Sitting of 18 May 2000

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

  LONDON LOCAL AUTHORITIES BILL [LORDS] (BY ORDER)
  Order for consideration, as amended, read.
  To be considered on Thursday 25 May.

  MERSEY TUNNELS BILL (BY ORDER)
  Order for Second Reading read
  To be read a Second time on Thursday 25 May

Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    Employee Share Ownership
    Mr. Jim CunninghamWhat assessment he has made of the effectiveness of regional conferences held to promote his new employee share ownership scheme. [121370]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): The conferences went very well, with over 1,000 companies taking part. The scheme was well received. We expect a lot of firms to take part and more than 500,000 employees to own shares in their companies for the first time.
    Mr. Cunningham: Will my right hon. Friend tell us whether there is a size limit for the small companies that can participate in the scheme? More importantly, what benefits will the labour force get out of such a scheme?
    Mr. Smith: The scheme has been designed—through consultation with companies, the Trades Union Congress, financial advisers and academics—to be flexible in responding to the needs of small companies. As for the benefits for employees, for the first time they can set aside money from pre-tax income to buy shares. Those can be matched by the employer with up to two free shares for every one that is bought. On top of that, employees can be awarded up to £3,000 worth of free shares a year from their employer; the amount can be performance related.
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    As my hon. Friend implies, the real benefit derives from the link between the participation of workers who identify with their firm and the benefits to the productivity of individual companies and the whole economy.
    Mr. Desmond Swayne: So why does the Chief Secretary devalue the potential value of the shares by the huge burden of regulation that he is imposing on the relevant companies?
    Mr. Smith: We are not devaluing the shares. Conservative Members would do well to put aside their churlish criticism and welcome the scheme as a huge boost for a shareholding democracy, in which they used to claim that they believed. In practice, they are obsessed with share options for the few, while we provide shareholding for the many.
    Mr. Denis MacShane: In that spirit of bipartisanship, has my right hon. Friend read the extravagant praise that the shadow Chancellor showered on the British economy? He used the sort of sycophantic language that even the most on-message Labour Member would not dare employ.
    Does my right hon. Friend agree that employee share ownership should command support from all parties, unions and employers? Previous Conservative Governments initiated moves in that direction and we are building on them. The House should unite and support it so that it is a big success in Britain.
    Mr. Smith: I agree wholly with my hon. Friend. Compared with the shadow Chancellor's statements about the strength of the economy, we have been modest in our claims. There should be a bipartisan spirit about the scheme. I hope that all hon. Members will welcome the huge extension of shareholding to many employees who were previously denied that opportunity.

    Horticulture
    Mr. Peter Luff: If he will exempt horticulture from the climate change levy. [121371]
    The Financial Secretary to the Treasury (Mr. Stephen Timms): No. We have recognised the unique position of the horticultural sector, with a special package of support, including a 50 per cent. discount on the levy for up to five years while energy efficiency measures take effect.
    Our approach will help improve energy efficiency in the horticultural sector, while protecting its competitiveness.
    Mr. Luff: Although the concessions are welcome, why is the Treasury pressing ahead with the imposition of the tax? Is that not another example of the Government's gimmick-ridden, soundbite-driven policies, which are stealthily strangling British business? Why, instead of imposing a tax of £12,500 per hectare on glasshouse growers in the United Kingdom, do the Government not follow the example of the Netherlands, where growers have been granted a 100 per cent. exemption from the levy in return for an agreement on emissions?
    Mr. Timms: The hon. Gentleman is wrong on several points. There is no longer a 100 per cent. exemption in

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    the Netherlands. We have taken account of the way in which the horticulture sector is treated elsewhere in the European Union. That is reflected in the strong additional package of support for horticulture that we have announced. I am glad that the hon. Gentleman welcomes it. The climate change levy arose from work that was carried out by Lord Marshall, who began it when he was president of the Confederation of British Industry.
    Organisations such as the Council for the Protection of Rural England and the Royal Society for the Protection of Birds have said:
    As we are cutting carbon emissions from fossil fuels, the new levy will make UK plc more competitive. Which is why Lord Marshall, chairman of British Airways, recommended using taxation… We think the Chancellor is introducing an essential levy that will support forward thinking industries and help to protect our environment. We applaud him for it.
    I hope that the hon. Gentleman does so too.
    Mr. Barry Sheerman: Does my hon. Friend agree that if horticulture needs some second thoughts and perhaps more concessions, manufacturing industry, too, needs a break? The manufacturing sector is trying to export at a time when the exchange rate is causing difficulties. It takes that on board, but it does not want a double hit through the levy. Could not we put it on hold for a while or ameliorate the position in some way?
    Mr. Timms: No, it is important that we go ahead with the levy. We have given a long period of notice so that everyone can make the necessary preparations. We have introduced a range of measures to boost the position of United Kingdom manufacturing, including the measures in the Budget on capital allowances, and there have been announcements recently about new orders for UK manufacturing.
    We have recognised the particular position of the horticulture sector. We have recognised, too, the special treatment afforded to horticulture elsewhere in the European Union, but our approach is the right one. My understanding is that 60 per cent. of the energy used in manufacturing will be covered by the concessionary negotiated agreements.
    Mr. David Heathcoat-Amory: Is the Financial Secretary aware that the brief flirtation between British industry and the Government is now well and truly over, because of the endless stream of new regulations and new business taxes, of which the levy is a good example? Will he confirm that the required CO2 reductions could easily be achieved by other less damaging means, as has been confirmed by the Government's own figures? Will he also confirm that sectors such as horticulture are likely to try to avoid the tax by moving to other countries, including those with lower environmental standards? Therefore the new business tax will damage not only British industry and jobs, but the world environment.
    Mr. Timms: The right hon. Gentleman is wrong. As I have told the House, the levy emerged from discussions with the CBI. The then president of the CBI carried out the initial work that led to its introduction. He recommended the use of taxation to deal with the climate change problem.
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    I remind the right hon. Gentleman of the views of the previous Government's Secretary of State for the Environment. I have already put this quotation to him, and I would have hoped that by now, he would have taken it to heart. The former Secretary of State said:
    Ozone depletion and climate change are not concerns which can be met in the short term. They demand alterations in our lifestyles which are neither easy nor quick.
    We are making the changes that need to be made. That is the right thing to do.

    Public Services
    Mr. Bill Rammell: What representations he has received on the Government's plans, announced in his Budget, to invest additional resources in public services in the coming year. [121372]
    The Chancellor of the Exchequer (Mr. Gordon Brown): My colleagues and I have received a number of representations on the Budget spending announcements, welcoming the £2 billion extra that we provided for the health service, the £1 billion extra for education and the over £0.5 billion extra for improving transport and fighting crime, all within our prudent fiscal plans. In total, that means that public spending on the national health service will rise by £5 billion this year and spending on the other services as a whole will rise by £25 billion.
    Mr. Rammell: I thank the Chancellor for that response. Does he agree with the House of Commons Library analysis that I have obtained which shows that the three-year spending increase for the NHS has never been matched by any Government in the history of the NHS? Does he agree that any political party that said that it would match those spending increases while at the same time cutting taxes regardless of economic circumstances would be not only economically illiterate, but deliberately trying to mislead the British public?
    Mr. Brown: Yes. The politically driven tax guarantee of the Conservative party means that the tax cuts would go to a privileged few, public services would be denuded of money, and the monetary and fiscal stability in our economy would be put at risk.
    If we look at what the Conservatives have said about the extra money that we are providing for the health service, we see that they refused to vote with us on the £400 million that we have raised from cigarette revenues; in other words, that money would not be available for the health service. They now say that £1 billion of the money should go to private medical insurance; in other words, that money would not be available to the health service, either. As for their other promises, it is absolutely clear that their politically driven tax guarantee cannot ensure that the health service has the money that it needs. The Conservative party is for privatisation in health. We are for a health service that is safe in people's hands.
    Sir Peter Tapsell: Does the Chancellor accept that whenever he increases public expenditure, he makes it more likely that the Bank of England will raise interest rates still higher, and that that

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    in turn will force up the exchange rate of sterling against the euro? Is there not now a clear and damaging conflict between the Government's fiscal and monetary policies?
    Mr. Brown: If we had listened to the advice of the shadow Chancellor—who at the time of the Budget said that there should be a fiscal loosening—there would have been a problem, but over the next two years there will be a fiscal tightening over and above what we have locked in in previous years. We have managed to do that by cutting debt interest payments, whereas the Conservative Government doubled the national debt. We have also cut the bills for social security, because we have got 900,000 more people into work. That is why we can spend more on the health service. That is why we can spend more on education. That is why public services in this country are improving—whereas they would be privatised under the Conservatives.
    Mr. Michael Connarty: Can the Chancellor confirm that his plans for the health service will mean an increase of 50 per cent. in cash terms, and 35 per cent. in real terms, for the health service through the period 2003–04? Does not that increase mean that £2,800 will be spent per household, compared with current spending of £1,800 per household? Can he also give us the figures for Scotland? Will Scotland receive the same percentage increase? What benefits will accrue to the Scottish health service?
    Mr. Brown: The Scottish Administration will receive its full settlement under the Barnett formula. I can confirm to my hon. Friend that the figures for the health service are £49 billion—that was for last year—then £54 billion, £59 billion, £64 billion and £68 billion, showing a 50 per cent. cash increase in the money going to the health service over five years.
    What I have noticed in the ensuing debate is that not one former Conservative Chancellor has supported the policy now being promoted by the shadow Chancellor. The former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), has said that the Conservatives' politically driven tax guarantee is "mad". The former Chancellor, Lord Lamont—whom the shadow Chancellor might expect to support him—has said that no party could responsibly propose what is being proposed. Both Lord Lawson and the most recent Conservative Chancellor have admitted that the private health insurance plans do not get value for money, and that the money would be better going where the Government are putting it—into the national health service.
    Mr. Michael Portillo: How can the Chancellor be so self-satisfied and puffed up when public services have got worse while he has been in office? Class sizes have gone up, police numbers have gone down by 2,300, 100 vital road improvements have been cancelled—although the roads position in this country is the worst for 20 years—and an extra quarter of a million people are waiting to see a consultant. Why does the Chancellor not talk about services delivered rather than what he has promised for the future?
    As the question concerns what representations the Chancellor has received, will he please confide in the House and tell us what his attitude will be to any representations from the Secretary of State for Northern Ireland?
    Mr. Brown: The Secretary of State for Northern Ireland and the whole Cabinet have been arguing the case—[Laughter.] Yes, we have done that in every region of the country. What the shadow Chancellor should face up to is that in his call for extra spending on transport, crime, health and education—that is exactly what he is implying—he is driving a coach and horses through the politically driven tax guarantee that he says that he supports.
    I do not think that people will listen to a shadow Chancellor who was responsible for some of the biggest tax increases that this country has ever seen, introduced VAT on fuel, increased national insurance, introduced the airports tax and the fuel escalator—all of which he put through the House of Commons—and said that he wanted to cut public spending, but who now says that he wants to increase public spending.
    Mr. Portillo: I do not think that the country will believe a Chancellor of the Exchequer who can never look me in the eye when he answers one of my questions. I wonder why the Chancellor of the Exchequer finds it so difficult to maintain eye contact. Could it be because, after three years of non-delivery, Labour voters in Labour heartlands know that he has let them down? Could it be because they know that he has wasted £7 billion on fraud, which has been identified by the right hon. Member for Birkenhead (Mr. Field)? How does the Chancellor of the Exchequer respond to the criticisms made by the British Medical Association, which said that the Government have not focused on what is "important" for the national health service, but have become preoccupied with "totally artificial indicators"?
    Will the Chancellor of the Exchequer not take some personal responsibility for the message from the local elections, which is that people know that Labour has broken its promises, not only on tax, but on public services, and that he is a Chancellor who taxes more but delivers less?
    Mr. Brown: I know what the BMA will say. First, it will support our policy on cigarette taxation, which will bring an extra £400 million for the health service. Secondly, it will support our policy on private medical insurance and giving money to the national health service.
    The shadow Chancellor said on the Jimmy Young show:
    Well, Governments are in a strong position when the economy is doing well. there's absolutely no denying that and I'm not going to go around saying that the economy is not doing well.
    The Leader of the Opposition is always saying that the economy is doing badly, but the shadow Chancellor has admitted that it is doing well. The Leader of the Opposition wants the politically driven tax guarantee, but the shadow Chancellor does not. The Leader of the Opposition is at odds with the shadow Chancellor on all the major economic issues. I know who the shadow Chancellor is shadowing, and it is certainly not me.
    Mr. Portillo: I am delighted that the Chancellor keeps quoting me. Does not that demonstrate that I will be a much more honest Chancellor than he has ever been?
    Mr. Brown: The shadow Chancellor went into the 1992 election saying that there would be no tax rises.

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    He then introduced VAT on fuel, the fuel escalator, a national insurance rise and the airport tax. He is not the solution to the Conservatives' problems; he is the problem for the Conservative party.
    Mr. Christopher Leslie: May I look my right hon. Friend in the eye and tell him that I welcome his priorities for investment? Is he aware that spending on the NHS in the Shipley and Bradford district has gone up by 9.3 per cent. this year to £344 million? That will have a major effect in reducing waiting lists, despite the criticisms from the Conservatives that it is reckless spending.
    Mr. Brown: Yes, and we know what my hon. Friend's constituents and the BMA would say about the present Conservative party policy on health. The Conservative health spokesman has said:
    Insurance companies could cover conditions that are not high tech or expensive, like hip or knee replacements, hernia and cataract operations
    that currently involve long waiting times. In other words, the Conservatives' policy is that pensioners and others would be told to get their operations outside the national health service. The Conservatives would compel people to take out private health insurance. The shadow Home Secretary has said that the problem with the health service is that we do not charge for much of what we do. That is the Conservative health policy. The shadow Chancellor spent two years outside the House of Commons looking again at Conservative policy. He might start by looking at that.

    Energy Taxation
    Mr. Tim Boswell: What recent representations he has received on energy taxation. [121373]
    Mr. Damian Green: What recent representations he has received from businesses on the climate change levy. [121377]
    The Financial Secretary to the Treasury (Mr. Stephen Timms): We have been in discussions with business interests and others on the climate change levy since the early planning work by Lord Marshall. We have recently consulted on the draft legislation underpinning the levy, the support for energy efficiency measures that is part of the package, and the definition of good quality combined heat and power plant. Throughout the process, we have received many representations that have helped to finalise the design of the levy.
    Mr. Boswell: I thank the Minister for that reply, but is he not a little concerned that such responsible bodies as the Aluminium Federation and the Chemical Industries Association are still far from satisfied with the outcome of those negotiations, and in some respects feel that they are further back than they were last December? Is he aware that even with the concessions that have been achieved to date, the likely burden on different sectors of the important aluminium industry will total £6 million, and that the concessions have still not been cleared by Brussels under the state aid provisions? Does he feel that
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    that is the right way to treat an industry that is typical of heavy manufacturing industry—for which the Government are said to care—and is exemplary in its use of recycling?
    Mr. Timms: Both sectors to which the hon. Gentleman has referred welcomed the changes announced in the pre-Budget report last November, and nothing has happened since to undo those. We are making good progress in our discussions with the EU on the state aids issue. The levy package and the negotiated agreements together will save at least 5 million tonnes of carbon dioxide emissions by 2010. The levy will be revenue neutral for the private sector because all proceeds will be recycled back to business through the cut in national insurance contributions. Many manufacturing firms will benefit from the levy package and will want the lower rate of national insurance contributions. The levy is broadly neutral between manufacturing and service sectors, and is the right way forward. Climate change is a huge issue that we need to tackle, and that is what we are doing in the right way with the levy.
    Mr. Green: Can I give the Minister another business representation on the levy, which, incidentally, gives the lie to what he has just said about the horticulture industry? Mr. Peter Wensak, who runs a nursery, has written to the climate change levy secretariat to say:
    The CO2…generated within my glasshouses is consumed by the plants … The net effect to the outside atmosphere is nil. Your proposal is that I should pay a charge that will encourage me to discharge less CO2…to the outside atmosphere. How much lower can I get than nil?
    He has an unanswerable case. Does not that show that the levy has nothing to do with reducing carbon dioxide emissions and everything to do with finding new ways to extract taxes from productive industries?
    Mr. Timms: No. The levy is revenue neutral, and we have responded to the particular situation of the horticulture sector as I have described. The levy is revenue neutral for the private sector; no revenue is going to the Exchequer. I have referred Opposition Members to the views of the former Secretary of State, and it is sad that those views are not shared by Opposition Members any longer. I am aware that the previous shadow Environment Secretary, the right hon. Member for Wokingham (Mr. Redwood)—who is in his place today—was awarded the booby prize in the green ribbon political awards. The citation said that the judges felt that the right hon. Gentleman had
    amply lived up to his reputation as a man who seems to understand little and care less about the future of life on earth.
    I know that the right hon. Gentleman has been sacked since then—but unfortunately, not for his views on the environment; they seem to be shared by most of the Conservative party.
    Mr. Tom Clarke: Does my hon. Friend accept that many people feel that, far from making tax reductions for fat cats a priority, we should discourage electricity companies from abusing the

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    regulator's attempts to reduce prices by their policies of huge job reductions and cutting essential services for consumers?
    Mr. Timms: The emphasis that we have placed on promoting consumers' interests means that utility companies are under pressure to increase efficiency. That is a good thing, and it is in the interests of my right hon. Friend's constituents. In some cases, that could mean job losses, but those companies will have to meet all the health, safety and environmental obligations that are placed upon them. Non-regulated companies are facing similar pressures. Many utilities are diversifying into other businesses, thus providing scope to grow the companies and offer improved opportunities for their employees.
    Mr. Bill O'Brien: I congratulate my hon. Friend the Minister on the way in which he has handled this issue; I was impressed by his appearance before the Select Committee on the Environment, Transport and Regional Affairs. The negotiated agreements are bringing satisfaction to some industries. However, this is a question of industry reaching certain targets and reducing emissions. Will my hon. Friend consider the idea that where those targets have been achieved, there should be negative payment of the climate tax because capital will have been spent to reach those targets? It would be an incentive for an industry if when it met the targets set by the Government, it would not pay the tax.
    Mr. Timms: Of course the arrangements that we have made for negotiated agreements—we are making good progress with the negotiations—mean that firms and sectors that sign up to demanding targets will be entitled to a reduced rate of the levy, with an 80 per cent. discount. That is the basis of the approach that my hon. Friend suggests, and it is right. I have said already that about 60 per cent. of manufacturing energy will be covered by those negotiated agreements and by the reduced rates of levy that will apply as a result. Manufacturing, as well as the rest of business, wants the reduced rate of employers' national insurance contributions—the 0.3 percentage point cut that we have introduced—because it will promote jobs and be good for every part of the country.
    Mr. Eric Forth: If the Minister justifies the swingeing rates of tax on vehicle fuel on environmental grounds, how does he justify the reduction in tax on domestic fuels, which cause even greater environmental damage?
    Mr. Timms: My right hon. Friend the Chancellor has cancelled the escalator on vehicle fuel duty, which was introduced by a Conservative Chancellor. We are adopting a range of measures to improve energy efficiency in the domestic sector: we have increased the incentives for people to cut their energy usage, we have expanded the home energy efficiency scheme, and we have introduced concessionary treatment for home energy insulation services. It is important that every part of the economy makes a contribution to achieving our climate change objectives.

    Unemployment
    Mr. Phil Sawford: What assessment he has made of the impact of the fall in unemployment and rise in employment during the last 12 months on the national economy. [121374]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Cuts of 167,000 in the unemployment claimant count over the past year have freed up savings of £800 million in social security benefits. That has increased the scope to make money available for public services. Unemployment is at its lowest level for 20 years.
    Mr. Sawford: I thank my right hon. Friend for that answer. Is he aware that in my Kettering constituency the number of young people on the dole has fallen by 87 per cent., long-term unemployment is down by 78 per cent., and overall unemployment is down by more than 3 per cent.? Does he agree that those figures clearly illustrate the difference between the new deal from this Government and the raw deal that the people of Kettering got from the previous Government?
    Mr. Brown: My hon. Friend is right. The Conservative party would abolish the new deal and the working families tax credit, which is making work pay. The Conservatives were responsible for the biggest rise in unemployment that this country has seen since the war. Unemployment in my hon. Friend's constituency is now 2.5 per cent.—and I can understand why the shadow Chancellor keeps congratulating us, because unemployment in his constituency is now 1.5 per cent.
    Mr. Matthew Taylor: With 250,000 jobs lost in manufacturing since the Government was elected, with 100,000 jobs lost in the past year, with farming in crisis, and with the TUC and the CBI united in pointing the finger at the high level of sterling as fundamental to the economic difficulties experienced by our manufacturing exporters, does the Chancellor agree with the Conservative shadow Chancellor that the high level of sterling is a mark of success, which business should simply learn to live with?
    Mr. Brown: I understand the difficulties that manufacturers and exporters face, and I said only a few days ago that the exchange rate of the euro to the pound does not reflect the fundamental underlying conditions. However, the measures that the hon. Gentleman's party and others propose to deal with the situation would create the same conditions as the Conservative Government created in the late 1980s, and return the economy to boom and bust. In particular, the reckless attempts by the Liberals to put money into everything without showing how they would pay for all their different programmes would endanger fiscal and monetary stability in this country. Both Opposition parties must face up to the fact that we are creating stability, but their policies would create boom and bust.
    Mr. Derek Foster: May I shock my right hon. Friend by congratulating the Government on their supply side labour policies, which are the best that I have seen in 30 years in politics? Nevertheless, I ask him to acknowledge the wide discrepancy in employment rates

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    between regions, especially for men aged over 50. The employment rate for that group is 53 per cent. in the north-east, but 73 per cent. in the south-east. I urge my right hon. Friend to do even more about that problem than the Government are already doing.
    Mr. Brown: It is precisely for the reason that there are men and women over 50 who want to get back to work but who find it difficult to do so that we have introduced the new deal for the over-50s in the past few weeks. That scheme gives special help to enable people who have been unemployed for a year to return to work, by giving them a supplement of between £50 and £60 to their wages for their first year back at work. I hope that my right hon. Friend and others will welcome what the Government are doing in that regard.
    I agree entirely with my right hon. Friend that if we were to return to the policies pursued by the previous Government and abolished the new deal, unemployment would be higher. I have been given a copy of the minutes of a meeting of the Conservative party's economic sub-committee. Its members thought that they would be able to look at the new deal but, unfortunately, the minutes state that while the committee is a useful sounding board, it has proved difficult to get the right group together and much work is now having to be undertaken by individuals. The committee's aim was to produce a paper on the failure of the new deal prior to announcing Conservative proposals, to be published in early April. We have yet to see any such paper.
    Mr. John Redwood: This is the Chancellor who has presided over the destruction of more than 200,000 manufacturing jobs and of much of British agriculture. He has driven road hauliers out of business or into overseas offices. He has watched as boom and bust have occurred at the same time. Far from getting rid of boom and bust, he is the one who can make sure that some people are driven into unemployment, while spin doctors and others prosper.
    In view of the big role played by high taxes in the matter, will the Chancellor answer one simple question? What is the current pump price of a litre of petrol, and how much of that price is tax?
    Mr. Brown: If I may say so, the right hon. Gentleman is now more on-message with the Leader of the Opposition than is the shadow Chancellor. Also if I may, I would add that the right hon. Gentleman should welcome the fact that in his constituency, since the general election—[HON. MEMBERS: "Answer the question."] Well, the right hon. Gentleman is asking about jobs and manufacturing industry. Since the general election, unemployment in his constituency has fallen by 34 per cent., and the new deal has meant a fall in youth unemployment of 69 per cent. [HON. MEMBERS: "He does not know the answer."] I should have thought the right hon. Gentleman would have welcomed the fact that we have removed the fuel escalator that he and his colleagues introduced, and that we have created 900,000 jobs.
    Mr. Dale Campbell-Savours: Given the link between unemployment and the value of the euro, and on the assumption that he wants the euro's value to increase over the coming months, will my right hon.
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    Friend say what measures he believes his counterparts in the various other European countries can take to increase the euro's value in the immediate future?
    Mr. Brown: The Finance Ministers of the European Union issued their statement after the meeting 10 days ago. They said that they would be reporting that growth in the EU this year would be of the order of 3 per cent. Growth in France is 3.7 per cent.; in Germany it is nearly 3 per cent.; and in most countries it is just under or around 3 per cent. That is a very big improvement on last year and the year before.
    The Finance Ministers also said that they would continue to pursue the process of reform in the European Union so that they would be in a position to make their economies create jobs. Unemployment is falling in Germany, France and the other economies. I believe that when EU growth rates catch up with those in the American economy and in economies in other parts of the world, people will understand the truth of my contention that the relationship between the euro and the pound does not reflect a fundamental, long-term aspect of the economy.
    Mr. Richard Ottaway: No matter how good the employment figures are—[Interruption.] Unemployment was falling under the previous Government and has continued to fall under this Government. The new deal has made not a shred of difference; in fact the decline in unemployment has slowed down. So far the new deal has cost £1.5 billion—enough to pay for 15 new hospitals or 15,000 policemen on the beat. At £20,000 a job, is not the new deal a huge waste of money?
    Mr. Brown: Now we know—not only would the Conservative Opposition abolish the new deal, but they would not have gone ahead with the windfall tax on the utilities that raised the £5 billion to make it possible. They would not provide the public services for the many, but would prefer to give tax cuts to the few large companies which we had to tax with our windfall levy to provide the money for jobs.
    The hon. Gentleman may think that the new deal has been a failure, but in that case, why has unemployment among young people fallen from the 200,000 that we inherited to 50,000 today? That is a 70 per cent. fall in youth unemployment under the Labour Government, as a result of the fact that 400,000 young people have managed to get on to the new deal. It is all very well the Conservative party calling the new deal an expensive failure and a colossal waste of money. We now know that they will argue at the election that the new deal should be abolished. That is the dividing line between a Labour Government who support stability, employment and public services for the many, and a Conservative party which is irretrievably identified with boom and bust, unemployment and tax privileges for the few.
    Mr. Dennis Skinner: Is my right hon. Friend aware that when the pits were closing in the 1960s, 1970s, 1980s and 1990s, they were closing when the pound was high and they were closing when the pound was low? The shipbuilding industry went down the same pan, and the state of the currency did not matter. I suggest that it is not the level of the pound that is the problem.

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    There is a problem with manufacturing; there is a problem with textiles right across the British Isles, but it has nothing to do with this euro madness that we hear from the Liberal Democrats and one or two others. The very idea that Britain will get allied to the weak, pathetic euro at this time is like asking David Beckham to sign on for Shrewsbury to get it out of the Conference.
    Mr. Brown: It is also interesting that the shadow Chancellor has said, contrary to some of the views of his Back Benchers:
    I think we've got to get used to the idea that the strong currency is not a bad thing. It is a reflection of a good economy.
    As a result of what we have heard today, it is now very difficult for the Conservative Opposition to criticise us on any aspect of our economic policy.
    My hon. Friend will know that in the past few weeks £100 million has gone into the coal industry, because we believe that it is right that the resources that the coal industry can produce for our country are harvested properly, and that the Ministry of Defence has been and will be announcing orders for the shipbuilding industry.

    Married Couples Allowance
    Mr. Andrew Robathan: How much the abolition of the married couples allowance will cost the average couple of working age in this financial year. [121376]
    The Paymaster General (Dawn Primarolo): As a result of the measures that we have taken in this and previous Budgets, from April 2001 households will be on average £460 a year better off, and families with children will be on average £850 a year better off.
    Mr. Robathan: I am sure that the House will deprecate the fact that the Minister, like everyone else on the Treasury Front Bench, is unable to answer a simple question. Let me help her out—the abolition of the married couples tax allowance will lead to approximately £200 in extra tax paid by 10 million couples in this country. How does she square that with the statement by the Prime Minister who, when he was Leader of the Opposition, said:
    The programme of the Labour party does not imply any tax increases at all…?
    Will the Minister also tell us how this joined-up Government square that with teaching about the importance of marriage, which the Secretary of State for Education and Employment wishes to see?
    Dawn Primarolo: I am delighted to help the hon. Gentleman by reminding him that the cost to married couples when the allowance was cut from 40p to 15p under the previous Government was £430 a year. Indeed, the shadow Chancellor, who was then Chief Secretary, described the married couples allowance as having "the least ongoing justification".
    The hon. Gentleman misses the point. The purpose of the abolition of the married couples allowance was to focus resources on families with children. As a result of the Conservative Government's policies, there were 3 million children in poverty when this Government were elected. The increases in child benefit, the introduction of
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    the working families tax credit, the rises in income support, the 10p tax rate and the cut in the tax rate to 22p have helped families when they need help most—when their children are small.
    Ms Sally Keeble: Does my hon. Friend agree that the married couples allowance was a hangover from the days when married men were compensated because they took on financially dependent wives? The allowance bears no relation to present circumstances, in which 70 per cent. or more of married women work and are financially independent. Does my hon. Friend agree also that most couples will very much welcome the extra help that will be introduced next year? I refer to the £416 that will be available when couples need it most, which is when children come along.
    Dawn Primarolo: My hon. Friend is right. In, I think, 1994 Lord Lamont, the then Chancellor of the Exchequer, said that the married couples allowance gave the most help to those on the highest incomes who needed it least, and the least help to those on the lowest incomes, who needed it most. The introduction of the children's tax credit will give, on average next year, £8.50 a week to lower and middle-income families. That is in addition to the extra resources that we introduced this year for child benefit increases, which are the greatest that have ever been made available. The previous Government were freezing such increases, which this year more than equal the married couples allowance.
    Mr. David Ruffley: Is the Paymaster General aware of the report produced by the Independent Item Club of economists, which was sponsored by Ernst and Young, which draws attention to an interesting feature of the abolition of tax allowances? The report demonstrates that when new Labour came to power, income tax accounted for 10 per cent. of household pre-tax income. After three years of new Labour Budgets, that has risen to 12.5 per cent. Will the hon. Lady give an undertaking that Treasury Ministers will cease to claim that the tax burden on households is decreasing, when independent evidence shows that it is increasing?
    Dawn Primarolo: I am interested to hear what the hon. Gentleman says. I always follow his comments with care. In the Select Committee on the Treasury, when he was studying the tables for the Budget for the year 2000, he said:
    From these tables it will be seen that the 2000 Budget makes successive reductions in tax (compared to the position if thresholds…
    I wonder how he squares that with what he has just said.

    Unemployment
    Dr. Stephen Ladyman: If he will make a statement on the impact of his Department's policies on the levels of employment and unemployment in the south-east. [121378]
    The Economic Secretary to the Treasury (Miss Melanie Johnson): In the south-east, as in the rest of the UK, we have created a sound and credible platform of economic stability that will help us attain our objective

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    of high and stable levels of growth and employment. Since the election, employment in the south-east has risen by 203,000 and unemployment has fallen by 60,000.
    Dr. Ladyman: I am grateful for that answer. Certainly business is booming in the south-east. Many Conservative Members who are straining to find bad news in the economy have constituencies with more than full employment. Unfortunately, however, that is not the position everywhere. Although the new deal has made great inroads into unemployment in Thanet, we still have far higher levels of unemployment than the national average. Will my hon. Friend consider the possibility of an employment action zone or action team, as announced in the Budget, for Thanet?
    Miss Johnson: I am grateful to my hon. Friend for making those points. We have heard already today that the Tories would scrap the new deal. However, I have the figures for those who are benefiting from it in Canterbury, which includes my hon. Friend's constituency. The new deal for young people there is benefiting 2,100 who started the programme. More than 1,000 of those people have moved into employment, with 750 securing sustained employment. I recognise that there may be further opportunities in Thanet through employment action zones and action taskforces for further work to be done. I know that my hon. Friend will share with me the conviction that it is the Government who are getting people back into work and that the Tories are the party of mass unemployment.
    Mr. Nicholas Soames: I warmly endorse the words of the shadow Chancellor, my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo), and acknowledge that in my constituency the economy is doing extremely well. However, that is nothing to do with Labour; it is due to the policies it was bequeathed by a very successful Conservative Government. Does the hon. Lady understand—or does she realise—the punitive effects on companies in the south-east and elsewhere of increased stealth taxes and, above all, of an ever-increasing burden of regulation? Does she believe that those disadvantages are likely to ensure that the economy continues to grow or rather that, as is the case in Mid-Sussex, a number of companies will remain on a knife edge?
    Miss Johnson: We are the party that introduced independence for the Bank of England. We introduced the national minimum wage, the new deal and the working families tax credit. Furthermore, we introduced the rules that are leading to a stable economy in which people are able to plan ahead. We have the lowest corporation tax ever. Equally, we are able to invest in public services—with record increases in expenditure in the health service and, for example, on child benefit. We shall take no lessons from the Conservatives, who left us a £28 billion deficit to deal with.
    Mr. Geraint Davies: My hon. Friend will know that yesterday the pound hit a six-year low against the dollar. Given the benign trading conditions that that creates, does she agree that the Government should encourage our manufacturers and exporters to refocus their sales towards the buoyant US
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    market, and that that will help to lift employment rates higher even than the record historic highs that we already enjoy in the south-east?
    Miss Johnson: As my hon. Friend is aware, our management of the economy is leading to growth. Indeed, the volume of manufacturing exports rose by 9.5 per cent. in the year to February 2000, and manufacturing productivity is increasing by about 5 per cent. That shows that our management of the economy is succeeding. If one compares that with the Tory record—under the Tories, manufacturing employment fell by almost 1 million from its peak in 1989 to its trough in 1993 and output fell by 7 per cent. between 1990 and 1991—one can see a sharp contrast with this Government who are able to manage the economy and set the rules in the right way so that we can plan ahead on a stable platform. Employment growth shows that—there are 929,000 extra jobs. The Tory record is one of mass unemployment and mismanagement of the public finances.
    Mr. Edward Davey: As the Chancellor failed to answer the question put by my hon. Friend the Member for Truro and St. Austell (Mr. Taylor), will the hon. Lady have a go? Does the Treasury agree with the shadow Chancellor and, apparently, the hon. Member for Bolsover (Mr. Skinner), that British business must learn to live with the strong pound? Is the answer yes or no?
    Madam Speaker: Order. I called the hon. Gentleman because the substantive question referred to the south-east and he has a constituency there. We will move on.

    Manufacturing Industry
    Miss Anne McIntosh: What representations he has received on the impact of his policies on the competitiveness of manufacturing industry; and if he will make a statement. [121379]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): Manufacturing industry makes a vital contribution to the economy. We are helping its competitiveness by creating the right economic climate of stability, low inflation and sound public finances, and through policies that help firms to innovate, to develop the skills of their work force and to grow.
    Miss McIntosh: Does the Chief Secretary agree that the two most damaging measures for the competitiveness of British manufacturing industry are high interest rates and the high pound? Does he agree that they must be tackled, or does he agree with the Secretary of State for Northern Ireland that we should simply scrap the pound?
    Mr. Smith: The hon. Lady is wrong. It is right that business has the confidence and the certainty to plan for the future, and it can do that with the platform of stability that we have created. We took the tough decisions on making the Bank of England independent and on imposing a fiscal and monetary framework that provides stability. We have avoided the penal levels of interest rates from which manufacturing industry suffered under

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    the Conservatives and that saw manufacturing output down by 18 per cent. in the early 1980s and down by 7 per cent. in the early 1990s—manufacturing output is actually now going up.
    We have acknowledged the competitive difficulties that some in manufacturing face. However, when Conservative Members emphasise that point, they are at risk of talking down British manufacturing industry and ignoring the fact that productivity is going up, that profitability has been at near record levels, that manufacturing output is going up, that exports have gone up 9 per cent. year on year—including a 6 per cent. in exports to the eurozone—and that manufacturing investment has been at historically high levels. Manufacturing has a good future with the policies for stability provided by this Government.
    Mr. Robert Sheldon: I shall not bore my right hon. Friend with my views on the euro, but will he bear in mind the fact that in addition to the difficulties that some manufacturers face from a decline in exports, there are problems with cheaper imports—up to one third cheaper in some cases? Manufacturers may complain about losses of exports, but importers do not complain because they make the money. Will my right hon. Friend take this aspect of a serious problem into account? The fact that imports come in cheaply has to be paid for by our manufacturers.
    Mr. Smith: The best way that we can help our manufacturers compete against imports is through the platform of economic stability that I have described and the extra measures that we have taken. In the Budget, we cut corporate taxes to their lowest-ever level and made permanent the 40 per cent. first-year capital allowances for small and medium-sized businesses. We also introduced the new research and development tax credit, which is worth £150 million a year, and the information technology allowances for small firms. We have provided £100 million to lever private finance into venture capital funds in the regions and £50 million for business clusters. The last thing that manufacturing businesses facing competition from abroad want is a return to the instability, boom and bust and short-termism that resulted from the Conservative party's attempt in government artificially to target a particular value for the pound.
    Mr. Christopher Gill: Why do the Government not come clean and admit that Labour's poll tax on jobs will do nothing for the competitive position of British manufacturing industry? What advice would the Chief Secretary give to, for example, the managing director of the Lawson Mardon Star aluminium company in Bridgnorth in my constituency? It employs 600 people and it calculates that the net extra payment that it will
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    have to find for each and every one of those employees as a result of the climate change levy will be £1,000 per annum.
    Mr. Smith: As my hon. Friend the Financial Secretary has already explained in answer to several questions, the climate change levy is fiscally neutral. Firms will benefit from the cut in the national insurance contributions that they will make. Moreover, not only is the levy fiscally neutral for the economy as a whole, but it is fiscally neutral within and between manufacturing and services.

    National Debt
    Mr. Desmond Browne: What his policy is on the management of the national debt. [121380]
    The Economic Secretary to the Treasury (Miss Melanie Johnson): Our debt management policy, as set out in the debt management report published on Budget day, is to minimise the long-term cost of the Government's financing needs, taking into account risk. Thanks to the introduction of the new monetary and fiscal framework, the debt interest bill is projected to be £4 billion a year lower than when we took office from the Conservative party.
    Mr. Browne: I thank my hon. Friend for that reply. In common with other Labour Members, may I welcome a debt management policy that will in the long term generate more resources every year for spending on our priorities, principally the reduction and elimination of child poverty?
    In the absence of a helpful quotation from the shadow Chancellor of the Exchequer to illuminate my question, I draw my hon. Friend's attention to the advice of that other great economic analyst, the hon. Member for Banff and Buchan (Mr. Salmond). On Saturday, at the Scottish National party's conference, he said:
    Scotland should demand £2 billion—
    from the £22 billion proceeds of the mobile phone spectrum auction
    for investment in public services and infrastructure now."
    Will my hon. Friend explain to the House why the Government have chosen not to do that but have instead chosen to use that money to reduce the national debt?
    Miss Johnson: Our policy is to manage the economy in a prudent fashion and gain the benefits of our prudence. The reduction of the national debt will bring benefits to the whole country and our aim is to reduce debt interest over the next few years and beyond. Of course, we inherited a £28 billion deficit from the Tories, under whom the national debt doubled. We have turned public finances around and made a massive investment in public services. I know that my hon. Friend will share my eagerness not to return to the Tory policies of boom and bust.

Business of the House
12.31 pm
Sir George Young: Will the Leader of the House give the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 22 MAY—Consideration of a timetable motion relating to the Nuclear Safeguards Bill [Lords] and Sea Fishing Grants (Charges) Bill followed by their remaining stages.
Consideration of a timetable motion relating to the Royal Parks (Trading) Bill and Television Licences (Disclosure of Information) Bill followed by their remaining stages.
TUESDAY 23 MAY—Second Reading of the Crown Prosecution Service Inspectorate Bill [Lords].
Second Reading of the Limited Liability Partnership Bill [Lords].
Motion relating to insurance for Members, including defrayment of the cost of defending defamation actions.
Motion relating to legal expenses incurred by the hon. Member for Mid-Worcestershire.
WEDNESDAY 24 MAY—Opposition Day [11th Allotted Day]. Until about 7 o'clock there will be a debate entitled "The Government's Failure to Tackle Crime" followed by a debate on transport spending. Both debates will arise on Opposition motions.
Proceedings on the Powers of Criminal Courts (Sentencing) Bill [Lords], which is a consolidated measure.
THURSDAY 25 MAY—Consideration of any Lords amendments which may be received to the Electronic Communications Bill.
Motion on the Whitsun recess Adjournment debate.
The provisional business for the week after the Whitsun recess will include:
MONDAY 5 JUNE—Consideration of any Lords Amendments which may be received to the Financial Services and Markets Bill.
TUESDAY 6 JUNE—Second Reading of the Police (Northern Ireland) Bill.
FRIDAY 9 JUNE—Private Members' Bills
I should like to take the opportunity to inform the House of business to be taken in Westminster Hall for when the House is sitting during June.
THURSDAY 1 JUNE—The House will not be sitting.
THURSDAY 8 JUNE—Debate on the fourth report from the Foreign Affairs Select Committee, from the session 1998–99, on Gibraltar.
THURSDAY 15 JUNE—Debate on the role of the voluntary sector in our national life—recognising and promoting volunteering.
THURSDAY 22 JUNE—Debate on the first report from the Education and Employment Select Committee, from the session 1999–2000, on school meals.
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THURSDAY 29 JUNE—Debate on the second report from the International Development Select Committee, from the session 1999–2000, on the future of sanctions.
Sir George Young: The House is grateful for next week's business and an indication of the business for the week following the Whitsun recess.
This week, the House received a further statement on Sierra Leone, but I must repeat the request that several of us made last week for a full day's debate on Sierra Leone in Government time. Our troops are doing a magnificent job in difficult circumstances and have been exposed to that situation for some time. The commitment is likely to last for many weeks and the position remains highly volatile. Will the Leader of the House review the disappointing response that she gave last week and give serious consideration to a full day's debate on Sierra Leone?
Separate from that request, are we not due for a foreign affairs debate to address some of the many problems in the world, such as those in Zimbabwe and Sri Lanka?
This weekend is a critical one for the Northern Ireland peace process. Might we have a statement from the Secretary of State for Northern Ireland on Monday, if there are important developments over the weekend?
The right hon. Lady has just announced guillotine motions on no fewer than four Government Bills. Is that not a serious overreaction to the detailed discussion yesterday on the Royal Parks (Trading) Bill? Is not the underlying problem the sheer volume of legislation that the Government are trying to push through the House of Commons?
We now have a Government response to the report of the Select Committee on Liaison, "Shifting the Balance". Does that not unlock the opportunity to have a debate on that important report?
Finally, the Leader of the House would be surprised if I did not ask for debates, first, on reform of the House of Lords and, secondly, on the intergovernmental conference.
Mrs. Beckett: I am grateful to the right hon. Gentleman for his support for the superb job that our troops are doing in Sierra Leone. Of course I shall continue to bear in mind his request for a full day's debate on that matter, but I remind him, first, that there will be a debate on Sierra Leone in Westminster Hall next week; and, secondly, that, although there has recently been a steady stream of Opposition days, which is correct and proper, the Opposition have not chosen to debate what he describes as an important subject. I do not often say this to the right hon. Gentleman, but he will recognise that it is open to the Opposition to provide time for such a debate, if they believe that one is required. None the less, I shall pass on his concerns to my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and continue to bear in mind his request for a general debate on foreign affairs.
My right hon. Friend the Secretary of State for Northern Ireland has, as the right hon. Gentleman knows, kept the House informed of developments in Northern Ireland. I note the right hon. Gentleman's request that, if there are important developments, the House should continue to be informed and I shall draw that to my right hon. Friend's attention.

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The right hon. Gentleman then asked for debates on Lords reform and the intergovernmental conference, and I have those issues in mind as ones that the House wants to debate. However, before that, he asked about the guillotine motions that I have announced, calling them an overreaction. As I am sure that he is aware, the two matters are not unrelated. The House is taking a great deal of time discussing legislation that is not contentious and that would not normally require much time in the House. Furthermore, there is a pattern whereby Bills go through Second Reading and Committee quite swiftly, and no amendments are tabled in Committee—
Mr. Eric Forth: That is the trouble.
Mrs. Beckett: The right hon. Gentleman might say that, but might I draw to his attention what I consider to be a rather worrying phenomenon? No amendments were tabled in Committee to the Nuclear Safeguards Bill, which is an important and worthwhile measure to discourage the proliferation of nuclear weapons; yet he and others tabled no fewer than 33 amendments, four new clauses and a new schedule for debate on the Floor of the House. A similar pattern can be seen in respect of the Royal Parks (Trading) Bill: the Bill was uncontentious and supported by Opposition Members, and the Standing Committee sat only once; yet no fewer than seven new clauses, 31 amendments and two new schedules were tabled to take up debating time on the Floor of the House. Any place of work can be brought grinding to a halt by people working to rule; then, measures have to be taken.
Mr. Jim Marshall: I support the call of the right hon. Member for North-West Hampshire (Sir G. Young) for an early debate on the intergovernmental conference. There are important issues for the House to discuss and it is imperative that we have a debate soon.
In that context, may we also have a debate on the developing European security and defence identity within the European Union? I am sure that many hon. Members would like to express their views on that matter before the Government decide what attitude to adopt toward any treaty changes that might be consequential on that development.
Mrs. Beckett: My hon. Friend makes an important point, both about the IGC debate and about other issues, such as defence identity in the European Union. I recognise the perfectly legitimate demand on all sides of the House for discussion of these important matters. That is why the Government are endeavouring to prevent business that should be discussed properly, but not at undue length, from taking excessive time.
Mr. Paul Tyler: I repeat my weekly request that the Government come off the fence on the reform of the House of Lords. It is now a fortnight since we were scheduled to have that debate. Might the gap in the Government's programme on Wednesday 7 June and Thursday 8 June, be filled with this important and urgent issue?
May we have an early opportunity to discuss transparency and open government? Is the right hon. Lady aware of the great concern felt by hon. Members on both
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sides of the House, including her own, concern that has been expressed this morning, about the fact that the important news about contamination and seed purity was given last night in a short, inadequate and potentially misleading written answer? Now that the Minister of Agriculture is to make a full statement in the House and be cross-examined, may I ask her to look at the overall question of the way in which information is given to the House? Does she really think that it is adequate to have written answers on such issues, followed by contradictory press statements and interviews on the "Today" programme?
Has the right hon. Lady followed up with her colleagues the important statement by Madam Speaker, after talks with Sir Richard Wilson, on giving information to the House? Finally, does the right hon. Lady recognise that many people outside the House believe that this is all too reminiscent of the former Government and the way in which they handled the issues of genetically modified seeds and contaminated animal feed, under pressure from me and my colleagues? We never received good answers from them. Can we expect better answers from this Administration?
Mrs. Beckett: Of course I am aware of the anxiety for a debate. Indeed, I share that anxiety. The hon. Gentleman will recall that I have made it plain that the Government do not intend to make their own pre-emptive announcement—if I may put it like that—in response to the royal commission, but wish first to hear the views of the House, and I am anxious to hear them. Equally, the hon. Gentleman will appreciate that pressure of business has made that difficult, particularly with much time being taken on the Floor in the way to which I have already alluded.
With regard to transparency and open government, I remind the hon. Gentleman that, in this Parliament, as of 11 April, the date of the latest figures that I have, we had made 219 statements; on average, under this Government, a statement has been made every two sitting days. The hon. Gentleman will also know that Madam Speaker has made it quite plain that a written parliamentary answer is a perfectly legitimate way of giving information, and, as he mentioned, my right hon. Friend the Minister of Agriculture is about to make a statement.
I have indeed followed up Madam Speaker's remarks. The hon. Gentleman may know that, because I believe that the letter leaked.
Mr. Ian Stewart: My right hon. Friend will be aware that the Government are carrying out a review of the vaccine damage payment scheme 1979. Can she make time available for an early debate on this important issue, so that the scheme's inadequacy can be fully debated?
Mrs. Beckett: I am grateful to my hon. Friend. I know that he has long campaigned on this issue. I fear that I cannot undertake to find time for such a debate on the Floor in the near future. Perhaps I could recommend to him the offices of Westminster Hall.
Mr. Patrick McLoughlin: In the light of early-day motion 678
[That this House takes note of the recent undertaking of the honourable Member for North Southwark and Bermondsey 'on behalf of my party that we will seek to deal with any matter in our party that other people are concerned about'; accordingly calls upon him and his party leadership to investigate and repudiate the unethical, misleading and on occasions deliberately untruthful campaigning tactics of Liberal Democrat candidates in the Manchester, Gorton constituency in the current local elections; condemns the Liberal Democrats in the Manchester, Gorton constituency for putting about the deliberately untruthful scare story about 'Labour's proposals to force benefits claimants to be paid through their bank accounts' when the Prime Minister has made absolutely clear that all benefits claimants will continue to have the right to collect their benefits from their local post office, to collect their benefits weekly if they so wish and to collect their benefits in cash; further condemns them for seeking to deceive local people about their vote in the Council against the proposal for a new high school on the Spurley Hey site, a proposal supported by both the governors and the staff of the current school and endorsed by the Secretary of State; points out to the people of Gorton that, if the Liberal Democrats had had their way, there would be an empty, derelict site at Spurley Hey; and is tired of the Liberal Democrat policy of seeking to mislead voters into supporting them either by telling outright lies or else by pretending that they are responsible for the achievements of others.],
early-day motion 679
[That this House condemns the Liberal Democrats in the Manchester, Gorton constituency for seeking to deceive the people of Gorton about the Liberal Democrats' role in the Friends of Gorton Park organisation, which the Liberal Democrats seek to imply they have some responsibility for, when the excellent work of the voluntary officers and members is in an organisation whose formation was suggested by Right honourable Member for Manchester, Gorton, and of which that Right honourable Member is President; further condemns the Liberal Democrats in the Manchester, Gorton constituency for seeking to deceive local people about the Liberal Democrats' non-existent role in the Gorton Monastery Charitable Trust; notes that the Right honourable Member for Manchester, Gorton sponsored a promotional reception for the trust at the House, that that same Right honourable Member the week before Easter had a meeting at the House with Dr Eric Anderson, Chairman of the National Heritage Lottery Trust, and that in the week after Easter the Lottery offered the Gorton Monastery Trust a £2.7 million grant together with development money and that the Chairman of the trust, Mrs. Elaine Griffiths, in that week wrote to the Right honourable Member offering 'thanks for all you are doing to help us, it is very much appreciated'; and questions why the Liberal Democrat candidate for the Rusholme ward gives his address in his election propaganda as 20 Lowestoft Street, M14, which is inside the ward, when his name is not on the election register for that address but for 263 Barlow Road, Manchester 19, which is in a different ward.],
and early-day motion 680
[That this House expresses its contempt for the Liberal Democrats in the Manchester, Gorton constituency for pretending that they have been active in the campaign
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against North-West Water's disgraceful plan to build a business park called Waterside Park, when the Liberal Democrats have been almost invisible in a campaign which has been organised jointly by the Labour Party and Fairfield Golf and Sailing Club, as a result of which 40,000 signatures were gathered for a petition which helped to persuade the Secretary of State for the Environment, Transport and the Regions to order a public inquiry into this pestilential project when the main opposition at the inquiry was organised by the party and the club and when the Liberal Democrats were scarcely to be seen at the inquiry; points out that there need never have been a privatised North West Water if the Liberals in the House had not voted in support of the former Right honourable Member for Finchley to bring down the previous Labour government; and further condemns the Liberal Democrat candidate for the Rusholme ward for seeking to deceive local people into believing that he has played an active part in the Friends of Platt Fields organisation when he only started attending this organisation's meetings a short while ago and scarcely ever opens his mouth at the meetings, and when the excellent work of the officers and members of Friends of Platt Fields is in an organisation which was suggested by the Right honourable Member for Manchester, Gorton, and of which that Right honourable Member is President.],
can the Leader of the House ensure a debate to enable us to talk about the co-operation between those on the Liberal Benches and the Government?
Mrs. Beckett: I have had my attention drawn to the wording of those motions. They are not a matter for me, but we are all aware that the electioneering tactics adopted by the Liberal Democrat party sometimes cause concern in the ranks of other parties.
Mr. Andrew Mackinlay: Will my right hon. Friend consider an early full day's debate on the Government's response to the Liaison Committee report, particularly bearing in mind that the Government have rejected the Committee's substantive recommendations? That underscores the need for a debate in order that we may express the collective will of the House and prevail upon the Government to change their mind so that the changes can be enacted before the next General Election. In particular, there are the extremely important questions of the appointment of Chairmen of Select Committees; the Committees' membership, and how members are selected; the timetable for setting them up after the General Election; and their ability to scrutinise and ratify public appointments.
May I tell the Leader of the House something that I was saving for my memoirs? It is ingrained upon my memory. During the Sierra Leone inquiry, a Government Whip—a lovely gentleman—came up to me and said, without a note of sarcasm, but with genuine incredulity, "Mackinlay, I just cannot understand you. We put you on the principal Committee of the House of Commons and you insist on asking all these questions." He concluded, "Why don't you just enjoy it?"
Mrs. Beckett: My hon. Friend will be aware that the Government's response has just been published, only about an hour ago. Although I understand his anxiety for a debate to be held, it is a little early for the House to

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have had an opportunity to digest the response. I agree that the matter is important, and I very much hope that the House will carefully examine and weigh both the report of the Liaison Committee and the Government's response.
I share the view, which I know that my hon. Friend holds, that the Liaison Committee's report has enormous implications for all hon. Members, and those implications are perhaps not as straightforward and simple as they may at first sight appear. I hope that hon. Members will not rush to judgment, but will look carefully at what is recommended and what that means for the operations of the House, and weigh the Government's response. I shall bear my hon. Friend's request in mind.
Mr. Peter Brooke: If it is true that the remarks of the Secretary of State for Northern Ireland on the euro on Tuesday were not cleared with the Treasury, and if that means that Northern Ireland will get an independent economic policy even before the resumption of devolution, is it possible for that to be announced first to the House, rather than to an engineering conference in Northern Ireland?
Mrs. Beckett: As I am sure that the right hon. Gentleman will be aware, if he has studied the remarks of my right hon. Friend the Secretary of State for Northern Ireland, that they were completely in line with everything that the Government have been saying on the matter. He will know that the policy has not changed, as the Prime Minister made plain at the Confederation of British Industry dinner.
Ms Jenny Jones: My right hon. Friend may have noticed written question No. 3 on the Order Paper today, which is due to be answered today, and which concerns the Home Secretary's decision on Mike Tyson's application for a visitor's visa. In view of the considerable public interest in that decision, can my right hon. Friend say whether she has had an indication from the Home Secretary of when he will give his decision and whether he will make a statement in the House on the matter?
Mrs. Beckett: As my hon. Friend knows, my right hon. Friend the Home Secretary has said that he hopes to make a decision reasonably soon on the application that has been received. I cannot tell her how soon that will be or whether my right hon. Friend will consider it right to make an oral statement to the House, but my hon. Friend knows that the Home Secretary is meticulous in keeping the House informed.
Mr. Alasdair Morgan: Next week it is Scottish questions again, when we have 25 minutes nominally for the Secretary of State and five minutes for the Advocate-General. The last five minutes usually consist of the hon. and learned Member for Edinburgh, Pentlands (Dr. Clark) saying that she cannot answer the questions asked because all her dealings and advice are confidential. Would it not be better and waste less of hon. Members' time if the two sessions were combined in one session of 30 minutes? If there were any questions for the Advocate-General, they could be answered along with the other questions to the Scotland Office team.
Mrs. Beckett: I understand the hon. Gentleman's point about the organisation of the Question Time. It is an issue
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for the House as a whole, and I am not sure how widely shared is his view that it would be better to roll the two Question Times into one. When next the Question Time schedule is re-organised, I shall bear his remarks in mind.
Ms Julie Morgan: Will my right hon. Friend find time for a debate on the rumoured takeover bid for Hyder, the water company for Wales, and the electricity company for south Wales? The rumoured bidder wants to break up the company, and that is likely to involve the loss of more than 1,000 jobs in Wales. Will my right hon. Friend ensure that the regulators look at the suppliers of water and electricity in Wales, in the best interests of consumers in Wales, the company and the 9,000 people who are employed by Hyder?
Mrs. Beckett: I fear that I cannot undertake to find time for an early debate in the House, although, again, I recommend Westminster Hall.
I understand my hon. Friend's anxiety for the interests of the consumers to take priority. As she will know, that is the thrust of the changes in the utilities regulations that the Government are introducing in the Utilities Bill. Although the rhetoric of the Conservative party suggested that the utilities would have to put the consumer first, that was not actually what the legislation said.
I understand the reason for my hon. Friend's anxiety, but I fear that I cannot find time for an early debate on the Floor of the House. However, Westminster Hall is available.
Mr. Geoffrey Clifton-Brown: May we have a debate on the politicisation of the civil service? That would enable us to draw attention to the scores of extra political advisers who have been appointed under the present Government, to point out that virtually all the departmental press officers have been replaced by those who will produce a line that is closer to that approved by Mr. Campbell, and to draw attention to the fact—freely admitted by the Prime Minister yesterday—that the civil service is now providing killer packs for the Prime Minister to use at Question Time.
Mrs. Beckett: I can only tell the hon. Gentleman this. He has been a Member of Parliament for quite a long time. If he nurtures the illusion that the civil service did not supply facts to previous Prime Ministers, right or wrong—which was part of the concern that he expressed—or that there were no special advisers, I can only say that I do not know where he has been.
The hon. Gentleman's remarks about departmental press officers are absurd. There are hundreds of press officers in Whitehall, just as there are hundreds of civil servants in Whitehall. While I bow to no one in my admiration for the work and skill of those who are employed by the Government as special advisers, the notion that they could run the Civil Service is ridiculous.
Mrs. Anne Campbell: I welcome my right hon. Friend's announcement that some forthcoming legislation will be timetabled. Has not the time come for programming and timetabling of all legislation? That would enable the House to operate more efficiently and effectively.
Mrs. Beckett: My hon. Friend makes an important point. As she knows, the programming of legislation, or

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legislative discussion, has been recommended to the House repeatedly, and has some distinguished authors on the Opposition Benches. From time to time, we have made successful use of programme motions, giving Opposition Members, including Back Benchers, an opportunity to steer the use of the time available. Many Members—I am one—believe that that is to the advantage of members of all parties.
My hon. Friend will know that that view is not shared by everyone. She will also know that if time is used on the Floor of the House in the way it has been used recently, that will raise questions of the kind that she has asked.
Mr. Forth: The right hon. Lady is silent yet again on the subject of House of Lords reform. How can she justify the fact that week after week has passed without the House of Commons being given an opportunity to discuss the matter? Can she give any indication at all to a waiting and anxious nation of where or when the matter will proceed and be resolved—or will we be left with the suspicion that the Government have no intention whatever of resolving the issue?
Mrs. Beckett: That question comes rather rich from the right hon. Gentleman. Yesterday, during the debate on the Royal Parks (Trading) Bill, one of his hon. Friends said:
I need to know why the House is debating this Bill in the middle of the afternoon when there are so many other matters for which we are told there is no legislative time.—[Official Report, 17 May 2000; Vol. 350, c. 369.].
It is not just legislative time; it is time for worthwhile debate.
I entirely share the view that a debate about House of Lords reform would be worth while, enabling Opposition Members to explain how they have proceeded, in one swift movement, from resisting any reform whatever, to wanting a Chamber that will be a rival to this one. I know that the right hon. Gentleman holds that view.
Some Opposition Front Benchers shake their heads. They should be aware that the right hon. Gentleman has now made publicly clear his belief that we should set up an elected Chamber that should be a rival to this Chamber. That is an important issue, which the House should discuss—but, while we are taking up time on the Floor of the House with matters that do not need to take up so much time, there is no time available to discuss matters of that kind.
Mr. Peter L. Pike: As the Government can carry over legislation, will my right hon. Friend announce at an early date that certain measures will be carried over, which will ensure better scrutiny and assist the Government timetable? May I make another helpful suggestion? As well as debating the Wakeham report, we should debate the Jenkins report, which would perhaps provide the Government with an opportunity to say that, having looked more closely at how proportional representation works, we shall take no more part in it and ditch it in the wastepaper basket?
Mrs. Beckett: At present, I am unable to make proposals for Bills to be carried over. My hon. Friend will
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know that such matters have to be discussed and agreed across the House, but I am aware that he proposed the idea to the Modernisation Committee and that it is one of many proposals that he has made that are designed to help the House handle its legislative business more effectively. On the Jenkins report, he will recall that we have debated that matter, but I shall, of course, bear his request in mind.
Mr. Michael Fabricant: The right hon. Lady will be aware that the Government are considering future uses of the dome. Can we have an urgent debate on exactly what the dome will be used for, before the closure of the tacky exhibition that is on in the dome—I guess in the next two or three weeks? Is she aware that there are now only two finalists for those who will run the dome? Is it not a disgrace that one of them is Mr. Robert Bourne, who—surprise, surprise—gave £66,000 to the Labour party over the past two years: another crony?
Mrs. Beckett: I take note of the hon. Gentleman's remarks about the dome, but he will know that many of those who have visited it, including many thousands of children, have taken much pleasure and enjoyment from it. He makes a remark about the process of selection. He should know that that decision-making process was initiated by the millennium commissioners. They made recommendations to the ministerial group at a meeting chaired by Lord Dalkeith, so there is clearly an independent element, as there rightly should be, in that process.
Mr. Paul Flynn: Although the Government are to be congratulated on the substantial sums of new money that they have given to pensioners in innovative ways, my right hon. Friend will be aware of the widespread anger at the 75p a week increase in pensions. The word that is almost universally linked with that increase is "insult". Is she aware that pensioners—many of whom visited the House yesterday to make this point—have contributed to the pension scheme all their working lives and that they would like to be paid their pensions as an entitlement, not given what they regard as handouts?
Mrs. Beckett: I understand the concern, and the irritation, felt by many pensioners. I also understand my hon. Friend's point. I know that many pensioners resent the way in which the heating allowance is paid, but that does mean that it is tax free. Similar sums made available through the weekly payment would not be tax free, so there are arguments for and against the mechanisms that the Government have used. However, it is clear that this Government have cut VAT on fuel and have provided substantial extra resources for pensioners in the Budget and will continue to do so.
Mr. Paul Burstow: May I draw the attention of the Leader of the House to early-day motion 732?
[That this House notes with concern the growing number of reported cases of inappropriate use of not for resuscitation (NFR) orders; believes that there is a gap between guidelines and practice which leaves patients and family members uninvolved in the decision to mark a patient's records 'NFR'; notes that research reported in the British Medical Journal found that two out of three

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patients with NFRs were not involved in the decision and that patients with NFRs were 30 times more likely to die; and calls on the Government to take urgent action to stamp out this immoral practice and issue clear instructions to the NHS on the use of not for resuscitation orders.]
It highlights the growing number of cases of inappropriate use of not-for-resuscitation orders in the NHS. Two out of three patients are not even consulted when those orders are put on their records. It is 30 times more likely that those with an order on their medical records will die during the course of their treatment in the NHS. Given that Age Concern reported only yesterday that almost three quarters of GPs believe that there is an age-based rationing of health care in the NHS, can the Secretary of State for Health make a statement on what the Government are doing to stamp out the immoral and unacceptable practice of using such orders without consulting?
Mrs. Beckett: The Government have made it plain that there should be clear guidelines on resuscitation policy, in hospitals or anywhere else in the health service. The Government are committed to ensuring the development of best practice throughout the NHS. We are aware of the anxiety that is being expressed and will continue to try to deal with it.
Dr. Phyllis Starkey: I express my profound thanks to the Leader of the House for her announcement about timetabling several Bills. I also thank her for making it clear while at least one of the usual suspects from the Opposition Benches was present that a more appropriate way of using parliamentary procedure would be to raise specific issues in Committee instead of on the Floor of the House. Does my right hon. Friend agree that it is in the interests of all parties for the public to retain confidence in the House and that the goings-on this week were guaranteed to convince the general public that the House was not relevant to them? Does she also agree that silly debating games have no place in what should be the prime legislative Chamber of this country?
Mrs. Beckett: I have a great deal of sympathy with my hon. Friend's remarks. Perhaps she knows that there has already been public and press comment on the folly of trying to impede the passage of, for example, Royal Parks (Trading) Bill, which deals with illegal trading that has implications for food safety, public order and several other important issues. The public would want the House to address those issues properly. There is no question of not discussing matters, but it must happen in the right way at a time that the House provides for such discussion. We should not exploit the opportunities of the House to delay business.
Mr. John Hayes: The Leader of the House will no doubt be as concerned as me about the letter to the Prime Minister from head teachers in Durham, which complains that schools there are falling to pieces. The state of schools is so bad that it adversely affects the quality of teaching and learning. The Government have given barely a quarter of the money that is needed to repair those schools. Will the Leader of the House provide for a statement that reconciles the comments
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of those who are at the sharp end, and do the job of educating children, with the increasingly unconvincing bluster and hyperbole of the Prime Minister?
Mrs. Beckett: I am glad that the hon. Gentleman asked me that. I was the Minister responsible for schools in the last Labour Government. We left the Conservative party a backlog of repairs and construction that needed to be tackled—most of it was inherited from the early 1970s, when the Conservative party was in power—of some £100 million when our capital budget was of the order of £10 million. I was seriously worried about that, but recognised with relief that, thanks to the changes that that Labour Government had made, North sea oil would provide substantial resources, which would make it possible to shorten the time scale necessary to tackle that backlog. The money was not used in that way. It was the equivalent in today's terms of £35 million every day for a solid 17 years. Yet when we came to power, we found a backlog of £3 billion to £4 billion. The hon. Gentleman should look to those on the Opposition Benches for the explanation of the poor state of schools.
Mr. David Chaytor: Reports recently published by the royal commission on environmental pollution and the United Kingdom Round Table on Sustainable Development referred to the need to cut greenhouse gas emissions by 60 per cent. in the years ahead. Given Conservative Members' minimal understanding of the issues of climate change, as shown by some of their fatuous questions at Treasury questions, and the Government's publication of our climate change programme, which is perceived as a model for other western countries, does my right hon. Friend agree that it is time for a full debate on the Government's climate change programme and the problems posed by climate change beyond 2010?
Mrs. Beckett: I understand and sympathise with my hon. Friend's concern. I know that he has long taken a great and expert interest in those matters. I fear that I cannot undertake to find time for such a debate in the near future because there is substantial pressure, although the Government's legislative programme is perfectly in line with those of previous Governments, as the statistics in the Liaison Committee report demonstrate. Nevertheless, I fear that, at this moment in the handling of the programme, I cannot undertake to find time for such a debate in the near future, but I will bear his request in mind.
Mr. Andrew Robathan: Will the Leader of the House arrange for a statement to be made next week on the ministerial code of conduct as it relates to trade unions? I remind her that paragraph 113 says:
care must be taken to avoid any actual or perceived conflict of interest… Ministers…should receive no remuneration from a union.
Can she arrange for the Deputy Prime Minister to make the statement, so that he can explain why he does not think that his flat in Clapham, at a beneficial rate from the RMT—the National Union of Rail, Maritime and Transport Workers—is in breach of the ministerial code?
Mrs. Beckett: I suspect that the hon. Gentleman has not read the report to which he has alluded.
Mr. Robathan: I have.
Mrs. Beckett: If he has, I am astonished that he asked that question because he will be well aware that the

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Committee's report points out that my right hon. Friend the Deputy Prime Minister lives in accommodation where the rent is set by an independent rent officer. The evidence is clear that he was not treated any differently or any more favourably than anyone else and that there is no complaint to answer.
Mr. David Taylor: As a reader of The Guardian for over 30 years, I have total confidence in the accuracy and insight of that esteemed organ. Today's paper tells us that the Government are likely to postpone the publication of their waste strategy, which was due to be published last month. Can my right hon. Friend find time for a major debate on the issues that are raised by a delayed waste strategy? Throughout the UK, 160 communities face the problems of incineration plants. In constituencies such as mine, thousands of acres are at risk from landfill operators. We must do more. We must waste less. We must recycle more. We need a guideline from the Government. Can we have a debate?
Mrs. Beckett: I understand my hon. Friend's concern, and I saw the report to which he alludes. Sadly, I fear that even The Guardian is not always totally accurate. I understand the underlying concern behind his question on discussions about waste management. The Government recognise its importance. We continue to consult. No doubt the Secretary of State for the Environment, Transport and the Regions will come forward with proposals in due course. I fear that I cannot undertake to find time on the Floor of the House for a debate soon, but, again, my hon. Friend might bear in mind Westminster Hall.
Mr. Graham Brady: During Treasury questions this morning, it became apparent that many Ministers were rather confused about the performance of the Government's new deal. After two years and the spending of £1.5 billion, can we have a debate in Government time that would allow Ministers to come up to speed on some of the facts of the matter, notably that youth unemployment has fallen more slowly since the introduction of the new deal; that 60 per cent. of entrants to the new deal go straight back on to benefits; that, of those who do go into work, 50 per cent.—according to the Government—would have got jobs anyway; and that 40 per cent. of those who go into work are out of work again within three months? It is not an impressive record for 1.5 billion worth of public money.
Mrs. Beckett: All that I can say to the hon. Gentleman is that it is rather depressing to see how desperate the Conservative party is to claim that the new deal is unsuccessful. It is the most substantial programme to assist people out of unemployment and into work that any Government have put in place. It is a success.
Mr. Brady indicated dissent.
Mrs. Beckett: The hon. Gentleman shakes his head. I find it hard to believe that Conservative Members do not share my experience when I visit places and organisations. People come up and voluntarily tell me how excellent the new deal is, how much they have benefited from it and
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how they are grateful for something that has transformed their lives. If they do not say it to Tory Members, perhaps it is because they think that they would not listen.
Shona McIsaac: Having terrorised my right hon. Friend in recent weeks about compensation for distant-water trawler men, I shall give her a week off because I understand from Ministers that the issue is moving forward, but may I ask her to find time for an urgent debate on standards in public life, following the revelations on the "Today" programme today by the Tory Member of the European Parliament Robert Goodwill that he buys air tickets from Leeds-Bradford to Brussels at a cost of £160 and then claims £500 back? Does that not show that real sleaze is alive and well in the Tory party?
Mrs. Beckett: I did hear those remarks this morning. My hon. Friend will know that there has long been concern in the House, and in our party, that the rules that apply within the European Parliament should be tightened. Those discussions are continuing, and they will be supported from the Labour Benches. Unfortunately, however, we do not have responsibility for the matter. I certainly have no responsibility for the actions of Members of the European Parliament.
Although I understand my hon. Friend's concern about standards in public life—which certainly we share, on both sides of the House—it is important that we tackle problems and abuses when they arise, and that we ensure that we ourselves handle with care all of those discussions. My concern is that not only the European Parliament, but political life as a whole could be brought into disrepute if we continue to mishandle these matters.
Several hon. Members rose—
Madam Speaker: Order. I shall try to call the remaining Members who are standing, but I tell the House that I have had to limit Back Benchers' speeches in the main debate to 15 minutes. I am therefore asking the hon. Members who are standing—who, as I know very well, are regular attenders of business questions—to put their questions briskly to the Leader of the House. I have a statement, and we have a good deal of business today. I do not want any rambling, long statements or comments. I want direct questions to the Leader of the House.
Mr. Stephen O'Brien: In the light of the Leader of the House's response to the hon. Member for North-West Leicestershire (Mr. Taylor), may I tell her that, in my constituency, there is an application to deposit toxic waste in a deep rock-salt mine? May I ask her to make time urgently—now—for a waste strategy debate on the Floor of the House before the Minosus application is determined? It is causing real fear to the residents in Moulton, Davenham and North Winsford in my constituency.
Mrs. Beckett: I understand the concern that the hon. Gentleman expresses and any hon. Member who would wish to have such issues aired. May I remind him, however, that the Government have provided twice as much time as used to exist for the airing of such issues, in Westminster Hall?
Mr. Desmond Swayne: Will the right hon. Lady eschew the siren voices of Labour

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Members who are strangers to the legislative process? Will she acknowledge that the Royal Parks (Trading) Bill passed its Second Reading and Committee stages in a matter of minutes, and that it was proper that it should be subjected to proper scrutiny—especially given that those who support the Bill claimed that it was vital for the control of the Mafia? Substantial progress on the Bill was being made yesterday. Will she recruit a small team of Labour Members who are prepared to work after midnight on the legislative process?
Mrs. Beckett: I am afraid that the hon. Gentleman has picked a particularly bad example. Not only has the Royal Parks (Trading) Bill had examination, but this is the second time that such a Bill has been considered by the House. The same legislation—as a private Member's Bill, which, incidentally, was promoted by a Conservative Member—was blocked in the previous Parliament. The notion that it has not had scrutiny does not stand up to scrutiny.
Dr. Julian Lewis: Given the abject failure today of Treasury Ministers to give direct answers to questions on the Government's policy on scrapping the pound and joining the euro, will the Leader of the House find Government time both for a statement from the Chancellor on the Government's official policy, and a statement from the Secretary of State for Northern Ireland on what the policy really is? If neither of them is available, perhaps the Minister with responsibility for Europe, the hon. Member for Leicester, East (Mr. Vaz), could come forward and say what the policy is. In so doing, perhaps he could explain his strange comment—in a letter to the hon. Member for Great Grimsby (Mr. Mitchell)—that, "We know who you Euro-sceptics are, and we are coming to get you in your constituencies." That was from a Labour Minister to a Labour Member.
Mrs. Beckett: I am advised that that is not what the letter said. I simply say to the hon. Gentleman that I fear that I cannot find time for yet more statements to remind the House that the Government's policy on the euro remains what it was when it was announced by the Chancellor and that it has not changed.
Mr. Owen Paterson: I deplore the statement on the timetable motions. I was here at 10 o'clock last night, when the debate was arbitrarily cut off by the Government Whip moving the Adjournment. Instead of going for timetable motions, will the Leader of the House consider suspending the 10 o'clock rule so that we can use the hours after 10 o'clock to hold the Executive to account, because that is what the taxpayer sends us here to do?
Mrs. Beckett: Yes, taxpayers send Members here to make good and sensible use of their time and to scrutinise legislation properly. We are not sent us here to waste the time of the House and taxpayers' money.
Mr. Nigel Evans: Last week, I spoke to a business man from Preston who employs almost 500 people. He said that the weakness of the euro makes it difficult for him to compete with all the cheaper imports coming in. In the light of the Prime Minister's statement yesterday that there are three positions on the euro—his position, that of the Chancellor of the Exchequer and that of the Secretary of State for Northern IrelandȔwill the Leader of the House arrange for an early debate on the single currency so that we can at least clarify which one of those three speaks for Her Majesty's Government?
Mrs. Beckett: I notice that it has finally dawned on the Conservatives that if they keep talking about a strong pound, they might be acknowledging that there is a strong economy, so they have started talking about a weak euro instead. I am sure that even the hon. Gentleman must have spotted that the Prime Minister said yesterday that the three positions on the euro were the Conservative position, the Liberal Democrat position and the Government's position, which has not changed.
Mr. John Bercow: Further to the pertinent inquiries from my right hon. and hon. Friends and the Chancellor's failure this morning to defend or disown the Secretary of State for Northern Ireland, may we have an urgent full-day debate on the Government's policy on the euro? Would that not show that bogus economic tests, contradictory ministerial statements, perplexing front organisations, misleading Government advertising and diversionary attacks on alleged xenophobes are all part of the concealment technique designed to hide the Government's bid to hand over the running of the British economy to the European Central bank, which we do not elect, cannot remove and would find it illegal to seek to persuade of the British point of view?
Mrs. Beckett: I am afraid that I cannot find time for a debate that we have already had so often in the House. I remind the hon. Gentleman that any decision on the issue would be made by the British people, not by the Government.
Mrs. Maria Fyfe rose—
Madam Speaker: I did not see the hon. Lady in the Chamber during the statement. Was she in to hear the Leader of the House's statement?
Mrs. Fyfe: No, I am sorry, but I was unable to be in earlier.
Madam Speaker: I am sure that the hon. Lady knows that we have a long-standing convention that it is a courtesy to the Minister concerned to hear the statement before asking questions about it. I am sure that she will forgive me for not calling her on this occasion.

GMOs (Conventional Crops)
1.17 pm
The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): With permission, Madam Speaker, further to the written answer given yesterday by the Minister of State, Ministry of Agriculture, Fisheries and Food, my right hon. Friend the Member for Gateshead, East and Washington, West (Ms Quin), I should like to make a statement.
I stress at the outset that no threat to public health or the environment has occurred.
The Government were advised on 17 April by Advanta Seeds UK that some of its supplies of conventional rapeseed, sold and sown in 1999 and 2000 in several European Union member states, possibly including the UK, contained a small proportion—about 1 per cent.—of genetically modified rapeseed. At that time the full facts were not known. We immediately sought to establish the details and to check the status of the particular genetic modification involved.
It appears that a non-GM seed crop being produced in Canada in 1998 had come into contact with a GM crop being commercially produced in the area, resulting in a small amount of GM seed in the conventional seed. The company has advised us that production of seed in 1999 was unaffected. In the UK, about 9,000 hectares were sown with affected stocks last year and about 4,700 hectares were sown this spring.
The genetic modification involved—known as RT73—is one that had previously been approved in the UK under our strict regulatory regime for food use and field trials in 1995 and 1997.
The genetic modification in question had previously been examined by the UK's expert committees—the Advisory Committee on Releases to the Environment in respect of environmental safety and the Advisory Committee on Novel Foods and Processes in respect of food safety. Both had cleared it.
We believe that there is no threat to the environment because the GM variety is sterile. It is difficult to see how it could cross-pollinate with other plants. It should be remembered also that oil produced from the crop is indistinguishable from conventional rape oil; no modified DNA will be present. ACRE and the Food Standards Agency have looked at this specific incident and concluded that there is no risk.
It remains the Government's policy that commercial planting of GM crops will not be permitted in the UK until the results of the farm-scale evaluation have been considered. These trials still have two years to run. I regret these developments, but I repeat that there has been no threat to health or the environment. We moved quickly to establish the facts and officials have been in continuous contact with the company.
These events have made it clear that there are gaps in the arrangements relating to seed purity at international level. My right hon. Friend the Minister of State accordingly announced yesterday that we would press for concerted international action to seek new legal standards for seed purity, so that, in particular, the standards take into account the presence of GM material in conventional seed stocks.
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Further, My right hon. Friend the Secretary of State for the Environment, Transport and the Regions has been setting up a system for spot-checking of seed imports for GM material. That system will be in place from 1 June. Work with the industry on a code of practice about production and sowing of conventional seed, including separation distances, and monitoring of GM content continues.
Mr. Tim Yeo: I welcome the Minister's assurances about human health and the environment, now that we know that 13,000 hectares of GM-affected oilseed rape have been commercially planted in Britain in the last two years. Nevertheless, I regret that the Minister did not come to Parliament yesterday to make the statement, instead of sneaking out some of the information by way of a written answer.
People will wonder why it has taken the Labour Government a whole month to publish information given to the Department of the Environment, Transport and the Regions on 17 April. Did the Ministry of Agriculture, Fisheries and Food receive any warning about this before 17 April? Does the Minister recognise that, in the month since 17 April, more of the GM-affected seed may have been planted by farmers who had been storing it?
I welcome the steps that the Minister announced to deal with the grave anxieties about seed purity. These are especially urgent, since the presence of GM-affected crops in Britain came to light only as a result of tests carried out in Germany. What action will the Government now take to monitor the environmental impact of the GM-affected crops being grown commercially? Does the Minister agree that all these crops should now be subject to the same procedures and controls as the current field-scale crop trials? Does he realise that any failure to do that will intensify public pressure for the destruction of those crops?
Will the Minister confirm that the affected seed came from Canada, where cross-contamination of seeds occurred over distances of more than 800 m? Does he agree that this means that distances in Britain by which GM crops are separated from conventional and organic crops must be increased immediately? Will he explain the difference between his unequivocal statement just now that the GM variety is sterile with the Advanta statement yesterday that only "a high proportion" is sterile?
What steps will the Government take to ensure that innocent farmers whose crops may now be worth less because they can no longer be certified as GM-free are properly compensated? Does not the Government's handling, yet again, of the continuing sorry saga of GM crop issues typify Labour's culture of confusion, complacency and cover-up?
Mr. Brown: I completely reject the attack on the Government's handling of the issue, and the attack on the Government's candour. We established the facts and put them in the public domain. The hon. Gentleman asks why we did not seek to make a formal statement yesterday: it was an Opposition day and it is a convention that the Government do not make statements on such occasions. In any event, Madam Speaker, you have said that the use of written answers is a proper way to put information before Parliament. The charge that the Government have acted with less than candour is one that I completely

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reject. Furthermore, I assure the House that I am more than willing to put in the Library any technical information that Members wish to seek so that everyone can see the advice on the technical points that is available to the Government.
Officials were first informed by the company on 17 April and I am not aware of any earlier information being available to the Department. The hon. Gentleman also asked about testing. As I said in my statement, my right hon. Friend the Secretary of State for the Environment, Transport and the Regions is introducing testing techniques for conventional seeds to test for GM content, and those arrangements will be in place by 1 June.
The hon. Gentleman is on to a good point in inquiring about separation distances, and the regulatory authorities are keeping that matter closely under review. That is also why we are conducting the trials. I am advised by the Government's professional advisers—just as the previous Government were when they were in office—that there is no danger to human health, and I am grateful to the hon. Gentleman for accepting that point. Because of the nature of the GM product, which is present only in small quantities, there is no danger to the environment either.
Ms Joan Walley: I thank my right hon. Friend for making such a frank statement. In view of what he has just said about making technical information available in the Library, will he be more specific so as to clear up some of the confusion that exists about the RT73 strain of Monsanto seed? Is there only a genetic trace for glyphosate herbicide tolerance? If it is possible that the plants are not sterile and could cross-pollinate and spread GM pollution, will he be prepared to trace where the seed has been used and order the crops to be pulled up?
Mr. Brown: The advice that the Government collectively have received is that it is not necessary to trace and destroy the crops. On the question of the sterility of the GM modification, I am happy to put a technical note in the Library, because that will be helpful to the House. In this whole matter, the Government are proceeding on the basis of professional advice provided to my right hon. Friend the Secretary of State for Health on food safety and to my right hon. Friend the Secretary of State for the Environment, Transport and the Regions on the environmental issues.
Mr. David Heath: I welcome the statement and the additional information that will be made available. I accept the Minister's assurances that no harm will be caused to the environment, but considerable harm has been done to the reputation of the Ministry for openness, especially because of the partial nature of the information available yesterday. There was a statement from the Home Office yesterday, so the Minister could have made a statement. Will he accept that the matter has destroyed the credibility of the import controls, such as they are; has made a nonsense of the so-called safe separation distances; and has caused potential economic damage to farmers who have planted non-GM seed in good faith?
Will the Minister confirm that on 18 June 1999, in The Times, Dr. Phil Dale of the John Innes centre in Norwich drew attention to the specific problem of a 1 per cent. contamination of seed from north America?
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Will the Minister account for the dilatory and ineffective way in which the Ministry has treated that information since? Will he accept that it is hard to discern a difference between the way in which Government Departments now work and the way in which they worked when the Conservatives were in charge during the BSE crisis? Will the Minister give an assurance that he will re-examine the safety zones; ensure that the import checks are effective and subject to external audit; and consider compensation for the farmers who have been affected through no fault of their own and may be locked into GM-free contracts that they now cannot complete?
Mr. Brown: The hon. Gentleman is overstating his case. There is no reason why this GM product cannot be used for food purposes, as was agreed under the previous Conservative Government. There is no risk to human health, and no one so far this afternoon has alleged that there is. I am grateful for that, as it does the cause of those opposed to genetic modification in principle no good to exaggerate the problems or to pretend that there are risks where there are none.
Clearly, there is a real problem with seed purity. My right hon. Friend the Secretary of State for the Environment, Transport and the Regions is introducing testing from 1 June for environmental purposes. The aim is to check that field trials are not being affected by inadvertent contamination by commercial seed product. That must be taken forward as a matter of urgency at international level, but it is to do with seed purity, not with environmental contamination or public health.
I completely reject what the hon. Gentleman said about the Ministry of Agriculture, Fisheries and Food. We established the facts and put them in the public domain. In addition, I have given the House an assurance today that the technical information that supports the advice to Ministers will also be placed in the House of Commons Library.
Joan Ruddock: I also thank my right hon. Friend for the statement that he has made today. Given what he said about sterility, and what Advanta has said about the cross-pollination which it believes was the cause of the contamination, may I press him on separation distances? Many hon. Members have supported the experiments being carried out on GM crops but, for useful comparisons to be made, proper separation between GM crops and conventionally grown and organic crops is crucial. Will he allow SCIMAC—the supply chain initiative on modified agricultural crops—to make its annual review in the normal way, and will he and his colleagues in the Department of the Environment, Transport and the Regions instruct it to undertake an immediate review of the matter? Most of us who support the experiments and the precautionary principle are worried about what has happened, and believe that the separation distances must be enlarged.
Mr. Brown: My right hon. Friend the Minister for the Environment, Transport and the Regions, who takes the ministerial lead on these matters, tells me that the re-examination sought by my hon. Friend is already under way in his Department. I think that she is on to a strong point.
Mr. Edward Leigh: Genetically modified crops are grown experimentally on three farms

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in my constituency. Will the Minister acknowledge that the overwhelming majority of rural folk are prepared to adopt a moderate and sensible attitude with regard to this matter? They realise that agriculture is under pressure and they are prepared to have GM crops grown experimentally in their localities. However, I hope that the Minister will accept that there must be no more cock-ups such as the one that has attracted so much bad publicity over the past 24 hours. Otherwise, there will be a real danger that his allies in public opinion will start turning against him and that sensible people in rural areas—not of the rent-a-mob variety—will start getting increasingly worried.
Will the Minister take this opportunity to reassure the public on matters such as cross-pollination, sterility, separation distances and so on? Will he also acknowledge that there is a rather casual attitude towards GM crops in north America? Will he reassure his friends in rural areas that he is taking the matter very seriously?
Mr. Brown: I take very seriously the issues of seed purity, protection of the public, and protection of the environment. That approach is the one adopted right across Government. The hon. Gentleman is right that what happened should not have happened: the question for the Government is what to do about it. I believe that the response that I have announced today, and that was announced yesterday in my right hon. Friend's written answer, is the right one. It will provide reassurance to farmers, just as it provides more general reassurance to the public.
Mr. David Drew: I welcome the statement made by my right hon. Friend, but the incident is clearly disappointing. The Government need take no lessons from the official Opposition, whose only contribution to the debate was to license GM foods in the first place.
The third report from the Select Committee on Agriculture examined the question of the segregation of GM crops, and determined that that segregation was very difficult to achieve. Given the comments from the hon. Member for Gainsborough (Mr. Leigh), should we not tell the north Americans that, until and unless they sign up to the Montreal bio-safety protocol, we will have to consider our own actions in relation to GM crops? That would mirror the unilateral action that they have taken in continuing to evaluate the risk analysis on BSE.
Mr. Brown: I understand that we either have agreement on the protocol or are close to it. My hon. Friend is on to the right point. The United Kingdom Government have taken the lead in trying to get the international agreements on seed purity that are at the heart of this issue. The work of the Agriculture Committee is a useful contribution to those discussions.
Mr. Paul Keetch: Is the Minister aware that Herefordshire reportedly has more organic farms per hectare than any other county in England, and that many organic farmers are concerned that they will lose their business if they lose Soil Association accreditation if they are infected by genetically modified crops? Is the right hon. Gentleman further aware that on 27 March the Minister for the Environment told me in a written answer that there were no GM farms in Herefordshire? However,
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in another written answer on 15 May, the right hon. Gentleman told me that there was one GM site in Herefordshire, at Preston Wynne, and that the Department of the Environment, Transport and the Regions had only discovered that fact on 26 April.
Can the Minister assure me that there are no other GM sites in Herefordshire? Can he tell me what compensation organic farmers will receive from the Government if they lose Soil Association accreditation? Can he assure me that the Ministry of Agriculture, Fisheries and Food will hold a public meeting in Herefordshire? It has held such meetings in Worcestershire, Warwickshire and other parts of the midlands, but has so far refused to hold one in Herefordshire.
Mr. Brown: Essentially, the question is for the Department of the Environment, Transport and the Regions rather than for me, because it is about accreditation and separation distances. However, all the issues are under review, and no one would want to do anything to damage the prospects for organic farmers. The Government are putting more money into supporting conversion to organic farming. The organic farm movement has won an important place in the retail marketplace. I want to sustain that, not see it undermined.
Mr. Alan Simpson: I congratulate the Minister on the work that the Ministry of Agriculture, Fisheries and Food has done in promoting organic farming. Will he come back to the House with a statement giving specific details of liability and compensation that relate to GM crop contamination?
Farmers across the country will be discovering that they have inadvertently fallen for the wiles of the food biotech industry. These GM gigolos have been touring the country, and farmers are waking up to the fact that the industry has rogered their fields and run off in the morning without accepting any responsibility for the contamination that follows.
At a time when consumers and supermarkets are queueing up to demand GM-free products, does my right hon. Friend accept that there are widespread implications for farm incomes if farmers can no longer offer that guarantee? Will he consider the arguments in favour not of a Child Support Agency but of a Farm Support Agency that will pursue the seed corporations which have demanded patents and royalties, and remind them that they will have to accept long-term, lifetime responsibility for GM paternity, and environmental responsibility?
Mr. Brown: I hope that my hon. Friend will take it from me that the advice to the Government is that there is no risk to human health in what has happened, and no risk to the environment. Environmental liability is currently under examination in the Department of the Environment, Transport and the Regions, with a view to a future parliamentary debate.
Mr. Simon Thomas: The Minister will know that Wales has declared itself a GM-free zone, and many people in Wales will be very disappointed at the recent incident. May I ask him—I accept his assurances about public health—whether 1 per cent. contamination would in itself make these crops non-GM-free? There is also a very real threat to organic farming arising from these incidents, as has already been mentioned.

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Whether by default or design, the Government seem to have engineered a number of crises of confidence around their GM policies. Will the Minister accept from me that farmers in Wales and Ceredigion want to produce food, whether organic or conventional, that people trust. Incidents such as this do not help. Will the right hon. Gentleman review the procedures and look in particular at the North American Free Trade Area, where it seems that the gene identification process is totally inadequate to stop these things happening?
Mr. Brown: My Department and the Department of the Environment, Transport and the Regions are focusing on the important issue of conventional seed purity. As I have said, my right hon. Friend the Secretary of State for the Environment, Transport and the Regions is introducing random checks from 1 June. There is no reason why the particular strain should endanger organic farm production, for example, because of the nature of the product.
Mr. Alan W. Williams: Can we be certain about the cause of the contamination? Was it a case of inadvertent mixing of GM and non-GM seeds, or was it pollination from a distance of 800 m? If it was such pollination, there are serious questions about what are safe distances. There is a fundamental biological question. If the cause of the contamination was pollination, how could a sterile crop pollinate at 800 m?
Mr. Brown: The issue is slightly more complex than that. We believe that it is pollination in Canada, but three-way pollination. In other words, it is not a question of the product that is present here and sterile having been shown not really to be sterile. I shall put a technical note in the Library that sets out the production process and how three-way cross-pollination occurred in Canada.
Mr. Desmond Swayne: The Minister, who is a former Government Chief Whip, has not been reading his Whip. Yesterday was not an Opposition day. The Opposition day was on Tuesday. Notwithstanding that, we had a statement. Does the right hon. Gentleman agree that while it is a matter of relief that the seeds in this instance will be sterile and do not in his estimate provide a threat to public health, he must give a reassurance on the issue that such a thing could happen? That is the real question.
Mr. Brown: On the hon. Gentleman's second point, that is why we are examining the important question of seed purity. On his first point, he is absolutely right.
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I read an earlier version of the Whip and I was wrong in what I said to the House. The hon. Gentleman has won one, but I do not resile from the underpinning point, which is that putting the facts into the public domain is the right thing for Ministers to do. The use of a written answer to do that, and putting additional information into the public domain, should be a perfectly acceptable way forward.
Ms Julia Drown: My constituents will be pleased to hear the Government's assurances that the contamination poses no threat to human health or to the environment. However, it raises real concerns for consumers who want to exercise their choice to avoid GM technology. It seriously undermines confidence in the companies that have been responsible for the contamination. What steps will my right hon. Friend take to talk to the companies and ensure that they take consumer choice seriously, so that our constituents can have assurances that if they want to avoid GM technology, they can?
Mr. Brown: I agree with what my hon. Friend says. The Food Standards Agency is pressing ahead with a labelling regime to ensure that consumers can exercise their choice. Discussions with the company have been going on at official level between my Department and others on an almost daily basis. My right hon. Friend the Minister of State will be seeing representatives of the company very soon.

BILLS PRESENTED
  POLICE
  Mr. Mackinlay presented a Bill to make provision to regulate the use of the term 'police' and related terms; to amend the law relating to the powers of certain constables; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 9 June, and to be printed [Bill 128].
  PARDON FOR SOLDIERS OF THE GREAT WAR
  Mr. Mackinlay, supported by Mr. Syd Rapson, Mr. Lindsay Hoyle, Dr. Norman A. Godman, Mr. Phil Sawford, Mr. Tony Benn, Mr. Kelvin Hopkins, Mr. Dennis Skinner, Mr. Ronnie Campbell, Mr. John Cryer and Mrs. Llin Golding presented a Bill to provide for the granting of pardons to soldiers of the British Empire Forces executed during the Great War of 1914 to 1919 following conviction for offences of cowardice, desertion or attempted desertion, disobedience, quitting post, violence, sleeping at post, throwing away arms or striking a superior officer; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 9 June, and to be printed [Bill 129].
Orders of the Day

  Care Standards Bill [Lords]
  Order for Second Reading read.
  Mr. Deputy Speaker (Mr. Michael Lord): Before we begin the debate on the Bill, I advise the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition. There will be a 15-minute limit on all Back-Bench speeches.
  1.44 pm
  The Secretary of State for Health (Mr. Alan Milburn): I beg to move, That the Bill be now read a Second time.
  Nearly 2 million people in our country rely on social services—more than a million older people, 400.000 children and 300,000 disabled people. They—above all other citizens in our society—have a right to expect that care is available for them when they need it and that, wherever that care is provided, it is of the highest possible standard. That is as true for social care services as for health care services. For too long, social care has been the poor relation. It is time to change that; this Bill does just that.
  Changes in society, growing public expectations, an ageing population and shifts in family structures make social care ever more central to the Government's ambition of a fair and decent society. Social services enhance the quality of life for some of the most vulnerable people in our society. Our task is to modernise those services so that they can provide our country with the best possible care.
  Dedicated and caring staff try to do just that. Thanks to their efforts, standards of care are often good, but sometimes—too often—they are not. Countless reports and inquiries have highlighted the weaknesses and failings of the safeguards that are supposed to protect vulnerable people, especially children. The most recent and devastating example is the Waterhouse report, presented to the House by my right hon. Friend the Secretary of State for Wales a few weeks ago.
  At the heart of the Bill lies the concern to drive up standards of care, not only for the almost 2 million people who rely on social services, but for the 900,000 children reliant on early years services and for the 800,000 patients using private hospital services. In this day and age, the public should know that those who provide crucial services are competent and well trained, that clear quality standards will be set and enforced and that those most in need of protection are properly safeguarded. The Bill will enable us to make real progress on each of those matters. It is based on the philosophy that what counts in service provision is the quality of care that the public receive.
  The Government have already set up a major programme of reform to raise standards in both health and education. The Bill applies that same approach to those other vital services for the public. The fundamental reforms that it sets in place are long overdue. The regulatory system that we inherited was a mess. It failed to provide adequate protection from abuse; it was characterised by a lack of consistency, independence and coverage.
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  First, there were no national standards and no consistency of approach. The regulatory system was fragmented, with 250 separate local inspection or registration bodies, all operating according to their own rules. That helped to produce a lottery in care. The new system will mean less rather than more bureaucracy.
  Secondly, the essential ingredient for successful regulation—independence—was severely compromised under the old arrangements. Local authorities inspected independent care homes at the same time as purchasing most of their services. Worse still, council-run care homes were exempt from statutory regulation and subject to inspection only by their own staff. Such a system could never guarantee residents either the peace of mind or the quality of care that they deserve.
  Thirdly, some services—most notably, home care services for elderly and disabled people—were subject to no regulation whatever, with all the potential for abuse that that allowed. Where there was regulation, it was often ineffective, because, more often than not, it was inappropriate, especially in the way that high-tech private hospitals were regulated as though they were low-tech nursing homes.
  Fourthly, there was no professional regulatory body dedicated to overseeing standards and practice in the social care sector. There was no organisation, such as those in other fields, to take a lead on driving up training and standards of care throughout the work force. Despite the overwhelming consensus on the need for such a body, the previous Government set their face against it; they refused to listen and refused to act.
  In my view and that of many other people, those were shameful failings in the previous system of regulation. The record of the previous Government was one of neglect and complacency. They were so mesmerised by the market that they became careless over standards.
  I should have expected the Opposition to have learned their lesson—not least because of the all-too-glaring failings in the regulatory system. Their amendment shows that, sadly, they have not. They remain as blinkered as ever. When asked to choose between safeguarding the public or protecting the providers, they made the wrong choice. They are reinventing their history and not learning from it. Theirs is a record that this Government are determined to put right.
  Alongside the other measures that we have already introduced—the new flexibilities for health and social care to work together, the best value programme to drive up standards and the quality protects programme to protect the most vulnerable children in the care system—this Bill will put in place new arrangements for ensuring excellence in vital care services. For no one are these guarantees more needed than for elderly people. Older people are entitled to be treated with dignity and respect wherever they use health or social care services.
  I take very seriously the criticisms that have been made of the current system of care. Age discrimination has no part in a modern care system. That is why—alongside the measures that we have already introduced to raise standards in the national health service through the Health Act 1999 and the measures contained in this Bill to raise standards in other care services—later this year, we will publish our national service framework, which will set new tough enforceable standards for the treatment and

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  care of older people wherever it takes place. I expect all parts of the care system to rise to the challenge of meeting these standards of care not just sometimes but always.
  These twin pieces of legislation—the Health Act 1999 and this Bill—will revolutionise the standards of care provided for older people and for others who use the care system. Our ambition is this: whatever health or social care service people receive wherever they receive it—and whether it is public or private—they should be assured that the care will be safe, will meet proper quality standards and will be delivered by skilled and competent staff.
  Mr. Desmond Swayne: Will the Secretary of State acknowledge that the draft standards that have been issued for care homes have not been reassuring? They have filled care home providers with horror at the thought of the burden of regulation that may fall on them, and they are the only examples that the providers have seen. Will he acknowledge that it will do little for elderly people if their providers are driven out of business?
  Mr. Milburn: Good providers have absolutely nothing to fear from the standards that we set out in "Fit for the Future?". As he knows, there has been detailed consultation. We received well over 1,000 responses, and we shall respond to them in due course. As the Minister of State, Department of Health, my hon. Friend the Member for Barrow and Furness (Mr. Hutton) has said to the independent care home sector, we shall be sensitive about the way in which we phase in the changes to ensure that the standards can be met. However, the hon. Gentleman would expect, as I would, the highest possible standards of care for our elderly relatives. There should be no compromise on standards of care. However, he and those on the Opposition Front Bench are making the same mistake that they made for 18 years—they are more worried about the providers than the users. It is the users of services who count.
  Mr. Paul Burstow: On the point about demanding higher care standards, will the Secretary of State tell us when the care assistants who work in care homes and in domiciliary services will come under the registration scheme for the General Social Care Council? Until they do, the policing of the standards will not be absolute and will therefore not give confidence to many people.
  Mr. Milburn: The hon. Gentleman asks a good question. I shall discuss the General Social Care Council shortly, but he knows that there has been no such system of registration in the past. We shall have to phase in the scheme for a very simple reason. Some 80 per cent. of the staff who provide social care services have precisely no qualifications whatever. That is appalling. There is an enormous training deficit and a skills deficit that will have to be tackled if we are to ratchet up the standards of care in the way that we want. We will begin the registration process with those—the social workers—who have recognised qualifications, but we want to move as quickly as we can to register others who are professionals in their own right, but who have not had the training input that they require.
  We shall do that as soon as we can, but that depends on our being able to implement our training strategy for social services. We have the right approach, we are
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  making the right investment and we have the means to register staff in a way that they should have long since been registered.
  Mr. Geraint Davies: Does my right hon. Friend agree that the new initiative offers the private sector new opportunities to provide a range of services for elderly people, particularly for short-term rehabilitative care, as well as to carry out the traditional role that it has now established? There is a growth in demand for such services and in places such as Croydon where there is a lot of provision, the private sector will welcome the opportunity to provide a range of service and the fresh demands and higher standards that that opportunity will bring.
  Mr. Milburn: My hon. Friend is absolutely right. As he knows, one of the biggest problems in the health care system is that, all too often, the wrong patient is in the wrong place at the wrong time. Twenty per cent. of acute beds in hospitals are often inappropriately occupied by older people who want nothing more than to get out of hospital. Frankly, who can blame them for that? They want to be back on their own two feet and live an independent life, as we all do. However, the lack of active rehabilitation services stands in their way.
  We are committed to building up those services. Indeed, when I recently allocated £600 million of additional revenue to the national health service, I said that one of its priorities was to work with NHS providers, and, when it makes sense, with private sector providers to build up intermediate care services. There is a challenge for the private sector, which is to prove that the services that it might offer the NHS and its patients are good value for money, do not create perverse incentives and, most importantly, offer patients the highest standards of care. The Bill covers precisely that and aims to enshrine quality in all parts of the care system.
  Mr. David Hinchliffe: On the possibility of using private care homes and private nursing homes, I am concerned that the majority are simply not geared up to the process described by my right hon. Friend. However, whether they will be in future is a different matter.
  Will my right hon. Friend reflect on comments made by Dr. Chai Patel of Westminster Health Care on "The World at One" on, I believe, the May day bank holiday? Responding to concern expressed by one or two people, including me, that private care home staff were not trained to do the job, Dr. Patel said that that was wrong and that the majority of those staff were NHS-trained. If my right hon. Friend intends to push people into the private sector, who will staff it? Given what the private sector itself is saying, it appears that the staff will come from the NHS.
  Mr. Milburn: My hon. Friend makes an important point which relates to what I said about the challenge that the private sector must prove that it can meet. It must offer good value for money and high standards of care, and—if services are going to be located there—must prove that no perverse incentives are created.
  I shall attempt to reassure my hon. Friend by saying that he is quite right to state, as he has done before, that all too often nursing homes and residential care homes

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  encourage a form of dependency. Many older people require that, so I cannot say that it is either right or wrong. If people have an acute condition and require active management, it is right and proper that they should be located in such homes. However, there should be choice in the care system. The incentives in the system often result in people being placed in care homes when they could be in their own homes. We must get that right.
  The nursing home sector must re-attune its services if it is to provide a range of intermediate care services that encourage independence, not dependency, and enable people to stand on their own two feet. I ask my hon. Friend not to close his mind to that possibility as we must ensure that, whenever care is provided, it is appropriate and of the highest standard. Right now, we do not have the range of rehabilitation services that we need in the NHS.
  Mr. Andrew Rowe: The Secretary of State is in danger of allowing his interest in the private sector to detract from the reality that many local authority homes have not been inspected to the same standards. Indeed, by his own admission, 80 per cent. of staff in those homes are untrained. Will he give us an estimate of what it will cost local authorities to bring their provision up to the standard that he is seeking to impose?
  Mr. Milburn: Local authorities will have to grapple with that. I do not have such an estimate, and local authorities must prove that they are capable of offering the highest standards of care. What I am not prepared to sanction, whether the care is provided in the private or the public sector, is lower standards of care. Let me state, straightforwardly and with all candour, that if it were an elderly relative of mine, I would want to be assured that the care provided was of the highest possible standard. That must be the right approach. Of course, some care homes in both the private and the public sector will have to grapple with difficult issues, but so be it. If we are to get the right standards of care, that is the right thing to do.
  Dr. Jenny Tonge: Does the right hon. Gentleman think that it would be better to give health authorities more money to prevent the closure of smaller hospitals—I have in mind the old cottage hospitals—and so enable the health authorities to commission low-tech rehabilitation care within their own area, without having to resort to the private sector?
  Mr. Milburn: Of course—if they can do that, there is no reason why they should not do it. When, in the Budget, we pumped into the NHS an extra £600 million of resources, we told health authorities and primary care groups that one of the stipulations—other than using the money to get waiting lists down and pay for new drugs and treatments—was that they had to build up intermediate care services. They have to decide where such services are best located, although I perceive a potential future for cottage hospitals in that respect.
  However, rather like the nursing homes mentioned by my hon. Friend the Member for Wakefield (Mr. Hinchliffe), cottage hospitals have to prove that they are capable of fulfilling the function. No institution has a God-given right to provide any sort of service—that right has to be earned. It must be proved to the public that the
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  right sort of service is being provided to the right standard. Of course there is huge potential for community and cottage hospitals to provide services, but they will probably have to retune the functions they carry out and change the nature of the work force they employ, so as to be able to provide a level of service that is markedly different from anything found in the NHS today.
  Mr. John Cryer: I agree with my right hon. Friend's comments about regulation and I regard the Bill as a welcome measure. However, my local authority is attempting to use the new standards as a reason to close care homes in my constituency and the local borough, and that strikes me as a rather dubious rationale. Will he give some idea of the timetable for the introduction of the new standards, so that local authorities can find investment or other means to adjust to them?
  Mr. Milburn: I, too, think that my hon. Friend's local authority has adopted a rather disingenuous position—after all, the standards are draft standards. People sometimes think that the Government do not undertake genuine consultation, but this happens to be one of occasions on which it was. We received a huge number of responses and we have to reflect on them, so that, when we introduce the new standards, they are enforceable. In addition, their introduction must be phased in such a way as to enable those who want to change their services to ratchet up standards to do so.
  The Minister of State, my hon. Friend the Member for Barrow and Furness, has been dealing with the matter, but I can tell the House that we shall start to introduce the new standards when the National Care Standards Commission comes into being, in approximately two years' time. The process will be phased, so that care homes in the public or private sector that want to change to meet the tougher national standards will be able to do so.
  The Bill establishes two new powerful regulatory bodies: first, the General Social Care Council, to regulate individuals providing social services; and, secondly and most important, the National Care Standards Commission, to regulate the organisations providing care services. The commission will be an independent national body overseeing the regulation of private and voluntary hospitals and clinics, care homes for elderly or disabled people, home care agencies and nurses agencies, children's homes, residential family centres, fostering agencies and adoption agencies. It will also carry out welfare inspections of boarding schools and colleges that accommodate children. As recommended by the royal commission on long-term care chaired by Sir Stewart Sutherland, the National Care Standards Commission will also monitor and report on trends in the provision of long-term care and take a national overview of quality in that sector.
  It might be for the benefit of the House if I dealt in a little more detail with the three major services that the commission will be responsible for regulating.
  Mr. John Bercow: I am grateful to the Secretary of State for giving way so that I may ask a

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  straightforward question: will the regulations flowing from the Bill be subject to the negative or the affirmative procedure?
  Mr. Milburn: That is a good question. We think that it will be the negative procedure, but perhaps I may return to the matter, because I am sure that I shall receive further and perhaps better advice.
  Mr. Philip Hammond: Further to that question, will the Secretary of State confirm that the standards for care homes to be issued by Ministers in the form of a statement will not be subject to any parliamentary scrutiny?
  Mr. Milburn: That is true. It is the Secretary of State's function. We have had a consultation. We are considering carefully what the care home sector and others—those representing residents in care homes—have had to say, and then we shall make our decisions.
  The National Care Standards Commission will be responsible first of all for regulating the full range of social care services. The commission will regulate the 30,000 care homes in this country, accommodating nearly half a million people. That will include, for the first time, care homes run by local authorities, which have until now been exempt. In providing for a national, independent regulation system, as promised in our election manifesto, we will remove the inconsistency and inefficiencies of the current system. Instead of the 250 different authorities responsible for regulating care homes, there will be one national body, providing a much more coherent and consistent service, to the benefit of both care home owners and their residents. For the first time, too, care provided to people in their own homes will be subject to statutory regulation.
  Until now there has never been a regulatory system to ensure that as the care home sector grows, it provides proper standards of care and does not put vulnerable people at risk. I believe that this measure will command widespread support.
  The Bill also breaks new ground by providing that private and voluntary hospitals will, for the first time ever in this country, be subject to a proper, tough and effective system of regulation. Until now, private hospitals have escaped proper scrutiny of their standards, and patients have had precious little redress when things went wrong. That is wrong, and this Bill will put it right.
  People, wherever they receive their health care services, deserve to have the highest standards of care. That is why, following consultation, we will set out new requirements and standards that every private hospital will have to meet. For the first time, there will be a statutory independent complaints system for those using private health facilities. Inspection, and, where necessary, enforcement action will be carried out by expert inspectors dedicated within the commission to regulating health care, including private hospitals and other private health care facilities.
  Concerns were expressed in the other place that private health care would not receive its due attention from the National Care Standards Commission because of the commission's broad range of regulatory responsibilities. That is wrong. Private hospitals will be under the spotlight as never before. They will get more than their fair share of
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  attention from the commission. We will therefore be seeking to remove the amendment made in the other place that would hamstring the National Care Standards Commission's powers over private hospitals. Instead, we will table amendments to enable joint working, where that is appropriate, between the National Care Standards Commission and the Commission for Health Improvement.
  Such joint working is important. As I said earlier, if it is in the interests of the NHS, and to the benefit of NHS patients, to use private health care facilities to carry out NHS treatment, one thing is absolutely essential: that quality of care, expertise of staff and standards of clinical facilities are up to scratch. The Bill will make sure that they are.
  Mr. Paul Flynn: Will the National Care Standards Commission guarantee that the suspected widespread over-prescription in care homes for the elderly of medicinal drugs, particularly neuroleptics, will be placed under proper control, with independent scrutiny from outside homes and from outside those prescribing to the homes?
  Mr. Milburn: I am aware of my hon. Friend's concern about those issues, which he has raised with me on several occasions. The commission will certainly be able to look at some of these areas. In particular, it will need to look—I am sure that the Committee dealing with the Bill will want to explore this in detail—at processes for administering drugs in care homes. That might partially address some of my hon. Friend's broader concerns about neuroleptics.
  I referred earlier to the shocking cases in which children were abused by the very people who were supposed to care for them. The National Care Standards Commission will also have significant responsibilities for safeguarding children. All types of children's homes will be regulated and subjected to rigorous inspections. This, again, will include local authority homes which are currently exempt. It will also include small private children's homes for fewer than four children.
  That loophole in the law has long been considered a scandal, and rightly so. We are determined to fix it at the earliest opportunity, so the Bill includes a provision amending the Children Act 1989 to remove the exemption for small children's homes, which we intend to bring into force as soon as possible after Royal Assent. That will mean that even before the other provisions of the Bill are brought into force, and before the National Care Standards Commission is fully up and running, the existing regulatory system will apply to small children's homes for the first time and for as long as local authorities continue to have regulatory responsibilities.
  Ms Debra Shipley: I thank my right hon. Friend for giving way, and welcome his comments about children. He hinted at a time scale, but can he be more specific? The Protection of Children Bill, which I had the honour to take through the House last year, became an Act last July but is still not operable. That is upsetting to me. I was told at the time that it was likely to be operable this summer. I have received a variety of answers to questions put by me and others in the Chamber, which suggest that the date of implementation is late

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  summer, autumn, early winter, or some time next year perhaps. The issue is serious, and I would value urgent action.
  Mr. Milburn: I pay tribute to my hon. Friend for her work in taking the Protection of Children Bill—now an Act—through the House. I know that it commanded a great deal of support. She will be pleased to know that the Care Standards Bill will establish an equivalent measure applying to people who are unsuitable to work with vulnerable adults.
  I know that my hon. Friend remains concerned about the timetable for the implementation of her own Bill, or Act, as it is now. Discussions are taking place between my Department and other Departments, and we intend to enact it as quickly as we can. I do not have a firm date for her, but I shall write to her as soon as possible and let her know the time scale that we have in mind.
  In recognition of its role in safeguarding children, the National Care Standards Commission will appoint a children's rights director, whose job it will be to ensure that children's rights and welfare are at the heart of all its responsibilities for regulating children's services. The director will fulfil a crucial function by always being available for people to turn to when they have concerns or suspicions about what may be happening in a children's home or other service.
  Mr. Hilton Dawson: Over the past three years, under his predecessor and my right hon. Friend, the Department of Health has set high standards for the participation and involvement of young people in care in policy making and in monitoring services. Can my right hon. Friend assure me that that will continue under the new system?
  Mr. Milburn: Yes, of course. The most important contrast that my hon. Friend could have drawn is the difference between the present regime and the previous one. So many of the scandals that are only now coming to light and being properly scrutinised occurred when the regulatory system in force was inherently and structurally flawed.
  The measures that we are introducing are long overdue. By and large, they are not matters of party political contention, so the issue for the Opposition is why, if they had 18 years in government to start taking action, they did not get on and do it. It is easy to sit on the Opposition Benches and say that everything is fine and the Government's proposals are fantastic. It is a damn sight harder to find the legislative time and to commit the resources to make the change, which is what the Government are doing. I pay tribute to my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) for his work to enhance safeguards for children.
  As my right hon. Friend the Secretary of State for Wales announced recently, there will be a parallel post in Wales: the children's commissioner. We will amend the Bill to effect that.
  I know that there are many in the country and in the House who would call for the commissioner to have a remit for all children, not just those in children's homes or receiving other care services. The provisions in the Bill
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  for a children's rights director in England, and a children's commissioner in Wales, will set up powerful new posts whose holders will champion the interests of children who are most in need of someone to speak up for them. It is those children who most need a voice, and for that reason I believe that, for the purposes of the Bill, those provisions are the right ones.
  Mr. Geraint Davies: Will my right hon. Friend give way?
  Mr. Milburn: I have given way once already, but very well.
  Mr. Davies: I thank my right hon. Friend for graciously giving way. First, can he give an assurance that inspections of children's homes and homes for the elderly will be carried out without warning, so that preparations cannot be made for imminent inspections? Secondly, can assure us that funding to the private, voluntary and public sectors for the implementation of the provisions will be even-handed, and that extra incentives will not be given to local authorities to push everything towards the private sector?
  Mr. Milburn: I can give my hon. Friend both assurances. There will be at least one unannounced inspection a year. That is right, so that residents of care homes can be assured that the standards of care that they receive have been properly, independently accredited. On the second issue, I can give him the assurance that he seeks.
  There is a more general point to make. Sometimes we hear—I suspect that we are about to hear quite a lot in a moment—about the regulatory burdens and the cost of regulation that the measures impose on the care home sector. It is worth reminding the House that the current cost of the fees for regulation amounts to 88p per care home bed. It costs £46 a year. It is also worth reminding the House that the average income stream for one of those beds is £13,500 a year. The cost of regulation amounts to 0.3 per cent. of income. That is a pretty small price to pay to assure vulnerable people that the care that they receive is of the highest quality.
  I turn finally to the Government's proposals for the regulation of child care, which are dealt with in part V.
  Dr. Peter Brand: With reference to the children's commissioner for Wales and the corresponding post for England, is that a difference of terminology only, or will the remit of the commissioner in Wales extend beyond children in residential establishments? There is danger not only for children who are known about in residential establishments, but for those out in the community who need help.
  Mr. Milburn: In the context of the Bill, the differences are largely differences of job title, rather than of function. There is one slight difference, with which I shall deal in a moment. We propose to give some early years regulatory functions to Ofsted, which in Wales will be the responsibility of the commission. However, I understand that the Welsh Assembly has a broader proposal on which it wishes to legislate at some point. That is a matter for the Welsh Assembly, not for me or the House.

