Sitting of 13 November 2001

Preamble
The House met at half-past Two o'clock
PRAYERS
MR. SPEAKER[MR. SPEAKER in the Chair]
Oral Answers to Questions
  HEALTH
  The Secretary of State was asked—
  HEALTH

    Health Care (Durham)
    Mr. Kevan Jones: If he will make a statement on the work of University hospital, Durham and the North Durham Health Care NHS trust. [12105]
    The Minister of State, Department of Health (Mr. John Hutton): North Durham Health Care NHS trust was formed on 1 April 1998. Since then, its income has grown by an average of 9 per cent. year on year. The trust met all its waiting list targets in 2000–01, and the new state-of-the-art University hospital of North Durham was completed on time and within budget.
    Mr. Jones: Does my hon. Friend agree that the success of the North Durham Health Care NHS trust is due, in no small part, to the chairmanship of Mr. Kevin Earley? Does he accept that Mr. Earley's removal from the chairmanship without any local consultation has left the trust leaderless and does nothing to help deliver the good health care that we expect in North Durham?
    Mr. Hutton: I certainly agree that the trust has performed, not least in getting the new hospital built on time; I am sure that the chairman of the trust made a significant contribution to that. However, it was right to move responsibility for appointments to an independent appointments commission. The procedures have been approved by the Commissioner for Public Appointments. Today, the NHS Appointments Commission confirmed that there will be a new chairman of the trust, and an announcement will be made in the near future.
    Mr. Gerry Steinberg: From his answer, my hon. Friend is obviously aware that Kevin Earley, who was chair of the trust, has been unceremoniously dumped after doing an excellent job in delivering the new hospital to us. My hon. Friend the Member for North Durham (Mr. Jones) has tabled questions to the Secretary of State asking who was invited to interview by the new NHS Appointments Commission, which organisations were consulted and why Kevin Earley was not reappointed. Every single question went unanswered. Was that because Mr. Earley crossed civil
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    servants in the north-east of England and, disgracefully, was sacked as a result? Is that not an example of transparency—
    Mr. Speaker: Order.
    Mr. Hutton: I am sorry, I cannot explain why those questions were not answered, but I shall certainly look into it. However, that has nothing whatever to do with the points that my hon. Friend made. We decided to set up the NHS Appointments Commission; that was the right thing to do. As I have made clear to the House, the commission's appointments procedures have been approved by the Commissioner for Public Appointments. How the NHS Appointments Commission goes about its task is a matter for it to decide, but I am quite sure that it did the right thing on this occasion.

    Nurses
    Mr. Bill Rammell: If he will make a statement on progress in meeting targets for the recruitment of nurses under the NHS plan. [12106]
    Mr. Mike Hancock: What plans he has to improve the retention of nursing staff. [12114]
    Mr. Simon Burns: Hurry up.
    The Secretary of State for Health (Mr. Alan Milburn): I am being as quick as I can.
    In the first year following publication of the NHS plan, the number of nurses employed in the NHS increased by 6,310; the number of qualified GPs and consultants increased by 1,230. By 2005, we expect 20,000 more nurses and 10,000 more doctors to be working in the NHS.
    Mr. Rammell: I thank the Secretary of State for his response. Does he agree that having 20,000 extra nurses under the NHS plan is critical to the future health and well-being of the NHS and is in stark contrast to the previous Government's cuts in the nurse training programme? Does he also agree that high nursing costs are one of the biggest deterrents affecting nurse recruitment in the south of England? While the additional £1,000 a year cost-of-living allowance in parts of the south-east is welcome, it is inexplicable that it has not extended as far as Essex. I strongly urge my right hon. Friend to get his officials to look at that issue again.
    Andrew Mackinlay: Or else.
    Mr. Milburn: I am being barracked from the right and the left. As for Essex, my hon. Friend the Member for Harlow (Mr. Rammell) will be aware that we introduced cost-of-living allowances this year for the first time. By definition, there is an element of rough justice about that; I appreciate that, and accept that there is a pressing case for other areas to be included. We are keeping the issue under active review and want to be able to extend the cost-of-living increases both to parts of the country where the labour market pressures are greatest and to professional groups, apart from nurses and midwives, where recruitment is difficult.

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    In the more medium term, we need a better formula for distributing NHS resources so that we can take account of the fact that labour markets in the south-east, for example, are different from those in my part of the world. By and large, there are areas of full employment in the south-east. I hope that we will eventually have full employment in the north-east too. As for the number of training places and commissions, my hon. Friend is right; we still have nurse shortages today precisely because the number of training places were cut in the mid-1990s by about 20 per cent.
    Mr. Hancock: Will the Secretary of State consider giving those returning to nursing greater help in meeting their retraining costs? Will he also consider a method of speeding up the re-registration of those who have returned to nursing, and will he comment on the fact that fewer than 50 per cent. of nurses working in the health service would be prepared to recommend nursing as a career with long-term prospects?
    Mr. Milburn: Since April 1999, more than 9,000 nurses who had left the national health service have returned to it. They have been attracted back to the NHS because we have made it more worth while for them to come back. We have increased their pay, the staging of pay that used to occur regularly is no longer occurring, and we are giving them, I hope, decent and fair pay rises. We want that to be extended in the future and, as the hon. Gentleman knows, we are renegotiating the way in which pay is decided in the NHS, to make sure that it is fairer and more transparent for all members of staff, but particularly for nurses.
    On nursing as an attractive career, it is important that those working in the nursing profession, those leading the nursing profession and all Members of the House continue to advocate the case for nursing. Nursing in the NHS continues to be a good career, as is evidenced by the fact that the number of applications for nurse degree courses over the past three years has risen by 86 per cent.
    Mr. David Hinchliffe: My right hon. Friend will be aware of the evidence that shows that the private health care sector recruits its staff almost entirely from the national health service. In respect of the concordats with the private sector at local level, what steps are the Government taking to ensure that the increased use of the private sector does not have a detrimental effect on the local NHS?
    Mr. Milburn: That is an important issue. One part of our health care system cannot benefit at the expense of another. We are making increased use of spare private sector capacity—for example, in private hospitals—so that we are able to expand the care available to NHS patients. That means that we can get more NHS patients treated more quickly. It is a matter of record that many of the private sector providers—the BUPAs of the world—employ their own nursing staff. There are issues that we will need to keep under review concerning the contribution to costs that those private sector providers make.
    Mrs. Marion Roe: Is the Secretary of State aware that many nurses are becoming increasingly unhappy about their conditions of work, particularly the fact that they are unable to give the time and attention to
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    patients that they would wish? How many nurses fail their training course, and how many nurses do not go into the nursing profession, having completed the training course?
    Mr. Milburn: The attrition rate, to which the hon. Lady is referring, is 10 to 11 per cent. of the number who apply for a nurse training course leading to a diploma or a degree, but the rate is falling. It is important that in the selection process we make sure that the candidates selected are appropriate for the job. The number of nurse training places, which was cut under the Administration whom the hon. Lady supported, is rising rapidly. That is welcome, but perhaps even more importantly, as I noted earlier, the number of people who want to go into nursing and who are applying for a nurse degree or a diploma course, is rising rapidly. I hope that that is a good sign of progress. It is one of many signs of progress that people will see in the NHS, and it is worth bearing in mind that there are currently 17,000 more nurses working in the NHS than when the Government took office.
    Fiona Mactaggart: I am pleased to hear what my right hon. Friend says about nurse training, but does he agree that in constituencies such as mine in the south-east of England, where there is a high level of employment, we need to be rather more imaginative about enabling people to get into the nursing profession—for example, by enabling those who have been hospital auxiliaries to do nurse training? What plans does he have to make nurse training more flexible and available to people who are currently employed in the health service?
    Mr. Milburn: As my hon. Friend is aware, we have already taken steps in that regard. It is one of the absurdities of the way in which we have traditionally employed people in the NHS that staff are employed in ghettos, or in silos—nurses here, doctors there, health visitors over there, health care assistants over here. We are trying to develop the concept of a skills escalator, so that people can develop skills through their career and jump off into different careers as they develop professionally. We have certainly made it easier for health care assistants to become nurses. We needed to make it easier for nurses to develop their careers, too.
    There is no simple answer to the problem of nurse shortages. An expansion in the number of nurse training places is obviously key to that and fair pay is important, but another crucial element is the so-called quality of life issue, which includes ensuring that nurses have flexible working conditions that suit them so that they can better balance their family and working lives, and that more child care is made available, not just in hospitals but in primary and community services too. There is real progress to report on all those aspects of improving the attraction of nursing as a career. Provided that we continue to invest in the NHS and, as my hon. Friend advocates, to make the reforms, we can look forward to an even bigger expansion in the number of nurses working in the NHS during the next few years than we have seen in the past few years.
    Mr. Burns: Will the Secretary of State clear up a discrepancy on the targets? The NHS plan claims that there will be 20,000 more nurses by 2004, but in Labour's manifesto the year was 2005. On which target is the Government's policy based, what is the baseline for the

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    target, are the nurse figures based on targets for whole-time equivalents, and how can they be achieved when the Department of Health figures show that there are 9,400 nurse vacancies in Britain, 2,960 of which are in London alone?
    Mr. Milburn: The hon. Gentleman might have said that the number of nurse vacancies is falling, not rising, that the number of nurse training places is rising, not falling, and that the number of nurses is rising, not falling. With regard to the relationship of the NHS plan to the manifesto, the hon. Gentleman might have noticed that the general election came after the NHS plan was published. The NHS plan was based on a baseline of 1999 figures up to 2004. The manifesto, on which we fought the election, was based on a baseline of 2000 up to 2005. [Interruption.] There is no particular revelation there. I know that the hon. Member for West Chelmsford (Mr. Burns) is from Essex, but even for a man from Essex he is getting terribly excited. [Interruption.] I am assured that men from Essex do get excited. [Interruption.] I have brought my hon. Friend the Member for Thurrock (Andrew Mackinlay) back into the Chamber. I always think that it is nice to make people happy, which is a rare occurrence in my job.
    We can be confident of making good progress towards the targets precisely because of the changes that we have introduced. Nurses would not be working under the sort of pressure that they are working under today if the hon. Gentleman, among others, had done the right thing when he was a Minister in the Department of Health, and increased the number of training places rather than cutting them.

    Smoking
    Mr. John McFall: If he will make a statement on progress on smoking cessation services. [12108]
    The Parliamentary Under-Secretary of State for Health (Ms Hazel Blears): The national health service smoking cessation services are making excellent progress. In 2000–01, 61,500 smokers successfully quit.
    Mr. McFall: What will be the funding for the next financial year, and is it in place? Does my hon. Friend agree that it is shameful that Parliament has not grasped the nettle and introduced a ban on tobacco advertising? When will the Government face up to their responsibilities, so that we stop all people, particularly young people, starting to smoke in the first place, and thereby remove the need for such programmes?
    Ms Blears: My hon. Friend is right that smoking cessation is a top priority for the Government. Smoking causes 120,000 deaths a year and costs the NHS £1.7 billion. With regard to future funding, we are asking primary care groups and trusts to plan for the needs of their communities because the services are incredibly successful. As I have said, 61,500 smokers quit last year, and the target for this year is for 40,000 smokers to quit. Nearly 30,000 quit in the first quarter, so the services are successful and we must ensure that they continue in the future. It is right that we try to prevent people from smoking in the first place. We have a manifesto
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    commitment to bring back the Tobacco Advertising and Promotion Bill in the lifetime of this Parliament. If it had not been frustrated by the Opposition, we might be further on than we are now.
    Mr. David Tredinnick: Will the hon. Lady confirm that it is not only patches that help people to give up smoking, but that there is a range of other alternatives, including hypnotherapy, reflexology, cranial-osteopathy and shiatsu? Is she aware that shiatsu is now available in the House of Commons Gym and that it can help with the cessation of smoking? Does she think that it is right that, although Members of Parliament can benefit from shiatsu, it is not available on the health service?
    Ms Blears: As usual, the hon. Gentleman is creative and imaginative, and suggests wonderful solutions. I agree that there is a range of therapies that can help people to give up smoking, and we should be exploring whatever works in helping people to do that. In terms of access to hands-on therapies, I am not entirely sure whether Members of Parliament should be taking that route. None the less, I believe that we should explore whatever therapies work for people.
    Mr. Kevin Barron: Does my hon. Friend agree that when smoking cessation services are part of programmes carried out in health action zones, such as the Thurcroft healthy hearts programme in my constituency, they, too, should be evaluated? If they are providing what we believe to be major services for improving health in our communities, they should be funded in years to come.
    Ms Blears: Many of the health action zones have done marvellous work in this field. For example, many of them are training young people to act as peer mentors. Thus, young people are persuading other young people why it is good to give up smoking and not to take it up in the first place. That is far more effective than older people telling younger ones what to do. Health action zones have been incredibly innovative in those areas. That is why we are asking primary care groups and primary care trusts to plan their commissioning for the long term, so that these excellent examples of good practice can be put into the mainstream of the health service.

    Residential Care Standards
    Dr. Andrew Murrison: If he will make a statement on how the national care standards for residential care homes will reflect the treatment needs of those with drug and alcohol problems. [12109]
    The Minister of State, Department of Health (Jacqui Smith): The standards will promote better quality care and help to prevent abuse by grounding practice in the principles of dignity, choice, privacy and respect. They will reflect the treatment needs of those with drug and alcohol problems by ensuring that their assessed and changing needs and personal goals are reflected in their individual plans.
    Dr. Murrison: I thank the Minister for that response. I welcome evidence from yesterday's Adjournment debate that the Government are softening their thoughts on the

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    regulations. However, they have confused the needs of short-stay patients in treatment with those of residents whose care homes constitute their homes. There is a big difference. Does she agree that free access to mail and visitors would give freer access to illicit substances and that lockable bedrooms would increase the likelihood of deliberate self-harm by residents? Does she also agree that—
    Mr. Speaker: Order. The question is far too long, and the hon. Gentleman is reading.
    Jacqui Smith: The hon. Gentleman's first comment was right. Although this may be difficult for Opposition Members to recognise, the consultation was a real one. We have listened and we will respond to the concerns that were expressed. The particular concern that he raised related to the treatment regimes that will be allowed under the standards. It is important to emphasise that we realise that, sometimes, the overriding need is to ensure that people get the care and treatment that they need in a safe and secure environment. That is why the standards, at the request of representatives from the drug treatment world, include standard 2.7, which recognises specifically that there will be times when freedom and choice might need to be restricted. It asks only that that be discussed and agreed with prospective service users as part of their initial assessment.
    Dr. Brian Iddon: I am grateful for my hon. Friend's response. Will she please note that the European Association for the Treatment of Addiction, Drugscope and Release, among others, have estimated that, if the care standards are adopted and unit costs are driven up, more than 50 per cent. of the care beds are likely to be lost in this sector?
    Jacqui Smith: I think that my hon. Friend is referring particularly to concerns about multi-occupancy rooms. The care standards will put in place the good standards that users of services have every right to expect, and ensure that they are provided and regulated uniformly across the country. When we consulted on multi-occupancy rooms, strong views were expressed by service users about the lack of privacy and dignity involved in sharing. I do not think that many hon. Members would be happy to share their bedroom with someone whom they had not invited into it, and we need to bear in mind the principle behind that when determining the standards.
    It is also important, however, that we ensure that the standards are based on evidence of the outcomes for service users. For that reason, we are seriously considering the standards relating to multi-occupancy rooms and, more importantly, we shall also consider whether and how it would be helpful to carry out new research into links between the occupancy of rooms and the sort of outcomes that service users achieve.
    Dr. Liam Fox: How can the House have confidence in the Department of Health's awareness of the suicide risks and the potential for continuing drug and alcohol abuse among those patients when the draft standards stipulate that
    "Staff enter service users"—
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    that means patients—
    "bedroom…only with the individual's permission…Service users have a key to their own bedroom…which can be locked from the inside…Service users choose when to be alone or in company, and when not to join an activity"—
    and that
    "Service users' own rooms include…lockable storage space"?
    Who writes this stuff? Have the draft regulations been approved by any of the Ministers, or have they simply been written by advisers who seem to have no understanding or experience of this sort of patient?
    Jacqui Smith: The hon. Gentleman obviously wrote and decided to deliver that question before he had listened to my previous responses. On his point about consultation, the standards were drafted and considered by experts within and outside the Department. They were subject to consultation meetings involving users, at which it is fair to say that users and providers expressed different views about them. This is a real consultation, and we are listening. I have already outlined, in relation to standard 2.7, how some of the concerns that he has mentioned might be overcome, but we will continue to listen and respond to people's concerns. When he sees the final standards, he will recognise that this is a Government who talk, but who also listen and respond to concerns.
    Dr. Fox: The last time that the Government promised us consultation on similar regulations was in relation to care homes in general. The Minister might remember that, during those debates, we predicted that the result of their botched approach would be the loss of a large number of care home beds, and bed blocking throughout the national health service. Does she understand the anger of those who now see 15 per cent. of beds blocked in Birmingham, 17 per cent. blocked in Buckinghamshire and 18 per cent. blocked in Brent? How can anyone have confidence in a Government whose incompetence means that, nowadays, people have to queue up not only to get into hospital but to get out?
    Jacqui Smith: People will have confidence in a Government who put the needs of the users of care homes at the centre of their policy. The hon. Gentleman is restating his claim that 50,000 care home places have been lost. That is wrong, as we have already pointed out to him. We accept, however, that there is a problem with capacity in care homes. That is why my right hon. Friend the Secretary of State set up the strategic commissioning group to consider how we can improve commissioning at local level in partnership with the independent sector. That is also why, on 9 October, my right hon. Friend announced a radical cash for change programme worth £300 million over this year and next, to tackle the problem of bed blocking. Such money was never promised by the Conservatives, and such measures would never have been delivered, had they won the last election.
    Mr. Bob Blizzard: Is not the move to national standards and national inspection of care homes meant to take that responsibility from local authorities to achieve greater consistency? Does my hon. Friend share my concern that some local authorities appear to be aiming to continue inspection under the guise of contract

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    monitoring? Is not such duplication a waste of resources and a nightmare for care home owners? Most of those I know welcome national standards.
    Jacqui Smith: My hon. Friend makes an important point, and I know that he has taken a close interest in the issue. He is right that the national approach to care standards is beneficial because there will be consistency across the country in regulation and inspection. The National Care Standards Commission, which comes into operation from next April, will ensure that that consistency exists while recognising the flexibility necessary to ensure that good provision continues.
    Local authorities, given the extra investment that this Government have provided for them, should concentrate on how they work constructively with local independent sector providers and other partners to ensure that we maintain and expand capacity for older people and others in need of long-term care. That is the priority that the Government set in the agreement that we published on 9 October, which is backed up with significant extra investment.

    Digital Hearing Aids
    Mr. Charles Hendry: If he will make a statement on the availability of digital hearing aids through the NHS. [12110]
    Mr. Don Foster: What are his Department's plans for the funding of digital hearing aids during 2002–03. [12120]
    The Minister of State, Department of Health (Jacqui Smith): National health service trusts may provide digital hearing aids for patients if clinically appropriate. Digital hearing aids are being provided by 20 NHS trusts in the modernising NHS hearing aid services project. Further decisions on digital hearing aid provision will be made in the light of the research evaluation of the project.
    Mr. Hendry: I am grateful to the Minister, but is she aware that millions of people with hearing difficulties will consider that reply to be deeply inadequate and wholly complacent? Is not it unacceptable that, in the 21st century, hearing aids in the United Kingdom continue to be based on outdated 1970s technology, whereas digital hearing aids are increasingly common in other parts of the world? Is not it time for the Government to stop posturing, push ahead faster with the trials and, particularly in the coming year, allocate the funds that are desperately needed to tackle the problem?
    Jacqui Smith: I am willing to take a lesson on posturing from Conservative Members, if necessary. The Government have invested practically in the whole process, which is necessary not just to give people digital hearing aids, but to provide them in a modernised fashion in the health service. In the pilot areas, people are being assessed in terms of their needs. They are fitted with digital hearing aids, which also involves the necessity for computer programming and skilled input, and then assessed to ensure that the hearing aids are appropriate.
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    I hope that everybody in the Chamber believes that we have a responsibility in the NHS to provide not only the equipment, but the process, the support and the skilled staff to ensure that that is done effectively. That is why we are using the pilot phases to ensure that we can roll out modernised hearing aid services provision across the NHS in a way that benefits patients to the maximum.
    Mr. Foster: The Minister will be aware that the audiology unit at Bath's Royal United hospital is one of the first-wave pilot schemes. Will she give it an absolute assurance that it will receive continued funding for the scheme from April next year? When, precisely, will that announcement be made? Is she aware that, even in the first-wave project areas, there is a difficulty in that some patients are given the new digital hearing aids and others the old aids?
    There is a solution to that problem. Will the Minister at least agree that it is inappropriate in pilot areas such as west Dorset for audiologists to be advised:
    "It is also very helpful if you can downplay the benefits of digital versus standard NHS hearing aids."?
    Will she join me in deprecating that advice?
    Jacqui Smith: I can say that, in the near future and subject to evaluation, we will make statements on the roll out of digital hearing aids and their continued provision in areas where that is clearly successful. I agree with the hon. Gentleman that it is important to ensure that we have strong evidence about the effectiveness of digital hearing aids so that, across the NHS, we provide not only the technology but the most appropriate procedure for patients. That will ensure that situations such as the one to which he referred no longer exist.
    Mr. Peter Pike: As the user of a hearing aid due to industrial deafness, may I point out to my hon. Friend that the current NHS hearing aids give people all the noises that they do not want to hear and make it difficult to hear those who are talking? Something must be done to ensure that deaf people can hear when people are speaking to them.
    Jacqui Smith: I am not quite sure what sounds my hon. Friend does not want to hear in Chamber!
    Part of our evaluation of the success of digital hearing aids will refer to the modernisation of the whole process—fitting, assessing and follow-up. That is why it is important both to evaluate technical success and to ensure that we can put in place the processes that will enable digital hearing aids to be fitted as part of the service that we expect for NHS patients.
    Mr. David Chaytor: May I tell the Minister about the excellent work done by audiology staff at Fairfield general hospital in my constituency? The issue that concerns them, in addition to the supply of digital hearing aids, is the screening of young babies for deafness. Does she have any plans to introduce pilot schemes for that kind of screening, which will bring enormous advantages to children in my constituency?
    Jacqui Smith: My hon. Friend is right: the early screening of babies enables problems to be identified and better joint working to be undertaken. That is why

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    screening the hearing of the newborn, which is done before they are discharged from hospital, or as soon as possible thereafter, is being piloted by 22 health authorities during 2001–02. Over the next three to four years, we intend to implement the scheme progressively across the NHS in England using the lessons that have been learned. It is important to recognise, however, that the programme involves screening rather than provision. We must therefore also ensure that we facilitate and improve joint working between the NHS, the education service and social services so that those children who are identified as having hearing difficulties are followed up and cared for. They will be identified earlier through the screening process, and we then have a responsibility to ensure that they get the treatment that they deserve from all those agencies.
    Rev. Martin Smyth: The Minister can be thankful that she does not understand about shutting out unwanted noises from hearing aids. I have benefited from a digital hearing aid, and I trust that the NHS experiment will start to be applied faster than at present. If the Minister is not prepared to take lessons from the previous Government's experience of postcode rationing, I fear that certain areas will not benefit from the digital roll out.
    Jacqui Smith: On the speed of delivery, the modernised hearing aids services project was announced a little over a year ago by my right hon. Friend the Minister of State. Twenty NHS trusts now routinely fit digital hearing aids. It is from that experience that I shall take lessons, and make sure that we roll out the programme in the most effective way. By the end of October, 13,278 digital hearing aids had been fitted and 16,178 people had been assessed. By the end of March, we expect that more than 18,000 people will have digital hearing aids on the NHS for the first time.
    Tim Loughton: Last week, in a speech characterised by such soundbites as "The modernised patient journey" and
    "The patient, not the hearing aid, is at the heart of the fitting process"—[Official Report, Westminster Hall, 7 November 2001; Vol. 374, c. 132WH.]—
    well, that is a relief—the Minister claimed credit, as she has again, for the 13,270 digital hearing aids fitted by the 20 first-wave trusts. Now, there is widespread confusion about the Government's commitment to continue funding that first wave with up to £25 million by or in 2003–04, let alone to roll out provision across the whole country. When will the Government finally acknowledge what we all know—that digital hearing aids work and clearly bring enormous benefits to people with hearing difficulties—and give a proper commitment to provide them across the country as soon as possible to the 2 million people who would benefit from them?
    Jacqui Smith: Conservative Members are high on commitments and a bit low on the practical details of how to meet them. My concern as a Minister is to ensure that patients receive not only the hearing aid, but the necessary assessment and fitting, conducted by a skilled work force. That is what patients of the NHS deserve. That is why we
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    will evaluate the results of the pilots that we set up. We will announce how we will roll out the programme in the near future.
    John Cryer: I appreciate what my hon. Friend says, but is she aware that there is a queue a mile long in my constituency for digital hearing aids because of their technological advantages over traditional ones, and that on 6 June last year my right hon. Friend the Minister of State made the plea that that technology be introduced into the NHS as quickly as possible? Can we introduce it more rapidly?
    Jacqui Smith: We want that technology to be introduced into the NHS as quickly as possible, but in a manner that provides support for patients, assesses them properly and ensures that the necessary computer and related equipment is available and that skilled staff are available to give the sort of service that people expect from the NHS. That is why it is right that we get it right. I assure hon. Members that we will look carefully at the results of the evaluation of our pilots so that we can use that information to roll out the benefits of technology across the NHS as quickly and effectively as we can.

    NHS Patients (Overseas Hospitals)
    Mr. Graham Brady: If he will make a statement on sending NHS patients for treatment in overseas hospitals. [12111]
    The Secretary of State for Health (Mr. Alan Milburn): Following rulings of the European Court of Justice, I announced in August that NHS health authorities and trusts could commission treatment for their patients overseas. Three areas in southern England are working through the legal and practical issues involved, with the aim of offering, by the end of the year, treatment abroad to those patients who want it. I shall publish guidance for the NHS based on the experience in those three sites.
    Mr. Brady: I am grateful to the Secretary of State for his response. He will know that in the Salford and Trafford health authority, the proportion of patients waiting more than a year for NHS treatment has doubled compared with four years ago. In that situation, he must know that his announcements have raised the expectations of many people who are waiting for treatment, sometimes in severe pain. When will he bring forward clear guidelines that will say under which circumstances and criteria people will be entitled to treatment overseas?
    Mr. Milburn: I thought that I had just set that out.
    Mr. Brady: When?
    Mr. Milburn: I did say when. Three sites are currently working through the issues because, as the hon. Gentleman will be aware, we want to get this right. Patients who want overseas treatment will be able to go abroad—I repeat: patients who want that; there should be no question of sending patients abroad against their wishes. Not only will such an alternative be offered according to clinical need and a proper assessment of the patient's need, but that person will have to want to go abroad for treatment.

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    It would be a disaster to send patients abroad and to find, for example, that the taxpayer was not getting good value for money and, more important, the patient was not receiving the highest standards of care. That is why we are working through the three pilot sites. I hope that we will be able to make the offer to patients by the end of this year, with a view to issuing guidance early in the new year to the NHS based on those patients' experiences. I think that that will be helpful.
    Incidentally, on the numbers who are liable to take advantage of such an option, my view is—other hon. Members may have a different opinion—that what most patients want, as the hon. Gentleman has rightly said, is the choice of good-quality local care based in their local hospital, and falling waiting times. Indeed, in the past year, the number of in-patients waiting more than a year for treatment has come down by 13 per cent.
    Mrs. Gwyneth Dunwoody: Is my right hon. Friend aware that one of the best ways of making a clinical assessment is to talk to and listen to the patient? Will he give an undertaking that no one will be offered care in a country where there are not sufficient doctors and nurses capable of performing that task? Will he also ensure that anyone receiving treatment abroad has a clear pattern of after-care, should that be needed, under post-operative treatment?
    Mr. Milburn: My hon. Friend makes a very good and telling point. It would be extremely foolish, as the hon. Member for Altrincham and Sale, West (Mr. Brady) seemed to be suggesting, to rush into such arrangements. We have to get them right to ensure not only that patients are fit and well enough to go abroad to be treated, but that they receive the appropriate support and after-care that they need in the country of treatment and once they return home. Those issues have to be worked through properly.
    I give my hon. Friend the assurance that she seeks on her first point. As she is aware, spare capacity is available in Germany, France and elsewhere, and we are looking to those countries so that we can treat what I believe is a minority of NHS patients, but that choice should be available to as many NHS patients as possible.
    Peter Bottomley: Does the Secretary of State recognise that there are plenty of patients in West Sussex and west Surrey—where one in 10 of those awaiting in-patient treatment are waiting more than one year—who would welcome not only the possibility of going abroad, but the opportunity to be treated in the Durham health authority or by his own authority, where the number of those waiting more than one year is almost nil? Such postcode delays could be sorted out without worrying about languages or going abroad. What is he going to do about that, and when will he do it?
    Mr. Milburn: That is a perfectly reasonable suggestion and, as the hon. Gentleman is probably aware, we are exploring ways in which we can make more choice available to patients. He is also quite right that waiting times vary in different parts of the country; even in London, the average in-patient waiting time varies from seven weeks in one hospital to 23 weeks in another. Very often, patients are locked into a contract with their local hospital that the local primary care group or primary care trust has negotiated. Although GPs have the right to refer
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    to other areas, it is important that they should exercise that right in a more proactive manner. We are investigating whether it is possible to extend more choice to patients, precisely to enable them to take advantage of the shorter waiting times available in some hospitals.
    On travel, the hon. Gentleman will be aware that, certainly in constituencies in southern England, geographical proximity is an issue. It makes sense for patients in Kent, for example, to travel to northern France rather than northern England. Although I know that geography is not necessarily the hon. Gentleman's strong point, I should have thought that even he would be able to distinguish his Arras from his Elmet. For the avoidance of doubt, one place is in northern France and the other is in west Yorkshire.
    Caroline Flint: I welcome my right hon. Friend's proposals to seek any opportunity to ensure that people in this country receive the treatment that they deserve. We will have to use whatever stop-gaps are necessary to deal with the 20 years of decline. In examining how the system might operate, will he consider issues such as travel to the destination, necessary support care during travel and especially the cost of travel? I should not like people on lower incomes to feel that they could not take advantage of the system because they might have to bear the burden of travel costs.
    Mr. Milburn: I strongly agree with my hon. Friend. As she is aware, the question asked by the hon. Member for Altrincham and Sale, West raises difficult and complex issues. The NHS already operates a scheme for patients, and particularly for low-income families, who need to travel to hospital, whether it is a local or more distant one. It seems obvious that we have to be able to extend the benefits of that type of scheme to those who might be travelling abroad for treatment. We have to assess that issue properly. Crucially, we also have to ensure that not only patients going abroad for treatment but their carers and families are offered appropriate support. We are seeking to address precisely those issues in the three pilot areas. Based on that experience, we shall be able to issue the appropriate guidance to the national health service.
    Dr. Evan Harris: If the initiative or stop-gap is to be taken seriously, it is the Government and not guinea pig patients on the south coast who must answer the questions. If patients have to pay for their own and their families' travel, where will be the fairness for those who cannot afford to pay? If the health authority or PCT pays for travel, how will value for money be delivered?
    If things go wrong, whom will the patient be able to sue, or—a more appropriate question for the Secretary of State—whom will the Government blame? How can informed consent be given and received in a foreign language? How will the Government feel if overseas trusts and providers advertise for British nurses and doctors to go and do the work?
    Is not the very fact that we are even considering this an indictment of the Secretary of State's management of the health service, and a sign that he has failed to deliver?
    Mr. Milburn: The hon. Gentleman began by asking good questions—precisely those to which we seek

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    answers. Believe it or not, it is not easy. I know that the hon. Gentleman thinks that it is easy, and that a magic wand can be waved to solve every problem in the national health service; but this is not the Harry Potter appreciation society. Difficult decisions are involved. Perhaps at some point even the Liberal Democrats will have to make a difficult decision.
    Mr. Burns: Oh, no!
    Mr. Milburn: Well, let us hope not.
    Issues of standards, negligence and informed consent are precisely the issues that must be worked out. With regard to standards, we are exploring whether it would be possible to accredit certain overseas care providers, perhaps with the involvement of the Commission for Health Improvement as the independent inspectorate of the NHS. As for negligence, complex legal issues need to be considered. It is right for us to do that in conjunction with primary care trusts, which, after all, will be the fulcrum of the health service that we want.
    The hon. Gentleman is right about the difficulties involving languages and informed consent. We will have to provide not just support enabling patients—and their carers and families—to travel, but language support, if the system is to offer genuine choices.
    The hon. Gentleman made a wider point about this being, somehow or other, all the Government's fault. He must realise that, as we said a year or more ago in the NHS plan, turning around the NHS will mean a long hard struggle. He knows as well as I do that the service suffered decades of neglect and underinvestment. We are putting that right, and we will continue to do so, because we have put the money in.

    District Nurses
    Helen Jones: What plans he has for involving district nurses in profiling the health needs of their community. [12112]
    The Minister of State, Department of Health (Mr. John Hutton): District nurses play an important role in profiling the needs of health communities, through their knowledge of local communities and also through their work with individual patients. They will support primary care trusts as part of their responsibility for preparing health improvement plans from 2002. They are also eligible to serve as members of the professional executive committee of primary care trusts. The process for their selection is determined by local nursing colleagues.
    Helen Jones: Does my right hon. Friend accept that, as well as playing a major role in improving people's health—allowing them to be maintained in their own homes, and avoiding unnecessary hospital admissions—district nurses, precisely because they work in the community, often have a better idea of its health needs than people sitting in offices elsewhere? Will he ensure not just that district nurses are eligible for involvement in PCTs, but that PCTs make a real effort to consult them
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    when drawing up health improvement programmes and trying to improve primary care? These are the people with a real knowledge of their local communities.
    Mr. Hutton: I strongly agree. District nurses do a brilliant job, and will have an increasingly important role to play in the pattern of NHS services that we want to be delivered in future. I certainly want all PCTs to consult fully, and to involve district nurses in the development of their local strategies. We aim to devolve more and more responsibility and power to the front line of the NHS, and I do not think anyone is closer to the front line than district nurses.
    Sir Teddy Taylor: Would the Minister be willing to consult the district nurses of Southend-on-Sea, where, with their encouragement, the John Grooms establishment for severely disabled people carried out a massive, costly improvement to provide separate residential units? It was then hammered by separate rating demands, which increased its rates by 300 per cent. The arrangement has only just started, although I understand that it has now been applied to another establishment in Wells, and will also be operated elsewhere. Will the Government review the law to ensure that homes providing care facilities do not receive separate rating demands? This is a new situation, and the Minister's help would be greatly appreciated.
    Mr. Hutton: I am not aware of the situation in Southend, and I am concerned about what the hon. Gentleman has said. If he is prepared to write to me about these matters, I shall take certainly them up with my colleagues in Government.

    Schizophrenia
    Liz Blackman: When he expects the National Institute for Clinical Excellence to publish its recommendations on the prescribing of atypical anti-psychotic medicines for schizophrenia. [12113]
    The Minister of State, Department of Health (Jacqui Smith): We anticipate that the National Institute for Clinical Excellence will publish guidance on atypical anti-psychotic drugs in March 2002, provided that there are no appeals against the draft guidance.
    Liz Blackman: I thank my hon. Friend for that reply, and I welcome the fact that NICE is appraising this class of drugs at the moment. I hope that there is no slippage in that programme. Is my hon. Friend aware that, although the traditional anti-psychotic drugs used at present on patients suffering from schizophrenia are useful, they also have some worrying long-term effects? Those effects include irreversible involuntary facial and body movements, which have long-term consequences for patients' employability and care needs.
    Jacqui Smith: My hon. Friend makes an important point about the consequences of side effects on the wider lives of people suffering from schizophrenia, and I assure her that the NICE appraisal will look at the side effects of both traditional and atypical anti-psychotic drugs. It is

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    important that a wide range of stakeholders—including users, carers, professionals and industry representatives—should be consulted and provide evidence to NICE.
    The appraisal will contribute to the on-going development of the clinical guideline on the management of schizophrenia, which is due for publication by the end of 2002. In that way we will be able to ensure that people with schizophrenia receive the very best and most appropriate care on the NHS across the whole range of treatment options, including treatment with drugs.
    Michael Fabricant: Will the Minister confirm the general point that drugs licensed in the United Kingdom—including the atypical anti-psychotic drugs and the anti-TNF drugs for rheumatoid arthritis currently under consideration by NICE—can still be prescribed and funded by local health authorities? Will funds be made available to local health authorities to enable them to prescribe the drugs permitted or encouraged by NICE?
    Jacqui Smith: We have made it clear that local health authorities should continue with their prescribing activities, but the problem highlighted by the hon. Gentleman is the reason that we have introduced NICE. NICE is a key component in ensuring that there is a common-sense way to end postcode prescribing: without it, the mess of variable access to treatment under different local policies would have continued. Where NICE has laid down guidelines already, rapid progress has been made towards giving people access to treatments on the NHS.
    Mr. Oliver Heald: The Minister will be aware of the widespread concern in the House that these modern medicines should be made available to patients, and she will have seen the reports from the Zito trust and heard the representations from the National Schizophrenia Federation, MIND and other bodies. Will the Minister say whether NICE has already reached its provisional findings in relation to those medicines? If so, will she insist that they be published? That would give those of us who want to argue and make further representations a chance to do so?
    Finally, will she confirm that, if NICE finds against the medicines on the grounds of affordability, it will still be possible for the Government to consider the matter again, as happened with beta interferon? If that is not going to be possible, will she say why?
    Jacqui Smith: As I said earlier, it is right that NICE should undertake the detailed analysis and consultation with stakeholders that is already under way. Provisional appraisal decisions are made available to the consultees, so that there can be continuing input into the decisions being made by NICE. Having set up an independent way of determining both the cost and the clinical effectiveness of drugs, I do not believe that it is right for Ministers to intervene in the approach that NICE is taking, but I can assure the hon. Gentleman that—as I pointed out earlier—the evidence of the effectiveness of NICE is that it has brought into the NHS, for the benefit of NHS patients, many treatments that were previously available only on the basis of a postcode and random prescribing process.

Points of Order
3.30 pm
Dr. Liam Fox: On a point of order, Mr. Speaker. I have given previous notice of this matter. Under the guidelines published by the Cabinet Office in July 2000, Departments are required to disclose sponsorship amounts of more than £5,000 in the departmental annual reports. This year, the Department of Health disclosed that, from various sponsors, it had received £500,000 for the public consultation on the NHS plan. In response to a parliamentary question this week, the Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), said:
"The Department funded the NHS national plan consultation leaflet and the public consultation to inform the NHS plan. There were no sponsors involved."—[Official Report, 6 November 2001: Vol. 374, c. 229W.]
Mr. Speaker, those two things cannot be right. On which occasion were we misled?
Mr. Speaker: The hon. Gentleman has put the matter on the record. It is now up to him to pursue it, perhaps through parliamentary questions.
Mr. Andrew Robathan: On a point of order, Mr. Speaker. I have given you prior notice of my point of order, which relates to the ability of Members of Parliament to hold the Executive to account—an ability that I believe Members on both sides of the House consider extremely important. This afternoon the parliamentary ombudsman will lay before Parliament a report entitled, "Access to Official Information: Declarations made under the Ministerial Code of Conduct". That relates to a series of questions that I tabled in the summer of 2000, to try to get declarations out of the Government. I asked each Department on how many occasions Ministers had made a declaration of interest according to the ministerial code of conduct. Each
714
Department, with the honourable exception of the Department for International Development, stated that they were hiding behind exemption 2 of the code of practice on access to Government information. I asked the ombudsman whether that was reasonable—[Interruption.]
Mr. Speaker: Order. The hon. Gentleman seems to be taking a long time. He must raise a matter that the Chair can deal with.
Mr. Robathan: Sir., the ombudsman has found, for the first time, that the Government will not accept his recommendations, and has laid that before Parliament. Mr. Speaker, have you heard from any Minister that a Minister will come to the House to explain why they have defied the ombudsman for the first time?
Mr. Speaker: My answer is no.
Mr. Peter Lilley: On a point of order, Mr. Speaker. You are absolutely scrupulous and fair in trying to balance the speakers called from both sides of the House during Question Time, and the House greatly values that. I wonder whether you have noticed that Government Whips and Front Benchers are using your very fairness to try to suppress debate, discussion and questioning on the issues that are most contentious, by dissuading their own Back Benchers from rising and by getting them to withdraw questions. Thus today, having grouped three questions, one of which was withdrawn, on the key issue of the shortage of nurses and doctors, so few Labour Members rose—perhaps because they are not interested in the shortage of nurses and doctors—that only two questions from the Opposition could be asked on that key issue. Could you have words with the Whips, Mr. Speaker, about the way that this is handled?
Mr. Speaker: I can take the blame for many things, but not for the activities of the Whips.

Opposition Day
[5TH ALLOTTED DAY]
Opposition Day

  Railtrack
  [Relevant documents: The transcripts of evidence taken before the Transport Sub-Committee of the Transport, Local Government and the Regions Committee on Wednesday 17th October, HC 239-i, Wednesday 24th October, HC 239-ii, Wednesday 31st October, HC 239-iii, and Wednesday 7th November, HC 239-iv, in relation to the Sub-Committee's inquiry into Passenger Rail Franchising and the Future of Railway Infrastructure.]
  Mr. Speaker: Before we come to the main business, I inform the House that there is a limit of 12 minutes on Back-Bench speeches, and also that I have selected the Government amendment.
  3.34 pm
  Mrs. Theresa May: I beg to move,
  That this House deplores the fact that there are discrepancies between accounts given by the Secretary of State for Transport, Local Government and the Regions to the House of his meetings with the Chairman of Railtrack and his discussions with the Rail Regulator relating to the putting into administration of Railtrack, and their accounts of these discussions; notes the concerns of overseas investors such as those expressed by David Winters. portfolio manager for Franklin Mutual, that 'a bigger risk premium is to be attached to investing in British companies now'; condemns the Secretary of State for failing to inform the House fully; notes that his failure to set the record straight has further undermined his, and the Government's, credibility; and calls on the Secretary of State to resign his post before further damage is inflicted on the Government's reputation, both in the business world and the country at large.
  I am sure that the House will want to join me in expressing our sympathy for the families of those who died in the tragic air crash in New York yesterday and, indeed, our sympathy for the people of New York. All of us who have any interest in air travel or responsibility for it will realise that this latest incident poses further challenges to an ailing airline industry and should be a matter of concern to us all.
  The Secretary of State has been brought to the House today to be called to account for the statements that he has made to the House in recent weeks, to explain why those statements have been disputed by third parties involved and to respond to concerns expressed across the House, as in the statement made on Radio 4 on Friday of last week by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who said that there were "gaps" in the various accounts. Above all, the Secretary of State is here to face up to the damage that he has done to the credibility of this Government and to the future of our rail network.
  Let us not be under any illusions. For this House, the Secretary of State's failure to account properly to Members for his actions is a matter of deep concern. For the travelling public, it is his failure to protect the interests of the railways that will hurt most.
  Mr. Kevin Hughes: Will the hon. Lady give way?
  Mrs. May: No, I will not give way at this stage.
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  The Secretary of State has been guilty of a breathtaking sleight of hand that has dealt a savage blow to future improvements in the railways, left railway workers robbed of their life savings and damaged the Government's credibility.
  Hugh Bayley: Will the hon. Lady give way?
  Mrs. May: I will make some progress before taking interventions.
  The Secretary of State stands accused of failing fully to inform the House of events leading up to the court's decision to grant an administration order for Railtrack. Let me remind the House that only last week, on 5 November, in response to my private notice question, the Secretary of State said that, on 25 July, the chairman of Railtrack had told him that, without Government financial assistance, on 8 November he would not be able to make the statement that Railtrack was a going concern. The very next day—Tuesday 6 November—the chairman of Railtrack disputed that, saying that that was not his recollection of the meeting. Indeed, he said, "It is not true".
  Railtrack has now passed over copies of the notes of that meeting, and other relevant documentation, to the Financial Services Authority. Will the Secretary of State now commit to placing copies of his Department's note of that meeting in the House of Commons Library, and will he make a copy available to the FSA?
  Sadly, that was not the only incident last week when the Secretary of State's account of events to Parliament was challenged by a third party.
  The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): Oh dear!
  Mrs. May: I suggest that the Under-Secretary, a former Whip, pays a little more attention to matters relating to people giving statements to the House and the veracity of those statements.
  On 5 November, I asked the Secretary of State if he had threatened the Rail Regulator with legislation if he used his powers to intervene in Railtrack. The Secretary of State replied that "there was no threat". Yet on Thursday last week, the Rail Regulator, Tom Winsor—in evidence to the Select Committee on Transport, Local Government and the Regions—stated clearly that, in a meeting on 5 October, the Secretary of State had told him that if he, the Rail Regulator, used his powers to intervene in Railtrack, the Secretary of State would introduce legislation to direct him.
  As the regulator said, he had to pause
  "to consider whether I had really heard what I had just heard."
  Not only was the Secretary of State going to direct the Rail Regulator in his powers to order an interim financial review, but he was going to direct him in all his powers: that is, take away his independence.
  The Secretary of State says that he was not threatening the Rail Regulator. I was not asking the Secretary of State if he had bullied the regulator to make him cry, or if he had shut him up in a cupboard and thrown away the key. I was asking if he had told the Rail Regulator that he

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  would legislate if the regulator intervened. The correct answer was yes; the Secretary of State, to all intents and purposes, said no.
  Mrs. Louise Ellman: Is the hon. Lady aware that the Rail Regulator also told the Select Committee that he was amazed that Railtrack had bypassed the normal procedures, and had in fact not come to him for a settlement?
  Mrs. May: The hon. Lady might also like to note that the Rail Regulator told the Select Committee that what the Secretary of State had done put under threat Virgin projects for the purchase of tilting trains for the west coast main line—a line which I know is of particular interest to the hon. Lady—and for its new country networks, and had put under threat the independence of the Bank of England as well. Perhaps the hon. Lady would like to consider that before she intervenes in future.
  Hugh Bayley: I wonder if we might establish one fact at the start of the debate. Does the hon. Lady believe that Railtrack made a sufficient contribution to rail safety and improved reliability of services in return for the hundreds of millions of pounds of public subsidy and billions of pounds of access charges that it received?
  Mrs. May: If the hon. Gentleman would like to examine the record of rail safety under public sector ownership and following privatisation, he will find—[HON. MEMBERS: "Answer the question."] Just listen. He will find that, notwithstanding the tragic crashes that did occur after privatisation, at Hatfield and Paddington in particular, the safety record under privatisation actually improved.
  Chris Grayling: Is my hon. Friend also aware that the Rail Regulator, in his evidence to the Select Committee, appeared to contravene the statement made by the Secretary of State that Railtrack was insolvent on Friday 5 October?
  Mrs. May: Indeed, and it seems that Ministers find it a little difficult to define the issue of insolvency. I note that yesterday, in another place, Lord Falconer had to apologise because there was a period when the New Millennium Experience Company, running the dome, had been insolvent when, as I understand it, he had said that it was not insolvent. It is an interesting contrast because, for the Government's pet project of the dome, they overlooked a period of insolvency pending a few grants, but for Railtrack, they could not wait to pull the plug, regardless of whether it was really insolvent.
  After the Secretary of State had made that reference in the House to the fact that there was no threat to the Rail Regulator, the Prime Minister's official spokesman, when challenged on the Rail Regulator's response to that, said that he was simply setting out "the logical consequence" of the Government's decision. Well, if it was a logical consequence, why did he not tell the House? We can only assume that he did not want Ministers to know what he proposed to do to the Rail Regulator and took great pains to keep Members in the dark. He must now explain that failure to inform the House. Moreover, he must tell the
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  House his intentions regarding the Rail Regulator. Will the Rail Regulator retain his independence, or will the threatened legislation go ahead?
  As I have said, that question has implications for more than the railways. The former gas regulator, Clare Spottiswoode, said this morning that
  "the way things are going it's quite difficult to know what might happen because if Stephen Byers did threaten"—
  [Interruption.] When it gets difficult, no Labour Member wants to listen and hear what will actually happen—
  "emergency legislation and got his way by doing that, and it's not quite clear exactly what other, sort of, things might be got through, through threats rather than through the normal due process of the law. I think this is a very serious accusation".
  How does the Secretary of State answer that accusation?
  I am sorry to say that these are not the only examples of the Secretary of State's failure. On 15 October, he told the House that the Government had
  "met all our legal obligations regarding payments to Railtrack."—[Official Report, 15 October 2001; Vol. 372, c. 959.]
  On 5 November, in response to my hon. Friend the Member for Surrey Heath (Mr. Hawkins), he said:
  "The decision was taken on 5 October not to provide additional funding for Railtrack."—[Official Report, 5 November 2001; Vol. 374, c. 28.]
  Yet a payment of £162 million that was due to be paid on 1 October under an agreement reached with the Rail Regulator in January was withheld by Government—four days before the Government pulled the plug on the company and two days before Railtrack staff took their dividends in the form of additional shares.
  Why was the money withheld? It was withheld supposedly because the Office for National Statistics could not decide under which heading it should appear in the national accounts. Forget the substance—just worry about the presentation.
  Geraint Davies: Will the hon. Lady confirm that, had she been in the Secretary of State's position, she would have paid the money? Will she now commit the Opposition to reprivatising the successor to Railtrack?
  Mrs. May: I have news for the hon. Gentleman—he should watch what the Secretary of State does to the new Railtrack. The right hon. Gentleman has invited bids from the private sector, so Railtrack may well end up back in the private sector once again. That may wipe a few smiles off Labour Members' faces.
  The real answer is that the Government were playing fast and loose with Railtrack, stringing the company along. At the end of September, the company still believed that the money would be paid, but the Government did not want to pay the money because it might have jeopardised their case for administration.
  Will the Secretary of State confirm that officials in his Department and/or officials in the Treasury put pressure on the Strategic Rail Authority not to make that payment on 1 October? Will he explain why, as of 30 October, the Government were willing to make that payment? Will he publish the correspondence between his Department and the SRA relating to negotiations on the proposed company Renewco?

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  Those are not idle questions. The case for the administration order put before the judge on 7 October raises several questions to be answered by the Department. Did the Secretary of State, through the statement made on his behalf by the Director General of Railways, explicitly tell the court on 7 October that the Rail Regulator had the power to intervene to bring forward an interim financial review, which could have brought forward funding for Railtrack, thus changing the company's financial position and its future solvency? Did the Secretary of State—
  Mr. Brian H. Donohoe: Will the hon. Lady give way?
  Mrs. May: No.
  Hon. Members: Give way!
  Mr. Speaker: Order. The hon. Lady is not giving way.
  Mrs. May: Did the Secretary of State, through the Director General of Railways, explicitly explain to the court that he had decided to introduce emergency legislation to remove the powers of the Rail Regulator?
  During that case, much was made of the evidence of Arthur Andersen on the financial status of the company, yet Arthur Andersen says:
  "It is not clear to what extent the forecast funding requirement could be reduced through careful cash management",
  adding that, "we have no information" regarding the company's ability
  "to raise additional funding via alternative sources."
  The Government knew. They knew that the company was preparing plans to reduce costs. They knew that the Rail Regulator could bring forward financing through an interim financial review. They knew that the company had not been given the chance to explore alternative sources of funding. They knew that they were not going to give the company that chance, because they had decided to pull the plug on Railtrack a long time before.
  Mrs. Gwyneth Dunwoody: Did the hon. Lady read the Rail Regulator's evidence carefully. especially the part where he said that Railtrack had not asked for an assessment, and that the company only rang him on the Saturday night to ask whether it would be possible for him to carry out an assessment in 24 hours, completing it on the Sunday and finding what the chairman described as "millions and millions" of pounds in cash by Monday morning?
  Mrs. May: As one in the hon. Lady's position knows well, the timetable was such that at that stage the regulator was not able to produce an interim financial review. However, she also knows—or should know—that during the whole of the summer, Railtrack was negotiating with the Government on restructuring the company and introducing a new company. The Government kept it thinking that that was going to be permitted and that money would be forthcoming, until 5 October when the chairman was called in.
  Mr. Gerald Howarth: Has my hon. Friend noticed that in the summer the accounts of Railtrack were
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  signed off and both the accountants and directors certified that it was a going concern? They had to certify that it would be a going concern for the whole of the coming year. There must have been agreement and letters from the Government offering comfort. Would it not be interesting to see those and to know why the Government ratted on them?
  Mrs. May: My hon. Friend makes a valid point. It would be interesting to see all the documentation that passed between the Government and Railtrack on this issue.
  Mr. Martin Salter: Will the hon. Lady give way?
  Mrs. May: No. I want to make some progress.
  There is no doubt that in the summer the Government had already decided on other plans for Railtrack. Let me take hon. Members back to June—[Interruption.]
  Mr. Speaker: Order. Let the hon. Lady speak.
  Mrs. May: On 6 June, in a radio call-in, the Prime Minister told listeners as regards the renationalisation of Railtrack:
  "I don't know that it would be very sensible. If we took it back, it's not just the share price we would have to pay for, we would also have to pay their debt back as well."
  Indeed, the Secretary of State himself admitted at the Labour party conference this year—just four days before he pulled the plug on the company—that the Government had received legal advice, influenced by the Human Rights Act 1998, that it could not buy back Railtrack shares at the current depressed price. Acquisition of the company's equity on top of its outstanding debt would cost the Government between £7 billion and £8 billion. I wonder when the Government asked for that legal opinion.
  Clearly, at that stage the Labour party was thinking about renationalisation, but compensating shareholders was going to cost too much. So, the Secretary of State—
  Mrs. Anne Campbell: Will the hon. Lady confirm that it is the Conservative party's policy to compensate shareholders to the tune of between £7 billion and £8 billion?
  Mrs. May: Shareholders are entitled to compensation based on the value of the company. [HON. MEMBERS: "How much?"] Labour Members all want to know how much, but perhaps they would also like to know that those were not my words but those of the Prime Minister.
  Several hon. Members rose—
  Mrs. May: I will not give way.
  The Secretary of State and the Labour party were thinking about renationalisation some time ago, but compensating shareholders would cost too much. So the right hon. Gentleman—ever keen to help the new Labour project—devised a cunning plan. He knew a way of renationalising without compensating shareholders. He would drive the company to the wall, put it into administration and renationalise on the cheap. How else

  721
  could he explain the way in which he and the Treasury held out on the discussions on the new company, Renewco? How else would he explain holding back the payment of £162 million that was due on 1 October, keeping the Strategic Rail Authority in the dark and not meeting its chairman from June to this day, as far as I am aware, to discuss his plans for Railtrack? How else does the right hon. Gentleman explain that he took such great pains at the beginning of April to state—a statement that he has relied on consistently since the company was put into administration—that the Government stood behind the network, not any company? How does the right hon. Gentleman explain keeping the Rail Regulator in the dark and then stopping him in his tracks when he suggested that he could help the company out?
  Mr. David Laws: Is the hon. Lady aware that the head of the Financial Services Authority gave evidence to the Select Committee in which he confirmed that evidence from Railtrack has now been lodged with the FSA? He has therefore written to the Secretary of State and the Department asking for a response. Does it makes sense for the House to make a judgment on those issues and the Secretary of State's future without even bothering to read the report that the FSA is now going to prepare?
  Mrs. May: We are not short of accusations against the Secretary of State which we can use to make a judgment on him, notwithstanding the report that will be prepared by the FSA. The plan is clear; it was devised by the Secretary of State and the Treasury was complicit in it. But like all Baldrick's cunning plans, it does not look so clever now. It means delayed or cancelled projects; phase two of the west coast main line has been delayed; likewise Thameslink 2001 and improvements to South. Central.
  Several hon. Members rose—
  Mrs. May: No, I am not giving way any more.
  It is clear that the plan of the Secretary of State means two years of chaos on the railways and delay in improvements. Indeed, the Prime Minister predicted that on 6 June, when he said that it would
  "probably take two years before we sorted everything out and, in those two years, we would have the railways in a state of paralysis and not be able to start the investment programme that is there now ready to go."
  Mr. Nicholas Winterton: Will my hon. Friend give way?
  Mrs. May: Yes.
  Mr. Winterton: I am glad that I carry some small influence. Is my hon. Friend prepared to go into detail about the implications of that sad saga for the west coast main line, which is critical to the economic future of the north-west of England?
  Mrs. May: I should tell my hon. Friend that I never could resist a more mature man.
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  The plan has indeed delayed the second phase of the west coast main line project; I know that that is a cause that my hon. Friend has valiantly championed. As the Rail Regulator made clear in his evidence to the Select Committee, it has caused extreme problems for Virgin in the purchase of tilting trains. Indeed, the Government can kiss goodbye to the subsidy that they were going to receive as a result of those developments.
  Mr. Donohoe: Will the hon. Lady give way?
  Mrs. May: No. The hon. Gentleman should take that as a compliment; I obviously do not think that he is more mature.
  The plan of the Secretary of State means increased cost to the taxpayer as the private sector walks away from investment or demands more government guarantees or a higher price for that investment.
  Several hon. Members: rose—
  Mrs. May: No, I am not going to give way any more—[Interruption.]
  Mr. Speaker: Order. Do not drown the hon. Lady out.
  Mrs. May: Thank you, Mr. Speaker.
  Claire Spottiswoode, the former gas regulator, said this morning when talking about Government intervention in Railtrack that
  "that would increase the cost of raising capital in the markets. And, of course, if the cost of raising finance for Governments goes up, then that affects all of us through increased taxes."
  The right hon. Gentleman's plan means that small shareholders, like Edith Knowles, aged 81, will lose their life savings—[Interruption.] It is a sad day when members of the Labour party are not interested in the problems faced by elderly people in this country. Edith Knowles from Preston has told how she paid £13,000 over the years for Railtrack shares which she hoped would cover any nursing care that she might need. She says:
  "Now all I have left is my pension. We aren't the fat cats Mr. Byers and MPs think we are."
  The Secretary of State's plan means that the Government could end up in the courts. He has let the railways down; he has let passengers down; he has let railway workers down; he has let taxpayers down; he has let savers down; and he has let the Government down.
  The Secretary of State stands accused of failing to inform the House; of holding promised funding back from the company; of stringing the company along by talking about the future, while he knew that he was going to pull the plug on it; of letting Railtrack staff take dividends as extra shares, when he knew that the shares would soon be worthless; of increasing the cost to the taxpayer of future investment in the railways; and of causing delay to the improvements in the rail infrastructure. The Secretary of State stands accused. There is only one verdict for the House to return: guilty as charged.
  4.1 pm
  The Secretary of State for Transport, Local Government and the Regions (Mr. Stephen Byers): I beg to move, To leave out from "House" to the end of the Question, and to add instead there of:
  'recognises that many of the problems of the railways stem from the years of underfunding of the industry by the previous Conservative Government and the shambles of their rushed and ideologically driven privatisation of Railtrack; welcomes the decisive action that Ministers have taken in regard to Railtrack which will be welcomed by the travelling public; congratulates the Government for developing contingency plans for the industry as soon as it was told of the company's plight; rejects the policies of the Opposition, who would have offered the company a blank cheque and even now wish to pay over £1bn to compensate shareholders; and welcomes the work of Ministers in developing positive policies to take the industry forward in terms of a successor to Railtrack and to put the interests of passengers first.'.
  At the outset, I associate myself with the remarks of the hon. Member for Maidenhead (Mrs. May) in relation to the tragic accident in the skies over New York yesterday. I am sure that the sympathies of the entire House go to those affected, their families and their loved ones.

