoter parts of Dumfriesshire. Getting a fresh loaf of bread or other essential requirements like banking, health and veterinary services involves a round trip of 30 miles. There are no signs of new industries, such as the forestry that there was in the 1960s, coming into the district to save the day. As has been said by a number of noble Lords, the lack of local services in the countryside, including education, shopping, banking and police, has accelerated a population drift to the towns and has discouraged an inflow of new residents or businesses.
However, I do not believe that noble Lords are aware that help may be at hand in the form of BT's new broadband telephone system, ADSL, or, to give it its full title, Asynchronous Digital Subscriber Loop. I believe that there is no need to whinge about the loss of the good old days. I wonder why no one, including the Prime Minister, whom I am informed apparently has listened closely to a briefing on the subject of ADSL, given by the chairman of BT, seems to have reacted to it.
Civil servants in the Cabinet Office have just compiled what, in my view, is an outdated and rather self-congratulatory document for the Prime Minister, and they too seem to have missed this latest development in information technology. The document in question is entitled Sharing the Nation's Prosperity, and is subtitled Economic, Social and Environmental Conditions of the Countryside. In spite of being 190 pages thick, with picturesque graphs and statistics, it makes no reference at all to the role of online services.
In fact, the statistics—the noble Lord, Lord Rodgers of Quarry Bank, mentioned one of—them show that death rates are lower in the countryside than in towns, but that is highly suspect. Although I can still drive a car, many at retirement age cannot. Therefore, they end their days in the towns as they can no longer look after themselves in the countryside. Once people cannot reach the services that they need, they have to move to the towns.
The noble Lord, Lord Rodgers, also avoided mentioning online services or information technology. That is sad. Yesterday the Minister for Science, in his introduction to the Postal Services Bill, at col. 936 of Hansard, gave the appearance of having no alternative but to press on with spending half a billion pounds on the ill-fated and outdated Horizon project to distribute social benefits. Why did he not make any reference to ADSL which I would have thought would be far safer and a more user-friendly medium to provide pensions and benefits to rural communities?
Incidentally, can the Minister explain to the House how Horizon, which I understand is based on a barcode system—itself outdated and which was never intended to be a security system—is the most up to date or the safest way to prevent the fraudulent receipt of benefits?

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What is ADSL? Just in case some noble Lords do not know of it, I shall refer you to last weekend's Sunday Times which summarised ADSL as BT's broadband Net connection capable of delivering voice, data and television into the home via existing copper telephone lines. According to BT, by next month over 7 million households will receive those services either through a television set-top box connected to the telephone or by a conventional Net connection via a telephone and a PC.
As from July, BT, and later its competitors, will be able to deliver, along existing telephone wires to homes in urban or remote environments, a complete range of online services that will include banking, shopping, unlimited radio, broadcast quality television, video films and e-mail. What is more, all this can be achieved without digging up the roads. We have the ability and the services available to provide these benefits without taking that course.
Medical and veterinary services in the countryside could be transformed by this service. A householder or farmer will, through ADSL, be capable of face-to-face communication with either a doctor or a vet situated 30 or even 300 miles away. Would not the marketing of sheep and cattle via ADSL be greatly enhanced by potential purchasers seeing for themselves the animals on site and the conditions in which they had been reared? Scottish beef and lamb could then be seen to be the best in the world and perhaps at long last receive a price to reflect that.
Much has been said in the debate about the role of the police. The police have telephones and for most rural householders the telephone is their only link to the outside world. The police can communicate face to face with a householder through this system. Indeed, any individual in the community can communicate in this way; the doctor or the vicar can use it. Why has this system not been mentioned so far? Indeed, why am I the only noble Lord who seems to read the newspapers? What has happened to the 6 million households who already have access to the system? The Government are set on modernisation, but I wonder where they stand on ADSL?
Could not the village hall or the local post office become local cyber centres? They could play a pivotal role in entertainment, distance shopping and home delivery from the nearest town via postal delivery services. At the moment, village halls remain locked for most of the year and seem to open only for occasions such as the annual flower show or to give shelter to itinerant morris dancers when it rains. Why cannot such halls become teaching centres for the new technologies? Why cannot they become meeting places for the old, the retired and village people who do not understand computer technologies so that they can learn? As has already been mentioned by one noble Lord, this is where the community can help itself to understand information technology without which—I include the village postmaster or sub-postmaster in this—it will he finished.
I do not see why postmasters should continue to exist if they cannot be bothered to learn how to work a computer. This is what the future is about.
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If postmasters want to have a future in the countryside, they have jolly well got to learn. The entire community is perfectly capable of taking this on, given proper support from the Government. ADSL is a revolution that is capable of transforming rural life. Why does it not seem to fit in with the Government's concept of modernising Britain, which they are so keen to do? I wonder whether it is a question of cost, or is it simply ignorance of what is available?
Lord Kimball: My Lords, the noble Lord is giving the House a fascinating description of this form of communication. However, can the noble Lord explain a point to me? If a householder electronically communicates face to face with a policeman who is some 40 miles away to inform him that his house is being broken into, how will this wonderful system arrest the offender?
Lord Tanlaw: My Lords, I did not want to go into arresting the offender, but rather to make the point that communication can be made with the police. It is up to the local police services as to how they work with their communities. That is a point that was discussed by the right reverend Prelate. In my contribution I am discussing communication. The exercise of the law is a matter that must be developed along lines that have already been suggested.
Perhaps I may return to the question of cost. The cost of bringing ADSL to the countryside and to the remoter parts of the land is a question of modernising the telephone exchanges. BT is a commercial organisation just like any other and as; such it will focus on urban areas where there is the maximum concentration of people with telephones. Either that company must be persuaded to provide or the Government must invest in the provision of modern local exchanges. I believe this to be an urgent matter. At present rural exchanges will be the last to be modernised because they serve the lowest concentrations of people with telephones. Perhaps the Minister can comment on this. Some £500 million is to be invested in the extremely doubtful Horizon system for the post offices. Could not the Government spend a little of the £23 billion the Chancellor received from the telecommunications companies to modernise countryside telephone exchanges? If that is not done, I doubt whether either BT or its competitors will do it.
We have here an opportunity to give a future to the countryside. We should be prepared to take that opportunity, but we need some encouragement from the Government. However, BT should not be too smug. Over the Christmas period we had no telephone services in Eskdalemuir for some 10 days. Indeed, we had no power either. The Government should ensure that adequate back-up is put in place so that proper services are provided in areas with low populations. If everyone is to use the BT system, everyone must be assured that an efficient service with appropriate back-up is provided. The telephones must work. However, I appreciate that this is a difficult problem in hill and upland areas which can experience excessively bad weather for most of the year.

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Local universities are springing up everywhere—one is being set up in Dumfries—and I envisage another role for them. Students could develop a role within the communities in their regions whereby they help to educate local people to understand information technology and become computer literate. That is because without computer literacy both the individual and the community will not have a future. For that reason, it is no good whinging about the lack of services; people themselves must get up to date.
Perhaps I may finish by saying that I had thought that several noble Lords would have mentioned such services in their contributions and that they would appreciate how exciting the future will be. As far as I can see, the future does not lie in many of the subjects that have been raised in the debate today.
Finally, some noble Lords, like myself, have the luxury of owning two homes. We will no longer suffer from the age-old dilemma expressed by the poet Horace, whom noble Lords will recall from their schooldays. Two millennia ago Horace made the following cry from the heart in his Satires:
"Romae rus optas absentem rusticus
urbem tollis ad astra levis".
"When in Rome, give me the countryside you cry
but when there, you praise the distant city to the sky".
From now on, with ADSL or a similar system, it will be possible to enjoy the benefits of the distant city while still enjoying the comforts of one's home in the countryside.
Lord Selsdon: My Lords, before the noble Lord sits down, perhaps I may correct a point he made. I did not wish to create the impression that I was against electronic communications. However, I am in favour of personal communication—person to person rather than down a line.
Perhaps I am a little old-fashioned, but I preferred it when I lived in Newbury at the time when the telephone operator was not "electronified". The operator knew where everyone was and knew who was talking to whom. If one called the doctor, she would intervene to say that he was, "With Miss So-and-so". I do not believe that electronic communication can replace personal relationships.
Lord Tanlaw: My Lords, perhaps I may say in response that I, too, liked the personal touch of the local operator. However, at the same time I did not enjoy having no privacy at all. There were occasions when I should have liked to be able to make a private telephone call. Telecommunications are the face of the future—and without the operators.
6.48 p.m.
Baroness Miller of Chilthorne Domer: My Lords, this debate which I am privileged to wind up from these Benches has given the House a clear picture of the year-on-year substantial loss of essential services to communities, both rural communities and urban
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neighbourhoods. It is a continuing loss, not a loss that has taken place only through time. I believe that it has happened because of the neglect and unwillingness of governments to invest in essential services. This began in the Conservative years when we lost cottage hospitals, small schools and public transport of all kinds. That took place when the Conservatives were pushing their philosophy of, "Every person for himself".
In his excellent introduction, my noble friend Lord Rodgers made the point about our two nations: the haves and the have-nots. Through the 1980s, a feeling was strongly engendered that if one wanted to go somewhere, one should buy a car and if one wanted one's child to play, one should buy a swing. It was not a time that looked kindly on investing in public services of any kind. Not only did it leave the people who could not afford the "buy it" solution without the services that they desperately needed, it also left communities where little value was placed on community resources. We now have to climb back from that base.
In terms of housing, that philosophy left vast under-investment in housing to rent and in affordable housing. Sadly, this Government have not committed new money to investment in social housing; they have only released the councils' own accumulated capital receipts. Nor have they defined what "affordable" means. I am beginning to wonder when, in a village where I live which is neither particularly special nor desirable, small and not especially remarkable houses are selling for between £80,000 and £90,000 yet salaries are frequently between £15,000 and £20,000.
Services too are lost by the private sector's obsession with "big", so well typified by the current Barclays Bank advertisement. It is incredible that it has the gall to continue to run such a campaign in the face of the fact that thousands of customers and small businesses face a future with no bank in their communities.
A number of noble Lords made the point about personal banking services being important. My noble friend Lord Newby made several important points in that regard and painted a clear picture of the FSA's duty to people in poorer communities and the role it could choose to undertake. The right reverend Prelate the Bishop of Portsmouth mentioned credit unions and their importance to communities. An interesting article in the Guardian last week pointed out that the FSA could choose to push credit unions, which may choose to be a community-based facility, down the road of imitating the larger financial institutions. I hope that that is something the Government will guard against. The small credit unions were set up to provide the very services that the banks fail to provide.
Economies of scale too have hit food purchasing. There may be more choice at a huge supermarket, but it is no choice at all if one cannot get there. The planning system has desperately let communities down as it allows inspectors to come in from outside and overturn decisions of local councils not to allow out-of-town shopping in favour of huge supermarkets

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being developed on the outskirts. The Government have changed that system through planning guidance. They produced a sequential test which should maintain the health of town centres. But it does not guard against inspectors not understanding local issues—a point highlighted by the right reverend Prelate the Bishop of Portsmouth—such as, for example, keeping the last shop in a community. Permission may be refused for that shop to change its use. But a planning inspector can come in and overturn that decision.
The loss of services continues. Even through the honeymoon period of this Labour Government the emphasis on "Education, education, education", did not translate far enough to stop public libraries, particularly in Labour authorities and inner cities, being run down or closed. It is surprising that the tie-up between education and libraries was not made more strongly by the Government. My noble friend Lord Falkland, in his excellent speech, emphasised the role that libraries have to play.
The Treasury decision to pay benefits through an automated credit transfer system was made before considering the effect that that might have on post offices. The panic measures introduced at Third Reading in the other place for an undefined subsidy with no date of introduction, no clear source of funds, unless it is more clearly defined as my noble friend Lord Newby said, is unlikely to be seen as much more than an election sop.
Why does the Post Office strike such a chord nationally? Partly because its services are essential, but partly because it is the last focus for many communities. When a post office closes, the village or neighbourhood information point and sometimes the food shop close with it. Again, close to home to me, the post office was sold. The new owners could not manage to maintain the food shop part and the business is being sold for the second time in six months with no buyers in view. An informal help centre for the village will close at the same time.
If to save government money the ACT system drives thousands of sub-post offices out of business, how much money will then be spent by the DETR on regeneration of those communities? The voluntary sector and local authorities spend large amounts of time, energy and resources putting together bids to central government for regeneration. That system suits central government because it means that they can decide what the focus of a regeneration agenda will be and award bids on that basis—a basis to match their political agenda rather than local needs.
Local people have far less say as to how they want their services to work. Is it surprising then that they take less interest? The Government are currently trying to find measures that will make people turn out and vote more in local elections and give time to the voluntary sector. But if they want that to succeed, they must establish a clearer link between local government finance and local service provision and what local people want. Perhaps they will bear that in mind in
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their forthcoming review of local government finance and focus not on an increasingly specific national target, but on meeting local needs.
I should like to turn to some of the specific services mentioned by noble Lords and, in particular, transport. My noble friend Lord Bradshaw described the virtuous circle of when more bus use equals better bus services. That applies in fact to many of the services that we have been discussing. The noble Lord, Lord Kimball, highlighted the deficiencies of the rural bus scheme. Of course, it has had problems. But the problems arose because a large amount of grant was awarded that had to be used up in an extremely short time. The idea behind the scheme was correct, but there should have been more thought to giving local authorities time to reflect local consultation in their applications. Now, some years into its establishment, the scheme is beginning to have a better effect. But I hope that the next time the Government award grants on that basis they will take account of the time, a point raised again by my noble friend Lord Bradshaw, that it takes effectively to implement a scheme, particularly in a dispersed geographical area.
My noble friend Lord Clement-Jones painted a grim picture of access to health services and highlighted in particular the importance of community pharmacies. Although the noble Lord, Lord Tanlaw, spoke interestingly about new technologies, health is certainly one area where personal access and person-to-person contact is very important, not only because of the physical symptoms that may be present, but also because issues of loneliness and depression are involved. Talking to a computer terminal will never solve those problems.
Lord Tanlaw: My Lords, I am grateful to the noble Baroness for giving way. I did not say that we should be talking to a computer service. Through the ADSL system, we will talk face-to-face with a doctor or, as in this case, with a vet. He will be able to see, to some degree, how serious a situation is or to offer immediate advice. But one will not be talking to a computer terminal or bits of writing on a screen.
Baroness Miller of Chilthorne Dourer: My Lords, I thank the noble Lord for elucidating that point and I shall return to that issue later in my remarks.
I should like to touch again on the issue of crime. My noble friend Lady Harris gave a particularly good account of the difficulties faced in rural policing. She touched also on the imaginative one-stop shop approach to re-open a police presence in rural areas. Again, the right reverend Prelate the Bishop of Hereford, whose speeches I always enjoy on these issues and no less today, talked of the possibility of mobile services. He also described the complex integrated approach of getting capital together to provide a village shop and post office, and highlighted the need for a similar integrated approach to a revenue package.
My noble friend Lord Phillips illustrated the problems faced by village shops. The Government have yet to understand the difficulties faced by local