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  On the regulation of child care, our intention is to transfer responsibility for regulation from local authorities to a new, distinct arm of Ofsted—the early years directorate. We will also introduce greater quality into the regulatory system through the introduction of more consistent standards for providers.
  Bringing together the regulatory systems for child care and nursery education will not only help create greater coherence and integration, but lead to improvements in the quality of early years services. Establishing national standards for Ofsted to operate will ensure that child safety will no longer be a matter of geography, but consistent across the entire country.
  The Bill—it is the first legislation to do this—allows new duties to be placed on those involved in looking after children aged between eight and 14, or 16 in the case of disabled children. Providers will be required to demonstrate that they and their employees are suitable to look after children. Those measures will radically reform the regulation of child care. This is a crucial step towards the creation of a level playing field between public, private and voluntary providers. Parents will have more peace of mind in the knowledge that their children are being cared for properly, wherever they are cared for.
  Mr. Julian Brazier: Will the Secretary of State give way?
  Mr. Milburn: I have given way a number of times, and I want to finish my speech.
  I want to mention one further aspect of care services that the Bill will include. In Committee, we shall table an amendment allowing the Government to issue statutory guidance under section 7 of the Local Authority Social Services Act 1970, relating to discretionary charges for home care. In future, local authorities will be required to set their charges in accordance with the new guidelines. At present, we do not have powers to issue such guidance.
  If home care is to play its full part in helping people to lead independent lives, charging policies that are manifestly unfair and deter people from taking advantage of access to care need to be tackled. Our proposal for a new power should enable us to do just that. We shall consult later on the content of the guidance.
  The care services covered by the Bill provide a lifeline for millions of people. They support and strengthen families, give children the start in life that they need, empower disabled people to live, work and enjoy life to the full, and support dignity and independence in old age. The Bill will help to ensure that those services live up to the ambitions that I have identified. It will provide modern, reliable arrangements to protect the welfare of vulnerable people. It will establish rigorous and coherent regulatory arrangements which, as well as safeguarding people against abuse, will promote high standards. It will introduce effective quality checks for private health care—this is the first time that that has happened—and it will revitalise the social care work force, and give it the recognition that it deserves.
  The Bill will benefit staff. It will benefit those who run care services. Most important, it will benefit the millions who depend on those services. It is a radical measure, and it will promote radical change. I commend it to the House.
  2.22 pm
  Dr. Liam Fox: I beg to move,
  That this House, whilst supporting the principles of improved quality of delivery of social care, and in particular greater protection to the most vulnerable, declines to give a Second Reading to the Care Standards Bill [Lords] because its approach is unnecessarily bureaucratic and intrusive, it fails to extend proper regulatory protection to all patients in acute hospitals, it makes insufficient progress towards improving adoption procedures, it will impose substantial additional cost burdens on social care providers at a time when the quality of care provision is being eroded by inadequate funding, without putting in place mechanisms to balance the obligations of higher quality with a guarantee of proper levels of payment, and it depends excessively on regulations which renders proper scrutiny of the Bill impossible.
  I am in the same position as the Secretary of State in the last debate: owing to prior engagements, I cannot be present for the winding-up speeches. I have already informed the Secretary of State and Madam Speaker of that, and I hope the House will forgive me for any perceived discourtesy.
  We support much in the Bill, although we have reservations about some measures, frankly cannot support others, and believe that some need to be taken further. However, it was disappointing that the Secretary of State constantly differentiated between providers and users. We should be concerned with overall provision, and the making of such a sterile differentiation shows how difficult the Government find it to stop being suspicious of any form of independent provision. Without providers, there is no service to regulate.
  Let me begin by identifying the parts of the Bill that we support. One important issue is that of high standards in nursing and residential homes. The Secretary of State is right to say that quality should be our watchword in health and social care. I doubt that a single Member would disagree with that. The elderly deserve security, dignity and a quality of care that is appropriate to their clinical needs. That will be an issue when the Government present their programme of intermediate care, as they have said they will do later in the year. Care must be tailored to individual needs; it must not be for the convenience of hospital managers, especially bed managers or those who wish to avoid unpleasant headlines in the run-up to an election.
  Although we support the proposal in principle, we shall all have to pay close attention in order to ensure that it applies to the appropriate patients, with appropriate selection. In terms of quality—I hope that the Secretary of State will pay particular attention to this—many of the places where intermediate care will be given are managed largely, in terms of medical care, by general practitioners who do not have full access to the range of medical services that would be available in the hospitals from which patients will be discharged. I hope that we will ensure that patients do not move to areas where they cannot have access to the full range of medical support, and other support that they need.
  I welcome measures to protect vulnerable adults from abuse, in the way in which children are protected. Many Members on both sides of the House, including my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) and the Under-Secretary of State for Education and Employment, the hon. Member for Barking (Ms Hodge), argued that such measures should be included in the Protection of Children Act 1999.

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  Perhaps the Minister who will be winding-up the debate, the hon. Member for Barrow and Furness (Mr. Hutton), will have had more time to consider than the Secretary of State had following an intervention, and will be able to give us some idea of when the Bill will be brought into effect. There is no point in putting legislation on the statute book if we do not bring it into effect to protect those whom it is intended to protect.
  Anyone who has worked with vulnerable adults will know how important it is for those who, for one reason or another, cannot stand up for themselves to be given adequate protection in law. We therefore welcome the proposals. I shall deal with the concept of a children's commissioner later, but I deal now with the parts of the Bill that we support with reservations.
  I welcome a more uniform approach to public and private sector providers in nursing and residential care. We strongly welcome clause 91, which makes new arrangements for the regulation of nursing agencies by removing their exemption from the Employment Agencies Act 1973 and repealing the Nurses Agencies Act 1957. It will bring nursing agencies into line with other employment agencies that supply health care professionals, such as locum doctors, dentists and those in professions allied to medicine in the national health service.
  The measure removes an illegal loophole, and we welcome it. However, we have reservations about the logic of the position in relation to acute care; I shall return to that shortly.
  The acknowledgement of the need to provide safe and effective delivery of private health care is also a welcome development, but an effective, relevant and resourced body must do that. Their Lordships wanted the Commission for Health Improvement to perform the task. The Government's intention, which the Secretary of State says they will seek to reimpose in Committee, is that the National Care Standards Commission alone should perform it. I think that in Committee the Minister will have to make a better case for reversing the change than the Secretary of State made today. We need to know more about the Government's intentions, and about precisely how the partnership that the Secretary of State mentioned will work. The delivery of the Government's plans will depend on the vehicles that they choose.
  There are three other causes for concern. The first relates to Wales and was raised by the hon. Member for Isle of Wight (Dr. Brand). Ministers can give as many assurances as they like about implementation and regulation under the Bill in relation to England, but they cannot possibly give binding assurances on behalf of the Welsh Executive; nor can the House hold them to account, as a result of the devolution legislation. That allows the potential for unevenness, even discrimination, in provision.
  Secondly, what does all this tell us about the Government's attitude to local government? Obviously, as the Bill was designed before the Government's poor showing in the local elections, it was designed for the general rather than the specific. The removal of the right of inspection, and the combination of best value and the Bill are likely to remove huge sections of local authority places in residential and nursing care. I wonder whether that was the Government's intention.
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  Thirdly, I was staggered by the Secretary of State's inability to give us even an estimate of how much it would cost local government to bring current provision up to the standards that the Government wanted to obtain throughout the United Kingdom. That does not bode well for the relationship between central and local government. Will the Minister give us a better estimate?
  While we are on the issue of money, may I ask who will pay for all this? Will the money come out of the current local authority settlement, or will the Government make more money available? Neither the Bill nor the Secretary of State have much to say about that.
  I deal now with the provisions that we find difficult to support. We cannot support the uncertainty over the Government's regulatory intentions or the heavy-handed imposition of minimum standards in a way that does not optimise the quality of the care delivered. The lack of a firm timetable is completely unacceptable; it has blighted the sector and resulted in capital starvation because lenders to the sector are uncertain. I warn Ministers that the result of that ham-fisted approach to the problem could be the closure of many independent care homes and a huge loss of overall capacity in the system. The consequences would be not only a human tragedy, with the care of frail, elderly patients disrupted, but an increased burden on local authorities, which carry the statutory burden of care. They may face simultaneous disruption and loss of their own capacity.
  Mr. Hinchliffe: The hon. Gentleman paints a bleak picture of the wholesale closure of care homes and private nursing homes. Will he consider the fact that the private sector says that it has 25,000 empty beds? Does he accept that the previous Government used a £10 billion public investment programme and changes in income support and supplementary benefit hugely to expand a sector that most people do not want to use? People want to retain their independence in their own homes, as my right hon. Friend the Secretary of State said.
  Dr. Fox: Would that things were as simple as the hon. Gentleman suggests. Not only total capacity but its geographical distribution are important. The provisions, if implemented as the Government intend, could result in a loss of private sector capacity and reduced local authority provision in some areas. That would create major problems for the patients involved. We must not deal with that matter lightheartedly or in the hon. Gentleman's typically party political way.
  Mr. Bercow: Does my hon. Friend accept that I asked the Secretary of State about the regulatory procedure precisely because, whatever the intrinsic merits or demerits of particular regulations, they should not be allowed to go through the House on the nod? Does my hon. Friend agree that the regulations should be fully debated in the House, that the sector should be consulted on them and that it should be granted the courtesy of adequate notice of the requirements for their implementation?
  Dr. Fox: As my hon. Friend knows, there is scarcely a word that he utters in the House with which I do not fully agree—he will notice that I chose the word "scarcely".
  The national minimum standards, which are among the most important matters, will be decided by Ministers. They will not be subject to scrutiny in the House. In other

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  words, the potentially most damaging economic changes for a huge number of care providers will not be debated by those who represent them or those in their care. Our general concern is that the Bill is largely an empty box; it is hugely dependent on regulations that have not even been published in draft.
  The Minister of State, Department of Health (Mr. John Hutton): It might help us to make progress if the hon. Gentleman would take another look at the Bill. If he were to read it carefully, he would understand that the national minimum required standards will take effect not on their own but only through the implementation of the regulations. We have made it clear that consultation on the regulations will take place under the procedures normally applied in the House and that the regulations will be developed only after the fullest public consultation.
  Dr. Fox: The standards may be implemented as a result of the regulations, but the decisions will be left entirely to Ministers, which is what we find difficult to swallow.
  Mr. Simon Thomas: Will the hon. Gentleman give way?
  Dr. Fox: No, I will not.
  It is bad enough that proceedings on the Bill began in the other place before consultation was finished, but there is now every chance that it will complete all its parliamentary stages before we know how the regulations will be implemented. That is typical—a contempt for Parliament that is dangerous, and that is destabilising for providers and patients.
  The Secretary of State referred to child minders. I have reservations about the excessively heavy-handed intrusiveness and the bureaucracy involved in allowing inspectors from the Office for Standards in Education to inspect the private homes of all child minders. Before we can accept the Government's proposals, we need to know whether any evidence exists to show that there is a problem in that sector and, if so, what is its magnitude. We simply seek information. Many decent people will feel threatened by the proposals, so we would need to hear a good justification for them before we could agree to them.
  As those proposals are a new distraction for Ofsted, will the Minister tell us what new funds will be made available to it for that function? What staff increases will be required? What discussions has he has had with the Secretary of State for Education and Employment on that matter?
  Caroline Flint rose—
  Mr. Dawson rose—
  Dr. Fox: I give way to the hon. Lady.
  Caroline Flint: Is the hon. Gentleman aware that, under the current system of registering child minders, a visit to the home is an important part of the inspection process? The Government have listened and included the best of the current process in the new one.
  Dr. Fox: If the Government can tell us why Ofsted is a better choice than the local authority, we shall be willing
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  to listen to their arguments. If they can also tell us why it is entirely legitimate to be able to seize computer records and so on, we shall listen. I want to ensure that there is a good justification for such powers and the changes that the Government propose before they are introduced.
  I turn now to the proposals that we support but would like to take further. The Secretary of State did not mention adoption; there are too few measures in this connection and the proposals should be extended. We should like several principles to be included in any adoption measures. A national register for those who wish to adopt children should be drawn up according to objective criteria so that those who meet the criteria can adopt children from any part of country. We should not have the petty bureaucratic restrictions that are, sadly, put in place by too many local authorities, with far too much emphasis being placed on their own political bigotry and political correctness and too little on what decent people can offer children in the adoption process.
  An adoption plan should be drawn up for all children in care so that the best and most specific type of prospective adoptive or foster parents can be found. All children in care should be allowed by law to have contact with outside groups—whether charities, Churches or families—to give them a full range of cultural experiences, not only those offered by social services.
  Mr. Steve McCabe rose—
  Mr. Hinchliffe rose—
  Dr. Fox: I will not give way on that point.
  The hon. Member for Isle of Wight anticipated a point that I want to make. We should go further than the Government and consider establishing a children's commissioner for England, if the post is confined to certain criteria. The commissioner must be independent and not answerable to the Secretary of State, although an annual report to Parliament could be made. There should be oversight of the statutory provision of services to children and the effectiveness of legislative safeguards and regulations relating to education, children's services or health services. However, there should be no remit to take up individual cases or to act as the champion for individuals. The commissioner should be mandated to identify weaknesses in policy or delivery. There should be no remit to interfere in the relationship of children with non-statutory providers, especially their parents.
  There should be such a commissioner solely for children because children do not have a voice through the ballot box and cannot enact change for themselves. Those in care and those whose parents do not care do not even have a natural adult sponsor. There are differences in the regimes that might be suggested for England and for Wales. I believe that we have to give children in England the same protection as children elsewhere receive.
  The Government are committed to providing a children's rights director only for looked-after children. We believe that the provision should go further. Almost all children's charities and professionals support the idea of a children's commissioner. The model that I suggest would allow protection and advocacy without interfering in the rights of parents.
  Mr. Brazier: All the independent bodies—including, most recently, the Prince's Trust—support allowing

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  mentors to have access to people, yet the Bill provides for one set of professionals to check up on another set of professionals.
  Dr. Fox: My hon. Friend makes not only an important point but the best attempt by an hon. Member to get on to the Committee that will consider the Bill. I congratulate my hon. Friend on his successful attempt to gain a place on that Committee.
  Mr. Hinchliffe: Will the hon. Gentleman give way?
  Dr. Fox: No, I must make progress.
  I want to consider equal regulation for all acute health care, in both the national health service and the private sector. We need to move from a managed to a regulated service in our general health care system. It is not possible—and even less desirable—to try to micro-manage a system in the NHS, which employs 1 million people. We need a single regulatory body, which operates in the interests of patients and not providers, for the acute health care sector.
  The Government have accepted the logic of unified inspection for care homes. Why do they not accept it for the whole acute sector? Why cannot a single body guarantee the same standards for patients, irrespective of whether they are treated in the private sector or by the NHS? We should legislate for the benefit of patients and our fellow citizens; we should not take account of whether different providers are involved.
  The Government have increasingly used the private sector to reduce NHS waiting lists. It is unacceptable to have one regulatory body for one sector and a different regulatory body for another when patients are increasingly interchanged between them. Single uniform regulation is logical. The Bill gives us an opportunity to provide for that. If it receives a Second Reading—I imagine it just might—such regulation can be considered in Committee.
  The Bill has much to commend it, but there is also much to be regretted. It provides much more protection for some, but more uncertainty for many. I hope that hon. Members will consider all those points and support the amendment. Good intentions do not make good law; we are in the House of Commons to ensure good law.
  2.43 pm
  Mr. Frank Dobson: I strongly support the Bill. For the first time in 20 years, decisive action is being taken to improve the quality of services for vulnerable people. It is worth bearing in mind that we are considering services for people who are old or ill or infirm or handicapped, or children who have special needs. Our society is supposed to provide care for those groups. We have a special duty of care for vulnerable people because they are least able to look after themselves.
  We must ensure that the approach in the new regulatory framework is based on the question: will the service be good enough for me, my children, parents, relatives or the people whom I love or hold dear? If the answer is no, the service is not good enough. We must start from there. The record for the provision of some of the services has been at best patchy and at worst shameful and deplorable. That
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  is to everyone's shame. I do not blame only the staff. In cases of molestation of children that has gone on for years, everyone has been at fault, including hon. Members on both sides of the House, for failing to take the necessary action.
  For many services, no standards have been set. That is bad for the people who are being cared for and their relatives because they do not know what they are entitled to expect. Sometimes, when relatives have pressed for higher standards in the private sector, the person in care has been threatened with being thrown out on the grounds that the relatives are troublemakers. That cannot be allowed to happen. It is also bad for staff and managers because they do not know what is expected of them. It is hard for people to do a proper job when they do not know what their job is.
  Even when standards have been set, the regulatory and inspection system has clearly been grossly inadequate. Some caring services, such as small children's homes—to which my right hon. Friend the Secretary of State referred—or services for people in their own homes, have been left to inspect themselves. We all know what happens then. Local authorities have been responsible for inspecting themselves.
  After a long series of reports and inquiries into scandalous failures, the previous Government did next to nothing. Almost the only change that took place was that child molesters managed to con the media into referring to them as paedophiles. That was the biggest change in the past decade. We must resolve that. The Government inherited a mess and we need decisive action, which is now being taken.
  The Bill covers a wide range of services, from meals on wheels and home helps to children in care and old people in residential homes or people in day centres. I pay tribute to large numbers of hard-working staff who do their best in difficult circumstances. However, across the board, services are not good enough. The public are entitled to know that the meals on wheels will be okay, that home helps will not steal from, for example, people who are blind, and that residential homes will be safe and staffed by proper professionals. They need to know that there will be high-quality day care for elderly people, that children in care will not be molested but will be educated and that fostering agencies will be above board.
  The proposal for the National Care Standards Commission places regulation of all the services that I have mentioned under one umbrella. That must be right. Standards must be set and the commission must ensure that they are fulfilled. Small children's homes will no longer be left unregulated. Councils will no longer be responsible for inspecting themselves. We shall have an independent, professional watchdog. It has been needed for years. The previous Government, in the face of mounting evidence and reports, did nothing about it. They made no changes. The Bill makes decisive changes, which are likely to lead to substantial improvement in services for vulnerable people.
  The Bill covers the public sector, the voluntary sector and the private, profit-seeking sector. Proper complaints machinery will exist for the first time in the history of most of the services, even those in the public sector. We need to ensure that the complaints machinery does not deal simply with individual complaints. We need to analyse the pattern of complaints and ensure that we can

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  identify systematic problems as they are exposed by the pattern of complaints. We must then make use of that. Any sensible business or public sector organisation wants to do that.
  I commend the proposal for establishment of a register for people who are unsuitable for working with vulnerable adults. I pay tribute to the enormous amount of hard work by my hon. Friend the Member for Stourbridge (Ms Shipley) on the Protection of Children Act 1999. I urge my right hon. Friend the Secretary of State to go back to the Department, to say, "Stuff the lawyers in all the Departments," and to get on with implementing that Bill because children's safety is more important than a lot of nit-picking by Government Department lawyers—a minor aside.
  Mr. Hammond: Given the right hon. Gentleman's intimate knowledge of the evolution of the Bill in the Department of Health, can he tell the House what he expects to be the impact on local authority provision of the proposals with regard to unified registration and regulation of care homes?
  Mr. Dobson: I did not understand the question. I shall sit down again. If the hon. Gentleman asks it in plain English, I will try to answer it.
  Mr. Hammond: In plain English, what will happen to the local authority care homes? Will there be a massive contraction in the number of local authority care homes after the Bill becomes law?
  Mr. Dobson: It depends on the quality. I hope that the object is that quality will rise and be uniformly high, whether the home is in the private, voluntary or profit-seeking sector. Frankly, if the local authorities cannot do their job properly, they should not be doing it. That is the test: can they do the job properly? If they cannot, they should get out of the business. That applies to quite a few people in the private sector, too. There will be changes in all directions in different parts of the country.
  There is the separate issue of the regulation of private hospitals that were greatly encouraged by the Conservative party during its 18 years in office. During that time, it did absolutely nothing to offer any protection to any people who resorted to the private sector, and was happy to continue to have such places treated as nursing homes.
  That was ludicrous because there was a massive change over time. There was a development and extension of the activities of private hospitals. The regulation became increasingly inadequate. That has been recognised even by the people in the private sector itself.
  Those people know that there are hospitals that carry out treatment for which they are not properly equipped. They know that operations are carried out in hospitals that do not have decent resuscitation equipment. They know that really difficult operations are carried out in hospitals that do not have the capacity to provide intensive care if anything goes wrong. They know that there are private hospitals where there is no 24-doctor on duty and, in some cases, scarcely a 24-hour nurse on duty. They know, as the public know, that there are private hospitals where doctors who have been suspended by the national health
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  service have been allowed to carry out operations on patients in those hospitals. They know that the regulation—to the extent that there has been any—has been concerned largely with the physical aspects, rather than the state of care and the attention that people have been getting. We have a basic duty to protect the public. The new regulatory body will do that. It will regulate, register and inspect.
  There was a plea from the Conservative Benches. After all these years of doing nothing, it appears that Tory policy is still to do very little in case it upsets owners of a few private homes. Decisive action is needed, but the only bit of decisive action that was proposed in that sphere was that, being so successful, the Commission for Health Improvement, which was developed basically as an NHS body and designed to even up and to improve the performance in NHS hospitals—as far as I can recall, unless my memory is playing tricks with me, the Tory Front-Bench team was totally opposed to it and voted against its establishment—should cover the private sector, too.
  My view, for what it is worth, is that the National Care Standards Commission is there to provide minimum safety for people who have private treatment, but it is not the job of a public body to help the apparently competing and competitive private sector to raise its standards further. Why cannot such hospitals raise their standards, if they have the merits of the competitive private sector, with all their American connections and such like? They should be able, generally speaking, to raise their standards themselves.
  The regulatory body, the National Care Standards Commission, may want to ask CHIMP to provide it with some regulatory or inspection services from time to time, but it should be left like that. Much improvement is needed in the NHS. The commission has its work cut out doing what people want it to do in the NHS. That, surely, must be the first priority, providing we have the minimum standards in place.
  I do not want to detain the House any longer. I believe that the Bill is a substantial, major step forward. It will be difficult for the commission to establish itself, to get itself working and to do the job as well as we would like it to do. It is right that the bulk of the circumstances in which it will operate will have to be laid down by regulation. We in Parliament know, if we have any sense, that we are bound to get things wrong at the start. It would be better to recognise that, and not to be vain and proud and to say, "Oh we have got it right. We cannot change it." If it is laid out through regulation, we can change it more promptly and more effectively, and make it work.
  I strongly support the main thrust of the Bill. I congratulate my colleagues on the Front Bench on what they have done in bringing it forward. It carries out exactly what we promised to do at the general election. It is another Labour promise being kept.
  2.56 pm
  Mr. John MacGregor: In the time available to me, I want to concentrate on only one issue: that relating to national required standards for residential and nursing homes for older people, as proposed in "Fit for the Future?".
  I want to do so because I have had many reasonable and responsible representations from my constituents on the matter. It seems that we may not be able to debate it

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  in detail in the House, despite what the Minister of State said, because, as I understand it, the measure will be introduced by negative resolution. It would be helpful for him to make a further announcement on that today.
  Of course I support high and ever higher standards—as high standards as the community can afford—with higher living standards all round. I take the same test as the Secretary of State. I look for the standards that I would expect for my relatives. Indeed, I have been through that closely recently and so speak with some feeling on the subject.
  There is huge concern among the providers of both local authority and private homes about the possible impact of the implementation of the proposals. I thought that it was offensive and unworthy of the Secretary of State—I am sorry that he has gone—to say that we were concerned only about the providers and not the provided—that is totally untrue. I thought that it was offensive to the many highly dedicated people who provide services as providers. It is clear that we should be concerned that the providers are able to provide. It is in that context that I make my remarks.
  I want to make three points, which have been put to me by proprietors and representatives of the local authority, in relation to the standards. The first is—I make the point quickly—the fear about the volume of regulation and over-prescription that will flow, if one reads some of the points in "Fit for the Future?" report.
  It is not just a question of the fees, which the Secretary of State referred to. The real cost is the administrative burden on the providers. Therefore, I hope that, in drawing up the regulations, the Government will not be unnecessarily prescriptive, will look at the implications for, and impact on, the providers, and will go through what the Lord Haskins committee said, so that we can be sure that the regulations are not overburdensome.
  The second point is in relation to staffing. There has already been a big increase in staffing costs for private residential homes, partly because of the impact of the national minimum wage and the working time directives, which in some cases have pushed up staffing costs by 16 per cent. in one year alone. I am told that holiday pay for part-time staff is having a particularly heavy effect on a number of those homes.
  The point, which the Secretary of State evaded, is that, at a time when fee increases are not properly reflecting cost increases—as we all know, a large part of the fees must come from local authorities—and margins in those homes are being seriously eroded to dangerously low levels, the issue of cost must be taken into account.
  The Secretary of State side-stepped that issue, as did the former Secretary of State—when the first said that local authorities were having to prove their case, and the second said that the test would be whether they do their job properly in local authority homes. That was not really the point. The point was that, if extra burdens and costs are being imposed by the Government on both types of homes, and much of the funding comes from the public sector, we would need to know how the costs will be met and where the funding will come from. The Secretary of State carefully avoided answering that question, but it is important that the Minster of State should do so. It is a great, and legitimate, concern to providers.
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  The third point that I should like particularly to raise is that of physical accommodation standards. I need not go into great detail on the issue, as it was debated in Westminster Hall, on 15 February 2000, in a debate initiated by my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), in which she explained some of the points that particularly concern those of us in Norfolk. The Minister of State was present at that debate and replied to it.
  I visited all types of homes in my constituency—local authority homes; the large new purpose-built homes that have been provided in the private sector, and one in particular; and the small homes that have been developed out of old country houses and that type of building. There are approximately 415 private homes in Norfolk, with an average size of 20 beds. I shall concentrate on the smaller homes, as that is the where the bulk of the provision is currently coming from.
  I rather get the impression that "Fit for the Future?" recommendations were designed for, and concentrate on, the large, newly built homes. The problem is that it will be many years before that type of home can replace all the existing ones. The interim period is going to be a worrying one. I understand that, in its current survey, the National Care Homes Association has estimated that 52 per cent. of homes have fewer than 20 beds and do not meet the standards for communal space, and that 10 per cent. of homes do not meet the standards for single and double rooms.
  The problem is that if the regulations are implemented as they have been proposed in "Fit for the Future?", many of those homes will be forced to close. Therefore, my main plea to the Minister is that the regulations must be developed and implemented sensitively.
  Mr. Tom Clarke: Will the right hon. Gentleman give way?
  Mr. MacGregor: I shall give way just once, as I am anxious not to exceed my time.
  Mr. Clarke: I am grateful, and I take the point that the right hon. Gentleman is making—that some of the standards that will be required are not being met. However, does he not look at the other side of the coin—does it not worry him that vulnerable, elderly people are living in such conditions, and that, until the Bill was introduced, that issue was not being addressed?
  Mr. MacGregor: I shall come to that point in a moment, as I have talked to residents in the types of home that I am talking about, including local authority ones, and I want to say something about that. I shall come back also to the issue of cost. There is not much point in simply saying that standards must be much higher, in over-regulating and in over-prescribing requirements if the result is that the homes on which we depend have to close. That is the point that I am trying to make. I also want to make the point that the homes that I am talking about and have visited do provide a high standard of care that is much appreciated by the residents themselves.
  I was speaking about closures. I understand that Caring Times, which undertook a survey recently, came to the conclusion that, if the full "Fit for the Future?" standards were imposed, 54 per cent. of beds in the surveys that it

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  undertook would be lost, and that more than 50 per cent. of the homes would close, because they would be bankrupt. We really do have to address that issue. My particular concern is that the smaller homes, which that same survey highlighted, were the most vulnerable.
  The proprietors of those homes have sunk a lot of capital in them to improve standards. They are dedicated, and they have done a good job in recent years. Many of them are approaching retirement age, but they may not be able to sell. Their homes—for a reason that I shall give in a moment—may not be viable, and they will simply close. It would be self-defeating for the vulnerable—for those for whom the Bill is intended—if the outcome were that there were many closures.
  "Fit for the Future?" had paragraphs on compliance costs, and seemed to suggest that, because there is over-capacity—which one or two Labour Members have mentioned—in the country as a whole, the effect of closures would not be that great. That suggestion is flawed, for three reasons. The first is a decline in capacity, which the Laing and Buisson Consultancy has already predicted will—in the near future, because of current trends—be up to 10 per cent.
  Secondly, as has been graphically brought home to me, if one or two rooms in a small home of 20 or fewer rooms have to close, in current circumstances, in which margins are extremely tight, that home would cease to be viable. If the home has to shut down one or two rooms, it will close. Therefore, "Fit for the Future?" has ignored a big gearing effect.
  The third reason has already been dealt with by my hon. Friend the Member for Woodspring (Dr. Fox)—the geographical effect. In my constituency particularly, many small homes are scattered round the constituency, serving local communities. If some of those homes are forced to close, residents will have to go elsewhere, a long way from where their relatives reside. Those residents, and their relatives, say that they want to stay in those homes. They are quite happy to stay in a home which may have one or two rooms that are rather smaller than the proposed regulations would suggest. The benefit to them of being in the home that they have been in and of being close to their relatives is much greater than having a slightly larger room.
  On 15 February, the Minister said that the standards must be "realistic and affordable", and that they must give providers a sensible time scale in which to make the necessary changes. I very much welcomed that comment, which suggested that he was taking some of these points on board. I ask him to spell that out rather more. All I am asking for is the application of common sense in examining some of the proposals in "Fit for the Future?"
  The National Care Homes Association had a point when it said:
  Those things which can be measured with a tape measure do not generally impinge on the quality of care afforded.
  I think that I would have put it slightly differently and said that one does not measure the quality of care by a tape measure alone, as so many other qualities are required.
  In the homes that I have seen, some of the rooms would have to be shut under the proposals—they cannot be physically enlarged—but are only a little smaller than would be required in the regulations. They are smaller
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  because the previous local authority specifications were lower, or, sometimes, for the simple reason that they were measured in feet rather than metres. It seems that common sense is very much required.
  I ask the Minister to reassure the many proprietors in my constituency and elsewhere, first, that the regulations will not be applied retrospectively to homes in which some rooms may miss the target by only a little and the residents—some of whom I have talked to—are perfectly content with their rooms and do not want to move elsewhere; secondly, that costs will be taken into account, and that, if extra costs are imposed, assistance will be given to both private and local authority homes to help them to meet those costs; and, thirdly, that, for existing homes, especially the small ones, there should be a long transitional period.
  Those proprietors are deeply anxious. They have sunk much capital, often after heavy borrowing, into their homes, and their capital is at stake. They are dedicated to providing a service, and it is not enough for the Government to say to them that nothing will happen until April 2002. They need more specific reassurance now, and I hope that the Minister will be able to give it today.
  3.8 pm
  Mr. David Hinchliffe: It is perhaps worth making one point in reply to the speech by the right hon. Member for South Norfolk (Mr. MacGregor), who mentioned private owners' capital. I remind him that much public-sector capital—£10 billion, at least—was provided.
  Mr. MacGregor indicated assent.
  Mr. Hinchliffe: I think that the right hon. Gentleman accepts that point.
  I welcome the Bill, which has been a long time coming. What is particularly exciting is that, today, in a debate on community care, we have a time-limit on speeches—usually, I am able to speak in these debates for half an hour and no one grumbles. We now have interest in the subject that we have not had before, and I commend the Government for generating that interest. They tackled an issue that has long needed to be tackled.
  Many hon. Members in the Chamber deserve commendation for their contribution to the Bill, not least the ministerial team. However, many hon. Members—Back Benchers and former Ministers—have contributed quite remarkably to bringing the Bill together, and I commend them. It is a great honour to follow my very good and right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson), who is still held in the greatest affection in God's own county. To me, London has always been a strange place, full of—with apologies to my hon. Friends from London—odd people.
  Mr. John Austin: My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) is also held in high regard in London. This may be the first time in 20 years that the issue has been addressed, but Bills do not come out of nowhere. My right hon. Friend's period in office is coming to fruition in the Bill. Nobody has done more than him to drive up standards in health and social services.
  Mr. Hinchliffe: I entirely agree. My right hon. Friend deserves the greatest credit.

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  Some of my comments on the Bill will be critical of it. I hope that my hon. Friend the Minister understands that they are intended to be constructive, and that I make them in the hope that in Committee the Government will look at some of the detailed points that need further examination. My comments are made in the context of my delight at the overall thrust and principles behind the Bill, which is long overdue.
  I welcome the National Care Standards Commission. I think that I wrote the policy document that first proposed removing the function of regulation from local authorities. I was shot at by some of my local authority colleagues at the time for that suggestion. I felt that it was important that regulation was independent from provision. I welcome the establishment of that principle.
  However, I have a slight proviso. One of the strengths of the previous system was local knowledge and accountability. I hope that we build local knowledge into the National Care Standards Commission, because it is fundamental to pick up intelligence about where things may be going wrong.
  I welcome the mechanisms for independent health care and, in particular, the proposals for domiciliary care. I introduced two Bills on the issue in the previous Parliament, which were opposed by the then Government. It is wrong that we have not regulated the domiciliary care that is given to some vulnerable people.
  I also welcome the General Social Care Council. The social work profession has long campaigned for such a body. I pay tribute to the parliamentary panel on personal social services and its secretary, Mr. Dick Clough. The hon. Member for Faversham and Mid-Kent (Mr. Rowe) has done a lot of hard work on that panel over many years. It is a cross-party issue on which there has been consensus.
  It would be wrong not to pay tribute to the successful campaigning of my hon. Friend the Member for Stockport (Ms Coffey) on small children's homes. Those provisions will be called the Coffey section. I also welcome the attention that has been given to fostering and adoption services. I would welcome clarification on whether the Bill will impinge on the accountability of guardians ad litem. I have some concerns about the lack of accountability of those professionals, who have a key role.
  I listened carefully to the hon. Member for Woodspring (Dr. Fox), who made the astonishing comment that the Conservatives wanted an adoption plan for every child in care. He obviously does not know that the majority of children who come into care are there only temporarily. It might be for only a couple of days. They are fostered while there are problems at home and then they go straight back. The Tories want adoption for every child who comes into care. The hon. Gentleman has clearly not thought that through, because he would not give way on it and left in a hurry. It is a bizarre idea, but we are used to that from the Conservatives.
  My concerns must be seen in the context of my strong overall welcome for the Bill. My first concern relates to children's rights directors. My right hon. Friend the Secretary of State has left the Chamber, but he inherited from his predecessor a policy document—which I know well—containing a commitment to appoint a children's
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  rights commissioner. There is a distinction between what the Government are proposing and what most people involved with child care want, including the Health Committee and other Committees and all-party groups that have pushed strongly for a rights commissioner.
  The role envisaged is too limited. Let me give an example of where a rights commissioner is desperately needed. Nobody has considered the fundamental principle of the welfare of the individual child in relation to the Child Support Agency. Like most hon. Members, I deal with any number of cases of disputes between parents when things have gone badly wrong—they are not talking to each other and access is wrongly being denied to parents as a result of CSA policies. A rights commissioner could penetrate an area that needs to be examined in the interests of vast numbers of children in this country who are suffering. I hope that the Committee will look at that.
  I find it embarrassing to agree with the hon. Member for Woodspring on one issue, but I do not fully understand why the Government are moving the inspection of child minding and day care to Ofsted. I used to be involved in registering child minders and day care when I worked in local government. I hope that further thought will be given to the proposal, because they are essentially care services and should be dealt with by people who understand the care issues involved. Ofsted is unsuitable for the role. Given its reputation, we could end up with league tables, performance-related pay or targets for tots. I have a serious worry that we are turning our young children into robots. They are under pressure to achieve academically and league tables also put teachers under pressure. I do not want those inappropriate pressures brought into child minding for the under-fives.
  Mr. Austin: I have some concerns on that. I am sure that my hon. Friend also agrees with the comments of Lord Laming in another place, to the effect that child minding is about social care and good child care practice rather than education. The Minister in another place responded by saying that he hoped that those involved in the inspection procedures in social services would move over to Ofsted, bringing their skills and knowledge. From his experience of social services and child care in local government, does my hon. Friend share my concern that many of those involved in child minding registration do not work exclusively in that area? If they moved to Ofsted, they would be divorced from their other child care functions and from their professional colleagues involved in social care. Would my hon. Friend care to comment on that?
  Mr. Hinchliffe: My hon. Friend makes an important point, which reinforces the need to look at the issue again. I hope that the Minister will take his comments in the spirit in which they were intended and that we can look at the issue in Committee.
  I should also like to query the regulation of adult day care. Having read the Bill and the guidance, I am not clear about that. If it is not to be regulated by the commission, it is a huge worry. I can envisage private care or nursing homes being closed on the grounds of poor standards and reopened the following day for day care, giving the same personal care with no regulation. Can we look at that again? We need to consider the way in which the commission can deal with proposals to close care and nursing homes. I had a debate about a home called Garden

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  House in Wakefield, which closed suddenly—its standards were rather poor—and was transformed, under the same ownership, into a day nursery. We need to understand how the separation of the regulatory system would deal with such a situation. The commission would deal with the care side and Ofsted would deal with the day nursery. We need to address the practicalities.
  My most serious concern is that the Bill looks at where we are now. I do not want to use the word "reactive", but it is not aspirational, as I should like it to be. We have heard the expected defence of private care home owners from the Tories. They did pretty well under the Tories and made a lot of money. We now have a huge empire full of empty places that nobody wants, funded largely by our taxpayers' money.
  The key question is how we would want to be cared for. Some of us are older than others—some are even older than me. I do not want to be in geriatrica, wall to wall, facing other people with similar problems. I want to remain in my own home in my own community. That is what we should aspire to. The Bill reacts to the current situation rather than looking forward 10, 15 or 20 years, when people will want something fundamentally different to what is deemed the norm now—the "oh, stick them in a care home" attitude. We can do better than that. In 1988, Denmark passed legislation prohibiting the institutional care of old people. If it is illegal in Denmark, a country not dissimilar to ours, why are we anxious to prop up an declining private care sector? Why are the Government considering filling some of the 25,000 empty places with people who ought to be cared for in some form of intermediate care setting within the NHS?
  We must consider life in non-institutional settings and home-based care, and we must look at what communications technology can offer in sustaining independence. We must anticipate where we will be in 10 or 20 years' time, because there will be a fundamentally different picture. This is an excellent measure which, with a bit of work, could become a landmark reform. I want to see that happen, and I think it will.
  3.20 pm
  Mr. Paul Burstow: The Bill comes to us from the Lords much improved from its First Reading incarnation. The establishment of a comprehensive system of inspection and regulation of social and health care providers is long overdue. It is essential if we are to build public confidence in services for children and vulnerable adults that this Bill secures Second Reading and Royal Assent, and that the tools that are given to regulators are put in their hands as soon as possible.
  Their lordships have done much to strengthen the Bill and to ensure that the protection afforded to vulnerable people covers the widest possible range of care settings. However, there is still a question of timing to be considered. How soon will the National Care Standards Commission begin to exercise its registration and inspection powers? When will home-based care be covered by national minimum standards—2003, 2004 or later?
  Day care—a late addition to the Bill—is another area on which we must establish clarity of timing. The Minister has offered a guarantee that, within one year of the
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  National Care Standards Commission being established, the Government will carry out a review as to how and when the regulatory regime for day care will come into force. It was not clear from the debates in the Lords what that meant in practice. When will the review be concluded? When will the regulations be in place to give comfort to those receiving domiciliary care that those providing it are doing so appropriately?
  When will that take place; 2002, 2003 or, as seems more likely, a much longer time scale? We have only to look at the process for producing the standard for "Fit for the Future?" for care homes to see how long that process has taken. It is something like two and a half years since the initial commission of that work, and we now await the results of the consultation exercises. If the same pattern holds true today for day care, we will lack national standards until 2004 at the earliest. I hope that the Minister can give reassurance on this point.
  The commission will be registering and inspecting against national minimum standards. Care home standards have been set out in "Fit for the Future?" and we have heard concerns about that. The Minister will know of the concerns felt by many in the independent homes sector about the burden that these standards represent. Lord Hunt stated that the Minister of State had
  indicated that the staffing ratios set out in "Fit for the Future?" will not be adopted. He has also given assurances that reasonable time scales will be set for homes to meet the final standards that will be required through the new regulatory pattern.—[Official Report, House of Lords, 28 March 2000; Vol. 611, c. 714.]
  Mr. Hammond: Does the hon. Gentleman agree that expressions such as "reasonable time scales" do not help bankers and home owners who are trying to deal with the blight that has descended on the industry? Does the hon. Gentleman have any idea of what a reasonable time scale is for compliance with the new physical standards for accommodation?
  Mr. Burstow: I look forward to exploring in some detail in Committee what the time scales will be. That is undoubtedly a legitimate cause for concern. It can be overstated, but it is nevertheless a legitimate concern about which we should be seeking clarification.
  Much emphasis has been placed on physical standards such as room size. I am not convinced that room sizes or the number of power points in a room are a satisfactory proxy for quality care. I hope that the commission will be able to focus its work on quality, and not just on things that it can easily measure, such as room sizes. By quality, I do not just mean the quality of care provided but, more important, the quality of life of the residents. That means that service users and care home residents must be treated not as passive recipients of care, but as active participants in promoting and regulating quality.
  However, I do not believe that the National Care Standards Commission can be an independent voice for elders because most older people never come within the ambit of formal social care. For that reason, I believe that there is a case for establishing a commissioner for the rights of older people. Such a commissioner would lend an independent ear and a powerful voice to promoting the rights and interests of older people. Such a commissioner would work closely with many aspects of central and local government, looking at the impact of those services on the lives of older people. The work would include the

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  Commission for Health Improvement and the National Care Standards Commission. The commissioner would report to Parliament.
  Such a focus is needed, as I believe that there is in our society a lack of recognition of elder abuse. It is still a taboo topic. We have broken the taboo when it comes to child abuse. There is still much to be done in the area of child protection, but the framework is in place. I pay tribute to the Government for what they have done, and we are beginning to see a real step change in the provision of services for children. I do not believe that the same can be said of elder abuse. Cases such as those highlighted in The Express's "Respect" campaign show why action is needed to stamp out elder abuse and age discrimination. The Express found evidence that residents in one care home were
  put to bed against their will and woken as early as 4.30 am to get ready for breakfast; not properly cleaned even though they regularly soiled themselves; left to sit for hours without activities and woken at two hour intervals during the night to be taken to the toilet because they are not given incontinence pads.
  The Minister will say that that case can be dealt with by the commission, but work by organisations such as Action on Elder Abuse has found that abuse extends beyond formal care settings. In their report "Listening is not Enough", Action on Elder Abuse highlights serious cause for concern about financial abuse by family members, physical abuse and neglect in care settings and psychological abuse wherever the older person lives.
  An independent commissioner for older people would send a powerful signal that the dignity and rights of older people matter and will be upheld. There is still a serious question mark over the role of the commission and its relationship with the Commission for Health Improvement. Where does clinical governance end and the national care standards begin?
  Given the talk of using nursing homes to provide step-down or convalescence beds and rehabilitation paid for by the NHS, surely the clinical responsibility—and hence the inspection responsibility—will rest with the Commission for Health Improvement. However, nursing homes will be registered and inspected by the National Care Standards Commission. Who leads? Who follows? Who decides what needs to be inspected? This is not clear in the Bill, and those providing the care will need that spelled out. I hope that the Minister will say more about that in Committee.
  My noble Friend Lord Clement-Jones successfully amended the Bill in respect of the commission's powers to contract with the CHI, and that was an important step in the right direction. We were disappointed, if not surprised, to hear today that the Government intend to reverse that amendment.
  While the commission will be doing this work in terms of inspecting and regulating private hospitals, it remains our view—as we stated during the passage of the Health Act 1999—that these matters should be regulated across the health service and not parcelled up into pieces. That principle has been accepted in respect of the registration and inspection of care homes, whether they are public or private, and we believe that the CHI should be charged with the responsibility to inspect public and private health care providers without fear or favour. It was a mistake by the
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  Government not to have embraced that, and we will continue to press the point as the Bill goes through the House.
  While the commission will regulate places and institutions, the General Social Care Council will regulate employers and employees alike. The council is very welcome. But how rapidly will it be allowed to cover the work force? Ministers have decided that those registered with the council in England must be qualified. But only one in five of the 1.25 million social care work force hold a relevant qualification. The largest part of the work force is made up of residential and domiciliary care staff where the level of qualification is very low indeed. Yet it is those people who have the greatest access to vulnerable people. Those staff are the very people who should be covered by the council to restore public confidence in our care system.
  The Training Organisation for the Personal Social Services training strategy sets out targets for boosting the number of qualified residential staff to between 40 and 50 per cent. over the next five years, but that is dependent on substantial increases in training resources and a much improved staff retention record. TOPSS is still to set targets for the training of domiciliary care staff. Where will the money come from to enable that to be realised? The Minister will no doubt tell us that the Government already provide funds to local authorities to train their staff, but what about private and voluntary sector providers?
  The Bill is intended to improve protection for the public, but by restricting registration to the minority of staff in the work force who hold formal qualifications the Government are leaving the door open to neglect and abuse. Studies in the US have found that there is a much higher incidence of abuse by care workers who have received no training. The level of untrained and unqualified staff in social care is unacceptably high. The Government must ensure that the front-line staff, whom we trust with the most intimate care of vulnerable people, are registered with the council as soon as possible. When stacking shelves at Safeways pays better than caring for frail elderly people, how does the Minister expect to attract the right people to join and stay in the care work force?
  The danger is that the fine words that the Bill contains will be realised not in five years' but in 10 years' time, and that cannot be right. Wales has decided to go for a big-bang approach and will register all social care staff, qualified or unqualified, from the outset. It has a smaller work force so that will be easier to manage. What is the Government's timetable for registering all staff in social care in England? The Secretary of State, in answer to my earlier question, said that it would be done as soon as possible, but some clarity on the timetable would be welcome.
  It had been widely trailed by Ministers that the Government planned to bring forward amendments to establish a children's commissioner for Wales who would be a champion for all children in Wales, whether in care or not. That is not quite what we heard today, and that will prove a disappointment to many on both sides of the House and to people outside.
  Ms Julie Morgan: I can assure the hon. Gentleman that the National Assembly for Wales is well aware of the scope of the Bill and intends to extend its scope as soon as it is passed.
  Mr. Burstow: I am delighted that the scope will be expanded, but why wait until the Bill is passed? Why not establish the commissioner in the Bill?
  Dr. Brand: It is possible for the National Assembly for Wales to expand the role of the newly named commissioner which, according to the Bill, will be exactly the same as the English equivalent. However, I can think of no legal ways in which this House will be able to expand the role of the English commissioner without further legislation.
  Mr. Burstow: That is right. The Welsh Assembly does not have its own legislative powers so it will rely on this House to give it the additional powers needed to widen the scope. The Bill provides an opportunity now to put in place the necessary powers to enable the Assembly in due course to widen the scope, and that matter needs to be considered further. The hon. Member for Lancaster and Wyre (Mr. Dawson) recently introduced a ten-minute Bill which would have provided for a children's rights commissioner for England, and I understood that the same provisions would be made for Wales in this Bill. It now appears that that is not what is intended, and I hope that the Minister will explain what the differences will be in practice. It now appears that one will be called a commissioner and the other will be called a director, but they will exercise the same jurisdiction, functions and responsibilities.
  Ms Julie Morgan: The National Assembly for Wales will add on advisory powers to the role of the commissioner, in addition to the powers given by the Bill, but will await additional legislation from this House to create the full commissioner role. The National Assembly sees the Bill as the first step in creating a full-blown children's commissioner in Wales.
  Mr. Burstow: I am encouraging the Government to take several more steps to achieve the full intentions of the ten-minute Bill, which hon. Members on both sides supported. I hope that we can achieve that end, because many right hon. and hon. Members have campaigned for it for many years and felt that we were much closer to achieving it than we in fact appear to be.
  When it comes to "Fit for the Future?" and the other national standards that will follow, I know that many care home owners and providers feel that the Government have failed to recognise that higher standards, better regulation and more training come with a price tag. Unless fee income can be increased, the numbers of providers leaving domiciliary care and residential care will continue to rise. Reducing choice and competition will result in lower standards. Providers will seek to pass on the costs of the extra obligations that are rightly being placed upon them in the form of higher fees and, in turn, social services departments will pass them on in higher charges or tighter eligibility criteria. Our aim has to be to protect vulnerable people from neglect and abuse and it cannot be right that we then present those very people with the bill for that service.
  Only last week the Audit Commission published a damning report on unacceptable variations in the level of charges for non-residential services. The range is staggering. Nine out of 10 councils now charge, but it cannot be fair that two people with the same assessed
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  need for care and the same financial means can pay widely differing amounts for their care package—anything from no charge to £120 per week. What the Audit Commission found is yet another postcode lottery. I am not opposed to charging, but it must be based on ability to pay. It must also be fair and consistent, and personal care should be free on the basis of assessed need. The Audit Commission found that one in three councils are operating charging policies that leave pensioners with less to live on than income support. Far too many councils fail to take account of the costs of disability in their charging policies and, as a result, the most disabled service users face the highest charges.
  I have already asked my own council to benchmark its charging policies against the Audit Commission's report, pending the guidance from the Government that the Secretary of State said was imminent, but many local authorities feel that they have been left to stew when it comes to developing charging policies. Since publishing a White Paper in 1998, the Government have maintained a Trappist silence on the subject of charging policy. Local authorities have had to develop their charging arrangements in a policy vacuum. We were expecting an announcement in July, so I was heartened to hear the Secretary of State say that the Government will take the necessary powers in the Bill to give the necessary instructions to local authorities to stamp out the practices that the Audit Commission criticised. I am delighted that the dialogue that a delegation and I had with the Minister seems to have encouraged that change. We will work hard to support any such amendment as best we can, because it is wrong that pensioners can be driven into poverty by local authority charging policies.
  Mr. Hammond: As the hon. Gentleman seems to have such a close understanding of the Government's intentions, does he understand that the Secretary of State intends to cap fees chargeable at a maximum or to introduce some standardisation? The latter would mean an increase in fees in those areas in which they are at present low or non-existent.
  Mr. Burstow: At a delegation organised by the all-party disablement group last week, I raised with the Minister the need for the power to be included in the Bill. As the hon. Member for Woodspring (Dr. Fox) recognised in his speech, we now have a framework for progress, but it is mostly an empty box and we have to wait to see the regulations. Will we have to wait until July, or beyond that? Will we see change before the general election or will change have to await the outcome of that election?
  As there has been a vacuum in non-residential charging policies, so has there been a vacuum in long-term care charges. The British Medical Association, in its briefing on the Bill, said:
  The organisation and funding of long term care needs to be established before confident regulation of care homes can be developed.
  That must be right. The royal commission majority offers a humane and practical formula for addressing the funding of long-term care and, indeed, its conceptual framework was adopted by the Audit Commission in its examination of charging policies.
  It is a disgrace that, in this country, debt collectors should still be chasing after dementia sufferers for money to pay for their care. Liberal Democrats support the royal

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  commission's main recommendation. Personal care should be free on the basis of assessed need. Location should not matter when people need intimate care such as bathing, dressing or feeding: that care should be free.
  The Bill deserves a Second Reading. It has been improved in the Lords, but serious questions remain. I hope that the spirit of co-operation that characterised deliberations in the other place will inform our examination of the Bill in Committee.
  Mr. Hutton: I am grateful to the hon. Gentleman for giving way, and for sharing with the House that information about his party's policy on care issues.
  The hon. Gentleman said that he supports the principle of free personal care for people receiving residential care, but he has confirmed his party's view that it is acceptable to charge for domiciliary care. He also said that he understood that there was a justification for charging in that respect.
  Mr. Burstow: When the Minister reads Hansard, he will see that I also made it clear that the personal care element of non-residential care should be free. As the Minister is interested in our policy, I will ensure that a copy of the policy statement from our last conference is sent to him so that he can inform himself more about the matter. It is appropriate for Liberal Democrats to set out where we stand on this issue. Too often, we are criticised—unfairly—for not stating what our policies are.
  As I said, the Bill deserves a Second Reading. The public require a system that promotes dignity and independence by providing the support and help that people need, when they need it and in the way that suits them best.
  3.41 pm
  Mr. Tom Clarke: I have listened to the debate with mixed feelings. I am truly delighted that the Government have introduced this Bill. It demands our support, and it enjoys the overwhelming support of the organisations working in the sector. However, I must admit that until my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) and my hon. Friend the Member for Wakefield (Mr. Hinchliffe) made their contributions, I had a feeling of deja vu. We know that there are problems, but the House seemed determined to stick at the detail of the proposals.
  I have been a Member of Parliament since 1982. I must tell the right hon. Member for South Norfolk (Mr. MacGregor), with great respect, that he did not ask a single question that has not been answered in report after report. The reports compiled by Sir Roy Griffiths and Lady Wagner are especially relevant in that respect. Given the problems that remain, and the fact that demography is making them worse, it is intolerable that we are not prepared to make progress until every detail of cost has been spelled out. It is as if the House were filled with accountants who are unaware of the vision needed to make progress and meet the day-to-day challenge of improving the lives of the vulnerable people whom this Bill seeks to help.
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  My right hon. Friend the Member for Holborn and St. Pancras was right to say that many people give the impression that we should do nothing, despite the evidence to the contrary. More than a decade ago, Sir Roy Griffiths said that the status quo was simply not an option with issues such as this. If that was true then, it is even more so today.
  I realise that cost is important and, if I have time, I hope to deal with the question of resources, but there is a danger that those who know the price of everything and the value of nothing will prevail. I welcome the Bill because it will allow progress to be made in such sectors as community care and child care, and in the provision of protection for vulnerable adults. That progress will not come a minute too soon.
  It is said that the public despair of Parliament, but they do not do so because of our power, influence and democratic role in society. People despair at the way in which we go on and on, nitpicking and debating questions to which they know the answers. For example, Mencap gave a wonderful briefing today, at which it described the problems faced by young people with learning difficulties, and set out the need for proper regulation and inspection of their institutional care. However, many of the points that it made are ones that it has made for years.
  We must move on and implement the proposals contained in the Bill. I welcome the proposals for long-term nursing and social care for older people and for disabled people. I welcome the Bill's approach to services for children in special care. I welcome the proposals regarding care provided for people in their homes, as a result of which an extremely important component of modern community care will be subject to statutory regulations.
  The proposed National Care Standards Commission is profoundly welcome, and long overdue. It will ensure that local circumstances are seen as part of a bigger picture. It is absolutely right and perfectly reasonable for the Bill to encourage the commission in the establishment of minimum standards. I am more and more convinced that what matters is our response to the needs of individuals, especially the most vulnerable. In all candour, I can tell the House that, if asked to choose between the views of service providers and those who need the services, I am on the side of the latter.
  It is entirely unacceptable that four in 10 councils do not carry out their inspection duties with regard to adult care. That is an argument for minimum standards in itself, and there are other examples of where improvements must be made. Do needs vary that much? I respect the rights of every individual, and acknowledge that every individual is unique, but what does the Bill seek to achieve?
  The aim behind the Bill is to provide a clean and healthy environment for people, to offer comfort, acceptable standards of hygiene, a sensitive response to the problems caused by double incontinence, and a social environment in which people can feel wanted, and loved. That is not too much to ask. If the House can support those aims through legislation and regulation, that is what it should do.
  It is absolutely right for hon. Members to criticise the work that is going on, but the House must remember that examples of best practice in all the matters that I have set out can be found in many parts of Britain. I am sure that all hon. Members want that best practice to become the norm.

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  I unreservedly welcome the Bill's proposals on training for care workers and social workers, and the proposal for general social care councils. The point has been made more than once in this debate—as it was in another place—that 80 per cent. of care workers have no recognised qualifications. That is an important point, but I invite the House to consider the other side of the coin: this country has depended for many years on people such as auxiliaries, cleaners and home care workers to deliver those vital services. In many cases, they make a sterling contribution to the life style and quality of life of the people with whom they work.
  I hope that we can put right problems to do with training, but also that we can do so with a sense of appreciation of those people who are so committed to helping others in so many ways, often without much in the way of financial reward. Moreover, what I have just said about that 80 per cent. of people and their dedication applies to many social workers as well. I hope that that does not make me sound too much of a populist.
  Let me turn to the provisions on the very important issue of child care. I had the privilege of leading for the Opposition during the passage of the Children Act 1989. My hon. Friend the Member for Wakefield (Mr. Hinchliffe) made an outstanding contribution. The Minister at the time was David Mellor who, in my opinion, was excellent, not least because he was prepared to listen. I know that Ministers will listen to the points made by the hon. Member for Sutton and Cheam (Mr. Burstow) and others who support the principles of what we are seeking to achieve but who, quite rightly, will question the detail and put forward better ideas if the opportunity is there. I hope that we will continue in a spirit of optimism and progress.
  My overwhelming recollection of the passage of the 1989 Act was the dreadful evidence of the inquiries into Cleveland, the Orkneys and elsewhere. I listened to the social workers and took the view that for many it was a case of "damned if you don't and damned if you do". That does not excuse the House from its responsibilities, which are addressed in the Bill.
  I welcome the proposals for introducing a children's rights director, for protecting vulnerable children, for introducing the National Care Standards Commission and for the regulation and inspection of children's homes. Such proposals are extremely welcome and long overdue. The same is true of plans for fostering agencies, voluntary adoption agencies and, above all, for removing the exemptions on children's homes. My hon. Friend the Member for Wakefield sought to do that, and was in some measure successful, when the 1989 Act was before the House.
  I could not welcome more warmly the new duties to be placed on those involved in looking after children aged between eight and 14, or 16 in the case of disabled children and, as Mencap points out, children with learning difficulties. Providers should be obliged to demonstrate that they and their employees are suitable to deal with such serious responsibilities in child care. Few occupations could be more important. I am glad that the issue is being addressed in the Bill. I have no doubt that, as it goes through its various stages, the provisions, acceptable as they are in principle, can be improved still further. That can do Parliament nothing but good.
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  I recall my days in local government and my work on a social work committee for children. I end this part of my speech by reflecting on a conference on children that I attended many years ago. It was addressed by a lady who, happily, lived a long life and was active in another place, Lady Elliot, who gave so much to the National Society for the Prevention of Cruelty to Children. What she said then is just as profound and relevant today. She said:
  without affection, life has little meaning for most people, and none at all for children.
  If the Bill takes a step forward in that respect, we will all welcome that.
  Finally, I turn to the provisions on home care. Because care in the community is so dependent, and rightly so, given that so many people continue to exercise their right to stay at home, we must ensure that services are available, that they are properly scrutinised, and that the people who benefit from home care have a say in service delivery.
  In the past few days, I visited Mr. Muldoon in my constituency. Until Christmas, he was a perfectly able man. He became disabled within a matter of weeks. He is now trapped in his bedroom; he is not able to use a chair lift—there are none—and there is no ramp at the door. He wants to get out and meet the bowlers and the people with whom he shares his life. I accept that when it comes to resources, even in my constituency, my local council has difficulty in delivering.
  We are talking about carers and about some people who will not understand what we are seeking to do in the Bill unless it really impacts on their quality of life. Mrs. Walker, who runs a carers' organisation in my constituency, drew to my attention the case of a person who suffers from schizophrenia who, because the nurse was on holiday, did not receive medication for five days. I hope that if these policies are pursued by the Scottish Parliament—because I realise the Bill's limitations—such problems will no longer occur.
  I end my speech by welcoming the Bill.
  3.56 pm
  Mr. Simon Burns: I, too, broadly welcome much of what is in the Bill. However, a number of areas cause me concern. I believe that the Government could have improved the drafting, but that can be considered in Committee.
  I also welcomed a great deal of what the Secretary of State said. One could not disagree with much of it. That also applies to the remarks of the right hon. Member for Holborn and St. Pancras (Mr. Dobson) and others. Clearly, any sane individual wants the very best care for their parents or the elderly.
  I thought that the Secretary of State slightly spoiled an otherwise balanced and reasonable speech by claiming that nothing had been done in this area between 1979 and 1997. I believe that the Bill is yet another stage in a rolling programme of community care, and it is to the community care aspects of the Bill that I wish to devote my comments.
  In the late 1970s and early 1980s, there was a fundamental shift in the way in which we sought to look after our elderly population, and rightly so. The old philosophy for the frail and the elderly, as opposed to the

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  elderly who needed medical nursing care, was to shut them away in hospitals—much as happened to those suffering from mental illness—where their quality of life was negligible. All they had was a dormitory-style bedroom with a bedside table and a lamp. That is not dignified for anyone. We were absolutely right to adopt a more enlightened policy on caring for these people.
  The main emphasis was to provide all the support possible where it was feasible for the elderly to remain within the security of their own homes, with support through social services and other agencies. Where elderly people were not ill but were too frail realistically to be supported or support themselves at home, they lived in residential homes.
  As my right hon. Friend the Member for South Norfolk (Mr. MacGregor) said, we saw the development of many independent, privately owned residential homes as well as a local authority sector providing this form of care and help for the elderly. Many of these homes are of the highest quality. In many instances, the children of elderly people are looking in their localities to find a home that fits the requirements and needs of their parents or their elderly relatives. Like us all, they want the best quality care and home for their parents. They are not prepared to take second best.
  However, it would be naive to say that every home in the private and local authority sectors is of the highest quality. Clearly that is not so. That is why it is probably right that we have a legislative framework to raise quality of care standards. However, that must be done sensitively and realistically.
  To suggest that nothing has been done since 2 May 1997 is patent nonsense. With the change in philosophy of the community care programme, we saw a great deal done. The moneys given to local authorities to assist the policy have frequently been mentioned. Since then, as part of the developing programme, we have seen changes introduced where they have been needed. The Registered Homes Act 1984 was an important piece of legislation. Contrary to what the Secretary of State said, there was the important Burgner report of 1995. There was also the landmark speech of my right hon. Friend the Member for Charnwood (Mr. Dorrell) in October 1996, in response to the Burgner report, which set out what the previous Government proposed to do. That was followed by the publication of White Papers early in 1997.
  If we had won the 1997 general election, we intended to introduce what was known to us as the great social security reform Bill. Fundamental changes were to be made. Many of them foreshadowed the contents of the Bill. In some instances they have been slightly changed and arguably improved upon with time and more consultation.
  For example, we were going to remove local authority responsibility for inspecting private homes, when their homes were not subjected to the same regime. The Bill will rightly stop that practice because it is patently nonsense. All homes for the elderly should be inspected on a consistent basis. Similarly, we intended to introduce a national benchmark system. The Government have moved slightly further with their commission. Perhaps that is an improvement with hindsight, but it represents the same principle of seeking to raise standards.
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  We intended to enshrine in legislation the regulating of domiciliary care. That important issue must be addressed, and the Bill does that. That is why I broadly welcome many of the provisions set out in it. However, I am slightly concerned with some of the details. The issue uppermost in my mind concerns minimum standards and requirements for homes. The approach must be sensitive, responsive and flexible. Having read "Fit for the Future?", I have grave concerns about some of the suggested benchmarks, especially those relating to room requirements.
  The Government could jeopardise a good intention and lose a good policy overall by becoming too bogged down in stipulating minutiae, which will place a significant burden on many homes without necessarily improving standards. I would argue that some of the requirements are patently ridiculous and that it would be absurd to introduce them.
  As my right hon. Friend the Member for South Norfolk said, it would be ludicrous if, by being over-prescriptive, we were to put out of business many excellent residential homes because they could not afford to fulfil the requirements, or because they did not have necessary space to enable them to do so. That would cause an even greater problem than that raised by requiring them to raise standards. If they were put out of business, there would be no homes available for many people.
  A suggested basic room requirement is that there should be
  at least 4.1 sq m for each resident (communal space must include a social room and a dining room).
  Depending on the number of residents, is that feasible? Is it necessary to use cast-iron terms? Another requirement states:
  Single rooms, in current use, must have at least 10 sq m of usable floor space (12 for wheelchair users).
  Do we need to have that detail?
  I assume that "single rooms" means bedrooms, and 10 or 12 sq m would be quite a lot of space in those rooms. Is it absolutely necessary?
  I am concerned that, as has been mentioned by several hon. Members, these minimum standards will emerge as a result of the Government's consultations. Then, as the Secretary of State said, ministerial decisions will be made. However, as I understand it, they will not be enshrined in regulations that come before the House. Unless the Minister can correct or reassure me—
  Mr. Hutton: The hon. Gentleman is wrong. Standards will be reflected in regulations, so the House will have the opportunity to debate them in the normal way.
  Mr. Burns: I am extremely grateful to the hon. Gentleman. Is he saying that if minimum standard room requirements are to be prescriptive, including specific room measurements, they will be set out in regulations that come before the House to be debated?
  Mr. Hutton: I do not want to take the hon. Gentleman's time. However, we shall have to await the detail of the regulations. To reassure him and the House, let me say that minimum standards cannot take effect unless they are reflected in the regulations. Standards will not have any independent, free-standing effect. They will

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  take effect only through regulations. If there is to be a 10 sq m requirement, that will have to be reflected in the regulations.
  Mr. Burns: I am grateful to the Minister but I am still unhappy. Even if the regulations were to include minimum room space standards, they would almost certainly be subject to the negative resolution of the House. That means that they would not be amendable. If the House debates regulations and raises problems with them, a Minister will not say from the Dispatch Box or in Committee, "We accept what you say. We shall withdraw the regulations and bring in new ones." From my experience in the House, I know that Governments do not do that. I am surprised that the Minister is relatively laid back on this issue. Governments do not withdraw regulations and reintroduce them. They believe that when they publish regulations, they are the best on offer and should be implemented. I am worried because I think that grave hardship will be caused to many extremely good residential homes, which we do not want to put out of business.
  There are problems with local authority homes. Local authorities have said over the years that they have not had the financial resources to improve and enhance their residential stock. If they have to upgrade their properties to meet minimum standards—in reality, probably for the first time—either they will have to close them because they do not have the necessary resources, or their budgets will be strained even more unless the Government are content to provide additional funding.
  Much of the Bill is broadly welcome in principle. I have raised some issues on which the Government must listen carefully. They must listen to the responses to their consultations; they must listen at the Committee stage and take account of further comments—notwithstanding the fact that the measure will have already gone through that process in another place. We all want to make sure that the measure is right; we do not want to score political points. We are united in our belief that standards for the care of the elderly are of paramount importance.
  Parallel to that, and of more immediate concern to many elderly people, is the Government's response, later this summer, to the problem of long-term care. Many elderly people and their families confront that problem not in relation to the home in which they live—where many will be content—but in relation to paying for it. They want to know what the Government will do to improve the present situation, because, over a period of time, it has become a mishmash.
  4.11 pm
  Ms Ann Coffey: I very much welcome the setting up of the National Care Standards Commission for the regulation and inspection of adult and children's services in the independent and public sectors. My brief remarks are on standards.
  The current standards for the registration and inspection of children's homes cover several important matters, such as the physical environment, staffing, staff training and health and safety. I hope that during future consideration of standards for children's homes, careful thought will be given to establishing standards for the care and control of young people placed in such homes.
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  I do not underestimate the challenging and difficult behaviour presented by some of those young people, nor the problems experienced by staff in maintaining control and providing care. Children's homes take some of the most difficult and disturbed young people, some of whom went into care for the first time because their problems were unmanageable in their own homes. Local authorities choose placements with those problems in mind.
  The progress of those young people is subject to regular review by social workers. Too many children leave the care system with poor skills; they have low educational achievements and are often extremely angry. The care system should not be merely a holding operation; it should give added value to children's lives. Sadly, that does not happen for a majority of children. In essence, that is the problem we face.
  The commission should examine the care and control that is provided by those homes. It could consider how the homes deal with such matters as absconding, incidents involving the police, exclusions from school, truanting or problems with neighbours—all of which are problems of control. It could also examine the activities and structures in the homes, as they not only cope with problems but give added value to young people by providing a high standard of care and support.
  Standards for the physical environment and for staffing are designed to provide care and control. However, unfortunately, that objective has often been lost. To ask the commission to consider care standards in relation to outcomes for the young people in those homes would firmly re-establish that relationship.
  I welcome the requirement for children's homes of fewer than four children to register. I thank my hon. Friend the Member for Wakefield (Mr. Hinchliffe) for his kind remarks. At worst, the loophole was open to unscrupulous providers; at best, it failed to provide proper safeguards for children and young people, who were often placed many miles away from their local authority. It is good news that, after the Bill receives Royal Assent, the Children Acts will be amended to require such homes to register immediately with a local authority. That shows the Government's determination to improve care standards in children's homes.
  The requirement for the regulation of independent fostering and adoption agencies is welcome. For a long time, their position has been unclear; they have operated in a legal grey area, because fostering regulations allowed local authorities to delegate some of their responsibilities to such agencies. The relationship between local authorities and agencies has varied. Some agencies have suffered because of local authorities with attitude.
  The recognition of such agencies will give foster parents a choice of agencies. I hope that will encourage all agencies to improve their support to foster parents, who have a difficult and challenging occupation.
  I welcome the fact that local authority fostering and adoption services will be subject to inspection. There has been widespread concern about children waiting in the system for a decision on their future and about the length of time it takes to find permanent families, including adoptive families. Figures show wide variation between local authorities in the percentage of children placed for adoption; in the length of time that children wait in care; and in the number of breakdowns in the care system experienced by children.

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  The organisation of services varies widely. In some local authorities, dedicated, specialist teams deal with adoption, while in others, social workers provide such services among their other responsibilities. I do not know whether those different forms of organisation affect the figures—it would be interesting to find out.
  As well as the introduction of standards for fostering and adoption agencies, I hope that other factors will be considered—for example, the length of time that children have been in foster homes waiting for a decision on their future; the length of time that children wait before adoption; the number of multiple placements; the number of breakdowns; and the number of complaints from foster parents. Such matters reflect the service that is provided. An improvement in fostering and adoption services, as part of better overall planning for children, is fundamental to the provision of permanent homes for children.
  It is important that the system gives the best possible care to the young person or child who enters it. Children should feel cared for. To feel that nobody cares is a lonely experience for an adult; for a child, it is devastating. In setting standards, the Bill will ensure that care is a positive experience for children. That is long overdue. The Bill is much to be welcomed.
  4.18 pm
  Mr. Andrew Rowe: The Bill brings together many of the interests that I have pursued during my time as a Member of this place. The hon. Member for Wakefield (Mr. Hinchliffe) was kind enough to recall my campaign for a variety of improvements in personal social care, including a campaign for a general social work council. When we were in government, I had many an argument with Ministers about the importance of such a council.
  It is a pity that for so long proposals excluded workers in that field. I always argued that a social work council should be something like the Michelin guide, so that people's skills could be noted as they acquired them, rather than waiting for some unspecified period when people would be deemed to have sufficient qualifications to be allowed to register. That was a shame.
  The Bill demonstrates that the quality of care is absolutely vital. One of the distressing features of public care—whether for the elderly or, more important, for children—is the fact that the care providers change so fast. The vulnerable people who most need stability are frequently confronted by a change of carer. Most young people in care are subjected to more changes in the person who is supposed to look after them than I would have been able to cope with at that age.
  In parenthesis, I suggest that it would be a better investment of public money sometimes to provide security and affection to the young people who are in long-term care than to provide the same sum later for the police, prisons and young offenders institutions. I feel strongly that we sometimes consider the problem the wrong way round. We should invest in the relatively small number of young people in long-term care so that we can compensate them for the instabilities and miseries that they have endured. Community Service Volunteers, of which I am
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  a trustee, and the Prince's Trust, which commented yesterday, both have evidence to suggest that such investment brings stability to those young people and enables them to play a full role in society.
  I am very pleased by the proposal for a children's rights director even though I would have preferred a children's rights commissioner. I have always believed that a commissioner was the right way forward, as does the NSPCC of which I am a trustee.
  I hope that as the United Kingdom Youth Parliament—I have the honour to be the chairman of its steering committee—emerges from its birth pangs, it will grow into a serious representative voice for young people. If we can make it as inclusive as we are desperately trying to do, it will become a sounding board on which Ministers and Government organisations will be able to test their ideas. We should make the Youth Parliament as information technology sensitive as we can, so that Government proposals can be put into a language that young people are able to understand. We will then be able to float our ideas by them. At present, most of our provision for young people is made in complete ignorance of what they themselves would choose.
  It is vital that we improve the training and recruitment of care staff. One of the paradoxes of public provision—especially low-paid public provision—is that as the employment figures improve and unemployment falls, the difficulty of recruiting and retaining good-quality staff in the caring professions becomes much more acute. The Bill provides a remarkable opportunity for the Government flamboyantly to turn their back on age discrimination.
  Many people—mostly, but by no means exclusively, women—have long experience of caring for a relative. When that relative dies or is taken into long-term permanent care, those people often want to use their caring skills in return for a part-time or full-time wage. Many of them will have an instinctive sympathy, as well as age parity, with the people for whom they care. Many of the problems of respect that the Secretary of State mentioned in his speech will solve themselves because such carers will deal with their near contemporaries. We do not do nearly enough to make caring attractive to those of our older citizens who would like to do it.
  Another element of training has been extraordinarily mishandled. I used to get extremely angry with Conservative Ministers—I am happy to get equally angry with Labour Ministers—about the way in which we have mishandled the national vocational qualification. The whole point of the NVQ, as I saw it, was to authenticate skills that people had acquired in practice. For example, if they had learned to turn someone so that he would not get bed sores, to feed someone who could not feed himself or to wash someone with a disability, those skills could be accredited through the NVQ.
  However, in the traditional British way that has lasted for at least 100 years, academics have tried to get hold of the system and turn the qualification into the equivalent of an O-level or something similar. They have tried to make the qualification more academic, which is nonsense. In an occupation in which 80 per cent of people have no recognised qualification, we need to recognise the practical skills that they have and on which they can build in part-time, day-release or other studies. We would then have more people with qualifications.

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  I am also interested in the costs that will result from the Bill. It will be expensive if it is to work, and all of us want it to work well. However, the idea that changing names and changing structures will enable us to find the money to make it work well is pie in the sky. If 60 per cent. of agencies already do not carry out their inspection responsibilities because they do not have the resources to do so, can we be certain that the new agency will carry out all its inspections and that it will have the money to do so?
  If we are to have much better and more effective training for a higher percentage of caring staff, they will expect an enhancement in their pay. If they receive that, it will increase costs enormously. Therefore, it is essential that the purchasers of residential care and domiciliary services pitch what they are prepared to pay at a rate that will bring providers into the market. Whether they are local authority providers or private providers, purchasers of domiciliary and residential care increasingly squeeze the sums of money that they are willing to offer. That is a dangerous game.
  I was sorry to hear in some exchanges a continued suspicion of the private sector. That is a shame, because in this area, above all others, the record of the public authorities has not been very good. The many scandals in children's homes, in particular, and in many local authority and publicly provided residential homes for elderly people clearly demonstrate that the nature of the provider is by no means a guarantee of good service.
  In the private sector, many small homes have typically been set up by couples who felt stultified by the constraints of the public sector. They worked for public authorities or for the national health service and felt that they were not able to do many of the things that they would have liked to do for their patients or clients. Therefore, they left and set up a home with the firm intention of providing better care than they would have been allowed to provide in the public sector. To belittle what they do or to imply that they are in it only for the money is a shame.
  The Bill should provide a real breadth of vision. I wish to provide an example that is continually forgotten but that arises from one of the campaigns with which I have been associated. Many problems would be greatly reduced by a serious programme of building lifetime homes. A great new welter of houses is to be spread across the south-east, built by private developers. They must not be allowed to claim exemption from new building regulations that have, at last, been passed and state that there must level entry at front doors, that one must be able to turn in the hall and so on.
  If one allows houses to be built with steps up to the front door, narrow doors and windows too high to see out of when one is in bed, the demand for residential care will again be exaggerated. When estates are being modernised, lifetime houses should be built. There is a lamentable lack of imagination and drive when it comes to making sure that homes meet minimal requirements and are accessible for people with disabilities and those with growing frailties.
  The new system suggests that we could make much more use of volunteers. I remember Peter Smallridge, a former director of social services in Kent, saying that one need only put up a notice outside a home saying
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  "KCC residential home" for the entire community to walk past and, indeed, never go near it. We need a much better programme to involve volunteers in homes. They go in and out unexpectedly, so can notice whether there is a smell of urine in passageways and whether people are frightened of the staff. They are as good at observing such things as anyone.
  However, we want more than that. We want better links with the education service, whether formal education, such as further education and adult education, or informal education, such as the university of the third age. One of the worst things that happens to people when they go into residential homes is that they switch off. It suits the stretched staff for them to watch "Neighbours"—not taking it in, but just sitting there—rather than being stimulated by new interests. I hope that the new dispensation will lead to such stimulation.
  I have some minor queries. Who will be responsible for the accuracy and timetabling of checks on staff? At the moment, checking to find out whether a member of staff is fit to look after children, boy scouts and so on takes so many weeks that an employer loses that person in the process. That is terribly important, as is the fact that nursing agencies that are to be regulated should take care to ensure that nurses are working for an appropriate period. At the moment, nurses with a mortgage to pay sign up with a nursing agency; they become exhausted on NHS wards and exhaust themselves even more until they provide an inadequate service to patients and staff.
  I conclude with the point made by my right hon. Friend the Member for South Norfolk (Mr. MacGregor). It is important that the inspections relate to the quality of care, not the size of the bedside table.
  4.33 pm
  Ms Julie Morgan: I am delighted to speak in our debate. I strongly welcome the Bill, and believe that the Government are showing their commitment to children, young people and adults in vulnerable positions. We all hope that the Bill will help to prevent scandals, such as those in children's homes in Wales, which have shamed this country.
  The Bill covers England and Wales. My right hon. Friend the Secretary of State did not have time to cover in his introduction those provisions that are specific to Wales. The principles are the same in both countries, but there is a specific difference relating to the children's commissioner. In Wales, we are all waiting eagerly for the Secretary of State for Wales to table an amendment that will pave the way for establishing the post of a children's commissioner for Wales.
  I want to concentrate on the children's commissioner, as there has been some interest this afternoon in Wales going a different way from England and introducing a children's commissioner, not a children's rights director. We must accept that that is a consequence of devolution. In Wales, we are doing what the National Assembly for Wales wants to do, although legislation on the matter is still to be passed in Westminster. We must consider how the two are to be tied together.
  I shall talk about how the concept of a children's commissioner has developed in Wales. Welsh voluntary bodies have led the way in lobbying for a children's commissioner. Children in Wales, the umbrella body, has been in the forefront, along with Barnados, the NSPCC

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  and other voluntary agencies. Before I came to the House, I was a social worker with Barnados and was involved in the campaign to establish a children's commissioner for Wales. In the National Assembly election campaign, Labour's manifesto stated that we would establish such a commissioner to look after the rights of all children in the community including those in care and those who are looked after. I believe that that now has all-party support in the Assembly.
  The Welsh aspect of the Bill also gives rise to an interesting and historic occasion. Introducing the post of children's commissioner will be one of the first pieces of primary legislation to be passed in Westminster in response to a direct request from the National Assembly. It will not be easy for the Assembly to get exactly what it wants and it will not get it all at once in the Bill. The amendment to the Bill that I mentioned must be as wide-ranging as possible to cover as many children in different situations as possible. I wonder whether there are situations to which the Bill could apply—for example, adolescent units in hospitals, such as that in my constituency which admits adolescents for five days a week. I do not believe that that will be covered by the Bill in its present form, but it would be useful for such settings to be covered in regulations.
  The Assembly seeks to establish a role for the commissioner that will cover all children in all settings, along with every aspect of their lives. It seeks a commissioner who would speak for children's rights and who would have the role of implementing the United Nations convention on the rights of the child in Wales. The commissioner would be a champion of children's rights and would raise the profile of children's issues in Wales. The commissioner would play a leading role in ensuring that the 70,000 children and young people in Wales would have some say in planning services. We in Wales envisage that that will be a key aspect of what he does.
  Throughout the world, there are commissioners who perform a role similar to that which we want in Wales. In Sweden, children and young people under the age of 18 have an ombudsman of their own, established by parliamentary legislation in 1993. In principle, the ombudsman covers all issues relating to children and young people. Children in Sweden are consulted on current issues by questionnaires, letters and telephone. They communicate their views via the internet and there is an information line. The commissioner goes out of her way to try to get young people's views on legislation or other measures going through the Swedish Parliament.
  In Norway, the ombudsman succeeded in increasing the period of paid maternity leave and worked to introduce legislation prohibiting physical punishment. Commissioners and ombudsmen act as advocates for children's rights.
  In the UK and Wales, children do not have a voice. They are especially vulnerable because their position is weak and there is no explicit recognition of children's civil and political rights. In Wales, responsibility for children is split between the Assembly and Westminster bodies such as the Home Office. There is often no consideration of children's needs in areas that do not directly affect them, such as transport, housing and health. The Assembly intends to extend the commissioner's remit
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  in relation to his advisory capacity after the Bill has been passed to cover all devolved matters. The commissioner will not deal with Home Office matters, as they are not devolved, but will cover all devolved matters. In that respect, the commissioner would operate in an advisory capacity until further primary legislation is introduced in Westminster to establish what the National Assembly wants,
  The Welsh commissioner can be a voice for all children and the Bill enables a start to be made. Although the commissioner should protect the rights of all children, emphasis must be placed on the rights of children in difficult circumstances, some of whom do not live in settings covered by the Bill: I have in mind disabled children, refugee children, traveller children, homeless children, children living in acute poverty and children living with domestic violence. We want the commissioner to be able to speak up for all such children.
  Through the amendment, we in Wales have a unique opportunity to lead the way in the United Kingdom. The post of the children's commissioner must be established as a matter of urgency, especially in the light of the Waterhouse report on the terrible scandals in care homes in north Wales, and of the current investigation into care homes in south Wales. We urgently need the post. The north Wales and south Wales inquiries demonstrate the need for a voice for children in care, and the amendment will be a first step toward establishing a more complete role at a later stage.
  The Assembly has available the money needed to establish the post of commissioner during this financial year, and the commissioner should have the statutory power to support all children in Wales, many of whom experience social exclusion outside the settings encompassed by the Bill. After the Bill is passed, there will be a need for further legislation to broaden the remit of the commissioner.
  We welcome the Bill and the amendment that is to be tabled. Let me end by saying that it is most important that children are involved as the legislation proceeds, that the regulations are drafted, and that the Act eventually operates.
  4.42 pm
  Mr. Simon Thomas: It is a pleasure to follow the hon. Member for Cardiff, North (Ms Morgan), whose advocacy of children's rights in Wales is well known. Judging by the thunder that we heard, her forceful and passionate speech in favour of the children's commissioner moved even the heavens. As her voice appeared to be failing toward the end of her speech, I am glad to be able to save it from further stress; I hope that mine will also last the course.
  I, too, shall concentrate on role of the children's commissioner in Wales and the way in which the Bill can be strengthened in Committee to develop that role. I start by paying tribute to the many right hon. and hon. Members—some of whom might well be present today, unbeknownst to me, as I do not yet know all their faces—who have, over the years, advocated that such a post be created. I pay special tribute to my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd), whose face I do know, who in 1993 introduced a private Member's Bill that would have established a children's commissioner in Wales.

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  The creation of the post was a Plaid Cymru manifesto commitment that was mirrored in some shape or form in all of the parties' manifestos for the National Assembly elections. That is why I was disappointed by the speech of the hon. Member for Woodspring (Dr. Fox), whose approach to Welsh matters showed no understanding of events in Wales. Considering that he was once the Conservative spokesman on constitutional matters, including Wales, it would appear that we have been spared. However, other hon. Members seated on what I still think of as "the Benches opposite", even though they are, in fact, situated to my right, made far more cogent speeches.
  Mrs. Caroline Spelman: My hon. Friend the Member for Woodspring (Dr. Fox) has apologised for no longer being here. I suspect that the hon. Member for Ceredigion (Mr. Thomas) did not hear my hon. Friend say that he understood the importance of the initiative in Wales, but regretted the disparity that will now arise out of devolution. Perhaps the hon. Gentleman should not put words in the mouth of my hon. Friend.
  Mr. Thomas: A measure that delivers in Wales what Welsh people want must be counted one of the successes of devolution.
  Mr. Swayne: We want it as well—that is the point.
  Mr. Thomas: Then it is for English Members of Parliament to make that case for England.
  In his worst mistake, the hon. Member for Woodspring revealed his confusion about the new commission. The standards commission in Wales is to be the National Assembly—there will be no separate body. Therefore, his arguments about the lack of democratic control do not apply, at least in Wales, because there the commission and the Assembly will be one.
  A children's commissioner has been a long time coming, although no particular blame attaches to the current Government or even to the previous Government. The fact is that society as a whole has taken a long time to catch up with the concept of children's rights and the need to enshrine children's rights in legislation. No doubt, before long, similar arguments will be heard in debates on corporal punishment; we shall see how that issue develops. The House will be aware that the establishment of a children's commissioner for Wales was a key recommendation of the Waterhouse inquiry into abuse in north Wales children's homes and foster care.
  I welcome the central tenet of the Bill and the way in which it sets out national standards—Welsh national standards in Wales and English national standards in England. Events in north Wales were not only about the deliberate abuse of children; they involved poor management, poor standards and a lack of listening to children. The lessons of north Wales are now being felt in my constituency. The current director of social services in Ceredigion was named in the Waterhouse report as an individual who had let children down in his previous post in the old county of Gwynnedd. He is now on sick leave while his management role in Ceredigion is externally appraised.
  When the events became public, I was still a member of Ceredigion county council. We noticed straight away that we could not immediately check out county staff and
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  learn what qualifications they had and what standards they had reached. Therefore, I welcome the Bill's provisions relating to standards. I raise that case to highlight the crucial importance of clear management roles and national minimum standards to the protection of vulnerable children and adults in care.
  I also welcome the proposed role of the National Assembly to oversee and monitor national care standards in Wales, and the establishment of Cyngor Gofal Cymru—the Welsh name of the Care Council for Wales, which is responsible for training. I hope that one of the council's priorities will be to deliver training in both languages—I understand that it is to replace the Council for Education and Training in Social Work, which was a pioneer of Welsh-language social work training—especially at local level. Those in my constituency who want to pursue social care training have to go outside my rural constituency and travel 40 or 50 miles to get the NVQ training that will bring them up to the right standard.
  National Assembly Members have made it clear that they want the commissioner to have a strong and powerful role that will allow his or her office to take a view of the quality of life of, and the range of services delivered to, children in Wales. It is true that the Bill, even with the amendment, does not achieve all that we want. The hon. Member for Cardiff, North made the reasonable suggestion that the Assembly should add an advisory role to the work of the commissioner, then seek other legislative opportunities to develop the commissioner's role further. Jane Hutt, the Assembly Secretary for Health said on 1 July 1999:
  we are absolutely committed to establishing an independence Children's Commissioner for Wales who can advise the Assembly on the delivery of services for children.
  That much is within the remit of the Bill. However, she added that the commission, in the role that she envisaged,
  would be able to promote the rights and interests of all children.
  The Bill needs to be strengthened before those aims can be achieved. I would like to think that Ministers will heed the concerns expressed by several hon. Members and look for ways to insert new provisions in the Bill, so that the Assembly can exploit to the full the role of the children's commissioner in Wales. If Wales is pioneering in this regard, I very much hope that other areas of the United Kingdom will see what we can do and follow us in time.
  There is real concern in the National Assembly that the Bill may not be the complete vehicle for the independent commissioner—one who will have the interests of all children in Wales at heart—that so many people want to see. As I understand the Government's intentions, those services covered by the Bill will come under the commissioner's remit, but the wider remit is a matter for debate. We are in danger of having a care standards commissioner, and not a fully fledged children's commissioner. That is one of the matters that we need to address.
  We need to move towards a more obvious ombudsman role for the commissioner, a sort of Ofchild or Offspring, able to take up individual cases if necessary, as test cases, to see how Government policies within Wales affect the whole remit of children's care. I should like to mention one aspect of particular concern to me: the provision of play, which has slipped back over the years from the time in the early 1990s when things seemed to be moving forward very well. We have now slipped back on play facilities for children, an essential part of their natural upbringing.