  We are witnessing a Tory smokescreen—an attempt to hide the fact that the Labour Government, and I as the responsible Secretary of State, have taken action against the failed privatisation that was Railtrack. The travelling public know that Railtrack was a failure. The City knows that Railtrack was a failure. The railway industry knows that Railtrack was a failure. The only people who regard it as a success are the architects of Railtrack: the Conservative party.
  The hon. Lady made a number of allegations and posed some questions this afternoon. It is interesting to note that they are the same allegations and the same questions raised by people who have a vested interest. There are those who seek compensation from the Government. Those shareholders are now clearly aided and abetted by the Conservative party. The Government's position is clear. We believe, as the Prime Minister said last week, that shareholders should get what they are entitled to, but that there should be no new taxpayers' money to compensate them.
  We now know that Railtrack has said that it wants £3.60 a share, guaranteed by the Government, regardless of the company's assets or liabilities. That would mean more than £1 billion of taxpayers' money being used to compensate shareholders for a bad investment. No doubt pressure will continue to try to force the Government to pay for the company's incompetence, but we are clear: investments can go down, as well as up. As we said on 2 April, we stand
  "behind the rail system but not behind individual rail companies and their shareholders".
  Mr. Douglas Hogg: Will the right hon. Gentleman tell the House what he has so far refused to tell me in reply to my written question: when, after 1 August, did his Department receive advice from the Treasury that it was unlikely that public funding for Railtrack would be approved?
  Mr. Byers: The issue that the right hon. and learned Gentleman raises concerns the relationship between different Departments. The position is clear. I took the
  724
  decision on 5 October based on the advice that I had received, including advice from my colleagues in the Treasury.
  Mr. John Redwood: On 3 July, the right hon. Gentleman told the House that it would cost £6 billion to set up a not-for-profit company, £2 billion to pay the shareholders and £4 billion to pay the debt holders. We know that he has decided to mug the shareholders and rob them of the whole £2 billion, but is it also his intention to rob the bond holders? Should they not be told, or does his scheme cost £4 billion plus the cost of sorting out the mess?
  Mr. Byers: The right hon. Gentleman knows, because I have made the statement in the House before, that on 25 July circumstances changed dramatically. That was the day on which the chairman of Railtrack, John Robinson, came to see me and outlined the position as he saw it. I will say something specifically about 25 July in a couple of minutes because the hon. Member for Maidenhead raised some serious points about that discussion.
  The Conservative party's difficulty with the issue is that Railtrack was the last throw of the privatisation dice when, in the dying days of the Major Government, it was floated on the stock market. Helpfully, the flotation was subject to a report by the Public Accounts Committee during the previous Parliament, when it was chaired by the right hon. Member for Haltemprice and Howden(David Davis), who is now chairman of the Conservative party. That report, the twenty-fourth report of the Public Accounts Committee, makes valuable reading and I commend it to Opposition Members.
  Michael Fabricant: Will the right hon. Gentleman give way?
  Mr. Byers: No, because I want to address this particular issue, but I will be more than happy to give way to the hon. Gentleman later.
  The key finding in relation to the flotation of Railtrack that emerged from the Public Accounts Committee's report—bear it in mind that it was rushed through ahead of the 1997 general election—was:
  "The timing of the sale was a factor in the poor value achieved, and the Department themselves acknowledge that the large increase in Railtrack share price since flotation was because it had been undervalued and sold in haste."
  The report goes on to disclose the scale of the loss to the taxpayer.
  Several hon. Members rose—
  Mr. Byers: I want to make this point, but I will give way in a minute.
  The report continues:
  "The share price of Railtrack quadrupled in two and a half years with the result that the taxpayer received less than £2 billion from the sale of shares compared with the company's current valuation of nearly £8 billion."
  At the time of the report, there had been a £6 billion loss to the taxpayer.
  Mr. Salter: Will my right hon. Friend explain to the House, in addition to the staggering increase in the share

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  value of Railtrack after privatisation, exactly how much money has been paid to the shareholders and directors? The information that I have suggests that about £700 million has been paid to shareholders and £10.4 million has been paid in bonuses to Railtrack directors. Are those figures correct?
  Mr. Byers: My hon. Friend is absolutely right. During the period of privatisation, some £700 million was paid in dividends to shareholders and some £10.4 million to directors by way of remuneration.
  Several hon. Members rose—
  Mr. Byers: Members of the Select Committee will have an opportunity tomorrow afternoon to quiz me at great length, so I shall give way to the hon. Member for Lichfield (Michael Fabricant).
  Michael Fabricant: Will the Secretary of State answer the question of my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), and say precisely on what date he was advised by the Treasury that funding would not be made available to bail out Railtrack?
  Mr. Byers: I have answered the question, although hon. Members might not like the answer. The decision was mine, taken on behalf of the Government, on Friday 5 October. That was when the decision was taken by myself as Secretary of State. It was a decision for me to take on behalf of the Government. That is the situation. I have explained it to the House before.
  Michael Fabricant: On a point of order, Mr. Speaker. I think that the Secretary of State has misunderstood my question. I asked him not when he made the decision, but when he was advised.
  Mr. Speaker: The Secretary of State is entitled to misunderstand questions.
  Mr. Byers: I will try not to misunderstand the question, Mr. Speaker.
  Michael Fabricant: Will the Secretary of State give way?
  Mr. Byers: If I can have a second chance of explaining the matter to the hon. Gentleman, he may find it beneficial. I know that he has not had experience of government and is unlikely to get any, but the reality is that, in government, there are Secretaries of State who are responsible for taking decisions. I was responsible for taking the decision in relation to Railtrack.
  Mr. Ronnie Campbell: It was the right one.
  Mr. Byers: I thank my hon. Friend very much. I took the decision on Friday 5 October.
  Several hon. Members rose—
  Mr. Byers: I want to make some progress, as many hon. Members wish to speak.
  Mrs. May: Will the right hon. Gentleman give way?
  Mr. Byers: Of course, I give way to the hon. Lady.
  Mrs. May: Perhaps I can give the Secretary of State some assistance in this matter. Will he inform the House whether he had any discussions with the Treasury, or whether any of his officials had discussions with Treasury officials, in which it was indicated that funding would not be forthcoming, prior to 28 September, the date on which The Stationery Office published the administration order?
  Mr. Byers: I have to say that the question of the printer's mark of 28 September—[Interruption.] That is the issue that the hon. Lady raised. I have already explained that the nature of government is such that there is advice that Ministers receive, and decisions were taken on Friday 5 October. That is the situation. [Interruption.]
  Mr. Speaker: Order. The House should allow the Secretary of State to answer. It is unfair not to do so.
  Mr. Byers: In relation to 28 September, I explained to the House last Monday that that was a printer's mark, and not a fax, as some people suggested. It was a printer's mark of the sort that The Stationery Office often uses. The issue was raised by the hon. Member for Maidenhead. I am seeking to outline the circumstances. I shall answer the allegations in a minute.
  Mrs. May: I am grateful to the Secretary of State for giving way a second time. I did not ask him about 28 September and the printing of the document. I asked him whether he or any officials in his Department had had any discussions prior to that date with Ministers or officials in the Treasury at which it was indicated that funding for Railtrack was unlikely to be forthcoming from the Treasury. It is a simple question—is the answer yes or no?
  Mr. Byers: The situation is this, as I have explained to the House on two previous occasions: there were two options that were being worked up. One was a situation of a decision being taken to put Railtrack into railway administration. Of course, in all those discussions, various Departments would have been involved. Alongside that were the restructuring proposals being made by Railtrack, which were being actively considered at the same time. We had two programmes of work that went alongside each other, with a decision taken on Friday 5 October. I hope that that makes it perfectly clear for Opposition Members.
  Mr. Salter: Will my right hon. Friend give way?
  Mr. Byers: No; I want to make some progress.
  I am trying to explain the background to Railtrack's formation, because there is a very important message here about how the Conservatives use public money to prop up their own approach to public services. I have already outlined the useful finding from the chairman of the Conservative party that the shares were undervalued by some £6 billion. But the situation is worse than that, because to ensure that the flotation was a success, £1.4 billion of debt owed to the taxpayer was written off by the Conservative Government. In addition, £69 million of profit, earned while Railtrack was in public ownership, was held back from the public, but then given to shareholders by way of a dividend. Taxpayers' money

  727
  was recycled as profit for Railtrack, sprinkled like confetti among shareholders—yet not one of them was a shareholder at the time when that profit was made.
  It is also enlightening—it shows the climate of the times under the Conservatives—to consider how the shares in Railtrack were marketed at the time of flotation. One financial adviser produced a pamphlet that stated:
  "Railtrack is essentially a property company and the land that Railtrack will own could be regarded as one of the most valuable pieces of real estate in the United Kingdom."
  This is the marketing for Railtrack. It refers to these sites as being ripe for exploitation, with retail developments at mainline stations being able to compete with major department stores up and down the country. The pamphlet then described how stations would have
  "a captive audience of passengers who are all potential customers…This waiting time is valuable selling time for retailers and food providers".
  That was the sales pitch for Railtrack flotation: to capture passengers at railway stations that have been redeveloped as shopping centres.
  The hon. Member for Maidenhead has made—
  Mr. James Gray: Will the right hon. Gentleman give way?
  Mr. Byers: No. I want to address the thrust of the hon. Lady's charges this afternoon, because they are important and significant. I want to address these allegations, because that is the basis on which this debate is being held.
  The hon. Lady has not addressed the important policy issues concerning my decisions. Instead, she fell back on innuendo, smear and allegations. So, today, let us cut through all that and look at the facts. I want to get on to the substance of the allegations that have been made.
  Mrs. May: Is the right hon. Gentleman saying to the House that the evidence given by the Rail Regulator to the Select Committee on the Treasury was innuendo, smear and allegation? That is what he has just implied.
  Mr. Byers: I shall come to the Rail Regulator. It was the hon. Lady's comments to which I was referring. I shall address the position of the Rail Regulator specifically. Before I do so, I want to address the issue raised by the hon. Lady about the meeting that I had on 25 July.
  Mr. Donohoe: Will my right hon. Friend give way?
  Mr. Byers: I shall not give way, for the simple reason that I want to put on the record the facts in relation to the allegations made by the hon. Lady. I hope that the House will indulge me if I do not take any interventions while I put on record the truth of the situation.
  The first allegation is in relation to the meeting between me and the chairman of Railtrack held on 25 July. I am aware that there has been some disagreement about what was said at that meeting. In my earlier statements to the House, I sought briefly to describe those discussions. Let me now set out the events in a little more detail.
  Mr. Mark Francois: Will the Secretary of State give way?
  Mr. Speaker: Order. The Secretary of State is not giving way, and when I rise, I expect hon. Members to be
  728
  seated. Could we have some order in the House? The Secretary of State is entitled—[Interruption.] The rabble is not just over there. The Secretary of State is entitled to a hearing.
  Mr. Byers: On 25 July, Mr. Robinson discussed with me a range of issues about Railtrack, including its management and the difficulties that it was being presented with by the present regime of regulation. He outlined to me in general terms the seriousness of Railtrack's financial situation, making it clear that the position was far worse than he had first thought. He spoke to me about needing a soft letter of comfort from the Government by the autumn, before being able to access existing banking facilities. If Railtrack was unable to access those facilities or receive extra financial assistance from the Government, it was clear that, on 8 November, when Railtrack was due to give its interim results, it would be unable to make the critical statement that it was a going concern.
  At the same time, Mr. Robinson suggested that my officials have further discussions with Railtrack's advisers, Credit Suisse First Boston, to consider in more detail the state of the company's finances and management, and a series of proposals for restructuring the company and the regime of regulations. Initial discussions took place between my officials and Railtrack's advisers on 27 July, and the message was stark. It was clear that the viability of the company was at issue. That is the sequence of events, and I hope that that clarifies the position for the benefit of the House.
  Mrs. May: Will the Secretary of State give way?
  Mr. Byers: I want to put on the record the specific points in relation to the series of allegations that have been made.
  The second allegation relates to the so-called threats to the Rail Regulator, Tom Winsor. The hon. Lady alleges that I made threats to the Rail Regulator; she did so again today. Now that the Select Committee has helpfully made the transcript available, Members will see clearly that the Rail Regulator at no stage said that he had been threatened. I ask Members to read the transcript, which is here. That was put to him and that was the position.
  I want to get on the record the truth of the situation. The hon. Lady made the allegation. I made it clear to the House on Monday 5 November that there were no threats. The first people to raise the issue of suspending the regulator were Railtrack's own advisers. I also made it clear to the House that, in my meeting with the chairman of Railtrack, we covered how the regulator would deal with those matters. Having taken the decision that we could not pour unlimited amounts of taxpayers' money into Railtrack additional to that which had already been agreed, it followed that, if necessary, we would introduce legislation to ensure that that objective was achieved. That was communicated to the regulator in response to a point that he raised with me.
  I made a factually accurate statement that I had the necessary authority to introduce legislation if need be. It would, of course, have been for both Houses of Parliament to consider the merits of such legislation. There were no threats. Just imagine the outcry there would have been—[Interruption.] No threats. Imagine the outcry there would have been had I refused to be open with the

  729
  regulator or had I misled him about the Government's intentions. There would have been cause for complaint and cause for the Opposition to raise the matter in the House, but that was not the case. It was raised in discussion by the regulator, and I gave him a factual reply.
  Several hon. Members rose—
  Mr. Byers: I am not giving way, because I want to get points to do with the allegations on the record.
  Most importantly, the regulator himself, in his evidence before the Select Committee, clearly did not feel threatened in any way. As he told the Select Committee, for him it was business as usual. It was clear that he did not feel that his independence had been undermined and clear that he retained his independence unless and until it was removed by Parliament.
  Several hon. Members rose—
  Mr. Speaker: Order. The Secretary of State has said that he is not giving way.
  Mr. Byers: The regulator told the Select Committee that he informed the chairman of Railtrack on the evening of Saturday 6 October that if an application was made to him for an interim review, it would be considered and it would be possible for the regulator immediately and publicly to announce that he had begun such a review. That all took place on the evening of Saturday 6 October, the evening before the High Court considered my—
  Miss Anne McIntosh: On a point of order, Mr. Speaker. I have a transcript here, which I understand is—
  Andrew Bennett: A shareholder.
  Miss McIntosh: Yes, I am a shareholder in Railtrack, Eurotunnel and First Group.
  I have in my possession a transcript, which I understand was not made available to the public. I am not sure of its status, but it is not the evidence taken by the Committee.
  Mr. Speaker: Order. Those are matters for debate. Hon. Members can rebut what the Secretary of State has said.
  Mr. Byers: If the hon. Lady is challenging the accuracy of the transcript, that is a matter for the Select Committee.
  Miss McIntosh: Will the Secretary of State give way?
  Mr. Byers: If it is on a point of clarification, then of course.
  Miss McIntosh: I am most grateful to the right hon. Gentleman. I shall not enter into the semantics of whether it was a threat or a promise to act. The evidence that we took from the Rail Regulator was that his ability to intervene and apply for an interim review was completely
  730
  neutralised. Why did the Secretary of State take away the independence of the only person able to protect the investment in Railtrack?
  Mr. Byers: Two issues are important here. First, only this House and another place could take away the independence of the regulator.
  Secondly, it is alleged that I somehow took away the regulator's independence so that he could not act. The evidence given by the Rail Regulator is precise on this point. On Saturday evening, 6 October, the regulator is phoned by the chairman and the chief executive of Railtrack. They ask him, "Can you conduct an interim review?" He says, "Yes, I can." That is what the Rail Regulator said last week in evidence before the Select Committee. The Rail Regulator told the Select Committee that, if an application were made to him for an interim review, he would consider it and
  "it would be possible…immediately and publicly to announce"
  that he had begun that review.
  The following day, my petition was heard in the High Court. No move was made to oppose my petition for railway administration.
  Mrs. May: As ever, the Secretary of State has been careful in choosing his words and in quoting the Rail Regulator. Will he confirm that the Rail Regulator went on to say to the Select Committee:
  "but I did not think it would be possible for me to complete it in 24 hours over a weekend"?
  That is what he had told the chairman of Railtrack.
  Mr. Byers: I do not know who advised the hon. Lady to put that quote in the public arena, but the truth is this: had Railtrack applied for a review on the Saturday evening, which is what the regulator indicated that he would be prepared to accept, then—this is the crucial point—on the Saturday evening, the regulator would have made public the fact that the review had begun. On the Sunday afternoon, the High Court judge, knowing that a review had commenced, would probably not have granted the petition. That is the situation.
  However, on that Sunday afternoon, Railtrack attended the High Court with counsel, and I presented my petition. Railtrack did not oppose the petition. Had Railtrack refused—
  Mr. Bernard Jenkin: You refused it.
  Mr. Byers: For the benefit of Opposition Members, I cannot refuse an interim review. On the evening of Saturday 6 October, the Rail Regulator indicated to Railtrack that he would be prepared to conduct a review, or consider it, if an application were made. No such application was made by Railtrack.
  Andrew Bennett: Does my right hon. Friend accept that it seems incredible that Railtrack, knowing immediately after the Hatfield disaster that it might have financial difficulties, did not consider going to the Rail Regulator and asking for a review, but preferred to try to negotiate with the Government? If Railtrack was really

  731
  concerned to protect its shareholders, should it not at least have approached the regulator before that date, almost 24 hours before the order was made?
  Mr. Byers: Those are issues for Railtrack rather than for me, as Secretary of State. People will no doubt want to raise questions about the conduct of Railtrack.
  Geraint Davies: Will my right hon. Friend give way?
  Mr. Byers: No, because I want to put on the record exactly what happened, in answer to the serious allegations that have been made by the hon. Member for Maidenhead.
  The final point that the hon. Lady made was that, somehow, I had kept my approach, and the possibility of legislation, secret from the House. That is a serious allegation. I have made no secret of our position. It was disclosed in a letter from our financial advisers, which formed part of our evidence to the High Court on 7 October. That same letter was one of a number of papers placed in the Library of the House on 23 October—so much for keeping it secret. It was placed in the Library on 23 October—a big secret. More important, on 2 November, the shadow Minister for Transport, the hon. Member for Brentwood and Ongar(Mr. Pickles), received a parliamentary reply from my right hon. Friend the Minister for Transport drawing his attention to the fact that the papers had been placed in the House of Commons Library. [Interruption.] No, it was not after the event. Clearly, there was a breakdown of communication between the beauty and the beast—[Horn. MEMBERS: "Who is the beauty?"] It is a close-run thing.
  There was clearly a breakdown of communication because last Wednesday 7 November, the hon. Member for Maidenhead said about the possibility of introducing legislation that it was a stark new piece of evidence. It had been in the House of Commons Library for over a fortnight. That is the reality. Therefore, the position in relation to the regulator is this: open and honest, no misleading of the regulator and the House kept fully informed of the Government's position.
  Mrs. Eleanor Laing: Is the Secretary of State in effect saying that he values the independence of the Rail Regulator, and that he will protect in perpetuity that independence? It is not what the Rail Regulator appears to have understood the Secretary of State to say when he said:
  "The Secretary of State said to me that if there were an application for an interim review he had the necessary authority to introduce immediate legislation to prevent the review taking place."
  That is a threat to independence. Is the Secretary of State now saying that he will protect the independence of the Rail Regulator?
  Mr. Byers: The independence of the Rail Regulator is a matter for the House. It is as simple as that. Conservative Members will be aware of that. That is the situation.
  Mr. Donohoe: Will my right hon. Friend give way?
  Mr. Byers: What happened is that, in conversation, it was raised by the regulator—
  Mr. Donohoe: Please.
  Mr. Byers: I had better give way.
  Mr. Donohoe: I make just two points. First, did the regulator not say last week to the Select Committee that
  732
  Railtrack at no time had ever approached him, and indeed, he felt that he was being cut out of the loop? Secondly, Railtrack thought that the Government were a soft touch and hoped to get the money out of the Government because it knew full well that it was never going to get it out of the regulator.
  Mr. Byers: As a member of the Select Committee, my hon. Friend will be aware of the evidence that was given last week. I think that he has accurately stated the regulator's position.
  One other major allegation was made by the hon. Member for Maidenhead—
  Mrs. May: Will the Secretary of State give way?
  Mr. Byers: No. I have given way several times to the hon. Lady. I want to go on to that particular point. I want to put on the record the response to her very important allegation that the £162 million that was legally due to be paid on 1 October was held back by the Government. I want to be clear about that, too.
  As part of the April deal, £337 million was due to be paid on 1 October, which the Government were legally obliged to pay. That was paid in full, every penny. on 1 October, but in addition, in April, all parties accepted that they would use their best endeavours to establish a special purpose vehicle called Renewco. It was recognised that it could be only on the basis of best endeavours because the arrangement could go ahead only if Renewco were not classified as being in the public sector. By 1 October, that condition had not been met, so the payment could not be made.
  However, the payment of the £162 million is a real diversion from the issues facing Railtrack. In discussions on restructuring, Railtrack made it clear that, even with the Renewco arrangement in place, Railtrack would still need additional Government support, and as my unchallenged petition to the High Court said, Railtrack would have a deficit of some £700 million by 8 December this year, and £1.7 billion by the end of March next year. Those were the figures. Railtrack's own view was that Renewco would not make a difference to those figures.
  Geraint Davies: Is my right hon. Friend aware that, as the Select Committee minutes show, on 7 October Tom Winsor said:
  "right up to the 5th October 2001"—
  which is the Friday before that Saturday—
  "I did not know that the company was claiming to government that it was in serious financial difficulties…The company's representations to my office were all consistent with the company having enough money to keep going until…sometime in summer 2002".
  In other words, Railtrack was misleading the regulator. That is why, as we have heard, Railtrack presented the new petition to the regulator.
  Mr. Byers: I think that when all hon. Members have the opportunity to go through the evidence and the regulator's statements, they will see that Railtrack did not avail itself of the possibility of an interim review although it was invited to do so by the regulator on the evening of

  733
  Saturday 6 October. The petition that I presented to the High Court was unchallenged although Railtrack and its counsel appeared in court.
  Chris Grayling: Will the right hon. Gentleman give way?
  Mr. Byers: No. I have been very generous in giving way, and I want to conclude my remarks because many other hon. Members wish to speak.
  The serious allegations have been addressed.
  Mrs. May rose—
  Hon. Members: Give way.
  Mr. Byers: The record will show that I have previously given way to the hon. Member for Maidenhead. [Interruption.]
  Mr. Speaker: Order. The Secretary of State has stated that he is not giving way, and that includes to Front Benchers.
  Mr. Byers: Hon. Members know that I am generous in giving way. I have already given way in this debate three or four times to the hon. Member for Maidenhead. I should now like to address the issue at hand, and specifically to examine Railtrack's stewardship of the railway network.
  My decision on 5 October to refuse further funding to Railtrack was not an easy one. However, I firmly believe that Railtrack was not part of the solution for our railways but a major problem. Let us consider Railtrack's stewardship. No asset condition register for the rail network is yet in place. Railtrack consistently opted not to invest in and maintain the network to a sufficiently high standard. Six months after Hatfield, more than 1,000 temporary speed restrictions were still in place. Costs on the crucial west coast main line project had leapt from about £2 billion to £6.3 billion under Railtrack's leadership, which is an increase of more than £4 billion.
  We had to say, "Enough is enough. Let us get to the root cause. Let us look at the structure and put it right, so that for the extra money that the Government are committing to railways, we will get a real return for the travelling public."
  The Transport, Local Government and the Regions Committee has made its concerns very clear. It said:
  "We…agree with the Rail Regulator's assessment, that Railtrack has not maintained and renewed the network to a standard which could reasonably be expected of it. Its past record is simply not acceptable."
  The Committee continued:
  "The system of managing contractors who carry out maintenance and renewal work on the railway through the system of 'cascaded safety cases' has been shown to have utterly failed. It is not just the system that has failed: Railtrack's management of its contractors has been woeful."
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  The Rail Regulator—the man who is responsible for regulation and for maintaining the railway network's independence—made the following points when asked whether he would have provided extra funding for Railtrack.
  Mr. Gregory Barker: On a point of order, Mr. Speaker. Is it not unprecedented for a debate of this importance to be held without the attendance of a single Cabinet member bar the Secretary of State?
  Mr. Speaker: Order. That is not a point of order.
  Mr. Byers: The advice that I gave to my Cabinet colleagues was not to be too exercised by a half-day Opposition debate. To be honest, most Cabinet members have far more important things to do than to listen to the rubbish that we have heard today from Opposition Members.
  I was about to give the House the benefit of the Rail Regulator's view on Railtrack. Asked whether he would have provided extra funds for Railtrack, he said that he had no duty or inclination to give taxpayers' money to a company to make up for its being inefficient and incompetent. It was possible, he said, that the company thought that if he would not give it money for being inefficient and incompetent, maybe the Government would. He thought that that was
  "an extraordinary judgement for the company to make".
  Mrs. May rose—
  Mr. Byers: No, I will not give way. The hon. Lady has had her opportunity: she has intervened four or five times, and she has not scored a hit so far.
  Interestingly, one group did very well out of Railtrack. We have heard about the dividends paid over the years £700 million—but the other group that did well was the directors of Railtrack. My hon. Friend the Member for Reading, West (Mr. Salter) gave the figures: the directors were paid more than £10 million between 1996 and 2001, including £1.3 million paid to Gerald Corbett, Railtrack's chief executive. This is the man who told Members of Parliament in the year before the crash at Ladbroke Grove that the tracks outside Paddington were safe. Lord Cullen described those comments as complacent or misleading.
  We have heard it all before, and we will hear it all again. This is the Tory privatisation culture that led the chief executive of Railtrack to tell Members of Parliament that the tracks outside Paddington were safe, which, according to Lord Cullen's investigation, was complacent or misleading. Two days after his report, which said that Gerald Corbett was complacent or misleading, Railtrack revealed the payment of £1.3 million. It is clear that the only things that Railtrack could get working on time were the executive compensation schemes.
  This country has the fourth largest economy in the world, but we do not have a railway service to match it. Action was needed to put the interests of long-suffering rail passengers first. They know that Railtrack has been at the heart of the problems experienced by the industry—a company that failed to offer an adequate service, and then came asking for yet more taxpayers' money.

  735
  The Tories, in this debate and previously, have backed the interests of a quarter of a million shareholders against the interests—[Interruption.]
  Mr. Speaker: Order. Hon. Members should not shout.
  Mr. Byers: The debate will show clearly that the Tories are backing the interests of 250,000 shareholders against the interests of 2.5 million people who travel on the railway network every day. They cannot come to terms with the fact that a failed privatisation has been ended by the Government.
  Delivering to passengers will now come before dividends for shareholders. Our people and our country deserve a railway system that is fit for the 21st century, and, no matter what the criticisms may be, we shall make the decisions that are necessary to enable that to happen.
  Mr. John Smith: On a point of order, Mr. Speaker. Can you offer me some guidance? I think that, during my right hon. Friend's speech, an Opposition Member intervened claiming to be a shareholder in Railtrack. I may have misheard, but I understood that that was what was being said. Given the nature of the debate—part of whose purpose is, I understand, to shore up the share value with taxpayers' money— is it in order for shareholders to take part in it, or not to declare an interest?
  Mr. Speaker: It is up to individual hon. Members to declare an interest. Additionally, I remind hon. Members that we must have some calmness in the Chamber.
  4.45 pm
  Mr. Don Foster: I begin by joining the hon. Member for Maidenhead (Mrs. May) and the Secretary of State in expressing sympathy to all who were affected by the dreadful air crash in New York yesterday.
  Given that so much desperately needs to be put right about our railways, it is regrettable that precious parliamentary time is being spent on a debate that is largely about who said what to whom, and when that was said. We have failed to address the key problems of our railways for far too long. It is a great pity that the Labour Government failed to act more quickly. It is also a great pity that, in this debate, we have not heard a single, solitary solution to the problems of the railways from any Conservative Member. Even worse, no Conservative Member recognises the nature of the real problems that faced Railtrack and that needed to be resolved. Despite the excellent work of many Railtrack employees, there were significant worries about the organisation, and reference has already been made to the matter of golden goodbyes. Although the Secretary of State referred to Gerald Corbett, he forgot to add that it was Gerald Corbett who apologised for Railtrack's failures.
  There have been numerous worries about Railtrack's repeated failure to meet each of the new deadlines that it set itself in order to get back to so-called normal following the Hatfield tragedy. There have been worries about the management and supervision of sub-contractors, and about cost overruns. Many people who saw the work of Railtrack at close quarters have expressed considerable worry. Much of the debate about Tom Winsor's evidence to the Select Committee on Transport, Local Government
  736
  and the Regions last week has been about whether he was threatened by the Secretary of State. Sadly, little attention has been focused on some of the Rail Regulator's other comments about precisely what he thought about Railtrack as an organisation. He said that he believed that they were the authors of their own misfortune, and that the core problem was the competence of the management of the company. He added that
  "I have no duty—and indeed no inclination—to give…taxpayers' money to the company for being inefficient or incompetent."
  Amazingly, the Rail Regulator went on to say that, for the life of him, he could not understand why a company that depended so much on its assets should have failed to produce a proper detailed asset register. He had to ask Railtrack on three separate occasions to produce voluntarily such an asset register and, when it failed to do that, he had to make its production obligatory. Tom Winsor was clearly worried, as were the train operating companies.
  It is worth reflecting that over the past four weeks—from 13 October—there has been a significant decline in passenger numbers on our railways. Approximately 2 million people have abandoned the railway system. Phil White, the chief executive of National Express, which is one of the largest train operating companies, was asked the reason for that. He made it clear that he blamed Railtrack and, not least, passengers' increasing frustration with the number of speed restrictions that are still in place.
  Of course something had to be done—not least because of the financial viability of Railtrack. In January, the company was placed on credit watch and then its credit ratings were dropped. On 18 February, Railtrack itself announced that it was significantly slashing its five-year investment programme. On 2 April, Railtrack went round with its now infamous begging bowl, asking for additional money.
  Chris Grayling: As the hon. Gentleman is giving the same speech that he gave in Westminster Hall this morning, perhaps I could make the same intervention that I made then. Does he agree that one of the reasons for the financial pressures on Railtrack was that the regulator had given the company what amounted to, in effect, a standstill budget for the next five years for repairs and maintenance of the network, despite the fact that the company was being asked to preside over a 50 per cent. increase in passenger numbers over the next few years?
  Mr. Foster: Let me shock the hon. Gentleman by giving him the same answer that I gave him in Westminster Hall: he will be well aware that, before that time, Railtrack had already decided to slash its investment budget. Furthermore, let me give him some additional information that I did not give him in Westminster Hall: it is clearly on the record in the Rail Regulator's evidence to the Select Committee that, on many occasions, he had made the offer to the company that it could come to him for a further review, but it failed to take up that offer. It is further evidence of real concern as to the competence of the management of the company that it failed to take up such offers.
  It is also important to consider what happened as we came nearer and nearer to the Secretary of State's decision. On 24 May, Railtrack reported an annual loss of £534 million and the share price fell by a further

  737
  3.7 per cent. Throughout the life of the company, the general trend of its share price has been downward. By 6 June, the share value had fallen so low that the company was ejected from the FTSE 100. Interestingly, one of the main commentators, A.B.N. Amro noted:
  "The full year results should leave investors in no doubt that their equity is in danger of being wiped out."
  It is a great pity that Railtrack's management did not warn shareholders of that situation.
  Amro also pointed out that Railtrack
  "has been valued on hope rather than fundamentals for too long".
  It was thus hardly surprising that, on 12 June, the Rail Regulator advised Railtrack to stop hawking its begging bowl around.
  In August, as the Secretary of State has already told us, Railtrack's own advisers suggested that there were only three options: restructuring, renationalisation or receivership. As all those problems were mounting, it makes perfect sense to those of us on the Liberal Democrat Benches that the Secretary of State had to act. He had to do something in the interests of the public.
  Although the Secretary of State must bear some responsibility for the way that he acted—as I shall explain in a moment—the shareholders, whose grievances have been so loudly expressed by Conservative Front Benchers, should be looking to the real author of their difficulty: not the Secretary of State, but mainly the management of Railtrack.
  I fully realise that many of those shareholders are Railtrack employees, but I hope that they will reflect on the interesting fact that on 25 July the company was prepared to hand out to its employees shares worth £5 million, but two weeks later began to develop plans to slash one in 12 of the work force. That is the measure of its regard for its employees.
  Mr. Michael Weir: I am interested in the point that the hon. Gentleman makes about the company's shareholders. In a previous life—in the latter part of last year—I was approached by a stockbroker who was advising one of my clients to invest in Railtrack. I pointed out that the share price was poor at that point, but I was told: "Don't worry about that, because the assets are much greater. Even if anything goes wrong, you'll be all right". The fact that such advice was being given to shareholders may be one factor, but they should have been aware of the falling share price even at that time.
  Mr. Foster: Indeed they should, and attention was drawn to that point on 25 July. The hon. Gentleman hits on an important point. I hope that the House will remember that the hon. Member for Maidenhead suggested that the shares were now completely worthless. That is simply not true, for the very reason that the hon. Gentleman gives; there are still significant assets available to shareholders.
  Mr. Byers: It is also important to make the point that there are effectively two companies. The first, Railtrack plc, is in administration. The other, Railtrack Group, is not in administration and the value in Railtrack Group is available to the shareholders of Railtrack.
  Mr. Foster: I am grateful to the Secretary of State for making that point, but we shall return in a minute to the
  738
  issue of the two companies and the confusion that has existed because of that. The Secretary of State is absolutely right to remind us that significant assets are still available to shareholders and those are the subject of on-going deliberations. The shares are not worthless, as the hon. Member for Maidenhead said.
  Our argument is that the Secretary of State was right to act. He was certainly right to decide that the solution was not one that involved pouring yet more taxpayers' money into this ailing and failing company. He was right also to seek to develop a solution that would end the conflict in a monopoly between shareholder profit and passenger safety. Something had to be done, and the Secretary of State's proposals to seek to develop a not-for-profit public interest company were definitely right.
  It is not surprising that we say that because, as far back as 14 February, we proposed that model to the Secretary of State. The week after we made our proposal, the Institute for Public Policy Research made a similar proposal. I acknowledge that the solution was the right one, but I fear that the way in which this has been handled, in part by the Secretary of State, may mean that following a botched privatisation, we are in serious danger of botching the solution with which he has come forward.
  Dr. John Pugh: Does my hon. Friend agree that the Secretary of State could have exonerated himself from the charge of planning renationalisation by pointing out that nobody would willingly and with premeditation cause as much confusion in the railway industry as he has by his actions?
  Mr. Foster: I am grateful to my hon. Friend and I will come on to why I believe the Secretary of State, having got the right solution, has caused great confusion. Partly that was because the Secretary of State had to rush into making the decision. For a long time, the Labour party—particularly when in opposition—railed against the Conservative Government's privatisation of the railways. One had the impression that, once in Government, Labour would take some serious action to address the problems. But, in practice, they did very little in their first term of office.
  There were times during their first term when one began to wonder whether they had changed their tune and were now great fans of privatisation. Within two years of coming into office in 1997, the Labour Government Foreign and Commonwealth Office—in collaboration, interestingly, with the Department of Trade and Industry—produced a booklet from the UK Railway Sector Group entitled, "Releasing the Power of Rail". That certainly did not criticise the Conservative party's privatisation of the railways. It is perhaps worth noting that the booklet was intended for overseas consumption, and not for consumption in this country.
  Mr. Geoffrey Clifton-Brown: The Liberal Democrats are long on criticism but short on solutions. Since his party was so clever as to propose a not-for-profit company in February, will he now tell us how the Liberal Democrats would lever in £30 billion of private money under such a not-for-profit company?
  Mr. Foster: If the hon. Gentleman will be patient, I will come to that. I was critical of his party for failing to

  739
  come up with any solutions, so it is clearly incumbent upon me to give some suggested solutions to the problem. I have every intention of doing so in a few minutes.
  Mr. Andrew Mitchell: Will the hon. Gentleman give way?
  Mr. Foster: No. I want to quote from the booklet, because it shows the problem that the Labour Government had in reaching a solution. The booklet, intended for overseas consumption, was hardly critical of privatisation when it said things such as:
  "Railways are back…Trains are cleaner, safer and often a good deal faster…There is new energy and enthusiasm in the industry."
  It even boasted, despite what it now says about fragmentation:
  "There are now 25 operating companies, instead of just one"
  and concluded:
  "The arrival of competition has produced a surge of talent and innovation."
  Therefore the problem was that there was a schizophrenia in attitudes to privatisation in the first term of a Labour Government.
  In the second term, after the general election, there still was not the glimmer of an intention, even by a new Secretary of State, to act. On February 14, when we produced the proposals that the hon. Member for Cotswold (Mr. Clifton-Brown) mentioned, my right hon. Friend the Member for Ross, Skye and Inverness, West (Mr. Kennedy) had raised the proposals at Prime Minister's questions, and received from the Prime Minister the bizarre answer:
  "I do not know what the right hon. Gentleman means by a not-for-profit organisation".—[Official Report, 14 February 2001; Vol. 363, c. 308.]
  Obviously, that solution was not even a glimmer in the Government's eye at the time.
  Much later, in June, that solution was still not being planned—nothing was afoot—because the Department's press release No. 285, of 18 June, had an interesting heading: "Government Pledges Certainty to allow the Industry to tackle the tough job ahead on our railways" and the Secretary of State was quoted in it as saying:
  "So I am not going to embark on big structural changes. What the industry needs now is a period of stability and certainty so it can concentrate on the vital job of delivering safe, reliable services for passengers and freight."
  In July, as the situation continued to worsen, Liberal Democrat Members again made attempts to persuade the Secretary of State to push the not-for-profit model. On 3 July, at Department for Transport, Local Government and the Regions questions, I asked the Secretary of State:
  "Will he reconsider his decision to make no major structural changes and examine proposals for bringing the parts of Railtrack that directly"
  relate to running
  "the railways into a not-for-profit public interest company?"
  The Secretary of State had an opportunity to reply, and he did. He said, interestingly. that the proposals would require legislation; we have heard nothing about any need for legislation now. He then said of the proposals:
  "They would simply introduce paralysis into the system, when we want genuine improvements"—[Official Report, 3 July 2001; Vol. 371, c. 137.]
  740
  In July, therefore, there was no intention to follow our proposals and yet, despite all that confusion, by 5 October the Secretary of State—and, presumably, the Prime Minister—had done a huge U-turn and decided to do so. The problem was that everything had to be done in such a rush that, effectively, the Secretary of State had to adopt the nuclear option approach, instead of taking the time, as we proposed in our document, to have discussions with Railtrack about that option—something that Railtrack's advisers proposed could be discussed with the Government as early as the middle of August.
  Mr. Redwood: Is it Liberal policy to give any compensation to either or both shareholders and bondholders? What is the Liberal party's estimate of the costs of strengthening the balance sheet, paying the current bills, sorting out the administration and giving the new not-for-profit company a strong enough foundation? Would it not be a very expensive matter?
  Mr. Foster: I shall answer the second part of the right hon. Gentleman's question in a minute. In answer to the first part of the question, we have made it absolutely clear that we do not believe that any additional Government—that is, taxpayers'—money should be put into supporting the shareholders. We recognise absolutely that a significant value remains in those shares as a result of the assets that still remain available to them, and that matter is being discussed at present. However, as many hon. Members have said, people holding shares should be aware that their value can go down as well as up. Anyone who had followed the value of Railtrack shares over a long period would have seen exactly where they were heading; the graph shows it clearly.
  Mr. Robert Syms: Will the hon. Gentleman give way?
  Mr. Foster: No.
  However, if the Secretary of State had to rush into his decision, there is also some confusion as to precisely what that decision is. On 15 October, having said that he was going to try to make changes, he said:
  "We shall propose to the administrator that a private company limited by guarantee be established to take over Railtrack's responsibilities. Any operating surplus it makes will be reinvested in the railway network…As it would have no shareholders, we would remove the conflict between the need to increase shareholder value and the interests of rail passengers."—[Official Report, 15 October 2001; Vol. 372, c. 955.]
  It is clear from that that the proposal was one that the Secretary of State was putting to the administrator. However, on 5 November, in an answer to his hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), he said:
  "Now we can move forward and put in place a structure whereby, because it will be a not-for-profit organisation, any operating surpluses can be used for the interests of the railway network."—[Official Report, 5 November 2001; Vol. 374, c. 241]
  At that point, the Secretary of State is stating definitely what the structure will be. However, on 6 November, in his speech to the Confederation of British Industry, he said:
  "But the company limited by guarantee is only one possible model."

  741
  There is considerable confusion, so I hope that the Minister who winds up the debate will provide a clear explanation. My understanding is that the administrator is entirely independent, and that it is for the independent administrator to decide whether or not to establish the model that both the Secretary of State and the Liberal Democrats want.
  Chris Grayling: Will the hon. Gentleman make clear his party's policy on the not-for-profit company? He has said that he would not countenance compensation from the public purse being given to shareholders, but if he rolls back the clock to the summer, when his policy was to pursue that option, did he expect that the company's assets would be confiscated through an administration order, as the Government have done?
  Mr. Foster: No. I am more than happy to share with the hon. Gentleman a copy of the document that has been publicly available since 14 November. It sets out three stages, the first and most sensible of which would have been to hold discussions with Railtrack. Given that that sector of its overall activities was making a huge loss, it is not unreasonable to suppose—as the company's advisers hinted during the August discussions with the Government—that the company might have wanted to pursue that option with the Government's support. The hon. Gentleman can read about the other stages.
  There is one other area in which the Secretary of State is guilty of causing some confusion. Just a few minutes ago, he intervened to remind the House that there are two separate organisations: Railtrack Group and Railtrack plc. He is absolutely right to say that the distinction between the two is crucial to understanding what happened.
  When I raised that specific issue during the discussion following the private notice question on 5 November, the Secretary of State replied:
  "Some of the confusion has been caused by the fact that there are two companies: Railtrack plc, which holds the licence to operate the network and which is in administration; and Railtrack Group, which is not in administration and is still run by the directors of Railtrack."—[Official Report, 5 November 2001; Vol. 374, c. 24.]
  That is clear. The implication is that it is everyone else, not the Secretary of State, who is confused about the distinction between the two bodies. Yet in his statement to the House on 15 October, he made specific reference to Railtrack on no fewer than 30 separate occasions, on 29 of which he referred only to "Railtrack" and made no distinction between Railtrack plc and Railtrack Group. On only one occasion did he refer to Railtrack plc. Perhaps most significant of all is that part of the statement in which the right hon. Gentleman spoke about what was being put into administration. He said, not Railtrack plc, but
  "Railtrack was taken into administration because it was, or was likely to become, unable to pay its debts."—[Official Report, 15 October 2001; Vol. 372, c. 955.]
  I do not accept that it is worth spending much time debating issues of who said what to whom and when. I genuinely believe, however, that the way in which the Secretary of State has handled the issue has led to some of the confusion. My biggest fear is that, because of the confusion, the new vehicle that the right hon. Gentleman
  742
  hopes will be agreed by the administrator—the not-for-profit public interest company—may have real difficulty in attracting private investment. That is the key concern.
  The hon. Member for Cotswold asked me what the Liberal Democrats would do about this. We have always made it clear that we believe that a not-for-profit public interest company should be able to raise bonds, but those should be Government backed. The Government are creating huge problems for themselves because of their obsession with the public sector borrowing requirement. The only successful way to move forward is by the approach I have outlined.
  Mrs. May: I am grateful to the hon. Gentleman for giving way and for responding to my hon. Friend the Member for Cotswold (Mr. Clifton-Brown). The hon. Gentleman has just said that the bonds would be Government backed. Presumably, that means a Government guarantee. How big a guarantee would he expect them to give? Would it be for the full £34 billion?
  Mr. Foster: The hon. Lady must consider the sums of money that would be required. As she is well aware, there are normally three ways to borrow money. The first is for the Government to borrow directly, which is the cheapest way and that is why a number of people want the complete renationalisation of Railtrack. The most expensive way is to borrow on the open market. The middle way—if one dare use that phrase—is to do it with Government guarantees. That would seem to be the most likely way to ensure that the money is produced.
  Mr. Eric Pickles: How much?
  Mr. Foster: The hon. Gentleman referred to the 1 per cent. and 2 per cent. returns that would be required in an earlier debate, so I will not go into that now.
  Mr. Gerald Howarth: Will the hon. Gentleman give way?
  Mr. Foster: No. I want to finish now as many other hon. Members want to speak.
  I end where I began. A great deal needs to be done to put right the problems on our railways. We should be debating not who said what to whom and when, but how we are to move forward with this new model for Railtrack: how to reduce fragmentation in our railways and find ways to put the track and trains together; how to get rid of the perverse penalty system; how to tackle the real problem of ridiculously high fares, which are some of the highest in the world; how to make more of our stations safer; and how to integrate trains and other forms of travel. Those are the questions in which the travelling public are interested. They want a safe, reliable and affordable railway and they want it quickly. Today's debate has not moved that on one iota.
  Several hon. Members rose—
  Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next speaker I remind the House that a 12-minute limit on Back-Bench speeches applies from now on. I call the hon. Member for Weaver Vale (Mr. Hall).
  5.13 pm
  Mr. Mike Hall: First, I offer my condolences to the families of those killed in the air crash in New York yesterday. It is right and proper for hon. Members to realise the gravity of that accident and to offer our condolences.
  I thank you, Mr. Deputy Speaker, for calling me to speak in a debate that has, ostensibly, been called by the Opposition to scrutinise the role of my right hon. Friend the Secretary of State for Transport, Local Government and the Regions in placing the administration order on Railtrack.
  We could look at the debate in a completely different light and see that it is a smokescreen intended by the Opposition to block out why we are debating the issue in the first place. It was the Conservative Government's privatisation of Railtrack that has left us where we are this afternoon.
  The start of the debate was interesting. The hon. Member for Maidenhead (Mrs. May) had the opportunity to explain Conservative party policy towards public transport in general and the railways in particular. She failed to do so and instead launched a personal attack on my right hon. Friend the Secretary of State. That attack was unwarranted. She did not make the case and, at the end of the debate, we will see clear support for his actions in the Lobby, which is right and proper.
  Clearly, the Tory party does not want to debate the failure of Railtrack because it was the architect of that failure. In 1993, the Conservatives were responsible for the legislation that paved the way for Railtrack and they proceeded with the flotation of the company on 20 May 1996.
  I am conscious of the fact that I have not spoken in the House for a while, but I have listened to an awful lot of debates. The Tories' contribution to this afternoon's debate qualifies them as a top candidate for the brass neck of the year award. The way in which they have broached the issue is breathtaking.
  Mr. Pickles: The hon. Gentleman is reading from a prepared speech.
  Mr. Hall: Of course I am. It is a long time since I have spoken in the House, and I am being careful about my remarks. Earlier today, I noticed that the hon. Gentleman was reading out his speech from the Dispatch Box in Westminster Hall.
  Mr. Pickles: There is no Dispatch Box in Westminster Hall.
  Mr. Hall: But the hon. Gentleman read out his speech.
  This is an interesting debate. Railtrack came to my right hon. Friend the Secretary of State and asked for a blank cheque to oversee the running of the company not just for this year, but for many years to come. It is interesting that a public company should come to the Government and say, "Please will you give us a blank cheque to cover our operations." It is not the Government's role to underwrite companies on the stock exchange, nor is it their role to
  744
  give further subsidy to a company that has had so much Government money in the past five years that it should not have had to go to the High Court.
  Chris Grayling: Will the hon. Gentleman give way?
  Mr. Hall: Not at the minute. If the hon. Gentleman will allow me, I will develop my argument. If I do not cover the point that he wishes to make, I am prepared to give way to him later.
  When the previous Government floated Railtrack on the stock exchange in 1996, it should have had a secure future. It had a valuable property portfolio and an annual guaranteed income stream of Government subsidy worth £1.8 billion. Why did it need to come to the Government after five years, during which it must have received £8 billion, to ask them to prevent it from being put in a position in which it might be trading insolvently and in which it was certainly unable to cover its costs.
  Chris Grayling: Will the hon. Gentleman give way?
  Mr. Hall: Not just yet; the hon. Gentleman must be patient. If he catches your eye, Mr. Deputy Speaker, he may get the chance to speak. There is a time limit on this debate, and I am conscious that many Members want to participate in it.
  Railtrack ultimately failed because privatisation by John Major's Administration was a rushed, botched and incompetent exercise that failed to deliver value for money for taxpayers. Specifically, it gave shareholders confidence in an unsound company and left the travelling public saddled with an inefficient and unsafe railway network.
  Mr. Clifton-Brown: The Government have had four years to sort it out.
  Mr. Hall: Things take time. If the privatisation had not been botched in the first place, we would not have needed to use so much public money to sustain that public limited company. Today, we have not had any apologies from the Opposition for the way in which they privatised Railtrack.
  Matthew Green: Will the hon. Gentleman give way?
  Mr. Hall: Not at the moment.
  We should receive at least some apology from the Opposition for the way in which they dealt with privatisation and for putting the travelling public in a difficult position. Right from the start, the Tories' motivation for privatising Railtrack was not difficult to discern. It was not to maximise receipts for the Treasury or make sure that the travelling public had a safer or more efficient railway—as my right hon. Friend the Secretary of State said, they were motivated by pure party political dogma.
  I do not expect the House to take my word for that. I urge Members to read the twenty-fourth report of the Public Accounts Committee, from the 1998–99 session. The House will recall that Railtrack was floated on 20 May 1996, as I said, and shares were issued at £3.90. The offer was oversubscribed by 10 per cent. and the Government raised £1.9 billion from the sale. Like many preceding

  745
  privatisations, the sale of Railtrack was characterised by the fact that the company was undervalued, shares were underpriced and taxpayers were ripped off. It is no wonder that the PAC said that Railtrack
  "had been undervalued and sold in haste".
  It is clear, even to the most partial observer in the Chamber, that the sale of Railtrack was not motivated by a desire to drive up standards in the railways, and certainly not by a desire to maximise profits for the Government—it was motivated by pure party political dogma.
  On 15 February 1999, in evidence to the Public Accounts Committee, Sir Richard Mottram, the permanent secretary at the Department of the Environment, Transport and the Regions, told the Committee that
  "in the political circumstances of that period, a 100 per cent. sale was required".
  The circumstances to which Sir Richard referred, as confirmed in the twenty-fourth report of the Public Accounts Committee, were that the Tory Government had decided to sell 100 per cent. of the shares in Railtrack because of the prospect of a Labour victory in the pending general election.
  I have no doubt that I am right. Sir Richard Mottram is a highly regarded, top-ranking civil servant. His evidence to the PAC was given impartially and provides irrefutable proof that Railtrack was privatised for political purposes. The report also confirms that the aim of privatising Railtrack was to give shareholders the best possible deal. The House will realise that the Tories failed to achieve that.
  At the time that Railtrack was privatised, it was described as having a secure and profitable income stream; a large asset base, including a substantial property portfolio; scope to reduce costs; and considerable investment potential. The Tory Government went even further and guaranteed the company an annual income of £1.8 billion, wiped off £1.4 billion of debts and offered the shareholders, in their first year, a return of 19 per cent. on their investment. Over the past five years, Railtrack has enjoyed about £8 billion of hard-earned taxpayers' cash, but in the same period the travelling public have suffered enduring delays in services, increased travel costs and misery at the hands of a privatised company.
  Anyone who has had the misfortune to travel on the west coast main line will confirm that the two major problems facing the line are that the track is totally inadequate and the signalling is in urgent need of modification and major investment. The west coast main line connects the north-west and Scotland to London. It is in a deplorable state. I cannot tell the House how much the economy of the north-west has lost as a result of the state of the line, but one thing is certain: because of the way in which Railtrack has handled its affairs, the prospect of the west coast main line being improved and upgraded under its stewardship has been no more than a pipe dream. The cost of that project has risen to more than £6 billion.
  Chris Grayling: Will the hon. Gentleman give way?
  Mr. Hall: I give way to the hon. Gentleman, whom I have come across before.
  Chris Grayling: The hon. Gentleman is presenting a black picture of Railtrack and its capabilities. If that is the
  746
  case, why did his Government choose to make Railtrack the principal investment vehicle for their 10-year plan for rail?
  Mr. Hall: That is an important question. Railtrack was the company that owned the track at the time that the 10-year rail plan was introduced. It was not until the early part of this year that Railtrack told the Government that it was facing severe financial difficulties. That is the straightforward answer. It would have been stupid not to include in the 10-year plan the company that owned the track.
  I beat the Conservative candidate in Warrington, South by only 191 votes in 1992. The hon. Gentleman fought the seat in 1997 and lost to my hon. Friend the Member for Warrington, South (Helen Southworth)— [Interruption.] I had not gone on the chicken run by then.
  How could a company like Railtrack find itself in such financial difficulty? With all that public money, why could it not invest in the rail and provide a brighter future for people who travel on the railways? There are two possible answers: at the time of privatisation, either the then Government did not know the state of disrepair of the track, or they knew the state of disrepair but did not tell anybody. The investment problems that Railtrack has experienced since the Hatfield disaster have brought it to its present state. If the then Government sold Railtrack without knowing the state of the track, that is one thing, but if they knew about the state of the track and did not tell anybody, that is criminally deceptive. That question needs answering.
  The next question that needs answering is why, once Railtrack was a publicly owned company, it did not carry out an investigation into the state of the track to find out what liabilities it had taken on? It might then have been able to plan a way forward to prevent the position in which it now finds itself. It might have been able to put a plan into action to build, over time, a railway that was efficient and effective for people to travel on.
  I am not sure what the answer is, but one thing I know for sure is that Railtrack did not tell its shareholders about the state of the company when it went to see the Secretary of State to ask for more money. I am certain that it knew that it would find itself unable to meet its debts, and therefore went to the Secretary of State. He has made the right decision, which is why the Tory party is on the wrong side of the argument this afternoon. We must take forward Railtrack in administration, find a secure future for it and ensure that the travelling public are better looked after.
  5.25 pm
  Mr. Kenneth Clarke: The Secretary of State was typically calm in the face of this afternoon's attack and the Back Benchers who came in to support him were extremely boisterous in that support. I am afraid that that merely arouses further my alarm about the future of the railways. I do not think that Labour Members appreciate just how much damage has been done. The blunders and behaviour of the Secretary of State will have lasting consequences which will be felt in more than one area.
  One important area, which we have debated this afternoon, is the damage done to shareholders' interests. It is plain that the Secretary of State remains unrepentant.

  747
  I am sure that it will be further explored not only in this debate but by the Financial Services Authority and, in due course, by the courts. The way in which the Secretary of State has behaved would bring considerable retribution on anyone in the private sector involved in the affairs of a publicly quoted company who behaved in such a way towards the markets and the company's owner.
  The damage that is obviously not appreciated by the Secretary of State or by Labour Back Benchers is that done to the future prospects of the railways. We should remind ourselves that there is probably widespread agreement in the House that the dominant issue to be addressed is how we are to raise the vast amounts of investment required to modernise the railway system and provide the travelling public with what they require. There is a need for £35 billion of private investment, on top of which it is likely that a lot of public investment will be required. No one listening to this debate could appreciate that that statement is supposed to be agreed to by the Labour party with the same enthusiasm with which the Conservatives and Liberal Democrats endorse it.
  In order to raise huge amounts of private investment, it is extremely important that the markets respond to the appeal and that the investment should be delivered in good time—parts of the railway network are probably deteriorating as we speak. It should also be delivered at reasonable cost to the taxpayer and the travelling public who have, in part, to service the return on that investment, and it must be invested efficiently to provide high quality service delivery to the public.
  The Government have gone backwards on all those counts. The way in which they have treated Railtrack and handled the events of the past few weeks has gravely damaged the potential to raise that sum of money at all, let alone in time.
  Dr. Pugh: Will the right hon. and learned Gentleman give way?
  Mr. Clarke: No, because I am speaking to a strict time limit, otherwise I would do so with pleasure. I will touch on what the hon. Member for Bath (Mr. Foster) said in a few moments.
  The Secretary of State's behaviour—his whole demeanour as well as his argument—shows me that he has learned nothing whatever either from his short time in office in this particular post or from the fact that the Government have, in more than four years, made remarkably little progress towards their ambition of getting the required private investment into the railways.
  As the hon. Member for Bath said, the Secretary of State rushed into the decision. Looking at and listening to the Secretary of State, and it is the second time recently on this subject that I have done so, I think that he is enjoying it. I think that he thought that this would be a popular decision, which would play well with Labour Back Benchers. It is playing well with some of them, and I will come to that in a second—they will come to regret it.
  Railtrack had been so vilified by members of the Government and their supporters that the right hon. Gentleman thought that insolvency would be greeted as a kind of public service, because fat cats who had caused accidents were being dispatched. I suspect that he even rushed out his announcement to ensure that it was not
  748
  stolen from him by someone such as the Chancellor of the Exchequer, trying to take the credit for an announcement that was very popular with old Labour or those who still have some vestige of old Labour instincts.
  The fact is that that instinct of the Secretary of State and of some of the hon. Members who have spoken is contrary to the Government's declared policy position. Since the moment when they came into office, the Government have never espoused the cause of renationalising the railways, because they know perfectly well that they have not the slightest prospect of raising the sums involved or of getting the quality of management that would be required if they ever reverted to a nationalised railway. Their policy is to make investment in the railways so attractive that it will continue to bring in the funds that are required.
  I am genuinely indebted to the hon. Member for Bath, as I was not previously aware of the pamphlet that the Government published in their first term extolling the virtues of privatisation as it had progressed thus far, two years into office. The pamphlet needs to be commended to people such as the hon. Member for Weaver Vale (Mr. Hall), who is responding in the way in which the Secretary of State wants his Back Benchers to respond. He made a speech that he could have made before 1997 or when he was fighting the election that year. He still thinks that the whole point is to vilify the privatisation process and to suggest that making profits out of private investment in railways causes accidents and reduces the level of service to the public. However, that is completely contrary to the direction in which the Government wish to go.
  As my hon. Friend the Member for Maidenhead (Mrs. May) pointed out, that argument is also completely contrary to the evidence and facts for the first two or three years. The Government's pamphlet was well supported by the evidence. Following privatisation, usage of the railway soared. Indeed, that turned out to be one of the problems, given the old-fashioned infrastructure. I think that passenger usage increased by about 35 per cent., although I am speaking from memory, for which I apologise. Freight usage increased by about 45 per cent., trains became more punctual and the safety record improved. Hence, the virtues of the approach were extolled to people overseas.
  The Labour party never quite learned from that and still has not done so. It was hostile to privatisation and it hankers to go back to more public sector control. I think that the Prime Minister and the Chancellor of the Exchequer have adopted the principles of privatisation and the private finance initiative, but, alas, their party has never done so. Indeed, even some of their Ministers have never really adopted those principles and do not approve of them.
  That is why the Secretary of State should be careful before he gets too happy about his fate this evening. He may have every confidence in the Government Whips or think that there are only small numbers in the Conservative party, and he may get favourable write-ups in sections of the press—however, no Cabinet Ministers are here. Understandably, there is no sign of the Prime Minister or the Chancellor of the Exchequer. If I were the Secretary of State, I would look out for them as soon as the first reshuffle occurs. I do not think they are pleased with his work, as something must be done to deliver improvement on the railways. That is meant to be the

  749
  second-term duty of the Government, who say they want to deliver noticeable improvements in the quantity of public service, but, as hon. Members may gather, they have gone in the opposite direction and are gravely damaging the prospects of raising the private sector investment that they want.
  The Deputy Prime Minister followed exactly the same pattern when he was responsible for these matters in the previous Parliament. He was hostile to the people with whom he should have been working from the moment when he took over responsibility for the railways. He enjoyed any discomfiture on the part of the companies or those who were responsible for them. He was inclined to intervene too much and to encourage over-regulation, which was one of the factors that inhibited the progress of the privatised railway companies. Of course, he found the same problem—he was attacking the companies that were supposed to be raising the capital that was necessary to deliver the Government's policy.
  The actual disaster that hit the finances of all the privatised companies was the aftermath of the railway accidents. The Government ordered inquiries, whose results I accept. They discovered management errors of the sort that occur in all organisations. However, the Government were content to allow the conclusion to be drawn that privatisation was somehow causing the accidents. The politicisation of railway accidents quite obviously meant that the reaction to the Hatfield crash was wholly excessive. The whole network was closed down for months and the finances of Railtrack and the operating companies have never been able to recover from that blow. Yet sections of the Labour party rejoiced, because they thought that the reputation of privatisation was being damaged again by those consequences.
  The present Secretary of State, in his short time in office, has sought to make matters worse. The operating companies have been offered shorter franchises, which make it less likely that they will be able to raise the capital for more modern rolling stock. He has got rid of the people who should be helping him. He sacked—in effect—Sir Alastair Morton, with whom I worked on developing the private finance initiative—now the Government's policy—in the first place. Sir Alastair Morton is a very difficult man to work with: that is why I used to have him there. He has fear of no one—he gives Ministers his own opinion, and he gives their officials his own opinion.
  That was all wrong for new Labour, and the best public servant it had was sacked. He was replaced by other public servants who were also difficult. Tom Winsor, the Rail Regulator, is now at odds with the Government over his account of what happened. That is a matter of pure semantics, as my hon. Friend the Member for Maidstone said. [HON. MEMBERS: "Maidenhead."] Yes; they are a little different. The idea is absurd that the independence of the regulator is intact, when a Secretary of State with a huge majority says that if the regulator seeks to intervene further, legislation will be passed to curb his powers. That was an absurd intervention on the powers of the regulator by the Secretary of State, designed to deliver his chosen objective—the closure of Railtrack.
  The Secretary of State has fallen out with all those people. He must have had a say in the choice of the directors of Railtrack, with whom he is now at war. That
  750
  goes on. Now he wants to put a not-for-profit company, which he is unable to explain, in a position in which the same shareholders will come back to put up the money again and put themselves at the mercy of his behaviour again.
  I conclude with the point with which I began. I do not think that it has crossed the Secretary of State's mind to consider the damage that he has done to the future of the railways and to the service that is likely to be given to the travelling public.
  5.37 pm
  Mrs. Louise Ellman: It is wholly appropriate that the Conservatives have brought the issue of Railtrack to the Chamber today. A better use of their time and ours, however, would have been to debate the possibility of a public apology by the Conservatives for their botched privatisation of our rail system, and to debate constructive proposals on how we might restore a rail service that meets the needs of the travelling public whom the right hon. and learned Member for Rushcliffe (Mr. Clarke) mentioned. We certainly do not have such a service at the moment.
  Railtrack was, from the beginning, part of a botched privatisation. Some of my hon. Friends have already referred to the conclusions of the National Audit Office's report, and to the £6 billion shortfall in valuation between what was obtained and what was due to the public. Railtrack was part of a flawed system of privatisation that separated wheels from rail and fragmented the public transport rail system. Worse, Railtrack soaked up public subsidy as the beneficiary of at least £9 billion of taxpayers' money. It paid out £10 million to directors and £700 million to shareholders.
  Mr. Pickles: Will the hon. Lady give way?
  Mrs. Ellman: I am sorry, but there are time constraints in this debate. I might give way later.
  In the uncontested petition made to the High Court by the Secretary of State, it was shown that the company had a projected deficit of £700 million by December, rising to an anticipated £1.7 billion by the end of March next year. Are the Conservatives seriously saying that the Government should have been prepared to give more to a company in such a financial state? It was eating up taxpayers' money and failing to deliver. It wanted unidentified amounts of money—open-ended cash supplies—and had predicted deficits that were not challenged in the petition to the High Court. To have done so would have been a dereliction of public duty.
  We should consider what Railtrack has failed to achieve. I will make particular reference to the west coast main line, because as hon. Members have said, that is an important issue, especially to the north-west region. The Transport Sub-Committee discussions made a number of things clear. They showed that, before Railtrack was placed in administration, discussions took place between Railtrack and Virgin, and that compensation to Virgin was considered because of Railtrack's failure to modernise the west coast main line as promised.
  During the Sub-Committee discussions, £300 million in compensation which Virgin thought was due to it from Railtrack was mentioned. Indeed, I have heard reference to larger sums. In addition, reference was made there and

  751
  elsewhere to the fact that Virgin sought rail ticket price increases as part of the compensation package. Virgin considered that it had lost money because of the failure to modernise the west coast main line.
  It is surely absurd and unjust that travellers on the west coast main line are losing out because Railtrack, before going into administration, failed to deliver modernisation as promised. Individuals are losing out; the economy is losing out. The economy of the north-west, and that of other regions, has suffered a great deal because of that failure; but according to statements made by the chief executives of Railtrack and Virgin in the Sub-Committee, we have confirmation that the public purse was asked to compensate the privatised company for failure to deliver what the public were promised. That adds insult to injury.
  Mr. Pickles: Will the hon. Lady give way?
  Mrs. Ellman: I may give way later.
  The travelling public have already lost out because modernisation did not take place as promised, and now they are being asked provide compensation. That is particularly galling for travellers from Liverpool.
  Owing to the privatised system and price rises inflicted by Virgin, some Liverpool-to-London services have increased in price by more than 100 per cent., and it is now impossible for anyone on such a service to get to London for less than £153 standard or £240 first class if they want to arrive before the afternoon. Liverpool is regenerating itself, but how can that be achieved if passengers face price increases of that order? They now hear that Virgin may increase saver ticket and other fares by 33 per cent. as part of the compensation package, because Railtrack failed to deliver.
  Mr. Clifton-Brown: Will the hon. Lady explain how she can have confidence in her own Secretary of State levering in £34 billion of private finance, which will be needed if her constituents are to experience improvements in the London-to-Liverpool service and modernisation of the west coast main line?
  Mrs. Ellman: My comments show how Railtrack, despite receiving large public subsidies, woefully failed to modernise the west coast main line. Instead of trying to cover up their bad record on rail privatisation, will the Conservatives suggest some positive ways forward? If they did so, I suggest that support from the private sector for investment would be forthcoming. However, Conservative Members are more concerned to cover up their misdeeds, mismanagement and incompetence than to look after the needs of the travelling public.
  Condemnation of Railtrack's management is easy to find. The evidence was clear in discussions that took place in the Select Committee over the past two weeks. Before that, the Select Committee's all-party report of March 2001 criticised Railtrack's performance in maintaining, renewing and developing the network, and described it as seriously inadequate. That criticism was supported by Conservatives on the Committee.
  Only last week, Tom Winsor, the Rail Regulator, told the Select Committee:
  "I believe that the company spent too long complaining about multiple stakeholder pressures and interfaces and failed to understand the simple realities of its business which are this: you do not neglect your assets and you are not hostile to your customers."
  752
  I cannot think of a more damning indictment. Comments of that nature were also made, by implication, to the Select Committee by the Strategic Rail Authority, the Department and by others giving evidence, including by the chief executive of GNER. Again and again, we heard about a company that apparently had no interest in its customers. Indeed, according to the regulator, it was hostile to them.
  Our interest, however, must be in deeds rather than words. For the west coast main line, Railtrack simply failed to deliver. One privatised company is now seeking compensation from the Government, and fares have been put up for already hard-pressed travellers because the privatised Railtrack failed to deliver. I cannot think of a more damning indictment of a privatised industry.
  Mr. Pickles: Will the hon. Lady give way?
  Mrs. Ellman: I am sorry, but I have only two minutes left.
  We must now look to the future and consider what to do. I applaud the decision taken by the Secretary of State. It is appropriate that questions be asked about procedures and legalities, and questioning on those issues will continue at tomorrow's meeting of the Select Committee. However, it would be more appropriate if Conservative Members faced up to their failings of the past and, instead of continuing their dogged adherence to failed privatisation, accepted that rail privatisation was wrong. It was not in the interests of the taxpayer or of the travelling public, and I ask them to join Labour Members in seeking a constructive way forward, in which we have once again a rail service run in the interests of the travelling public.
  5.48 pm
  Sir Brian Mawhinney: The essence of this debate on the handling of the Secretary of State's decisions relating to Railtrack is best summed up by the fact that he could not even stay to listen to what was said about his behaviour, and has already fled the Chamber. I wanted to start by finding some common ground with him, although I admit that I shall go on to be critical thereafter.
  I share the Secretary of State's unhappiness about the quality of Railtrack management over the past few years. Had the Conservatives been in government, we would have taken a similarly jaundiced view of some of the decisions and behaviour of the Railtrack board. Mr. Corbett has a lot to answer for.
  The giveaway in the Secretary of State's speech was how frequently he had to resort to the partisan and ideological instincts of his Back Benchers. We have seen that in the House for generations; it is not a new instinct, but it is always a reflection of a Minister who is in trouble. That is what we heard today.
  The Secretary of State was all injured innocence. He could not understand what the fuss was about, but the truth is that he has form. Some time ago, he told the nation about a conversation that he had with the chairman of BMW, and the chairman of BMW said, "It ain't so." He tells the nation about a conversation with the chairman of Railtrack and the chairman of Railtrack says, "It ain't so." He tells the nation of a conversation with the Rail Regulator and the Rail Regulator says, "It ain't so."