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communities when they put together complicated packages first, to save something, and then to enable it to continue to run. The example of a shop not being ab7le to be a charity, illustrated by my noble friend, was particularly salient. I believe that the Countryside Agency is doing some work on some of the barriers to village shops, but far more consideration needs to be given by the Government to removing all the obstacles facing communities wanting to create their own facilities.
So through these years of declining services every government have shirked the idea of laying down a set of standards for access to services. Do we know how far it is reasonable to expect people to travel to a hospital or a food shop? How long a journey should a parent have to make to take a baby to childcare or a child to school before getting to work? Of course there are targets for emergency services, but there is very little provision for day-to-day living. The fact that national government have been remarkably silent on the issue of laying down standards for access to essential services has, again, enabled them to shirk the issue of what to do as regards closing essential services. People have no basis upon which to judge whether or not they are getting a raw deal if they have to make an hour's journey to see a doctor or take a £1 bus ride to buy a packet of aspirin.
In answer to the concern of my noble friend Lord Phillips about court closures, I am sure that the Minister will say that it is a local matter; and so it should be. However, it needs to be judged against a national view of how hard it may be for users to access alternatives. There could then be a real assessment, both locally and nationally, of the real costs of closure.
As we approach the next spending round, I hope that some of the problems highlighted by the Index of Local Deprivation, which is an excellent and jargon-free report, will give some indication of the extraordinary lack of information about how people can access services physically. When focusing on measuring access to services, it concludes that it can only be measured "as the crow flies". But very few crows are trying to access services. The report says that unfortunately detailed information is not available for the whole of England as regards the routes that public transport or cars would need to take to access services and that it is,
"unlikely ever to be available".
That will make life very difficult.
The Minister may choose to turn to new technology as the means that people will use more and more to access services which do not need an actual physical presence. Here I agree with the noble Lord, Lord Tanlaw, in that it is a very exciting area. I do not fully understand the technology to which he referred. However, I serve as chair of my local food-links (set up by Somerset County Council) in which I must declare an interest. We are creating a website so that farmers may sell their produce direct to local businesses and, indeed, to local people. New technology is playing a huge role in commercial transactions of that nature, and also in service provision.
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But what kind of work are the Government doing to prepare for these changes? Computer ownership and access is threatening to create a new type of two-class system—similar to that created by car ownership in the past century. If you have a smart new model, you can have better and faster access than people with an old model or none at all. This is already becoming an issue in schools where children with access to a computer at home are doing better at their homework. Government service planning needs to consult on ITC use and on how it can best be used for accessing services, especially in needy communities.
Our debate today has been about investment in communities. Up until very recently, services have been seen as distinct from one another; and, indeed, are still seen as such by some government departments. I believe that people are increasingly beginning to understand that diminishing one essential service has a knock-on effect on the way that the rest of the services work, or do not work, in their community.
In its key publication last year, A Better Quality of Life, the Government—and especially the Prime Minister in his foreword—spoke of the importance of living in strong communities. The Government identified their three key indicators for sustainable communities: Number 1 indicator was the number of local authorities with LA21 plans, so that is defined; the second indicator was "community spirit", but the Government say that that is an indicator simply to be developed. The Number 3 indicator was "voluntary activity" but, again, that was an indicator simply to be developed. Can the Minister say whether the Government have carried out any work on developing the "community spirit" indicator? If they have, can be tell us how communities are faring?
Community spirit is certainly what Liberal Democrats and Liberal Democrat local authorities invest in: it fights for essential services and gets together to build new community facilities, to repair old ones, to bring a baby clinic to the village hall or to start a lunch club for the older generation. The Government must realise the importance of community spirit or "social capital". Social capital is how you get on with your neighbours and how you help each other. It affects people's health and how safe they feel in their homes. That brings to mind some of the issues raised by my noble friend Lady Harris regarding the fear of crime and its perception. We need mixed communities—mixed by age, by income, by working and by being retired. Communities that share problems and create with local and national partners are vibrant and decent places in which to live. That is what we should all be working towards and investing in.
7.5 p.m.
Baroness Byford: My Lords, this is a most timely debate coming as it does in the midst of the furore about the bank closures in rural areas and the future of sub-post offices both in such areas and in the inner cities. I add my thanks to those already expressed by others to the noble Lord, Lord Rodgers, for giving us

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the opportunity to discuss these pressing issues for those who live in isolated and/or deprived communities all over the country.
We have had a fascinating afternoon. Perhaps I may just mention a few points and then return to my brief. I was most interested by the contribution made by the noble Lord, Lord Tanlaw, because in a way what he said epitomised one of the problems facing us as a society. As we move forward, we need to be looking forward and using all the modern equipment that is available to us. At the same time, I very much support my noble friend Lord Selsdon in his desire, which I believe many in this Chamber would support, to keep the very things that we believe to be important in this life. I do not necessarily mean in the era upon which my noble friend reflected; namely, that of his youth. However, if we cannot have an interaction one to one, an understanding of one another's problems and a willingness to help one another, we shall in today's society, with all its modernism, be that much the poorer. I look to modernism because it has ways of helping us, but I very much hope that we preserve the things that most of us feel are of great value.
Perhaps I may also reflect on the very good contribution of my noble friend Lord Kimball. We share Leicestershire as home base; and, indeed, the noble Baroness opposite started her home life in the area. It was interesting to note that my noble friend recorded the "Country File" programme that focused on rural fears: 55 per cent burgled; 45 per cent have experienced vandalism; 20 per cent have experienced arson; and 10 per cent have suffered physical violence. As I listened to my noble friend giving us those statistics, I thought, "Yes, Hazel, you qualify on numbers one and two and your brother-in-law qualifies on number three". Fortunately, we do not qualify on number four—physical violence. But those of us who live in rural areas experience extreme difficulties from time to time.
It is very upsetting when one is burgled because someone actually enters your home. But as those of us involved in farming and in rural communities know very well, there is the deliberate—and I mean "deliberate"—vandalism to our property; for example, people coming along with wire cutters and opening gates. They then turn cattle out on to the roads, which could cause accidents. These are equally pressing problems for those who live in rural areas. I should like to express my thanks for the suggestions that came from the contributions to which I referred. Such matters are important in society today.
I am not against modernising. Last weekend, if I may go local again, the way in which we need to use modern techniques while having regard to our past experience was epitomised for me a t the Leicestershire County Show. I noticed the way in which one farmer promoted his product. He was using modern technology to do so, but he said that it was essential to have good husbandry in the first place. That is why he is producing good quality animals that people want to buy. That example fits in well with today's debate.
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I, too, struggled a little over defining "essential services". Indeed, the noble Lord, Lord Rodgers of Quarry Bank, set us quite a task in that respect and many speakers produced their own themes. I should like to begin by concentrating on one or two of the obvious services.
First, I turn to banking. Banks are commercial institutions. They are in business to make profits. They make profits by offering financial services to individuals, to companies and to other bodies which either have enough money to need it serviced as opposed merely to held safely for a short time, or have enough money to be able to afford expenditure on a range of services, or have enough money to have acquired some of the more valuable items that money can buy such as property, foreign currency accounts or investments.
Even in these days of e-commerce banks prefer their customers to be situated in fairly large numbers close to each branch. By and large, banks do not find it profitable to site branches either in rural areas—only 9 per cent of English villages have one—or in deprived inner-city districts. People who live in such places have to travel, sometimes quite long distances, to visit their bank. They can switch from the bank of their choice to another which has a branch closer to their home if they are lucky enough to have that choice; they can switch to telephone banking, as many hundreds have; or they can make little or no use of banks and employ other methods of holding money, paying bills and gaining access to cash.
The latest regional development council survey of rural services found that only 57 per cent of villages still have post offices. Some 70 per cent of these have combined post offices and shops which are interdependent, as other noble Lords mentioned. I do not have figures for post offices in the inner cities—I do not know whether the Minister will be able to provide them—which are threatened with closure when the Government adopt automatic benefit payment. The new system will also pose great difficulties for those who live in heavily populated, deprived areas.
Government Minister Mr Rooker said on 24th January that the Government will pay benefits only into a bank account. Yesterday we discussed this at length. I should be happy for the Minister to respond to some of my points in writing. Will he compel one or more banks to open accounts for people whose sole income may be the benefit to which they are entitled and for people whose sum total of worldly goods may not even reach four figures? Will the Minister forbid those banks the right to charge account holders for converting computerised benefit transfers into hard cash? Will he assure us that he will institute a foolproof method to ensure that none of those accounts will be eligible for overdrafts, for personal loans or for security for credit cards at only 21.9 per cent APR. and an annual fee of a mere £10? The situation is frightening. It may cost the Government less in money terms to pay all benefits through ACT, but I remind the Minister that government are to a democratic

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people what oil is to the internal combustion engine—without it there is a horrible noise and nothing works for long.
I now turn to health. As recently as last night in "Case Notes" on Radio 4 we were assured of the proven links between health—or should I say ill health—and poverty, not even dire, old-fashioned Dickensian poverty but relative poverty. Mr Blair's study pronounced the quality of life in rural areas as being better in many respects than in conurbations. I have no doubt that those living in straitened circumstances in villages are likely to be healthier than their counterparts in the city. However, there are developments in health provision for both sets of people that cause me grave concern. Will the Minister confirm that the number of GPs applying for city vacancies is falling? Can he tell me how much of a work overload this is creating for existing city practitioners? Is the Minister also aware of persistent reports that practitioner committees are directing that one or two doctor practices, where an incumbent dies or retires, will be amalgamated with larger units? Can he say how many such moves have already been made and whether any of them has occurred in inner-city areas?
I have received a number of reports that primary care groups have instructed their members to stop writing repeat prescriptions to cover three or six-month periods, as has been past practice. If that is true, I am mainly concerned for those who have difficulty reaching a phone to ask for a prescription renewal or getting to the surgery to pick one up. However, this measure will also prove an added cost for those who are not exempt from prescription charges and I fear the resultant workload for doctors and their staff because of all those extra incoming calls, prescription forms and collection visits. Will the Minister explain what is going on and the reasons behind the measure and state whether it results from instructions issued by the Department of Health? For many years prescriptions have been left at some post offices for people to collect. That is an important role.
Several of the points that I have made under the health heading will have a considerable impact on transport requirements. Unfilled vacancies in GP practices, the closure of practices and increased frequency of prescriptions will all result in some patients having to travel further and more often to seek the help that they need. As has already been said, the problems of rural transport are well known. Therefore today I draw attention to a problem of inner-city transport.
It is possible for someone wishing to bring a child to London for the day from the Midlands to do so for as little as £1. However, someone who needs to take a child a mile and a half to a doctor or to a hospital appointment may be faced with a fare of at least that much. London Underground has a minimum fare of £2 for all children over five. Is the Minister aware of any moves to tackle this problem?
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I return to the rural areas. The National Federation of Women's Institutes recently published its 1999 survey, The Changing Village, which considered the state of rural services. It contains many points of relevance to today's discussion. I hope that it will be widely read in the corridors of Whitehall. Among the most important demands for improvements is that for youth facilities in some remote rural areas where there are few such facilities. The survey listed four main concerns which have not all been mentioned today: housing, the closure of shops, the increase in traffic and the lack of public transport. I am sure that the Minister is aware of many of the good innovations in some rural areas. For example, youngsters in Warwickshire are loaned a bike for a year which enables them to travel to jobs that otherwise would be inaccessible. Other areas provide community bus services which are not included within the scope of rural buses. However, I understand that there is talk about the withdrawal of the VAT exemption from some of the charity/community bus services. I hope that the Minister will comment on that.
Yesterday I spoke at great length about post offices and the ACT system for the payment of benefits. Like the noble Lord, Lord Phillips of Sudbury, I, too, am a patron of VERSA, which helps to encourage the preservation of rural villages and their shops, which often also comprise post offices. It is difficult to decide which are the priority issues in this area. I refer to transport, post offices, health and dental services. In some areas it is becoming extremely difficult to access dental provision. Community hospitals and the withdrawal of some of their services have not been mentioned directly today. I refer also to appropriate housing, particularly in rural areas, and affordable housing for first-time buyers and for retired people. I believe that small businesses have not been mentioned. Rural areas contain many small businesses which survive, grow and, I hope, become big businesses. The majority of such businesses in rural areas employ fewer than 10 people.
Another matter that I touch on is education and accessibility to jobs. Another speaker mentioned magistrates' courts, and not only in Suffolk, where I know there is a problem. Colleagues in Derbyshire have experienced exactly the same situation where many magistrates' courts have been closed. It may be easier for those who work within the service, but for those who want to go to court and have to appear it is an extra cost which sometimes involves three or four changes of transport.
Before I sit down perhaps I may put one more question to the Minister as regards magistrates' courts. There is increasing use of stipendiary magistrates. I believe that communities are immensely important to us all in the Chamber tonight. Many of us have slight concerns about having more stipendiary magistrates rather than people who live and work in the community and who know it.