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  There is also a danger of the commissioner's becoming too bureaucratic. We need flexibility. We need a commissioner who does not just report annually to the National Assembly, where the report is debated for a week or so and then forgotten, but a commissioner who is actively involved in children's issues and reports to the Assembly fairly regularly.
  I should like to take an example from elsewhere, one that I saw last week in Canada—the commissioner of the environment in the province of Ontario, who was looking at the environmental bill of rights and the response of Government Departments to it. It struck me that it had taken five years for that commissioner to grow out of the bureaucratic restrictions on him and start to look at the overarching issues that link together all environmental questions. In other words, he had been concentrating on individual environmental issues, and only after five years or so had grown enough wings to look at the overarching issues, which in that case happened to concern land use planning. I should not like to see that happen in Wales; I should like the commissioner to be looking at those overarching issues from the start.
  There may be some concern that that means that the commissioner will start interfering in many Government Departments, but that is the whole point. If children are to be better served than they have been in the past, a truly independent commissioner must have that ability to go into various Government Departments and see what they are doing for children and how everything links together.
  That is why my party, Plaid Cymru—the party of Wales, has been advocating in the Assembly, particularly in the debate there yesterday, a similar power to that of the Commissioner for Racial Equality and the Equal Opportunities Commission to issue a non-discrimination notice and go in and try to move towards change within Government offices.
  We need to combine the natural influence, which will grow, of the office of a commissioner in Wales with sufficient statutory powers to ensure that children's rights move on in Wales and that the sort of disastrous behaviour to which the hon. Member for Cardiff, North (Ms Morgan) referred is put firmly in the past.
  An additional and important power is enforcement, where there are questions in relation to cross-boundary issues. This can best be illustrated by talking briefly about the Welsh language. Many hon. Members will know that it is one of the two official languages in Wales, and there is an obligation on all Government Departments to deliver services in the Welsh language, which by implication, with the Children Act 1989 and the need to take into account children's cultural background, means delivery of services in Welsh to Welsh-speaking children. There are young people who leave Wales for care. Young offenders are an obvious example. I am concerned about how their needs may be met within the context of the Bill.
  This raises a question about the children's commissioner's remit for non-devolved and cross-border matters. These are no doubt matters for debate and discussion in Committee. The Welsh Language Act 1993 is a useful model.
  I should like briefly to mention private sector care homes. I agree with many of the points made during the debate by Labour Members. However, I would point out
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  that in rural areas private sector care homes play a very real role where the local authority cannot deliver the small-scale homes that allow people to stay in their villages. We have many small homes in Ceredigion of just four or five units, which allow people to stay in their own community, where their family live. I should not like to see standards introduced in such a way as to force those homes out of business.
  My final point concerns the role and participation of children and young people themselves. The National Assembly has a unique partnership with the voluntary sector, a scheme that is unique within the framework of the United Kingdom. This could be a very useful base for expanding the advocacy role of children. The National Assembly can use its burgeoning relationship with the voluntary sector and advocacy and children's organisations, such as Children in Wales, to listen to the views of children and involve them in the appointment and progress of the office within Wales. I hope that on this and other matters the Government will listen not only to what the National Assembly says, but to what its Committees are saying. There are some interesting debates going on there. I hope that we can deliver to Wales the sort of children's commissioner that the children and young people of Wales deserve.
  4.56 pm
  Mrs. Joan Humble: I should like first to say how pleased I am at the interest that so many hon. Members have shown in this debate, many of them drawing on their own experience to take part in it in a constructive manner. The interest shown in the debate perhaps also reflects the fact that now is the time for a new legislative framework.
  The hon. Member for West Chelmsford (Mr. Burns) referred to the Registered Homes Act. That legislation was passed in 1984, and much has changed since then. It is now time to look at a new framework, and especially a new national framework, with national standards, so that individuals do not suffer from a lottery of care depending on where they live.
  Perhaps that is why the Bill has been so warmly welcomed by so many bodies—local authorities, the independent sector, the voluntary sector; indeed, all agencies concerned with caring for vulnerable people. It is the culmination of a great deal of pressure from many people over a long period of time. It is important that we get it right, because we are talking about the most vulnerable members of our communities. We need to ensure that we are setting the right standards for them and supervising the care that they receive.
  In setting those standards, we must first look at the 1 million-plus people who are employed in the care sector and ensure that they are trained, regulated and supported. Therefore, I shall begin with a few comments about the proposed General Social Care Council. The council will at last give social workers the status as a profession that they deserve.
  Mr. Dawson: Hear, hear.
  Mrs. Humble: I thank my hon. Friend for that intervention. He is also a constituency neighbour, and yes, he would say that because from past knowledge of him as

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  a social worker, I know that he cared deeply for the young people for whom he cared. There are many more such social workers, often working in difficult circumstances.
  It has always been especially difficult for social workers to project a positive image of themselves and their work, because examples of poor practice when things go wrong are what hit the headlines. The public rarely hear of the hard work, the long hours and the commitment of social workers dealing with difficult people, often in difficult circumstances.
  We must also remember that sometimes the wrong decision is made, and worse, sometimes social care staff are involved in abuse and misconduct. Many people are dependent on the care and support given by social workers and other social care staff, who make vital decisions about their welfare. By setting up the General Social Care Council, we will be able to reassure clients that standards have been set, training specified and codes of conduct put in place, as well as giving status to the profession.
  I look forward to the council gradually including more groups of care workers in its remit as the educational standards are set and met. It is often care assistants in residential establishments, day centres or domiciliary agencies who deal with vulnerable people, so they need to be drawn into the scope of the regulatory system.
  The National Care Standards Commission will allow users, staff and the public to get a much clearer idea of what standards of service and conduct to expect. Many people who approach social services for various sorts of service have little idea what is on offer, what to expect and how to judge the quality of the service. At last, we are to give them information that will enable them to judge the quality of the services offered; to know what they are entitled to; and if it is not offered, to ask why. As members of the public, they will be able to get involved in the debates in which we are engaged in determining care standards. I hope that the commission will actively engage in the process of empowering service users, listening to what they want, and discussing their priorities for social and nursing care.
  We have heard much about the need to listen to children. I entirely agree that it is important for the voice of the child to be heard. Equally, it is important that adults with disabilities have a say in the sort of provision that they receive, and that elderly people are listened to, not just for the purpose of setting up the services, but when they have complaints and concerns. I am particularly conscious of the fact that many elderly people do not complain about the services that they receive. They are extremely vulnerable, so we need to encourage them to be directly involved.
  I shall comment on the "Fit for the Future?" document, with no apologies to my right hon. and hon. Friends who have spoken about it with passion. I want to pick up on concerns expressed by Opposition Members. It is not just in rural areas, as the hon. Member for Ceredigion (Mr. Thomas) said, that care homes are a vital part of the community.
  Many elderly people have come to Blackpool to retire. They come to the Fylde coast to enjoy the sunshine and all that it has to offer, but the time comes when they look for residential care. We have many residential care homes, which I visit. I speak to the staff who work in them and to the residents who are looked after there.
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  "Fit for the Future?" is an important document and should inform much of our debate. Many of its proposals will improve the quality of life and the quality of care for older people, so we must not dismiss it out of hand. Many of its recommendations for good practice are already being implemented in care homes, but those who run homes in the private sector in my constituency are concerned about the physical standards that homes will have to meet.
  Some of those standards will be difficult, if not impossible, to meet. The document acknowledges the need for a realistic timetable for implementation of national standards, and recognises that they will need to be applied with a "certain degree" of local flexibility. That flexibility will be crucial.
  In the Lancashire county council area, 71 per cent. of homes will not meet the standard for 10 sq m bedrooms. In the Blackpool unitary authority area, that figure rises to 91 per cent. Fifty per cent. of Lancashire's residential homes and 34 per cent. of Blackpool's will not meet the requirement for 80 per cent. single rooms. That includes a large number of homes offering care to my constituents.
  Mr. Michael Jabez Foster: Does my hon. Friend agree that the seaside towns especially will have a problem? Victorian and Edwardian buildings, many of which are listed, will have particular difficulties in complying with the standards, not just in terms of cost, but physically. Does my hon. Friend agree that a light touch will be important with respect to those areas?
  Mrs. Humble: I strongly agree with my hon. Friend. Many of the homes that I visit are exactly the sort of establishment that he describes. They are small homes offering fewer than 25 beds and are converted from former domestic residences. Indeed, many elderly people choose them precisely because of the homely environment that they offer. I hope that the Government's final proposals will be sufficiently flexible to recognise the particular local difficulties that areas such as mine and other coastal towns may have.
  Mr. Hammond: I know about the star rating system that operates in care homes in the hon. Lady's constituency. Does she agree that it might be better to think in terms of establishing an overall star rating system measuring the overall care experience in a home than to think in terms of mechanistic measures of input, as the Bill seeks to do?
  Mrs. Humble: The hon. Gentleman has anticipated what I was going to say. I will elaborate on the star system shortly.
  Implementing "Fit for the Future?" as a standard will cause widespread home closures. It will seriously destabilise the care market, and will also reduce the amount of choice for potential clients. All that, however, must be seen in the context of the full commitment of my local care providers—and certainly that of the Lancashire Care Association—to the provision of high-quality care. I see that when I visit homes in the area.
  In Blackpool, the commitment to standards and quality has led to a partnership between the local authority and the independent and voluntary sector in the development of an independently run star rating system. Residential

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  Domiciliary Benchmarking has developed a detailed set of criteria against which both independent and local authority homes are measured. Interestingly, that anticipates the Bill's provision for all homes to be treated equally.
  The star rating scheme offers a mechanism for external validation, but it is also a useful management tool for home managers. It offers annual assessment of residential care establishments that highlights both their strengths and their weaknesses, enabling managers to deal with the weaknesses and enhance the strengths. In the first year of the scheme, about half Blackpool's homes have participated and have been awarded stars. A brochure has been produced, which means that members of the public have a much clearer idea of what services are on offer before placing their elderly relatives in homes.
  Blackpool council has decided to reward higher standards of care by paying homes more if they have higher star ratings. It recognises that investing in quality sometimes has cost implications, and it is rewarding those who are investing in training and in improving quality. There has been a 3 per cent. increase for two-star establishments, a 4 per cent. increase for three-star establishments, and a 5 per cent. increase for four and five-star establishments in the fees that the local authority will pay. That often leads to substantial additional income for homes, so it is clearly an incentive for investment.
  I am sure the Minister will expect me to say this. Yes, sometimes quality does cost—although many aspects of the Bill demonstrate that we can raise standards simply by changing work practices and improving management. I know that substantial additional resources have already gone into social services, and I have seen the results in my constituency. Lancashire county council has invested an additional £750,000 in community care services, and that is now showing on the ground in terms of the assessments that people receive. There is much to be welcomed in the Bill. As I have said, we see examples of good practice locally—certainly in my constituency.
  I should like to discuss many parts of the Bill, but I have run out of time and others wish to speak. I look forward to their speeches, and to the speedy passage of the Bill.
  5.9 pm
  Mr. Julian Brazier: I have mixed feelings about the Bill. I am torn between welcoming any measure that would tackle abuse in homes for children, the elderly and vulnerable adults with learning difficulties, and considerable disappointment that this huge, complicated and lengthy Bill is mostly about establishing regulatory structures but does not contain much of a clue about the content of those regulations.
  I am co-chairman of the all-party adoption group and a vice-chairman of Voice, which looks after the interests of adults with learning difficulties.
  I shall make three relatively brief points before focusing principally on children in care and adoption. First, I echo the points that have been made thoroughly and extremely articulately by several of my hon. Friends and, most recently, by the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble). A balance must be struck on regulating residential and nursing homes for the
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  elderly. As my hon. Friends have said, that balance must focus on the quality of care, not meeting the length of a tape measure.
  Another good residential home has closed recently in my constituency because of financial overstretch. Its owners said, bluntly, that reading "Fit for the Future?"—the Government's consultation document—finally persuaded them that their home had no future. [Interruption.] The Minister may shake his head, but they said that publicly.
  Secondly, it is also extremely important to strike a balance when legislating for pre-school child care, and considerable emphasis must be placed on weeding out potential abusers. The industry is expanding quickly under the working families tax credit and other Government policies and, irrespective of whether one approves of those policies, it is sadly inevitable that paedophiles will try to get into the market as it expands. The industry is vulnerable because 126,000 people have been convicted of serious sexual or violent offences against children. However, the need for checks—such as those carried out by the police, as well as the measures hinted at in the Bill and the rigorous pursuit of references—should not be confused with petty over-regulation.
  We should learn from our dreadful experience of the ham-fisted attempts of social workers in Kent to close several excellent playgroups after the introduction of the Children Act 1989. An especially good playgroup in Whitstable came within an ace of being closed down on the basis that there was insufficient provision of lavatories, even though the Government circular issued in the wake of the Act made it clear that the scale guidelines on lavatories were not to be interpreted mechanistically. The inspectorate was forced to back off and we saved a good playgroup at the last minute.
  Thirdly, I want to make a particular point on adults with learning difficulties. The Government's ideas, if fleshed out, should be good news, but I remind the Minister of a matter that has been on his desk for some time. In a joint letter, the hon. Member for Slough (Fiona Mactaggart) and I raised the matter of access to the files of people with learning difficulties. A legal anomaly seems to have existed for a long time. Whereas adults are entitled to access to their files and can obtain files on behalf of children, there is no mechanism for getting hold of files on behalf of people with learning difficulties, who, unfortunately, are prevented from obtaining their own. I hope that the Minister will address that.
  The Minister will not be surprised to hear that adoption and children in care constitute the principal burden of my speech. Hon. Members from all parties have raised the issue of adoption. We all welcomed the news that Downing street was setting up a unit to consider the lamentable figures: fewer than 4 per cent. of children in care have been adopted in the past five or six years. That is only 2,000 out of nearly 53,000 children who are languishing in care. The majority of them are in foster care, but a proportion are in children's homes. Twelve thousand have been in care for more than four years. Some of those are now too old realistically to be adopted, but they could have been candidates for adoption when they were first placed in care.
  I was tremendously disappointed when I read the Bill and found that, while plenty of clauses relate to regulating fostering agencies, it provides no specific ammunition on

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  adoption. The Secretary of State made only a passing reference to adoption in his opening speech. [Interruption.] I am sorry, but I did not hear that sedentary intervention.
  Mr. McCabe: I simply said that the Secretary of State made a more lucid statement than the hon. Member for Woodspring (Dr. Fox), who said that all children who came into care for any amount of time should be considered for adoption.
  Mr. Brazier: The Secretary of State made no statement on adoption. He mentioned it in only half a sentence, whereas my hon. Friend the Member for Woodspring (Dr. Fox) made sensible recommendations. I believe that, after a transitional period, when it has been established that children are most unlikely to return to their birth families, in principle, every child should be considered for adoption. There are examples in my constituency of much older, severely abused children, who have been successfully adopted with remarkably little support, even though, like many other hon. Members, I would argue for more support.
  Mr. Hinchliffe: Will the hon. Gentleman give way?
  Mr. Brazier: I am sorry, but we are up against the clock and many other hon. Members wish to speak.
  I want to mention two subjects in this area that the Bill could have covered but does not. There have been strong statements from Downing street about the way in which we will coerce—that is the only appropriate word—the many local authorities with appalling records on adoption from care into providing for more adoption, and especially into considering more favourably parents who want to adopt.
  Let me deal with one canard. Time and again when I have debated the point with senior social workers, they have said, "Ah, Mr. Brazier, you'd be the first to castigate us if we placed for adoption children who were subsequently abused." Yet the local authorities that have the worst records of not undertaking proper police checks and thus of placing children in foster care, where they have been abused, and which have repeated incidences of abuse in their children's homes, also have a lamentably low record on placing children for adoption. That can be checked in the Library.
  For example, three London authorities are involved in one case in my constituency. For many years, they placed children with a single man who was sent to prison two years ago. He was known to Kent social services as a potential abuser, yet for 10 years three London local authorities placed children with him for fostering because they could not be bothered to check with the local social services. Last year, one of them, Lambeth placed fewer than 1 per cent. of the children in its care for adoption.
  I should like to propose concrete measures for coercing those authorities into giving parents who want to adopt a fair chance, after carrying out the sensible police and reference checks. They should not discard them simply for the familiar, politically correct reasons that we have heard so often.
  There are several ways of doing that. One is a national register, which was suggested by my hon. Friend the Member for Woodspring. I would support that. If the
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  Government are not willing to go that far, another approach would be to put some welly at least into the existing legislation on value for money. Arguably, more than half of local authorities are performing really badly, but we could take the duty away at least from the really bad ones at the extreme end—the Lambeths, the Islingtons, the Hackneys and one or two leafy rural authorities, too; why does Dorset have such a poor record when Bournemouth next door has a good record, for example?—and hand the duty over either to voluntary agencies, or to a national agency.
  A second proposal within the issue of adoption and children in care could be in the Bill and is not. I have said that the Bill is all about setting up frameworks for regulation. I think that there is much to be said for having a national framework, but there is little hint of what the regulations will be.
  I know that the Minister is a fair-minded man. He kindly received a delegation of the all-party group on adoption before it had even formalised its all-party statement. We had a good exchange with him. Last year, his Department commissioned some excellent research, with which I know the Minister is familiar, from Cardiff university. It was published by BAAF—British Agencies for Adoption and Fostering. It caused considerable ripples because it took the lid off the poor practice in many local authorities. Above all, it ended with a mass of detailed and sensible proposals in that area.
  Many of us hoped that those proposals would form a basis for Government regulations and that they would then be put out to consultation, so there was dismay when we heard that, instead, the Government had given the whole package back to BAAF and asked it to spend a long period bringing out its own regulations, which would then go out to consultation.
  I do not want to get involved in any personal attacks. I look forward to the director of BAAF, Felicity Collier, addressing our all-party group on the subject in a fortnight's time, but two facts are indisputable. First, BAAF has consistently supported the practice in most local authorities and attacked organisations such as the Institute of Economic Affairs, which first took the lid off what was going on. Secondly, BAAF is principally funded by adoption agencies, including many of the local authorities where the problems exist, so it is disappointing to hear that it, rather than the independent report, will be given the role of providing the core of the regulations. Ironically, BAAF published that report. I hope that, in answering that point, the Minister will identify what pressure he has put on BAAF to ensure that some strong voices from outside the immediate BAAF club are involved in drafting those regulations.
  Within the limited time available to me, I should like to make two further points. First, the Minister is setting up a children's commissioner with the power to look at the interests of children in care, a proposal that is warmly welcomed by hon. Members on both sides of the House, although there have been various criticisms, and questions as to whether it goes far enough. I think that, on balance, it is a good thing, but I strongly suggest that we need something else—it was hinted at by my hon. Friend the Member for Woodspring and my hon. Friend and neighbour the Member for Faversham and Mid-Kent (Mr. Rowe)—a clear statutory role for volunteers in the system.

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  By chance, I heard testimony only a month apart; first at a Voice meeting from someone involved in whistleblowing in the learning difficulties area; and then from a lady who had much to do with taking the lid off child abuse in Wales. It struck me how difficult it was for professionals to blow the whistle, so I make an appeal—I see that my time has come to an end, Mr. Deputy Speaker—for a much bigger statutory role for voluntary mentors in the system.
  5.24 pm
  Mr. Jonathan Shaw: I am grateful for the opportunity to speak in this debate. As someone who worked as a care assistant on first leaving college, and, more recently, as a social worker, I warmly welcome the Bill. I have had personal experience of the difficulties caused because we did not have the type of provisions made in the Bill. It addresses issues that have caused the profession and the public many concerns.
  I am pleased to see that my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) is back in the Chamber, as I should like to join in the accolades paid to him by my hon. Friends. His passion, drive and determination are responsible for much of this legislation. Those of us who were in the Chamber when he presented White Papers and the Utting report could not fail to detect that passion, much of which we heard in his speech today.
  We look forward to the passage of the Care Standards Bill—and to Second Reading of the Children (Leaving Care) Bill. Both Bills will do much to assist and improve safeguards for some of our most vulnerable citizens. As any of us, or our friends or relatives, might one day need care, we could all be directly affected by this Bill, so we all have a self-interest in its passage.
  There have been various reports and inquiries on care standards: on how we can care for those of us who are frail or disabled and protect those of us who have been abused. The names of the inquiries and their chairmen have changed over the years, but, every time that there is another inquiry, we politicians shake our heads, wring our hands and say, "This must never happen again." Sadly, it does happen again. I hope that this legislation will change that, so that we never again have reports such as that on the appalling events in north Wales. However, we do not know what will happen in the future, and such events may occur again. We can only do our very best in legislating, but we should be prepared to revisit the issue. Nevertheless, I hope that we never again see such cases.
  When I was undertaking my social work training, the Kimberly Carlisle and Jasmine Beckford tragedies—I am sure that many hon. Members remember them—caused us consternation. It was difficult to believe that young children could slip through the net and lose their lives. More recently, we have had the Utting report, and the harrowing Waterhouse report, which told of children living in a climate of fear, violence and abuse, with people inflicting deep emotional scars on them. Those reports have showed us the system's deficiencies.
  Lack of training is one of the recurring themes in those huge reports. However, training and proper qualifications in providing good-quality child care and good-quality domiciliary care for the elderly and disabled require
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  investment. As long ago as 1948, the Curtis report examined the situation in children's homes and told of the need for better-qualified residential staff. More that half a century later, we are saying the very same thing.
  Many hon. Members have mentioned the 1 million people in the social care work force, 80 per cent. of whom have no qualifications. I welcome the 50,000 qualified social workers who will be added to the register of the General Social Care Council, and I think that there is a commitment that heads of homes also will be registered as soon as possible. However, as hon. Members have already said, the many other social care workers should be registered.
  It will take a long time to do that. Work in social care is often poorly paid, and those who do it may not continue long enough to obtain qualifications to enable registration. I hope that, in his reply, my hon. Friend the Minister will say whether he has an aspiration, or a timetable on qualifications, for those people, and whether he can report back to Parliament on any progress. We do not want to find that in 20 years, the figure for those without qualifications is still 70 per cent.
  Dr. Tonge:rose—
  Mr. Shaw: I would rather not give way, because I want to try to keep my speech short so that my hon. Friends have a chance to speak.
  I hope that my hon. Friend the Minister will be able to refer to qualifications.
  The General Social Care Council is a welcome development that will do much to raise the profession's standing. It has been called for for a long time. There is a shortage of qualified social workers and many local authorities find it difficult to fill all their posts. That increases the case loads of existing social workers, because they want to ensure that all the children on the at-risk register are visited and the standards of the day centres are checked. There are only so many hours in the day. If the council raises the profile and standing of the profession, new applicants may be attracted.
  Social workers do not receive many accolades. They are often damned if they do and damned if they do not. We do not see headlines saying "Mrs. Jones is on the road to a full recovery thanks to the care package put together by her social worker", but that is what normally happens: the boring, day-to-day reality of social services departments. The scandals are few and far between.
  One of the golden lessons from the many reports that we have received is that we have to listen to children better. Warner, Waterhouse and Utting all said that. Children need to have confidence that the structure is real, not a black hole where complaints are lost. Complaints should not be dealt with by the individual concerned. I have seen complaints go up and down the line, with the social worker involved sending it up to the director. We need a more serious system in which young people are listened to.
  I salute and applaud the quality protects programme, which is making a real difference. It is not just warm words, but real money that the Department has put in. It is having a good effect in my two local authorities of Kent and Medway. I hope that the Government keep the issue of putting advocacy on a statutory footing under review.

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  The children's rights officer is another welcome development, although, together with many hon. Members on both sides, I would rather have a children's rights commissioner, who would cut across all Government Departments and could be a champion who impacted on all legislation.
  Putting independent fostering agencies on a level playing field with the public services is welcome. I worked in a fostering team in north Kent for a while. The Utting report made specific mention of the growing number of private fostering agencies in that part of the country, principally to serve the London boroughs, which had great difficulty in recruiting. We did not know anything about those agencies and had no relationship with them. That shroud of mystery led to suspicion. We understandably felt some animosity when they poached our foster carers, as we saw it. We do not want stand-offs. I am sure that the agencies had an important contribution to make. Let us get them working together. A level playing field of inspection will do a lot to bring the agencies together.
  Another important issue is private fostering. Amendments were tabled in the other place by my noble Friend Lady David to regulate private fostering. The Government resisted them because they felt that private fostering concerned arrangements within families. That certainly was not the case when Utting reported, as he was concerned about private fostering. In paragraph 3.74, Utting quoted a social services inspectorate report of 1993 which said:
  Private fostering covered a wide range of situations in which potentially vulnerable children were being placed in the care of strangers, without any checks being undertaken as to their suitability to the care for children.
  The way in which some of the placements were being made raised some very real concerns about the welfare of these children.
  Time and again we have heard in the Chamber today, "Is it good enough for my relatives?" Given that background, would I be happy to place my child with a private fosterer? No, I would not. I would want that fosterer to be regulated. The matter should not stand as it is in the Bill at the moment, with an inspection and a visit every six months for the child. We know that, with a shortage of social workers, that will not happen. We need private fosterers to approach the National Care Standards Commission to be regulated and registered. Otherwise, we will see similar situations. I hope that the Government will reconsider that matter, given the contradictory information given in Committee in the other place and in the Utting report.
  On many fundamentals, the Bill is uncompromising, because we have compromised too much in the past. It will be welcomed by high-quality service providers in the public and private sectors. It will be welcomed by children in care, elderly people in residential care, people with disabilities and the country.
  5.37 pm
  Mr. Desmond Swayne: I believe profoundly that we get what we pay for. As a people, we have always wanted things on the cheap. We have been unprepared in many instances to pay the premium required for quality. If people do not get what they pay for, they are largely responsible themselves for not insisting on quality. As a nation, we are poor at getting
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  quality. We are good at complaining, but we complain to one another; we rarely confront the restaurateur and send back the bottle.
  If we insist on quality, and we realise that we have to pay a premium for quality, we ought to be prepared to pay that premium for quality when it comes to quality of care. The state, through at least one of its agencies, is the largest purchaser of care services. We have a profound impact on the market by the standards that we demand and for which we are prepared to pay.
  The hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) was perceptive. If the Government think that room sizes and doorway widths are important priorities and if they are prepared to pay the premium for them, that will send a powerful signal to the market, and the market would respond to that. My fear is that the Government are not prepared to pay for the standards and quality that they want. They want to achieve those standards without paying for them; to achieve them by regulation.
  When the Secretary of State was asked what estimate he had made of the costs to local authorities of providing the standards in the draft standards guideline that he had issued, he said that he had made no such estimate. That is irresponsible. Is the intention behind the Bill to privatise that form of residential care? If the impact of the measures is to drive the public sector out of the market, that will be the result.
  Another reservation that I have about the Bill is that it is something of an empty page on which regulations can and will be written. I do not favour such enabling legislation, because it leads to much bad law. When constituents ask us how on earth this or that legislation came into existence and how could we have voted for it, the answer often is that we never voted for it at all. It was subject to the negative resolution procedure, sat in the Library for 20 days and no one raised a prayer against it. Nobody actually read it, so it became law. I favour a return to the system whereby every regulation was included in Bills and every Committee stage was taken on the Floor. Of course, we would have much less legislation, because it would take so long, but I reckon that we would be much better governed as a result.
  The Government cannot resile from the draft standards that they have issued, including those on room size and door widths, and I draw the Minister's attention to the perceptive comments on those standards by the hon. Member for Blackpool, North and Fleetwood. A representation that I have regularly received from my local care providers is that the owners of residential care homes perceive that they will be subjected to the same standards as nursing care homes, and the two are very different.
  There has been some talk about how sensitively the regulations might be introduced—perhaps over two, five or even seven years. However, if care home owners have borrowed money over 25 years to address the standards in their residential care provision, and then fall foul of the new regulations, a seven-year introduction period will be of no benefit. The mere issuing of the standards has blighted the industry. I have had many care home owners tell me that they are now unable to sell their properties as a result of the proposed regulations, and the banks and finance providers have noticed that and are not prepared to lend.

  541
  I find it strange that I agree in many respects with the hon. Member for Wakefield (Mr. Hinchliffe) on the provision that Ofsted should be required to scrutinise the activities of pre-schools, especially when the main competitor of pre-schools—the reception classes in primary schools—will not be subject to the same level of regulation. The Bill may be a disaster for pre-schools, which are part of a delightful movement. All my three children have been through pre-school education and my youngest is still there. I really enjoy visiting the pre-schools in my constituency, but they all take place in dusty, perhaps inadequate, church, school and village halls. I wonder what blow will be dealt to that movement by a host of unwelcome and unnecessary regulations. I thought that parliamentarians might have learned from the disaster that regulation has been for so many other activities, not least the livestock and meat industry.
  In conclusion, I draw the House's attention to the contribution from the right hon. Member for Coatbridge and Chryston (Mr. Clarke). He said that it was important that we provide for our elderly people a loving and caring environment. How true that is, but regulations measure only the easy, unimportant things. Room sizes and door widths make little difference to a loving and caring environment. That is reason enough for voting for the amendment this evening.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. Before I call the next Back Bencher, I point out to the House that five remain to be called. The winding-up speeches will begin at 6.30 pm, so hon. Members can draw their own conclusions. I have no power to restrict any contribution, but all five Back Benchers can be called to speak if speeches are curtailed.
  5.45 pm
  Mr. Steve McCabe: I begin by congratulating my right hon. Friend the Secretary of State on bringing forward the Bill. Regulation in this area is long overdue, and the clear aim is to raise standards and protect vulnerable people.
  My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) spoke about day care and domiciliary care. I understand that a Government amendment in another place means that establishments providing day care for elderly people will now be included in the National Care Standards Council. As the elderly population expands, and as we encourage the policy that people should be maintained in their homes for as long as that is practicable, the matter of day care provision and domiciliary care is likely to arouse as much concern as residential care. Will my hon. Friend the Minister say when he hopes that day care provision for elderly people will be subject to regulation and inspection?
  It is worth noting that about a third of all psychiatric care in this country is conducted in private psychiatric hospitals and clinics. That is a vital sector, but it is also open to all sorts of potential abuse. It is right that we should seek to regulate it.
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  We should also be concerned about the fairly substantial numbers of people who are transferred to national health service hospitals following failed treatments or procedures originally carried out in the private sector. Many of the operations are quite substantial. If they were carried out in the NHS, the consultant would be supported by three or four assistants, but in private hospitals he often performs operations without that help. It is probably no great surprise therefore that so many errors and mistakes arise. It seems to me that that is another area ripe for some regulation.
  Clause 6 establishes the National Care Standards Council and is to be welcomed. However, what will be the relationship between the council and the social services inspectorate? At present, the inspectorate plays a significant role in promoting standards of good practice.
  Ministers have given assurance that regulators appointed by the commission will be experienced people, with special expertise in health or social care. Will my hon. Friend the Minister say a little more about their recruitment?
  I especially welcome the provision that a complaints procedure will be a condition of registration. Will my hon. Friend confirm that that requirement will apply too to private nurseries and child day care provision?
  I recently had personal experience of a private nursery in my constituency. No complaints procedure was in place there, and the nursery had many other shortcomings. I understand that social services departments have limited powers with which to deal with such establishments. What makes it all the more alarming is that the proprietor of the nursery is an inspector for Ofsted—the very body that will be responsible for inspecting child day care provision. It cannot be right to employ as regulators people whose own standards of practice leave a lot to be desired.
  There has also been criticism from the private residential sector of inspection work carried out by the local authority. There remains suspicion in some quarters—with reason, I think—that some individuals are unduly hostile towards the private sector. We need to have confidence that inspection or regulation will be truly independent. We should be careful about employing those who have ideological objections to a particular sector, allowing those with direct business interests to inspect their competitors, or employing those whose own standards of practice are flawed. I would be grateful if the Minister could reflect on that when considering the best way to recruit appropriate staff.
  I welcome the establishment of the National Care Standards Commission, which seems to be a response to the Sutherland commission. I appreciate that I have nothing like the influence with the Minister that the hon. Member for Sutton and Cheam (Mr. Burstow) has. However, now that the Government have brought forward this Bill, which deals with one aspect of the problem, may I ask my hon. Friend the Minister whether it is not time to bring forward complementary proposals to deal with the question of payment for residential care? I welcomed today's announcement on guidance for domiciliary care charges, but we need to sort out who pays, what level of means-testing—if any—will be applied, and what charges should be applied across the country. The hon. Member for Sutton and Cheam pointed out that the recent Audit

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  Commission report shows a remarkable variation in charges, but there is no correlation between the level of charge and the standard of care or service.
  Quite a lot of time has been spent today on the private residential sector and the draft standards suggested in the consultation document, "Fit for the Future?" Significant costs could be imposed on the sector, leading to a significant reduction in capacity, if those draft standards are implemented too quickly or if there is too much rigidity when considering the physical features of homes.
  A care home owner said to me recently that if he were to comply with the room size requirements, he would have to rip out all the en suite facilities that he has just installed at considerable cost. That makes no sense. I welcome recent ministerial comments that it is planned to phase in those requirements and that the emphasis will be as much on standards of care as on any physical feature.
  The hon. Member for Woodspring (Dr. Fox) made the point that if Ministers are considering giving private care homes a new role in providing care for those leaving hospital and needing recuperation, we have a right to expect significantly higher standards in those establishments if they are to provide adequate intermediate care. In such cases, it is reasonable to demand increased numbers of properly trained and qualified staff and resources such as physiotherapy. The prospect of a new and quite lucrative market for care home owners surely means that they should wish to upgrade their establishments significantly. We should make a distinction between establishments that might seek that sort of business and other homes to which right hon. and hon. Members have referred.
  I welcome the proposed General Social Care Council, but how will it be funded? Will it receive part of the budget now held by the Central Council for Education and Training in Social Work, which is about £600 million a year? What will the relationship be between the council and the register that it will establish at some time after April 2002, and the new nursing regulatory body, which I believe will cover health care assistance. which is likely to come into force in September 2001? We need to know whether there will be a point of contact or connection between these agencies.
  5.55 pm
  Dr. Peter Brand: I welcome the thrust of the Bill. It will allow us to catch up with changing practice over the past 20 years. There were fit people in part III homes 20 years ago, and we now have residential and nursing homes in which there are much greater levels of dependency. We have heard that the private sector does much work that used to be the natural work of the national health service.
  The Bill does not address sufficiently the anticipated changes that I hope that its enactment will encourage. The contribution of the hon. Member for Wakefield (Mr. Hinchliffe) clearly made that point. If we are to use the private sector imaginatively, we should stop the current practice of using it as a sort of oubliette for difficult people with whom we do not want to bother the NHS. It is not a challenge for the private sector provider only to give us a modern service. The NHS must ensure that there is suitable outreach from the secondary care sector and other such areas. For that reason, I am extremely disappointed that we do not have a common final route of
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  complaints—for example, using the health ombudsman for all patients irrespective of whether they are in the private sector or in the NHS, or funded through the private sector or the NHS.
  The two inspection regimes will be extremely confusing. No doubt that issue will be explored when the Bill is considered in Committee. I welcome the inspection registration that will be set up for residential homes. However, I hope that there will be a reasonable amount of local discretion. Inspection and registration should not mean hitting people over the head and removing their ability to provide a service.
  We have had an extremely good joint inspection and registration unit on the Isle of Wight. It did not merely inspect and regulate because it advised, supported and guided on better forms of practice. I hope that the local element of a national system will not be lost.
  Flexibility of interpretation should be allowed when dealing with the draft standards that have been published. There is no need to say anything about that after the excellent speech by the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble). However, I shall use the example of an acute nursing home that is used by patients for only a short period, occupying their own room. Must such a place have enormous dining rooms, common rooms and smoking rooms if they are never to be used? There should be a degree of local discretion.
  I shall engage briefly in the children's commissioner-children's director debate. I appreciated the contributions made by the hon. Members for Cardiff, North (Ms Morgan) and for Ceredigion (Mr. Thomas). I hope that we can benefit from the Welsh Assembly's more enlightened view. I think that the hon. Lady and the hon. Gentleman are being too modest in not pushing for what they clearly want to see in their home country to be set out in the Bill. We would support them because that is what we want to see in our home country. I hope that in Committee they will support amendments that may well take the form of a ten-minute Bill that was introduced not so long ago.
  There is also the matter of child care, child minding and pre-school playgroups. I have some fear of Ofsted in that regard. Unlike our local inspection and registration unit, which is an enabling organisation, most schools in my local authority have not found being Ofsteded a positive experience; they tend to be relieved when it is over because they do not enjoy the process.
  When dealing with small, flexible organisations such as pre-school playgroups, it is important that there is knowledge as well as structure—sympathy as well as regulation. That would be better achieved through the inspection and registration set-up that will be created, which would have a social care background, than through an assessment of how well children are doing on their tables or of the standard of their reading and writing.
  I hope that the new regulations will resolve the anomaly over child minding under the child care tax credit system, whereby people can receive the credit only if they use a registered child minder, who must have a qualification for under-fives. Under the regulations, children with special needs or learning difficulties can qualify for those credits, but older children rarely benefit from the care of people who are trained specifically to look after the under-fives. At present, the system is far too rigid. It should be

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  possible to assess individual carers as to their suitability to look after a particular child. If they are appropriate, the tax credit should not be denied.
  In response to an intervention by my hon. Friend the Member for Sutton and Cheam (Mr. Burstow), the Secretary of State referred to domiciliary services. The royal commission was clear as to the difference between the provision of home helps, who traditionally give social support such as housework and shopping, and the domiciliary help that people need because they are physically or mentally frail. Our policy is to means-test charges—we would welcome a unified set of regulations—for social support in people's homes, but to work towards the provision of free personal care, whether delivered in a residential setting, such as a nursing home, or in people's own homes. That would eliminate the perverse incentive to shunt people off to homes, because, as has often been pointed out this evening, people want to stay in their own home for as long as possible.
  6.3 pm
  Ms Jenny Jones: As someone who worked in child protection and on child abuse cases some years ago, I support much of the Bill. Many of the new provisions are long overdue.
  I congratulate my right hon. Friend the Secretary of State for Health on presenting the Bill, and join my colleagues in praising my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) for his work on such matters—I am pleased that we can acknowledge his input.
  I seek clarification on the transfer of regulation of child minding and day care from local authorities to a new arm of Ofsted. My hon. Friend the Minister will be reassured to hear that I am not making a pitch to serve on the Standing Committee; I merely want to know how that transfer of responsibility will work.
  Although I realise that we need consistent national standards for the regulation of child minding and day care, we should note that some local authorities have maintained good standards for a considerable time and have offered an excellent service. One of them is Wolverhampton borough council. In correspondence with me last year, the Department of Health acknowledged the excellent work done by Wolverhampton. Councils that already offer an excellent service are concerned about the effects of such a transfer of responsibility. Therefore, I want to take the opportunity to try to clarify some issues.
  In Wolverhampton, we found that the registration and monitoring unit of social services works very closely with the Wolverhampton Childcare Agency, which develops child care for the under-fives. It was set up more than a decade ago and is acknowledged nationally for the good work that it does. The agency and the unit deliberately work closely together to build up the local intelligence network that is needed if their work is to be effective. If the regulation arm of such work is to be moved from the local authority to Ofsted, will my hon. Friend the Minister tell us how that link will be preserved? On the face of it, the link will be broken and that has implications for the quality of the local service.
  I agree with my hon. Friend the Member for Wakefield (Mr. Hinchliffe) about Ofsted. I have grave reservations about whether a new arm of Ofsted will be the suitable
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  national body to take on the regulation of child minding and day care. Ofsted has a certain style and, frankly, that style will be inappropriate for the regulation of child minding and day care. It is as simple as that.
  At the moment, Ofsted deals with formal education. As far as I am aware, it does not have any expertise in the regulation of child minding and day care, so where will it acquire such expertise from? The obvious solution seems to be that staff working in local authorities will be transferred to Ofsted, particularly if it works on a regional or sub-regional basis. Will my hon. Friend the Minister clarify whether that is the case? If it is, what arrangements will be made, especially bearing in mind that they will probably have to take account of the Transfer of Undertakings (Protection of Employment) Regulations 1981.
  Whenever one moves something from locally elected councils to a more centralised quango, it is legitimate to raise the issue of political accountability. If people do not like what their local council does, they can go to it and complain. However, if they do not like what this new branch of Ofsted does, to whom will they complain? Where will the local accountability go?
  My constituents very much value the highly accessible local service that they have. If it is moved from Wolverhampton to a London-based quango, they might lose out. Some councils already offer a good service and achieve high standards, so it would be ironic if attempts to raise all standards nationally and to achieve consistency meant that those local authorities that probably provided the model for the Bill found that their local services were downgraded. That would be unfortunate. I hope that my hon. Friend will bear those points in mind and give me reassurances and clarification.
  6.8 pm
  Mr. Hilton Dawson: It is a privilege to take part in the debate to support this excellent Bill.
  In this country there has been much justified criticism of social workers, the organisations that employ them and social work in general. However, some of the very best people whom I am privileged to know are social workers. They are utterly dedicated, resilient, occasionally eccentric—I admit that—and they do good work, and sometimes great work, with unlikely people in sometimes extraordinary circumstances. No other profession would require someone to build a relationship with a reclusive elderly lady, with long periods spent standing on the doorstep and negotiating by means of slips of paper, to bury a long-dead cat or to return years' supplies of empty milk bottles surreptitiously to the dairy.
  The General Social Care Council is vital because social work is a distinct profession. Social work employs people in many different ways and many different circumstances, but it has defined skills, a knowledge base and superb values. Social workers listen to people and are non-judgmental, and social work is imbued with unconditional positive regard. It enables vulnerable people to make their own choices and to make what they will of their lives.
  There have been many scandals in social work, but it has also been a scandal that an excellent profession has been underpaid, undervalued, undermined and maligned for so long. The General Social Care Council is a big step.

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  It will have a huge job and it will need continuing massive support from the Department of Health to develop professional practice. Social work is a mighty job, which involves itself in the biggest issues of all and decisions that utterly change lives. It is hugely stressful; it involves major statutory powers and a duty to protect vulnerable people. Every hon. Member should place more value on social workers.
  There is a chance that this will be a great Government for children in care. The Government need to be great in that regard. There are decent people on both sides of the House, but, quite honestly, I loathed and despised the previous Conservative Government for their wilful neglect of the children in care with whom I worked for 15 years before I came to the House.
  Mr. Burns: Rubbish.
  Mr. Dawson: Take it from me, those were your policies—
  Mr. Deputy Speaker: Order. I do not have any policies—at least not while I am in the Chamber.
  Mr. Dawson: They were certainly not your policies, Mr. Deputy Speaker; they were those of the Conservatives. They would never have done what this Government are doing, such as introducing "Quality Protects", establishing a new national organisation for young people in care, imposing new statutory duties towards care leavers and introducing this Bill.
  Mr. Hammond: Will the hon. Gentleman give way?
  Mr. Dawson: No. We have heard a lot of nonsense about the children's commissioner from Conservative Members this afternoon. They immediately undermined their arguments by creating a spurious split between parents' rights and children's rights. Conservative Front-Bench Members are trying, once again, to leap on a popular and populist issue that they do not understand. Their attitude towards it is absurd.
  After the introduction of the Children Act 1989, the previous Government had eight years in which to bring in a new adoption Act. This Government are taking sensible action on adoption and putting children's needs and best interests at the forefront of their policy. The Conservatives are treating adoption as a political ideology, and that is totally unacceptable.
  The National Care Standards Commission will shine an independent light on all those places where children live away from home. There will be a children's rights director. Let us savour the words "children's rights". They are a fine Government who explicitly commit themselves to children's rights. I eagerly anticipate the work of the commission, which will be informed by the people who know about services—the children who live in children's homes. The commission will take a child-centred approach to raising standards in homes, in fostering and in adoption.
  I would prefer the Bill to range a little more widely, because as well as introducing a children's rights director, which is essential, we should be following the excellent example of the Welsh Assembly in establishing a commissioner for all children. That is an argument for
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  another day, but I am confident that the logic of the Government's commitment to children, to joined-up policies and to human rights will lead to children also winning that day.
  I support everything that has been said about private fostering. We should establish a right to independent advocacy for all children in care. I am aware that that is a developing field and that the Government have a host of good intentions, but I should like to see in the Bill a real commitment to a statutory right to advocacy for children in care.
  I shall not go on as we have only a short time available. The Bill is important and the Government deserve great credit for having brought it this far. I strongly support it.
  6.15 pm
  Caroline Flint: I thank my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson) for his brevity. I join my colleagues in honouring our right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) for his contribution, not only during today's debate but throughout his political life, especially when he was the Secretary of State for Health.
  I shall address two matters, one of which has been raised by my hon. Friends the Members for Wakefield (Mr. Hinchliffe) and for Birmingham, Hall Green (Mr. McCabe)—the protection and inspection of day care facilities for vulnerable adults. One year ago today, I wrote to the then Minister for Public Health, my right hon. Friend the Member for Dulwich and West Norwood (Ms Jowell), after being approached by a constituent, Mrs. Sawdon. She expressed concern about her son, who attends a local day care establishment called a social education centre which, for five days a week, provides care and educational activities for vulnerable adults. Her point was that such establishments are not open to any form of external inspection. The Minister replied that the situation was under review but that, as yet, the Government did not consider it necessary to legislate.
  In November last year, I put a question to the Minister of State, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), which was followed up by a question from my hon. Friend the Member for Wakefield, because we believe that we have to pay attention to the important issue of day care facilities. In my area, and in many others, parents are asked to pay a fee for such services. Many do not object to that charge, but they like to know precisely what they are paying for and what safety procedures and precautions are being observed, so that they can be sure that the service reaches the highest standard.
  I hope that my hon. Friend the Minister will clarify the position. According to the Official Report of the debate in the other place, the powers in this Bill will be used
  to introduce regulation by the national care standards commission of day care centres which provide nursing or personal care.
  I hope that that extends to facilities that provide educational activities, such as the centre in my constituency. Also promised was
  a review within one year of the commission being established to decide the details of exactly how and when the regulatory regime will come into force.—[Official Report, House of Lords, 28 March 2000; Vol. 611, c. 650.]

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  Will my hon. Friend put confirmation of that on the record of this House and elaborate on it?
  I chair the all-party child care group. I should like some clarification in respect of the regulation of day care services. I understand from the explanatory notes that nannies do not come under the definition of such provision in the Bill, except if they look after the children of more than two families in the home of one family. Therefore, if the care is provided by a nanny in the home of one set of parents and the children of another set of parents come to that home, it appears that the Bill will apply. I hope my hon. Friend the Minister will look carefully at those provisions.
  Child care is changing enormously and, as several Opposition Members have said today, it has huge potential for growth. To an increasing extent, nannies are not employed only by the extremely well-off, and shared arrangements are often made. Parents are concerned about the right setting for their child, so they choose the familiar setting of the home, into which care provision is brought.
  I should also like clarification of how the provisions apply to disabled children. In connection with domiciliary arrangements, the Bill states that the provisions will apply if someone comes into the home to care for a person who has an illness or disability. Will they apply if a family employs a nanny to come into the home to care for a child who has special needs and who cannot be left to fend for itself in the same way as they will to adults who receive domiciliary care in their home?
  Those were the two matters that I wanted to raise. I look forward to making a speech on Monday at a conference organised by the NSPCC on protecting babies from harm, and to elaborating on the many things that the Government are doing to make sure that children come first—giving support to parents and families and making sure that we have the highest standards expected in this important sphere.
  6.20 pm
  Mr. Philip Hammond: This has been a worthwhile, largely measured and well-informed debate, showing a good deal of consensus on both sides of the House on many of the objectives of the Bill.
  I have been whiling away the moments by looking up in "Dod's Parliamentary Companion" the background of some of the hon. Members who have spoken. No fewer than six on the Government side have a background in social work, which gives them experience on which to draw but means that they will come at the problems that we are discussing from a certain point of view.
  I was disappointed that the Secretary of State chose to strike the pose that he did, seeking to undermine the spirit of shared objectives by claiming that all good things in social care began on 2 May 1997. I am extremely grateful to my hon. Friend the Member for West Chelmsford (Mr. Burns) for putting the Bill in its correct historical context.
  I do not know whether the right hon. Member for Holborn and St. Pancras (Mr. Dobson) was making a bid to get his job back. If so, the Secretary of State can sleep soundly, because obviously no one has told the right hon.
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  Gentleman that overt hostility to the independent sector is now off-message. I was going to describe what the right hon. Gentleman said as intemperate until I heard the hon. Member for Lancaster and Wyre (Mr. Dawson), whose comments I found most intemperate. He made outrageous allegations against the last Administration. If he would care to tell us to whom in particular his accusation of wilful neglect was directed, I am sure that those people would like the opportunity to respond. His comments are the grossest insult to people such as my hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe), who has a long and honourable history in the House of engagement with issues around adoption, fostering and the protection of children which even the Secretary of State was happy to acknowledge.
  Mr. Dawson: I made it very clear that there are decent people on both sides of the House, and I would certainly include the hon. Member for Faversham and Mid-Kent (Mr. Rowe). But the experience of those working in the field that I worked in was of a Government who, over many years, with many opportunities, did not care and did nothing. In fact, they undermined efforts that were being made to help children in care.
  Mr. Hammond: The hon. Gentleman's intemperate language does nothing to advance his cause.
  By and large, the debate has been constructive and well informed. I should like to mention particularly the contribution of the hon. Member for Birmingham, Hall Green (Mr. McCabe), who once again has saved me quite a lot of time by making several of the points that I wanted to make and asking the Minister several of the questions that I would have posed to him.
  I wish to make it clear at the outset that we did not take lightly the decision to table a reasoned amendment. On large parts of the Bill we share the Government's aspirations, although we do not always agree with them about the route that they have chosen to reach our shared objectives. There are others where we believe that an opportunity has been missed to strengthen protection of the vulnerable, to extend the principle of the level playing field and to put in place all the elements needed to ensure that the future provision of social care, primarily commissioned by local authorities but supplied by independent providers, is placed on a stable and sustainable basis.
  We welcome the recognition of the need for a unified system of regulation covering both public and private sector providers of social care, but we regret that the Government have not demonstrated their commitment to this unified approach by extending the proposals on registration of independent hospitals, as my hon. Friend the Member for Woodspring (Dr. Fox) suggested, to cover all hospitals, so that all patients, wherever they are treated, can benefit. We shall press for the Government to follow the logic of their own argument.
  We welcome the commitment to quality in residential care, but we are dismayed that the Government appear to have been lured into a bureaucratic "check the box" approach, measuring inputs rather than outcomes, and focusing on easily measurable physical features such as room sizes and numbers of power points or chairs in a room, rather than on what really counts—the quality of the care experienced. That point was eloquently made by

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  my right hon. Friend the Member for South Norfolk (Mr. MacGregor) and also by the hon. Member for Sutton and Cheam (Mr. Burstow).
  We applaud the establishment of external control, albeit not fully independent, over local authorities' functions in relation to adoption and fostering, but we deeply regret that the Bill does not take the opportunity to give the Care Standards Commission a duty of maintaining a national register of potential adoptive parents, approved according to standardised, objective and relevant criteria. I welcome the knowledgeable contribution of my hon. Friend the Member for Canterbury (Mr. Brazier) to the debate.
  We support the good intentions behind the proposed inspection and registration of child care facilities, but we share with some Government Members the gravest reservations about the practical and ethical consequences of imposing a welter of regulation and creating draconian powers for a new army of bureaucrats to enter people's homes and to inspect and seize documents and possessions.
  We shall need further clarification on the role of the children's rights director and on the differences proposed between the regimes in England and Wales. We see no logic in accepting different levels of protection for the interests of children in one country compared with the other. A children's rights director is not the same as a commissioner, as the hon. Member for Wakefield (Mr. Hinchliffe) and my hon. Friend the Member for Faversham and Mid-Kent pointed out, underlining the bipartisan nature of views on the issue.
  We shall seek clarification of the scope of powers under the Bill to regulate alternative practitioners on the fringes of medicine, and to extend to the often vulnerable people who turn to those unregulated practitioners the protection that the Bill provides to other groups.
  We shall want to know what message the Government want local authorities to take from the Bill, removing as it does many of their functions, curtailing others and, taken together with the Local Government Bill, effectively squeezing them out of residential care provision.
  Towering above and beyond those concerns are two overarching flaws in the Bill—the excessive use of regulations and ministerial statements of standards, which renders the Bill a virtually empty box, not amenable to proper scrutiny or analysis; and the total absence of any acknowledgement of the huge resource implications of the Bill or of the crisis in funding of social care provision, which in many areas of the country makes the Bill's worthy objectives look like distant aspirations.
  I shall deal first with the use of secondary legislation to make regulations, and worse, the powers for Ministers to set the minimum standards, which will literally spell life or death to care homes, without any parliamentary scrutiny. In key areas of the Bill, it is impossible for us to assess the impact or significance of what is proposed until the standards and regulations are finalised.
  If the Minister does not mind my saying so, I think that his intervention on a couple of occasions muddied the waters. It is my clear understanding—I am sure that if he were listening, he would correct me if I am wrong—that, although the regulations will be presented to the House in the form of statutory instruments subject to the negative procedure, the standards will be set by a ministerial statement and will at no time be subject to scrutiny in the
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  House. Probably the most important part of the Bill in terms of its impact on people providing social care will thus come into effect without any proper scrutiny.
  The Government-commissioned paper by the Centre for Policy on Ageing, "Fit for the Future?", has set the cat well and truly among the pigeons, with hundreds of proposed standards for care homes, many of dubious value and some ruinously costly to implement. We now know that the Government will not implement all of those proposals, but we do not know which ones they will implement, at what level and over what time scale.
  In the meantime, the proposals relating to accommodation in particular have blighted the sector. Care home owners and lenders alike are unable to assess whether particular homes will be compliant, or will have to invest heavily in order to avoid closure. Many properties are, in effect, unsaleable, and many capital providers have simply withdrawn from the market. A clear statement from the Minister, and a timetable, are now imperative—not just to protect the owners and operators of care homes, but to ensure that the provision that exists in the marketplace remains there.
  Mr. Rowe: Does my hon. Friend agree that, although the initial anxiety was felt most acutely in the private sector, the same financial burden will have to fall on the community charge payer? Local authorities must view the requirements with equal anxiety.
  Mr. Hammond: My hon. Friend is entirely right. I shall say more about this in a moment. However, it goes further than that. Ultimately, the burden of cost that falls on the private sector will be borne by the taxpayer in one way or another. The presence of 75 per cent. of people in residential and nursing homes is financed by local authorities and, ultimately, by the taxpayer.
  Elsewhere—for example, in relation to independent acute hospitals—the Bill's registration regime is subject to compliance with standards and regulations that are as yet unknown. These are not minor housekeeping details; they are fundamental to a proper assessment of the impact of the Bill. The use of regulation-making and standard-setting powers—sometimes beyond the scope of parliamentary scrutiny—and the failure to present draft regulations for consideration in parallel with the Bill mean that the Government are asking the House to write them a blank cheque.
  Meaningful scrutiny is impossible. The regulatory impact assessment published with the Bill—the Government are obliged to publish such information for the benefit of Members—is itself a meaningless exercise. It acknowledges that costs will be imposed, both in the form of fees and in the form of the costs of compliance with standards—but with no estimate whatever of the potentially enormous total of the latter.
  Mr. Dawson: My colleagues have been scrutinising the Register of Members' Interests. We note that the hon. Gentleman has a shareholding in Castlemead Ltd., a company involved in housebuilding and development, including the development of premises for lease to general medical practitioners. Did the hon. Gentleman declare that interest before the debate?
  Mr. Hammond: My interest is declared in the register. It has nothing whatever to do with the subject of today's

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  debate. As far as I know, general practice premises have nothing to do with the subject of the Bill. What I find most amazing is that the hon. Gentleman's right hon. and hon. Friends on the Front Bench have been scrabbling through the Register of Members' Interests. Given the army of civil servants and special advisers that they have behind them, one would think that my registerable interests, and those of my colleagues on the Front Bench, would be firmly fixed in their minds.
  I trust, Mr. Deputy Speaker, that I have not transgressed the rules in any way. I do not believe that I have. That was a rather pathetic attempt by the hon. Member for Lancaster and Wyre (Mr. Dawson), if he does not mind my saying so. Perhaps, on reflection, he will wonder whether it was wise to allow himself to be used as the stooge of the Front Bench as the register was passed backwards through the Chamber.
  As I was saying before I gave way to the hon. Gentleman, perhaps too generously, the regulatory impact assessment gives no estimate of the potentially enormous cost of compliance with the standards that are to be imposed by ministerial statement under the Bill. In the one area in which progress on draft standards has been made—standards for residential care homes—the publication of the document has blighted the sector with uncertainty, as the Government have had to distance themselves from the majority of the recommendations and from the excessive burdens recommended by the authors of that document.
  Who will pay? Especially in the residential and domiciliary care sector, a raft of new burdens will be laid on top of the compliance cost of the huge burdens that the Government have imposed on businesses through higher taxes, the working time directive, the minimum wage, the parental leave directive and the other paraphernalia of the social chapter.
  Mr. Dobson: Which of those burdens would the hon. Gentleman repeal?
  Mr. Hammond: I simply make the point that the Government have already imposed a huge additional financial burden on businesses in general and especially on the independent care home sector. They have done so against a background of below-inflation increases in the fees paid by most local authorities during the past three years.
  A large firm of chartered accountants, acting as receivers, is already one of the biggest operators of residential care beds in the country. The Minister knows that a crisis point has been reached, especially in high-cost areas, with squeezed local authorities simply unable to pay the fees that will ensure an adequate supply of beds. Not only have the fees risen more slowly than inflation, but the needs of those placed in care homes has increased dramatically as local authorities have been forced to ration. People are now routinely being placed in care at the residential care fee level, although their needs are equivalent to those of people who only a few years ago were placed in nursing care.
  The Bill completely misses the opportunity to link fees, ideally with incremental bands, to needs as well as geographical cost criteria—and, in turn, to relate staffing
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  ratios and other standards to those levels—and to ensure that that is done fairly and transparently by introducing a standardised assessment mechanism that can be accepted by providers and commissioners across the country. We shall table amendments in Committee to achieve those objectives and to end the lottery by which different local authorities use different assessment criteria and vary the eligibility thresholds to reflect their changing budgetary circumstances.
  We must know whether the Government will openly acknowledge that their proposals will be paid for from the public purse. If local authorities are not fully reimbursed for the additional costs, the number of placements that they can support will decrease and people with ever greater needs will be left to fend for themselves. If the Government are prepared to acknowledge that they will pay the bill, why do they have to legislate to achieve those important improvements?
  As my hon. Friend the Member for New Forest, West (Mr. Swayne) has said, the Government could have achieved many of their objectives through the contracting process by arranging for premium fees to be paid where certain standards were met in the way that the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) described in respect of her local authority.
  I re-emphasise our support for many of the aspirations behind the Bill. My noble Friends in the other place have sought—in some cases, successfully—to address some of its shortcomings. If, as I expect that they might, the Government defeat the Opposition amendment and the Bill receives its Second Reading, we shall continue that work in Committee in a constructive and positive way. We shall try to convince the Government of the need to extend the Bill's scope in some areas, to change its focus in others and to narrow its ambitions where it risks straying beyond what is practical and creating excessively intrusive and bureaucratic mechanisms, to create workable, fair and consistent legislation.
  The members of the Standing Committee that will consider the Bill will be hampered by its architecture and the "cart before the horse" approach that the Government have adopted. We will not know the Bill's full cost implications perhaps for years to come—not until long after parliamentary scrutiny has been completed and certainly not until we see the detailed standards and regulations. We do not know the cost impact on service providers because no meaningful regulatory impact assessment is available. That cannot happen until the detailed standards and regulations are in place.
  We do not know how or whether the Government intend to meet the huge cost burdens that the proposed changes will impose on local authorities, independent providers and others, nor consequently the impact of this well- intentioned but potentially damaging Bill on the availability of, and access to, social care and the other services that it covers.
  I urge my hon. Friends to support the amendment and send the Government back to the drawing board with a clear message that the House supports the Bill's underlying aspirations to improve quality, strengthen protection of the vulnerable and level the playing field, but cannot approve what is in essence a blank cheque without the remotest guidance on the costs that will be imposed, or any clue about how they will be met.
  6.40 pm
  The Minister of State, Department of Health (Mr. John Hutton): During the debate, we have heard nearly 20 speeches from the Back Benches. Many of those speeches were excellent, including that of the right hon. Member for South Norfolk (Mr. MacGregor). The hon. Member for Ceredigion (Mr. Thomas) also made a good speech. It was the first time that I had heard him speak. He took exactly the right approach to the Bill and made a positive contribution to the debate. That also applies to the speeches of my hon. Friends the Members for Stockport (Ms Coffey), and for Cardiff, North (Ms Morgan), my very good hon. Friend the Member for Wakefield (Mr. Hinchliffe); my hon. Friends the Members for Blackpool, North and Fleetwood (Mrs. Humble), for Chatham and Aylesford (Mr. Shaw), for Birmingham, Hall Green (Mr. McCabe), for Wolverhampton, South-West (Ms Jones), for Don Valley (Caroline Flint) and my hon. Friend the Member for Lancaster and Wyre (Mr. Dawson), who introduced a welcome note of consensus to our proceedings.
  No speech was better than that of my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson). My right hon. Friend the Secretary of State and I had the privilege of serving under my right hon. Friend the Member for Holborn and St. Pancras when he was Secretary of State for Health. Many hon. Members who spoke pointed out that the Bill owes a great deal to my right hon. Friend's commitment, vision and concern for children and frail and vulnerable people. He deserves a round of applause for the measure. [Interruption.] I did not mean that literally.
  Twenty substantial contributions to our proceedings were made this afternoon. I hope that hon. Members will not think me discourteous if I do not try to respond to every detailed point. A welter of comments have been made. It is apparent from the volume of material that I have at the Dispatch Box that I am inundated with technical information, which I shall try to plough through.
  Let me begin with the points that the right hon. Member for South Norfolk made because he and others, including my hon. Friend the Member for Blackpool, North and Fleetwood, expressed some anxiety about "Fit for the Future?". The right hon. Gentleman asked for three assurances: that the regulations would not be too prescriptive; that they would not be too burdensome; and that the better regulation taskforce would be properly consulted on their implementation. I can give him an assurance on all three points. We have tried repeatedly to send a clear message from the Department of Health to the care home sector and others that we shall proceed sensibly and carefully with the proposals.
  Few hon. Members who spoke in the debate, apart from the hon. Member for New Forest, West (Mr. Swayne), on whose speech I shall not dwell, argued against higher standards. The hon. Gentleman is the authentic voice of 19th-century laissez-faire politics, and we expect nothing less of him. I tried to reassure the right hon. Member for South Norfolk in a debate in Westminster Hall that we shall take a common-sense approach to the Bill. It would be stupid to do otherwise, and we are not stupid. We need and rely on good-quality care home providers. As we move towards a new set of minimum requirement standards, we shall ensure that they are sensible, affordable and practical.
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  The right hon. Gentleman and many other Conservative Members referred repeatedly to the potential use of a 10 sq m standard. A bit of historical accuracy might be helpful. The right hon. Gentleman and other Conservative Members might be interested to know that their party is responsible for the 10 sq m standard, which it set nearly 30 years ago. Having had a standard for 30 years, people have been—[Interruption.] The hon. Member for West Chelmsford (Mr. Burns) says that I am wrong.
  Mr. Burns: I did not say that.
  Mr. Hutton: Sorry. I stand corrected, but the standard is nearly 30 years old. It was introduced by the hon. Gentleman's party. It was never properly seen through, so there is an issue that we need to address.
  I am not saying that that will be the final standard that we set, as that would be inappropriate, but it is wrong of Conservative Members to give the impression that the reference to a 10 sq m standard has been pulled magically out of thin air; that it will come as a complete surprise to everyone in the care home sector; and that everyone is putting their hand in the air and saying, "What on earth is going on?"
  Mr. Burns: What I actually said was that things may have moved on. The fact that something was set down 30 years ago does not mean that, 30 years later, it is still relevant or the right thing to do.
  Mr. Hutton: That is true, but if the hon. Gentleman is arguing that the 10 sq m standard is too high, that will be an interesting argument. I have not heard any Conservative Member say that 10 sq m is too high a standard.
  Dr. Brand: It may be that 10 sq m has been the aspiration, but I know that local authorities have had local guidelines that have varied from that. I have enormous sympathy for people who have invested heavily in meeting local standards which may not now meet the national standard.
  Mr. Hutton: I agree. That is exactly the issue that we are trying to address with the Bill. As the Secretary of State said, at the moment, in relation to residential care homes, there are 150 different regulatory units. That is a recipe for chaos, as he rightly said. The guidelines to which he referred have come not from us but from local authorities. It is the care home sector itself—the point has totally escaped Opposition Members—which has asked us to introduce greater consistency and to have a proper level playing field that will ensure for the first time that good care home providers are not undercut by poor providers. That is precisely what we are trying to do with the Bill. That will become clearer to Opposition Members as they find out a little more about what we intend to do.
  My hon. Friend the Member for Wakefield made an important speech and asked a number of specific questions. He started with a specific concern about the inspection process that the National Care Standards Commission will oversee. Others have raised similar concerns. The commission will deliver its services through a network of locally based teams involving lay

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  inspectors drawn from local communities, so it is absolutely our intention that, as the commission takes on that responsibility, it will keep a local focus and draw on local expertise.
  Several hon. Members, including my hon. Friend, referred specifically to Ofsted's role in the new arrangements to be introduced under the Bill. I know that, in the Standing Committee, where those issues will be looked at in more detail, the Under-Secretary of State for Education and Employment, my hon. Friend the Member for Barking (Ms Hodge), will be more than happy to respond to some of those technical and detailed points, but I make it clear that the Government's proposals have been generally welcomed by the sector. Ofsted's duties in relation to the Children Act 1989 are clear. The focus on care, welfare and development of the child cannot and will not be played down by the new statutory responsibilities that we want to give Ofsted.
  My hon. Friend the Member for Wolverhampton, South-West referred specifically to the transfer of staff. It is our intention that local authority staff who do that work will transfer to Ofsted. My hon. Friend might be interested to know that, if those staff do transfer to Ofsted, it will more than double in size, so I do not believe that she should seriously entertain any concern that an education culture will dominate that part of its work. She can be reassured about that.
  My hon. Friend might also be reassured by some good news. I am informed that the National Childminding Association asked its 40,000 members to tell it of their concerns about the Government's proposals. The good news is that the members of the association unanimously supported the Government's proposals. The only slightly bad news is that only two replies were received. Therefore, we probably need to think carefully about what the response means. However, as I said, my hon. Friend the Under-Secretary of State for Education and Employment will certainly be prepared to entertain a further, more detailed discussion about all those proposals.
  One other matter that arose repeatedly in the debate—in all the speeches by Labour Members, and in some of those by Opposition Members—was a request to me to clarify in a little more detail the Government's intentions on future regulation of daycare services. In another place, my noble friend Lord Hunt made it clear that we intend to use clause 39 to extend the regulatory framework to include daycare centres. There is therefore absolutely no question about that—it will happen. My noble Friend said that, one year after the National Care Standards Commission is up and running, we want it to be able give us advice on how to extend the framework.
  I think that that is an entirely sensible way of going about the matter. We have to take advice from the commission on its ability to take on that new and important additional responsibility, which has never been attempted before. We have to ensure that we get that particular part of the process right.
  Mr. David Drew: Will my hon. Friend also investigate the implications for sheltered units, and
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  particularly very sheltered units, some of which have contacted me to say that they are unsure how developments on registration will affect them?
  Mr. Hutton: My hon. Friend has made a very good point, and we shall certainly most carefully consider those matters as we develop our proposals.
  The hon. Member for Canterbury (Mr. Brazier) expressed his long-standing concern about adoption. He knows—he and I have spoken at length about adoption issues—that the Government take those issues very seriously indeed. The hon. Gentleman and his hon. Friends can be reassured and quite confident that we intend to produce our new proposals in the very near future.
  The hon. Member for New Forest, West made a characteristic contribution to our proceedings. Although I do not want to dwell on his speech—it would probably be better if we drew a veil over most of it—he made two points that were absolutely extraordinary for someone of his views, which he is obviously very careful about articulating. Effectively, he was arguing for a substantial increase in the amount of social care expenditure provided to local authorities, which was quite bizarre. Perhaps he and Opposition Front Benchers will tell us how much more they want to spend on social services in the future. I am sure that we shall return to that issue.
  Conservative Members, but most particularly the hon. Member for New Forest, West, seemed to argue against the very principle on which the Bill is based, which is that it is not possible to drive up quality standards, as he and other Conservative Members desire, by relying on the market alone; we have been down that road, and we know absolutely that that approach would fail. The market itself is not able to deliver the high-quality standards provided for in the Bill.
  Mr. Swayne: The hon. Gentleman, as a Minister, represents the taxpayer—who, overwhelmingly, is the greatest purchaser of those services. If the taxpayer puts his faith in certain standards, he should be prepared to pay a premium for them—as they are doing in Blackpool, as the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) said. Such a premium, much more than any regulation, would be the most powerful engine in driving up standards.
  Mr. Hutton: Absolutely; of course that has an important role to play. However, to say that that is the only way in which we can ensure improved care standards in an important sector shows a complete misunderstanding of the situation and of the history of the evolution of the service.
  The Bill, which delivers another of the Government's manifesto commitments, will improve both the quality and the consistency of the vital care services used by hundreds of thousands of people. It will close the gaps and loopholes created in our regulatory system by Conservative Members when they were in office. Those deficiencies protected the poor provider at the public's expense.
  The Bill will help foster higher standards among the social care work force—80 per cent. of whom have no recognisable qualification of any type—who do some of

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  the most important jobs in our society. It will establish new and powerful safeguards that will better protect vulnerable people from the risk of abuse.
  All of those are important objectives, which is why the Bill has received strong support from a wide variety of organisations and interests, and why I ask my hon. Friends to support it today. However, the Bill goes much further than that. Behind it lies a clear view of the importance of higher-quality public services, the need for effective and better regulation, and the need for improved public confidence in our system of inspection and registration—a confidence that has been severely shaken by a succession of appalling scandals of which right. hon. and hon. Members will be very aware.
  The present arrangements are out of date and inadequate for the new challenges that lie ahead. That was recognised most recently in the Waterhouse report on child abuse in care homes in north Wales. Those challenges are in part the consequence of demographic changes. They are also in part the result of rising public expectations about the standards required from service providers and the need to ensure better protection for children and vulnerable adults. In future, the public interest must be better served in all those key areas. The Bill has the public interest at its heart and will make a positive contribution in maintaining confidence in all the services covered by its provisions.
  The Bill proposes a radical redesign of the registration and inspection systems. A new independent organisation, the National Care Standards Commission, will be established in England. Similar arrangements will be put in place for Wales. The commission will have important new powers to promote consistent quality standards in all care homes, including children's homes. The loophole in the Children Act 1989 that allowed small children's homes to avoid any effective supervision and registration requirements will be closed. The commission will also have the power, for the first time, to regulate domiciliary care services, protecting people in their own homes from poor standards and inadequate care.
  Private health care will also fall within the scope of the commission—an important extension of patient protection and safeguards. The new General Social Care Council, which has been widely welcomed by Labour Members, will work to raise the standards of the whole social care work force. As many of my hon. Friends have argued, the establishment of such a body is long overdue.
  Those are only some of the main changes that the Bill will bring about. The others include: new institutions to develop a new emphasis on higher-quality services; a level playing field for the first time as between public and private sector providers; greater consistency and an end to the current variation in care standards; better protection; and improved public confidence. The Bill complements the Government's wider initiatives to improve the standards of other key services such as education and the national health service. We believe in public services and we want their performance to be improved. The Bill provides further support for our programme of modernisation and reform.
  The Bill sets a new course and a new purpose. It brings an end to the sterile and damaging ideology of the past. For the Conservatives, the only question that mattered was who provided the service. After two speeches from the Opposition Front Bench, we are none the wiser about their
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  policy. They remain stuck in the comfort of their collective memory of how things used to be. In the mean time, the public have moved on and have left the Conservatives behind. For the Government, the issue is the quality of service. That is where the Bill makes a significant step forward.
  There will be many beneficiaries of our new approach to raising quality standards. Children in care homes will be better protected. Older people in care homes or being cared for at home can be more confident that they will receive the best possible care. Bringing together the regulatory systems for child care and nursery education will result in an improvement in the quality of early-years services, benefiting young children and their parents. Part VI provides important additional protection to vulnerable adults who require residential or home care services. Care providers will benefit from a streamlined and consistent regulatory system—something that providers have been seeking for a long time and that the Conservatives conspicuously failed to deliver.
  Above all, the public will benefit from the Bill, because their wider interests are clearly being advanced. Judging by their contributions to the debate, the Opposition have nothing positive to offer. Their position today has been a depressing mix of cynicism and willingness to sacrifice higher-quality standards to commercial interests, finished off by an astonishing attempt to rewrite their record in office. That response is not credible and not good enough.
  The Government's approach is different. In voting for the Bill, my hon. Friends can be sure that they will be serving the best interests of all their constituents.
  Question put, That the amendment be made:—
  The House divided: Ayes 120, Noes 274.

  Division No. 200]

  [6.59 pm

  AYES

  Amess, David

  Forth, Rt Hon Eric

  Arbuthnot, Rt Hon James

  Fraser, Christopher

  Atkinson, David (Bour'mth E)

  Garnier, Edward

  Atkinson, Peter (Hexham)

  Gibb, Nick

  Baldry, Tony

  Gill, Christopher

  Bercow, John

  Gillan, Mrs Cheryl

  Beresford, Sir Paul

  Gorman, Mrs Teresa

  Blunt, Crispin

  Green, Damian

  Boswell, Tim

  Greenway, John

  Bottomley, Peter (Worthing W)

  Grieve, Dominic

  Bottomley, Rt Hon Mrs Virginia

  Gummer, Rt Hon John

  Brady, Graham

  Hammond, Philip

  Brazier, Julian

  Hawkins, Nick

  Brooke, Rt Hon Peter

  Hayes, John

  Browning, Mrs Angela

  Heald, Oliver

  Bruce, Ian (S Dorset)

  Hogg, Rt Hon Douglas

  Burns, Simon

  Horam, John

  Butterfill, John

  Howard, Rt Hon Michael

  Chapman, Sir Sydney (Chipping Barnet)

  Howarth, Gerald (Aldershot)

  Hunter, Andrew

  Chope, Christopher

  Jack, Rt Hon Michael

  Collins, Tim

  Jackson, Robert (Wantage)

  Cran, James

  Johnson Smith, Rt Hon Sir Geoffrey

  Curry, Rt Hon David

  Davis, Rt Hon David (Haltemprice)

  King, Rt Hon Tom (Bridgwater)

  Day, Stephen

  Kirkbride, Miss Julie

  Dorrell, Rt Hon Stephen

  Laing, Mrs Eleanor

  Emery, Rt Hon Sir Peter

  Lait, Mrs Jacqui

  Evans, Nigel

  Lansley, Andrew

  Faber, David

  Leigh, Edward

  Fabricant, Michael

  Letwin, Oliver

  Flight, Howard

  Lewis, Dr Julian (New Forest E)

  561

  Lidington, David

  St Aubyn, Nick

  Lilley, Rt Hon Peter

  Shepherd, Richard

  Loughton, Tim

  Simpson, Keith (Mid-Norfolk)

  Luff, Peter

  Soames, Nicholas

  McIntosh, Miss Anne

  Spelman, Mrs Caroline

  MacKay, Rt Hon Andrew

  Spicer, Sir Michael

  Maclean, Rt Hon David

  Spring, Richard

  McLoughlin, Patrick

  Stanley, Rt Hon Sir John

  Madel, Sir David

  Streeter, Gary

  Malins, Humfrey

  Swayne, Desmond

  Maples, John

  Syms, Robert

  Mates, Michael

  Tapsell, Sir Peter

  Maude, Rt Hon Francis

  Taylor, Ian (Esher & Walton)

  Mawhinney, Rt Hon Sir Brian

  Taylor, John M (Solihull)

  May, Mrs Theresa

  Tredinnick, David

  Moss, Malcolm

  Trend, Michael

  Nicholls, Patrick

  Viggers, Peter

  Norman, Archie

  Walter, Robert

  O'Brien, Stephen (Eddisbury)

  Waterson, Nigel

  Ottaway, Richard

  Wells, Bowen

  Page, Richard

  Whitney, Sir Raymond

  Paice, James

  Whittingdale, John

  Paterson, Owen

  Willetts, David

  Pickles, Eric

  Wilshire, David

  Portillo, Rt Hon Michael

  Yeo, Tim

  Prior, David

  Young, Rt Hon Sir George

  Redwood, Rt Hon John

  Robathan, Andrew

  Tellers for the Ayes:

  Robertson, Laurence

  Mr. John Randall and

  Rowe, Andrew (Faversham)

  Mr. Geoffrey Clifton-

  Ruffley, David

  Brown.

  NOES

  Abbott, Ms Diane

  Clarke, Tony (Northampton S)

  Ainsworth, Robert (Cov'try NE)

  Clelland, David

  Allan, Richard

  Coaker, Vernon

  Allen, Graham

  Coffey, Ms Ann

  Anderson, Donald (Swansea E)

  Cohen, Harry

  Austin, John

  Coleman, Iain

  Barnes, Harry

  Colman, Tony

  Barron, Kevin

  Connarty, Michael

  Beard, Nigel

  Cook, Frank (Stockton N)

  Beckett, Rt Hon Mrs Margaret

  Cook, Rt Hon Robin (Livingston)

  Beith, Rt Hon A J

  Cooper, Yvette

  Bell, Stuart (Middlesbrough)

  Corbett, Robin

  Benn, Hilary (Leeds C)

  Corston, Jean

  Benn, Rt Hon Tony (Chesterfield)

  Cotter, Brian

  Bennett, Andrew F

  Cousins, Jim

  Benton, Joe

  Crausby, David

  Bermingham, Gerald

  Cryer, Mrs Ann (Keighley)

  Best, Harold

  Cryer, John (Hornchurch)

  Betts, Clive

  Cunningham, Jim (Cov'try S)

  Blears, Ms Hazel

  Curtis-Thomas, Mrs Claire

  Boateng, Rt Hon Paul

  Darvill, Keith

  Borrow, David

  Davey, Edward (Kingston)

  Bradley, Keith (Withington)

  Davey, Valerie (Bristol W)

  Brand, Dr Peter

  Davidson, Ian

  Brinton, Mrs Helen

  Davies, Geraint (Croydon C)

  Brown, Rt Hon Nick (Newcastle E)

  Dawson, Hilton

  Browne, Desmond

  Denham, John

  Burden, Richard

  Dismore, Andrew

  Burstow, Paul

  Dobbin, Jim

  Butler, Mrs Christine

  Dobson, Rt Hon Frank

  Byers, Rt Hon Stephen

  Dowd, Jim

  Campbell, Mrs Anne (C'bridge)

  Drew, David

  Campbell, Ronnie (Blyth V)

  Drown, Ms Julia

  Cann, Jamie

  Dunwoody, Mrs Gwyneth

  Caplin, Ivor

  Eagle, Angela (Wallasey)

  Caton, Martin

  Eagle, Maria (L'pool Garston)

  Cawsey, Ian

  Ennis, Jeff

  Chapman, Ben (Wirral S)

  Field, Rt Hon Frank

  Chaytor, David

  Fitzpatrick, Jim

  Clapham, Michael

  Flint, Caroline

  Clark, Rt Hon Dr David (S Shields)

  Flynn, Paul

  Clark, Paul (Gillingham)

  Follett, Barbara

  Clarke, Rt Hon Tom (Coatbridge)

  Foster, Rt Hon Derek

  562

  Foster, Michael Jabez (Hastings)

  McDonagh, Siobhain

  Foster, Michael J (Worcester)

  McDonnell, John

  Foulkes, George

  McGuire, Mrs Anne

  Fyfe, Maria

  McIsaac, Shona

  Galloway, George

  McKenna, Mrs Rosemary

  Gapes, Mike

  MacShane, Denis

  Gardiner, Barry

  Mactaggart, Fiona

  George, Bruce (Walsall S)

  McWalter, Tony

  Gibson, Dr Ian

  McWilliam, John

  Gilroy, Mrs Linda

  Mahon, Mrs Alice

  Godsiff, Roger

  Marsden, Gordon (Blackpool S)

  Goggins, Paul

  Marshall, Jim (Leicester S)

  Golding, Mrs Llin

  Maxton, John

  Gordon, Mrs Eileen

  Meacher, Rt Hon Michael

  Griffiths, Jane (Reading E)

  Meale, Alan

  Griffiths, Win (Bridgend)

  Merron, Gillian

  Grogan, John

  Michie, Bill (Shef'ld Heeley)

  Hall, Mike (Weaver Vale)

  Milburn, Rt Hon Alan

  Hall, Patrick (Bedford)

  Miller, Andrew

  Hanson, David

  Moonie, Dr Lewis

  Harman, Rt Hon Ms Harriet

  Moore, Michael

  Heal, Mrs Sylvia

  Moran, Ms Margaret

  Healey, John

  Morgan, Ms Julie (Cardiff N)

  Heath, David (Somerton & Frome)

  Morley, Elliot

  Henderson, Doug (Newcastle N)

  Mountford, Kali

  Hepburn, Stephen

  Mudie, George

  Heppell, John

  Mullin, Chris

  Hesford, Stephen

  Murphy, Jim (Eastwood)

  Hewitt, Ms Patricia

  Naysmith, Dr Doug

  Hill, Keith

  O'Brien, Bill (Normanton)

  Hinchliffe, David

  O'Brien, Mike (N Warks)

  Hodge, Ms Margaret

  O'Hara, Eddie

  Hoey, Kate

  Olner, Bill

  Hoon, Rt Hon Geoffrey

  O'Neill, Martin

  Hope, Phil

  Osborne, Ms Sandra

  Howarth, Alan (Newport E)

  Pearson, Ian

  Hughes, Ms Beverley (Stretford)

  Pickthall, Colin

  Hughes, Kevin (Doncaster N)

  Pike, Peter L

  Hurst, Alan

  Plaskitt, James

  Hutton, John

  Pollard, Kerry

  Iddon, Dr Brian

  Pond, Chris

  Jackson, Ms Glenda (Hampstead)

  Pound, Stephen

  Jackson, Helen (Hillsborough)

  Prentice, Ms Bridget (Lewisham E)

  Jenkins, Brian

  Prentice, Gordon (Pendle)

  Johnson, Miss Melanie (Welwyn Hatfield)

  Prescott, Rt Hon John

  Primarolo, Dawn

  Jones, Ms Jenny (Wolverh'ton SW)

  Purchase, Ken

  Rammell, Bill

  Jones, Jon Owen (Cardiff C)

  Rapson, Syd

  Jones, Dr Lynne (Selly Oak)

  Raynsford, Nick

  Jowell, Rt Hon Ms Tessa

  Roche, Mrs Barbara

  Keeble, Ms Sally

  Rooker, Rt Hon Jeff

  Keen, Alan (Feltham & Heston)

  Rooney, Terry

  Keen, Ann (Brentford & Isleworth)

  Ross, Ernie (Dundee W)

  Kelly, Ms Ruth

  Roy, Frank

  Kemp, Fraser

  Ruane, Chris

  Kennedy, Jane (Wavertree)

  Ruddock, Joan

  Khabra, Piara S

  Russell, Bob (Colchester)

  Kidney, David

  Ryan, Ms Joan

  Kilfoyle, Peter

  Salter, Martin

  King, Ms Oona (Bethnal Green)

  Sarwar, Mohammad

  Kumar, Dr Ashok

  Sawford, Phil

  Ladyman, Dr Stephen

  Sedgemore, Brian

  Laxton, Bob

  Shaw, Jonathan

  Leslie, Christopher

  Sheerman, Barry

  Lewis, Ivan (Bury S)

  Shipley, Ms Debra

  Lewis, Terry (Worsley)

  Singh, Marsha

  Linton, Martin

  Skinner, Dennis

  Lloyd, Tony (Manchester C)

  Smith, Angela (Basildon)

  Lock, David

  Smith, Jacqui (Redditch)

  Love, Andrew

  Smith, Llew (Blaenau Gwent)

  McAvoy, Thomas

  Spellar, John

  McCabe, Steve

  Starkey, Dr Phyllis

  McCafferty, Ms Chris

  Stevenson, George

  McCartney, Rt Hon Ian (Makerfield)

  Stewart, David (Inverness E)

  Stewart, Ian (Eccles)

  563

  Stinchcombe, Paul

  Walley, Ms Joan

  Stoate, Dr Howard

  Ward, Ms Claire

  Strang, Rt Hon Dr Gavin

  Wareing, Robert N

  Stringer, Graham

  Watts, David

  Stunell, Andrew

  White, Brian

  Sutcliffe, Gerry

  Whitehead, Dr Alan

  Taylor, Ms Dari (Stockton S)

  Wicks, Malcolm

  Taylor, David (NW Leics)

  Williams, Rt Hon Alan (Swansea W)

  Thomas, Gareth R (Harrow W)

  Thomas, Simon (Ceredigion)

  Williams, Alan W (E Carmarthen)

  Timms, Stephen

  Williams, Mrs Betty (Conwy)

  Todd, Mark

  Wills, Michael

  Tonge, Dr Jenny

  Winterton, Ms Rosie (Doncaster C)

  Touhig, Don

  Woolas, Phil

  Trickett, Jon

  Wray, James

  Truswell, Paul

  Wright, Anthony D (Gt Yarmouth)

  Turner, Dennis (Wolverh'ton SE)

  Wright, Dr Tony (Cannock)

  Turner, Dr Desmond (Kemptown)

  Wyatt, Derek

  Turner, Neil (Wigan)

  Twigg, Derek (Halton)

  Tellers for the Noes:

  Twigg, Stephen (Enfield)

  Mr. Tony McNulty and

  Vis, Dr Rudi

  Mr. David Jamieson.

  Question accordingly negatived.
  Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on second or third reading), and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

  CARE STANDARDS BILL [LORDS] [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question put forthwith, pursuant to Standing Order No. 52,
  That, for the purposes of any Act resulting from the Care Standards Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

  (a) any expenditure incurred by a Minister of the Crown under the Act; and

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

  Question agreed to.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at the sitting on 23rd May, the Speaker shall put the Questions necessary to dispose of the proceedings on the Motions in the name of Margaret Beckett relating to insurance for Members and payment of legal expenses to the honourable Member for Mid-Worcestershire not later than one and a half hours after the commencement of proceedings on the first such Motion, and such Questions shall include the Questions on any amendments selected by the Speaker which may then be moved.—[Mr. Betts.]

  SCOTTISH GRAND COMMITTEE
  Ordered,
  That the Scottish Grand Committee shall meet at Westminster on Monday 12th June at half-past Four o'clock to consider a substantive Motion for the adjournment of the Committee, the proceedings to be interrupted at Seven o'clock.—[Mr. Betts.]

Hard Flooring
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
7.15 pm
Mr. Martin Linton: I am grateful to Madam Speaker for giving me the opportunity to introduce this Adjournment debate on what may, at first, seem a rather recondite subject—the application of the construction industry training board levy to hard flooring firms. It is not a subject that is often discussed at bus stops and bars in my constituency, and it has not sent right hon. and hon. Members rushing into the Chamber to hear what it is about.
I am raising the subject because of an injustice in how the system operates. I understand that hard flooring firms all over the country suffer from it. I make no apology for the fact that I raised the issue with regard to a particular firm, Wright's Flooring, and its owner, Brian Wright, who lives in my constituency.
Many of us have green filing trays on our desks, marked "In", "Out", "Filing" or "Case work". I also have a tray marked "TD" which is short for "Too Difficult". That is where I put difficult problems that require too much work—problems that have a long history, that involve two or three Departments, or that have been described in an unnecessarily complicated way. I confess that I would have been tempted to put this problem into that tray, where it would have languished for a long time—probably for ever—were it not for the fact that Mr. Wright is such a palpably honest and hard-working man, and he has a very good case.
I have to do four things in my allotted time: explain the nature of the injustice; describe briefly the history that has led to it; suggest what can be done to resolve the problem; and suggest whose responsibility it is.
The nature of the injustice is simple. Mr. Wright is paying a training levy to the construction industry training board. His competitors, on the whole, do not pay it. He does not object to paying the levy. He is not a critic of the CITB; on the contrary, he sends apprentices to be trained in the arts of laying vinyl and other hard floors through the CITB at Erith. He thinks, by and large, that the CITB does a good job, as do I. However, he objects to paying the levy while others do not.
Mr. Wright does not claim that the money that he pays is extortionate. He pays about £3,300 a year on a turnover of about £500,000. Of course, that is rather misleading. The levy is a very small proportion of the wage bill, but a much higher proportion of the profits. He works in a highly competitive business, and if his profit margin is only about 5 per cent., that comes to about £30,000 a year. That is all that he gets from running the business, and out of that he has to find £3,300, which is quite a sizeable chunk.
It is not so much the percentage that matters as the principle. Why does he pay but not his competitors? To understand that, I shall briefly go over the history. Hard flooring firms are considered part of the construction industry, whereas carpet layers are considered to be part of the furniture industry. The law decided some years ago that sticking lino on the floor with glue constituted construction, whereas fitting carpets constituted furnishing. It is the glue that makes the difference. There

565
is an arcane argument about what happens with carpet tiles, which are also glued. I think that it was ruled that that glue was a removable adhesive and therefore did not count as proper glue. So hard flooring firms pay the levy and carpet layers do not because there is no longer a furniture industry training board. That is not a big problem. The significant problem is that firms are classified according to what they mainly do. Firms that lay fitted carpets will almost invariably also, if asked, fit hard floorings.
In this instance, Mr. Wright is a specialist hard flooring contractor. He prefers to remain with what he is best at, which is hard flooring. By and large, his competitors are carpet laying companies that also engage in hard flooring. They are usually much larger than Mr. Wright's firm. The hard flooring work that they turn over, though only a small part of their business, or at least less than half of it, is often much greater than Mr. Wright's. They do not pay the levy and he does.
It would be understandable if the smaller companies did not pay the levy and the larger ones did. In this instance, however, it is the smaller specialist companies that pay while the larger ones do not. The smaller companies have to charge the same rate per square metre as the larger companies. If they did not, they would be driven out of business. The smaller companies have to absorb the cost of the levy as well as the diseconomies of scale that they are bound to suffer.
When the system was set up originally, every firm had to pay a training levy, if not to the construction industry training board then to another training board. I do not need to remind you, Mr. Deputy Speaker, that there were 28 training boards covering all industry. If an employer did not pay to one, he paid to another. It did not matter that a firm was classified according to what it mainly did. There were no ragged edges because the whole of industry was covered.
However, in the 1980s all but two of the training boards were abolished. In my view that was a retrograde step, but as that is not my central argument, I shall not pursue it. The present situation is that the ragged edges matter. The House will understand that ragged edges are anathema to hard flooring layers. That is what they are paid to avoid. We like floor covering to go right up to the wall and we like the join to be invisible. I think that they are entitled to expect that the Government will deal with the ragged edges in the training levy system with the same care and precision.
What can be done to resolve the problem? I wrote to the Minister and he made a couple of suggestions. First, he said that it is open to a trade association to ask the responsible Minister to remove its sector from the scope of the CITB levy. It would have to satisfy the Minister that the majority of its members wanted to stop paying the levy, and that satisfactory voluntary training arrangements were in place. I have put the matter to the Contract Flooring Association, which is based in Nottingham. It replied:
The Contract Flooring Association has not supported the retention of the CITB during successive reviews particularly because the method of applying the levy has always been seen to be very haphazard.
The association asked me to make it clear that the objection has never been to the CITB itself, and that it is recognised to be doing an excellent job in many
566
construction skills. Scaffolding and steeple-jacking are good examples of that. The problem is not the quality of its work but the fact that some firms pay the levy and some do not. The situation seems haphazard and unfair.
The majority of the CFA's members are already outside the scope of the levy as a result of a case brought to an industrial tribunal by Tyndale Carpets. When that firm won its case, the CITB did not appeal. As a result, nearly all the flooring companies came out of the CITB, leaving only a few hard flooring companies in its scope. Ironically, Tyndale is now one of the competitors that Mr. Wright faces. It does far more hard flooring work than he does, but it does not pay the levy.
In any event, Mr. Wright does not want to come out of the scope of the CITB levy. Instead, he wants everybody to compete on a level playing field. The problem lies not with the levy but with the rule that it applies to firms mainly engaged in hard flooring. One obvious solution would be for firms to pay the levy on the proportion of their wage bill that relates to hard flooring. I put that to the Minister in my letter. He replied:
Though the use of "mainly" in the definition can lead to some anomalies, it is difficult to think of another system that would not create more difficulties.
I sympathise with his problem, but who has the responsibility for finding the solution? The remedy may be in the hands of the trade associations. I encourage them to pursue that—if possible—if they can agree that all hard flooring companies should come out of the CITB.
However, that might merely move the ragged edge further along. The real problem is that, since the abolition of almost all the training boards, it is the Government's duty to find a fair way of deciding who pays and who does not. It is not enough to observe that it is difficult to think of a solution that would not create more problems.
If Mr. Deputy Speaker, you hired people to lay vinyl in your kitchen and they did not lay it under the fridge because the fridge was hard to move, you would say that it was their problem; it would be their job to solve it. It is exactly the same for the Government. Since the abolition of all the other training boards, we have been left with a ragged edge around the construction industry. On our own admission, that creates several anomalies. The job of Government is not to say that the problems are difficult to solve, but to find ways of solving them.
Many firms find a way out of the problems through dishonesty. They have only to state that the majority of their work comes from carpet laying and they are in the clear; or, if they fail to declare their full wage bill, they do not need to pay the levy. In fact, they do not even need to tell the CITB of their existence. The onus is not on the business to pay the levy, but on the training board to collect it—unlike the Inland Revenue and Customs and Excise. As 30,000 firms join or leave the industry every year, that is hard to police.
However, the situation is also hard for small, specialist, long-established firms such as Wright's Flooring. Mr. Wright has been running the business since 1962. He employs about 10 skilled craftsmen. He believes in training youngsters and, as a result, has often had father-and-son teams in his work force. Such small firms are exactly what we need in my constituency; they are specialised, skilful and reliable, and do not try to do what they are not good at.

567
Mr. Wright has a strong belief in training people for the job, and in treating people—and being treated—fairly. That is why he objects so strongly to the situation in his industry. Why should he pay, while others do not? Sadly, he often thinks of giving up his firm—even though he has a full order book—because he feels unfairly treated.
What is especially galling is that everyone agrees that he is being unfairly treated. The CITB agrees that he has a case, although it still charges him the levy; the Minister agrees that there is an anomaly; and, as Mr. Wright's representative, I certainly agree that he suffers an injustice. The problem is that he can do nothing about that injustice; it can be remedied only by Parliament and the Government—he looks to them.
7.28 pm
The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): I am grateful to my hon. Friend the Member for Battersea (Mr. Linton) for raising this important issue. I commend him for drawing the attention of the House to his serious concern on behalf of his constituent. He works hard for the people of Battersea—this is an example of that.
I am also aware that he is a strong supporter of training and of the CITB, which is a statutory training board. As he mentioned, it is one of only two that remain. It is a large training business whose role is to ensure that there is a skilled work force able to meet the needs of the industry it serves.
My hon. Friend raised several complex issues. They are not easy to resolve without creating other difficulties—he anticipated my argument on that point. It is important to keep in mind the wider benefits for the whole industry of the training board and the levy.
I shall set out the general context of the work of the CITB, before dealing with the particular concerns expressed by my hon. Friend. The board is regularly reviewed—most recently in 1997—and exists only because the industry wants it. The board is not an unwelcome imposition by Government. Employers, with the support of the trade unions, have consistently made a strong case that a mechanism for collective funding is necessary to train a national pool of highly skilled workers. They are clear that there would otherwise be a reduction in the total amount of training. That is because of the special circumstances of the industry, with its mobile work force, employment often on a project-by-project basis and the significant use of labour-only sub-contractors.
In such circumstances, the levy and training grant mechanisms spread training costs across those who train and those who do not train. Everyone contributes whether or not they are willing to train and all, ultimately, benefit in that trained labour is available to the whole industry. That describes the general position.
The benefits go far beyond the return of levy paid in the form of grants to those employers who train the industry's future work force. The levy also provides for the development of occupational standards, especially on health and safety which is critical. Furthermore, provides for the development of qualifications, the availability of export training advisers and for work with schools on careers advice and with the further education sector on improving course quality and on research on skills forecasting. All that activity and more is to the
568
competitive benefit of the companies within the scope of the training board. As my hon. Friend will appreciate, that includes those companies that decide to use the training board's services or to train and claim a direct grant for whatever reason. Nevertheless, they still benefit substantially from the work of the board.
Specifically, for firms engaged in floor covering, the CITB has developed national vocational qualifications and standards at levels 1, 2 and 3. They cover the full range of skills, including laying hard coverings. Grants are available to contribute towards the cost of achieving those qualifications. Floor covering training is delivered at three locations—in Kent, Salford and Glasgow. Again, funding is available from CITB for training costs and, if necessary, for travel and lodging expenses. If companies prefer to train themselves, there is help for that through the board's on-site assessment and training scheme. The Contract Flooring Association is involved in arrangements to make it easier for flooring companies to use that scheme. Many opportunities are in place for such companies to develop their training arrangements.
To ensure a level playing field between companies, demands have been made in recent months for there to be a law that would make it mandatory for every construction company to register with the CITB. The CITB is considering making such a proposal, and I have said that I will consider a change in primary legislation. However, a convincing case will need to be made. It will need to take full account of the costs and benefits and give full consideration to the administrative and bureaucratic implications. Whether a company is in scope to the levy can be a fairly complex decision, and that was the burden of my hon. Friend's remarks.
For example, it might surprise the House that plumbers, electricians and fence erectors are out of scope while bricklayers, carpenters and painters are in scope. I am not sure that we could reasonably expect companies to make that decision, and how do we wish to penalise them if they make the wrong one?
At present, it is the board's responsibility to identify and register firms. I know that it does that vigorously and will always follow up information given to it. The CITB is successful in improving levy collection—last year, it collected an extra £10 million.
My hon. Friend was concerned that firms whose main activity is not floor covering but which, nevertheless, do significant amounts of that work are not liable to the levy and he pointed out that that gives rise to anomalies. I have some sympathy with the point, but I cannot see a better way of identifying construction companies without creating further anomalies. To levy all firms that undertake any construction activity, no matter how small, would be very hard to implement. Where would the line be drawn—at 25, 30, 40 per cent. of a company's work load being a construction activity? It is a difficult question and he will understand the problems surrounding that. The CITB's approach of more than half seems, on balance, to be right.
I understand the point about the so-called "jagged edge" caused by different types of floor covering, only some of which are within the scope of the levy. It adds strength to the argument if one draws a comparison between the jagged edges that customers do not want to see and those that are apparent in this area of public policy. My hon. Friend's point was well made.

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Until 1992, all floor-covering activity was potentially in the scope of the CITB, but an industrial tribunal took the view that carpet and carpet tiles are furnishings and therefore do not fall under the relevant statutory definition of construction. The CITB has operated on that basis since that decision.
That brings me to my conclusion and the way forward. As far as I know, there is no groundswell of opinion that we should revert to the pre-1992 position by bringing carpet laying back within the scope of the levy or, on the other hand, that we should remove hard floor covering from its scope. We do not know how many companies are affected, but there are about 200 that declare themselves to CITB as being mainly engaged in floor covering. It is for them, with their trade association, to make the case for change one way or the other based on a judgment of how best to ensure that quality training continues at least at the present levels.
I listened carefully to my hon. Friend and I shall re-examine his arguments in Hansard tomorrow. Obviously, the CITB can consider representations. I
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assure my hon. Friend and his constituent that I shall discuss this very case with the CITB at our next meeting. My hon. Friend made his argument powerfully, and given the way in which he described what is clearly a small but successful business, I understand his points about margins and competition.
I conclude by underlining the main issue: it is about ensuring that effective arrangements are in place to provide a high-quality work force for the construction industry, including the floor covering sector. At the very time when we need to improve both the quantity and quality of training in our country, we do not want to do anything that would undermine our chances of achieving that objective.
I should be happy to have a follow-up meeting with my hon. Friend to discuss the matter further and I congratulate him on bringing to the attention of the House a matter that is, for some, obscure, but for those of us who understand it, very important.
Question put and agreed to.
Adjourned accordingly at twenty-two minutes to Eight o'clock.

Preamble
[MR MICHAEL J. MARTIN in the Chair]

Construction Industry
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Clelland.]
2.30 pm
The Minister for Housing and Planning (Mr. Nick Raynsford): I am pleased to have the opportunity to initiate this debate on the future of the construction industry. It is entirely appropriate to use the facilities of Westminster Hall for a debate that, I am delighted to see, has attracted a significant number of hon. Members from different parties, which reflects the importance of the industry. It is not appropriate to refer to both sides of the Chamber because there is a lot of overlap, which is thoroughly healthy.
The construction industry is important for a number of reasons, one of which is its scale. It has an annual turnover of £65 billion—some 8 per cent. of gross domestic product—it employs 1.4 million people or 1.7 million if the professionals and consultants are included, and it consists of 160,000 companies. But it is not just size that matters. The construction industry is important because of its vital role as a key delivery mechanism for the improvement of our economic and social infrastructure. The public sector alone accounts for some £25 billion of the industry's turnover, which is 40 per cent. of the total. Railways and other public transport facilities, hospitals, schools, universities, housing and other public services depend on high-quality construction. Similarly, in the private sector, services and industries depend on efficient, reliable, good-value construction for the delivery of plans to improve their services to consumers.
The Government came to power with a commitment to invest in the modernisation of Britain and to improve its economy and social infrastructure. Construction plays a vital role in the delivery of those improvements. British construction companies are world leaders in many respects. They are renowned for innovative engineering, high-quality design and architecture, and they are world leaders in project finance. They are major players in the supply of materials and components, project management and professional consultancy. They earn around £10 billion a year in overseas earnings.
However, the industry also has problems. It has traditionally been fragmented and even the largest United Kingdom contractors are small in comparison with the major continental, American and Japanese companies and, in a globally competitive market, that sometimes matters. Profit margins have traditionally been low and construction companies have seen relatively poor stock market valuations.
The industry is one of the UK's worst polluters. Every year it produces some 70 million tonnes of waste material, with some 13 million tonnes of that being material that is delivered to sites but never used. The
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industry does not have a good record on training, despite the sterling efforts of the Construction Industry Training Board. It has one of the worst records of any industry for health and safety with around 4,000 serious accidents and only rarely fewer than 80 deaths a year. The work force is ageing and has a very small proportion of women and representatives of ethnic minorities. Only 3 per cent. of construction professionals and 1 per cent. of craft operatives are women and only 1.7 per cent. come from ethnic minorities, compared with 6 per cent. in the total work force. In the domestic sector, the industry's reputation is tarnished by the often outrageous activities of cowboy builders.
Our task is to help the industry to build on its strengths, to continue the process of improving its standards and at the same time to bear down on the problems and difficulties that hold it back.
Aware of the vital role of construction, and of the need for radical improvements in performance, my right hon. Friend the Deputy Prime Minister asked Sir John Egan to chair a construction task force to review the performance of the industry and to recommend changes to improve its delivery and effectiveness. Sir John and his team reported in July 1998. "Rethinking Construction" is an excellent report, which built on, supported and extended the work and recommendations of Sir Michael Latham's equally important report "Constructing the Team" which was published a few years earlier. We owe a considerable debt of gratitude to both Sir Michael and Sir John for their mould-breaking contributions to improving the culture and performance of the construction industry.
"Rethinking Construction" came to radical conclusions, yet it reflected a substantial consensus emerging among many leading figures in the industry. Its recommendations have won wide acceptance, not in every detail but as a strategy that points the way forward and gives urgency to the process of reform. I shall not delay the proceedings by trying to summarise in detail the report's many recommendations.
The key conclusions were that capital costs and construction time could be reduced by 10 per cent. a year, year on year; performance on predictability in relation to budget, time, defects and accidents could be improved by 20 per cent. a year, year on year; and productivity, turnover and profits could also be increased by 10 per cent. a year, year on year. At first sight, those appear to be bold targets. However, they are only modest advances on the targets that Sir Michael Latham set out in his earlier report. As the task force pointed out, the best clients and suppliers are already close to achieving them.
The task force identified a need for leadership by clients, and especially by Government and the public sector. That leadership would demonstrate what could be achieved and would disseminate those lessons across the industry as a whole. That represented a major challenge for the Government, the public sector and UK plc. It was also a unique opportunity. We have responded to that challenge and grasped the opportunity.
The construction industry is large and varied. It is deeply embedded in the fabric of our economy and society, and I do not pretend that there are any magic

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wand solutions. Success will depend on concerted and sustained action across a broad range of issues, which must be pushed forward boldly, pursued persistently and stuck to resolutely. It is less than two years since "Rethinking Construction" was published, but I am pleased to say that there are already signs of substantial progress.
Before I outline what has been achieved, I must stress the importance of the broader context within which the construction industry must operate. As an investment industry, it is especially vulnerable to wide swings in demand. Anyone in construction can tell us that the boom-and-bust approach that characterised the economic management of the previous Government had a disastrous impact on the industry.
The first, and perhaps most important, role for the Government is to manage the economy so as to deliver the steady growth that is vital to a healthy construction industry. Because of prudent macro-economic management, construction is benefiting from an economy that is growing steadily. The prospects for continuing steady low-inflation growth have rarely looked better. That is true for the United Kingdom domestic economy and for export markets on the continent. It is beginning to come true in south-east Asia, where Japan and the other tiger economies are now recovering from the shock of their recent collapse.
Secondly, apart from creating the right macro-economic environment, the Government have also broken away from the pernicious tradition of annuality in Government spending. With three-year spending plans and the move towards resource accounting, not least for local authority housing revenue accounts, we are enabling public sector clients of construction in both local and central Government to plan their spending over a period of years. That will enable them to secure a steadier and more cost-effective programme of construction work, and to build longer-term relationships, which is a fundamental element of the partnering approach that is advocated by Sir Michael Latham and Sir John Egan. From next autumn, local authorities will be required to draw up business plans to help all concerned to plan for the most effective use of resources. The best value reviews, assessments and performance measures will also contribute a powerful incentive to improve whole-life value through construction.
Thirdly, we have provided for sustained programmes of expenditure on the extension and improvement of many public services, notably hospitals, schools, social housing and transport infrastructure. As announced in the Budget, spending on gross capital formation will increase over the next five years from £24.1 billion a year to £41 billion a year.
In those three ways, the Government have played a key role in helping to ensure that the construction industry benefits from a steadier and more predictable work load than for many years. That gives the industry a secure base and the prospects that it needs to make essential major investments in new technology, improved processes and recruiting and training a high calibre work force.
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We have also taken a series of measures to promote the radical reforms advocated in "Rethinking Construction". First, 18 months ago, we helped the industry to set up the Movement for Innovation—M4I—board and the housing forum to promote and disseminate innovation in the industry at large and in the housing sector. We invited the leading plants and suppliers to propose demonstration projects that would illustrate innovative approaches, measure their performance and share and help to spread their experience and lessons. I am pleased to report that 235 demonstration projects, worth about £3.5 billion, have been submitted, including 56 housing projects and 179 non-housing projects. That is seven times the level for which Sir John Egan called in his report. It is a great tribute to the construction industry that it has responded with such enthusiasm, and on such a scale, to the challenge laid down in "Rethinking Construction".
Secondly, we established the central and local government task forces to promote radical improvements in the performance of public sector clients. In April last year, my right hon. Friend the Chief Secretary launched the achieving excellence campaign, with challenging targets, action plans and regular measurement and monitoring of performance to raise the performance of Government Departments and agencies. The pioneering building down barriers project, which is run by the Ministry of Defence and supported by my Department, has shown impressive results. Whole-life costs are down by between 7 per cent. at Wattisham and 14 per cent. at Aldershot. Construction time has been reduced by 20 per cent., and wastage has been almost eliminated.
Turning to local government, the Deputy Prime Minister and Sir Jeremy Beecham wrote to local authorities last July, inviting them to commit themselves to similar targets and programmes as part of the best value initiative. The local government task force had its first substantive meeting in January this year, and launched its campaign at a conference six weeks ago. We already have 70 demonstration projects from local authorities, including road repairs, bridges, schools and housing.
Thirdly, also last July, and again building on Sir John Egan's recommendations, we challenged the leading clients from both the public and private sectors, to draw up a clients charter to encapsulate and drive forward a radical improvement in client and industry performance. A draft of the charter is currently out for consultation. I am confident that by around the end of the year, we will have achieved our target of getting enough clients signed up to account for 50 per cent. of construction procurement. That will provide a major impetus for improvement across the industry.
Fourthly, we have set in hand an important initiative to improve the industry's performance on respect for people issues—that is, valuing the people who work in the industry and encouraging policies that promote diversity, health, safety, good site conditions, welfare and training. That has been widely welcomed—not least by industry leaders, who appreciate that their growing recruitment and retention problems can be resolved only by delivering radical improvements in the way in which they treat their work force. That includes attracting more women and ethnic minorities to view construction as a potential career. This autumn, we

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hope to start trialling, with the demonstration projects, a set of performance measures on respect for people issues.
Fifthly, we took the initiative to improve the industry's performance in respect of sustainability and minimisation of waste. In February last year, we issued a consultation paper and encouraged the establishment of an industry group, under Sir Martin Laing's able chairmanship, to raise awareness, demonstrate the business case for sustainable construction and help the industry to measure its performance. Last month, we published the strategy paper "Building a better quality of life". It sets out our priorities, including better use of existing assets, improved design to minimise waste, minimising whole-life consumption of energy, and a variety of other measures designed to achieve improvements in environmental performance and greater profitability for the industry. The assumption that environmental targets can be met only at a greater cost is one of the fallacies of the current debate. Cutting out waste saves money, and many environmental improvements will benefit the profitability of the industry.
Sixthly, we are taking steps to encourage improved design. In particular, we want public sector clients to lead the way by adopting a team-based approach to design. Design should be visually attractive and imaginative, respect its locality and environment, allow quick, reliable and safe construction, and deliver maximum value, effectiveness and efficiency. As recently as this week, we launched a new design guide to encourage quality design throughout public planning.
Mr. Tony Baldry: I should be grateful if the Minister would explain to what extent the house-building industry has been consulted on the design guide. Those in the industry seem to feel that the Minister was criticising them for not executing good design. What was the policy imperative that brought about the design guide? Was it simply that, in future, building density will be far more concentrated?
Mr. Raynsford: The hon. Gentleman raises a valid point about the purpose of the design guide. I shall return to his earlier question on consultation in a moment, but the purpose of the design guide is to improve standards of design. Those who look at the performance of designers in this country will know that, at their best, they are world class. Sadly, that high quality is not to be seen in all the buildings that we construct. There are too many examples of shoddy, second-rate buildings that damage our environment, and we want to raise the general standard. I should say in a completely non-partisan way that the Secretary of State for the Environment in the previous Conservative Government, the right hon. Member for Suffolk, Coastal (Mr. Gummer), had an equal passion for improving the quality of design. We are simply pursuing and developing that agenda.
I have met regularly with house builders, and forcefully made the point that we are keen to improve standards of design, so they are well aware of our views. It is in everyone's interest that the guidance is followed. It is not restrictive; it does not try to impose a blueprint; it does not say, "We know best"; but it does say, "We want to improve the quality of design in the interests of the environment, the public and good quality building".
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In respect of measures relating to the construction task force, I turn to the publication last May of the first set of key performance indicators, which were based on the "Rethinking Construction" targets to which I referred. Last month, we published figures for the end of the first full year, which showed improvements in some areas but plenty of scope for progress. Measurement is a key to driving forward improved performance—whether in terms of value for money, construction time and predictability, health and safety, diversity or sustainability. It will enable individual companies or projects to compare their performance with others, identify areas of weakness and provide a tremendous motivation for continuous improvement. We are steadily improving and extending the measures, so that, before too long, they will cover the full range of issues to which I have referred. In time, they will provide a powerful incentive and tool for improving performance.
The construction task force suggested that its recommendations would be widely taken up only when they were seen to be successful, hence the emphasis on demonstration projects. We must show what can be achieved, before we start to disseminate the lessons.
We must create the mechanisms to help the industry to be aware of and understand the lessons. That is why, 18 months ago, we established the construction best practice programme. It is has grown increasingly popular, and, so far, there have been more than 70,000 requests for help or advice. Next week the M4I board will launch the knowledge exchange, a net-based system to help the industry to hear about good practice and exchange experience.
It is still early to judge the impact of the initiatives. It is scarcely 18 months since we began the drive to promote the implementation of "Rethinking Construction". The main representative bodies of the industry—the Construction Industry Training Board, the umbrella groups and the professional bodies—agree that "Rethinking Construction" has given an invaluable impetus to reform. Unquestionably, the initiatives that I have described have aroused real enthusiasm across a wide swathe of the industry and a real determination among many leading clients and suppliers to rethink construction.
I have focused on our efforts to improve the performance of the industry. However, we have also taken important initiatives to protect consumers and improve standards in the domestic sector. In April 1998, we published a consultation paper on tackling cowboy builders. In July 1998, in response to the views expressed about that paper, we brought together a working group, under the chairmanship of Tony Merricks, to develop a practical scheme to tackle cowboy builders. The group reported to me in August 1999, and we accepted its recommendations. Last month, we launched the first of two pilots in Birmingham. Once sufficient numbers of builders have been assessed and registered, the scheme will be open to consumers in Birmingham, probably in June or July this year. A second pilot will be launched in Somerset next week. By the end of the year, we should have gained enough experience from the pilots to decide whether the scheme should be extended nationwide.
Mr. Baldry: I am grateful to the Minister for giving way a second time. We have a strange format here, Mr. Deputy Speaker, which does not encourage

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interventions and lulls us into a false sense of consensus. That is why our forefathers were wise not to have a horseshoe shape for the main Chamber.
Is the Minister concerned that, in the whole of the midlands, only about 100 building firms have signed up for the pilot scheme? That suggests that a purely voluntary scheme will not work, particularly if it is a complicated scheme for which people have to fill in huge numbers of forms. Clearly, firms are not supporting the scheme, and many of them probably feel that they are better off with the cowboys.
Mr. Raynsford: I rather value the horseshoe shape in this Chamber. I believe that encouraging consensus, where genuinely possible, is a thoroughly good thing.
I would have thought that there would have been consensus on this issue. I have with me a copy of a report from the beat the cowboys working party produced by the previous Government. It was published in 1988.
Mr. Baldry: Before my time.
Mr. Raynsford: The hon. Gentleman, who served as a Minister with responsibility for construction in the intervening period, will, no doubt, wish to explain to the House why the previous Govt took no action to implement the recommendations of that working party. So far, about 250 builders in the Birmingham area have registered an interest in the new quality mark scheme, although we have not yet launched the formal publicity and marketing campaign. The reports suggesting that there is no interest are wide of the mark.
Such schemes will always have a chicken and egg problem. Builders will not be keen to sign up until they see positive results, as consumers start placing their orders. Equally, the scheme cannot be promoted to the public until enough builders have signed up and there is a reputable group from which the public can choose. That is the chicken and egg issue. We are determined to have a strong and reputable group of builders in place, before we launch the scheme to the public. I am confident that we will achieve that. In that way, we will ensure effective action to tackle cowboy builders 12 years after the previous Government talked about it but failed to act. More than 200 builders in Birmingham have shown sufficient interest to join the scheme and have been sent registration packs—and that is before serious marketing has started.
Finding a builder who delivers competent, reliable work is never easy. The quality mark scheme is aimed at giving domestic consumers the information that they need to choose a competent builder or tradesman to maintain, repair or alter their homes. Builders who register with the scheme will be assessed against basic criteria of technical competence, financial soundness and training, including management, and craft skills. They will agree to follow a code of practice, to conform to a complaints procedure and to use an insurance-backed warranty scheme. We will develop the scheme carefully, building on the experience that we gain from the pilots. It represents an historic innovation and a major step forward for the industry and especially for consumers. We must not let them down. If it takes a little time to get it right, it will be time well spent—not 12 years, I hasten to add, but a matter of months.
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Some feel that a voluntary scheme may not be sufficient to curb the cowboys. We agree that tougher measures are needed. In parallel with my Department's initiatives, the Department of Trade and Industry published in July last year the White Paper "modern markets: confident consumers". That included proposals to amend the Fair Trading Act 1973 to provide a power for the courts to grant injunctions against specific practices carried out by specified trades, a power for the courts to ban from trading for a period traders with a history of disregarding their legal obligations and a power for the Secretary of State to make orders by secondary legislation to specify that certain unfair practices should become criminal offences.
Rogue traders usually operate at local level. Colleagues at the Department of Trade and Industry propose that the new powers should be available to local authority trading standards officers as well as to the Office of Fair Trading. Those legislative changes, taken together with our quality mark scheme. will in time have a major impact in helping consumers to find a trustworthy builder or tradesman and in helping consumers and trading standards officers to put a stop to the outright rogues.
I have outlined a number of initiatives that we have taken to promote a radical improvement in the performance of the construction industry and to protect consumers from cowboy builders. Time prevents me from covering many others, such as changes to the building regulations to assist people with disabilities and improve energy efficiency in buildings as well as the measures that we have taken to assist British construction companies to compete successfully and secure work in overseas markets.
Our initiatives have been widely welcomed by all the representative bodies. Perhaps most encouraging of all, the old adversarialism, which was the bane of construction, has begun to give way to a genuine determination among leading clients, professionals, contractors and suppliers to work together to promote innovation.
Mr. David Drew: I do not want to put my hon. Friend on the spot, but I was pleased to receive a submission from the Federation of Master Builders. The first point that it identified was the equalisation of the VAT regime to help with repair, maintenance and improvement. I know that that is subject to review by the Treasury, but, given the strong support from the Rogers urban task force, I hope that anything that the Minister can do in his Department, which I have to believe is in favour of the move, will help the construction industry by making sure that we have a level playing field from the outset.
Mr. Raynsford: My hon. Friend raises a fair point, which exercises many people in the industry and in the House. While taxation is a matter for the Chancellor, there is genuine interest across Government in the way in which we can use economic instruments more effectively to promote our objectives. Following the Budget, there has been a move to consult about changes to stamp duty and to encourage activity in urban areas. A wider debate about the use of economic instruments,

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including VAT, is likely in the months ahead. We shall make clear our response to the important Rogers report in the forthcoming urban White Paper.
With a sound economic basis for solid growth and a real sense of excitement about the scope for transforming the industry's performance and profitability, prospects for the future of the construction industry are better than at any time during the past 20 years. However, this is no time for complacency. The clear lesson from the past few years is that British construction has the capacity to be—and at its best, it already is—a world-class industry. A commitment to continuous improvement and a determination by the industry and the Government to work together to drive forward the Egan agenda, are the only ways to ensure that the industry can take on and beat the best in the world. That is our objective, and we are determined to achieve it.
3 pm
Mr. Robert Syms: I should start by declaring an interest. The Register of Members' Interests shows that I am the director of a family property company that has a subsidiary that is involved in building, and I am a fellow of the Chartered Institute of Building. For three years, I have tried to avoid getting involved in debates on the building industry, but because my colleagues are serving on Committees upstairs, I volunteered to participate in this debate.
It may be the effect of this Chamber's shape or the fact that it is Thursday afternoon, but I have to say that I agree with quite a lot of the Minister's comments—I am sure that many other hon. Members do too.
The building industry is difficult to measure. When I was doing some research for this debate, I found that some sources suggested that the appropriate figure was more than 5 per cent. of gross domestic product, others put it at 9 per cent. and the Minister gave the figure of 8 per cent. One source states that the industry employs 1.4 million, but that figure can be worked up to nearly 2 million if one includes professionals and those who supply the industry.
During the past three years, I have observed that on occasion statements are made in the House because a particular firm or industry has problems, but on other occasions hundreds of jobs, or a few thousand, may be discussed. The building industry involves thousands of jobs. I do not need to remind hon. Members that dividing the number of people who are employed in the industry by the number of constituencies shows that, in our constituencies, more people are employed in building and its allied industries than in any other industry.
What the industry produces is vital. In the modern age, we spend most of our day in a product of the building industry. The importance of producing decent, quality buildings has become more pressing with our move from the previous century to this one.
The building industry always has certain problems—it is a cyclical industry. The Minister said that boom and bust had been eliminated, but that remains to be seen. Throughout my lifetime, and those of my father and grandfather, both of whom were builders, there have been cycles. Sometimes, the upside of a cycle can be just as devastating for the industry as the downside. When
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one is competing for contracts and hoping that one will have the labour for a particular job six or 12 months hence, a housing boom may cause one concern because someone may come along and offer one's workers higher wages, and one might be left with labourers who are not sufficiently skilled to complete the contract.
Those who work in the industry experience terrible problems getting paid—customers do not always provide builders with their due. If one supplies a person with a refrigerator, one can always take it back, but if one has built an extension on a house, and a long legal argument ensues, it is much harder to do that. Bills and cash flow are important to the industry.
The industry has a tremendous image problem. Much of the difficulty involves cowboy builders, who were discussed earlier. People who have visited me in my surgery because of problems with builders usually thought that they would make a saving, perhaps by making a cash payment. They experienced difficulties because they did not go to someone who was reputable and were not willing to pay a proper price for a proper job. People sometimes get caught in that way.
I welcome the Government's and the industry's initiatives.
Mrs. Claire Curtis-Thomas: I was interested by the hon. Gentleman's comments on debt and cash flow in the building industry, which may be an historical problem. Does he agree that the introduction of the Late Payment of Commercial Debts (Interest) Act 1998 has done much to help small businesses, especially those in the construction industry?
Mr. Syms: The 1998 Act has been helpful to some businesses, but a real problem remains. People sometimes commit to building jobs, but do not appreciate the full cost or the expense of additional extras. They may suddenly find at the end of a job that they do not have the resources to pay for it. One ends up in arguments or litigation much more frequently than one used to years ago.
The biggest enemy of cowboy builders is the industry itself, as those who work in the industry appreciate the damage that they do to it. The quality of work must be secured. I am glad that the Treasury is considering the VAT regime, but at present it does not provide great incentives for getting rid of cowboy builders because people often try to save a little by avoiding tax.
I welcome Michael Latham's report; it was a good start in the effort to create a strategy for the industry. Sir John Egan's report is also very good. Of its key points, I think that we would all agree with the need for committed leadership for the industry, a focus on the customer—these days, one lives and dies by the way in which one treats one's customers—integrated processes and teams, a quality-driven agenda and a commitment to people. All those aims are vital for the industry.
While echoing the caveats of my hon. Friend the Member for Banbury (Mr. Baldry), I welcome the attempts at the quality mark scheme in Birmingham and Somerset. One needs a critical mass in these matters, but there must also be a method of differentiating quality builders who will provide a decent product from those who are less good. We hope that the industry will adopt that scheme and give it an opportunity to run. If it does not work, we shall have to try something else.