  753
  It reminds me of that old saying, "Everybody's out of step except our Johnny"—everyone knows the meaning of that.
  I dealt with the Rail Regulator. We had a series of meetings during my 11 months as Secretary of State for Transport. We recognised our individual responsibilities. We showed respect for each other's responsibilities. Neither I nor any of my Secretary of State colleagues ever threatened to take away the independence of the regulator if he did not do what we wanted him to do, or thought should be done.
  We have now got to the point where, following the Rail Regulator's evidence—I am not getting into semantics, either—the chief executive of Railtrack has, I am told, talked on the record about the possibility of legal action against the Secretary of State for "malfeasance in public policy". The House should not underestimate the seriousness of that charge. Whether he is proven in a court to be guilty or not, the damage is done to Railtrack and indeed to the Secretary of State by the very raising of that charge. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) was right, as he so frequently is. The Government do not understand that the Rail Regulator is one of the guarantors of the confidence of the City and the private sector in putting money into organisations such as that. The damage will be enormous.
  Mr. Kelvin Hopkins: Will the right hon. Gentleman give way?
  Sir Brian Mawhinney: No. There is only a limited amount of time.
  Talking of the City, I remind the House of another comment that the Secretary of State has made in the Chamber on two or three occasions recently. It was one of the few things that my hon. Friend the Member for Maidenhead (Mrs. May) did not mention. He has repeatedly told the House that he has had discussions with people in the City and that they were all enthusiastic about putting more money into private finance initiative and public-private partnership projects.
  Those of us who have had some experience found that a bit incredible, but there was no evidence to contradict the Secretary of State until I opened yesterday's Evening Standard and read:
  "The Institutional Shareholders' Committee, which represents every investing body in the City…suggested there was a clear legal case for pursuing the Government over its handling of Railtrack.
  The ISC also called on Bank of England Governor Sir Edward George to intervene in the situation to prevent lasting damage in relations between the City and the Government.
  The committee states that it has written to Sir Edward 'to explain its concern over the need for a stable and productive relation between the Government and the City'".
  Listen to this:
  "It says the letter 'urges the Governor to use his good offices to promote a solution that alleviates this concern and will allow the City to continue financing projects of vital importance to this country'".

  754
  The City is telling the Governor of the Bank of England that, unless he finds a solution to the dispute between the Government and the City, the City will not invest in Government projects. That is not what the Secretary of State has told the House repeatedly.
  The Minister for Transport (Mr. John Spellar): Will the right hon. Gentleman give way?
  Sir Brian Mawhinney: I will not. The right hon. Gentleman will have time to respond at the end of the debate.
  Yet again, the Secretary of State is saying one thing in here which is being disputed outside. Johnny still seems to be out of step.
  I turn to the question that the Secretary of State did not answer. He was asked repeatedly whether he consulted the Treasury before the decision of 5 October. Indeed, he patronised my hon. Friend the Member for Lichfield (Michael Fabricant) by telling him that he did not understand what he was asking because he had never been in government. Well, I have. I believe the Secretary of State when he says that he signed the documents on 5 October. I do not believe the Secretary of State when he says that the decision was made on 5 October. I shall tell the House what the Minister for Transport knows to be true, although he will not say it at the Dispatch Box. Because transport is one of the big spending programmes, the relationship between transport, the Treasury and No. 10 is extremely close.
  My private office talked to the private office of the Chancellor of the Exchequer and the private office of the Prime Minister regularly. My senior officials talked to senior officials in the Treasury and in No. 10 regularly. The idea that I as Secretary of State would have made such a decision without its having been talked about and cleared by the Chancellor and the Prime Minister is bunkum—plain, ordinary, common or garden, copper-bottomed bunkum. That is why the Secretary of State would not answer the question this afternoon, though it was put to him repeatedly. The truth is that he signed the paper on 5 October, but the decision was made primarily by the Chancellor and the Prime Minister some time in advance. They said to the Secretary of State, "Go out and handle it."
  My right hon. and learned Friend the Member for Rushcliffe was not always the easiest Chancellor for a Secretary of State for Transport to relate to, but my guess is that he was a jolly sight easier to relate to than the present Chancellor. If he would not have allowed me to make that decision, I do not think that the present Chancellor and the present Prime Minister would have allowed the Secretary of State to float off freely and on his own behalf, without reference to anyone, to make a decision and to announce it to the world. If the House thinks that that is what happened, it is more gullible than I know it to be. All that sums up the indictment of this debate, from which the Secretary of State has fled.
  I accept that the Secretary of State is unlikely to take advice from me, but I would like to offer him three pieces of advice in a spirit of co-operation. First, he should get back to the positive and constructive things that he said about the railways when he first took office, before he understood the massive damage that his predecessor the Deputy Prime Minister had done to the rail network.

  755
  He started well. Indeed, if he is not too embarrassed to admit it, he will even tell the House that one or two of us told him privately that we were encouraged by the start that he had made. He should get back to that frame of mind.
  Secondly, the Secretary of State should work extremely hard to extricate the railways from the political football stadium in which he has placed them, which was demonstrated yet again by his speech today. Some of us who are keen to see an effective railway system might be more willing to respond positively to trying to help establish the railway system if it were done in a much less partisan and politically driven way.
  Thirdly, the Secretary of State is in the Cabinet. He is a grown-up in political terms. As a grown-up in political terms, he should understand that what counts is not the volume of applause behind him or the vitriol of those in front of him. He will be measured by his effect on the railways. He has damaged them almost beyond repair. It is now time that he tried to redeem some of that damage.
  5.59 pm
  Richard Burden: As one who experiences the joys of the west coast main line most weeks, the issue of how to get our railway system up to scratch is of some importance to me. As one who represents a midlands constituency, I know that the future of our railway system is a far more important matter than whether my train gets to London on time. Establishing a rational structure in our rail industry is critical to the economic health of the region that I represent. As my hon. Friends the Members for Weaver Vale (Mr. Hall) and for Liverpool, Riverside (Mrs. Ellman) said, a rational structure is also vital to the north-west.
  The issues and decisions that my right hon. Friend the Secretary of State has faced in the past few months are enormously important, and I believe that the public expect them to be treated as such by politicians of all colours. The public expect us to get our priorities right. Although I did not agree with many of the comments of the right hon. and learned Member for Rushcliffe (Mr. Clarke), I think that he was at least attempting, certainly in parts of his speech, to address some of the real issues facing the rail industry.
  If the public saw how Opposition Front Benchers have approached this debate, I would be surprised if they thought that the Opposition were getting their priorities right. The public know that, when Conservative Members privatised the railways, the theory was that the rigours of the market mechanism, with its winners and losers, would lead to service improvements. Many hon. Members were not convinced by that theory, and polls at the time suggested that the public were not convinced. However, the subsequent management failures and incompetence have exceeded the expectations of even the most cynical of us.
  If the public were not convinced when the railways were privatised, they will be even less convinced that Conservative Members have their priorities right now or that they have the interests of the travelling public at heart. Conservative Members seem to be concerned most about the losses sustained by shareholders because of the operation of the very market mechanism that they introduced. Although no one wants shareholders to lose money, Conservative Members need to say clearly, as I
  756
  hope they will in reply to this debate, whether they believe that the off-setting of shareholders' losses should be the priority call on public funds, ahead even of investing the same sums in improving services.
  If Conservative Members are arguing that they would not have got into this situation, they have to say whether they would have written a blank cheque to Railtrack. If they would not have done so, what would have been the upper limit to their support?
  Getting our railway system up to scratch will cost money, and it will be expensive regardless of which party is in government. We have to face that fact. The key point is that we have to be confident that the structure by which investment is delivered has the interests of the travelling public, our industry and our economy as its first priority and not somewhere down the list.
  Conservative Members initiated this debate not to discuss priorities or the railways, but to try to get at the Secretary of State. Last week, the shadow Secretary of State said—it has been repeated by the Leader of the Opposition and, today, by the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney)—that the Secretary of State has "form". In alleging that, they have attempted to draw parallels between the way in which he has handled Railtrack and his handling of the Rover crisis last year, when he was at the Department of Trade and Industry. As I was pretty close to last year's events, if there are parallels to be drawn, I should like to share a few of my own recollections that are relevant to today's debate.
  I recall that within 24 hours of BMW making that appalling announcement, the Secretary of State was in the region talking to BMW and the unions, and getting involved right from the word go. I recall that when most industry experts and Opposition Front Benchers were saying that Rover was finished and thousands of job losses were inevitable, he was one of the few people saying that we should try to find another way. I recall that when he acted in that manner he was attacked for interfering and meddling, much as Opposition Front Benchers have been trying to attack him today on Railtrack. However, were it not for his interference and that of a few other people, 20,000 jobs would not have been saved and MG Rover would not be the successful company that it is today. If parallels are to be drawn, my right hon. Friend's "form" bodes rather well for his handling of Railtrack.
  My right hon. Friend is, of course, not the only one with form, and there are other parallels to be drawn between last year's events at Rover and this year's events at Railtrack. One is very clear. Last year, when thousands of jobs were at stake at Rover, the Opposition's priority was not to work out how to defend the jobs or to get the company back on its feet, but to engage in endless public tittle-tattle about who said what to whom and when they said it. Scoring party political points, both then and today, was and is not a means to the end of illustrating a serious political alternative; they have been seen by Conservative Members as an end in themselves. Scoring party political points is the precise purpose of today's Opposition day debate.
  Despite Conservative Members' crocodile tears and everything that they say about investor confidence, I think that no one would be more pleased than them if their words and this debate further damaged investor confidence. Their objective is to score points, not to deal with the matter.

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  There are huge issues facing our railway service, including how to provide it with the necessary investment. There are huge issues about finding the right structure to deliver the interests of the travelling public and ensure that Great Britain has a railway service of which it can be proud. If we are to have a debate on those issues, we need a different approach from the Opposition. They had no credibility last year when they tried to discuss the car industry, and they have no credibility this year as they try to talk about Railtrack.
  6.7 pm
  Mr. John Redwood: I have declared my interests in the register.
  The Secretary of State finds himself in a dreadful situation. I echo the comments of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) and my right hon. Friend the Member for North-West Cambridgeshire (Sir B. Mawhinney), who spoke with considerable experience, about how much more costly it is now going to be to sort out the problems of our railway industry, how much delay there will be in sorting them out and how much confidence this Secretary of State, on behalf of this Government, has knocked out of the relationship between the Government and financiers, bank managers, bond financiers and those who raise equity money.
  It is right for people to ask what the Opposition would do. I am very happy to suggest what could be done in this situation, as it is clearly well beyond the skills and attention of the Secretary of State. The legal position, as I understand it, is that the shareholders of Railtrack, at group level, retain residual assets. They must make their own decisions on whether they wish to continue trading those assets in some form or sell them and rescue what little money they can from the group assets that are not in administration. They also have a clear interest in the administrator obtaining best value, if he can secure value, for the assets in administration. That is also the legal duty with which the administrator is charged.
  The Secretary of State is not in control of that process, nor should he be. Those are assets that have been placed into administrative receivership and now have to be sorted out as best they can by the administrator. The sooner that they are sold on to an owner who can do something with them and set about rebuilding the battered balance sheet, the better it will be.
  The Secretary of State is in danger, I think, of misleading his own Back Benchers. He implies that his model of the not-for-profit company is the one that will naturally emerge from the administration process. That is by no means clear. Labour Back Benchers may be disappointed to discover that bids are received, and they may be even more disappointed if one or other of them is better than any bid that can be put forward by the not-for-profit company. We still do not know who will sponsor the not-for-profit company, how it will write a prospectus, how it will raise cash, who will serve on it and what type of guarantees it or other bidders will receive from the Government.
  I hope that the Government are in no doubt that they will have to offer fair funding to any bidders. They should, of course, first apologise for the mess that they
  758
  have created, but the only sensible course that they can then follow is to state clearly to Parliament and the public, for the first time, what money is available to those who will be charged with the duty of running the Railtrack assets. Bidders will then be able to bid on the basis of greater certainty, and to ascribe a negative or positive value to the assets that are in administration. I fear that, in their current shape, the assets have a negative value, and that a substantial dowry will be required by whoever takes them on.
  It is obvious that Railtrack's balance sheet must be strengthened. In answer to one of my questions, the Secretary of State said that he hoped that the new company would have an A credit rating. There is no way that Railtrack, on paper, could command such a rating in its current guise. I would expect the balance sheet to require a sum well above £1 billion of additional equity, or surrogate equity, which I think is the Secretary of State's preferred route. He cannot quite bring himself to admit that he must inject new extra capital into a company whose shareholders he has just helped to bankrupt, but he will have to put in that equity, or surrogate equity, of well over £1 billion to give it any chance of securing some kind of credit rating in the City.
  The Secretary of State seemed to know that on 3 July, when, in rejecting the idea of the not-for-profit public interest company that had been suggested by some Members, he told the House that it would cost £2 billion to buy out the shareholders—we know that he does not wish to do that now—and another £4 billion to sort out the bond holders, because there is that amount of bond finance in Railtrack. When I asked him today, in the House, whether he proposed to wipe out the bond holders or whether he was effectively offering a Government guarantee for the £4 billion, he characteristically declined to answer; but the question is terribly important to assessing the cost to the Secretary of State of the forced administration of the Railtrack enterprise.
  Then there are the costs of the administration itself, which are likely to be high. Given the phenomenal legal bills that the Secretary of State and his advisers must be incurring, and those incurred by those advising the administrator, Railtrack and the regulator—many of which will be a charge on public funds—I suggest that there will be no change out of £100 million for the fees of lawyers, accountants and others involved in reporting on the progress of Railtrack, and the amount could escalate well beyond that. I should be delighted if the Minister intervened to assure me that the Government have received quotes for all those charges well in advance and the amount will be smaller, but I think that it would be safe to pencil in well over £100 million—something similar to the huge fees that the Government are running up in the public-private partnership negotiations in regard to London Underground, which remain stalled and mired in difficulty and uncertainty.
  There is also the cost control that the company itself was minded to implement, but that is probably not currently being implemented by the administrator. I estimate that at least £250 million of costs would have been saved in the trading year ending next March, and will probably not materialise because a degree of management has been removed from the company, and the administrator is taking things more easily in an attempt to find out what is there and how he can proceed.

  759
  We then come to the £800 million that has already been guaranteed by the Government. That was squirrelled out by a question asked by someone else; I was not told, although I asked a direct question that should have required that answer. Anyway, we know that £800 million has already been guaranteed, or has gone, to deal with the day-to-day bills of the company in administration—and, given the cash forecasts that we have heard from the Secretary of State, presented by the company before he made his decision, there may be another £650 million to go out before the end of the year. I am sure that the Government will feel that they must guarantee that in some way.
  If we leave aside the £4 billion of bond holders' money—there are different ways of treating it, but according to the Secretary of State it should all be a direct charge on public accounts—we arrive at a total of £2.8 billion by the end of the year to try to keep the company going, and start sorting out the problems in administration. I suggest that that is well in excess of anything that the Government needed to give, or would have granted, to the company before it was put into receivership.
  I have asked the Secretary of State to tell the House how much would have gone into the company this year and next if plans had continued under the 2 April agreement, but I have received no answer. I think that Ministers should tell us how much they had planned to put in, both directly and through the Strategic Rail Authority; what the timing of the payments would have been; and what extra amount they estimated might be needed on top of that. I find it extraordinary that Ministers could sign off on a going-concern audit basis in the summer of this year, and a few weeks later be scrambling around saying that the company would become insolvent and something drastic would have to be done.
  My right hon. and learned Friend the Member for Rushcliffe made a more general point about the cost of this Secretary of State to the Government. Let us take just the transport element of private finance under the 10-year plan—£35 billion, perhaps £34 billion. If we assume that the cost of the Secretary of State's damage amounts to only an extra 1 per cent. per annum in interest to allow for the greater hazards involved in doing business with the Government now, we are talking about an extra £3.5 billion over a typical 10-year term of debt.
  That would be the extra cost of financing a programme of this size, and that is just one element. The Secretary of State will have to stand accused of increasing the costs of financing a number of Government programmes. The Government anticipated large sums of private money for other transport systems, health, educational establishments, prisons and a wide range of other public facilities. There is no doubt, given the City's current mood, that the price has just gone up. Some very smooth talking, and the removal of the Secretary of State, will be required to reassure people and put the price down again. [Laughter.] I am glad that the Government think that a matter for so much hilarity, but the public are not amused.
  This has meant a delay in vital investment in the railway industry. It has interrupted the progress of an industry that the Government themselves said was going rather better as a result of privatisation. Before the general election—in May, in Westminster Hall—the hon. Member for Streatham (Keith Hill), then a transport Minister, made a very good speech praising the growth in traffic,
  760
  the improvement in investment and the new equipment that was coming to the railways—success that he believed had been achieved by the industry in privatised ownership since 1997. I found myself in full agreement with him. I did not confess that at the time because I knew that he had said those things because an election was coming up and he wanted to claim some credit for a Tory success a few years earlier. But I see that he is enjoying the situation now, because he knows that what he said was true, and that those who have taken over have made an awful mess. A new Secretary of State came in and overruled the perfectly sensible policy espoused by the hon. Gentleman and his then colleagues, causing the trouble that we are now seeing.
  Time does not permit me to say much more. Let me end by saying that this Secretary of State is going to send a huge bill to the travelling public, the taxpayer and the Government as a whole. It is a disgrace and he should go. We need someone who understands how the market works, and how to raise the colossal sums that we need to get the railways on the move.
  6.18 pm
  Clive Efford: My right hon. Friend the Secretary of State was entirely right to take the public finance trough from under the Railtrack snout. His decision could be described as an admission of failure—failure to tame Railtrack, a monopoly created at the time of privatisation which separated track from trains. Since it was first created as a public body and later privatised, it has consistently failed to control its costs. More important was its failure to deliver on its obligation to provide an efficient and reliable network. The train operating companies will be relieved to know that their needs no longer have to play second fiddle to Railtrack's shareholders.
  Railtrack was created in April 1994, and questions about its finances have existed ever since. That continued after privatisation in May 1996, despite assurances given by the then Tory Government. In 1995, there was concern about Railtrack's ability to meet its financial investment targets. In September 1996, the Rail Regulator introduced the "Network Management Statement", intended to ensure that Railtrack fulfilled its investment commitments, especially in regard to maintenance. In November 1996, half-year figures showed that Railtrack was underspending on maintenance and renewals. The regulator stated that that was wholly unacceptable. He repeated that again in the following January at a meeting with the directors of Railtrack and, again, in a letter responding to Save Our Railways. He said in that letter:
  "As I said in December 1996 the current level of underspend"—
  on maintenance and renewals—
  "is wholly unacceptable."
  In May 1997. Railtrack published a further amended network management statement. The regulator responded by calling for greater public accountability from Railtrack and stated that he intended to alter its license to ensure that that was delivered. His statement acknowledged that Railtrack was a monopoly and that the regulator must provide a system of controls such as those that would be expected of a competitive market. After May 1997, the newly elected Labour Government announced their intention to introduce a new regime for the regulator to increase Railtrack's accountability.

  761
  There have been repeated reports of Railtrack's failures throughout its history. Numerous newspaper articles have warned everybody about the dangers of investing in Railtrack. As early as June 1996, The Economist discussed "The Railtrack Trap" and the arrangements to finance Railtrack that were set up by the Railways Act 1993. On 21 December 1996, The Daily Telegraph contained an article called "Watchdog in Attack on Railtrack Underspend." The Financial Times ran a series of articles early in 1997 with headlines such as "Railtrack Warned to Speed up Investment" and "Railtrack Investment Row Gets Up Steam". There is a catalogue of reports of Railtrack's failures.
  We have had a constant stream of failures and attempts by the regulator and successive Governments to tame the Railtrack beast. However, all attempts failed because they tried to remould Railtrack into something that it was not set up to be. Public money was passed to private shareholders through a set up that was devised to do nothing but launder public money into private hands.
  In April 2001, Railtrack received an extra £1.5 billion from the Government. Immediately, Railtrack used nearly £200 million of that to pay dividends to shareholders. The public's anger about privatisation is underlined by the Paddington and Hatfield crashes, which epitomise the effect of privatisation on our rail network. The public have no doubt where the blame lies. They know that profit was put before safety. That was epitomised when the former chairman of Railtrack sat with his colleagues in his office on the night of the Hatfield crash and emerged at 6 am to state that he was the only man to see Railtrack through the crisis. A few weeks later, he was handed £400,000 and he went out through the back door. It is clear that Railtrack was not set up to run an efficient railway, but was set up with only shareholders in mind.
  On Second Reading of the Railways Bill in 1993, John McGregor, the then Secretary of State for Transport, said that the Bill was
  "an historic change for the better in Britain's railway system."—[Official Report, 2 February 1993; Vol. 218, c. 156.]
  He described Railtrack as an "entrenched monopoly" that had
  "an instinctive tendency to ask for more taxpayers' subsidy and to feel that public subsidy will always be there as a crutch whenever things look difficult. Inevitably public ownership also brings with it the constraints of public finance, not least given the many competing demands on the public purse."—[Official Report, 2 February 1993; Vol. 218, c. 156.]
  There is clearly not a competing demand on the public purse when public money is passed into private hands, but only when a public service is subsidised.
  Railtrack has given us constant excuses for its failures to deliver. The Railways Act 1993 paved the way for rail privatisation. The first mention of the possibility of Railtrack's privatisation was made only in October 1992. If Opposition Members do not believe me, I am referring to a House research document that states that the first reference that was ever made to Railtrack's privatisation occurred in that month. However, an Act that effectively privatised Railtrack had been passed by the end of November 1993.
  The reason for such undue haste is explained by a leaked memo from the then Chancellor, to which my right hon. Friend the Member for Oldham, West and Royton
  762
  (Mr. Meacher), who is now Minister for the Environment, referred during an Opposition day debate on 18 October 1995. He said that the then Chancellor of the Exchequer wrote to the then Prime Minister to ask for Railtrack privatisation to be speeded up because it was
  "integral to the Budget arithmetic."—[Official Report, 18 October 1995; Vol. 264, c. 358.]
  We were treated to the Conservative Government's money-raising exercise to finance pre-election tax cuts. That is why Railtrack's privatisation was rushed and botched, and why we are debating the matter today.
  Tom Winsor offered Railtrack an interim review, as he stated when he gave evidence to the Select Committee on Transport, Local Government and the Regions last week. From 15 January, it was open to Railtrack to go back to Tom Winsor to ask for an interim review of charges to access railways. It failed to accept that offer until the weekend of the meeting with the Secretary of State, when it asked for that interim review to be carried out in 24 hours over a weekend. Opposition Members' entire argument appears to hinge on that single fact, which is a thin thread on which to charge the Secretary of State with misleading shareholders and mishandling the affair.
  My right hon. Friend the Secretary of State ended Railtrack's repeated failures. Public finances cannot continue to pour into the private sector at the expense of an efficient rail service. I support my right hon. Friend's actions, which I hope will lead to an efficient public rail service that the people of this country have the right to expect.
  6.27 pm
  Miss Anne McIntosh: I repeat, for the record, my declaration of interest. I hold shares in Railtrack, FirstGroup and Eurotunnel, and my husband works for an American airline company. Therefore, I share the sentiments of other hon. Members following yesterday's tragic plane crash and loss of life in New York.
  Today, we have seen a classic case of the manipulation of evidence. It is time that the record spoke for itself. I especially refer to paragraph 765 of the evidence given by the Rail Regulator to the Select Committee on Transport, Local Government and the Regions last week. He said:
  "I added that taking me under political control would go entirely against the grain of the major theme of the Government's policy position in the General Election campaign, which was about getting private sector capital into the provision of public services. I told them that such a step would do considerable harm to the ability of the Government to get companies to put money into public projects. I also mentioned the implications of the Human Rights Act 1968 because of the right of the citizen to have his civil rights determined by an impartial tribunal."
  That was against the background of the Rail Regulator stipulating in a press statement on 12 June that Railtrack had the environment to confound its critics and to succeed.
  The Rail Regulator told the Select Committee that when the Secretary of State told him that the Government had decided to put Railtrack into administration that weekend, he had said that he was
  "very surprised at the circumstances as they explained them to me and the suddenness of the decision on railway administration. I explained that we at ORR had had no indication of any imminent insolvency from the company."

  763
  In paragraph 761, Mr. Winsor notes:
  "Mr Byers said that they had thought of that"—
  an interim application from Railtrack—
  "and that if such an application were made, he had the necessary authority immediately to introduce emergency legislation to entitle the Secretary of State to give instructions to the Regulator. After pausing to consider whether I had really heard what I had just heard, I asked whether that would be to over-rule me in an interim review or in relation to all my functions. Mr. Byers said that it would cover everything but that its first use would be in relation to an interim review which the Government did not want to proceed".
  Mrs. Ellman: Will the hon. Lady give way?
  Miss McIntosh: No, I will not.
  In the devastating evidence that Mr. Winsor shared with the Committee, he admitted his surprise at the suddenness of the Secretary of State's decision to put Railtrack into administration, at the fact that the company's financial situation could have deteriorated so badly in so short a time and that his office had no inkling of Railtrack's impending insolvency. Mr. Winsor explained to the Secretary of State that, in his view, Railtrack would exercise its right to apply for an interim review to keep it afloat.
  It is my firm belief, which the Secretary of State is free to contradict in the House, that he had effectively neutralised and neutered the power of the Office of the Rail Regulator, Mr. Tom Winsor, to process such an interim review. In fact, the Secretary of State had countermanded that application. He expected that Railtrack would make such an application and he fully intended to bring emergency legislation before the House to enable him to instruct the regulator.
  In that well-thought-out, well-prepared, swift move, the Secretary of State completely neutralised the Rail Regulator and blew his independence out of the water. The implications and ramifications of that move are enormous and deeply alarming, both to the House and outside, for Railtrack as a company, for its shareholders and especially for the Office of the Rail Regulator. Furthermore, there are implications for the regulation of other industries.
  The implications for the travelling public are clear. The question that the Secretary of State must answer in the House today, or perhaps tomorrow in the Select Committee, is: how can he give an assurance to train operators and investors that whatever the successor to Railtrack may be, it will be adequately funded and that that investment will be protected by an independent regulator?
  Successive sectors have used this model: energy, telecommunications and transport depend on the role of an independent regulator for the smooth operation of the industry and for the ultimate protection of the interests of shareholders.
  There are also ramifications for the public sector. Clause 24 of the NHS Reform and Health Care Professions Bill deals with the independent regulation of the health service and the reform of the General Medical Council, yet clause 25(2) provides—yet again—for power of direction to the Secretary of State to overrule the very independence of that regulator. That threatens the principle of the independence that the Bill is intended to create.
  764
  The inadequacies of the Secretary of State are well rehearsed. His lapses of memory are only too familiar, but his poor record in this matter is noteworthy: for example, his decision not to award a 20-year franchise to GNER, against the clear advice of the Strategic Rail Authority. The Select Committee heard in evidence that neither the Secretary of State nor any of the Department's Ministers had tried to hold a meeting from the date that the right hon. Gentleman took office to the date of the announcement of Sir Alastair Morton's retirement. That meant that the two major applicants in that east coast main line renewal spent £4 million apiece—a total of £8 million—in promoting their bid. At present, that money is not recoverable.
  The cost of putting Railtrack into administration runs at £2 million a week—a cost to be met by the Government and thus the taxpayer. Following the demise of the independence of the Rail Regulator, one question remains to be answered. In the bidding for Railtrack—the new not for profit company, limited by guarantee—who will set the base line?
  The Secretary of State may care to answer that question this evening, but is he the man in whose hands the travelling public want to see the future of the railways? The answer is no, and I beg the right hon. Gentleman to consider his position.
  6.35 pm
  Mr. Eric Pickles: Before I begin my speech, I wish to associate myself with the remarks of my hon. Friend the Member for Maidenhead (Mrs. May) and the Secretary of State for Transport, Local Government and the Regions about the people of New York who continue to suffer. We all admire their bravery.
  The debate got off to a marvellous start with my hon. Friend's speech. There were distinguished contributions from my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), my right hon. Friends the Members for North-West Cambridgeshire (Sir B. Mawhinney) and for Wokingham (Mr. Redwood), and my hon. Friend the Member for Vale of York (Miss McIntosh). We are grateful to her for all her hard work on the Select Committee, and especially for exposing the truth about these matters.
  It is a cause of regret to the Opposition that the Secretary of State has not seen fit to be in the Chamber much today, and in particular that he is not here for the winding-up speeches—[Interruption.] Ah, here he is! I am glad that he has made it; we can all be late.
  I have felt a little sorry for the right hon. Gentleman—[Interruption.] No, I have, because we have made history today. This is the first ever vote of no confidence in a member of the Cabinet and not a single member of the Cabinet thought fit to turn up to support the right hon. Gentleman. He said that he had sent a message to his colleagues: "Don't come today, you've got more important things to do." I am sure that we would all like to see that particular e-mail.
  We knew that the right hon. Gentleman was in trouble when he tried to present himself as a Gucci-suited class warrior, talking about the fat cats and reeling off sums of money—the many millions of pounds of bonuses—yet those sums pale into insignificance against the amount of extra interest that we shall all have to pay for our infrastructure projects because of the Secretary of State.

  765
  The right hon. Gentleman failed to answer the principal question: on 5 October, when did he first receive the information from the Treasury that it was not prepared to fund Railtrack? On 5 October, did he receive information from the Treasury: "Well, basically Steven, do whatever you like. If you want to give it billions of pounds, we are right behind you"? I do not believe for one moment that the Treasury said that. The right hon. Gentleman should understand that, sooner or later, we will find out the date and that from that point on he will have been guilty of creating a false market in shares. Sooner or later, that date will come out—[Interruption.] In reply to the Whip, the hon. Member for Hove (Mr. Caplin), I am certainly on the side of the workers who have been robbed of their savings by the Government.
  As the Secretary of State is thought to be relying on his notes of 25 July, he has no alternative but to place them in the Library. We look forward to being able to study his version of the minutes. We have seen everyone else's minutes for that date, so we should see his.
  The right hon. Gentleman made a great statement that he did not feel that he threatened the regulator and that he should be acquitted of that. As one of my hon. Friends said, we do not think that the right hon. Gentleman is a physically imposing or intimidating person. Even if he took a dose of steroids, we would not find him very frightening—as might have been the case with his predecessor. We were interested in the substantive point of whether or not he had promised to produce legislation. We now know that he said that he would produce legislation.
  Let us be blunt with the right hon. Gentleman. He said no to the House when he should have said yes. At the very least, we should have received a qualified no. We completely accept that the right hon. Gentleman did not threaten the regulator. Instead, he chose the well-trodden path of the Corleone family, by making the regulator an offer he could not refuse. Railtrack is in administration because the Government refused to provide additional public money, as was their right. More importantly, Railtrack is in administration because other modes of finance were cut off by the Secretary of State. No one can save Railtrack because the Secretary of State was determined—
  Hugh Bayley: Will the hon. Gentleman give way?
  Mr. Pickles: I will not give way to a part-time attender of the debate. The hon. Gentleman cannot expect to swan in at the beginning and then again at the end. I am not taking interventions from someone who has not had the courtesy to attend the debate. He can sit down.
  Hugh Bayley: On a point of order, Mr. Deputy Speaker. The reason I left the Chamber after the hon. Member for Maidenhead (Mrs. May) had replied to my intervention was because she inadvertently misled the House. I have been to the Library to get the facts—
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman has been here long enough to know that that is not a point of order. He must find other ways of pursuing matters of debate.
  Mr. Pickles: I am sure that the hon. Gentleman is a quicker speed reader than that.
  766
  It is the same offer that the Government made to the court—
  Hugh Bayley: Will the hon. Gentleman give way?
  Mr. Deputy Speaker: Order. It is perfectly clear that the hon. Member for Brentwood and Ongar (Mr. Pickles) is not giving way.
  Mr. Pickles: I would give way to anybody who has attended the debate.
  It is the same offer that the Government made to the court. With the removal of the independent regulator, the company exists at the whim of the Secretary of State.
  Mrs. Ellman: Is the hon. Gentleman suggesting that he would give additional funding to a company that has a predicted deficit of £700 million by December and £1.7 billion by next March—an uncontested allegation?
  Mr. Pickles: The hon. Lady earlier made great play of the west coast main line. On 8 October, the Secretary of State was due to receive from Railtrack a solution to that problem. When, in about 10 years' time, the hon. Lady is still receiving complaints from her electors, we will have to remind them that she supported a decision that meant that money for phase 2 of the west coast main line was not made available.
  There is a gap in the Secretary of State's story. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said that
  "frankly, there is a gap, but I don't know it is quite as artificial as anyone is making out."
  Given that the next capital project is to be the underground, perhaps the Government are realising that "mind the gap" might be a good way to remind themselves of how their capital projects are going.
  My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) was right to ask where the missing £34 billion will come from. Most will rest on the back of 15 special purpose vehicles to create a mixture of public and private finance. Few have any realistic chance of getting off the ground in less than two or, more likely, four years, by which time the problems will be much worse. That means the delay or cancellation of projects. Goodbye west coast main line; goodbye Thameslink 2000; goodbye improvements on South Central. The result?—stagnation of the railways, low investment and fewer passengers.
  Mr. Hopkins rose—
  Mr. Pickles: The hon. Gentleman has attended the debate so of course I will give way.
  Mr. Hopkins: I travel on Thameslink every day and I understand that Thameslink 2000 was to have been finished by 2000 under privatisation. Is that successful privatisation?
  Mr. Pickles: If the hon. Gentleman travels on Thameslink every day, he must realise that he will be later and later and that he will have to get up earlier to arrive in this Chamber. That will go on for years. I wish the hon.

  767

  Gentleman many years in this Chamber, but I guarantee that when he retires, which I hope will be many years from now, he will have seen no improvement.
  There will be fewer passengers, less freight and higher fares; in other words, welcome back British Rail.
  Hugh Bayley: Will the hon Gentleman give way?
  Mr. Pickles: I have told the hon. Gentleman that he did not attend the debate and I am not satisfied by his explanation.
  We know that the senior civil servant within the Department said in a meeting with Credit Suisse First Boston in July that the movement towards a non-profit company was neither "appropriate nor attractive". We know that Mr. Winsor told the Select Committee that he warned the Secretary of State that this would affect public-private partnership deals. Hospitals, roads, railways and airports will all be affected, as my right hon. Friend the Member for Wokingham said.
  We all know that the next PPP deal will be the underground. Interest rates alone will cost an extra £10 million because of the incompetence of the Secretary of State. When we think about the number of hospitals and roads on top of that, we can appreciate the full extent. We know that Ministers have absolutely no interest in the shareholders or the employees of Railtrack. They realise that 92 per cent. of the employees of Railtrack own shares. Overnight, a grade 1 signaller took a pay cut of 9.4 per cent. For clerical staff, 6.1 per cent. of pay was taken away by the Government.
  Let one family speak for them all; a Mr. and Mrs. Byers. They are pensioners who invested £3,500 for their old age and nursing care. They have said that their lives are "absolutely ruined". I suspect that the right hon. Gentleman who bears the same name will also bear the responsibility for his career being ruined.
  We have read the views of an anonymous Minister, who is not here today, but who, I understand, is a member of the Cabinet. He told The Independent:
  "It's not Tony's style to bow to external pressure to get rid of a Minister but nor is it his style to keep a discredited one in the longer term. And, let's be honest, a Cabinet Minister's job is not as safe as a spin doctor's."
  The Secretary of State must realise that he represents the single greatest obstacle to investment in the railways. Let us put it simply. The City no longer trusts the Government and the public no longer trust their money with the Government. The Government now have the great task of raising the sums necessary for the railways, but they cannot do so with the Secretary of State at the helm. He must now go.
  6.47 pm
  The Minister for Transport (Mr. John Spellar): First, I wish to associate myself with the comments made by others regarding the tragedy in New York yesterday and the impact that that will have on the aviation industry and those who work in it, many of whom are our constituents.
  This has been an interesting debate—
  Hugh Bayley: I am grateful to my right hon. Friend for allowing me the opportunity to intervene at this point.
  768
  When I intervened on the hon. Member for Maidenhead (Mrs. May) to ask whether she believed that Railtrack had made a sufficient contribution to rail safety and the reliability of services in return for the money it received from the Government, she said that rail safety had improved since privatisation. The Library has provided me with figures showing that the number of fatalities grew from eight in the year prior to privatisation to 43—[Interruption.] It may be a laughing matter for Conservative Members, but it is not for the families of those who died. There has been a fivefold increase and if the hon. Lady looked at the brief from the Library—
  Mr. Deputy Speaker: Order. Interventions must be brief, particularly at this stage of the debate.
  Mr. Spellar: My hon. Friend's point is well made.
  We were pleased to hear my hon. Friend the Member for Weaver Vale (Mr. Hall) gaining his voice, and I was pleased to hear my neighbouring colleague, my hon. Friend the Member for Birmingham, Northfield (Richard Burden), putting the record straight on Railtrack and BMW. [Interruption.]
  Mr. Deputy Speaker: Order. The House should hear the winding-up speech in silence, which we have not had so far.
  Mr. Spellar: My hon. Friend the Member for Eltham (Clive Efford) ably represented, once again, a significant part of London's commuterland.
  There were one or two interesting revelations. The hon. Member for Brentwood and Ongar (Mr. Pickles) wished my hon. Friend the Member for Luton, North (Mr. Hopkins) a long period in the House, which shows an accurate reading of the opinion polls and the future prospects of the various parties. Alarmingly for those who sell hair dye, the hon. Member for Maidenhead revealed that she prefers mature men. There will be an instant reduction in the use of hair dyes and a great proliferation of grey hair around the Chamber in the coming days.
  The debate was also interesting for the fact that we have wasted half a day when there are so many other issues that could be discussed—issues on which, at business questions, Opposition Members have demanded debates. Last week, the hon. Member for South Holland and The Deepings (Mr. Hayes) asked for a debate on arable farmers, the hon. Member for Sutton Coldfield (Mr. Mitchell) for one on health, the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) for one on the House of Lords, and the hon. Member for Ruislip-Northwood (Mr. Wilkinson) for one on London. All those might have been more appropriate subjects—they are all important. The previous week, the right hon. and learned Member for Sleaford and North Hykeham asked for a debate on the Crown prerogative, the hon. Member for Bexhill and Battle (Mr. Barker) for one on civil defence and the right hon. Member for North-West Hampshire (Sir G. Young) for one on the economy. All those were more significant issues.
  An extremely interesting aspect of the debate was Opposition Members' failure to mention certain subjects. I heard precious little mention of passengers, of freight, or of the industry, but an awful lot of talk about a small section of the City—those who bought Railtrack shares

  769
  recently, while others in the City were selling them those shares. That is a very small constituency—but it is the one to which the Conservative Opposition largely address themselves.
  Let us deal with the underlying facts. Railtrack did not oppose our petition to the High Court for administration because it recognised the strength of the case. Our evidence to that court showed a deficit for Railtrack of £700 million by 8 December, rising to £1.7 billion by March 2002. Faced with those facts, the court—not the Secretary of State—in the person of Mr. Justice Lightman, said:
  "this is clearly a case where the making of an order is not only appropriate but absolutely essential. I shall therefore make the order immediately."
  Therefore Railtrack, in its current form, was not part of the solution for our railways but a major problem, and a very expensive problem at that.
  During the debate, I was amazed by the cavalier way in which the Opposition treated public money. The right hon. and learned Member for Rushcliffe (Mr. Clarke), the hon. Member for Maidenhead and the right hon. Member for Wokingham (Mr. Redwood) all seemed to be quite easy about substantial but unspecified sums of public money being thrown around. The right hon. and learned Member for Rushcliffe—in a term used in the debate—has form in that. After all, during the time when he was Chancellor we nearly doubled the national debt.
  Mr. Kenneth Clarke: As the right hon. Gentleman was listening to my speech, he will recall that I was concerned about the delay to future investment in the railways and the cost to future investment and the prospects of raising private investment, after all these incidents. Does he expect the west coast main line refurbishment to have made any worthwhile progress by the time of the next general election?
  Mr. Spellar: I am very glad that the right hon. and learned Gentleman raised the west coast main line, a project which Railtrack originally budgeted at £2.3 billion. It is now an estimated £7 billion and rising. Railtrack's total failure to control its costs—/Interruption.] I shall tell the right hon. and learned Gentleman, and the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney), about the attitude of the City of London. Both the Secretary of State and I have had many meetings with a range of financial institutions about the London underground and other areas, and they believe that those are good business prospects and are keen to be engaged in them. That is the reality, contrary to the scare stories that are being put around by the right hon. and learned Member for Rushcliffe and his colleagues.
  Mr. Redwood rose—
  Mr. Spellar: If the right hon. Gentleman will wait a minute, I will come to him.
  The right hon. and learned Member for Rushcliffe is not alone. We also have some questions to pose to the hon. Member for Brentwood and Ongar and the right hon. Member for Wokingham, who talk a lot about
  770
  compensation. I simply ask them, compensation to whom, compensation for what, and how much? We have heard about the loss of shareholder value. The value of the company decreased from some £9 billion at its peak to £1.5 billion even before the events we are discussing.
  I give way to the right hon. Member for Wokingham. I hope that he will now answer those questions: to whom, for what, and how much?
  Mr. Redwood: As the Minister should remember, I said that the cheapest option now was to sell the assets back to the private sector and to have limited but agreed funding. Does the Minister agree that that is the best answer or is he effectively going to renationalise, and, if so, how big will the massive bill be?
  Mr. Spellar: The right hon. Gentleman has totally failed to answer the questions that I asked him. The administrator will have to examine the assets within Railtrack and that assessment will determine the value that is realisable for the Railtrack shareholders. The question that I posed to the right hon. Gentleman, and which none of his colleague has answered, is how much public money would they put in to pay the shareholders? That is the question that they must answer, and they have not answered it tonight.
  During the debate, much weight has been placed on the comments of Tom Winsor. My colleague and hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) ably quoted some of the evidence about more recent events. However, let us consider what Tom Winsor said about Railtrack—the company that is obviously the jewel in the Tories crown, the apple of their eye. In his speech of 12 June, just after the Secretary of State and I entered our current posts, he said:
  "I believe the answer is found in the mistakes of a rushed privatisation with too many corners cut, weak regulation and a company which squandered its skills base whilst neglecting the condition of its physical assets. And it did not happen suddenly.
  The seeds of Railtrack's present predicament—and that of the whole railway industry—were sown in 1993–7"
  who was the transport Minister during part of that time?—
  "when the industry was being restructured and prepared for privatisation. In those years, time and again, when there was a choice between protecting the public interest and promoting proceeds of privatisation, the latter was given a higher priority. The theory was—if there was one at all—that Railtrack would be responsive and competent, and would see its own interests coinciding with those of its customers and public interest…
  Railtrack pursued an agenda which, in too many respects, left the dependent customer in the lurch. It sometimes appeared that it mattered more that Railtrack was the darling of the City of London rather than a supplier"—
  Mr. Barker:rose—
  Chris Grayling rose—
  Mr. Spellar: It is Opposition Members who have been quoting the Rail Regulator with such approval throughout the debate, so I am surprised that they are so concerned when I quote other words of the Rail Regulator, many of which he reiterated in his evidence to the Select Committee.
  Chris Grayling rose—
  Mr. Spellar: I will not give way.

  771
  Finally, the Rail Regulator said—illustrating well the on-going problems that there had been with the company—
  "The company should put away the begging bowl, and stop spending valuable management time hawking themselves unwanted round Whitehall, and knuckle down to getting train services back to a sustainable level of reliability and quality of service."
  We certainly did not hear much from the prosecution—the official Opposition. What we did hear certainly was not Perry Mason. I have just quoted a devastating indictment of a failed company, brought about by a political action by a previous Government. What this second debate on Railtrack has shown is history repeating itself as farce—and boring, repetitious farce at that. What was new this evening was not relevant and what was relevant was not new.
  It is a shame that we do not have a procedure in the House for recording no confidence in Her Majesty's Opposition. I therefore have no hesitation tonight in being equally repetitious and repeating my closing remarks in the debate a fortnight ago.
  The general elections of 1997 and 2001 showed that the voters believed that the Tories were not fit for government. Once again today, they have shown that they are not even fit to be the Opposition.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 152, Noes 394.

  Division No. 57]

  [6.59 pm

  AYES

  Ainsworth, Peter (E Surrey)

  Duncan, Alan (Rutland & Melton)

  Amess, David

  Duncan, Peter (Galloway)

  Ancram, Rt Hon Michael

  Duncan Smith, Rt Hon Iain

  Arbuthnot, Rt Hon James

  Evans, Nigel

  Atkinson, David (Bour'mth E)

  Fabricant, Michael

  Bacon, Richard

  Fallon, Michael

  Barker, Gregory

  Field, Mark (Cities of London)

  Baron, John

  Flight, Howard

  Beggs, Roy

  Forth, Rt Hon Eric

  Bellingham, Henry

  Fox, Dr Liam

  Bercow, John

  Francois, Mark

  Boswell, Tim

  Gale, Roger

  Bottomley, Peter (Worthing W)

  Gibb, Nick

  Bottomley, Rt Hon Virginia

  Goodman, Paul

  Brady, Graham

  Gray, James

  Brazier, Julian

  Grayling, Chris

  Browning, Mrs Angela

  Green, Damian (Ashfond)

  Burns, Simon

  Greenway, John

  Burnside, David

  Grieve, Dominic

  Burt, Alistair

  Gummer, Rt Hon John

  Butterfill, John

  Hague, Rt Hon William

  Cameron, David

  Hammond, Philip

  Cash, William

  Hawkins, Nick

  Chapman, Sir Sydney (Chipping Barnet)

  Hayes, John

  Heald, Oliver

  Chope, Christopher

  Heathcoat-Amory, Rt Hon David

  Clappison, James

  Hendry. Charles

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Hoban, Mark

  Hogg, Rt Hon Douglas

  Clifton-Brown, Geoffrey

  Horam, John

  Collins, Tim

  Howard, Rt Hon Michael

  Conway, Derek

  Howarth, Gerald (Aldershot)

  Cran, James

  Hunter, Andrew

  Curry, Rt Hon David

  Jack, Rt Hon Michael

  Davies, Quentin (Grantham)

  Jackson, Robert (Wantage)

  Davis, Rt Hon David (Haltemprice)

  Johnson, Boris (Henley)

  Djanogly, Jonathan

  Key, Robert

  Dodds, Nigel

  Kirkbride, Miss Julie

  Dorrell, Rt Hon Stephen

  Knight, Rt Hon Greg (E Yorkshire)

  772

  Laing, Mrs Eleanor

  Shepherd, Richard

  Lansley, Andrew

  Simmonds, Mark

  Leigh, Edward

  Simpson, Keith (Mid-Norfolk)

  Letwin, Oliver

  Smyth, Rev Martin (Belfast S)

  Liddell-Grainger, Ian

  Soames, Nicholas

  Lidington, David

  Spelman, Mrs Caroline

  Lilley, Rt Hon Peter

  Spicer, Sir Michael

  Loughton, Tim

  Spink, Bob

  Luff, Peter

  Spring, Richard

  McIntosh, Miss Anne

  Stanley, Rt Hon Sir John

  MacKay, Rt Hon Andrew

  Steen, Anthony

  Maclean, Rt Hon David

  Streeter, Gary

  McLoughlin, Patrick

  Swayne, Desmond

  Malins, Humfrey

  Swire, Hugo

  Maples, John

  Syms, Robert

  Mates, Michael

  Tapsell, Sir Peter

  Maude, Rt Hon Francis

  Taylor, John (Solihull)

  Mawhinney, Rt Hon Sir Brian

  Taylor, Sir Teddy

  May, Mrs Theresa

  Tredinnick, David

  Mercer, Patrick

  Trend, Michael

  Mitchell, Andrew (Sutton Coldfield)

  Turner, Andrew (Isle of Wight)

  Murrison, Dr Andrew

  Tyrie, Andrew

  Norman, Archie

  Viggers, Peter

  O'Brien, Stephen (Eddisbury)

  Walter, Robert

  Osborne, George (Tatton)

  Waterson, Nigel

  Ottaway, Richard

  Watkinson, Angela

  Paice, James

  Whittingdale, John

  Paterson, Owen

  Widdecombe, Rt Hon Miss Ann

  Pickles, Eric

  Wiggin, Bill

  Portillo, Rt Hon Michael

  Wilkinson, John

  Prisk, Mark

  Willetts, David

  Randall, John

  Wilshire, David

  Redwood, Rt Hon John

  Winterton, Mrs Ann (Congleton)

  Robathan, Andrew

  Winterton, Nicholas (Macclesfield)

  Robertson, Hugh (Faversham)

  Yeo, Tim

  Roe, Mrs Marion

  Young, Rt Hon Sir George

  Ruffley, David

  Sayeed, Jonathan

  Tellers for the Ayes:

  Selous, Andrew

  Mrs. Cheryl Gillan and

  Shephard, Rt Hon Mrs Gillian

  Dr. Julian Lewis.