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I am sorry that my winding-up speech has been so wide-ranging. In particular I thank noble Lords on my Benches who have spoken in the debate. I do not particularly envy the noble Lord in making his response but I know that we look forward to hearing it.
7.20 p.m.
Lord Whitty: My Lords, I appreciate the noble Baroness's reply because, as a result of the Motion tabled by the noble Lord, Lord Rogers of Quarry Bank, I have to act as a one-man joined-up government in a way which we do not have to do very often in this House. Therefore, I congratulate the noble Lord on laying the foundations for this debate, which is wide ranging, although it has some common themes. One of them, which he enunciated at the beginning of the debate, is that within our relatively prosperous economy there is a significant, and perhaps growing, proportion of people who are deprived in the traditional sense of the word, and who also lack access to services such as education, technology and jobs.
Much of the debate has focused on rural areas. In one sense one would expect that of this House. I am grateful to the noble Lord, Lord Newby, for pointing out that many of the most inaccessible and isolated communities are in the centres of our cities. It is important that we treat both communities in that context.
The Government recognise that many of our communities are failing or going into retreat. Last month we published our consultation paper National Strategy for Neighbourhood Renewal. As many noble Lords will know, that stems from the 1998 report of the Social Exclusion Unit Bringing Britain Together and the recommendations of the 18 policy action teams whose activities are designed to tackle the deep-seated problems, particularly those of the deprived communities.
One can argue about the level of deprivation between rural areas and the inner cities and between one area of the country and another. We know the symptoms. Social exclusion is a shorthand label for what happens when individuals and communities suffer from a combination of linked problems. They include unemployment, low incomes, poor housing, poor skills, high crime rates, bad health and family breakdown. Whatever their general ideology and approach over the years, governments have long had policies to try to address those problems and, by and large, they have been addressed singly and, sadly, with mixed results.
What we are trying to do that is new in this area is to tackle the interaction between these problems and to prevent them to some extent arising in the first place. I agree with the noble Baroness, Lady Miller of Chilthorne Domer, that we have a big inheritance in terms of decay in the infrastructure and services which we have to reverse. Many noble Lords have identified these problems as being the failure of state provision, government intervention, local authorities or of the services themselves.
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It is also a failure of the market and changing economic circumstances. People are left behind as a result of progress. The problems associated with inner-city areas, perimeter estates and rural areas are the same. They include disillusionment, demoralisation and the misery of people in such situations. The problems know no geographical bounds. It is therefore crucial that the strategy we adopt addresses these different areas. It is also crucial that we engage with the other players in the communities, including the voluntary and private sectors, the public agencies and, most importantly of all, with the communities themselves.
Sustainable regeneration is not primarily about what government do for people or what they and other outside agencies do to people; it is about helping people to create neighbourhoods in which they wish to continue to live, work, and play. To quote the noble Baroness, Lady Miller of Chilthorne Domer, again it involves the recreation of a community spirit in a new age with new kinds of jobs, communities and industries in both rural and urban areas.
The debate has revealed visions which are in part nostalgic in the case of the noble Lord, Lord Selsdon, and futuristic in the case of the noble Lord, Lord Tanlaw. We need the merger of both. However, they both need people to identify with them and not to feel that those visions are being imposed on them.
The role of government in that respect is in part a question of the allocation of resources. The major reallocation of such resources in our system is, in a sense, through local government. The importance of such government in this area is vital. The balance of spending is determined by the priorities of national governments. In our review of local authority financing we are trying to devolve more decisions to the local authorities themselves.
One can always argue about the balance of spending and whether it totally reflects the real deprivation felt in rural and urban areas. One can argue that whatever index one uses, someone is going to feel that they have missed out.
Perhaps I may correct some of the impressions as regards recent allocations through the standard spending assessment; for example, the more sparsely inhabited areas have received average increases of 4.7 per cent and the shire counties 5.1 per cent, which are significantly above the 4.4 per cent average. Nevertheless, it is not just a question of the allocation of total resources, but of tackling the problems in relation to particular services identified in the course of this debate and beyond.
In view of the recent debates about crime and particularly rural crime, it is important not to get the recent hysteria out of proportion. It remains true that rural areas are relatively safe areas in which to live. I regret the degree of media and political opportunism which has arisen as regards particular cases in identifying the real problems of rural crime. It has grown, but it is still the case that it is less than one-third or one-half of the rate of crime in other areas of deprivation in our inner cities.

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Police funding in that context was referred to by the noble Baroness, Lady Harris, and others. It already reflects a sparsity element in recognising the additional costs involved in policing rural areas. Decisions on future funding will be taken up in the spending review to be announced in the summer. Some of the points to which the noble Baroness referred as regards police allocation can be addressed there. The resources for rural police, and her suggestion about retained police officers on the fire service model, are currently being studied by Home Office Ministers, as are other innovations in rural policing and crime concerning mobile police stations, better communications and the possible use of ancillary facilities.
The noble Lord, Lord Rodgers, himself raised the question of whether rural areas will be able to bid for the reducing burglary initiatives. The sum of £60 million spread over three years is available on application from any area where there is a burglary problem, including rural areas.
The noble Lord, Lord Kimball, referred to the examination of the police funding formula, including the sparsity element. As I said, the formula is currently under examination for the current spending review.
I was slightly surprised by the reference that the noble Lord, Lord Kimball, made to the chief constable—I think he said—who indicated that those believed by the police to be the perpetrators of crime could not expect the police to offer appropriate protection, either to themselves or to their property. I find that a surprising comment for a police officer to make. I should be grateful if he or other noble Lords could furnish me with particular details, which I undertake to pass on to the Home Office. I hope that it is not true—I believe it not to be true—that that is the attitude of the police.
In relation to the issue of magistrates' courts, which was raised by the noble Lord, Lord Phillips of Sudbury, I take note of the noble Lord's concerns, which were reflected by the noble Baroness, Lady Byford, about the closures of magistrates' courts and the way in which we conduct our justice system in rural areas. Formally speaking, of course, such decisions are matters for the Magistrates' Courts Committees. I shall ensure that those issues are raised with the Lord Chancellor's Department.
I move from the justice system to the slightly firmer ground—for myself—of rural and other transport. It is quite clear that good transport provision remains crucial to ensuring that people have the means to access all the other services we are concerned about, particularly in rural areas. Accessibility may simply be a function of remoteness and economic isolation.
I take many of the points raised by the noble Lord, Lord Bradshaw. We have to be realistic about transport in rural areas; for the foreseeable future a very large proportion of rural transport will continue to be conducted by private car. That does not mean that we can ignore those who are unable to drive, or
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cannot afford to drive, or do not want to. We need, therefore, to concentrate very much on the provision of bus and related services.
For some reason, the noble Lord, Lord Rodgers, referred to the White Paper before the one we published in 1998. Certainly in the intervening 20 years there was a serious decline in rural bus services and bus usage generally. Since then, this Government have gone into action and our initiatives to improve rural bus services are making a significant difference. There was another £50 million last year to provide additional services, and the first year of the rural bus subsidy grant generated 10 million extra passenger trips on more than 1,800 new or enhanced bus services. So I disagree with the noble Lord, Lord Kimball, that this money has not been well spent. The allocation of the money depends on the number of small locations in local authorities, and has therefore primarily been used for rural routes.
Often though, fixed bus routes are not the most appropriate solution. We need to be more imaginative than to think only of "conventional" services. Our rural bus challenge grant system aims to encourage innovative travel projects and more flexible, on-demand services—perhaps something between a bus and a taxi—and there is possibly a role for bicycles in certain circumstances. To date, we have announced more than £28 million for 104 successful innovative schemes in this programme, providing start-up money for projects such as demand-responsive and community-based services.
The noble Lord, Lord Bradshaw is correct: it is no use relying on buses if the roads are congested and the buses cannot move, whether we are talking about inner cities or congested trunk roads. The Government are determined to give a greater priority to buses, both in the cities and in other areas where there is a problem with road space. That means a combined and integrated policy of reducing car usage, of prioritising bus lanes, of effective enforcement and of building on the experiments in which we are now engaged in relation to safety cameras for the enforcement of speed restrictions, bus lanes and detection of other traffic offences. It also means a better system of information to potential consumers, as the noble Lord rightly pointed out.
All of this will be taken up by some of the powers in the Transport Bill, which the House will shortly be debating, and in the announcement we hope to make in the summer about the 10-year transport strategy. The Bill will strengthen the powers of local authorities. We will provide another £780 million this year for local transport capital spending, which will include bus priority measures, joint ticketing arrangements and better passenger information.
So far as concerns ticketing information, the noble Lord, Lord Bradshaw, raised the issue of competition laws and the apparent contradiction between that and an integrated transport approach. We understand that the Office of Fair Trading is proposing to bring forward a blocking exemption, as he hinted. This would exempt most joint ticketing schemes from the

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Competition Act. We expect the draft to be produced quite soon. The Government have also promised to bring forward amendments to the Transport Bill to deal with competitive issues as they affect the local authorities' new bus powers. Again, we shall shortly be debating that matter in this House. The noble Lord also referred to concessionary fares. Again, a number of adjustments are being made which move in his direction.
Therefore, there is a whole package of measures in relation to improving rural transport in particular and to providing a more flexible system of transport within our inner cities. Transport is often I he key to access to the other services that have been referred to in relation to health and education.
Of course, rural areas are still heavily dependent on agriculture—and agriculture is in a poor state in many parts of the country at the moment. The Prime Minister, who met farmers' leaders a few weeks ago, set out a new programme of initiatives for the support of agriculture and agricultural change. Beyond that, however, we need to look at diversification within rural areas—the small businesses, to which the noble Baroness, Lady Byford, referred; and the information technology, to which the noble Lord, Lord Tanlaw, referred. All of this is part of a transformation of the rural community into new services, new businesses and new technology, without abandoning the community spirit which often still exists within those areas.
Some of this requires government intervention and government help. The noble Lord, Lord Kimball, referred to the Countryside Agency and its loss of grant-making powers. That is not entirely true. Some of those powers have been transferred to the regional development agencies, but they will be for rural development purposes. Some of the grant-making facilities are still there within the Countryside Agency; for example, the scheme for the support of small shops.
I move as rapidly as I can to the issue of banking services and the post office network within rural areas in particular, which probably provoked this debate in the first place. The noble Lord, Lord Selsdon, referred to his ambition to be both a lay preacher and a local Midland Bank manager. It is quite clear that he would have made an excellent lay preacher; I reserve judgment as to whether he would have made a great hank manager.
Lord Selsdon: My Lords, perhaps the noble Lord will allow me to intervene. I like to feel that the pressure that we, on all sides of the House, could put on the banks would be considerable if it came from Leicester. In order to be the chief general manager of the Midland Bank, it was always deemed that one had to be, first of all, the manager of the Leicester branch.
Lord Whitty: My Lords, as my noble friend Lady Farrington and the noble Baroness, Lady Byford, are present, I am not going to disagree with that.
It is clear that in terms of both quality of life and economic viability, the financial sector is very important. We have made it clear to the banks that we
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expect them to play their part in eliminating financial exclusion, which is an important part of social exclusion. They need to develop appropriate products and delivery channels to ensure that they reach people in deprived communities. That does not necessarily mean that we can expect the reopening of all the banks that have closed over the past half-decade or so in both inner cities and rural areas. There is no single solution; diversity and choice are important.
I should say to the noble Lord, Lord Newby, that we are encouraging the main banks to develop accounts with no overdraft facilities and no frills—bank accounts which are appropriate for the kind of people who at present do not have bank accounts but whose failure to have access to financial facilities is not only an enormous financial loss to themselves but a social cost to the community as a whole. I am pleased to say that some of the banks are committed to this concept. We need to ensure that they all are. To respond to the noble Baroness, Lady Byford, we are not going to compel the banks to issue bank accounts to people to whom they would not otherwise issue them, but we are encouraging them to have a broader view of their role, which eventually must be profitable and commercial to them as well.
Baroness Byford: My Lords, I am grateful to the noble Lord for giving way. Is he able to comment on the article in yesterday's Independent on the establishment of a social bank for the 2 million people who do not have a bank account if the banks are not to be forced to provide banking services? If he is not able to comment, I quite understand.
Lord Whitty: My Lords, the noble Baroness ha .s the advantage of me in having read the Independent yesterday. I am aware of general provisions in relation to social banking, some of which relate to what I am about to mention in relation to the Post Office.
Before we leave banking as such, there is a problem if banks do not seize this opportunity to play a more social role in these communities. There is a problem for them, and their image has seriously suffered. The other week I was accused of calling for a boycott of the banks when in the very same breath I had denied that I was calling for a boycott of a major bank. But that is the way it goes. What I was concerned about is the banks' boycott of customers. Indirectly, they are effectively boycotting some of the rural area customers who have relatively simple banking requirements. We have to change.
The noble Lord, Lord Newby, referred to new financial arrangements for the Post Office being part of the Link arrangements and to the Post Office's role there. It would be disingenuous to pretend that the Post Office is not also under serious pressure. It has lost 10 per cent of its network over the past decade. But we are committed to the maintenance of a nation-wide network of post offices. The role the Post Office can play may well change as a result of arrangements it is making with the banks. I know that the noble Lord, Lord Tanlaw, was deeply sceptical about the Horizon project, but in the immediate period it is technologically