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There is also a problem, as always, in relation to employment training and skills shortages. Because of the cyclical nature of the industry, qualified people often leave it and do not return, perhaps because they get work in factories, where they find the temperature warmer and the work easier. At the moment, there is labour market pressure because of the years of economic growth that we have experienced, and because of events in Ireland. Growth rates are quite high, and there is a construction boom over there. Women and ethnic minorities were mentioned, and it is true that there are not enough members of either group in the industry. However, anyone who has worked in the construction industry will appreciate the contribution made by the Irish contingent, and its absence might be causing a problem.
Mr. Stephen O'Brien: It is important to recognise that in Ireland a great deal of the construction spend is a combination of catch-up from a very low base and a culture in which a replacement building is put in place, especially for family dwellings, without demolishing the previous one. In this country, we have one of the world's longest tail demolition rates—a fact that will help when making a comparison. Furthermore, a great deal of Irish construction is still financed by European Union grant aid, because Ireland is on a different base formula.
Mr. Syms: My hon. Friend makes a good point. I am aware of the fact that there are many experts and people with many years' experience in the industry here today.
In terms of skills shortages, the number of applicants for civil engineering courses has fallen from 5,100 in 1994 to 3,800 in 1997. That trend must be reversed, and we must make the industry more attractive to those looking for a long-term career. Everyone these days seems to want to go into the media, but one can have a worthwhile career in the building industry.
We must continue the line adopted by Latham and Egan in terms of the need for better leadership in the building industry, and the need to do all that we can to weed out the cowboy builders who give the industry such a bad name. The industry also needs a stable economic environment, and I hope that the economy continues to grow. As I have said, economic cycles have always been with us, and I believe that they always will be. However, if we can maintain more balance between the upswings and the downswings, perhaps we shall stand a better chance of succeeding.
The Government have got one thing badly wrong. That is the construction industry scheme, in relation to the tax scheme that has been introduced. I know that it had its genesis under the previous Government, because I had a go at Ministers about it then, although they did not seem to listen. The present Government made several changes when they introduced the scheme. Under the old scheme, using the 714 certificate, one could fax through and photocopy certificates, which worked pretty well. It is unbelievable that anyone could introduce a scheme in which people now have to drive around and physically show the certificate to the person with whom they are doing business. In the age of
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electronic commerce, that is not a terribly good idea. However, I am glad that the Government have taken on board some of the problems and started to amend the scheme.
Treasury officials always complain that the industry does not pay its full whack of tax and national insurance, but it is difficult for it to do so, given its structure. In trying to crack down under successive Governments, the Treasury has not thought through the consequences, and has sometimes done the industry great harm. As always, those who are law abiding and try to do what the Government want by obeying regulations do not benefit, as opposed to those who ignore the regulations and work in the cash economy.
This is a vital industry: if it prospers, the nation will prosper. Provided that we can find decent leaders and encourage young people to attend appropriate university courses and training schemes, we can provide better buildings that will benefit everyone in this country.
This is a good subject to debate in this Chamber. It has not been discussed sufficiently, whether in the House or in Standing or Select Committees. I hope that this will be the first of a number of debates on the construction industry, and I look forward to members of all parties bringing their experience to the subject.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. John McWilliam): Order. Before I call the next speaker, I should say that several hon. Members are seeking to catch my eye. If all want to speak, could they please try to be as brief as possible?
3.11 pm
Mr. David Chidgey: I will take your words to heart, Mr. Deputy Speaker, and give other hon. Members the chance to bring their experience to bear on this important debate.
I should begin by declaring an interest. I am a civil engineer—non-practising, but I am hoping to do better—and a fellow of the Institution of Civil Engineers. It is good to see that many of the hon. Members who are chartered engineers are present today, and I shall extend that observation even to the odd architect. [Laughter.] He is a good chap really.
Mr. Deputy Speaker: Order. The hon. Member for Chipping Barnet (Sir S. Chapman) has been a Member of Parliament for a long time. He has been called lots of things, but never odd. [Laughter.]
Mr. Chidgey: I shall contemplate your intervention, Mr. Deputy Speaker, when time permits.
I want to deal with three points in this debate, which is concerned primarily with the construction industry. However, we have spent time discussing the somewhat different issue of housing, and with regard to the Minister's response to an intervention on tax regimes, a little more support for the use of tax regimes to encourage housing development on brownfield sites, rather than greenfield sites, would have been helpful. That is an area in which much can be done.
Before developing my main argument, I should repeat an apology. Because of a constituency engagement, I cannot stay for the end of the debate. I have already spoken to the Minister about the matter, so I am sure that he will understand.

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There have been mammoth changes in the construction industry in my professional life, and we must prepare for the future challenges. The construction industry has formed a very important part of our employment base for many decades, if not centuries. As has been said, when there is a recession, the construction industry always bears the brunt and experiences the first fallout. We are not talking about the loss of a few thousand jobs; often, as many as half a million jobs are lost in a short space of time. In the main, those people do not return to the industry, even when the economy picks up or there is a boom, so the industry is always playing catch-up.
Changes in the construction industry in the past few decades are important to the way in which we view its future. When I started as a professional civil engineer in the 1970s, the construction industry was benefiting greatly by the oil boom in the middle east, and British contractors and consultants led the way because of our long-standing ties with those countries and Governments. That was a great source of export income for this country, and presented significant opportunities for the industry and the development of its skills. Of course, it did not start there. In the 1950s, the industry had a great dowry from the days of empire. In post-colonial times, local civil services continued to award contracts to British contractors and consultants because that was the system that they knew and respected; they understood the way that we worked and were reassured by that. The problem was that people sometimes became complacent in the knowledge that work would come their way.
At that time we had a huge, worldwide export market, in which the construction industry was a major player. The Minister's comment that our industry has the potential to be world class rather shook me, because, until fairly recently, I had always thought it to be so. Traditionally, it has been world class and a world leader. I accept that it has to change: we can no longer scour the world to pick up civil engineering contracts in roads, bridges and railways. Times have changed since the days when thousands of men could be put on-site for a job somewhere on the sub-continent of India. The middle east market is much smaller than it was, and is serviced mainly by local employees, technicians and engineers.
The internationally funded projects that we used to bid for, and win, are nowadays too few, and too unprofitable—far too many British firms compete for returns that are far too small. For example, a few years ago there were some 4,000 registered consulting engineers in this country. Whenever those 4,000 engineers bid for a European-funded project, they were bidding for a place on the shortlist for the European contender. That was an almost impossible situation.
Mr. Lawrie Quinn: In 1998, professionals in the construction industry who worked in overseas markets contributed £2.3 billion to the British economy in invisible earnings, which equates to 20 per cent. of the total. Is that not a sign that we are world leaders and world class, and that we should continue to market that throughout the world?
Mr. Chidgey: I am grateful to the hon. Gentleman for making the important point that 20 per cent. of our invisible earnings come from the professional and
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technical skills of the construction industry. However, two decades ago the proportion was 40 per cent. or more. The industry vied strongly with the financial institutions, which are always quoted as the main source of invisibles. Yes, we are still major players, but we will not be in any shape to continue along those lines unless we look to the future and address the problems.
The high-value overseas markets for our construction industry, in terms of construction management and engineering skills, are no longer in the world as we used to know it, but in north America and Europe.
Mr. Jim Cunningham: Does the hon. Gentleman agree that when we talk about the value of the construction industry in relation to exports, we should consider the fact that Berlin, for example—especially east Berlin—is a vast construction camp where many British companies are involved?
Mr. Chidgey: I am grateful to the hon. Gentleman for that intervention. I recently had the good fortune to visit Berlin on parliamentary business, and saw the latest developments in the German Parliament's move from Bonn to Berlin, which is probably the biggest construction project of its type in the western world.
I do not know whether there are opportunities for the British construction industry beyond those that we have grasped, because I am not involved in that day-to-day aspect of the profession. The point that I am trying to make is that the market has changed dramatically. The industry has made great strides in recognising that, in order to stay in business, but the Government must recognise it too.
Consulting engineers and contractors have changed their way of operation in response to the Latham report and they are responding now to Sir John Egan's efforts in the Movement for Innovation board. I welcome that, because it is a good initiative. We can do a lot more, and I hope that the Government will be minded to take the necessary interest to ensure that we do more to introduce best practice, initiatives and progress.
I am aware that other hon. Members want to speak, so I shall be brief in my final comments. Much more could be done in the United Kingdom. We have an horrendous legacy of decaying infrastructure, which is inevitable because we were one of the first countries to industrialise, so our infrastructure is that much older. It needs attention and we must consider how to maintain, improve and develop it to meet the needs of society in transport and public buildings. We must examine more closely and work more readily on sustainable development. I want to place on record the work of the Institution of Civil Engineers in throwing off the image of dusty, dog-in-the-manger engineers which the profession had and being forthright and visionary in their approach to sustainable development. We should welcome that and pursue it, and the Government have a role to play.
Our export market presents a tremendous challenge in sustainable development and the environment. When we consider a healthy environment, we tend to think of reducing the pollution and fuel consumption of cars on motorways, but for people in much of the world it means clean water, sanitation and food that they can rely on, and that presents tremendous opportunities for British companies.

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We have the opportunity to develop sustainable skills. There are too few engineers and technicians. I heard today that half the structural engineers employed in this country are now imported not just from Europe, but from further afield. We are importing the basic engineering skills that we have taken for granted since Victorian times, which is an illustration of how far we have gone in being unable to sustain the skills that we need to drive our economy.
There is a huge problem with the public attitude that engineering and manufacturing is a dying industry. With the problems at Rover and Ford at Dagenham, parents do not encourage their children to go into engineering because they believe that there may be no decent jobs available. Nothing could be further from the truth. Engineering is the essential industry that drives our economy and sustains the quality of life that the people of this country have the right to expect. The Government have a duty to ensure that they can achieve that.
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Mr. Jim Cunningham: Unlike some Opposition Members, I would not claim to be an expert on the construction industry. I am a layman, but I want to raise a number of issues. I welcome the report and the Government's intention to take action and to set up pilot schemes. It is always wise to set up pilot schemes because mistakes can be discovered as well as the good points.
The construction industry is important to the economy not only because of the jobs that it provides locally, but because of exports, especially hidden exports. When I intervened earlier, I alluded to Berlin, which I visited 18 months ago. There is a vast construction camp in east Berlin, for which British companies provided designs, skills and know-how. Some projects are massive, including the German Parliament building and others in places such as Dresden, which was bombed during the war.
The Construction Industry Training Board has projected an average annual increase of 2.5 per cent. in construction output in the west midlands, matching the national average, and there are more people employed in the construction industry in the west midlands than in many other parts of the United Kingdom, but people do not often think of that.
Large projects such as Coventry City stadium, which is in my constituency, and the Bull Ring in Birmingham involve a huge number of people from the industry in designing, planning, building and maintaining major schemes, and many smaller industrial projects are up and running or set to start later this year. It is good to see a buoyant forecast for the construction industry, especially after the lean years of the early 1990s, but there are still challenges to face, some by the Government, which I am sure that some of my hon. Friends will mention, and some by the industry.
On industry challenges, Sir John Egan's report "Rethinking Construction" raised such themes as a better response from industry employers to clients' needs, greater respect for people in the industry and the dissemination of best practice to maximise value for money, profitability, reliability and respect for people.
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The quality mark initiative, a Government-sponsored scheme aimed at raising the standard of workmanship in the domestic repair, maintenance and improvement sector, is a great start, and I am pleased to see that consumers, builders and all the major stakeholders, including the construction industry and consumer groups, had a hand in developing the scheme from an early stage.
We welcome the news that consumers will be able to select reputable builders who have shown independent assessors that they have the skill to complete work to a high standard. That will enable firms to identify themselves as a quality enterprise and to differentiate themselves from the cowboys. I will watch the pilots in Birmingham and Somerset with interest.
In August last year the cowboy builders working group published a report that made recommendations aimed at protecting consumers from unfair practices, largely in the domestic repair and maintenance sector. The report's proposals have major implications for training in the industry at all levels and for the industry's operative registration schemes. The final report recommended that an independent body be established to own the quality mark and supervise its operation. Together with representatives from the construction industry, consumers and local authority interests, the group is charged with implementing the quality mark and ensuring that cowboy builders are corralled as far away as possible from trusting consumers.
There will always be groups who are more vulnerable and susceptible to cowboy builders than others. Nationally, Age Concern has decided that it, too, wants to take action against cowboy builders, who often prey on the elderly and the housebound. Its new scheme, First Checkpoint, is a way of doing just that. It has launched pilot schemes in three areas to protect vulnerable older people from cowboy builders and other rogue home maintenance tradespeople. Its aim will be to help older people to obtain good-quality home improvements on fair terms from the right people. The scheme already has community-wide backing in each area from trading standards, social services, crime prevention officers and neighbourhood watch associations.
One of the pilot areas is Coventry, and I am happy to give it my full support to stop disreputable and untrustworthy builders and tradesmen giving the construction industry a bad name. The cowboys damage the reputation of decent professionals, because even older people who do not suffer directly are put off having work done because of the stories that they have heard.
Some of the scams that people try to get away with are incredible. An 86-year-old housebound woman in Coventry was driven to her building society by a boiler installer to withdraw her £900 savings. The boiler that he installed failed to heat the water, and she had to spend another £700 having the work put right. A blind pensioner from Bradford was talked into signing a cheque for £180 to tarmac a drive, which was left unfinished. The firm in question had spent just two hours on the job. In another case roofers charged a disabled pensioner £40 for a roof inspection. They told him that the battens were rotten. Another roofer who

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later checked the roof found that the tiles had been deliberately removed to expose the battens to the elements.
Shoddy home improvements cause distress, inconvenience and serious financial loss to vulnerable older people and their families. Accredited and experienced builders, architects, surveyors and home improvement professionals such as glaziers, plumbers and electricians, many of whom have been recommended, will be invited to register with Age Concern. They are needed either on a paid-for basis to carry out work for older people at the going rate or on a voluntary basis to help to ensure that the scheme is successful.
Age Concern has taken steps to protect older people from being ripped off by builders and tradespeople who join the scheme. Participating home improvement professionals will be able to provide three references from the previous year and will be fully insured. They will sign up to a code of practice and agree to site inspections by local Age Concern First Checkpoint schemes.
Last year, according to a survey by Coventry trading standards officers, there were 138 incidents involving cowboy builders and other rogue traders preying on local people. I am informed that that is just the tip of the iceberg. Before our debate, Sandra Williams, an advocacy officer for Age Concern, told me of a recent case in Coventry, in which a retired couple in their 80s noticed a leak in their bathroom. Their daughter, who would normally have helped them with such matters, was on holiday, so they found someone in the "Yellow Pages" and asked him to look at it. He claimed to be a member of the institute of planning and gave them a price, to which they agreed.
He did the work—poorly, it turned out—in a couple of hours and offered to drive the 80-year-old lady to the building society. She refused to go for the cash, pointing out that the invoice was for far more than had been agreed. Many people fail to do likewise, and there have been cases of people being taken to banks and building societies to withdraw hundreds of pounds. In the case of the couple in Coventry, the builder issued an invoice for £130 for materials and £90 for labour. An independent assessor said that the parts would have been £45, at most, and that the labour would have taken no more than an hour.
Why should lay people have to argue with those who are employed to do a job for them? We should be able to have confidence that we are not being ripped off, every time that we employ a tradesman or tradeswoman to fix a problem. In conclusion, I applaud the work done by the Department of the Environment, Transport and the Regions, and by my hon. Friend the Minister in trying to address the issue of accreditation. I ask the Minister to help organisations such as Age Concern, which have very little funding, but provide a valuable service in addressing the problems caused by cowboy builders.
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Mr. Nick Hawkins: I begin by declaring an interest as parliamentary consultant to the British Cement Association. Moreover, as a barrister, I did a number of construction industry cases and, as a
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corporate lawyer, I have worked for construction companies and other companies involved in building and property. I therefore come to this afternoon's debate with a considerable interest.
We should all be aware that a balance should be struck between the interests of our constituents, who wish to preserve the environment and the green belt from excessive development, and the interest of the country in high-quality development and the replacement of inadequate buildings with good ones. I know that the Minister shares my commitment to achieving that balance, not least because we were the only two Members of the House who attended the construction industry awards dinner. The Minister was present to give out the awards, and I agreed with much of his speech on that occasion, as I have agreed with what he and my hon. Friend the Member for Poole (Mr. Syms) have said today.
There can often be a measure of agreement in debates such as this. We all accept that there are challenges to be faced and a great deal of work to be done, but everyone involved in the reputable side of the construction industry has a great deal of which they can be proud. As many hon. Members, including the hon. Member for Eastleigh (Mr. Chidgey), have said, it is important to recognise that British construction companies are earning huge amounts abroad by producing high-quality buildings. I can tell the hon. Member for Coventry, South (Mr. Cunningham)—whose concerns I share—that what he saw in Berlin 18 months ago still applies. I was able to visit our German counterparts in Berlin during the Easter recess, where I saw how British companies continue to play a major part in the reconstruction work there, as in many other countries.
The Minister would also agree that, just as he faces challenges in his discussions with his counterparts in the Treasury, every level of the construction industry faces great problems. My hon. Friend the Member for Poole and other hon. Members who have spoken have rightly expressed concern at our failing to get taxation arrangements right. I therefore urge the Minister to continue the pressure that I know he has already sought to put on his counterparts in the Treasury. When amendments are debated by the Committee considering the Finance Bill, and perhaps in future legislation, it will be essential to realise that for small companies taxation arrangements and issues such as the replacement of the 714 form scheme—I think that everybody now accepts that the changes originally introduced by the Government were not helpful—can make the difference between profit and loss and between survival and prospering and bankruptcy. I see the Minister nodding and making notes. I am grateful to him, because I know that he has taken these issues seriously.
Further work still needs to be done on CIS 5 and CIS 24. I apologise to the Minister for the fact that, like the hon. Member for Eastleigh, I will be unable to stay until the end of the debate, but I hope that he will at least be able to say a little about those. I cannot stay until the end because I have to attend a meeting with one of his ministerial colleagues, but I apologise to him and to other hon. Members for leaving early.
I want to turn to some of the other issues, on which I think the Minister and I will again agree. First, much new housing construction is of high quality. The Minister may be aware of the green leaf awards for

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environmental standards. He will probably be pleased to know that last Friday I presented two of those awards to successful projects in my constituency. He is certainly aware that in my constituency there is a great deal of Ministry of Defence land, which will now be developed, and other brownfield sites.
When I presented the green leaf award certificates last Friday morning, I was pleased to see that one of the developments was a high-quality, low-cost development on a brownfield site. The developers, Barratt, and people from the Housebuilders Federation told me that the houses had replaced a disreputable nightclub that had had to be closed down, having been an enormous nuisance to people living in the area, and had then become a derelict site with crime, criminal damage and use by drug addicts and squatters. Local people, who in other circumstances might not have wanted the site to be developed for housing, were delighted to see it cleared and good-quality, low-cost affordable housing built on it. The high-quality developers are looking out for such sites.
The second site was an extremely high-quality development for retired people by English Courtyard at Mytchett Heath in my constituency. Having seen that large site being developed over the past three or four years, I know how greatly those who live in it appreciate the good balance between the number of housing units and the preservation of an arboretum, an open-air theatre and other high-quality facilities. The developers did not seek to cram in the maximum number of units. Again, the Minister nods. He shares my praise for developers who develop sites sensitively.
I want to make a final constituency point, of which I think the Minister is aware. It is agreed in the local plan that one of the larger Ministry of Defence sites will be developed—the former Alma-Dettinger barracks. A group of concerned residents, led by my constituent, Mrs. Shirley Coveney, is working with the developers—once again, Barratt—on a large site to try to preserve some of its best features and not allow everything to be knocked down, and to have a development along the same environmentally friendly lines as the Poundbury model village that His Royal Highness Prince Charles has so strongly supported on his estate.
I hope that there will be cross-party agreement on some of those issues, but many in the construction industry continue to be concerned about the effects of the climate change levy. On behalf of a range of industries—not merely those in construction but those in horticulture and others—I should tell the Minister that there are severe concerns. He and other hon. Members may not have focused yet on the impact that positive environmental measures have had on many people involved in construction, particularly in cement and concrete, in recent years. I know that he is aware of the environmentally friendly use of recycled waste tyres in cement and concrete production, and I hope that he will continue to support that, but I hope that he recognises that further progress is necessary and that he and Ministers not only in his Department but in all Departments, especially the Treasury, will take seriously the concerns that have been expressed by industry leaders.
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Cement and concrete can help to prepare brownfield sites for new home development, because in-situ cement mixing can physically and chemically mobilise contaminants in the ground. The British cement industry, other industries and the university of Greenwich's centre for contaminated land remediation continue to collaborate on that. The Minister smiles; I know that he particularly welcomes anything involving the university of Greenwich. Once sites are decontaminated, the improved land can be used as ordinary building land. For example, the millennium dome is built on such a site, as are a new school in Leyton and housing in West Drayton.
Whisper concrete has been trialled extensively, and such experimental road surfaces can offer environmental benefits. My constituents express much concern about road noise from the M3, and nearby constituents have noise problems from the M25, so I hope that the Government will examine not only whisper concrete but other road surfaces. Some technical experts have written to me and have pressed the Minister's colleague in another place, Lord Whitty, on the possible use of Colsoft. Perhaps the Minister will consider that and examine my correspondence with the noble Lord.
I will briefly make one or two other points. Not only the construction federation but the Construction Industry Council and the Chartered Institute of Building have told me that further work should be undertaken to ensure better collaboration between some of the construction industry bodies. The Construction Industry Board, the construction research and innovation panel and the construction best practice panel sometimes experience liaison problems. Councillor Keith Bush, one of my constituents, is a diligent borough councillor and has done much work with the Chartered Institute of Building. Some bodies are partly or entirely funded by the Government, and he regularly discusses with me the need to ensure that they work together better. I am sure that the Minister will take account of that.
The plans to deal with cowboy builders need to be allied to changes in the value added tax regime, which I hope that the Minister will discuss with his counterparts in the Treasury. The Construction Industry Council believes that unless changes to the VAT payable on domestic repair and maintenance are made to help reputable builders, it will be difficult to make the cowboy builder schemes work. I am sure that all hon. Members will agree that although tougher measures are needed to tackle the cowboys, the real rogues will try to drive a coach and horses through the rules. The boys from the blackstuff, if I can caricature them as that, are not interested in schemes or rules. We must persuade people always to use reputable builders.
In answer to an intervention by my hon. Friend the Member for Banbury (Mr. Baldry), the Minister said that many building firms around Birmingham have expressed interest in the scheme. It is all very well to say that, but reputable companies must sign up for the scheme when its marketing takes effect. The acid test will be whether people use the reputable builders—I see that the Minister agrees.
Construction output is estimated at between £60 billion and £62 billion per annum. All hon. Members support a continuing increase in that, but it

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must be high quality, and construction firms and building companies must not be strangled by red tape. When the Minister examines his pilot schemes, I hope that he will ensure that we do not repeat the problems with the replacement of form 714 and with taxation, and that we do not create an over-bureaucratic system.
When we debate again, perhaps in the main Chamber, the way in which housing and construction should develop, we should all bear in mind the fact that in south-east England, and especially in constituencies such as mine, there is enormous pressure not to spoil the green belt or the countryside beyond it. We must ensure that we maximise the use of existing brownfield sites and preserve the best of our existing buildings. The Minister will know that I have regularly championed the conversion of existing buildings for modern uses, not only throughout my eight years or so in this House, but in articles that I wrote before entering Parliament. We have seen good examples around the country, such as Dean Clough in Halifax and the way in which marvellous Victorian industrial heritage, such as Salt's mill, has been used as art galleries. There are marvellous examples of how those projects can be developed.
I ask the Minister to bear in mind the concerns being expressed about another fine Victorian building that might be under threat, Manningham mills in Bradford, which is not dissimilar to Salt's mill. I ask him to consider carefully the comments that experts have made about that issue in the press in recent days.
I have tried to cover a lot of ground quite quickly. The Minister was right to praise all the work being done by leading industry figures, such as Sir Michael Latham, Sir John Egan and Sir Martin Laing; I echo what he said. There is great hope for the future that construction will continue to be an industry of which everyone in Britain can be proud. However, we must ensure that there is delivery and that consumers dealing with small building firms are encouraged to choose only the reputable ones. We cannot stop every rogue who is operating, but we can ensure that there is real consumer protection, so that the good firms can flourish without being strangled by red tape and the rogues can be pursued and driven out.
We must ensure that larger firms are also encouraged to have high standards, particularly in relation to safety, which I regard as of paramount importance, but which has not been mentioned a great deal so far. At the same time, we must ensure that there is no risk that even large firms will be strangled by an over-bureaucratic approach.
3.47 pm
Mr. Andrew Miller: I do not bring with me any vested interest in the industry. I have a certain amount of experience, as the hon. Member for Eastleigh (Mr. Chidgey) knows from his earlier incarnation in materials testing and engineering geology. I suspect that I might have done some work for him when he was an undergraduate many years ago. I leave it to hon. Members to decide who has worn best. I also suspect that I have laid more bricks personally than the Opposition have dropped collectively.
I am concerned about cowboy builders, and we must get to grips with that issue. I have one case in mind from my own constituency. I shall not deal with it in any
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detail, because I hope that there will be a police prosecution shortly. The case is similar to that described by my hon. Friend the Member for Coventry, South (Mr. Cunningham).
I am concerned about another aspect. Again, I shall not name the firms involved, but one major construction site in Chester employs, quite understandably, a network of subcontractors. They are further subcontracting and saying to people down the chain, "We want you to work on a self-employed basis, rather than being directly employed by us." That is a clear and deliberate attempt—the owner of the principal contract understands this—to avoid paying into the national insurance fund and to avoid paying income tax. That practice must be wiped out; major companies that are subcontracting, and whose subcontractors are also subcontracting, must take action and be more responsible.
A constituent visited me a few weeks ago—a bricklayer who is nearing retirement. A company had dismissed him because he refused to work for it on a self-employed basis. He won a tribunal; the principal contractor dismissed the sub-contractor; the second sub-contractor did the same and is now in the process of a second industrial tribunal claim against the other sub-contractor. That practice is utterly unacceptable. It reflects the fragmentation to which my hon. Friend the Minister referred. In turn, that has a major impact on training, where apprentice bricklayers—the next generation of skilled workers—have been working with the contractors.
My principal topic this afternoon is health and safety. The practice that I described does not promote an effective health and safety culture. I thank my hon. Friend the Member for Corby (Mr. Hope) for bringing a Biblical quotation to my attention. I did not know that one of the qualifications for being a Parliamentary Private Secretary in the Department of the Environment, Transport and the Regions was Biblical scholarship. My hon. Friend pointed out that verse eight of chapter 22 of Deuteronomy states:
When you build a house, you shall make a parapet for your roof that you may not bring the guilt of blood upon your house if anyone fall from it.
Safety in the industry is crucial. We all agree that preventable accidents and ill health are unacceptable. The industry has done much in recent years to reduce the number of fatal accidents, but the latest figures are still worrying. There were 70 deaths in 1998–99; 86 in 1997–98; and 93 in 1996–97—an unacceptable number of fatalities. The number of musculo-skeletal injuries is horrific. Averaged out over the previous five years, there were 83 fatal accidents, 3,164 major injuries and an estimated 123,000 musculo-skeletal injuries. Those injuries currently cost the country approximately £180 million a year—a burden that the taxpayer should not have to bear. Responsibility lies with all players in the industry, including employees, to drive those figures down. There have been some encouraging trends, as I said, and we must further encourage participants to move towards a healthier and safer environment.
The industry is examining the all-round competence, including knowledge of health and safety, of its workers. There is significant support for the construction industry training board construction skills certification

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system, which covers the skills of brickies, plasterers, carpenters and other jobs of significant risk. There are currently 292,000 cardholders of the certificate of training achievement for those operating cranes and hoists, which is a positive step in the right direction.
Last week there was a fatality on a refurbishment project at Cleanaway in my own constituency, when scaffolding collapsed. It is still under investigation by the Health and Safety Executive, but that sort of incident should not occur if we drive forward standards and improve certification at all levels of the industry.
Employees and trades unions can help tremendously. There has been a greater coming together and professionalism on major building sites in recent years. I hope that the work that has been done in more static occupations such as factory environments to promote health and safety and proper representation continues.
Mr. Quinn: Does my hon. Friend agree that one of the main problems with the construction industry is its mobile nature, and the fact that it is not easy to employ safety representatives on sites? Does he agree that the construction trade unions should be considering some type of roving safety rep scheme to bring about the change of culture that is needed on construction sites?
Mr. Miller: I am grateful to my hon. Friend. I recognise his experience in this sphere. That approach ought to be considered as it may provide a solution.
I refer my hon. Friend to my earlier remarks about subcontracting, which exacerbates the problem. I am not sure where the right model lies. It is possible that parts of the country where there is greater activity might provide different solutions, but something along the lines that my hon. Friend suggests needs to be considered.
I go along with the comments of Conservative Members about VAT. This is another Tory U-turn. That is wonderful. It was their party's policy to impose VAT on construction materials. I know that only too well because it happened when I was rebuilding my derelict house and I got caught for the 12.5 per cent. that the Tories slapped on them. It also taught me some interesting things, one of which was that the whole process was rigged with loopholes, all of which surrounded not the repair and maintenance of listed buildings or churches, but the extension of them, created for the benefit of one or two people down the end of the Corridor. It was outrageous. I could understand their being used to protect listed buildings to ensure their repair and maintenance, or churches, and our heritage, but it was done to enable listed buildings to be extended. That is an absurd set of rules, which I hope the Chancellor of the Exchequer will address in due course.
Public perception of the industry has improved tremendously. As my hon. Friend the Minister said, design and architecture have improved dramatically. Exciting new developments are taking shape all around us, ranging from the London Eye to some of the superb blocks of flats on the river. Even the character of housing estates in suburbs and towns is improving dramatically. The relevant professions deserve to be congratulated on that.
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However, there is more to be done. I refer to the management of sites while developments are taking place in order to minimise disruption. The transfer of responsibility for roads and communal areas between developers and local authorities must be undertaken in a more systematic and tidy way. There have been a few unacceptable examples in my constituency, where I have had to persuade developers to finish work that they should have done before the transfer to the local authority. Some improvements can be made in quality standards in all areas. The public are entitled to a better recourse to the complaints process than they have through the current NHBC system, which has caused a number of problems in my constituency.
The industry is exciting. It provides a lot of work in this country. It has huge risks associated with it, but there are moves in the right direction to improve that. I urge the industry to work with all the partners, including the trade unions, to address those health and safety issues. I am sure that it will continue as an important and vibrant contributor to the British economy.
4.1 pm
Sir Sydney Chapman: I am grateful to be called in this important debate. I should like to begin by congratulating all the speakers so far. The Minister is to be applauded for the tone and most of the content of his speech. I do not claim to be an expert on the construction industry, but I recognise it as one of the greatest industries in our country. Its definition varies, and that is amplified by the different figures that have been given. I would prefer to stick to the £65 billion output; last year it was £62 billion, so that it is a pretty conservative point to make.
The industry represents about 8 per cent. of our gross domestic product and, equally importantly, employs 2 million people. That figure is broken into roughly 1.25 million employees and 750,000 self-employed people. That underlines the variety in the industry, but adds to some of its complexities and problems.
Historically, the construction industry has had little influence in the corridors of power and there are two reasons for that. First, people who work in it are evenly spread throughout the country. There are no construction industry seats waiting to be swung by the drop of an electoral promise, in the way that there used to be car manufacturing or farming seats. Secondly, and this was exemplified by the hon. Member for Eastleigh (Mr. Chidgey), it is a disparate industry that almost has a genius for falling out among its different parts.
I can more truthfully describe myself nowadays as a non-practising architect, an honorary chartered surveyor and a has-been politician. I hope that the division in the industry is ending—there are some good signs for that. The Minister referred to the excellent far-reaching report of our erstwhile colleague, Sir Michael Latham. That spawned the Construction Industry Training Board and the Construction Clients Forum. Then there was the setting up of the Construction Industry Council, with 55 representative bodies. It might be appropriate at this time to declare an interest. I belong to seven of those 55 bodies. I am an honorary fellow of five of them, a member of the Royal Institute of British Architects and a fellow of the Royal Town Planning Institute. If I may declare a reverse form of financial interest, I have to pay the architects and the planning profession.

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I can be brief because many of the points have been made. I should like to rehearse the five principal problems facing the industry, as I perceive them. First, historically—I am not making any party political points here—the industry has suffered from under-investment. I mentioned the 8 per cent. investment. Research shows that European Union countries have an average investment of about 12 per cent. We see the result of our investment in the huge backlog of infrastructure that needs attention and the huge number of homes that need to be brought up to modern standards, and it is perfectly legitimate of the construction industry to point that out. I recognise and welcome the construction task force that was set up by the Deputy Prime Minister and headed by Sir John Egan. I hope that its plans will be implemented.
The second problem is efficiency, but since everybody has talked about that, I do not need to. The third problem, which has also been touched upon, is the quite frightening skills shortage, particularly in the engineering sector. I hope that that can be addressed. It is easy to talk about spending someone else's money, but the Government, rightly or wrongly, have introduced a scheme to encourage more teachers by offering £6,000 to postgraduates who take up certificate of education courses for one year. Perhaps we are coming into an era when such an arrangement should be targeted at parts of the construction industry to attract engineers and the other skilled craftsmen.
The fourth problem, inevitably, is regulation. As hon. Members have said, not least the hon. Member for Ellesmere Port and Neston (Mr. Miller), health and safety are paramount in our society, never mind the construction industry. However, there is too much red tape, which has been added to unnecessarily in recent years. Much of the construction industry consists of small and medium-sized businesses, which have suffered from increasing burdens. An almost byzantine structure of separate regulations applies in this huge, all-embracing industry, and many of them overlap. They govern, not only the design and construction of buildings, but their operation. I offer the House an eight-word quotation.
Our regulatory framework is excessive or poorly conceived.
Those were the wise words of the Prime Minister and they fit the construction sector to a T-square. Even recent employment legislation has not helped. There is a division of opinion on this, but I question the value of the working time regulations.
The fifth problem facing the industry is the VAT inconsistencies, for which the previous Government are partly to blame. All Governments are to blame, however. I know that the Government are looking at the effect of VAT on maintenance and repair of buildings and that there is an EU directive problem, but my reading of the directive is that, if minded to, the Government could reduce VAT to 5 per cent. Let us remember that the repair and maintenance sector represents almost half of the output of this great industry.
I must make the point that the climate change levy is an absurdity. We seem to be encouraging the domestic sector to spend more money on energy while also taxing every other sector on the amount that it uses. Exceptions have to be made for big energy users so that, although they pay a huge penalty—and will continue to do So—
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they will get some recompense, which will not happen for more modest building material producers. The building products business is a big part of the construction industry. I feel strongly that in introducing the aggregates tax the Government have got it wrong. The aggregates industry proposed an improvement programme that would be far more protective that the aggregates tax ever could be.
The construction industry has a vital role in sustainable development. I define this as using resources to meet the needs of people today without irrevocably damaging the world for future generations. We must maximise the use of renewable energies and the recycling of waste. We must minimise contamination of land and water and stop poisoning the air. We must reuse existing buildings wherever practicable. The Government must implement a comprehensive waste strategy. I am confident that they will begin to do so. They must insist on the minimum use of energy in construction works and ensure that buildings are designed for maximum energy conservation.
The Government have promised to take the lead, and rightly so, as the biggest single client in the construction industry. I understand that they want to see buildings designed, procured and constructed in a more environmentally friendly way. The Under-Secretary, the hon. Member for Stretford and Urmston (Ms Hughes), rightly observed that Government action alone will not make construction more sustainable. There is a genuine challenge to the industry. Building a better quality of life must begin with a more sustainable built environment.
I am grateful to have had the opportunity to speak in the debate. I end simply by echoing what has been said about where we build in the future. We must build on brownfield sites wherever possible, if necessary, giving tax incentives to people to do so. We must build on greenfield sites only as a last resort—I realise that we shall have to build on some of them. We must never build on what is perhaps one of the most successful examples of post-war planning policy—green belt land.
Several hon. Members rose—
Mr. Deputy Speaker: Order. Before I call the next hon. Member, I want to make it clear that payment of professional fees by Members is not a declarable interest any more than is the fact that I found a couple of my old slide rules the other day.
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Mrs. Claire Curtis-Thomas: I am grateful, Mr. Deputy Speaker, to be able to speak in this important debate. I declare several interests. I am a passionate engineer, a fellow of the Institution of Mechanical Engineers, a senator on the Engineering Council, which regulates our professional body, an honorary fellow of the Institute of Chartered Surveyors and a devotee of one of the most outstanding professions in the United Kingdom that contributes more to the quality of life than any other discipline that I can think of.
It has been a great privilege to work in the engineering business for the past 20 years. I am sorry that I did not get into the construction business. Fortunately—I am

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pleased that some of my colleagues are not with me today—I entered the mechanical engineering business, but had I known more about the civil engineering business I would probably have gone into that. There can be no greater tribute to individuals than to see their legacy stand after their demise. Some of the United Kingdom's building structures are first class. They are outstanding, and they draw visitors from all over the world—not least the building in which we stand today.
As an aside, I have to tell hon. Members that when the original plans for this building were submitted there was such an outcry—which continued before and after its construction—that, unfortunately, it led to the suicide of the original architect. That is terrible but it illustrates the way in which views about the edifices around us—I am thinking in particular of the millennium dome—change after a suitable period for reflection.
Mr. Syms: One hundred years.
Mr. Stephen O'Brien: If it stays up that long.
Mrs. Curtis-Thomas: Yes.
I turn to the serious matter of skills shortages and gaps, and regulation. Most of us who have lived through the latter part of the 1970s and right through the 1980s and 1990s witnessed the decimation of the construction industry. It went quickly from being a booming business, with more projects than it knew what to do with, into major recession. The skilled and semi-skilled work force at both technician and professional levels moved from the industry into other work. Some in the vocational and craft industry did not; they went into employment.
That was fine, but unfortunately it had a tremendous impact on further education colleges, higher education colleges and universities. There was a lag of some three to four years between the demise of the construction industries and the impact on the academic and training institutions—but that impact is still felt today. FE and HE colleges simply could not attract enough recruits through their doors to support the courses that they had offered previously. Therefore, the people who generated the skills and academic requirements for the business slowly diminished. Excellent lecturers and facilities in small FE and HE colleges and in universities diminished gradually but surely over time.
In the latter part of the 1990s, we began to see a welcome resurgence of the construction business. However, the skills and requirements needed to underpin it were in short supply. Many companies were unable to fill order books or respond to demand simply because they could not find recruits. The Government have taken a number of significant initiatives to tackle that, but Government action alone is not sufficient.
Last year I attended a conference under the banner "From Skills to Prosperity" in the north-west that brought together businesses and the academic community. It sought to match academic output with skill requirements in the region. The reality today is that there are many academic institutions with reasonable facilities that produce individuals who do not match local employers' requirements. Many local employers
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require skills that are not articulated by the academic and training institutions that could satisfy those demands. I would applaud any dialogue that encourages academic and training institutions better to fit their courses and training programmes to meet the needs of local employers. The lag in producing courses that meet demand is about three to four years, so I am seriously concerned that the current shortages will become significantly worse in the coming two to three years.
I am greatly disappointed that this nation now has to import such expertise. We stand to benefit a great deal from bringing engineers from other parts of the world, gaining from their experience and learning from their academic and professional courses.
Mr. Deputy Speaker: Order. Will the hon. Lady speak to the microphone? The people who transcribe the debate are not in the Room and they rely on the signal from the microphone.
Mrs. Curtis-Thomas: The arrival of engineers from other parts of the world is welcome because we learn much from them in terms of their approach to training and to our work. However, we are failing to tackle the crisis in our universities.
The perception of engineering was mentioned earlier. I will touch on this because it relates particularly to women. A significant number of mathematics and science graduates are coming out of universities. Much to my delight, women achieve far better grades than their male counterparts. It might be thought that the most wonderful resource is therefore available to us, but unfortunately, it is not interested in the construction industry. It is a source of personal sadness, because I know that the business offers opportunities for every sort of skill and intellect. I know that the Department of the Environment, Transport and the Regions is tackling the problem. I am pleased that there has been some improvement, but much work remains to be done.
I want to move on to the budget allocated by several different Departments to the public understanding of science. That budget is currently fragmented, so the impact of the collective budget is also fragmented. Many of us would agree that we should make considerable effort to improve the recruitment and retention of people in key United Kingdom industries. The budget, which is intended to encourage the public understanding of science and support the crucial industries, should be realigned to meet the needs of industries that underpin the UK's economic contribution.
Finally, I want to deal with regulation. I received some useful literature from the Construction Federation—two notes, one of which referred to the burden of regulation and excessive red tape. Because I am an engineer, I tend to the objectives, so I did not hesitate to ring up and say, "You referred to burdensome regulation and red tape. Please supply some details." I received a three-page note today, some of which I should like to share with hon. Members.
The concern expressed by the Construction Federation is not unique to this particular engineering discipline, but is shared by all the other disciplines. The regulations are generated by several Departments. The main ones that affect the industry include the Health and

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Safety at Work, etc. Act 1974, the Fire Precautions (Places of Work) Regulations 1992, the MOD building regulations and the Disability Discrimination Act 1995.
There is no doubt that regulation is necessary, but there is concern that the co-ordination and impact of regulation is not as effective as it could be. I am heartened by the work of the better regulation unit and the insistence of both the previous and the present Administration that newly drafted regulations should have an accessible structure and a deliverable and enforceable mode of execution. We are not in a perfect position, but significant progress has been made to make the impact of regulation less burdensome.
Finally, I want to congratulate the Department of the Environment, Transport and the Regions on today's debate. I have enjoyed all the contributions. The construction industry is an unsung hero in terms of the excellence and wherewithal of our nation.
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Mr. Tony Baldry: The hon. Member for Ellesmere Port and Neston (Mr. Miller) referred to vested interests, but there are no vested interests in this Chamber—only registered interests and experience. The hon. Member for Crosby (Mrs. Curtis-Thomas) demonstrated in her contribution how valuable it is to have people in the House who can draw on such genuine experience.
The Register of Members' Interests will show that I have several registered interests relating to the construction industry, though I do not intend to deal with any of them specifically this afternoon. I also have experience at the Bar where I specialise in construction disputes, and as an adjudicator for the Housing Grants, Construction and Regeneration Act 1996.
The debate is the first that I can recall to have been held specifically on the construction industry. Given the size of the industry, it is a good development. I hope that the debate will become annual, and perhaps the Minister will confirm that.
I oppose consensus, but the Minister keeps on making reasonable speeches. That is dangerous because it lulls people into a false sense of security. Ministers are not meant to do that. I sometimes think that I or the shadow Leader of the House, my right hon. Friend the Member for North-West Hampshire (Sir G. Young), might have made such speeches, with a few tweaks, when we were the Ministers responsible for construction, so I suppose that some continuum exists. The Minister did extremely well to avoid standing as a candidate for London mayor, and has done well to remain as the Minister responsible for construction for three years.
It was perfectly fair for the Minister to say that the previous Government published a report on cowboy builders in 1988. That was before I entered the Department, which had moved on to other issues by the time I entered. In fairness, during my tenure, we established a construction sponsorship directorate, we started to have fortnightly meetings with the industry and we initiated the Latham review, which produced the Latham report. However, dealing with cowboy builders was unfinished business.
I fully understand why Ministers are always reluctant to introduce statutory measures, because competing for legislative time is difficult and involves participating in
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the requisite Cabinet committees. However, I hope to show that statutory underpinning to a scheme for dealing with cowboy builders could be achieved within the existing law.
The public's perception of the construction industry is often based on their feelings for cowboy builders, and the reports that they read on them. Such builders are the bane of the responsible construction industry. Figures from the Office of Fair Trading show that home repair and maintenance is the fastest-growing source of consumer complaints. Builders receive proportionately more complaints than do car mechanics, estate agents or anyone else. That is a matter for concern. All hon. Members can give examples, from their constituency surgeries or postbags, of people who have been ripped off by cowboy builders, and one or two of those cases have been mentioned this afternoon.
Sadly, the constituents who are cheated are often among the most vulnerable, and can least afford such treatment. The Government's response has been unnecessarily timid. They are moving in the right direction, and the working group to consider the problem of cowboy builders was good news. The group recommended establishing a nationwide register to cover all building work, and the Government accepted its recommendation on the quality mark scheme for construction.
Earlier this year, the Government launched a pilot scheme in Birmingham, and parliamentary written questions could be tabled to tease out the disputed numbers involved in that. In response to my intervention, the Minister said that more than 240 builders in Birmingham had evinced an interest in taking part in the pilot scheme. If that is true, there must have been a sudden rush in the past few days.
I once told someone that I found Building magazine and Construction News compulsive bedtime reading, and that person said that I had a sad life. Undeterred, I read the 4 May edition of Building magazine, which said:
Midlands builders snub cowboy pilot
Fewer than 100 firms have called government hotline to join Birmingham quality mark trial.
Clearly, there is dispute over the figures, but the number remains proportionately small whether it is 100 or 240. The reason for that may be the amount of time that a builder must waste in providing proof that he is a competent builder, as described in the application packs. The packs appear to be prohibitive, as they are complicated, and at £500, the registration fee is fairly substantial. I fully appreciate the Minister's point that there is a chicken and egg element about this. However, if one does not achieve sufficient coverage of a quality mark scheme, one is further penalising good builders. It is they who take the time to fill in the registration forms and pay the fee, yet they do not benefit from the quality mark.
As I said when I introduced a ten-minute Bill on the scheme last year, it is more than patent that there will be several difficulties when voluntary schemes are not backed by the force of law. Consumers must come to terms with yet another identification mark, when a plethora already exists in the construction industry.
I was interested in the comments by the hon. Member for Coventry, South (Mr. Cunningham) on the scheme being introduced by Age Concern. It sounds perfectly

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worth while and valuable, but will doubtless involve yet another logo or identification mark with which consumers in Coventry and elsewhere must come to terms. It will take some time before a voluntary quality mark achieves the necessary recognition among consumers to ensure that builders who have become sufficiently competent to acquire it are seen as such by consumers. As the Constructors Liaison Group said,
for any scheme to be effective consumers must be sure that the company they choose is technically competent. CLG is concerned that the pilot schemes as they are currently instituted do not adequately ensure this.
The Birmingham pilot does not seem to be commanding support, and that seems to be because it is impractical for small buildings firms. The greatest difficulties often exist in small firms. The forms issued require information about management systems and procurement systems that may be partially irrelevant to the average one-man band or smaller building company. It is more than plain that the lack of interest may be due in part to the six-part forms. As the chief executive of the Specialist Engineering Contractors Group observed,
The amount of time a small builder will have to waste providing proof that he is a competent builder laid out in the application packs is prohibitive…a good builder might feel he's better off with the cowboys.
Therefore, it is no surprise that not many firms in the midlands—the Minister's figure is 240, Building magazine says 100—have called the Government to register. Sadly, that lack of interest will, I suspect, mean that the trial is again delayed.
The Birmingham pilot highlights the real need for the Government to reconsider their approach. I firmly believe that the best way to combat cowboy builders is compulsory measures. Time and again, surveys have clearly shown that consumers want a Government-sponsored approach to cowboy builders. Why then do the Government not build on their existing proposals and combat the cowboys through statutory regulation? They could use the Building Act 1984 to extend building regulations and establish a new category of minor works. That would provide a framework for the regulation of builders and would be linked to membership of a professional body or trade association and third-party inspection.
Such an approach would give clear statutory underpinning to any quality mark scheme and would provide a clear incentive to those within the construction industry to achieve quality mark status, which could only be good news for consumers. It would also place the onus on local authorities to police more effectively the activities of unqualified builders. Above all, it would send the clearest possible signal to the consumer about who are, and who are not, quality mark builders. That signal would be far clearer than those offered by the Birmingham pilot.
This is not a new idea. It already enjoys widespread support throughout the construction industry. The Federation of Master Builders has said that it is doubtful whether the voluntary nature of the quality mark scheme will lead to better regulation of the industry and drive out cowboys. It believes that
a combination of simple, but formal registration, a mandatory requirement to provide an insurance backed and a reduction in VAT would be the ideal solution to curb rogue traders.
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The FMB has a point about VAT. In France, VAT has been reduced and so has the black economy. It is not a point that I will pursue, but the essence of its comments remains the same: the Government's proposals will not work as effectively as we should all like.
It seems strange that the Government are not acting in that way because the final report of the working group on combating cowboy builders recommended
that DETR continue to consider how amendments to the building regulations, including their extension to repair and maintenance sector could be affected to reflect and complement the objectives of the quality mark.
Why do they not develop their proposals into a statutory obligation? It seems even stranger when one considers that the Government published a consultation paper only last year on the Building Act 1984 which acknowledged that the development of a quality mark scheme identifying competent building firms should be central to the effort to tackle cowboy builders. The DETR's new consultation paper states:
by having such powers at its disposal, the department may be able to introduce new regulations in response to changing national requirements without these becoming an onerous burden either on business, the householder or third party building control.
In other words, it readily acknowledges that it would be possible to give statutory underpinning to a quality mark scheme for construction to protect consumers without it placing any particular burden on the construction business, the consumer or local authorities.
The voluntary approach will not be effective. Only time will tell whether my fears are well founded. I simply hope that if it appears that a voluntary scheme is not attracting sufficient registration from builders or sufficient recognition from consumers, the Government will not be too proud to reconsider the issue, particularly when it is clear that the consensus in the construction industry favours mandatory underpinning.
I now wish to raise an entirely different matter. The Government have introduced new design proposals this week. I was interested in the Minister's comments about their origin. He was certainly right that previous Conservative Ministers, not least my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) had particular views on design. Sometimes I thought my right hon. Friend's views were particular to himself, but none the less he sought to encourage good design. The Minister's introduction goes part and parcel with new pressure for builders to intensify the amount of new housing that they put on land and increasing the density from 20 houses to 30 houses an acre. To put that into perspective, it would mean putting 30 houses on an area the size of Banbury United football pitch. It is the sort of density that we see in the back-to-back houses in the opening credits of "Coronation Street"—a programme that we watch when we are not reading Building magazine or Construction News.
The Government have got themselves into this position. They are trying to ensure that sufficient houses are built in the south-east, but they are also conscious of the considerable concern that too much land and green fields will be taken up for housing. Part of their approach to square that circle is to encourage builders to increase their housing density. Is that appropriate? Will there be sufficient space for play, recreation and family life if one encourages that degree of housing density?

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Perhaps we should rethink the way in which housing numbers are determined and give local communities a greater say over the speed with which their towns and villages expand. In my constituency, there is considerable and growing resentment about the fact that large numbers of new houses have been imposed on towns such as Banbury and Bicester, which want to stabilise at their current size. I hope that the Government will reconsider the density figures. I cannot believe that building new housing at the specified level of density will be good news for future generations.
Those who work in the construction industry often bemoan the fact that there is insufficient interest in construction. Today's debate demonstrated that there is interest in and considerable knowledge about the industry. I hope that we shall have similar debates in future—that would be good news for the construction industry and those in the House who take a genuine interest in the subject.
4.41 pm
Angela Smith: I thank those hon. Members who kept their contributions brief so that as many speakers as possible could participate. Rather than repeat points that have already been made, I associate myself with the comments that were made by my hon. Friends the Members for Ellesmere Port and Neston (Mr. Miller) and for Coventry, South (Mr. Cunningham) on cowboy builders and on health and safety at work.
Mr. Deputy Speaker: Order. Perhaps I can assist the hon. Lady, who encouraged hon. Members to be brief. There are rules about being near live electrical equipment in thunderstorms.
Angela Smith: In that case, perhaps I should be extremely brief. If the electricity supply allows me, I want to discuss the Minister's comment on whole-life value in construction and the way in which the construction industry is key to the delivery of economic and social improvements.
The construction industry does not simply build houses—it also builds homes and communities. We need to examine the impact that housing design and construction have on communities. I welcome the Minister's response to my question earlier this week, when "By Design", which involves urban design, was published. When we discuss the quality of the environment, we often refer to the countryside. However, those of my constituents who live in heavily populated urban areas also need to maintain their quality of life and the quality of their environment. I welcome the approach that the document adopted.
I speak with no expert knowledge, I do not read Building magazine at bedtime and I have no professional qualifications or recent academic qualifications in this area, but many of my views are shared by the experts. The Egan report and the report by the social exclusion unit on neighbourhood renewal touched on relevant matters.
I speak not as a professional but from my experience and that of my constituents. At the age of nine I moved to Basildon, where I was brought up in what was then called council housing, which has been renamed social
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housing. When I left home and went to college, many of my peers thought that I was wealthy because I had mentioned the gardener on my parents' estate. It had not occurred to them that I was referring to the gardener on a council estate.
The house in which I grew up and in which my parents still live is typical of the good-quality homes that can be found in my constituency. I still remember my excitement at the age of nine when I moved to Basildon. However, with a little extra cost, imagination and thought, the pitfalls and problems that may affect future generations could have been avoided. I shall highlight some of those problems and some of the solutions that have been found locally.
New towns, by their nature, have high-density housing. Basildon is just 51 years old—a sparsely populated area quickly became a large and busy new town. While the relevant housing policy was generally good, designers occasionally appeared to be experimenting with us. I should have the support of most of my constituents if I proposed a ten-minute Bill that suggested that all house designers and builders should live on the council estates that they create for at least five years after they have designed and built them.
It is easy to see the problems with hindsight. The unprecedented and unpredicted growth in car ownership meant that garage space was quickly filled. People had to park their cars in parking areas a long way from home and car crime increased substantially. At that time, privacy for the individual was greatly prized in house design. As a result, there were no front gardens and houses were created around courtyards with high brick walls. Windows tended to face the back, so those who walked through the estate did not enjoy the security of being observed by people at their windows or in their gardens. In addition, some of the new heating systems proved inadequate.
We have looked at the work that can be done, some of which is mentioned in the "By Design" document. I hope that the final act of regeneration will be to rename the Vange 3/4 estate, although that is merely window dressing. We were concerned about the physical condition of homes. Structural repairs were needed and heating and ventilation were poor.
We have worked with the Rev. David Eaton and St. Chad's church, among others, to identify economic and social problems. There is high unemployment and far lower academic achievement than our children are capable of.
The council has used the estate renewal challenge fund to kick-start partnership with the Anglia housing association and set up the Vange community housing association and its board of volunteers. All the volunteers have put in considerable time and effort, but I shall flag up only a few. Councillor Paul Kirkman, who is chairman of housing, Lyn Beaumont, Julie Estarbrook and Keith Pocket have worked hard to ensure that the project was a success. There was a recent visit by the Archbishop of Canterbury, which was hosted by St. Chad's church, and the Barge pub has also participated. Although it is welcome, I cannot think of many projects where a church and pub have come together for the benefit of the community.
The Minister will be aware of the planning for real concept. In keeping with that concept, Bardfield junior school constructed a scale model of the estate and local

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community. We asked residents about the problems that they experience in their environment and homes. As well as matters relating to their homes, they mentioned crime, safety, the environment, traffic, leisure and community facilities, jobs and training, and health. All those issues have impacted on the quality of life on the estate.
We have brought together partners from the various agencies. Lack of time prevents me from going into detail, but by investing in the construction and improvement of homes, we have also rebuilt the community. Similar work has been undertaken on the five links estate by using money from the single regeneration budget, social housing grants and private finance. The part of the estate that has been completed is excellent. Unpopular blocks of flats, underground car parking areas and garages have been demolished. My assistant, Lynda Gordon, and I have visited several people in their new homes and they are delighted. I am very envious of Lynda. She is a former resident of the flats, so she was allowed to knock part of them down with a huge crane. I was not, and I shall never forgive her for that.
Crime and the fear of crime were the main factors that residents identified, but they feel unsafe in their own homes and environments because of poor housing design. Although I have stressed how wonderful the project is, it has tackled only half the estate and the Minister will forgive me for taking this opportunity to mention that we need the SRB6 bid to complete the work. I emphasise that point because my constituents need that money and I hope that he will ask his ministerial colleagues to look favourably on the bid.
Our aim has been to stop regarding the construction of housing and the construction and rebuilding of communities as separate issues. As I have said, when we construct homes, we construct communities. It is not simply a question of the homes themselves, but of how we treat the surrounding environment. Sadly, many years ago, the high street was knocked down and a private shopping centre built. Crime is rife because of the design of the shopping centre, and it is proving difficult to force the private owners to do something about it. Builders and all who are engaged in construction have an obligation to the families who will live in their homes and communities. That goes far beyond ensuring that the fabric of the house is safe—it is an obligation to the fabric of the community.
Government is about quality of life. The Minister mentioned the respect for people initiative in relation to those who work in the industry. I should like that to extend to the people who live in the council estates and housing estates that are provided by those contractors and constructors.
All hon. Members meet people with housing problems. With hindsight, it is easy to say that councils, Government builders and estate designers have created those problems, but allocating blame does not help the situation. What will help is learning the lessons from the mistakes that we have made and ensuring that we do not repeat them.
4.50 pm
Mr. Stephen O'Brien: While I was waiting for the debate to begin, I had a brief interchange with the Minister about the difficulties involved in knowing where to sit in this hemicycle Chamber. I have moved as close to him as I possibly can, but can go no further. I hope that he realises that I have taken centre stage, rather than the middle ground.
Before I entered the House last July, I was involved in the construction sector—especially the building materials side—for 10 years. I worked for Redland plc, an international FTSE 100 company that makes roof tiles, bricks and aggregates in 32 countries. I was also, for five years, chairman of the public and parliamentary affairs committee of the National Council of Building Material Producers, which subsequently joined with the Alliance to become the Construction Products Association. I no longer have any declarable interests in that regard, although I should say that I am an unremunerated member of the parliamentary panel for the Association of Consulting Engineers.
Perhaps I should challenge the hon. Member for Ellesmere Port and Neston (Mr. Miller) as to which of us has laid more bricks.
Mr. Miller: The hon. Gentleman has dropped more, that is for sure.
Mr. O'Brien: I have not had as much time as the hon. Gentleman in which to do so. More importantly, he has worked on only one house; I assure him that I have worked on many more roofs. I have to say to the hon. Member for Corby (Mr. Hope) that the parapet referred to in Deuteronomy has now given way to the soffit board.
As has been widely acknowledged during today's debate, the health of our economy is dependent on a vibrant construction industry. The industry is capable of sustained growth. The signs of that—the number of tower cranes that can be seen or the number of track homes that are being built—can be identified in this country or in any other part of the world. The old truth about construction—that it was essentially a local business, in terms of materials or building, with radial markets—has disappeared, principally because of the value-to-weight ratio of building materials.
The construction industry is undeniably vital to the health and prosperity of the nation, because we spend 80 to 90 per cent. of our lives in or on the built environment. That applies to leisure time, home life, work life and transportation and movement. The industry represents 8 per cent. of gross domestic product and a huge number of jobs.
I felt that the Minister demeaned himself during his opening remarks by using the Chancellor's hackneyed phrase "boom and bust", because he has a great deal of experience of the industry—indeed, he and I met many years before I entered the House. The industry has been, and is likely to remain, fundamentally cyclical—although the degree of cyclicality is open to question. That is due primarily to the fact that the marketplace has two main drivers, in addition to the normal laws of supply and demand.
The first is that most of the materials for construction are commodity materials and it is difficult for competitors to make distinctions between their different

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materials. A welcome degree of innovation and a great deal of effort are going into research—especially, these days, into the environmental aspects of the market. However, whenever there is a variation in supply and demand in commodity markets, in relation to the people, office space or factory space required, the price will be the factor that collapses. For example, a company making bricks will commission the factory when it sees the curve going up. However, by the time the commission period—usually a minimum of 18 months—has passed, the market could have peaked. That will put more overcapacity into the market and perpetuate the cyclicality. That is inevitable because competitors in a free market—a welcome state of affairs—habitually compete for market share.
The other driver, apart from the normal supply and demand criteria, is the land turn. In the construction industry, the idea exists that it is the building that matters. The building is phenomenally important to our identity, culture and national pride. Much of what we see when we look around us is a definition of what we believe we are. However, the driver for the financial base of construction is the land turn. In this country, particular issues arise from that because of our planning laws and because we are an island with a restricted amount of useable land—not least if we preserve the green belt, as my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) mentioned.
Land has a scarcity value. There is, therefore, an added premium on the land turn. The speed with which value is added to land is often the determining factor in its profitability. As the Minister rightly said, we might argue in favour of increasing the work load within the sector, for the health of the economy. The fact that, in Europe, construction accounts for an average of 12 per cent. of gross domestic product has been mentioned. Even if we take away the rather oddly funded European Union grants, that figure would still be about 11.5 per cent. An example of those grants can be found in Madeira, where tunnels and motorways are being built all over the island. That seems to be the last place one would want such construction, but that is where the European Union has decided to put its money. The United Kingdom's figure is 8 per cent. of GDP. We have a serious deficit in terms of infrastructure, replacement housing and remodelling. That is one of the main issues relating to what is to drive the two main concepts that the built environment represents: our quality of life opportunities and competitiveness.
Politicians have a role to play in bringing value to the construction industry. It is not good enough that people are badly housed or that they do not have sensible work places—an increasingly environmentally sensitive area. Furthermore, it is no good producing commodities if one cannot get them to market—for example, to the docks at Southampton.
I cite the example of the dispute over Twyford down. Irrespective of the politics behind that decision, had we been minded to invest more in the scheme, a solution might have been to put a tunnel under Twyford down. In my opinion, that would have been a better way, although I understand why the decision was taken to build the M3 corridor in the way that it was; it was vital to our competitiveness. There was no dispute that the M3 had to be properly linked to Southampton. It would have been a good idea to spend more money, but the
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general tenor of public opinion at the moment is that it is difficult to persuade people that raising taxation, which such a proposal might have entailed, is a good thing. However, that was a trade-off that I want to place on the record.
When we look to the future of the construction industry, the essential commodity is confidence. It drives the necessary planning and investment and although we have mentioned cyclicality and the opportunities of economic growth, certain factors are dragging confidence down. I shall touch briefly on those issues, given that so many have already been well argued and addressed. I applaud the initiatives of the Government and the previous Government in trying to get best practice to demonstrate best value, both in the private sector and in the major client sector—the governmental and quasi-governmental organisations that commission work—but there is a drag on that because the very best practice may mean giving up some competitive advantage. That is one area in which trust must be created. Trust and confidence in the construction industry are necessary if there is to be added value benefit.
Other hon. Members want to speak and time is pressing, so I shall skip my detailed arguments because they have been adequately covered, but I will refer briefly to the calibre of those who go into our industry. The hon. Member for Crosby (Mrs. Curtis-Thomas) made a valid point. I used to be involved with the Cambridge university career service and it was a great disappointment to find that only 4.8 per cent. of Cambridge graduates went into manufacturing industry, primarily the construction industry. My aim was to increase that figure to 10 per cent., but I failed. It got to 9 per cent., but has since fallen back to 7.6 per cent. If we are to encourage high-calibre graduates, including women—who are proving to be very successful in their attainments at graduation—into the industry, we must change the perception that it is a dirty, working-site sort of business. It is a highly sophisticated, innovative, science-based industry.
I urge the Minister, when considering the arguments that have been made today, to do his best to encourage the Chancellor to take a positive step to align the fiscal incentives to all the initiatives that have been suggested today by various hon. Members and by the Minister. Those incentives make a difference and will enable the construction industry to have a secure future.
5.2 pm
Dr. Ashok Kumar: I shall try to be brief because I know that my hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) wants to speak.
The aspect that I want to focus on and to which my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) referred is the image of the construction industry and how young people perceive it. No one in the Chamber has focused on that during our debate, but young people are the future engineers, carpenters, bricklayers, painters and so on. The Construction Industry Training Board recently commissioned a poll from MORI on young people's perception of the construction industry. Young men and women aged 15 to 19 were asked whether they would consider entering

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the industry as a career choice. One in five found the idea of a career in construction very or fairly attractive, but the majority—65 per cent.—found it unattractive, with more than half of those finding it very unattractive. The disadvantages, with which more than 40 per cent. of respondents agreed, included long hours, dirty, dangerous, outside work, and hard physical work. That was hardly an encouraging response from an age group that is needed to maintain the industry's productivity. The Minister must consider that because the future of the construction industry needs quality young people.
I want to focus on the Teesside tertiary college in my constituency, which is a good example of a local training provider and tries to narrow the skills gap to which hon. Members have referred. The college offers NVQ courses at various levels in the built environment, painting and decorating, wood occupations, plastering, plumbing and so on. Recently, it has offered taster sessions in construction to local secondary schools to try to raise understanding of construction activities and awareness of opportunities available in the industry.
The Minister referred to the problem of promoting women in the industry, but I am sure that he will be pleased to know that Teesside tertiary college has been making a tremendous effort to promote women and disabled students. More women students are attracted to the construction courses than to other engineering courses, and the college has two deaf students, who are supported by a sign language interpreter.
I also want to draw to the Minister's attention an article in the Daily Express earlier this week about the Oxford women's training scheme, one of a handful of United Kingdom schemes providing training, employment development and support in non-traditional skills for women. Of course it is limited, but it is an achievement, and there should be more such schemes.
Teesside tertiary college has also seen a marked increase in the number of modern apprenticeships and new deal students registering for its courses. From September 2000, school leavers will be offered the opportunity to combine academic A-levels with vocational training in the built environment. Most of those students are self-motivated. While links with employer organisations such as the Engineering Construction Industry Training Board and Building Engineering Services Training are good, employers do not fund training except by providing day release. Consequently, some students find it hard to be motivated to complete a course that their employers do not appear to value and they leave, adding to the semi-skilled work force that causes so many problems.
An encouraging report published by the Minister's Department on Monday, which was written by a working group of the Consultative Committee for Construction Industry Statistics, found that the number of companies providing support went up by 10 per cent. between 1998 and 1999. The Minister should encourage that sort of training in colleges and provide future support.
5.6 pm
Mr. Lawrie Quinn: Before I begin, it would be appropriate for me to draw everyone's attention to my interests listed in the Register
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of Members' Interests. I am proud to be a chartered civil engineer. I worked in the railway industry for 20 years and I am glad to say that, should I ever need to find alternative employment, my former employer, Railtrack, has offered me first refusal if I want to return to that career, so I have duly listed it. That neatly brings me on to one of the recurring themes of today's debate—the future of the construction industry and a desperate skills shortage.
Recently, the industry's widely read magazine New Civil Engineer reported the lamentable fact that we are now having to recruit engineers from the Indian subcontinent to deliver the prestigious west coast main line infrastructure project. That is the thin end of the wedge. I join the hon. Member for Chipping Barnet (Sir S. Chapman), who displays a considerable knowledge of the construction industry, in urging the Government to look closely at the crisis point at which we are arriving. We need to focus on these skill shortages; we need classic, joined-up government across all Departments to look at construction professionals for the future; and we need to provide people with an opportunity to become flourishing engineers and construction professionals, so that they can contribute to the overseas earnings delivered by construction—20 per cent. of invisibles, as was mentioned earlier. It is an important part of the British economy that we cannot afford to lose.
In the limited time that I have I want to refer to an important conference that will take place in Birmingham next week. I congratulate the Minister on facilitating this debate, because I know from visiting the millennium dome, which is a good example of British engineering and innovation, that an important event is taking place in his community today. When I met the person who is now the mayor of Greenwich borough, I gave her an alibi for the Minister—not that he needed one. I told her that he was involved in an important debate in the House and that I was hoping to catch Madam Speaker's eye. She understood, and I am sure that she would want me to pass on her best wishes. The Minister and the Deputy Prime Minister have supported the Movement for Innovation initiative throughout. Next week, it is holding an important national conference entitled, "Rethinking construction—profiting through innovation".
The considerable time that I have spent in the construction industry has taught me that construction involves teams and partnership and it requires people to work together. It is appropriate that we had our debate in this Chamber—we all want to focus on the future of this vital industry, and there has been a consensus throughout.
Some hon. Members who spoke earlier may not have passed on due credit to the many learned organisations that work in construction, including the Institution of Civil Engineers, to which I belong, and the Institution of Structural Engineers. The chartered surveyors organisations have done much important work. All such groups have been batting for Britain—they helped to ensure that the world's engineering opportunities have been met by British engineers and, recently, they have helped to develop the skills of engineers abroad, especially those in the developing world. I commend all those engineering institutions, which have worked closely with and offered learned expertise to the Republic of China.

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We need to focus on world markets and the skills of engineers. I hope that under this Labour Government, engineering and construction will move from its current high point to even better times.
5.12 pm
Mr. Raynsford: We have had an absolutely excellent debate. My opening speech was followed by those of 12 hon. Members, and if my concluding remarks are added, there will have been 14 speeches in all. Our debate ranged over many subjects, all of which are of considerable importance and relevance to construction.
Our debate was characterised by the expertise of the hon. Members who have spoken—we have had an incredibly well-informed debate—and by the many different perspectives that have been represented. We have benefited from, for example, the professional and technical expertise of my hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) and from the business expertise of the hon. Member for Eddisbury (Mr. O'Brien). We were given some interesting insights into professional backgrounds. My hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) clearly went the wrong way in her training when she studied mechanical rather than civil engineering. I was delighted by her contribution to our debate.
There is a risk of a brick-laying competition between my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) and the hon. Member for Eddisbury, and there may be a bedside-reading competition between the hon. Member for Banbury (Mr. Baldry) and other hon. Members, who may choose to read alternative construction publications at night. We have discussed several immensely serious issues that matter greatly to the industry and which will affect its future.
The hon. Member for Poole (Mr. Syms), the Opposition spokesman, opened the debate in his characteristic way. I became well accustomed to his style during our exchanges on the Transport Bill, when we sat on opposite sides of a Committee Room, which is a more confrontational venue. He displayed the sweet reasonableness that characterises his contributions, not only in this debate, but elsewhere. He highlighted certain specific problems, notably those of people in the construction industry who were not being paid on time. I am happy to be able to say that, because of the recommendations in the Latham report and the action taken to put them into effect in the Housing Grants, Construction and Regeneration Act 1996—introduced by the previous Government, but brought into effect by this Government—we are making inroads into the issue. It is widely accepted that that Act has made things better. However, there are still some problems, and we shall consider those as we review progress on that legislation.
The hon. Gentleman also highlighted the problems with the construction industry scheme. One of the curiosities of the old 714 scheme was that it required people to present their 714 certificates in person. That is not widely known, because virtually no one did so. The problem with the use of fax is that it is difficult to authenticate material sent through electronic communication systems; it is easy to present bogus certificates. Presentation in person should provide an
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extra element of security. We are aware of the anxieties that have been voiced about the scheme. As the hon. Gentleman acknowledged, a review is under way. We are looking for ways to simplify the scheme, while preserving the basic principle that we should provide proper safeguards against abuse and tax evasion. We want to create a framework in which the industry will find it easier to operate and which will cut out unnecessary red tape—a theme that came up repeatedly in the debate.
The hon. Member for Eastleigh (Mr. Chidgey) mentioned his experience in civil engineering in the middle east in the 1970s. He described the dominant position of the British construction industry at that time. He was concerned that we should continue to push our interests in that part of the world, as well as elsewhere. I am pleased to be able to put on record—the hon. Gentleman explained courteously that he could not stay for the winding-up speech—that, in the past three years, the Department has led construction trade missions to several countries in that region.
I have led missions to Egypt, Jordan, Lebanon and Turkey, the last leading to a successful joint venture between the British construction industry and the British Government to prepare a master plan for reconstruction in the Yalova area, which is one of the areas most devastated by the terrible earthquake in Turkey last year. That is a practical example of industry and Government working together to help where it is needed overseas, thereby helping the British construction industry to compete more easily and more successfully in those markets. We are committed to that.
My hon. Friend the Member for Coventry, South (Mr. Cunningham) spoke with great knowledge and passion about appalling examples of abuse of vulnerable people by cowboy builders. Nothing angers hon. Members more than stories about elderly people and other vulnerable people being scandalously ripped off by rogues who masquerade as builders and, by doing so, blacken the reputation of the whole construction industry. That is why we are determined to drive forward our programme to tackle the evil of cowboy builders. I shall return to that issue in response to the points raised by the hon. Member for Banbury.
Before I do, I will refer to the contribution made by the hon. Member for Surrey Heath (Mr. Hawkins)—also, unfortunately, unable to stay, as he explained courteously. He rightly highlighted the difficulty of achieving a balance between conflicting interests. He mentioned the importance of high-quality building while preserving the countryside. That is one of the great dilemmas of our time—how can we ensure that we meet the great need for housing in areas under great pressure without damaging or destroying our priceless countryside unnecessarily? We are trying to do that through planning policy guidance that seeks less profligate use of land without downgrading the quality of the environment.
To refer to a point made by the hon. Member for Banbury, the densities of some of the most desirable and most well designed buildings in our cities—for example, Georgian houses in London and some of the much praised new developments such as Poundbury in the west country and even the millennium village in Greenwich in my constituency—are far higher than the 23 per hectare which has been the average for house-

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building in the south-east in recent years. If a high-quality environment can be provided at 30 dwellings per hectare, housing needs can be met and further unnecessary land-take avoided. That is a prize that we must achieve. We are discussing not poor-quality, tawdry environments but high-quality design to create environments such as Poundbury, Greenwich, Chatham Maritime and the Georgian terraces in London. We want to provide good environments where people will want to live. That is how we can achieve the balance that the hon. Member for Surrey Heath rightly wants.
My hon. Friend the Member for Ellesmere Port and Neston rightly highlighted problems with employment practices under which self-employment regulations were abused for a variety of reasons that were endemic in the industry. He stressed the importance of a new approach and an end to the old adversarialism in the industry. We are making progress, but there is a long way to go. Above all, we are getting the message across that it is important for the industry to have a well trained, loyal work force instead of depending on individuals who are simply hired on a casual basis. Many of the evils of poor employment practice and poor construction can be attributed to those patterns of the past and we are trying to move away from that.
My hon. Friend also highlighted the safety issue, which is of great concern to him and many other hon. Members, as well as the trade unions, which have played an important part in highlighting practices in the industry that have led to an unacceptable level of accidents, injuries and fatalities. There are currently around 80 fatalities a year, which is too high, and too many people suffer serious health problems and injuries as a result of unsatisfactory working practices.
There is no complacency and we continue to work to improve standards and to ensure that the Construction, Design and Management (Health and Safety) Regulations 1994 are carried forward to improve working practices. I know that the Health and Safety Commission is extremely vigilant in pursuing the matter. The "Working Well Together" initiative is a ground-breaking campaign developed by the Health and Safety Executive's construction industry advisory committee to refocus the industry on the principles of the 1994 CDM regulations and provide impetus for change. We shall continue to maintain a high focus on that.
The hon. Member for Chipping Barnet (Sir S. Chapman) has great experience and knowledge of the construction industry, having worked as an architect and having retained his interest and understanding of the issues relating to architecture, planning and construction. He raised a number of important matters. He questioned why the construction industry has had less political clout that it deserves. I hope that we can begin to change that.
In response to a challenge from the hon. Member for Banbury and in advance of my comments on his speech, I should say that we initiated this debate because we thought that it was right to have it. It is not for me to decide whether we should have such debates annually, but our debate today has been informed and serious and the House would benefit from similar debates. We
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would have no difficulty with that, and it might help to raise the political profile of the industry, which would be a thoroughly good thing.
The hon. Member for Chipping Barnet asked about the climate change levy and the aggregates levy, while stressing the importance of sustainability in construction policy. If we want to achieve sustainability, we must discourage profligate use of materials. There is no doubt that economic instruments can play a role in discouraging unnecessary use of certain materials. Whether the aggregates levy is the right method is a matter that we shall continue to debate for some time, but the voluntary package put together by the Quarry Products Association has failed in a number of respects to meet the objectives essential to an effective voluntary scheme.
More seriously, many small quarrying companies declined to participate, and made it clear that they totally opposed the voluntary package. In my view, one cannot have a voluntary package to which a significant number of players in the industry—albeit small ones—have not signed up. That creates competition distortions between those who are prepared to pay a voluntary levy and those who are not. That factor led my right hon. Friend the Chancellor to decide that a voluntary scheme was not feasible, and that it was necessary to move towards an aggregates levy.
My hon. Friend the Member for Crosby rightly highlighted the problems associated with excess regulation, and the important work of the better regulation task force. I am pleased to say that we are working on those themes in a number of areas, including building regulations and certain aspects of planning policy. We are trying to establish proper safeguards to ensure compliance with requirements that are essential to safety and good performance. However, we do not intend to produce unnecessary red tape or impose unreasonable burdens on industry. There is a balance to be struck, but we believe that there is further scope for improvement in the regulatory framework, enabling us to achieve what is necessary while avoiding the imposition of an unreasonable burden on business.
I introduce comments on the speech of the hon. Member for Banbury with such remarks because he is an advocate of a statutory scheme to deal with cowboy builders. I put it to him that trying to regulate an industry consisting of 160,000 separate companies gives rise to problems of red tape. There is a tension between statutory regulation and the argument—which has been voiced widely in this Chamber—for reducing the regulatory burden. I say to the hon. Gentleman, as I have said to others, that if it became clear that a voluntary scheme could not work, we would not hesitate to look at the matter again. There would be no question of pride about our previous commitment to a voluntary scheme; we would be prepared to review the need for a statutory scheme.
Nevertheless, the Merricks committee recommended a voluntary scheme and that is what we are pursuing. We believe that it can work, and the evidence from Birmingham is encouraging. I have great respect for Building, but the hon. Gentleman should not believe everything that he reads in it. The figure of 250 is ours, and I hope that he will read my letter, which will correct

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the figures that he quoted from the most recent issue. We believe that the voluntary approach should be pursued, and we are keen to do so.
My hon. Friend the Member for Basildon (Angela Smith) gave a warm welcome to the "By Design" document that was published at the beginning of this week, and highlighted some specific issues in her constituency, where planning-for-real exercises can put right some past mistakes and create a better environment. She used that as an ingenious way to promote a single regeneration budget bid, but she will understand that I cannot comment on that.
The hon. Member for Eddisbury, who has great expertise in the construction field, made a number of useful points. He highlighted the conflict between land use, planning issues, quality of life and competitiveness, and used Twyford down as an example, although many others could be given. I agree wholeheartedly that those are difficult challenges which must be met intelligently. We must strike the best possible balance between
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competing claims. He emphasised the importance of trust and confidence to the future of the industry, and I wholeheartedly agree.
My hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) talked about the importance of attracting young people into the industry and the negative messages that are sent by poor site conditions and other discouraging factors. We must do more to encourage an active interest in the industry, so that more young people with talent and skills will enter it.
My hon. Friend the Member for Scarborough and Whitby, who also has great expertise in this field, talked about the importance of construction as a team game. He is right, and this afternoon's debate has been a team exercise. It has also been a credit to Parliament and the industry—the future success of which we want to promote.
Question put and agreed to.
Adjourned accordingly at half-past Five o'clock.

EDUCATION AND EMPLOYMENT

  Students (A-levels)
  Mr. Clappison
  To ask the Secretary of State for Education and Employment what proportion of leavers aged 16 to 18 years entered higher education following completion of A-levels from(a) sixth forms in independent schools, (b) sixth forms in maintained schools, (c) sixth form colleges and (d) other further education colleges in the last year for which figures are available. [120920]

  Mr. Wicks
  The available information, for entry to full-time higher education, is given in the table. Equivalent data for part-time admissions are not available.

  Prior educational establishments of students aged 16–18 with A-level1 qualifications accepted for entry in 1999 through UCAS to full-time and sandwich undergraduate courses

  Previous establishment

  Number of acceptances

  Percentage of total

  Sixth Form Centre

  1,780

  1.5

  Independent School

  19,906

  16.6

  Sixth From College

  18,763

  15.6

  Maintained Schools

  67,819

  56.5

  Other2

  10,777

  9.0

  Not known

  924

  0.8

  Total

  119,969

  100.0

  1A-level being the highest qualification on entry

  2Includes Other FE/HE establishments

  Connexions Service
  Mr. Clappison
  To ask the Secretary of State for Education and Employment what the timetable is for the mapping of current provision of services to be undertaken by the Connexions Service as referred to in paragraph 7.20 of "Connexions: the best start in life for every young person". [122453]

  Mr. Wicks
  As part of their proposals, each pilot area has been asked to submit a timetable for completing their mapping exercise. We expect all pilots to complete an initial exercise by September 2000. In submitting proposals for the wider introduction of the Connexions Service from April 2001 we expect further mapping will have started before the end of the year.

  Mr. Clappison
  To ask the Secretary of State for Education and Employment if personal advisers will be provided for pupils in independent schools through the Connexions Service. [122702]

  Mr. Wicks
  The Connexions Service will provide access to high quality guidance and support to all 13–19 year olds, giving particular priority to those young people who are most at risk of encountering obstacles to a successful transition to adulthood.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Education and Employment what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121649]

  Mr. Wills
  The headline pay settlement was 2.5 per cent. on the pay bill and, together with the additional funds from staff turnover, staff in post received performance-related increases averaging 3.9 per cent. The increases were not staged.

  Open Government
  Dr. David Clark
  To ask the Secretary of State for Education and Employment how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121853]

  Ms Hodge
  The Home Office holds responsibility for the Code of Practice on Access to Government Information and monitoring its operation and effectiveness, and will respond to this question on behalf of Government as a whole. I refer my hon. Friend to the reply given by the Secretary of State for the Home Department today.Official Report, columns 216–17W.

  University Buildings
  Dr. Gibson
  To ask the Secretary of State for Education and Employment what steps he has taken to assess the structural integrity of university buildings constructed in the 1960s. [122696]

  Mr. Wicks
  Higher education institutions are autonomous bodies. Each university is responsible for the maintenance and repair of its own estate. No survey has been carried out to look specifically at 1960s buildings, but in 1997 the Higher Education Funding Council for England commissioned a survey to review the condition of the whole higher education estate. As a result of the survey, the Higher Education Funding Council for England introduced a "poor estates" initiative, setting aside £200 million for higher education estates funding up to 2000.

  Teachers
  Sir Sydney Chapman
  To ask the Secretary of State for Education and Employment how many teaching posts are(a) vacant and (b) filled by supply, temporary and agency teachers in (i) state primary schools and (ii) state secondary schools in (1) Barnet Local Education Authority and (2) Greater London areas; and what proportions of the total the figures represent. [122735]

  Ms Estelle Morris
  The following table shows the number of vacant teaching posts and the number of posts covered by teachers in occasional service in the maintained nursery, primary and secondary sector in Barnet local education authority and Greater London at January 2000.
  193W

  Teacher vacancies

  Teachers in occasional service

  Full-time vacant posts

  Vacancy rate

  Number of agency teachers

  Number of other occasional teachers

  All occasional teachers

  Occasional teacher rate

  Nursery/Primary

  Barnet

  30

  2.8

  30

  10

  40

  3.6

  Greater London

  520

  2.0

  1,200

  540

  1,730

  6.1

  Secondary

  Barnet

  20

  1.6

  20

  10

  30

  2.2

  Greater London

  410

  1.8

  680

  190

  870

  3.5

  Note:

  Totals may not sum to component parts because of rounding

  A qualified teacher vacancy refers to a full-time permanent appointment (or an appointment of at least one term's duration) at 20 January 2000 which was advertised but not filled. Vacancies include those filled on a temporary basis unless filled by someone with a fixed term contract of one term or more. Supply, temporary and agency teachers on a contract of at least one month cannot be separately identified from teachers in regular service.

  Teachers in occasional service collected on Form 618G provide cover for a variety of reasons e.g. vacancies, training courses and sickness absence.

  Further Education Funding Council
  Mr. Goggins
  To ask the Secretary of State for Education and Employment when he expects the Further Education Funding Council to publish its tariff value of courses for 2000–01. [122734]

  Mr. Wicks
  The tariff document for 2000–01 is due to be published on 22 May 2000.

  Funding and Research Council
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Education and Employment if he will make a statement on the terms of reference for the review of the funding and research council. [122138]

  Ms Hewitt
  I have been asked to reply.

  Overall responsibility for funding university infrastructure in Scotland, Wales and Northern Ireland is with the devolved Administrations. For England, the responsibility is with the Higher Education Funding Council for England.

  In addition, my Department, together with the Wellcome Trust and the HEFCE, is responsible for the £750 million Joint Infrastructure Fund initiative, which provides for research infrastructure and equipment in UK universities. My Department is also responsible, together with the Higher Education Funding Councils and the Department of Higher and Further Education, Training and Employment, for the Joint Research Equipment Initiative for university research equipment.

  Competition for funds from the JIF has been very strong. There have been many high quality applications
  194W
  and we have been able to fund only the most outstanding. Under the terms of the JIF scheme there can be no re-submission of unsuccessful applications.

  JIF was set up as a one-off fund to boost university infrastructure. The Government are giving careful consideration to the need for a follow-on programme. This includes exploration of options other than allocation based on competition through bidding.

  The 1997 Dearing Report of the National Committee of Inquiry into Higher Education drew attention to the need to invest in university research infrastructure in order to ensure that the UK remains at the forefront of scientific research. Dearing's recommendations were based on the 1996 "Survey of Research Equipment in UK Universities" undertaken by the Policy Research in Engineering, Science and Technology Unit at the University of Manchester (PREST). Dearing also drew on Segal Quince and Wicksteed's 1997 "Review of Dual Support: The Funding Gap" study of overall research funding in universities.

  I understand that the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom expects to publish shortly an updated study by PREST, part funded by CVCP and HEFCE, of the present state of research equipment provision and needs in UK universities.

NORTHERN IRELAND

  Robert Hamill and Gregory Girvan
  Mr. Corbyn
  To ask the Secretary of State for Northern Ireland if disciplinary proceedings will be instituted against officers present at the location of the attack on 27 April 1997 in Portadown town centre on Robert Hamill and Gregory Girvan. [119709]

  Mr. Ingram
  The Independent Commission for Police Complaints are actively considering whether disciplinary proceedings will be instigated in this particular case.

  Mr. Corbyn
  To ask the Secretary of State for Northern Ireland how many witness statements have been taken by the Royal Ulster Constabulary inquiry team investigating the murder of Robert Hamill. [119710]

  Mr. Ingram
  There have been 301 witness statements taken to date.

TRADE AND INDUSTRY

  University Funding and Infrastructure
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry if he will list the universities awarded funding for research infrastructure as part of the Joint Infrastructure Fund Competition, indicating how much funding each will receive. [121665]

  Ms Hewitt
  The Joint Infrastructure Fund (JIF) has made 109 awards worth just under £600 million to 39 universities. The final two rounds of awards will be announced in November 2000 and March 2001.

  The successful universities are listed. The value of Round 2 and Round 3 awards are subject to negotiation with successful applicants and will be announced later this year. Round 1 figures are shown in the table.

  £ million

  Universities awarded funding1

  Value of Round 1 awards

  Aberdeen

  —

  Bangor (University of Wales)

  2.8

  Bath

  —

  Birkbeck College

  —

  Birmingham

  11.1

  Bristol

  2.0

  Cambridge

  30.4

  Cardiff

  —

  Dundee

  —

  Durham

  —

  East Anglia

  —

  Edinburgh

  6.3

  Glasgow

  2.1

  Imperial College

  11.3

  King's College, London

  —

  Lancaster

  0.6

  Leeds

  2.4

  Leicester

  —

  Liverpool

  6.1

  LSE

  6.6

  Manchester

  1.8

  Newcastle

  4.4

  Nottingham

  5.0

  Oxford

  17.9

  Queen Mary and Westfield College

  24.8

  Queen's, Belfast

  0.4

  Reading

  —

  Sheffield

  —

  Southampton

  3.8

  Strathclyde

  1.2

  SUERC (Glasgow)

  3.9

  Surrey

  4.7

  Sussex

  —

  Ulster

  —

  UMIST

  —

  University College, London

  —

  Wales College of Medicine

  —

  Warwick

  1.0

  York

  —

  Total (Round 1 only)

  150.4

  1JIF Rounds 1–3

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry (1) which organisations are responsible for funding infrastructure requirements in universities; [122139]

  (2) what models are being considered for the replacement of the Joint Infrastructure Fund. [122137]

  Ms Hewitt
  Overall responsibility for funding university infrastructure in Scotland, Wales and Northern 196W
  Ireland is with the devolved administrations. For England, the responsibility is with the Higher Education Funding Council for England.

  In addition, my Department, together with the Wellcome Trust and the HEFCE, is responsible for the £750 million Joint Infrastructure Fund initiative, which provides for research infrastructure and equipment in UK universities. My Department is also responsible, together with the Higher Education Funding Councils and the Department of Higher and Further Education, Training and Employment, for the Joint Research Equipment Initiative for university research equipment.

  Competition for funds from the JIF has been very strong. There have been many high quality applications and we have been able to fund only the most outstanding. Under the terms of the JIF scheme there can be no re-submission of unsuccessful applications.

  JIF was set up as a one-off fund to boost university infrastructure. The Government are giving careful consideration to the need for a follow on programme. This includes exploration of options other than allocation based on competition through bidding.

  The 1997 Dearing Report of the National Committee of Inquiry into Higher Education drew attention to the need to invest in university research infrastructure in order to ensure that the UK remains at the forefront of scientific research. Dearing's recommendations were based on the 1996 "Survey of Research Equipment in UK Universities" undertaken by the Policy Research in Engineering, Science and Technology Unit at the University of Manchester (PREST). Dearing also drew on Segal Quince and Wicksteed's 1997 "Review of Dual Support: The Funding Gap" study of overall research funding in universities.

  I understand that the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom expects to publish shortly an updated study by PREST, part funded by CVCP and HEFCE, of the present state of research equipment provision and needs in UK universities.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry (1) what his policy is on funding proposals which have not been successful in gaining an allocation from the Joint Infrastructure Fund; [122165]

  (2) what provision will be made for financing research infrastructure once the funds from the Joint Infrastructure Fund have been allocated; [122164]

  (3) what analysis has been made of the volume of investment required in research infrastructure in universities to bring infrastructure in particular subject areas up to the standards of major international competitors. [122166]

  Ms Hewitt
  [holding answer 15 May 2000]: I refer my hon. Friend to the answer given today to her written question 122138, Official Report, column 193W.

  Insolvency Legislation
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry what plans his Department has to act on the recently published consultation document on reform of insolvency legislation. [121661]
  197W
  Dr. Howells
  The consultation document, "Bankruptcy: A Fresh Start"—which is the formulation of outline suggestions for possible changes to the law—marks the end of the first stage of the review. The consultation period ends on 30 June. A lot of detailed work will be needed before decisions are made about whether and, if so, how bankruptcy law should be changed. This will be informed by responses to the consultation.

  EU Research and Development Reports
  Mr. Bercow
  To ask the Secretary of State for Trade and Industry what categories of reports are funded under the call for proposals for indirect research and technological development actions in the framework of the specific programme for research, technological development and demonstration in the field of improving the human research potential and the socioeconomic knowledge base, referred to in European Community Document (2000/c 74/08); and if he will make a statement. [121493]

  Ms Hewitt
  European Community Document 2000/c 74/08 refers to a call for proposals under the Strategic Analysis of Specific Policy Issues (STRATA) activity of the programme, Improving the Human Research Potential and the Socio-Economic Knowledge Base (IHP). The call identifier is IHP-STRATA-00-1.

  Under the call the Commission has invited proposals to produce reports on a number of specific issues relating to science and technology policies, these include:
  European science and technology policies and national and global systems;
  Articulation between research, training and development and other policies within the European institutional environment;
  Management of change in science and technology policy; and
  Collaboration in science, technology and innovation: changing needs and opportunities for policy.

  Research
  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry if he will list the Government's research priorities and the research priorities of(a) the United States and (b) Germany. [122133]

  Ms Hewitt
  This Government's overall priorities for science and technology were set out following the Comprehensive Spending Review in "Forward Look 1999 (Cm 4363)". They are:Maintaining the excellence of UK Science—ensuring UK science is and remains world class;
  Promoting business exploitation—supporting the development and exploitation of new and existing technologies, particularly through encouraging partnerships and the flow of people between universities and business; and
  Ensuring effective use of science and technology by Government Departments—in support of their policy, regulatory. and procurement responsibilities.

  Science budget funding of HEIs' capital

  Capital element of research grants to HEIs

  1994–95

  1995–6

  1996–97

  1997–98

  1998–99

  1999–2000

  2000–01

  BBSRC

  8.800

  8.100

  7.720

  6.280

  7.470

  10.000

  11.000

  EPSRC

  33.296

  32.307

  33.564

  35.585

  39.336

  33.764

  49.627

  ESRC

  0.100

  0.100

  0.300

  0.600

  0.600

  0.700

  0.800

  MRC

  11.300

  9.950

  11.631

  11.700

  10.182

  8.276

  7.800

  NERC

  3.340

  6.818

  3.087

  3.897

  3.263

  3.805

  5.908

  PPARC

  3.472

  6.751

  4.363

  5.238

  5.213

  6.039

  6.175

  198W
  Details of the specific research priorities of individual departments, Research Councils and other bodies are also set out in "Forward Look", copies of which are available in the Library of the House. These priorities are being reviewed in the context of the current Spending Review.

  In the USA, the main priorities for civilian research set out in the federal budget for Financial Year 2000 are:
  All areas of Biomedical research, in particular human genomics and also plant genome research;
  Fundamental information technology research; and
  Bio-complexity—research on inter-dependencies between the elements of specific environmental systems.

  The German Federal Government research priorities set out in their 1999 science research budget include the areas of biotechnology, production engineering, marine and polar research, lasers, IT and sustainable development.

  Mrs. Curtis-Thomas
  To ask the Secretary of State for Trade and Industry how much has been provided by each of the research councils and the four funding councils for spending by the universities on equipment to support scientific research programmes by subject area in each year since 1994. [122135]

  Ms Hewitt
  Data in respect of the Research Councils and the Higher and Further Education Funding Council (England) are as set out.

  Details of awards so far made from the Joint Infrastructure Fund were provided in my answer to my hon. Friend's written question 121665 answered today, Official Report, column 193W.

  The funding of Higher Education Institutions in Scotland, Wales and Northern Ireland is the responsibility of the devolved administrations.

  HEFC(E)'s capital funding for research in HEIs

  Year

  Mainstream

  JREI

  JIF (£ million)

  1994–95

  62.8

  —

  17.5

  1995–96

  67.1

  —

  29.0

  1996–97

  45.4

  19.8

  37.7

  1997–98

  50.0

  25.7

  —

  1998–99

  52.3

  25.8

  —

  1999–2000

  53.9

  16.3

  —

  2000–01

  54.0

  —

  —

  1Round 1

  2Round 2

  3Round 3

  199W

  Joint research equipment initiative

  Calendar year of the award

  1996

  1997

  1998

  1999

  BBSRC

  1.1

  1.6

  1.5

  3

  EPSRC

  3

  4.6

  5.4

  5.5

  MRC

  1.1

  1.4

  1.8

  2.1

  NERC

  0.4

  0.6

  0.7

  0.8

  PPARC

  —

  —

  —

  —

  Total

  5.6

  8.2

  9.6

  12.2

  The Research Councils also provide access for university researchers to national and international facilities.

  Departmental Vehicles
  Mr. Pearson
  To ask the Secretary of State for Trade and Industry how many(a) cars and (b) commercial vehicles operated by his Department were manufactured (i) in the UK, (ii) in the EU and (iii) elsewhere. [122253]

  Dr. Howells
  [holding answer 17 May 2000]: Other than hire cars and vehicles supplied by the Government Car and Despatch Agency, for which my right hon. Friend the Minister of State for the Cabinet Office responded on 17 May 2000, Official Report, column 141W, my Department operates 19 cars, manufactured as follows:

  UK: 13

  UK or EU: 21

  EU: 2

  Elsewhere: 1

  1Due to some models being simultaneously manufactured in more than one country, it is not possible to be more specific without unjustifiable expense.