  NOES

  Abbott, Ms Diane

  Boateng, Rt Hon Paul

  Adams, Mrs Irene (Paisley N)

  Borrow, David

  Ainger, Nick

  Bradley, Peter (The Wrekin)

  Ainsworth, Bob (Cov'try NE)

  Bradshaw, Ben

  Alexander, Douglas

  Brake, Tom

  Allan, Richard

  Breed, Colin

  Allen, Graham

  Brennan, Kevin

  Anderson, Rt Hon Donald (Swansea E)

  Brooke, Annette

  Brown, Rt Hon Gordon (Dunfermline E)

  Armstrong, Rt Hon Ms Hilary

  Atherton, Ms Candy

  Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

  Atkins, Charlotte

  Austin, John

  Brown, Russell (Dumfries)

  Bailey, Adrian

  Browne, Desmond

  Baird, Vera

  Bruce, Malcolm

  Baker, Norman

  Bryant, Chris

  Banks, Tony

  Buck, Ms Karen

  Barnes, Harry

  Burden, Richard

  Barrett, John

  Burgon, Colin

  Barron, Kevin

  Burnham, Andy

  Battle, John

  Burstow, Paul

  Bayley, Hugh

  Byers, Rt Hon Stephen

  Beckett, Rt Hon Margaret

  Cairns, David

  Begg, Miss Anne

  Campbell, Alan (Tynemouth)

  Beith, Rt Hon A J

  Campbell, Mrs Anne (C'bridge)

  Benn, Hilary

  Campbell, Ronnie (Blyth V)

  Bennett, Andrew

  Carmichael, Alistair

  Benton, Joe

  Casale, Roger

  Berry, Roger

  Caton, Martin

  Betts, Clive

  Cawsey, Ian

  Blackman, Liz

  Challen, Colin

  Blears, Ms Hazel

  Chapman, Ben (Wirral S)

  Blizzard, Bob

  Chaytor, David

  Blunkett, Rt Hon David

  Chidgey, David

  773

  Clark, Mrs Helen (Peterborough)

  Green, Matthew (Ludlow)

  Clark, Paul (Gillingham)

  Griffiths, Jane (Reading E)

  Clarke, Rt Hon Charles (Norwich S)

  Griffiths, Win (Bridgend)

  Grogan, John

  Clarke, Rt Hon Tom (Coatbridge)

  Hain, Rt Hon Peter

  Clelland, David

  Hall, Mike (Weaver Vale)

  Clwyd, Ann

  Hall, Patrick (Bedford)

  Coaker, Vernon

  Hamilton, David (Midlothian)

  Coffey, Ms Ann

  Hamilton, Fabian (Leeds NE)

  Coleman, Iain

  Hancock, Mike

  Colman, Tony

  Hanson, David

  Connarty, Michael

  Harman, Rt Hon Ms Harriet

  Cook, Frank (Stockton N)

  Harris, Dr Evan (Oxford W)

  Corbyn, Jeremy

  Harris, Tom (Glasgow Cathcart)

  Corston, Jean

  Harvey, Nick

  Cotter, Brian

  Havard, Dai

  Cousins, Jim

  Healey, John

  Cox, Tom

  Heath, David

  Crausby, David

  Henderson, Doug (Newcastle N)

  Cruddas, Jon

  Henderson, Ivan (Harwich)

  Cryer, Mrs Ann (Keighley)

  Hendrick, Mark

  Cummings, John

  Hepburn, Stephen

  Cunningham, Rt Hon Dr Jack (Copeland)

  Heppell, John

  Hermon, Lady

  Cunningham, Jim (Cov'try S)

  Hesford, Stephen

  Cunningham, Tony (Workington)

  Heyes, David

  Curtis-Thomas, Mrs Claire

  Hill, Keith

  Dalyell, Tarn

  Hinchliffe, David

  Darling, Rt Hon Alistair

  Hoey, Kate

  Davey, Valerie (Bristol W)

  Holmes, Paul

  David, Wayne

  Hood, Jimmy

  Davidson, Ian

  Hope, Phil

  Davies, Rt Hon Denzil (Llanelli)

  Hopkins, Kelvin

  Davis, Rt Hon Terry (B'ham Hodge H)

  Howarth, Rt Hon Alan (Newport E)

  Howarth, George (Knowsley N)

  Dawson, Hilton

  Hoyle, Lindsay

  Dean, Mrs Janet

  Hughes, Beverley (Stretford)

  Denham, Rt Hon John

  Hughes, Kevin (Doncaster N)

  Dhanda, Parmjit

  Hughes, Simon (Southwark N)

  Dismore, Andrew

  Humble, Mrs Joan

  Dobbin, Jim

  Hurst, Alan

  Donohoe, Brian H

  Hutton, Rt Hon John

  Doran, Frank

  Iddon, Dr Brian

  Dowd, Jim

  Illsley, Eric

  Drew, David

  Ingram, Rt Hon Adam

  Drown, Ms Julia

  Jackson, Glenda (Hampstead)

  Dunwoody, Mrs Gwyneth

  Jamieson, David

  Eagle, Angela (Wallasey)

  Jenkins, Brian

  Eagle, Maria (L'pool Garston)

  Johnson, Alan (Hull W & Hessle)

  Edwards, Huw

  Jones, Helen (Warrington N)

  Efford, Clive

  Jones, Jon Owen (Cardiff C)

  Ellman, Mrs Louise

  Jones, Kevan (N Durham)

  Etherington, Bill

  Jones, Lynne (Selly Oak)

  Ewing, Annabelle

  Jones, Martyn (Clwyd S)

  Farrelly, Paul

  Jones, Nigel (Cheltenham)

  Field, Rt Hon Frank (Birkenhead)

  Kaufman, Rt Hon Gerald

  Fisher, Mark

  Keeble, Ms Sally

  Fitzpatrick, Jim

  Keen, Alan (Feltham & Heston)

  Fitzsimons, Mrs Lorna

  Keen, Ann (Brentford & Isleworth)

  Flint, Caroline

  Keetch, Paul

  Flynn, Paul

  Kelly, Ruth

  Foster, Rt Hon Derek

  Kemp, Fraser

  Foster, Don (Bath)

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

  Foster, Michael (Worcester)

  Foster, Michael Jabez (Hastings)

  Khabra, Piara S

  Foulkes, George

  Kidney, David

  Francis, Dr Hywel

  Kilfoyle, Peter

  Gapes, Mike

  King, Andy (Rugby & Kenilworth)

  Gardiner, Barry

  King, Ms Oona (Bethnal Green)

  George, Andrew (St Ives)

  Knight, Jim (S Dorset)

  George, Rt Hon Bruce (Walsall S)

  Kumar, Dr Ashok

  Gerrard, Neil

  Ladyman, Dr Stephen

  Gibson, Dr Ian

  Lamb, Norman

  Gilroy, Linda

  Lammy, David

  Godsiff, Roger

  Lawrence, Mrs Jackie

  Goggins, Paul

  Laws, David

  774

  Laxton, Bob

  Pound, Stephen

  Lazarowicz, Mark

  Powell, Sir Raymond

  Lepper, David

  Prentice, Ms Bridget (Lewisham E)

  Leslie, Christopher

  Prentice, Gordon (Pendle)

  Lewis, Ivan (Bury S)

  Prescott, Rt Hon John

  Liddell, Rt Hon Mrs Helen

  Price, Adam

  Linton, Martin

  Primarolo, Dawn

  Lloyd, Tony

  Prosser, Gwyn

  Llwyd, Erfyn

  Pugh, Dr John

  Love, Andrew

  Purchase, Ken

  Lucas, Ian

  Quin, Rt Hon Joyce

  Luke, Iain

  Rammell, Bill

  Lyons, John

  Rapson, Syd

  McAvoy, Thomas

  Raynsford, Rt Hon Nick

  McCabe, Stephen

  Reid, Alan (Argyll & Bute)

  McCafferty, Chris

  Rendel, David

  McCartney, Rt Hon Ian

  Robertson, Angus (Moray)

  McDonagh, Siobhain

  Robertson, John (Glasgow Anniesland)

  MacDonald, Calum

  McDonnell, John

  Roche, Mrs Barbara

  McFall, John

  Ross, Ernie

  McGuire, Mrs Anne

  Roy, Frank

  McIsaac, Shona

  Ruane, Chris

  McKechin, Ann

  Ruddock, Joan

  McKenna, Rosemary

  Russell, Bob (Colchester)

  Mackinlay, Andrew

  Ryan, Joan

  McNamara, Kevin

  Salmond, Alex

  McNulty, Tony

  Salter, Martin

  MacShane, Denis

  Sanders, Adrian

  McWalter, Tony

  Sarwar, Mohammad

  McWilliam, John

  Savidge, Malcolm

  Mahmood, Khalid

  Sawford, Phil

  Mahon, Mrs Alice

  Sedgemore, Brian

  Mallaber, Judy

  Shaw, Jonathan

  Mann, John

  Sheerman, Barry

  Marris, Rob

  Sheridan, Jim

  Marsden, Gordon (Blackpool S)

  Shipley, Ms Debra

  Marshall, Jim (Leicester S)

  Simpson, Alan (Nottingham S)

  Marshall-Andrews, Robert

  Skinner, Dennis

  Martlew, Eric

  Smith, Rt Hon Andrew (Oxford E)

  Michael, Rt Hon Alun

  Smith, Rt Hon Chris (Islington S)

  Milburn, Rt Hon Alan

  Smith, Geraldine (Morecambe)

  Miliband, David

  Smith, Jacqui (Redditch)

  Miller, Andrew

  Smith, John (Glamorgan)

  Mitchell, Austin (Gt Grimsby)

  Smith, Llew (Blaenau Gwent)

  Moffatt, Laura

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

  Moore, Michael

  Southworth, Helen

  Moran, Margaret

  Spellar, Rt Hon John

  Morgan, Julie

  Squire, Rachel

  Mortey, Elliot

  Starkey, Dr Phyllis

  Morris, Rt Hon Estelle

  Steinberg, Gerry

  Mountford, Kali

  Stevenson, George

  Mudie, George

  Stewart, David (Inverness E)

  Mullin, Chris

  Stewart, Ian (Eccles)

  Munn, Ms Meg

  Stinchcombe, Paul

  Murphy, Denis (Wansbeck)

  Stoate, Dr Howard

  Murphy, Jim (Eastwood)

  Stringer, Graham

  Naysmith, Dr Doug

  Stuart, Ms Gisela

  Oaten, Mark

  Stunell, Andrew

  O'Brien, Bill (Normanton)

  Sutcliffe, Gerry

  O'Brien, Mike (N Warks)

  Tami, Mark

  O'Hara, Edward

  Taylor. Rt Hon Ann (Dewsbury)

  Olner, Bill

  Taylor, Ms Dari (Stockton S)

  O'Neill, Martin

  Taylor, David (NW Leics)

  Öpik, Lembit

  Taylor, Matthew (Truro)

  Organ, Diana

  Taylor, Dr Richard (Wyre F)

  Osborne, Sandra (Ayr)

  Thomas, Gareth (Clwyd W)

  Owen, Albert

  Thomas, Gareth R (Harrow W)

  Palmer, Dr Nick

  Thomas, Simon (Ceredigion)

  Perham, Linda

  Thurso, John

  Picking, Anne

  Timms, Stephen

  Pickthall, Colin

  Tipping, Paddy

  Pike, Peter

  Todd, Mark

  Plaskitt, James

  Tonge. Dr Jenny

  Pond, Chris

  Touhig, Don

  Pope, Greg

  Trickett, Jon

  775

  Truswell, Paul

  Williams, Mrs Betty (Conwy)

  Turner, Dennis (Wolverh'ton SE)

  Williams, Hywel (Caernarfon)

  Turner, Dr Desmond (Kemptown)

  Willis, Phil

  Turner, Neil (Wigan)

  Winnick, David

  Twigg, Derek (Halton)

  Winterton, Ms Rosie (Doncaster C)

  Twigg, Stephen (Enfield)

  Wishart, Pete

  Tyler, Paul

  Woodward, Shaun

  Tynan, Bill

  Woolas, Phil

  Walley, Ms Joan

  Worthington, Tony

  Wareing, Robert N

  Wray, James

  Wright, Anthony D (Gt Yarmouth)

  Watts, David

  Wright, David (Telford)

  Webb, Steve

  Wright, Tony (Cannock)

  Weir, Michael

  Younger-Ross, Richard

  White, Brian

  Whitehead, Dr Alan

  Tellers for the Noes:

  Williams, Rt Hon Alan (Swansea W)

  Mr. Ivor Caplin and

  Mr. Ian Pearson.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
  The House divided: Ayes 335, Noes 193.

  Division No. 58]

  [7.12 pm

  AYES

  Abbott, Ms Diane

  Campbell, Alan (Tynemouth)

  Adams, Mrs Irene (Paisley N)

  Campbell, Mrs Anne (C'bridge)

  Ainger, Nick

  Campbell, Ronnie (Blyth V)

  Ainsworth, Bob (Cov'try NE)

  Casale, Roger

  Alexander, Douglas

  Caton, Martin

  Allen, Graham

  Cawsey, Ian

  Anderson, Rt Hon Donald (Swansea E)

  Challen, Colin

  Chapman, Ben (Wirral S)

  Armstrong, Rt Hon Ms Hilary

  Chaytor, David

  Atherton, Ms Candy

  Clark, Mrs Helen (Peterborough)

  Atkins, Charlotte

  Clark, Paul (Gillingham)

  Austin, John

  Clarke, Rt Hon Charles (Norwich S)

  Bailey, Adrian

  Baird, Vera

  Clarke, Rt Hon Tom (Coatbridge)

  Banks, Tony

  Clelland, David

  Barnes, Harry

  Coaker, Vernon

  Barron, Kevin

  Coffey, Ms Ann

  Battle, John

  Coleman, Iain

  Bayley, Hugh

  Colman, Tony

  Beckett, Rt Hon Margaret

  Connarty, Michael

  Begg, Miss Anne

  Cook, Frank (Stockton N)

  Benn, Hilary

  Corston, Jean

  Bennett, Andrew

  Cousins, Jim

  Benton, Joe

  Cox, Tom

  Berry, Roger

  Crausby, David

  Betts, Clive

  Cruddas, Jon

  Blackman, Liz

  Cryer, Mrs Ann (Keighley)

  Blears, Ms Hazel

  Cummings, John

  Blizzard, Bob

  Cunningham, Rt Hon Dr Jack (Copeland)

  Blunkett, Rt Hon David

  Boateng, Rt Hon Paul

  Cunningham, Jim (Cov'try S)

  Borrow, David

  Cunningham, Tony (Workington)

  Bradley, Peter (The Wrekin)

  Curtis-Thomas, Mrs Claire

  Brennan, Kevin

  Dalyell, Tam

  Brown, Rt Hon Gordon (Dunfermline E)

  Darting, Rt Hon Alistair

  Davey, Valerie (Bristol W)

  Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

  David, Wayne

  Davidson, Ian

  Brown, Russell (Dumfries)

  Davies, Rt Hon Denzil (Llanelli)

  Browne, Desmond

  Davis, Rt Hon Terry (B'ham Hodge H)

  Bryant, Chris

  Buck, Ms Karen

  Dawson, Hilton

  Burden, Richard

  Dean, Mrs Janet

  Burgon, Colin

  Denham, Rt Hon John

  Burnham, Andy

  Dhanda, Parmjit

  Byers, Rt Hon Stephen

  Dismore, Andrew

  Cairns, David

  Dobbin, Jim

  776

  Donohoe, Brian H

  Jones, Jon Owen (Cardiff C)

  Doran, Frank

  Jones, Kevan (N Durham)

  Dowd, Jim

  Jones, Lynne (Selly Oak)

  Drew, David

  Jones, Martyn (Clwyd S)

  Drown, Ms Julia

  Kaufman, Rt Hon Gerald

  Eagle, Angela (Wallasey)

  Keeble, Ms Sally

  Eagle, Maria (L'pool Garston)

  Keen, Alan (Feltham & Heston)

  Edwards, Huw

  Keen, Ann (Brentford & Isleworth)

  Efford, Clive

  Kelly, Ruth

  Ellman, Mrs Louise

  Kemp, Fraser

  Etherington, Bill

  Khabra, Piara S

  Farrelly, Paul

  Kidney, David

  Field, Rt Hon Frank (Birkenhead)

  Kilfoyle, Peter

  Fisher, Mark

  King, Andy (Rugby & Kenilworth)

  Fitzpatrick, Jim

  King, Ms Oona (Bethnal Green)

  Fitzsimons, Mrs Lorna

  Knight, Jim (S Dorset)

  Kumar, Dr Ashok

  Flint, Caroline

  Ladyman, Dr Stephen

  Flynn, Paul

  Lammy, David

  Foster, Rt Hon Derek

  Lawrence, Mrs Jackie

  Foster, Michael (Worcester)

  Laxton, Bob

  Foster, Michael Jabez (Hastings)

  Lazarowicz, Mark

  Foulkes, George

  Lepper, David

  Francis, Dr Hywel

  Leslie, Christopher

  Gapes, Mike

  Lewis, Ivan (Bury S)

  Gardiner, Barry

  Liddell, Rt Hon Mrs Helen

  George, Rt Hon Bruce (Walsall S)

  Linton, Martin

  Gerrard, Neil

  Lloyd, Tony

  Gibson, Dr Ian

  Love, Andrew

  Gilroy, Linda

  Lucas, Ian

  Godsiff, Roger

  Luke, Iain

  Goggins, Paul

  Lyons, John

  Griffiths, Jane (Reading E)

  McAvoy, Thomas

  Griffiths, Win (Bridgend)

  McCabe, Stephen

  Grogan, John

  McCafferty, Chris

  Hain, Rt Hon Peter

  McCartney, Rt Hon Ian

  Hall, Mike (Weaver Vale)

  McDonagh, Siobhain

  Hall, Patrick (Bedford)

  MacDonald, Calum

  McDonnell, John

  Hamilton, David (Midlothian)

  McFall, John

  Hamilton, Fabian (Leeds NE)

  McGuire, Mrs Anne

  Hanson, David

  McIsaac, Shona

  Harman, Rt Hon Ms Harriet

  McKechin, Ann

  Harris, Tom (Glasgow Cathcart)

  McKenna, Rosemary

  Havard, Dai

  Mackinlay, Andrew

  Healey, John

  McNamara, Kevin

  Henderson, Doug (Newcastle N)

  McNulty, Tony

  Henderson, Ivan (Harwich)

  MacShane, Denis

  Hendrick, Mark

  McWalter, Tony

  Hepburn, Stephen

  McWilliam, John

  Heppell, John

  Mahmood, Khalid

  Hesford, Stephen

  Mahon, Mrs Alice

  Heyes, David

  Mallaber, Judy

  Hill, Keith

  Mann, John

  Hinchliffe, David

  Marris, Rob

  Hoey, Kate

  Marsden, Gordon (Blackpool S)

  Hood, Jimmy

  Marshall, Jim (Leicester S)

  Hope, Phil

  Marshall-Andrews, Robert

  Hopkins, Kelvin

  Martlew, Eric

  Howarth, Rt Hon Alan (Newport E)

  Michael, Rt Hon Alun

  Howarth, George (Knowsley N)

  Milburn, Rt Hon Alan

  Hoyle, Lindsay

  Miliband, David

  Hughes, Kevin (Doncaster N)

  Miller, Andrew

  Hughes, Beverley (Stretford)

  Mitchell, Austin (Gt Grimsby)

  Moffatt, Laura

  Humble, Mrs Joan

  Moran, Margaret

  Hurst, Alan

  Morgan, Julie

  Hutton, Rt Hon John

  Morley, Elliot

  Iddon, Dr Brian

  Morris, Rt Hon Estelle

  Illsley, Eric

  Mountford, Kali

  Ingram, Rt Hon Adam

  Mudie, George

  Jackson, Glenda (Hampstead)

  Mullin, Chris

  Jamieson, David

  Munn, Ms Meg

  Jenkins, Brian

  Murphy, Denis (Wansbeck)

  Johnson, Alan (Hull W & Hessle)

  Murphy, Jim (Eastwood)

  Jones, Helen (Warrington N)

  Naysmith, Dr Doug

  777

  O'Brien, Bill (Normanton)

  Southworth, Helen

  O'Brien, Mike (N Warks)

  Spellar, Rt Hon John

  O'Hara, Edward

  Squire, Rachel

  Olner, Bill

  Starkey, Dr Phyllis

  Organ, Diana

  Steinberg, Gerry

  Osborne, Sandra (Ayr)

  Stevenson, George

  Owen, Albert

  Stewart, David (Inverness E)

  Palmer, Dr Nick

  Stewart, Ian (Eccles)

  Perham, Linda

  Stinchcombe, Paul

  Picking, Anne

  Stoate, Dr Howard

  Pickthall, Colin

  Stringer, Graham

  Pike, Peter

  Stuart, Ms Gisela

  Plaskitt, James

  Sutclifte, Gerry

  Pond, Chris

  Tami, Mark

  Pope, Greg

  Taylor, Rt Hon Ann (Dewsbury)

  Pound, Stephen

  Taylor, Ms Dari (Stockton S)

  Powell, Sir Raymond

  Taylor, David (NW Leics)

  Prentice, Ms Bridget (Lewisham E)

  Thomas, Gareth (Clwyd W)

  Prentice, Gordon (Pendle)

  Thomas, Gareth R (Harrow W)

  Prescott, Rt Hon John

  Timms, Stephen

  Primarolo, Dawn

  Tipping, Paddy

  Prosser, Gwyn

  Todd, Mark

  Purchase, Ken

  Touhig, Don

  Quin, Rt Hon Joyce

  Trickett, Jon

  Rammell, Bill

  Truswell, Paul

  Rapson, Syd

  Turner, Dennis (Wolverh'ton SE)

  Raynsford, Rt Hon Nick

  Turner, Dr Desmond (Kemptown)

  Robertson, John (Glasgow Anniesland)

  Turner, Neil (Wigan)

  Twigg, Derek (Halton)

  Roche, Mrs Barbara

  Twigg, Stephen (Enfield)

  Ross, Ernie

  Tynan, Bill

  Roy, Frank

  Walley, Ms Joan

  Ruane, Chris

  Wareing, Robert N

  Ruddock, Joan

  Watts, David

  Ryan, Joan

  White, Brian

  Salter, Martin

  Whitehead, Dr Alan

  Sarwar, Mohammad

  Williams, Rt Hon Alan (Swansea W)

  Savidge, Malcolm

  Sawford, Phil

  Williams, Mrs Betty (Conwy)

  Sedgemore, Brian

  Winnick, David

  Shaw, Jonathan

  Winterton, Ms Rosie (Doncaster C)

  Sheerman, Barry

  Woodward, Shaun

  Sheridan, Jim

  Woolas, Phil

  Shipley, Ms Debra

  Worthington, Tony

  Simpson, Alan (Nottingham S)

  Wray, James

  Skinner, Dennis

  Wright, Anthony D (Gt Yarmouth)

  Smith, Rt Hon Andrew (Oxford E)

  Wright, David (Telford)

  Smith, Rt Hon Chris (Islington S)

  Wright, Tony (Cannock)

  Smith, Geraldine (Morecambe)

  Smith, Jacqui (Redditch)

  Tellers for the Ayes:

  Smith, John (Glamorgan)

  Mr. Ian Pearson and

  Smith, Llew (Blaenau Gwent)

  Mr. Ivor Caplin.

  NOES

  Ainsworth, Peter (E Surrey)

  Bruce, Malcolm

  Allan, Richard

  Burns, Simon

  Amess, David

  Burnside, David

  Ancram, Rt Hon Michael

  Burstow, Paul

  Arbuthnot, Rt Hon James

  Burt, Alistair

  Atkinson, David (Bour'mth E)

  Butterfill, John

  Bacon, Richard

  Cameron, David

  Baker, Norman

  Carmichael, Alistair

  Barker, Gregory

  Cash, William

  Baron, John

  Chapman, Sir Sydney (Chipping Barnet)

  Barrett, John

  Beggs, Roy

  Chidgey, David

  Beith, Rt Hon AJ

  Chope, Christopher

  Bellingham, Henry

  Clappison, James

  Bercow, John

  Clifton-Brown, Geoffrey

  Boswell, Tim

  Collins, Tim

  Brady, Graham

  Conway, Derek

  Brake, Tom

  Cotter, Brian

  Brazier, Julian

  Cran, James

  Breed, Colin

  Curry, Rt Hon David

  Brooke, Annette

  Davies, Quentin (Grantham)

  Browning, Mrs Angela

  Davis, Rt Hon David (Haltemprice)

  778

  Djanogly, Jonathan

  Maude, Rt Hon Francis

  Dodds, Nigel

  Mawhinney, Rt Hon Sir Brian

  Duncan, Peter (Galloway)

  May, Mrs Theresa

  Duncan Smith, Rt Hon Iain

  Mercer, Patrick

  Ewing, Annabelle

  Mitchell, Andrew (Sutton Coldfield)

  Fabricant, Michael

  Moore, Michael

  Murrison, Dr Andrew

  Fallon, Michael

  Norman, Archie

  Flight, Howard

  Oaten, Mark

  Forth, Rt Hon Eric

  O'Brien, Stephen (Eddisbury)

  Foster, Don (Bath)

  Öpik, Lembit

  Fox, Dr Liam

  Osborne, George (Tatton)

  Francois, Mark

  Ottaway, Richard

  Gale, Roger

  Paice, James

  George, Andrew (St Ives)

  Paterson, Owen

  Gibb, Nick

  Pickles, Eric

  Goodman, Paul

  Portillo, Rt Hon Michael

  Price, Adam

  Gray, James

  Prisk, Mark

  Grayling, Chris

  Pugh, Dr John

  Green, Damian (Ashford)

  Redwood, Rt Hon John

  Green, Matthew (Ludlow)

  Reid, Alan (Argyll & Bute)

  Greenway, John

  Rendel, David

  Grieve, Dominic

  Robathan, Andrew

  Gummer, Rt Hon John

  Robertson, Angus (Moray)

  Hancock, Mike

  Robertson, Hugh (Faversham)

  Harris, Dr Evan (Oxford W)

  Robertson, Laurence (Tewk'b'ry)Roe, Mrs Marion

  Roe, Mrs Marion

  Harvey, Nick

  Ruffley, David

  Hawkins, Nick

  Russell, Bob (Colchester)

  Hayes, John

  Salmond, Alex

  Heald, Oliver

  Sanders, Adrian

  Heath, David

  Sayeed, Jonathan

  Hendry, Charles

  Selous, Andrew

  Hermon, Lady

  Shephard, Rt Hon Mrs Gillian

  Hoban, Mark

  Shepherd, Richard

  Hogg, Rt Hon Douglas

  Simmonds, Mark

  Simpson, Keith (Mid-Norfolk)

  Holmes, Paul

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

  Howard, Rt Hon Michael

  Smyth, Rev Martin (Belfast S)

  Howarth, Gerald (Aldershot)

  Soames, Nicholas

  Hughes, Simon (Southwark N)

  Spelman, Mrs Caroline

  Hunter, Andrew

  Spicer, Sir Michael

  Jack, Rt Hon Michael

  Spink, Bob

  Jackson, Robert (Wantage)

  Spring, Richard

  Johnson, Boris (Henley)

  Stanley, Rt Hon Sir John

  Jones, Nigel (Cheltenham)

  Steen, Anthony

  Keetch, Paul

  Streeter, Gary

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

  Stunell, Andrew

  Swayne, Desmond

  Swire, Hugo

  Key, Robert

  Syms, Robert

  Kirkbride, Miss Julie

  Tapsell, Sir Peter

  Knight, Rt Hon Greg (E Yorkshire)

  Taylor, John (Solihull)

  Laing, Mrs Eleanor

  Taylor, Matthew (Truro)

  Lamb, Norman

  Taylor, Dr Richard (Wyre F)

  Lansley, Andrew

  Taylor, Sir Teddy

  Laws, David

  Thomas, Simon (Ceredigion)

  Leigh, Edward

  Thurso, John

  Letwin, Oliver

  Tonge, Dr Jenny

  Lewis, Dr Julian (New Forest E)

  Tredinnick, David

  Trend, Michael

  Liddell-Grainger, Ian

  Turner, Andrew (Isle of Wight)

  Lidington, David

  Tyler, Paul

  Lilley, Rt Hon Peter

  Tyrie, Andrew

  Llwyd, Elfyn

  Viggers, Peter

  Loughton, Tim

  Walter, Robert

  Luff, Peter

  Waterson, Nigel

  McIntosh, Miss Anne

  Watkinson, Angela

  MacKay, Rt Hon Andrew

  Webb, Steve

  Maclean, Rt Hon David

  Weir, Michael

  Widdecombe, Rt Hon Miss Ann

  McLoughlin, Patrick

  Wilkinson, John

  Malins, Humfrey

  Willetts, David

  Maples, John

  Williams, Hywel (Caernarfon)

  Mates, Michael

  Willis. Phil

  Winterton, Mrs Ann (Congleton)

  Younger-Ross, Richard

  Winterton, Nicholas (Macclesfield)

  Wishart, Pete

  Tellers for the Noes:

  Yeo, Tim

  Mrs. Cheryl Gillan and

  Young, Rt Hon Sir George

  Mr. John Randall.

  Question accordingly agreed to.
  MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House recognises that many of the problems of the railways stem from the years of underfunding of the industry by the previous Conservative Government and the shambles of their rushed and ideologically driven privatisation of Railtrack; welcomes the decisive action that Ministers have taken in regard to Railtrack which will be welcomed by the travelling public; congratulates the Government for developing contingency plans for the industry as soon as it was told of the company's plight; rejects the policies of the Opposition. who would have offered the company a blank cheque and even now wish to pay over £1bn to compensate shareholders; and welcomes the work of Ministers in developing positive policies to take the industry forward in terms of a successor to Railtrack and to put the interests of passengers first.

Stakeholder Pensions
Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the second debate, on the Government's stakeholder pension scheme. I should announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
7.24 pm
Mr. David Willetts: I beg to move,
That this House regrets the Government's failure to deliver stakeholder pensions to its target group of 'those with moderate incomes of between £10,000 and £20,000 a year'; condemns the failure to reform the obligation to purchase an annuity at age 75. which is a disincentive to taking out stakeholders and other forms of personal pension; regrets the spread of means-testing which acts as a disincentive to saving; condemns the burdens on company pension schemes which are causing employers to close them to new members; and calls on the Government to review its pension policies so as to reverse the decline in funded pensions.
The purpose of this debate is to hold the Government to account for a policy launched in their election manifesto of 1997 on a new form of personal pensions—stakeholder pensions—known in the trade as genetically modified personal pensions. They were legislated for in 1999 and, of course, they were launched in April 2001. Stakeholder pensions have now been available and marketed for more than six months and it is time to hold the Government to account for the delivery of promises that they made when they were pushing their legislation through the House.
I shall briefly remind the House of what the Government promised. The target group for stakeholder pensions are the 5 million people on low and middle incomes who do not have a pension. Lord Rooker, the former Minister of State, said:
"Our estimate of the target group of five million people for stakeholder pension schemes is based on the number of people earning between around £10,000 and £20,000 who are not in an occupational pension scheme."—[Official Report,10 April 2000; Vol. 348, c. 25W.]
So the target was the 5 million people with modest earnings who did not have pension provision. How successful are the Government in addressing that target group and ensuring that they take out stakeholder pensions? We know—not, I am afraid, from the Government's statistics, but from the Association of British Insurers—that 416,000 stakeholder pensions have already been sold; a modest but useful figure one might think, until one looks in a bit more detail at who those 416,000 people are.
We know that 160,000 people have transferred out of the construction industry pension scheme, which is already in operation. The biggest single move into stakeholder pensions has been by the construction industry, from another form of pension provision, which accounts for approximately 160,000 of the 416,000 pensions sold. We are therefore left with about 250,000 people who have taken out stakeholder pensions; perhaps they are in the Government's target group for the new pension provision. Again, the ABI estimates that approximately half the people taking out stakeholder pensions already have private pension provision above the minimum contracted-out level. They may be people who are transferring from some other form of funded pension scheme, or they may be taking the benefits of concurrency. However, it looks as if about 125,000 of the

781
250,000 people who are moving into a stakeholder pensions already have some form of pension provision. They are not the target group, which consists of people who do not already have a pension.
We are left with 125,000 people. How are the Government doing with them? The total may be a bit smaller, but at least 125,000 members of the target group have taken out stakeholder pensions. The Government said that stakeholders were aimed at people with modest earnings; perhaps they have overachieved on that. We know that approximately 25 per cent. of stakeholder pensions have been taken out by individuals with incomes of less than £7,500 or no income at all. Who are they? We have all been reading the financial pages of our newspapers, so we know that they are the non-working wives of people who have been well advised that the pension is a useful tax relief—
The Parliamentary Under-Secretary of State for Work and Pensions(Maria Eagle): It is wives, is it?
Mr. Willetts: Yes, by and large, it is usually non-working wives. They appear to make up another 25 per cent. of the people who have taken out stakeholders, and account for another 62,000 pensions.
Perhaps the Government have at least managed to issue stakeholder pensions to 62,000 people in their target group. However, that is not the end of the story, because there is another group. We know that 15 per cent. of stakeholder pensions have been taken out on behalf of children, usually by their grandparents, accounting for another 37,000 pensions. In fact, a generous assessment of how the Government are doing is that they have managed to issue, perhaps, 37,000 stakeholder pensions to their target group of 5 million. Mr. John Jory of Building and Civil Engineering Insurance, the company which is selling stakeholder pensions to people in the construction industry, said:
"we are probably the only provider selling to the target market."
It may be that nobody else is selling to the target group. I suspect that the number of stakeholder pensions sold by the Government to the target group may be lower than the number of life peers created by the Prime Minister—248 at the last count and, of course, rising fast. We want to hear from the Minister tonight what he has been doing to meet his target of 5 million people who do not have funded pensions, which is the target group for stakeholder pensions.
What have the Government been doing? First, as we would expect from them, they have been spinning—redefining the target group. There has been an elaborate debate about whether the target group are people on low to moderate earnings, or on moderate to high earnings. I will not detain the House with the various prevarications of the Secretary of State and his colleagues about that. Suffice it to say that we can at least be clear, because it has been said time and again, and it is the basis on which the state second pension is constructed, that the target group are those with incomes of £10,000 to £20,000 a year who do not have an occupational pension.
It is no good the Government spinning themselves out of trouble by claiming that that is not the target group. They have regularly identified it as the target group.
782
The Government will be spinning for the rest of their life. "Spinning their way out of trouble" will be their epitaph, but it will not do.
The other great recourse of a Labour Government in trouble is to an advertising campaign. It cost £6.5 million—three times as much as the entire Department of Social Security advertising budget in the previous year. The Government have tried to tempt people from the target group into stakeholder pensions by increasing awareness of them. I congratulate the Secretary of State. His advertising campaign has clearly worked. The Government have succeeded. During the period of the advertising campaign, between February and June 2001, people's awareness of stakeholder pensions rose by 15 per cent. That was, in part at least, because of the Government's advertising campaign.
Good news, so far, but there has been one problem: the more people have grown aware of stakeholder pensions as a result of the Government's advertising campaign, the more confused they have become about pensions in general. The IFA promotion chief executive, David Elms, said:
"The worrying trend is that as people are becoming increasingly aware of stakeholder pensions, they are becoming more and more bewildered."
The only thing the advertising campaign has succeeded in doing is making people more confused about stakeholders and pensions than they were before it started. There has been a 10 per cent. increase in the number of people who describe themselves as being in the dark about retirement planning since the Government's advertising campaign began, so the only effect of the campaign has been to spread more confusion about the best way of saving for a pension.
I want the Secretary of State to offer the House this evening an account of who is buying stakeholder pensions, whether that is compatible with the Government's objective for the target group, and what he will do to meet the objectives that he has laid before the House for the marketing of stakeholder pensions.
Why have stakeholder pensions proved such an extraordinary flop, after all the publicity, the expenditure on advertising, and the effort that the Government have put in over the past five years? I suggest that there are three reasons. The first is that as means testing spreads further and further up the income scale, fewer and fewer people can be confident that they will he better off if they have a stakeholder pension.
We hear from the Government Benches all the time about the problems of pensions mis-selling, but it would be mis-selling a stakeholder pension if people took one out, perhaps saving out of their modest earnings, and at the end of the day found that they were hardly better off, despite having put aside a few thousand pounds of their hard-earned savings. We have repeatedly asked Ministers to answer the $64,000 question: how much money do people need to have in a stakeholder pension fund in order to be confident that the money that they will receive when they retire will float them above means-tested benefits? The answer could well be $64,000. It could be more than that, but we have never had a figure from Ministers. That is why they run the risk of mis-selling their own stakeholder pension.
The Institute for Fiscal Studies warned that
"the increase in the rate of the minimum income guarantee over the next few years will unambiguously discourage saving".

783
The Secretary of State has a problem of his own creation as he spreads means testing up the income scale.
Secondly, the Government have imposed new taxes on funded pensions. They have increased the burden of taxation on people who save for their retirement. The Prime Minister told the House last year that we should not worry about the burden of extra taxation. He said that
"because of rises in the stock market since the election, those sums"—
the sums that we were quoting for the increase in taxation—
"are entirely illusory."—[Official Report, 1 November 2000; Vol. 355, c. 704.]
However, the sums that we were quoting for the cost of those tax increases were very real. It was the stock market gains that the Prime Minister claimed in defence of his policy that were illusory. It is no good the Government saying that they want to encourage people into funded pensions, if they then tax them more heavily.
The third way the Government have made the problem worse is by failing to respond to the widespread demand from all parts of the House, to be expressed in a private Member's Bill promoted by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), for reform of annuity law. The present position, whereby someone is obliged to buy an annuity at the age of 75, is a further disincentive to people taking out a stakeholder pension or other forms of personal pension provision. For many people, the obligation to purchase an annuity at the age of 75 is an extremely unattractive proposition. There are proposals on the table to tackle that. It is a source of genuine amazement to me that the Government have still not acted on a manifest problem.
Richard Ottaway: Is not the problem the fact that the Budget Book states that the Government are engaged in discussion and in reviews and analysis of the situation, yet Ministers make it clear that they have no intention of making any progress? We have one half of Government disagreeing with the other half.
Mr. Willetts: My hon. Friend is right. The Government have set out an objective for more funded pension provision, an objective which I wholeheartedly endorse. One of the Secretary of State's own documents states:
"Currently about 60 per cent. of total spending comes from the State and 40 per cent. from the private sector. Over time, we expect this balance to change so that 40 per cent. will come from the State and 60 per cent. from the private sector."
What does "over time" mean? How long will we have to wait to achieve that? Is the right hon. Gentleman taking any steps towards the achievement of that objective? The danger is that we are going in the opposite direction. The danger is that in Britain, after years of success in building up funded pensions, we may now be going backwards.
The gentleman who has just become the chairman of the National Association of Pension Funds says that stakeholders may force pension take-up down. He says that pension provision may fall with the introduction of stakeholders, if one of the effects of stakeholders is that people can move into inferior pension provision compared with what they currently have.
784
Marks and Spencer Financial Services has warned of this in its "Stakeholder Barometer", which states:
"Only a quarter, 27 per cent., of companies planning to set up stakeholder pension schemes will contribute to an employee's pension, with the remaining 73 per cent. just offering access. This is in stark contrast to the existing situation where more than half, 52 per cent., of the employers with a group personal pension set up already, have decided to actively contribute to some or all of the pensions set up by their employees."
That is hard evidence which I hope the Secretary of State will take into account.
The danger is not only that are we failing to make any progress towards the objective shared in all parts of the House of more funded pension provision relative to state provision; the danger is that we may be going backwards.
Paul Flynn: One policy project is to change a decision made by the Government that the hon. Gentleman supported on annuities at the age of 75. What will be his Government's policy, if they are elected at some future date? Will they abolish the stakeholder pension, or will they reform it? If they reform it, how will they do so?
Mr. Willetts: We are in favour of encouraging more funded pension provision. The purpose of the debate tonight is to establish what the Government are doing to meet their objectives for funded pension provision. I observe around the world a fascinating debate on how to encourage more funded pension provision. Our last manifesto contained proposals on that to encourage people to build up a funded alternative to the basic state pension, and on annuities. I support the initiative to simplify the regime for the regulation of pensions. I do not want to embarrass the right hon. Member for Birkenhead (Mr. Field), but his ideas for encouraging more funded pension provision are the sort of thing that we should be considering. Why are the Government doing nothing whatever to encourage more funded pension provision?
In an attempt to persuade the Minister for Pensions in particular of the power of our arguments, I refer the right hon. Gentleman to the notification that came across my desk of a conference which took place last week entitled "China's Pension System: Crisis and Challenge", on how China should move towards more funded pensions—[Interruption.] No, I am afraid I did not go.
For the Minister's benefit in particular I quote a resolution of the third plenary session of the 14th central committee of the Communist party of China calling for more funded pensions. It calls for the integration of
"social pooling with individual accounts"
for funded pensions. We have now reached the stage where throughout the world there is a more radical debate about moving to more funded pensions than the Government are willing to tolerate in Britain.
Roger Casale: Will the hon. Gentleman give way?
Mr. Willetts: No, I want to come rapidly to a conclusion because many other hon. Members wish to speak.
Throughout the world there is a debate about how to encourage more funded pension provision, an objective to which the Government have signed up. Why are they completely failing to meet their objectives?
Lynne Jones: If the hon. Gentleman wants to encourage more people in the target

785
earning group of £10,000 to £20,000 a year to take out funded pension schemes, what policies would he introduce to ensure that they are not caught in the means-tested trap which would make them little better off?
Mr. Willetts: One of the policies that we proposed at the last election was to enable people to build up bigger pension pots by making it possible to opt out from the basic state pension, which would increase their chance to build up a fund that would be worth so much that they would be floated off means-tested benefits.
I want to quote three organisations that have put clearly the points that we have tried to make this evening. First, Age Concern says that the crucial question is:
"Will stakeholder pensions ensure the delivery of an adequate retirement income for people on lower income levels? On current information, Age Concern believes they are not on course to deliver."
Does the Secretary of State disagree with Age Concern? Nick Timmins, writing in the Financial Times, said:
"The Government's pension policy is in a mess…makes the present course look increasingly unsustainable…something in the current arrangements is going to have to give."
From the Secretary of State's own side comes the friendly fire of the Institute for Public Policy Research, which says:
"There is concern from a number of quarters…that the government's strategy is unravelling."
It refers to
"doubts about Stakeholder pensions reaching their target group"
suggesting the need for a reassessment.
Tonight we ask the Secretary of State to come clean with the House about the take-up of stakeholder pensions and the reasons why they are manifestly failing to reach the target group who he has repeatedly assured the House are the people he expects to take out stakeholder pensions. In addition, we ask him to reflect on the fact that one of our nation's achievements was to build up more funded pensions as a proportion of our national income than just about any other advanced western country. That great achievement is now being frittered away, and stakeholder pensions are the latest example of that failure.
7.44 pm
The Secretary of State for Work and Pensions Mr. Alistair Darling): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
'welcomes the Government's reformed framework for pensions, which ensures that today's pensioners share in the country's rising prosperity and that tomorrow's pensioners are encouraged to save for their retirement, building on the foundation of the basic state pension; believes that pensioner poverty must be tackled through the minimum income guarantee; supports the reform of SERPS to create the State Second Pension which will give more help to low paid earners and people with broken work records, such as carers and disabled people; further supports stakeholder pensions which provide a low cost, flexible option for moderate or higher earners who do not have access to a good occupational scheme; welcomes the Government's plans to ensure that pensioners with modest savings or a small occupational pension are rewarded for their thrift through the new pension credit: and supports the need for an effective system of financial regulation through the FSA and other measures to build public confidence.'.
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I listened to the hon. Member for Havant (Mr. Willetts) make his second speech in the House since the general election. It is the second speech in which he has spoken at some length without at any point saying what his alternative approach might be, in this case on pension reform. I take with a pinch of salt his criticism of our policies. He is in the unusual position of having, in the previous Parliament, been responsible for not just one but two failed pension policies.
In May 2000, the Conservative party announced that it would get rid of the winter fuel payment and the free television licence, referring to them as gimmicks. In September 2000, the Conservatives said that they would consolidate the Government's "gimmicks" and redirect their savings into the basic state pension.
That is interesting because, when it comes to consistency, which is important in pension planning, I see from the Conservative party's website that its policy is to keep the winter fuel allowance and other special payments. It says:
"We would keep the Winter Fuel Allowance, free TV licences and the Christmas Bonus. And we would extend payments to people in care homes, to over 75s without a TV and to pensioners abroad."
Having moved from scrapping those gimmicks, they will now pay winter fuel payments to pensioners who live abroad and give free television licences to pensioners without televisions. That appears to be the sum total of the Conservatives' present policy.
The hon. Gentleman also referred to his second policy—it too encountered some difficulty during the election campaign—to scrap the basic state pension and encourage young people to opt out of it into a funded pension—[Interruption.] Conservative Members should be aware of the policies on which they fought the last election.
The difficulty is that the pension policy on which the hon. Gentleman fought the last election would have resulted in a young man having to save £10 a week from the age of 16 just to buy back the basic state pension that the Conservatives had taken away. The other difficulty, which is where the Conservatives got into real trouble at the election, is that the policy of moving everybody into a funded pension would have given rise to a black hole of some £6 billion. During the election campaign, they could not say where they could find that money, which is why, I think in week two, they stopped talking about their pension policy altogether.
The only thing that seems to have survived—at the moment anyway—is their savings policy, referred to in the motion, where 85 per cent. of the gain goes to the richest 20 per cent. of Conservatives. That should not be a surprise; nothing much has changed there.
I intend to deal with all the points that the hon. Gentleman made, but when we talk about the pension reforms that we put in place we have to bear in mind the problems that we encountered when we took office.
Mr. James Clappison: The right hon. Gentleman should be ashamed.
Mr. Darling: The hon. Gentleman talks about shame, but he should reflect on what we had to clear up. There was the mis-selling of pensions, which cost the industry millions of pounds. Hundreds of thousands of people lost out as a result of what the Conservative Government did.

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They halved the value of the state earnings related pension scheme and presided over a growing gap between the poorest pensioners and those who were better off. They left 2 million pensioners in poverty and did nothing to help the low paid or those in part-time work. They did nothing for disabled people and nothing for women to enable them to save for their pension. They failed to plan for the future. Moreover, critical to the subject we are debating tonight. they left a system riddled with disincentives so that those who did save for their retirement saw no advantage from their thrift and effort. That is what we inherited and what we had to clear up.
Mr. Gregory Barker: Is it not the case that the right hon. Gentleman inherited a substantially larger savings ratio than the one that prevails now, that savings under this Government have utterly collapsed, and that the Government have no credible policy to return to anything like the savings ratio that they inherited?
Mr. Darling: The savings ratio was at its lowest level ever in 1991, when the hon. Gentleman's party was in government.
I should like now to set out for the House the changes that we have made to pension policy for those on low incomes and also for those on moderate and high incomes. Our reforms are based on the clear principle that those who can save have a clear responsibility to do so. Yes, we want to get more people into funded pensions. In return, we need to ensure that the Government support those who cannot afford to save. Here we part company with the Conservative party, because we do not think that low-paid people should be put into funded pensions, because they are not good value for them. We also want to ensure that when people save for their retirement, they are rewarded for their thrift, and that the pension system is properly regulated and supervised so that we avoid the mis-selling problems that arose under the previous Government.
For today's pensioners, our first priority is to tackle the pensioner poverty that we inherited. More than 2 million pensioners live in poverty. In that respect, I want to deal with the first point made by the hon. Member for Havant, which he has also made on other occasions. When he speaks about means-testing, he makes clear over and over again his distaste for it, but he does not say what he would introduce in its place. The fact is that the only way of tackling poverty and getting more money to the people who need it most is to identify pensioners on low incomes. It is impossible to do that without an assessment of income, unless one takes the view that a universal increase should be given to everyone to take care of those on the lowest incomes. I do not believe that that is Conservative party policy today or that it will be at any time in future.
Mr. George Osborne: The Secretary of State speaks about targeting help. When Lord Rooker, a former social security Minister, was a Member of this House, he clearly identified the target group for stakeholder pensions, to which my hon. Friend the Member for Havant (Mr. Willetts) referred. How many of the 416,000 stakeholder pensions have gone to people in the target group? Will he answer the question?
Mr. Darling: I shall deal further with stakeholder pensions in a moment. I thought that the hon. Gentleman
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might have been able to tell us the answer as to what exactly the Conservatives' policy is towards those poorer pensioners. Of course, Opposition Members do not like talking about poor pensioners, because they did nothing to help them tackle poverty in all the time they were in office. Indeed, when they were in government, they expected a single pensioner to live on £68 a week. Today, the same pensioners, under our policy, get £92 a week, which is £18 more than the Conservatives gave them.
Mr. Paul Goodman: Will the right hon. Gentleman give way?
Mr. Darling: No, not just now.
When the Conservative party says that it is against means-testing, it really means that it is against a policy that resulted in Britain's poorest pensioners getting, in some cases, £18 a week more than they would have received under a Conservative Government. That is what the Tories oppose.
Mr. Goodman: Will the right hon. Gentleman give way?
Mr. Darling: No, I shall not do so just now. If the hon. Gentleman is patient, I might just give way to him at some stage later. However, if he stands up again in the immediate future, I shall not do so.
If the Conservative party is going to maintain its line that it is against means-testing, which presumably means that it would get rid of it, the inevitable conclusion must be that it would end up taking away money from some of the poorest pensioners in this country—pensioners who, for one reason or another, did not or could not save enough for their retirement. The difference between us and the Tories is clear. When they were in power, a pensioner aged between 60 and 74 was expected to live on £68.80 a week. Today, that same pensioner gets £18 more. I am more than happy to defend that policy on any occasion, because I cannot see how pensioner poverty can be tackled other than by ensuring that money goes to those pensioners who need it most.
In the past few months—and, indeed, over the past couple of years—we have heard time and again criticisms from the Conservatives about our policy, but they have never once referred to their alternative. Given all the criticism that they make, we can only assume that they would remove the minimum income guarantee, which would mean that a large number of pensioners would be substantially worse off if the Conservatives were ever returned to office. This is not the first occasion when the Government have talked about pensioners on low incomes, but there has been absolute silence on the Conservative Benches, because they have nothing to say.
I now turn to the policies that we have put in place and to the long-term reforms that are designed to ensure that we encourage additional saving by people who can afford it—people on moderate and higher earnings, who, as I have said before, should be encouraged to save for their retirement. We have a twin-track approach. We believe that those on lower incomes are better off in state provision. [Interruption.] It is said that that is all right, then—a comment that was made rather smugly, if I may say so.

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As I said, there is a big difference between the two parties. I believe that it is wrong for people on low incomes to go into funded pensions and I do not believe that any political party should encourage them to do so. Such pensions are not good value for people on low incomes. That is why we reformed the state earnings-related pension scheme and replaced it with the state second pension. After the changes that we have made, some 18 million people on low earnings, including those who are disabled or have taken career breaks, can get an increased pension. Again, the Conservatives did nothing about that during the 18 years they were in government.
Our policy for people on low earnings is first to deal with pensioner poverty today through the minimum income guarantee. For people of working age who are likely to be on low earnings or who are on career breaks, the state second pension will mean that far more help is given than they would ever before have received. We do not believe that people in that position should be encouraged to opt for funded pensions, because they would lose much of their contribution through administrative costs. I cannot believe that it is a sensible policy to force people on low earnings into funded pensions, although it is a policy that the Conservatives, at least, adopted at the election.
As I said, we believe that those on moderate and higher earnings should be in funded pensions, so we have sought to expand the choices that are available in the funded sector. That is why we launched the stakeholder pension: to give a choice to people who could not access occupational pensions or who were on personal private pensions, but for whom such pensions were inappropriate. That is why stakeholder pensions were introduced.
Reference has been made to the target, but it is clearly set out in the pensions Green Paper that was published in December 1998. It contains numerous references to the targets, and the target group is people on moderate and higher earnings. That is printed in the document in black and white for anybody who cares to see it. The target has not changed one jot since the pensions were launched.
Several hon. Members rose—
Mr. Darling: I shall certainly give way to the Conservatives who are now desperate to intervene, but I want first to put something to them. I see that the right hon. Member for Hitchin and Harpenden (Mr. Lilley) is in his place. I remain confused about the Conservative attitude to stakeholder pensions. The hon. Member for Havant, who now speaks for the Opposition on these matters, was vague, but in February this year, the right hon. Member for Hitchin and Harpenden gave an informative interview in the Financial Adviser, a splendid publication with which I am sure all hon. Members who are present are familiar. He said:
"I would be more than surprised if a future Tory government even contemplated abolishing stakeholder pensions"
He went on to say:
"Stakeholder pensions should give savers more bang for their buck. Savers should see less of their contributions absorbed by costs and more being invested in assets which, other things being equal, will mean higher pensions when they retire."
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On this occasion, I could not disagree with him.
Mr. Peter Lilley rose—
Mr. Darling: As I have mentioned the right hon. Gentleman, I shall give way to him, after which I shall come to the other Opposition Members who wish to intervene.
Mr. Lilley: The right hon. Gentleman is correct that, before stakeholder pensions were introduced, I expressed my hope that they would be a success. I did so because I would like any measure that is designed to increase private funded provision for pensioners to succeed. He did not, however, mention that I expressed my fear that stakeholder pensions would, at best, make a small contribution to increasing funded provision and that, at worst, they would undermine that provision. Have his assiduous officials drawn his attention to my remarks to the same audience a few days ago, in which I expressed my disappointment that stakeholder pensions had been such a flop and my belief that, in the light of that lack of success, the only way in which the Government could make them work would be to move to compulsion? Will he confirm that that is now on his agenda?
Mr. Darling: I appreciate that Conservative Members sometimes have to perform heroic acrobatic feats to get from what they said at one point to what they now wish to say. The framework and design of stakeholder pensions were very clear when the right hon. Gentleman gave his interview earlier this year, and at no point did he say anything other than that he would be surprised if the Tories ever sought to get rid of them. He was extremely complimentary.
Mr. Lilley: Will the right hon. Gentleman give way?
Mr. Darling: No, please let me finish. I have just read out what I believe to be an accurate quote of what the right hon. Gentleman said. He may not like it, but that is what I have done. I have not quoted what he said three days ago, because I have not seen what he said three days ago.
Mr. Lilley: Will the right hon. Gentleman give way?
Mr. Darling: I will not give way to the right hon. Gentleman now, but I will in a moment because he obviously feels very strongly about this. I have quoted what he said in his interview with the Financial Adviser and, no matter what he is now trying to do, he was extremely complimentary about stakeholder pensions a few months ago. I am bound to wonder what has changed now. He is clearly embarrassing his own Front Benchers.
Mr. Lilley: In the article in the Financial Adviser in February, I also said:
"I have emphasised the danger that the introduction of stakeholder pensions may undermine existing company defined benefits schemes, accelerate the pace of closures and lead to mis-buying by members leaving such schemes…even reducing overall pension provision."
Mr. Darling: One day, I am sure that we shall have plenty of time to go through the right hon. Gentleman's

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entire interview, and all his speeches during his life and times here. He does not disagree with a word that I quoted from the Financial Adviser, so I am afraid that he cannot get away with that.
Stakeholder pensions are tilling a crucial gap in the market. They are good value. The 1 per cent. cap on management fees is now being reflected across other pension products.
Several hon. Members rose—
Mr. Darling: I have promised that I shall give way in a moment.
Stakeholder pensions are portable, and can he taken from job to job. That is important when one recalls that the average worker now moves employer six times. People are flexible; they do not need to be earning to benefit. If people take career breaks, they ought to be able to contribute. They also allow people to contribute to a stakeholder and to an occupational scheme.
Given that the Government's—and, I think, the Opposition's—objective is to encourage people to save for their retirement, it is encouraging that, over the past few months, the sales of pensions in general, as well as stakeholder pensions in particular, have been extremely buoyant. More people are taking out pensions. Some of that may be attributable to advertising; I do not know. The advertising was general, not geared to one particular product. The evidence is that more people have been taking out pension products in the last few months.
The impact of stakeholder pensions, in relation to the cap on administrative charges and the other features, such as their flexibility and portability, that make them more attractive, will now and in the longer term have a wholly beneficial effect on the pensions industry. I will now give way to the hon. Member for Wycombe (Mr. Goodman), as he has been straining at the leash for so long.
Mr. Goodman: I am very grateful to the Secretary of State for giving way. Will he now answer directly the question put to him by my hon. Friend the Member for Tatton (Mr. Osborne)? How many of the 416,000 stakeholder pensions sold have been sold to people in the target group?
Mr. Darling: Some 400,000 stakeholder pensions have been sold. Frankly, nobody is in a position, at this stage, to say who exactly has bought them. Nobody knows that yet. I make that point because I am now beginning to see why Conservative Members have called this debate now, rather than in a few months' time, when there might be further evidence. This product has been on the market for just over six months. Pensions are not something that people just go out and buy on a whim; they think about it, and take time to build up to it.
There is an analogy here with individual savings accounts. I remember Conservative Members saying that ISAs would not take off, and that they would not be sold. In fact, what happened was that, after a slow start, sales of ISAs increased year by year. To be fair, exactly the same thing happened with PEPs and TESSAs; it took some time before they became extremely popular. That is not uncommon in financial products.
I understand that the professor who speaks for the Liberal Democrats—the hon. Member for Northavon (Mr. Webb)—has some research that he is going to tell
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the House about shortly. I am sure that he has been a professor for a long time; I notice that his name is now prefaced with that title. No doubt he will tell us exactly what that research shows.
At this early stage, we know that more than 400,000 stakeholder pensions have been bought. I am sure that that figure will increase over time, but at the moment there is no empirical research to show exactly who has bought them. It is more important to consider the amount of money that has been invested in pensions this year. Investment in all forms of pensions has increased by some 50 per cent., which is a significant part of our drive to increase the number of people holding funded pensions.
Mr. Mark Prisk: Given the Secretary of State's confidence in the potential success of these schemes, will he rule out the need to make them compulsory in future?
Mr. Darling: I did not realise that the Conservatives' policy was further to extend compulsion. The hon. Gentleman wants to rule it out, while the right hon. Member for Hitchin and Harpenden wants to rule it in. It is worth bearing it in mind that it is compulsory, at the moment, for anyone who is employed to contribute to a pension scheme—either to the state second pension or to a funded pension, if the individual contracts out.
Stakeholder pensions are new on the market; they have been on the market for just six months, and it is encouraging that some 400,000 have been sold. If there are people who were in personal private pensions who should not have been, and who transfer to stakeholder pensions because they find them better value, I shall not criticise that. Some people may be in pension schemes that close down or change, and they may go into stakeholder pensions. That is precisely why we developed stakeholder pensions: to ensure that those options were there. As for the idea that we should criticise people who start making pension or savings provision for their children or grandchildren, I thought that that was something that the Conservatives used to encourage. Now they seem to be condemning it.
Lynne Jones: Will my right hon. Friend give way?
Mr. Darling: I will give way in a moment.
One has to remember that, in the last few months, the sale of pensions has increased by some 55 per cent., the sale of single premium pensions is up by some 192 per cent., and group personal pension sales are up. One also has to bear it in mind that, last year, the overall amount contributed to non-state pensions was the highest ever—a real-terms increase of some £19 billion since we came to power in 1997. What we are seeing in the funded pension sector is encouraging, and it is wholly in line with our stated aim in the Green Paper to encourage more people to take out funded pensions.
Lynne Jones rose—
Mr. Willetts rose—
Mr. Darling: I shall give way to my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), and then come back to the hon. Member for Havant.
Lynne Jones: Is not my right hon. Friend concerned at the evidence that many of the people taking out

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stakeholder pensions are among the most affluent? They are benefiting from generous tax reliefs of up to £792 a year at the basic rate and more at the higher rates, while people in the target group cannot afford to take out pensions or, if they do, are scarcely better off. I understand him not wanting to take lessons on pensions from the Conservatives, but will he listen more closely to groups such as the pensions provision group and the Institute for Public Policy Research, which has said that it is looking into the subject of pensions and that the Government's policy is in danger of unravelling? Will he study its report when it is produced early in the new year?
Mr. Darling: The report has not yet been produced. I have spoken to the IPPR, as my hon. Friend might imagine. My answer to her is exactly the same as the answer that I gave to Conservative Members. At this stage, we know that just over 400,000 stakeholder pensions have been sold, but nobody is yet in a position to give an accurate breakdown of who exactly has bought them. In any event, to judge stakeholder pensions or any other financial product after only six months would be fraught with difficulties. It is not possible to reach a judgment after a very short period.
It is not surprising that people who are transferring from personal private pensions, or people who have got the cash and want to make provision for people, will be first in the queue. However, a more accurate picture of stakeholder pensions will grow over a period of time. The Government's objective, as we set out in the Green Paper some three years ago, is to ensure that more people go into funded pensions. The figures that I referred to are encouraging, because more people are taking out funded pension provision. That is wholly desirable.
Mr. Willetts rose—
Mr. Darling: Before the hon. Gentleman intervenes, I must say that it would be nice if he were to tell us exactly what is his policy on stakeholder pensions. He referred to the Association of British Insurers report as if it somehow supports his argument, but it is in no way critical of stakeholder pensions. Neither is the research that it commissioned, which accompanied the letter circulated to hon. Members. The ABI report refers to the fact that stakeholder pensions are new. It is too early to reach a judgment, which is what he wants to do, but I am not surprised by that in the absence of a Conservative pensions policy. He has two failures under his belt already, so it is not surprising that he has to content himself with criticising our policies.
Mr. Willetts: The Secretary of State and his fellow Ministers have regularly referred to the target group for stakeholder pensions. All we ask is that he tell the House whether he is hitting his target, what his target is, when we will know whether he is hitting it and how we will measure that. For 25 minutes. he has danced around the point. How can he be judged against the objectives he has set himself? That is all that the debate is about and he has failed to answer.
Mr. Darling: If the hon. Gentleman refers to the pensions Green Paper, which we published in December
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1998, he will see the targets clearly set out first at paragraph 27 and then at paragraph 10 on page 49. The target group is people on moderate and higher earnings. It has been the target since 1998, it remains the target today and it will be the target tomorrow and in future years.
Mr. Jonathan Djanogly: Will the Secretary of State give way?
Mr. Darling: Not at the moment. Before moving on, I want to make a point to the Liberals. The hon. Member for Northavon—the professor—will no doubt speak, but I notice that he refers to what he perceives as the deficiency of the scheme in the press release published on his website, which states:
"An element of compulsory saving is essential".
A very Liberal word that—an "element". No one is sure how much or how little. Is the figure 1, 2 or 3 per cent?
We will be fascinated to hear from the hon. Gentleman on two points. First, I believe that he has a paper from a pensions company. If he quotes from it, he must provide it to all Members of the House if he wants any credibility. Let us have a look at it; let us see what this pension company has to say. Secondly, if indeed we need an element of compulsory saving, as he puts it, perhaps he will tell us what that element will be. If he has time, he should also tell us how he would fund his pension plans, which cost some £3 billion. There must be a limit to how much the Liberals' tax proposals can cover in respect of education, health, transport and pensions.
Mr.Barker rose—
Mr. Djanogly rose—
Mr. Darling: I have given way to the hon. Member for Bexhill and Battle (Mr. Barker), so I give way to the hon. Member for Huntingdon (Mr. Djanogly).
Mr. Djanogly: The Secretary of State has frequently referred to the fact that stakeholder pensions are for medium and higher earners. If that is the case, why have the Government spent £6 million advertising them to the great mass of the population? Why have the Government put in place a system whereby companies can be prosecuted for not introducing stakeholder pensions? The system that he describes is for mass pensions, not pensions for a small percentage of the population, and it has failed.
Mr. Darling: It is a long time since I have heard such a daft observation. The Government's objective, which I would have thought both sides of the House shared, is to encourage people who can save to do so. The objective of the Government's advertising campaign is to get people to think about their pension provision in retirement. That is not all we are doing. As the hon. Gentleman may be aware, over the next five years, people will receive an annual forecast of what their pension will be on retirement. I would have thought that most hon. Members would have considered that wholly beneficial.
Mr. Barker rose—
Richard Ottaway rose—
Mr.Darling: I will not give way at the moment; I have not finished with this intervention. Good heavens, surely Conservative Members want me to deal with one of them at a time.