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quite important—the automation of all post offices by 2001. To date, a quarter of them have been converted. As the noble Lord said, a significant amount of money is going into the Horizon project. That will be an efficient delivery mechanism, but it needs to be sufficiently flexible to move into the next stage of modernisation, including taking advantage of the ADSL operations, which even in rural areas will probably be commercially viable for BT.
In immediate terms, customers of certain banks—the Alliance and Leicester, again, the Giro Bank, the Co-op Bank and Lloyds TSB—already have access to banking services at post offices. We now have an extension to Barclays customers and Co-op Bank customers in Scotland and Northern Ireland. Once the Horizon programme is fully implemented, those agency agreements could enable the Post Office to play a major role effectively as a social bank but in co-operation with the banking community as a whole.
The right reverend Prelates, the noble Lord, Lord Selsdon, and others criticised the decisions in relation to the payment of benefits. We are committed to the migration of all benefit payments to secure electronic means by 2005. That has been made clear by my colleagues. However, we have also given—my noble friend Lord Sainsbury mentioned this yesterday—an assurance that those claimants who wish to continue to collect their benefits in cash at post offices will continue to be able do so. We will therefore see a Post Office providing both traditional banking services and locking itself into Internet-based services. One can envisage a situation where post offices develop beyond that, much on the lines envisaged by the noble Lord, Lord Tanlaw—either for banks or village halls or village shops—and where they form the basis in this Internet society of other information services for rural communities, or act as bases for larger retail outlets—the relationship between village shops and Sainsbury was referred to—as a way of delivering services, both physical and electronic, to the inhabitants of our more remote communities. Post offices seem to be well placed to play a major role in those developments, as do village shops and other village-based outlets.
The noble Lord, Lord Newby, asked whether we would trigger the clauses in the Postal Services Bill relating to subsidy. We are currently awaiting a report from the Performance and Innovation Unit on the future of post office networks. While we put the enabling power in the Bill, we will need to assess the situation in the future. The major revenue stream from the Benefits Agency will not cease to operate through post offices before 2003. In that sense we can take a reasonably medium-term approach to future potential subsidies.
Many other areas were referred to. The noble Viscount, Lord Falkland, referred to libraries. I accept some of what he said, but I also recognise that library services, particularly in some of the smaller libraries, need to develop and modernise. There was a fair degree of concentration on the health service. The noble Lord, Lord Clement-Jones, was to the forefront in referring to the need to develop the health service.
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We have established primary care trusts and primary care groups. We have established health action zones, which now cover 50 per cent of the population of England—some 13 million people—who live in deprived areas. The noble Lord referred to NHS Direct. I appreciate that there are differing views on that. I nevertheless appreciated the noble Lord's comments. We are talking here about a 24 hours a day, seven days a week service which already covers 65 per cent of the population of England. It represents a major increase in accessibility to NHS services and one which should benefit many of the more deprived people who do not have a continuing relationship with their GP, particularly in inner-city areas but also in some rural areas where there is not a convenient GP surgery.
There are substantial problems of investment, staff planning and motivation, to which the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Byford, referred. Many of those can be dealt with within the substantially increased allocation to the health service which the Chancellor announced in the Budget Statement. That will include the development of walk-in centres located in areas of which, one hopes, the noble Lord, Lord Clement-Jones, would approve, and well as some others. We will look at the way in which we use staff, including, for example, the prescribing powers of nurses and other paramedics. It will also involve mobile delivery services and the engagement of local pharmacies with GPs in order to provide a very direct and accessible service, particularly on estates and in rural areas.
I have rushed my speech and I have still managed to take up 26 minutes, which shows what a wide-ranging debate it has been. I hope that on other issues I may write to noble Lords, in some cases after consulting colleagues on their areas of responsibility. It has been a worthwhile and timely debate. I reject the deeply pessimistic note that the noble Lord, Lord Selsdon, struck at one point in his address. In order for us to address the problems of rural areas and rural poverty, and of inner-city areas and inner-city poverty and isolation, we need a combination of government action and of facilitating self-help in those areas. That involves both local and national leadership. It involves a degree of joined-up government. It involves co-operation between the private, voluntary and public sectors. It involves a serious degree of engagement of all public and private service providers in those areas. It involves reasonable access to essential community services.
How we define "reasonable" and how we define "essential" has probably not been completely addressed in the course of the debate. But we all know broadly what we are talking about and we all know that a significant percentage of our population currently suffers, and probably suffers more than it would have done in relative terms, and in some cases in absolute terms, from lack of access to those services, from isolation and from cumulative deprivation. Our neighbourhood renewal strategy must address those problems; and, together, we must address the prevalent trend in some of those areas; namely, of both

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public and private services in retreat—which means, in consequence, that those neighbourhoods are in retreat.
As I hope noble Lords will appreciate, the Government have made an energetic start. We do not believe that we have yet tackled all of the problems as effectively as we need to. We are building on that in terms of the allocation of resources and joining up activity, and in terms of the priorities of government. It is only a start. People in deprived communities striving to make a better life for themselves deserve more from us, and the Government are committed to ensuring that that happens.
Lord Rodgers of Quarry Bank: My Lords, the noble Lord, Lord Whitty, has done as well as any Minister could have done in replying to so diverse a debate. I thank the Minister on behalf of the other 14 contributors for all that he has said, and for the fact that, in so far as he has failed to answer any specific questions, his Private Secretary will be busy making sure that there are letters for him to sign.
The noble Lord, Lord Tanlaw, who is no longer in his place, said that the debate had been one long whinge. That is precisely what it has not been. I have been restored by the extent to which local initiatives of one kind or another, referred to on all sides of the House, hold out more hope than otherwise might be the case for many of the deprived areas.
In his spirited comment, the noble Lord, Lord Selsdon, suggested that there was a particular interest on these Benches in the issues raised. He is right. But I believe that it is shared by Members on all sides of the House who are deeply concerned with problems of deprivation, whether mainly in the countryside, which we have principally discussed today, or in towns, cities and urban areas in general.
We shall return to these matters in due course but, meanwhile, in thanking all those who have taken part in the debate, I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Statutory Nuisances (Hedgerows in Residential Areas) Bill [H.L.]
7.52 p.m.
Baroness Gardner of Parkes: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Gardner of Parkes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Lockwood) in the Chair.]
Clause 1 [Statutory nuisance]:
Baroness Gardner of Parkes Baroness Gardner of Parkes moved the amendment:
Page 1, line 12, at end insert-
(""hedge" means a number of woody plants, whether capable of growing into trees or not, which are so planted as to be intended to be in line and, when mature, to be so integrated together as to form both a screen and a barrier;")
The noble Baroness said: This is a simple and straightforward amendment. It has been placed before the Committee because it became clear in the Second Reading debate on 11th January that we needed to have this definition of a hedge included in the Bill.
The amendment is fairly self-explanatory. I put down a Question for Written Answer on 29th March and received a reply from the Minister on 19th April stating that he had received 3,000 replies to the consultation document. So it is clear that this is a matter of considerable interest to people. I believe that the amendment will improve what I consider to be a right and correct Bill. I beg to move.
Lord Graham of Edmonton: I rise to support the amendment, and also to express some disappointment. Before the House went into Recess, after collaboration with the noble Baroness, Lady Gardner, I asked her to add my name to the amendment. As the Clerk at the Table will tell us, that is not appropriate, and I needed to speak directly. I was given the telephone number of the Clerk on duty during the Recess. I telephoned him last Friday and asked him to put my name down. When I came to the House yesterday and found that it had not been added to the amendment, the Clerk in the Printed Paper Office was kind enough to say that perhaps the provision only begins to operate when the House returns, and therefore it should be down today. Unfortunately, it is not down today. I note that I have the attention of the Clerk at the Table. I hope that he may cause inquiries to be made as to why, having spoken to the proper source, my publicised support for the amendment was not made available to the packed Benches listening with avid attention to what is undoubtedly a major legislative matter.
The situation as the noble Baroness, Lady Gardner, and I see it is simply this. First, we are grateful for the progress that has been made by what might be called the hedge industry, the hedge agitators, or the group of people—the many thousands—who want to see some improvement made. For many years, primary legislation has been required, and there is enormous pressure on time. The Minister who will reply will recognise, as we do, the enormous burden that is carried by her department on a range of issues. We should be hard put to it to make out a case that this should take precedence over other pressing matters. Nevertheless, those who are affected are often frightened, timid and poor; they cannot face the prospects of a court case possibly costing tens of thousands of pounds. A very good friend of mine, Michael Jones, spent a fortune and eventually won, but the case had to go through the courts.

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The purpose of this provision is to take the burden off the individual resident and place it on a third party. The Government fairly and helpfully produced a document entitled high hedges/possible solutions which offers four options for action. The one that the noble Baroness, Lady Gardner or Parkes, I and many others favour is Option 4. I hope that the Minister can tell us a little about where the 3,000 replies fall. I am convinced that the vast majority of them will favour Option 4.
In essence, Option 4 provides that,
"Legislative provisions could be introduced for a tailor-made system for taking action against hedges which cause problems. There are at present no relevant powers to introduce such measures through secondary legislation. Primary legislation would, therefore, be required.
"One approach would be to allow people who have problems with high hedges to complain to a third party, probably the local authority. If the authority upheld the complaint, it would specify the remedial action necessary and enforce it".
That encapsulates not merely the solution but all of the problems in arriving at the solution. Ultimately, in most planning matters enforcement is the nub. It is all very well having legislative provisions, sections and subsections, but how do we enforce what the law lays down?
There is a range of options and possibilities. I was very pleased at the enormous breadth of the consultation that took place. I hope the Minister will refer to it. The document contains a list of consultees, including the Association of London Government—and I declare an interest as vice-president. There is a body called Birch Homes. I wonder which branch that is! The list also includes Fairview Homes; the Federation of Private Residents' Association; Hedgeline; Leech Homes; the Local Government Association; and Mediation UK—it may have a part to play in this. It goes on to mention the National Farmers Union and the National Housing Federation. I congratulate the Government on the breadth of the consultation. Perhaps the document is itself part of the reason why this matter has come before the Committee. It is understandable that people should spend a good deal of time on this matter because the options are explained and the arguments are teased out so well.
At the end of the day, this amendment seeks to keep alive a Bill which, as the noble Baroness and I recognised at Second Reading, could not proceed without government support. If the Government say tonight that they are not in a position to be more helpful than to tell us that 3,000 responses have been received but not what they say nor what they intend to do in response—it is for the noble Baroness opposite to decide what to do with the Bill but the Government should be under no illusion that there are thousands of people with legitimate concerns to raise.
I have an interest in people who live in park homes. Sometimes the site owners are very bad. Some of the people who live on these sites are old, frail, frightened and poor and require muscle from someone who is willing to use it: the Government. The noble Baroness
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and I and many others, including the Minister who is to reply, have served on local authorities. The Minister will understand that, if local government is to have a sufficient number of officers to carry out this task, an enormous burden will be placed on it. Unless we deal with the little people and the little issues, the quality of life in this country will be the poorer.
I look forward with a great deal of interest to hearing what my noble friend has to say. I fully support the amendment, which has been properly tabled and whose genesis can be found in the report itself. In paragraph 5.25, one sees:
"A definition of a hedge which has been used in a civil legal judgement is 'a number of woody plants, whether capable of growing into trees or not, which are so planted as to be intended to be in line and which, when mature, to be so integrated together as to form both a screen and a barrier'".
That is precisely the wording of the amendment. If that definition is good enough for the courts it should be good enough for the Committee. I fully support the amendment.
8 p.m.
Lord Bradshaw: This amendment and the Bill as a whole have the support of these Benches. We hope that the Government will find time to support the legislation. We regard the planting of particular kinds of trees not only as environmentally undesirable but as an instrument to be used aggressively to bully vulnerable neighbours. We support the amendment.
Lord Hardy of Wath: I echo the definition that is offered in the amendment to which my noble friend referred. Some time ago I recall looking at a wide variety of former enclosure Acts. In those Acts the word "fence" was frequently used as a description of a hedge. The description offered in this amendment is far more appropriate than "fence", which would not necessarily be regarded as a hedgerow in the 21st century. I trust that noble Lords will be sympathetic to the amendment and ensure that the Bill completes its Committee stage rapidly.
Baroness Byford: I support my noble friend's amendment which provides a good, commonsense description of a hedge. Sufficient has already been said in the Chamber. We on these Benches await with interest the response of the Minister.
Baroness Farrington of Ribbleton: I thank the noble Baroness, Lady Gardner of Parkes, for giving us a further opportunity to discuss the problems caused by some residential hedgerows and specifically to consider the question of what is a hedge. The noble Baroness's amendment to this Bill seeks to define what constitutes a hedge and thus what type of boundary feature might be subject to inspection by environmental health officers to determine whether they are a statutory nuisance. The definition proposed by the noble Baroness supported fully, if not in name, by my noble friend Lord Graham of Edmonton, is taken from the legal judgment in the case involving Michael Jones, the founder of Hedgeline. That