  Post Offices
  Mr. Ashdown
  To ask the Secretary of State for Trade and Industry when his Department plans to bring forward proposals for developing the future business potential of the Post Office network; and if he will make a statement. [121310]

  Mr. Byers
  Completion of the installation of the Horizon system, a modern automated IT platform, throughout the Post Office network in 2001 will provide the potential to develop a range of new business opportunities. In addition to automated network banking on an agency basis, Horizon would provide an important part of the infrastructure for a universal bank offering basic banking services accessible at post offices. We also see opportunities for post offices to develop a key role in e-commerce services and scope for a further development of their role as one-stop shops for many Government services and transactions. We are also looking at the role post offices may be able to play in fulfilling our objective of making the Internet accessible to all by 2005.

  Mr. Ashdown
  To ask the Secretary of State for Trade and Industry what plans he has to support the development of a post office universal bank; and if he will make a statement. [121308]

  Mr. Byers
  The Government strongly support co-operation between the banks and the Post Office to develop a universal bank offering basic banking services to all. The Horizon project to equip the post office 200W
  network with a modern on-line IT platform, towards which the Government are contributing nearly £500 million, has the potential to provide an important part of the infrastructure for such a bank. A universal bank accessible through post offices would complement the agency network banking service which the Post Office already provides under arrangements with Girobank/Alliance and Leicester, LloydsTSB, Co-operative and Barclays Banks.

  Mr. Ashdown
  To ask the Secretary of State for Trade and Industry when he plans to bring forward detailed proposals relating to subsidies for post offices; and if he will make a statement. [121309]

  Mr. Byers
  I refer the right hon. Member to the reply given by my hon. Friend the Minister for Competitiveness, on 11 May 2000,Official Report, column 439W.

  Green Transport
  Mr. Don Foster
  To ask the Secretary of State for Trade and Industry if he will list the key buildings for which his Department(a) submitted and (b) did not submit green transport plans by March. [122561]

  Dr. Howells
  In line with the target set in the Integrated Transport White Paper for the introduction of green transport plans for key government buildings we have completed plans for the Department's three key buildings—Atholl House, St. Mary's House and Westfield House.

  Petrol
  Ms Jenny Jones
  To ask the Secretary of State for Trade and Industry what steps he has taken to facilitate a meeting between representatives of petrol retailers and petrol wholesalers to discuss a code of practice. [122361]

  Dr. Howells
  I said during the petrol retailing debate in January that I was happy to broker a meeting if the concerned parties wished to meet and were prepared to compromise where necessary. Such a meeting has not yet been requested, but I intend to take the initiative and invite relevant parties to meet. However, it is sensible to receive advice from the Director General of Fair Trading on the future of the 1966 undertakings first. I expect to receive this soon.

  Climate Change Levy
  Mr. Pollard
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact of the climate change levy on the competitive position of the United Kingdom's horticultural industry. [120805]

  Ms Quin
  I have been asked to reply.

  It is not possible to say with precision what the effect of the climate change levy will be on the competitive position of the United Kingdom's horticultural industry. This will depend, among other things, on the extent to which individual sectors and firms within the industry are exposed to international competition, the future energy

  201W
  use of the industry and the extent to which the industry takes up the various incentives offered under the levy to improve energy efficiency.

  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. With respect to the horticultural industry the Chancellor of the Exchequer announced in Budget 2000 that the Government intend to introduce a package of measures to help protect its competitiveness. Subject to State Aids clearance from the European Commission this will include:
  A special package of support for horticulture allocated from the energy efficiency fund. This package will aim to improve energy efficiency across the sector and will include activities such as the provision of site specific advice for individual businesses;
  An extension to the list of investments qualifying for enhanced capital allowances to include thermal screens. This will provide a further fiscal incentive for horticultural businesses to invest in energy saving technologies, and;
  A temporary 50 per cent. discount on the levy for a period of up to five years to the horticulture sector while the energy efficiency measures targeted at the sector take effect.

DEFENCE

  Biological Warfare
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence if he will make a statement on the(a) role of the 1 Field Laboratory Unit that operated a biological warfare agent detection facility during the 1990–91 Gulf conflict and (b) work of that unit in detecting biological warfare agents. [123219]

  Mr. Spellar
  The 1997 "Gulf Veterans Illnesses: A New Beginning" policy statement set out a number of commitments to help address the health concerns of Gulf Veterans. One of these commitments was to review specific incidents of suggested biological warfare exposures and the activities of 1 Field Laboratory Unit. As part of this commitment I am today publishing a paper entitled, "A Review of the Activities of the 1 Field Laboratory Unit and Suggested Biological Warfare Agency Detections During Operation Granby".

  As a result of our review of the available information we assess that UK troops were not subject to attack by or exposed to biological warfare agents during the Gulf conflict. There were alarms on some detectors, many of which were recognised to be false by the system operators at the time. On one occasion, a biological substance was detected and samples returned to the UK for testing. The tests concluded that this was not caused by a biological warfare agent. Our review re-examined this incident and concludes that the evidence suggests that the detection was caused by natural biological material.

  Defence Aviation Repair Agency
  Mr. Olner
  To ask the Secretary of State for Defence what performance targets have been set for the Defence Aviation Repair Agency for 2000–01. [123220]
  202W
  Mr. Spellar
  Key Targets have been set for the Chief Executive of the DARA for financial year 2000–01. The targets build on the progress already made by the Agency since it formed in April 1999 and are as follows:

  Key Target 1—Quantity
  To achieve 95 per cent. of the agreed programme of work weighted by value.

  Key Target 2—Cost
  To keep within the approved full operating cost budget, within a tolerance of +1 per cent. while delivering the agreed programmes of work.

  Key Target 3—Timeliness
  To meet 95 per cent. of the agreed Turn-Round-Times for fixed wing and rotary aircraft within a tolerance of +5 per cent. or five working days, whichever is the greater.

  Key Target 4—Quality
  To achieve a customer standard index rating of 75 points or higher, made up from:

  A. To achieve 98 per cent. acknowledgement of Customer Concerns within two working days—20 points.

  B. To achieve 95 per cent. of Investigations and Response to Customer Concerns within 56 days or as agreed—40 points.

  C. To achieve a 5 per cent. reduction from the FY99–00 baseline of DARA Attributable Customer Concerns, as a percentage of quantity—15 points.

  Key Target 5—Efficiency
  Efficiency 1: The development of the appropriate basis and measurement system for reporting efficiency as a Trading Fund—such as an indexed measure of the contribution of DATA to the DLO Lean Support Initiative.
  Efficiency 2: To achieve a 15 per cent. increase in repayment work revenue from a FY99–00 outturn baseline.

  Army Base Repair Organisation
  Mr. Olner
  To ask the Secretary of State for Defence what performance targets have been set for the Army Base Repair Organisation for 2000–01. [123221]

  Mr. Spellar
  Key Targets have been set for the Chief Executive of the ABRO for financial year 2000–01. The targets build on the progress already made by the Agency since it formed in April 1993 and are as follows:

  Key Target 1—Quantity
  To complete 95 per cent. of all Sensitive and Significant programmes within the times agreed with the customer.

  Key Target 2—Timeliness
  To complete 95 per cent. of District Load tasks within the priorities agreed with the customer.

  Key Target 3—Efficiency
  To increase manpower utilisation by 3 per cent.

  Key Target 4—Working Towards Trading Fund Status
  ABRO to proceed to shadow trading by 1 April 2001.

  Gulf (Reserve Forces)
  Mr. Kidney
  To ask the Secretary of State for Defence if members of the Reserve Forces who served in the Gulf are entitled to attributable pensions benefits. [123222]
  203W
  Mr. Spellar
  Attributable benefits for Reserve Service were introduced in 1980, and the regulations are contained in the Naval and Marine Pay and Pensions (Non-Effective Benefits and Family Pension) Order 1999, the Army Pay Warrant 1977, and the Queen's Regulations for the Royal Air Force. It has been the practice since 1980 to award attributable benefits only where members of the Reserve Forces are medically discharged from the Reserves at an end of a period of active duty. During periods of recalled service for operations, individuals in the regular reserve forces could claim benefits only if they were medically discharged at the point of demobilisation. We have now taken legal advice, which suggests that Army reservists are, under current regulations, eligible to claim attributable benefits if they are medically discharged from the reserve at any time. Our legal advisers have also identified some anomalies in the regulations for the other Services.

  We therefore propose for the future that all members of the volunteer reserves and regular reserves should be eligible for attributable benefits if they are medically discharged from the reserve forces at any time for reasons attributable to reserve service. The existing anomalies in the regulations, under which reservists are treated differently depending on which Service they come from, will be removed. We shall re-examine claims from Gulf Reservists under the interpretation of the regulations we now believe to be correct. We shall also consider any new claims.

  Gulf War Illnesses
  Mr. Kidney
  To ask the Secretary of State for Defence what assessment he has made of the RAND Corporation report entitled, "A Review of the Scientific Literature as it Pertains to Gulf War Illnesses, volume II: Pyridostigmine Bromide". [123223]

  Mr. Spellar
  The RAND report, which is a comprehensive compilation of published literature on pyridostigmine bromide (PB) and its relationship to Gulf Veterans' Illnesses (GVI), has now been carefully reviewed and a written assessment of the report has been produced. I am placing a copy of this assessment in the Library of the House.

  The RAND report does not present any new work on pyridostigmine bromide. It concentrates on several hypotheses of how PB might be the cause of GVI and to a lesser extent discusses the effectiveness of PB. Although a number of theories have been identified they have not, in our view, been critically evaluated and there is no differentiation between the credibility and the value of the various pieces of research. The report gives no guidance as to which of the various hypotheses is worthy of further investigation or for the prioritisation of further research. The approach and methodology adopted for this review do not advance the debate on whether PB is possibly linked to illness in Gulf veterans.

  Naval Bases and Supply Agency
  Mr. Reed
  To ask the Secretary of State for Defence what performance targets have been set for the Naval Bases and Supply Agency for 2000–01. [123225]
  204W
  Mr. Spellar
  Key Targets have been set for the Chief Executive of the NBSA for financial year 2000–01. The targets build on the progress already made by the Agency since it formed in December 1996 and are as follows:

  Key Target 1—Quantity and Timeliness
  To provide up to 40028 Standard Berth Unit Days on demand.

  Key Target 2—Timeliness, Quality and Cost
  Provide quality, timely and cost effective engineering support to allocated vessels to the annual level indicated in the Fleet Time Maintenance Loading Programme (FTMLP) within ± 3 per cent. of budget.

  Key Target 3—Quantity, Timeliness and Efficiency
  Non-explosive Stores: Supply 88 per cent. of available material, including fuel, within Required Delivery Dates, while achieving the agreed targets for high priority Operational Defects.

  Key Target 4—Quantity and Timeliness
  Munitions: Supply 99 per cent. of available maintained munitions within demand timescales.

  Key Target 5—Quantity
  Provide Single Living Accommodation (SLA) to 25 per cent. of entitled personnel at Director Naval Services and Conditions (DNSC) Grade 2 standards or better.

  Defence Communications Services Agency
  Mr. Reed
  To ask the Secretary of State for Defence what performance targets have been set for the Defence Communications Services Agency for 2000–01. [123224]

  Mr. Spellar
  Key Targets have been set for the Chief Executive of the DCSA for financial year 2000–01. The targets build on the progress made by the Agency since it formed in April 1998 and are as follows:

  Key Target 1—Service Assurance (Quantity)
  To achieve a mean 96 per cent. of the service performance targets in the Services Baseline Document.

  Key Target 2—Service Provisioning (Timeliness)
  To commission 90 per cent. of new requests for service on or before the dates agreed with customers.

  Key Target 3—Service Restoration (Timeliness)
  To restore 95 per cent. of interrupted services classed as operationally urgent within four hours or within other specific periods agreed with customers.

  Key Target 4—Service Support (Quality)
  To achieve a 75 per cent. average success rate in response to demands on all DCSA Operator Assistance Centres (OACs) and helpdesk facilities.

  Key Target 5—Customer Satisfaction (Quality)
  To achieve a 70 per cent. mean of customers/users who express moderate or high satisfaction with the services and support offered by the DCSA.

  Key Target 6—Efficiency
  To achieve an improvement in efficiency by reducing the average unit cost of output for current DCSA products by 5 per cent. per annum.

  Defence Evaluation and Research Agency
  Mr. Hancock
  To ask the Secretary of State for Defence if he will list the foreign representations that he received in respect of the DERA part sell-off and privatisation; and if he will make a statement. [122379]

  Mr. Hoon
  Throughout the DERA PPP process there has been substantial and widespread discussion with officials from each of our international collaborative
  205W
  partners. These have involved a considerable number of British officials, with meetings taking place in the UK and overseas often in the margins of bilateral and multilateral meetings. In addition, we have received written responses as part of last year's consultation process from a number of foreign companies. I refer the hon. Member to the answer I gave to the hon. Member for Truro and St. Austell (Mr. Taylor) on 10 January 2000, Official Report, column 85W, regarding details of the companies and our international collaborative partners.

  Representations have focused on the need to ensure that PPP does not affect our ability to:

  (a) maintain and further develop our international research programmes;

  (b) ensure that security sensitive information owned by foreign governments and passed to the UK under Government-to-Government arrangements, can continue to be adequately protected; and

  (c) ensure that foreign commercially sensitive intellectual property passed to the UK under Government-to-Government arrangements can continue to be adequately protected.

  Ms Squire
  To ask the Secretary of State for Defence if it is DERA's policy to support the(a) Business Innovation Centre at Rosyth Europarc and (b) application for European funding. [122399]

  Dr. Moonie
  The Defence Evaluation and Research Agency (DERA) is strongly committed, through the Defence Diversification Agency (DDA), to encouraging the widest possible exploitation of defence technology in the civil sector, in line with Government policy. The DDA is implementing this policy by establishing a national network of technology diversification managers, all rooted in DERA but located in regionally based business communities, one of which is the Rosyth Europarc, to provide a technology brokering service. It is also DERA's policy to support the Europarc Business Innovation Centre's application for European funding.

  Penalty Clauses
  Mr. Gordon Prentice
  To ask the Secretary of State for Defence if he will list the contracts entered into with private sector companies for the provision of goods or services since May 1997 where penalty clauses were triggered for non-performance; and if he will make a statement. [122017]

  Dr. Moonie
  Provision of such a list would require consideration of some 6,000 contracts and could be provided only at disproportionate cost.

  Typhoon Aircraft
  Mr. Wilkinson
  To ask the Secretary of State for Defence what functional modifications will be made to the Mauser 27mm cannon to be installed in the first 55 Eurofighter Typhoon aircraft to be delivered to the Royal Air Force. [121755]

  Dr. Moonie
  The 27mm Mauser Cannon fitted to Eurofighter will undergo a number of internal modifications affecting the ammunition feed arrangements and muzzle blast suppressor. No additional modifications are required if the gun is carried but not used.

  Defence Diversification Council
  Dr. Lynne Jones
  To ask the Secretary of State for Defence, pursuant to his answer of 22 March 2000,Official Report, column 566W, when he expects the Defence Diversification Council to be established; and if he will make a statement on the reasons for the delay. [122233]

  Mr. Key
  To ask the Secretary of State for Defence when he will set up the Defence Diversification Council; and if he will make a statement. [122128]

  Dr. Moonie
  We are currently examining the implications of the DERA Public/Private Partnership proposals for the work that is now being undertaken by the Defence Diversification Agency. Once that examination has been completed, we shall announce our proposals for the future of the Agency, including the arrangements for the establishment of the Defence Diversification Council.

  Hawk Trainer
  Mr. Hancock
  To ask the Secretary of State for Defence what was the original estimated cost of the Hawk Trainer Replacement Airframe Programme; what is the cost expected to be on completion; what is the end date for this contract; and if he will make a statement. [122374]

  Dr. Moonie
  Early estimates suggested that the cost of the programme would be of the order of £160 million. A contract for the work was awarded to BAE SYSTEMS in December 1998. Details of the contract are commercially sensitive, but the value was of the order of £120 million (VAT inclusive). The programme commenced in July 1999. The first aircraft was returned to service, ahead of schedule, in April of this year. The programme is due to be completed by January 2004.

  Suez Canal
  Mr. Healey
  To ask the Secretary of State for Defence what is his estimate of the number of servicemen who served during the Suez Canal Zone occupation from 1951 to 1954 who are still alive. [122333]

  Dr. Moonie
  [holding answer 16 May 2000]: This information is not held centrally. The work that would be required to determine whether in fact it would be possible to provide this information could be provided only at disproportionate cost.

  AWE Llanishen
  Ms Julie Morgan
  To ask the Secretary of State for Defence what amounts of beryllium and depleted uranium are left on site at the Atomic Weapons Establishment in Llanishen Cardiff; and when he expects the site will be free from contamination. [122391]

  Dr. Moonie
  [holding answer 16 May 2000]: Although traces of beryllium and depleted uranium have been found in specific locations they are of a very low level and, being contained on the site, pose no threat to health or the environment. Precise levels of contamination are currently being collated in preparation for a contract to be let for the remediation phase of site decommissioning, and will be made public shortly. The site is expected to be free from contamination by autumn of next year.

  Tomahawk Missile
  Mr. Quentin Davies
  To ask the Secretary of State for Defence what plans he has to equip the Royal Navy with the Tactical Tomahawk missile; if this will be carried by(a) Royal Navy submarines and (b) the future Type 45 destroyer; and if he will make a statement. [122111]

  Mr. Hoon
  [holding answer 17 May 2000]: No decision has yet been taken on whether the Royal Navy should procure tactical Tomahawk (TACTOM) missiles. However, a contract has been placed, through the United States Department of Defense, to undertake a joint US/UK feasibility study to evaluate the design options for torpedo tube launch of the TACTOM missile. This enabling work will allow UK options for TACTOM procurement, if required in the future, to remain open. There are currently no plans for the type 45 destroyer to have a land attack capability.

  Casualty-receiving Ship
  Mr. Quentin Davies
  To ask the Secretary of State for Defence when he plans to place an order for the additional primary casualty receiving ship referred to on page 25 of the Strategic Defence Review. [122112]

  Dr. Moonie
  [holding answer 17 May 2000]: A range of procurement options are being considered to meet the requirement. Initial work suggests that we should be in a position to place a contract during 2002, and the programme to achieve this date is being developed.

  BVRAAM
  Mr. Hoyle
  To ask the Secretary of State for Defence when he will make an announcement on the preferred supplier for the BVRAAM. [122145]

  Mr. Hoon
  I announced on 16 May the Government's intention to procure the METEOR missile, offered by a consortium led by Matra BAe Dynamics, as the Beyond Visual Range Air-to-Air Missile for the Eurofighter aircraft. Our decision will give the RAF the most advanced air-to-air missile in the world, and will ensure that Eurofighter can combat all projected air-to-air threats well into its service life.

  Conservation Document
  Dr. Tonge
  To ask the Secretary of State for Defence how many copies of the document entitled "Respecting the Environment Conservation on the Defence Estate and the Role of the MOD Conservation Office" were printed; how many were distributed; where they were distributed; and what the total cost was. [122708]

  Dr. Moonie
  40,000 copies of the MOD booklet, "Respecting the Environment" were printed. The cost of designing and printing the document was £11,548.33 which equates to 29 pence a copy. Over 30,000 copies have been or are being distributed via the Defence Tourer exhibition and the Army Presentation Team and directly to schools, colleges, libraries and interested members of the public. This process continues. Distribution costs are not separately identified.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Defence what was the average percentage increase in 208W
  salaries of non-industrial civil servants, excluding members of the senior civil service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121652]

  Dr. Moonie
  For staff covered by the main departmental pay system, the headline settlement added 2.7 per cent. to the paybill. Together with funds released by staff turnover, staff in post received performance-related increases averaging 4.5 per cent. A further 0.2 per cent. represented restructuring costs associated with the move to a more efficient and flexible structure and was focused on the Department's lowest paid staff. The increase was not staged.

  Heavy Lift Aircraft
  Mr. Hoyle
  To ask the Secretary of State for Defence when he will make an announcement on the preferred supplier for the short-term and long-term heavy lift aircraft. [122144]

  Mr. Robertson
  To ask the Secretary of State for Defence when he will make a decision on his Department's participation in the A400M airbus project; and if he will make a statement. [122396]

  Mr. Hoon
  I announced on 16 May the Government's intention to procure 25 A400M aircraft, to be developed and produced by Airbus Military, to meet the strategic airlift needs of our Armed Forces in the medium to long term. In the interim we will meet our short term needs through lease of four C-17 aircraft from The Boeing Company. This investment in our strategic airlift capability delivers the major enhancements promised in the Strategic Defence Review and will ensure that our Armed Forces are properly equipped with the best equipment.

  Cluster Bombs
  Ms Oona King
  To ask the Secretary of State for Defence (1) if he will make a statement on the(a) manufacture in the United Kingdom of, (b) use by United Kingdom armed forces of and (c) export of cluster bombs; [110169]

  (2) if he will make a statement on the circumstances in which British armed forces use cluster bombs. [110170]

  Mr. Spellar
  Cluster bombs held by the Royal Air Force are manufactured in the UK by Hunting Engineering Ltd. Cluster bombs are an effective weapon both against armoured targets and area targets, such as a group of soft-skinned military vehicles. UK armed forces will always use the most appropriate weapons against a given target, acting within their Rules of Engagement, taking into account weapon effectiveness and the need to minimise collateral damage. Applications for the export of cluster bombs are considered on a case-by-case basis against criteria announced by the Foreign Secretary on 28 July 1997 and the EU Code of Conduct on Arms Sales.

LORD CHANCELLOR'S DEPARTMENT

  Bowman Report
  Mr. Fitzpatrick
  To ask the Parliamentary Secretary, Lord Chancellor's Department what is his response to the
  209W
  recommendation in the Bowman report on the Crown Office List that there should be a comprehensive review of the present structure, jurisdiction, procedures, remedies and routes of appeal of tribunals. [123129]

  Jane Kennedy
  The Lord Chancellor has welcomed Sir Jeffery Bowman's recommendation. It has been 43 years since the last thorough review of tribunals. The number of tribunals has grown greatly since then. There has also been a fundamental change in the nature of, and pressures on, their work. The Lord Chancellor has therefore decided that there should be a wide ranging, independent review of tribunals.

  Its terms of reference will be:
  To review the delivery of justice through tribunals other than ordinary courts of law, constituted under an Act of Parliament by a Minister of the Crown or for purposes of a Minister's functions; in resolving disputes, whether between citizens and the state, or between other parties, so as to ensure that:
  There are fair, timely, proportionate and effective arrangements for handling those disputes, within an effective framework for decision-making which encourages the systematic development of the area of law concerned, and which forms a coherent structure, together with the superior courts, for the delivery of administrative justice;
  The administrative and practical arrangements for supporting those decision-making procedures meet the requirements of the European Convention on Human Rights for independence and impartiality;
  There are adequate arrangements for improving people's knowledge and understanding of their rights and responsibilities in relation to such disputes, and that tribunals and other bodies function in a way which makes those rights and responsibilities a reality;
  The arrangements for the funding and management of tribunals and other bodies by Government Departments are efficient, effective and economical; and pay due regard both to judicial independence, and to ministerial responsibility for the administration of public funds;
  Performance standards for tribunals are coherent, consistent, and public; and effective measures for monitoring and enforcing those standards are established; and
  Tribunals overall constitute a coherent structure for the delivery of administrative justice.
  The review may examine, insofar as it considers it necessary, administrative and regulatory bodies which also make judicial decisions as part of their functions.

  The review will be led by Sir Andrew Leggatt, supported by Dame Valerie Strachan, and a team of expert advisers. It will operate in an open, consultative way, involving and seeking views from as wide a range of interests as possible. The Lord Chancellor has asked Sir Andrew to report to him by 31 March 2001.

  Green Transport
  Mr. Moore
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will list the key buildings for which the Lord Chancellor's Department(a) submitted and (b) did not submit green transport plans by March. [122622]

  Mr. Lock
  In line with the target set in the Integrated Transport White Paper, green transport plans for three Headquarters buildings were completed by March 1999. Draft plans for a further 55 key buildings have been prepared and these will be introduced by July 2000.
  210W
  The key buildings are:

  Birmingham county court

  Bolton Combined court

  Bow county court

  Bradford Combined court

  Brighton county court

  Bristol county court

  Cardiff Civil Justice Centre

  Central Criminal court

  Central London Trial Centre

  Coventry Combined court

  Croydon Combined court

  Crown court at Birmingham

  Crown court at Bristol

  Crown court at Manchester

  Crown court at Southwark

  Crown court at Wood Green

  Derby Combined court

  Exeter Combined court

  Immigration Appellate Authority, Taylor House

  Immigration Appellate Authority, York and Wellington Buildings

  Inner London Sessions House

  Judge Advocate General's Office/Council On Tribunals

  Judicial Studies Board, Millbank

  Kingston upon Hull Combined court

  Law Commission

  Leeds Combined court

  Leicester Crown and county court

  Liverpool Combined court

  Maidstone Combined Court

  Manchester county court

  Milton Keynes county court

  Newcastle upon Tyne Combined court

  Northampton Bulk Issue Centre

  Northampton Combined court

  Northern Circuit Office

  Norwich Combined court

  Nottingham Combined court

  Office of the Social Security Commissioners

  Official Solicitors Office/Chichester Rents Crown court

  Oxford Combined Court Centre

  Plymouth Combined court

  Portsmouth Combined court

  Preston Combined court

  Principal Registry of the Family Division

  Reading county court

  Royal Courts of Justice

  Sheffield Combined court

  Snaresbrook Crown court

  South Eastern Circuit Offices

  Southampton Combined court

  Stoke on Trent Combined court

  Teesside Combined court

  Willesden county court

  Wolverhampton Combined court

  Worcester Combined court.

  Marriage Support
  Ms Kelly
  To ask the Parliamentary Secretary, Lord Chancellor's Department how much the Lord Chancellor's Department has spent since 1997 on(a) marriage support funding and (b) marriage counselling services; and how many people have been helped in each year. [122600]

  Jane Kennedy
  Spending by the Lord Chancellor's Department on marriage and relationship support and research for the financial years since 1997 is as follows: 1997–98: £3.4 million; 1998–99: £3.0 million; 1999–2000: £3.2 million. In line with Sir Graham Hart's recommendations in his report to the Lord Chancellor on Marriage Support Funding (published in November 1999), the allocation is being increased as follows: 2000–01: £4 million; 2001–02: £4.5 million; 2002–03: £5 million.

  This spending is currently provided to the central bodies of the main marriage and relationship support and research organisations towards expenses incurred in the development of training and support to local services, including the selection, training and supervision of counsellors, administrative costs and research. The Government do not directly fund the provision of counselling services. It is therefore not possible to calculate precisely how many people are helped in each year.

  Open Government
  Dr. David Clark
  To ask the Parliamentary Secretary, Lord Chancellor' s Department how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121855]

  Jane Kennedy
  I refer my right hon. Friend to the written answer given to him today by my right hon. Friend the Home Secretary on behalf of the Government as a whole,Official Report, columns 216–17W.

  Civil Servants
  Dr. David Clark
  To ask the Parliamentary Secretary, Lord Chancellor's Department what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121645]

  Jane Kennedy
  This reply covers non-industrial civil servants working in the Headquarters of the Lord Chancellor's Department and Associated Offices, the Court Service, and the Public Trust Office.

  The average increase received by non-industrial civil servants who achieved a satisfactory or better performance was 4 per cent. The main increases were not staged, but they were paid with effect from 1 October 1999 rather than the normal settlement date of 1 August.

HOME DEPARTMENT

  Mike Tyson
  Ms Ward
  To ask the Secretary of State for the Home Department when he will make a decision on Mr. Mike Tyson's application for entry clearance. [123031]
  212W
  Mr. Straw
  I have today informed Mr. Tyson that he will be granted entry clearance for a single visit of three weeks' duration strictly for the purpose of a boxing match in Scotland on 24 June 2000.

  The decision to grant entry clearance has been taken in accordance with Rule 320(18) of the United Kingdom Immigration Rules which requires that admission will not normally be given to those with criminal convictions for relatively serious offences unless it can be justified for strong compassionate reasons, but also bearing in mind the residual discretion which I have under the Rule.

  In reaching my decision, I took note of the fact that Mr. Tyson has relevant convictions for the purposes of the application of this Rule. I also noted that there are recent allegations of an assault on an employee of a nightclub in Las Vegas, but we understand this is still under investigation. And I took into account the views expressed by the public about Mr. Tyson visiting the United Kingdom.

  I did not consider that there were strong compassionate reasons which would justify admission in Mr. Tyson's case for the purpose of the Rule. However, I concluded that there were other exceptional circumstances which justified his entry to the country for the purpose of participating in the boxing match. My decision took account of the following factors:
  that Mr. Tyson's behaviour on his previous visit to the United Kingdom was satisfactory;
  that any risk to the public to which his criminal convictions and other allegations referred to above might be relevant, would be minimised by the circumstances of his proposed visit—ie his high media profile, the presence of his trainers and other supporting entourage, and the limited duration of his visit; and
  that a refusal to permit entry would result in a loss of economic benefit to the United Kingdom, and in particular to the areas in which engagements took place, and would not enhance the United Kingdom's standing as a venue for major sporting events.

  I also took account of the fact that Rule 320(18) currently operates in an inconsistent manner in that those in the public eye whose convictions are known are more likely to be caught by its provisions.

  Immigration Rules
  Ms Kelly
  To ask the Secretary of State for the Home Department what progress has been made on the review of paragraph 320 (18) of the Immigration Rules. [123030]

  Mr. Straw
  I have today published a consultation document which details the consideration given to this matter and the changes proposed. A copy of the paper has been placed in the Library. Comments on the document are invited by 20 June 2000 and should be addressed to:

  Susan Wale,

  European Directorate,

  Room 1212 Apollo House,

  36 Wellesley Road,

  Croydon,

  CR9 3RR.

  Prison Service
  Siobhain McDonagh
  To ask the Secretary of State for the Home Department if he will publish the results
  213W
  achieved by the Prison Service on each of its Key Performance Indicators in 1999–2000; and if he will make a statement. [123128]

  KPI

  Target

  Actual

  Category A escapes

  0

  0

  Escapes from prisons and prison escorts, expressed as a proportion of average population

  0.05%

  0.059%

  Escapes from contracted escorts, expressed as a ratio per prisoners handled

  Less than 1:20,000

  1:22,251

  Assault rate (percentage of average population)

  9%

  9.9%

  Rate of positive random mandatory drug tests (MDT)

  18.5%

  14.4%

  Percentage of the population held two to a cell designed for one (Doubling)

  18%

  18.5%

  Average purposeful activity hours

  24 hours

  23.2 hours

  Total Accredited Offending Behaviour Programme completions (OBPs)

  3,600

  4,478

  Sex Offender Treatment Programmes (SOTPs)

  700

  586

  Cost per Uncrowded prisoner place

  £26,208

  £25,567

  Cost per prisoner

  £27,392

  £25,567

  Average working days lost to staff sickness

  12.5

  13.3

  Percentage of public correspondence replied with 20 working days

  95%

  93.6%

  Asylum Seekers
  Mr. Fearn
  To ask the Secretary of State for the Home Department if his Department has compiled a list of postcodes to be avoided in the dispersal of asylum seekers' programmes. [120632]

  Mrs. Roche
  Asylum seekers who are supported by the National Asylum Support Service will be dispersed to cluster areas around the country. Our intention is to ensure that the cluster areas are suitable for asylum seekers taking into account, inter alia, the views of local authorities. In some cases, local authorities may advise that particular areas may not be suitable for asylum seekers and they may identify such areas by post-code. That information would be taken into consideration in determining whether to accept any accommodation for asylum seekers if offered in that area.

  Mr. David Atkinson
  To ask the Secretary of State for the Home Department if he will make a statement on the number of asylum seekers placed to date in bed and breakfast accommodation in Bournemouth; whom local authorities are required to notify before placing asylum seekers in such accommodation in other authority areas; and if he will make a statement. [122477]

  Mrs. Roche
  The information requested is not held centrally. There is no requirement under the voluntary interim scheme for one local authority to notify another before placing asylum seekers in accommodation in another local authority area. However, we have encouraged local authorities doing this to liaise with those authorities into whose areas asylum seekers are being sent.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department what steps he is taking to ensure that the Asylum Support Agency maintains the closest possible contact with local authorities in connection with the asylum seekers dispersal policy; and if he will make a statement. [122748]

  Mrs. Roche
  We remain in consultation with the Local Government Association (LGA) and the Association of London Government (ALG). We consult local authority consortiums about proposed accommodation providers operating in their area, giving as much information as possible about the likely locations of the accommodation that the private sector providers are likely to offer.
  214W
  Mr. Boateng
  The Prison Service Key Performance Indicators (KPI) results for 1999–2000 are given in the table. Data are provisional and subject to validation by prisons.

  We notify the relevant health and education authorities that an asylum seeker (and family if applicable) have been dispersed to their area. On a weekly basis, we notify the relevant local authority consortiums.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department if he will list for each region in England the contracts that have been entered into between the Asylum Support Agency and providers of accommodation. [122751]

  Mrs. Roche
  As of 15 May, the Home Office had awarded contracts to the following accommodation providers:

  Ade1phi Hotels Limited, Hove, East Sussex

  Angel Group Limit, London E1

  Capital Accommodation (London) Limited, London N8

  Clearsprings (Management) Limited, Rayleigh, Essex

  Glasgow City Council (on behalf of the Scottish Regional Consortium of local authorities)

  The Landmark Liverpool Limited, London W3

  Roselodge Limited, Wembley, Middlesex

  Shallan (UK) Limited, London NW3

  South Yorkshire Housing Association Limited and Yorkshire Community Housing Association (a joint venture), Sheffield

  YMCA Glasgow.

  These providers—although not contractually limited to the areas in which they are operating at present—are currently supplying accommodation in the following cluster areas:

  Birmingham (Adelphi)

  Bradford (Angel: Clearsprings)

  Gateshead (Roselodge)

  Glasgow (Glasgow City Council; YMCA Glasgow)

  Leeds (Angel: Clearsprings)

  Liverpool (Capital: Landmark)

  Manchester (Adelphi: Capital: Clearsprings)

  Nelson (Adelphi: Clearsprings)

  Newcastle (Angel: Roselodge)

  Sheffield (Roselodge: South Yorkshire Housing Association)

  Sunderland (Roselodge).

  Other cluster areas will be brought on stream as the new support arrangements are rolled out.
  215W
  Negotiations will also be continuing with a view to concluding further contracts with other providers to ensure that sufficient accommodation continues to be available to meet projected needs. We expect to be in a position to award further contracts shortly.

  Home Detention Curfew
  Miss Widdecombe
  To ask the Secretary of State for the Home Department how many prisoners imprisoned for burglary and released on the Home Detention Curfew scheme had been convicted of a prior offence of burglary; and if he will make a statement. [122094]

  Mr. Boateng
  This information is not held centrally and could be obtained only at disproportionate cost by requesting information from individual establishments.

  Probation Service
  Mr. Pollard
  To ask the Secretary of State for the Home Department if he will make a statement on the level of recruitment and retention of probation officers. [122309]

  Mr. Boateng
  During 1999, there have been significant increases of four per cent. in the number of probation officers in post and of seven per cent. in the number of other probation service staff in post (whole-time equivalent in both cases). The increase in probation officers is due largely to more than doubling the number of trainee probation officers in the year.

  Criminal Injuries Compensation
  Mr. Blizzard
  To ask the Secretary of State for the Home Department (1) what evidence is used by the Criminal Injuries Compensation Authority in judging whether a claimant's own conduct caused or contributed to the incident; [122327]

  (2) what percentage of claims to the Criminal Injuries Compensation Authority are rejected on the grounds that the injured person's own conduct caused or contributed to the incident. [122326]

  Mr. Charles Clarke
  The Authority advises that in the three years ending 31 March 2000, the proportion of cases refused under paragraph 13(d) of the compensation scheme, on grounds of conduct, as a percentage of total cases settled was around 5.4 per cent.

  The Authority further advises that in most cases, it determines whether an applicant's conduct caused or contributed to the incident in which the applicant was injured by considering the report on the incident provided to the Authority by the police and any other relevant information the applicant may have supplied. The Authority may also consider police witness statements and interview transcripts where available. Where the incident has resulted in court proceedings, the Authority may also obtain and consider information about these proceedings and their outcome.

  Sexual Offences
  Mr. Ben Chapman
  To ask the Secretary of State for the Home Department when the review led by his Department into the law on sexual offences will be completed and a report published. [122586]
  216W
  Mr. Charles Clarke
  The sex offences review has completed its work and reported to Ministers. I hope that its proposals will be published for consultation shortly.

  National Family and Parenting Institute
  Ms Kelly
  To ask the Secretary of State for the Home Department how much has been spent on establishing the National Family and Parenting Institute; what is its estimated annual budget; and if he will make a statement on the planned impact of the Institute. [122532]

  Mr. Boateng
  [holding answer 17 May 2000]: I understand that the National Family and Parenting Institute, which is an independent charity, launched in November 1999, had the assistance of a grant from the Joseph Rowntree Foundation of £120,000. They have not published their budget for 2000–01, but they are receiving over £2 million over the next three years from central government.

  Working in partnership with other professional and voluntary family support organisations, the Institute aims to be a centre of expertise, ensuring readily accessible and reliable support for families and parents.

  Kosovan Refugees
  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department what financial support is being made available to Kosovan refugees returning from the United Kingdom to their home country; and if he will make a statement. [122727]

  Mrs. Roche
  The current voluntary return programme from the United Kingdom began on 26 July 1999 and will end on 25 June 2000. For humanitarian and economic reasons it was decided to give a relocation grant of 720 Deutschmarks per person (approximately £250), payable on arrival in Kosovo, to all those who chose to go back under the return programme. That grant was increased to 1,300 Deutschmarks per person (approximately £400) with effect from the flight on 5 May. Arrangements have also been made to transport larger possessions overland to Kosovo. This will enable Kosovans to take back, for example, household goods and building materials, which they have bought or been given, and which they cannot take on an aeroplane.

  In order to benefit from the grant and the overland transport of goods, Kosovans must register for return by 10 June and leave the United Kingdom on one of the organised voluntary return flights by 25 June.

  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department what financial support is available to Kosovan refugees who have applied for asylum after the expiry of their 12 months' sanctuary in the United Kingdom; and if he will make a statement. [122730]

  Mrs. Roche
  Under the new support arrangements that we began phasing in on 3 April all new destitute asylum seekers who claim asylum in Scotland or Northern Ireland and additionally, since 17 April, all new asylum applicants in Kent will be supported by the National Asylum Support Service.

  In all other cases, support will fall to local authorities who may provide essential living needs under the provisions of the Asylum Support (Interim Provisions) Regulations 1999.
  217W
  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department if it is his policy to allow Kosovan refugees receiving medical treatment from the NHS to remain in the United Kingdom pending completion of treatment in cases where treatment is not available in Kosovo. [122728]

  Mrs. Roche
  Every request by a Kosovan to remain here longer on medical grounds will be considered carefully on its individual merits.

  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department what is his policy on ordering the return home of Kosovan refugees; how many Kosovan refugees have been required to return home against their will in the last 12 months; and if he will make a statement. [122731]

  Mrs. Roche
  Kosovan Albanians who were evacuated to the United Kingdom under the Humanitarian Evacuation Programme (HEP) between 25 April and 25 June 1999 were granted 12 months' leave to enter. As agreed with United Nations High Commissioner for Refugees (UNHCR) at the outset of the evacuation process, protection was afforded on a temporary basis only. It was made clear at the time and subsequently that the leave of the evacuated Kosovans would not be extended and that they would be expected to return to Kosovo as soon as it was safe to do so.

  The UNHCR judge that it is now safe for the majority of Kosovan Albanians to return to Kosovo and this has been exemplified by the one million Kosovans who have voluntarily chosen to return since July 1999.

  The Government have given every assistance to Kosovan Albanians who wish to return to Kosovo permanently by funding two voluntary assisted return programmes and giving each returning person a relocation grant. The current programme and grant will run until 25 June. If, at the end of the 12-month period, people do not choose to return voluntarily and there are no protection or other humanitarian reasons to prevent them from doing so, I regret that consideration will be given to enforcing their return. It is the Government's hope that the generosity of this country in affording protection to the Kosovan Albanians in their hour of need will not be overlooked in this way and that such action does not have to be taken.

  There have been no enforced removals to Kosovo in the last 12 months.

  Mr. Hilary Benn
  To ask the Secretary of State for the Home Department how many refugees from Kosovo have returned home from the United Kingdom in each of the last 12 months. [122733]

  Mrs. Roche
  The current voluntary return programme from the United Kingdom began on 26 July 1999 and will end on 25 June. The programme is open both to those Kosovans who arrived in the United Kingdom under the Humanitarian Evacuation Programme (HEP) and to independent arrivals. As of 10 May, 1,280 Kosovans who arrived in the United Kingdom under the HEP and 370 independent arrivals had returned permanently to Kosovo under the voluntary programme. The table shows the number of Kosovans returning permanently by month since the programme started.
  218W

  Month

  Humanitarian evacuation programme

  Independent arrivals

  July 1999

  148

  1

  August 1999

  460

  32

  September 1999

  303

  115

  October 1999

  79

  48

  November 1999

  60

  29

  December 1999

  28

  43

  January 2000

  16

  26

  February 2000

  4

  14

  March 2000

  35

  18

  April 2000

  57

  22

  May 2000

  90

  22

  Total

  1,280

  370

  In addition, a further 423 Kosovans benefited from the "explore and prepare" programme which operated between 2 December 1999 and 20 April. This programme enabled heads of Kosovan Albanian households, or community leaders who wished to assess the situation in Kosovo, to visit and make the necessary preparations for the permanent return of their families or communities.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for the Home Department what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior civil service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121648]

  Mr. Straw
  The headline pay settlement in the core Home Office was 2 per cent. on the pay bill and, together with the additional funds from staff turnover, staff in post received performance related increases averaging 4.0 per cent. The increases were not staged. In our agencies, staff received average performance related increases as follows:

  Percentage

  Forensic Science Service

  3.67

  Prison Service

  4

  United Kingdom Passport Agency

  4.1

  None of these awards were staged.

  In the Fire Service College, pay negotiations have not been concluded and the information is therefore not yet available.

  Open Government
  Dr. David Clark
  To ask the Secretary of State for the Home Department how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121854]

  Mr. Straw
  The annual Monitoring Report on the Code of Practice on Access to Government Information contains information regarding the operation of the Code during the calendar year, including statistics on the number of requests received under the Code. These statistics are broken down by Department. (Government
  219W
  Departments all submit returns for inclusion in the report.) The statistics relate to the calendar year: it is not possible to break these down into parliamentary sessions.

  The 1998 Monitoring Report was published in July 1999 and contains statistics for that calendar year. The total number of requests received in 1998 was 23,754, of which a total of 22,009 were granted. The breakdown of these requests into individual departments is contained in Appendix 1. Copies of the 1998 report are in the Library. I hope to be able to publish the 1999 Monitoring Report on the Code of Practice on Access to Government Information shortly.

  Demonstrations
  Mr. Evans
  To ask the Secretary of State for the Home Department what measures have been taken to ensure the protection of(a) private and (b) public property during demonstrations involving anarchist groups in (i) London and (ii) elsewhere. [122614]

  Mr. Charles Clarke
  Protection of property during demonstrations is an operational matter for the police service and for the owners or agencies responsible for the property.

  I understand that during the recent demonstrations in London, discussions were held between the Metropolitan Police, the Royal Parks Agency and English Heritage about the best ways to protect property of public importance.

  Hunting with Dogs
  Dr. Gibson
  To ask the Secretary of State for the Home Department what representations he has received from Ministers outside his Department on the issue of hunting with dogs. [122698]

  Mr. Mike O'Brien
  Information relating to internal discussion and consultation is not disclosed under exemption 2 of the Code of Practice on Access to Government Information.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department what plans he has to bring forward a Bill, one of whose aims would be to ban hunting wild mammals with hounds. [122749]

  Mr. Mike O'Brien
  My right hon. Friend the Home Secretary announced in the reply he gave to my hon. Friend the Member for Worcester (Mr. Foster) on 11 November 1999,Official Report, columns 787–88W, how the Government wished to proceed on the issue of hunting with dogs. The Government will offer reasonable time, if necessary, and drafting assistance for this issue to be considered by the House of Commons through a Private Member's Bill on a free vote.

  Mr. Gordon Prentice
  To ask the Secretary of State for the Home Department if he has set the Burns inquiry a deadline for reporting; and if he will make a statement. [122750]

  Mr. Mike O'Brien
  In announcing the inquiry into hunting in the reply given to my hon. Friend the Member for Worcester (Mr. Foster) on 11 November 1999,Official Report, columns 787–88W, my right hon. Friend the Home Secretary stated that the inquiry will be asked to report by late spring this year.

  Police (Chorley)
  Mr. Hoyle
  To ask the Secretary of State for the Home Department when the police cells at Chorley will be brought up to Health and Safety Executive approved standard. [122172]

  Mr. Charles Clarke
  A £300,000 refurbishment of Chorley police station is in progress, and I understand that the police station will meet all applicable health and safety standards when it is complete.

  Mr. Hoyle
  To ask the Secretary of State for the Home Department how many people arrested in Chorley have been detained in police cells in(a) South Ribble and (b) Skelmersdale, in the last year for which figures are available; and of those detained, how many were arrested in Chorley. [122170]

  Mr. Charles Clarke
  This information is not held centrally.

  Mr. Hoyle
  To ask the Secretary of State for the Home Department how many times in the last two years Greater Manchester police have assisted in operations in Chorley. [122173]

  Mr. Charles Clarke
  Officers from Greater Manchester and Lancashire collaborate on routine operations on a day-to-day basis in Chorley and this has proved very successful. There has been only one pre-planned organised collaboration in the area, Operation Coalition, involving both forces.

  Back-up Custody Facilities, Leyland
  Mr. Hoyle
  To ask the Secretary of State for the Home Department at which police station the back-up custody suite to Leyland is located. [122171]

  Mr. Charles Clarke
  There are two back-up custody facilities for Leyland: Chorley is the first and Bamber Bridge the second.

  Family Support
  Ms Kelly
  To ask the Secretary of State for the Home Department (1) how much was spent in each year since 1997 on the Family Support Grant; [122597]

  (2) how much has been spent in each year on the Fathers Fund. [122598]

  Mr. Boateng
  The Family Support Grant is a new programme of funding for voluntary organisations which first became available in 1999. There is no separate Fathers Fund, but each year a theme is selected to focus on particular areas of work. In 1999, the theme was work with boys, young men and fathers. Grants first paid out in the year April 1999–2000 are available for up to three years and for 2000–2001, for up to two years. Expenditure has been as follows:1999–2000

  £1 million in total, of which £474,724 was on work with fathers;

  2000–01

  £3 million in total, including £663,645 on work with fathers.

  Police Corruption
  Dr. Kumar
  To ask the Secretary of State for the Home Department if he will estimate the overall cost of the Lancet inquiry into alleged corruption in the Cleveland police force and breakdown the costs under their main headings; and if he will make a statement. [122701]

  Mr. Charles Clarke
  The cost of the Lancet inquiry to the end of April this year was £2.622 million. This can be broken down as follows:

  £ million

  Cleveland officers (including salaries, overtime and travel/subsistence)

  1.271

  Officers from Northamptonshire, Warwickshire and West Yorkshire (including salaries, overtime and travel/subsistence)

  1.169

  Other costs (accommodation and office expenditure)

  0.182

  Young Offenders Institutions
  Ms Julie Morgan
  To ask the Secretary of State for the Home Department (1) how many inmates of young offenders institutions(a) committed and (b) attempted suicide in each year since 1977; [122747]

  (2) how many cases of self-harm by inmates of young offenders institutions took place in each year since 1977. [122726]

  Mr. Boateng
  The information requested is given in the tables from the earliest year that records are available. Information about attempted suicides is not recorded separately, but is incorporated into figures on self-harm incidents.

  Incidents of self-harm at HMP young offenders institutions 1990–91 to 1999–2000

  Financial year

  Incidents of self-harm

  1990–91

  312

  1991–92

  341

  1992–93

  469

  1993–94

  474

  1994–95

  717

  1995–96

  1,143

  1996–97

  793

  1997–98

  879

  1998–99

  944

  1999–20001

  n/a

  1 Not yet available

  Self-inflicted deaths at HMP young offenders institutions 1988–2000

  Calendar year

  Number of deaths

  1988

  1

  1989

  2

  1990

  2

  1991

  4

  1992

  4

  1993

  1

  1994

  1

  1995

  2

  1996

  6

  1997

  5

  222W

  Self-inflicted deaths at HMP young offenders institutions 1988–2000

  Calendar year

  Number of deaths

  1998

  5

  1999

  8

  20001

  1

  1 As at 16 May 2000

  Notes:

  1. Establishments have been categorised according to their primary role. However, it should be noted that there are a number of other prisons that hold young offenders (eg male remand centres) which are not included.

  2. Incidents do not equate to numbers of prisoners as an individual prisoner may self harm more than once.

  3. Self harm data are derived from information provided by establishments to the Prison Health Policy Unit. These data include information on all attempted suicides.

  4. Prior to 1990, data on self-harm have not been held centrally in a format which permits distinction according to type of establishment.

  5. Prior to 1988, data on suicides have not been held centrally in a format which permits distinction according to type of establishment.

  6. It should be noted that not all self-inflicted deaths conclude with a verdict of suicide.

  Ms Julie Morgan
  To ask the Secretary of State for the Home Department how many cases of(a) rape and (b) assault within young offenders institutions were reported to the authorities in each year since 1997. [122725]

  Mr. Boateng
  The figures for the numbers of assaults of a sexual nature and other assaults in young offender institutions reported to Prison Service headquarters since April 1997 are set out in the table. Separate figures for rape and buggery are not available. Such assaults are included within the figures for assaults of a sexual nature, which also include lesser sexual offences.

  Assaults in young offender institutions (YOIs)

  Year

  Assaults of a sexual nature

  Other assaults

  1997–98

  17

  1,016

  1998–99

  19

  1,501

  1999–2000

  17

  2,757

  Forensic Science Service
  Mr. Streeter
  To ask the Secretary of State for the Home Department what steps he is taking to reduce delays by the Forensic Processing Department in Chepstow in the processing of forensic information relating to recent burglaries in Devon and Cornwall. [122615]

  Mr. Charles Clarke
  I understand that the main involvement of the Forensic Science Service Chepstow Laboratory in these cases has been DNA analysis. The information was provided within 23 days. More generally, the average turn round time for all work in domestic burglary cases over the last six months was 34 days. This year, the Forensic Science Service aims to improve turn round times by the introduction of a classification system whereby cases identified by the customer as urgent or critical are dealt with ahead of standard case types. Further, over the next six months the number of staff is being increased by 15 per cent. to address the balance between demand and capacity in all case types.

FOREIGN AND COMMONWEALTH AFFAIRS

  British Council
  Mr. Wyatt
  To ask the Secretary of State for Foreign and Commonwealth Affairs what has been the percentage increase in the number of countries in which the British Council is represented since(a) 1979 and (b) 1997, and the percentage change in real terms of the Council's grant-in-aid over the same periods. [121825]

  Mr. Hain
  The number of countries in which the British Council is represented increased by 38 per cent. between 1979 and 1997. During this period, the Council received a grant-in-aid from both the FCO and the DFID. The grant-in-aid from the FCO increased by 24 per cent. in real terms (from £83.9 million to £104.1 million) over this period; however, the overall increase was much smaller as the grant-in-aid funding from DFID declined by 56 per cent. in real terms over the same period.

  Angola
  Mr. Pike
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the Government's policy is on the UN Security Council proposal to establish an International Criminal Tribunal for Angola; and what action he is taking to pursue that policy. [122227]

  Mr. Hain
  There is no UN Security Council proposal to establish an International Criminal Tribunal for Angola. We do not consider that the necessary conditions exist at present for the creation of such a tribunal.

  Iraq
  Ms Drown
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proportion of the revenue from sales of Iraqi oil was allocated by the UN for humanitarian supplies to Iraq in each of the last two years. [122511]

  Mr. Hain
  67 per cent. of Iraq's oil revenue is allocated to the UN "oil for food" humanitarian programme. With Iraq once again among the world's five largest oil producers, and since the passage of resolution 1284, able to export unlimited amounts of oil under this programme, a potential $10 billion will be available this year for the humanitarian programme.

  Ms Drown
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the capacity of the Iraqi oil industry to pump the quantity of oil permitted by the UN Security Council. [122504]

  Mr. Hain
  The passage of UN SCR 1284 in December 1999 removed the ceiling on Iraq's exports under the "oil for food" programme. Together with the recent recovery in world oil prices, this has boosted Iraq's oil exports back to—if not above—their peak historical level of around $15 billion per annum, seen only briefly in 1980. Iraq's Oil Minister has also recently announced that Iraq is planning to increase further its oil exports by about 700,000 barrels per day which would put Iraq among the world's top five oil exporters. This means that an estimated $10 billion should be available for the humanitarian programme in Iraq this year.
  224W
  The Iraqi oil industry needs spare parts in order to be able to sustain this level of production. The Security Council doubled to $600 million the allocation from "oil for food" for the purchase of oil spare parts earlier this year in line with the UN Secretary-General's recommendation.

  Ms Drown
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what is the Government's policy on delaying shipments of humanitarian supplies to Iraq by the UN Sanctions Committee; [122502]

  (2) what steps he is taking to help expedite those shipments of humanitarian supplies for Iraq that are being delayed by the UN Sanctions Committee. [122503]

  Mr. Hain
  We expedite the supply of humanitarian goods to Iraq. We take very seriously our responsibility as a member of the Sanctions Committee, and scrutinise closely all applications. The Committee plays a vital role in ensuring that Iraq does not acquire prohibited goods (such as arms and weapons of mass destruction) and that Iraq spends "oil for food" money for the benefit of the Iraqi people and not the Iraqi regime. Some contracts cannot be processed because of insufficient information: lack of end-user details, or even no description of the goods to be supplied. Others are put on hold because there are dual-use concerns or because the goods in question are not humanitarian in nature. In total, we put only a tiny percentage of "oil for foods" contracts on hold (about 1 per cent. overall).

  Under Security Council resolution 1284, which Britain piloted through the Council last year, Sanctions Committee procedures for approving humanitarian contracts have been streamlined to ensure that contracts are processed even more quickly than before. The Committee now reviews all "oil for food" contracts within two (instead of five) working days, and it has agreed lists of foodstuffs, medical, agricultural and educational goods which no longer need to be referred to the Committee but simply notified to the UN Secretariat. Working procedures for an expert group to approve oil spare parts contracts more speedily have also now been agreed.

  Ms Drown
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the conclusion of former UNSCOM officials that Iraq has been disarmed of its weapons of mass destruction. [122535]

  Mr. Hain
  Up until its withdrawal from Iraq in December 1998, UNSCOM consistently reported to the United Nations Security Council that serious gaps remained in Iraq's declarations on chemical and biological weapons and ballistic missiles. In March 1999, the United Nations Disarmament Panel confirmed UNSCOM's analysis. We therefore believe it is essential that Iraq allows United Nations weapons inspectors to resume their work.

  Ms Drown
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the value of humanitarian supplies for Iraq on hold at the UN Sanctions Committee. [122501]

  Mr. Hain
  As at 31 March, 12,225 contracts under the 'Oil for Food' programme, with a value of almost $15 billion had been received by the United Nations
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  Sanctions Committee. Of these, 1,180, with a value of $1.7 billion had been placed on hold. The UK placed holds on only about 1 per cent. of contracts received.

  The UK's policy is to expedite the supply of humanitarian goods to Iraq. We scrutinise all contracts to ensure that Iraq does not acquire prohibited goods (such as arms and weapons of mass destruction), and that it spends 'Oil for Food' money for the benefit of the Iraqi people and not the Iraqi regime. Some contracts are put on hold because there are dual-use concerns or because they lack crucial information, such as end-user details or even a description of the goods to be supplied. The vast majority of holds are released once further information or assurances about end-use are provided.

  Ethiopia and Eritrea
  Mr. Roy
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the present hostilities between Ethiopia and Eritrea. [122922]

  Mr. Hain
  In its resolution 1298(2000) adopted on 17 May, the United Nations Security Council demanded that Ethiopia and Eritrea cease all military action, withdraw military forces, and reconvene proximity talks under the auspices of the Organisation of African Unity. The Security Council imposed, in relation to those two States, a mandatory arms embargo and a ban on the provision of related technical assistance or training.

  The embargo is established for twelve months. At the end of this period the Security Council will decide whether the Governments of Ethiopia and Eritrea have complied with its demands and, accordingly, whether to extend the embargo for a further period. The embargo will be terminated immediately if the Secretary-General reports that a peaceful definitive settlement has been concluded.

  The United Kingdom co-sponsored this resolution, which was adopted in response to the further outbreak of hostilities between Eritrea and Ethiopia. The Security Council has noted with concern the serious humanitarian implications of the fighting for the civilian population.

  The European Union imposed an arms embargo against Ethiopia and Eritrea on 15 March 1999 in response to a United Kingdom proposal, following the adoption on 10 February 1999 of UN Security Council resolution 1227, which urged all States to end all sales of arms and munitions to both countries.

  Kosovo
  Mr. Hilary Benn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the security and safety situation in those areas of Kosovo to which refugees are returning from the United Kingdom; and if he will make a statement. [122729]

  Mr. Vaz
  Since the withdrawal of FRY forces from Kosovo, the security situation for Kosovo Albanians has dramatically improved. UNHCR have indicated that there are now no protection concerns for the great majority of Kosovo Albanians. Over 930,000 refugees have now returned. Some refugees in the UK have made 'explore and prepare' visits funded by HMG. Their final decision on where to settle is however a matter for them.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior civil service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121646]

  Mr. Hain
  The headline pay settlement for Foreign and Commonwealth Office staff was 2.5 per cent. on the paybill and, together with the additional funds from staff turnover, staff in post received performance-related increases averaging 3.95 per cent. The increases were not staged.

  Diamond Trade
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with his EU counterparts concerning the Diamond High Council in Antwerp. [122705]

  Mr. Hain
  My right hon. Friend the Foreign Secretary discussed the issue of conflict diamonds with his Belgian counterpart in January. Officials are also in contact with the Belgian Government and the Diamond High Council on this issue. We welcome the participation of the Diamond High Council in the recent Kimberley Technical Forum on conflict diamonds which aimed to identify measures to curb the trade in conflict diamonds. The Foreign Secretary will be pressing strongly for support for such action, including the possibility of a global certification scheme for rough diamonds, at a meeting of G8 Foreign Ministers in July.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent UN report on the diamond trade in Sierra Leone. [122704]

  Mr. Hain
  We are not aware of any recent UN report on the diamond trade in Sierra Leone. We are however deeply concerned about the contribution of the illicit diamond trade to the conflict in Sierra Leone. My right hon. Friend the Foreign Secretary will be pressing strongly for G8 support for action on diamonds, including the possibility of a global certification scheme for rough diamonds, at a meeting of G8 Foreign Ministers in July.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with De Beers diamond company; and if De Beers have indicated the changes to their internal structures which they have made to ensure compliance with United Nations Security Council resolution 1173. [122703]

  Mr. Hain
  I met with De Beers in January this year and emphasised the need for the diamond industry to respond with specific measures to concerns over the trade in illicit diamonds which fuel conflict. We welcome De Beers' commitment to operate in strict compliance with United Nations Security Council resolution 1173 (1998), including through a guarantee that they will not trade in diamonds which come from any area in Africa controlled by forces rebelling against the legitimate and internationally recognised Government of the relevant country.
  227W
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress he has made in persuading the United Nations Security Council to amend resolution 1173 to require all diamonds to carry a certificate of origin. [122706]

  Mr. Hain
  United Nations Security Council resolution 1173 (1998) deals specifically with Angola and is therefore not an appropriate means through which to pursue action to control the wider international trade in illicit diamonds. The Foreign Secretary will be pressing strongly for G8 support for action on diamonds, including the possibility of a global certification scheme for rough diamonds, at a meeting of G8 Foreign Ministers in July.

  Sudan
  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the UN Special Rapporteur's report on Sudan concerning the role of oil in the conflict. [122338]

  Mr. Hain
  We remain concerned about reports of human rights abuses associated with oil exploration in the Sudan. We regularly raise them and other human rights issues with the Government of Sudan including through the EU/Sudan dialogue. The EU made clear its concerns about human rights in the resolution it sponsored at this year's UN Commission on Human Rights.

  Dr. Tonge
  To ask the Secretary of State for Foreign and Commonwealth Affairs what reports he has received concerning airstrips and roads built by oil companies being used by the Government of Sudan for the purpose of bombing raids. [122341]

  Mr. Hain
  We are aware of reports suggesting that airstrips in the oil areas of Sudan may also have been used for military purposes.

  We have made clear to the Government of Sudan our concern about aerial bombing raids and have called on them to abstain from any attacks on civilian targets.

  Human Rights
  Mr. Paul Marsden
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will encourage the IMF to develop a detailed audit trail for the sale of oil reserves by countries that abuse human rights; and if he will make a statement. [115721]

  Mr. Andrew Smith
  I have been asked to reply.

  The Chancellor of the Exchequer is the UK's Governor of the IMF and is responsible for the management of UK interests at the Fund. The IMF is an International Financial Institution set up to promote a sound world financial system and broad-based economic growth through assistance to countries experiencing unsustainable external imbalances and related economic difficulties. The IMF's remit, as set out in the Articles of Agreement, emphasises that only economic conditions shall be relevant to its decisions.

  The IMF's Executive Board has, in the last month, agreed to the adoption of a strengthened framework of measures to safeguard the use of Fund resources and to deter misreporting and misuse of Fund resources. A key part of this will be a requirement that all countries making use of Fund resources will be required to publish annual
  228W
  central bank financial statements that are independently audited in accordance with internationally accepted standards.

CULTURE, MEDIA AND SPORT

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Culture. Media and Sport what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121654]

  Mr. Chris Smith
  In my Department the headline pay settlement was 3.7 per cent. of the paybill. The average performance-related increase in salaries for staff below the Senior Civil Service was also 3.7 per cent. because there were no additional funds available from staff turnover. Other benefits increased the value of the settlement to 4 per cent.

  In the Royal Parks Agency the headline pay settlement was 3.16 per cent. and, together with the additional funds from staff turnover, the average performance related increase in salary and allowances was 3.74 per cent.

  The increases were not staged.

  National Lottery
  Mr. Alexander
  To ask the Secretary of State for Culture, Media and Sport what data he has collated on National Lottery ticket sales by(a) constituency and (b) social class. [122269]

  Kate Hoey
  A table showing National Lottery ticket sales by constituency for the first five years of the Lottery's operation has been placed in the Libraries of the House. (This table is reproduced in House of Commons Library Research Paper 00/24.)

  The National Lottery Commission supports a social research programme on participation in the National Lottery. Report No. 1 of this programme, published in May 1999, contains data on participation by social class. Copies of this report have also been placed in the Libraries of the House.

SOCIAL SECURITY

  Child Benefit
  Ms Kelly
  To ask the Secretary of State for Social Security what is the(a) forecast cost of introducing the Income Support supplement to Child Benefit and (b) projected number of claimant families on a year by year basis. [122611]

  Angela Eagle
  There is no Income Support supplement to Child Benefit. However, the above inflation increases to Child Benefit from April 1999 and April 2000 were reflected in Income Support to ensure that the families on the lowest incomes benefit from the increases. The information contained in the table shows the estimated cost and number of claimant families.
  229W

  Estimated cost (£ million)

  Number of claimant families

  1999–2000

  80

  1,230

  2000–01

  140

  1,215

  2001–02

  160

  1,200

  Notes:

  1. Figures based on Budget 2000 forecast.

  Child Benefit expenditure 1997–98 to 2001–02

  Total expenditure (£000)

  Amount of total expenditure attributable to increase since 1997 (£000)

  Total number of children (Thousand)

  Total number of children in respect of whom payment made (Thousand)

  1997–98

  7,088

  138

  12,729

  12,729

  1998–99

  7,295

  352

  12,716

  12,716

  1999–2000

  8,216

  1,371

  12,689

  12,689

  2000–01

  8,531

  1,724

  12,763

  12,763

  2001–02

  8,804

  2,017

  12,754

  12,754

  Notes:

  1. Increased expenditure includes both Retail Prices Index and discretionary uprating.

  2. Figures based on Budget 2000 forecast.

  3. Caseload figures are consistent with the Departmental Report 2000.

  Open Government
  Dr. David Clark
  To ask the Secretary of State for Social Security how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121862]

  Mr. Rooker
  I refer my right hon. Friend to the written answer given today by my right hon. Friend the Secretary of State for the Home Department,Official Report, columns 216–17W.

  Green Transport
  Mr. Don Foster
  To ask the Secretary of State for Social Security if he will list the key buildings for which his Department(a) submitted and (b) did not submit green transport plans by March. [122559]

  Mr. Bayley
  The information requested is not available in the format requested. Such information as is available is in the following lists.

  Many offices submitted green transport plans covering a number of buildings in their locality which comprise the office management unit.

  Offices that submitted plans

  Leytonstone

  Romford

  Whitechapel

  Stratford

  Poplar

  Tottenham

  Walthamstow

  Norwich Mountergate

  Lowestoft

  Peterborough

  Braintree

  Harlow

  Ipswich

  Canning Town

  230W
  2. Expenditure figures rounded to nearest million.

  3. Caseload figures rounded to nearest 5,000.

  Ms Kelly
  To ask the Secretary of State for Social Security what was the(a) total and (b) forecast level of expenditure since 1997 on increasing Child Benefit; and in respect of how many children payments were made. [122599]

  Angela Eagle
  The information is in the table.

  Clacton

  Stoke Newington

  Great Yarmouth

  Colchester

  Edmonton

  Hoxton

  Hackney

  Basildon

  Bury St. Edmonds

  Ilford

  Grays

  Cambridge

  Wood Green

  Barking

  Chelmsford

  Southend

  Edgware

  Paddington

  Highgate

  Ealing

  Acton

  Euston

  Glasgow Benefit Centre

  Aylesbury

  Watford

  Lewisham

  Streatham

  Brixton

  Balham Steel House

  Balham Irene House

  Peckham

  Fulham

  Aldershot

  Andover

  Basingstoke

  Southampton

  231W

  New Forest

  Fareham

  Brighton

  Hastings

  Worthing

  Bognor

  Eastbourne

  Crawley

  Hove

  Chichester

  Lewes

  IRC Worthing

  Haywards Heath

  Sittingbourne

  Tunbridge Wells

  Broadstairs

  Bromley

  Canterbury

  Chatham

  Dover

  Folkestone

  Gravesend

  Sutton

  Winchester

  Croydon

  Guildford

  Bloomsbury

  Ashford

  Thanet

  Southwark

  Bexley

  Portsmouth

  Kingston

  Isle of Wight

  Makerfield Benefit Centre

  Launceston

  Sutton in Ashfield

  Skegness

  Scunthorpe

  Grimsby

  Grantham

  Basford

  Nottingham Castlegate

  Nottingham Pearson

  Coventry Cofa Court

  Bridgend

  Llangefeni

  Porth

  Llanelli

  Aberystwyth

  Cwmbran

  Morriston

  Newport

  Aberdare

  Ammanford

  Merthyr Tydfil

  Caerphilly

  Ebbw Vale

  Tonypandy

  232W

  Neath

  Rhyl

  Blackwood

  Pontypridd

  Cardiff Heron House

  Porthmadog

  Colwyn Bay

  Pembroke

  Barry

  Wrexham

  Gwyneddigion

  Flint

  Carmarthen

  Swansea

  West Derby

  Rochdale

  Middleton

  Bury

  Oldham

  Failsworth

  Sale

  Stockport

  Hyde

  Wigan

  Leigh

  Bolton

  Burnley

  Blackburn

  Chorlton

  Openshaw

  Longsight

  Manchester Baskerville

  Manchester Wilmslow

  Manchester Cheetham

  Manchester Wythenshawe

  Wythenshawe Remote Store

  Doncaster

  Hull

  Bradford

  Mexborough

  Scarborough

  Rotherham

  Keighley

  Sheffield North-East

  Bridlington

  Halifax

  Doncaster

  Hull

  Bradford

  Dewsbury

  Goole

  Harrogate

  Scarborough

  Northallerton

  Hull

  Sheffield South-West

  York Monkgate

  Leeds Hume

  Barnsley

  Hemsworth

  233W

  Sheffield South-East

  Sheffield Bents Green

  Leeds Century House

  Leeds Park Place

  Leeds East Southern

  Wakefield Crown House

  Pontefract Enterprise

  Castleford Wheldon road

  Bede House Tyneside

  Wear View

  Bishop Auckland

  Middlesbrough

  Stockton

  Peterlee

  Darlington

  Durham

  North Shields

  Hexham

  Wouldhave House

  Blyth

  Ashington

  Newcastle St. James

  Byker

  Sexton House

  Cumbernauld

  Dumfries

  Ayr

  Glasgow Partick Benalder

  Glasgow Shettleston

  Glasgow South-West

  Elgin

  Glasgow Anniesland

  Glasgow Provan

  Greenock

  Kilmarnock

  East Kilbride

  Glasgow Bridgeton

  Irvine

  Clydebank

  Inverness

  Glasgow Laurieston

  Glasgow Springburn

  Glasgow Maryhill

  Glasgow Pitt street

  Greenock Crosshore street

  Renfrew

  Cowdenbeath

  Dunfermline

  Kirkaldy

  Leven

  Hamilton

  Bellshill

  Falkirk

  Stirling

  Motherwell

  Coatbridge

  Galashiels

  Edinburgh East

  Edinburgh City

  Peterhead

  234W

  Bathgate

  Leith

  Arbroath

  Edinburgh Argyle House

  Perth

  Dundee

  Aberdeen Greyfriars House

  Bootle DBC

  Bristol DBC

  Cop Lane

  Glasgow DBC

  Heywood DBC Store

  Leeds DBC

  Midlands DBC

  Newcastle Arden House DBC

  Preston Duchy House

  Preston Elizabeth House

  Preston Palatine House

  Preston Red Rose House

  Scholefield Mill Nelson DBC

  Sutton DBC

  Wales DBC

  Warbreck House (Blackpool)

  Wembley DBC

  Hinchley Wood

  Canon Park

  Tyne View Park (Newcastle)

  Norcoss (Blackpool)

  Quarry House (Leeds)

  Sutton Coptall House

  Bloomsbury Whittington House

  Glasgow Wellington House

  Newcastle Manorview

  Cardiff Oxford House

  Birmingham Auchinleck

  Leeds York House

  Falkirk Callender Park

  Falkirk Antonine House

  Dudley Pedmore

  Dudley Quay House

  Birkenhead Great Western

  Birkenhead St. Marks

  Sheffield Bents Green

  Sheffield Chesham

  Sheffield Premier House

  Liverpool CSAC

  Cardiff CSAC

  Basingstoke CSAC

  Glasgow CSAC

  Plymouth CSAC

  Hastings CSAC

  Peel Park

  Durham House

  Lytham St. Annes

  Ilford Park Polish Home

  235W
  Offices which did not submit plans

  Hendon

  Barnet

  St. Albans

  Wellingborough

  Bracknell

  Banbury

  Reading

  Hertford

  Stevenage

  Slough

  Oxford

  Bedford

  Hounslow

  Neasden

  Luton

  High Wycombe

  Northampton

  Trowbridge

  Plymouth

  Barnstaple

  Bristol East

  Gloucester

  St. Austell

  Swindon

  Poole

  Bournemouth

  Bath

  Weston-Super-Mare

  Plymouth

  Cheltenham

  Salisbury

  Weymouth

  Taunton

  Exeter

  Bristol

  Torbay

  Truro

  Yeovil

  Bristol

  Chippenham

  Bridgwater

  Penzance

  Willand Blackdown

  Lichfield

  Chesterfield

  Newcastle under Lyme

  Loughborough

  Leicester

  Derby

  Boston

  Worksop

  Longton

  Nottingham Station street

  Kings Lynn

  Lincoln Orchard street

  Mansfield

  Hanley

  Cannock

  Ilkeston

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  Derby

  Burton on Trent

  Lincoln Viking House

  Hereford

  Smethwick

  Birmingham Poplar road

  Shrewsbury

  Birmingham high street

  Birmingham Bristol road

  Birmingham St. Margarets

  Telford

  Wolverhampton

  Birmingham Summer Row

  Birmingham Soho

  Birmingham Coventry road

  Birmingham Ravenhurst

  Walsall

  West Bromich

  Leamington Spa

  Worcester

  Dudley

  Rugby

  Birmingham Claredon House

  Nuneaton

  Birmingham Walsall road

  Halesowen

  Redditch

  St. Helens

  Lytham

  Liverpool Edgehill

  Liverpool Garston

  Ellesmere

  Widnes

  Kendall

  Northwich

  Workington

  Warrington

  Liverpool

  Crewe

  Preston

  Blackpool

  Whitehaven

  Carlisle

  Liverpool Bootle

  Barrow

  Southport

  Liverpool

  Birkenhead

  Wallasey

  Lancaster

  Skelmersdale

  Liverpool Kirkby

  Liverpool Belle Vale

  Chester

  Liverpool Toxteth

  Preston Holborn House

  Manchester Salford Quays

  Leeds Trevelyan Square

  Manchester Westpoint.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Social Security what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121658]

  Mr. Rooker
  The headline pay settlement for the Department, its agencies and its non-departmental public bodies was 2.80 per cent. on the paybill. Together with the additional funds from staff turnover, staff in post received performance related increases averaging 4.46 per cent. The increases were not staged.

  Stakeholder Pensions
  Mrs. Lait
  To ask the Secretary of State for Social Security what the target market is for stakeholder pensions; and what the definition of success in that market will be before the Stage 2 of the State Second Pension is introduced. [122592]

  Mr. Rooker
  Stakeholder pensions are primarily intended for moderate earners—those earning between about £10,000 and £20,000 a year—but many higher earners will also be able to take advantage of the lower charges, greater flexibility, and simpler tax regime which stakeholder pension schemes will introduce.

  The Pensions Green Paper explains that we expect the new State Second Pension to become a flat-rate scheme for those on lower earnings when stakeholder pension schemes have established themselves as low-cost, value-for-money, funded second pensions.

  Fraud
  Mr. Cox
  To ask the Secretary of State for Social Security how many people have been convicted of benefit fraud in the UK during the last 12 months. [122075]

  Mr. Rooker
  The number of people convicted of benefit fraud in the 12 months from April 1999 to March 2000 was 9,752. In the same period the Benefits Agency issued 5,594 cautions and 4,702 administrative penalties (Total 20,048).

  Mr. Boswell
  To ask the Secretary of State for Social Security if he will make a statement on the scale of benefit fraud attributable to disability benefits and on action being taken to combat it. [121686]

  Mr. Rooker
  [holding answer 15 May 2000]: Latest figures show that 6.5 per cent. of claims to Invalid Care Allowance (ICA) and 1.5 per cent. of Disability Living Allowance (DLA) cases showed fraud.

  Within the two main disability benefits—Disability Living Allowance and Attendance Allowance—securing the gateway to the benefits and dealing with some claimants' failure to report changed circumstances are crucial to cutting the level of overpayment due to fraud and error. We are seeking better sources of evidence to substantiate claims. We are also ensuring that claimants know more about the purpose of these benefits and understand their responsibilities for reporting change. We shall achieve this by making direct contact with the claimant at the start of the claim and by checking at regular intervals to ensure that entitlement remains correct.

  Pensions
  Mr. Peter Bottomley
  To ask the Secretary of State for Social Security if he will estimate the number of pensioners who will receive basic State Pension increases(a) above and (b) below 70p a week when the next uprating of pensions takes effect. [121504]

  Mr. Rooker
  For a pensioner to receive an increase of greater than/less than 70p in 2001–02, based on the projected rate of inflation of September 2000, they would have to be receiving a basic State Pension of greater than/less than approximately £21 per week in 2000–01. This is 31 per cent. of the full Category A rate of basic pension.

  The information is in the table.

  Estimates for 2001–02

  Thousand

  Above 70p

  Below 70p

  Total

  Great Britain

  10,020

  130

  10,150

  Overseas (non-frozen)

  240

  140

  380

  Total

  10,250

  270

  10,520

  Notes:

  1. Estimates based on an assumed uprating in April 2001 of 3.4 per cent.

  2. Figures rounded to the nearest 10,000 and may not sum as a result.

  3. Estimates have been provided by the Government Actuary Department.

  4. Figures do not include an estimated 480,000 frozen rate overseas cases who will not receive an increase in their basic State Pension.

HEALTH

  AIDS-HIV
  Mr. Gerald Howarth
  To ask the Secretary of State for Health by how much life expectancy is reduced from first diagnosis on average for those suffering from AIDS and HIV. [120673]

  Yvette Cooper
  The information is not available in the form requested.

  For those whose deaths have been reported, the average age at HIV diagnosis and AIDS diagnosis, and the average interval between diagnosis and death (ie survival) are shown in the table.

  Years

  Average age at diagnosis

  Average interval between diagnosis and death

  For men

  HIV

  35.6

  4.1

  AIDS

  38.3

  1.4

  For women

  HIV

  29.9

  3.4

  AIDS

  32.1

  1.2

  Note:

  Any patient whose date of death is not known has been excluded.

  Source:

  United Kingdom data to the end of March 2000 from the Communicable Disease Surveillance Centre, Public Health Laboratory Service.
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  The HIV/AIDS figures in the table do not include the contribution to survival by those diagnosed but still living and thus represent the worst-case scenario. Factors affecting survival after an HIV or AIDS diagnosis include: (i) the level of immune depletion at the time of diagnosis; (ii) the age of the patient and (iii) the availability of treatments effective in delaying disease progression.

  People living with HIV and AIDS are currently benefiting from combination drug treatments that became available in the mid-1990s. These treatments are now prolonging life and have been associated with a reduction in the number of HIV-related deaths to about one-third of their previous level.

  Folic Acid
  Mrs. Brinton
  To ask the Secretary of State for Health which bodies he will consult concerning the conclusions and recommendations of the Committee on Medical Aspects of Food Policy in relation to folic acid and the prevention of disease; and what issues the consultation will cover. [120986]

  Yvette Cooper
  This will be a public consultation. The consultation document will be placed in the Library, available on the Department of Health and Food Standards Agency websites (www.doh.gov.uk and www.foodstandards.gov.uk respectively), and circulated to a wide range of public health, consumer and industry interests. The consultation will cover the full range of issues relating to the fortification of flour with folic acid.

  Osteoporosis
  Ms Atherton
  To ask the Secretary of State for Health what provision has been made available on the National Health Service for the percutaneous vertebroplasty operation to treat osteoporosis; and if he will make a statement. [121083]

  Yvette Cooper
  The percutaneous vertebroplasty operation to treat osteoporosis is an expensive and relatively new procedure, the clinical effectiveness of which remains unproven. All new technologies such as this need to be fully evaluated before they can be generally recommended.

  In-vitro Fertilisation
  Mr. Kidney
  To ask the Secretary of State for Health when he will publish the survey of IVF provision throughout the country undertaken by his Department. [121482]

  Yvette Cooper
  We hope to publish the results of the survey of in-vitro fertilisation provision shortly.

  Skin Cancer
  Ms Kingham
  To ask the Secretary of State for Health what actions her Department is taking to educate the public regarding the dangers of skin cancer. [121521]

  Yvette Cooper
  We are taking a number of measures to educate the public regarding the dangers of skin cancer:
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  We are producing this summer a range of new posters and a fact sheet on sun protection which is available from Health Promotion England Customer Services, Marston Book Service, P.O. Box 269, Abingdon, Oxford OX14 4YN.

  We will continue the Sun Know How website currently at: http://www.hea.org.uk/campaigns/sun-know-how/index.html while sun awareness information for schoolchildren is available on the Wired for Health website: www.wiredforhealth.gov.uk

  This summer, we are continuing to fund the Meteorological Office to provide information about the Solar UV Index in forecasts tailored specifically for television and radio weather presenters.

  Ultraviolet radiation can damage the skin and lead to skin cancer. Sunlight is the main source of ultraviolet radiation. The Chief Medical Officer's advice is:
  Babies of all skin colours should be kept out of direct sunlight.
  White skinned people (especially those whose skin burns easily) need to take great care when out in the sun. Sunburn increases the risk of skin cancer—cover up, use a sunscreen of factor 15 or more and avoid the midday sun during the summer months.
  Brown skinned people have a much lower risk of sunburn in the UK but still need to take care if the sun is very strong. Cover up, seek shade and use a high factor sunscreen in hot climates.
  Black skinned people are unlikely to burn and have a very low risk of skin cancer, but too much sun can cause wrinkles and premature aging for people of all skin colours.
  Everybody can suffer from heat exhaustion and dehydration, so if the sun is hot drink plenty of water and moisturise dry skin.
  Look out for moles that change shape or colour; become bigger, itchy or inflamed; that weep or bleed. These may be symptoms of skin cancer and should be checked.

  Prostate-related Illnesses
  Mr. Sarwar
  To ask the Secretary of State for Health what plans the Government have to continue and develop further research into prostate-related illnesses. [121471]

  Yvette Cooper
  Government 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.

  Since 1997 we have committed over £800,000 to new research projects on prostate cancer, through the Medical Research Council and through the Department of Health. 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 United Kingdom. It is being run by the MRC and includes Departmental representatives and the major cancer research charities. At the Department's request, the Forum considered the issue of prostate cancer at its first meeting

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  on 10 January. It 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.

  In addition the Department is spending approximately £550,000 on research into benign prostatic hyperplasia.

  Asthma
  Mr. Paul Marsden
  To ask the Secretary of State for Health if he will make a statement on the health risks of asthma sufferers drinking soya milk. [121760]

  Yvette Cooper
  It is recognised that foods such as soya can combine with other factors such as throat and chest infections, allergies to dust mites, pollens, pets, irritants such as cigarette smoke etc. to provoke or exacerbate asthmatic attacks. However, food is seldom the only factor. For those individuals who are not allergic to soya, we are not aware of any particular risks to asthma suffers of drinking soya milk.

  GP Item of Service System
  Mr. Sheerman
  To ask the Secretary of State for Health what assessment he had made of the benefits of adopting the system of item of service for general practitioners. [122073]

  Mr. Denham
  Item of service payments to general practitioners are one of the components of the national general medical services contract. The contract is under continual review to ensure it encourages delivery of the best service to patients.

  Hospital Admissions
  Mr. Brake
  To ask the Secretary of State for Health what was the average cost of a single hospital admission in(a) Bromley Health Authority and (b) North Cumbria in the last 12 months for which figures are available. [122366]

  Mr. Denham
  The average cost of a single hospital admission within Bromley Health Authority was £1,154, compared with £1,269 for North Cumbria Health Authority.

  NHS Reform
  Mr. Swayne
  To ask the Secretary of State for Health what the budget is for the current public consultation regarding the(a) future and (b) reform of the NHS. [122140]

  Mr. Denham
  [holding answer 15 May 2000]: The overall cost of the public consultation will depend upon the nature of the public response, but we are meeting the costs from existing resources following reprioritisation within the Department.
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  All staff who are working on the National Plan have either been seconded from the National Health Service or Government. The cost of producing 1,000,000 leaflets for staff is around £55,000 and of producing 12,000,000 leaflets for the public is around £200,000. Other public involvement activity, which includes the public fora and focus groups, will cost around £85,000.

  The consultation will help shape the National Plan which will underpin the way in which the additional resources for the NHS over the next four years of £4.2 billion in 2000–01, £3.7 billion in 2001–02, £4.1 billion in 2002–03 and £4.4 billion in 2003–04 will be used for the modernisation of the NHS.

  National Alcohol Strategy
  Mr. Corbett
  To ask the Secretary of State for Health when he intends to publish the national alcohol strategy. [122390]

  Yvette Cooper
  [holding answer 16 May 2000]: The Department plans to launch a consultation paper about a National Strategy to Tackle Alcohol Misuse in England later this year. After a sufficient period for comment the strategy will be published.

  Female Circumcision
  Ms McCafferty
  To ask the Secretary of State for Health what guidance his Department issues to health authorities concerning the operation of the Prohibition of Female Circumcision Act 1985. [122493]

  Yvette Cooper
  [holding answer 17 May 2000]: "Working Together to Safeguard Children" was issued to health authorities jointly by the Department of Health, the Home Office and the Department for Education and Employment in December 1999. It is also addressed to those who work in the education services, the police, social services, the probation service, and others working in contact with children. Reference to female genital mutilation highlights the importance of focusing on preventive strategies where practising populations are known to live.

  Websites
  Mr. Maclennan
  To ask the Secretary of State for Health, pursuant to his answer of 19 April 2000,Official Report, column 518W, on websites, if he will list the sites under his responsibility, for which a company provides a technical service, free of charge, towards creating the site, and on which the company is mentioned; and if he will (a) list the company and (b) estimate the market value of this publicity for the company in each case. [122746]

  Ms Stuart
  No company providing a website technical service free of charge is mentioned on the Department's websites.

  For National Health Service websites, the NHS 50th site was sponsored by British Telecom, and the NHS Direct Online website currently does not advertise the site development company. Both websites are accessible to all via the internet, including the NHS. The NHS Direct Online was visited by 1.5 million people on its first day of operation. Any market value of publicity for companies

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  mentioned on these, or the numerous other NHS websites, is not held centrally, and could not be collected except at a disproportionate cost.

  TB Vaccination
  Dr. Tonge
  To ask the Secretary of State for Health what his policy is on TB vaccination for young people at school. [118774]

  Yvette Cooper
  I refer the hon. Member to the reply I gave the hon. Member for Brentwood and Ongar (Mr. Pickles) on 3 May 2000,Official Report, column 166W.

  Breast Cancer
  Angela Smith
  To ask the Secretary of State for Health what representations he has received regarding the availability of qualified and experienced radiographers to undertake breast cancer screening. [120083]

  Yvette Cooper
  We are currently considering with the professional bodies the capacity and workforce of the breast screening programme, in view of the growing numbers of women eligible for breast screening as those born in the post-war years reach the age of 50.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Health what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121653]

  Ms Stuart
  The headline pay settlement was 2.3 per cent. on the total pay bill and, together with the additional funds from staff turnover, staff in post received performance related pay increases averaging 4 per cent. The increase was not staged.

  Chemotherapy
  Dr. Gibson
  To ask the Secretary of State for Health what percentage of cancer patients have received chemotherapy as part of their treatment for each of the last five years. [122695]

  Yvette Cooper
  The information requested is not currently available. However, Professor Mike Richards, the National Cancer Director, and the Cancer Services Analysis Team are about to undertake a national survey of chemotherapy services. This survey will include data on the number of patients receiving chemotherapy and the volume of drugs used. The survey will be undertaken during the next six months and the results will be available by the end of the year.

  Pharmacists
  Mr. David Heath
  To ask the Secretary of State for Health what representation of pharmacists there is on the NHS Modernisation Action Team. [122118]
  244W
  Ms Stuart
  Professor Alison Blenkinsopp of the Department of Medicine Management at Keele University is a member of the Patient Care (Empowerment) Modernisation Action Team.

  Pharmacy Strategy
  Mr. David Heath
  To ask the Secretary of State for Health when he will publish the Government's pharmacy strategy. [122117]

  Ms Stuart
  I refer the hon. Member to the reply I gave my hon. Friend the Member for Edmonton (Mr. Love) on 4 April 2000,Official Report, column 394W.

  Health Visitors
  Ms Kelly
  To ask the Secretary of State for Health how much has been spent on the provision of health visitors in each year since 1997; and if he will estimate how many children were seen in this period. [122558]

  Yvette Cooper
  The amount of expenditure on the provision of health visitors is not separable from amounts spent in other areas of the community health services. Estimates of the number of children aged under 16 seen by health visitors are contained in the table:

  Number of children aged under 16 seen by health visitors

  Thousand

  Year

  Number

  1996–97

  2,411

  1997–98

  2,358

  1998–99

  2,309

  Source:

  Department of Health return KC55 Statistics Division 2B

  Over 90 per cent. of children seen by health visitors are aged 4 years or under.

  Technicians
  Dr. Tonge
  To ask the Secretary of State for Health what plans he has (1) to introduce national schemes to promote the training and recruitment of prosthetic and orthotic technicians; [122340]

  (2) to restore apprenticeship schemes in the NHS for prosthetic and orthotic technicians. [122342]

  Mr. Denham
  The training and recruitment of prosthetic and orthotic technicians are the responsibility of local National Health Service employers.

  The recently published "Review of Workforce Planning" acknowledges that there are a number of staff groups playing important roles in service delivery who currently sit outside mainstream workforce planning and funding arrangements. The review states that it is important that their training and development needs are properly identified and considered.

  A National Advisory Group has begun work to determine the current profile of the orthotist and prosthetist workforce and education arrangements. The analysis will include consideration of the number, training and role of orthotic and prosthetic technicians.

  Death Statistics
  Mr. Brake
  To ask the Secretary of State for Health how many deaths were recorded in the(a) Bromley and (b) North Cumbria Health Authority area in each month for the last five years. [122367]

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

  Numbers of deaths by month of occurrence 1994–98, Bromley and North Cumbria Health Authorities

  Bromley

  North Cumbria

  1994

  1995

  1996

  1997

  1998

  1994

  1995

  1996

  1997

  1998

  January

  300

  319

  316

  402

  284

  455

  397

  433

  435

  326

  February

  235

  243

  276

  241

  226

  332

  308

  357

  318

  297

  March

  267

  302

  274

  235

  261

  295

  350

  312

  286

  377

  April

  247

  229

  226

  217

  279

  295

  285

  317

  291

  352

  May

  228

  250

  250

  212

  232

  306

  338

  288

  299

  291

  June

  247

  229

  223

  236

  245

  291

  287

  276

  321

  285

  July

  244

  253

  221

  206

  252

  290

  254

  300

  242

  299

  August

  232

  234

  235

  229

  213

  280

  267

  265

  241

  318

  September

  253

  236

  204

  229

  212

  273

  290

  279

  294

  276

  October

  258

  252

  224

  253

  242

  308

  326

  278

  298

  315

  November

  264

  260

  258

  246

  259

  304

  339

  279

  309

  301

  December

  276

  368

  352

  262

  319

  389

  400

  372

  363

  369

INTERNATIONAL DEVELOPMENT

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for International Development what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in her Department for 1999–2000; and to what extent the pay awards were staged. [121657]

  Clare Short
  The headline pay settlement was 2.5 per cent. on the paybill and, together with the additional funds from staff turnover, staff in post received performance-related increases averaging 4 per cent. The increases were not staged.

  Green Transport
  Mr. Moore
  To ask the Secretary of State for International Development if she will list the key buildings for which her Department(a) submitted and (b) did not submit green transport plans by March. [122618]

  Mr. Foulkes
  The Department for International Development has UK offices in London and East Kilbride. In line with the target set in the Integrated Transport White Paper the Green Transport Plan for the Department's London offices (94 Victoria Street, plus annexes at 20 Victoria Street and at Glen House) was completed and published before the end of March 2000. The Green Transport Plan for the East Kilbride office was completed before the end of March, but printing problems slightly delayed its publication until April 2000.

  Ethiopia
  Mr. Robertson
  To ask the Secretary of State for International Development what is the value of(a) food aid and (b) other aid which her Department has provided
  246W
  Letter from John Pullinger to Mr. Tom Brake, dated 18 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question about the number of recorded deaths in Bromley and North Cumbria Health Authority for the last five years. I have been asked to reply in the Director's absence.
  The table below gives the number of deaths that occurred in Bromley and North Cumbria Health Authorities each month, for the last five years. The 1999 Health Authority boundaries have been used to give consistent areas over the last five years.

  to Ethiopia during the last month; how much she expects to provide during each of the next three months; and if she will a Statement [120214]

  Mr. Foulkes
  Since January 2000 we have committed over £9.0 million of bilateral food and non-food relief for Ethiopia. Food aid so far promised this year totals over 32,000 metric tonnes (MT), of which over half has been distributed or is in the process of being distributed. In addition, we contribute about 17 per cent. of the cost of EC food aid, estimated to be some 432,000 MT in 2000. 46,665 MT of EU food has already arrived in Djibouti. Non-food inputs often form part of the food aid package and have included the provision of seeds, water tankering and capacity building.

  Departmental Contracts
  Ann Clwyd
  To ask the Secretary of State for International Development what assessment her Department makes of the human rights records of companies applying for her Department's contracts. [122146]

  Mr. Foulkes
  We are currently working with various bodies on ethical aspects of procurement activity. In awarding contracts, we operate within the Government's procurement policy based on value for money.

SCOTLAND

  Open Government
  Dr. David Clark
  To ask the Secretary of State for Scotland how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121851]

  Dr. Reid
  I refer my right hon. Friend to the reply given today by my right hon. Friend the Home Secretary,Official Report, columns 216–17W.

ENVIRONMENT, TRANSPORT AND THE REGIONS

  Index of Local Deprivation
  Mr. Coleman
  To ask the Secretary of State for the Environment, Transport and the Regions what weighting the geographical access to services domain has been given in the compilation of the new Index of Local Deprivation. [121576]

  Ms Beverley Hughes
  The consultation paper on the methodology released in December 1999 proposed that the geographical access to services domain be given a weight of 10 per cent. in the compilation of the overall index. The final weightings of the domains will be announced when the new index is published.

  Mr. Coleman
  To ask the Secretary of State for the Environment, Transport and the Regions on what date he plans to publish the new Index of Local Deprivation; and if he will make a statement. [121573]

  Ms Beverley Hughes
  The Index of Local Deprivation review is on-going. The new index will be published within the next few months.

  Mr. Coleman
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list those local authorities who have risen over 10 places in the latest Index of Local Deprivation and are now in the top 65 places. [121574]

  Ms Beverley Hughes
  The review of the Index of Local Deprivation is on-going. The new index will be published once it is finalised and agreed. A consultation exercise on the methodology of the new index, which included a draft index, closed in January. This draft index showed illustrative rankings of all local authorities in England if the proposals contained in the methodology document were to be adopted. The rankings in the draft index may change as a result of further data checking, further testing of the index and the outcome of the consultation.

  Mr. Coleman
  To ask the Secretary of State for the Environment, Transport and the Regions what percentage of those regeneration funds allocated in England and Wales on the basis of the Index of Local Deprivation were allocated to London Boroughs in 1999–2000; and if he will estimate what percentage would have been allocated to London boroughs if the new Index had been used as the key determinant of the allocation of those resources. [121575]

  Ms Beverley Hughes
  A number of factors determine the allocation of budgets for regeneration programmes including the total amount of resources available, national priorities and the relative needs of each region. One measure used to determine the needs of each region is the Index of Local Deprivation, which is used to inform the allocation of the Single Regeneration Budget and the New Deal for Communities.

  The indicative allocations of resources to regions for all rounds of SRB have been based on the following formula: 50 per cent. according to the regions' share of 1993 population in areas with above average deprivation (based on the 1991 Index of Local Conditions score for each Local Authority district); and 50 per cent. based on the district level deprivation score, for areas with above average deprivation. The SRB is a competitive programme and the
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  final distribution of resources in each year is dependent upon the quality of bids received for new schemes, together with the pattern of commitments from earlier SRB rounds. A national target, introduced under Round 5 of the SRB in 1998, is for 80 per cent. of new money to be allocated in the most deprived areas which, for this purpose, are taken to be the local authority district areas included in the top 50 on one or more of the four measures of deprivation in the 1998 Index of Local Deprivation. The indicative SRB regional allocation for London represented 27 per cent. of total SRB resources for 1999–2000 in England.

  Thirty nine areas have been identified in England in two rounds of the New Deal for Communities programme, of which ten are based in London Boroughs. 26 per cent. of NDC funding, under the first round of the programme, was allocated to London Boroughs in 1999–2000.

  The Review of the Index of Local Deprivation is still on-going. The new Index will be published once it is finalised and agreed. A consultation exercise on the methodology of the new Index, which included a draft index, closed in January. This draft index showed illustrative rankings of all local authorities in England if the proposals contained in the methodology paper were adopted. The figures contained in the draft index may change as a result of further data checking, further testing of the index and the result of the consultation.

  Connexions Service
  Mr. Clappison
  To ask the Secretary of State for the Environment, Transport and the Regions what estimate he has made of the number of partnerships that have come together for the delivery of the Connexions Service. [122455]

  Mr. Wicks
  I have been asked to reply.

  "The Connexions Service: prospectus and specification" which was published on 4 May, invites partners to come together in the 47 Learning and Skills Council areas to develop outline Partnership Proposals which should be submitted by 9 June.

  Fibreglass Insulation
  Mr. Wigley
  To ask the Secretary of State for the Environment, Transport and the Regions, pursuant to the answer of 3 May 2000,Official Report, column 168W, concerning the carcinogenicity of fibre glass products, what advice his Department gives to local authorities about the safest materials that should be used for house insulation; and if he will make a statement. [121967]

  Mr. Meacher
  The Department encourages home insulation but has made no recommendation to local authorities concerning the safest material that should be used for house insulation.

  The Department issued advice to local authorities on man made mineral fibres (including fibre glass) used as house insulation last year through the publication "Asbestos and man made mineral fibres in buildings, practical guidance". The publication is also available on the DETR website (www.environment.detr.gov.uk/asbestos/guide//index.htm).
  249W
  This guidance updates and replaces the advice on man made mineral fibres and loft insulation issued to local authorities in England and Wales in 1987 by the Department of the Environment and the Welsh Office.

  Telecommunications Sites and Masts
  Mr. Hurst
  To ask the Secretary of State for the Environment, Transport and the Regions how many planning applications in England and Wales to install telecommunications masts of more than 15 metres in height were(a) granted and (b) refused in 1999. [122232]

  Ms Beverley Hughes
  The Government do not collect this information.

  Mr. Green
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to enforce the sharing of mobile phone base station sites; and if he will make a statement. [122461]

  Ms Beverley Hughes
  The Government's policy is firmly to encourage mast and site sharing where that is appropriate. Conditions attached to the use of powers granted to individual mobile operators by the Secretary of State for Trade and Industry, and incorporated in their operating licences, include a requirement to investigate mast sharing before seeking to put up any new mast.

  DETR Circular 4/99, "Planning for Telecommunications" makes clear our expectation that developers should provide evidence to local planning authorities that they have carefully considered the use of existing masts, buildings and other structures before seeking to erect any new mast, regardless of size. An authority may be justified in refusing prior approval or planning permission if it considers the evidence regarding the consideration of such alternative sites is not satisfactory.

  Mr. Green
  To ask the Secretary of State for the Environment, Transport and the Regions what plans he has to change the planning regulations for mobile phone masts; and if he will make a statement. [122474]

  Ms Beverley Hughes
  In their response to the report of the Independent Expert Group on Mobile Phones, issued on 11 May 2000, the Government said that they were minded to introduce a requirement for full planning permission for all new telecommunications masts, but would need to consult widely before doing so, including on the purpose and precise scope of any new arrangements. We shall issue a consultation paper on this and related guidance as soon as practicable.

  Sustainable Development Commission
  Mr. Green
  To ask the Secretary of State for the Environment, Transport and the Regions when the Sustainable Development Commission will hold its first meeting; and if he will make a statement. [122462]

  Mr. Meacher
  The Sustainable Development Commission, which will replace the UK Round Table and British Government Panel on Sustainable Development, is expected to begin work in the summer. The DETR is currently in the process of completing appointments to the Commission and hopes to make an announcement on the Chairmanship of the Commission in June. The date of the first meeting will need to be agreed with the Chair, possibly in July. It will be for the Commission to decide the frequency and timing of its meetings from that point, along with its other working arrangements.

  Leasehold Residential Property
  Shona McIsaac
  To ask the Secretary of State for the Environment, Transport and the Regions how many leasehold residential properties there are in each electoral ward in Cleethorpes constituency. [122351]

  Mr. Mullin
  The Survey of English Housing provides estimates of the number of leasehold dwellings in England. The Survey of English Housing cannot produce estimates for parliamentary constituencies.

  Shona McIsaac
  To ask the Secretary of State for the Environment, Transport and the Regions what statutory provisions govern the rights of family members to purchase the freehold of a leasehold residential property they have inherited. [122352]

  Mr. Mullin
  Section 7 of the Leasehold Reform Act 1967 allows certain family members who were resident in a leasehold house at the time of the deceased's death to satisfy the residence test even where they would not normally do so. They must still have resided in the premises for at least three years in the last ten and meet the other conditions that normally apply. We are considering whether to extend these provisions as part of our leasehold reform package.

  For flats, only half the group buying the freehold (enfranchising) need to satisfy the residence test (we propose to abolish the residence test as it applies to collective enfranchisement). Subsection 6(3)(b) of the Leasehold Reform, Housing and Urban Development Act 1993 allows the residence test to be satisfied even where the tenant's previous occupation of the flat was not by right of the lease. Therefore, an individual who inherits a long lease on a flat should be able to participate in enfranchisement in the usual way. Subsection 14(5) deals with the possibility that a participating tenant might die during the enfranchisement process. Section 16 makes provision in the event of the death of the nominee purchaser.

  Shona McIsaac
  To ask the Secretary of State for the Environment, Transport and the Regions what guidelines his Department has issued on setting a price for the purchase of the freehold of leasehold residential properties. [122350]

  Mr. Mullin
  There is no set formula for deciding on the price of a freehold. The Leasehold Reform Act 1967 (as amended) sets out the basic principles to be used when deciding how much should be paid for the freehold of a house. The Leasehold Reform, Housing and Urban Development Act 1993 makes similar provision for flats.

  Guidance on this point is included in our booklets "Leasehold flats: your right to buy the freehold of your building or renew your lease" and "Leasehold houses: your right to buy the freehold of your house or renew your lease". Both are available free of charge from DETR Free Literature, PO Box 236, Wetherby, LS23 7NB. This guidance is for information only—it has no legal authority.

  A14
  Mr. Jenkin
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list all casualties and accidents on the A 14 involving heavy goods vehicles in the last 10 years. [122484]
  251W
  Mr. Hill
  [holding answer 16 May 2000]: The data from 1995 to 1998 are given in the tables. The A14 has been in its present form only since 19 July 1994, when the A45 between Felixstowe and the M11 at Cambridge and the A604 between the M11 and the A6 at Kettering became the A14 and a new length of Road between the A6 and the M1 was opened. Previous data for the A14 are not comparable.

  Road accidents involving HGVs: 1995–98

  Accident severity

  Year

  Fatal

  Serious

  Slight

  Total

  1995

  7

  30

  66

  103

  1996

  4

  25

  76

  105

  1997

  5

  28

  78

  111

  1998

  4

  17

  92

  113

  Casualties in road accidents involving HGVs: 1995–98

  Casualty severity

  Year

  Fatal

  Serious

  Slight

  Total

  1995

  10

  40

  81

  131

  1996

  7

  38

  94

  139

  1997

  8

  41

  91

  140

  1998

  6

  26

  112

  144

  Radioactive Waste Disposal
  Mr. Robertson
  To ask the Secretary of State for the Environment, Transport and the Regions how he monitors the disposal of radioactive waste; what steps he takes to ensure that such waste is not used in household products; and if he will make a statement. [122335]

  Mr. Meacher
  [holding answer 16 May 2000]: The European Directive 96/29/Euratom lays down basic safety standards for the protection of the health of workers and the general public against the dangers arising from ionising radiation. The Directive makes the disposal, recycling or reuse of radioactive substances subject to prior authorisation. It also permits member states to set levels of radioactivity at which materials for disposal, recycling and reuse may be released from this requirement for prior authorisation providing that strict radiological criteria are met. This concept is known as clearance, with clearance levels setting a threshold at or below which the levels of radioactivity are small and pose a negligible radiological risk irrespective of the fate of that material. The Radioactive Substances Act (RSA 93), which implements the relevant provisions of the Directive, is administered in England and Wales by the Environment Agency.

  In support of these regulatory functions, the Environment Agency commissions independent monitoring of radioactive waste disposals and their impact on the environment. Details of the monitoring programme are published annually in a report entitled "Radioactivity in the Environment: A summary and radiological assessment of the Environment Agency's monitoring programmes". Copies of the latest report, for 1997, can be found in the Library.

  Transatlantic Open Skies
  Mr. Mitchell
  To ask the Secretary of State for the Environment, Transport and the Regions if he 252W
  will make a statement concerning the progress of the current negotiations on the Transatlantic Open Skies proposal. [122681]

  Mr. Mullin
  Following earlier meetings between my right hon. Friend the Deputy Prime Minister and the US Secretary of Transportation, formal talks between the UK and the US on bilateral aviation issues resume on 13 June. The Government will continue to press for the liberalisation of air services between our two countries, in order to secure additional benefits for consumers, for the UK aviation industry and for the wider UK economy.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for the Environment, Transport and the Regions what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior civil service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121644]

  Ms Beverley Hughes
  The headline pay settlement was 2.4 per cent. on the paybill and, together with the additional funds from staff turnover, staff in post received performance-related increases averaging 4.0 per cent. The increases, payable from 1 August 1999, were not staged.

  Open Government
  Dr. David Clark
  To ask the Secretary of State for the Environment, Transport and the Regions how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121858]

  Ms Beverley Hughes
  I refer my right hon. Friend to the answer given today by my right hon. Friend the Home Secretary,Official Report, columns 216–17W.