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The hon. Member for Huntingdon got one thing right. He has at last understood that the target audience is moderate and higher earners. If one mounts a television advertising campaign, it is not possible to blank out the screens of people on low earnings. It is necessary to show the same advertisements on screens up and down the country, so that people who can save have it drawn to their attention that they need to save for their retirement. That brings me to the third element.
Mr. Barker rose—
Richard Ottaway rose—
Mr. Darling: I will not give way, because I am conscious of the fact that this is a half-day debate. Other Members on both sides of the House want to speak.
The third element of our reform, which is crucial, is to deal with a point raised by the hon. Member for Havant—the incentives to save. Under successive Labour and Tory Governments there has always been a tension between their desire to ensure that there is a floor beneath which pensioner incomes should not fall—even the Conservatives paid income support, although it was substantially lower than the minimum income guarantee—and encouraging people to save. That is why we are introducing the pension credit, which is designed to help people who lose out under the current system because they have done what successive Governments told them to do—put a bit of money aside for retirement.
Mr. John Butterfill: Will the Secretary of State give way?
Mr. Darling: Not at the moment.
The pension credit will ensure that someone who has saved money receives a reward for having done so. That is essential if we are to encourage people to save. Interestingly, many big pension providers welcomed the announcement of the pension credit in November last year as vital if we are to encourage people to save. It is necessary to continue to ensure that we have a system that boosts the income of the poorest pensioners while building in an incentive to save so that if people save through a stakeholder pension, an occupational pension or other means, they receive a reward for it.
Richard Ottaway rose—
Mr. Barker rose—
Mr. Darling: I will not give way at the moment. I want to finish the point.
I opened my remarks by drawing attention to the fact that, at one stage in his career, the hon. Member for Havant was in favour of scrapping winter fuel payments. He then discovered that those sitting behind him were rather nervous about knocking on pensioners' doors to say, "Vote Conservative, it will cost you 200 quid." I would be intrigued to hear how he will persuade his party to say at the next election, "If we are returned to power, we will take away the pension credit."
The pension credit will benefit more than 5 million pensioners on low and modest earnings. If it is Conservative party policy to remove the pension credit
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and take money from more than 5 million pensioners, I very much look forward to Conservatives arguing the case. They will have some difficulty doing so.
Mr. Butterfill rose—
Richard Ottaway rose—
Mr. Darling: I give way, for the last time, to the hon. Member for Bournemouth, West (Mr. Butterfill). I must conclude.
Mr. Butterfill: I hope that the right hon. Gentleman has read the observations on the pension credit submitted by the pensions provision group, which the hon. Member for Birmingham, Selly Oak (Lynne Jones) mentioned. Paragraph 5 of that excellent report says:
"As ever, attempts to use means-tested benefits to target help on today's pensioners can also discourage today's workers from saving for their retirement. The Pension Credit scheme would be no exception."
Mr. Darling: The hon. Gentleman is being somewhat selective in what he quotes. The pensions provision group supports the introduction of the pension credit. It would like the credit to be more generous and we could argue about that, but it is not against the credit. Indeed, most pension providers—most independent observers—welcome the pension credit. The fundamental wrong in respect of the social security system that has been in place for the best part of 50 years is that it acts as a disincentive to saving. I would have thought the reform long overdue. My recollection is that one of my Conservative predecessors who is no longer a Member of the House welcomed the reform, because it is necessary for us to reward thrift and effort, not penalise them.
I look forward to hearing what the Conservatives have to say when the Bill comes before the House. I would have thought that any measure that encourages thrift and rewards effort ought to be supported, not criticised.
Mr. Butterfill indicated assent.
Mr. Darling: I am delighted that I seem to have won one convert on the other side of the House, if no other.
Richard Ottaway: Will the Secretary of State give way?
Mr. Darling: No, I want to conclude.
Over the past four years, we have recovered some of the damage that we inherited. We have tackled pensioner poverty. We have put in place long-term pension reform to ensure two things. The first is that people on low earnings, people with broken work records, the disabled and women who take time off to look after children have access to a good second pension through the state second pension. In some cases, that will double the amount of benefit that they get. Secondly, we have made reforms to long-term pension provision, by introducing stakeholder pensions, in order to provide more options. Stakeholder pensions are complementary to the existing provision of occupational and personal pensions. Finally, we shall shortly bring before Parliament proposals to implement the pension credit, which will ensure that we not only alleviate poverty but reward thrift.

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It is a pity that, on an Opposition day on pensions, which is an important matter, we do not know the Opposition's position. We know that they still have a savings policy in which 85 per cent. of the gain goes to the richest 20 per cent. of pensioners. We know that they do not agree that 2 million pensioners are at least £15 a week better off. We know that they oppose the pension credit, which will benefit more than 5 million pensioners. It is a courageous decision to be against that. We know that they have nothing to say to people on low incomes who want to save.
We have no idea where the Opposition stand on stakeholder pensions. All that we know is that sitting opposite me is a man who wants to be remembered for giving free television licences to pensioners without televisions. The hon. Member for Havant, who now speaks for the Conservatives on this matter, wrote the last Conservative manifesto. On tonight's performance, I very much hope that he will write the next one as well.
8.21 pm
Mr. Steve Webb: It has rightly been pointed out that if a Government set themselves a target, it is appropriate to measure their performance against that target. Our difficulty is that when the Government realise that they are not hitting the target, they attempt to move it.
The Secretary of State read from the 1998 Green Paper, but he seems to forget that, subsequent to that Green Paper, his pensions Minister, now Lord Rooker, told this House in July 2000 that the target group was not the same as the market for stakeholder pensions; they were separate entities. He said:
"The target group is those on moderate earnings"—
not moderate or high earnings, which is what the Department has said in all its written answers since the election—[Interruption.] Is the Secretary of State saying that his pensions Minister was wrong to say that? He went on to say that the White Paper defined that as between £10,000 and £20,000 a year. He could not have been more explicit.
Either the Secretary of State is saying that the pensions Minister did not know what the target group was or, more likely, written answers now talk about moderate and higher earners because the Government know that they are missing the target of only moderate earners.
Mr. Darling: The hon. Gentleman is a professor, and I thought that professors looked at all the evidence. Should not he look at the Green Paper that set out our policy, rather than take isolated quotes from Ministers? If he looks at the Green Paper, he will see what the target is.
Mr. Webb: The status of Ministers' statements is somewhat doubtful.
Mr. Tim Boswell: If the target were £10,000, which is a reasonable working assumption in view of what the hon. Gentleman has told us, it would be about half average earnings, so it would be a relatively low income by any standards.
Mr. Webb: Yes; there is no sense in which the £10,000 to £20,000 range, which was explicitly mentioned by the
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then pensions Minister, is anything other than a moderate income, or perhaps even low to moderate. It is certainly not a high income.
The Secretary of State seems to imply that his policy is frozen in aspic from the time of the Green Paper in 1998. In February 2000, the same pensions Minister told the House that the Government would measure the success of the stakeholder pension scheme by the number of people on moderate earnings without a second pension—those in the target group who take up a second pension. He could not have been more explicit. However, the Government know that they are not hitting the target, so they try to move it.
Surely, if a Government set themselves a target, they should make inquiries as to whether they are hitting it. I presume that the Secretary of State, being a responsible Minister, will have talked to those who know who buys stakeholder pensions. Who has that information? Those who sell them. I therefore presume that the Secretary of State has been in touch with the sellers and has asked them—[Interruption.] The hon. Member for Stockport (Ms Coffey) prompts the Secretary of State to ignore my question. [Interruption.]
Madam Deputy Speaker (Sylvia Heal): Order.
Mr. Webb: Thank you, Madam Deputy Speaker.
Either the Secretary of State has asked the industry, knows the answer and is covering up or, worse still, has not asked the industry. We have asked the industry and I shall tell the House what a major provider—
Ms Ann Coffey: Name it.
Mr. Webb: I shall deal with that in a moment. A major provider has given us commercially sensitive information and has asked not to be named. I am happy to respect that confidence.
Let me give the Secretary of State some information that he apparently does not have. The major provider said:
"We analysed the stakeholder business in the first few months…and used standard classifications to look at who was buying."
Four groups of people were buying stakeholder pensions: 11 per cent. are children. I do not have a problem with grandchildren being bought pensions by their grandparents. We need to crack pensioner poverty in 2060, so I am pleased that the Government are making headway on that—never let it be said that they are short-termist.
Some 58 per cent. of policyholders fall into what is described as four of the wealthiest classes. I wonder whether Conservative Members recognise any of the categories. They are: wealthy equity holders; affluent mortgage holders; comfortable investors; and prosperous savers.
Mr. Barker: And professors.
Mr. Webb: Indeed. None of those categories is the target market. As ever, I shall be more generous than Conservative Members and name those who fall into the categories who might be regarded as the Government's target market. This information comes from a provider that sells the product, so it should know. It says that 26 per cent., or one in four, of the products goes to the

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five categories that form the target market: better-off borrowers; younger spenders, working families; thrifty singles; and middle-aged assured. Thus roughly a quarter of the product goes to the target market.
The final category, 13 per cent., is the older classes: settled pensioners—Lord Rooker—and older cash users. That 13 per cent. is important and I hope that the Minister will address this matter when he responds. There seems to be a good reason for thinking that some of the 13 per cent. are using the stakeholder pension as a tax dodge. Those people have some capital, they put it into a stakeholder pension one day and then, extremely quickly, they retire and take the money out of the stakeholder pension. They have benefited from tax relief when taking out the pension; they take a quarter of the pot as a lump sum and buy an investment product with the balance, and they have a fantastic return on a very short-term investment.
I hope that the Secretary of State will not tell us that that is what stakeholder pensions were for. Those people form a whole category. The final 3 per cent. form a category called "other", but I could not quite work out who those were.
Mr. Andrew Dismore: The hon. Gentleman has given all sorts of percentages. What was the size of the sample from which the mysterious pension provider was working? How many pensions has it sold, so that we can gauge what the percentages mean in terms of numbers?
Mr. Webb: The hon. Gentleman will be aware that if I tell him how many products were sold, he will be able to work out which company sold them. As I have promised to respect that confidence, he must realise that I cannot give that information. If he doubts the percentages, why does not the Secretary of State ring the various companies tomorrow and see whether he gets a different answer? The BBC expressed an interest in the figures and it rang round the other providers, apart from the one that I have mentioned, and they all told the same story. If that survey is not accurate, let the Secretary of State tell us what is, which he has signally failed to do.
The Minister for Pensions (Mr. Ian McCartney): Can the hon. Gentleman answer a question, just in case I have to deal with the matter later? If the BBC rang every other one, he must have told the BBC who that pension provider was.
Mr. Webb: The BBC—
Mr. McCartney rose—
Mr. Webb: Let me respond to the intervention.
Mr. McCartney rose—
Madam Deputy Speaker: Order. The hon. Member for Northavon (Mr. Webb) must respond to the intervention.
Mr. Webb: Indeed. The BBC rang a sample of providers. Obviously, it did not ring all of them. I made a slip of the tongue. I accept that. I do not know whether the BBC rang that provider or not, because I of course did not tell the BBC.
Mr. Butterfill: I am a little puzzled by the hon. Gentleman's example of a tax fiddle. He said that
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someone took out a stakeholder pension, promptly retired, took his 25 per cent. and put the money into some other investment. There is only one other investment into which that could be put at the moment: an annuity, which is a singularly bad investment. Does he really think that that is likely?
Mr. Webb: If the hon. Gentleman reads the personal finance columns of a weekend as assiduously as I do, he will find that people are being recommended to take capital, put it into a stakeholder pension, on which they can get tax relief at the higher rate immediately, which is a fantastic rate of return, and take a quarter of that out tax free, which is another fantastic rate of return. The combined effect of the tax relief on the way in and the tax-free lump sum more than compensates for the relatively modest return on annuities, even if they buy the best annuity that is going.
Mr. McCartney: The hon. Gentleman made a statement to the House that he was maintaining a confidence and had not informed anyone else of the information. He went on boldly and clearly to tell the House that the BBC had phoned everyone else. He must answer the point clearly. If that is the case, he must have informed the BBC. If he has informed the BBC, he should inform the House.
Mr. Webb: The complete absence of a response on the substance of the issue is demonstrated by that line of questioning. I said, as the record will show, that it was a slip of the tongue to refer to the other providers. Let me make the position clear. The BBC knows the figures that I just gave. It does not know the name of the company. It rang pension providers and all of them said the same thing. The substantial question is: are they right or are they wrong? Do the Government know? If they do know, the Minister should have brought that information to the House this evening. If they do not know, they have been negligent. That is the situation.
I look at the hon. Member for Havant (Mr. Willetts) with some respect because it is rather difficult to draw up a motion in the absence of any policy whatever on pensions, with the exception of the annuity policy. The motion says:
"this House regrets the Government's failure to deliver stakeholder pensions to its target group".
We have provided evidence of that; the Government have provided no counter-evidence. The motion
"condemns the failure to reform the obligation to purchase an annuity at age 75".
The hon. Member for Arundel and South Downs (Mr. Flight) pursued that matter in the previous Parliament. It has been taken up by the right hon. Member for Skipton and Ripon (Mr. Curry) in a private Member's Bill, which I will support. The House will find that there is a Liberal Democrat manifesto commitment to relax the annuity rule, so we support that element of the proposal.
The motion then
"regrets the spread of means-testing".
There are two reasons why means-testing has spread. One is because the money has gone into the minimum income guarantee. The other is because the pension rise has been so small.

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While the Secretary of State was speaking, he was heckled by Conservative Members with that memorable phrase, "75p." When the House was invited to divide on the issue of whether '75p was inadequate, only one party said that it was: the Liberal Democrats. [Interruption.] When the Conservatives had the chance to put their money where their mouth was—[Interruption.]
Madam Deputy Speaker: Order. Please allow the hon. Member to continue.
Mr. Webb: Thank you, Madam Deputy Speaker.
Mr. Willetts: Will the hon. Gentleman give way?
Mr. Webb: I will.
Mr. Willetts: I remind the hon. Gentleman that that was perhaps not his finest parliamentary moment because his voting would have stopped any increase whatever in the basic state pension. Voting for no uprating was less than smart.
Mr. Webb: The hon. Gentleman chooses to forget the two occasions on which the House voted on 75p. He may remember the Liberal Democrat early-day motion that said succinctly, as ever, that 75p on the basic state pension would be inadequate. During a Liberal Democrat Opposition day, we put that to a vote, and the Conservative party abstained. Voting for that motion would have had no effect on upratings, but it would have indicated Conservative opposition. Indeed, I recall intervening on the hon. Gentleman to ask whether he would have put it up by 75p. In his characteristically honest manner, because he is nothing if not honest, he said, "I probably would have done the same myself." So while it is true that the growth in means-testing is regrettable, it is clearly not true that Conservative Members would have done anything about the basic state pension other than to make matters worse.
The Opposition motion also mentions
"the burdens on company pension schemes…causing employers to close them to new members".
I suspect that all hon. Members should exercise some caution on that issue. Although it is true that the Government took £5 billion out of occupational pensions, no party—not one—promised in its general election manifesto to replace that money. Therefore, although it is fair enough for Conservative Members to say that they, like Liberal Democrat Members, voted against the proposal at the time, that money is gone and we have to look forward to what will replace it.
The piece de resistance of the Conservative motion is in the final line, where the once great Conservative party—which I am told is Britain's lead Opposition party—issues a radical call to arms to Britain's pensioners. Conservative Members call
"on the Government to review its pension policies".
They do not demand that the Government do anything in particular, they simply call on Ministers to have a review.
I recall when, in 1997, we were newly elected, the Government hit the ground reviewing and it was one review after another. The number of reviews was mocked
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widely by the Opposition. Five years later, however, Conservative Members have reached the pinnacle of demanding just a review. I hope that we get far more than a review. I hope that we get a decent pensions policy.
In his speech, the Secretary of State pre-empted some of my comments and asked me questions on the Liberal Democrats' approach to pensions policy. I think that it would be in order if I were very briefly to reply to those questions and distinguish our policy from that of Conservative Members.
We believe that means-testing, which was mentioned in the official Opposition motion, will be diminished only when there is a decent basic state pension. That is the heart of our approach. Although the Government amendment to the motion describes the basic state pension as a "foundation", it is a sinking foundation. When the pension credit is introduced, half of all pensioners will receive it and the pension level will not affect their standard of living at all. The pension level will affect only their credit. Moreover, the other half of pensioners will be the richest half, to whom pension levels will increasingly not matter. Therefore, the Government's policy is effectively to phase out the pension entirely. That is the direction of their policy.
We believe that the pension needs to be rescued and that the priority group are those—the old elderly—who have seen the real value of their pension decline for the past 20 years. At the previous general election, the Liberal Democrats pledged a 50 per cent. income tax rate on those earning more than £100,000 annually. In written answers, the Chancellor told us how much money that rate would raise. It would be more than enough to pay £15 weekly in the pensions of the over-80s, who are the poorest pensioners in the land.
The Secretary of State said that pension increases must be either means-tested or paid across the board, but it is possible to have intelligent targeting. We can target increases on the old elderly, who are the poor elderly. They are the priority group.
Mr. Dismore: Will the hon. Gentleman give way?
Mr. Webb: In a moment.
We have to put the pension beyond the realm of means testing. The critical point is that no one will save if means testing is the reward for saving. If we can increase the pension particularly for older pensioners to the level of the means test, every pound that they save thereafter will be pure gain—not 40 per cent. or 60 per cent. gain, but 100 per cent. gain. When we reach that point, we shall have decent levels of funded pensions. Until we have a decent basic state pension, neither the Government's nor the official Opposition's proposals will succeed.
8.38 pm
Mr. Frank Field: I should like first to emphasise the aspects of the Government's policy that I welcome, and then to draw some different conclusions from the figures that were presented by the hon. Member for Havant (Mr. Willetts). Although I am relieved that so few of the target group have bought a stakeholder pension, the already significant number of those who have bought one should give the Government a very important lesson—that the stakeholder is a real success if one has an adequate first-tier pension. Although one would not

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expect the Government to be thinking on the Floor of the House about how their pensions policy will develop, I hope that, before the end of this Parliament, Ministers will introduce serious proposals on how to implement an adequate first-tier pension for everyone in the United Kingdom. In addressing that issue, I should also like to touch on the reform proposals that were recently made by the pensions reform group, of which I am a member.
I welcome two huge successes in the Government's pension policy. The first is that the stakeholder has reduced significantly, and will continue to reduce significantly, the charges faced by pension savers. We need only consult Pensions Weekly to see how much further there is to go. This week's issue gives the example of someone beginning late in the day to save substantial sums towards retirement, and ending up paying contributions of nearly a quarter of a million pounds to the provider, although the pension is marketed as a stakeholder pension. Real progress has been made in reducing charges, and the Government should be congratulated on that. They also deserve our thanks for the efforts significantly to increase workers' access to low-cost pensions. That, too, was part of the stakeholder pension reform. I doubt that any Member will deny that we should applaud the Government's moves on both fronts.
The difficulty arises when we look at the target group, and at the figures presented by both the hon. Member for Havant and the hon. Member for Northavon (Mr. Webb). If we think about stakeholder pensions in terms of the target group, some disappointment must be expressed in the target group's take-up—although I would say that its refusal to touch the product shows a lot of common sense. Let me explain why many in the target group should not touch the product, and why I am pleased that there are so few take-ups. If we continue our efforts to achieve a high take-up among the lower half of the target group, we—as a Government—may open ourselves to the mis-selling of pensions. That would be more serious than our having to say that our reforms had helped groups other than the one that we had targeted, that we were pleased about that, and that we would proceed to further pensions reform to help the original target group.
The problem arises from the fact that, in their entirely proper desire to help poorer pensioners now, the Government have holed below the water line their long-term reform of stakeholder pensions if they are targeting those with between £10,000 and £20,000 a year. We know already that about half of them cannot save to make themselves better off than they would be if they spent all their money and took advantage of the minimum income guarantee. Some of our constituents complain that, having saved, they are not as well off as they thought they would be, given what people are picking up on the MM. The error may be compounded when the pension credit is introduced.
My worry is that one or two of the big companies that are making a big song and dance about stakeholder pensions are selling them on the basis that the two reforms will be with us for the long term. I wonder whether that is true. Let us consider the cost of linking the MIG to earnings and continuing to link the state pension to prices. Not only do more and more pensioners become eligible for the MIG over the years; because they do, and because one benefit increases so much more quickly than the other, the cost will escalate. Indeed, it is already escalating.
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In fact, I wonder whether the two reforms will be in place at the end of the day. I congratulate my constituents who have not bought stakeholder pensions on the basis that they will be in place; the chances are that they will not. As if that were not difficult enough for the Government, the Chancellor has introduced two other savings products making it even more difficult for anyone who might want to take up a stakeholder pension to decide to do so. Would someone with modest to low earnings, seeing what the Chancellor is offering on individual savings accounts, lock up his or her savings in a long-term pensions product, or go for an ISA? Clearly, most people would go for the ISA.
We are now told that there will be a savings gateway. All who go through the gateway will have a pound added to every pound that they save. Which of our constituents in the target group will sign up to a stakeholder pension when, by going through the savings gateway, they can double their savings immediately for three years? Moreover, as with all schemes that encourage saving—good to start, more difficult to stop—there will presumably be an extension of the scheme.
Given that we do not yet know the details of the pension credit, and that half of the target group can make themselves better off by not saving and relying on the minimum income guarantee than they can by saving, should we be surprised at the figures produced by the hon. Members for Havant and for Northavon? I am not surprised at them—in fact, I am relieved, and I hope that this debate helps to spread the message about the stakeholder pension.
The stakeholder pension is a useful new product. The lesson for politicians is that all those who receive or will receive an adequate first-tier pension are plumping for the stakeholder pension. They are pleased with what the Government have done, and about the significant reduction in costs. They can see those costs falling still further, and they are putting their money where the Government's mouth has been. They are wise to do so.
Although we should naturally celebrate the successes achieved by the Government's pensions reform programme, my third theme is that at some stage we will have to examine how we propose to ensure that everyone—rather than merely some people—in the country has an adequate first-tier pension. If that pension were to be aimed above means-tested levels, many of the problems identified in the debate would fall by the wayside. There would not be a problem with the mis-selling of stakeholder pensions, as everyone would know that they would keep every penny that they saved if they had an adequate first-tier pension.
Moreover, an adequate first-tier pension would mean that there would be no problem with annuities. Annuities exist only because we taxpayers pay substantial sums to encourage people to save towards their retirement. It is reasonable, therefore, to expect that people do not spend those savings foolishly, as that would allow them to draw on taxpayer's money for a second time by claiming means-tested assistance. However, people with adequate first-tier pensions will be free, if they wish, to buy annuities with their other pension products. Some will do so, and others—especially in the current climate—might consider that rather a poor deal.
Finally, I commend for discussion a proposal from the all-party pensions reform group. It has proposed that an adequate first-tier pension could be ensured by combining

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the existing national insurance pension with funded provision. That combination would be compulsory, but the guarantee would be given—as far as any such guarantee is possible—that people who pay their way and pay their whack will end up with a pension above means-tested assistance levels.
Hardly any of us can buy such a guarantee in the private market. People as rich as Mr. Branson might be able to, but they do not need to. For almost all of us, therefore, such a guarantee would be very valuable.
The proposed scheme is quite open about the element of redistribution that it contains, which would ensure that people who cannot pay but who are decent citizens would have their contributions paid up front. In that respect, I disagree with my right hon. Friend the Secretary of State. I consider that, in schemes that contain an element of redistribution, it is better for people on lower pay to be funded than it is for them to rely on credits and promises that future taxpayers may not meet.
The pensions reform group does not try to duck the fact that such a scheme would come at a price. It accepts that we will have to pay more if we want adequate pensions. Clearly, the way in which those new contributions are introduced is a matter of importance.
A number of hon. Members have expressed interest in the idea. The pensions reform group is an all-party group, and its members include the hon. Members for Northavon and for Arundel and South Downs (Mr. Flight). Many financial institutions outside the House have played their part in working up the proposals. We have six months in which to examine the aspects that need further work, to ascertain whether the scheme is a starter.
I hope that at the end of our debate we shall record in the Lobby our pleasure at the real movement that the Government have made in beginning to change how pensions are sold and in ensuring that those pensions offer a good deal for people who save. However, I stress that the Government's keenness to help the poorest pensioners through means testing stores up real problems for modest income groups. Such people feel that the system has now turned against them and that what they thought of doing as decent citizens is not rewarded but penalised.
We shall always have the dilemma of how to help the poorest, unless we get down to debating, at some stage during this Parliament, how we ensure an adequate first provision for everybody in the country. The hon. Member for Havant helped that debate along this evening by giving us figures showing that all those who currently have basic pension cover have been the biggest takers of stakeholder pensions. They have sent a clear message to Members on the Treasury Bench.
8.51 pm
Mr. Peter Lilley: I certainly approach stakeholder pensions not as their enemy but as someone who, as the Secretary of State for Work and Pensions pointed out, wishes them to succeed. I have always supported measures to improve the amount and extent of privately funded pension provision.supported the concept of stakeholder pensions and I am extremely disappointed that they have been such a failure.
I am disappointed but not surprised. It was mistaken of the Secretary of State to try to suggest that I had ever given a blank cheque to the concept of stakeholder pensions. When
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they were introduced, I pointed out that they were at best likely to make only a modest contribution to increasing funded provision, and that they were rather more likely to undermine the existing provision.
The Government set themselves four objectives for stakeholder pensions. The first was to reduce the costs that absorbed the amount of money people put in, so that more would go into investments for their retirement. The second was to require employers to offer access to stakeholder pensions and to encourage them to make contributions to those funds for their employees. The third was to encourage those people in the target group—earning between £10,000 and £20,000 a year—to opt out of the state unfunded, pay-as-you-go scheme and into funded private provision, and to save more in those schemes than they do at present. Finally, the overall intention was to shift the balance of provision for pensions from 40 per cent. privately funded and 60 per cent. pay-as-you-go to the reverse: 60 per cent. funded and 40 per cent. pay-as-you-go by 2050.
There is half a century to go. All we asked of the Secretary of State was that he give some indication of how each of those four objectives was being achieved. What indication was there from the early results—the first six months—of how they were being achieved? It was sad and significant that the right hon. Gentleman did not try to address his objectives or to assess the results of the early months.
On the low-cost target, the decision to require providers of stakeholders to charge within a structure that set a maximum percentage cost related to the funds invested certainly means that, compared with the previous systems—which often included a high up-front premium absorbed in commission, and a commission charge that was not reduced relative to the amount put in—those who save limited amounts and who save only intermittently will gain. At first sight, that is an improvement. The 1 per cent. level of charge at first seems quite tight. Actually, over a lifetime's savings, that represents a large gain to the providers. The Australian system starts off with a slightly higher proportion of premiums absorbed in costs—1.29 per cent at present. However, that is set to fall as the system matures. It is calculated that by the time the average amount of savings for each individual in the Australian system has reached just US$30,000, the costs absorbed by the system will be just 0.5 per cent. That might not seem much of a difference, but because of the effect of compound interest, the result over a lifetime of saving can be a net pension that is up to 15 per cent. higher than if the high level of costs had been absorbed. I hope that the Secretary of State will look at that.
Another target was to require employers to give access. We have not had much mention of that today, but we know from the Association of British Insurers that, at the end of September—just a few days before the scheme became compulsory—about one third of employers were not actually meeting that requirement. A very high proportion were not giving access to their employees by the target date. It was extraordinary that the Secretary of State chose to say nothing about that. He gave no warning, or encouragement, to those who have not met their legal obligations, nor did he warn them of the hefty fines that they could face under the present rules.
Mr. Butterfill: Does my right hon. Friend agree that the situation is even more worrying, because a significant minority of employers are not even aware of their obligations?
Mr. Lilley: Indeed. A study by Axa Sun Life has shown that of those who had not put such schemes in place—we are talking here of employers with turnover of £1 million or more—about 90 per cent. did not realise that they had to do so. That is worrying. It is sad that the Secretary of State did not use this opportunity to publicise the scheme. In due course, the law will have its way and employers will do so.
The more interesting question is how many employers will voluntarily make contributions to their employees through those funds. One hope that some will, but studies suggest that only about 10 per cent. of employers who do not do so at present are planning to do so. That may be offset by the effect on pensions provision of the availability of stakeholder pensions, encouraging employers to wind up existing schemes and move to a less generous scheme than the had previously. Again, we heard nothing about that from the Secretary of State.
The key aim of the Secretary of State has been to encourage the target group, about which there is no doubt. The Library brief makes it clear that the target group comprises those earning between about £10,000 and £20,000 a year. It is hoped that they will opt out of the state scheme and save their rebates from that and, if possible, more than that. We know that, in its first six months, the scheme is sadly failing with that target group. The vast majority of the rather small number of policies sold simply represent transfers from approved personal pensions and additional voluntary contributions into stakeholders on stakeholder terms. There is no net increase in the number of people saving or of the amount of saving as a result.
We know also that the pensions providers have been focusing on people outside the target group—essentially the tax-advantaged saving of high-income earners via their wives and children, or those exploiting the concurrency rules who already have occupational pensions themselves. If their income in any one year falls below £30,000, they can, for the next five years, put up to £3,600 in a tax-advantaged stakeholder in addition to their occupational pension. HSBC, Norwich Union, Halifax, Legal and General, Scottish Widows and the Virgin group have all sold more pensions to those tax-advantaged groups than to the target group. The Secretary of State has not acknowledged that. If he refutes it, and if he has evidence to rebut it, let him tell us. Or is he going to try to convince his supporters on the Back Benches that the whole purpose of the operation was to provide a new tax-advantageous savings scheme for higher income groups?
The Secretary of State claimed that there was some counter-evidence that there was a boost in personal pension provision, if not strictly in stakeholder provision, over the past few months and that the figures showed that. Actually, that boost is very largely the result of people moving out of Equitable Life and similar with-profits schemes into personal pensions and similar schemes. It is
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misleading to suggest to the House that it is the result of the success of his scheme; it is the result of the failure of his regulation.
Mr. Boswell: Does my right hon. Friend agree that if there was to have been such an improvement, and very plausibly for the reason that he has just given us, it would be in complete distinction to the inexorable decline in the number of participants in occupational pension schemes in the past three years?
Mr. Lilley: That is absolutely correct. I have read that there are about 800,000 fewer people in occupational schemes than there were when the Conservatives left office.
The fourth objective—the overall objective of increasing the proportion of pensions provision in this country that is privately funded—is extremely desirable. This country, unlike the bulk of continental countries, has encouraged people to build up funded private provision, so we do not have to rely on a rising burden falling on the taxpayer as the population ages, in the way that most continental countries do.
We have more funded private provision for pension liabilities in this country not just than any other country in Europe, but than all the other countries in the European Community put together, because people have bothered to save and invest for the future. As the right hon. Member for Birkenhead (Mr. Field) pointed out when he was Chairman of the Select Committee on Social Security, that is a reason why we should be very cautious about merging our financial future with that of those who have not made such provision for the future.
We want to make further progress towards that objective and I am glad that the Labour party has reversed its position and now wants to build on our success, but to encourage more people to opt out of the state scheme or to save more requires either persuasion or compulsion.
Persuasion is costly. It is simply not possible, under the 1 per cent. cap, for people to devote the time and effort needed to persuade people on modest incomes to opt out of the state scheme, and still less to save more than their rebates if they do opt out. The former will therefore devote their attention only to those on high earnings, who make it profitable for them. So either the Secretary of State will have to amend that 1 per cent. cap, and perhaps allow some extra amount to be spent for advice or persuasion if people save more than the rebate when they opt out of the state scheme, or he will have to consider compulsion. There simply are no other options available to him to meet his objective.
However, it is important that we be clear in our mind as to what compulsion means with second pensions. There is already a compulsory state second pension. Everyone in the country who is in employment must put money into the state earnings-related pension scheme, soon to be the state second pension, or, if they opt out of that, put the equivalent amount of money, via a rebate, into an approved private scheme or stakeholder scheme, or company pension.
Additional compulsion, therefore, must take the form either of extending that obligation to the self-employed, which is desirable in principle but impractical in practice—even the Australians have not extended their scheme to the self—employed—or of compelling people to

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opt out of the state second pension and into private schemes. That was obviously the Government's intention when they were preparing their Green Paper. Famously—on page 123, I believe—it contains a reference to when it is compulsory to opt out of the state second pension, which they had failed to proof-read.
As I understand it, it is in due course the intention to make the state second pension a flat-rate pension, while keeping graduated rebates for those who opt out. I would be grateful if the Minister confirmed that that remains the Government's intention. I hope that he will explain how it can be other than mis-selling to provide people with a state second pension when they could get larger than the equivalent sum if they opted out and bought a better than equivalent pension by so doing. In such circumstances, it is both sensible and in line with the Government's original intentions that they compel people to opt out of the state second pension and into private funded pensions; if they do not do so, they will be guilty of mis-selling. Will the Minister tell us whether that is the Government's long-term intention?
The third way of introducing additional compulsion into the system would be to require employers to make a contribution—say, the 3 per cent. of income that is required to make personal pensions equivalent to stakeholder pensions in the eyes of the regulator—and to make it compulsory for all employers to pay such moneys into their employees' scheme. Is the Minister considering doing that? If he is, how will he differentiate such a requirement from a simple increase in tax in the eyes of employers or employees?
I make no bones about the fact that I would like there to be some way in which to require the self-employed to save more, but I cannot see how that could be practicable. It is not right at this stage to require employers to make additional contributions over and above those necessary to fund the state second pension. However, it is reasonable to consider the possibility of requiring people to opt out in due course from the state second pension and into funded pension provision—as we already allow them to do from SERPS—and thereby over time improving their position, enhancing their exposure to this country's growth and prosperity, and generating an increased flow of funds into industry, which will strengthen the economy and benefit us all when we retire.
It is sad that the Secretary of State has not risen to the occasion today and that he has not talked about his targets and the evidence so far. It is sad, too, that he is manifestly failing to achieve the aims and targets of which we all approve. I hope that in winding up the Minister for Pensions will do better than his colleague did in his opening speech.
Mr. Geoffrey Clifton-Brown: I am grateful to my right hon. Friend for giving way just before the end of his speech. Does he agree that the people who will benefit most from opting out of the state system and perhaps from being compelled to opt out of the state second pension are the youngest members of our work force? If in getting people to opt out of the state second pension we started with the youngest people—who by a
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acompounding effect have the most to gain from having a private pension—it would be the beginnings of establishing the second, private pension as a norm.
Mr. Lilley: My hon. Friend is correct. His suggestion bears a startling similarity to the proposal I made before the 1997 general election—the basic pension plus—which I acknowledge bore a similarity to proposals in a paper that was published by my hon. Friend, which I subsequently saw. I hope that Ministers will learn as much from him and me as we have learned from each other.
Several hon. Members rose—
Madam Deputy Speaker: Order. The debate is a short one and little time remains. If hon. Members keep their remarks brief, all may be able to catch my eye.
9.8 pm
Mr. David Kidney: I shall be brief, Madam Deputy Speaker.
Stakeholder pensions began in April. On 8 October, about a third of a million employers were required to designate a stakeholder scheme. Some more relevant changes, such as the new pensions service and SERFS becoming the state second pension, are due to be introduced in April 2002. It strikes me as unreasonable of people to leap to judgment as they have tonight, and to use words like "flop" and "failure" so soon. However great the desire to carry out assessment and evaluation, it is reasonable to allow more than six months and to complete the development of the policy first. That is my answer to the criticisms that have been made so far.
On a more constructive note, my message is that, other than the defence of the nation, it is difficult to think of a public policy area where long-term consensus among political parties would be more useful than pensions provision. I think of the young workers of today, considering whether to make an investment in a pension for their retirement decades hence. They will be thinking of the number of general elections between now and when they retire and the changes in the law on pensions that could take place within that time. They will be thinking of historical events that might put people off having a pension.
Being as neutral as I can and not seeking to attribute blame to any political party, I could list many events such as pensions mis-selling, the attack on SERPS and more recently the problems of Equitable Life, not to mention the changes in our economy, with times of high interest rates and inflation and today's low interest rate environment and the effect that that has had on rates for annuities. People will bear all those things in mind when they decide whether to make that investment in a pension.
To put the stakeholder pension in its place in present public policy, the Government want the basic state pension as the foundation--with all the criticisms that the Liberal Democrats would heap on the sturdiness of that foundation—and they want to build on that with the second tier of pensions and provide sufficient diversity of choice for people to have no excuse that they cannot find a pension that suits them. As many hon. Members have said, the stakeholder pension is one choice that might suit some people. That is a sensible policy.

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Stakeholder pensions are designed in particular for people on modest incomes, although no one is excluded from the entitlement to take nit such a pension. Many hon. Members have commented on the desirability of the standard features of stakeholde pensions and the limits on management charges. Those pensions make an important contribution to the second tier.
Surely it is in the interests of all hon. Members and of the entire population that people be encouraged to save for their retirement and that they save enough to build up sufficient funds and receive an adequate income in retirement. Surely those are the goals that we all want to achieve. The best way to achieve those goals is through stability—stability of public policy, which is where the requirement for consensus among politicians comes in. I also believe that it means the stability of public-private partnership. Labour has accepted, although it has been painful, that there is a role for private provision. I appeal to Conservative Members to accept the painful truth that there is also a role for public provision and that the two must go together to make a successful whole pension policy.
Stability of regulation is also required. The critics of regulation should bear in mind the fact that the Financial Services Authority will not have all its statutory powers until the end of this month. We also need stability in the economy. Most rational politicians think that an independent Bank of England and inflation target are useful contributors to a stable economy.
We need stability of pension rules. It is vital when we try to persuade people to take out pensions that they are confident that as much as possible of their investment will accrue to their pension fund throughout their working life, and that they will not be robbed of great chunks of their investment every time they change from one scheme or one job to another.
The public policy tools that politicians have are the basic state pension, the pension credit, regulation and partnership with the private sector. Importantly, the new second state pension allows credits for carers. That is a vital feature that must be retained whatever changes are made. A strong and diverse second pension provision market is also a tool.
There ought to be a concordat between political parties individually—never mind just the one party in government—and the providers; there is also an important role for employers. Research by the Association of British Insurers shows that the proportion of the target work force for stakeholder pensions who would be willing to take out a pension would rise from one third to one half if employers contributed. We need willing employers to be partners in that enterprise.
There must be a willingness to confront the obstacles to public policy that will crop up from time to time. The present problem with annuities is one such obstacle and we should all find a solution to it. We need less of the party political bickering and more of a unified message from politicians and providers, so that from now on we put the welfare of pensioners at the centre of pensions policy.
9.14 pm
Mr. John Butterfill: I shall be as brief as possible in dealing with this important subject. I am afraid that the Government missed a tremendous
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opportunity when they first reviewed pensions by not building on the work of the pensions reform group, the all-party group that I chair and the retirement income working party, and completely restructuring pensions in a way suggested by hon. Members on both sides of the House. An element of compulsion is necessary. My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) suggested that there could not be compulsion on employers. Of course there could, just as one could hypothecate part of the employer's national insurance contribution. One could do something similar with the self-employed, who would be compelled via an increased contribution or, to avoid that, by showing that they were making private provision.
The stakeholder pension has only one merit—to drive down costs—which I accept is vital, as costs were far too high. However, looking at the target group, I believe there is a grave danger of mis-selling. In previous debates in the House, I have said that it is difficult to envisage how any independent financial adviser could recommend a stakeholder pension to someone in the target group without being at risk of mis-selling. The Secretary of State said that that problem would be overcome by the pensions credit. He should read the full response of the pension provision group, which states in a summary:
"We are concerned at the limited amount of information in the Consultation Document about the intended design of the Pension Credit scheme, how it would be implemented and the implications for other benefits such as Housing and Council Tax Benefits.
We are surprised that the Government has declined to publish fairly basic information, such as the number of people who stand to gain and the additional amounts they would receive from the Pension Credit scheme and the expected total cost of the proposals.
We greatly regret the lack of clarity. This seems a serious step backward from the extent of detail and information the Government gave in the 1998…Green Paper.
We are also concerned about the possible negative impact this uncertainty could have on people's willingness to join the new Stakeholder Pension Schemes which are about to be launched and on the ability of financial advisers to offer informed advice on the decisions people will need to take."
That problem is compounded by annuities. The fact that annuities are low makes it difficult for people in lower income groups to benefit. If annuities were abolished, as recommended by the retirement income working party, and a limited platform equal to the minimum income guarantee were introduced, people would be free to do what they liked with the rest of their money, subject to certain constraints, and much of the problem would be overcome.
We are faced, however, with a dichotomy within Government. The Inland Revenue is resisting annuity reform. A press release issued after a meeting with a Treasury only yesterday said that reform could
"lead to unsustainable tax leakage owing to increases in income tax rebates on contributions once the 'disincentive of buying an annuity' had been removed".
In other words, part of the Government is saying that a disincentive is needed for people to buy pensions. It believes that the annuity is a disincentive, hence it must be kept so that excessive tax relief does not have to be given. What nonsense; I thought that it was Government policy to increase the incentives for people to buy personal pensions.

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The press release also says that pensions schemes could lead to the very rich having
"a mechanism to avoid inheritance tax."
At the moment, if the very rich put everything in a trust, they have to arrange to die before 75. Inconveniently, that does not always happen so, once the 75-year rule is removed, they could use that as an inheritance mechanism. There is a simple way of dealing with that; all the Government have to do is legislate to cap contributions from the rich, and the whole problem disappears. Yet the Government retain that antique device, and one must ask why. Perhaps one of the reasons is that by forcing people to buy annuities, they force them to buy Government bonds at ever reducing rates. The Government are therefore forcing retiring pensioners to fund Government debt.
9.20 pm
John Mann: In the interests of brevity, I have cut out a significant proportion of my speech. I keep coming to Opposition day debates, unlike many Opposition Members. At least there are sufficient Conservative Members to oblige them, if they were a small company—unlike the Liberal Democrats—to have a stakeholder pension.
I have been waiting for the cut and thrust of debate—that explosion of ideas that is supposed to characterise Parliament, with the Government being robustly and precisely examined by a defiant Opposition. Each day in debates I wait with excited anticipation for an onslaught from the official Opposition, but all we get is the occasional Back-Bench cameo.
I could compare the situation to a game of Bagatelle that I once received. Hon. Members may recall those traditional Bagatelle games. When one fires the spring, the ball bearing spins around with a "ping". The one I got was one of those badly made Bagatelle games; as one drew the spring back, the sound was less of a "ping" and more of a "boing", as the ball bearing trickled slowly up the game and lamentably cascaded downwards. When I listen to those on the Opposition Front Bench, I hear no "ping" today.
For 18 years, during which I first started paying in, I had to deal with the raiding of pension funds by employers when i advised pension fund trustees. During those 18 years, I had to watch as members of my family without occupational pension funds retired into poverty pensions. With all the brains available to the Government, after 18 years there was still no sustainable, effective pensions policy. Instead, there was the legacy of the pensions time bomb facing us now.
I want to ask my right hon. Friend the Minister about the role of the trade unions in stakeholder pension funds. The occupational pensions that we have are the legacy of effective collective bargaining by working people through their trade unions—bargaining to get the employer to make a serious contribution to an occupational pension. In persuading employers to take up and develop stakeholder pension funds, and in bargaining beyond stakeholder pensions into occupational pension funds, an opportunity is being missed by the trade unions which should be a rightful part of their historic role and, more importantly,
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a critical part of their future development as organisations representing working people. They should seize the opportunities provided by the stakeholder pension funds and run with them, both for their members and in terms of their interaction with employers.
I would liken the stakeholder pension to a game of cricket. The stakeholder pension is, so to speak, the first pair at the wicket still batting, but what is required is a solid team performance to take the team through to a long-term win. It is far too soon to draw conclusions from the early returns that we have, especially as so little information has been provided. A natural caution on the part of the public when faced with the question of where to invest money for their future is understandable, particularly when one considers the target group at which stakeholder pensions are aimed. I would go further and say of my constituents, who are most prudent and financially cautious people, that it is laudable that they have waited to see how the legislation pans out before committing themselves to anything.
In the stakeholder pension, the Government have succeeded in beginning to create access to a low-charge pension scheme for those who previously had no means of securing their future. In the long term, it is the beginning of the process of providing security for those people's future. I congratulate the Government on the measure. It is a "ping" in the right direction.
9.25 pm
Mr.Peter Viggers: The Government came to office promising great things of the stakeholder pension: high standards of value for money, flexibility and security. Things started to go wrong when they used the expression "low-cost pension" to describe it. As has rightly been said, the intent is to drive down the cost of a pension, but there is no such thing as a low-cost pension. Pensions are extremely expensive and large amounts have to be found to build up a fund if there are to be good pensions. I see that as a result of my declared interest as a trustee of a pension fund.
Do stakeholder pensions work and are they worth while'? One problem that has not been mentioned is that they were introduced through employers and made compulsory for those with more than five qualifying employees. That was an acrimonious point. It means that about 15 per cent. of the target population who work for smaller employers are excluded to start with.
A second point is that the scheme is voluntary, not compulsory. I do not believe that it will be possible to have a viable scheme unless it is made compulsory, which will drive down costs. Only 416.000 people have taken out stakeholder pensions.
I was baffled by the Secretary of State's insistence that stakeholder pensions are for moderate and higher earners. If they are, why did he tell the House on 23 February 1999, at column 229, that the target was "middle and lower ranges" of income? Why did Lord Rooker, the then Minister of State, say that stakeholder pensions were intended for
"those with moderate incomes of between £10,000 and £20,000"?—[Official Report, 3 April 2000: Vol. 347, c. 719.]
During the debate, I came to the conclusion that the Secretary of State had missed the goal the first time around and was therefore moving the goalposts nearer to the current situation. Only 36 per cent. of those who have

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taken out stakeholder pensions are in the main target area of income of £11,500 to £20,000 and a quarter have incomes of more than £20,000. We all know a lot of advertising seeks to attract richer people to take advantage of the stakeholder tax breaks on behalf of other members of their family.
Could there be a better use of the money by people taking out stakeholder pensions? In many cases there could. The state second pension scheme, which takes over from SERPS in April 2002, may be a better investment for many because of the low level of contracting-out rebates. It has not been noted during the debate that many of those in the stakeholder pension target area have personal debt of some kind on which they are often paying a large amount of interest. The best investment that they could possibly make would be to pay off their private borrowings, on some of which they are paying well over 20 per cent.
The real reason why I oppose the system put forward by the Government is the level of means-testing, which does not just concern me but makes me angry. The Chancellor of the Exchequer, addressing the Labour party conference in 1993, said that the next Labour Government would
"achieve what in 50 years of the welfare state has never been achieved—the end of means tests for our elderly people."
Between 1979 and 1997, the number of pensioners means-tested fell from 57 to 38 per cent., but it is now due to rise to between 56 and 59 per cent. by 2003. The minimum income guarantee linked to wages means that there is a growing gap between the basic state pension and the guaranteed minimum income. The greater that gap becomes, the greater the means-testing, the effort that has to be made to bridge the gap and the extent to which a saver on modest earnings is wasting his or her money by throwing it away and spending it where state benefits are otherwise available.
Mr. Tony McWalter: Will the hon. Gentleman give way?
Mr. Viggers: I am sorry; I cannot.
Someone on the minimum income guarantee will have housing benefit and council tax relief. That means that a person who has made prudent, but modest, provision for retirement can be worse off than someone who has never done anything in that regard. This is a widening gap and there is increasing and justified resentment about it.
When I make that point to the Secretary of State—I have done so several times—he simply asks whether I would not allow some extra relief for those on the lowest incomes. I understand the point, but does he understand that there is a deepening sense of resentment among those who have made prudent provision for their retirement about the fact that some people who have made no provision are better off than them? Of course, the pension credit that is to be introduced would increase the amount of means-testing to about 65 per cent. Does the Minister think it is acceptable for 65 per cent. of pensioners to be on means-tested benefits? I submit that it is not.
I cannot let this debate go without making two more points. First, I thank the Secretary of State for being present throughout the debate, which is unusual among Cabinet Ministers these days. His presence is a great compliment to the House, for which I thank him.
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On the second point, I shall make my last comments in very rapid succession. This Government have introduced the greatest of all stealth taxes in damaging pensions by abolishing advance corporation tax relief for pension funds. That is a devastating blow of some £5 billion a year that is only now being felt. It is estimated that a 30-year-old will now need to pay an extra £200 a year to maintain his pension at the previous level. Tesco has increased contributions to its pension fund by 15 per cent. to pay for the change. Some 17 per cent. of those on final pension schemes are now in schemes that are being closed to new members. That is a devastating indication of the damage done to the pensions industry by the abolition of the tax relief. The result is that 9,000 new pension schemes were formed in 1997, 5,000 were formed in 1998 and only 3,000 were formed in 1999. What would I do? I would not mislead people by talking about low-cost pensions, but increase the basic retirement pension, introduce compulsory contributions to an adequate scheme and so reduce means-testing and increase self-respect for our pensioners.
9.32 pm
Mr. Tony McWalter: I am aware, Madam Deputy Speaker, that you want this contribution to be no more than three minutes long, so I shall do my best to confine my remarks to that time.
With regard to the previous speech, I must say that pensioners in my constituency are glad that there is a large gap between the basic pension and the minimum income guarantee. That £20 gap for single pensioners corresponds to £20 more that they have to spend, or £20 for a better standard of living. If the previous speaker the hon. Member for Gosport (Mr. Viggers) was trying to suggest that that is demeaning because it is based on means-testing, all I can say is that it is real money that has a role to play in improving the quality of those people's lives. I am also glad that we have this Government and that they are pursuing that policy, and that the Conservatives are not in government, as they seem to want to remove it.
My main point is to emphasise to my right hon. Friend the Minister that it is important to take on board the remarks made today, such as those of the hon. Member for Bournemouth, West (Mr. Butterfill), about the interface between the arrangements for the stakeholder pension and the pension credit. Like my hon. Friend the Member for Bassetlaw (John Mann), I do not feel that I would want a stakeholder pension if I were earning, say, £13,000 a year. That seems a pretty bad deal. Even if one were to build up painfully over many years a fund that was four times one's income, at £50,000 or so, it would provide an income of about £80 a week, on current annuity rates. When that amount is added to the basic pension of £70-odd, one is left with about 150 quid. One would probably then be just at the edge of the taper for the figures that we have seen in respect of the pension credit and would not, perhaps, get many of the benefits that would be available if one was on the minimum income guarantee as well. One would also be taxed, and various other matters could be relevant. If one was eligible for housing benefit, one would be removed from it and so on. One's quality of life might still end up poorer than it would have been under the minimum income guarantee, even with a pension credit, if the credit was not generous. That calculation is based on the indicative figures that we have seen for the pension credit.

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We must think much more carefully about the relationship between the stakeholder pension, the pension credit and the associated systems of benefits, so that in the end there can he a clear incentive for people earning £13,000 a year or thereabouts to make the real sacrifices that they would have to make to build up a fund of quadruple their current income level. I hope that my right hon. Friend the Minister will say that he is going to rethink some of the arrangements relating to the pension credit to ensure that there is a real incentive for people to buy into this scheme.
9.36 pm
Mr. Tim Boswell: This interesting debate has taken place against a background of two wider economic considerations, both of which are disturbing, and both of which have been created by this Government alone. The first is the alarming overall decline in the savings ratio, which has halved over the almost five years of this Government, from more than 10 per cent. in 1997 to 5 per cent. in the early quarters of this year. It is entirely characteristic of the Labour Government that they concentrate on one vital part of the scene—pensions, which we all accept are vital—while neglecting others.
The general message that the Government are putting out is one of a disincentive to save. It is hardly surprising that that disincentive generates the conclusion that the annual savings gap caused by these policies is now measured in tens of billions of pounds, and is currently estimated by the Association of British Insurers at £27 billion a year.
Secondly—this is quintessential new Labour—the Government offer inducements in one direction, for stakeholders, while at the same time damaging the market prospects in others. At an early stage of the last Parliament, I was more directly involved in the many debates about the Government's abolition of advance corporation tax and payable tax credits. Those measures took more than £5 billion from pensions every year and, as my hon. Friend the Member for Gosport (Mr. Viggers) has just said, effectively take £200 a year from the average 30-year-old.
Those figures should inform our general concerns in this debate. It has been an interesting one, and it belied the bland comment that I have just received in a written answer from the Minister for Pensions who said, heroically, that stakeholder pensions were designed to be simple. They may be simple enough, but the conclusions for policy are far from simple.
My hon. Friend the Member for Havant (Mr. Willetts) provided a masterly dissection of the subject, emulated, if only in part, by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and by the right hon. Member for Birkenhead (Mr. Field). My hon. Friend the Member for Havant received admirable assistance and many thoughtful comments from my hon. Friends the Members for Bournemouth, West (Mr. Butterfill) and for Gosport. The hon. Member for Northavon (Mr. Webb) helped to twist the knife in the Secretary of State, and there were further contributions from the hon. Members for Stafford (Mr. Kidney), for Bassetlaw (John Mann) and for Hemel Hempstead (Mr. McWalter).
Everyone has made a genuine contribution, although perhaps the least convincing or cogent was that of the Secretary of State. He went to great lengths not to answer
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the questions that were put to him. He said that he did not know the answers, but I am not sure whether ignorance is an excuse. When Ministers of the Crown set up a new policy, they ought to be able to answer our questions. Even if they are not yet able to do so, they ought at least to have established the machinery by which their policies can be tested, and on which they can report. I know that he is uneasy about that, as is every Member who has spoken.
The argument is not about motives, as we all want to increase the proportion of income being put aside for the retirement years. We have little option on that. We must also offer a fair deal to those making the saving, and we need to see whether the current arrangements, much hyped by the Government, are working.
The first conclusion that I have to draw is that there is and remains a radical confusion at the heart of the Government as to the target group for stakeholder pensions. One of my hon. Friends referred to the Secretary of State's original statement in February 1999 that people in the middle and lower ranges were the target group.
The former Minister of State, Lord Rooker, has been mentioned several times and, in particular, he referred to the target group as those on moderate incomes of between £10,000 and £20,000 a year. That is 5 million people. By definition, almost all those persons will be on below average earnings.
The Government's new definition, set out in their amendment to our motion, defines the target group as "moderate or higher earners". On the formula that they have given, that means anybody earning £10,000 a year or more, and the sky is the limit. In new Labourspeak, lower means higher or, if it means that someone can meet a target, the target changes to meet the concept of the day. I knew someone who consumed an inordinate amount of mothballs. When the shopkeeper asked why he had been back to the shop four times in a week, he said, "You can't hit them every time."
Secondly, the stakeholder scheme, by any standard, is hardly selling like hot cakes. Let us take first the employer gatekeepers. Remember, they are under a legal obligation to designate schemes for any business with more than five employees, yet on the statutory date of 8 October it was estimated that at least a third fell at the first fence as they had not registered by the deadline.
The Occupational Pensions Regulatory Authority is responsible for policing those defaulters and Ministers must hope in their hearts that it does not feel too many collars, because it could be overwhelmed. That would send a disturbing signal to those Ministers who want to pose as the friends of business.
The Minister of State and I have debated employment law, and I am interested in whether an individual employee with a grievance about non-designation could pursue a case through the already overloaded employment tribunal system because he had not received his rights. I am not sure whether that has ever been clarified.
It is hardly surprising that take-up is relatively disappointing, with only 416,000 stakeholder policies sold to date. Many were no doubt transferred from other schemes. I am interested in a written answer received last week by the hon. Member for Northavon, although he did not refer to it. Despite all the effort and expense involved in advertising in the first place, Ministers now say that they are not specifically advertising stakeholder policies. That is not a ringing endorsement.

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Figures on stakeholder pension charges published last week by the Financial Services Authority show a wide disparity between providers. In many cases, a personal pension still offers better value, although that of course depends on the circumstances. I do not know whether it suits the Government to say that they have targeted the workers by hand and by brain, but they have a achieved a position—I have to say that I have no interest to declare—whereby the rational purchaser of a stakeholder pension is me. I have a brand new granddaughter, and I can make provision for her 60 years down the track. Therefore, Government policies could succeed only if they operate as outdoor tax relief for the financially sophisticated. All that is of a piece with the Government's other failures in pensions policy. Like other private pension holders, stakeholders will have to go through the annuity hoop referred to by my hon. Friend the Member for Bournemouth, West and others. There is a strong Treasury interest in trying to secure public funds at minimal cost.
Then there is the whole issue of the minimum income guarantee. That has been just as much a flop in practice as the stakeholder pension, with a take-up of only one fifth of the target group to date. Of course, Ministers pray in aid their forthcoming pension credit. They should ask themselves whether they are absolutely sure that those changes can be financed with no losers, and with significant beneficiaries but at no Treasury cost. Even if they can achieve that, are they happy about subjecting more than half of pensioners to the inevitable means-testing?
Last but not least, the overall number of pensioners in occupational schemes has fallen year on year under this Government. Many also face a retreat from quality, having to move to less generous schemes. It is no accident that the IPPR—not normally a friend of those on the Conservative Benches—concluded in August:
"The Government's pension policy is basically in a muddle. It is unravelling and something needs to be done about it and needs to be done quickly."
Age Concern echoes some of those concerns. If Ministers are still not in the mood to listen, hon. Members must make a modest start in the House tonight by voting for our motion.
9.46 pm
The Minister for Pensions (Mr. Ian McCartney): I shall try to deal with hon. Members' questions as I go along but if, by the end of the debate, I have not done so I shall write to them and place my letters in the Library so that those who have taken part in the debate can see the answers.
I thank my right hon. Friend the Member for Birkenhead (Mr. Field) and my hon. Friends the Members for Stafford (Mr. Kidney), for Bassetlaw (John Mann) and for Hemel Hempstead (Mr. McWalter) for taking part in the debate. It has given us an opportunity to set out the four key stages of the Government's policy: saving the basic state pension from the Conservatives, who would have liked to have privatised it; reforming SERPS by creating a second state pension to help the low paid and the carers of disabled people for the first time ever; the creation of the pension credit so that it pays to save; and giving people a choice through the stakeholder pension, with a second tier for those on moderate and higher earnings.
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When I listened to Conservative Members in this debate I felt astonished, because for 18 years they failed virtually every pensioner organisation in Britain. They left us with a complete mess and were contemptuous of older people. Hon. Members will remember what those in charge of Conservative policy thought about pensioner poverty and treating people with dignity. Edwina Currie, the former Health Minister, told pensioners:
"Buy long johns, check your hot water bottles, knit gloves and scarves and get your grandchildren to give you a woolly night-cap."
That was the Tory strategy for pensioners in Britain; and it got worse.
Mr. Boswell: Will the Minister give way?
Mr. McCartney: Why?
Mr. Boswell: I simply want to ask the Minister a question—it does not refer to the former colleague to whom he has just referred. Will he tell the House whether pensioner incomes rose or fell under the Conservative Government?
Mr. McCartney: When the Conservatives left office there was the biggest gap in equality of pensioner incomes in the history of this country.
Mr. Barker: Will the Minister give way?
Mr. McCartney: No. The hon. Gentleman has been jumping up and down like a jack-in-the-box. He and the hon. Member for Huntingdon (Mr. Djanogly) have been like Pinky and Perky.
As my right hon. Friend the Secretary of State highlighted, in our first four years we cleared up the sorry trail of misery created by the Tories over 18 years. We simply rolled up our sleeves and put right the injustices of our inheritance. We tackled the legacy of pensioner poverty; dealt with the inherited SERPS debacle; and put right the mis-selling scandal, ensuring that compensation was paid to the thousands of people who were conned by Tory Members into leaving their occupational scheme.
Put simply, the Tories failed those who needed help most. At least 2 million pensioners were living on or below woefully inadequate levels of income support. Many more were living in fuel poverty. That was the reality of the 18 years of Tory rule. The Tories did nothing for women who stayed at home to look after their children or elderly relatives. Those women could not build up decent pensions and were left to be in poverty when they retired. They deserved better and the Tories did nothing for them.
The Tories left us with a system where there were huge disincentives to save. Why should people have saved for retirement when all they would have found was that they were no better off, or in some cases worse off? People saved for nothing under the Tories. Nor was a framework in place to offer good-value alternatives if individuals could not access an occupational pension scheme.
In the teeth of Tory opposition, we were not prepared to ignore those issues and to condemn many pensioners to a life of poverty. That is why during our first term in office we reviewed the pension system to replace it with one that is modern, inclusive and fair to everyone. Our strategy is simple: we want to ensure that all pensioners

821
have a decent income in retirement. Therefore, we have taken action to help all pensioners, while giving priority to the least well-off.
The basic state pension will remain the foundation of income in retirement. Nothing the Conservatives said today showed that they would commit themselves to that, too. It is an essential building block of pensioner income, but we should not look at it wistfully through rose-coloured glasses. It provides a basic income in retirement—nothing more, nothing less. That has always been the case.
The system has flaws. That is why we are modernising it. In the process of modernisation, we want to take steps to ensure that we do not penalise married women who paid the reduced stamp, and that low-paid workers who did not earn enough to pay national insurance get access to the second state pension. We want to ensure that we have a system where people retire with dignity and a guarantee of income.
That is why we introduced above-inflation increases in retirement pension this year and next—£5 a week for single people, £8 a week for a couple—and from April 2002, there will be further increases of £3 a week for single people and £4.80 for couples. We introduced the minimum income guarantee for the poorest pensioners in our society, free television licences for the over-75s worth £104, and winter fuel payments worth £200. All those were opposed by Conservatives.
Mr. Lilley: Will the Minister confirm that the value of the extra money paid to pensioners is less than the £5,000 million a year that the Government are extracting from pension funds, so that pensioners overall are net losers from the Government?
Mr. McCartney: That is absolute nonsense. Furthermore, the right hon. Gentleman is one of the most culpable because he was the Secretary of State for a long period during the last Conservative Government, who extended means-testing while putting more people below the poverty line. He stood back and watched as community after community faced high unemployment and 50-year-olds were put out of work. As well as losing their job, they lost the opportunity in that part of their earning life to have a decent pension in retirement. He should hang his head in shame for what he did as a Minister.
Mr. Goodman: Will the Minister give way?
Mr. McCartney: Can the hon. Gentleman sit down for a moment? He phased me—I thought Mr. Bean was standing up in front of me. I apologise. I will get back to him.
We are spending nearly £3 billion a year more on pensioners than it would have cost to restore the earnings link in April 1998. This year, 2001–02, we are spending around £4.5 billion extra a year in real terms on pensioners as a result of policies since 1997. In 2002–03, that will rise to £5.5 billion extra a year, to answer the right hon. Member for Hitchin and Harpenden (Mr. Lilley).
822
I give some examples of how that additional money has been spent. At April, nearly 2 million of the poorest pensioner households will be at least £15 a week, or £800 a year, better off in real terms as a result of the measures that we have taken since 1997. Our policies are helping those who are most in need of that extra spending. A total of £2 billion is going to the poorest third of pensioners, five times more than the earnings link would have given them. That approach is narrowing the gap between rich and poor.
It was a rough-and-ready solution to a real problem, but it has worked. In the three years since the introduction of the minimum income guarantee, we have paid £12 billion to the poorest pensioners in our society. I refuse to apologise for such a policy.
Mr. Goodman: Will the Minister give way?
Mr. McCartney: I will give way later. Be quiet. [Interruption.]
Mr. Speaker: Order. The Minister is not giving way.
Mr. McCartney: I have never in my life been frightened of a Conservative, however big.
In this debate, Conservative Members have placed great emphasis on the means test. Either they want to cut the minimum income guarantee and reduce income by £15 per week for the poorest pensioners, or they want to make a huge increase in the basic state pension. However, the latter option is not Tory party policy. What is their policy? Are they going to cut pensions by £15 per week for the poorest pensioners? It is just another example of Tory Members thrashing around on policy.
We shall soon be publishing our proposals on the pension credit, which will remove stigma and needless complexity, combat poverty and promote security—which is critical. Half of all pensioner households will be entitled to the credit, which will signal the end of the weekly means test. We shall modernise the way in which we deliver help to pensioners, simplify the rules and significantly reduce the information that they have to provide initially. We shall enable pensioners to receive their entitlement with much less intrusion and hassle.
The pension credit is the next stage of our strategy to deal with disincentives for people to save. Introduction of the credit will reward people for saving for their retirement. The credit will provide a guaranteed income level below which no pensioner should fall. It should be worth, in 2003, about £100 for single pensioners and £154 for couples. This is the first time that people with modest savings will not be penalised for thrift. Those who qualify for the pension credit will receive a cash top-up for the pounds that they save. When they were in government, Conservative Members' priority was to tax moderate and small second pensions at a rate of 100 per cent. and give tax rebates to the most wealthy in society. That is not our priority.
There was a gap in the market for low-cost, secure, flexible and good quality pensions. Consequently, we introduced the stakeholder pension, which has been widely welcomed, even by the Tory house magazine. The personal finance editor of "The Sunday Torygraph" said:
"'There is absolutely nothing wrong with stakeholders. For those who can afford to put money away to fund their retirement they are a jolly good idea."