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definition was also mentioned in our consultation paper to which reference has been made. The paper recognised the need for any new legislation to specify the types of hedges to be covered and to ensure that any system of control focused on problem hedges. It also suggested that the definition used in Michael Jones's case might be a good starting point but sought views on possible alternatives.
While, therefore, the noble Baroness's amendment represents one possible way to define a hedge, we want to reflect further on the matter in the light of the results of the consultation. The noble Baroness, Lady Gardner of Parkes, and my noble friend Lord Graham of Edmonton have pressed me in advance of today's Committee stage to say something about progress with our consultation on possible solutions to nuisance hedge problems. As the Committee will recall, the Government sought views on four options, which included voluntary and legislative action. We are currently analysing some 3,000 responses. We made clear from the beginning that we did not have a preferred solution but looked to respondents to help us to decide whether more should be done to relieve this source of long-running and distressing neighbourhood disputes. We shall take account of the best way forward and hope to make a statement by the summer setting out our decisions and the reasons for them.
The noble Baroness, Lady Gardner of Parkes, and my noble friend Lord Graham of Edmonton have asked about the nature of the responses. I do not believe that it would be helpful at this stage to seek to go into details. The Committee will be as impressed as the Government by the number and range of the responses, including nearly 200 from local authorities, which represents about a 40 per cent response rate. The noble Baroness and my noble friend are worried that we are not moving quickly enough. We understand that people feel they can wait no longer for an answer to their problems. However, these are sensitive issues and it is important that we consider them carefully.
We have heard much today, and on previous occasions, about hedge victims and the bullying and problems that can occur, which have been witnessed by me and other members of the Government. But a hedge has two sides. The responses to the consultation show that some owners believe that they have a right to deal with, for example, the intrusion of noise or being overlooked from neighbouring properties and they do not see why the law should interfere. As ever, we recognise the need for a balance to be struck. If we rush in without thinking it through properly the law may become unenforceable, which will help no one. It is important that we arrive at the right answer.
The noble Baroness offers her Bill as a possible vehicle to implement any government proposals for legislative action on nuisance hedges. It represents, however, only one of the possible options to deal with hedge problems. The consultation paper included other legislative solutions as well as some that did not involve passing new laws. Noble Lords will understand, therefore, that I would be pre-judging our
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consideration of the consultation responses if I were to commit us today to supporting or amending the noble Baroness's Bill.
I understand people's desire for early action to bring them relief from the ills associated with these hedges. The noble Baroness and my noble friend Lord Graham of Edmonton believe that the Bill offers a simple solution to nuisance hedge problems, building as it does on the established system for dealing with statutory nuisances. However, as I explained to noble Lords at Second Reading, the Government have concerns about whether using the statutory nuisance regime to control hedging is the best answer. The main point to bear in mind is that currently statutory nuisance laws regulate activities that are prejudicial to health. The courts have shown that they expect more stringent tests to be satisfied for any matter to be a statutory nuisance. Therefore a person would need to establish that there was a direct causal link between the alleged nuisance and an illness.
In the case of problem hedges, the matter is far from straightforward and the outcome in any particular case uncertain. Therefore we have to consider whether the statutory nuisance route is unlikely to provide the clear-cut remedy that the noble Baroness and my noble friend seek to address in raising the plight of nuisance hedges.
I repeat: we understand people's desire for early action but the best way we can serve them is by making certain that we come up with workable solutions. We should have more to say on the matter in the summer.
8.15 p.m.
Lord Graham of Edmonton: Before the noble Baroness sits down—I may have missed this point—we are told that consideration is being given to the 3,000 responses. After three months she is unable to give us positive news. Can she tell us when she expects the outcome from the analysis of replies to be available? From her long experience, the Minister will understand that this private measure needs to clear its stages in the House of Lords and in another place—and we know what can happen in the month of July to Bills which do not have government approval.
As I said, what the noble Baroness, Lady Gardner of Parkes, does at the next stage is entirely within her gift. However, the Minister may be able to help us. We do not intend to allow the issue to go away. The Bill may not be the solution, but we should like to engage with the Government on the best way forward.
Baroness Farrington of Ribbleton: I am sorry not to be able to be more helpful to my noble friend Lord Graham of Edmonton than to repeat that we understand the urgency of the situation. We hope to be able to make an announcement in the summer about the evaluation and the Government's preferred option with regard to the different choices.
Lord Graham of Edmonton: Of this year?
Baroness Farrington of Ribbleton: The summer of this year. Before I seek to sit down, the only thing that

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I can say with any certainty—and I cite one of my noble friends on another occasion—is that summer follows spring and precedes autumn; and I cannot be drawn further on the time.
Baroness Gardner of Parkes: I thank noble Lords who have taken part in the debate on the amendment, which has clarified the present position. It is a long time since the consultation ended on 31st January. It is natural that people are impatient.
I have received many letters, but perhaps I may refer to two which I have received in the past couple of days. One sought to deal with the issue through an anti-social behaviour order. The person stated:
"I have tried without success to get the police to act on an antisocial behaviour order and I enclose a copy of the Prime Minister's speech at the Labour Party Conference stating that it is within the police powers to act; also a recent letter from the Home Office stating a similar line, all to no avail".
The Home Office letter is a detailed page in small print. The writer highlights the relevant part of the Prime Minister's speech stating that,
"from April antisocial neighbours can be taken to court and punished. I say to the police, use those powers, and I say to the public, help the police to make them work".
The writer is upset that having tried in every way he can to use the antisocial legislation, he has had no success.
The other letter goes on at great length for a couple of pages, but one paragraph is headed "Government policy" and states that the question at the core of this issue is whether a small number of bullies should be allowed to cause grievance and nuisance to neighbours and reduce the value of neighbours' homes. It asks whether, alternatively, the Government will stand up to the many against the bullying few as they promised to do when elected in 1997.
I have referred to those letters because they were the most extreme in their declarations. But other letters have reflected the great frustration and unhappiness being caused. The Minister says that there are two sides to a hedge. There certainly are: the sunny, bright, light side; and the dark, shady side. I agree with the noble Baroness when she says that the answer must be right and enforceable. I should like to say how greatly I appreciate the helpfulness of the noble Baroness and of the noble Lord, Lord Whitty, when approached with questions on this issue. I appreciate that the Government want the solution to be thorough and right. But it cannot be right that the only person who has succeeded at present is Michael Jones. The noble Lord, Lord Graham, mentioned the cost; but he did not say that the case had taken 20 years. I have received many letters saying that people cannot believe that any issue could take 20 years.
I agree that the consultation document is somewhat complex. The writers of some letters have enclosed copies of their responses to the department. I have some sympathy with the department on the time it will take to analyse those responses. Some indicate that they like option four, but also like a little bit out of option one, and perhaps a taste of option two. On
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reading the letter, one hardly knows which option the writer supports. If more people have written with a clear-cut answer, it will be easier to analyse the responses. Otherwise the analysis will be extremely difficult.
The noble Baroness referred to the regulation of activities prejudicial to health. There are clear-cut cases. We have received correspondence from women whose husbands have died from the worry caused by such cases. So it is not the case that one cannot establish that the situation is prejudicial to health. However, the Minister referred to the courts' expectations. I do not think that the majority of cases would come to court. In the vast majority of cases, a word from the council—and I emphasise that the council would come only if requested to do so, and it should be able to charge for its services; it would be wrong otherwise—would draw an individual's attention to his hedge. While sometimes the nuisance is deliberate and the bullying element comes into the matter, it is at other times simply a lack of care and thoughtlessness. People do not notice the hedge because it does not affect their light. They are on its sunny side.
I hope that the Committee will accept the amendment. I commend it.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Remaining clause agreed to.
House resumed: Bill reported with an amendment.

Environmentally Friendly Fuels for Vehicles
8.20 p.m.
Lord Dubsrose to ask Her Majesty's Government what steps they are taking to encourage the use of vehicles powered by environmentally friendly fuels.
The noble Lord said: My Lords, I welcome the opportunity to discuss the fuels used by vehicles and the effect that they have on both air quality and climate change. I believe that these issues are generally well-known and understood. It is my contention that the Government are doing well but could do a little better. That is the premise of the debate.
The Government have already set up the cleaner vehicles taskforce, which will soon publish a further report with recommendations for the Government. I thought that its previous report in August 1999 was good, but how much of it is being acted upon? We have the policies, but we are moving too slowly and other countries may be getting ahead of us.
I welcome, as elements in government policy, the air quality strategy, the Energy Saving Trust's powershift programme, the climate change programme and the DTI's foresight vehicle and advanced fuel cell programme. I hope that the successful candidate for Mayor of London will agree to consider the issue as important and decide that it is far better to use a carrot

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than just a stick and provide incentives for cars and other vehicles which use environmentally friendly fuels and want to come into the City of London.
I believe that the use of fuels can influence not just noise levels but emissions such as carbon dioxide, benzene, carbon monoxide, particulates, sulphur dioxide, oxides of nitrogen and ozone. There are several types of environmentally friendly fuel. Some can be used immediately in existing vehicles while others have high conversion costs. We as a country should not be backing only one system, but should be examining the various systems and seeing which turn out to be the best.
There are four basic approaches. First, there are reformulations of petrol and diesel; for example, lead-free petrol, low benzene petrol, ultra-low sulphur diesel and ultra-low sulphur petrol. Secondly, there are alternative fuels of which there are two main types: liquid petroleum gas and compressed natural gas. Thirdly, there are the electric options: batteries and fuel cells. Fourthly, there are the hybrids: the use of petrol and LPG, or the use of petrol and an electric battery together in one vehicle.
The electric battery has a constraint on the distance which can be travelled before it is recharged. Fuel cells do not have that constraint, but they have another difficulty; that is, the high cost of manufacture. Developments have taken place. For instance, a company called ZeTek Power has developed a zero emission taxi which was first unveiled in July 1998. Furthermore, trams and trolley buses represent an environmentally friendly option. The costs of producing some of the vehicles which can use LPGs, electricity and so forth, are high. The people who want to use them say that prices would fall if we could achieve economies of scale.
Several vehicle manufacturers are developing their own approach to green vehicles and there are therefore many different solutions. I am grateful to those which have written to me with their suggested way forward. For example, Toyota has developed a vehicle called Prius. It is a hybrid using petrol combined with an electric motor and it is the first mass-produced hybrid car in the world. It will be sold in the UK within four or five months. Peugeot believes that diesel is the best way forward. Vauxhall believes that the fuel cell is eventually the way forward, but that in the meantime more should be done to encourage LPG in duel fuel vehicles using gas and petrol. It believes that LPG could be an important way forward, but there are high costs of conversion. Of course, there are insufficient refuelling points for people who have converted. The ZeTek company is developing fuel cells which can be refuelled with hydrogen and I understand that the operation takes just five minutes. However, charging an electric battery car can take several hours, if not the whole night.
Regrettably, because of lack of government backing or that of other agencies, ZeTak is building a factory in Cologne after scrapping plans to build in Ramsgate, Kent. However, I understand that it is talking to Rover at Longbridge, so perhaps with some Government encouragement there will be a way forward.
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There are other examples of good practice. Safeway has a fleet of natural gas powered vehicles. Honda is moving in that direction. A factory in Ballymena, Northern Ireland, makes electric buses. Camden has a 16-seater community bus in which I have travelled. It takes people to old people's day centres or disability day centres and has a range of 200 miles. The battery can be charged overnight and therefore journeys can be planned. I understand that Westminster City Council has a fuel cell van for use in parks.
Nevertheless, I believe that we are slipping behind other countries. I visited Rome some time ago and saw in the city centre small electric buses taking people on shorter journeys in that area. As regards LPG, other countries are way ahead of us. The Netherlands has 400,000 LPG vehicles; Italy has 1 million; France has 150,000; and according to industry estimates we have about 15,000 LPG and CNG vehicles. It was earlier estimated that, given the right policy framework, there was a potential market in this country of 500,000 LPG vehicles by 2003. I fear that that looks unlikely.
I now turn to the suggestions that I want I o make to the Government. The first concerns a range of duties and charges. I welcome the fact that in the Air Quality Strategy for England, Scotland, Wales and Northern Ireland the Government said:
"central government has a role to play in providing the overarching regulatory and fiscal framework that promotes cleaner, more efficient vehicles and fuels".
I believe that there are a number of ways forward. For example, why not allow cars which use the most environmentally friendly fuel—and by that we would mean electric cars—to park free of charge on sites where parking is allowed? I understand that Westminster City Council has such a scheme, although I have never seen the details. There are also opportunities within vehicle excise duty and fuel duty—and within congestion charges if they are introduced—to balance the situation more in favour of vehicles which are environmentally friendly.
Some of the changes are short-term and others will take longer. We might in the short term have to do more to develop those changes which can be made quickly and then concentrate on those which will take longer. Therefore, my second suggestion is that there should be a differential to support the introduction of low sulphur petrol. Next March, the Chancellor intends to introduce a 1p differential, which I believe is too low. The take-up of cleaner vehicles by the bus industry is somewhat constrained by the fuel duty rebate and I wonder whether a greater incentive could be given to the use of cleaner fuel.
However, there are serious problems when petrol stations want to sell LPG; they must obtain planning permission, which can take a long time. Can anything be done to help them? I also believe that the Government, local government and the public sector as a whole can set an example. I wonder how much the Government are doing by using some of the environmentally friendly vehicles. Even the use of ultra-low sulphur diesel would be a step forward as the change can be made easily. I believe that there is a need for a long-term commitment—say, five years—in order