  Green Transport
  Mr. Moore
  To ask the Secretary of State for the Environment, Transport and the Regions if he will list the key buildings for which his Department(a) submitted and (b) did not submit green transport plans by March. [122610]

  Mr. Hill
  In line with the target set in the Integrated Transport White Paper for the introduction of green transport plans for key Government buildings by March 2000, we completed 50 plans covering all of DETR's key buildings:DETR (C)

  Great Minster House, London

  Eland House, London

  Ashdown House, London

  Seymour House (now Hempstead House), Hemel Hempstead

  Driving Standards Agency

  Stanley House, Nottingham

  Westgate House, Newcastle

  Haymarket House, Edinburgh

  Cumberland House, Birmingham

  Caradog House, Cardiff

  Charles House, Kensington

  Cardington

  253W
  Driver and Vehicle Licensing Agency

  Longview Road, Swansea

  Trafford House, Manchester

  Buckingham House, Preston

  Eastgate House, Leeds

  Edward House, Birmingham

  Sidcup House, Sidcup

  Parkway House, Chelmsford

  Connect House, Wimbledon

  Federated House, Dorking

  City House, Leeds

  Jefferson House, Leeds

  5 Broadway, Birmingham

  Heron House, Bedford

  St. Christopher House, London

  Tollgate House, Bristol

  Sunley Tower, Manchester

  Albion House, Bedford

  Falcon Road, Exeter

  Charter Court, Hemel Hempstead

  Maritime and Coastguard Agency

  Spring Place, Southampton

  Marine House, Aberdeen

  Vehicle Certification Agency

  Units 1, 2 and 3 Eastgate Office Centre, Bristol

  Vehicle Inspectorate

  Berkley House, Bristol

  Welcombe House, Swansea

  Planning Inspectorate

  Tollgate House, Bristol

  QEII Conference Centre

  QEII CC, London

  Government Office for London

  Riverwalk House, London

  GO South West

  4th and 5th Floors, The Pithay, Bristol

  Mast House, Plymouth

  GO South East

  Bridge House, Guildford

  GO North West

  Sunley Tower, Manchester

  Washington House, Manchester

  Cunard Building, Liverpool

  GO Yorkshire and Humberside

  City House, Leeds

  25 Queen Street, Leeds

  GO Eastern

  Heron House, Bedford

  Vision Park, Cambridge

  Building A, Westbrook Centre, Cambridge

  Traffic Area Network (TANU)

  Hillcrest House, Leeds.

  In addition, since March 2000, we have completed a plan for the Rent Service Agency's Clifton House (it became an Executive Agency with effect from 1 October 1999).

  Mobile Homes
  Mr. Paice
  To ask the Secretary of State for the Environment, Transport and the Regions what steps he plans to take in respect of the recommendation from the Park Homes Working Party regarding residential mobile home sites; and what is the timetable for such action. [122616]

  Mr. Raynsford
  My Department aims to publish the recommendations of the Park Homes Working Party by early July this year, with a deadline of 31 October for any comments interested individuals and bodies may wish to make. I will announce our conclusions in due course after that date.

  HGVs
  Dr. Tonge
  To ask the Secretary of State for the Environment, Transport and the Regions if he will introduce a night-time ban on the movement of all heavy goods vehicles in residential areas. [122337]

  Mr. Hill
  Responsibility for traffic management on local roads, including the question of whether or not to introduce a night-time ban on lorries in residential areas, is entirely a matter for the local traffic authority for the area concerned.

  Bushmeat (Uganda)
  Dr. Tonge
  To ask the Secretary of State for the Environment, Transport and the Regions what representations he has received concerning the trade in bushmeat in Uganda; and if he will make a statement. [122339]

  Mr. Mullin
  While the Government have received no specific representations on the situation in Uganda, illegal trade in bushmeat is a growing problem in many African countries, particularly in west and central Africa. I am very pleased that a United Kingdom paper on this issue, tabled by my Department for discussion at last month's Conference of the Convention on International Trade in Endangered Species (CITES), was given unanimous support. The result is the formation of a new international working group under the auspices of CITES, involving the key African countries concerned, donors such as the United Kingdom and United States, and relevant non-governmental organisations. As the issue goes beyond the strict international trade remit of CITES, the UK and Convention Secretariat are actively seeking the full participation of other international bodies such as the Convention on Biological Diversity, the United Nations Food and Agriculture Organisation and the International Tropical Timber Organisation. My Department has already made £50,000 available in the current financial year to support this initiative. I hope others will soon follow.

  London Underground
  Mr. Efford
  To ask the Secretary of State for the Environment, Transport and the Regions what London Transport has spent to date on consultancy costs for the London Underground public-private partnership. [123029]

  Mr. Hill
  I understand from London Transport that their expenditure on external consultants from 20 March 1998 (the date the Government announced the PPP) to 31 March 2000, for work on the PPP and restructuring London Underground, was £60.3 million.

TREASURY

  Research and Development
  Mr. Derek Twigg
  To ask the Chancellor of the Exchequer if he will make a statement on the introduction of the new tax credit for companies investing in research and development. [121381]

  Mr. Timms
  The new R&D tax credit was introduced in April. It will benefit 4,500 companies and support almost £1 billion of R&D per year. The enhanced relief will reduce those companies' costs for carrying out R&D by between 24 and 30 per cent., reflecting the importance the Government attach to helping small businesses succeed by reaping the benefits of our new enterprise economy.

  Mr. Ben Chapman
  To ask the Chancellor of the Exchequer what representations he has received on his measures to help companies with research and development. [121386]

  Mr. Timms
  Our new research and development tax credit, introduced on 1 April, has been warmly welcomed since its announcement a year ago. We received representations emphasising the importance of incentives for R&D in small and medium firms, and so that is where the credit is being targeted. We have also decided, responding to representations, that the credit should be available as well to companies not yet trading. The changes we have made in response to representations have increased by 1,000 the number of firms expected to benefit from the tax credit.

  Charity Taxation
  Mr. Hope
  To ask the Chancellor of the Exchequer if he will make a statement on his policy on charity taxation. [121382]

  Mr. Tom Clarke
  To ask the Chancellor of the Exchequer if he will make a statement on the proposals in his Budget to increase giving to charity in Britain. [121395]

  Miss Melanie Johnson
  The Government are keen to encourage more people to give more to charity. A package of new taxation reliefs aimed at encouraging millions more individuals and companies to give every year to charities—"Getting Britain Giving"—is included in the current Finance Bill.

  The reliefs go further than the Government's proposals in the review of Charity Taxation consultation document published a year ago and further than those announced by the Chancellor in his pre-Budget report in November. At every stage we have listened to the views of charities, those who represent them and donors. We now have a generous package of measures which we estimate will be worth £400 million a year to charities. It has been warmly received in all quarters.

  National Changeover Plan
  Mr. Bercow
  To ask the Chancellor of the Exchequer if he will make a statement on the cost of the National Changeover Plan. [121384]
  256W
  Miss Melanie Johnson
  The second Outline National Changeover Plan was published in March. It showed that by the end of February 2000, the public sector as a whole had spent around £6.3 million on planning for the possibility of the UK joining the single currency, mainly in the DSS and the revenue Departments.

  Without preparation, the UK would not have a practical option to join the single currency. The Government are committed to giving the British people a genuine choice.

  Mr. Clappison
  To ask the Chancellor of the Exchequer if he will make a statement on progress with the National Changeover Plan. [121396]

  Miss Melanie Johnson
  Progress on national changeover planning was reported in the Government's second Outline National Changeover Plan which was published on 9 March. Copies of the Plan are available in the Library. We are now working with our partners in the business, public and voluntary sectors to take forward the next steps set out in the Plan.

  Miss Kirkbride
  To ask the Chancellor of the Exchequer what representations he has received on the cost of the National Changeover Plan. [121409]

  Miss Melanie Johnson
  The Government work with a wide range of organisations from the private, public and voluntary sectors on changeover planning. A list of the private and voluntary sector organisations involved in Working Groups is given on page 57 of the second Outline National Changeover Plan, published on 9 March.

  National Insurance
  Mr. Amess
  To ask the Chancellor of the Exchequer if he will make a statement on the effects of raising the national insurance upper earnings limit. [121385]

  Dawn Primarolo
  Given the substantial increases in the starting point for paying employees' National Insurance contributions this year and next, raising the upper earnings limit helps to maintain a fair base for such contributions.

  Mr. Webb
  To ask the Chancellor of the Exchequer how many women were paying reduced rate national insurance contributions in(a) 1988 and (b) 1990. [121389]

  Dawn Primarolo
  Around 1,060,000 and 785,000 women respectively paid National Insurance contributions at the married womens' reduced rate in 1988 and 1990.

  Exchange Rate
  Mr. Alan W. Williams
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of the value of sterling against the euro on UK manufacturing. [121387]

  Miss Melanie Johnson
  Exporters in general are coping surprisingly well with the weakness of the euro. In the three months to February, goods exports volumes to EU countries were up more than 6 per cent on a year earlier.

  Somerset House
  Mr. Tyler
  To ask the Chancellor of the Exchequer if he will make a statement on the future occupancy of Somerset House by the Inland Revenue. [121388]
  257W
  Dawn Primarolo
  The Government will continue to keep the occupancy of Somerset House under review. For the time being, the Inland Revenue's occupancy provides the Somerset House trust with a substantial guaranteed source of income, which is needed for restoring and developing the site.

  Competitiveness
  Mr. Forth
  To ask the Chancellor of the Exchequer what assessment he has made of the effect of the tax changes since May 1997 on the competitiveness of British industry. [121390]

  Dawn Primarolo
  Details of the Budget measures can be found in the relevant tables of the July 1997, March 1998, 1999 and 2000 Red Book. Our corporation tax rate is the lowest ever and lowest among major industrialised countries. The combination of this rate and other Budget measures have enhanced the UK tax system, providing an improved environment for UK business to compete.

  Currency Speculation
  Mr. Barnes
  To ask the Chancellor of the Exchequer what representations he has received recently concerning the taxation of international currency speculation. [121391]

  Miss Melanie Johnson
  This House had the opportunity to discuss the taxation of international currency transactions on 18 April, in the adjournment debate tabled by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe). My hon. Friend the Financial Secretary to the Treasury set out the Government's view on that occasion.

  In addition, the Treasury has received several letters from hon. Members, who raised the issue on behalf of their constituents, and several letters directly from members of the public.

  Reserves
  Mr. Fabricant
  To ask the Chancellor of the Exchequer when he next plans to meet the Governor of the Bank of England to discuss the value of the nation's foreign currency and precious metal reserves. [121392]

  Miss Melanie Johnson
  The Chancellor meets the Governor of the Bank of England on a regular basis to discuss a wide range of issues.

  Mr. Swayne
  To ask the Chancellor of the Exchequer if he will make a statement about the current value of the Bank of England reserves. [121405]

  Mr. Andrew Smith
  Part 1 of the Treasury Press Notice, issued on the third working day of each month, provides details of UK foreign currency assets and liabilities. The latest figures were published on 4 May showing net reserves of $13,643 million (£8,764 million) at the end of April 2000. A more detailed breakdown is provided in the template published monthly on the Bank of England's website.

  Expenditure Plans
  Mr. Simon Hughes
  To ask the Chancellor of the Exchequer how he intends to use the(a) Budget surplus of 2000–01, (b) income from mobile phone licence sales and (c) Exchequer reserves. [121393]
  258W
  Mr. Andrew Smith
  The Budget plans were set out in Budget 2000 (HC 346). Proceeds from mobile phone licence sales will be used to reduce public sector net debt. Reserves are used in line with the provisions of the Exchequer Equalisation Account Act 1979.

  Mobile Phone Licences
  Mr. Llwyd
  To ask the Chancellor of the Exchequer what representations he has received proposing the division of moneys raised from the sale of the third generation mobile phone licences between the devolved administrations and central Government; and if he will make a statement. [121394]

  Mr. Andrew Smith
  The Chancellor has received two representations.

  Small Businesses
  Mrs. Anne Campbell
  To ask the Chancellor of the Exchequer if he will make a statement on his plans for a tax reduction for small businesses investing in computers or e-commerce developments. [121397]

  Dawn Primarolo
  The Government are introducing in the Finance Bill 100 per cent. first year capital allowances for investment by small businesses in information and communications technology between 1 April 2000 and 31 March 2003. These businesses will be able to write off immediately against their taxable profits the full cost of computers, software including websites, and next generation internet-enabled mobile phones. This measure will encourage small businesses to get on line and will help make the UK the best environment in the world for e-commerce by 2002.

  Advertising
  Mr. St. Aubyn
  To ask the Chancellor of the Exchequer what has been the cost of expenditure on advertising on behalf of his Department since 1997. [121398]

  Mr. Andrew Smith
  The total cost of advertising by HM Treasury from April 1997 to March 2000 has been approximately £6.5 million.

  Unemployment
  Mr. Khabra
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of his Department's policies on the levels of employment and unemployment in London. [121399]

  Miss Melanie Johnson
  In London, as in the rest of the UK, we have created a sound and credible platform of economic stability that will help us attain our objective of high and stable levels of growth and employment. Since the election, employment in London has risen by 150,000 and unemployment has fallen by 73,000.

  Steel Industry
  Mr. MacShane
  To ask the Chancellor of the Exchequer what representations he has received from the steel industry about the value of sterling. [121400]
  259W
  Miss Melanie Johnson
  The Government regularly meet with representatives from the steel industry. The Government understand the concerns of the manufacturing industry more generally about the value of the pound.

  New Deal
  Mr. Page
  To ask the Chancellor of the Exchequer if he will make a statement on the level of funding for the New Deal. [R] [121401]

  Mr. Andrew Smith
  The New Deal is being funded, for this Parliament, by the revenue received from the Windfall Tax on the excess profits of the privatised utilities. Information on the estimated allocation of the Windfall Tax receipts between different programmes is set out in Table 4.1 of the Economic and Fiscal Strategy Report of Budget 2000. Plans for future funding are being discussed in the current Spending Review.

  Business Tax Reliefs
  Dr. Palmer
  To ask the Chancellor of the Exchequer what responses he has received from business to his plans to introduce tax reliefs for large companies that invest in growing firms to generate new jobs. [121402]

  Dawn Primarolo
  The Government's proposals for a Corporate Venturing Scheme which provides tax incentives for corporate investment in small higher risk trading companies were subject to two rounds of consultation. Feedback from individual businesses and representative bodies endorsed our view that corporate venturing can offer real benefits to the companies concerned and the UK economy as a whole, commented on the form and detail of the scheme, and welcomed the changes made both in the pre-Budget Report and the Budget, which reflect comments made during consultation.

  Disabled People
  Mr. Miller
  To ask the Chancellor of the Exchequer what steps he is taking to increase the financial benefits of work for disabled people and their families. [121403]

  Dawn Primarolo
  The Government have set aside £195 million from the receipts of the Windfall Tax specifically to assist people with disabilities. The New Deal for disabled people has been testing a range of approaches—personal advisers, innovative schemes and benefit changes—to find out what helps people return to work. To date, over 2,500 people have been helped into work by the New Deal pilots. The Government are currently developing plans for extending the New Deal for disabled people nationwide and introducing rehabilitation and retention pilots to test different ways to help disabled people move into, and remain in, work.

  In October last year, the Government introduced the Disabled Person's Tax Credit (DPTC) to replace Disability Working Allowance (DWA). The new tax credit, which is intended to help people with an illness or disability to return to, or take up, work by topping up income, was more generous than DWA and changes since October have improved it further. This April, the under-11 child tax credit in the Disabled Person's Tax Credit (DPTC) was increased by £1.10 a week over and above indexation, and from June this year, the under-16 child tax credit in DPTC will be further increased by £4.35 a
  260W
  week. And from October 2000, a new Fast Track gateway to the Disabled Person's Tax Credit will be introduced to help people who become sick and disabled while working, remain in work.

  The numbers on DPTC have increased when compared with the Disability Working Allowance (DWA). At the end of March 2000, there were 21,800 awards of DPTC, compared with 18,500 awards of DWA at the end of July 1999. The average award of DPTC at the end of March 2000 was £70 a week compared to an average £60.50 a week under DWA.

  Employment (Eastern Region)
  Dr. George Turner
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of his Department's policies on the levels of employment in the Eastern region since May 1997. [121404]

  Miss Melanie Johnson
  In the Eastern Region, as in the rest of the UK, we have created a sound and credible platform of economic stability that will help us attain our objective of high and stable levels of growth and employment. Since the election, employment in the East has risen by 126,000 and unemployment has fallen by 53,000.

  Capital Gains Tax
  Mr. Colman
  To ask the Chancellor of the Exchequer what representations he has received from business on his decision to cut capital gains tax for long-term investments. [121406]

  Dawn Primarolo
  Following the 1999 pre-Budget Report, we consulted widely on our proposals to improve Capital Gains Tax business assets taper relief. The respondents to the consultation supported the direction in which we were leading. The views of business on this year's Budget proposals to use taper reform to boost productivity and increase the provision of risk capital have been overwhelmingly positive.

  Save-as-you-earn Scheme
  Mr. Dobbin
  To ask the Chancellor of the Exchequer if he will make a statement on the future of the save as you earn scheme following the start of the new all-employee shareholding scheme on 6 April. [121407]

  Mr. Timms
  The Chancellor of the Exchequer announced in his Budget Statement that 1.7 million people now in the 'Save As You Earn' scheme will continue to enjoy its benefits.

  Give-as-you-earn Scheme
  Dr. Godman
  To ask the Chancellor of the Exchequer what has been the cost of the give-as-you-earn scheme in each year since its implementation. [121408]

  Miss Melanie Johnson
  I refer my hon. Friend to the answer I gave him on 11 November 1999,Official Report, columns 779–80W. The cost of the Payroll Giving scheme since it was introduced in 1986 has been published annually in Inland Revenue Statistics. The total cost of the scheme up to April 1999 was £44 million.

  Commemorative Coins
  Mrs. Lawrence
  To ask the Chancellor of the Exchequer what plans he has to issue new commemorative coins in 2001. [123247]

  Miss Melanie Johnson
  Her Majesty the Queen has been graciously pleased to approve the Chancellor of the Exchequer's recommendation that in 2001:a crown piece should be issued to mark the centenary of the death of Her Majesty Queen Victoria and the end of the Victorian era; and
  a special design should be adopted for the reverse of the two-pound coin to commemorate the centenary of Marconi's first long distance wireless transmission from Cornwall to Newfoundland.

  Collector versions of the two coins will be available from the beginning of the year and the coins will also be available, later in the year, at face value from most banks and post offices.

  Working Families Tax Credit
  Mr. Field
  To ask the Chancellor of the Exchequer if he will list the average net income(a) before Working Families Tax Credit but with receipt of other benefits, (b) with the addition of Working Families Tax Credit before tapering of other benefits and (c) with the addition of Working Families Tax Credit following the tapering of Housing Benefit and Council Tax Benefit for (i) all recipients of the Working Families Tax Credit and (ii) families earning between (1) £4,000 and £6,000 per year, (2) £6,000 and £8,000 per year, (3) £8,000 and £10,000 per year and (4) £10,000 and £12,000 per year. [122393]

  Dawn Primarolo
  [holding answer 16 May 2000]: Insufficient data on income are provided by applicants for the Working Families Tax Credit to determine their net incomes including the various benefits mentioned. Also, household survey data available for analysis do not yet cover families receiving the tax credits, and sample numbers may in any case be too small for reliable estimates to be made in the detail requested.

  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer if he will estimate the(a) number and (b) percentage of claimants of Working Families Tax Credit who also claim (i) Housing Benefit, (ii) Council Tax Benefit and (iii) both Housing and Council Tax Benefit. [122518]

  Dawn Primarolo
  The receipt of Housing Benefit (HB) and Council Tax Benefit (CTB) cannot be determined from the information processed for applications for the Working Families Tax Credit (WFTC). The receipt of WFTC can however be determined from the information processed for claims for HB and CTB, and I understand from the Department of Social Security that estimates of the numbers requested will be available towards the end of the year. Household survey data available for analysis do not yet cover families receiving WFTC.

  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer (1) what statistics he collates on the operation of the Working Families Tax Credit; [122516]

  (2) when figures on the first six months of operation of the Working Families Tax Credit will be published. [122515]
  262W
  Dawn Primarolo
  Statistics on Working Families Tax Credit (WFTC) awards are published each quarter. The first tables were published on 11 April, in respect of awards current at the end of November 1999.

  Up to the end of March 2000 there had been 1,030,200 awards made of the WFTC. The number of telephone calls handled by the WFTC helpline and the response line in each month to April 2000 was given in a reply to the hon. Member for Havant (Mr. Willetts) on 10 May 2000, Official Report, columns 423–24W. WFTC will be covered in the operational statistics shown in the Inland Revenue Annual Report for the year ended 31 March 2000, which is due to be published in the autumn.

  Capital Modernisation Fund
  Mr. Yeo
  To ask the Chancellor of the Exchequer what has been the total financial value of(a) applications and (b) successful applications made by each Government Department to the Capital Modernisation Fund in each year of its operation. [121422]

  Mr. Andrew Smith
  [holding answer 9 May 2000]: Allocations from the Capital Modernisation Fund by Department and year are listed in table 1.9 of Public Expenditure Statistical Analyses 2000–01 (Cm 4601). In line with the practice of successive Governments, applications for funding within Government are not published.

  Civil Servants
  Dr. David Clark
  To ask the Chancellor of the Exchequer what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior Civil Service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121647]

  Mr. Timms
  The headline pay settlement for HM Treasury was 2.5 per cent. on the paybill and, together with the additional funds from staff turnover, staff in post received performance related increases averaging 4.7 per cent. The increases were not staged.

  Contributions Agency
  Mr. Sarwar
  To ask the Chancellor of the Exchequer how many civil servants over the age of 60 years employed by the Contributions Agency have been required to retire following its transfer from the Benefits Agency to the Inland Revenue; and at which centres they were based. [121322]

  Dawn Primarolo
  Prior to the transfer of the staff and functions of the former Contributions Agency (CA) to the Inland Revenue on 1 April 1999, the CA operated a normal retirement age of 60 for all staff. As part of the transitional arrangements on moving over to this policy, extensions of service had been agreed for some staff, up to a maximum retention date of 31 July 1999.

  As part of the terms and conditions package negotiated with the relevant trade unions and accepted by CA staff by way of ballot, the Revenue undertook to honour any extensions of service agreed by 31 March 1999. Thus, post transfer, any individual who had been granted an extension by that date was retained by the Revenue until the expiry of that period.
  263W
  As was the case for CA, the Revenue also operated a normal retirement age of 60. The agreed terms of the negotiated package provided that, after transfer, former CA staff would be retired in line with the Revenue retirement age policy, subject to the commitment on extensions of service granted prior to 31 March 1999.

  Since the transfer on 1 April 1999, the following numbers of former CA staff have been required to retire.

  Location

  Normal retirement at age 60

  Retirements over age 60

  Total number of retirees

  BMSD

  1

  0

  1

  IR East

  2

  7

  9

  IR London

  3

  18

  21

  IR North West

  1

  4

  5

  IR Scotland

  0

  1

  1

  IR South West

  2

  4

  6

  IR South East

  1

  2

  3

  IR South Yorkshire

  0

  1

  1

  IR Wales and Midlands

  1

  2

  3

  LBO

  1

  0

  1

  NICO (Newcastle upon Tyne)

  17

  51

  68

  IR North

  1

  1

  2

  Totals

  30

  91

  121

  Marginal deduction rate (per cent.)

  Illustrative examples

  40 to less than 50

  Basic rate taxpayer on Council Tax Benefit taper

  50 to less than 60

  Non-taxpayer on WFTC taper

  60 to less than 70

  Basic rate taxpayer on WFTC taper

  70 to less than 80

  Basic rate taxpayer on Council Tax Benefit and WFTC tapers

  80 to less than 90

  Basic rate taxpayer on Housing Benefit and WFTC tapers

  90 to less than 100

  Basic rate taxpayer on Housing Benefit, Council Tax Benefit and WFTC tapers

  Government Payment Targets
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what Government policy is on the timing of payments of their contractors and suppliers; what length of time between delivery or invoice and payment is proposed in Government guidelines; and what action is taken to monitor whether targets are met. [122522]

  Mr. Andrew Smith
  The timing of payments is set out in guidance to Departments and requires payment to be made promptly to contractors and suppliers in accordance with agreed terms of contract. Where no contract exists, payments should be made within 30 days of receipt of a valid invoice.

  The payment performance of Government Departments is monitored annually and reported to Parliament by the Department of Trade and Industry before the summer recess.

  Open Government
  Dr. David Clark
  To ask the Chancellor of the Exchequer how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121857]

  Miss Melanie Johnson
  I refer my right hon. Friend to the answer given today by my right hon. Friend the Home Secretary,Official Report, columns 216–17W.

  Tax Rates
  Mr. Willetts
  To ask the Chancellor of the Exchequer, pursuant to his answer of 5 April 2000,Official Report, column 500W, on tax rates, if he will provide illustrative examples of cases where taxes and benefits can interact to produce a marginal deduction rate of (a) 40 per cent. and above, (b) 50 per cent. and above, (c) 60 per cent. and above, (d) 70 per cent. and above, (e) 80 per cent. and above and (f) 90 per cent. and above. [120381]

  Dawn Primarolo
  A marginal deduction rate (MDR) measures how much of an additional pound of earnings is paid in taxes or in reduced benefit or tax credit entitlement. The table gives some examples of the combinations of income tax and National Insurance for those on income-related benefits or WFTC that give rise to marginal deduction rates of 40 per cent. or more. All the examples assume that National Insurance is payable, at the contracted-in rate.

  Manufacturing
  Mr. Ian Taylor
  To ask the Chancellor of the Exchequer if he will make a statement on his policies for promoting manufacturing business. [121375]

  Mr. Andrew Smith
  Manufacturing industry makes a vital contribution to the economy. We are helping its competitiveness by creating the right economic climate of stability, low inflation, and sound public finances and through policies which help firms to innovate, develop the skills of their workforce and grow.

  Taxation
  Mr. Gibb
  To ask the Chancellor of the Exchequer if he will publish the amounts (i) in current prices, (ii) in constant 1999–2000 prices and (iii) as percentages of personal income, taken by(a) income taxes, (b) national insurance contributions, (c) value-added tax, (d) other central Government indirect taxes, (e) the aggregate of (a) to (d), (f) average council tax payments and (g) the aggregate of (a) to (d) and (f) for (1) a single person,(2) a married couple without children, both working and (3) a married couple with two children, husband in work, wife not working, in each case at 50, 75, 100, 150 and 200 per cent. of average earnings for the financial year 1999–2000, taking account of changes announced in his Budget Statement and previously announced changes and for each of the years (w) 1996–97, (x) 1997–98, (y) 1998–99 and (z) 1999–2000. [116508]

  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what average level of income he estimates a single-earner couple will receive(a) gross and (b) net in

  265W
  (i) 2000–01 and (ii) 2001–02; if he will set out the method used in making this calculation; and if he will make a statement. [118850]

  Mr. Portillo
  To ask the Chancellor of the Exchequer what taxes he includes in his calculation of the tax burden on the average family. [121009]

  Dawn Primarolo
  [holding answer 14 April and 5 May 2000]: The available information, which shows income tax (including child benefit and working families tax credit from its first full year of implementation) and national insurance contributions, at multiples of median full-time earnings of all employees is given in the table. The figures are shown in (a) current prices and (b) as percentages of income, for (i) the years 1996–97 to 2001–02 where the figures take account of all changes announced in Budgets to date. Estimating the impact of indirect taxes is imprecise as spending patterns vary widely between households with the same composition and income. The level of council tax payments will also vary depending on where families live.

  The figures use median all-employee earnings. However, the data are available only since 1983. Looking over a longer time period, using male mean earnings, the series shows that as a result of personal tax and benefit measures in the last three Budgets the tax burden on a family with two children on 100 per cent. of average earnings will fall by 2001 to the lowest level since 1972.

  Percentage

  50

  75

  100

  150

  200

  Single:

  1996–97

  £per week

  Gross Income

  153.98

  230.97

  307.96

  461.94

  615.92

  Income Tax

  16.58

  35.06

  53.53

  90.49

  135.94

  NICs

  10.52

  18.22

  25.92

  40.62

  40.62

  Percentage of gross earnings

  Income Tax

  10.8

  15.2

  17.4

  19.6

  22.1

  NICs

  6.8

  7.9

  8.4

  8.8

  6.6

  Tax + NICs

  17.6

  23.1

  25.8

  28.4

  28.7

  1997–98

  £per week

  Gross Income

  160.37

  240.55

  320.73

  481.10

  641.46

  Income Tax

  16.63

  35.07

  53.51

  90.40

  137.78

  NICs

  11.08

  19.09

  27.11

  41.54

  41.54

  Percentage of gross earnings

  Income Tax

  10.4

  14.6

  16.7

  18.8

  21.5

  NICs

  6.9

  7.9

  8.5

  8.6

  6.5

  Tax + NICs

  17.3

  22.5

  25.1

  27.4

  28.0

  1998–99

  £per week

  Gross Income

  166.35

  249.53

  332.70

  499.05

  665.40

  Income Tax

  17.22

  36.36

  55.49

  93.75

  142.81

  NICs

  11.52

  19.83

  28.15

  43.38

  43.38

  Percentage of gross earnings

  Income Tax

  10.4

  14.6

  16.7

  18.8

  21.5

  NICs

  6.9

  7.9

  8.5

  8.7

  6.5

  Tax + NICs

  17.3

  22.5

  25.1

  27.5

  28.0

  1999–2000

  £per week

  Gross Income

  174.83

  262.25

  349.67

  524.50

  699.34

  Income Tax

  17.29

  37.39

  57.50

  97.71

  151.10

  NICs

  10.88

  19.63

  28.37

  43.40

  43.40

  266W

  Percentage

  50

  75

  100

  150

  200

  Percentage of gross earnings

  Income Tax

  9.9

  14.3

  16.4

  18.6

  21.6

  NICs

  6.2

  7.5

  8.1

  8.3

  6.2

  Tax + NICs

  16.1

  21.7

  24.6

  26.9

  27.8

  2000–01

  £ per week

  Gross Income

  182.88

  274.31

  365.75

  548.63

  731.50

  Income Tax

  18.17

  38.29

  58.41

  98.64

  157.06

  NICs

  10.69

  19.83

  28.98

  45.90

  45.90

  Percentage of gross earnings

  Income Tax

  9.9

  14.0

  16.0

  18.0

  21.5

  NICs

  5.8

  7.2

  7.9

  8.4

  6.3

  Tax + NICs

  15.8

  21.2

  23.9

  26.3

  27.7

  2001–02

  £ per week

  Gross Income

  191.11

  286.66

  382.21

  573.32

  764.42

  Income Tax

  19.21

  40.23

  61.25

  103.30

  165.47

  NICs

  10.41

  19.97

  29.52

  48.63

  48.80

  Percentage of gross earnings

  Income Tax

  10.1

  14.0

  16.0

  18.0

  21.6

  NICs

  5.4

  7.0

  7.7

  8.5

  6.4

  Tax + NICs

  15.5

  21.0

  23.7

  26.5

  28.0

  Married with two Children:

  1996–97

  £ per week

  Gross Income

  153.98

  230.97

  307.96

  461.94

  615.92

  Income Tax

  11.41

  29.89

  48.37

  85.33

  130.78

  NICs

  10.52

  18.22

  25.92

  40.62

  40.62

  CB

  19.60

  19.60

  19.60

  19.60

  19.60

  Percentage of gross earnings

  Net income tax

  7.4

  12.9

  15.7

  18.5

  21.2

  NICs

  6.8

  7.9

  8.4

  8.8

  6.6

  Net tax + NICs—CB

  1.5

  12.3

  17.8

  23.0

  24.6

  1997–98

  £ per week

  Gross Income

  160.37

  240.55

  320.73

  481.10

  641.46

  Income Tax

  11.35

  29.79

  48.23

  85.12

  132.50

  NICs

  11.08

  19.09

  27.11

  41.54

  41.54

  CB

  20.05

  20.05

  20.05

  20.05

  20.05

  Percentage of gross earnings

  Net income tax

  7.1

  12.4

  15.0

  17.7

  20.7

  NICs

  6.9

  7.9

  8.5

  8.6

  6.5

  Net tax + NICs—CB

  1.5

  12.0

  17.2

  22.2

  24.0

  1998–99

  £ per week

  Gross Income

  166.35

  249.53

  332.70

  499.05

  665.40

  Income Tax

  11.74

  30.87

  50.00

  88.27

  137.33

  NICs

  11.52

  19.83

  28.15

  43.38

  43.38

  CB

  20.75

  20.75

  20.75

  20.75

  20.75

  Percentage of gross earnings

  Net income tax

  7.1

  12.4

  15.0

  17.7

  20.6

  NICs

  6.9

  7.9

  8.5

  8.7

  6.5

  Net tax + NICs—CB

  1.5

  12.0

  17.3

  22.2

  24.0

  1999–2000

  £ per week

  Gross Income

  174.83

  262.25

  349.67

  524.50

  699.34

  Income Tax

  13.50

  33.61

  53.71

  93.92

  147.31

  NICs

  10.88

  19.63

  28.37

  43.40

  43.40

  CB

  24.00

  24.00

  24.00

  24.00

  24.00

  267W

  Percentage

  50

  75

  100

  150

  200

  Percentage of gross earnings

  Net income tax

  7.7

  12.8

  15.4

  17.9

  21.1

  NICs

  6.2

  7.5

  8.1

  8.3

  6.2

  Net tax + NICs—CB

  0.2

  11.1

  16.6

  21.6

  23.8

  2000–01

  £ per week

  Gross Income

  182.88

  274.31

  365.75

  548.63

  731.50

  Income Tax

  18.17

  38.29

  58.41

  98.64

  157.06

  NICs

  10.69

  19.83

  28.98

  45.90

  45.90

  CB

  25.00

  25.00

  25.00

  25.00

  25.00

  WFTC

  81.19

  46.99

  12.79

  —

  —

  Percentage of gross earnings

  Net income tax

  -34.5

  -3.2

  12.5

  18.0

  21.5

  NICs

  5.8

  7.2

  7.9

  8.4

  6.3

  Net tax + NICs—CB

  -42.3

  -5.1

  13.6

  21.8

  24.3

  2001–02

  £ per week

  Gross Income

  191.11

  286.66

  382.21

  573.32

  764.42

  Income Tax

  10.71

  31.73

  52.75

  94.80

  164.42

  NICs

  10.41

  19.97

  29.52

  48.63

  48.80

  CB

  25.85

  25.85

  25.85

  25.85

  25.85

  WFTC

  74.90

  39.16

  3.43

  0.00

  0.00

  Percentage of gross earnings

  Net income tax

  -33.6

  -2.6

  12.9

  16.5

  21.5

  NICs

  5.4

  7.0

  7.7

  8.5

  6.4

  Net tax + NICs—CB

  -41.7

  -4.6

  13.9

  20.5

  24.5

  Married two earners (0 Children):

  1996–97

  £ per week

  Gross Income

  153.98

  230.97

  307.96

  461.94

  615.92

  Income Tax

  0.00

  12.07

  28.96

  64.95

  101.90

  NICs

  5.64

  13.34

  21.04

  36.43

  51.83

  Percentage of gross earnings

  Income Tax

  0.0

  5.2

  9.4

  14.1

  16.5

  NICs

  3.7

  5.8

  6.8

  7.9

  8.4

  Tax + NICs

  3.7

  11.0

  16.2

  21.9

  25.0

  1997–98

  £ per week

  Gross Income

  160.37

  240.55

  320.73

  481.10

  641.46

  Income Tax

  0.00

  11.72

  28.83

  64.86

  101.74

  NICs

  6.12

  14.13

  22.15

  38.19

  54.23

  Percentage of gross earnings

  Income Tax

  0.0

  4.9

  9.0

  13.5

  15.9

  NICs

  3.8

  5.9

  6.9

  7.9

  8.5

  Tax + NICs

  3.8

  10.7

  15.9

  21.4

  24.3

  1998–99

  £ per week

  Gross Income

  166.35

  249.53

  332.70

  499.05

  665.40

  Income Tax

  0.00

  12.16

  29.88

  67.23

  105.49

  NICs

  6.40

  14.71

  23.03

  39.67

  56.30

  Percentage of gross earnings

  Income Tax

  0.0

  4.9

  9.0

  13.5

  15.9

  NICs

  3.8

  5.9

  6.9

  7.9

  8.5

  Tax + NICs

  3.8

  10.8

  15.9

  21.4

  24.3

  1999–2000

  £ per week

  Gross Income

  174.83

  262.25

  349.67

  524.50

  699.34

  Income Tax

  0.00

  11.63

  30.79

  71.00

  111.21

  NICs

  4.28

  13.03

  21.77

  39.25

  56.73

  268W

  Percentage

  50

  75

  100

  150

  200

  Percentage of gross earnings

  Income Tax

  0.0

  4.4

  8.8

  13.5

  15.9

  NICs

  2.4

  5.0

  6.2

  7.5

  8.1

  Tax + NICs

  2.4

  9.4

  15.0

  21.0

  24.0

  2000–01

  £ per week

  Gross Income

  182.88

  274.31

  365.75

  548.63

  731.50

  Income Tax

  2.54

  16.69

  36.35

  76.58

  116.81

  NICs

  3.37

  12.23

  21.38

  39.66

  57.95

  Percentage of gross earnings

  Income Tax

  1.4

  6.1

  9.9

  14.0

  16.0

  NICs

  1.8

  4.5

  5.8

  7.2

  7.9

  Tax + NICs

  3.2

  10.5

  15.8

  21.2

  23.9

  2001–02

  £ per week

  Gross Income

  191.11

  286.66

  382.21

  573.32

  764.42

  Income Tax

  2.75

  17.75

  38.42

  80.46

  122.51

  NICs

  2.77

  11.27

  20.82

  39.93

  59.04

  Percentage of gross earnings

  Income Tax

  1.4

  6.2

  10.1

  14.0

  16.0

  NICs

  1.4

  3.9

  5.4

  7.0

  7.7

  Tax + NICs

  2.9

  10.1

  15.5

  21.0

  23.7

  Notes:

  1. Income tax payments are calculated on the basis that the household receive no tax reliefs other than the standard allowances and only have income from employment. All earners, including wives, are assumed to pay Class 1 national national insurance contributions at the contracted-in rate.

  2. Earnings are taken to be the median gross weekly earnings of all full-time employees on adult rates with pay unaffected by absence. (Median earnings are more representative of the population as a whole than mean male full-time earnings.)

  3. A family with two children is assumed to have both children aged under 11.

  4. In line with the convention in the Tax Benefit Reference Manual, Child Benefit is treated as negative income tax.

  5. Working Families Tax Credit is included from its first full year of implementation in 2000–01

  6. For the two earner family it is assumed earnings are split 60 per cent.:40 per cent.

  Employment Statistics
  Mr. Alexander
  To ask the Chancellor of the Exchequer how many people in work are(a) women aged between 50 and 60 years, (b) men aged between 50 and 60 years, (c) women aged between 60 and 65 years, (d) men aged between 60 and 65 years, (e) women aged over 65 years and (f) men aged over 65 years; and what percentage are in full-time employment in each category. [122370]

  Miss Melanie Johnson
  The information 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. Douglas Alexander, dated 18 May 2000:
  The Director of the Office for National Statistics (ONS) has been asked to reply to your recent question on people in employment aged over 50. I am replying in the Director's absence.
  The table attached shows non-seasonally adjusted estimates from the Labour Force Survey (LFS) which is the main source of labour market data on individuals. It gives the number of men and women in work by age group and the percentage that are in full-time employment in each category in the winter (December to February) quarter of 1999/2000.

  269W
  People aged 16 or over are classed in employment by the LFS if they have done at least one hour of paid work (as an employee or self-employed) in the week prior to their LFS interview or if they have a job that they are temporarily away from. People who do unpaid work in a family business and people on Government-supported training and employment programmes are also included according to the International Labour Organisation convention.

  Persons in employment by age group and whether working full-time, United Kingdom, Winter (December–February) 1999–2000

  Thousand and percentage1

  Age

  In employment

  50–59

  60–64

  65+

  Men

  2,731

  644

  283

  Of which:

  Total in full-time employment

  2,512

  526

  88

  Percentage in full-time employment2

  92

  82

  31

  Women

  2,297

  370

  179

  Of which:

  Total in full-time employment

  1,201

  116

  22

  Percentage in full-time employment2

  52

  31

  12

  All persons

  5,028

  1,014

  461

  Of which:

  Total in full-time employment2

  3,712

  642

  110

  Percentage in full-time employment

  74

  63

  24

  1Not seasonally adjusted

  2People in full-time employment as a percentage of all in employment in the relevant age band.

  Source:

  Labour Force Survey, Office for National Statistics

  Subcontractors
  Dr. Tonge
  To ask the Chancellor of the Exchequer what reports have been made on subcontractors registering C154 certificates; and if he will make a statement. [122707]

  Dawn Primarolo
  None. In terms of checks on eligibility, I refer the hon. Member to the answers I gave to the hon. Member for Brentwood and Ongar (Mr. Pickles) on 17 April 2000,Official Report, columns 370–71W.

  Compliance Costs
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer how far the Inland Revenue and Customs and Excise have progressed with their research on compliance costs to business of major taxes and duties; for which taxes and duties the review has been completed; if he will place the completed research in the Library; and if he will make a statement. [122517]

  Dawn Primarolo
  The Inland Revenue and Customs and Excise have embarked on a four year programme of research on business compliance costs. The joint programme starts in 2000–01 with separate research projects on the costs to business of dealing with VAT and Corporation Tax of non-financial companies.

  The results of this research will enable the Revenue Departments to look for ways of making improvements in those areas. They will shortly be inviting expressions of interest in tendering for projects within the programme.

  As the joint programme has just begun, no research has yet been completed.

  VAT
  Mr. Burstow
  To ask the Chancellor of the Exchequer what estimate the Treasury has made of the VAT revenue per annum from 2001 on(a) tampons, (b) menstrual towels, (c) panty liners, (d) light use continence pads and (e) heavy use continence pads. [122102]

  Dawn Primarolo
  [holding answer 15 May 2000]: As a result of the 2000 Budget, from January 2001 the Government are cutting VAT on all women's sanitary protection products from 17.5 per cent. to 5 per cent.—the lowest level allowed. The VAT revenue per annum from 2001 on (a) tampons, (b) menstrual towels and (c) panty liners is estimated to be £5 million, £5 million, and negligible, respectively. Light use continence pads and heavy use continence pads are already zero-rated when supplied to incontinent people. Data on standard-rated sales of continence products are not directly available.

WALES

  Green Transport
  Mr. Don Foster
  To ask the Secretary of State for Wales if he will list the key buildings for which his Department(a) submitted and (b) did not submit green transport plans by March. [122560]

  Mr. Paul Murphy
  The Wales Office is fully committed to measures such as the "greening" of official ministerial cars. Because the Department is principally located in central London, no members of staff routinely drive to work, instead relying on public transport. However, my Department is extremely small and controls only a single building which houses fewer than 50 staff. We have not therefore submitted a green transport plan.

  Civil Servants
  Dr. David Clark
  To ask the Secretary of State for Wales what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior civil service, in his Department for 1999–2000; and to what extent the pay awards were staged. [121656]

  Mr. Paul Murphy
  Wales Office staff are seconded from the National Assembly for Wales and their last pay settlement was the same as that received by Assembly staff. The headline pay settlement applicable from August 1999 was 2.5 per cent. on the pay bill and, together with the additional funds from staff turnover, staff in post received performance related increases averaging 4.2 per cent. The increases were not staged.

  Open Government
  Dr. David Clark
  To ask the Secretary of State for Wales how many applications for information he received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121860]

  Mr. Paul Murphy
  I refer my right hon. Friend to the answer given to him today by my right hon. Friend the Home Secretary,Official Report, columns 216–17W.

  My Department has received no such applications during this session.

AGRICULTURE, FISHERIES AND FOOD

  Veterinary Medicines
  Mr. Robertson
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the application of EU Directive 81/851/EEC to the traceability of veterinary medicines in the United Kingdom. [105197]

  Ms Quin
  [holding answer 17 January 2000]: I apologise for the long delay in responding, the result of an administrative error.

  Council Directive 81/851/EEC as amended contains provisions to assist traceability of veterinary medicinal products by way of requirements on marketing authorisation holders, wholesalers and retailers to keep detailed records of purchases and sales. Regulations to implement the requirements of the Directive in relation to retail sales by pharmacies and veterinary practices were laid before Parliament on 10 January and entered into force on 1 February.

  Greyhounds
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will list the countries(a) from which greyhounds were imported to and (b) to which greyhounds were exported from the United Kingdom in each of the last five years and the number of greyhounds imported and exported in each case from each of those countries in each of those years. [120584]

  Mr. Nick Brown
  [holding answer 3 May 2000]: Figures on the import of dogs into Scotland, Wales and Northern Ireland are not held by my Department.

  Imports

  Details of the breed of commercially traded dogs imported into the UK from other member states in accordance with Article 4A of the Rabies (Importation of Dogs, Cats and Other Mammals) Order 1974 (as amended) are not held centrally.

  Capital modernisation fund

  Application

  (a) Purpose

  (b) Intended recipients

  (c) Financial value (£000)

  (d) Outcome

  Round 1

  National Flood Warning Project

  To deliver improvements in quality and effectiveness to the flood warning service in England and Wales through public and private sector partnerships

  MAFF and Environment Agency

  5,000

  Unsuccessful

  Pilot Public Private Partnership Project for coast protection work at Scarborough

  Setting-up costs of a pilot project to encourage local authorities with responsibility for coast protection to utilise long-term strategic plans in considering alternative methods of procurement

  Scarborough borough council and MAFF

  2,000

  Unsuccessful

  Electronic Data Interchange for Seed Certification

  To enable efficiency and cost savings by minimising manual data entry from statutory seed certification forms, provide a speedier service to industry and gain experience in EDI application for similar services

  MAFF

  50

  Unsuccessful

  Establish managed telephone services to support delivery of schemes under Common Agricultural Policy

  Seedcorn funding for installation of computerised call-handling system at MAFF Regional Service Centres on a pilot basis to improve level of customer service

  MAFF

  50

  Unsuccessful

  Fishing Capacity Rationalisation

  To achieve a better balance between fishing capacity and available fishing opportunities by encouraging fishing industry to develop its own plans for restructuring

  MAFF

  5,000

  Unsuccessful

  272W
  However, the number of greyhounds imported into England and entering quarantine from outside the British Isles during 1997, 1998 and 1999 and details of the countries they were imported from are as follows:

  Country

  1997

  1998

  1999

  Australia

  2

  2

  1

  Cyprus

  0

  0

  2

  Germany

  1

  0

  0

  Israel

  0

  1

  0

  Italy

  0

  0

  1

  Spain

  0

  0

  54

  USA

  6

  3

  1

  Information on the number of greyhounds imported into England during the preceding two years could be provided only at disproportionate cost, as it is not computerised.

  Exports
  Annual figures for dog exports prior to 1997 are not readily available and could be obtained only at disproportionate cost, as they are not computerised.

  Figures held on the export of dogs from the United Kingdom since 1997 are not sub-categorised by breed and it is therefore not possible to state how many were greyhounds.

  Capital Modernisation Fund
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will list the applications made to date by his Department to the Capital Modernisation Fund giving the(a) purpose of the application, (b) intended recipients, (c) financial value and (d) outcome of each application. [120636]

  Mr. Nick Brown
  [holding answer 3 May 2000]: The information requested by the hon. Member is as set out:
  273W

  Capital modernisation fund

  Application

  (a) Purpose

  (b) Intended recipients

  (c) Financial value (£000)

  (d) Outcome

  Redevelopment of Central Veterinary Laboratory at Weybridge

  To update facilities

  MAFF

  up to 70,000

  Unsuccessful

  Cattle Imports
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will list the countries from which live cattle were imported to the United Kingdom in each of the last five years and the number of live cattle imported from each of those countries in each of those years. [120567]

  Mr. Nick Brown
  [holding answer 3 May 2000]: The number of live cattle imported into the United Kingdom for the period 1995–99 is shown in the following table.

  Country

  1995

  1996

  1997

  1998

  1999

  Austria

  0

  59

  30

  0

  0

  Belgium/Luxembourg

  53

  33

  162

  0

  73

  Canada

  87

  71

  239

  161

  1,730

  Denmark

  99

  35

  282

  177

  468

  France

  491

  247

  2,232

  469

  216

  Germany

  122

  113

  764

  98

  195

  Hungary

  0

  0

  0

  8

  0

  Ireland

  22,086

  12,698

  7,942

  7,315

  23,959

  Isle of Man

  0

  0

  0

  0

  5

  Italy

  0

  0

  17

  16

  4

  Jersey

  0

  19

  0

  0

  0

  Netherlands

  1,627

  2,704

  12,308

  1,956

  1,082

  New Zealand

  0

  0

  34

  0

  0

  Romania

  0

  0

  59

  294

  0

  Source:

  Great Britain figures were obtained from the Ministry's computer system which issues export health certificates. Department of Agriculture Northern Ireland figures were obtained from their Veterinary Division. The figures are provisional and subject to change.

  Abattoirs
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the costs incurred by farmers as a result of the recent changes in the regional distribution of over-thirty-months scheme abattoir contracts. [120559]

  Mr. Nick Brown
  [holding answer 3 May 2000]: The award of 20 contracts for over-thirty-months scheme (OTMS) abattoir services in the UK followed a competitive tender and looked to ensure that sufficient slaughtering capacity was available having regard to the main production areas. Where abattoirs have changed, some individual farmer's costs have increased a little because their abattoir is now further away; but others have decreased.

  Electronic Communications
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the savings to be gained as a result of the electronic provision of his Ministry's forms. [120566]

  Mr. Nick Brown
  [holding answer 3 May 2000]: Savings resulting from the electronic provision of forms will arise both in relation to the time of those farmers who
  274W
  choose to use electronic interactive forms and in administrative time in the Department. Projects are under way to assess the technology. The pilot for electronic submission of IACS forms in Anglia Region has already had a successful start.

  Consultation Exercises
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food for each formal consultation exercise solely or jointly undertaken by his Department since May 1997, what was the period allowed for submissions by the parties consulted. [121432]

  Mr. Nick Brown
  [holding answer 9 May 2000]: Information on the response periods for individual consultation exercises is not collected centrally and could be made available only at disproportionate cost.

  BSE
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if the Government's official scientific advisers are satisfied that the procedures routinely used in the production of gelatine in France are sufficient to destroy any trace of BSE infectivity in this product. [121416]

  Mr. Nick Brown
  [holding answer 9 May 2000]: The Spongiform Encephalopathy Advisory Committee, the Government's independent scientific advisory body on BSE, has concluded that gelatine is safe for use in food given the large reduction in theoretical infectivity in the production of gelatine from raw material from which Specified Risk Materials (SRM) are excluded. In the case of France, there are controls on SRM removal both in relation to home production and to imports of raw materials for gelatine production.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he has(a) consulted and (b) been consulted by the French Minister of Agriculture over the possibility of other ways of BSE transmission. [121414]

  Mr. Nick Brown
  [holding answer 9 May 2000]: Extensive discussions took place between myself, the French Minister of Agriculture and the Commission at official and ministerial level about BSE-related issues. There has been a very full exchange of scientific opinion underpinning public decision making on this issue.

  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food from which budget the unbudgeted expenditure on the BSE inquiry has been funded. [121424]

  Mr. Nick Brown
  [holding answer 18 April 2000]: All costs of the BSE inquiry are met from within the existing budget of my Department and the budgets of the Department of Health, the Scottish Executive Rural and Agriculture Department, the National Assembly for Wales Agriculture Department and the Northern Ireland Department of Agriculture and Rural Development.
  275W
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food in what instances he would seek a review of the BSE risk status of an EU member state. [121415]

  Mr. Nick Brown
  [holding answer 9 May 2000]: The EU Scientific Steering Committee is nearing completion of its assessment of geographic BSE and risk in the EU and some third countries.

  Regional Service Centres
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will publish estimates of the value of his Department's Regional Service Centres if they were sold for development. [121436]

  Mr. Nick Brown
  [holding answer 9 May 2000]: Were any of the Regional Service Centres to be sold, this information would be commercially sensitive. Not all of the Regional Service Centres could be sold for redevelopment because some are leasehold, some are used by other Government Departments as well as ourselves, and in some cases the local planning authority might not agree to redevelopment of sites.

  Organic Food Production
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what information he has collected about the national standards that apply in each EU member state regarding the duration of the conversion period required for land used to grow organic crops. [121430]

  Mr. Nick Brown
  [holding answer 9 May 2000]: Council Regulation (EEC) 2092/91 requires land used to grow organic crops to be subject to a conversion period not less than two years, or three years in the case of land used to grow perennial crops other than grass. However, the regulation permits these conversion periods to be reduced in the light of previous use of the land immediately prior to conversion. It does not specify a minimum conversion period.

  As we understand the current position, six member states, including the UK, require a minimum conversion period of 12 months. The other member states permit conversion periods shorter than 12 months in exceptional cases. However, the Commission is reviewing the position with the aim of achieving a greater degree of consistency of practice between the member states.

  Aid Package
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food which of the components of the aid package announced on 30 March are intended to replace services discontinued as a result of the restructuring of his Department. [121428]

  Mr. Nick Brown
  [holding answer 9 May 2000]: None.

  Armed Services (Purchase of Supplies)
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what meetings he and his Ministers or officials have had with the Ministry of Defence to discuss the purchasing of supplies for the armed services; and if those meetings were used to encourage the purchase of British agricultural produce by the Ministry of Defence. [121431]
  276W
  Mr. Nick Brown
  [holding answer 9 May 2000]: Ministers and officials regularly have meetings with the MOD to discuss how the proportion of UK sourced food for the armed forces can be increased.

  Sheep Passports
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the introduction of sheep passports. [121417]

  Mr. Nick Brown
  [holding answer 9 May 2000]: There are currently no plans to introduce sheep passports.

  Regional Office Closures
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has made of the net effect on his Department's budget of the planned closure of his Department's regional offices. [121427]

  Mr. Nick Brown
  [holding answer 9 May 2000]: No decisions have been taken on the future of the Ministry's Regional Service Centres (RSCs) following the recent review of CAP scheme administration.

  Departmental Budget
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will list the items in his Department's budget on which planned expenditure was reduced by over £250,000 in financial year 1999–2000 and in each of the previous three financial years. [121426]

  Mr. Nick Brown
  [holding answer 9 May 2000]: The information requested by the hon. Member can be provided only at disproportionate cost.

  Pig Farmer Demonstration
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food what representations he has received about the presence of the demonstration by pig farmers in Parliament Square. [121438]

  Mr. Nick Brown
  [holding answer 9 May 2000]: I have received a number of representations about the current state of the pig industry, some of which made reference to the demonstrations by pig farmers in Parliament Square.

  Agri-environment Schemes
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food (1) what estimates he has made of the effect on Government expenditure of changes in the level of payments under each of the agri-environment schemes to fall this year and the next as a result of his Department's reassessments of income forgone by participating farmers; and what the figures are; [121419]

  (2) what estimates he has made of the effect on the grants received by farmers under each of the agri-environment schemes of his Department's re-assessments of income forgone by participating farmers; [121418]

  (3) what research his Department has undertaken into the effect of reductions of payments made under agri-environment schemes, with particular reference to the South Downs Environmentally Sensitive Area scheme; and what study he has made of the impact of these reductions on the take-up of such schemes; [121437]
  277W
  (4) if reductions in specific payments under the South Downs environmentally sensitive area scheme are made at the discretion of his Department. [121420]

  Mr. Nick Brown
  [holding answer 9 May 2000]: Rates of payment to farmers participating in the Environmentally Sensitive Areas and Countryside Stewardship Schemes are governed by EU Council Regulation 1257/1999 and Commission Regulation 1750/1999. These provisions require payment rates to be calculated on the basis of income forgone, additional costs incurred, and an incentive not exceeding 20 per cent. of the income forgone. Following the review of payment rates in 11 ESAs in 1999, it is estimated the overall effect on grants to participating farmers in those ESAs would be a reduction of 1 to 2 per cent. Of the eight rates available in the South Downs ESA two were increased, two were reduced and the remainder were unchanged. It is estimated the overall effect will be a reduction of 5 per cent. compared with payments to farmers in that ESA in 1999.

  I announced to the House on 7 December 1999 that Government expenditure on agri-environment schemes would increase to more than double the current level during the seven years of the England Rural Development Plan.

  Salvage Meat
  Mr. Yeo
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the decision not to give the Food Standards Agency responsibility for the investigation into TB and salvage meat sold by his Department into the human food chain. [121440]

  Mr. Nick Brown
  [holding answer 9 May 2000]: No such decision has been made. It would be for the Food Standards Agency to decide whether any assessment of risks to food safety should be carried out.

  European Fisheries Regulations
  Mr. Mitchell
  To ask the Minister of Agriculture, Fisheries and Food what consultation the European Commission have had with Her Majesty's Government on consolidation of the European regulations relating to fisheries; what steps the Government have taken to consult user and operator interests in respect of the Commission's intentions; what steps he will be taking to ensure that in such consolidation no disadvantage will accrue to United Kingdom fishing interests; and what timetable is envisaged for publication of a draft revised regulation. [121632]

  Mr. Morley
  There are no current proposals before the Council of Ministers to consolidate European Fisheries legislation.

  In 1999 all provisions relating to Total Allowable Catches and Quotas in 2000 were, for the first time, brought together in a single regulation (Council Regulation (EC) No. 2742/1999). The industry was fully consulted on those proposals.

  Currency Fluctuation (Compensation)
  Miss McIntosh
  To ask the Minister of Agriculture, Fisheries and Food what recent representations he has 278W
  received requesting monetary compensation to farmers as a result of the change in values of the pound and euro. [121765]

  Ms Quin
  We have received a number of representations requesting agrimonetary compensation to farmers.

CABINET OFFICE

  Penalty Clauses
  Mr. Gordon Prentice
  To ask the Minister for the Cabinet Office if she will list the contracts entered into with private sector companies for the provision of goods or services since May 1997 where penalty clauses were triggered for non-performance; and if she will make a statement. [122010]

  Mr. Stringer
  Since May 1997 a penalty clause has been triggered on one Cabinet Office contract, as follows:

  Supplier: The Stationery Office Ltd.

  Description: Provision of Printing Services

  Reason for penalty: Late Delivery.

  The Central Office of Information has had a number of instances where service credits were obtained from suppliers in respect of unsatisfactory performance or for breach of their contractual obligations. These instances are not recorded separately and the cost of extracting the information would involve incurring disproportionate costs.

  Computer Viruses
  Mrs. Lait
  To ask the Minister for the Cabinet Office at what precise time her Department became aware of the computer virus known as the Love Bug. [122590]

  Mr. Ian McCartney
  The Cabinet Office became aware of this computer virus at 10:19am on Thursday 4 May 2000.

  Open Government
  Dr. David Clark
  To ask the Minister for the Cabinet Office how many applications for information she received under the Open Government: Code of Practice on Access to Government Information in the last parliamentary session; and how many were granted. [121852]

  Mr. Stringer
  I refer my right hon. Friend to the answer given today by my right hon. Friend, the Secretary of State for the Home Department,Official Report, columns 216–17W.

  Deregulation Unit
  Mrs. Lait
  To ask the Minister for the Cabinet Office what system is used by the Deregulation Unit for monitoring the regulatory burden on the voluntary and charitable sectors. [122818]

  Mr. Stringer
  Since August 1998 this Government have insisted that Regulatory Impact Assessments are carried out whenever regulations are likely to have an impact on business, charities or the voluntary sector. Lists of Regulatory Impact Assessments that affect businesses, charities or the voluntary sector are recorded in twice
  279W
  yearly Command Papers which are placed in the Libraries of the House. There is no distinction made between Regulatory Impact Assessments for business and those that are purely concerned with charities and the voluntary sector.

  Green Transport
  Mr. Moore
  To ask the Minister for the Cabinet Office if she will list the key buildings for which her Department(a) submitted and (b) did not submit green transport plans by March. [122619]

  Mr. Stringer
  In line with the target set in the Integrated Transport White Paper for the introduction of green transport plans for Government buildings, by 31 March 2000 we had completed a plan which covered all of the buildings occupied or owned by the Cabinet Office and its agencies, as follows:

  Cabinet Office
  Downing street, 70 Whitehall, Great Smith street, Admiralty House, 36 Whitehall, Government Offices Great George street, 53 Parliament street, 10 Great George street, 4 Matthew Parker street, Hepburn House, Queen Anne's Chambers, Ashley House (all central London), Grosvenor House (Basingstoke), Sovereign House (Norwich), St. Clement's House (Norwich).

  Agencies
  Civil Service College (Sunningdale and 11 Belgrave road, London), GCDA (Ponton road, London), CCTA (Rosebery Court, Norwich), TBA (Royal Liver Building, Liverpool), PACE (Trevelyan House, London; 28 Thistle street, Edinburgh;
  280W
  Lawnswood Park, Leeds; West Point, Manchester; 38 George road, Birmingham; Beaufort Court, Bristol; Steel House, London), plus the Col (Hercules House, London).

  On 1 April 2000, CCTA, TBA and PACE transferred to the Office of Government Commerce, and the Civil Service College was fully integrated into the Centre for Management and Policy Studies within the Cabinet Office.

  Task Forces
  Mr. Pickles
  To ask the Minister for the Cabinet Office what has been the total cost to the Exchequer of Government task forces since May 1997. [121383]

  Mr. Stringer
  I refer the hon. Member to my answer to the right hon. Member for Wells (Mr. Heathcoat-Amory) on 9 December 1999,Official Report, column 634W.

  Civil Servants
  Dr. David Clark
  To ask the Minister for the Cabinet Office what was the average percentage increase in salaries of non-industrial civil servants, excluding members of the senior civil service, in her Department for 1999–2000; and to what extent the pay awards were staged. [121650]

  Mr. Stringer
  The headline pay settlement (excluding Agencies) was 2.5 per cent. on the paybill, together with the additional funds from staff turnover and staff in post received performance-related increases averaging 3.6 per cent. The increases were not staged.

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

Chechnya
Lord Juddasked Her Majesty's Government:
What progress has been achieved in relations with Russia on the enhancement of human rights and the promotion of a political peace settlement in Chechnya.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, progress on a political peace settlement in Chechnya has been slow. We have consistently urged this on Russia as the only way to resolve the conflict. The Foreign Secretary reiterated our concern during official talks in Moscow yesterday. He also pressed for action on human rights in Chechnya, where international pressure has secured some progress. Russia has agreed to access for international organisations and has set up a national commission to investigate human rights abuses.
Lord Judd: My Lords, I thank my noble friend for that reply, but does she not agree that the action which has so far been taken is simply to put pieces of machinery in place which could potentially deliver results but that results are so far conspicuous by their absence? Does she not therefore agree that while it is obviously vital to build good relations with Russia and to bring her into the centre of world affairs, the issue of human rights cannot be fudged? Does she not agree therefore that the overwhelming majority of the members of the Parliamentary Assembly of the Council of Europe are absolutely right to say that, unless action and positive results can be seen, it is impossible to reconcile Russia's action in Chechnya with her continued membership of the Council of Europe?
Baroness Scotland of Asthal: My Lords, I understand the concern that the noble Lord expresses, but I say straight away that the process is essential. Having a process which is transparent and upon which we can rely in order to ascertain precisely what has happened, and having an independent element in that process, is critical. Therefore we should not in any way dismiss the importance of the concessions that have already been made in relation to that process. The Council of Europe—the noble Lord is right to give voice to this matter—has considered this matter seriously. It proposed a suspension of Russia. This will be reconsidered in June. Russia has made various comments about offers she is making to address these
354
issues. They will be seriously considered. Russia is very much being put on her mettle. We shall review this issue.
Viscount Cranborne: My Lords, can the noble Baroness tell us a little about the tensions that the Chechnya question presents the Government with in their desire to support President elect Putin? Is it not at least possible that pursuing firmly the views that the noble Lord, Lord Judd, wants the Government to pursue could undermine the stability of President elect Putin within Russia itself? If the Government push the views of the noble Lord, Lord Judd, to the ultimate, how will the Government resolve that potential conflict?
Baroness Scotland of Asthal: My Lords, in relation to all such issues it is a question of balance and also a question of critical engagement. There are many levels on which we are working well with President Putin. He understands the agenda that Britain wishes to push. He also understands that we shall be robust on the matter of human rights. Getting that relationship right so that we can move forward, giving encouragement and enabling the new president to do that which is essential for Russia to be a true partner, must be our focus. At the moment we believe that that balance is being carefully handled by Her Majesty's Government and it is working as well as one can reasonably expect it to.
Baroness Rawlings: My Lords, following the Minister's reply to my noble friend, what representations have Her Majesty's Government made to the Government of Russia regarding the attack on the Media Most headquarters in Moscow and on NTV Television and the detention of the Radio Liberty journalist, Andrei Babitsky, by the Russian security forces?
Baroness Scotland of Asthal: My Lords, the situation regarding the journalist has been raised with our Russian colleagues. As I said in my initial Answer, my right honourable friend the Foreign Secretary spoke yesterday to his opposite number, Mr Ivanov. The issues in relation to Chechnya and human rights were raised. We shall continue to raise these issues with them.
Lord Wallace of Saltaire: My Lords, does the Minister recall that the problems in Chechnya partly grew out of Russian-armed Chechens supporting the separatists in Abkhazia as a means of destabilising Georgia? Is the Minister aware that the Abkhazia situation remains unresolved? Are the British Government bringing any pressure to bear on the Russians to resolve the problems of Abkhazia and thus help to stabilise the Government of Georgia?
Baroness Scotland of Asthal: My Lords, I am not able to tell the noble Lord whether that precise dimension of the problem has been raised. However, I can reassure him that issues in relation to regional stability have been a matter of constant concern, both on the part of my right honourable friend the Foreign Secretary and other Ministers within Her Majesty's Government, together with our officials. The issue of stability in the area remains critical and is very much on the agenda.

Nuclear Disarmament
3.7 p.m.
Lord Jenkins of Putneyasked Her Majesty's Government:
Whether they consider that the banning of all nuclear weapons can only be achieved by the adoption of a plan by the nuclear powers along the lines proposed by the Canberra Commission, and whether they will now propose such a plan.
Baroness Scotland of Asthal: My Lords, I am puzzled by this Question from my noble friend. The Canberra Commission did indeed consider the merits of proposing a precise timeframe for the elimination of nuclear weapons, but, after careful thought, decided not to do so. We believe that it was right to reach that conclusion. We remain convinced that the best way to make progress towards nuclear disarmament is by pursuing achievable, incremental steps forward. Given the complexity and difficulty of the issues involved, we do not believe that the adoption of a timed plan would in practice be likely to hasten the achievement of this goal.
Lord Jenkins of Putney: My Lords, my noble friend is right to say that the Canberra Commission decided in the end not to put forward its proposal for a convention. But, since that time, that matter has been reconsidered. A most remarkable document entitled Security and Survival, emanating originally from the United States although it represents also the views of several other countries, proposes a model for a convention. I suggest that that is sufficiently impressive for the Government seriously to reconsider the question of a convention. Am I wrong in thinking that the Government will agree that in the end a convention will have to take place in order to prevent the disaster which will occur if we have no such agreement among nations?
Baroness Scotland of Asthal: My Lords, as my noble friend knows, the Government have made it crystal clear—I hope—that our goal is the global elimination of nuclear weapons. That fundamental commitment has already been made. We also want to see faster progress in that direction. I shall, of course, note what is stated in the document to which my noble friend refers, but the Government feel that it is most
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important that we target our attention on achievable goals so that we make incremental improvements in the situation as quickly as we can manage that.
Lord Archer of Sandwell: My Lords, does my noble friend agree that unless the nuclear powers show some evidence of their intention to fulfil their obligations under the non-proliferation treaty, the non-nuclear powers will eventually renounce the treaty? Can she instil some sense of impending doom into our partners before we reach the point of no return?
Baroness Scotland of Asthal: My Lords, the noble and learned Lord is right to express his concern. However, there have been some glimmers of hope in the recent past. It is significant that in Russia the Duma has ratified Start II; it has also ratified the comprehensive test ban treaty. We are moving—slowly, admittedly—in the right direction. I can reassure the House that all of those in Her Majesty's Government who have the privilege of dealing with this matter have their eyes clearly focused on our long-term goal of the global elimination of nuclear weapons. We shall not be distracted from the path towards that long-term goal.
Lord Carver: My Lords, can the Minister say when we can expect to see some results from the review of NATO's nuclear weapon policy, which was set in hand in a council meeting at the summit last April?
Baroness Scotland of Asthal: My Lords, I wish I was able to give your Lordships a specific timetable in relation to that matter. I do not have one. All I can say is that this matter is moving forward as quickly as it reasonably can. I wish that I could tell your Lordships more.
Baroness Rawlings: My Lords, have Her Majesty's Government made representations to the Russian Government regarding the decree that the Russian President, Mr Putin, signed amending the 1992 presidential decree on export control over nuclear materials, equipment and technologies?
Baroness Scotland of Asthal: My Lords, I am not able to answer the noble Baroness in regard to that matter. I shall write to her in due course.
Lord Wright of Richmond: My Lords, what action have the Government taken to persuade the Israeli Government—which no longer make any secret of having a nuclear capability—to sign the nonproliferation treaty?
Baroness Scotland of Asthal: My Lords, all countries engaged in this kind of activity have been approached with a view to, first, encouraging acknowledgement and, secondly, dealing with it. The noble Lord is right: Israel has not made the necessary concessions in this regard.
Lord Chalfont: My Lords, further to the question of the Canberra Commission, does the Minister recall

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that in its report the commission stated that one of the most important means of ensuring the success of the Canberra plan was effective verification? It then went on to say that no verification plan can ever be 100 per cent effective. Can she reassure the House that none of the plans for disarmament, denuclearisation and all the other processes will be entered into unless there is a full and reliable verification procedure?
Baroness Scotland of Asthal: My Lords, the noble Lord is right; Britain will retain its nuclear deterrent for as long as it appears necessary for our safety. We have made that commitment; there is no reason at the moment to revise it.
Lord Brookman: My Lords, the Minister will be aware of a debate in another place in which the Foreign Office Minister pledged, in regard to the whole question of non-proliferation, that he would be working with the New Agenda Coalition to make progress in this area. Can she inform the House of any developments in those discussions?
Baroness Scotland of Asthal: My Lords, I can confirm that our delegation in York has been working extremely hard to forge agreement on the way forward for nuclear disarmament and non-proliferation. In particular, it has made a major effort to bridge our remaining differences with the countries which make up the New Agenda Coalition. We have shown a good deal of flexibility and imagination in seeking an agreed outcome from this conference and we hope that others will do likewise. I am sure that the whole House will join with me in expressing the hope that these efforts will bear fruit. If agreement is not reached by the time the conference ends tomorrow, it will not have been for any want of effort on our part.
Lord Stoddart of Swindon: My Lords, am I correct in believing that the Russian President, Mr Putin, has stated that if the Americans go ahead with their new missile defence system based in space there will be no further moves towards nuclear disarmament? If that is so, what representations have Her Majesty's Government made to the United States Government about that issue?
Baroness Scotland of Asthal: My Lords, we have been speaking to both Washington and Moscow about the anti-ballistic missile treaty and the need for an agreement. We have been encouraging both sides to negotiate so that an amendment to that treaty will be possible. The treaty has been amended in the past; it is possible for it to be amended again. We are very hopeful that our Russian and American colleagues will take this matter seriously and resolve it between them. We are not a party to that treaty, but we obviously wish them well in coming to some accommodation.

Northern Ireland: Public Transport
3.16 p.m.
Lord Bradshawasked Her Majesty's Government:
Whether the extension of the age profile of the bus fleet operated by Ulsterbus is consistent with their policy of encouraging the use of public transport.
Baroness Farrington of Ribbleton: My Lords, it is the aim of the Department of Regional Development that Translink should replace vehicles as they reach their target replacement age of 12 years for coaches and 18 years for buses. Over a period of time this would give average fleet ages of six years for coaches and nine years for buses. The extent of the Ulsterbus requirement for public funding to help to meet this aim is being considered as part of the current spending review. Like the noble Lord, we recognise that a modern bus fleet will encourage the use of public transport.
Lord Bradshaw: My Lords, I thank the noble Baroness for that reply. I declare an interest as a past chairman of the public sector bus companies in Northern Ireland. Is the Minister content with the fact that moneys from bus fares—which are of course paid by the poorer section of the community—which were prudently set aside by the bus companies in order to replace the fleet, have been taken away and used to subvent other government expenditure programmes, including road building? Does the Minister agree that this is a most unfortunate example of regressive taxation?
Baroness Farrington of Ribbleton: My Lords, I recognise the noble Lord's commitment to public service, which he demonstrated in the early 1990s as chairman of Ulsterbus and Citybus, and I compliment him on it. The Northern Ireland Transport Holding Company is a public corporation; its reserves are public money and its expenditure is only possible within the overall Northern Ireland public expenditure control total. However, in May 1998, the Chancellor of the Exchequer agreed that £25 million of those funds should be used for Northern Ireland, providing a significant boost to the local economy. The boost to public expenditure provided by the Chancellor's initiative was a major factor in enabling an additional £21 million to be spent on public transport over the years 1999–00 and 2001–02, and we still have this year's spending review in which spending on public transport is being given serious consideration.
Lord Dubs: My Lords, does my noble friend agree that the Northern Ireland Transport Holding Company is desperately short of money to modernise its fleet of buses and, indeed, Northern Ireland Railways, and to improve standards of safety? Can she comment on why the Northern Ireland Transport Holding Company has not so tar achieved any

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significant relationship with the private sector, through either PFI, PPP or leasing, as a way of improving public transport in Northern Ireland?
Baroness Farrington of Ribbleton: My Lords, I agree with the basic premise behind my noble friend's question, but would add that additional expenditure also assists improvement of access for those with disabilities. We are actively looking at the prospects for public/private partnerships for public transport in Northern Ireland. It is clear that the Northern Ireland Transport Act 1967 would need to be amended to enable PPPs to be introduced. Work would also have to take place on contract specification and negotiation. However, PPPs offer the prospect both of introducing greater efficiencies into public transport and making the phasing of public expenditure requirements easier to cope with.
Lord Laird: My Lords, if the Government's policy, as outlined by the Deputy Prime Minister, that the average age of a bus fleet should be only eight years does not apply to Northern Ireland, the purpose of that policy being access for disabled people, does not that show a case of discrimination against disabled people in Northern Ireland who use public transport?
Baroness Farrington of Ribbleton: My Lords, the noble Lord's interest in and knowledge of transport issues in Northern Ireland are well known. In the report From Exclusion to Inclusion, which was published last December, the Disability Rights Task—Force recommended that the exemption for transport operators from the first and October 1999 phases of DDA—access to services duties—should be removed in civil rights legislation. We are considering how to achieve that. I accept that replacing old buses with new buses that make access easier is desirable. However, the decisions that have been taken by successive Secretaries of State with regard to public expenditure in Northern Ireland have been made on the basis of careful judgment. I am sure that the noble Lord, Lord Laird, will join all other noble Lairds —
Noble Lords: Oh!
Baroness Farrington of Ribbleton: My Lords, I am aware that there is only one noble Lord, Lord Laird. I am sure the noble Lord will join all other noble Lords in hoping that the Assembly and the Executive will be making these vital judgments in Northern Ireland as soon as possible.
Lord Berkeley: My Lords, does my noble friend agree that quality bus driving is as important as quality buses? Do the Government have any plans to improve the quality of the training of bus drivers so that travelling on a bus becomes a pleasure rather than a "hanging on like grim death" experience, as is so often the case at the moment?
Baroness Farrington of Ribbleton: My Lords, I have not received any specific complaints about the driving
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of vehicles in Belfast or other parts of Northern Ireland. Maintaining high quality in terms of driver training and retraining, and monitoring that quality are extremely important. I shall look to see whether any further initiatives are taking place.
Baroness O'Cathain: My Lords, I support the comments made by the noble Lord, Lord Laird. Is there any way in which the Minister can bring pressure to bear so that Northern Ireland is not discriminated against in terms of disabled people's access to public transport? From my knowledge of the Province, I would say that there is probably a greater need in that part of the United Kingdom than there is in the rest of it.
Baroness Farrington of Ribbleton: My Lords, I accept the point made by the noble Baroness and repeat my earlier comment. The Government are presently considering the recommendation on the right of access and other recommendations which need primary legislation in order to go forward. The point is very well made.
Lord Randall of St Budeaux: My Lords, does my noble friend agree that if we are to reduce pollution and congestion in this country and in Northern Ireland as well, there has to be provision of personal services? A bus cannot provide that because it is bound by law to go on fixed routes at certain times. Does she further agree that the time has come to change the legislative structure in which public transport operates?
Baroness Farrington of Ribbleton: My Lords, my noble friend makes an important point, but I am at a disadvantage, not having detailed knowledge of public transport legislation. I cannot foresee a day when buses are not required to go on a predetermined route and stop in predetermined places. However, having made that point, I understand that the former Prime Minister, Mr Macmillan, is reputed to have assumed that it was possible to get a bus to go wherever one wanted to go. My noble friend raises an important point with regard to access to transport and the possibility of providing a variety of community services, including services such as Dial-a-Ride.

Social Inequalities
3.25 p.m.
Baroness Miller of Chilthorne Domerasked Her Majesty's Government:.
Which areas of inequality, highlighted by the Office for National Statistics' report on social inequalities, concern them most.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, the report to which the noble

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Baroness refers portrays the inequalities in income, health, education and work that this Government inherited.
Noble Lords: Oh!.
Baroness Hollis of Heigham: Yes, my Lords, the report is based on statistics which go up to 1997–98, so by definition it is true that it analyses the problems which the Government inherited and are currently addressing. It will not surprise the noble Baroness that the inequality which concerns me most is the poverty, and therefore the inequality in life chances, of children.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for her reply. The Government are to be congratulated on producing such clear statistics, but are they not horrified that the report reveals that women earn on average 42 per cent less than men? That is totally unacceptable. The same report highlights the fact that girls achieve consistently better results at school and yet by the age of 20 they earn on average 10 per cent less than men. Does the Minister accept that this lower pay, combined with the fact that women take time out for childbirth and childcare, means that they may also face a poorer old age, with less good pensions? What are the Government going to do to root out this institutionalised sexism in pay? Are they thinking of reforming the Equal Pay Act?.
Baroness Hollis of Heigham: My Lords, the noble Baroness has addressed a very important point and the House is right to be concerned about it. I think I am right in saying that her statistic that women's pay is 42 per cent behind that of men is in terms of total income through earnings coming in. That may not take full account of the fact that women's work is more part-time while men's is full-time and men do more overtime. My statistics show that in the 1970s women's pay was 60 per cent of men's and in terms of full-time equivalence it is now 81 per cent of men's. That 19 per cent gap, comparing like with like, is no more acceptable than the kind of statistics offered by the noble Baroness. She is entirely right.
The noble Baroness asked what the Government are doing. The biggest leap forward in women's equal pay came, as she mentioned, with the Equal Pay Act 1970. The next biggest leap forward has come with this Government's national minimum wage. Twelve per cent of all women now benefit from the national minimum wage compared with 4 per cent of men. If one adds to that not just the national minimum wage but the working families' tax credit, which effectively pays women on, say, £4.50 an hour a man's wage of £9, one sees a real improvement in women's income and, as the noble Baroness hoped, a real improvement in women's pensions in the years to come.
Lord Archer of Sandwell: My Lords, in the light of my noble friend's earlier Answer, does she agree that, of all the inequalities which trouble us, the most
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worrying are those relating to child poverty, because they are likely to be passed on from generation to generation?.
Baroness Hollis of Heigham: My Lords, my noble and learned friend is absolutely right. We know that if children are born poor they go on to experience poorer health, they go on to experience more truancy and they go on to experience fewer opportunities of employment. They are born poor, they live poor and they die poor.
The best way we know of to break child poverty, thus springboarding such children into the prospect of living a decent life, is to ensure that one or other or both of their parents are in work. The source of poverty is lack of access to the labour market. That is precisely why on the one hand we are endeavouring to bring lone parents into the New Deal while on the other hand, through our reform of the Child Support Agency, we will ensure that their children enjoy the maintenance that they should receive. If we get parents into work and child maintenance payments flowing, we hope the result will be that those children will have a decent chance in life.
Baroness Gardner of Parkes: My Lords, the Minister has implied that the statistics quoted all relate to inherited circumstances. Why, then, have the Government still done nothing to address inequalities in health, in particular as regards the indices of deprivation in physical health as well as those for my own field, that of dentistry? Is it not the case that the Government have done nothing to reach children who simply cannot get any form of National Health Service treatment?.
Baroness Hollis of Heigham: My Lords, as regards the second point made by the noble Baroness, my noble friend Lord Hunt has told me that we are working on the dental health strategy. In response to the noble Baroness's wider point, the Government's response to the Acheson report has been to state that local authorities must develop health improvement programmes. One of the primary functions of those programmes must be to address the real health inequalities reflected in cancer rates, strokes and the like. From the statistics that we inherited, we know that life expectancy at birth for a boy is around five years less in the two lowest social classes as compared to the two highest classes. If you are born poor, you will live for five years less. Those are the kinds of inequalities that my noble friend Lord Hunt and his team at the Department of Health are seeking to address. I am sure that we all wish them well in their task.

Psychotherapy Bill [H.L.]
Lord Alderdice: My Lords, I beg to introduce a Bill to establish a body to be known as the General Psychotherapy Council; to provide for the regulation of the profession of psychotherapy, including making

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provision as to the registration of psychotherapists and as to their professional education and conduct; to make provision in connection with the development and promotion of the profession; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Alderdice.)
On Question, Bill read a first time, and to be printed.

Divorce (Religious Marriages) Bill [H.L.]
Lord Lester of Herne Hill: My Lords, I beg to introduce a Bill to make provision enabling a court to require the dissolution of a religious marriage before granting a civil divorce. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Lester of Herne Hill.).
On Question, Bill read a first time, and to be printed.

Financial Services and Markets Bill
3.34 p.m.
Read a third time.
Clause 2 [The Authority's general duties]:
Lord Saatchimoved Amendment No. 1:
Page 1 line 19, at end insert ("; and
(c) which does not unnecessarily impair the competitive position of the United Kingdom").
The noble Lord said: My Lords, in moving Amendment No. 1, perhaps I may speak also to Amendment No. 2. This Bill is a response to the trend towards consolidation in the financial services industry. Hence, nine regulators are to be merged into one. That is all well and good, but since the Bill arrived in your Lordships' House, a 10th regulator has been added—a German regulator. That is because there is a more powerful force behind the changes in this industry; namely, globalisation. The two amendments in this grouping reflect that aspect.
The first amendment has the modest objective of seeking to ensure that the new regulatory system under the FSA,
"does not unnecessarily impair the competitive position of the United Kingdom".
It seeks no more than what is described in a letter to The Times this morning submitted by several noted practitioners in the financial services world. They have written to urge the Government to,
"carefully weigh regulatory purity against competitive innovation, and to seek a balance between the two".
They go on to say that,
"Not to do so would be to put at risk the UK's extraordinary achievement in financial services, an industry in which the UK has retained a disproportionate share of the global market".
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That lies at the root of our concerns and sets out the philosophy that, from the beginning, has guided our approach to this Bill.
The financial services industry is unique. It is Britain's largest industry. Without it, Britain would be in a state of balance of payments deficit permanently. That is why so much concern has been expressed about UK competitiveness and also reflects the second aspect of this group of amendments: the sudden appearance on the scene of a 10th regulator, the German regulator, as a result of the proposed merger of the London and Frankfurt stock exchanges.
The chairman of the proposed new merged exchange has said that this merger "has to happen". Perhaps I may quote his reasoning.
"The London Stock Exchange could not go it alone".
Perhaps, but if one accepts that as a sad fact then, as happened on Report, a number of questions must be raised about the impact of that merger on this Bill.
As a consequence of amendments introduced by the Government in your Lordships' House, the FSA is now the responsible listing authority for the London Stock Exchange. But the result of the merger is that we shall have one exchange and two regulatory regimes. We are uneasy about that situation.
The Minister has conceded that the,
"appropriate regulatory arrangements for the merged body are not clear".
The FSA has stated that it is,
"working closely with our German supervisory colleagues to arrive at a sensible regulatory outcome for iX, the new exchange".
However, will the resulting system bear any resemblance to the Bill that Parliament has been considering over the past two years? The Government state that the outcome of those talks between the regulators is,
"not a responsibility of the Government".
Who, then, will be responsible for the fair and equal regulation of Smith plc and Schmidt gmbh—two companies in the same sector quoted in Frankfurt, in euros? How will the Government ensure that a level playing field of regulation is in place for all the participants in the merged exchange? Who will address the concerns of the Treasury Select Committee in another place about regulatory arbitrage; that is, companies listing in one place or another to gain a competitive advantage? Who will answer Mr Arthur Levitt, chairman of the American Securities and Exchange Commission, who has asked:
"How they are going to apply, and the likelihood of, a common listing and common governance structure?"?
In a few moments I am sure the Minister will say that all these concerns are groundless and that the Government considered all this carefully when drafting the Bill. However, if that is the case, how odd it has been to hear the chairman of the Stock Exchange yesterday in his submission to the Select Committee of another place, where he stated:
"No representations had been made to the London Stock Exchange about this merger from the Treasury; none from the Bank of England and none even from the Financial Services Authority itself".

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We have the uneasy feeling that this merger is shifting the ground underneath our feet and is in danger of making obsolete all of the epic two years' worth of parliamentary scrutiny of this Bill.
For those reasons, Amendment No. 2 is intended to address these growing concerns and to give the Government a chance further to reflect on them. First, the amendment states that the merged exchange must be "regulated to common standards" in both countries. That principle should apply both to the exchange itself and to those who are members of the exchange. Secondly, the amendment states that the treatment of market abuse, in particular the nature of the prohibition and the deterrent intended to prevent it, must be the same in both countries. Noble Lords will be well aware that both of these issues are highly relevant to the FSA's market confidence objective and so we have tabled our amendment under that heading.
If, having completed its review of the regulatory implications of the merger, the FSA does conclude that there are substantial differences in approach to market regulation and market abuse in Germany—which I have been assured is certainly the case—then this amendment would confirm that the FSA would be charged with the task of ensuring, so far as is practicable (we realise that the obligation cannot be unqualified) that a regulatory level playing field, both in relation to the operation of the market and to market abuse, is in place.
We should recognise the globalisation of markets in the Bill and reflect that in the objectives of the FSA. I beg to move.
Lord Newby: My Lords, I am grateful to the noble Lord, Lord Saatchi, for having raised this issue. When he first did so, a couple of weeks ago, many noble Lords, and indeed many in the City, were barely aware of the merger of the London and Frankfurt stock exchanges. It has been interesting to watch the volume of interest, comment and disunity on the issue grow with every passing day. A cloud no bigger than a man's hand has rapidly developed, like the thunderstorm earlier today. This is a major issue. It has far-reaching implications for the way in which the City, and indeed Frankfurt, operate. I suspect that there is a bumpy road to travel before the merger is consummated, if it happens.
To that extent, I share the analysis of the noble Lord, Lord Saatchi, but then our paths diverge. The problems with which we are faced in terms of the Bill stem from the fact that the merger has not yet taken place. By definition, we cannot know what form it will take. Its longer-term consequences are unclear, even to many of the players in the market. When the final structure of the new entity is clear, a view may be formed that the Bill requires amendment. The problem is that we are asked now whether it should be amended. Given the complete lack of clarity as to where the process is going, we simply cannot have the degree of certainty that would enable us to accept the amendment.
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On examination of the draft amendments before the House, that view is reinforced. Frankly, Amendment No. 1 adds little to the existing provisions of Clause 2. As for Amendment No. 2, as a declaration of intent it sounds fine; however, I am at a loss to know how the FSA can ensure that the German regulator adopts measures consistent with those in the Bill—just as I am unsure how the FSA would respond if the Frankfurt regulator said, "This is the way we do it in Germany. I hope you will now amend your regulations so that they are consistent with the way in which the system operates in Frankfurt". So I fear that I cannot support either amendment.
However, this is a substantial issue. The Bill's provisions will not deal adequately with it for the longer term. I suspect that, just as some in the City have been somewhat complacent about the consequences of the merger of the two exchanges, there may be a certain complacency at the Treasury, and possibly even among Ministers, about the longer-term consequences of the merger. Therefore, although I have great sympathy with the thought behind the two amendments—and a sinking feeling that we shall be returning to financial services regulation sooner rather than later—I cannot support the amendment.
3.45 p.m.
Lord Borrie: My Lords, I congratulate the noble Lord, Lord Saatchi, on a timely intervention at the previous stage in asking us to think about the important proposed merger between the London and Frankfurt stock exchanges. It is clearly relevant to so much of the Bill's provision, although, as I think the noble Lord will accept, not to the whole of it. There are aspects of the financial markets which will he unaffected. Nevertheless, it was only right that the noble Lord should bring these matters forward at the previous stage and again now.
In somewhat light-hearted vein, I congratulate him also on ensuring that the media are well aware of his proposed amendments—the Financial Times in particular. I do not, however, congratulate him on reviving a proposal of which, frankly, many of us are rather tired. The amendment seeks, inappropriately, to elevate to subsection (1) a matter that we all recognise as important; namely, the competitiveness of London and the UK in these matters. As the noble Lord knows better than any of us, the clause recognises that the authority, in discharging its general functions, should,
"have regard to … the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom".
We all agree on that, and it seems that the provision is in the right position, alongside the other matters. The noble Lord wants once again to elevate this albeit important point to become one of the principal regulatory objectives of the Bill.
Perhaps I may again contrive to bore your Lordships by citing the four regulatory objectives. Surely they are unexceptionable; they are accepted on all sides of the House. They are: market confidence; public awareness; the protection of consumers; and

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the reduction of financial crime. What more do we want? Of course, we all want international competitiveness to be considered, and there is provision for that in Clause 2. It must be the prime objective of the many firms that operate in London. It must be right at the top of their enterprise agenda. But we are talking about the agenda and objectives of the regulatory authority.
There may be different views on either side of the House as regards our relative keenness on regulation at all, or on having a regulatory authority such as this. But surely it is eminently appropriate that it should have public interest objectives. I have cited the four immensely appropriate public authority regulatory objectives in Clause 2, and I do not think that we want to alter the provision now. That has nothing to do with the proposed merger between London and Frankfurt.
I share the thoughts of the noble Lord, Lord Newby, in regard to Amendment No. 2. But I am not privy to the thoughts of my noble friend the Minister. Like other noble Lords, I look forward to hearing his response.
Lord Stewartby: My Lords, I was rather disappointed to hear that although the noble Lord, Lord Newby, was sympathetic to the purport of Amendment No. 2, he did not feel that he could support it. He offered two reasons, the first being that the authority would not be in a position to ensure common standards from one country to another. There is a simple answer to that. The amendment uses the expression,
"so far as is practicable".
That seems a perfectly reasonable way of dealing with the point.
The noble Lord's other reason seemed to be that these are early days; that if the Stock Exchange merger with Frankfurt goes ahead, this will be a big change and it is difficult at this stage to consider all the potential implications and, therefore, what the legislative response should be. However, I find it difficult to see how one can quarrel with the wording of the new subsection (3) (in Amendment No. 2), which has been drawn up to provide a requirement that the Financial Services Authority should do two very general and desirable things. The first is, so far as is practicable, to ensure that markets and exchanges are regulated to common standards when those markets and exchanges operate both in this country and in another; the second is to encourage overseas regulators to adopt similar measures, or measures consistent with those in the Bill, in relation to the prohibition of market abuse.
The amendment may not be perfect, although given its source—my noble friend Lord Saatchi—it is obviously of high quality. It is very important that today the amendment is not only moved but accepted by the Government. When the Bill goes back to another place it will give the Government an opportunity to table an amendment which meets the points that have been made and incorporates them
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into the Bill before it is enacted. If we had to wait for new regulatory legislation to follow up this matter the process would be very much longer.
In view of the tremendous effort that has been made by the Government, noble Lords and others to put the Bill into the right form, it is unlikely that the Government will be enthusiastic about introducing another regulatory Bill on this subject in the near future. I believe that if we gave the Government more time to think how to deal with the matter we would be doing them and the Treasury a favour. Without wanting to sound sycophantic, my officials in the Treasury were some of the most intelligent and conscientious people with whom I have ever had the privilege to work. I have no doubt that for some time they have been grappling with the implications of the potential merger which has arisen at a very late stage in our consideration of this Bill and which raises new and fundamental questions about how the regulatory system will operate where there are shared markets. It would assist the House and the proper formulation of this Bill, at a late stage before it becomes an Act, if the Treasury had a further opportunity to consider this new and vitally important issue. I hope that on reflection the noble Lord, Lord Newby, will be able to support this amendment and that it will find general favour in your Lordships' House this afternoon.
Lord Desai: My Lords, I did not speak at the Report stage of the Bill. However, I detect a philosophical contradiction in Amendments Nos. 1 and 2, which have been spoken to by the noble Lord, Lord Saatchi. Amendment No. 1 and all the gloss that we have read in today's newspapers mean, more or less, that there are limits to the regulation of financial markets and there should be a hands-off attitude. Those matters which are self-regulatory ought to be left alone and the FSA should not intervene too much. Whether or not that is right, that is the gloss which has been put on the amendment. After all, as my noble friend Lord Borrie said, the competitive position has been covered in subsection (2). However, Amendment No. 2, which concerns the super-regulator, states that matters cannot be left to themselves. The logic of the amendment is that there is a need for a European financial services authority. If the noble Lord, Lord Saatchi, had said that I am sure that the noble Lord, Lord Newby, would have supported a super-European financial authority.
Given the fact that it is premature to speak of a merger and a number of matters must be sorted out, we should leave it to the markets, the stock exchanges and the financial authorities in the two countries to deal with it. Let them do their work and not complicate their lives and ours. As happens with all financial services Bills, no doubt when this legislation passes into law it will be out of date. That is in part a matter of regulating financial markets. In one, two or three years' time we shall return to the subject and have another nice Bill comprising several hundred clauses

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to deal with, but this is not the time to do it. I believe that that would contradict the philosophy behind Amendment No. 1.
Lord Elton: My Lords, the noble Lord's reference to another nice Bill of several hundred clauses caused the Minister to close his eyes for a moment. I sympathise with him.
I hope that the Minister will start by confirming or otherwise my noble friend's opening remarks about the degree of consultation on the developing situation. I hope that he will tell noble Lords that the Government have been in touch with the very important bodies which were listed. I also hope he will tell your Lordships (if the Minister can listen with his right ear to what I say) to what extent Her Majesty's Government are in touch with the German Government and their regulator's thinking about how the developing situation is to be dealt with. The noble Lord, Lord Newby, is right to say that at the moment everything is uncertain, but that is the worst possible ground for failing to prepare for whatever may happen.
The weight of my noble friend's second amendment is to give the authority an objective to achieve in the developing situation, however it may develop. The amendment requires it to ensure, as far as practicable, equality of regulation in either part of the market. The British people can expect nothing less than that the Government will do their best to ensure that those who earn their bread and butter in foreign exchange do so as nearly as possible on a level playing field. Perhaps the noble Lord will say that that is clearly expressed elsewhere in the Bill, and that is quite possible. I make no apology for not being certain about it because I have never taken part in legislation in this style before. My perception of the Bill is very much that which a porpoise has of a sailing ship. In the time available and with the resources at one's command one cannot be apprised of the whole subject. We must grasp whatever is put before us. This particular matter is exceedingly important, and I believe that we should grasp it firmly. I hope that the noble Lord, Lord Newby, will see the merit of that before the debate is over and that your Lordships will join my noble friend in pursuing the matter.
My noble friend suggests that it is as well to table an imperfect amendment in order that it can be rectified in another place. We should not proceed in that way. If it is agreed that the amendment is necessary but imperfect the proper procedure is to recommit the clause to Committee. I am aware that that is a matter for the usual channels. However, we have bodged this matter to such an extent and in such haste given its scope—the Minister may say that two years does not represent haste, but the length of time must be proportionate to the work done—that I hope what my noble friend seeks in this amendment will be achieved by one route or another.
4 p.m.
Lord Rees: My Lords, my noble friend Lord Saatchi has very properly taken us back to the question which
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he raised robustly last week on the final day of Report stage. On that occasion the Minister gave an equally robust answer. I am bound to say that his answer did not entirely satisfy me, and perhaps it did not satisfy other noble Lords. I refer to the implications of the proposed merger of the London and Frankfurt Stock Exchanges. One recognises that the merger is not yet complete and that the noble Lord, Lord Newby, has reservations. However, we do not have the luxury of time. This is the last day, at any rate in theory, on which the House is able to consider this particular Bill. We cannot wash our hands of an important question because the precise event which gives rise to this debate has not yet concluded. At least it should focus our minds on the kinds of questions that will arise when trading transactions and markets extend beyond one national area. Therefore, it is incumbent on this House at least to express a view on the general question, even if we are conscious that we cannot deal with all the detailed points that may arise if the merger goes through.
The Minister said last week that no amendments to the Bill were called for and that neither the Government nor himself as the Minister piloting the Bill would be responsible for the consequences of the merger. I am not entirely certain that that is so, but let us debate the matter on those terms. He and the Government are responsible for the Bill and for offering to the country and to us some conclusions about the implications of major operations such as those posed by the proposed merger before we wave goodbye to the Bill and it moves to another place.
I offer my sympathy to the Minister who has had o carry the burden for so long. After many wearisome weeks no doubt he and the whole House want to be certain that this Bill will provide at least some kind of practical regulatory framework. We cannot simply wash our hands and say, "Well, there are certain problems arising on the horizon and let us wait until they arrive". We should indicate to the world outside that we have focused a little on this particular question. It is not entirely an academic one. No doubt German residents are trading at the moment on the Stock Exchange and UK residents are trading on the Frankfurt Exchange. The Mannesman Vodaphone transaction focused our minds on matters that spill over national boundaries.
We have to focus a little more closely. I do not believe that we can take the rather bland view offered by the noble Lord, Lord Newby, and say, "We may have to come back to it at a later stage". At the moment the Stock Exchange is still within the jurisdiction of the FSA. If I understand the German position correctly, the Frankfurt Exchange is within the regulatory regime of Hessen and possibly of some German federal regulatory regime.
Perhaps the Government have considered the matter, but they have not taken us into their confidence. Does the Bill need to be amended in the absence of some European structure? Do not let us get involved in a debate as to how far we want to have some super European structure. But in the absence of some kind of pan-European regime on this matter,

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what do we do? In what area will the FSA need to develop its competence? The Minister might indicate to us the kind of points that he would like included and which he might be putting to the FSA, for all I know.
It has been an unprecedented legislative process. My noble friend Lord Elton suggests that we may have to prolong and enlarge it. I admire the rigour with which he has applied himself to the proper process. Whatever it may be, we have been subjected to cascades of government amendments and very often not long before the Sitting. I do not blame the Minister if he does not want to embark on a further exploration of a major issue and would like to shed the load for a while to his colleagues in another place. It is critically important that we attempt to ensure that the framework of the Bill is right and that it will deal adequately with activities and transactions that spill over two jurisdictions.
I appreciate that my noble friend Lord Lamont is due to mount a debate next week about the merger of the two exchanges. Alas, that is a little too late. It may be criticism of the way in which this Bill has been handled. It is very important that we form a view tonight on this question. I do not believe that it can be just brushed aside. I hope that the Minister will recognise the various difficulties when the amendments have been debated and that he will respond a little more helpfully than he did last week.
Lord McIntosh of Haringey: My Lords, I always like to begin with as much agreement as possible. I say from the outset how much I agree with the opening remarks of the noble Lord, Lord Saatchi, as regards the importance of financial markets not just to themselves but to this country; their importance internationally and the fact, which he emphasises regularly and quite rightly, that the world does not owe us a living in that financial markets can move from one location to another if the climate is not right for them. Having said that, I am not going to go very much further in agreement with him.
I shall deal with the two amendments in turn. Amendment No. 1 is identical to the amendment which the noble Lord moved in Committee and very similar to the one which he moved at Report. There is nothing I can do to persuade myself that they are right now when I believed they were wrong then.
The purpose of the amendment is to ensure that the FSA's regulatory activities do not unnecessarily impair the competitive position of the United Kingdom. I have said it before and I shall say it again. We all agree that that is vitally important. We need checks and balances in place to ensure that the United Kingdom's competitive position is not adversely affected by too much or too little regulation. But the Bill already provides for that and does so in a way that is effective in the requirement on the FSA set out in Clause 2(3)(e), to have regard to,
"the international character of financial services and the desirability of maintaining the competitive position of the United Kingdom".
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As I understand it, the reason why the noble Lord, Lord Saatchi, has been so persistent in advancing the amendment is that he believes that without it the FSA will not take competition seriously enough. At Report stage he referred to his,
"concerns that there is no proper balance in the Bill between the pursuit by the FSA of its regulatory objectives and the desirability of encouraging competition and the competitiveness of the UK. We believe that it is essential to seek to achieve that balance, notwithstanding the difficulties to which that may give rise for the FSA in performing its functions".—[Official Report, 13/4/00; co1.335].
The Bill strikes this proper balance now, but that balance would be upset by the noble Lord's amendment. As I said at Committee and repeated at Report,
"Subsection (1) places a positive requirement on the FSA to take action. This is appropriate when we are talking about objectives; that is, the aims of regulation. In contrast, the need to take account of international competitiveness is something which should condition the way it goes about meeting the objectives. That is as true for competitiveness as the other matters dealt with in Clause 2(3)".—[Official Report, 16/3/00; col.1803].
I am sorry to repeat it again, but the argument is being put in comparable terms. It is not just that competitiveness is a matter which is properly dealt with as a principle in subsection (3)(e) but that it is, as I said at Report stage,
"by placing the same duties on the FSA in relation to this issue as it has in relation to the regulatory objectives themselves, the amendment introduces into the Bill a degree of ambivalence as to the relationship between those objectives and the proposed new duty. Is the proposed new duty inferior to the objectives, superior to them, or something which ranks equally alongside them? I do not know the answer, and I do not think that the FSA will know either".—[Official Report, 13/4/00: col.341].
The competitiveness principle that the Bill already contains does not simply oblige the FSA to turn its mind to competitiveness every now and again. It must have regard to it and give it due weight in taking all of its regulatory decisions. I believe that that is very clear. The amendment would create confusion.
I turn to Amendment No. 2, which has largely been the subject of the debate so far. As the noble Lord, Lord Saatchi, said, the amendment has been prompted by the proposed merger between the London Stock Exchange and the Deutsche Borse. I have listened carefully to the noble Lord's speech, but I have to say that the amendment seems to be based on a misconception of the extent of the proper role and jurisdiction of the Financial Services Authority.
I can hardly claim that we have been considering the possibility of such a merger since the early days of the Bill. I do not believe that anybody had been considering it because the matter had not been mooted. It is certainly true that the full details of the proposed exchanges have yet to be worked out and it is also true—it could hardly be otherwise—that the FSA will need to look carefully at the implications of what emerges. But the Bill provides the right regulatory framework. There are practical issues for the regulator, but they are issues that are within the framework that the Bill provides, and no amendments

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to the Bill are required. The noble Lord, Lord Rees, asked the right questions which I shall attempt to answer.
Let me say what I can about the plans that the exchanges have outlined. I understand that the intention is to create two pan-European equity markets. The first will be a market for blue-chip shares, based in London. It will continue to be a UK recognised investment exchange, overseen by the FSA. The second will be the proposed joint venture with NASDAQ to provide a market for growth company shares, which will operate in Frankfurt under German regulation. We are talking about two separate exchanges and, although there will need to be co-operation between the FSA and its German counterparts, there are separate regulatory jurisdictions.
That is not a unique situation. A similar arrangement already exists. The Swedish OM Group owns both the stock exchange in Stockholm, regulated by the Swedish authorities, and a derivatives exchange in London which is a UK recognised investment exchange overseen by the FSA. The FSA and the Swedish counterpart have their separate roles and the arrangements work satisfactorily.
We have no doubt that the provisions of the Bill relating to the recognition of exchanges are able to cope with structures such as the proposed international exchanges. We are confident that the recognition requirements for exchanges will be robust enough to cope with any issues that may arise by the operations outside the UK of UK-based exchanges; for example, the placing of dealing screens in foreign jurisdictions which enable traders to access the UK exchange.
On the amendment, as Clause 3 of the Bill makes clear, the purview of the FSA is the financial system operating in the UK. The key words here are "operating in the UK". The FSA is not and cannot be responsible for markets and exchanges located abroad which do not have operations in the UK. They are subject to the regulatory authorities of the jurisdiction in which they are located.
Of course, they all co-operate in the International Organisation of Securities Commissions and the Forum of European Securities Commissions, but it would be giving the FSA duties beyond its responsibilities and powers to suggest that it can ensure, even so far as is practicable, that markets and exchanges are regulated to the same standards as those in the UK. When we have debated home state and host state regulations, that has been a matter of debate throughout the consideration of the Bill.
It is not that we do not know what to do. We know that the provisions in this Bill are adequate for the challenges that may be placed on it by this or any comparable merger. We have no doubt that no amendments are required to the Bill. I urge the noble Lord, Lord Saatchi, not to press the amendment.
Lord Saatchi: My Lords, I return to what the noble Lord, Lord Borrie, said. He was interested to know
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why we were so persistent—I believe he said "so tiring"—on the subject of UK competitiveness. I want to explain that by trying to thread together our first amendment, our second amendment and Clause 2(3)(e) of the Bill, which he read out, relating to,
"the desirability of maintaining the competitive position of the United Kingdom".
In doing so, I can also deal with the point made by the noble Lord, Lord Desai, about a possible contradiction between the first and second amendments.
Our interest in the first amendment is illustrated precisely by the matters dealt with in the second amendment. The UK financial services industry is a modern miracle. It is unique. To my knowledge, it is the only UK industry in which Britain leads a global market. We believe that that is the strength of our position. The chairman of the London Stock Exchange, the jewel at the heart of this great industry, tells us that Britain could not go it alone. That means that there is a serious question mark over the UK's competitiveness in this industry, despite what appears to be its dominant position.
I have no doubt that what the chairman of the Stock Exchange said is true. He is explaining to us that mergers of stock exchanges will follow in the train of mergers of companies. There will probably be many of them. Sometimes such mergers will be with stock exchanges that have an easier regulatory regime and sometimes with stock exchanges that have a harder regulatory regime. In their own interests, people will pick and choose which bit suits them best. In that process, somebody will have to be responsible for ensuring that British companies are not placed at a disadvantage by the curious new situation.
That brings me to the point made about the contradiction. If there is a contradiction, let me draw out a contradiction that is in the Bill as it stands. At some stage during our debates I recall the Minister explaining that the reason why it was inappropriate to raise up the competition objective—to elevate it as the noble Lord, Lord Borrie, said—was that other regulators in other countries would consider it offensive for the FSA, with which they were dealing, to have in the Bill an objective to maintain competitiveness, or any words that suggested that it had a duty to advance the interests of the United Kingdom. That was put forward as a reason not to elevate the competition objective.
What shall we make of the contradiction of the FSA which has to have regard to,
"the desirability of maintaining the competitive position of the United Kingdom"—
as the noble Lord, Lord Borrie, says? What will it do, as the listing authority of a combined exchange of two countries, or three countries or five countries? How can it be the listing authority for the exchanges of several countries and have the aim of looking after the competitive position of the United Kingdom?
The problem is inherent in the Bill. That is the heart of what we are trying to say with these amendments. The Bill has not anticipated the major change that is

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taking place before our eyes. We believe that our amendments are important in order to give the Government a little more time—perhaps while the Bill is in the Commons—to think about the implications of these huge changes. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Saatchimoved Amendment No. 2:
Page 2, line 37, at end insert—
("(3) Maintaining confidence in the financial system includes ensuring so far as is practicable that markets and exchanges which operate both in the United Kingdom and in another country or territory and members of those markets and exchanges are regulated to common standards and that the overseas regulator in the relevant country or territory adopts measures consistent with those under this Act for the prevention and prohibition of market abuse in relation to those markets and exchanges.
(4) "Overseas regulator" has the same meaning as in section 190.").
The noble Lord said: My Lords, I spoke to Amendment 2 when speaking to Amendment No. 1. I beg to move.
4.18 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 128; Not-Contents, 144.