823
Last year, there was no facility for people in the target group to have such a pension. Two thirds of employers are now on board, and hundreds of thousands of individuals who did not havt appropriate pension cover now have it. The policy is a success, and it will continue to be a success.
We have a continuing monitoring and evaluation plan to assess the impact of stakeholder pensions as well as information from the pensions industry. We shall continue that assessment. Conservative Members have said nothing today to change my mind that stakeholder pensions were the right policy to introduce, or to make me doubt that the policy will ensure that, in the next few years, hundreds of thousands of people who had no access to pensions under the Tories have such access.
Despite the Opposition's attempt to rubbish our pensions strategy, it is clear that it is their policies, not ours, that are in disarray. Their policies are unworkable, unattainable, unsustainable and very unpopular, even among Conservative Members. Their policies are a continuing catalogue of disaster.
There is no confusion about where the Government stand on pensions. Pensioner poverty increased under the Tories, but the Government are reducing it. The Tories mis-sold pensions, but we ensured that their victims were compensated. The Tories had the state earnings-related pension scheme, but we are modernising it. The Tories tried to cheat widows by not allowing them to inherit SERPS, but we have put that right. The Tories wanted to abolish winter fuel payments, but we have increased them to £200. The Tories wanted to deny over-75s a free television licence, but we have introduced a scheme to provide them with one. The Tories introduced charges for pensioner eye tests, but we abolished the charges. The Tories increased VAT on fuel, but we reduced it to the lowest possible level. The Tories also opposed the pension credit.
Worst of all, the Tories coldly condemned millions of older workers to the dole. They abandoned them. They rejected them. They threw them on the scrap heap. The Government are against age discrimination, and we shall legislate against it.
David Maclean rose—
Mr. McCartney: I ask the House to reject the Tory motion.
Mr. Speaker: Order. I take it that the Minister has finished.
Question put, That the original words stand part of the Question:
The House divided:Ayes 194, Noes 328.

Division No. 59]

[10 pm

AYES

Ainsworth, Peter (E Surrey)

Barker, Gregory

Allan, Richard

Baron, John

Amess, David

Barrett, John

Ancram, Rt Hon Michael

Beggs, Roy

Arbuthnot, Rt Hon James

Beith, Rt Hon A J

Atkinson, David (Bour'mth E)

Bellingham, Henry

Bacon, Richard

Bercow, John

Baker, Norman

Boswell, Tim

Baldry, Tony

Bottomley, Peter (Worthing W)

824

Bottomley, Rt Hon Virginia

Jenkin, Bernard

Brady, Graham

Johnson, Boris (Henley)

Brazier, Julian

Jones, Nigel (Cheltenham)

Breed, Colin

Key, Robert

Brooke, Annette

Kirkbride, Miss Julie

Browning, Mrs Angela

Knight, Rt Hon Greg (E Yorkshire)

Bruce, Malcolm

Laing, Mrs Eleanor

Burns, Simon

Lamb, Norman

Burnside, David

Lansley, Andrew

Burstow, Paul

Laws, David

Burl, Alistair

Leigh, Edward

Butterfill, John

Letwin, Oliver

Cameron, David

Liddell-Grainger, Ian

Carmichael, Alistair

Lidington, David

Cash, William

Lilley, Rt Hon Peter

Chapman, Sir Sydney (Chipping Barnet)

Loughton, Tim

Luff, Peter

Chidgey, David

McIntosh, Miss Anne

Chope, Christopher

MacKay, Rt Hon Andrew

Clappison, James

Maclean, Rt Hon David

Clifton-Brown, Geoffrey

Malins, Humfrey

Collins, Tim

Maples, John

Conway, Derek

Mates, Michael

Cotter, Brian

Maude, Rt Hon Francis

Cran, James

Mawhinney, Rt Hon Sir Brian

Curry, Rt Hon David

May, Mrs Theresa

Davies, Quentin (Grantham)

Mercer, Patrick

Davis, Rt Hon David (Haltemprice)

Mitchell, Andrew (Sutton Coldfield)

Djanogly, Jonathan

Moore, Michael

Dodds, Nigel

Murrison, Dr Andrew

Dorrell, Rt Hon Stephen

Norman, Archie

Duncan, Alan (Rutland & Melton)

O'Brien, Stephen (Eddisbury)

Duncan, Peter (Galloway)

Öpik, Lembit

Duncan Smith, Rt Hon Iain

Osborne, George (Tatton)

Evans, Nigel

Ottaway, Richard

Fabricant, Michael

Paice, James

Fallon, Michael

Paterson, Owen

Field, Mark (Cities of London)

Pickles, Eric

Flight, Howard

Portillo, Rt Hon Michael

Forth, Rt Hon Eric

Prisk, Mark

Foster, Don (Bath)

Pugh, Dr John

Fox, Dr Liam

Randall, John

Francois, Mark

Redwood, Rt Hon John

Gale, Roger

Reid, Alan (Argyll & Bute)

Garnier, Edward

Rendel, David

George, Andrew (St Ives)

Robathan, Andrew

Gibb, Nick

Robertson, Hugh (Faversham)

Gidley, Sandra

Robertson, Laurence (Tewk'b'ry)

Goodman, Paul

Roe, Mrs Marion

Gray, James

Rosindell, Andrew

Grayling, Chris

Ruffley, David

Green, Damian (Ashford)

Russell, Bob (Colchester)

Green, Matthew (Ludlow)

Sanders, Adrian

Greenway, John

Sayeed, Jonathan

Grieve, Dominic

Selous, Andrew

Gummer, Rt Hon John

Shephard, Rt Hon Mrs Gillian

Hammond, Philip

Shepherd, Richard

Hancock, Mike

Simmonds, Mark

Harris, Dr Evan (Oxford W)

Simpson, Keith (Mid-Norfolk)

Hawkins, Nick

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

Hayes, John

Smyth, Rev Martin (Belfast S)

Heald, Oliver

Soames, Nicholas

Heath, David

Spelman, Mrs Caroline

Heathcoat-Amory, Rt Hon David

Spicer, Sir Michael

Hendry, Charles

Spink, Bob

Hermon, Lady

Spring, Richard

Hoban, Mark

Stanley, Rt Hon Sir John

Hogg, Rt Hon Douglas

Steen, Anthony

Holmes, Paul

Streeter, Gary

Horam, John

Stunell, Andrew

Howard, Rt Hon Michael

Swayne, Desmond

Howarth, Gerald (Aldershot)

Swire, Hugo

Hughes, Simon (Southwark N)

Syms, Robert

Hunter, Andrew

Tapsell, Sir Peter

Jack, Rt Hon Michael

Taylor, John (Solihull)

Jackson, Robert (Wantage)

Taylor, Matthew (Truro)

825

Taylor, Dr Richard (Wyre F)

Widdecombe, Rt Hon Miss Ann

Taylor, Sir Teddy

Wiggin, Bill

Tonge, Dr Jenny

Wilkinson, John

Tredinnick, David

Willetts, David

Trend, Michael

Willis, Phil

Turner, Andrew (Isle of Wight)

Wilshire, David

Tyler, Paul

Winterton, Mrs Ann (Congleton)

Tyrie, Andrew

Winterton, Nicholas (Macclesfield)

Yeo, Tim

Viggers, Peter

Young, Rt Hon Sir George

Walter, Robert

Younger-Ross, Richard

Waterson, Nigel

Watkinson, Angela

Tellers for the Ayes:

Webb, Steve

Mrs. Cheryl Gillan and

Whittingdale, John

Dr. Julian Lewis.

NOES

Abbott, Ms Diane

Clwyd, Ann

Adams, Mrs Irene (Paisley N)

Coaker, Vernon

Ainger, Nick

Coffey, Ms Ann

Ainsworth, Bob (Cov'try NE)

Colman, Tony

Alexander, Douglas

Connarty, Michael

Allen, Graham

Cook, Frank (Stockton N)

Anderson, Rt Hon Donald (Swansea E)

Cook, Rt Hon Robin (Livingston)

Corbyn, Jeremy

Armstrong, Rt Hon Ms Hilary

Cousins, Jim

Atkins, Charlotte

Crausby, David

Austin, John

Cryer, Mrs Ann (Keighley)

Bailey, Adrian

Cummings, John

Baird, Vera

Cunningham, Rt Hon Dr Jack (Copeland)

Banks, Tony

Barnes, Harry

Cunningham, Jim (Cov'try S)

Barron, Kevin

Cunningham, Tony (Workington)

Battle, John

Curtis-Thomas, Mrs Claire

Bayley, Hugh

Daryell, Tam

Beckett, Rt Hon Margaret

Darling, Rt Hon Alistair

Begg, Miss Anne

Davey, Valerie (Bristol W)

Benn, Hilary

David, Wayne

Bennett, Andrew

Davidson, Ian

Benton, Joe

Davies, Rt Hon Denzil (Llanelli)

Berry, Roger

Davis, Rt Hon Terry (B'ham Hodge H)

Betts, Clive

Blackman, Liz

Dawson, Hilton

Blears, Ms Hazel

Dean, Mrs Janet

Blizzard, Bob

Denham, Rt Hon John

Blunkett, Rt Hon David

Dhanda, Parmjit

Borrow, David

Dismore, Andrew

Bradley, Rt Hon Keith (Withington)

Dobbin, Jim

Bradley, Peter (The Wrekin)

Donohoe, Brian H

Bradshaw, Ben

Doran, Frank

Brennan, Kevin

Dowd, Jim

Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

Drew, David

Eagle, Angela (Wallasey)

Brown, Russell (Dumfries)

Eagle, Maria (L'pool Garston)

Browne, Desmond

Edwards, Huw

Bryant, Chris

Ellman, Mrs Louise

Burden, Richard

Ewing, Annabelle

Burgon, Colin

Farrelly, Paul

Burnham, Andy

Field, Rt Hon Frank (Birkenhead)

Byers, Rt Hon Stephen

Fisher, Mark

Cairns, David

Fizpatrick, Jim

Campbell, Alan (Tynemouth)

Fitzsimons, Mrs Lorna

Campbell, Mrs Anne (C'bridge)

Flint, Caroline

Campbell, Ronnie (Blyth V)

Flynn Paul

Caplin, Ivor

Foster, Rt Hon Derek

Casale, Roger

Foster, Michael (Worcester)

Caton, Martin

Foster, Michael Jabez (Hastings)

Cawsey, Ian

Foulkes, George

Challen, Colin

Francis, Dr Hywel

Chapman, Ben (Wirral S)

Gapes, Mike

Chaytor, David

Gardiner, Barry

Clark, Mrs Helen (Peterborough)

George, Rt Hon Bruce (Walsall S)

Clark, Paul (Gillingham)

Gibson, Dr Ian

Clarke, Rt Hon Charles (Norwich S)

Gilroy, Linda

Godsiff, Roger

Clarke, Rt Hon Tom (Coatbridge)

Goggins, Paul

826

Griffiths, Jane (Reading E)

McDonagh, Siobhain

Griffiths, Win (Bridgend)

MacDonald, Calum

Grogan, John

McDonnell, John

Hain, Rt Hon Peter

McFall, John

Hall, Mike (Weaver Vale)

McGuire, Mrs Anne

Hall, Patrick (Bedford)

McIsaac, Shona

Hamilton, David (Midlothian)

McKechin, Ann

Hamilton, Fabian (Leeds NE)

McKenna, Rosemary

Hanson, David

Mackinlay, Andrew

Harris, Torn (Glasgow Cathcart)

McNamara, Kevin

Havard, Dai

McNulty, Tony

Healey, John

MacShane, Denis

Henderson, Doug (Newcastle N)

McWalter, Tony

Henderson, Ivan (Harwich)

McWilliam, John

Hendrick, Mark

Mahmood, Khalid

Hepburn, Stephen

Mahon, Mrs Alice

Hesford, Stephen

Mallaber, Judy

Heyes, David

Mann, John

Hill, Keith

Marris, Rob

Hinchliffe, David

Marsden, Gordon (Blackpool S)

Hoey, Kate

Marshall, Jim (Leicester S)

Hood, Jimmy

Marshall-Andrews, Robert

Hope, Phil

Martlew, Eric

Hopkins, Kelvin

Michael, Rt Hon Alun

Howarth, Rt Hon Alan (Newport E)

Milburn, Rt Hon Alan

Howarth, George (Knowsley N)

Miliband, David

Hoyle, Lindsay

Miller, Andrew

Hughes, Bevertey (Stretford)

Mitchell, Austin (Gt Grimsby)

Hughes, Kevin (Doncaster N)

Moffatt, Laura

Humble, Mrs Joan

Moran, Margaret

Hurst, Alan

Morgan, Julie

Hutton, Rt Hon John

Morley, Elliot

Iddon, Dr Brian

Morris, Rt Hon Estelle

Illsley, Eric

Mountford, Kali

Ingram, Rt Hon Adam

Mudie, George

Jackson, Helen (Hillsborough)

Mullin, Chris

Jamieson, David

Munn, Ms Meg

Jenkins, Brian

Murphy, Denis (Wansbeck)

Johnson, Alan (Hull W & Hessle)

Murphy, Jim (Eastwood)

Jones, Helen (Warrington N)

Murphy, Rt Hon Paul (Torfaen)

Jones, Jon Owen (Cardiff C)

Naysmith, Dr Doug

Jones, Kevan (N Durham)

O'Brien, Bill (Normanton)

Jones, Lynne (Selly Oak)

O'Brien, Mike (N Warks)

Jones, Martyn (Clwyd S)

Olner, Bill

Kaufman, Rt Hon Gerald

O'Neill, Martin

Keen, Alan (Feltham & Heston)

Organ, Diana

Keen, Ann (Brentford & Isleworth)

Osborne, Sandra (Ayr)

Kemp, Fraser

Owen, Albert

Khabra, Piara S

Palmer, Dr Nick

Kidney, David

Pearson, Ian

Kilfoyle, Peter

Perham, Linda

King, Andy (Rugby & Kenilworth)

Picking, Anne

King, Ms Oona (Bethnal Green)

Pickthall, Colin

Knight, Jim (S Dorset)

Pike, Peter

Kumar, Dr Ashok

Plaskitt, James

Ladyman, Dr Stephen

Pond, Chris

Lammy, David

Pope, Greg

Lawrence, Mrs Jackie

Pound, Stephen

Laxton, Bob

Prentice, Ms Bridget (Lewisham E)

Lazarowicz, Mark

Prentice, Gordon (Pendle)

Lepper, David

Prescott, Rt Hon John

Leslie, Christopher

Price, Adam

Levitt, Tom

Primarolo, Dawn

Lewis, Ivan (Bury S)

Prosser, Gwyn

Liddell, Rt Hon Mrs Helen

Purchase, Ken

Linton, Martin

Quin, Rt Hon Joyce

Lloyd, Tony

Quinn, Lawrie

Llwyd, Elfyn

Rammell, Bill

Love, Andrew

Rapson, Syd

Lucas, Ian

Raynsford, Rt Hon Nick

Luke, Iain

Robertson, Angus (Moray)

Lyons, John

Robertson, John (Glasgow Anniesland)

McAvoy, Thomas

McCabe, Stephen

Ross, Ernie

McCafferty, Chris

Roy, Frank

McCartney, Rt Hon Ian

Ruane, Chris

827

Ruddock, Joan

Thomas, Gareth (Clwyd W)

Ryan, Joan

Thomas, Gareth R (Harrow W)

Salmond, Alex

Thomas, Simon (Ceredigion)

Salter, Martin

Tipping, Paddy

Savidge, Malcolm

Todd, Mark

Sawford, Phil

Touhig, Don

Shaw, Jonathan

Trickett, Jon

Sheerman, Barry

Truswell, Paul

Sheridan, Jim

Turner, Neil (Wigan)

Simpson, Alan (Nottingham S)

Twigg, Derek (Halton)

Skinner, Dennis

Twigg, Stephen (Enfield)

Smith, Rt Hon Andrew (Oxford E)

Tynan, Bill

Smith, Rt Hon Chris (Islington S)

Walley, Ms Joan

Smith, Geraldine (Morecambe)

Wareing, Robert N

Smith, Jacqui (Redditch)

Weir, Michael

Smith, John (Glamorgan)

White, Brian

Smith, Llew (Blaenau Gwent)

Whitehead, Dr Alan

Soley, Clive

Williams, Rt Hon Alan (Swansea W)

Southworth, Helen

Spellar, Rt Hon John

Williams Mrs Betty (Conwy)

Squire, Rachel

Williams, Hywel (Caernarfon)

Starkey, Dr Phyllis

Winnick, David

Steinberg, Gerry

Winterton, Ms Rosie (Doncaster C)

Wishart, Pete

Stevenson, George

Woodward, Shaun

Stewart, David (Inverness E)

Woolas, Phil

Stewart, Ian (Eccles)

Worthington, Tony

Stinchcombe, Paul

Wray, James

Stoate, Dr Howard

Wright, Anthony D (Gt Yarmouth)

Stuart, Ms Gisela

Wright, David (Tefford)

Sutcliffe, Gerry

Wright, Tony (Cannock)

Tami, Mark

Taylor, Rt Hon Ann (Dewsbury)

Tellers for the Noes:

Taylor, Ms Dari (Stockton S)

Mr. John Heppell and

Taylor, David (NW Leics)

Mr. Graham Stringer.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
The House divided:Ayes 324, Noes 194.

Division No. 60]

[10.15 pm

AYES

Abbott, Ms Diane

Bradley, Rt Hon Keith (Withington)

Adams, Mrs Irene (Paisley N)

Bradley, Peter (The Wrekin)

Ainger, Nick

Bradshaw, Ben

Ainsworth, Bob (Cov'try NE)

Brennan, Kevin

Alexander, Douglas

Brown, Russell (Dumfries)

Allen, Graham

Browne, Desmond

Anderson, Rt Hon Donald (Swansea E)

Bryant, Chris

Burden, Richard

Armstrong, Rt Hon Ms Hilary

Burgon, Colin

Atkins, Charlotte

Burnham, Andy

Austin, John

Byers, Rt Hon Stephen

Bailey, Adrian

Cairns, David

Baird, Vera

Campbell, Alan (Tynemouth)

Banks, Tony

Campbell, Mrs Anne (C'bridge)

Barnes, Harry

Campbell, Ronnie (Blyth V)

Barron, Kevin

Caplin, Ivor

Battle, John

Casale, Roger

Bayley, Hugh

Caton, Martin

Beckett, Rt Hon Margaret

Cawsey, Ian

Begg, Miss Anne

Challen, Colin

Benn, Hilary

Chapman, Ben (Wirral S)

Bennett, Andrew

Chaytor, David

Benton, Joe

Clark, Mrs Helen (Peterborough)

Berry, Roger

Clark, Paul (Gillingham)

Betts, Clive

Clarke, Rt Hon Charles (Norwich S)

Blackman, Liz

Blears, Ms Hazel

Clarke, Rt Hon Tom (Coatbridge)

Blizzard, Bob

Clwyd, Ann

Borrow, David

Coaker, Vernon

828

Coffey, Ms Ann

Hinchliffe, David

Colman, Tony

Hoey, Kate

Connarty, Michael

Hood, Jimmy

Cook, Frank (Stockton N)

Hope, Phil

Cook, Rt Hon Robin (Livingston)

Hopkins, Kelvin

Corbyn, Jeremy

Howarth, Rt Hon Alan (Newport E)

Cousins, Jim

Howarth, George (Knowsley N)

Crausby, David

Hoyle, Lindsay

Cryer, Mrs Ann (Keighley)

Hughes, Beverley (Stretford)

Cummings, John

Hughes, Kevin (Doncaster N)

Cunningham, Rt Hon Dr Jack (Copeland)

Humble, Mrs Joan

Hurst, Alan

Cunningham, Jim (Cov'try S)

Hutton, Rt Hon John

Cunningham, Tony (Workington)

Iddon, Dr Brian

Curtis-Thomas, Mrs Claire

Illstey, Eric

Dalyell, Tarn

Ingram, Rt Hon Adam

Darling, Rt Hon Alistair

Jackson, Helen (Hillsborough)

Davey, Valerie (Bristol W)

Jamieson, David

David, Wayne

Jenkins, Brian

Davidson, Ian

Johnson, Alan (Hull W & Hessle)

Davies, Rt Hon Denzil (Llanelli)

Jones, Helen (Warrington N)

Davis, Rt Hon Terry (B'ham Hodge H)

Jones, Jon Owen (Cardiff C)

Jones, Kevan (N Durham)

Dawson, Hilton

Jones, Lynne (Selly Oak)

Dean, Mrs Janet

Jones, Martyn (Clwyd S)

Denham, Rt Hon John

Kaufman, Rt Hon Gerald

Dhanda, Parmjit

Keen, Alan (Feltham & Heston)

Dismore, Andrew

Keen, Ann (Brentford & Isleworth)

Dobbin, Jim

Kemp, Fraser

Donohoe, Brian H

Khabra, Piara S

Doran, Frank

Kidney, David

Dowd, Jim

Kilfoyle, Peter

Drew, David

King, Andy (Rugby & Kenilworth)

Eagle, Angela (Wallasey)

King, Ms Oona (Bethnal Green)

Eagle, Maria (L'pool Garston)

Knight, Jim (S Dorset)

Edwards, Huw

Kumar, Dr Ashok

Ellman, Mrs Louise

Ladyman, Dr Stephen

Ewing, Annabelle

Lammy, David

Farrelly, Paul

Lawrence, Mrs Jackie

Reid, Rt Hon Frank (Birkenhead)

Laxton, Bob

Fisher, Mark

Lazarowicz, Mark

Fitzpatrick, Jim

Lepper, David

Fitzsimons, Mrs Lorna

Leslie, Christopher

Flint, Caroline

Levitt, Tom

Flynn, Paul

Lewis, Ivan (Bury S)

Foster, Rt Hon Derek

Liddell, Rt Hon Mrs Helen

Foster, Michael (Worcester)

Linton, Martin

Foster, Michael Jabez (Hastings)

Lloyd, Tony

Foulkes, George

Llwyd, Elfyn

Francis, Dr Hywel

Love, Andrew

Gapes, Mike

Lucas, Ian

Gardiner, Barry

Luke, Iain

George, Rt Hon Bruce (Walsall S)

Lyons, John

Gibson, Dr Ian

McAvoy, Thomas

Gilroy, Linda

McCabe, Stephen

Godsiff, Roger

McCafferty, Chris

Goggins, Paul

McCartney, Rt Hon Ian

Griffiths, Jane (Reading E)

McDonagh, Siobhain

Griffiths, Win (Bridgend)

MacDonald, Calum

Grogan, John

McDonnell, John

Hain, Rt Hon Peter

McFall, John

Hall, Mike (Weaver Vale)

McGuire, Mrs Anne

Hall, Patrick (Bedford)

McIsaac, Shona

Hamilton, David (Midlothian)

McKechin, Ann

Hamilton, Fabian (Leeds NE)

McKenna, Rosemary

Hanson, David

Mackinlay, Andrew

Harris, Tom (Glasgow Cathcart)

McNamara, Kevin

Havard, Dai

McNulty, Tony

Healey, John

MacShane, Denis

Henderson, Doug (Newcastle N)

McWalter, Tony

Henderson, Ivan (Harwich)

McWilliam, John

Hendrick, Mark

Mahmood, Khalid

Hepburn, Stephen

Mahon, Mrs Alice

Hesford, Stephen

Mallaber, Judy

Heyes, David

Mann, John

Hill, Keith

Marris, Rob

829

Marsden, Gordon (Blackpool S)

Sheerman, Barry

Marshall, Jim (Leicester S)

Sheridan, Jim

Marshall-Andrews, Robert

Simpson, Alan (Nottingham S)

Martlew, Eric

Skinner, Dennis

Michael, Rt Hon Alun

Smith, Rt Hon Andrew (Oxford E)

Milburn, Rt Hon Alan

Smith, Rt Hon Chris (Islington S)

Miliband, David

Smith, Geraldine (Morecambe)

Miller, Andrew

Smith, Jacqui (Redditch)

Mitchell, Austin (Gt Grimsby)

Smith, John (Glamorgan)

Moffatt, Laura

Smith, Llew (Blaenau Gwent)

Moran, Margaret

Soley, Clive

Morgan, Julie

Southworth, Helen

Morley, Elliot

Spellar, Rt Hon John

Morris, Rt Hon Estelle

Squire, Rachel

Mountford, Kali

Starkey, Dr Phyllis

Mudie, George

Steinberg, Gerry

Mullin, Chris

Stevenson, George

Munn, Ms Meg

Stewart, David (Inverness E)

Murphy, Denis (Wansbeck)

Stewart, Ian (Eccles)

Murphy, Jim (Eastwood)

Stinchcombe, Paul

Murphy, Rt Hon Paul (Torfaen)

Stoate, Dr Howard

Naysmith, Dr Doug

Stuart, Ms Gisela

O'Brien, Bill (Normanton)

Sutcliffe, Gerry

Olner, Bill

Tami, Mark

O'Neill, Martin

Taylor, Rt Hon Ann (Dewsbury)

Organ, Diana

Taylor, Ms Dari (Stockton S)

Osborne, Sandra (Ayr)

Taylor, David (NW Leics)

Owen, Albert

Thomas, Gareth (Clwyd W)

Palmer, Dr Nick

Thomas, Gareth R (Harrow W)

Pearson, Ian

Thomas, Simon (Ceredigion)

Perham, Linda

Tipping, Paddy

Picking, Anne

Todd, Mark

Pickthall, Colin

Touhig, Don

Pike, Peter

Trickett, Jon

Plaskin, James

Truswell, Paul

Pond, Chris

Turner, Neil (Wigan)

Pope, Greg

Twigg, Derek (Halton)

Pound, Stephen

Twigg, Stephen (Enfield)

Prentice, Ms Bridget (Lewisham E)

Tynan, Bill

Prentice, Gordon (Pendle)

Walley, Ms Joan

Prescott, Rt Hon John

Wareing, Robert N

Price, Adam

Weir, Michael

Primarolo, Dawn

White, Brian

Prosser, Gwyn

Whitehead, Dr Alan

Purchase, Ken

Williams, Rt Hon Alan (Swansea W)

Quin, Rt Hon Joyce

Quinn, Lawrie

Williams, Mrs Betty (Conwy)

Rammell, Bill

Williams, Hywel (Caernarfon)

Rapson, Syd

Winnick, David

Raynsford, Rt Hon Nick

Winterton, Ms Rosie (Doncaster C)

Robertson, Angus (Moray)

Wishart, Pete

Robertson, John (Glasgow Anniesland)

Woodward, Shaun

Woolas, Phil

Ross, Ernie

Worthington, Tony

Roy, Frank

Wray, James

Ruane, Chris

Wright, Anthony D (Gt Yarmouth)

Ruddock, Joan

Wright, David (Telford)

Ryan, Joan

Wright, Tony (Cannock)

Salmond, Alex

Savidge, Malcolm

Tellers for the Ayes:

Sawford, Phil

Mr. John Heppell and

Shaw, Jonathan

Mr. Graham Stringer.

NOES

Ainsworth, Peter (E Surrey)

Beggs, Roy

Allan, Richard

Beith, Rt Hon A J

Amess, David

Bellingham, Henry

Ancram, Rt Hon Michael

Bercow, John

Arbuthnot, Rt Hon James

Boswell, Tim

Atkinson, David (Bour'mth E)

Bottomley, Peter (Worthing W)

Bacon, Richard

Bottomley, Rt Hon Virginia

Baker, Norman

Brady, Graham

Baldry, Tony

Brazier, Julian

Barker, Gregory

Breed, Colin

Baron, John

Brooke, Annette

Barrett, John

Browning, Mrs Angela

830

Bruce, Malcolm

Knight, Rt Hon Greg (E Yorkshire)

Burns, Simon

Laing, Mrs Eleanor

Burnside, David

Lamb, Norman

Burstow, Paul

Lansley, Andrew

Burt, Alistair

Laws, David

Butterfill, John

Leigh, Edward

Cameron, David

Letwin, Oliver

Carmichael, Alistair

Liddell-Grainger, Ian

Cash, William

Lidington, David

Chapman, Sir Sydney (Chipping Barnet)

Lilley, Rt Hon Peter

Loughton, Tim

Chidgey, David

Luff, Peter

Chope, Christopher

McIntosh, Miss Anne

Clappison, James

MacKay, Rt Hon Andrew

Clifton-Brown, Geoffrey

Maclean, Rt Hon David

Collins, Tim

Malins, Humfrey

Conway, Derek

Maples, John

Cotter, Brian

Mates, Michael

Cran, James

Maude, Rt Hon Francis

Curry, Rt Hon David

Mawhinney, Rt Hon Sir Brian

Davies, Quentin (Grantham)

May, Mrs Theresa

Davis, Rt Hon David (Haltemprice)

Mercer, Patrick

Djanogly, Jonathan

Mitchell, Andrew (Sutton Coldfield)

Dodds, Nigel

Moore, Michael

Dorrell, Rt Hon Stephen

Murrison, Dr Andrew

Duncan, Alan (Rutland & Melton)

Norman, Archie

Duncan, Peter (Galloway)

O'Brien, Stephen (Eddisbury)

Duncan Smith, Rt Hon Iain

Öpik, Lembit

Evans, Nigel

Osborne, George (Tatton)

Fabricant, Michael

Ottaway, Richard

Fallon, Michael

Paice. James

Field, Mark (Cities of London)

Paterson, Owen

Flight, Howard

Pickles, Eric

Forth, Rt Hon Eric

Portillo, Rt Hon Michael

Foster, Don (Bath)

Prisk, Mark

Fox, Dr Liam

Pugh, Dr John

Francois, Mark

Randall, John

Gale, Roger

Redwood, Rt Hon John

Garnier, Edward

Reid, Alan (Argyll & Bute)

George, Andrew (St Ives)

Rendel, David

Gibb, Nick

Robathan, Andrew

Gidley, Sandra

Robertson, Hugh (Faversham)

Goodman, Paul

Robertson, Laurence (Tewk'b'ry)

Gray, James

Roe, Mrs Marion

Grayling, Chris

Rosindell, Andrew

Green, Damian (Ashford)

Ruffley, David

Green, Matthew (Ludlow)

Russell, Bob (Colchester)

Greenway, John

Sanders, Adrian

Grieve, Dominic

Sayeed, Jonathan

Gummer, Rt Hon John

Selous, Andrew

Hammond, Philip

Shephard, Rt Hon Mrs Gillian

Hancock, Mike

Simmonds, Mark

Harris, Dr Evan (Oxford W)

Simpson, Keith (Mid-Norfolk)

Harvey. Nick

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

Hawkins, Nick

Smyth, Rev Martin (Belfast S)

Hayes, John

Soames, Nicholas

Heald, Oliver

Spelman, Mrs Caroline

Heath, David

Spicer, Sir Michael

Heathcoat-Amory, Rt Hon David

Spink, Bob

Hendry, Charles

Spring, Richard

Hermon, Lady

Stanley, Rt Hon Sir John

Hoban, Mark

Steen, Anthony

Hogg, Rt Hon Douglas

Streeter, Gary

Holmes, Paul

Stunell, Andrew

Horam, John

Swayne, Desmond

Howard, Rt Hon Michael

Swire, Hugo

Howarth, Gerald (Aldershot)

Syms, Robert

Hughes, Simon (Southwark N)

Tapsell, Sir Peter

Hunter, Andrew

Taylor, John (Solihull)

Jack, Rt Hon Michael

Taylor, Matthew (Truro)

Jackson, Robert (Wantage)

Taylor, Dr Richard (Wyre F)

Jenkin, Bernard

Taylor, Sir Teddy

Johnson, Boris (Henley)

Tonge, Dr Jenny

Jones, Nigel (Cheltenham)

Tredinnick, David

Key, Robert

Trend, Michael

Kirkbride, Miss Julie

Turner, Andrew (Isle of Wight)

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Tyler, Paul

Willetts, David

Tyrie, Andrew

Willis, Phil

Viggers, Peter

Wilshire, David

Walter, Robert

Winterton, Mrs Ann (Congleton)

Waterson, Nigel

Winterton, Nicholas (Macclesfield)

Yeo, Tim

Watkinson, Angela

Young, Rt Hon Sir George

Webb, Steve

Younger-Ross, Richard

Whittingdale, John

Widdecombe, Rt Hon Miss Ann

Tellers for the Noes:

Wiggin, Bill

Dr. Julian Lewis and

Wilkinson, John

Mrs. Cheryl Gillan.

Question accordingly agreed to.
Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House welcomes the Government's reformed framework for pensions, which ensures that today's pensioners share in the country's rising prosperity and that tomorrow's pensioners are encouraged to save for their retirement, building on the foundation of the basic state pension; believes that pensioner poverty must be tackled through the minimum income guarantee; supports the reform of SERPS to create the State Second Pension which will give more help to low paid earners and people with broken work records, such as carers and disabled people; further supports stakeholder pensions which provide a low cost, flexible option for moderate or higher earners who do not have access to a good occupational scheme; welcomes the Government's plans to ensure that pensioners with modest savings or a small occupational pension are rewarded for their thrift through the new pension credit; and supports the need for an effective system of financial regulation through the FSA and other measures to build public confidence.

Stakeholder Pensions

  BUSINESS OF THE HOUSE
  Motion made, and Question proposed,
  That, in respect of the Anti-Terrorism, Crime and Security Bill, notices of amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. McNulty.]
  Hon. Members: Object.
  Debate to be resumed tomorrow.

  DELEGATED LEGISLATION
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
  LOCAL GOVERNMENT FINANCE
  That the Local Government Finance (England) Special Grant Report (No. 88) (HC 305) on Special Grant for Activities Undertaken by Beacon Councils, which was laid before this House on 25th October, be approved.—[Mr. McNulty.]
  Question agreed to.
  LOCAL GOVERNMENT FINANCE
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
  That the Local Government Finance (England) Special Grant Report (No. 81) (HC 276) on 2001-02 Special Grant for Gypsy Sites Refurbishment, which was laid before this House on 29th October, be approved.—[Mr.McNulty.]
  Mr. Speaker: I think the Ayes have it.
  Hon. Members: No.
  Division deferred till Wednesday 14 November, pursuant to Order [28 June 2001].

PETITIONS

  Road Safety
  10.31 pm
  Miss Anne McIntosh: I have the honour to present a petition from Mrs. Jonete Coates, of Redmain cottage, Tollerton road, Huby, Yorkshire and 100 other residents of Huby or neighbouring villages, objecting to excessive speeds on country roads in and around Huby.
  The petition states:
  The Petitioner therefore requests that the House of Commons urges the Secretary of State for the Home Department and the Secretary of State for Transport, Local Government and the Regions to introduce measures which will ensure that the Tollerton Road is made safer for both users of the road and local residents.
  And the Petitioner remains, etc
  To lie upon the Table.

  East Gloucestershire NHS Trust
  10.33 pm
  Mr. Geoffrey Clifton-Brown: I have the honour to present a petition from 7,238 petitioners out of a total readership of 18,000 of the Wiltshire and Gloucestershire Standard.

  The petition reads as follows:
  To the House of Commons,
  The Petition of the readers of the Wilts and Gloucestershire Standard newspaper, Cirencester. Declares that the decision by the East Gloucestershire NHS Trust to take junior doctors away from Cirencester Hospital casts serious doubts over the future of health provision in Cirencester and the Cotswolds, especially with regard to the Accident and Emergency facility.
  The Petitioners therefore request that the House of Commons resolves that Her Majesty's Government instructs Gloucestershire Health Authority and the East Gloucestershire NHS Trust to maintain the present level of quality of NHS provision at Cirencester Hospital.
  And the Petitioners remain etc.
  To lie upon the Table.

Domestic Violence
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McNulty.]
10.34 pm
Margaret Moran: I congratulate the Department of Health on its guidance to health care professionals working on domestic violence. Its manual, which is a key resource for health care workers on domestic violence, is a model to be proud of. I welcome the fact that, over the past few years, it has been increasingly recognised by health professionals and the Department that health services play a critical role in providing access to help and protection for abused women and children and are a front-line point of contact for anyone experiencing domestic violence.
Until recently, the health service has tended to disregard all but the immediate medical needs of people experiencing domestic violence. Any refuge relying on the support of GPs and health visitors will confirm that that has been a mixed experience, subject to the resources and understanding of the staff who work with it. Recent initiatives by the royal colleges and the crime reduction programme have undoubtedly improved responses to domestic violence, as has the welcome funding of a Women's Aid programme to raise awareness of the issue.
However, much more remains to be done. Domestic violence is a key issue for the national health service, so why is it not referred to at all in the NHS plan? We need a more systematic approach across front-line health services to training; we also need to enable domestic violence survivors to access safely help that they may desperately need. In particular, we need clear measures to show how health trusts and, more importantly, primary care groups and trusts are implementing the guidance. A recent survey by Women's Aid shows that performance is patchy and the measurement of outcomes almost non-existent. General practitioners, dentists, health visitors, nursing maternity services, psychiatric and mental health care, general medicine, surgery and accident and emergency departments all need to be provided with training and confidence to identify and provide guidance.
Survivors should not have to rely on enlightened health care professionals; they should be sure that help is available wherever and whenever it is needed. Domestic violence, particularly violence against women, is a problem in all countries, whether rich or poor. According to the British Medical Association, in this country it affects about one in four women, regardless of ethnic origin or status. The BMA found that about one in nine women using the health services have been hurt by someone they know or live with. The Department's own 1997 publication, "On the State of the Public Health", acknowledged that
"the health and social costs and consequences of domestic violence are extensive and serious enough to constitute a major public health issue."
Research has shown that health care services are often the first point of contact for women living with violent men. Women fleeing domestic violence are most likely to attend accident and emergency departments because of their 24-hour access and the anonymity that they provide.
According to a 1996 study, domestic abuse is a common cause of significant injury, mental health difficulties and chronic health problems in women. It is
834
estimated that 50 per cent. of women being treated for mental illness have a history of domestic violence. It has been well documented that psychiatric illness, particularly depression, anxiety and post-traumatic stress disorder, is greater in women who have experienced domestic violence. Many women do not talk about their abuse because of fear or shame. Often, a partner will not let a woman out of his sight, so a visit to a GP, often because of the illness of a child. may be her only way to communicate the problem. She may not know how to seek help, so an appointment at the doctor's or the hospital may be the only time when she is alone and able to talk.
Violence and abuse are a public health scourge and their effects on health and well-being should never be underestimated. Many health professionals see patients whom they suspect of being abused at home, but may be unsure about to how to deal with the issue. That was the depressing finding of a recent Women's Aid report. Health care professionals have to engage with those embroiled in violent situations to deliver the appropriate care. Research has found that, in some cases, health professionals are seeing abused women as many as eight times before action on domestic violence is taken. It can be difficult for someone to acknowledge that the abuse that she is experiencing is domestic violence. That is not helped by professionals who do not recognise the seriousness of the matter.
In the online consultation between parliamentarians and survivors of domestic violence, Womenspeak, one survivor stated:
"None of the help I received whilst still married was of any use. I got told that as it wasn't happening every day. I should count myself lucky. I knew nothing about the help I could have received and no one told me. I also did not realise at this stage that the abuse I was receiving was domestic violence. It must have been obvious to the police, solicitor and staff of the hospital but no one said a word."
Recognition of the abuse is often the first step to seeking help, so any agency responding to a domestic violence situation must, at the very least, offer the victim adequate support and supply relevant information about support available in the local area. The Womenspeak consultation found that that rarely happens in some areas.
In another contribution from the consultation, a woman reported:
"For six of those years I had no help from the police until I was admitted into hospital. While I was at the hospital I was given no advice on the help I could get, even though the nurse and doctor who treated me knew that I had been attacked by my partner. It was only when a police officer came to take a statement from me the following day that he gave me the number of the Domestic Violence Officer, who in turn gave me the number of a refuge for women. This was the first I knew that there was any help for myself and my son.
Research in 1999 found that women experiencing domestic violence present frequently to health services and require wide-ranging health interventions, so a variety of health professionals have daily contact with patients whose health may be at risk or is already damaged by domestic violence, often over many occasions, yet only 6 per cent. of abused women were accurately identified in emergency departments.
It is an appalling fact that violence against women is more likely during pregnancy and early parenthood. The extent and level of abuse was well illustrated by a midwife who recently confessed that she had little idea about the

835
problem until a woman whom she had cared for and whose baby she had delivered just 48 hours before was readmitted for care because her husband had cut away her perinatal sutures in order to have intercourse.
Pregnant women in violent circumstances look to midwives to help them confront the issues and receive support. It is a sad fact that maternal morbidity and pre-natal morbidity and mortality are significantly higher in women who live in violent and disadvantaged circumstances, and the numbers have been increasing. For the first time, domestic violence is included as one of the causes of death in the last maternity mortality report, "Why Women Die".
The recently produced Department of Health midwifery action plan includes a clear steer for midwives towards developing their public health role. It acknowledges the need for midwives to be skilled in recognising the emotional, sexual or the often more evident physical abuse which take place against women, and to be able to act in the best interests of the woman and baby who are the primary focus of midwives' care. Sadly, that is not the norm throughout the national health service. I can cite an example from my constituency, where a GP told a woman who came to him after being set on fire by her husband to go home and not to annoy her husband again.
That approach is reflected in a recent survey by Women's Aid, which found that only 27 per cent. of health authorities had a written practice or protocol for dealing with domestic violence. Fewer than a quarter collect information on the incidence and prevalence of domestic violence, and about half included the issue in their health improvement programme, which might simply mean the inclusion of a sentence on the subject and might not mean much action in practice.
The survey reveals a similar or worse picture of practice among health trusts, yet health care professionals working in trusts are in an ideal position to encourage disclosure of abuse and to record it in order to highlight the scale of the problem and the need for relevant services. The report concludes that most trusts seem to ignore that.
In areas such as mine, there has been a large increase in the reporting of domestic violence, with about 250 incidents reported a month. Increasingly, those reporting are women from ethnic minorities, but as is the case in many trusts, little or no information about domestic violence is available in ethnic languages. Like many primary care trusts, the focus of what training exists is on health visitors alone. In Luton primary care trust health visitors have, in the past, attended training sessions set up by Women's Refuge and have updated training. Like other primary care trusts, it relies on one identified health visitor with experience in domestic violence who is a resource for her colleagues. But what happens when she leaves?
As for general practitioners, once again the picture is pretty desperate for those seeking help with domestic violence. General practitioners do not have formal training, either as junior doctors or as postgraduates. Locally, Luton primary care trust has encouraged GPs to be involved with training undertaken by health visitors, but it is not compulsory. Nationally, less than 9 per cent. of primary care trusts have a domestic violence policy and less than a quarter have a member of staff with some responsibility for domestic violence issues.
836
It is clear from the survey that most senior staff in primary care trusts have given the matter relatively little or no thought. Where they have, they have cited difficulties of developing and implementing a policy throughout the various independent GP practices and other primary care services.
Despite the increasing importance of primary care groups and trusts as the front line of resources and contact for survivors, the picture does not look good. Many respondents felt that the only way to effect change was for domestic violence to become one of the designated priority care groups and have their performance measured.
As one health authority acknowledged:
"Domestic violence is not properly recognised as a priority. It is very difficult to raise any form of interest except in a small minority of already committed and interested informed people."
Another primary care group said:
"Having read the questionnaire it is apparent that the vast majority of issues covered do not apply to the services we commission nor has the topic been identified as a priority for the primary care group."
What hope, then, for the woman who seeks help from her GP? She may find little or no literature or training, and little or no network to point her towards support and assistance.
Worryingly, there is still no systematic monitoring of the extent to which women experiencing domestic violence make use of the health service, nor of the outcomes when they do, and very few health authorities collect their own data on incidents or referrals.
Responding to domestic violence is the responsibility of all agencies, not just the police or Women's Aid. The health service has a pivotal role to play in the identification, assessment and responses to domestic violence, not only because of the impact and cost of domestic violence to women's health, but because of the cost to the health service itself. For example, the financial cost of domestic violence for health agencies in Hackney in 1996 was estimated at £580,000, and that did not include hospitalisation and medicine.
It is essential that health professionals are sensitive to signs and indicators that might suggest domestic violence. Women may find it hard to make the first step by disclosing domestic violence, but they may hope that the health professional will notice that something is wrong and put them in touch with support.
What can the NHS do? I urge the Minister to take action on reinforcing the guidelines, particularly to primary care groups and trusts where their involvement is so vital. We need systems which monitor how or whether the guidelines are being used throughout the health service, but especially among front-line provision such as GPs and accident and emergency services.
We need training on domestic violence issues to be included within the initial professional education of all health care staff and as a regular part of on-going training. For the national health service effectively to respond to the needs of those experiencing domestic violence it needs to ensure that it is raising awareness among staff of domestic violence and its effects; to instigate compulsory training; to create a safe environment which encourages disclosure by those experiencing domestic violence; to develop safe protocols for helping those in this situation; to develop good referral systems as part of a multi-agency response; to ensure that women health professionals are

837
available where necessary; to seek to empower those experiencing domestic violence to make their own informed decisions; to provide options and information; and to respect confidentiality. It needs to display information and to work with refuges, helplines and outreach and advocacy services for women and children, and also to develop referral and support networks recognising the role and skills of other agencies.
It is clear that, unless responses to domestic violence are included among the criteria against which the performance of health care providers is measured, many will continue to ignore the issue. The health service may be a lifeline for women whose contact with the outside world is restricted by a violent partner. For them, access to front-line health services that recognise and respond to their needs may be a matter of life and death.
10.50 pm
The Parliamentary Under-Secretary of State for Health(Ms Hazel Blears): I am delighted to congratulate my hon. Friend the Member for Luton, South (Margaret Moran) on securing this very important debate. I am aware of her tremendous record of raising these issues in the House in relation to almost every single Department. By her personal endeavours, she has raised the matter way up the agenda. I am also personally aware of the online consultation that she was responsible for organising, which gave women the opportunity to respond through the internet and to tell their own stories about their experience of domestic violence. There is nothing more moving than to read and understand the real experiences of women in the community and the impact of domestic violence not on only them, but on their families. I commend that consultation to all hon. Members who have not had the opportunity to hear and understand the views that have been expressed, which are extremely powerful and have been a great aid to us all in understanding the complexity of some of the issues that are involved.
The facts about domestic violence are shocking to all of us. About one in four women will experience domestic violence at some time in their lives. Although we have heard predominantly about women in this debate, there is a clear recognition that domestic violence sometimes involves men as its victims, and we must not forget that. More than 1 million incidents of domestic violence are recorded by the police every year. One in four of all assaults involve such violence. Two in every five women who are murdered are killed by a partner or ex-partner. Certainly, domestic violence is very rarely a one-off episode. More often, the experience is one of repeated and intensifying assault. On average, a woman experiences 35 incidents of domestic violence before seeking help. That is the extent of the problem.
About a third of domestic violence starts in pregnancy. Often, when there is domestic violence in a family, it escalates during pregnancy, when women are at their most vulnerable. Women with unwanted pregnancies often carry the greatest risk. Domestic violence is clearly associated with miscarriages, premature birth and labour. low birth weight, and foetal injury and death.
Almost all women will have contact with the health service by being registered with a GP. I agree entirely with my hon. Friend that the health service is ideally
838
placed to pick up and monitor cases and, it is to be hoped, to take action in this very important area. A recent study showed that approximately 80 per cent. of women in a violent relationship had sought help from the health service on at least one occasion.
The issue is one for the Government as a whole and not just the NHS. The policy document "Living Without Fear", published in 1999, set out the Government's initiatives across all Departments, as well as good practice and our commitment to tackling domestic violence and other forms of violence against women. It is important that we consider not only the women who are involved, but the children, who can suffer if they live in households where there is regular domestic violence. It has been shown that such violence can have a serious impact on children's development and well-being.
The health service has a particular role to play in trying to counter domestic violence. Health professionals are most likely, out of those in all agencies, to come into contact with its victims. They are also the most likely people to be perceived as non-judgmental, which is a very important issue for women in these circumstances. Many women simply want the abuse to end, but they may be concerned that their children will be taken away from them once the agencies start to intervene. There is a genuine fear that, once social services become involved, the consequences can sometimes be dire for the whole family. Women's trust in health professionals whom they do not see as threatening or judgmental can therefore be vital in giving them the self-confidence to disclose what has been going on.
Health professionals have a key role to play in helping women to tell them what is happening in their homes, in providing support and practical advice about the available options, which is what many women are looking for, and in demonstrating a continuing understanding and a source of help or referral. Whatever decision the woman initially makes, the health service professional will be there to support her, to help her through the system and to help her to take advantage of the choices on offer.
My hon. Friend referred to the NHS resource manual for health professionals that was developed in March last year. I am grateful that she thinks that it is a valuable resource. The manual builds on and consolidates guidelines that have been issued by the various royal colleges. It provides greater clarity to stimulate the debate and to inform the development of good practice throughout the health service. It is aimed primarily at health care professionals, to try to increase their knowledge and understanding of the issues, to highlight the nature of domestic violence that takes place in a range of settings, and to show how it is likely to be evident among the patients for whom they care. They will then be able to see the warning signs and the symptoms, and be ready to intervene and to take action.
The manual is to be used as a resource that provides a starting point for health authorities and trusts to review their own policies and practices. I accept that it needs to be supplemented with information and data that will support local implementation, because the manual will only be good when it is keyed into what is happening in local communities and used as a source of practical help on the ground, providing real information to assist people.
It is essential that front-line workers be supported by their managers in implementing and developing the protocols to tackle domestic violence. There needs to be

839
better monitoring and much more extensive information gathering, so that we can be aware of the full extent of the problem. My hon. Friend is right to say that if we can measure progress, things tend to get done. Unless we do so, this issue could slip down the agenda, which is certainly not what we want.
The resource manual has been widely taken up, right across the health service. The first print run of 10,000 copies has already gone, and the second print run is going well. We are trying to push it out into every part of the NHS.
We are also moving on from there. We are funding the Women's Aid Federation of England in a three-year project to raise awareness of domestic violence in the health service. The federation carried out an initial survey, the findings of which were published last year, as my hon. Friend mentioned. She is right to say that not enough health authorities or trusts have their own written policies, or an accurate way of monitoring the extent of the problem in their communities. We at the centre need to ensure that, as the primary care trusts begin to develop their commissioning policies, they take this matter seriously. The federation's survey has been tremendously useful in showing us what action is being taken on the ground, where the gaps are, and where we need to do even more.
The Women's Aid Federation will undertake a second survey next year to gauge how successful the manual and its awareness project have been. We intend to measure and monitor these processes and to ensure that they happen. The federation has also published a practice directory, a very useful document giving examples of new health care initiatives in tackling domestic violence. One of the challenges for the NHS is to try to spread good practice. There are pockets of excellence everywhere in this country. and it is sometimes frustrating that we try to reinvent the wheel rather than learn from each other and spread the good ideas across the country. The directory of good practice will be a useful tool for the whole NHS to use.
We have also considered domestic violence in relation to NHS Direct. If women telephone the service, they can get immediate advice, signposting and referral to appropriate support services in their community. The telephone number of NHS Direct is becoming much more widely known, and the service has now been rolled out nationally. In the east midlands, NHS Direct has been piloting a domestic violence protocol for use with callers to the service. It will report on the pilot, and if it is successful it will be rolled out to other areas of the country.
Although tackling domestic violence is important to the NHS, it is also important for us to respond to these problems on a cross-government, multi-agency basis. The Home Office has been active in supporting a whole range of initiatives under the crime reduction process. I want to highlight two examples in which the health service, eduction services and local authorities have been able to do really practical work in tackling these issues. The first is in north Devon and Torridge, which is a rural area. Often, support services for women suffering from domestic violence are particularly difficult to access in
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such areas, because they are concentrated in urban communities. The project provides services in the local accident and emergency department, which is where many women immediately go when they experience domestic violence.
It is hoped that the project will expand in its second phase to encompass every health centre and doctor's surgery in the district and two small local hospitals. It aims to provide advice from Women's Aid and legal advice from solicitors and to ensure that 24-hour victim support is available on the spot to help women—and, indeed, men if they are victims of domestic violence—through the health service. We can all learn from the project, and we should evaluate it to judge how successful it is. We must ensure that there is support in the community to help people in that situation, whatever the time of day or night. The project is extremely interesting.
The other example I want to highlight is supported by the health action zone project in Leeds. It is entirely different, but just as valuable. Three local schools and a mixed-sex group of boys and girls aged eight and nine are involved. The aim is to ensure that they are aware of the problems of domestic violence from a very early age, to extend awareness and to ensure that domestic violence is on their agenda.
I hope that, when we raise the next generation, we will not duplicate the problems that exist in so many families. Again, a multi-agency approach is involved—raising awareness and ensuring that we can support those young people if they happen to be in families where domestic violence unfortunately occurs, as well as giving them the self-confidence and self-esteem to tackle it themselves.
Those are two of about 22 projects being funded this year. There were 200 bids for support from a £10.7 million programme, which is making a tremendous impact on tackling domestic violence in communities. There is a great deal going on, but I would not claim to my hon. Friend the Member for Luton, South that we do not have a lot more to do on the issue. It is widespread and it infiltrates so many families in our community.
All Members of the House want to ensure that we send a clear message that there is never any excuse for domestic violence. It is a crime like any other. It turns people's lives into tragedies for themselves, their children and the rest of us. The Government have to put practical support in place so that we give people choices. Domestic violence is dreadful, because it traps many women and victims generally in a situation in which they feel there is no hope and nobody there to help. There is nobody they can turn to, and they are isolated and alone.
We must ensure that we put in place in our community support networks that give people the chance to live the kind of life that almost all of us take for granted. We are making progress, but we have a long way to go. I am delighted that my hon. Friend has again raised the issue in the House and ensured that we all have it at the forefront of our minds when we develop policy in this extremely important area. I congratulate her again on raising it in the debate.
Question put and agreed to.
Adjourned accordingly at three minutes past Eleven o'clock.

Preamble
[SIR ALAN HASELHURST in the Chair]

Tourism
Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Fitzpatrick.]
9.30 am
Mr. Tom Clarke: I am particularly pleased this morning to be debating the future of tourism in the United Kingdom. It is an appropriate time for such a debate, given that the World Travel Market, the main event in the global travel industry—it is now in its 22nd year—is taking place in Earls Court this week.
My concern is for tourism throughout Britain. I am aware that some aspects of tourism and travel have been devolved to other assemblies, including the Scottish Parliament and the Greater London Authority. Nevertheless, I am particularly happy that the British Tourist Authority, which has a crucial role, is working in partnership with the national tourist boards of Scotland, England, Wales and Northern Ireland. I congratulate the Scottish Parliament on its wisdom in accepting the logic of the BTA's argument that it should project tourism abroad for the whole of Britain, including Scotland: we can already see the benefits.
Tourism and hospitality is a big industry, with the potential for enormous growth. Tourism and travel drive the UK economy. Last year, the industry was worth £64 billion, and tourism accounts for about 4 per cent. of Britain's gross domestic product. In 2000, the industry employed 1.8 million people. That is 7 per cent. of the UK work force and five times as many people as are employed by the car industry. In 2000, 25.2 million overseas visitors came to Britain, spending £12.8 billion. Our top five overseas markets last year were, first, the United States of America, followed by France, Germany, the Irish Republic and the Netherlands. At the start of last year, we had every reason to feel confident and optimistic, and the industry's hopes were high.
That confidence should be set against the backdrop of the publication in 1999 of "Tomorrow's Tourism: a growth industry for the new Millennium" by the Department for Culture, Media and Sport. That important document presented a strategy for the industry, and I congratulate my right hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), the former Secretary of State, and my hon. Friend the Member for Rossendale and Darwen (Janet Anderson), the former Minister for Tourism, Film and Broadcasting, on the heavyweight contributions that they made to that document. I hope that I, too, was able to make some contribution to it.
Hopes were high until we were struck with foot and mouth disease, which was followed by the terrible events of 11 September. Before the outbreak of foot and mouth disease, spending by overseas visitors was expected to rise by 2 per cent. to about £13 billion. The presentation
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overseas, night after night, of television scenes of the outbreak had a severe impact on inbound tourism, and not only in contaminated and restricted areas. The BTA estimates that losses for 2001 attributable to foot and mouth disease represent 10 per cent. or £1.5 billion fall. It welcomes the £14 million that is being given in addition to existing Government grant in aid to implement an intensive marketing strategy to encourage overseas visitors to come to Britain.
Passengers' fears of air travel following the terrorist attacks in the United States have also had a serious impact. On 26 September, the BTA announced that Britain's inbound tourism industry stood to lose about £2.5 billion because of the combination of foot and mouth disease and terrorism. Spending by overseas visitors is likely to drop by about 20 per cent., which will be a big blow to the industry. In September, the number of overseas visitors decreased by 11 per cent. and spending decreased by 16 per cent. compared with the same period last year. The BTA said:
"This is deeply worrying for the tourism industry—the critical months for inbound tourism are from July to September when a third of all visit ors come to Britain."
In common with my right hon. and hon. Friends, I sincerely thank everyone in the industry for applying themselves positively and with dedication to an extremely difficult challenge that could not have been predicted. We also thank the Department for Culture, Media and Sport, the BTA, the Foreign and Commonwealth Office, the regional tourist authorities and the local authorities, which have not had an easy time.
I recently visited Cumbria—I have a soft spot for that beautiful part of Britain—and I saw evidence of that dedication, particularly in the Lake district. I congratulate those who serve the Cumbria tourist board, including its chief executive, Chris Collier. I also congratulate Vicky Robinson and Graham Lamont, the joint chairmen of Theatre by the Lake, which they kept packed almost every night even as they were surrounded by the problems that I have described. I saw Zeffirelli's cinema, which serves two cultures in Ambleside, in the heart of Wordsworth country. That is important to me and many others and represents something very attractive for Cumbria.
I was reminded again this week of the fact that those associated with the Cumbria tourist board do not rest on their laurels. They reminded me of the importance even today of opening all footpaths, including the coast-to-coast footpath, which they have been told might not open until Easter. The path is important to them, and I hope that things will be cleared up long before then.
I want to base my remarks about Scotland on a comprehensive letter that I received from Jim Torrance, the Scottish policy convenor of the Federation of Small Businesses—we must remember the huge number of small businesses involved in tourism. For the most part, the letter was upbeat, which is consistent with the situation in Scotland. Tourism is our fourth largest industry and employs 7.9 per cent. of those in employment. Let me give a flavour of the letter. Among other things, the federation said:
"There is strong—but anecdotal—evidence (official statistics are not yet available) that tourism is doing relatively well in many areas of Scotland … Argyll for example had had its best tourist season since 1997. The main widely expressed concern was about finding adequate staff."