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that any tax or duty advantages can become part of the system to encourage manufacturers and customers to make a change. For example, it would be useful if there were a longer-term duty differential between LPG and diesel. I believe that it would be right to reduce the duty on products such as LPG to the EU minimum. There is a need for capital allowances where vehicles must be converted and also a need to install refuelling points. Here, I refer to LPG but the same applies also to other fuels. We need to look at greater vehicle excise duty concessions, including those for company cars, for environmentally-friendly vehicles.
I wonder what the Government are doing with regard to fuel cell research and other research in the UK. What is being done to encourage the location of manufacturing plant here? I do not want to see all those developments take place simply in other countries. Presumably, whereas the EU exercises constraints on subsidies to motor car manufacture, there would be fewer such constraints on research spending. I wonder what the Government can do to help in that direction over and above what is already taking place. I have already referred to Rover at Longbridge, and I wonder whether more could be done to encourage this type of research there.
I turn to a suggestion which arose in the Cleaner Vehicles Task Force report with regard to grading vehicles. Perhaps all vehicles could be graded, say, from A to E in terms of their greenness and their beneficial effect on the environment, rather as white goods in shops are graded A to E. Then, benefits in terms of free parking and nil excise duty, and so on, would be possible.
Finally, I believe that the proposals that I have mentioned should be accompanied by publicity. Again, that was recommended by the Cleaner Vehicles Task Force. It is only right that where a public vehicle uses an environmentally-friendly fuel, that should be writ large on the sides of the vehicle so that people know that that is happening and that the Government are setting an example and, indeed, developing the environment. Therefore, many things can be done. I know that some are being done already. However, I believe that they could be speeded up and I should like to see more energy and enthusiasm behind the initiatives. I hope that the Government will respond along those lines.
8.31 p.m.
Lord Lucas: My Lords, I am enormously grateful to the noble Lord, Lord Dubs, for giving us the opportunity to have this debate. As several noble Lords will know, I have an interest to declare as a director of ZeTek Power, to which the noble Lord, Lord Dubs, has already referred. It is a company which makes fuel cells, some of which end up in vehicles. Therefore, in parts my speech will be biased, but I hope also in parts well informed. I am sure that the Minister will be wise enough to separate the two and respond accordingly.
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This debate asks the Government to encourage the use of vehicles powered by environmentally-friendly fuels. Why should the Government do that? For the foreseeable future, the vast majority of vehicles will continue to be powered by good old petrol and diesel, and environmentally-friendly fuels will remain restricted to a small number of vehicles. They will, as it were, be a flea on the elephant of the great vehicle industry. It is far more important for most of us that the emissions from the elephant are controlled than that we should have a few more fleas on it.
At first sight, it is not obvious why the Government should do a great deal, and perhaps that is why this and past governments have not done a great deal. There is a strong public wish to see something done and there has always been a cosmetic level of support for natural gas and other technologies. I believe that the Government have always understood the need to participate in this kind of public exercise in order to encourage the automotive companies and others to take seriously the need to improve their own act in reducing, as it were, the elephant's emissions. In that, I believe that over the long term the Government have succeeded.
However, I believe that there is another strong reason why the Government should wish to move further in the direction suggested by the noble Lord, Lord Dubs; that is, the probable creation of a very substantial set of new industries in this area. I believe that the recent events at Longbridge and the possible future events at Dagenham should have brought home to us all the danger of not being the country where a large industry is based and of having reached the position where we are not at the research and manufacturing heart of those industries. Thus, when jobs come to be shed and when reorganisation takes place, it is our workers and our industry that suffer.
It is important that we should take measures now to ensure that new industries are based here. We are doing that in a Bill already before this House with regard to e-commerce—a little late but, none the less, welcome. We should be doing that in the industries which will, with good fortune, come to exist in the area of environmentally-friendly fuels.
There are two important things that the Government can do to help: first, regulation; and, secondly, practice. Regulation is, of course, the stick with which they can beat people into doing what they want. However, it is also a hurdle which is placed in the way of anyone who tries to develop a new product or a new service in this country. As the noble Lord, Lord Dubs, pointed out, many hurdles stand before people who try to produce environmentally-friendly vehicles and who work on environmentally-friendly fuels. Complicated regulations surround vehicle production on anything but the tiniest scale.
As yet, there has been no great government effort to get out there and find what the industry needs by way of new regulations. Inevitably, new questions will be raised, particularly when electric vehicles become common in any form. First, they will be silent. You can no longer rely on the noise of an approaching car to

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warn you not to step out into the road. Secondly, they will probably be a potent source of electrical interference. These matters need to be considered well in advance One cannot wait until companies are producing hundreds of such vehicles a year, then step in and say, "Halt. We need five years to consider what is going to go on here".
If we want to encourage these industries to develop here and if we want to encourage the big North American companies which are leading some areas of fuel cell research, for example, to base some of their operations here, we need to provide the type of environment where their initial products will be welcomed. That means that we must get going now on ensuring that, as the noble Lord, Lord Dubs, said, the right regulations on vehicles and on planning permission for refuelling stations are put in place.
There is also a need to become involved in practice; that is, to ensure that the Government encourage in their own activities the use of those vehicles. As the noble Lord, Lord Dubs, said, Westminster has purchased a fuel cell van from ZeTek. Others in the local authority area may well follow, but as yet government have taken no action. While there is no distribution infrastructure for the fuels used by those vehicles and, naturally, they remain considerably more expensive than petrol vehicles, it is very important that the tax policy on those fuels none the less offers an advantage to users of the fuels.
This is the type of situation which we should like to find in this country. It is one which exists in Germany and in the United States. The welcome given there to those new technologies is of an order of magnitude greater than that available in this country. That is the fundamental reason why, having tried for several years to obtain government support for building a factory in this country, in a few short months we have found ourselves in the heart of the hydrogen infrastructure and government-funded research infrastructure in the Ruhr and hope shortly to be in a similar position in New York.
It would be wonderful if this country would wake up to the opportunities that exist. Even John Brown of BP recognised in his Reith Lecture that the hydrogen economy is coming. Of course, hydrogen is not an energy source; it is merely an energy carrier. However, it is the most likely convenient energy carrier for the medium-term future when we are beginning to rely on all kinds of different potential sources of energy. There is a big infrastructure to be developed. Hydrogen can be environmentally friendly in its production and is certainly environmentally friendly in its use. Like the Internet, we are at a very early stage when there are many opportunities, many companies and many ideas which will turn out to be failures. However, it is important that enough of them should arise here so that some of the successes also occur here.
Fuel cells are by no means the only technology. Microturbines, Sterling engines and all sorts of other things are happening, none of which seem to be receiving significant support from this Government. There are all sorts of sub-technologies associated with
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fuel cells: reformers, capacitors, batteries, electric control systems, material science, to mention a few, all of which would be enormously helped if there was a growing industry in fuel cells in this country. In addition, there are all sorts of spin-offs of fuel cells for end users which, should they be developed to a point where they are more commercial than they are at the moment, would make a great impact on transport, refrigeration, buildings and all sorts of other industries.
We are very well placed in this country, with a host of small engineering companies and a long tradition of engineering excellence, to make use of developments in the area of environmentally friendly power sources, if the development takes place here, so that those small companies can on their own doorstep become involved with the originating companies and the expertise, rather than having to wait for some big American company to import the finished product.
It would be very nice to see, for instance, the Government's Powershift project having more room in it for fuel cells. It does not at the moment seem to. Most of the money goes to natural gas, which is finite. In my opinion, what appears to be happening, namely picking winners, is not the right way to go about this. As the noble Lord, Lord Dubs, said, it is important to encourage as many alternatives as possible. We are in a ferment of opportunity. All sorts of things are happening. It is impossible to tell which technology will turn out to be right at the end of the day. There are so many different alternatives. There is so much to be done in all of them. It is important not to pick the winner but to hold the race here, so that the winning takes place in this country for the benefit of our citizens.
The noble Lord, Lord Whitty, is a Minister in the Department of the Environment, Transport and the Regions. All three areas are involved in this subject. The environment is obviously involved; transport, for the benefits that this new industry could bring to our whole transport industry; the regions, because, when it comes to clean air, the benefits of environmentally friendly fuels happen locally. One of the great observations that I bring back from Germany and the United States is that it is regional enthusiasm, the enthusiasm of the City of Cologne, the enthusiasm of the City of New York, that makes things happen. Concentrating these matters too much in central government seems in this country to have a stultifying effect. I hope that the noble Lord will encourage his Ministry to learn from this and that we might see a greater degree of delegation to enable innovative councils to make things happen in this country.
8.42 p.m.
Lord Palmer: My Lords, I, too, am grateful to the noble Lord, Lord Dubs, for so eloquently introducing this, to my mind, perhaps one of the most important debates ever to take place in your Lordships' House. I must declare an interest. I am a farmer in the Scottish Borders and I grow industrial oilseed rape, most of which goes to France and Germany and is converted into fuel.

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Why do I say that this debate is so important? First, farming is in one of the worst recessions ever. Secondly, there have been no major discoveries in the North Sea in the past decade. Thirdly, OPEC will soon be back in control, and that can only lead to rampant inflation.
Every time in the past five years that we have debated agriculture in your Lordships' House, I have implored both this Government and the last one to spend more money on research and development for alternative fuels that can be more efficient and environmentally friendly. My pleas, sadly, have always fallen on deaf ears.
It is pathetic that we spend just £1.9 million per year—half of what Germany spends—on research and development. Only biofuels (biodiesel and bioethanol) recycle carbon. Cutting the penal tax rate on biodiesel, imposed illogically by the previous government, would be the obvious way to achieve crisply a useful environmental and political gain.
The price of fossil oil has more than doubled in the past year, with Brent crude currently standing at 24 dollars per barrel. It has in the last six months been as high as 30 dollars per barrel. It may be wise now to establish even a small domestic renewable source of diesel fuel prior to what seems an inevitable price hike when OPEC once again takes control of world sales and prices. It is demonstrably true that biodiesel energy life cycles and emissions are both better than those for fossil diesel taken overall.
On researching information for this debate, it is quite fascinating to realise that 100 years ago one-fifth of the farmland of England was given over to transport fuels. I refer to oats and hay for horses. In view of the changing structure of British agriculture today and the current nonsense of "set aside", it is quite possible to foresee a similar amount of land being used again for energy crops. There are about 30 million acres of farmland in England. Currently some 1 million acres are used for oilseed rape, which is used mainly for cooking oil and other food applications.
The best growers can achieve a yield of around a tonne per acre. Therefore, 500,000 acres could be put into industrial cropping for biodiesel to produce 500,000 tonnes of biodiesel itself, making valuable use of the land, the sunshine and indeed the rain to produce energy from our current account, rather than living off our fossilised capital account. Judging by the strange terms of a letter sent to BABFO recently from the Head of New Crops and Sugar Division, MAFF has no grasp of the reality of this matter but wanders into realms that would not seem to be the proper concern of an agricultural ministry. Here again, I make a plea for more funds to be made available for research and development.
In practical terms, within five to seven years British farmers could produce half a million tonnes of diesel from fields which might be relatively unproductive. This would be a 3 per cent start to tackle the problem of how to cope when the mineral oil runs short, as indeed it surely will. Given an appropriate tax regime,
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such production is likely to start very quickly in either Hull or Liverpool, both of which are areas in need of a vast amount of extra employment. Biodiesel cooking oil is also likely to be boosted by purification and recycling of used cooking oil, and this could amount to perhaps 50,000 tonnes per year, solving a tricky waste disposal problem at the same time. I implore Her Majesty's Government to take this on board.
The public likes the concept of clean, green road fuels and wishes them to be available. The present so-called "green" fuels are, by and large, phoney, as they merely reduce emissions while leaving the main greenhouse gas problem untouched. They are finite and polluting. Biodiesel and bioethanol, by contrast, are renewable, sustainable and biodegradable. Promoting these fuels would be a widely understood and popular move in the bear garden of the current debate on road fuel taxes.
The wisdom of British governments, however, has been far more damaging to our pockets, let alone the environment. Although it was Lloyd George who first taxed fuel in 1908, the increase in fuel taxes, compared with the increase in the retail prices index, did not appear unreasonable until the early 1980s. By 1993, in my view it was unacceptable, and since May 1997 it has become outrageous. Every £10 that we spend on fuel includes £8 going straight to the Treasury. Our fuel is already among the most expensive in the world and I believe passionately that expensive road fuel is the ignition light for inflation.
When Rudolf Diesel demonstrated his engine of that name in Paris back in 1908, he ran it on peanut oil. Peanut oil was effectively the first biodiesel fuel and it is pathetic what little progress has been made in the past 92 years. Biodiesel in this country is mainly derived from oil seed rape and sunflower oil. It has a sister called bioethanol derived from wheat, potatoes and sugar beet.
Although presently costing more to produce than fossil fuels, they are less toxic than table salt, less harmful to the skin than soap, are biodegradable in water, contain negligible sulphur, do not contribute to global warming and yield significant reductions in the most harmful of emissions. The tail pipe emissions from bioethanol are particularly low which make it an ideal fuel for inner-city low emission zones.
Currently eight European cities use biodiesel in public transport systems. It is growing (in both senses) in popularity in the United States and is sold at over 700 filling stations in Germany. Virtually all diesels can run on it with little or no modification, but you will not find it here because in 1995 the last government imposed full duty on it, making it uneconomic to produce, and the present Government, sadly, have kept the status quo.
If we were to reduce the duty to 10 per cent of present levels, production of this cleaner, renewable fuel would be achievable. It would reduce our dependence on the Saudis and perhaps do something to restore this Government's reputation among farmers. My Lords, does that make too much sense to be part of any British government's transport policy?