Division No. 1

CONTENTS

Aberdare, L.

Dean of Harptree, L.

Ackner, L.

Denham, L.

Anelay of St. Johns, B.

Dixon-Smith, L.

Arran, E.

Eccles of Moulton, B.

Astor of Hever, L.

Eden of Winton, L.

Attlee, E.

Elles, B.

Bell, L.

Elliott of Morpeth, L.

Belstead, L.

Elton, L.

Blackwell, L.

Feldman, L.

Blaker, L.

Flather, B.

Blatch, B.

Fookes, B.

Boardman, L.

Fraser of Carmyllie, L.

Bowness, L.

Freeman, L.

Brabazon of Tara, L.

Geddes, L.

Bridgeman, V.

Gibson, L.

Brougham and Vaux, L.

Glentoran, L.

Burnham, L. [Teller]

Goschen, V.

Buscombe, B.

Greenway, L.

Byford, B.

Hanham, B

Campbell of Croy, L.

Henley, L. [Teller]

Carlisle of Bucklow, L.

Higgins, L.

Carnegy of Lour, B.

Holderness, L.

Carr of Hadley, L.

Hooper, B.

Cavendish of Furness, L.

Howe, E.

Chadlington, L.

Howell of Guildford, L.

Clark of Kempston, L.

Hunt of Wirral, L.

Cope of Berkeley, L.

Hylton-Foster, B.

Courtown, E.

Inglewood, L.

Cowdrey of Tonbridge, L.

Jenkin of Roding, L.

Craigavon, V.

Jopling, L.

Cranborne, V.

Kelvedon, L.

Crathorne, L.

Kimball, L.

Crickhowell, L.

Kingsland, L.

Cumberlege, B.

Kirkham, L.

Dacre of Glanton, L.

Knight of Collingtree, B

376

Laing of Dunphail, L.

Rawlings, B.

Lamont of Lerwick, L.

Rawlinson of Ewell, L.

Lane of Horsell, L.

Rees, L.

Luke, L.

Renton, L.

McColl of Dulwich, L.

Roberts of Conwy, L.

Mayhew of Twysden, L.

Rogan, L.

Miller of Hendon, B.

Rotherwick, L.

Molyneaux of Killead, L.

Saatchi, L.

Monson, L.

St. John of Fawsley, L.

Montagu of Beaulieu, L.

Seccombe, B.

Montrose, D.

Selborne, E.

Mowbray and Stourton, L.

Selsdon, L.

Mutton of Lindisfarne, L.

Sharples, B.

Naseby, L.

Shaw of Northstead, L.

Norfolk, D.

Skelmersdale, L.

Northbrook, L.

Stevens of Ludgate, L.

Northesk, E.

Stewartby, L.

Norton of Louth, L.

Stodart of Leaston, L.

O'Cathain, B.

Strathclyde, L.

Onslow, E.

Swinfen, L.

Onslow of Woking, L.

Taylor of Warwick, L.

Oxfuird, V.

Thatcher, B.

Park of Monmouth, B.

Thomas of Gwydir, L.

Parkinson, L.

Trefgarne, L.

Peel, E.

Trumpington, B.

Perry of Southwark, B.

Wade of Chorlton, L.

Plummer of St. Marylebone, L.

Wilcox, B.

Pym, L.

Willoughby de Broke, L.

Quinton, L.

Wolfson, L.

NOT-CONTENTS

Acton, L.

Ezra, L.

Addington, L.

Falkland, V.

Alderdice, L.

Farrington of Ribbleton, B.

Alli, L.

Faulkner of Worcester, L.

Amos, B.

Filkin, L.

Archer of Sandwell, L.

Gale, B.

Ashley of Stoke, L.

Geraint, L.

Ashton of Upholland, B.

Gibson of Market Rasen, B.

Bach, L.[Teller]

Gilbert, L.

Barker, B.

Goudie, B.

Bassam of Brighton, L.

Gould of Potternewton, B.

Beaumont of Whitley, L,

Graham of Edmonton, L.

Berkeley, L.

Greaves, L.

Billingham, B.

Grenfell, L.

Blackstone, B.

Hamwee, B.

Bledisloe, V.

Hardy of Wath, L.

Borrie, L.

Harris of Greenwich, L.

Bradshaw, L.

Haskel, L.

Brett, L.

Hayman, B.

Bridges, L.

Hilton of Eggardon, B.

Brooke of Alverthorpe, L.

Hollis of Heigham, B.

Brookman, L.

Hooson, L.

Burlison, L.

Howells of St Davids, B.

Carter, L. [Teller]

Howie of Troon, L.

Christopher, L.

Hoyle, L.

Clarke of Hampstead, L.

Hughes of Woodside, L.

Cledwyn of Penrhos, L.

Hunt of Chesterton, L.

Clement-Jones, L.

Hunt of Kings Heath, L.

Clinton-Davis, L.

Irvine of Lairg, L.(Lord Chancellor)

Cocks of Hartcliffe, L.

Cohen of Pimlico, B.

Jacobs, L.

Craig of Radley, L.

Jay of Paddington, B.{Lord Privy Seal)

Crawley, B.

Dahrendorf, L.

Jenkins of Putney, L.

Darcy de Knayth, B.

Judd, L.

David, B.

King of West Bromwich, L.

Desai, L.

Laird, L.

Dholakia, L.

Lea of Crondall, L.

Diamond, L.

Lester of Herne Hill, L.

Donaldson of Lymington, L.

Levy, L.

Dubs, L.

Lipsey, L.

Eatwell, L.

Lockwood, B.

Elder, L.

Lovell-Davis, L.

Evans of Temple Guiting, L.

Macdonald of Tradeston, L

377

McIntosh of Haringey, L.

Roper, L.

McIntosh of Hudnall, B.

Sawyer, L.

Mackenzie of Framwellgate, L.

Scott of Needham Market, B.

Mackie of Benshie, L.

Serota, B.

Maddock, B.

Sharp of Guildford, B.

Mallalieu, B.

Shepherd, L

Massey of Darwen, B.

Simon, V.

Merlyn-Rees, L.

Shore of Stepney, L.

Miller of Chilthorne Domer, B.

Smith of Clifton, L.

Mishcon, L.

Smith of Gilmorehill, B.

Molloy, L.

Stoddart of Swindon, L.

Morris of Manchester, L.

Strabolgi, L.

Murray of Epping Forest, L.

Symons of Vernham Dean, B

Newby, L.

Tenby, V.

Nicol, B.

Thomas of Walliswood, B.

Peston, L.

Thornton, B.

Phillips of Sudbury, L.

Tomlinson, L.

Pilkeathley, B.

Tordoff, L.

Ponsonby of Shulbrede, L.

Turner of Camden, B.

Prys-Davies, L.

Uddin, B.

Puttnam, L.

Walker of Doncaster, L.

Ramsay of Cartvale, B.

Wallace of Saltaire, L.

Randall of St. Budeaux, L.

Warwick of Undercliffe, B.

Redesdale, L.

Wedderburn of Charlton, L.

Rendell of Babergh, B.

Whitaker, B.

Richard, L.

Wigoder, L.

Rodgers of Quarry Bank, L.

Wilkins, B.

Rogers of Riverside, L.

Williams of Mostyn, L.

Roll of Ipsden, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.28 p.m.
Lord McIntosh of Haringeymoved Amendment No. 3:
After Clause 6 insert the following new Clause—
DUTY OF AUTHORITY TO FOLLOW PRINCIPLES OF GOOD GOVERNANCE
(".In managing its affairs, the Authority must have regard to such generally accepted principles of good corporate governance as it is reasonable to regard as applicable to it.").
The noble Lord said: My Lords, in moving the amendment, I speak also to opposition Amendment No. 5. Since Amendment No. 4, which is not in my name, is so similar to Amendment No. 5 I wonder whether noble Lords opposite will allow me to speak to the two together. It would be slightly artificial not to do so.
Amendment No. 3 reflects the commitment I gave at Report stage to look again at four amendments tabled by noble Lords opposite and, if necessary, to return at Third Reading with government amendments needed to achieve the effects which the noble Lords opposite sought.
The impact of the amendment will be to impose a duty on the FSA to have regard to certain generally accepted principles of good corporate governance in managing its affairs. My speaking note gives the lower case for those words but I think that it is generally understood that they could equally well be upper and lower case.
The corporate governance principles in question are those which it would be reasonable to regard as applicable to the FSA. Although I understand those who may prefer the FSA to be required to have regard to all principles, such a wide duty could give rise to a
378
risk that, given its unique role, the FSA would be attacked for not applying principles which are unsuitable or undesirable.
For that reason, we are not able to accept Amendment No. 5, which would require the authority's constitution to reflect all generally accepted principles. For example, Section 1C of the combined code deals with relations with shareholders. Clearly we should not expect, nor legislate for, the FSA to adhere to those principles in code provisions when it has no shareholders. On the other hand, the top management element is clearly applicable. Therefore, while principles such as those in Section IC cannot apply, it is equally obvious that several current principles, including, for example, those relating to the chairman and chief executive officer, and board balance could reasonably be applied.
There is no incompatibility between the current principle relating to chairman and chief executive and our belief that the best governance structure for the FSA is to combine the roles of chairman and chief executive. As I have said on a number of occasions, we believe that combining the roles provides the best means of meeting the FSA's objectives and of ensuring clear accountability to Treasury Ministers and speed of decision-making. We recognise that other noble Lords hold a different view.
In particular, there is no incompatibility between combining the role of chairman and chief executive and provision A.2.1 of the combined code. Provision A.2.1 states in its entirety:
"A decision to combine the posts of chairman and chief executive officer in one person should be publicly justified. Whether the posts are held by different people or by the same person, there should be a strong and independent non-executive element on the board, with a recognised senior member other than the chairman to whom concerns can be conveyed. The chairman, chief executive and senior independent director should be identified in the annual report".
The FSA complies with all those requirements. Public justification appears at page 107 of the FSA's annual report. A strong and independent non-executive element on the board is provided for by statute. There is a recognised senior member other than the chairman: that is, the deputy chairman, Stewart Boyd QC. We have made clear in earlier debates the important role that we expect him to play on the board.
Finally, the chairman, chief executive and senior independent director are identified in the FSA's annual report. In other words, the FSA complies with all the safeguards recommended by the combined code for companies which combine the role of chairman and chief executive.
Another feature of the Government's amendment is that the principles of corporate governance which should apply to the FSA are not to be determined by the FSA itself but by reference to what it is reasonable to regard as applicable. That is also a feature of Amendment No. 4, tabled by the main opposition parties. We have no overriding objection to that amendment. It is not dissimilar to our own; indeed, we believe that it is already catered for by the

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Government's amendment, which speaks of the authority having regard to generally accepted principles "in managing its"affairs".
Amendment No. 4 refers to the constitution of the authority. The terms which the FSA includes in its constitution are part and parcel of its affairs; indeed, the terms of the FSA's constitution are central to the management of its affairs. It follows that the FSA would not comply with the duty imposed on it by the Government's amendment if it failed to frame its constitution in a manner which enabled its affairs to be managed in a way which had regard to such generally accepted principles of good corporate governance as may reasonably be considered to be applicable to it.
On the basis that it does not add to our amendment, I hope that noble Lords will withdraw Amendment No. 4. I beg to move Amendment No. 3.
Lord Newby: My Lords, we are grateful to the Government for having put forward a new clause which attempts to deal with the concerns that we have raised at every stage of the Bill with regard to the corporate governance of the FSA. Noble Lords who have been with us through those debates will remember that two principal concerns were raised in this respect. One related to the role of the non-executive directors. We felt that in the Bill as originally drafted their role was inadequately broad and was not as broad as that of the non-executive directors in a company.
The second issue to which the noble Lord, Lord McIntosh, referred at some length relates to the question of the split between the roles of chairman and chief executive. I believe it is fair to say that there has not been a complete meeting of minds between ourselves and the Government on the substance of that point. However, we felt that the key issue required on the face of the Bill was a recognition that the principle of corporate governance—namely, the top end structure—and the question as to whether there should be a chairman and chief executive, with its presumption in the code that there would be such a split, should fall within such areas of good corporate governance as the FSA would be required to have regard to in conducting its business.
With the passage of this amendment, our view is that it will be presumed that when the current incumbent moves on there will be a separate chairman and chief executive. That will be determined at the time. However, if that does not happen, the key point of the amendment is that it will require the Government and the FSA to justify it in the way that the noble Lord mentioned. Therefore, given that the amendment encompasses the principles of top end structure—the principle of separation of powers at the top end of the FSA—we are pleased to accept the amendment.
Lord Saatchi: My Lords, I am grateful that even at this late stage the Government have seen the merit of what was proposed at earlier stages of this process by the Liberal Democrat and our Benches. I am glad also that the wording of the proposed new government
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amendment has been addressed more specifically in the words expressed by the Minister this afternoon. The words of the proposed new clause are a little vague. I believe that I am right in saying that the Minister confirmed this afternoon that it is reasonable to regard the principle that there should be a separate chairman and chief executive as applicable to the FSA. Certainly I have taken it that that was his meaning.
Lord Boardman: I accept the principle of good corporate governance in the amendment, and I find it difficult to reconcile that to what the Minister said with regard to the role of chairman and chief executive. It has been held strongly by successive governments and by those involved in the business world that separation of the role of chairman and chief executive is a matter of importance. I know that on previous occasions the noble Lord said that that applied to commercial concerns and that it did not apply in this particular game. I believe that it applies more strongly in this game. If everyone is quite honest with themselves, the dominant factor is the presence of the current incumbent and his saying that he does not intend to accept a chief executive under him or a chairman above him. The Government have departed from the rules of good governance in endorsing that request. I like the amendment; I dislike the way in which it is proposed that it should be applied.
Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords and, indeed, even to the noble Lord, Lord Boardman, for their response to the amendment. To be absolutely precise in answering the noble Lord, Lord Saatchi, I did not say that I accepted that the split between chairman and chief executive was appropriate; I said that in this respect the combined code of good corporate governance is applicable to the FSA. I read out in its entirety provision A.2.1, which sets out what should happen if it is judged that the roles of chairman and chief executive should be combined. But I accept—and it will always be the case—that we disagree about what should happen now. We may disagree in the future about what should happen, but at least we appear to be in agreement—I am grateful for that—that the code of conduct of good corporate governance should apply.
On Question, amendment agreed to.
[Amendments Nos. 4 and 5 not moved.]
Lord Bachmoved Amendment No. 6:
After Clause 9 insert the following new Clause—
DUTY TO CONSIDER REPRESENTATIONS BY THE PANELS
(" .—(1) This section applies to a representation made, in accordance with arrangements made under section 7, by the Practitioner Panel or by the Consumer Panel.
(2) The Authority must consider the representation.
(3) If the Authority disagrees with a view expressed, or proposal made, in the representation, it must give the Panel a statement in writing of its reasons for disagreeing.").

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The noble Lord said: My Lords, the two opposition parties tabled joint amendments on the first day of Report about representations made to the authority by the practitioner and consumer panels.
In response, my noble friend indicated some sympathy for certain of the points raised in debate and said that he believed that there was scope for improvements to be made to the arrangements under the Bill for giving feedback to the panels. Accordingly, he undertook to consider the matter further.
Having given the matter careful thought, we have tabled this new clause which requires the FSA to consider representations made to it by either panel in accordance with the arrangements under Clause 7 and, where the FSA disagrees with those representations, to make a written statement of its reasons for disagreeing.
We believe that this new clause adds, in a structured way, a great degree of transparency and therefore improves on the arrangements for the panels. I commend it to the House. I beg to move.
Lord Kingsland: My Lords, I think I can say that this is a rare moment for the connoisseur of the arts and mysteries of Her Majesty's Treasury to savour; because this is the second acceptance in a row of amendments tabled by the Opposition.
Perhaps I may say to your Lordships that this amendment is of even greater consequence than its predecessor because, as the Minister has said on frequent occasions, the authority has legislative powers. As a regulatory authority, its position is unique in that respect. It will make rules which it will not have to bring to your Lordships' House before they become binding. Therefore, it is right that the authority should be answerable to somebody and that somebody—or perhaps I should say, those somebodies—are the practitioner panel and the consumer panel.
I am delighted that, in circumstances where there is disagreement between the authority and those panels, the authority will have to give its reasons. I have just one question to put to the Minister. Can I be assured that, in circumstances where the authority gives such reasons, those reasons will be made public?
Lord Newby: My Lords, I join the noble Lord, Lord Kingsland, in thanking the Government for coming forward with an amendment which meets the concerns raised in our earlier amendments. Again, I express the hope that this new trend of flexibility which the Treasury has shown in relation to these two amendments may be a growing trend in the future.
4.45 p.m.
Lord Bach: My Lords, the answer to the noble Lord's question is "yes". I am delighted if we have, on this occasion, managed to please the noble Lord. Perhaps in future he will look more kindly on the Treasury and not believe everything he reads about it in the quality newspapers.
On Question, amendment agreed to.
Clause 18 [Authorised persons acting without permission]:
Lord McIntosh of Haringeymoved Amendment No. 7:
Page 8, line 17, leave out subsection (2) and insert —
("(2) The contravention does not—

(a) make a person guilty of an offence;

(b) make any transaction void or unenforceable; or

(c) (subject to subsection (3)) give rise to any right of action for breach of statutory duty.

(3) In prescribed cases the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 7, 10, 12, 14, 17 to 19, 24, 61, 70, 71, 141 and 142, which is an opposition amendment to Amendment No. 141. The origin of this group of amendments goes back further than this House. On 20th July 1999, in another place, the Government undertook to reconsider the different provisions in the Bill dealing with rights of action where contraventions of requirements such as those that may be imposed under Parts IV, X and IX are concerned. Part IV is concerned with permission to carry out regulated activities, Part X with rules and guidance, and Part IX with incoming firms.
The broad aim is to reproduce the current pattern of rights of action as provided for under Sections 62 and 62A of the Financial Services Act 1986 as far as it is possible to do so given the different structure of the Bill.
Under those provisions, consumers enjoyed rights of action not only for breaches of rules, but also for breaches of requirements imposed using the intervention powers under the Act. Those types of requirement, both rules and interventions, will often correspond more correctly to permissions under Part IV and requirements imposed on incoming firms under Part IX than rules made under Part X.
The position is also complicated by the different circumstances in which rights of action may be enjoyed by non-private persons depending on the nature of a breach. That is a more complicated situation than is currently allowed for under either Clause 18, which confers no rights of action for permission breaches, and Clause 197, which confers rights of action by analogy with Clause 145 in Part X.
Our amendment to Clause 18 and the new clause after Clause 197 will therefore confer on the Treasury a power to prescribe the circumstances in which a person may have a right of action as a result of a breach of a requirement imposed under Parts IV or XIII respectively.
I should make it clear here that the default position will be that breaches of Part IV and Part XIII requirements do not attract rights of action. Only the cases that are prescribed by order will give rise to such rights. That is necessary to ensure that there is similar treatment between authorised persons who are subject to rules and requirements with similar effects. For example, some investment firms are constrained from

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handling client money by SRO rules. Breach of those rules attracts rights of action. That ensures that there is a possible right of action where a person handles client money when they should not, as well as when a person who is entitled to handle client money fails to follow the applicable rules. In both cases, it is right that the consumer should have a right of action if they suffer loss.
However, it is not our intention to create rights of action in respect of requirements which are equivalent to financial resources rules; for example, individual capital ratios for banks, or premium income limits for insurance companies. The effect will therefore be to make it clear that breaches of these requirements do not attract rights of action.
Part X already contains a power for the FSA to specify whether a breach of a rule by an authorised person attracts rights of action for private persons, and to specify that some classes of rules attract rights for non-private persons. The amendment to Clause 145 ensures consistency within the Bill by aligning the power with the new provisions in Clauses 18 and 197.
The amendment therefore replaces the FSA's power with a power for the Treasury to prescribe circumstances in which a right of action that would be exercisable by a private person can be exercised by a non-private person. This would, for example, enable the Treasury to reproduce Regulation 3 of the Financial Services Act 1986 (Restriction of Right of Action) Regulations 1991, which ensures that a non-private person—for example, a solicitor, who is acting in a fiduciary capacity for a private person, for example, a minor—can exercise the same rights as a private person. We did not feel that it was sufficiently clear that the current wording would enable us properly to address this sort of situation.
The amendment to Clause 69(2) makes equivalent provision for contraventions under Part V.
I turn now to Clause 397. Reviews of past business are in effect a mechanism for redress when there has been a widespread or regular failure on the part of authorised persons to comply with rules and private persons have suffered losses in respect of which authorised persons are liable to make compensation payments.
As Clause 397 stands, it would not be possible to set up a review of past business which required authorised persons to compensate non-private persons. Our amendment will allow them to do so in circumstances and capacities to be prescribed by the Treasury. This group of amendments has been brought about as a result of the Government's careful consideration of points made on different occasions by Members of the Opposition. I am grateful to them for expressing their concerns. I hope they will support these changes. Perhaps I may respond to the opposition amendment when it has been spoken to. I beg to move.
Lord Kingsland: My Lords, apart from our own Amendment No. 142, the amendments in this group
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are either those with which we have no problem or those which respond to concerns we raised in Committee and on Report.
Amendment No. 142 seeks to deal with the following problem. Government Amendment No. 141 seeks to allows a non-private person acting as an intermediary, typically a fiduciary such as a trustee or agent, to bring an action for compensation under Clause 397 for widespread or regular rule contraventions even though the intermediary is not a private person.
That seems fine in principle, but in our submission the clause, as drafted, allows the intermediary to bring an action on behalf of other non-private persons. We believe that that cannot be right. Our amendment to the government amendment is to restrict the right of an intermediary to bring an action to circumstances in which it is acting solely for private persons who could bring the action themselves if they were not using the intermediary.
That was the approach adopted in the 1991 Treasury regulations which restricted the right of action for contravention of FSA rules to private investors. We think that that approach is the proper one to adopt.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord Kingsland, for his support for the other amendments in the group. I am grateful, too, for his explanation of Amendment No. 142. He is right in saying that it is our intention simply to enable a person acting in a fiduciary or comparable capacity to exercise the rights that the private person would have and nothing more. But that is clear already.
The new subsection goes on to state that the loss suffered by a A—that is, the fiduciary or equivalent—is to be treated as a loss suffered by a private person,
"in relation to whom A was acting in that capacity".
So it is only fiduciaries or persons acting in some other prescribed capacity on behalf of private persons who are added by the amendment. I hope that when the time comes the noble Lord will feel able not to pursue his amendment.
Lord Kingsland: My Lords, I am grateful to the Minister for his explanation. His interpretation of the clause is the one I seek. However, with great respect to the noble Lord, I believe that it would provide the clarity that the legislation needs if he accepted the amendment which I have tabled. Litigants will now have to look not only at the Act but also at the Minister's speech in order to acquire the necessary clarity.
Lord McIntosh of Haringey: My Lords, we have some time between now and Amendments No. 141 and 142. Although we are occupied with other matters we shall both continue to think about it, as will my officials. My view is that what I have said is entirely clear from the Bill and therefore the amendment, though well intentioned, is not necessary.
On Question, amendment agreed to.
Clause 19 [Restrictions on financial promotion]:
Lord Kingslandmoved Amendment No. 8:
Page 8, line 22, leave out ("or inducement to engage in investment activity") and insert ("to engage in investment activity or information which is intended or might reasonably be presumed to be intended to induce any person to do so").
The noble lord said: My Lords, in moving Amendment No. 8 I shall speak also to Amendments Nos. 9 and 82.
I understand that the Minister accepts that a mere factual statement would normally not be caught by Clause 19. We, in turn, accept that, in some cases, a statement of fact could be used as a way of persuading the person receiving the communication to buy or sell investments.
At a meeting I was privileged to attend last week with the Minister, I think it was agreed that the Treasury would think further about the wording which should be used to catch what was intended—namely, promotional communications. On the basis that the Government will ensure that it is made clear in the financial promotions exemption order that a mere statement of fact—for example, that British Land shares had gone up 10 per cent in the preceding week will not be treated as an inducement unless it is intended to act as an inducement—we will withdraw our amendment.
Amendment No. 9 is repeated from Report stage because the Minister also stated, at the same meeting last week, that he will consider again whether to accept the terms of Amendment No. 9 or something similar. The amendment seems to me, at any rate, to conform with what the Treasury wishes to achieve. We entirely accept that the amendment can be introduced in the Treasury's exemption order rather than in the Bill. We would be grateful to hear what the Minister has to say about this.
Finally, I turn to Amendment No. 82. The present wording of the Bill gives rise, for the first time, to a world-wide prohibition on marketing collective investment schemes which have not been approved by the authority for marketing to the general public. In our view it is not appropriate to impose this prohibition where the local regulator allows marketing to the particular category of investor which the firm wishes to approach. This prohibition means that the only firms which cannot market the fund, in the country concerned, to investors outside the authority's permissions, which the local regulator allows to be solicited, are firms authorised under the Bill. That is wholly contrary to the Bill's principle that the UK's competitive position should be maintained.
The Minister in another place indicated, in Committee, that she accepted that it is not necessary to impose as wide a restriction on the marketing of collective investment schemes by firms which are authorised under the Bill as the prohibition on financial promotions by persons who are not authorised under the Bill at all.
I believe that the Treasury indicated, at the meeting held last week which the Minister kindly arranged, that it intends to provide an exemption from the
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prohibition on marketing unregulated collective investment schemes in the case of certain communications from within the UK to investors outside it; although the exact scope of the exemption has not yet been decided. On the basis that this exemption will cover our concerns and allow marketing of unregulated collective investment schemes to investors outside the UK as now, even if the FSA has not provided a specific exemption for them, we would be pleased to withdraw the amendment.
Lord Wedderburn of Charlton: My Lords, perhaps I may ask the noble Lord a question about the first two amendments to which he spoke; that is, Amendments Nos. 8 and 9. The phrase which the noble Lord chose is that,
"which is intended",
which is obviously clear,
"or might reasonably be presumed to be intended".
I do not know what that means. I would understand a second limb that said, "or might reasonably be understood to be intended". That would be a perfectly normal process, but presumption comes from somewhere else. Where is the presumption from? What kind of matter would be presumed to be intended other than that which would be understood to be intended?
Courts will obviously pay great attention to the fact that that word is used and not the normal word "understood".
5 p.m.
Lord Kingsland: My Lords, I am grateful to the noble Lord for his intervention. The object of the phrase,
"or might reasonably be presumed to be intended",
is to prevent the authority from having to prove mens rea in a particular case; in other words, it refers to an inference from the facts. If the noble Lord is unhappy with the word "presumed", I shall be happy to replace it with a word that he considers more appropriate. But that is the point.
Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord, Lord Kingsland, for taking the time to come and talk with us last week in relation to the issues behind these amendments and I can certainly confirm that in the course of that discussion we felt that the issues between us were narrowing, as has happened so often in this Bill. But that does not mean, I am afraid, that it enables me to accept his amendments; nor does it persuade me, after consideration following the meeting, that we need to make further amendments to the Bill.
Amendment No. 8 replicates an amendment at Report stage. It would delete "inducement" from the financial promotion restrictions and replace it with,
"an invitation to engage in investment activity or information which is intended or might reasonably be presumed [or understood] to be intended to induce any person to do so".
The amendment registers concerns that have been expressed throughout parliamentary proceedings on this Bill, that the language of Clause 19(1) is drawn too

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widely and that it requires amendment to achieve the Government's stated policy to capture promotional communications only. That is where we are generally in agreement.
I acknowledge that there are different dictionary definitions of "inducement" and one of the possibilities is to,
"bring something about or cause it to happen".
But there is a difference between the meaning that that word could be given on its own and the meaning that it will have in the particular context of this Bill.
When we met last Thursday to discuss this issue, notwithstanding the breadth of meaning ascribed to "inducement" outside the Bill, I said to the noble Lord, Lord Kingsland, that the Government do not believe that "inducement", as used in the Bill, will catch communications where the effect has been to prompt an investment decision regardless of the motivation of the communicator. We are convinced that "inducement", in its Bill usage, already incorporates an element of design or purpose on the part of the person making the communication.
When Clause 19 was amended in Committee in another place, we did not intend to move away from the idea that there must be an element of persuasion contained in the communication. If we had intended the clause to catch communications that prompted an investment activity, regardless of the communicator's intention, we would have made that clear by using a term other than "inducement".
In addition, we consider that the word "inducement" gathers some flavour from its juxtaposition with "invitation". Our intention, in relying on "invitation or inducement", has always been to capture the flavour of "old" advertising and cold calling, but without being limited to specific media implicit in those terms. That, after all, is the reason why we are making any changes at all in this Bill from the Financial Services Act 1986.
It follows that the clause as it stands will not catch communications of the type that have been put to us as giving rise to concern; for example, public announcements, exchange of draft share purchase agreements in corporate finance transactions or cases in which the recipient of a communication simply misunderstands its contents and engages in investment activity as a result. Those are not inducements.
We have considered carefully whether there would be advantage in expanding on "inducement" in the way that the amendment proposes. Inevitably, in determining whether a particular communication constitutes an inducement, much will depend on the context. Something that would not be considered an inducement in one set of circumstances could well be an inducement in another. Very often the difference will depend on the actual or perceived intent behind the communication. As we indicated, we believe that this already emerges from the word "inducement", and we do not want to compromise that.
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Our objection to Amendment No. 8 is that it does not throw any light on what "inducement" actually means. In fact, it is possible that an amendment to the effect of the noble Lord's would have precisely the opposite effect to that which he intends. By making explicit mention of intention on the face of the Bill, there is a danger that the courts will take "inducement" to have the wider meaning that it may bear in other contexts outside the Bill. There is no reason to mention "intention" if one believes, as we do, that the notion of design or purpose is implicit in this context. It follows that by making explicit provision for intention, we could imply that we are using the word "inducement" in its widest sense. That could well have the effect of catching some of the things that we and noble Lords opposite do not want to catch. We consider therefore that it is best to leave the provision as it stands.
Amendment No. 9 seeks to amend subsection (3) of Clause 19 so that subsection (1), which sets out the basic prohibition, does not apply unless the communication is intended, or might reasonably be presumed to be intended, to be acted on by a person in the United Kingdom. Amendment No. 82, also proposed at Report stage, proposes a similar change to Clause 233, which relates to promotions of collective investment schemes.
Amendment No. 9 focuses on what is meant by,
"communication … capable of having an effect in the United Kingdom".
whereas Amendment No. 82 seeks to limit the prohibition to promotions which are made to persons in the UK. The noble Lord, Lord Kingsland, described them as a "world-wide ban", which contains a certain amount of hubris; as if we could impose a world-wide ban. I shall discuss those amendments together because they are related.
The Government believe that the issue of territorial scope is one which is best dealt with in subordinate legislation. For Clause 19 we have already proposed something designed to address the issue raised by Amendment No. 9 in the draft order set out in the Treasury's second consultation document on financial promotion which was issued in October last year; namely, cutting back the,
"capable of having an effect".
test in subsection (3) of Clause 19. We are giving careful consideration to representations that have been made on this and other points. We propose to ensure that the prohibition only catches cases where there are risks to consumers in the United Kingdom so far as our intentional obligations allow.
In relation to Clause 233, noble Lords will recall that in Committee a new Treasury power was introduced to make exemptions. One of the main purposes of that was to enable exemptions to be made to allow outward promotions to other jurisdictions where it was appropriate to do so. We intend to do that.
In Committee, these amendments were part of the general exercise of amending Clauses 19 and 233 to ensure that the Treasury has the necessary flexibility to adjust the scope of both prohibitions, not only to take

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full account of technological developments, but also to deal with our international obligations. In particular, we are subject to certain EU requirements in relation to certain outward and inward promotions.
Clauses 19 and 233 now provide for a Treasury order-making power to disapply the prohibition in both clauses in relation to communications originating in specific countries or groups of countries such as EU member states. These provisions will enable us to comply with our obligations to give effect to requirements such as a home state regime for e-commerce transactions, while at the same time enabling us to give effect to obligations which arise by virtue of general EU law under the treaty. Let me say quite categorically that the Government are committed to ensuring that the financial promotion regime set out in both Clauses 19 and 233 complies with Community requirements.
With specific regard to Amendment No. 9, we maintain our belief that it is not at all clear what "acted on" means. I refer to the example we used on Report. If a communication is sent from abroad for onward transmission by an agent in the UK, is that a communication which is intended to be "acted on" by a person in the United Kingdom?
We have met on this subject. We have thought about this subject. The noble Lord has thought about this subject. We take the view that these amendments would not add to the Bill and may indeed subtract from it.
Lord Kingsland: My Lords, I thank the Minister for his very thorough reply. I derive some comfort from what he said about the prospect of delegated legislation with respect to the latter amendments.
As regards the main amendment to Clause 19, I continue to think that this would be better dealt with on the face of the Bill. The Minister's interpretation of that clause gave us some hope to think that statements of fact will be seen in their proper context. Although I should like to press him further, I feel that, in all the circumstances, the wisest thing for me to do would be to ask leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 9 not moved.]
Clause 24 [Agreements made by unauthorised persons]:
Lord Bachmoved Amendment No. 10:
Page 10, line 45, leave out ("("the purchaser")").
The noble Lord said: My Lords, I beg to move.
On Question, amendment agreed to.
Lord Bachmoved Amendment No. 11:
Page 11, line 10, leave out ("deposit-taking") and insert ("accepting deposits").
The noble Lord said: My Lords, in moving Amendment No. 11, I should like to speak also to Amendments Nos. 13, 15, 16, 30 to 34, 48 to 55, 75 to 79, 101 to 135, 149, 150, 168, 169 and 176 to 192. Those of your Lordships who are quicker than I will already have added those up to 78 in all. It is a rather large
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group and it demonstrates the difficulties that arise—incidentally, it also illustrates how the number of individual amendments can be a highly misleading guide to assessing the extent to which a Bill has been substantively amended—with a Bill of this size when a minor technical matter has to be addressed.
The two main issues which this group of amendments seeks to address are, first, to ensure that the way in which certain matters relating to insurance and deposits are described in the Bill is consistent with the structure of the Bill; and, secondly, to enable the repeal of the Insurance Companies Act 1982. Your Lordships will be happy to hear that I do not intend to go through each of the 78 amendments in turn but that I shall deal with them, as it were, by subject matter.
Under deposits, the change of references to deposit-taking in the five Amendments Nos. 11, 13, 15, 16 and 169 are—famous last words—easily explained. At the moment, the Bill refers in some places to "deposit-taking" and in others to "accepting deposits". We think it is pretty clear that these terms are intended to have the same meaning. However, by ensuring that the same term is used throughout, we remove the scope for someone to argue that accepting deposits and deposit-taking have different meanings. We have therefore standardised references to the term that most neatly meets the structure of the Bill.
Our main difficulty with the references to insurance in the Bill—I am sorry that there are so many of them—is that they all depend on definitions in the Insurance Companies Act 1982. It has always been our intention that the 1982 Act should be repealed in its entirety. Unfortunately, it has taken us a while to devise a suitable mechanism for achieving the desired result in a way that is consistent with the structure of the Bill, under which particular regulated activities will be defined off the face of the Bill.
Half a dozen of the amendments change references to "dealing" in contracts of insurance to "effecting or carrying out" such contracts. Not only does this more accurately describe the activity we are seeking to capture, but it also introduces consistency throughout the Bill and removes scope for argument about whether they were intended to mean the same, or different, things.
The next batch of 10 or so amendments removes the references to "insurance business" and inserts in their place references to,
"the effecting and carrying out of contracts of insurance".
This is because, although the concept of "insurance business" is used in the 1982 Act to identify the activities that are regulated, it does not really fit with the structure of the Bill. This simply uses a different formula to identify the activities that are regulated under the Bill; namely, "carrying on regulated activities". These amendments reflect that. Where it is necessary, in a particular provision, to refer to a business in the broader sense being maintained or transferred, the amendments describe that as,
"business which consists of the effecting or carrying out of contracts of insurance".

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The next batch of amendments sets out changes needed—these account for about half the amendments in the group—to remove references to "insurance companies". "Insurance company" is a term of art borrowed from the very different regulatory structure of the Insurance Companies Act 1982. In that Act its meaning is not limited to companies: indeed, individuals and one industrial and provident society fall within that definition. It also includes any person carrying on insurance business, whether or not they are authorised to do so.
Our approach therefore has been either to refer an authorised person with permission to effect or carry out contracts of insurance, or simply to refer to an insurer which will be defined in regulations made by the Treasury in a particular context. In some cases, for example, the insolvency provisions, it will be necessary to limit the application of certain provisions to companies or to authorised persons. In other cases, a wider meaning will be necessary.
The final substantive matter dealt with in this group is the introduction of the new clause after Clause 415. This defines the concepts of "contracts of insurance", "reinsurance" and contracts of particular types of insurance by reference to Clause 20 and Schedule 2. This makes it clear that the references in the Bill are to have the same meanings as in the order. If necessary, the definitions could be amplified in secondary legislation under the provisions of Part III of Schedule 2.
The new clause also confers on the Treasury power by order to define certain other insurance-related terms: namely, "policy" and "policy-holder" and power by regulations to determine the law applicable to prescribed classes of insurance contracts.
There are also a few amendments that make very minor drafting or technical changes, many of which are intended to bring the relevant provisions into line with the changes I have already described. They include, for example, Amendment No. 101 to Clause 340, which concerns a record of authorised persons, where we have just spotted a mistake in a definition in subsection (7). When I say "just" I do not mean just now but earlier on, during the period between Report and today's proceedings. I wonder whether anyone else spotted that mistake too! The definition should have been of an "authorised unit trust scheme".
Finally, the four amendments to Clause 137 seek to ensure that the powers under that clause which relate to the creation of charges will operate properly in Scotland. As the clause stands, the word "charge" could be taken to have a different meaning here from the meaning given in Clause 109(15). Also, without the amendment in relation to Scotland, the definition would have a narrower meaning than it does for the rest of the United Kingdom. We are therefore correcting that.
As I said at the beginning, these amendments are technical and they appear to be quite insignificant, but we believe that they are necessary to ensure that the Bill works properly. I beg to move.
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On Question, amendment agreed to.
Clause 25 [Agreements made through unauthorised persons]:
Lord Bachmoved Amendments Nos. 12 and 13:
Page 11, line 17, leave out ("("the purchaser")").
Page 11, line 27, leave out ("deposit-taking") and insert ("accepting deposits").
The noble Lord said: My Lords, I beg to move.
On Question, amendments agreed to.
Clause 26 [Agreements made unenforceable by section 24 or 25]:
Lord Bachmoved Amendment No. 14:
Page 12, line 8, leave out ("other party") and insert ("person against whom the agreement is unenforceable").
The noble Lord said: My Lords, I beg to move.
On Question, amendment agreed to.
Clause 27 [Deposit-taking in breach of general prohibition]:
Lord Bachmoved Amendments Nos. 15, 16 and 17 en bloc:
Page 12, line 22, leave out ("deposit-taking") and insert ("accepting deposits").
Page 12, line 35, leave out ("deposit-taking") and insert ("accepting deposits").
Page 12, line 36, leave out subsection (6).
The noble Lord said: My Lords, I beg to move these three amendments en bloc.
On Question, amendments agreed to.
Clause 28 [Enforceability of agreements resulting from unlawful communications]:
Lord Bachmoved Amendments Nos. 18 and 19:
Page 12, line 44, at end insert ("; and
"controlled investment" has the same meaning as in section 19").
Page 13, line 9, leave out ("an") and insert ("a controlled").
The noble Lord said: My Lords, I beg to move.
On Question, amendments agreed to.
5.15 p.m.
Clause 34 [Persons authorised as a result of paragraph 1(1) of Schedule 5]:
Lord McIntosh of Haringeymoved Amendment No. 20:
Page 15, line 19, leave out ("its") and insert ("his").
The noble Lord said: My Lords, in moving this amendment, I shall speak also to government Amendments Nos. 21, 22, 143, 160, opposition Amendment No. 161, and government Amendments Nos. 162 to 167 and 170 to 173.
The three amendments to Clause 34 (Amendments Nos. 20 to 22) correct the incorrect and unintended implication from the use of "it" and "its" in that clause; namely, that a person authorised as a result of paragraph 1(1) of Schedule 5 may not be a natural person. The provision covers operators, trustees and depositories of recognised collective investment schemes. The question of whether these roles can be

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discharged by natural persons is a matter for law of the home state concerned. So these changes are a minor, but necessary adjustment.
The Government's amendments to Schedule 3— namely, Amendments Nos. 160 onwards—are part of our response to concerns raised by the Opposition at Committee stage in this House. The changes ensure that the passporting provisions work properly and are fully compatible with European law. As the Bills stands, if an incoming EEA firm fails to go through the relevant procedures set out in paragraphs 13 and 14 of Schedule 3 before carrying on regulated activities in the United Kingdom, the enforcement of the agreements provisions of Clause 24 will apply to transactions effected in the course of carrying on this business. Likewise, Clause 25 will apply to transactions effected by an authorised person in consequence of anything said or done by the incoming firm in the course of carrying on such business.
We have given a lot of further thought to the enforcement provisions over the course of our debates and have made a number of amendments to meet concerns raised by noble Lords opposite and their colleagues in another place. We have also reconsidered their application in this context and have concluded that this is probably disproportionate and possibly discriminatory.
It an outgoing UK authorised person carries on activities covered by the relevant directive in another EEA state without having gone through the relevant procedures, the Bill will not render transactions effected by that person in the course of carrying on those activities unenforceable. To apply the enforcement of agreements provisions to incoming firms that fail to follow the proper procedures might, therefore, be discriminatory.
The similarity of approach of the opposition Amendment No. 161 suggests that the noble Lords opposite share our view, at least to some extent, that these provisions need to be disapplied. The new paragraph that we propose to insert after paragraph 15 disapplies Clauses 24 and 25 in relation to any agreement entered into by an EEA firm in the course of, or any agreement entered into by an authorised person as a result of, regulated activity carried on without the relevant procedures having been completed. The amendment also disapplies Clause 27, which deals with enforcement of deposit agreements. I apologise to your Lordships for the fact that this was omitted from the list that we supplied last week. It has been corrected and relaid, and now appears in the corrected form on the Marshalled List.
Leaving aside the point about Clause 27, the Opposition alternative is less generous in terms of the circumstances in which Clauses 24 and 25 would be disapplied. The use of the term "permitted activity" may be intended to narrow the effect of this paragraph to activities covered by the directives, rather than any regulated activity. However, the definitions of "permitted activity" in paragraphs 13 and 14 of Schedule 3 are related to the activities set out in the consent notices provided for in those paragraphs. A
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"permitted activity" is therefore only an activity for which notification has been received by the FSA from the home state regulator.
As this is the most significant step in the procedures as far as concerns the EEA firm and its home state regulator, narrowing the effect of the new paragraph to only those cases where that step had in fact been taken would pretty well completely neutralise the purpose of the amendment.
As regards UK firms, sub-paragraphs 18(11) and 19(9) of Schedule 3 currently provide that the FSA may make rules for UK firms not subject to the rulemaking powers under Part X which offer cross-border services without having completed the necessary procedures set out in those paragraphs. This is aimed at subsidiaries of UK credit institutions which may benefit from the extended passport under Article 18 of the Second Banking Coordination Directive, but whose activities in the UK may not be regulated activities under the Bill; for example, consumer credit lenders.
We have decided that that approach is unsatisfactory. It is not clear that a power to make rules for unauthorised persons will be effective in ensuring that the necessary notification procedures are observed, which is of course necessary in order fully to meet the requirements of that directive. So the new paragraph that we are inserting after paragraph 19 makes a failure to follow the correct notification procedure a criminal offence. This follows the existing law and removes the need to make provision for the FSA to make rules applicable to persons who would not otherwise be subject to FSA rules. Therefore, we are deleting those two sub-paragraphs.
Amendments Nos. 162 to 167 address particular concerns raised by the Opposition in Committee on 21st March; namely, that the provisions of paragraph 19 did not accurately reflect the notification procedures for provision of cross-border services under the Investment Services Directive. Therefore, these amendments explicitly align the provisions on the outward passport for cross-border services with the provisions of the Investment Services, Second Banking Coordination Directive, Third Life Insurance Directive and Third Non-life Insurance Directive.
We are also responding to an issue raised by the noble Lord, Lord Kingsland, by way of our Amendment No. 163. This will remove subparagraph 19(1)(b) which prevents a UK insurance company from commencing its cross-border activities until the FSA has made the necessary notification—in the form of a "consent notice"—to the host state regulator and has informed the company of the fact. The requirement is not provided for by the insurance directives in relation to cross-border services, although it is in relation to the establishment of a branch in another member state. Therefore, imposing it here would be incompatible with the directives. Consequently, we propose to remove subparagraphs 19(3) to (6).

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Finally, our amendment to paragraph 19(7)—Amendment No. 165—clarifies that the FSA must notify a firm's host state regulator of a notice of intention by sending a copy of the notice of intention to the host state regulator within a month of its receipt by the FSA. The amendment adds a requirement that when the FSA sends the notice of intention to the host state regulator it must also give written notice to the firm. The amendment also adds the requirement that if a firm's EEA right derives from the Investment Services Directive, it must wait until it receives this written notice before it begins providing the service to which the notice of intention relates.
Our amendments to Schedule 6 address a number of issues arising in relation to paragraph 2, which establishes various conditions for authorisation that relate to the location of a person's registered and/or head office and, indeed, where he carries on business. Paragraph 2(1) proceeds on the assumption that every body corporate incorporated under the law of any part of the United Kingdom will have a registered office. That may not be the case; for example, a body incorporated by a private Act of Parliament may not have a registered office.
Paragraph 2(2) imposes threshold conditions on EEA persons which, in the case of EEA firms under Schedule 3, would give the FSA a responsibility that went beyond that allowed for the host state by the home/host state division of responsibility established by the directives. We also consider that it may be disproportionate in respect of EEA persons who are not subject to the directives, particularly treaty firms qualifying for authorisation under Schedule 4.
Thirdly, we have concluded that paragraphs 2(3) to (5) impose unnecessarily restrictive conditions on persons from non-EEA States. In particular, subparagraph (5) should not apply to non-UK persons. The requirement to carry on business in the UK should be the default requirement for UK nationals and not, as it is presently drafted, for unincorporated persons from other states.
To the extent that it is necessary for the FSA to impose requirements in relation to the corporate or structural arrangements of overseas firms, this can be adequately achieved through the suitability criterion under paragraph 5, which requires the FSA to be satisfied that a person's affairs are conducted soundly and prudently.
We propose to amend paragraph 2(1) of Schedule 6 so that the requirement that a body corporate incorporated under the law of any part of the United Kingdom must have both its head office and its registered office in the UK applies only to a body corporate that actually has a registered office. In the case of any other body corporate, the requirement should be that the head office must be in the United Kingdom. This is required by the single market directives.
The other sub-paragraphs, which deal with overseas persons, are omitted. Two of our amendments to paragraphs 6 and 7 are consequential changes which
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reflect the fact that, by virtue of the previous amendment, paragraph 2 will no longer apply to EEA or treaty firms. The final amendment is a minor drafting amendment to insert a missing "the".
To a large part, these amendments respond to points which the Opposition have raised in debate here and in another place and we are grateful to them. They also reflect some further thinking on these issues by the Government. The result is a set of amendments which serve to reduce some unnecessary burdens on overseas persons doing business, or seeking to do business, in the United Kingdom. I beg to move.
On Question, amendment agreed to.
5.30 p.m.
Lord McIntosh of Haringeymoved Amendments Nos. 21 and 22:
Page 15, line 22, leave out ("it") and insert ("he").
Page 15, line 23, leave out ("it") and insert ("he").
On Question, amendments agreed to.
Clause 50 [Determination of applications]:
[Amendment No. 23 not moved.]
Clause 69 [Actions for damages]:
Lord McIntosh of Haringeymoved Amendment No. 24:
Page 33, line 32, at end insert—
("() In prescribed cases, a contravention of that kind which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person, subject to the defences and other incidents applying to actions for breach of statutory duty.").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 25:
After Clause 86, insert the following new clause—
PUBLIC CENSURE OF SPONSOR
(".—(1) Listing rules may make provision for the competent authority, if it considers that a sponsor has contravened a requirement imposed on him by rules made as a result of section 86(3)(c), to publish a statement to that effect.
(2) If the competent authority proposes to publish a statement it must give the sponsor a warning notice setting out the terms of the proposed statement.
(3) If, after considering any representations made in response to the warning notice, the competent authority decides to make the proposed statement, it must give the sponsor a decision notice setting out the terms of the statement.
(4) A sponsor to whom a decision notice is given under this section may refer the matter to the Tribunal.").
The noble Lord said: My Lords, in moving Amendment No. 25 I wish to speak also to Amendments Nos. 26, 27, 28, 137, 138, 174 and 175.
The government amendments in this group are necessary to fill three gaps in the provisions of the Bill dealing with the competent authority for listing. The first covers the arrangements for sponsors where we need to ensure that the competent authority continues to have available the range of disciplinary sanctions which it possesses at present. We signalled that we would make this change during the debate in

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Committee. At the moment the Bill does not provide for the intermediate power publicly to censure sponsors rather than remove them from the list of approved sponsors. The new clause, introduced by Amendment No. 25, brings in such a power, and Amendments Nos. 137 and 138 make consequential changes.
It may be convenient for me to say a few words about the Opposition amendment to the proposed new clause. I see that the Opposition nod in the affirmative. The Opposition Amendment No. 26 would extend the power of public censure to cover not only breaches of rules imposing requirements on sponsors, under Clause 86(3)(c), but also to cover rules specifying,
"services which must be performed by a sponsor",
under Clause 86(3)(b). I think that I understand what lies behind the amendment, but I do not believe that it is necessary.
The purpose of Clause 86(3)(b), in contrast to Clause 86(3)(c), is not to allow the competent authority to make rules which bind sponsors, but to allow it to make rules which bind issuers of listed securities, or persons seeking admission to the list. Rules of this kind would tell issuers, not sponsors, what activities they were not to perform themselves, but would need to ask a sponsor to take on their behalf. If such rules were breached, the breach would then be on the part of the issuer, not the sponsor. If this happened, the competent authority already has the power to impose sanctions on the issuer, including a public censure, if appropriate, under Clause 88. If, however, the competent authority wanted to make a rule requiring sponsors to do any particular thing, it will do so under subsection (3)(c).
The second change we are making, with Amendments Nos. 174 and 175, is to align the provisions on the legal immunity of the complaints investigator, when investigating complaints against the FSA as competent authority, with those applying when he is investigating the FSA as regulator. This will ensure that he is able to carry out any investigations without being inhibited by the fear that he may be subject to legal action.
Finally, I turn to Amendments Nos. 27 and 28. These pick up on a point raised by the noble Lord, Lord Kingsland, at Report stage, when he noted that this clause referred to a,
"significant adverse effect on competition",
whereas the test used elsewhere in the Bill was one of a "significantly" adverse effect. This was, as the noble Lord quite rightly concluded, an error on the Government's part, and I am grateful to him for bringing this to our attention. These amendments are intended to correct this error. I beg to move.
[Amendment No. 26, as an amendment to Amendment No. 25, not moved.]
On Question, Amendment No. 25 agreed to.
Clause 92 [Competition scrutiny]:
Lord McIntosh of Haringeymoved Amendments Nos. 27 and 28:
Page 45, line 13, leave out ("significant") and insert ("significantly").
Page 45, line 24, leave out ("significant") and insert ("significantly").
On Question, amendments agreed to.
Clause 101 [Control of business transfers]:
[Amendment No. 29 not moved.]
Clause 102 [Insurance business transfer schemes]:
Lord McIntosh of Haringeymoved Amendments Nos. 30 to 34:
Page 50, line 29, leave out ("deal in") and insert ("effect or carry out").
Page 50, line 35, leave out ("deal in") and insert ("effect or carry out").
Page 50, line 40, leave out ("deal in") and insert ("effect or carry out").
Page 51, line 7, leave out ("reinsurance business carried on") and insert ("business which consists of the effecting or carrying out of contracts of reinsurance").
Page 51, line 28, leave out ("reinsurance business") and insert ("the effecting or carrying out of contracts of reinsurance").
The noble Lord said: My Lords, I beg to move Amendments Nos. 30 to 34 en bloc.
On Question, amendments agreed to.
Clause 103 [Banking business transfer scheme]:
[Amendment No. 35 not moved.]
Clause 109 [Effect of order sanctioning business transfer scheme]:
[Amendment No. 36 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 37:
After Clause 113, insert the following new clause—
("Modifications
POWER TO MODIFY THIS PART
The Treasury may by regulations—

(a) provide for prescribed provisions of this Part to have effect in relation to prescribed cases with such modifications as may be prescribed;

(b) make such amendments to any provision of this Part as they consider appropriate for the more effective operation of that or any other provision of this Part.").

On Question, amendment agreed to.
Clause 114 [Market abuse]:
[Amendment No. 38 not moved.]
Clause 115 [The Code]:
[Amendment No. 39 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 40:
After Clause 115, insert the following new clause—
PROVISIONS INCLUDED IN THE AUTHORITY'S CODE BY REFERENCE TO THE CITY CODE
(".—(1) The Authority may include in a code issued by it under section 115 ("the Authority's code") provision to the effect that in its opinion behaviour conforming with the City Code—

(a) does not amount to market abuse;

(b) does not amount to market abuse in specified circumstances;

(c) does not amount to market abuse if engaged in by a specified description of person.

(2) But the Treasury's approval is required before any such provision may be included in—

(a) the Authority's code; or

(b) a proposed code published by the Authority under section 116.

(3) "City Code" means the City Code on Takeovers and Mergers issued by the Panel on Takeovers and Mergers as it has effect at the relevant time.
(4) "Specified" means specified in the Authority's code.").
The noble Lord said: My Lords, in moving Amendment No. 40 I wish to speak also, for the sake of clarity, to opposition Amendment No. 41—which is an amendment to Amendment No. 40—and to opposition Amendments Nos. 42, 63, 64 and 65.
We come now to an issue which has occupied a good deal of space in the public prints in the past few days, indeed, in the past few weeks. I hope, nevertheless, that I need not detain noble Lords too long. However, it is necessary to set out some of the background.
I have made it clear that we support the work of the Takeover Panel. We believe that it has done a good job in regulating the conduct and process of takeovers. We want it to continue to do that job in the way that it has been doing it. We also believe that it is vital that our financial markets are protected from the effects of market abuse wherever and whenever it occurs. That is why we have introduced the new market regime in the Bill.
I do not think that these aims are in conflict in any way. It is, of course, the case that market abuse, indeed serious market abuse, can occur during takeovers. Because of that it is important that proper procedures and arrangements are in place between the FSA and the Takeover Panel. We do not want unnecessary duplication or to create unnecessary uncertainty.
At the beginning of this week I wrote to noble Lords who had taken part in the earlier debates, attaching the paper which I had asked the FSA to produce after our previous debate. This sets out the progress that has been made to date on finalising procedures and agreements. As that paper makes clear, the FSA and the panel are working on three fronts: first, identifying provisions which can provide safe harbours in the FSA's code of market conduct; secondly, on an operating agreement which sets out liaison and information sharing arrangements; and, thirdly, on a policy statement on the circumstances in which the FSA would expect the Panel to lead, and the circumstances in which it might take the lead itself.
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It is clear to me that this is the right way forward, as it is in the case of recognised investment exchanges which are also working with the FSA on similar arrangements to deal with possible overlap. Concern has been expressed, however, that these arrangements by themselves are not enough in the case of the Takeover Panel. Quite why the Takeover Panel is in such a special position compared with exchanges, I am not sure. But, be that as it may, the concern is, apparently, that the FSA would be forced to intervene by the courts, regardless of its stated policy that it will not seek to intervene except in exceptional circumstances.
As I said in our previous debates, fears have been grossly overstated. It is clear to us and to the FSA that the FSA could adopt a policy of not intervening where it thought that it was being dragged in for tactical reasons. It is clear that the FSA could adopt a policy of leaving it to the panel to take action where it was satisfied that the panel could deal with the mischief adequately.
It is also clear that the courts would not look kindly on parties to a bid, and on others involved in the bid, seeking to circumvent the clear position that the courts have adopted as regards judicial interference in takeovers. As I said in our earlier debate, in my view the courts would frown on any such attempt and would view favourably any effort on the part of the FSA to avoid that happening. The FSA will, of course, have to consider making exceptions to any policy it adopts—in this area as well as anywhere else—but, as long as it acts reasonably, there will be nothing to fear.
Let me make two further points. First, there is overlap now between the regulatory regime and the Takeover Panel's code, as there is between the panel's code and the criminal offences of insider dealing and market manipulation. No one has thought to frustrate takeover bids to date through these means; the only change following the introduction of the new market abuse regime will be the potential degree of overlap, not the nature of it.
Secondly, it is extremely difficult to see how involving the FSA will have any effect on the timetable of the bid. Despite this being the main concern expressed by the panel, no one has plausibly explained how this might occur. The panel has stated that it is worried about injunctions for market abuse. But such injunctions would be aimed at the abuse, not at the merits or otherwise of the bid; they would not interfere in the takeover process.
Lord Forsyth of Drumblean: My Lords, I am grateful to the Minister for giving way. He may recall that I intervened when we discussed this matter earlier and that I asked him specifically about the issue of judicial review. He replied that he did not think that judicial review would succeed. Is not the Minister missing the point? People might apply for judicial review—it may not be successful in the courts— and that in itself will introduce delay, which could be used tactically in order to frustrate the process of the bid. These are the

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kinds of tactical issues which may be used by advisers that are causing concern to the Takeover Panel and to people in the City.
Lord McIntosh of Haringey: My Lords, it is of course possible that after the legislation has been passed someone may try that on, but the courts would get wise to that very quickly indeed. As the noble Lord, Lord Forsyth, agrees, it is hardly likely that the judicial review itself or an injunction would succeed. In any case, it is unlikely that an injunction would succeed in upsetting the timetable of the takeover bid. It would be an injunction on the abuse, not one which brought to a halt the process of the takeover bid.
I presume that that is why, as far as I am aware, no one has ever pressed the FSA to seek injunctions under Section 61 of the Financial Services Act alleging possible breach of the market manipulation offence. The fear of the noble Lord, Lord Forsyth, is one which could have been expressed at any time since the passing of the Financial Services Act 1986. The ability to seek an injunction is available under Section 61 of that Act; it has never been sought.
I move now to government Amendment No. 40.
Lord Pearson of Rannoch: My Lords, before the Minister moves away from that point, is there not a new factor in this argument? The Government have virtually signed up to the takeover directive, which therefore leaves the Luxembourg court lying in the background of the process that the Minister said has not yet taken place. May that not be a further encouragement to the kind of route suggested by my noble friend Lord Forsyth?
Lord McIntosh of Haringey: My Lords, I made it clear in my opening remarks that the Government support the work of the Takeover Panel and we believe that it has done a good job in regulating the conduct and process of takeovers. We want it to continue doing that job. Whatever action may be taken by the European Union could, of course, affect British legislation, regardless of whether this or any other amendment were included in the Bill. It has no effect on the provisions we are now making.
Amendment No. 40 seeks to establish a proper relationship between the Takeover Panel and the FSA. We have to do that because the Takeover Panel is at the moment acting legally by any standards and with the full support of government.
Perhaps I may now turn to government Amendment No. 40. We have reflected further on the points made by noble Lords in the previous debate. We have looked carefully to see whether anything could properly be added to the Bill to deal with the concerns that have been raised. I certainly share the concerns of the noble Lord, Lord Newby, about the dangers of duplication and the issue of fairness; that people who comply with one set of rules should not be pursued under another set of rules. As he said, it is difficult to see an argument for pursuing someone who has
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complied with the City code in the circumstances in which the safe harbour provisions already exist in relation to the market abuse code.
While we continue to believe that administrative arrangements will prove robust, we have decided to introduce a new clause (Amendment No. 40) which will allow the FSA to place provision in its code of market conduct to the effect that,
"behaviour conforming with the City Code…does not amount to market abuse".
The amendment allows the FSA to specify conditions of limitations, as do the amendments tabled by the noble Lords, Lord Saatchi, Lord Kingsland, Lord Newby and Lord Sharman. Our amendment is different from those tabled by those noble Lords in two important respects. First, our amendment provides that the FSA has to have the Treasury's approval before it can include such provisions in its code of market conduct. If the FSA were to include such a provision, it would effectively be handing over control of safe harbours in this important area to the Takeover Panel. We believe that it is right that the Treasury should be involved in such a decision by the FSA—a body for which it is answerable in Parliament—to delegate the responsibility which Parliament has given it in this area to a non-statutory regulator; that is, the Takeover Panel. Treasury Ministers will, of course, be answerable in Parliament for any decisions they make.
The second and most important difference is that, unlike Amendment No. 63, the provision allows the FSA to promote a safe harbour for behaviour in conformity with the City code and not in conformity with whatever the panel may say. If one follows through the definition in subsection (6), the way in which Amendment No. 63 would work is to allow the FSA to provide a safe harbour which is, in the opinion of the panel—and this includes any revised opinion; any changes in the opinion formed by the panel—
"in conformity with the City Code…as applied by the Panel and as amended from time to time by the Panel.
This means that in the area of takeovers, market abuse is whatever the panel at any time says that it is. I have received a letter from Mr Drayton, the director general of the panel—I believe other noble Lords have also received it—in which he describes this as,
"an amusing way of characterising the safe harbour proposal".
Unlike Mr Drayton, I do not find this amusing at all.
In the letter he prefers slightly different wording, but all he is doing is dressing up the stark fact that if the definition in this amendment were ever to find its way onto the statute books, abuse in this area would be what the panel says it is. I am astonished that any noble Lord should contemplate that. What a fuss there would be if we had said that market abuse was whatever the FSA says it is, but in this area at least the FSA can change its mind on a case-by-case basis without consulting or being accountable to anyone.
I thought that the noble Lords, Lord Saatchi and Lord Kingsland, had realised this in tabling Amendment No. 64, which, although substantially the

403
same as Amendment No. 63, does not provide that abuse is whatever the panel says it is but is in line with the approach in our amendment.
I have been asked to confirm whether "conformity with the City Code" in our amendment means "in conformity with the City code as applied by the panel". The answer to that is "yes". The City code is the code which is drafted and applied by the panel, and no one else. The very nature of the code and the way in which it is operated in practice means that the question of whether behaviour conforms with the City code will depend to a considerable extent on the panel and its interpretation of the code. But "in conformity with the City code" does not mean that the FSA will be unable to take action unless the panel says it can. That gets us into the kind of territory covered by other opposition amendments which we cannot support. This, as I explained, would allow the panel to say what is and is not market abuse on a case-by-case basis. The safe harbours for behaviour which conforms with exchange rules will not work like this, and no one has suggested that they should.
The FSA will be the body to which Parliament has entrusted the operation of the market abuse regime. It is only right that it should take the initial view on whether action should be taken against a person under Part VIII of the Bill. Given what I have said about the nature of the code and the panel's role in interpreting and applying it, I would naturally expect the FSA to take the panel's view before it decided whether behaviour fell within the safe harbour which the government amendment would enable it to provide. It would be foolish if it did not. In what I would expect to be a very rare event—namely, where the FSA and the panel disagreed on what "in conformity with the code" meant—it would be open, under our amendment, for the FSA, as the primary regulator, to take action. But let us not forget the background in which it could take action.
First, the person accused could call the panel to give evidence that his behaviour was in conformity with the City code. That would clearly carry a great deal of weight. Furthermore, the test of whether market abuse has taken place rests on the view of the regular user of the market as to whether expected standards have been met. Clearly, the panel's views will be important in determining that question. As a result, it is clear that any disputes between the panel and the FSA on whether behaviour was or was not in conformity with the City code would be very rare. But where such a dispute did arise, it is right that the question should be capable of being tested before the tribunal to be established under the Bill. I would expect the tribunal and, if the matter came before them, the higher courts, to attach due weight to the panel's views in accordance with established case law. None of this needs interfere with the timetable of the Bill, which is the crucial issue as the panel sees it.
I hope noble Lords will agree that our amendment strikes the right balance here, given the concerns that have been expressed and which I have not, despite my best efforts, managed to convince all noble Lords are
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unfounded. The amendment provides what I might call a "safety valve" and in that respect is entirely in line with Amendment No. 63. I said at the beginning that I hoped I would not detain your Lordships too long. I have detained your Lordships too long. I have much more to say about the various opposition amendments, but it is probably better if I do not say it until they have been moved. I beg to move.
Lord Kingslandmoved, as an amendment to Amendment No. 40, Amendment No. 41:
Line 4, after ("with") insert ("one or more specified rules or notes in").
The noble Lord said: My Lords, in moving this amendment, I should like to speak also to Amendments Nos. 42 and 63 to 65. I have no intention of wearying the House by going over ground already covered in Committee and on Report. The purpose of our amendments is twofold: first, to provide that conforming with the City code as applied by the Takeover Panel is a safe harbour for the purposes of Clause 117(1) of the Bill; secondly, to provide that:
"Except at the request or with the consent of the Panel, the Authority may not during the course of an offer exercise its powers under the Act in respect of behaviour which it considers may amount to market abuse".
We believe that, without such ring-fencing on the face of the Bill, the authority will, irrespective of its wishes—at this point I should like to draw the Minister's attention to the intervention of my noble friend Lord Forsyth—be compelled, in each and every takeover bid, to stand in the shoes of the panel, and second-guess its every move, in order to meet its market abuse responsibilities under the Bill.
In particular, we do not believe that a mere policy statement by the FSA will furnish the necessary ring-fencing. Any self-denying ordinance by the authority will be susceptible to judicial review in the courts on the grounds both of illegal delegation and illegal fettering. In short, failure to accept our amendments would destroy the panel as we know it, one of the City's greatest assets and a key to so much of its success.
I am pleased to say that, yesterday, the Minister tabled a government amendment seeking to grapple with the first, and only the first, of our two anxieties—that is to say, the provision of a safe harbour. The Minister has explained his amendment to your Lordships. From the point of view of the Opposition, it allays some but not all of our fears. In particular, we could not accept the current drafting of subsection (1) of the proposed new clause. Subsection (1) reads:
"The Authority may include in a code issued by it under section 115 … provision to the effect that in its opinion behaviour conforming with the City Code—

(a) does not amount to market abuse;

(b) does not amount to market abuse in specified circumstances;

(c) does not amount to market abuse if engaged in by a specified description of person".

That is all right as far as it goes; but the clause will not provide the safe harbour that we believe is necessary unless the amendment also embraces the interpretation that the panel places on the code in any particular set of circumstances.

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These concerns could be met in one of two ways: either by the addition after the expression "City Code" of the words "as applied by the Takeover Panel"—by that I mean, as applied by the Takeover Panel in any particular set of circumstances—or, alternatively, by excising the words after "behaviour" and inserting the expression which appears in subsection (6) of our Amendment No. 63:
"behaviour of a person … which in the opinion of the Panel conforms with the responsibilities imposed on that person by the City Code".
We believe that one or other of those expressions must appear on the face of the government amendment if we are to accept it.
I know that the noble Lord cannot make anything in the nature of a manuscript amendment in your Lordships' House today; but an undertaking that such words would be incorporated in an amendment in another place would be satisfactory to the Opposition.
As regards our other concern, the Minister has directed the attention of your Lordships' House to our Amendments Nos. 64 and 65. Yesterday we tabled Amendment No. 42, which is intended to meet some of the criticisms that the Minister has laid at the door of Amendments Nos. 64 and 65. The effect of the amendment is to establish a jurisdictional boundary between the authority and the panel during the course of a bid.
The amendment would leave the authority completely free to pursue market abuse once the bid had been completed; and therefore would not fetter in any way its ability to take disciplinary action thereafter. The amendment would enable the panel, meanwhile, to get on with the regulation of bids without the parties to a potential takeover having the opportunity tactically to involve the authority and, through that involvement, the courts as well.
Amendment No. 42 comes before Amendment No. 65 in the order of voting. If the Minister is unable to accept Amendment No. 42, I must give him notice that we shall move that amendment. In the meantime, I beg to move Amendment No. 41.
6 p.m.
Lord Newby: My Lords, we are discussing two separate but related issues in this group of amendments; namely, what have been referred to as the "safe harbour" and the "gatekeeper"' provisions. I shall deal first with the safe harbour provisions, without reiterating the arguments for including such measures in the Bill. We were pleased that eventually the Government produced Amendment No. 40. It demonstrates a recognition on the part of the Government that a provision in respect of safe harbours was required on the face of the Bill in order to clarify the matter. That has been discussed by many noble Lords at all stages of the Bill.
The remaining key issue, referred to by the noble Lord, Lord Kingsland, and where I share his view that there is a lack of clarity in the amendment as currently drafted, is the question of who shall interpret the City code. The noble Lord's suggestion is to insert a form
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of words that makes it absolutely clear that the interpreter of the City code is indeed the Takeover Panel—it is its code—rather than the FSA. That is important and I hope that, when the Minister concludes the debate on this amendment, he will be able to give an assurance to that effect.
As regards the other element of this debate, that of the "gatekeeper" argument, in the debate on Report I argued that it represented an undesirable fettering of the role of a principal and primary regulatory body to include such a gatekeeper provision. I remain of that view. The key argument that has been advanced in favour of the gatekeeper provision is that made by the noble Lord, Lord Forsyth, and—most energetically over recent weeks—by the Takeover Panel. The argument states that there will be a high degree of tactical use of judicial review in order to gain a short-term tactical advantage, with no particular anticipation of success as regards the judicial review. If it were ever heard, it would take place only long after the merger had either succeeded or failed.
I have tried to weigh what, on the one hand, seems to me to be the important principle that the FSA should remain unfettered in its powers against the argument, on the other hand, that the whole conduct of mergers will be undermined by the repeated use of judicial review proceedings. Having read the voluminous correspondence that has emanated from all sides of this debate, I still remain unpersuaded of the argument set out in Amendment No. 42. I am not happy with the notion that the FSA will have to sit on its hands until a takeover is concluded and I am not convinced that we shall see the degree of judicial proceedings anticipated and feared by the panel, the noble Lord, Lord Forsyth, and others. For those reasons, we on these Benches shall not support Amendment No. 42.
Lord Donaldson of Lymington: My Lords, I take it that it has been generally agreed that, as a general proposition, in principle the views of the FSA on these matters should prevail over those of the Takeover Panel. However, the exceptional circumstance that gives rise to the problem is when the bid is in progress. Then the City panel necessarily, although not always, may have to take instant decisions. It will of course expect all the parties involved in the bid to comply with those instant decisions rather than acting contrary to them. In that situation, I agree that the courts would follow their ordinary practice, but it is important to outline briefly what happens in a case of judicial review.
An application for leave to apply for judicial review is made. In theory, until it has been dealt with by the courts, an application has no effect whatever. But in a sense that is theoretical. I shall explain why. Turning to a different field, that of local authority actions—an area with which, when I dealt with judicial reviews, I was much concerned—I would have been extremely put out if, having received an application for judicial review, the local authority proceeded to act in a way which made any decision by the court on judicial review entirely nugatory.

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However, as a lawyer, I would have to admit that a local authority would be entitled to do exactly that. Of course, if I had learnt that an authority was acting in that way, I would have slapped an injunction on it—but that is another matter. My principal point is simply this: people may not realise that they are able—metaphorically speaking—to raise two fingers to the courts at the stage at which all that has happened is that an application for leave to apply has been made. If the court does not like it, it is for the court to make an order to hold the ring until the application can be dealt with. But people do not think in those terms; perhaps it is a good thing that they do not. The authority of the court is thought to be asserted from the moment someone applies to the court, but that is not the case and that is where the problem lies.
I should have thought that it would be perfectly possible for the FSA, when producing its code in conjunction with the City code, to cope with that situation quite simply. In whatever circumstances, but most likely during a current takeover bid, it could say that, subject to the undoubted right of the City panel to alter the rules as circumstances change during the course of the bid—I am sure that in practice that does happen—the FSA will treat the actions of those concerned as not amounting to market abuse. That would obtain during the course of the bid. However, once the bid had been cleared, the FSA will approach the Takeover Panel and say something along the lines of, "We cannot accept this. You must alter the code".
It is very likely that the Takeover Panel will agree with the FSA, because all parties have the same objectives in mind. However, if the Takeover Panel did not agree, the FSA must have the last word on the matter. The FSA would declare that if in the future anyone complied with that particular aspect of the City code, they would do so at their peril because the FSA regarded that element as being capable of being construed as market abuse.
This situation is akin to the line taken by the courts in Datafin where we would not interfere during the course of the bid—in the sense that we would give no injunctive relief. However, afterwards, we might very well say that we did not think that this was right and if anyone tried it again, we would intervene. I suggest that that is exactly what the FSA should do under government Amendment No. 40. Provisions should be put in place to enable people to use a safe harbour, provided that they are complying with the City code, but without prejudice to the next round, when neither they nor anyone else would be able to do so.
Lord Forsyth of Drumlean: My Lords, I do not propose to detain noble Lords. Suffice it to say that the contributions made by my noble friend Lord Kingsland and the noble and learned Lord, Lord Donaldson, reflect very much what I wish to say.
Perhaps I may make two points. First, I thank the Minister for bringing forward Amendment No. 40. It demonstrates that the Minister is trying to respond to the points that have been made. That said, the
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amendment has a serious weakness in terms of meeting the anxieties expressed in that it does not make clear who will determine whether the City code has been complied with. Unless it is the panel, clearly we are no further forward. I hope that the Minister will reflect on the points that were made by my noble friend and give an undertaking that he is prepared to change the wording to make it clear that compliance with the City code will be a matter determined by the panel in this context.
The second point that I should like to put to the Minister, in the politest possible way, is that the Government have been at great pains to tell everyone how much they respect the Takeover Panel, how good it is and what an important institution it is. As I came into the Chamber, I was handed a page of briefing from the Takeover Panel stating that:
"Unless the Bill is amended, there will be significant damage to the quality of takeover regulation in the UK. This in turn will damage the reputation of the UK financial markets for integrity and efficiency".
That is a very strong statement, coming from a body which the Government say that they respect and which, unlike members of the Government, has years of experience in this area. I do not think that any government can afford to ignore statements of this kind in this rather cavalier way. Therefore, I hope that the Minister will listen to these points.
Subsection (2) of Amendment No. 40 gives the game away. Perhaps I have missed something—I know that it is the practice throughout the Bill—but when we were in government we did not introduce clauses referring to government departments; they referred to Ministers. Subsection (2) states,
"But the Treasury's approval is required before any such provision may be included".
Had I been responsible for the Bill, the reference would have been to the Chancellor of the Exchequer. We really are seeing the game being given away and that this is being run by officials in the Treasury rather than Ministers. There is an extraordinary appearance of Banquo's ghost here. We have been assured throughout proceedings on the Bill that the principle at stake is that there should be one responsible authority. Suddenly, we find in the proposed amendment that the Treasury is the hidden hand to which the authority will have to go for approval.
I say in the friendliest possible way to the Government: please listen to the points that have been made. My noble friend has proposed a solution. It is important that our markets are seen to have integrity and to be efficient. That is in the interests of shareholders—that means every pensioner in this country with a private pension. For a Bill that purports to be concerned about ensuring market efficiency and integrity, it is extraordinary that we have arrived at this stage with these kinds of statements being made by people with no axe to grind other than the good name of the City of London.
6.15 p.m.
Lord Borrie: My Lords, concern has been apparent throughout our debates on this topic at various stages

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that the powers of the Takeover Panel and the reputation that it has built up over more than 30 years should be preserved in a new environment. We value it for the great benefits that it has achieved and we do not want them to be adversely affected by anything in the Bill.
With respect, one of the difficulties that the Opposition have had in putting forward amendments is that one of the great benefits of the Takeover Panel is that it is not a statutory body. It is a self-regulatory body, devised and deriving its composition from a number of City institutions and, as I said, it has given great value. But any amendments in this or any other Bill referring to the Takeover Panel involve the panel in a statutory role and statutory functions. A responsible legislative Chamber must accept that when such a body is, as it were, inserted into legislation, that is done without any controls over its composition, formation, procedure and so forth.
The Opposition have rightly been concerned about the detailed composition, function, objectives and concerns of the Financial Services Authority. I have no doubt that they are concerned about those matters in relation to the Takeover Panel, but Parliament is not concerned with it. Therefore, there is something of a dilemma in slotting in the Takeover Panel and giving it certain powers under the Bill, without having any say in how it works or how it is composed.
The reason I mention this is that there has been a measure of agreement about wanting to preserve the Takeover Panel's role during the offer period. In so doing, both the Government and the Opposition have been faced with the question of how to slot the panel in, how to devise a way in which the panel is not lost to life, is not coming to an end after 30 years but has a continuing and valid role. That can possibly be achieved by legislation, but we must make sure that we get it right. This is not the only way of getting it right. It could be done by means of agreement, practice or concordat between the Financial Services Authority, which is a statutory body, and the Takeover Panel.
The noble Lord, Lord Newby, said that we were concerned with two matters: the first is the safe harbour provision that we want to devise, so that if people comply with the provision in the code they will not be guilty of market abuse; the second is the gatekeeper provision. In regard to the safe harbour provision, there has been a measure of support, although not necessarily enthusiastic, for the Government's Amendment No. 40. The main difference of approach seems to lie in who is to have the final say—not who is to have any say, but the final say—as to what constitutes market abuse. The Bill contains definitions of market abuse, and over the years the Financial Services Authority has developed practice and precedents in regard to market abuse. However, we have no say over the composition and procedures of the Takeover Panel. Surely the final determination must he that of the statutory body; namely, the Financial Services Authority.
If the authority has a desire to preserve an understanding of the role of the Takeover Panel, surely it will do the kind of things that were indicated by my
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noble friend the Minister at the beginning of this debate; namely, to be constantly in touch, to take advice, and because the Takeover Panel has a great deal of experience of bids it will certainly start life in its relationship with the new Financial Services Authority as providing a powerful viewpoint which the FSA would fully understand it would do well to accept. But there is a difference in saying that it is the opinion of the Takeover Panel—this is the opinion of the Opposition in Amendment No. 63—that is all-pervasive and prevailing. It seems to me that that is not suitable. To put it shortly, the opinion of the panel is valuable and highly relevant, but it should not be conclusive. The conclusive view should be that of the Financial Services Authority.
On the gatekeeper provision, noble Lords opposite are right to express concern and regret that there is no government amendment dealing with the matter. I expressed concern in Committee that one does not want a position whereby the authority is in any way fettering its discretion, which could subject it to judicial review. I make no apology for repeating that the FSA is a statutory authority and the Takeover Panel, while it has many advantages, is not. It is inappropriate to insert into the Bill the word "request", which appears in the Opposition amendment, so that the authority can deal with matters only at the request of the panel, because the FSA is accountable and responsible at the end of the day.
Given the view expressed by everyone in this House about the value of the Takeover Panel, I have no fears about the FSA wading in during the course of a bid when the panel with its 30 years' experience is already there. We are to have a new regime and it is important to devise a convention, concordat or agreement—I do not know the appropriate word—to ensure that the excellent practice, the value of which we have all seen, continues and that there is deference by the authority, as it were, to the panel with all its experience. But we must not write this into the Bill when we have no control over the composition and procedures of the Takeover Panel, or anything else to do with that body. Let us ensure that the authority that is set up under the Bill devises codes of practice or concordats with the Takeover Panel.
Lord Boardman: My Lords, in our debates on this particular subject we tend to lose sight of the achievements of the Takeover Panel. The noble Lord, Lord Borrie, and other noble Lords have referred to the achievements of the panel. Its strengths which are now attacked by the government amendment are twofold. The first, which I describe with some reluctance since I qualified as a lawyer, is that the panel proceeds without the advocacy of lawyers. Secondly, the panel has a code of conduct which, unlike statutory regulation that people seek to get round, everyone feels honour bound to try to observe. As a result, under the chairmanship of the noble and learned Lord, Lord Shawcross, and successive chairmen the Take-over Panel has been made up of experienced businessmen who come to decisions which have been challenged in

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the courts on only two occasions. As the noble and learned Lord, Lord Donaldson, said, on those occasions the Law Lords dealt with the matter briefly, effectively and sensibly. Otherwise, the Takeover Panel has resolved a great number of issues.
The government amendment would destroy the very virtues which have made the Takeover Panel so effective. It would give rise to the involvement of lawyers, injunctions and a whole variety of matters which have been avoided in the past. My noble friend's amendment enables the panel, as far as possible, to proceed effectively in the way that it has done in the past. The panel comprises distinguished and experienced City men and women who know what is going on and can ensure that there is fairness and avoid litigation and all the costs that that involves. I hope noble Lords accept my noble friend's amendment and recognise the weaknesses in the government amendment which invites the trouble that so far we have managed to avoid.
Lord Elton: My Lords, I merely wish to add one reminder to your Lordships in considering the present situation. A takeover battle is not like a game of chess; it is a game of tennis. One cannot have the umpire on the centre court ringing up for a second opinion. It is necessary to have an authority during a takeover battle. No one seeks to deny the FSA the final word, in the way that the noble and learned Lord, Lord Donaldson, said could happen. But if the FSA is to be given the final word in a takeover battle when the panel is already involved the result is bound to be chaos and the thing will not work.
Lord Stewartby: My Lords, I rise briefly to support Amendment No. 42. It appeared that the Minister sought to argue that, on the basis of the new clause, the final decision would not rest with the authority. It would. It is only during the course of an offer that its activities are constrained. I said at Report stage it was a pity that noble Lords had not received a fuller explanation of the thinking of the Government and the authority on this matter at an earlier stage so that noble Lords could avoid having to deal with it at the last minute. When I said that the matter had been under discussion for a long time the noble Lord told me that the panel had raised its concerns only recently. I am advised by the panel that it first made known its concerns to the Treasury and the FSA as long ago as March 1998. It is better to have before us the working paper as to the nature of the discussions between the Treasury, the authority and panel, but it is still in an unformulated state.
The noble Lord, Lord Borrie, again emphasised that the final decision on this issue should rest with the authority, not a non-statutory body like the panel. That is exactly what new Clause 42 does.
Lord Borrie: My Lords, I apologise for interrupting the noble Lord. If I did say that I did not mean that the authority should have the final decision. I meant that the matter should not be dealt with on the face of the
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Bill as the noble Lord suggested, for the reasons that I sought to elaborate, but that, instead, the result he sought could be achieved by agreement between the statutory and non-statutory bodies.
Lord Stewartby: My Lords, I am grateful to the noble Lord for that explanation of his argument. It would be helpful if there was an agreement between the parties that the authority would not exercise its powers during the course of an offer. That would not remove its final responsibility. However, no undertaking has been received from the authority, nor is there an assurance from the Government at this stage, that such a self-denying ordinance is in prospect. Therefore, I hope that the House accepts the very powerful case made by the noble and learned Lord, Lord Donaldson, that on practical grounds we should follow the course suggested in Amendment No. 42.
Lord McIntosh of Haringey: My Lords, procedurally we are debating Amendment No. 41 as an amendment to Amendment No. 40. Therefore, on behalf of the Government Front Bench I shall reply to Amendment No. 41 as an amendment to Amendment No. 40. It will then be open to the noble Lord to decide what to do about that amendment and, in due course, Amendment No. 42. Perhaps I may first put to rest the mind of the noble Lord, Lord Forsyth. The noble Lord believes that there is something sinister about the reference to the Treasury. If he looks back at the legislation for which he was responsible he will discover that it was always called "the Treasury". The Treasury is defined in the Interpretation Act as "the Lords Commissioners of the Treasury". The Lords Commissioners include the Prime Minister and the Chancellor but not any Treasury officials. I am sure that if necessary the noble Lord, Lord Renton, can convince his noble friend of that.
My first duty is to refer to Amendment No. 41 as an amendment to Amendment No. 40. I shall in due course refer to Amendment No. 42 which we have been told is to be pressed to a Division. Finally, I seek to persuade your Lordships that Amendment No. 40, with or without Amendment No. 41, is worthy of the support of the House.
Amendment No. 41 would provide the additional words,
"one or more specified rules or notes in" [the code].
I do not believe that that adds anything. The new clause already allows the FSA to include the provision that behaviour conforming to the City code does not amount to market abuse in specified circumstances. That will allow the FSA to state that behaviour of a kind specified in rule X and/or rule Y does not constitute market abuse. I believe that that covers the point. I do not feel strongly about it except that I am not sure of the status of notes in the code and whether they are part of it or are simply good practice. In that case the amendment would be objectionable. As I have said, I do not feel very strongly about it.
I feel extremely strongly about Amendment No. 42. That would not give the FSA any discretion at all. It would provide that it could not take any action during

413
a bid situation, using any of the powers under any part of the Act—not just market abuse powers, but powers, for example, to take action against authorised persons because of fitness and "properness" issues except with the consent of the panel. That goes much further than anything we have had before and much further than anything that noble Lords have produced in amendments. It provides a statutory carve-out for a non-statutory body. That cannot be acceptable.
As regards Amendment No. 40, there have been some very useful and valuable contributions to the debate. I refer to that of the noble and learned Lord, Lord Donaldson. He asked for a safety valve. Our amendment provides the kind of safety valve that he described. As he said, it would not prejudice the next round. The issue of whether there had been a breach of the City code in the context of the safe harbour, which the amendment provides, will ultimately be a matter for the tribunal and the courts. We would expect the issue to arise rarely, but when it does, as is the case when exchange rules are breached, it will be for the tribunal to decide.
Lord Donaldson of Lymington: My Lords, I supported Amendment No. 40. Although support for Amendment No. 42 has been attributed to me, I believe that all that is necessary could be achieved under Amendment No. 40.
Lord McIntosh of Haringey: My Lords, I am most grateful to the noble and learned Lord. His name has been taken in vain by a number of speakers on the Benches opposite in the false assumption that he was supporting them.
As regards the basic issue of gatekeepers and safe harbours, I believe that what the noble Lord, Lord Newby, wants, and I am sure that what we want, is a safe harbour and not a gatekeeper. I believe that we agree on that. The problem with Amendment No. 63, to which the noble Lord put his name, is that it lets the gatekeeper into the safe harbour through a back route. Perhaps I am going too far ahead in the Marshalled List. The point is that our Amendment No. 40, for which I am delighted to have the support of the noble and learned Lord, Lord Donaldson, preserves the distinction. I entirely understand this dislike of the noble Lord, Lord Newby, for the gatekeeper role, and I share it. Inserting words of the kind suggested into subsection (4), as suggested in Amendment No. 41, would give the panel a quasi-gatekeeper role. The FSA would be unable to act unless it consulted the panel. In a case where it disagreed, it would be the panel's view which prevailed. That could be the case whether or not a bid was in process.
The only other substantive point made by noble Lords is the argument that somehow the role of the FSA in Amendment No. 40 could bring a takeover bid to a halt or enable it to be halted for undesirable reasons. I believe that that has now been fully answered by the analogy with the courts which the noble and learned Lord, Lord Donaldson, gave. An injunction would be against abuse and not against the continuaton of the takeover. The fears which have
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been expressed by the Takeover Panel are entirely unjustified. There is nothing stopping the panel taking instant decisions. If judicial review proceedings are brought, I cannot see what difference that can make to the process of the bid. The issue is only whether or not market abuse has occurred. That would not call a halt to the bid. There is no conceivable reason why it should.
I repeat the point that I was asked to make earlier on, whether "in conformity with the City code" in our amendment means "as applied by the panel". The answer is "yes" in the sense that the City code is the code which is drafted and applied by the panel. There can be no other answer. If I am wrong and it can be shown that I am wrong, my honourable and right honourable friends in another place will look at that issue again. I cannot see how in commonsense language that is not the case.
My objection in principle to Amendment No. 42, which is the worst of all the amendments before us, is to the suggestion that it is entirely open to a non-statutory body, the Takeover Panel, to determine on a case-by-case basis, without any responsibility towards tribunals or the courts, what is or what is not market abuse. The market abuse procedures which The market abuse procedures which have been accepted by this House as being the right way to extend the powers of financial services regulations would be shot through if it were possible for a non-statutory, non-accountable body to determine how it should be interpreted on a case-by-case basis. Since the fears expressed by noble Lords opposite and by the Takeover Panel have not been substantiated, I ask your Lordships to accept Amendment No. 40 and I ask the noble Lord, Lord Saatchi, to withdraw Amendment No. 41.
Lord Kingsland: My Lords, I thank the Minister for his reply. As regards Amendment No. 42, the Minister has made his position absolutely clear. When the moment comes to deal with it, the Opposition will move the amendment and test the opinion of the House. In the circumstances we shall withdraw Amendment No. 41.
As regards Amendment No. 40, it is essential that the Minster adds at the end of the expression "with the City Code" the words "as applied by the Takeover Panel" to make it absolutely clear that, in any particular set of circumstances, it is the interpretation of the code by the panel that is covered by the safe harbour. Any other approach would mean that, in future, nobody involved in a takeover bid would have any confidence in the guidance given by the Takeover Panel.
Therefore, if we are to support the amendment, what we are seeking is nothing less than an express undertaking by the Minister to your Lordships that in another place the expression,
"as applied by the Takeover Panel"

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will be added after the expression, "with the City Code". If he is not prepared to give that undertaking, we shall oppose Amendment No. 40. I beg leave to withdraw Amendment No. 41.
[Amendment No. 41, as an amendment to Amendment No. 40, by leave, withdrawn.]
6.39 p.m.
On Question, Whether the said amendment (No.40) shall be agreed to?
Their Lordships divided: Contents, 118; Not-Contents, 167.

Division No. 2

CONTENTS

Acton, L.

Howie of Troon, L.

Allenby of Megiddo, V.

Hughes of Woodside, L.

Alli, L.

Hunt of Chesterton, L.

Amos, B.

Hunt of Kings Heath, L.

Archer of Sandwell, L.

Irvine of Lairg, L. (Lord Chancellor)

Ashton of Upholland, B.

Bach, L.

Jay of Paddington, B. (Lord Privy Seal)

Bassam of Brighton, L.

Berkeley, L.

Jenkins of Putney, L.

Billingham, B.

Judd, L.

Blackstone, B.

Kennedy of The Shaws, B.

Borrie, L.

King of West Bromwich, L.

Bragg, L.

Layard, L.

Brett, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Lipsey, L.

Brookman, L.

Lockwood, B.

Burlison, L.

Lovell-Davis, L.

Burns, L.

Macdonald of Tradeston, L.

Carter, L. [Teller]

McIntosh of Haringey, L.

Chandos, V.

McIntosh of Hudnall, B.

Christopher, L.

MacKenzie of Culkein, L.

Clarke of Hampstead, L.

Mallalieu, B.

Cocks of Hartcliffe, L.

Marsh, L.

Cohen of Pimlico, B.

Massey of Darwen, B.

Craig of Radley, L.

Merlyn-Rees, L.

Crawley, B.

Milner of Leeds, L.

Dacre of Glanton, L.

Molloy, L.

Darcy de Knayth, B.

Morris of Castle Morris, L.

David, B.

Morris of Manchester, L.

Desai, L.

Murray of Epping Forest, L.

Diamond, L.

Nicol, B.

Donaldson of Lymington, L.

Paul, L.

Donoughue, L.

Peston, L.

Dubs, L.

Pitkeathley, B.

Elder, L.

Prys-Davies, L.

Evans of Temple Guiting, L.

Ramsay of Cartvale, B.

Farrington of Ribbleton, B.

Rendell of Babergh, B.

Faulkner of Worcester, L.

Renwick of Clifton, L.

Filkin, L.

Richard, L.

Gale, B.

Rogers of Riverside, L.

Gibson of Market Rasen, B.

Sawyer, L.

Gilbert, L.

Serota, B.

Goudie, B.

Shepherd, L.

Gould of Potternewton, B.

Simon, V.

Grabiner, L.

Simon of Glaisdale, L.

Graham of Edmonton, L.

Smith of Gilmorehill, B.

Grenfell, L.

Stoddart of Swindon, L.

Hardy of Wath, L.

Strabolgi, L.

Harris of Haringey, L.

Symons of Vernham Dean, B

Haskel, L.[Teller]

Tenby, V.

Hayman, B.

Thornton, B.

Hilton of Eggardon, B.

Tomlinson, L.

Hollis of Heigham, B.

Turner of Camden, B.

Howells of St Davids, B.

Uddin, B.

416

Walker of Doncaster, L.

Whitty, L.

Warner, L.

Wilkins, B.

Warnock, B.

Williams of Elvel, L.

Warwick of Undercliffe, B.

Williams of Mostyn, L.

Wedderburn of Charlton, L.

Winston, L.

Whitaker, B.

Young of Old Scone, B.

NOT-CONTENTS

Aberdare, L.

Harris of Greenwich, L.

Addington, L.

Haslam, L.

Alderdice, L.

Hayhoe, L.

Ampthill, L.

Henley, L.[Teller]

Anelay of St. Johns, B.

Higgins, L.

Arran, E.

Hogg, B.

Astor of Hever, L.

Holderness, L.

Attlee, E.

Holme of Cheltenham, L.

Baker of Dorking, L.

Hooper, B.

Barber, L.

Howe, E.

Barker, B.

Howell of Guildford, L.

Bell, L.

Hunt of Wirral, L.

Belstead, L.

Inglewood, L.

Blackwell, L.

Jacobs, L.

Blaker, L.

Jenkin of Roding, L.

Blatch, B.

Jopling, L.

Boardman, L.

Kelvedon, L.

Bowness, L.

Kingsland, L.

Brabazon of Tara, L.

Kirkham, L.

Bradshaw, L.

Knight of Collingtree, B.

Bridgeman, V.

Laing of Dunphail, L.

Brightman, L.

Lamont of Lerwick, L.

Brittan of Spennithorne, L.

Lane of Horsell, L.

Brougham and Vaux, L.

Lester of Herne Hill, L.

Burnham, L. [Teller]

Luke, L.

Buscombe, B.

McColl of Dulwich, L.

Byford, B.

Maddock, B.

Caithness, E.

Mancroft, L.

Campbell of Croy, L.

Mayhew of Twysden, L.

Carnegy of Lour, B.

Miller of Chilthorne Domer, B.

Carr of Hadley, L.

Miller of Hendon, B.

Cavendish of Furness, L.

Montagu of Beaulieu, L.

Chadlington, L.

Montrose, D.

Chilver, L.

Mowbray and Stourton, L.

Clark of Kempston, L.

Murton of Lindisfarne, L.

Colwyn, L.

Naseby, L.

Cope of Berkeley, L.

Newby, L.

Courtown, E.

Newton of Braintree, L.

Cowdrey of Tonbridge, L.

Norfolk, D.

Craigavon, V.

Northbrook, L.

Cranborne, V.

Northesk, E.

Crathorne, L.

Northover, B.

Crickhowell, L.

Norton of Louth, L.

Cumberlege, B.

O'Cathain, B.

Deedes, L.

Oakeshott of Seagrove Bay, L.

Denham, L.

Onslow, E.

Denton of Wakefield, B.

Onslow of Woking, L.

Dholakia, L.

Oppenheim-Barnes, B.

Dixon-Smith, L.

Oxfuird, V.

Eccles of Moulton, B.

Park of Monmouth, B.

Eden of Winton, L.

Parkinson, L.

Elles, B.

Patten, L.

Elliott of Morpeth, L.

Pearson of Rannoch, L.

Elton, L.

Peel, E.

Falkland, V.

Perry of Southwark, B.

Feldman, L.

Pilkington of Oxenford, L.

Fookes, B.

Platt of Writtle, B.

Forsyth of Drumlean, L.

Plummer of St. Marylebone, L

Freeman, L.

Rawlings, B.

Geddes, L.

Rawlinson of Ewell, L.

Glentoran, L.

Reay, L.

Goschen, V.

Redesdale, L.

Greaves, L.

Rees, L.

Greenway, L.

Renfrew of Kaimsthorn, L.

Hambro, L.

Renton, L.

Hamwee, B.

Roberts of Conwy, L.

Hanham, B

Rodgers of Quarry Bank, L.

417

Rotherwick, L.

Soulsby of Swaffham Prior, L.

Roper, L

Stevens of Ludgate, L.

Russell, E.

Stewartby, L.

Ryder of Wensum, L.

Stodart of Leaston, L.

Saatchi, L.

Strathclyde, L.

Scott of Needham Market, B.

Swinfen, L.

Seccombe, B.

Taylor of Warwick, L.

Selborne, B

Thomas of Gwydir, L.

Selsdon, L.

Thomas of Walliswood, B.

Sharp of Guildford, B.

Trefgarne, L.

Sharples, B.

Trumpington, B.

Shaw of Northstead, L.

Wallace of Saltaire, L.

Sheppard of Didgemere, L.

Watson of Richmond, L.

Shutt of Greetland, L

Wigoder, L.

Skelmersdale, L.

Wilcox, B.

Smith of Clifton, L.

Willoughby de Broke, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.49 p.m.
[Amendment No. 42 not moved.]
Clause 118 [Power to impose penalties in cases of market abuse]:
Lord Bachmoved Amendment No. 43:
Page 61, line 12, leave out ("amount to market abuse") and insert ("fall within paragraph (a) or (b) of subsection (1)").
The noble Lord said: My Lords, in moving the amendment, I speak also to Amendments Nos. 44 and 140. These amendments make important improvements to the protections in the market abuse regime in Clause 118 aligning them with the protections introduced into the restitution provisions on Report. They also correct an omission from the defences introduced on Report from the offences of misleading statements and practices in Clause 390 ensuring that the protection they provide can apply in a wider range of circumstances. I am sure they will be welcomed by noble Lords.
Following amendments made in Committee, Clause 118 now applies protections against the imposition of penalties or the making of a public statement where a person has reasonable grounds for believing that his behaviour was not market abuse or takes reasonable precaution to avoid engaging in market abuse. These are in line with amendments put down by noble Lords opposite and were welcomed by the House.
On Report we introduced these same protections into the provisions concerning restitution for market abuse. At the same time we also applied the protections so far as concerns restitution to those who require or encourage another to engage in abuse as part of the improvements to those provisions with respect to requirers and encouragers.
Amendments Nos. 43 and 44, amending Clause 118, simply bring the same protections into play in the market abuse penalty regime for those who require or encourage others to engage in market abuse. I am sure this will be welcomed by noble Lords.
Amendment No. 140 to Clause 390 simply extends the protection for behaviour in compliance with control of information rules and price stabilisation
418
rules to the full range of actions covered by Clause 390(1)(a); namely, the making of promises and forecasts as well as the making of statements. I beg to move.
On Question, amendment agreed to.
Lord Carter: My Lords, if I may interrupt business, it seems that there is general agreement that we can probably finish the groups before us by eight o'clock. I suggest that we do so, and that we take the Unstirred Question at eight o'clock. I shall be grateful if the House can complete this business by eight o'clock so that noble Lords waiting for the Unstarred Question do not have to wait too long.
Lord Bachmoved Amendment No. 44:
Page 61, line 14, leave out ("engaging in market abuse") and insert ("behaving in a way which fell within paragraph (a) or (b) of that subsection").
On Question, amendment agreed to.
Clause 129 [Legal assistance scheme]:
[Amendment No. 45 not moved.]
Clause 133 [General rule-making power]:
Lord Hunt of Wirralmoved Amendment No. 46:
Page 68, line 15, leave out from ("to,") to end of line 16.
The noble Lord said: My Lords, I return to a subject raised on Report. The Minister may recall that on behalf of a number of organisations, but in particular the Association of British Insurers, I was concerned that the words "may be adversely affected by" would extend a wide definition of "consumer". My amendment deletes the words "may be adversely affected by" and inserts new sub-paragraph (c) clarifying that we are referring to persons,
"who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them".
I hope that with that clarification we return to what I think the Government originally intended: a tighter definition of the word "consumer".
In moving the amendment, I hope that I have also explained Amendments No. 47 and 86 to 89 which are consequential on the amendment. I beg to move.
Lord Bach: My Lords, I am grateful to the noble Lord for tabling the amendments. We have at several stages of the Bill had debates on the meaning of the word "consumer" as it is defined for the purposes of the Bill. It has taken a bit of time to arrive at a definition that incorporates all the appropriate persons without leaving out a category of person that the authority should properly be expected to protect.
I believe that these amendments, and the corresponding amendments that define "client" for the purposes of Clause 321, now strike the right balance. I am bound to say that it is most unlikely we would ever be able to achieve absolute precision in the definition, however long we worked at it and however long the relevant provision in the Bill were to become. However, I think that we are now so close to the point we are striving to reach that we should adopt the definition proposed by these amendments.

419
I am therefore pleased to advise your Lordships' House that the Government accept all the amendments in this group and we are grateful to the noble Lord, Lord Hunt of Wirral.
On Question, amendment agreed to.
Lord Hunt of Wirralmoved Amendment No. 47:
Page 68, line 17, at end insert ("; or
(c) who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them.").
On Question, amendment agreed to.
Clause 136 [Insurance business rules]:
Lord McIntosh of Haringeymoved Amendments Nos. 48 and 49:
Page 69, line 16, leave out ("deal in") and insert ("effect or carry out").
Page 69, line 20, leave out ("long-term insurance business") and insert ("business which consists of the effecting or carrying out of contracts of long-term insurance").
On Question, amendments agreed to.
Clause 137 [Insurance business: regulations supplementing Authority's rules]:
Lord McIntosh of Haringeymoved Amendments Nos. 50 to 55:
Page 69, line 35, leave out ("deal in") and insert ("effect or carry out").
Page 69, line 39, leave out ("deal in") and insert ("effect or carry out").
Page 70, line 3, leave out from ("of") to end of line 4 and insert ("charges").
Page 70, line 5, leave out from ("making") to ("created") in line 6 and insert ("charges").
Page 70, line 8, leave out from ("circumstances") to end of line and insert ("charges").
Page 70, line 12, at end insert—
("(6) "Charges" includes mortgages (or in Scotland securities over property).").
On Question, amendments agreed to.
Clause 142 [Control of information]:
Lord McIntosh of Haringeymoved Amendment No 56:
Page 72, leave out lines 19 to 21 and insert ("about the disclosure and use of information held by an authorised person ("A").").
The noble Lord said: My Lords, in moving Amendment No. 56 I speak also to government Amendments Nos. 58 and 60. Perhaps noble Lords opposite will allow me to speak now to their Amendment Nos. 57, 59 and 62 if that is convenient.
The Bill was amended at Report stage on 9th May, conferring on the authority the power to make control of information rules with regard to authorised persons.
The Government have discussed Clause 142 with the City Liaison Group with regard to outstanding concerns in relation to the operation of this clause. Having considered carefully the group's concerns
420
(specifically with regard to the scope of the rule-making power), the Government are proposing three amendments to Clause 142 which, we hope, will tackle the issues raised.
Amendment No. 56 will enable the authority to make rules specifying circumstances in which a person may withhold information, or decide not to use information, which he would otherwise have to disclose or use for his customer's benefit. This means that if the authorised person maintains arrangements that conform with the rules (broadly speaking, if they maintain Chinese walls), then he will not be subject to certain obligations that would otherwise apply. This brings the clause into closer alignment with the power set out in the Financial Services Act, allowing the authority to make rules similar in effect to rules adopted under that Act.
Amendment No. 58 amplifies the sort of rules that can be made about disclosure and use of information. It should be stressed that subsection (2), as amended, is not designed to restrict the application of subsection (1). The purpose behind subsection (2), as amended, is to indicate how the rule-making power may be exercised with regard to an authorised person's fiduciary obligations towards his client.
With regard to the deletion of the current subsection (2), the Government consider that in view of the other changes made to this subsection there is no need to make specific provision for rules which,
"require A to restrict or prevent the passing of information within his business".
We believe that the power to make these rules is implicit in the broad power set out in subsection (1) of Clause 142 as amplified by subsection (2) as amended. I should stress again that the purpose of Clause 142 is to enable the authority to make rules that are similar in effect to rules currently adopted under the Financial Services Act. The Government believe that this clause effects this purpose.
Amendment No. 60 deletes subsections (3) and (4) so as to ensure that Chinese walls are effective in relation to dealings by an authorised person with different departments in his client's firm which might also be operating a Chinese wall. I commend the government amendments to the House.
Perhaps I may turn, by agreement, to Opposition Amendments Nos. 57 and 59. We believe that our amendments to Clause 142 already deal with the concerns raised in those amendments. Given that Clause 142(1) will allow the authority to make rules about the use and disclosure of information held by an authorised person, it is implicit in that power that the authority will be able to make rules which may take the form of "enabling" or "requiring" rules. I repeat that the purpose behind Clause 142 is to allow the authority to make rules that are similar in effect to rules currently adopted under the Financial Services Act. It should be noted that the relevant provision in that Act provides for both enabling and requiring rules. In the light of my remarks, I hope that noble Lords will see fit not to move their amendments.