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On a less positive note, perhaps, the letter continued with the important point that
"Businesses experiencing a bad season have cited the strength of sterling"—
I would describe it as the weakness of other currencies—
"fuel prices, staff problems, competition, foot and mouth, the effects of the 11th September and inadequacies at Area Tourist Board and visitscotland/STB."
I do not necessarily share that view of the last of those perceived problems, but it is fair to put it in context. The letter stated:
"The individual impact of these differing variables has not been assessed."
I would not do justice to the letter or the views of the people of Scotland if I did not repeat its main point, as I want to underline the plea made by the Federation of Small Businesses. It reminded us of the delicate decision still to be taken about the need for the ferry link between Rosyth and Zeebrugge. It welcomes, as I do, the fact that my right hon. Friend the Secretary of State for Transport, Local Government and the Regions has given his stamp of approval for it, as well as funding. The FSB also knows that what is happening in Europe is important to that decision. The link is vital not only to tourism in Fife, but the rest of Scotland, and we would all welcome its spin-off effects on other industries.
My right hon. Friend the Secretary of State for Culture, Media and Sport and my hon. Friend the Minister my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State for Culture, Media and Sport set up the Tourism Alliance, an umbrella body designed to deal with the fragmentation that my right hon. Friend said was taking place in the industry. I would like to hear from my hon. Friend how that matter is progressing.
My hon. Friend would be extremely surprised if I did not mention the document published by the Department for Culture, Media and Sport last month. "Tourism—The Hidden Giant—and Foot and Mouth" as the Government's response to the report of the Select Committee on Culture, Media and Sport, which is chaired by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). I hope that the debate will give my hon. Friend the opportunity to respond further to three important points that it raises.
Page 3 of the document tells us that the Select Committee took the view that
"the English Tourism Council had been designed more…to the needs of the Government than…the customer".
Page 4 states that the spread of funding was uneven geographically, according to the Committee, and that the Committee talked of
"under-investment by the public sector in tourism".
Page 7 refers to claims of slow response by not only the Government, but other public bodies, on the outbreak of foot and mouth disease. I look forward to what my hon. Friend the Minister has to say about those points, as I seek to understand the complex issues.
I want to be much more positive now, and have every reason to be so. Much in the 1999 review offered great practical and welcome encouragement to the many people who contributed to its conclusions. Its
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recommendations were based on making the most of the talents of all our people in the tourism and hospitality industry. During my short time as a Minister, the issue that seemed to dominate every discussion was the minimum wage. We do not hear much about it now. It seems to have settled down to offer fulfilment to those in the industry, which is important to them. The evidence that I have seen suggests that staff turnover is falling. I welcome that, as I do the new deal, which has substantially contributed to jobs in the industry.
Transport is important to tourism. The terrible events of 11 September hit London tourism hard, as my hon. Friend will know from his meetings with industry representatives. However, he will also know of opportunities for the public to visit local attractions and to take time to enjoy a vast array of theatre performances and concerts in cities, including London. As transport is of the essence for successful tourism, will my hon. Friend join me in welcoming the excellent initiative of the Heathrow, Gatwick and Stansted express air-rail links, which allows the public to buy a return ticket on any of the three express routes into central London for only £10, having parked their cars without extra cost at any one of the three south-east airports? That is good for families, it is good value for money, and it is a good way to keep cars away from busy London roads.
In addition to that achievement I shall cite others in my constituency. I hope that the Summerlee heritage park in Coatbridge will serve as a model of how to attract tourists and visitors to see the best industrial archaeology. Yesterday I took part in discussions with representatives of North Lanarkshire and East Dumbartonshire councils. I am sure that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) will welcome the reassurance that they are highly aware of the importance that we accord to attractions such as the Antonine wall and the Roman fort. Perhaps those responsible at the heritage lottery fund are following our discussions; I assure them that the two councils are paying great attention to the opportunities that are no doubt on offer.
Among the very welcome action points in the strategy document are the development of several creative industries, including film and sports, in relation to tourism. I congratulate the BTA on the various film maps that it has produced. I understand that, for example. it and other tourist boards plan promotions such as a Harry Potter map of Britain.
Mr. John Lyons: I remind my right hon. Friend of the importance of film in developing tourism. I know that he recently suggested that the film "The Full Monty" had created a lot of potential for Sheffield and that he was criticised by Mr. Johnson and others for that. However, there are good examples—such as, in Scotland, "Braveheart"— of films helping to increase tourism.
Mr. Clarke: I was a little amused by Mr. Frank Johnson's sketch when the matter was raised in the House last week. He is entitled to laugh at his own jokes, but sometimes he must feel a bit lonely. It is rather distressing that he does not seem to read his own newspaper. The Daily Telegraph perceives the link between film and tourism. It stated that researchers had recently concluded that a tourism location featured in a successful film can expect the number of visitors to

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increase by 54 per cent. over four years. My hon. Friend was right about Scottish films. "Rob Roy", "Braveheart" and "Loch Ness" together produced an extra £7 million to £15 million in tourism revenue. Any sensible person would welcome that.
The strategy for tourism covered the importance of marketing and of quality control and the need for development of skills and training. It called for more integrated promotion of our wonderful cultural heritage and countryside attractions. It welcomed, as I do, the regeneration of our traditional resorts. I am pleased that my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) is to initiate a debate on that subject later this week. The English tourist board tells us that about 900,000 people—almost 1 million potential holidaymakers—have changed their plans between now and the end of September and will now holiday at home instead of abroad.
It is important to make the most of the outstanding regeneration of our cities and what is happening in the resorts. I have seen the regeneration of Newcastle, Manchester, Liverpool, Cardiff, Glasgow, Belfast and London, with huge improvements to the dockyards here. That represents a welcome invitation to domestic and international tourists. There is a plea in the document for more central Government support for the regions. That debate will, rightly, continue. The Minister will want to comment on the annual tourism summit, bringing together industry and Government, which is also very welcome. The new technology of the internet and computerised booking services is important as we seek to serve a growing public.
I would like to conclude by wishing the industry well. The people serving the industry—in restaurants, hotels, castles and theme parks, as well as those working in transport to bring people to every region of the country—matter. They represent the best of Britain and we wish them and their industry the very best of British.
9.51 am
Mr. Elfyn Llwyd: First, I congratulate the right hon. Member for Coatbridge and Chryston (Mr. Clarke) on securing this important debate. I agree with almost everything he said, except that I think that the Scottish, English and Welsh tourism products are quite different. I believe that it is better to advertise them separately, not for political reasons but because they are distinct and should be marketed distinctly.
I was born and brought up in Betws-y-Coed, which is probably the most famous tourist village in Wales and probably one of the first tourist areas in Wales, so I am well aware of the benefits of good, sustainable tourism to the local economy. Gwynedd council has had a film site officer for the past 10 years, so it agrees with the right hon. Gentleman about the importance of film to tourism. Tourism is obviously an important component in the British economy. In the Welsh economy it brings in about £2 billion per annum, which is approximately 7 per cent. of Welsh GDP. In many coastal areas, and some rural areas as well, the relative contribution of tourism is even higher.
Several external factors, however, have had an impact on the performance of the tourist industry during the past 12 to 18 months. Even before the outbreak of foot
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and mouth disease there was the question of the strength of the sterling against the euro, which has already been referred to. Recent research demonstrates that there is a direct link between the value of sterling and international tourism receipts. Every 1 per cent. rise in the external value of the pound leads to a decline in UK international tourism receipts of about 1.3 per cent. The relative strength of the pound has an effect, as the right hon. Gentleman said.
A second factor is the relatively high price of petrol and the unfortunate publicity surrounding the petrol blockades in the UK. Those were brakes on growth for some key international markets. Added to that there are, unfortunately, signs that the US economy is slowing down, and growth in consumer spending throughout Europe remains sluggish. Despite these constraining external factors, the British Tourist Authority was forecasting before the outbreak of foot and mouth disease that spending by overseas visitors in Britain would rise by about 2 per cent. in 2001—In other words, that it would rise from £12.8 billion to slightly more than £13 billion, which is a huge sum. By the end of May, that figure had to be revised down by between 10 and 20 per cent. to take into account the consequences of foot and mouth disease. Even after that revision, the market is still significant.
Foot and mouth has hit many parts of the United Kingdom, and not uniformly. It has hit harder in some areas than others. Areas such as my constituency where, fortunately, an outbreak did not occur, were constrained by the closing of footpaths. The right hon. Member for Coatbridge and Chryston said that they should be opened, and of course they should. I am sure that the time is right for that to be done. Those constraints had a heavy impact on Snowdonia, for example, which is part of my constituency. I understand that the Minister climbed Snowdon on Saturday morning, so he is doing his bit for tourism and for my constituency.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Dr. Kim Howells): The café was closed.
Mr. Llwyd: Perhaps that was not the greatest loss, but I will not pursue that red herring.
Some businesses record a downturn of about 75 per cent. in their receipts. We know about that because there have been several debates on the subject in the Chamber and elsewhere. Turnover fell by 22 per cent. in the Easter period, and more than two thirds of businesses said that the bookings for the rest of 2001 have declined by about 60 per cent. on average. That is a huge drop. On the basis of previous experience, the UK domestic market is likely to recover first. That is good news for Wales because at least 80 per cent. of spending from overnight visitors derives from the core UK market. I hope that there will soon be an urgent recovery.
In summary, the Welsh tourist board estimates that tourism spending in Wales during the first six months of the year declined by 15 per cent., which is equivalent to £182 million. As a direct result of the impact of foot and mouth disease and the awful events of 11 September, the board estimates that further losses of at least another £100 million will be incurred by the end of the year. That

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amounts to a loss of some £280 million in the year. Such an impact could place 10,000 jobs at risk in Wales. The multiplier effect from tourism means that the total number of jobs affected could be as high as 15,000.
However, we must not dwell on all this doom and gloom. The right hon. Gentleman finished on a high note and he is right to talk up the tourist industry. One positive outcome of the foot and mouth outbreak—if there can be such a thing—is that it has shown the business community and the public the important contribution made by tourism to local economies. That does not happen merely in rural areas but in cities such as York and London. People have now realised that it is a poor industry that needs nurturing and that benefits will accrue to all businesses as a spin-off from a healthy tourism industry.
In Wales, the industry supports around 100,000 jobs which is about 10 per cent. of the work force. It is Wales' largest industry. It is estimated that it supports around 25,000 jobs directly in rural Wales, and others indirectly. Farm-based tourism is a growth area that needs developing, especially with the forthcoming changes to the common agricultural policy. Green tourism needs to be considered and diversification should be introduced when possible. Of course, all farmers will not be able to diversify—that is common sense. However, diversification will be possible in many areas, and we should work to assist the process in those areas.
The future of the £2 billion tourism industry in Wales depends on nurturing a highly skilled work force to provide the high quality holiday experience that is expected by an increasing number of discerning visitors. The tourism training forum, which is a new independent body that was set up by the Welsh tourist board, Education and Learning Wales and the National Assembly is considering ways of matching available training with what is required in terms of work in the tourism business, whether we are talking of restaurants, hotels, leisure facilities or visitor attractions.
I recently had the great pleasure of attending a function at the Porthmeirion hotel, which is unique, to note the launch of a flagship project in my constituency. The Meirionnydd chef project is a publicly supported venture by the tourist board and the local further education establishment. Young chefs go to 10 or 12 flagship designations within the constituency, moving from one hotel to another and learning best practice in each one. It is an excellent step forward that will raise our game immensely. I am proud that it is being piloted in my constituency.
We need to raise our game, and we have done so during the past 15 years or so. The standard of accommodation is generally better, as is the standard of fare at local pubs. Standards are improving, but the dreadful events of 11 September pose a considerable challenge. The impact will vary from country to country, but recent information from the BTA suggests that the number of visitors from the USA will fall by 40 to 60 per cent., those from Canada by 30 to 40 per cent., those from Australasia by 20 to 25 per cent., and those from Europe by 10 to 15 per cent. Those are only estimates, but there is a huge challenge ahead.
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I am pleased that a rural recovery plan is now being discussed in the National Assembly for Wales and that a similar initiative is being pursued in this place. I am also pleased that the Minister for Rural Affairs has realised that tourism is an integral part of rural life and must form a central plank of any rural recovery strategy to be pursued by Westminster. He pointedly restated that at a function last week, and we all hope that that aspiration will be transformed into urgent action to arrest the sharp decline in the rural economy in recent years. That is of particular moment to Wales because many rural areas support our Welsh-speaking communities, which are under threat. I welcome that indication from the Minister and hope that there will be progress in the coming weeks and months. We must make it possible for young people to work in good, well-paid jobs in high quality tourism, to branch out into the industry and to think positively about remaining in their local communities and developing their careers locally.
One area that is ripe for further development is diversification in the agriculture sector. Agri-tourism is an untapped resource and we should look for high-quality diversification projects that are sustainable in terms of local economies and the environment. We must also have regard to our competitors. The marketing budget in Wales is only £300,000, but in Illinois in the United States it is £24.5 million, in Florida it is £16.6 million and in Canada it is £21.3 million. In Wales, alas, where the industry is hugely important, the budget is only £0.3 million. That is a plea for greater assistance for the Welsh tourist board and the tourist industry generally—[Interruption.] The Minister seems to disagree. The marketing figures were printed in the Western Mail a week or so ago.
Dr. Howells: So they must be right!
Mr. Llwyd: As the Minister says, they must be right. The Western Mail was also right in what it said about the Welsh Affairs Committee.
We in Wales are proud that the Ryder cup will be played in Wales. That is a vote of confidence in the tourism infrastructure of the country and there will be a considerable spin-off. I do not want to fall out with my Scottish colleagues, but I have no doubt that they will learn from the Welsh experience—I say that with tongue in cheek and humour.
We in this Chamber realise the importance of tourism, but we must ensure that everyone realises that it is important. Tourism needs to be developed further and in a sustainable manner. We must concentrate on this great, untapped potential, and rise to the challenges to which I have referred.
10.5 am
Mr. Bob Blizzard: I, too, want to congratulate my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) on securing this debate. One can have nothing but the utmost sympathy for anybody who is trying to run a tourism business in this country or, indeed, anywhere in the world. The events of 11 September have had a devastating effect on tourism and travel worldwide. I was on holiday in the

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United States at the time of the attack, and I remained there for a further 10 days. After touring some of the beautiful national parks of the south-west of America, it was disheartening to return to Las Vegas to discover that it was 90 per cent. empty. Indeed, Las Vegas was to prove a pointer for the deep impact of 11 September on other places, including this country.
Yesterday's crash underlines a difficult situation. In the past, we might have overcome such a terrible disaster relatively quickly. We know that air travel is statistically very safe, but in spending considerable time wondering about the cause of yesterday's crash, we add to the pall of uncertainty and fear that this new era of terrorism—with the fear of anthrax in the background—has cast over the world, and which has put people off travelling anywhere. There are those who still say, "What are we doing in Afghanistan and is it our war?" However, 11 September was an attack on us all: on the world economy, and on tourism as much as any other sector. The sooner we can put an end to this business, the sooner we will rebuild people's confidence in travelling, so that they can sample the delights we have to offer in the UK.
There has been a clear impact on the home-grown business of sending people abroad, and on the number of visitors to this country. The foot and mouth crisis showed us the value of tourists from America and other parts of the world, and recent events have only compounded the misery of foot and mouth. Although the business of Hoseasons—a great company in my constituency that specialises in holidays in this country—is not concentrated in the main areas affected by foot and mouth, it nevertheless took quite a hit.
Tourism is alive everywhere. Every town, village and community in this country has something of interest to show to visitors. My constituency, for example, has some great natural assets, but we do not make enough of them so we do not benefit from tourism as much as we should. I should say that Lowestoft officially has the best beach in the country. Although the English tourist board granted the award back in 1991, the contest has never been held since, so I say that we are still champions.
The River Waveney, which gives its name to my constituency. forms the southern boundary of the broads, and Oulton Broad, Beccles and Bungay all have delights to offer. However, there is a worry in my constituency that a wind of change is blowing through the Broads Authority. Certain proposals have caused disquiet. Some are saying that perhaps the business of attracting people to enjoying the broads—an activity that will always remain water-based—may be downgraded in the interests of conservation. I ask my hon. Friend the Minister to keep a close eye on this matter because it will take an Act of Parliament or an order to make changes, should the Broads Authority propose them. I am keeping an eye on the issue, and I hope that he will too.
The other great asset in my constituency is the fact that Lowestoft is Britain's most easterly point. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) is present, so perhaps we can form a cardinal points club. Unlike John o'Groats and Land's End, Lowestoft is not famed as a cardinal point, but the potential is there.
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To exemplify my point, I shall tell a brief story about our efforts to address the fact that we are not well known as the most easterly point in Britain. We have tried to develop a landmark because we do not have a natural point like Land's End—I must confess that I have not been to John o'Groats. We planned to install a great sculpture, and we found an artist to design it, but it has proved difficult to obtain funding. When we applied for European objective 5b funding, we were told that the site was 50 yards on the wrong side of a boundary, even though a landmark would clearly benefit the whole local area. When we tried the lottery, our case was considered to be funding for the arts. The fine art buffs thought, "We have never heard of this artist: the sculpture would not be of a high quality." They should have considered the case from the perspective that a sculpture could regenerate an area that has suffered from declines in manufacturing and fishing.
Although tourism is arguably Britain's biggest industry, it is not treated as such by the various layers of government. For example, many councils consider tourism with leisure services. Tourism connects with running swimming pools and parks, but people who run tourist businesses say, "Why can we not work with the economic development department that helps other industries?" It is difficult to access assisted area status funding. My constituency has that designation, but it is difficult to access those funds, which are considerable, for tourism. I have already described the difficulty that we had in accessing European funding, in which we currently have objective 2 status. There are unwritten rules that hinder tourist businesses and prevent them from accessing funds.
We can obtain funding to develop physical facilities. When my right hon. Friend the Member for Coatbridge and Chryston was Minister with responsibility for tourism, he was proud to come to Lowestoft to open our new yacht marina, which was a grand occasion. We have had funding to put on events such as Lowestoft airshow, which brings many people into the town. Events are a good way in which to draw in visitors and to attract attention to one's area, but tourism today involves looking after people when they arrive. Businesses that look after people need support and help to raise their game.
My remarks are mirrored in national Government. The previous Government had a Department of National Heritage, which created the impression that people would be attracted here if we merely preserved historic buildings, pageantry, Stonehenge and castles. The Department for Culture, Media and Sport is broader than that, but I am sometimes concerned that tourism, the country's largest industry, is tucked away where it could easily be lost. People sometimes ask, "Who is responsible for tourism?" We have an excellent Minister and he is doing wonderful work. However, it is difficult for him to push tourism in the way in which the Department of Trade and Industry pushes the industries that it serves.
This is hard to say at a time when the tourist industry is suffering, but we must confront its biggest failing. Tourism is about not only attractions but the standard of hospitality that we offer to visitors. Hospitality is an important word, and I am pleased that we now talk about the hospitality industry. In general terms, our standard of hospitality is dismally low. When I travel

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around the world it is clear to me that we do not compare well with other places in terms of what we have to pay at hotels.
It is a similar story with our standards of service—in hotels, restaurants and shops, we are found wanting. Whenever I return from a holiday in the United States, I wonder why Americans want to come here, given the standard of hospitality that they receive. We sometimes mock them for their "Have a nice day" culture, but it counts for a lot—it is part of a national effort to train people to be pleasant and welcoming. Having returned from holiday, I went to the Labour party conference in Brighton. I queued for 10 minutes to get a bottle of water at a place where the four or five people who were behind the counter all thought that stacking boxes was more important than serving me. When I asked for a bottle of cold mineral water, the woman rummaged in the fridge and produced one that was not remotely cold. I said, "I asked for a cold one," and she replied, "Well, it's just come out of the fridge." That spoke volumes about the relationship between the service industry and the customer. During my three weeks in America, I visited public conveniences in deserts, mountains and cities that were spotlessly clean; those that I found on my return to Heathrow stank. That is not a good advertisement for this country.
The main task is to drive up our standards of hospitality, and I hope that my hon. Friend the Minister will take that as an important part of his mission. As well as naming and shaming the worst examples, we should give a helping hand to people who want to improve. We must find better ways of using existing funds to help our tourist businesses to invest to modernise and to improve their standards. We have so much to offer in the United Kingdom; I hope that we do not throw it away.
Mr. Edward O'Hara (in the Chair): For the benefit of hon. Members, given the time available I intend to start the Front Bench replies at half-past 10 and to call the Minister no later than 10 minutes to 11.
10.17 am
Mr. John Lyons: I compliment my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) on taking the time to secure the debate.
My right hon. Friend referred to diversity. That is important, because all too often we think about tourism only in terms of foreign visitors coming to the United Kingdom. Yet nowadays much of the market consists of visitors from other parts of the UK. People come to this country to travel around for many reasons—we should never underestimate the diversity of their tastes and interests.
I support my right hon. Friend's comments about the contribution of the film industry. When it comes to film, there is only one issue: location, location, location. It is a great plus to an area's local economy when a film is shot there, because hundreds of people—actors, actresses, sound recordists, and so on—live locally meanwhile. Moreover, once the film is made it brings a tremendous boost to the area's profile. For example, the second series of the BBC's "Monarch of the Glen" stimulated tourism in the area where it was filmed—people saw it on the screen and wanted to sample it for themselves.
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The UK has traditional tourist areas, but many other areas want to be opened up and be considered attractive to tourists. Tourist boards must assist areas that have not been flavour of the month or even of the year, as they need help, too.
Many of these areas have great potential as tourist attractions. The Forth and Clyde and Union canal, which goes across central Scotland nearly all the way from Edinburgh to Glasgow, is one example. It was closed for 30 or 40 years and has been reopened with hundreds of millions of pounds of public money. There is a towpath for cyclists and walkers, a line of Roman forts and the Antonine wall alongside the canal These features make it attractive to many people, not only to those who want to use it for boating. Such areas need support because often industries and tourist attractions need to be reinvigorated and made attractive to people from abroad and throughout the UK.
I agree with what was said about service and making ourselves attractive to visitors; we need to get the basics right. I would be happy to talk all day about the good examples, of which there are many, but unfortunately, there are bad examples. If we do not face them, people will not revisit attractions. I had visitors from Italy for four weeks in the summer and I had to show them round Scotland. which was a pleasure, but it was discouraging that information at some major attractions was not translated into Italian or, in many instances, any other language. That makes it appear that we are turning our back on foreign visitors. It would not take much to get the basics right. We want to attract people to the UK for the first time, and then see them come back again and again. That is the most important issue for the tourist authorities, and, if they can get it right, tourism has a healthy future.
10.22 am
Mr. John Grogan: The debate this morning has a Scottish flavour. Listening to my right hon. Friend the Members for Coatbridge and Chryston (Mr. Clarke) and my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Lyons) made me want to get on the GNER and go up to Scotland. It could not be colder there than it is in the Chamber.
Scotland has a lesson for England and Wales, which would help to boost the tourist industry. It has nothing to do with "Monarch of the Glen" or "Rob Roy" but with the Scottish liquor licensing laws. In that respect, England and Wales are at a competitive disadvantage compared with Scotland, and that affects tourism. When he introduced liquor licensing laws in England and Wales, Lloyd George famously remarked: "We are fighting three enemies: Germany, Austria and the drink, and the greatest of these is the drink." That legacy has lived with us since that day, inhibiting entrepreneurs in the hospitality and tourist sectors.
All political parties now believe that it is time to reform the liquor licensing laws. During the last days of the election campaign, a significant number of the people working with me received a text message on their mobile phones saying, "If you don't give a 4X for the liquor licensing laws, vote Labour." I was waiting for one myself when I realised that it was being sent only to those under the age of 25.

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I make the point seriously: it is wrong to advertise the advantages of reforming the liquor licensing laws as being only in the interests of the young, who perhaps go to pubs and clubs most. The main advantage of reforming the liquor licensing laws is that it would boost the tourist sector, and towns and cities in England and Wales would have a more civilised environment. Entrepreneurs could open premises where there was a demand. Tourists in London, York or Manchester cannot understand why pubs have to shut at 11 o'clock at night and they have to move on to a venue where they must pay over the odds to get in and for drinks when often all they want to do is have a quiet drink.
Large organisations like London First that represent our tourist industry and big cities say that in our current tight market the liquor licensing laws are a big disadvantage to London in attracting conferences and conventions, for example. When the all-party beer group went to Scotland to hear evidence on this matter, one Scottish pub executive, who shall be nameless, looked at us pitifully and said, "Even Cinderella was allowed to stay up until midnight." We are hampered by these laws in England and Wales. I know that their reform is high on my hon. Friend's agenda, and all power to him. I hope that we will have a Bill to reform our liquor licensing laws in the next Queen's Speech. I hope that there may even be the prospect of a draft Bill before then, because it would be widely welcomed by many Members and certainly by a hard-pressed tourist industry.
10.25 am
Annabelle Ewing: I, too, congratulate the right hon. Member for Coatbridge and Chryston (Mr. Clarke) on securing this important debate. As he will know, tourism is vital for my constituency. Obviously this has been a truly dreadful year for tourism. The foot and mouth crisis devastated tourism for many months in Perth and many parts of rural Scotland. The countryside was closed, and in places such as Perthshire it is a principal attraction. Some hotels in places like Crieff lost all their advance bookings for June and July overnight. It is hard to imagine how any small business that is already suffering is supposed to cope with such a devastating reduction in its cash flow.
Not only did we have foot and mouth, we had the terrible events of 11 September, which many hon. Members have mentioned. We must now work out ways to get Americans to fly to Scotland and elsewhere in the United Kingdom, and that is a difficult task, not least because of the awful crash yesterday in New York.
All these issues have had a serious impact on tourism, but I should like to focus on two specific structural points relating to UK Government policy. Although tourism per se in Scotland is devolved to the Scottish Parliament, economic policy continues for the present to be set in London. The high pound policy is terribly damaging to tourism, as the right hon. Member for Coatbridge and Chryston alluded to when he quoted the Federation of Small Businesses in Scotland. The high fuel tax policy is equally devastating, as my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd) mentioned.
It is a puzzle to us in Scotland how, as the oil rich nation of the European Union, we pay the highest fuel taxes in the industrialised world. These two aspects of
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economic policy are extremely damaging to tourism. How does the Minister feel that the interests of the tourism industry can be promoted and fostered against the backdrop of such damaging economic policies? We also have high value added tax rates in the tourism sector. We have swingeing business rates that are once again higher than business rates in England because our former Finance Minister, Jack McConnell, soon to be our latest First Minister, I believe, decoupled the rates poundage between Scotland and England. Our tourism sector, which mostly comprises small businesses, is struggling.
In short, Scotland is in danger of being perceived as a high-cost destination, and that, allied with the poor transport infrastructure links in certain places, is causing serious problems. The right hon. Member for Coatbridge and Chryston talked about the direct ferry link between Rosyth and Zeebrugge, which the Scottish National Party welcomes. We have been calling for a link for many years, and want any such measure expanded to include direct air links. We also want an undertaking that the Government will secure a public service obligation for flights from Inverness to Gatwick and Heathrow, which are vital for business and tourism in Scotland. I agree with the hon. Member for Meirionnydd Nant Conwy that the potential for tourism in Scotland and elsewhere in the UK is huge. I laud those involved in the industry.
Mr. Edward O'Hara (in the Chair): Order
10.30 am
John Thurso: Before I begin, I should declare my interests because I am involved with several tourist bodies. I am president of the Tourism Society, patron of the Hotel and Catering International Management Association and chairman of the British Hospitality Association leisure panel. I am involved in many other bodies and I especially want to declare my presidency of North of Scotland Hospitality, which goes under the great acronym of NOSH. I am also a director of several companies and own a small hotel in the village of Halkirk in my constituency.
I have spent my entire life working in the industry and I am delighted that we are having this debate during World Travel Market week, as the right hon. Member for Coatbridge and Chryston (Mr. Clarke) said. I am grateful to him for giving us the opportunity to debate this important industry. He mentioned the size of the industry and the number of people it employs. Tourism is the third largest industry in the United Kingdom and is projected to be the largest employer and the largest industry in the world in the next five years. We want to be a key part of that market.
I agree with the right hon. Gentleman that much of Scotland has had a surprisingly good year. I lost a great deal of money in March and April, May was dicey, but things picked up from June. Hoteliers in my constituency tell me that they have had a rather good season after a terrible start because of foot and mouth disease. Indeed, Dornoch has had one of its best seasons ever, which might have something to do with the fact that Madonna got married there last winter.
Mr. John Greenway: Location, location, location.
John Thurso: Absolutely. Even the Dornoch caravan site has had an excellent season. It is well run, and if the hon. Member for Waveney (Mr. Blizzard) is looking for superb quality, that is what the site offers.
Scotland has, however, had a bad time in the international market, which was badly hit by foot and mouth disease and the events of 11 September. I have no doubt that yesterday's tragic accident will have a further effect on the industry.
Fuel prices are definitely a barrier. That is not only because of the high cost of fuel, but because of the 15p a litre differential between Inverness and Thurso. It would be a great help if the Government could deal with that.
The UK tourism industry faces challenges in three areas: structure, quality and productivity. To state the obvious, tourism is an economic activity and is no different from a factory in that it creates social and environmental damage if it is not properly located. To take an extreme case, allowing passengers from 20 buses to get out in a Cotswold village of 50 houses, wander round, leave their rubbish and move on without spending any money would result in great inconvenience and disruption but no economic benefit. The key question for tourism must, therefore, be how to extract the maximum economic benefit with the minimum environmental and social damage.
Of the three challenges that I mentioned, I shall deal first with structure. The current structure of the BTA, visitscotland.com and the English Tourism Council is not working. In another place four years ago, I predicted that the way in which tourism was being devolved would be bad for the workings of the industry, as the industry itself now largely accepts.
There is a curious anomaly. I agree with tourism being wholly devolved to the Scottish Parliament and visitscotland.com, which has a full budget and responsibility for marketing. The BTA is a cross-border authority with responsibility for marketing Britain, but has all the money and marketing for England. The ETC, which was created some years ago from the ashes of the English tourist board, has no marketing budget. That is perfectly ludicrous, and I urge the Minister to rethink it. We must give it marketing clout. I am a federalist. I believe in the union, and a key point is equal devolution for England and Scotland. We also need a much clearer idea of what the BTA can do.
I disagree with the criticisms of quality made by the hon. Member for Waveney. The United Kingdom has some bad products and some superb ones. Talk of rip-off Britain and ghastly products does an immense disservice to those in the industry who work hard to achieve quality. I shall give an example. Skibo castle, Morangie house and Ackergill tower in my constituency are world-class properties. They are world beaters. One would not find a finer conference venue in the world than Ackergill tower.
We have many great products—London is now the world leader in food—but we need to root out the bad. There is only one way to do so, which is to grasp the nettle of statutory registration of accommodation providers. Until every accommodation provider is registered, we will not be able to deal with the problem. I advise the Minister of the consensus in the industry, which was not there five years ago. The Government should act on it.
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I want to touch briefly on productivity and squaring the employment circle. The industry is a large employer and pays out—not to individuals, but in bulk—a great deal in wages. The industry has to become more productive, so that fewer people earn more money. Until they do, the sort of careers that we would like to see will not be possible. The right hon. Member for Coatbridge and Chryston mentioned the minimum wage, and I agreed with him. In another place, I voted and spoke in favour of it. My businesses had a minimum wage of £4 an hour two years before the Government brought in their minimum wage, and I always raised mine ahead of that. Happily, I am now out of the business and I do not know what it is doing. The minimum wage did a tremendous amount to force the industry to understand that it had to improve conditions. We must find new ways to work, to re-engineer businesses in the industry and to be more productive.
It is important to consider the Government's role. They must create a structure that works, as I mentioned, by considering the relationships of the national tourist boards and the regional tourist authorities in England and ensuring that they can be made to work better. The Government must also decide whether they want to sponsor the industry, or whether it is appropriate—there is an intellectual argument for this, although I do not accept it—simply to let the industry get on with its job. However, the Government must not dive in from the touchline to administer the occasional pat or, as has more often happened in the past, the occasional kicking, and then dive back again. The industry views the Department for Culture, Media and Sport in an unfavourable light. Much has been done, but there is a pretty clear consensus in the industry in favour of a return of tourism to the Department where many people think it properly belongs—the Department of Trade and Industry, where there are Ministers who understand the concept of supporting an industry. I ask the Minister to realise that the industry really desires the Department for Culture, Media and Sport to do something to help it.
10.40 am
Mr. John Greenway: It is good to debate tourism in your presence, Mr. O'Hara, as you and I had a very happy visit, with the Inter-Parliamentary Union, to Athens last week, where we saw something of the Greek tourism industry and perceived the need to promote Britain abroad. I, too, congratulate the right hon. Member for Coatbridge and Chryston (Mr. Clarke) on securing the debate, and particularly on doing so to coincide with the World Travel Market. I agree with him and the hon. Member for Strathkelvin and Bearsden (Mr. Lyons) about film tourism. Television tourism is very big in Ryedale. After "Brideshead Revisited", the number of visits to Castle Howard increased dramatically. Some people in the villages affected would still say that we have almost more tourists than we want, because of the "Heartbeat" programme. My view is that that is a tremendous advertisement for North Yorkshire.
The well documented difficulties experienced by many tourism businesses in this difficult year still overshadow any debate on tourism. The right hon. Gentleman highlighted the losses. The English Tourism Council's estimate of losses from foot and mouth disease this year

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is £4.2 billion. Many of those losses will never be made up. That sum translates into the losses sustained by individual businesses and organisations. We all, I am sure, could tell of personal tragedies in our constituencies or, for those of us pursuing a tourism brief, in other parts of Britain. Today's news that the National Trust, which owns an important property at Nunnington in my constituency, has this year suffered losses from foot and mouth estimated at £7 million to £8 million, suggests the impact on many organisations.
Dr. Julian Lewis: Kate Mount and Christine Ames of New Forest Tourism have urged on me the point that in areas like the New Forest, where there was no outbreak of foot and mouth, the effect on tourism was nevertheless catastrophic because of a perception that people should not go there. It was almost as bad as if the disease had broken out. The losses were just as serious.
Mr. Greenway: I fully endorse that. My experience in Ryedale was the same. We had only one foot and mouth case there, in the north-west part of the constituency, as part of the Thirsk cluster. However, the impact on tourism has been devastating because most of the tourism in Ryedale is rural.
Other hon. Members have spoken about the events of 11 September and yesterday's horrific accident. Today we should say only that we recognise the importance of putting across the message that the skies are safe and that we are doing all we can to continue to improve passengers' safety and security.
Tourism is a £64 billion industry. There were signs in the immediate aftermath of the foot and mouth crisis that the Government and opinion formers recognised the value and importance of tourism to the economy. That recognition has not been followed through with sufficient action and zeal, although I do not believe that that is entirely the fault of the Department for Culture, Media and Sport. The difficulty is in the Government as a whole, and particularly in the attitude of the Treasury. Back in the spring, it was mooted that the Government were considering making an additional £50 million available to the BTA and the ETC for promotion. In the end, only £18 million was provided, £14.2 million of which went to the BTA.
It is our view also that support for small businesses in many areas is inadequate. especially in the foot and mouth hot spots. The right hon. Member for Coatbridge and Chryston mentioned Cumbria, which I have visited three times. More could have been done to help, especially with interest-free loans, but the problem now is that many of these cash-strapped businesses will have to start making some of the deferred payments of rates and VAT.
The Government have been reasonably generous in providing additional funds for the British Tourist Association—I have already said that it has received £14.2 million. I warmly congratulate the BTA: its tourist promotion programmes show great ingenuity and originality. However, they need to be repeated again and again if we are to win back lost customers from overseas.
I shall concentrate on Government support for the domestic market— particularly that in England, which represents four-fifths of the tourist industry. Support for
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the domestic market remains inadequate; post-11 September it is even more likely that revival of tourism businesses will come essentially from domestic business and perhaps from the near continent. A further ferry link from Zeebrugge was mentioned; we have such a link in Yorkshire at Hull.
I agree with the right hon. Member for Coatbridge and Chryston—I have been saying so for the best part of a year—that the ETC must have a marketing role. It is nonsensical that the Government should still refuse to accept that fact. Funding for English tourism needs to be increased in order to catch up with that for Scotland and Wales. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said that Wales, Scotland and England are different; he is right, but tourism businesses in England look with envy at the resources that the Welsh Assembly and the Scottish Parliament are giving those parts of the United Kingdom.
Our regional tourist boards are doing an excellent job but they are underfunded. In recent weeks, Yorkshire and Humber regional development agency and other agencies in the north-west and the north-east of England have given additional resources to their regional tourist boards. That is a good example of what can be done. However, the picture across England as a whole is haphazard and inconsistent, which leads to the conclusion that, when it comes to government funding for tourism, England is the poor relation.
Despite the current crisis, the ETC has received no additional money since April, when it received its £3.8 million share of the £18 million that I mentioned earlier. At last night's BTA reception, people were asking me how the Government could find £20 million to keep open an empty dome but could not make additional resources available to support tourism in England. The £3.8 million that the ETC received gave a return of £27 for each pound invested in tourism. The Government therefore have a stake in the tax revenues that would result from increased tourism activity as well as from a reduced demand for social security support for the staff of failed tourism business who are laid off. That suggests that extra Government help for promoting tourism in England would be a good investment. Above all, it would have a beneficial effect on the hard-pressed rural economy. I commend the concept to the Minister.
The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) suggested that the Government should sponsor the industry. I cannot agree with him that it would make sense to put tourism in the arms of the Department for Trade and Industry. However, it would make sense if "Tourism" appeared in the title of the Department for Culture, Media and Sport—a suggestion that was made in the Conservative party manifesto. One of the reasons why I do not agree with the hon. Gentleman is that, having been the shadow Minister in this area for nearly two years, I know that the present Minister, his predecessor and Department officials are sympathetic to some of the thoughts that I have expressed today. I hope that the concerns that have been expressed during our debate will help the Minister and the Secretary of State in their battles with the Treasury.
The right hon. Member for Coatbridge and Chryston said that we wish the industry well. Indeed we do, but the industry needs more than good wishes. It needs practical help and support.
10.50 am
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Dr. Kim Howells): I join other hon. Members in congratulating my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) on securing this important debate. I agree with much that has been said about the importance of tourism. There is no question that it is a hugely important industry. It is interesting that we rarely debate tourism in Parliament. That is because Parliament never debates successful industries—it only ever debates failing ones. It is important to remember that we have had very few debates on tourism during the past 20 years because it is a rapidly growing, successful industry. I would be the last person in the world to say that we politicians should get our sticky little fingers on tourism and start making choices for the industry as though we know what is best for it. We do not know what is best for it. It has grown out of the entrepreneurial expertise of those such as the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), who are at the sharp end of the industry.
The industry has been tested in a way that it has never experienced before, first by the blight of foot and mouth and then by the effects of the terrible events of 11 September. The industry has been tested as hard as any has ever been tested. I have been to many of the places that have been mentioned today and seen the hardships, especially of micro-businesses, whose raison d'etre was to serve tourists on a footpath in, say, the northern fells of the Lake district. That is how they have always existed. There is no option for them to diversify into anything else. Once those paths were closed they were in desperate trouble.
I agree with many of the remarks made this morning, including those of the hon. Member for Ryedale (Mr. Greenway), who said that experience ought to have taught us something since last February and March about the importance of not making blanket statements about the countryside being closed and about the advice given to people not to go anywhere near paths that they may have walked on for many years. The question is complex. Only this week I have heard discussions on radio programmes and on television during which farmers have complained about the right-to-roam legislation. There will be big debates about whether people can go on certain parts of our hillsides and farms.
The issue is not one-sided. The National Farmers Union wanted the culling of animals. It wanted people to be prevented from going on our countryside. We should remember that it was not only the Government. It was, to say the least, an extraordinarily steep learning curve, and great mistakes were made that had a serious effect on the industry.
My right hon. Friend the Member for Coatbridge and Chryston is right in saying that that should have taught us about the nature of the industry. The industry generates huge amounts of revenue and it is labour intensive. It demands skills and is a great provider of them if things are done properly. Most importantly of all, it is sustainable in a way in which so many of those industries that were closed in the 1980s and 1990s, such as coal mining and shipbuilding, were not. That is the difference between those industries and tourism.
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The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) is right to say that we must up the game and play to our strengths. That means, above all, that we must train our young people. We must go further than that; we must give them a real belief in the industry—that it has a future. We are the only major economy that I know of anywhere in the world in which to work behind a bar in a pub or to serve at a table in a restaurant is regarded as a second-rate or third-rate job. In France, Germany and Italy, those skills are regarded as key, but by kids in our schools such jobs are regarded as something that they might do only if they can get nothing else or want to make a few bob on the side to see them through to some other career.
We have to get real, and that will demand a great cultural change. The hon. Member for Ryedale is right in pointing out that the word "tourism" does not even appear in the title of the Department of which I am proud to be part, although it is a business with a yearly turnover of £64 billion. That is symptomatic of our perception of it as a not entirely serious industry. I am glad that hon. and right hon. Members have made that issue clear.
I could argue about the sums made available and the arrangements in place for the support of tourism in Britain, but instead I Will shock my colleagues by saying that I agree with much of the criticism. It was a mistake to take the marketing role away from the ETC, and we must put that right, although it will take some doing. We must not react to the crisis in the industry in a knee-jerk way, because this is tourism's big chance. The spotlight is on tourism in not only rural areas, where no other employment exists for those who are suddenly without a livelihood, but London, which is the greatest city in Europe. Central London was hit harder than anywhere else in Britain by the first foot and mouth outbreak and the terrible events of 11 September.
I am glad that we are beginning to get the agencies together to tackle these issues in a co-ordinated way, because all too often the response in the past has been fragmented. We must consider carefully the configuration between the ETC, the BTA and regional tourist boards, including those in Wales and Scotland. No one has mentioned Northern Ireland, but it is an interesting case. It realised some time ago that its fate as a tourist destination was bound up with the phenomenal success of the Irish Republic, and it has made great strides in developing links.
I take on board everything that my right hon. Friend the Member for Coatbridge and Chryston said, especially on avoiding pessimism, which the hon. Member for Meirionnydd Nant Conwy repeated. The current issue of "Travel GBI " says:
"Tourism business in the UK showed a dramatic upswing last month in what many in the industry feel is a foretaste of things to come in 2002."
The article went on to mention a group that had
"enjoyed a 'hugely successful' 2001 season."
When I was in Taunton last week, the chief executive of the south-western tourist board, which is our most successful regional tourist board, described the situation as serious but said that for many businesses in the southwest this was the best autumn for 20 years. He said that some resorts were reporting the best season that they had on record.

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As several right hon. and hon. Members said, the impact has been patchy. Some places have sustained themselves well while others have done poorly. No matter where we are, we must up the game and play to our strengths in delivering a product that is much better than the one we have delivered up to now. The hon. Member for Caithness, Sutherland and Easter Ross was right to say that we should not talk ourselves down. We have some superb establishments and we should do all that we can to publicise them and to spread best practice. Wherever I go in the country, everyone tells me that there is a shortage of good chefs. That fact is an indictment of the way in which we have approached education and training. We must give the industry a much better name and ensure that we learn from this crisis and build on our strengths. I am positive that we can go from success to success and that the industry will in future be a great one—as great as it has been in the past.

Railtrack
11 am
Mr. Christopher Chope: I am delighted that so many hon. Members have joined us for the first of two debates today on Railtrack and the Secretary of State for Transport, Local Government and the Regions. We also have an interesting Select Committee meeting on the subject tomorrow.
Over the weekend of 5 to 7 October, the Government engaged in an act of confiscation without compensation against Railtrack. Until recently, Railtrack was one of the top 100 quoted companies in the country. By their action, the Government precipitated one of the largest ever corporate failures in the United Kingdom. The events leading up to that weekend and the role of the Secretary of State are the subject of a major debate in the House this afternoon. The motion in the name of my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), which I enthusiastically support, condemns the Government and the Secretary of State and calls on the Secretary of State to resign his post.
In our debate, I shall concentrate on the implications of 7 October, when the order that put Railtrack plc into railway administration was made. The actions of the Secretary of State over that weekend have made the problems of the railways far worse for the travelling public, those who work for Railtrack and the taxpayer. The travelling public are faced with a long period of uncertainty during which vital decisions on investment will be delayed. The situation for those who work for Railtrack is even worse. More than 10,500 of Railtrack's 12,000 employees are angry and disillusioned, having lost £1,000 or more each from their savings in Railtrack shares. One signalman, a lifelong Labour supporter—but not any more—has lost £33,000. The Conservative party regards those shareholders as loyal employees of a company providing a vital public service, while the Labour party's view is to condemn them as naïve, greedy and deserving of the fate that has befallen them. The Liberal Democrat party, in the words of its amendment on the Order Paper, "regrets the confusion arising".
It is more than confusion; it is confiscation. Indeed, some shareholders draw a parallel with the confiscation without compensation that President Mugabe resorted to against white farmers. The Government of Zimbabwe regard the mass trespass of their supporters on to private farms not as a threatening act but merely as the logical consequence of refusal to do as instructed—the same defence used by the Secretary of State in countering charges that he threatened the Rail Regulator. Fortunately, in this country the rule of law and parliamentary democracy still function, and that is why aggrieved Railtrack shareholders are intent on seeking compensation through the courts, while the independent regulator and the chief executive of Railtrack have spoken out fearlessly against the actions of the Secretary of State.
I ask the Minister a simple question: how can one run a better railway by making employees angry at their betrayal? I will give way to the hon. Gentleman if he wishes to reply to that now—or perhaps he will reply to it at the end of the debate. The answer, of course, is that

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one cannot do that While the Government claim that they want to run a better railway, they have betrayed its key stakeholders: the people who work for it. Significantly, the Government have not mentioned the people who work on the railway in their public statements since 7 October. Indeed, not only have employee shareholders lost out, but so have many other small shareholders, either directly or through holdings in pension funds. Who will pick up the bill for the loss of investor confidence? It will be none other than the taxpayer.
We have heard that American fund managers, far from being attracted to invest in the railways, will stop investing as a direct result of what the Secretary of State has done. Franklin Mutual of New Jersey, which has one of the largest holdings in Railtrack with 4 per cent. of the shares, said that the Secretary of State's political decision to force the company into administration has changed for ever its involvement in the British market.
Mr. Phil Woolas: Fund managers would say that.
Mr. Chope: If the hon. Gentleman wishes to expand on that, I shall give way to him. Franklin Mutual is absolutely right. It runs an investment organisation and realises as a result of the Government's action that they can no longer be trusted. David Winters, Franklin Mutual's portfolio manager, said:
"An injustice has been done. We did not expect the UK to do something like this. If the Government is willing to do this, it sets the tone for the entire market. A bigger risk premium is to be attached to investing in British companies now."
That is not only the American view. The director-general of the Confederation of British Industry said on Sunday:
"The capital markets like stability, they don't like surprises"
They had no stability and a lot of surprises when all this happened.
Without private sector investment, the Government's 10-year transport plan for the railways is unachievable. To deliver a "bigger, better, safer railway" requires £60 billion. It is common ground, at least between the Government and the Conservative party, that all that money cannot be afforded by British taxpayers.
The Secretary of State led us to believe that placing Railtrack into administration reduces the burden on British taxpayers. Is it not odd, then, that on Sunday a senior official in the Department for Transport, Local Government and the Regions said:
"The relationship between the Department and the Treasury is the worst I have ever known. It is very sour indeed."
That official reported that the Secretary of State had become so isolated from the Chancellor that he had had to enlist the help of the Deputy Prime Minister to obtain a more sympathetic hearing. As someone who once served as a Transport Minister, I can only say that if the relationship between the Department for Transport, Local Government and the Regions and the Chancellor of the Exchequer is worse than ever before, it must be dire indeed.
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It would be extraordinarily out of character for the Chancellor of the Exchequer or any Treasury Minister to be at odds with a Secretary of State who had just taken a course of action to save taxpayers' money. The perception in the Treasury and elsewhere is that taxpayers will have to foot a much larger bill as a result of railway administration. The implications extend not just to investment in Railtrack and the railway infrastructure, but to all the Government's public private partnerships. Last Sunday, the Independent on Sunday printed an article under the headline, "Railtrack collapse might cost British taxpayers an extra £7.5bn." The article included a reference to whether we would receive the investment, and at what price, in the public private partnership being arranged for the London underground. It seems that the price will be significantly above what it would have been before the Government's actions on 5 to 7 October.
Under the Government's 10-year transport plan, the Strategic Rail Authority is responsible for using public funding to attract private sector investment to enhance the railways. How will Railtrack administration facilitate that objective?
The Secretary of State recently appointed a new chairman of the Strategic Rail Authority at an annual salary of £250,000 for a five-year contract. Has his remit changed from that of his predecessor and, if so, in what way? The glossy leaflet produced jointly by the Strategic Rail Authority and the Office of the Rail Regulator in May this year stated:
"The Strategic Rail Authority sets the overall strategic vision, brings together passenger and freight interests and ensures that passenger services, fares and other interests are controlled and protected in a way that provides better value."
Nine months have now passed since the Strategic Rail Authority started operations, but it has not yet produced a strategy. A strategy document has been promised for this month. I hope that the Minister can tell us this morning when it will be published and whether it will address the issue of how the strategic objectives will be furthered by putting Railtrack into administration. There are rumours that the document may be published in a truncated form and issued subject to review, which would not be of much use in setting a clear strategy for the railways.
What about the role of the Rail Regulator? I asked the Minister to explain how the Rail Regulator will fulfil his principal statutory duty to regulate Railtrack's stewardship of the national rail network now that it is in administration. The Rail Regulator is statutorily independent of the Government. Parliament invested him with a range of statutory powers under the Railways Act 1993, as amended by the Transport Act 2000 and the Competition Act 1998. His job is to ensure that Railtrack's income—a combination of private finance and public subsidy that is set by the regulator—is spent on the right things at the right time.
The Rail Regulator has not been without his critics, but he has been a vital servant of customers. As the glossy leaflet to which I have referred makes clear:
"By using his powers proactively, proportionately and fairly the Regulator is helping to create a better railway for passengers and freight customers."

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How can investors in any company that emerges from the Railtrack administration be assured that the Rail Regulator will not be second-guessed and threatened by the Secretary of State? Does the Minister accept that the Secretary of State's actions on 7 October have destroyed at a stroke the credibility of the Rail Regulator's independence? Is it not obvious that the role of a regulator will vary greatly, depending on whether the company that takes Railtrack out of administration is a not-for-profit company or a for-profit company?
The administrator is legally independent of the Government and is obliged to consider all offers for the business on their merits. However, how can companies and organisations interested in taking Railtrack out of administration be convinced of the administrator's freedom of action? In his initial statement following the railway administration order, the Secretary of State made it clear that he was wedded to the creation of a not-for-profit company staffed by a miscellany of Government toadies. At that stage, the Secretary of State had it in mind that the chairman of Railtrack would be one such toady, but it was great to discover that he was not to be seduced in that way.
Mr. Patrick McLoughlin: My hon. Friend has hit on a very important point. Bearing in mind the vicious way in which the Secretary of State attacked the chairman of Railtrack in his statement to the House a few weeks ago, is it not surprising that he was the first person to come to the Secretary of State's mind as chairman of the new company?
Mr. Chope: My hon. Friend is absolutely right. The Secretary of State is behaving in an extraordinary way. He is making many enemies among those who have made career changes in order to do their best to provide a good railway for our country. When they do not do as the Secretary of State insists, all they get is abuse. The issue is one of trust in the Secretary of State. When he decides, under schedule 7 to the Railways Act 1993, whether to accept the administrator's proposals, he will be judge and jury in his own favour on his own pet proposal.
On 23 October, the Secretary of State told the House that
"it will ultimately be for the administrator to assess and make recommendations on proposals for the transfer of Railtrack's assets out of administration, as a going concern."
That was an accurate statement. However, he continued:
"Under schedule 7 of the Railways Act 1993, I will have to approve any such transfer. However, there is every possibility that"—
as recent press coverage has made clear—
"there will be more than one proposal before the administrator. The Government and I welcome that."—[Official Report, 23 October 2001; Vol. 373. c. 163.]
Like hell they do. The Secretary of State said from the outset that he had a proposal, and he implied that it would be implemented immediately on commencement of the administration.
For how long will the administration continue? I am told that it may be for at least a year, during which time it will cost an enormous amount of money. In effect, the
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same people will be running Railtrack as before, with the exception of the four administrators from Ernst and Young and one other person.
What are the implications for the administrator's freedom of action? For example, what freedom is he being given to reduce the staff overhead, which Railtrack had been preparing to announce in October? Is the £800 million that has been allocated to keep the administrator in funds the only payment that he will receive, or will there be more? Are those payments coming from the DTLR budget or from the contingency reserve?
When will a new business plan be produced? When will a prospectus be prepared? How is the anger of 10,500 employees who have lost their savings to be assuaged? The Government are talking about special purpose vehicles. How will that safeguard the west coast line project? How will not-for-profit companies be able to create surpluses? All the statements by the Secretary of State suggest that they will be able to create surpluses and will not be at risk of making any losses. The only way in which they can create surpluses is by charging more for access to the tracks. Where are the upgrades to come from, and how are they to be financed? How will the risks of performance and train operator compensation be handled through special purpose vehicles? The Minr needs to answer a whole host of questions.
Mr. John Smith: As the hon. Gentleman draws to a conclusion, I wonder whether he intends to refer at all to the customers of Railtrack, as so far he has not done so. Is anything to be gained by customers or taxpayers from bailing out an incompetent company, and what price is he prepared to pay for that?
Mr. Chope: I did refer to customers and to taxpayers; perhaps the hon. Member for Vale of Glamorgan (Mr. Smith) was preparing his notes for his own speech. I am keeping mine shorter than the normal 20 minutes because I know that many hon. Members want to join in.
I want to concentrate on the way ahead.
Dr. John Pugh: Will the hon. Gentleman give way?
Mr. Chope: No. Those who work for Railtrack, private sector investors and taxpayers all have a role to play in solving the problems precipitated by the Secretary of State. One thing above all is clear: there will be no solution without his resignation.
11.18 am
Geraint Davies: The first thing that I want to say is that the Secretary of State's decision was the right decision, a brave decision and a hard decision. The alternative proposed by the Opposition is to drip-feed, unsustainably, a casualty that was on a life-support system.
In the run-up to 1997, when the Conservative Government were facing inevitable election defeat, they sold off Railtrack at a fraction of its value—around £2 billion, although the markets valued it at around £8 billion. That is acknowledged by the Public Accounts

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Committee. That enormous rip-off cost every taxpayer about £100—let us put shareholder loss in the wider context of taxpayer loss. The public were left not only out of pocket but with an unco-ordinated and fragmented mess and an absurd corporate structure. People have talked about false markets. Railtrack consisted of Government money—taxpayers' money—that had been paid to it. Some of that money could be lifted out for shareholders and some of it was invested in services, but the focus on cost reduction inevitably led to difficulties on the safety front.
I remember seeing the headline of an article in the trade press in which Railtrack put the case that signal investment did not make business sense. It made safety sense, but it did not make business sense to Railtrack's incompetent managers. When I say "incompetent managers", I am, of course, referring to Mr. Winsor's testimony to the Select Committee on Transport, Local Government and the Regions:
"At my first meeting with the Secretary of State after the election, I said I believed that the core problem of the railway industry was the competence of the management of the company"—
Railtrack. When Mr. Winsor was asked why Railtrack chose to turn to the Government, rather than to him, for help, he replied:
"I have no duty or inclination to give taxpayers' money to the company to make up for it being inefficient and incompetent. It is possible that the company thought that if I would not give them money for being inefficient and incompetent, maybe the Government would. I think that would be an extraordinary judgment for the company to make".
His view was that there was incompetent management in an unsustainable and crazy false market.
Chris Grayling: If Railtrack was badly structured and incapable of delivering success, why did the Government choose to make it the principle investment vehicle in their 10-year plan?
Geraint Davies: The 10-year plan was predicated on our starting point. However, we are moving toward a stakeholder model. A non-profit making corporate governance will bring together the various stakeholders who were in the business of blaming each other for our shambolic railway system. The shambles was caused by the previous Government's under-investment combined with an absurd and unsustainable corporate structure. We shall move toward train operating companies, the Strategic Rail Authority, customers and employees working together for a better future that will be supported by record Government investment, which is something that we did not see when the Conservatives were in government.
Mr. Eric Pickles: I am concerned about the hon. Gentleman's political career. Earlier, he rebuked the Deputy Prime Minister for suggesting that safety had not been compromised under privatisation. Will he clarify those remarks? Was the Deputy Prime Minister wrong?
Geraint Davies: Perhaps the hon. Gentleman can explain what he means.
Mr. Pickles: The hon. Gentleman said earlier that safety was compromised under Railtrack and
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privatisation. The Deputy Prime Minister went out of his way in the House to say that safety had not been compromised under privatisation. The hon. Gentleman clearly feels that the Deputy Prime Minister was wrong. Will he clarify his remarks?
Geraint Davies: The Deputy Prime Minister will stand by his remarks. The regulator requires the system to be safe, but in a private corporation such as Railtrack there is evidence, which I quoted, that there is a trade-off between investment and shareholder needs. Investment in signals, which is an overhead, has a bearing on safety. There has been an on-going discussion about signals, investment and time scale. It would be silly to suggest that there was not a trade-off between investment and shareholder needs.
The Government inherited Frankenstein's monster. To pretend that that will scare away investors in the private market is to misunderstand that market. There is no doubt that the hon. Member for Christchurch (Mr. Chope) has correctly quoted American fund managers. If one can, one will invest in what appears to be a risk-free corporation. If one can buy shares in the knowledge that the Government will always bail one out, one will invest more money. Compare that with, for instance, private finance initiatives, of which the Government have completed more than 100. On 26 November the National Audit Office will publish a report on the relative success of all those projects.
I will not run through all the questions, but one was about the level of risk transfer and added value. There is not much risk transfer if the corporation thinks that it will be continually bailed out by the taxpayer. That was the false market of Railtrack—the absurd monster that was created by the Conservatives, who sit here smirking. I presume that their policy would have been to continue to drip-feed that monster never-ending amounts of money simply to support their prejudice. The British public know that that would not be the right thing to do, although it would be the easy thing to do. We have done the right thing, which is to issue no blank cheques. I know that the hon. Member for West Derbyshire (Mr. McLoughlin) wants to offer £1 billion from his coffers.
Mr. McLoughlin: I should like to take the hon. Gentleman back to what he was he saying about safety. It is important that this point is not misunderstood. Does he say that the Health and Safety Executive has failed in its duty on railway safety over the past five years?
Geraint Davies: No, of course I do not. I simply say that Railtrack is losing confidence and has issued press releases saying that various investments in safety matters did not make business sense. That is clearly borne out by the cuts that Railtrack has made. It seems rich that in his opening remarks the hon. Member for Christchurch said that the workers had been betrayed on the issue of costs, yet a moment later he asked the Minister to clarify what facility there was to reduce the staff overhead as Railtrack planned. In his opening remarks the plan was to look after the workers, yet later it was to sack half of them to reduce overheads. That is ridiculous.
In 1996, as we approached privatisation, the Conservatives adopted a scorched-earth approach. The idea was to sell off a publicly-run industry at any price,

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just to get it out of the system so that it could not be publicly accountable or represent value for money again. We have managed to turn that round. We have got rid of the system that I have described in which a corporate intermediary pays Government money to shareholders while cutting investment.
There have been horrendous failures in rail safety such as at Paddington and Hatfield. It was notable that the then chairman of Railtrack, Gerald Corbett, who had apparently been running a very safe system, closed it down to change all the tracks. We are led to believe that until that point the system was safe, yet all of a sudden he had to close it down and then he resigned and ran off to India to go on a diet, having been given an undisclosed amount of money. We are supposed to support that system of secrecy. The same week that Gerald Corbett went off to India with his massive pay packet, Kevin Keegan, another well-known figure, resigned because he was not doing his job properly. He did not take any money with him. The whole system was absurd.
Several hon. Members rose—
Geraint Davies: I shall give way to the hon. Member for Epsom and Ewell (Chris Grayling), as I should like him to comment on how that step change took place overnight.
Chris Grayling: I thank the hon. Gentleman for giving way again. This is a hugely important point. Is he aware that Lord Cullen made two very clear statements in his second report—first, that the nature of the privatisation of the railways did not have an adverse effect on safety and secondly, that the railways have continued to become safer since privatisation? None of us feel anything but the deepest horror and shock about the accidents at Ladbroke Grove and Hatfield, but they are not typical of the safety trends in the rail industry.
Geraint Davies: There certainly have been fewer fatalities and greater safety over time. My point, as the hon. Member for Epsom and Ewell will know if he was listening, was that the chairman of Railtrack was in charge of a system that was apparently completely safe, in the aftermath of Paddington but decided to close down the rail industry because it was not safe. Either it was safe or it was not. I respect what Lord Cullen said, but it is strange. He said, too, that in the immediate aftermath of the sale there should not necessarily have been a systemic reason for safety problems. It is bizarre to say, "This is a completely safe system," and at the same time say also that it is fair to close it down because there are problems with the track.
Dr. Julian Lewis: Will the hon. Gentleman give way?
Geraint Davies: No. I will move on, as other hon. Members may wish to speak.
The previous Administration had no record of building public-private partnerships or levering in private money; they sold off our assets on the cheap. However, there is an enormous groundswell of investment from this Government. The Conservative policy on the tube was simply to sell it off, but when the
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private sector cut costs and services and raised fares to maximise profit, there would have been a problem again. The Opposition have no understanding of the culture of public-private partnership and bringing the best to bear in terms of risk transfer and added value; to them it is a matter of selling the industry to the market and perhaps having to bail it out. That is not what the public want, and their verdict at the election made that clear.
The Conservative focus on the issue is non-strategic; the Opposition are not addressing the strategic interests of a customer-driven rail network in the new millennium. They are interested only in the tittle-tattle of who said what in a meeting. That is all they talk about in the Tea Room. What the public want to know is whether they can get on a train, and whether they can have an environmentally sustainable fast system that works for Britain. They were let down by 20 years of under-investment and the virtual destruction of the rail system as the Conservative forces backed away from the public, who threw them out on their ear.
We are now rebuilding a new corporate governance to bring together the different parts of the rail industry to work with a public investment commitment that has never been seen before. That will renew the culture of working with the private sector, perhaps on project-based delivery to provide the best value for money and the best quality for customers. Workers, customers, Government, business and environmentalists will clap their hands and welcome this great change.
I wish the Secretary of State the best of luck. I am sure that he will not be distracted by the rubbish, tittle-tattle and trivia of Conservative Members, who will stay in opposition for many years to come.
several hon. Members rose—
Mr. Edward O'Hara (in the Chair): Order. It may assist the many hon. Members who want to participate in the debate to know that the winding-up speeches will start at 12 o'clock and the Minister must be called not later than 12.20 pm.
11.34 am
Mr. John Horam: The speech of the hon. Member for Croydon, Central (Geraint Davies) was typical of Labour contributions to debates on the railways: they simply retell history and give no reason why, if what happened was so catastrophic, they did not do something at the start of their Administration, rather than wait for four and a half years. They claim that they are doing something decisive, but they are merely reacting in panic to events to which they have contributed.
The second aspect of the Government's lamentable performance since they came to office is that they have simply dumped everything on the Railtrack management and staff in a disgraceful manner. They inherited the innovative and new structure of Railtrack and the operating companies when they came into office. They had the opportunity to nurse it and to achieve the good management that would have delivered better service and, crucially, retained private sector confidence so that private money could be levered in, as was intended all along.