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By producing environmentally friendly fuels, everyone will benefit and I urge Her Majesty's Government to take action by pump priming tax derogation now and spending more on research and development before it is too late.
8.52 p.m.
Lord Beaumont of Whitley: My Lords, I too thank the noble Lord, Lord Dubs, for initiating this extremely important debate this evening.
Some of the cleanest and most environmentally friendly transport is powered, as has already been said, by electricity. Of course, the true measure of how friendly it is depends on how the electricity is generated. But now that more and more of it is powered by wind and waves and other clean sources, transport which can use that electricity is important.
I want to take up with the Minister this evening—and I have given him notice of this—the matter of the financial and bureaucratic blocks being experienced by the Bristol electric railbus, which is one of the most promising developments in that field. I have no interest to declare except a lifelong friendship with the person behind it, Mr Jimmy Skinner, who was also for a long time a colleague of mine in the Liberal Party.
The Bristol electric railbus uses 34 per cent of the energy of a conventional roadbus and runs on an easy-to-build lightweight track. Its unique feature is a steel flywheel which acts as a rechargeable source of energy. It has been running reliably now for three years along a half-mile length of track, and its proponents, who have sunk a lot of their own money in it from a sense of public duty—I can vouch for that as the reason—and Bristol now want the opportunity to use it on a longer and eventually commercially viable track.
One of the ways in which that could be done without noticeable extra expense is by the use of derelict track owned by Rail Properties Ltd and, therefore, under the direct control of the Government, and the objections so far seem to be of a purely bureaucratic nature. I ask the Minister to see what can be done to resolve that.
On the wider scale Bristol is applying for extra money for development, but the doctrine, sound in principle, that local authorities should be responsible for their own transport systems has blocked progress. Mr Rickett, head of the Integrated Transport Task Force—another of these hybrid animals—has said,
"The government is not going to change its policy that local authorities should decide what forms of transport are best suited for their area".
I should say in passing that I am far from clear what authority he has for saying that the Government will or will not change their policy. I should have thought that was up to Ministers. But in any case, we are not asking for that policy to be changed; we are asking for a policy of backing innovative clean transport and research, experiment and deployment for local authorities that want it to be funded centrally for the good of all.
I say that the doctrine that it should be done locally is sound in principle, but local authorities are strapped for cash and innovative systems which could have a
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national, and indeed an international, use should surely be funded nationally. I understand that when Glenda Jackson was the Minister responsible there was such a fund but that it appears to have disappeared.
When publicly minded individuals and firms come up with ideas which they test satisfactorily and which everyone except the immediate competition—in this case buses—can see is a very good thing, it is appalling that those ideas should be frustrated.
In addition to my first question about the use of rail owned by Rail Properties Ltd, I make a further plea to the Minister that he will apply himself to seeing that the main principle is addressed. He has a reputation in this House and far beyond for being a man not tied down by shibboleths and bureaucracy. I beseech him to urge the Government to apply themselves to the realities of progress in this field.
8.56 p.m.
Lord Stoddart of Swindon: My Lords, I too thank my noble friend Lord Dubs for raising this very important Question. Indeed, I hope that the Government will listen to what he said and take heed of his suggestions and, indeed, of the many other suggestions which have been made by other noble Lords this evening.
There is no doubt that traffic fumes from all sources are certainly a health hazard and, indeed, some estimates have put the annual death toll from traffic fumes at some 10,000 in London alone. So there is certainly a health aspect to this problem which should be addressed. Indeed, on that count alone, the issue is important.
Traffic fumes also create a smelly, unpleasant environment which interferes with people's enjoyment of facilities, and especially shopping in towns. Let us take Oxford Street, for example. Oxford Street is probably one of the finest shopping streets in Europe, if not in the world. Cars are banned. But large numbers of buses and taxis belching diesel fumes make shopping for many, especially asthma sufferers and others with breathing problems, a nightmare indeed.
That is a place where we should certainly be using environmentally friendly fuels of various sorts, or at least of one sort. The electric fuel is the one which I favour. A start should be made in converting to environmentally friendly fuels for all vehicles.
Many suggestions have been made this evening. Liquid petroleum gas—my noble friend Lord Dubs mentioned it—is certainly a fuel which should be considered as an alternative. Of course, biofuels should also be considered, as was suggested by the noble Lord, Lord Palmer. All I would like to say to him is that I believe that in Reading there was an experiment with one of those fuels in the public transport system and the whole town smelt of fish and chips. Of course, some people like fish and chips; others do not. Nevertheless, it is an idea which certainly needs consideration.
Lord Palmer: My Lords, perhaps the noble Lord would give way. We are both familiar with the town of

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Reading. Indeed, I was born there. Would the noble Lord agree that the smell of fish and chips is different from the smell of ginger nuts that for many years used to permeate through the entire town of Reading?
Lord Stoddart of Swindon: My Lords, Huntley and Palmer's ginger nuts, and indeed their breakfast biscuits, were renowned throughout the world. I am sorry that they are no longer made in Reading. Unfortunately, they are not made anywhere.
Apart from the other fuels that I have mentioned, there is electricity. In my view, that is undoubtedly the most environmentally-friendly fuel. We have not yet reached the stage when electricity can be used extensively for cars, but there are certainly possibilities for urban public transport, as has been mentioned by the noble Lord, Lord Beaumont.
I want to concentrate my remarks on public transport. I have the honour to be the president of the British Trolleybus Society and the chairman of its trustees. That is an organisation whose dedicated members have kept the interest in trolleybuses alive for many years and who have maintained and restored many trolleybuses from various parts of the country at the Sandtoft Transport Centre near Doncaster. Indeed, last year I had the privilege to re-launch a rebuilt Reading trolleybus—number 113—and I had the opportunity to drive it. I had never driven one before and it was certainly a different experience from driving my car. Noble Lords will be glad to know that I had no accidents and I managed to stop the trolleybus at the right stop. That was a good experience.
My interest in trolleybuses stems from my experience as chairman of the Reading corporation transport undertaking in the 1950s and 1960s when I came to realise that the trolleybus was a fine vehicle for urban stage carriage bus services. They are clean, fumeless, quiet, smooth riding and they have superb acceleration which is needed for stage carriage work and an efficient braking capability. Although they are silent, if someone steps out in front of a trolleybus, the driver can brake quickly because they have retroactive brakes. They are superb vehicles. They have a long life and low maintenance costs.
With such great advantages people may ask why they were discontinued. In my view, the answer is that there was enormous pressure from the oil lobby, although other factors such as lack of flexibility and frequent bunching leading to bad timekeeping, were cited as major reasons. Many of the reasons given were spurious and are certainly now capable of remedy through the application of new technology which could facilitate overtaking and better batteries that would enable trolleybuses to run off-wire for reasonable distances. In my view, technically there is no barrier to the reintroduction of the trolleybus.
As to running costs, even when oil prices were low—the noble Lord, Lord Palmer, pointed out that they are now sky high even without tax—the operating costs of trolleybuses were only marginally higher than those
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for diesel buses. With oil prices high and electricity prices lower in real terms, it is likely that costs per mile would now be in favour of trolleybuses.
It may be said that support for the trolleybus is backward looking. However, I must point out that although we, in this country, may have forgotten the trolleybus—some people under 30 have never seen one—in many countries they are an integral and an important part of the public transport system. In Europe and in many other parts of the world, the trolleybus is an essential and an integral part of their stage carriage services in towns and cities.
If many other countries operate them successfully, is it not time that we, in Britain, re-examined our attitude to them? Therefore, my plea to the Government is that they should finance research and development into electric vehicles and especially into a possible new role for the trolleybus in our public transport infrastructure. By that I mean assistance with re-installing the necessary overhead infrastructure and an accelerated change-over from diesel buses to trolleybuses or other environmentally-friendly vehicles. I believe this matter is urgent. We need to deal with the problems of motor vehicle exhaust urgently.
As the noble Lord, Lord Lucas, pointed out, there are other advantages. We would have to manufacture new trolleybuses which would create an opportunity for a new industry to be formed at a time when some industries in the automotive sector are closing.
I hope that my noble friend Lord Whitty will be able to give some encouragement to all noble Lords who have spoken and that the Government will listen to what has been said and will treat this problem as a matter of urgency.
9.6 p.m.
Lord Bradshaw: My Lords, I thank the noble Lord, Lord Dubs, for introducing this subject. I speak from some practical experience in public transport. Before the debate I inquired why compressed natural gas vehicles are not as welcome in the bus industry as they once were. In one British city there is a fleet of 11 such buses but they have turned out to be more expensive to run than was expected. Worse than that, from an engineering point of view they are complex. Their fuel tanks are so big and heavy that they cannot be fitted on double-decker buses and the view now is that their maintenance costs will be very high.
As noble Lords may know, I am a member of Oxfordshire County Council, and I was involved in the introduction of electric buses in Oxford. From an economic point of view they were almost catastrophic. Rarely were the five buses ever available. Breakdowns were frequent. A normal diesel bus would carry 25 seated and nine standing passengers, but that had to be reduced to 18 seated passengers because 4 tonnes of batteries had to be carried on the vehicle. They simply did not perform well. We must be realistic when taking decisions on which technologies it will be possible to extend economically to the bus industry.
The available evidence suggests that, at least in the short term, we should concentrate on the use of the best ultra-low sulphur diesel fuel, catalysts and

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particulate traps. Of course, new vehicles will be equipped with the best technology, but unfortunately there are weak business incentives to retrofit vehicles with systems such as particulate traps. The noble Lord, Lord Stoddart, referred to the fumes in Oxford Street. Buses should not be emitting black smoke, but certainly older buses need to be retrofitted with particulate traps.
Perhaps this is an area where the Government could help. I believe that out of the £280 million set aside in the Budget for transport, a sum of £6 million has been identified for the task of cleaning up pollution. Funding for the retrofitting of particulate traps to the newest of the older vehicles would be a good way of spending the money.
Modern engines, called Euro II engines, burn more fuel than the older engines, but they appear to offer the best way forward. As the Disability Discrimination Act comes into force and local authorities enter quality partnerships, this is likely to include a requirement to consider air quality. For that reason, I believe that we can look forward to the introduction of diesel buses with increasingly better engines that pollute far less.
In the longer term, if the Government are to put money into research, it would be much better to go one big step further into the area outlined by the noble Lord, Lord Lucas. The hydrogen fuel cell appears to offer a great many advantages. It is a plentiful fuel and one that does not produce greenhouse gases. Furthermore, it appears to be possible to build fuel cells of a reasonable size. However, a great deal of development work still needs to be done.
I take the point made earlier about picking winners, but I should be reluctant to see more money being spent on projects such as battery technology. When I joined the railway in 1959 that technology was hailed as an imminent and useful source of energy to propel trains. In reality it has advanced little over the past 40 years. I would much prefer to see the adoption of a technology that appears to have a realistic prospect of success, not only for fuelling vehicles but also for the provision of work in a new technology in which this country could take the lead.
One area of transport requires the Government's close attention. A great deal of pollution comes from old cars that are used as taxis. I suggest to the Government that a case can be made for imposing an age limit on taxis. That would be a local authority matter, but is something that could be required for local transport plans. Nowadays taxis should always be fitted with catalytic converters. Taxis spend a good deal of time with their engines idling in town centres to keep the drivers warm. That is by far the most polluting part of the cycle. Furthermore, taxis and private hire vehicles—I am referring to both types of vehicle—should have more regular emission tests than only once a year. Because they cover a much greater distance than the average private car, a strong case can be made for more frequent tests on such vehicles.
Mention has been made of electric traction. Certainly that is something for which we should aim. I, too, used to live in Reading and I very much
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regretted the departure of the trolley buses to which the noble Lord, Lord Stoddart, referred. I can remember the day of the last trolley bus in that town. It was most regrettable when they were taken out of service.
A matter that has greatly disappointed me—although I realise that I run the danger of having the Minister tell me, physician, heal yourself—is that neither in the network management statement of Railtrack nor in the calls for franchise renewal have I seen much evidence of extended electrification of the railways. That is an important point because it touches on what has been said by the noble Lord, Lord Palmer; namely, that we are already extremely dependent—and in the future will be even more dependent—on imported fossil fuels, not only for our road transport but also for our railways. This is in marked contrast to continental Europe, where a much larger percentage of the railway network has been electrified. To some extent this is a strategic issue. Not all of one's transport infrastructure should be tied to a common fuel base because then you can be held to ransom that much more easily.
Those are the points that I wished to contribute to this debate. I look forward with great interest to what the Minister has to say.
9.13 p.m.
Lord Brabazon of Tara: My Lords, I, too, am grateful to the noble Lord, Lord Dubs, for introducing this debate. I am not sure that I go as far as the noble Lord, Lord Palmer, in his description of its importance, but it has been interesting for all of us who have an interest in transport and cleaner technology.
I declare an interest as the user of a petrol-driven motorcar. Before we go any further with this debate, we should pay credit to the motor industry for the enormous advances in technology that have taken place over the past several years. They have eliminated completely the general use of leaded petrol; introduced the catalytic converter and vastly improved technology in the building of engines and cars themselves. I understand that cars now produce only 10 per cent of the pollution they did 10 or 20 years ago. In fact, some manufacturers claim that in polluted areas, that which comes out of the exhaust pipe is cleaner than that which goes in through the carburettor, though I feel that one would have to live in a fairly polluted area before that became true.
The noble Lord, Lord Stoddart, mentioned the case of Oxford Street—I, too, had it down in my notes for mention—which I gather is the single most polluted street in central London; and that has a ban on private cars. So the pollution is caused only by diesel-driven buses and taxis. Having said that, I shall be the first to regret the passing of the old Routemaster bus. I hope that whoever becomes mayor of London tomorrow will ensure that it survives. At the same time, I hope that the new mayor will ensure that those buses are re-engined with the latest technology.
Noble Lords referred to a number of different technologies available for environmentally friendly vehicles. Electricity, of course, is by far and away the