421
So far as their Amendment No. 62 is concerned, on Report I stressed that the Government believe that the courts would be unlikely to hold that someone could successfully sue an authorised person for breach of fiduciary duties where the authorised person had complied with FSA rules made under Parliament's delegated legislative powers. We maintain that there is no need for a specific defence in Clause 142.
In addition, the new clause makes express provision for rules compliance, which will have certain consequences. The Bill states that in specified circumstances an authorised person may withhold information which he would otherwise have to disclose and may decide not to use information to benefit certain persons when he would otherwise have to use it to their benefit. These provisions are aimed specifically at displacing the fiduciary duties that would otherwise arise. If the Bill states that information can be withheld or not used in certain circumstances, then in those circumstances it can be with held or not used. Nothing else is needed to achieve that result.
There is a very real danger than an express civil liability defence in Clause 142 will have implications in relation to the effect of compliance with authority rules in other areas of the Bill. In the light of the fact that we have achieved the same effect in a way that safely negotiates round those dangers, I urge noble Lords not to move this amendment. I beg to move Amendment No. 56.
On Question, amendment agreed to.
[Amendment No. 57 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 58:
Page 72, line 24, leave out from ("have") to end of line 26 and insert ("to disclose to a person ("B") for or with whom A does business in the course of carrying on any regulated or other activity;
(b) specify circumstances in which A may withhold information which he would otherwise have to disclose to B;
(c) require A not to use for the benefit of B information A holds which A would otherwise have to use in that way;
(d) specify circumstances in which A may decide not to use for the benefit of B information A holds which A would otherwise have to use in that way.").
On Question, amendment agreed to.
[Amendment No. 59 not moved.]
Lord Bachmoved Amendment No. 60:
Page 72, line 27, leave out subsections (3) and (4).
On Question, amendment agreed to.
Clause 145 [Actions for damages]:
Lord Bachmoved Amendment Nos. 61:
Page 74, line 21, leave oat from beginning to ("subject") in line 23 and insert ("In prescribed cases, a contravention of a rule which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person,").
On Question, amendment agreed to.
[Amendment No. 62 not moved.]
Lord Kingslandmoved Amendment No. 63:
After Clause 153, insert the following new clause—
("CHAPTER IIA
POLICIES RELATING TO TAKEOVER REGULATION
MARKET ABUSE: BEHAVIOUR CONFORMING WITH CITY CODE
—(1) Subject to subsections (2) and (3), the Authority is authorised to include in the code issued under section 115 a statement that behaviour of a person which is in conformity with the City Code does not amount to market abuse.
(2) Subsection (1) does not apply in respect of behaviour which satisfies the condition in subsection 114(2)(a).
(3) A statement made under subsection (1) may include such conditions and limitations as the Authority considers appropriate, including conditions and limitations specifying the behaviour and the persons covered by the statement.
(4) The Authority may at any time alter or replace any statement made under subsection (1).
(5) If a person behaves in a way which fulfils the requirements of any statement included pursuant to subsection (1) in the code issued under section 115, that behaviour of his is to be taken, for the purposes of this Act, as not amounting to market abuse.
(6) In this section—
"behaviour of a person which is in conformity with the City Code" means behaviour of a person which in the opinion of the Panel conforms with the responsibilities imposed on that person by the City Code;
"the opinion of the Panel" includes any revised opinion formed by the Panel as a result of any further consideration;
"City Code" means the City Code on Takeovers and Mergers issued by the Panel as applied by the Panel and as amended from time to time by the Panel;
"the Panel" means the Panel on Takeovers and Mergers.").
The noble Lord said: My Lords, I beg to move.
7.3 p.m.
On Question, Whether the said amendment (No. 63) shall be agreed to?
Their Lordships divided: Contents, 144: Not-Contents, 106.

Division No. 3

CONTENTS

Addington, L.

Burnham, L. [Teller]

Alderdice, L.

Buscombe, B.

Ampthill, L.

Byford, B.

Anelay of St.Johns, B.

Caithness, E.

Arran, E.

Carnegy of Lour, B.

Astor of Hever, L.

Carr of Hadley, L.

Attlee, E.

Cavendish of Furness, L.

Barber, L.

Chadlington, L.

Barker, B.

Chilver, L.

Bell, L.

Clark of Kempston, L.

Belstead, L.

Colwyn, L.

Blackwell, L.

Cope of Berkeley, L.

Blatch, B.

Courtown, E.

Boardman, L.

Cowdrey of Tonbridge, L

Bowness, L.

Craigavon, V.

Brabazon of Tara, L.

Cranborne, V.

Bradshaw, L.

Crathorne, L.

Bridgeman, V.

Crickhowell, L.

Brougham and Vaux, L.

Cumberlege, B.

423

Darcy de Knayth, B.

Newton of Braintree, L.

Deedes, L.

Norfolk, D.

Denham, L.

Northbrook, L.

Denton of Wakefield, B.

Northesk, E.

Dixon-Smith, L.

Northover, B.

Donaldson of Lymington, L.

Norton of Louth, L.

Eccles of Moulton, B.

Oakeshott of Seagrove Bay, L.

Eden of Winton, L.

O'Cathain, B.

Elliott of Morpeth, L.

Onslow, E.

Elton, L.

Onslow of Woking, L.

Falkland, V.

Oxfuird, V.

Feldman, L.

Park of Monmouth, B.

Fookes, B.

Parkinson, L.

Forsyth of Drumlean, L.

Pearson of Rannoch, L.

Freeman, L.

Peel, E.

Geddes, L.

Pilkington of Oxenford, L.

Glentoran, L.

Platt of Writtle, B.

Goschen, V.

Plummer of St. Marylebone, L

Greaves, L.

Rawlings, B.

Hambro, L.

Reay, L.

Hamwee, B.

Redesdale, L.

Hanham, B.

Rees, L.

Harris of Greenwich, L.

Renfrew of Kaimsthorn, L.

Haslam, L.

Roberts of Conwy, L.

Hayhoe, L.

Rodgers of Quarry Bank, L.

Henley, L. [Teller]

Roper, L.

Hogg, B.

Rotherwick, L.

Holderness, L.

Russell, E.

Holme of Cheltenham, L.

Saatchi, L.

Howe, E.

Scott of Needham Market, B.

Hunt of Wirral, L.

Seccombe, B.

Inglewood, L.

Selborne, E.

Jacobs, L.

Selsdon, L.

Jenkin of Roding, L.

Sharp of Guildford, B.

Jopling, L.

Sharples, B.

Kelvedon, L.

Shaw of Northstead, L.

Kingsland, L.

Sheppard of Didgemere, L.

Kirkham, L.

Shutt of Greetland, L

Laing of Dunphail, L.

Soulsby of Swaffham Prior, L.

Lane of Horsell, L.

Stevens of Ludgate, L.

Lester of Herne Hill, L.

Stewartby, L.

Luke, L.

Stodart of Leaston, L.

McColl of Dulwich, L.

Swinfen, L.

Maddock, B.

Taylor of Warwick, L.

Mancroft, L.

Thomas of Walliswood, B.

Mayhew of Twysden, L.

Trefgarne, L.

Miller of Chilthorne Domer, B.

Trumpington, B.

Miller of Hendon, B.

Wallace of Saltaire, L.

Monson, L.

Watson of Richmond, L.

Montrose, D.

Waverley, V.

Murton of Lindisfarne, L.

Wilcox, B.

Naseby, L.

Willoughby de Broke, L.

Newby, L.

Young, B.

NOT-CONTENTS

Acton, L.

Christopher, L.

Allenby of Megiddo, V.

Clarke of Hampstead, L.

Alli, L.

Cocks of Hartcliffe, L.

Amos, B.

Cohen of Pimlico, B.

Archer of Sandwell, L.

Crawley, B.

Ashton of Upholland, B.

David, B.

Bach, L. [Teller]

Desai, L.

Bassam of Brighton, L.

Diamond, L.

Berkeley, L.

Donoughue, L.

Billingham, B.

Dubs, L.

Blackstone, B.

Elder, L.

Borrie, L.

Evans of Temple Guiting, L.

Bragg, L.

Farrington of Ribbleton, B.

Brett, L.

Faulkner of Worcester, L.

Brooke of Alverthorpe, L.

Filkin, L.

Brookman, L.

Gale, B.

Burlison, L.

Gibson of Market Rasen, B.

Burns, L.

Gilbert, L.

Carter, L. [Teller]

Goudie, B.

Chandos, V.

Gould of Potternewton, B.

424

Grabiner, L.

Molloy, L.

Graham of Edmonton, L.

Morris of Castle Morris, L.

Grenfell, L.

Murray of Epping Forest, L.

Harris of Haringey, L.

Nicol, B.

Haskel, L.

O'Neill of Bengarve, B.

Hayman, B.

Paul, L.

Hilton of Eggardon, B.

Peston, L.

Hollis of Heigham, B.

Pitkeathley, B.

Howells of St Davids, B.

Prys-Davies, L.

Howie of Troon, L.

Ramsay of Cartvale, B.

Hughes of Woodside, L.

Rendell of Babergh, B.

Hunt of Chesterton, L.

Renwick of Clifton, L.

Hunt of Kings Heath, L.

Rogers of Riverside, L.

Irvine of Lairg, L. (Lord Chancellor)

Sawyer, L.

Shepherd, L.

Jay of Paddington, B. (Lord Privy Seal)

Simon, V.

Stoddart of Swindon, L.

Jenkins of Putney, L.

Strabolgi, L.

Judd, L.

Symons of Vernham Dean, B

Kennedy of The Shaws, B.

Tenby, V.

King of West Bromwich, L.

Thornton, B.

Layard, L.

Tomlinson, L.

Lea of Crondall, L.

Turner of Camden, B.

Lipsey, L.

Uddin, B.

Macdonald of Tradeston, L.

Walker of Doncaster, L.

McIntosh of Haringey, L.

Warner, L.

McIntosh of Hudnall, B.

Warwick of Undercliffe, B.

MacKenzie of Culkein, L.

Wedderburn of Charlton, L.

Mallalieu, B.

Whitaker, B.

Marsh, L.

Whitty, L.

Massey of Darwen, B.

Williams of Elvel, L.

Merlyn-Rees, L.

Williams of Mostyn, L.

Milner of Leeds, L.

Winston, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
7.12 p.m.
[Amendments Nos. 64 and 65 not moved.]
Clause 163 [Appointment of persons to carry out investigations in particular cases]:
Lord Bachmoved Amendment No. 66:
Page 85, line 23, leave out from ("under") to end of line 27 and insert ("prescribed regulations relating to money laundering;").
The noble Lord said: My Lords, this amendment is a technical change which should make subsection (4)(b) of Clause 163 a little clearer. At present this gives the FSA the power to investigate:
"an offence under any [other] enactment … which the FSA has power to prosecute … but it would not otherwise have power to investigate".
That refers in effect to money laundering offences under the regulations to be prescribed under Clause 395(1)(b). Those are the only offences which would be covered by Clause 163(4)(b). The amendment therefore replaces subsection (4)(b) with a direct reference to prescribed money laundering offences.
This technical change will also remove a potential doubt as to the fact that it enables the FSA to mount investigations into possible money laundering offences in Scotland. It is clearly important that the FSA should be able to conduct investigations into such suspected offences regardless of where in the UK they may have been perpetrated. I beg to move.
On Question, amendment agreed to.
Clause 169 [Admissibility of statements made to investigators]:
Lord Kingslandmoved Amendment No. 67:
Page 89, line 23, leave out ("a") and insert: ("that").
On Question, amendment agreed to.
[Amendment No. 68 not moved.]
Clause 180 [Conditions attached to approval]:
Lord McIntosh of Haringeymoved Amendment No. 69:
Page 96, line 41, leave out ("refusal") and insert ("decision to refuse").
The noble Lord said: My Lords, I understand that this amendment was to be debated with opposition Amendment No. 23, which was not moved. However, since it is purely formal, I beg to move.
On Question, amendment agreed to.
Clause 197 [Actions for damages]:
Lord McIntosh of Haringeymoved Amendment No. 70:
Leave out Clause 197.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 71:
After Clause 197, insert the following new clause—
CONTRAVENTION OF REQUIREMENT IMPOSED UNDER THIS PART
(".—(1) Contravention of a requirement imposed by the Authority under this Part does not—

(a) make a person guilty of an offence;

(b) make any transaction void or unenforceable; or

(c) (subject to subsection (2)) give rise to any right of action for breach of statutory duty.

(2) In prescribed cases the contravention is actionable at the suit of a person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty.").
On Question, amendment agreed to.
Clause 208 [The compensation scheme]:
Lord Bachmoved Amendment No. 72:
Page 111, line 26, leave out ("qualified for authorisation under Schedule 3 at that time") and insert (", at that time—

(a) qualified for authorisation under Schedule 3, and

(b) fell within a prescribed category,").

The noble Lord said: My Lords, perhaps I may deal first with the government amendments in this group; namely, Amendments Nos. 72, 73 and 80. These amendments allow a more precise definition of the extent to which EEA firms can, like UK firms, be required to join the compensation scheme, The scheme is designed to provide a safety-net of protection for consumers where authorised firms carrying on regulated activities find themselves unable to meet their liabilities and it would therefore be wrong to allow EEA firms authorised by virtue of Schedule 3 to opt out of providing this protection.
426
The issue was raised by an opposition spokesman in another place, the honourable Howard Flight, who said that the compensation scheme should apply to all operators in the marketplace, with compulsory membership.
There are questions of EC law here, and the Treasury has had to consider carefully how best to ensure that the requirements of Part XV of the Bill meet our obligations under EC directives. The Investor Compensation Directive and the Deposit Guarantee Directive provide that EEA firms that participate in deposit and investor compensation schemes in their home state cannot be required to join the UK scheme.
Clause 208(10) therefore provides that firms authorised by virtue of their passport rights under Schedule 3 need not participate under the scheme unless they elect to do so under Clause 209(5). They may elect to participate where the UK scheme offers higher levels of compensation than their home state scheme—taking out "top-up cover" under the new scheme will enable them to compete on a level playing field with UK firms.
As things stand, however, those provisions go wider than intended because they apply to all passported firms, whether or not they are covered by directive requirements. That could lead to gaps in the protection provided by the compensation scheme, particularly in the area of insurance, where there is no requirement on other member states to put in place their own compensation arrangements. I can tell noble Lords that, in fact, there are some member states that have no such protection for insurance policyholders. That is why the existing arrangements under the Policyholder Protection Acts require incoming firms to participate in the UK scheme. These amendments will allow such protection to continue under the new compensation scheme.
The amendments to Clauses 208 and 209 will allow the Treasury to prescribe which passported firms are given a choice whether to join the scheme. The effect of the changes proposed will be to enable the Treasury to require all passported firms not covered by EC directives to join the scheme in the same way that UK firms will be required to join. The amendments allow the Treasury to deal with this matter in regulations because the requirements imposed by EC directives may change over time. It is therefore necessary to ensure that the Bill allows sufficient flexibility for detailed changes to be made in order to ensure that we continue to fulfil our obligation under EC law.
The amendment to Clause 219 is consequential on these changes to Clauses 208 and 209. Clause 219 enables the scheme manager to inspect certain documents held by the Official Receiver. The amendment to Clause 219 enables the Treasury to prescribe the extent to which that provision applies to EEA firms.
As part of this group of amendments, the noble Lord, Lord Hunt of Wirral, has tabled an amendment. Perhaps he will forgive me if I speak to it at this stage.

427
When we considered Part XV on Report, the noble Lord raised a technical concern about what is now Clause 210(1) in connection with reinsurance. My noble friend asked his officials to pursue this point with the Association of British Insurers and the FSA in the run-up to today's deliberations. We have also had a constructive exchange with the noble Lord opposite on this matter.
The upshot of those discussions is that the Treasury now agrees that there could be circumstances in which the scheme might wish to pay compensation to insurance company policyholders. That would bring Clause 210 into play. It is therefore desirable to amend the Bill to make clear that the assignment of a policyholder's rights to the scheme manager is not intended to cast doubt on the ability of insurance companies to claim under relevant reinsurance contracts. The noble Lord's amendment would have that effect. For the second time today, already, the Government are happy to accept his amendment.
Lord Hunt of Wirral: My Lords, I thank the Minister for his generous words and for acknowledging the importance of the point I was able to make on behalf of the Association of British Insurers. I am grateful to him for having removed the necessity for my making any speech at all by indicating in advance that he is willing to accept my amendment, which I shall move at the appropriate moment.
On Question, amendment agreed to.
Clause 209 [General]:
Lord Bachmoved Amendment No. 73:
Page 112, line 20, after ("3") insert (", and
(b) falls within a prescribed category,").
On Question, amendment agreed to.
Clause 210 [Rights of the scheme in relevant person's insolvency.]:
Lord Hunt of Wirralmoved Amendment No. 74:
Page 112, leave out lines 35 to 37 and insert—
("( ) as to the effect of a payment of compensation under the scheme in relation to rights or obligations arising out of the claim against a relevant person in respect of which the payment was made;").
On Question, amendment agreed to.
Clause 211 [Continuity of long-term insurance policies]:
Lord McIntosh of Haringeymoved Amendments Nos. 75 and 76:
Page 113, line 34, leave out ("carry on long-term insurance business") and insert ("have permission to effect or carry out contracts of long-term insurance").
Page 113, line 39, leave out from first ("of") to ("to") in line 40 and insert ("a relevant long-term insurer's business so far as it consists of the carrying out of contracts of long-term insurance, or of any part of that business,").
On Question, amendments agreed to.
Clause 212 [Insurers in financial difficulties]:
Lord McIntosh of Haringeymoved Amendments Nos. 77 to 79:
Page 114, line 18, leave out ("carry on insurance business") and insert ("have permission to effect or carry out contracts of insurance").
Page 114, line 22, leave out from first ("of") to ("to") in line 23 and insert ("a relevant insurer's business so far as it consists of the carrying out of contracts of insurance, or of any part of that business,").
Page 114, line 25, leave out ("insurance business") and insert ("to effect or carry out contracts of insurance").
On Question, amendments agreed to.
Clause 219 [Scheme manager's power to inspect documents held by Official Receiver etc.]:
Lord McIntosh of Haringeymoved Amendment No. 80:
Page 118, line 9, leave out ("qualified for authorisation under Schedule 3 at that time") and insert (", at that time—

(a) qualified for authorisation under Schedule 3, and

(b) fell within a prescribed category.").

On Question, amendment agreed to.
Clause 224 [Awards]:
Lord Bachmoved Amendment No. 81:
Page 121, line 23, leave out from ("for") to ("of-) in line 26 and insert ("—

(a) financial loss; or

(b) any other loss, or any damage.").

The noble Lord said: My Lords, this amendment deals with Clause 224(3). Several noble and learned Lords around the House voiced concerns during Report stage that this provision might be open to misinterpretation. We undertook to consider carefully whether anything could be done by way of clarification.
The purpose of Clause 224(3) has always been simply to refer to types of loss or damage. It was never our intention that the ombudsman should be required to try to construct hypothetical contracts, nor to award compensation according to whether or not there had been a breach of an actual contract. Indeed, such an approach would cut straight across the principle set out in Clause 223 that the ombudsman should settle cases on the basis of what is fair and reasonable in all circumstances. We have always wanted that to be clear.
The amendment is intended to put matters beyond doubt. It recasts subsection (3) so that the reference to awards of a kind a court could make for breach of contract is replaced by a more straightforward distinction between financial loss and other loss or damage of a specified kind.
The amendment is similar to the one we considered on Report. The difference is that it preserves the requirement that awards for non-financial loss or damage, covered by paragraph (b), must be specified in rules made by the FSA. That is to ensure clarity and certainty for those affected by the scheme and is a longstanding feature of this provision which we believe is widely accepted.

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One final point which perhaps I may mention relates to future losses. The noble Lord, Lord Hunt of Wirral, mentioned on Report the question of whether the expression "financial loss" in the amendment to which he spoke could be taken to refer to future losses. Financial loss in this context is intended to mean loss which is susceptible of measurement in money or, to put it another way, capable of calculation in economic terms. It is intended to include future losses of earnings or profits. Those losses which, by their nature, cannot be assigned a monetary value by other than artificial means—for example, mental distress, pain and suffering—fall under paragraph (b).
I congratulate the noble Lord, on the day of this first test match, on a hat trick. I beg to move.
Lord Hunt of Wirral: My Lords, I rise to point out that my ability to succeed in a hat trick is only made possible by the fact that I was the privileged Lord to speak on behalf of the four musketeers—namely, the noble Lords, Borrie, Donaldson, Phillips and myself—in putting forward these points. I did so with strong support. I did so, also, with the intention that we should preserve the best of the existing schemes, namely the simplicity, informality and speed with which these matters are dealt with, while at the same time not erring towards situations which might need interpretation by the courts.
Perhaps I may ask the Minister: presumably the power to make money awards is not limited by the powers of the courts—I believe that was very much what he was explaining to us—and that future loss includes uncrystallised future losses? I believe he has made that clear. However, obviously I shall reflect on the points he has made. I very much welcome the amendment.
On Question, amendment agreed to.
Clause 233 [Restrictions on promotion]:
[Amendment No. 82 not moved.]
Clause 293 [Directions and revocation: procedure]:
Lord McIntosh of Haringeymoved Amendment No. 83:
Page 157, line 41, leave out from ("decision") to ("and") in line 42.
The noble Lord said: My Lords, in moving Amendment No. 83, I shall speak also to Amendment No. 84. I can deal with Amendment No. 83 quickly. It is simply a drafting amendment removing some unnecessary words. Amendment No. 84 is more important.
On the final day of Report stage, I referred to the proposal by the noble and learned Lord, Lord Donaldson, that the Bill should be amended to ensure that the tribunal's jurisdiction could, if necessary, be extended to cover disciplinary proceedings of recognised bodies in the area of market abuse. I said that we intended to table an amendment at Third Reading to deal with this.
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That is what the present new clause does. The noble and learned Lord, Lord Donaldson, has kindly taken time to write to me and, to use the words of his letter,
"I concur and have nothing to add".
If a person who is a member of a recognised investment exchange or recognised clearing house engages in behaviour which amounts to market abuse under Clause 114, it is likely that this will also constitute a breach of the rules of the recognised body concerned. Rather than taking market abuse proceedings, the FSA might leave this to be dealt with as an internal disciplinary matter.
In many cases, the recognised bodies might be best placed to take such action, as the bodies closest to the markets. That is right, but when it is the case, the person disciplined would not have the right to refer the matter to an independent tribunal as he would if it had been dealt with by the FSA under Clause 114. The problem with this is that it is conceivable that inconsistency might develop over time between the way such cases are dealt with by recognised bodies as compared with the tribunal. It might; I am not saying that it will but there is a possibility. Subsection (2) allows the Treasury to make an order enabling disciplinary cases to be referred to the tribunal, should that possibility arise.
Subsection (2)(b) deals with a different possibility. We are confident that all the provisions of the Bill are consistent with the provisions of the Human Rights Act 1998 and the European Convention on Human Rights. But it is possible that at some point in the future, developments in the courts' jurisprudence on these matters might require us to provide for an appeal from the internal disciplinary procedures of recognised bodies in market abuse cases to a body such as the tribunal established by the Bill. Subsection (2)(b) would allow the Treasury to make an order allowing for such issues to be referred to the tribunal.
We are taking a power which will enable the Treasury to provide for exchange and clearing house disciplinary cases involving market abuse to be considered by the tribunal in certain circumstances. We do not have any plans to use this power, but if we did we would consult widely, including in particular with the recognised exchanges and clearing houses themselves. I beg to move.
On Question, amendment agreed to.
7.30 p.m.
Lord McIntosh of Haringeymoved Amendment No. 84:
After Clause 294, insert the following new clause—
EXTENSION OF FUNCTIONS OF TRIBUNAL
(".—(1) If the Treasury are satisfied that the condition mentioned in subsection (2) is satisfied, they may by order confer functions on the Tribunal with respect to disciplinary proceedings—

(a) of one or more investment exchanges in relation to which a recognition order under section 285 is in force or of such investment exchanges generally, or

(b) of one or more clearing houses in relation to which a recognition order under thal section is in force or of such clearing houses generally.

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(2) The condition is that it is desirable to exercise the power conferred under subsection (1) with a view to ensuring that—

(a) decisions taken in disciplinary proceedings with respect to which functions are to be conferred on the Tribunal are consistent with—

(i) decisions of the Tribunal in cases arising under Part VIII; and

(ii) decisions taken in other disciplinary proceedings with respect to which the Tribunal has functions as a result of an order under this section; or

(b) the disciplinary proceedings are in accordance with the Convention rights.

(3) An order under this section may modify or exclude any provision made by or under this Act with respect to proceedings before the Tribunal.
(4) "Disciplinary proceedings" means proceedings under the rules of an investment exchange or clearing house in relation to market abuse by persons subject to the rules.
(5) "The Convention rights" has the meaning given in section 1 of the Human Rights Act 1998.").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 85:
After Clause 316, insert the following new clause—
("Transfers of business done at Lloyds
TRANSFER SCHEMES
. The Treasury may by order provide for the application of any provision of Part VII (with or without modification) in relation to schemes for the transfer of the whole or any part of the business carried on by one or more members of the Society or former underwriting members.").
The noble Lord said: My Lords, this amendment should have been debated with Amendment No. 49, which was not moved. But since it is entirely uncontroversial, I beg to move.
On Question, amendment agreed to.
Clause 321 [Directions in relation to the general prohibition]:
Lord Hunt of Wirralmoved Amendments Nos. 86 to 89:
Page 175, line 15, after ("rights") insert ("or interests").
Page 175, line 16, leave out ("or which may be adversely affected by.").
Page 175, line 16, at end insert ("any").
Page 175, line 17, at end insert ("; or
(c) persons who have rights or interests which may be adversely affected by the use of any such services by persons acting on their behalf or in a fiduciary capacity in relation to them.").
The noble Lord said: My Lords, with the leave of the House I shall move Amendments Nos. 86 to 89 en bloc. I beg to move.
On Question, amendments agreed to.
Clause 327 [The Friendly Societies Commission]:
Lord Bachmoved Amendment No. 90:
Page 178, line 30, after ("in") insert ("or determined in accordance with").
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The noble Lord said: My Lords, in moving Amendment No. 90, I shall speak also to Amendments Nos. 91 to 100, 145 to 148, 151 to 156, 158 and 193 to 209. This is another quite large group of amendments and covers a number of different topics including mutual societies, repeals, consequentials, transitional arrangements and territorial extent of the Bill. However, they are connected to one another in that they all deal with amendments that have to be made to existing legislation as a result of the reforms introduced by the Bill.
Dealing with mutuals first, some of the amendments before us in this group are the result of a review of the proposals for the future arrangements for the registration and regulation of mutual societies. This is an area where the Treasury has been making good progress in preparing for the next stages and indeed has already been consulting industry representatives on the changes and repeals it proposes to make using the powers under the Bill.
The amendments to the clauses in Part XXI of the Bill—Amendments Nos. 90 to 100—reflect the potential shortcomings of the powers which have been identified during the process of preparing early drafts of the relevant orders. To give a specific example, the current bodies—the Friendly Societies Commission, the Building Societies Commission and the Registrar of Friendly Societies—are under statutory obligations to produce annual reports on the performance of their functions under the relevant Acts. We believe that after their respective functions have been transferred, in most cases to the authority, that those bodies should produce a final report before the order bringing about their demise comes into force. As the current powers are expressed, they appear to require a specific date to be named in the order. But it may well be that we would wish to define the dissolution date by reference to the day on which the relevant report is deposited with the Treasury.
The majority of the amendments to the schedules contained in this group correct and supplement certain modifications and repeals that we proposed to make to the relevant legislation. As they stand, the schedules reflect the early thinking on the changes that would be needed and, as I said, the Treasury has been developing more complete proposals in discussion with the industry.
In any case, the Bill does not tell the whole story. In addition to making orders under Part XXI for the transfer of functions of the Building Societies Commission, the Friendly Societies Commission and the Registrar of Friendly Societies, and in addition to repeals and amendments which are consequential on those orders, the Treasury will also use the powers under Clause 418 to make a number of further repeals and modifications which are consequential on the Bill. The Government believe that this approach will make the changes more coherent and intelligible to those affected by the reforms. So the schedules focus on amendments that are not simply consequential on the Bill.

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We considered an example of such a change at Report stage when the Government brought forward amendments that will give incorporated friendly societies greater commercial freedoms to form and own subsidiaries. In addition, a number of the new amendments now being made to Schedule 18, which are echoed in Schedule 22, will remove certain restrictions on credit unions under the Credit Unions Act 1979. Those changes are possible because of the regulatory powers that will be available to the authority when credit unions become authorised persons under the Bill. To digress briefly, this deregulation for credit unions is another area where the Treasury is taking positive, practical steps in support of the wider government policy of seeking to tackle financial exclusion.
Moving to repeals and the other amendments, Amendment No. 145 inserts a new clause after Clause 408. I hope this will satisfy the noble Lord, Lord Elton, who asked about the Insurance Broker Registration Act 1977 on the last day of Committee, and the noble Lord, Lord Hunt of Wirral, who asked about the Industrial Assurance Acts on the last day of Report. In response to their amendments I gave a commitment that the Government would bring forward appropriate amendments to the Bill that would deliver the necessary repeals. This clause, with the relevant additions to Schedule 22 by Amendments Nos. 202 and 203, are in line with the Government's commitment.
In relation to the Channel Islands and the Isle of Man, the new clause after Clause 422 is connected. The Industrial Assurance Acts extend to the Isle of Man and the Channel Islands. We will need to consider with the relevant authorities what repeals and savings will need to be made to the legislation as it affects the islands. It is also the case that certain of the legislation relating to mutuals also extends to those islands. The powers under this clause, exercisable by Order in Council, will enable the Government to ensure that any relevant transfers of functions from the Registry of Friendly Societies have effect in the islands. The powers will also permit any more substantive amendments that are to be made to have effect in the islands, to the extent that that is appropriate.
In relation to consequential powers, we are also seeking a number of amendments to Clause 418. That clause confers powers on the Treasury by order to make such incidental, consequential, transitional or supplemental provision as they consider necessary or expedient, though of course only for the purposes set out in subsection (1).
First, we propose by Amendments Nos. 151 and 152 that the power should also be exercisable by other departments. I will not return at great length to a debate of insurance terminology—we have dealt with that already today. But the fact is that "insurance company" is a term that features in other legislation such as the Companies Act. Conferring the power on Ministers of the Crown will ensure that the Secretary of State could call upon the power in Clause 418 to introduce an appropriate definition of insurance company to the Companies Acts, or perhaps replace
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the reference to insurance company with something more appropriate. This amendment leads to a consequential change in Clause 420 to ensure that the exercise of this power continues to be by way of statutory instrument.
Amendment No. 153 concerns a technical point. The clause currently only works for,
"provisions of the Bill, or giving full effect to it".
It might be that the consequential amendments may be needed in the light of provisions made under the Bill; that is to say, in secondary legislation.
Amendments Nos. 154 and 155 simply clarify that the power in Clause 418 includes the power to repeal legislation (or revoke it in the case of a Northern Ireland Order) and to provide for the dissolution of relevant statutory bodies. The main candidates for dissolution are in fact already expressly dealt with in the Bill in Part XXI and the new clause after Clause 408, to which I have just spoken. However, until we have fully uncovered every provision we cannot be certain that the list is comprehensive. Of greater concern would be if the definition of regulated activities were extended in the future, with the result that the functions of other bodies were effectively subsumed into the FSA.
Finally, there are a few amendments to Schedules 20 and 22, to which I have not yet spoken. These remove certain amendments we were proposing to make to other legislation, to substitute definitions that cross-refer to banking, insurance and financial services legislation. Unfortunately, they did not work well. For example, substituting "bank" with,
"authorised person with permission to accept the deposits".
for the purposes of the Income and Corporation Taxes Act 1988 had the effect of abolishing the special tax treatment of building societies and credit unions. That was never our intention, but I make the point because they are perfect examples of why we need to extend the powers under Clause 418 to be exercisable by Ministers of the Crown.
To conclude, the amendments in this group are for the most part a mixture of minor drafting points and points of technical detail, but some also provide for a degree of deregulation. They improve the Bill and the regulatory arrangements for societies. I hope that your Lordships will support them. I beg to move Amendment No. 90.
On Question, amendment agreed to.
Clause 328 [The Registry of Friendly Societies]:
Lord McIntosh of Haringeymoved Amendments Nos. 91 to 94:
Page 178, line 38, after ("Societies")insert(",or of an assistant registrar of friendly societies for the central registration area,").
Page 178, line 40, leave out ("functions of the Registrar") and insert ("of their functions").
Page 179, line 11, at end insert—
("( ) the office of assistant registrar of friendly societies for the central registration area,").
Page 179, line 14, after ("in") insert (", or determined in accordance with.").
On Question, amendments agreed to.
Clause 329 [The Building Societies Commission]:
Lord McIntosh of Haringeymoved Amendment No. 95:
Page 179, line 24, after ("in") insert (", or determined in accordance with,").
On Question, amendment agreed to.
Clause 330 [The Building Societies Investor Protection Board]:
Lord McIntosh of Haringeymoved Amendment No. 96:
Page 179, line 28, after ("in") insert (", or determined in accordance with,").
On Question, amendment agreed to.
Clause 332 [Supplemental provisions]:
Lord McIntosh of Haringeymoved Amendments Nos. 97 to 100:
Page 180, line 9, at end insert—
("() for the transfer of any functions of a member of the body, or servant or agent of the body or person, whose functions are transferred by the order;").
Page 180, line 29, at end insert—
("() for the carrying on and completion by or under the authority of such person as may be specified in the order of any proceedings, investigations or other matters commenced, before the order takes effect, by or under the authority of the person whose office, or the body which, ceases to exist as a result of the order;").
Page 180, line 32, leave out ("or the substitution of the Treasury") and insert (", the Treasury or such other body as may be specified in the order").
Page 180, line 34, at end insert—
("() On or after the making of an order under any of sections 327 to 331 ("the original order"), the Treasury may by order make any incidental, supplemental, consequential or transitional provision which they had power to include in the original order.").
On Question, amendments agreed to.
Clause 340 [The record of authorised persons etc.]:
Lord McIntosh of Haringeymoved Amendment No. 101:
Page 185, line 29, after ("trust"") insert ("scheme"").
On Question, amendment agreed to.
Clause 348 [Interpretation of this Part]:
Lord McIntosh of Haringeymoved Amendment No. 102:
Page 191, line 1, at end insert—
("( ) In this Part "insurer" has such meaning as may be specified in an order made by the Treasury.").
On Question, amendment agreed to.
Clause 353 [Insurance companies]:
Lord McIntosh of Haringeymoved Amendments Nos. 103 and 104:
Page 192, line 31, leave out ("insurance companies") and insert ("insurers").
Page 192, line 35, leave out ("insurance companies") and insert ("insurers").
On Question, amendments agreed to.
Clause 358 [Authority's powers to participate in proceedings]:
Lord McIntosh of Haringeymoved Amendment No. 105:
Page 194, line 24, leave out from ("an") to end of line 25 and insert ("insurer effecting or carrying out contracts of long-term insurance").
On Question, amendment agreed to.
Clause 359 [Insurance companies carrying on long-term business]:
Lord McIntosh of Haringeymoved Amendments Nos. 106 to 111:
Page 195, line 3, leave out from ("An") to ("may") in line 4 and insert ("insurer effecting or carrying out contracts of long-term insurance").
Page 195, line 6, leave out ("a company") and insert ("an insurer").
Page 195, line 8, leave out first ("company") and insert ("insurer").
Page 195, line 8, leave out second ("company") and insert ("insurer").
Page 195, line 23, leave out ("company") and insert ("insurer").
Page 195, line 28, leave out from ("an") to end of line and insert ("insurer effecting or carrying out contracts of long-term insurance").
On Question, amendments agreed to.
Clause 362 [Insurance companies: service of petition etc. on Authority]:
Lord McIntosh of Haringeymoved Amendments Nos. 112 and 113:
Page 196, line 21, leave out from first ("an") to ("the") and insert ("authorised person with permission to effect or carry out contracts of insurance,").
Page 196, line 25, leave out from first ("an") to first ("the") in line 26 and insert ("authorised person with permission to effect or carry out contracts of insurance,").
On Question, amendments agreed to.
Clause 369 [Continuation of long-term business while in liquidation]:
Lord McIntosh of Haringeymoved Amendments Nos. 114 to 126:
Page 199, line 40, leave out from beginning to end of line 1 on page 200 and insert ("insurer which effects or carries out contracts of long-term insurance").
Page 200, line 3, leave out from beginning to ("with") and insert ("insurer's business so far as it consists of carrying out the insurer's contracts of long-term insurance").
Page 200, line 4, leave out from ("to") to end of line 5 and insert ("a person who may lawfully carry out those contracts").
Page 200, line 11, leave out from first ("the") to ("require") and insert ("insurer attributable to contracts of long-term insurance effected by it").
Page 200, line 12, leave out ("of the business").
Page 200, line 13, leave out ("of the business").
Page 200, line 22, leave out from ("contracts") to end of line 23 and insert ("of long-term insurance effected by the insurer").
Page 200, line 27, leave out from first ("the") to end of line and insert ("insurer's business so far as it consists of carrying out its contracts of long-term insurance").
Page 200, line 29, after ("that") insert ("part of the insurer's").
Page 200, line 30, leave out from ("contracts") to second ("that") in line 31 and insert ("of long-term insurance effected by the insurer").

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Page 200, line 31, leave out ("its").
Page 200, line 31, at end insert ("of that part of the insurer's business").
Page 200, line 36, leave out ("company") and insert ("insurer").
On Question, amendments agreed to.
Clause 370 [Reducing the value of contracts instead of winding up]:
Lord McIntosh of Haringeymoved Amendments Nos. 127 and 128:
Page 200, line 40, leave out ("insurance company") and insert ("insurer").
Page 200, line 43, leave out ("company's") and insert ("insurer's").
On Question, amendments agreed to.
Clause 371 [Treatment of assets on winding up]:
Lord McIntosh of Haringeymoved Amendments Nos. 129 to 132:
Page 201, line 4, leave out ("insurance company") and insert ("insurer").
Page 201, line 6, leave out ("type of business of the company") and insert ("part of the insurer's business").
Page 201, line 7, after ("that") insert ("part of the insurer's").
Page 201, line 9, leave out ("type of business of the company") and insert ("part of the insurer's business").
On Question, amendments agreed to.
Clause 372 [Winding-up rules]:
Lord McIntosh of Haringeymoved Amendments Nos. 133 to 135:
Page 201, line 12, leave out ("insurance company") and insert ("insurer").
Page 201, line 16, leave out ("insurance companies) and insert ("insurers").
Page 201, line 23, leave out ("company") and insert ("insurer").
On Question, amendments agreed to.
Clause 383 [Final notice]:
[Amendment No. 136 not moved.]
Clause 385 [Application of sections 386 and 387]:
Lord McIntosh of Haringeymoved Amendments Nos. 137 to 139:
Page 210, line 37, after (" 86(4)(b),") insert ("(Public censure of sponsor)(2),").
Page 210, line 41, after (" 86(6)(b),") insert ("(Public censure of sponsor)(3),").
Page 210, line 41, leave out (" 195(5)(a),").
On Question, amendments agreed to.
Clause 390 [Misleading statements and practices]:
Lord McIntosh of Haringeymoved Amendment No. 140:
Page 215, line 19, after ("statement") insert (", promise or forecast").
On Question, amendment agreed to.
Clause 397 [Schemes for reviewing past business]:
Lord McIntosh of Haringeymoved Amendment No. 141:
Page 219, line 34, at end insert—
("( ) The Treasury may prescribe circumstances in which loss suffered by a person ("A") acting in a fiduciary or other prescribed capacity is to be treated, for the purposes of an authorised scheme, as suffered by a private person in relation to whom A was acting in that capacity.").
The Deputy Chairman of Committees (Lord Elton): My Lords, Amendment No. 141 has been moved. Amendment No. 142 appears on the Marshalled List as an amendment to Amendment No. 141. Does the noble Lord wish to move Amendment No. 142?
Lord Kingsland: My Lords, not moved.
[Amendment No. 142, as an amendment to Amendment No. 141, not moved.]
The Deputy Chairman of Committees: My Lords, the question is that Amendment No. 141 shall be agreed to.
Lord Donaldson of Lymington: My Lords, I wished to say "no" or "not content", but I got lost! Is it open to me to say a word on Amendment No. 141? Then may I speak on that? If it is a fact that Amendment No. 142 has been lost "in the wash", that is a pity because Amendment No. 141 is open to misconstruction. The problem arises out of the word "treated". "Treated" can be regarded as "deemed" and, if so regarded, then it means, for instance, that a trustee for a limited liability company, or somebody who is not considered to be a private person—which incidentally has yet to be defined by the Treasury—might be treated under this amendment as a loss being suffered by a private person. It is perhaps a tiresome construction and a slightly unnatural one but I would have agreed, had I been able to, with Amendment No. 142, which would have got rid of any latent ambiguity. Indeed, had it been moved and gone through on the nod, a great deal of time would have been saved.
Lord Kingsland: My Lords, if I may respond to what the noble and learned Lord, Lord Donaldson, has just said, I think I spoke to Amendment No. 142 earlier, sharing his concerns about it. The noble Lord the Minister responded in his usual fashion—and there it is!
Lord McIntosh of Haringey: My Lords, "my usual fashion" was obviously entirely convincing to the noble Lord, Lord Kingsland, but not quite so convincing to the noble and learned Lord, Lord Donaldson. Amendment No. 142 has gone, and I do not think I can do very much about Amendment No. 141 except to undertake to write to both noble Lords about the issue and see whether I can put their minds at rest.
On Question, amendment agreed to.
Clause 402 [Gibraltar]:
Lord McIntosh of Haringeymoved Amendment No. 143:
Page 222, line 22, leave out ("Authority") and insert ("Treasury").
On Question, amendment agreed to.
Clause 407 [Service of notices]:
Lord McIntosh of Haringeymoved Amendment No. 144:
Page 225, line 17, leave out ("or other document to be given") and insert (", direction or document of any kind to be given or authorises the imposition of a requirement").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 145:
After Clause 408, insert the following new clause—
("Removal of certain unnecessary provisions
PROVISIONS RELATING TO INDUSTRIAL ASSURANCE AND CERTAIN OTHER ENACTMENTS
.—(1) The following enactments are to cease to have effect—

(a) the Industrial Assurance Act 1923:

(b) the Industrial Assurance and Friendly Societies Act 1948;

(c) the Insurance Brokers (Registration) Act 1977.

(2) The Industrial Assurance (Northern Ireland) Order 1979 is revoked.
(3) The following bodies are to cease to exist—

(a) the Insurance Brokers Registration Council;

(b) the Policyholders Protection Board;

(c) the Deposit Protection Board;

(d) the Board of Banking Supervision.

(4) If the Treasury consider that, as a consequence of any provision of this section, it is appropriate to do so, they may by order make any provision of a kind that they could make under this Act (and in particular any provision of a kind mentioned in section 332) with respect to anything done by or under any provision of Part XXI.
(5) Subsection (4) is not to be read as affecting in any way any other power conferred on the Treasury by this Act.").
On Question, amendment agreed to.
Clause 411 [Carrying on regulated activities by way of business]:
Lord McIntosh of Haringeymoved Amendment No. 146:
Page 229, line 22, leave out (" 420(2)") and insert (" 420(3)").
On Question, amendment agreed to.
Clause 412 [Parent and subsidiary undertaking]:
Lord McIntosh of Haringeymoved Amendment No. 147:
Page 229, line 41, after ("13(9)(a)") insert ("or (aa)").
On Question, amendment agreed to.
Clause 413 [Group]:
Lord McIntosh of Haringeymoved Amendment No. 148:
Page 230, line 12, after ("13(9)(c)") insert ("or (cc)").
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 149:
After Clause 415, insert the following new clause—
INSURANCE
(" .—(1) In this Act, references to—

(a) contracts of insurance,

(b) reinsurance,

(c) contracts of long-term insurance,

(d) contracts of general insurance,

are to read with section 20 and Schedule 2.
(2) In this Act "policy" and "policyholder", in relation to a contract of insurance, have such meaning as the Treasury may by order specify.
(3) The law applicable to a contract of insurance, the effecting of which constitutes the carrying on of a regulated activity, is to be determined, if it is of a prescribed description, in accordance with regulations made by the Treasury.").
On Question, amendment agreed to.
Clause 416 [Expressions relating to insurance]:
Lord McIntosh of Haringeymoved Amendment No. 150:
Leave out Clause 416.
On Question, amendment agreed to.
Clause 418 [Consequential and supplementary provision]:
Lord McIntosh of Haringeymoved Amendments Nos. 151 to 155:
Page 232, line 31, leave out ("The Treasury") and insert ("A Minister of the Crown").
Page 232, line 32, leave out ("they consider") and insert ("he considers").
Page 232, line 34, leave out ("of its provisions or for giving full effect to it") and insert ("provision made by or under this Act or for giving full effect to this Act or any such provision").
Page 232, line 40, at end insert—
("( ) for applying (with or without modifications) or amending, repealing or revoking any provision of or made under an Act passed before this Act or in the same Session;
( ) dissolving any body corporate established by any Act passed, or instrument made, before the passing of this Act;").
Page 232, line 42, after ("repeal") insert ("or revocation").
On Question, amendments agreed to.
Clause 420 [Regulations and orders]:
Lord McIntosh of Haringeymoved Amendment No. 156:
Page 233, line 46, leave out ("the Treasury") and insert ("a Minister of the Crown").
On Question, amendment agreed to.
Lord Newbymoved Amendment No. 157:
After Clause 420, insert the following new clause—
PUBLICATION OF DRAFT REGULATIONS AND ORDERS
(" .—(1) The Treasury must publish a draft of any regulations or orders proposed to be made under this Act in the way appearing to them to be best calculated to bring it to the attention of the persons likely to be affected by the proposed regulations or order.

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(2) The draft must be accompanied by—

(a) an explanation of the purpose of the proposed regulations or order; and

(b) notice that representations about the proposals may be made to the Treasury within a specified time.

(3) Before making the proposed regulations or order, the Treasury must publish an account in general terms of—

(a) the representations made to them in accordance with subsection (2)(b); and

(b) their response to them.

(4) If the regulations or order made by the Treasury differ from the draft published under subsection (1) in a way which is, in the opinion of the Treasury, significant, the Treasury must (in addition to complying with subsection (3)) publish details of the differences.
(5) Subsections (1) to (4) do not apply if the Treasury consider that the delay involved in complying with them would be prejudicial to the interests of consumers.").
The noble Lord said: My Lords, it is with some relief that I stand to move this amendment. Barring some appalling disaster, this will be the last time I shall speak on this Bill, unless something comes back from the other place. This amendment, like the first amendments that were moved what seems like many moons ago, relates to the openness and transparency with which the FSA should do its business. This is a very straightforward amendment and it requires the Treasury, when publishing a draft of regulations or orders, to make sure that the people who are likely to be affected by them have drawn to their attention the fact that the draft is accompanied by an explanation. Having received any representations, the Treasury should publish an account in general terms of the representations that have been made to them, and giving their responses.
In our view, this is completely in line with the government amendment which was agreed earlier today in respect of the consumer and the practitioner panels. In terms of publishing reasons it seems to us to be good practice, and we hope very much that the Government will feel able to accept the proposals put forward. I beg to move.
Lord Kingsland: My Lords, this is probably the fourth or fifth time this particular amendment has been tabled. We have persisted with it because we think it is important and we have not been satisfied with the assurances given in your Lordships' House concerning the Treasury's policy on consultation.
The assurances have been unsatisfactory because they have been couched in terms that the "Treasury would normally consult", thus giving no comfort that the Treasury will adopt a disciplined approach to consultation. Secondly, and more importantly, what is lacking from the Treasury's consultation is any procedure for providing feedback on the comments and representations made. A common complaint in relation to the Treasury's consultations on the Bill is that the Treasury has not responded to representations. This has resulted in considerable frustration on the part of those who go to a great deal of trouble to make what are usually—dare I say it?—helpful and constructive comments.
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If the Treasury regards the consultation exercise as useful to it then I would say, with great respect, that it should encourage it. This amendment does no more than set out what the Treasury should be doing in any event. One change we have made to the drafting of the amendment is to refer in subsection (1) to "persons likely to be affected" rather than, as previously, to "the public". In our view, this is helpful in cutting down the scope of the consultation exercise.
Lord McIntosh of Haringey: My Lords, we have indeed debated this matter on more than one previous occasion and I am sorry that the assurances we gave at the time do not appear to be satisfactory. Cabinet Office guidelines require departments to consult "where appropriate"—I know the noble Lord, Lord Kingsland, does not like that phrase, but I will explain why it is necessary—and to produce regulatory impact assessments before making any new legislation that imposes burdens. The Treasury—and this I can undertake—will always make sure that it complies with Cabinet Office guidelines. However, it does not follow that it would be appropriate for the Bill to impose rigid consultation requirements on the Treasury. The Government are directly accountable to both Houses of Parliament; Parliament scrutinises and questions what the Government do. It is certainly open to Parliament to consider whether there has been appropriate consultation on secondary legislation made under this or any other Bill.
There is nothing unusual in the procedures for making secondary legislation under the Bill. It is necessary for the Treasury to make a number of orders and sets of regulations under the Bill, but that is simply a reflection of the complexity of financial regulation and of the need for such regulation to be able to adapt effectively to developments in financial markets and services. The Delegated Powers and Deregulation Committee has considered the Bill carefully, and we have accepted every one of the recommendations that it has made since the Bill came to this House.
The logic of the amendment seems to be that all departments should be under a duty to consult on all secondary legislation all the time. That is unnecessary; indeed, it would intrude on the right of Parliament to decide for itself about the legislation that it wishes to approve. Government departments should consult where it is appropriate to do so.
The purpose of consultation in this context is to inform and improve the quality of the legislation that Parliament is asked to consider. Where consultation could achieve that aim, we would consult. However, perhaps I may give noble Lords an example of where it would not be appropriate. Clause 423 requires the Treasury to make commencement orders to bring the separate provisions of the Bill, once enacted, into force. These are highly technical orders, which simply give effect to the legislation that Parliament has enacted. The subject matter is so entirely a matter of pure technical detail that they are not even subject to parliamentary procedure. It would be odd if we were

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to subject these commencement orders to statutory consultation procedures; but that is what the amendment would do.
I hope that most noble Lords will be able to acknowledge that, in practice, the Treasury has a good record of consultation. Indeed, I read from a list—which I could not bear to finish because it was so long—setting out the advisory bodies that the FSA has established and the way in which it carries out its consultation. This Bill has been the subject of an unprecedented level of consultation. We are still in the process of consultation on literally dozens of items of secondary legislation arising out of this Bill. Of course, we value the dialogue and the views of people who respond to our consultation. We intend to continue with that approach.
Perhaps I may reassure noble Lords that we shall continue to take a consultative approach. We shall bring draft regulations and orders to the attention of those individuals or bodies with a material interest in them. We shall also fully consider the comments that we receive. Throughout the time that the Bill has been developing, the Treasury has published feedback statements summarising responses to formal consultation exercises and providing feedback on the points raised. We shall certainly continue to do so.
As to publication, we often give feedback either directly to the persons concerned or in subsequent press notices, or other publications; or, indeed, in many cases, on the Treasury's website, which is a very effective form of publication of this kind. The Treasury has issued a progress report in response to consultation on the Bill. I believe our record to be so good on these matters that further assurances beyond those that I have given would really be unnecessary or "otiose", if I may use the word for the last time.
Lord Newby: My Lords, I shall resist talking about the word "otiose" because I am not sure whether we should allow the noble Lord to use it for the last time in these circumstances. Indeed, I do not believe that these requirements would be otiose.
The Treasury is moving into the modern world in a number of respects. First, it uses the web much more successfully and extensively than it ever did; and, secondly, it consults more than it ever did previously. I am disappointed that the Minister has not felt able to accept this amendment because it seems to us to be a sensible one. However, in view of the increased assurances that we have received at each stage of the Bill's proceedings, I must express my thanks to the Minister for having moved as far as he has been able to. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 422 [Northern Ireland]:
Lord McIntosh of Haringeymoved Amendment No.158:
Page 235, line 10, at end insert—
("(2) Except where Her Majesty by Order in Council provides otherwise, the extent of any amendment or repeal made by or under this Act is the same as the extent of the provision amended or repealed.
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(3) Her Majesty may by Order in Council provide for any provision of or made under this Act relating to a matter which is the subject of other legislation which extends to any of the Channel Islands or the Isle of Man to extend there with such modifications (if any) as may be specified in the Order").
On Question, amendment agreed to.
Schedule 1 [The Financial Services Authority]:
[Amendment No. 159 not moved.]
Schedule 3 [EEA Passport Rights]:
Lord McIntosh of Haringeymoved Amendment No. 160:
Page 251, line 6, at end insert—
("Effect of carrying on regulated activity when not qualified for authorization
—(1) This paragraph applies to an EEA firm which is not qualified for authorisation under paragraph 12.
(2) Section 24 does not apply to an agreement entered into by the firm.
(3) Section 25 does not apply to an agreement in relation to which the firm is a third party for the purposes of that section.
(4) Section 27 does not apply to an agreement in relation to which the firm is the deposit-taker.").
On Question, amendment agreed to.
[Amendment No. 161 not moved.]
Lord McIntosh of Haringeymoved Amendments Nos. 162 to 167:
Page 252, line 16, leave out sub-paragraph (11).
Page 252, line 41, leave out from ("specified") to end of line 46.
Page 253, line 1, leave out sub-paragraphs (3) to (6).
Page 253, line 17, leave out from ("must") to end of line 20 and insert (", within one month of receiving a notice of intention, send a copy of it to the host state regulator.
(7A) When the Authority sends the copy under sub-paragraph (7), it must give written notice to the firm concerned.
(7B) If the firm concerned's EEA right derives from the investment services directive, it must not provide the services to which its notice of intention relates until it has received written notice from the Authority under sub-paragraph (7A).").
Page 253, line 21, leave out sub-paragraph (9).
Page 253, line 24, at end insert—
("Offence relating to exercise of passport rights
—(1) If a UK firm which is not an authorised person contravenes the prohibition imposed by—

(a) sub-paragraph (1) of paragraph 18, or

(b) sub-paragraph (1) or (7B) of paragraph 19, it is guilty of an offence.

(2) A firm guilty of an offence under sub-paragraph (1) is liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum; or

(b) on conviction on indictment, to a fine.

(3) In proceedings for an offence under sub-paragraph (1), it is a defence for the firm to show that it took all reasonable precautions and exercised all due diligence to avoid committing the offence.").
On Question, amendments agreed to.
Schedule 6 [Threshold Conditions]:
Lord McIntosh of Haringeymoved Amendments Nos. 168 to 173:
Page 256, line 26, leave out ("insurance contracts") and insert ("contracts of insurance").

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Page 256, line 29, leave out ("deposit-taking,") and insert ("accepting deposits,").
Page 256, line 34, leave out from ("Kingdom") to end of line 5 on page 257 and insert ("—

(a) its head office, and

(b) if it has a registered office,

that office, must be in the United Kingdom.
(2) If the person concerned has its head office in the United Kingdom but is not a body corporate, it must carry on business in the United Kingdom.").
Page 258, line 5, after ("1") insert ("and 3").
Page 258, line 11, after ("1") insert ("and 3").
Page 258, line 13, at beginning insert ("the").
On Question, amendments agreed to.
Schedule 7 [The Authority as Competent Authority for Part VI]:
Lord McIntosh of Haringeymoved Amendments Nos. 174 to 175:
Page 259, line 22, after ("if") insert ("—
(a) sub-paragraph (1) of").
Page 259, line 23, at end insert ("; and
(b) for the words from the beginning to "(a)" in sub-paragraph (3) of that paragraph, there were substituted "Sub-paragraph (2) does not apply".").
On Question, amendments agreed to.
Schedule 12 [Transfer schemes: certificates]:
Lord McIntosh of Haringeymoved Amendments Nos.176 to 192:
Page 269, line 21, leave out ("long-term insurance business") and insert ("business which consists of the effecting or carrying out of contracts of long-term insurance").
Page 269, line 29, leave out ("general insurance business") and insert ("business which consists of the effecting or carrying out of contracts of general insurance").
Page 269, line 36, leave out ("given").
Page 269, line 44, leave out ("insurance companies") and insert ("persons who effect or carry out contracts of insurance").
Page 270, line 9, leave out ("insurance company,") and insert ("insurer.").
Page 270, line 10, after ("responsible") insert ("in Switzerland").
Page 270, line 10, leave out ("insurance companies in Switzerland") and insert ("persons who effect or carry out contracts of insurance").
Page 270, line 16, leave out ("insurance company" means a company") and insert ("insurer" means a body").
Page 270, line 19, leave out ("general insurance contracts") and insert ("contracts of general insurance").
Page 270, line 20, leave out ("reinsurance business") and insert ("the effecting or carrying out of contracts of reinsurance").
Page 270, line 29, leave out ("insurance companies") and insert ("persons who effect or carry out contracts of insurance").
Page 270, line 36, leave out ("insurance companies") and insert ("persons who effect or carry out contracts of insurance").
Page 271, line 1, leave out ("insurance business") and insert ("contracts of insurance").
Page 272, line 16, leave out ("insurance company") and insert ("insurer").
Page 272, line 25, leave out ("insurance company"") and insert ("insurer"").
Page 272, line 27, leave out ("general insurance business") and insert ("a regulated activity consisting of the effecting of contracts of general insurance").
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Page 272, line 30, leave out ("long-term insurance business") and insert ("a regulated activity consisting of the effecting of contracts of long-term insurance").
On Question, amendments agreed to.
Schedule 18 [Mutuals]:
Lord McIntosh of Haringeymoved Amendments Nos. 193 to 198:
Page 285, line 36, at end insert—
(" .In section 37 (restrictions on combinations of business), omit subsections (1),(1A) and (7A) to (9).").
Page 285, line 37, leave out ("37") and insert ("38").
Page 287, line 39, leave out paragraph 17.
Page 288, line 10, at end insert—
(" .In section 6 (minimum and maximum number of members), omit subsections (2) to (6).
. In section 11 (loans), omit subsections (2) and (6).
. Omit sections 11B (loans approved by credit unions), 11C (grant of certificates of approval) and 11D (withdrawal of certificates of approval).").
Page 288, line 13, leave out paragraphs (a) and (b) and insert ("omit subsections (2), (3), (5) and (6)").
Page 288, line 14, at end insert—
(" .In section 28 (offences), omit subsection (2).").
On Question, amendments agreed to.
Schedule 20 [Minor and Consequential Amendments]:
Lord McIntosh of Haringeymoved Amendments Nos. 199 to 201:
Page 290, line 3, leave out paragraph 1.
Page 291, line 3, leave out sub-paragraphs (5) to (7).
Page 291, line 36, leave out sub-paragraph (9).
On Question, amendments agreed to.
Schedule 22 [Repeals]:
Lord McIntosh of Haringeymoved Amendments Nos. 202 to 209:
Page 293, line 38, at end insert—

("1923 c.8.

The Industrial Assurance Act 1923.

The whole Act.

1948 c. 39.

The Industrial Assurance and Friendly Societies Act 1948.

The whole Act.")

Page 294, line 11, at end insert—

("1977 c.46.

The Insurance Brokers (Registration) Act 1977.

The whole Act.")

Page 294, line 12, column 3, at beginning insert—
("Section 6(2) to (6).
Section 11(2) and (6).
Sections 11B, 11C and 11D.")
Page 294, line 13, column 3, leave out from ("14,") to end of line 16 and insert ("subsections (2), (3), (5) and (6)").
Page 294, line 16, column 3, at end insert—
("Section 28(2).")
Page 294, line 18, column 3, leave out ("Part V.").
Page 294, column 3, leave out lines 29 to 31.

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Page 294, line 36, column 3, after ("to") insert—
("36. In section 37, subsections (1), (1A) and (7A) to (9).
Sections 38 to")
The noble Lord said: My Lords, perhaps I may say something here that should have been included in a previous speaking note. I should like to express my gratitude to the current Deputy Speaker, the noble Lord, Lord Elton, for encouraging us to include the repeal of the Insurance Brokers (Registration) Act 1977 Act (Amendment No. 203) in this grouping. I beg to move.
On Question, amendments agreed to.
7.57 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)
Lord Saatchi: My Lords, perhaps I may crave the indulgence of the House for a few minutes. I should like to put a few brief comments on the record. I should like, first, to thank the Minister for the way in which he has presided over this very long and complicated process. It seems to me that he has shown an extraordinary grasp of the complicated issues in the Bill. Indeed, I shall never forget the moment when my noble friend Lord Onslow asked the noble Lord to explain exactly what he meant after he had read out a particularly complicated brief on an extremely difficult clause; and he did. He did so in simple plain language; it was a stellar performance.
The Minister has been tremendously courteous and very forgiving of the procedural stumbles that we on this side of the House have often made; and that applies particularly to me. We have greatly appreciated the breezy and cheerful way in which he has been able to reject our proposals, on the grounds either that they were unnecessary or that they were wrong. However, he has always done so with great good cheer, and that has taken the sting out of his rejections. I am really most grateful to the noble Lord; indeed, I have learnt a tremendous amount from observing his performance on this Bill. I should add that I hope that his cold gets better very soon.
I should also like to thank the noble Lord, Lord Newby, because we struck up an excellent relationship at the beginning of the proceedings on the Bill. We seemed to approach certain key issues, such as corporate governance and the Takeover Panel, from a similar point of view. I am most grateful to the noble Lord for the many deep and long conversations that we have had on such issues.
I must, however, also thank our team of Back-Benchers, although they are not present in the Chamber this evening. Nevertheless, I hope that they will read my tribute to them in Hansard. They have been a wonderful volunteer army and we have been a merry band of brothers. I have had the great privilege
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of learning from some of the most skilful and charming people with whom I have ever had the pleasure to work. They have been at the front of the stage, but there were three people backstage whose names I should like to bring to the attention of the House. I have in mind our two lead lawyers, Charles Abrams and Richard Slater, and our researcher, Alex Hartley. Without the three of them, there is no possibility that my noble friend Lord Kingsland and I would have been able to make even a dent in this Bill. I am most grateful to all of them and thank them sincerely.
Lord Newby: My Lords, I had not intended to speak again, but as the relationship between myself and the noble Lord, Lord Saatchi, has been made so much of, I cannot help but reciprocate. I echo the thanks expressed to the Minister and his team for the huge amount of time and effort they have expended in dealing with questions that we have put to them. I also thank officials in the FSA and the director and officials of the Takeover Panel, who have been extremely assiduous. I also, of course, thank my colleagues, not least my noble friend Lord Sharman, who has been a great source of information and help to me.
It has, indeed, been a pleasure working with the noble Lord, Lord Saatchi. I am not absolutely sure whether it will be possible to develop this relationship with regard to other matters. However, we on these Benches have greatly appreciated the close working relationship we have had with the noble Lord and his noble friend.
Lord McIntosh of Haringey: My Lords, I do not believe in making Bill do now pass speeches. However, two contributions have been made which have revealed the subterranean links between the Conservative Party and the Liberal Democrat Party. I always suspected that those links existed but I have never heard them so clearly expressed. I believe that that serious mistake will have to be corrected in some form or another. Nevertheless, I pay tribute to the noble Lord, Lord Newby, to the noble Lord, Lord Saatchi, who did the glamorous bit, and to the noble Lord, Lord Kingsland, who did the work! Above all, I pay tribute to the Treasury team who have been responsible for this Bill. We have been involved with it for only a couple of months; they have been involved with it for two years. If we express relief at seeing the Bill pass out of our hands, we can imagine how they must feel. They have done a fantastic job.
On Question, Bill passed, and returned to the Commons with amendments.

Business
Lord Bach: My Lords, as consideration of the Financial Services and Markets Bill is now finally complete, this evening's Unstarred Question is no longer restricted to the one-hour available for dinner break business. Instead, a limit of one-and-a-half hours will apply. As a result, everyone on the list now has 12 minutes in which to speak. However, if noble

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Lords prefer to avoid the inconvenience of extending their speeches at such short notice, I can assure them that they will attract no criticism from these Benches, nor, I suspect, from the rest of the House!

Export of Works of Art
8.2 p.m.
Lord Freyberg roseto ask Her Majesty's Government what is their response to the Forty-fifth Report of the Reviewing Committee on the Export of Works of Art.
The noble Lord said: My Lords, it gives me great pleasure to introduce tonight's debate to examine the findings of the forty-fifth report of the Reviewing Committee on the Export of Works of Art.
The purpose of the committee is to help retain in the UK objects of outstanding importance which would otherwise go abroad. Set up by the Chancellor of the Exchequer in December 1952, it consists of eight members appointed by the Secretary of State for Culture, Media and Sport who have expertise in such fields as paintings, furniture, manuscripts and suchlike. There are three criteria for recommending the deferral of the decision for export licence which can broadly be described as national, aesthetic or academic importance. These are known as the Waverley criteria.
In 1998–99, the most recent year for which we have published figures, there were 8,019 applications for export licences, and of these 20 were deemed potentially to fall under the Waverley criteria and therefore to be considered as individual cases by the committee—a slightly lower number than usual.
The committee's thoughtful report voices a number of concerns to which I should like to draw further attention. The most serious of these is the declining amount of money available to help purchase threatened works of national importance. There are several reasons for this. First, over the past few decades the level of museum funding for acquisitions has dwindled in line with the funding for museums themselves, while at the same time the cost of art and artefacts has soared. Thus most museums are unable to find the money to buy even a single major work of art per year and are reliant on the Heritage Lottery Fund, the National Heritage Memorial Fund and private funding bodies such as the National Art Collections Fund.
The arrival of the lottery in 1994 led to the belief that there need never be another crisis over important works of art leaving Britain for lack of funds, but this has so far proved incorrect. For a start, the focus of one of the important contributors, the Heritage Lottery Fund, has changed in line with government demands for greater emphasis on regional equality and small community projects rather than large national ones. It has also been heavily oversubscribed, with present demands exceeding supply by approximately four times. Thus funding of ever more expensive acquisitions has had stiff competition with the funding
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of similarly desirable historic buildings, land and countryside, libraries, industrial transport and maritime projects, churches, urban parks, archaeology and coalfields. The list continues.
This would not have had such an impact were it not for the swingeing cuts to the budget of the National Heritage Memorial Fund, the other most important contributor, for museum acquisitions. This went from £12 million pre-Lottery to just £2 million in 1998–99, and dramatically affected its ability to assist acquisitions. In 1996–97 the National Heritage Memorial Fund and the Heritage Lottery Fund total was £24 million, but just two years later it had dropped to £5.8 million.
The Government's decision to increase the National Heritage Memorial Fund's grant-in-aid gradually over a three-year period—1999–2002—is most welcome, but in the meantime the National Heritage Memorial Fund has announced that it cannot consider acquiring works of art which are threatened "only" by loss through export. The Heritage Lottery Fund is so concerned at the impact of the fall in National Heritage Memorial Fund funding that it is taking the highly unusual step of subsidising the National Heritage Memorial Fund's 2000–01 grant-in-aid by £1.5 million in order to bring the total to £5 million. This is the sum the Heritage Lottery Fund considers,
"the minimum amount necessary in a year to maintain even the most basic defence of the most outstanding parts of our national heritage which are at risk".
This does not bode well for the future. The Heritage Lottery Fund has so many demands on its funding, which makes it even more important that the National Heritage Memorial Fund—which has always considered works of art important—has enough for cultural acquisitions.
The introduction to the reviewing committee's 45th report confirms the consequences of this change in funding policy; namely, its contribution to,
"the continuing loss of significant objects from our shores".
Worryingly, it warns that,
"Unless current policies are changed, the situation is likely to become more acute".
The Heritage Lottery Fund's decision to double its planned annual acquisitions allocation from £5 million to £10 million is welcome, but even this is far short of what it was spending on acquisitions a few years ago.
As a result of the reduced moneys available, some museums no longer even bother to apply for funds because they believe that their chances with the HLF are so slight. One notable recent exception was the Heritage Lottery Fund's generous support towards the purchase of Botticelli's Madonna and Child by the National Museums and Galleries of Scotland. However, the circumstances in that case are, strictly speaking, outside this debate as the Botticelli was purchased before an export licence application had been made. Nevertheless, the case illustrates the problems that museums encounter in making major acquisitions. If Heritage Lottery funding had not been forthcoming and an export licence applied for and deferred, the inability of our national institutions to

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purchase the work would have made a mockery of the whole rationale of the reviewing committee. A number of other outstanding works have been lost precisely because of insufficient public funding. While the private sector can, and does, supplement government funding, it cannot act as a substitute.
I am also worried about what chance non-national museums have of raising the required 25 per cent of acquisition over £100,000. It seems quite unreasonable that institutions, notably in areas of social and economic deprivation with limited means of fundraising, should be put off applying for funds. The short deferral periods regularly imposed for an export stop constitute a further disincentive. If the Heritage Lottery Fund is to be an inclusive fund, it should not penalise the poorer institutions. Perhaps it could give further attention to the levels of their partnership funding requirements.
A subject much on my mind in the past few months has been VAT on free museums. In this instance, because VAT is liable on sales of art to domestic buyers, museums—particularly free ones—are at a particular financial disadvantage when competing against overseas buyers. For example, when in 1996 the Ashmolean Museum in Oxford purchased a female bust by Canova for £695,000 (the purchase price agreed by the Getty Museum) it was obliged to pay an extra £51,000 in VAT. Being a free museum, it was unable to reclaim the VAT, an option that would have been available to the admission-charging Victoria and Albert Museum. Such a distinction seems unfair and divisive.
Another issue raised by the reviewing committee which is well worth the Government considering is a fourth Waverley criteria. This would introduce a provision for preserving special collections intact. In some cases, a collection of items which are not in themselves of great value—that is, individually below the minimum threshold—or interest is worth preserving as a whole. An excellent example is the extraordinary Indian collection of Clive of India, the great majority of which is now in the ownership of the National Trust at Powis Castle.
I should also like the Government to consider the wider use of private treaty sales and the possible introduction of a system of "Gift aid in kind". I know that my noble and learned friend Lord Simon of Glaisdale will discuss this possibility further.
Finally, in the light of both devolution and fairness, I wonder whether there should be greater consultation with the Scottish, Welsh and Northern Ireland museums over what is being considered for export control. At the moment, it is up to the entirely London-based experts to decide whether to inform these or other regional museums about individual objects, rather than simply to let them know what is being considered. It would surely be relatively straightforward to send the relevant information to them as well, rather than making decisions on their behalf.
The sums of money available to buy major works of art have fallen considerably in the past few years and spending on acquisitions has dropped to its lowest
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level ever. One has to be realistic and recognise that there are other calls and obligations, but acquisitions should not be marginalised either. A museum with a healthy and imaginative acquisition policy is likely to be a lively institution. The purchase of an important work of art can generate excitement, publicity and pride, leading to increased access—that crucial mainstay of the Government's museum policy.
In conclusion, while I understand that art acquisitions must take their place with other purchasing demands, it is important that the right balance is struck. At the moment the balance is not right. To make it more so, the National Heritage Memorial Fund funding needs to be increased to its former, pre-lottery level, and therefore updated in line with other spending commitments.
8.13 p.m.
Lord Strabolgi: My Lords, once again we are indebted to the noble Lord, Lord Freyberg, for initiating a debate on the arts. I have listened with the greatest of interest to his speech and the very detailed points he made about this continuing problem. The reviewing committee is concerned at the low level of retention of Waverley standard items, despite the temporary deferment of export licences to enable matching offers to be made.
As the noble Lord said, support comes from two official bodies—the Heritage Lottery Fund and the National Heritage Memorial Fund—but this support is not as effective as it might be and no longer carries out the initial intention of protecting our national heritage. The Heritage Lottery Fund was able to contribute only some £5 million in 1998–99, compared with £17 million for purchases the previous year. That is a very big decline. This is because the Department for Culture, Media and Sport has decided to widen the definition of "heritage" and considerable sums have been diverted to other needs. There is a problem over grants. For items costing more than £100,000, grants are awarded at up to 75 per cent, leaving a museum or gallery to raise 25 per cent. This can be a quite considerable sum for very important artworks and beyond the means of most institutions.
It is the same story with the National Heritage Memorial Fund, which was intended to be a fund of last resort. Its annual allocation has been reduced by successive governments from £12 million in 1993–94 to a paltry £2 million in 1997–98—a period for which, although the noble Lord, Lord Freyberg, was too kind to say so, the previous administration were responsible. The present Government are increasing this to £5 million in 2001–02, but it is still under half of what it was seven years ago.
Fortunately, the National Art Collections Fund (NACF) is able to come to the rescue from time to time. The fund, which is supported by subscriptions and bequests from members of the public throughout the land, has been able to assist towards saving several important items, such as the Botticelli mentioned by the noble Lord, Lord Freyberg, which is now, happily, in the National Gallery of Scotland.

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Help is also given by the Museums and Galleries Commission which, together with the Victoria and Albert Museum, enables non-national museums to acquire objects valued at less than £300,000. I am pleased to say that this enabled the Doncaster Museum and Art Gallery, with help from the HLF and the NACF, to acquire three 18th-century portraits by Joseph Wright of Derby of notable Doncaster people.
In spite of the help given by these bodies and special appeals for subscriptions from members of the public, the reviewing committee points out that several starred items have had to go abroad. These include a superb late Rembrandt which was valued at more than £9 million and a Poussin valued at £4.5 million. An important Cezanne, valued at between £9 million and £12 million, is coming up at auction next month. This is at present on loan to the National Gallery.
What long-term policy do the Government have for retaining starred works of art when they come on the market? Is the Waverley system still working? Is it better that we should concentrate on saving important works that are an integral part of our national heritage, such as the Sherborne Missal, which was accepted by the Government in part satisfaction of inheritance tax from the Northumberland estate and is now permanently in the British Library? It had of course been formerly on permanent loan, generously lent by the noble Duke, the Duke of Northumberland.
But can we—indeed, should we—always try to retain every work of art of foreign origin, many of which were bought on the grand tour by our 18th-century ancestors? While we must all be sad at the loss of the Rembrandt, it has gone back to the Netherlands; and the Poussin painting of the "Destruction of the Temple" has been exported to the Israel Museum in Jerusalem, where of course it has great significance.
Great masterpieces belong to the world. Many have been brought here in previous centuries. If they go on to other countries such as the United States, they are equally appreciated and well cared for, and they will continue to provide, in their life-enhancing qualities, inspiration and pleasure for future generations.
8.19 p.m.
Lord Renfrew of Kaimsthorn: My Lords, once again we are indebted to the noble Lord, Lord Freyberg, for initiating a debate on the arts. This is a very appropriate occasion to discuss the report of the reviewing committee. We should also praise the work of the reviewing committee, which has had a number of successes in preventing important national treasures from leaving this country. But the noble Lords, Lord Freyberg and Lord Strabolgi, have been entirely right to emphasise that the funding that has been made available to the National Heritage Memorial Fund has decreased significantly, while the Heritage Lottery Fund has signally failed to step in in this area. So I can only underline the points which they have very effectively made.
In general, one certainly wishes to praise the 45th report of the reviewing committee. However, I have a concern of my own, which is with antiquities
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and with the traffic in unprovenanced antiquities. I note in the report what at first sight seems a success with the Roman gold finger ring—Case 16—which after deferral of licence was generously presented by its owner to the British Museum. That should rank as a success. It ended up in the British Museum. What concerns me, however—this is a matter for the reviewing committee—is that there is in the report no reference to the provenance of the ring. It is understood to have originated within the British Isles, but where was it found and when? We are not told that in the report. Was it subject to the usual Treasure Act procedures under the terms of which any find of an antiquity of gold in England or Wales must be reported to the local coroner. We are not told.
That is not good enough. There may be honest and understandable reasons for the lack of details as to the find spot of this antiquity, but, if so, they should be given. If it meets the third Waverley criterion, as we are assured by the committee it does—namely, that it is of outstanding significance for some particular branch of art, learning or history—and if it was found in the soil of Britain, we should know more about it. Therefore I should like to ask for an assurance from the Minister that she will suggest to the Secretary of State that the reviewing committee be requested to inquire into the provenance of all antiquities, and indeed other works of art, which come before it, not least those of British origin, and to give clearly in the report the results of its inquiries. The reader should not be left to wonder whether the law of the land has been broken and whether this issue has even occurred to the reviewing committee.
That, however, is not my main point. As we have heard, the reviewing committee was appointed by the Chancellor of the Exchequer in 1952 and its primary purpose is to help retain in the United Kingdom objects of outstanding importance. But the terms of reference of the committee, as set out in Appendix A, are wider and include the provision to supervise the operation of the export control system generally. I should like to ask what considerations the reviewing committee has given to a particular set of important responsibilities which arise under European Council Regulation No. 3911 of 1992 on the export of cultural goods. Noble Lords may well recall the debate some eight years ago when the matter was indeed discussed by the House before these provisions were adopted and became part of British law.
The point here—it is not as trivial a point as it might first sound, or indeed unduly technical—is that we have in this country very few checks on the illicit trade of antiquities where antiquities flow into this country from overseas, are freely sold here without any check or restraint and are then relatively freely exported. But there are the export licensing requirements and, as I understand the position, any objects which originate within the European Community are supposed to leave their country of origin with a certificate indicating that they have done so legally. When they leave this country for a destination outside the European Community they require an export licence.

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Part of that export licensing procedure involves seeking the documentation from the state of origin that the objects left legally. I am not at all clear that these procedures are being adequately followed and I am very clear that they are not adequately discussed in the report of the reviewing committee, although certain figures are touched on in table 1.
Perhaps I may refer to two provisions. The 1997 guidance to exporters of antiquities from the Department of National Heritage, as it then was, indicates that objects certainly do require an export licence under the regulation if they are the direct product of excavations, finds and archaeological sites within a member state. The concern is that they may have come straight on to the market after being recently discovered. That is fully dealt with there. Under the Export Licensing for Cultural Goods, Procedures and Guidance, issued by the Department of National Heritage, again in 1997, we read that,
"where an object has come from another EU Member State on or after 1 January 1993, either directly or via a non-EU country, applicants requiring an EC licence should include with their application evidence that the object was legally despatched from the originating Member State. The Export Licensing Unit can provide details of the evidence that is required for a particular originating Member State".
I do not read in the report of the reviewing committee, where I would expect to read it, a discussion of these issues. I do not expect the Minister to give us a full account of the matter this evening, but I hope that she will assure us that she will suggest to the reviewing committee that in future it takes adequate note of these points, which are provisions under British law as well as under EC law.
I shall give a brief example. I do not want to take too much of the time of House but I should like to suggest, by way of example, the case of an Apulian vase from Italy, such as the one sold at Christies on 21st April 1999, which was in the time period covered by the report. It was a large Apulian pottery amphora attributed to the Baltimore painter. No provenance was given. There was a valuation of the order of £12,000. I do not want to go into detail on that piece and I do not expect the Minister to do so. But I would expect it to require an export licence because it is clear that many Apulian vases are appearing on the British market that have been looted in Italy and illegally exported from there. Therefore, it would certainly be expected that if an export licence were issued by this country, that piece would come accompanied by documentation from the Italian Government that it had left the nation of Italy legally.
I have the gravest doubts as to whether these procedures are being adequately followed. Certainly, the report of the reviewing committee gives no adequate indication that they are. This is an important area which falls within the province of the reviewing committee. I look forward to the Minister's reply on these points and to a rather better balance in future reports of the reviewing committee, where I believe it is its duty to address these matters adequately.
8.28 p.m.
Lord Simon of Glaisdale: My Lords, it is a real privilege to follow the noble Lord, Lord Renfrew, who speaks with incomparable authority on the matters that he has been discussing. I share in the expression of the debt we owe to my noble friend in raising this matter because we are indeed facing a breakdown of the export system, based on the Waverley criteria. As paragraph 2 of the report states, referring to the continuing loss of some significant objects from our shores:
"Unless current policies are changed, the situation is likely to become more acute".
I hope that the noble Baroness will not be dismayed if I say that the House looks to her to explain what change of policy the Government have in mind to rectify the situation.
My noble friend gave detailed figures, but I invite noble Lords to consider one or two more general matters. I shall leave aside those matters where the Waverley Committee was not satisfied and the application was withdrawn, as well as matters of deferral; also the very important Gauguin picture, which was acquired privately and is now very generously on loan to the National Museum of Wales. Instead, I shall concern myself only with matters that satisfied the Waverley criteria and on which the committee made a recommendation.
The works which were retained in this country numbered five. Their total value was a little under £1,100,000. In addition, on every one of those items, the National Art Collections Fund, a privately funded charity, made a contribution. There we have the figure—a little under £1,100,000. On the other hand, the value of all the items recommended for retention came to a little short of £ 17 million, more than 16 times as much.
The most important item has been referred to by the noble Lord, Lord Strabolgi; namely, the Rembrandt, a major late Rembrandt. It was valued at £9,300,000. It was a starred recommendation. In other words, the committee regarded it as a major matter. Nevertheless, that painting has gone abroad through lack of funds. It certainly would be valuable if the contributions of the National Heritage Memorial Fund were to be restored, as has been recommended by my noble friend and by the noble Lord, Lord Strabolgi.
Perhaps I may make two further points. First, the committee, in paragraph 17 headed "Starred Items", having noted that the Rembrandt had gone abroad in spite of being a starred item, recommended the revival of a system of special government grants towards acquisitions that preceded funding from the National Heritage Memorial Fund. I have spent quite a lot of my life saying that I must not "anticipate the Budget proposals of my right honourable friend", but I should be most grateful if the noble Baroness could at least say that that is being seriously considered.
Secondly, there is another way to meet this problem; that is, to utilise the American fiscal system. I am sorry that I did not give the noble Baroness notice that I was going to raise this subject. I had thought that

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the noble Lord, Lord McIntosh, was to reply to the debate. He knows all about it. The system works along these lines. A private individual can buy a work of art and, on his agreeing that it shall pass to a national institution on his death, he can set off the expense of the acquisition against his taxable income. In fact, when I looked deeper into the American system, I saw that it goes a little further. As the market has become more restricted and, over time, the works of art have become more valuable, that difference in value can also be offset annually against the individual's taxable income. I certainly do not recommend that.
When I raised this matter rather generally and tentatively in a debate on a finance Act, I was cautious about the possibility of "fiscal enormity". However, it seemed to me that, when considering the crisis we are facing, and bearing in mind in particular the Rembrandt which went to Holland, we should consider seriously the American system, or at any rate its initial stage; namely, that the price of the object could be set off against taxable income on condition that the item was left to the public on the owner's death. Although I know that we would be giving rich individuals a very great advantage—I can see the difficulty for a government that are egalitarian in their view how this would go fundamentally against their way of thinking—it seems to me that, realistically, we should examine the situation very carefully. I hope that the noble Baroness will be able to say that the suggestion will be considered.
8.37 p.m.
Viscount Falkland: My Lords, the House will be grateful once again to the noble Lord, Lord Freyberg, for introducing an arts debate on another important issue. I have to say that I found the time spent in my preparation for this evening's debate rather uplifting, although the story underlying the review committee's report is sombre in that losses continue owing to lack of funds. Nevertheless, the report itself is presented very well. It has been written in surprisingly good English' and is clear and well illustrated. I congratulate all those who were involved in its production, including the department.
The continuing loss of artworks is disappointing because many of us thought that, once lottery funding aimed at specific causes concerning works of art was introduced, the condition as regards retention of works of art in this country would improve. However, I do not think that that is the case. I take very seriously what has been said by other noble Lords—and in particular the remarks of the noble Lord, Lord Renfrew—who drew to our attention various cases summarised in the report which do not indicate that the right and proper information has been put forward.
Not being an expert in this field, I am glad that a number of speakers are experts so that my rather superficial view can be corrected. The report was rather like a well-made film or a well-written book: a great many questions were not answered—which rather appealed to me. It gave me great joy to read many of the individual export cases, which are so well
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set out. The noble Lord, Lord Renfrew, drew our attention to the case of the Roman gold finger-ring which, happily, has ended up in the British Museum. I was fascinated, and it added to my enjoyment that there was some uncertainty about the ring's provenance. I follow the noble Lord's point that it is the responsibility of the committee in such cases to produce the kind of information that he drew to our attention.
The report highlights looking on the good side. Looking at the cases set out, if money were available—which, sadly, it is not, for reasons that have been well presented—we are in relatively good hands. I include the Department for Culture, Media and Sport, which is not always given a good press. Even from these Benches the noble Lord, Lord McIntosh, has received quite a rough or irritating time. The noble Lord is a doughty performer. I noted that, tonight, he had lost his voice. I am delighted that the noble Baroness will reply to the debate, as she is able and competent to do so, and I am glad that the noble Lord, Lord McIntosh of Haringey, will be able to rest his voice. He undertakes a very large amount of work and taxes himself to the utmost.
From reading the report, it seems that the Waverley criteria are working quite well. However, it is clear that the Heritage Lottery Fund and the National Heritage Memorial Fund are not able to stem the flow of important works of art from this country. We retain a very small proportion of the works that should ret urn to us. The reason is simply lack of funding. I do not know how the Government will be able to stop this draining of priceless works of art. I hope that the noble Baroness will be able to give us some comfort and tell us where the money will come from.
If we are taking the matter seriously, we ought to consider replacing some of the grant-making procedures that have disappeared. The amount available in terms of grant has dropped markedly. One cannot help being encouraged by the wide range of works that come within the scope of the Waverley criteria as indicated in the report. Examples include such important names in British art as Stubbs, Joseph Wright of Derby and others. I was particularly struck by two items, which are possibly at the lower end of the scale in terms of importance. Although I have not seen the original, the reproduction of an 18th century painting by Tilly Kettle, "The Meritorious Officer" is fascinating, as is the story behind the picture. As I understand it, the work of this artist is not represented in this country at all; most of his paintings are elsewhere. That in itself is no disastrous thing these days. Exhibitions travel round the world and works of art are available to us in a way that they were not previously. I hope that at some time an exhibition will be mounted of Raj or pre-Raj painting. If I am still here, I hope that I shall be a member of the All-Party Arts and Heritage Group, whose members will doubtless go to that exhibition. Access to pictures is not completely denied us because paintings go abroad; however, very good reasons are given as to why pictures, sculptures and other works should remain here.

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The report recognises the principle of being evenhanded with local authority galleries. I share that view. However, I also share the committee's concern that we should not forget the importance of our national museums and galleries, which attract a huge amount of interest both in this country and abroad. The National Gallery has an enormous number of visitors from the regions.
I should like to confirm and support what has been said about VAT. We have argued this point in the House on other occasions—although not very satisfactorily. VAT is an area that I would rather avoid, if possible. It seems to be an esoteric area where one makes no progress at all. We have now had some seeming comfort from the department regarding a change. We are told that, in order partially to correct the extraordinary anomaly that museums and galleries which allow free entry cannot claim back their VAT—the result in terms of acquisition and extension is clear to see—they can now levy a minimal charge that, it is implied, will satisfy the requirements of Customs and Excise, which has stated clearly in the past that token charges will not wash. Perhaps the noble Baroness will amplify the point. Although we have discussed the position in previous debates, it has now changed.
The Government have made it clear that they support free entry to museums and galleries, and we know the difficulties and the cost of that. The amounts that were originally estimated to cover the requirements of free entry to all our national museums and galleries were hopelessly inadequate, and other arrangements had to be envisaged. Most noble Lords who take part in these debates support the principle of free entry.
In conclusion, perhaps I may refer to the Finance Act 1998, which is mentioned in the report—and I apologise for speaking for longer than my allotted time. The Government were not so understanding of our concerns about those objects which, for taxation reasons, would be subject to a deferred tax provided that certain conditions, such as access, were met. Many of those conditions seemed to us to be too constraining and too rigorous; it seemed that they would probably have the effect of making owners feel that it was not worth going through these procedures and the works would go abroad. We have expressed those fears. It appears that that is happening, and I wonder whether there is any realisation of it. I understand that there is a system of review of that particular part of the Finance Act.
Having said that, the hour is late. This has been a very well informed discussion, as are most of our debates on art. I have much enjoyed the report of the reviewing committee and look forward to hearing the reply of the noble Baroness.
8.50 p.m.
Lord Luke: My Lords, I, too, thank the noble Lord, Lord Freyberg, for giving us the opportunity to debate this important subject. The contributions so far exemplify the superiority of quality over quantity. The
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debate has been interesting and, for me, most instructive. In particular, I welcome the speech of my noble friend Lord Renfrew. I, too, look forward to hearing the reply of the Minister. I declare an interest as a dealer in watercolours, none of which, sadly, has attracted the attention of the reviewing committee—before or after I bought them.
The report on which this debate centres covers the year to the end of June 1999 and was published last November. We are, therefore, not far from the end of another year of activity by the reviewing committee. Let us hope that in this year's report the reviewing committee will not find it necessary to repeat the devastating indictment set out in paragraph 2 on page 7 of the report where reference is made to the persistently low level of funding available to museums and galleries and to some of the policies adopted by the trustees of the Heritage Lottery Fund and the National Heritage Memorial Fund. As the noble Lord, Lord Freyberg, observed, the Government have increased some grants by small amounts, but have really only tinkered with the problem. In the year under review, 35 per cent of the number of articles deferred have found purchasers in the UK. That does not sound too bad. However, only 10 per cent by value of the items deferred have been saved for the nation.
As the noble and learned Lord, Lord Simon of Glaisdale, and the noble Lord, Lord Strabolgi, pointed out, the reviewing committee was particularly disappointed by the response to the appeal for funds to purchase "Portrait of an Elderly Man" by Rembrandt. That particular case raises the question whether the Waverley criteria as they relate to the reviewing committee's recommendations should be modified and possibly limited to items which have a pre-eminent importance relevant to the culture and/or history of these islands, but including really important collections, which perhaps are a different matter, as the noble Lord, Lord Freyberg, said—and eschew efforts to keep in this country great works of art which do not satisfy that particular qualification, however important they may be in other ways. After all, in this country we already have a great number of important and representative works of art of foreign origin. Funds are clearly not there, and perhaps we should cut our cloth accordingly.
The Government are entirely to blame for this situation in that their policy of siphoning off lottery money originally intended for the arts to fund other projects, however worth while, has created a much smaller pot for heritage spend. A remedy such as I have outlined would force the Government to acknowledge that they had failed abysmally to resolve the problem. I look forward to hearing what the noble Baroness has to say on this matter. I also support the suggestion of my noble friend Lord Renfrew that the reviewing committee should include the provenance of each object in both its deliberations and recommendations.
Customs and Excise could help a great deal by persuading the European Union that VAT need not be charged on matching offers for deferred items by non-charging museums. I believe that if that was agreed, it would produce a much better result than the proposed

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£1 charge, to which the noble Viscount referred. I do not believe that that would work. Customs and Excise and the Government could also continue to press the European Union to abandon the 5 per cent rate on imported works of art which makes it much more difficult, or even impossible, for British museums and galleries to acquire objects from outside the EU in competition with similar institutions based outside continental Europe.
Like my noble friend Lord Renfrew and the noble Viscount, Lord Falkland, I congratulate the reviewing committee on the production of a very readable report, the whole of which I understood. I cannot say the same for the reports of some other important bodies. I also congratulate the reviewing committee on doing a difficult job well in increasingly annoying circumstances. To spend a great deal of time making recommendations with regard to outstanding items only to have one's views, in effect, spurned as a result of totally inadequate funding for purchase must be very frustrating.
I must declare another interest as an enthusiastic member of the National Art Collections Fund, which was referred to by the noble Lord, Lord Strabolgi. That has helped to fund the purchase of a great number of works of art since its foundation in 1903. The report is concerned that the NACF will be put under increasing pressure to contribute, especially where the trustees of the National. Lottery Fund decline to help. The trustees have been constrained by the instruction of the Secretary of State that they must increasingly fund new and better means of access for people to our heritage. That is all very estimable, but the reviewing committee considers that the continuing pressure on the funds of the HLF available for acquisitions will inevitably lead to the irretrievable loss to the nation of many important objects. That would be a great pity. Together with other noble Lords, I hope chat the Government will reconsider their policy in this area.
8.56 p.m.
Baroness Ramsay of Cartvale: My Lords, we are all grateful to the noble Lord, Lord Freyberg, for raising the subject of the export of works of art and giving us an opportunity to speak about the many great treasures that we are so fortunate to have in this count We have heard some interesting and informative speeches by noble Lords with considerable expertise in this field. Some of that expertise is well known; some has just been revealed tonight, like that of the noble Lord, Lord Luke, who declared an interest in watercolours.
We are united in our regard for the tremendous importance of keeping in this country cultural objects of outstanding national importance, and we are indebted to the reviewing committee which advises Ministers in the Department for Culture, Media and Sport on whether an object for which an application for an export licence has been made is one that we should aim to keep in this country. Noble Lords will agree that the fact we have been considering the 45th report of the committee is a testament to the stature
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and continuing effectiveness of this most distinguished group of advisers. I pay tribute to the excellent work of the committee under the chairmanship of Sir John Guinness. The complimentary remarks of the noble Viscount, Lord Falkland, about the presentation of the report will be received with pleasure by members of that committee.
I can reassure my noble friend Lord Strabolgi that the committee continues to make its recommendations against the tried and tested criteria drawn up by the Waverley Committee in 1952. When Ministers accept a recommendation from the committee that a cultural object satisfies one or more of those criteria, and the decision whether to grant an export licence is deferred, it provides an opportunity for an item considered to be of outstanding national importance to remain in the UK.
The system is regarded throughout the world as one of the fairest in terms of balancing the varying interests of all those concerned: the protection of the national heritage; the rights of the owner selling the goods; the exporter or overseas purchaser; and the position and reputation of the UK as an international art market. However, once Ministers have export-stopped an item, it is then for public institutions, or indeed for private individuals, to decide whether they wish to take the opportunity to acquire the export-stopped item.
Lord Simon of Glaisdale: My Lords, why does the noble Baroness put it that way? Formerly, it was considered the responsibility of the government to make a contribution in the case of a major work, as was done, for example, with a Titian about 20 years ago.
Baroness Ramsay of Cartvale: My Lords. I shall make various points later about what the Government are doing to help the financial efforts to keep works of art in this country. I say to the noble and learned Lord, Lord Simon of Glaisdale, that there have been enormous changes in how this field has developed in 20 years. For example, there was not a lottery 20 years ago, and so on. There are many reasons why what happened 20 years ago is not very helpful to us now. I was making the point that the decision to purchase is not for Ministers to make. I repeat that.
I am pleased to be able to remind noble Lords that of the 17 items seen by the reviewing committee in 1998 to 1999, which, as other noble Lords have said, is the period covered by the 45th report, and subsequently temporarily barred from export, seven were later acquired at a total value of £2,200,000. These include a first century AD bronze harness mount purchased by the Corinium Museum at. Cirencester, referred to by the noble Lord, Lord Renfrew; three paintings by Joseph Wright of Derby purchased by Doncaster Museum and Art Gallery, referred to by my noble friend Lord Stabolgi, a lady's secretaire by Chippendale purchased by Temple Newsam House in Leeds; a Charles II silver porringer purchased by the Fitzwilliam Museum, Cambridge, and two items which have been respectively donated and loaned: a Roman gold finger ring generously

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donated to the British Museum—I shall have more to say about that in response to the point made by the noble Lord, Lord Renfrew in that connection—and Gauguin's "Ruisseau" mentioned by the noble and learned Lord, Lord Simon of Glaisdale, which has again most generously been placed on loan at the National Museum of Wales.
Noble Lords have asked why the Heritage Lottery Fund and the National Heritage Memorial Fund cannot do more to prevent such items leaving the country. I remind noble Lords of the magnificent record of these bodies and the trustees who serve on them. Since 1995 they have allocated just over £80 million to acquisitions for public collections. In 1998 to 1999 they gave £560,000.
We should also remember that not all items recommended for an export stop by the reviewing committee are the subject of an application to either the Heritage Lottery Fund or the National Heritage Memorial Fund. It is a matter of great satisfaction that the Heritage Lottery Fund increased by 100 per cent its proposed support for museum acquisitions including export-stopped works, from £5 million to £10 million. Moreover, the Government have undertaken to increase their grant to the National Heritage Memorial Fund to £5 million for the financial year 2001 to 2002.
Perhaps this is the time to deal with the point made by the noble Lord, Lord Luke. Perhaps I may call it the "raid on the Lottery" allegation. I believe he used the words "siphoning off. I do not believe he will be surprised that I do not for one minute accept that kind of vocabulary. I point out that the New Opportunities Fund was established with an endowment from the Lottery. Income from Lottery sales has been higher than expected and so the money used was not expected to come into the system through the Lottery. Other good causes, for instance, arts, heritage and sport are not losing out through the money established in the New Opportunities Fund.
I remind noble Lords that, while Ministers have influence at the broadest level on the policy directions of the Heritage Lottery Fund and the National Heritage Memorial Fund, they cannot, could not and would not, seek to intervene in the decisions on individual bids to support different projects. In any case, the joint trustees of these two bodies can only respond to actual applications and must judge these on a case-by-case basis and against competing priorities.
The noble Lord, Lord Freyberg, referred to the reviewing committee's comment in its report that it was concerned about low levels of funding available to museums and galleries for purchases, coupled with the effect of policies recently adopted by the Heritage Lottery Fund and National Heritage Memorial Fund, which, it is claimed, have contributed to the continuing loss of significant items from our shores.
I do not believe that that is the full picture. The Heritage Lottery Fund, in its museum acquisition policy, has emphasised that applications relating to individual items at risk of loss through export are not
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treated as a lower priority than other items for which Lottery funding is being sought. It has stated that the proportion of Lottery money available for the heritage should indeed enable museums to build up their collections. While the trustees establish indicative sectoral allocations, they are not totally bound by these. They were able to respond to exceptional cases which other noble Lords have referred to, such as the Sherborne Missal, now in the British Library, and the Botticelli "Madonna", which we are delighted should have been acquired by the National Galleries of Scotland.
Again, the existence of highly successful schemes such as acceptance in lieu continue to provide owners with an incentive to offer outstanding works of art to the nation in lieu of inheritance tax. This was a factor in the acquisition of the Sherborne Missal and also the important Mondrian "Composition B with Red", which was accepted in lieu of tax last year, again supported by the Heritage Lottery Fund. It can now be seen at Tate Modern, the magnificent new gallery at Bankside where entrance is free. Perhaps I may make a personal observation. I was immensely impressed by the gallery when I visited it briefly the other evening.
For their part, the Government have increased their funding of museums and galleries that continue to acquire important works, including export stopped items. However, decisions on individual acquisitions are made by the trustees of those institutions. I confidently expect that they will be assisted in that by one of the tax changes that we introduced in April. That will boost charitable giving to the arts, museums and heritage sectors.
The noble Lord, Lord Freyberg, and the noble Viscount, Lord Falkland, mentioned that many non-charging museums are at a financial disadvantage when purchasing works of art because they are unable to reclaim VAT. Her Majesty's Customs and Excise are aware of that concern and DCMS officials are in touch with them about it. To the noble Viscount, Lord Falkland, I say that there has not been any advance or change since my noble friend Lord McIntosh replied to the previous debate on this subject. However, DCMS officials are in touch with colleagues in Customs and Excise on the matter.
The noble Lord, Lord Freyberg, suggested that the Government should consider a fourth Waverley criterion to preserve collections intact. The question of the export control of items not themselves of large monetary value, but valuable as part of a collection as a whole, is a thorny issue that has been debated and reviewed on several occasions since 1986. Although the existence of pre-eminent collections has not been questioned, serious practical and legal problems were identified with the proposition. So far no one has been able to find a satisfactory solution. However, officials are looking again at what may be done.
The noble Viscount, Lord Falkland, referred to the effect of the Finance Act 1998, but I remind noble Lords that the changes were designed to give the public better access to tax exempt heritage. Those arrangements are being updated by agreement wherever possible.

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The noble Lord, Lord Freyberg, referred to devolution, a subject, as noble Lords know, that is dear to my heart. The Government fully appreciate the need to take into account the interests of Scotland, Wales and Northern Ireland as well as other regional considerations down to the local level when an application for an export licence is received. Some of the 50 or so museum experts who advise the Government about licences are already based in Scotland. All the experts to whom licences are referred are also encouraged to consult others, not just over regional matters but also for more specific scholarly advice before deciding whether to object to the granting of an export licence.
My noble friend Lord Strabolgi and the noble and learned Lord, Lord Simon of Glaisdale, mentioned the particular issue of items "starred" as being of exceptional importance by the Reviewing Committee on the Export of Works of Art, but which, nevertheless, are sometimes eventually exported. I would remind noble Lords that only six items have been so designated over the past four years and, of those, two—Canova's "Ideal Female" bust and the Moser "Gold Bo x"—have remained in this country, once again with the generous support of the Heritage Lottery Fund, the National Heritage Memorial Fund and the National Art Collections Fund. I note the concerns of my noble friend Lord Strabolgi, but I remind him that decisions on which items to support are a matter for the trustees of the various funds concerned.
The noble and learned Lord, Lord Simon of Glaisdale, mentioned the US fiscal system. The budget contained changes to allow individuals to offset charitable donations to cultural institutions against their taxable income. That means that more money should now go to cultural institutions as a result of those changes, and indeed that is happening. It provides individuals with a greater incentive to make such donations.
The noble Lord, Lord Renfrew of Kaimsthorn, made a most interesting speech, as is to be expected from someone of his immense expertise. As to the Roman ring to which he referred, that was said to have been found in Norfolk in 1995. The noble Viscount, Lord Falkland, also mentioned it. I can report that the reviewing committee ordered a lengthy investigation into the provenance and legal status of the ring. However, upon investigation it was concluded that, due to insufficient information, exact provenance could not be established. Therefore, it was decided that it was inappropriate to include that in the annual report.
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The noble Lord, Lord Renfrew, also mentioned that the department's advisers in the national museums vet catalogues in advance of auction to confirm which objects fall within the limited interest category and which objects will require an export licence. We would expect those same advisers to alert us should they have any reason to believe that a particular object has been recently looted.
The noble Lord, Lord Renfrew, also referred to the Council regulation on the export of cultural goods. He is right to state that that provides a derogation which permits member states to exclude from the export licensing requirement objects of limited archaeological or scientific interest. There is no informal financial threshold. The criterion is strictly whether or not something is of limited interest. This exclusion from licensing does not, and cannot, apply to objects which are the direct product of excavations, finds and archaeological sites within a member state since the Council regulation does not permit it to do so. The Department for Culture, Media and Sport has produced a guidance note to exporters explaining this in more detail. I understand that the noble Lord, Lord Renfrew, was involved in helping draft that guidance.
I can reassure the noble Lord that I shall draw the attention of the reviewing committee to his views on the export licensing regulations.
I thank all noble Lords who have taken part in this most interesting debate. I am sure we would all wish to recognise the valuable contribution of the export reviewing committee, and in cash terms—at the end of the day this is what so often counts—of the Heritage Lottery Fund and the National Heritage Memorial Fund as well as the joint former Museums and Galleries Commission and the Victoria and Albert Museum Purchase Fund. I should not close without giving due recognition also to those many thousands of individuals who contribute either personally or through the National Art Collections Fund, which contributed more than £117,000 towards the export-stopped items saved for the nation in 1998 to 1999.
I am sure that, with continuing good will, and all the new developments I have outlined, we can continue to save many previous and beautiful items for this country. Moreover, many more people will now be able to see them in future thanks to the major extensions of free admission that we have introduced at the national museums and galleries. I assure noble Lords that we are determined that our great national collections shall be available for everyone.
House adjourned at sixteen minutes past nine o'clock.

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