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cleanest fuel at the point of use. But one must remember that that electricity has to be made somewhere. So one may be shifting the pollution from one place to another. Also, those vehicles suffer from a lack of power, performance and range.
The noble Lord, Lord Stoddart of Swindon, referred to trolley buses. I can assure him that I am old enough to remember trolley buses in London. As far as I can remember, the problem was that the trolley would come unstuck from the electricity supply above. The driver would have to come round and rehook it up at the top; meantime an enormous jam would have formed behind. But if one could find the kind of trolley bus which could survive on its own for at least a limited distance, that may be a step forward. To give one anecdote, the noble Lord, Lord Stoddart, said that they were in use in various different countries. I visited Ulaanbaatar in Mongolia some years ago when I was a Minister in the Foreign Office. They used electricity-powered trolley buses which were extremely clean. The only problem was that that city was naturally prone to smog and the power station was only two miles up the road. Whenever there were smoggy conditions, the whole city was covered in the smoke from the old-fashioned coal power station, so any benefit to the population was immediately lost. I am not saying that that means that we should not look into that avenue for the future.
In relation to gas, I declare a past honorary interest as president of the Natural Gas Vehicle Association. I was disappointed to hear what the noble Lord, Lord Bradshaw, said, although I have not really kept up with progress. I read somewhere with great excitement that there was going to be a doubling of the number of outlets for compressed natural gas, which sounded good until one read that it meant a rise from 30 to 60 over the whole country. It is one of those times when the use of percentages tends to mislead.
There are problems with the lack of infrastructure, but liquefied petroleum gas can be useful for depot-based fleets. Those vehicles have another advantage which I do not believe has been mentioned this evening, in that they can be much quieter than conventional diesel-driven vehicles, particularly for something like a refuse cart which has a compressor as well as an engine. That could provide significant advantages for local residents. Of course, the problem is that, due to the lack of infrastructure, private motor cars would have to be dual-fuelled, which means that they would have to have a petrol tank as well as a gas cylinder. So the owner would lose most of the boot space.
I should like to ask the Minister a serious question on the matter. It is one to which I know that the noble Lord, Lord Dubs, referred. It relates to the granting of planning permission for LPG facilities at refuelling stations. I understand that BP Amoco had hoped to install LPG facilities at 70 filling stations this year. But, so far, I believe that it has received planning consent for only three. Similarly, Shell had a target of 100 for the year, but it has reduced that number to 60 merely because of the difficulty in getting planning
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permission. Can the Minister tell us what the Government are going to do to assist by way of giving guidance to local authorities in order to make it easier for planning permission to be granted for LPG refuelling facilities at petrol stations? I understand that this might be included in the final version of PPG13, but can the noble Lord tell us what progress has been made in that respect?
I turn now to diesel. Like other noble Lords, I, too, was briefed by Peugeot on the matter. I take a good deal of interest in what the company has to say. Diesel emits 20 per cent less greenhouse gases and 50 per cent less hydro-carbon pollutants than petrol. When we shortly have particulate filters that will completely eliminate any particulates coming out of the exhaust, that will be a very significant improvement.
However, we in this country seem to be going in completely the opposite direction to any other country in Europe. Over Europe as a whole, the number of diesel vehicles as a percentage of the total has risen from just under 25 per cent in 1998 to 28.5 per cent in 1999 and, in the first months of this year, the number rose to over 30 per cent. In Germany, France, Spain and Italy the number has risen during each of those periods but, because of the tax regime on diesel, the increase in vehicle excise duty on diesel-driven cars and the increase in duty on diesel itself, we seem to be the only country where the number is decreasing. Why are we taking this step, which seems to be completely different from steps being taken anywhere else? I am not suggesting that we should always follow the example of other European countries, but they seem to have proved a good point in this case.
Certainly, as far as the industry is concerned, Peugeot is not the only company which believes that diesel in efficient modern new vehicles—not the old buses to which I referred earlier—is a very important way forward. My noble friend Lord Lucas told us about fuel cells. I am not familiar with the technology involved, but I have heard that great developments are taking place at quite a rapid rate at present. As my noble friend said, it is a pity that such developments are taking place elsewhere and not in this country. Many people seem to regard the fuel cell as the "thing" of the future; indeed, it may well be. People seem to regard it as something worth waiting for, and that is perhaps why we have not made particular progress in other methods of reducing emissions.
I believe that the noble Lord, Lord Dubs, referred to a report on the costs and environmental benefits of modern technology that is expected shortly from the Government. Can the Minister tell the House when that report is due? I understood that it would be produced this month. It would be interesting to read its findings. I wonder whether we shall receive it as early as expected.
I conclude by saying that we on this side of the House would very much welcome progress in this respect. We would certainly make further reductions in fuel duty on cleaner fuels. I am pleased that the Government have continued with what we started on the duty on natural gas and on LPG. We would also

1115
introduce tax discounts for alternative environmentally friendly fuelled cars and we would grade vehicle excise duty according to the environmental standards of cars. If I may say so, the present proposals from the Government are not sophisticated enough in that direction. They seem to rely entirely on engine size rather than necessarily on fuel efficiency.
I thank the noble Lord, Lord Dubs, once more for introducing the debate and I look forward to hearing the Minister's reply.
9.25 p.m.
Lord Whitty: My Lords, I too congratulate my noble friend Lord Dubs on, and thank him for, initiating this debate, which has proved instructive. Noble Lords who are present in the Chamber have a significant interest in, and knowledge of, the areas we are discussing. Some of that knowledge is new to me and I shall consider their points on international experience and on technology.
From the Government's point of view this is a timely debate as it follows recent announcements of government initiatives to encourage cleaner vehicles and fuels. For example, changes to the company car tax system and to VED rates—the noble Lord, Lord Brabazon, mentioned this—for new cars relate to the emissions index rather than to engine size as for old cars. From next year the charges will relate to CO2 emissions. Increased funding for the Powershift programme was announced as part of the Budget package. These are all clear signals of the Government's determination to promote cleaner, more fuel efficient vehicles.
We are adopting these measures to help us tackle two of the greatest environmental challenges facing us: climate change and air quality. Road transport is the third largest source of carbon dioxide emissions—the main greenhouse gas—in the UK. Measures to reduce CO2 emissions from transport will play a central role in meeting our Kyoto targets. Conventional petrol and diesel vehicles will become more fuel efficient in coming years and will help us to meet those targets for 2010; cleaner fuelled vehicles will also play a significant part. New technologies will need to be adopted to meet the targets for 2010 and more significant greenhouse gas reductions will be needed in the future.
My noble friend Lord Stoddart referred to air quality. The problem of the quality of the air that we breathe as pedestrians or as motorists is an acute one. In support of our commitment to improve air quality, we have set tough air quality objectives to be met throughout the UK over the next few years. Our new Air Quality Strategy, published in January, identifies the major sources of air pollution in the UK and sets out a programme of action for delivering cleaner air.
As road transport is one of the major sources of air pollution, especially in urban areas, any attempt to improve air quality must consider measures to reduce pollution from transport in terms both of engine design and of fuel technology. As the noble Lord,
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Lord Brabazon, indicated, much is already being done to reduce pollution from conventional car and lorry petrol and diesel engines. They are becoming cleaner thanks largely to tougher European emissions standards and consequent efforts by motor manufacturers and also fuel processors. As a result, total emissions from transport are declining in terms of local air pollutants despite increases in road traffic.
However, even with these improvements, our air quality objectives for particles and nitrogen dioxide may not be met in some urban pollution hotspots. We need further measures to reduce emissions from road transport in those areas. Under the system of local air quality management, local authorities are required to identify any air pollution hotspots and to draw up action plans to deal with them. Cleaner fuels and technologies are measures that could further reduce vehicle emissions and deliver air quality improvements.
In terms of carbon emissions we are still faced with a situation where the growth of traffic is outpacing technological improvements. I take the point that the noble Lord, Lord Brabazon, made that we take into account not only immediate emissions and environmental effects, but also the whole life effects of that technology from manufacture through to scrapping. He also made the point that it is not only a question of emissions but noise which can bring environmental benefits if it can be reduced. Some cleaner fuels and technologies also produce significantly less noise than conventional motors. For example, gas-powered vehicles are much quieter. As the noble Lord, Lord Lucas, indicated, electric vehicles are also very quiet in operation although there are certain side costs involved which need to be addressed. The benefit from gas-powered lorries, for example, delivering in residential areas is not only as regards a reduction in pollution, but also the noise is far less disruptive to the quality of life in residential districts.
That is the background. Perhaps I may explain how the Government are encouraging the wider use of cleaner fuels and vehicles. The Powershift programme is sponsored by my department and administered by the Energy Saving Trust. It provides grants towards the additional cost of buying gas and electric vehicles. Clearly, the ability to increase the growth of the market depends on reducing the cost differential with conventional vehicles. Only vehicles offering significant emission benefits qualify for such grants. Powershift has already directly assisted the purchase of over 3,000 gas and electric vehicles.
In recognition of the continuing success of Powershift, my noble friend Lord Macdonald recently announced a substantial increase in its budget of up to £10 million in this financial year. That is three times the previous budget. It will enable Powershifi to keep pace with the increasing demand for cleaner fuel vehicles.
In addition to Powershift, the Government have introduced a range of tax incentives to provide and support cleaner vehicles. Road gas fuels such as

1117
liquefied petroleum gas and compressed natural gas benefit from a much lower rate of duty than conventional petrol and diesel. Electric vehicles benefit from no fuel duty on electricity and lower VED at £40 a year. Gas, trucks and buses can benefit from savings of up to £1,000 a year on the annual road tax. As I have said, new, cleaner fuel cars will benefit from lower rates of VED from next year and from the reformed company tax regime from the year 2002.
So it is not just alternative fuels that benefit. We are also encouraging cleaner petrol and cleaner diesel. For example, leaded petrol was banned at the beginning of this year. Ultra-low sulphur diesel now effectively accounts for all diesel sold in the United Kingdom thanks to the fuel duty incentive. In the recent Budget the Chancellor announced a 1p. per litre incentive for ultra-low sulphur petrol to take effect from 1st October 2001. As noble Lords have said, the Government set up the cleaner vehicles task force to bring together the motor and oil industries, environmentalists and others to promote the production, purchase and use of cleaner and more efficient vehicles.
In answer to the noble Lord, Lord Brabazon, the task force's report on cleaner fuels will be published on 31st May. That will compare the performance of a range of fuel technologies and will include a series of recommendations including recommendations aimed at government, industry and users on how cleaner fuels and technologies can be used.
The work of the task force has already led to a number of new initiatives. For example, there is a £6 million programme for a new cleaner vehicles programme. That initiative is a direct response to the recommendations to reduce pollution from existing vehicles and in particular from buses and taxis. As my noble friend Lord Stoddart and the noble Lord, Lord Bradshaw, said, they are still substantial polluters. There is a slower rate of turnover of a fleet than in the car sector. Urban vehicles such as buses and taxis will benefit from that programme by fitting catalysts and particulate traps.
In addition the new Motorvate scheme arose from a task force initiative. The scheme, which will be formally launched in June, sets simple, achievable targets to ensure that we have lower CO2 emissions.
The cleaner vehicles programme will include retrofitment of particulate traps to buses, and it will be for local authorities—or, in London, the Public Carriage Office—to take up those proposals. There are a number of technical options available.
The Government, of course, have a responsibility in relation to public sector vehicles. I am keen that government departments and agencies take up the benefit of cleaner vehicles. There are some limited success stories to mention. The Government Car Service is currently operating 33 LPG cars and is planning long-term trials of LPG vans. The DSS has taken a proactive role and is currently operating 73 LPG vehicles and intends to order a further 30 cars. Local authorities are to the fore in this area in the use
1118
of both LPG cars and CNG vans. The development of the use of electric vehicles is taking place in a few local authorities, notably Coventry and a consortium of London authorities.
Again in relation to conventional fuels, the noble Lord, Lord Brabazon, raised the question of the differential between petrol and diesel and the difference between ourselves and certain other countries. Certainly it is true that the motor industry is making tremendous strides in reducing harmful emissions from diesel, but emissions of particulates and oxides of nitrogen are still expected to be significantly higher compared to emissions from new petrol cars. That is why the differential is there. Nevertheless, recent developments in diesel after-treatment technologies have the potential to offer significant emission reductions, to the extent that some diesel cars could eventually have comparable emissions with clean petrol cars.
Questions were raised in relation to the infrastructure for gas vehicles. The noble Lord, Lord Brabazon, and my noble friend Lord Dubs referred to the issue of planning. I can confirm that the revised transport planning guidance (PPG13) will encourage local authorities to view planning applications for refuelling facilities much more favourably. There are now some 360 LPG refuelling points within the United Kingdom and around 30 or so CNG points, as the noble Lord, Lord Brabazon, said.
As to electric vehicles, the Government are keen to encourage their wider use. They have a lower VED rate; we offer grants under the Powershift programme; we are encouraging local authorities to use them in their fleets where the vehicles' relatively low range can be incorporated; and we are encouraging other potential users.
As to trolley buses—an issue raised by my noble friend Lord Stoddart—I, too, have nostalgic views of trolley buses despite never having lived in Reading or ever visited Ulan Bator. There is some prospect of progress in this regard, but the overall cost of trolley buses given the huge infrastructure outlay—we may have made a mistake in taking out the infrastructure in the first place, but putting it back will cost money—is likely to be higher than traditional buses with cleaner fuels and retrofitting for existing buses.
The noble Lord, Lord Lucas, raised the question of the regulation of electric vehicles. Although many of the features that apply to conventionally fuelled vehicles will apply to electric vehicles, new regulations will be required, and we are taking a proactive part in the drawing up of those regulations in Europe. As the noble Lord will know, vehicle regulations are now determined at EU level.
The noble Lord, Lord Palmer, referred to biodiesel. We certainly recognise that biodiesel is a renewable source of energy that has some major advantages over conventional mineral diesel. However, the production and distribution of biodiesel can be quite energy intensive. Unless this energy is produced from renewable sources, biodiesel cannot be considered as truly renewable. Nevertheless, we consider that it has

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potential advantages. Technology has been developed in Germany and elsewhere. Biodiesel is often considered to be carbon-neutral as the carbon absorbed by the oilseed rape when it is grown offsets the carbon emissions when biodiesel is burnt. We propose to keep under review the whole scope for rapeseed or indeed other organic crop-based fuels. For example, there are advantages with short-rotation willow coppice which are greater than those for rapeseed. There are significant areas that need further examination. The Government will undertake that.
Noble Lords have referred to fuel cells as the technology of the future. We agree that fuel cells may well be the best bet. However, we need to cover the whole range of technologies that will come into play over different timescales. An expanded Powershift programme is already supporting fuel cells and the programme contributed to the costs of the vehicle referred to in relation to Sevco and Westminster Council. We are very aware of the potential of fuel cell vehicle technology. We would hope that both research
1120
that the DTI, under its advanced fuel cell programme, is already supporting and, it is to be hoped, eventual production could accrue to this country.
I come now to the points raised by the noble Lord, Lord Beaumont of Whitley, in relation to the development of what I refer to as ultra-light rail options. A number of innovative systems are being promoted in this field. To develop this commercially and operationally, it would have to fit into the priorities for the local transport plan. Funds have been made available as part of the innovative public transport project with the aim of producing a prototype of an innovative public transport system. A number of bids are currently being considered. We are undertaking various small-scale research programmes in this area.
I have run out of time. This has been a fascinating debate. There are a number of potential options here. I shall study all noble Lords' comments as we look into developing further our strategy in all of these alternative fuel areas.
House adjourned at eighteen minutes before ten o'clock.

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