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The hon. Gentleman talked about the Government's expertise and success but totally ignored the fact that my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) created the present structures. He introduced the public-private partnership and the private finance initiative, and was extremely successful in dealing with prisons, roads and motorways. That happened well before the hon. Gentleman was even a Member of the House of Commons, and he should not rewrite history in the way that he did.
Geraint Davies: It is worth telling the hon. Gentleman that, as leader of Croydon council, I oversaw the tramlink public-private partnership. We started discussing the issue in 1986 and it went through the House under the previous Conservative Government. The idea that I have no hands-on experience of projects worth hundreds of millions pounds is quite false.
Mr. Horam: I accept what the hon. Gentleman says about tramlinks, which are an excellent idea. He should not, however, distort the history of the private finance initiative and public-private partnerships, which were well advanced before a Labour Administration ever thought of them. The Government have simply carried on with the good aspects of Conservative Government policy but, sadly, they have failed to take advantage of some initiatives.
When they came into office, the Government had an opportunity to manage the situation in a way that would have produced better results for those who use trains regularly or take long journeys and for employees—my hon. Friend the Member for Christchurch (Mr. Chope) was right to focus on those groups. The Government had an opportunity to make the industry viable but, sadly, they failed.
We are where we are today because the Government failed to take the opportunities offered by the innovative and new structure that they inherited from the Conservative Government. They have totally failed, and it is apparent to all concerned—Members of Parliament, railway users and Railtrack employees, who are undoubtedly angry—that the Secretary of State is in a mess.
In a spirit of fairness, I fully accept that the railway management cannot entirely escape blame. It did not always live up to its operational responsibilities in the way that we would have wished. Equally, the Rail Regulator cannot entirely escape blame for some of the things that happened. He gave punctuality and regularity of service too much priority over safety, which gave Railtrack wrong incentives, for which we have paid. However, when anything has gone wrong in the past four and half years, Ministers have regularly and repeatedly dumped all the blame on the Railtrack management—the executives and board—like a shot.
I know Railtrack well because I represent a commuter constituency in outer London, and I have often talked to Railtrack and Connex, which is my local operator. I know that their morale has suffered because repeated and unfair Government statements have dumped all the blame on them. Even this summer, when I last talked to Railtrack, it thought that things were beginning to come
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round post-Hatfield. Indeed, Tom Winsor, the rail regulator, said that things were beginning to move in the right direction, that some major problems had been resolved and that those involved were close to getting things right—but then the right hon. Member for Tyneside, North (Mr. Byers) became the Minister responsible for the issue. From his point of view, it is probably unfortunate that he, as a law lecturer with no experience of management, has been put in jobs that demand some understanding of the role of management. People often think that management is simple, but it is quite difficult and requires skills and experience. In a previous incarnation, the Secretary of State completely messed up the BMW affair, and he has messed up again now.
A propos the remarks made by my hon. Friend the Member for Christchurch about the relationship between the Treasury and the Department for Transport, Local Government and the Regions, it is probably true that a Blairite Minister was confronted with a Chancellor of the Exchequer who was not always his best friend.
The Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Plymouth, Devonport (Mr. Jamieson), knows that a Treasury Minister should be in the Chamber as well, because the Treasury is, to a considerable extent, to blame for some of the problems that have occurred in the industry. In relation to London Underground and Railtrack, the Chancellor of the Exchequer's attitude has not been fundamentally posited on giving a better service to users and a better job to employees. He has simply considered the subjects from a narrow Treasury point of view.
It is sad that what has to be done with Railtrack was already beginning to be done. It needs to be run in a decentralised way, with the organisation structured so that it can respond sensibly to the investment needs of operating companies.
Mr. Geoffrey Clifton-Brown: After privatisation, had passenger numbers on railways not reached a post-war high? Passenger numbers, investment and safety levels were increasing. Now there is a complete lack of confidence in the railway system. Surely my hon. Friend's constituents want increased investment in the railways and some hope that their rail service will improve.
Mr. Horam: My hon. Friend is right to stress hope. The present situation is disastrous. I talked this morning to servants of the House, some of whom are my constituents. They said that their train was late every day last week as they came to work. Such problems are regular. Overcrowding is severe and safety remains a problem. People want hope, but at the moment they have no hope. Hope has receded as a result of the measures taken by Ministers.
The company could have been nursed into life, but now we face total uncertainty. We do not know whether a not-for-profit company, another private organisation or something else will succeed Railtrack. There is huge delay. What will happen to schemes that my local Connex rail managers had banked on to improve problems such as overcrowding and regularity? For

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example, there were schemes to invest in platform lengthening and signal re-siting so that the trains could carry 12 coaches rather than eight or six, which could mean that more people were carried in greater comfort and with greater regularity. That is what commuters in Orpington want.
Mr. Don Foster: The hon. Gentleman talks about a lack of investment. Will he confirm that on 18 February. long before the Secretary of State's action, Railtrack announced that it was slashing its major project budget?
Mr. Horam: I am not familiar with that fact. A report in The Observer made the point that
"Improvements worth billions of pounds for Britain's ailing rail network are to be put on hold indefinitely because of the Government decision to force Railtrack into administration."
They had not been put on hold before that. I have talked to Connex South Eastern, my local rail operator, which was to have talks in September about the schemes that I mentioned—platform lengthening, signal re-siting and so forth—to improve the capacity of trains. Those talks have been postponed because Railtrack was put into administration.
The report in The Observer continued:
"Industry sources have told The Observer that modernisation schemes for struggling commuter lines, improvements to mainline routes between cities and track maintenance to reduce delays will have to be put off because of worries about the railways' future."
It suggests that the delay will be between six months and two years, so I disagree with the hon. Member for Bath (Mr. Foster). A package was clearly emerging for my local rail operator, which is the only one about which I can confirm anything, but all that has been put into the future.
I have pressed the Minister on such matters before and I will do so again. I want to know when there will be clear investment plans that will benefit the users of the railway. I also want to see the commuters into central London getting proper priority against the more visible main line track improvements. London is one of the great wealth creators of the country, as I am sure the hon. Member for Croydon, Central will agree. I will continue to press the Minister, because transport under this Government has been a disaster. Jonathan Porritt, appointed by the Government as chairman of the Sustainable Development Commission, singled out transport as the biggest area of total disaster under this Government when he made a speech at the beginning of this year in the presence of the Minister for the Environment and others.
Transport. whether one examines the case of Railtrack or that of London Underground, has gone backwards under the Government. We are now work off than we were five years ago, when progress was being made. That is a disgrace, and I am delighted that my hon. Friend the Member for Christchurch secured this debate so that we could discuss these important issues.
11.45 am
Mr. John Smith: I will keep my contribution as brief as I possibly can, Mr. O'Hara, to allow other Members to speak.
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A specific aspect of the placing of Railtrack in administration was featured on the front page of the South Wales Echo last week. The newspaper pointed out that we have been assured by the Secretary of State that, under any new arrangement anticipated by the Government, the Vale of Glamorgan railway line will be reopened for a passenger service at the beginning of 2003. That will be the largest single investment in railways in Wales since the days of Beeching. The service will be fine and passengers will flock to it and be able to catch the train, which will now run from Barry all the way to Bridgend, to stations in Rhws and in Llanilltud Fawr. If we are lucky, it will run to Llandow, but we will have to wait and see.
My other point is one that I did not anticipate making until I heard the speeches of Conservative Members. Sitting here, I wondered what sort of "Alice in Wonderland" world we were living in. I never thought that we would hear Tory Members, with their alleged commitment to the private sector and their ideological commitment to free enterprise and the market, defend a clearly incompetent company. Mr. Winsor made it clear, in his evidence to the Select Committee, that the company was incompetent and believed that if it could not keep going back to the regulator for more money, it could go straight to the Government and demand whatever it wanted for as long as it wanted.
Railtrack believed that the Government would carry on pouring money into a black hole, irrespective of the outrageous record of this allegedly private company. I have had the privilege of managing a limited company and recognising the commercial disciplines of answering to its shareholders and—most important in any successful company—meeting its customers' needs. If a private company fails to meet its customers' needs, it will never satisfy its shareholders. Yet Conservative Members want to bail out a failing company. Until now we have not heard a figure, and I hope that at some stage in the debate they will tell right hon. and hon. Members exactly how much taxpayers' money they would be prepared to use to bail out a failing private sector company. Will it be £1 billion extra to bail out their shareholder friends, or £1.5 billion, or £2 billion?
I look forward with interest to hearing what price a party committed ideologically to privatisation and the success and achievement of the private sector is prepared to pay to bail out a failing private sector company. I have never heard anything so absurd in my life. Somehow, the Opposition suggest, confidence in the private sector and private-sector partnerships will be regained by a massive taxpayers' bail-out, but that is not how the private sector works. If investors see that money is being pumped in to bail out a failing company, they will desert that company as surely as night follows day. Exactly how much taxpayers' money should be spent on bailing out an incompetent company?
I picked up a point from this morning's debate that is important for the people of this country. What alternative do the Opposition propose? We have heard no alternatives apart from some fuzzy reference to a decentralised organisation—a suggestion that came from a member of a party that created one of the most centralised, centrally planned and inefficient structures ever seen. Let us hear of an alternative. And what of their crocodile tears for small shareholders? They do not give a damn about small shareholders—they care only

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for the institutional shareholders, who are now crying out because the company that they invested in, which has been a total failure, is not going to be bailed out indefinitely. I am glad that that company will not be bailed out indefinitely, and the sooner we replace it with a new structure that puts the customer first, the better. I recognise the interests of stakeholders at every level, but services must be customer focused or they will not succeed. That must be top of the agenda.
Geraint Davies: Does my hon. Friend think that the Opposition might move towards privatising the industry again, given that it originally cost £6 billion, which, along with the £1.5 billion compensation package, comes to quite a lot of money? Everything added together comes to a total of £13.5 billion. Does he think that they will propose privatisation again, as it was clearly such a good idea?
Mr. Smith: My hon. Friend makes an interesting point. After this morning's contributions from the Tory Opposition, I would think them capable of doing it again. The company was privatised in an ill-considered way and was given a huge advantage when the taxpayer was ripped off by its undervaluation. It was given a huge capital base to work from as well as revenue support from central Government. The fact that it failed so badly only shows how incompetent the company was.
The regulator has been mentioned in the debate—specifically, the disagreement between the regulator and the Secretary of State. That does not bother me so much; what interests me is that the regulator said that the company had neglected both its assets and its customers. I think that he was right.
Mr. Clifton-Brown: I think that the hon. Gentleman needs a little break—and to keep taking the tablets. Does he think that lambasting the private sector as he is doing will make it more or less likely that it will invest the £30 billion that the Government need for their 10-year plan?
Mr. Smith: The hon. Gentleman has no idea what he is talking about, unfortunately. Unlike him, I have worked for the private sector and for a limited company. I know how the real world works. I am not running down the private sector—far from it. The private sector will see through the Conservative party's ridiculous proposals quicker than anyone else.
The structure of any future company must be customer focused and customer driven. From my limited experience I suggest that, whatever formula the Government devise for partnerships, they recognise their strengths and weaknesses and the fact that one cannot make the private sector do what it is unable to do. It is driven by a commercial imperative, so they should ensure that any accountabilities and responsibilities belong to the relevant part of the partnership.
Similarly, one cannot ask the Government and the public sector to do what they cannot do. The successful formula is one that demarcates responsibilities clearly and gives the two sectors the freedom to do what they do
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best without interference. If that formula is used we can look forward to the outcome, as it will deliver a service to the hard-done-by train passengers, who have suffered for so long.
I want to make a point that has been overlooked in at least two contributions to the debate. There is a difference between a not-for-profit company and a non-profit-making company. It is wise not to confuse the two. We should strive for a not-for-profit company that is organised on clear commercial lines, but is customer driven.
11.57 am
Chris Grayling: I thank the hon. Member for Vale of Glamorgan (Mr. Smith) for keeping his remarks brief and leaving me three minutes in which to speak.
On 18 June, the Secretary of State said:
"I am not going to embark on big structural changes. What the industry needs now is a period of stability and certainty so it can concentrate on the vital job of delivering safe. reliable services for passengers and freight".
Two weeks later, he turned Government policy and the previous statements of the Strategic Rail Authority on their head by saying that he wanted to progress not 20-year franchises, but two-year franchises. Nine days after that was the famous meeting between him, his officials and John Robinson, the chairman of Railtrack, at which there was or was not, depending on whom one believes, a discussion about Railtrack's viability as a business.
The dominant issue over the past three months is whether Railtrack was really insolvent or whether the Government attempted to push it into insolvency to deliver nationalisation at no cost. If it was insolvent, what happened between May and October to make it so? There is no evidence of any major adverse financial developments. The financial results due at the end of October were likely to be in line with market expectations, so what problems did Railtrack face?
The first problem was that the regulator's review had offered the company an increase in spending for repairs, renewals and operational expenses for the next five years from £12.9 billion to £13.3 billion. That is extremely little, given the huge challenge that Railtrack faces if it is to cope simply with the increase in passengers during the past five years, let alone the Government's target of a 50 per cent. increase in the next 10 years.
Another problem concerns Renewco, the company agreed by the Government to be established as an alternative vehicle for some of the investment finance. It was due to be set up in June, but it was delayed and delayed and never happened. The £162 million grant that was supposed to underpin the next stage of investment never appeared. Then the Government scrapped their own regulatory system to remove any option that the industry had to sort out its financial predicaments.
On what information did the Secretary of State act? He did not talk to the Strategic Rail Authority, the regulator or, I suspect, the Minister. So who was involved in the discussions? What due diligence was there with regard to the financial position? Did the Secretary of State really take his decision on the basis of a single meeting with the Railtrack chairman, or had he already taken it? Was he looking for an excuse? We now

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see investment plans on the shelf in all directions. I shall listen with interest to the Minister's comments about that and about what happens next.
12 noon
Mr. Don Foster: Given what will happen later, I suspect that we are at the beginning of what can truly be described as groundhog day.
I listened with interest to the thoughtful and analytical speech of the hon. Member for Christchurch (Mr. Chope), whom I congratulate on securing this Adjournment debate. However, I remind him that one is in danger of losing the plot if one exaggerates too much. The hon. Gentleman went way over the top by comparing the Secretary of State's actions to those of President Mugabe in Zimbabwe. I noted with interest that his thoughtful speech neither acknowledged that significant problems needed to be tackled nor offered solutions.
I also noted with interest the sedentary suggestion that the hon. Member for Brentwood and Ongar (Mr. Pickles) would give us some solutions. We look forward to them. I understand that he will suggest the precise sum that should be invested. I have taken a small risk—
Mr. Mike Hancock (in the Chair): Order. The hon. Gentleman risks anticipating what other hon. Members might say.
Mr. Foster: I suspect that you might be right, Mr. Hancock. However, I have taken a risk and written down the sum to which I suspect the hon. Gentleman will refer.
There is no doubt that significant problems needed to be tackled within Railtrack. At least the hon. Member for Orpington (Mr. Horam) was prepared to acknowledge that there were some problems with the management of Railtrack. There were concerns about the golden goodbyes that various people were given. When he retired, one of the recipients, Mr. Gerald Corbett, was prepared to acknowledge that there were significant problems with Railtrack. There were concerns about the management and supervision of contractors, project cost overruns and the organisation's financial viability. As hon. Members will no doubt discuss later in great detail, Railtrack was placed on credit watch and its rating was reduced. We are all aware of its frequent attempts to go around Whitehall with its begging bowl and its plans to sack one in 12 of its staff. I do not entirely share the view, but there are concerns in some quarters that safety remains a problem, as the hon. Member for Orpington said.
Many of those who are close to what is happening are highly critical. The hon. Member for Vale of Glamorgan (Mr. Smith) referred to the critical comments that the Rail Regulator, Mr. Tom Winsor, made about Railtrack during his evidence to the Select Committee last week. For example, he said:
"They are the authors of their own misfortune."
He continued:
"The core problem is the competence of the management of the company."
He talked later of Railtrack's failure to look after both its assets and its customers. It was interesting to note from his answers that he had tried on three separate
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occasions to persuade Railtrack voluntarily to produce something as simple as a register of all its assets, but that it had not done so.
The train operating companies have been critical of Railtrack. The passenger figures for the four weeks up to 13 October have fallen by 2 per cent., which means that more than 2 million passengers have deserted the railways. Phil White is the chief executive of the largest train operating company, National Express, which has nine out of the 25 rail franchises. He has blamed Railtrack for much of the problem:
"Passengers are becoming increasingly frustrated at the number of speed restrictions still in place."
Railtrack has repeatedly given us dates by which the system will be back to normal. Time after time it has given us dates; time after time it has failed to deliver.
I was fascinated to hear from the hon. Member for Orpington that he had had discussions with Railtrack as recently as this summer, when he was told, "we are beginning to come round". We were promised that the problems would be over by last Christmas, but now we are told that the company is still coming round.
There were significant problems with Railtrack, and the Government had to make a decision. One solution, which was not sensible, was to continue to pour more and more taxpayers' money into this ailing and failing company. The time had come to pull the plug and to find an alternative way forward. Let us remember that Railtrack's advisers calculated that there were only three options: to restructure, to renationalise or to put the company into receivership. The Secretary of State's decision was correct. For far too long there has been an obscene conflict in a monopoly between shareholder profit and passenger safety; it had to be brought to an end.
Chris Grayling: Does the hon. Gentleman accept that, excluding the west coast main line project, Railtrack had been given a standstill budget for repairs and maintenance for the next five years?
Mr. Foster: There were many difficulties in the funding arrangements, but the real difficulty was Railtrack's inability to attract the necessary private sector finance to carry out its work. I remind the hon. Gentleman of my earlier intervention: it was in February, not in the past few weeks, that Railtrack acknowledged that it must make significant reductions in its funding for a variety of projects. Something had to be done, and the not-for-profit public interest company approach is correct. I would say that, of course, because Liberal Democrats proposed the idea on 14 February 2001. One week after we proposed it, the Institute for Public Policy Research came up with a similar proposal.
My criticism of the Secretary of State relates to the way in which he has handled the issue. There is no doubt in my mind that had he given serious thought to the matter at an earlier date, when everybody knew the problems, there would have been a variety of ways in which to introduce the new model. He did not have to adopt the nuclear option. There would have been an opportunity for discussions with Railtrack given that its advisers had raised that possibility. The speed with which the Secretary of State operated, and the way in which he did so, has led to considerable confusion.

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There is also confusion about who owns which assets. That is an understandable concern for Railtrack's shareholders. However, the shareholders should point the finger of blame not at the Secretary of State but at Railtrack's managers, who have let the shareholders down.
Huge confusion has arisen about who said what to whom and when. The hon. Member for Croydon, Central (Geraint Davies) has described that debate as "tittle-tattle". The travelling public are not interested in that—they want to know when they will have a safe, reliable and affordable railway. Many key issues relating to the future of our railways need to be addressed. They include not just the structure of Railtrack, but ways of reducing fragmentation, sorting out the problem of ridiculously high fares, bringing together train and track, further improving safety and so on. Those are the issues that the travelling public are concerned about. They will not be interested if Members on both sides of the House spend all their time discussing what the hon. Member for Croydon, Central described as tittle-tattle. They want to know how the Secretary of State will end the current confusion and how we will move forward.
12.10 pm
Mr. Eric Pickles: I congratulate my hon. Friend the Member for Christchurch (Mr. Chope) on securing this excellent debate. As the hon. Member for Bath (Mr. Foster) said, he approached it analytically and with his customary moderate and middle-of-the-road style, which was most welcome and refreshing.
My hon. Friend the Member for Orpington (Mr. Horam) said, rightly, that the Government were reaping what they had sown and and that they had failed to take various opportunities that were offered to them. My hon. Friend the Member for Epsom and Ewell (Chris Grayling) raised some pertinent points on whether Railtrack was bust. I suspect that we shall remember the opening part of the debate and the speech of the hon. Member for Croydon, Central (Geraint Davies), who organised the equivalent of a parliamentary egging of the Deputy Prime Minister by suggesting that he was silly to suggest that privatisation had not in any way compromised safety. I wish the hon. Gentleman godspeed when he leaves the Chamber.
We are aware of exactly what the Labour Whips wanted.
Geraint Davies: It is quite wrong for the hon. Gentleman to suggest that I said that my right hon. Friend the Deputy Prime Minister was silly. I simply made a point about what Railtrack had done and what was said in the press—that it had closed down the system and issued press notices saying that there was a trade-off between signal investment and business sense.
Mr. Pickles rose—
Mr. Mike Hancock (in the Chair): Order. I remind the hon. Gentleman that the Minister will expect and need 10 minutes in which to reply. If the hon. Gentleman takes further interventions, he will not have extra time.
Mr. Pickles: We have been chums for a long time, Mr. Hancock. I am like a chronometer and will stop. I was merely concerned about the hon. Member for Croydon, Central.
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We shall return to the matter later. The Minister may be Secretary of State before the day has passed and, if he is, we wish him well.
We need to know whether Railtrack was bust. The various questions would then be relevant. Was Railtrack bust according to the classic balance sheet or cashflow definition? We know, because my hon. Friend the Member for Epsom and Ewell said so, that Railtrack was operating from its business plan and there was nothing new. Everyone knew what the position was and it was clear that the company needed an extra £1.5 billion in January and March this year. The hon. Member for Bath reminded us that Railtrack was taking steps to cut back, but he drew the wrong conclusion. On 2 April an agreement was made between the Strategic Rail Authority, the Government and Railtrack to obtain the extra £1.5 billion.
We know that that work was undertaken with City advisers Lazard and with Linklaters and Paine to create a company, to which my hon. Friend the Member for Epsom and Ewell referred, called Renewco. Half was to be owned by Railtrack and half by the Strategic Rail Authority. We also know that by triggering Renewco, Railtrack would have received £162 million under schedule D of the April agreement. That in turn would have generated an extra £318 million from the banks, so Railtrack would have had not much less than £0.5 billion at its disposal. With the Government's payment of £330 million, on which the Secretary of State was keen to comment, and the extra money, Railtrack would have received only a little less than £1 billion.
We now know that during the summer, the Treasury dragged its feet on the creation of Renewco. We know that until days before the Government pulled the plug on Railtrack, they were still promising the £162 million. That was equivalent to saying, "The cheque is in the post". The Government are now able to pay the £162 million, so they have made an offer to Railtrack. What has changed? Why can they now pay the money? The only explanation is that offering the money earlier would have prevented Railtrack from going into receivership. It is because of the Government's decision that Railtrack is in precisely that position.
As for future funding, a chief civil servant at the Department for Transport, Local Government and the Regions said at a meeting with Credit Suisse First Boston that the creation of a not-for-profit company would be neither appropriate nor attractive. Before the Select Committee, the regulator warned the Secretary of State against a decision that would fundamentally undermine policy on public-private partnership deals. In future, City institutions will be looking for between 0.5 per cent. and 1.5 per cent. on all deals.
In a few weeks, the first of two public-private partnership deals involving London Underground and two consortiums—Metronet and TubeLines—will be signed. Some £8 billion will have to be raised. The City estimates that an extra £10 million a year in interest will have to be paid as a direct result of decisions taken by the Secretary of State.. That is £10 million less for public services and improvements to the line. Hospitals, roads and rail will cost more because this Government have decided to pull the plug on Railtrack. In an earlier intervention, the hon. Member for Oldham, East and Saddleworth (Mr. Woolas), who is Parliamentary

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Private Secretary to the Minister, said, "They would say that, wouldn't they?" That is more than £1 million a word.
We hear the mocking of those hard workers who decided that they wanted not only to work for the rail industry but to make a contribution. Some 92 per cent. of Railtrack employees made investments. They are not highly paid: a grade 1 signaller gets a little less than £12,000, and a clerical worker gets only £18,000. Overnight, those people have had the equivalent of a wage cut. Signallers lost 9 per cent., and clerical workers lost 6 per cent. Some signalling managers lost £7,500, and some assistant area production managers lost £20,000. Most of those shareholders decided to take script dividends because they were committed to the railways. However, the Government have kicked them in the teeth.
I shall let one example speak for all. In an e-mail sent to my office, a railway worker asked me to put the following question:
"How can the railways improve now that he"—
the Secretary of State—
"has just robbed 90 per cent. of railway workers of their savings and pension contributions?"
He continued:
"I myself worked on the railway between 1992–1997, and have invested £11,000 in Railtrack...This year I have been made redundant, and lost 90 per cent. of my savings. New Labour, New start?"

That railway worker was encouraged by the Government to take out an employee share ownership scheme. Today, we will see whether the Secretary of State is prepared to do the right thing and put the interests of the railways above those of his own political career, and whether he will ensure that the only blockage to substantial investment in the railways is the Secretary of State himself. We look forward to his ultimate departure.
12.19 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Mr. David Jamieson): I congratulate the hon. Member for Christchurch (Mr. Chope) on securing the debate. I constantly marvel at how often Conservative Members give us an opportunity microscopically to examine their handling of transport when they were in government. I believe that the hon. Gentleman was a barrister in his former incarnation. If this had been a court of law, Mr. Hancock, you as the judge would have thrown the case out after a few minutes owing to the total lack of evidence.
People who listen to these debates or read Hansard will be interested to note how Conservative Members talk endlessly about personalities, but seldom about the needs of passengers. The former Prime Minister, Winston Churchill, must have been in a debate like this when he said,
"When the eagles are silent, the parrots begin to jabber."
Today's Opposition Benches confront us with a row of budgies, endlessly repeating half truths, hearsay, innuendo, supposition and false rumour. One of those false rumours, which seriously undermines the Tories' case, was the newspaper story that occasioned the
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private notice question a week ago about the so-called scandal of the leaked fax. I have that document in my possession. It is a statutory instrument that was laid before the House on 8 October, but that did not stop Conservative Members getting very excited about it. The document was not actually a fax—what hon. Members thought were fax codes at the top were printers' references. If the Opposition are to make a case, they need to do their homework first.
Dr. Pugh: Will the Minister give way?
Mr. Jamieson: I shall not give way—there is a lot to cover.
The hon. Member for Christchurch raised several matters. The new chairman of the SRA, Richard Bowker, will consider a strategic plan, and I anticipate that that will he published by the end of the month.
I have already dealt with funding for the administration in a written answer. The immediate funds are to be provided from the contingency reserve, to be replaced by departmental funding in the winter supplementary round.
I liked the summary by my hon. Friend the Member for Croydon, Central (Geraint Davies) of how privatisation was undertaken. The people who should be in the dock are sitting on the Opposition Benches, not the Labour Benches. Sir Philip Beck, who was the chairman of Railtrack until early this year, said on the "Today" programme as recently as 9 November:
"I've also said...that the privatisation was initially conceived with some perverse incentives which were unhelpful to the railway industry and...as a consequence to the travelling public".
The hon. Member for Orpington (Mr. Horam) said that a Treasury Minister should be in the dock. I should be interested to hear some Conservative Members answering questions about how privatisation took place and why we find ourselves in the current situation. The hon. Gentleman made a wide, sweeping claim that the Government had done nothing for transport. He did not mention that the funding for his local transport plan in Kent had been increased by 76 per cent. The hon. Member for Epsom and Ewell (Chris Grayling) was obsessed with personalities. We heard him rattling through the personality questions.
My hon. Friend the Member for Vale of Glamorgan (Mr. Smith) raised a good point and even invited the hon. Member for Brentwood and Ongar (Mr. Pickles) to intervene. He did not and I shall give him a further opportunity.
Mr. Pickles rose—
Mr. Jamieson: The hon. Gentleman has not heard what I want him to intervene about yet. He should be patient. My hon. Friend invited him to tell us how much would be needed to compensate the shareholders at the suggested level of £3.60 per share. Like the hon. Member for Bath (Mr. Foster), I wrote down a figure. We will see whether the hon. Gentleman gives us a figure that matches those that we have before us.
Mr. Pickles: I am happy to do so. Perhaps I could trade a quote from Sir Philip Beck, who said that the Secretary of State would
"find it very difficult to get any private sector funds in"

under the new arrangement. The Minister does not seem to have been listening to the shareholders—
Mr. Mike Hancock (in the Chair): Order. The hon. Gentleman is making a speech. Interventions should be short.
Mr. Pickles: I will just finish my point, Mr. Hancock. The shareholders have made it clear that they do not require any help from the Government. There are plenty of assets in Railtrack. The Minister must therefore address the problem of finding that investment.
Mr. Jamieson: That was very interesting, Mr. Hancock.
When asked by my hon. Friend the Member for Vale of Glamorgan, the hon. Gentleman said from a sedentary position that he would say how much they would compensate to the penny. He did not. I can tell him what the figure is. I do not know whether the hon. Member for Bath has written down a similar figure. To compensate the shareholders at the level that has been talked about would cost £1.5 billion. I should be interested to know whether the hon. Gentleman has cleared that with the shadow Chancellor who, only last week, told us that he wanted the state's proportion of gross domestic product to be reduced to 35 per cent. I do not know how he will do that in the context of providing £1.5 billion.
Mr. Pickles: Will the Minister give way?
Mr. Jamieson: The hon. Gentleman must be patient; I am just warming to my task. If that £1.5 billion is to be paid to the shareholders, how will that improve any of the services for the travelling public?
Mr. Pickles: The Minister makes my point exactly. The Government can do nothing to prevent that
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compensation. It will all take place in the courts. Railtrack and the rail industry will be locked up for years. The Minister will be unable to deliver any of the promises.
Mr. Jamieson: We have clearly rattled the hon. Gentleman's budgie cage today. He has not got an answer to the points that we made.
My right hon. Friend the Secretary of State was faced with continuing and increasing difficulties with Railtrack. On 15 October he outlined the further measures that he intended to take to put the travelling public first. That was his priority. The House will be familiar with the history of Railtrack. I will not delve into all the details today, but in 1996 Railtrack was privatised. It was the only publicly floated utility that was directly subsidised by the Government; the subsidy made up for two thirds of its revenue. After the Hatfield crash, the whole of the network was urgently reviewed and fundamental safety issues were addressed.
The hon. Member for Orpington said that safety was a problem. Perhaps he could write to tell me exactly where those safety problems lie in his area, as I am not aware of any.
Mr. Horam: Is the Minister inviting me to seek an Adjournment debate? I should be delighted to bring those facts to his attention.
Mr. Jamieson: If the hon. Gentleman would like to apply for an Adjournment debate to discuss rail safety, I should be happy to answer his points.
As always in these debates, there is not enough time for the Minister to give a full response to every point. This has been a curtain-raiser for our debate this afternoon on the Floor of the House. I am sure that we shall hear again this afternoon what we heard this morning. We have a Tory party that is putting passengers in second place. We have a Labour Government who are putting taxpayers and the travelling public first. I know where the interests of the British people lie. The people will listen to what we have to say and not to the Opposition's obsession with personalities.

Ministry of Defence Fire Services
Mr. Mike Hancock (in the Chair): The hon. Member for Moray (Angus Robertson) has asked me whether he can make an intervention. He has cleared it with the hon. Member for Selby (Mr. Grogan) and I see that the Minister has also agreed to that.
12.30 pm
Mr. John Grogan: We have heard a great deal lately about firefighters' sense of public service, public spiritedness, selflessness, bravery, and brotherhood and sisterhood. Our Prime Minister rightly praised New York's finest for their dedication to duty, humanity and bravery. Within hours of the dreadful occurrences of 11 September, more than 100 men and women from our Ministry of Defence fire service volunteered to go to New York to help with the rescue. As far as I know, there are no plans to privatise New York's fire service. The House and the country will be surprised to learn that, on the other hand there is, every possibility that the Ministry of Defence fire service will be privatised.
Under the Ministry of Defence's airfield services study project, the work of nearly 3,000 defence fire service and air support staff at about 100 military sites across the UK and abroad is potentially the subject of bids for a contract worth around £4 billion over 15 to 25 years. In Yorkshire, the bases covered by the Ministry of Defence fire service include RAF Linton-on-Ouse, RAF Dishforth, RAF Topcliffe, RAF Church Fenton, which is in my constituency, RAF Fylingdales and the US air force base at Menwith Hill. As I said, the bases are scattered throughout the country. My hon. Friend the Member for Stafford (Mr. Kidney) has a base in his constituency, for example.
On 20 September this year—with impeccable timing—three private consortiums were invited to tender for the work of the Ministry of Defence fire service and associated support services. "Associated support services" may be an anodyne phrase, but it means tanker drivers, mechanics, vehicle technicians and refuellers—the very people upon whom our pilots rely for their lives and whose sense of public service, professionalism and patriotism we all too often take for granted.
The origins of this sorry situation go back to the late 1980s, when a major study was undertaken to review the Ministry of Defence fire services. The study recommended that the existing Navy, Army and Air Force departmental services should be rationalised into one fire service under central control. The trade unions, led by the Transport and General Workers Union, backed the proposals in full, showing great farsightedness; it was a failure of management not to implement them. At the time, the total concept was resisted by the management of the three services, principally because it was believed that commanding officers should retain control of their own fire service personnel. Partial rationalisation followed, in the form of a renamed Ministry of Defence fire service with common technical standards and training. However, each service continued to manage its element of the fire service in different ways, to suit its service culture. Duplication inevitably occurred—the very reason the trade unions had argued for a unified structure in the late 1980s.
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Parliamentary answers to my hon. Friend the Member for Thurrock (Andrew Mackinlay), who has taken a particular interest in the subject, show that in 1995 the then Government initiated a feasibility study to look at the viability of privatising the provision of airfield support services to the Ministry of Defence worldwide. The new Labour Government received the report, which indicated that there was, not surprisingly, significant private sector interest in the idea. Further work continued. Some negotiations with the trade unions were held, and in September this year, with no statement of any kind to the House, invitations to tender were issued.
I have much respect and regard for right my hon. Friend the Minister of State for Defence. I cannot imagine that he has ever got up in the morning with privatising the jobs of Ministry of Defence firefighters at the top of his agenda. When I first heard about the issue, I thought that perhaps he was faced with a recalcitrant work force who refused to contemplate change, put safety and security at risk by their inefficiency, and gave public service a bad name, and that in those circumstances he had to contemplate drastic change. However, the truth is that his work force has been crying out for change and modernisation for a decade.
I repeat: the work force has backed far-reaching change in the defence fire service in the 1980s and more recently, the trade unions and the stakeholders—the defence fire service management, the lieutenant colonels and the wing commanders—have got together and produced the Ministry of Defence "Fire Study 2000", which shows clearly how to cut costs by 20 per cent. and retain the fire service as a true public service in the public sector. The study states:
"This report identifies that, although previous reports have proposed changes for efficiency and effectiveness, reluctance to change has meant that all possible savings have not been realised... The Study Team proposes in this Report the creation of a new organisation—Defence Fire Risk Management Organisation—as an agency to be responsible for all fire risk management and fire support for military capability worldwide...The study team identifies that...there would be substantial cost savings (at least 20 per cent. per annum on current operating costs) through a leaner, more efficient structure, localised service provision, functional support direct to service providers with reduced travel and subsistence costs. There will be efficiency gains through multi-skilled personnel, reduced levels of management, effective IT and communication and personnel with devolved responsibility".
That is management speak, but staff who have given their working lives to the defence fire service and the associated services felt for the first time that their ideas for improvement were being taken seriously. The irony is that because the external tendering process has now started and will not be finished for a year or two, there is no start date for implementing the public sector solution outlined in the report. In the meantime, taxpayers' money is being wasted and best value set aside.
There are three elements to the airfield support services project: first, the procurement of equipment in which the trade unions are happy to embrace private sector involvement; secondly, the defence fire service where a robust public service comparator has now been established; and, thirdly, all other support services. Under the chairmanship of Wing Commander Bob Waldegrave, who initially met the trade unions at Transport house—I do not know whether it was over beer and sandwiches. An intense effort was made to

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identify future inefficiencies to provide the most efficient and effective in-house support service for the Ministry of Defence. The Ministry set a deadline of 2002 for the work, which is unrealistically tight and restrictive; it will not allow enough time for a robust public sector comparator to be established for the support workers, whose jobs I mentioned earlier and who are outside the defence fire service. The private sector has had five years to put its case together and it seems strange to go out to tender before a complete public service comparator is available.
What is to be done? I paraphrase the Ministry's line. which is, "We've started so we'll finish. We will only privatise if there is demonstrable value for money and if operational effectiveness is not affected. It is too early to say what the outcome will be." But operational effectiveness cannot be guaranteed in a contract, no matter how clever the lawyer. Operational effectiveness in the military and, crucially, its support services, depend on men and women being prepared to go the extra mile, to set aside their own interests and to be flexible out of loyalty, duty and patriotism; men and women who have a clear sense of belonging to the organisation that they work for and are part of, not that to which their boss is contracted or subcontracted.
For example, the defence fire services currently provide free cover to support the civilian services in counties such as my own—North Yorkshire. That is particularly valuable in a big rural area. Last year, during the floods in York and Selby, crews from the Church Fenton station spent hour after hour trying to assist local people. Moreover, in the past two years, parliamentary answers reveal that defence fire service personnel have been deployed overseas 91 times on military operations and exercises. Perhaps firefighters from a privatised force would have to go overseas as part of their contract; however, Darren Gribben, a firefighter recently returned from several months' service in Kosovo, said:
"I was proud to serve in the hostile conditions of war-torn Pristina, but I would be unsure of returning under a privatised service."
I believe in the power of the public service ethos. It should be constantly tested and probed, but it should always be acknowledged out of respect for those for whom it is a driving force. I hope that the Government would prefer to have an efficient and modern defence fire service in the public sector. If not, some will ask what are our limits. They will want to know whether the Government will consider privatising the whole fire service.
Three consortiums are bidding to win the contract under offer which, remarkably, will be for between 15 and 25 years; however, the media and politicians have only just started scrutinising them. One consortium, Logicair, includes Serco, whose safety record was criticised when it bid unsuccessfully for the civilian air traffic control service. All three consortiums are considering drastic job cuts.
On grounds of safety and security, in light of all recent circumstances and of the services' efficiency plans, the Minister should today remove the threat of privatisation from the defence fire service. He should also announce an extension of next February's deadline to allow those
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working in associated support services—they, too, have served our country well—a chance to get their act together, so that a fair public sector comparator for their work can be established.
12.41 pm
Angus Robertson: I start by praising the hon. Member for Selby (Mr. Grogan) for securing today's debate. It is timeous and necessary. I also thank him and the Minister for allowing me to speak. Knowing that time is short, I shall be brief.
Like the hon. Member for Selby, I have strong concerns about the proposed privatisation, not least because my constituency contains two of the most significant Royal Air Force bases in the United Kingdom—Lossiemouth and Kinloss. Many of my RAF constituents have raised the planned privatisation with me, and I voice those concerns today.
I share the view of the hon. Member for Selby that the proposals are misguided and ill timed. In the short time available to me, I shall raise also a number of other matters. The concerns expressed by the hon. Gentleman are shared by Moray trades council, which has written to me on the subject, the Transport and General Workers Union and the Scottish National party.
I wish to raise several questions with the Minister: I hope that he will be able to respond. Many of the firefighters at RAF Lossiemouth, whose morale is at rock bottom, are extremely concerned about back-fill—the ability to bring in extra firefighters to cover changes in the category of planes that use those bases. In general, Tornadoes operate from RAF Lossiemouth, but an increasing number of VC10s and Tristars now use it. Those planes are large and have heavy fuel loads, and their status for firefighting goes from category 4 to category 7. The base also has squadrons on detachment, and there is flying every day.
Will the Minister confirm that squads at RAF Lossiemouth will be reduced from seven to six? I would be keen to hear his views on how airfield commitments can be met with fewer men. I wish also to bring to his attention the fact that morale is at rock bottom. Is he not concerned about the safety implications?
Lastly, I wish to speak of some specific measures that were incorporated in the minutes of the local works Whitley council, which met on 28 September. It noted that RAF Lossiemouth is to be re-categorised as a category 3 station and that its four firefighter crews will be
"reduced from 7 to 6...However, the Command Fire Officer at the time"—
who is named in the report—
"stated in writing that these figures did not include crew commanders, only the operational firefighters."
The report adds that the person in question has, however,
"now retired and Command Fire has not subsequently substantiated his statement. It transpires that the revised manning figures do include crew commanders and are now enshrined in Joint Services Publication 426."
The document adds that
"the Trade Union side wished to record its dissent over the deceitful and underhanded way in which this issue has been handled."

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I should be grateful if the Minister could deal with those matters.
12.45 pm
The Minister of State for Defence (Mr. Adam Ingram): I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate on the future of the Ministry of Defence fire service and providing the House with an opportunity to discuss a subject that is important to him and to other hon. Members. Many have raised issues with me by way of parliamentary questions and other means.
Some emotive language has been used, and I understand why, but I want to remove some of the emotion from the debate, not because I cannot become as exercised as other hon. Gentlemen about the valuable and important service performed by the staff in question, but because we need to think about the matter in a logical, reasonable and structured way. It is better, therefore, that I define the work that is being undertaken in the Department that has clearly given rise to the debate.
Two separate but interlinked work streams are under way in the Department: the airfield support services project—known as ASSP—and "Fire Study 2000". I want to explain their key features to put them in context. The ASSP is investigating whether a public-private partnership would be the most viable and cost-effective way of providing airfield support services to the Ministry of Defence worldwide without compromising operational effectiveness or safety. That final phrase is, of course, crucial and nothing that is done will detract from operational effectiveness or safety.
Fire cover is an important element of ASSP, but we are considering the full range of airfield support services: aircraft fuelling, movements and air cargo handling, airfield clearance, which includes sweeping and snow and ice clearance, and other more general aircraft services such as towing, water, waste and lifting services. The ASSP approach came out of "Front Line First", where specific defence cost studies suggested that airfield support had potential to yield efficiencies, possibly by public-private partnering. Indeed, a number of multi-activity contracts—private contractor arrangements—have been in place at RAF airfields for some years. It is now intended through ASSP to draw together the experience and lessons learned from running those contracts and to consider whether one overarching contract encompassing all the necessary services would provide the best value for money. It is a tri-service, defence-wide project. All the key stakeholders have been involved, as we tried to ensure that, if it proceeds, ASSP provides the right service and outputs.
In September we issued an invitation to negotiate to three consortiums, inviting bids against the statement of requirement. Hon. Members and the trade unions were informed that the invitation to negotiate had been issued. Bids for 15 and 25-year terms are invited. The three bidders involved— Airside, Approach Services and Logicair—are companies that already run multi-activity contracts at many Ministry of Defence airfields. They are not new to the territory, and the concept that we are examining is not a new one. Existing multiactivity contracts already include fire cover—fire cover is not separate—for a number of the RAF stations and airfields, so this is not an unprecedented step into the unknown.
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In terms of the next stage of the project, bids are due back by the end of February 2002. There will then be a comprehensive and detailed evaluation before the next major decision stage, which is planned for the end of 2002. If the ASSP is judged to offer the best way forward, and I stress that no decision has been made—this is not top and tail and there are no preconceptions about the outcome—we would then announce a preferred bidder with a view to letting the contract in late 2003. The new service would be implemented in a rolling programme during 2004. That is the background to the matter and the time scale that could apply if a preferred bidder was chosen and we decided to proceed on that basis.
Entering this process by issuing an invitation to negotiate does not mean that a PPP solution is inevitable. There is still a lot of work to be done before any final decisions are taken about the preferred solution. I want to return to some the issues that were raised relating to the ASSP project in a moment, but I would like to turn now to "Fire Study 2000", which is a separate issue running concurrently with the ASSP.
The Ministry of Defence fire service is a large and complex organisation based both in the UK and overseas. The service covers some 108 operational fire stations and employs some 1,320 civil servants, 673 RAF firefighters, 450 Royal Navy aircraft handlers, 422 contractors and 263 locally employed civilians at overseas stations. In addition to their regular duties, it has also made its expertise available in areas of tension across the world including, at the present time, in the Balkans. My hon. Friend the Member for Selby referred to that role.
Although we recognise the fire services' outstanding record of service, it became clear in the late 1980s that a rationalisation of the Ministry of Defence fire service structure was overdue. A major review was undertaken at that time, which recommended that the fire services of the Royal Navy, the Army and the Royal Air Force should be rationalised into a single fire service under central control. Although the proposal was embraced by the fire services themselves, other concurrent organisational changes within the Department meant that some important aspects of the rationalisation did not go ahead. I agree with my hon. Friend the Member for Selby that that was an opportunity lost, and not because of a lack of commitment from the work force at the time.
Following the over-arching strategic defence review undertaken by the Government in 1998, it was clear that the structural problems of the defence fire service had not gone away and that a fresh study was needed. A major review known as "Fire Study 2000" was accordingly launched in January 2000 with a remit to review the current organisation and operation of the defence fire service and develop an optimum strategy for meeting the Department's current and future requirements for fire risk management in times of peace, crisis, and war.
The first stage of "Fire Study 2000" was completed in July of this year and the second stage, involving a more detailed financial appraisal, is due to be completed by the end of December. The proposed future organisation embraces all fire safety support services required by the MOD and comprises a single

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totally integrated organisation that provides opportunities for a more effective and efficient organisation delivering improved value for money.
Mr. Geoffrey Clifton-Brown: Does the Minister accept that one of the support services for the defence fire service is training? Is he aware that the fire service college in Moreton-in-Marsh provides high-quality cost-effective training? Will he consider carefully whether defence fire service staff could receive their training at that college?
Mr. Ingram: I shall take those comments on board. I accept the point that training is an important aspect of how any defence service is delivered at airfields and elsewhere and I shall write to the hon. Gentleman about the point that he raised.
By explaining the two strands of examination, I want to point out the clear relationship between ASSP and "Fire Study 2000". We must be driven partly by the desire to ensure that all that we deliver is as efficient as possible. The public sector comparator—an essential aspect of the public-private partnership scheme that we envisage—must be as taut and well constructed as possible. It should inform the overarching examination of the delivery of service at our airfields. "Fire Study 2000" informs the public sector comparator, so it will help to provide a robust comparator against which we can judge the bids. That seems a sensible approach. I would like to hear any dissent from that—any logical argument against trying to ensure that maximum efficiency is brought into play and that we exercise our best minds to ensure best value for money in all aspects of service delivery.
My hon. Friend the Member for Selby and I have commented on the trade union commitment overall, in terms of approaches to study. The trade unions are heavily engaged in developing the public sector comparator. I want to compliment them on their close examination of the subject. However, that does not mean that we then assume that the private sector can necessarily provide the right level of service and best value for money. The next step, logically, need not follow. Similarly, we cannot assume that the existing service necessarily offers best value for money to the taxpayer.
We are dealing with a big organisation with huge inefficiencies that have been identified time and again, and have not been tackled in the past for reasons that we
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need not discuss. Now we are tackling them in a logical and coherent way. We have to test the market and then assess the bids. We should not refuse to consider what the market can provide, and we must recognise the fact that the market is already in place through several schemes linked to the overall delivery of service. We should see what they can do to ensure best value for money.
Angus Robertson: Will the Minister use his limited time to answer one or more of the questions that I asked him?
Mr. Ingram: The hon. Gentleman wears on his sleeve great concern about what is happening in his constituency, but his party would probably close down the activity of bases in Scotland. It is opposed to NATO and the defence posture of our country. I am trying to deal with the main issues raised by my hon. Friend the hon. Member for Selby, who secured the debate. I will deal with the questions posed by the hon. Member for Moray (Angus Robertson) in writing, because sufficient time is not available. As ever, we have to make do with the time available.
We are simply guaranteeing the safety and security of all services delivered at the airfields. There is no privatisation initiative. The allegation that we are privatising the Ministry of Defence fire service will not stand up to an examination of the explanation that I have given. Jobs will not suddenly be cast aside. Many protections will be put in place to maintain the jobs of the civilian staff who provide the service. My hon. Friend accepted that the unions recognised the need to ensure a rational approach, so that there is a logical development. Overall employment plays a part in the equation on efficiencies. Everyone is facing up to the need to tackle the problem constructively and responsibly.
The two studies being conducted on two strands are closely interrelated. However, our overall strategy will be to ensure that operational effectiveness and the safety of our armed forces are never put at risk. Those services exist to provide that safety, albeit with armed forces personnel as part of their delivery. We recognise the important role played by those who deliver the services. but we must get value for money from them. We must regard every penny as having the value of a pound.
Mr. Mike Hancock (in the Chair): Order. I ask hon. Members and others who are not staying for the next debate to move quietly and quickly out of the room.

Skegness and District Hospital
1 pm
Mr. Mark Simmonds: I am grateful to Mr. Speaker for granting me the debate and to you, Mr. Hancock, for allowing me to start so promptly. I also thank the Minister for being here to reply to the debate. There have been several similar debates during the past few weeks and I anticipate that she will be kept busy responding to further debates in the forthcoming months as health care in the United Kingdom continues to decline and deteriorate.
There are only two hospitals in my constituency: Pilgrim hospital, in Boston, which is the main one, and the community hospital in Skegness. The two hospitals are approximately 22 miles apart and are connected by a poor road, requiring a 25-minute journey by car and a 35 to 40-minute journey by ambulance. The town of Skegness is growing, and the inherent population is now some 18,000. The town has doubled in size since Pilgrim hospital in Boston was built. Many people retire to Skegness, especially from the former coalfields of the midlands, and some of them require continuing medical treatment.
Skegness is also a strong tourist destination. Hundreds of thousands of people visit the town and its immediate surrounds each year. It is no longer just a summer destination—it is visited irrespective and in spite of the weather. Butlins holds 8,000 to 9,000 people at a time and is open almost all year round. The enormous population fluctuations that used to occur are now more evenly spread throughout the year.
I am concerned about the future of Skegness and District hospital for my constituents and for those who spend their holidays in the area. With the creation of the primary care trusts and, in particular, the establishment of the proposed East Lincolnshire primary care trust from 1 April 2002, the transfer of Skegness community hospital is inevitable. It will be the responsibility of the primary care trusts to develop the future strategy and level of provision of health care. It is essential that all medical staff work with colleagues in the community, including community nurses, social services, the voluntary sector and most importantly the users, and take note of their views and concerns. I have no issue in principle with the responsibility, provision or level of health care being entrusted to the medical professionals in east Lincolnshire, with local clinicians and managers ensuring that the local services reflect the needs of the local community. That is apparently one of the thrusts of the Government's National Health Service Reform and Health Care Professions Bill.
I understand that the transfer of Skegness community hospital to the proposed primary care trust is to take place on 1 April 2003. An enormous amount of work must be done, and the purpose of this debate is to ensure that sufficient funding and importance of service are attributed to enable the hospital to remain open and guarantee that there is no diminution of service provision for the people of Skegness and its visitors. Current service provision at the hospital provides two wards, X-ray, physiotherapy, a day unit, out-patients and an accident and emergency department. It is my duty to represent all my constituents, to convey their concerns and to ensure the provision of top-quality health care.
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I will refer specifically to some matters. First, the accident and emergency department is an essential prerequisite for any thriving town, especially one with such an enormous and growing tourist population. I have heard medical professionals talk about the best geographical location for accident and emergency services, and the implications of that need not be spelled out. The best location is and must remain Skegness, even though it would still be managed by the United Lincolnshire Hospitals trust under the new proposals.
Second the general thrust of the proposed primary care trusts is to provide modern surgeries that are accessible, particularly by car. That is admirable, but the poor car parking facilities at the Skegness community hospital are not at the apex of the agenda for the town's many elderly retired people who have no alternative to public transport. New surgeries tend to be in fringe or out-of-town locations, so a centrally located hospital is a must. Primary and intermediate care must complement and be in addition to services in Skegness hospital—it must not replace them.
Thirdly, the two existing wards have 39 beds, 15 of which are GP led and 24 of which are consultant led. It is feared that those could be used solely for general practitioners under the proposed primary care trust. That would not allow consultants to transfer patients back to Skegness from Boston's Pilgrim hospital for aftercare treatment. That could cause further bed blocking and exacerbate already difficult problems, lengthen already unacceptably long waiting lists and increase cancellations of operations. Furthermore, if the proposed primary care trusts ran short of money, an obvious saving could be made by shutting a ward and using fewer beds. What safeguards will the Government put in place to ensure that that will not happen?
Fourthly, I am concerned that consultants' clinics and out-patient departments might be moved away from Skegness to Boston under the proposed primary care trust. That is a concern particularly because of the terrible shortage of consultants in Lincolnshire. In one recent example, the United Lincolnshire Hospitals trust had to stop the portable breast screening service because of consultant shortages. There is also an ever-worsening shortage of general practitioners—indeed, the Government's figures suggest that there were 19 GP vacancies in Lincolnshire in 2000 and 49 this year. There is a similar problem with nurses. If there is to be any improvement in service provision, staffing levels must be improved throughout. The cost of moving the outpatient department would be enormous both financially and in terms of the health of the people of Skegness.
There is an ever-growing trend in the national health service to specialise. That is understandable given the enormous cost, for example, of providing a specialist cardiac department. However, there must be scope to provide a general level of service in a community, and the Government are ultimately responsible for that.
The safety of nursing staff is not an issue that is unique to Skegness or Boston, but it concerns many of my constituents. Skegness hospital was recently broken into during the night, staff were attacked and knocked to the floor and patients were robbed. We all know that that is an unacceptable state of affairs, and I ask the Minister to make additional resources available for security and staff safety in the hospitals in my constituency. If that is not the Department of Health's responsibility, will she

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assure me, as the representative of the dedicated health professionals in my constituency, that she will speak to her counterpart in the Home Office or wherever else the funding comes from to secure that extra funding?
In conclusion, I want health care provision in Skegness to be improved and widened to allow more patients to be treated nearer their homes, particularly because we have an ever-increasing and ageing indigenous population and an ever-increasing number of tourists. Neither I nor my constituents will be happy if Skegness hospital is turned into a glorified surgery under the proposed primary care trust. It is a hospital and must remain one.
Skegness hospital is a good, well used, well established and modernised hospital that must be maintained. Will the Minister give an assurance and an unconditional guarantee that sufficient emphasis will be placed on maintaining Skegness hospital in its totality, without any diminution of service provision? Delivery of a satisfactory level of health care is ultimately the responsibility of the Government.
1.10 pm
The Minister of State, Department of Health (Jacqui Smith): I congratulate the hon. Member for Boston and Skegness (Mr. Simmonds) on securing this important debate on the future of Skegness and District hospital. I am aware of some concerns among local people in the hon. Gentleman's constituency, as he ably outlined, about the future level of provision at the hospital. I reassure them and him that they need not fear for the future of what is an excellent community hospital: there are no plans to close or to downgrade it.
Skegness and District hospital dates back to 1913 and, as I am sure the hon. Gentleman will agree, has served its residents and the summer tourist population as a community hospital admirably since then. It has been part of the United Lincolnshire Hospitals NHS trust since April 2000, when all the acute hospital trusts in the Lincolnshire health authority area merged. As I am sure the hon. Gentleman is also aware, that was a merger of management teams rather than a reconfiguration of services. As a result, management costs have been reduced with no consequent detriment to services.
As the hon. Gentleman said, Skegness and District hospital currently provides 39 in-patient beds, 15 of which are GP run and 24 of which are consultant-managed medical beds. I will come to the issue of the primary care trust management but I assure the hon. Gentleman that there are no proposals to change the balance or use of those beds. The hospital also has X-ray, physiotherapy, out-patients, and day unit facilities and services and an accident and emergency department. As a thriving community hospital, Skegness dealt with nearly 25,000 accident and emergency attendances and almost 500 admissions or transfers into the hospital in the last financial year.
As the hon. Gentleman acknowledged, the accident and emergency department in particular experiences peaks in demand at certain times, particularly in summer with the influx of tourists, although those seasonal differences have decreased over recent years.
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Routine discussions are, therefore, held regularly between the United Lincolnshire Hospitals NHS trust, Boston and Skegness primary care group, Lincolnshire social services and Lincolnshire ambulance and health transport service NHS trust to ensure that accident and emergency services continue to be provided in the most appropriate manner to best meet the needs of the patients who use it.
For some time, some patients have been stabilised at Skegness hospital and then transferred to Pilgrim hospital, Boston, if their condition has allowed that. A clinical working group at the United Lincolnshire Hospitals NHS trust has just begun the process of formalising protocols that will enable ambulance personnel to identify patients who would be better taken directly to Pilgrim hospital. This might include people seriously injured in road traffic accidents or who need specialist diagnostic facilities such as CT scans. On current numbers, that might mean that up to 10 people a day who would previously have been transferred to Pilgrim hospital following stabilisation at Skegness could be taken there directly, thus speeding up their treatment.
The purpose of the proposals is to maintain the accident and emergency services at the hon. Gentleman's local hospital. In the past 18 months, the Government's commitment to the national health service has translated into leading—edge service developments at the hospital. The most obvious example of that is the introduction of thrombolytic treatment by paramedics prior to arrival at the hospital. Since it was introduced in July 2001, ambulance paramedics have been liaising directly with hospital doctors at Skegness in order to administer clot-busting drugs that give patients with suspected heart attacks the best possible chance of a successful outcome. That is on top of the fact that Lincolnshire ambulance service is consistently meeting its eight-minute response time targets in 75 per cent. of category A emergencies.
A telemedicine project in the accident and emergency department at Skegness means that more complex cases can be dealt with locally through the telemedicine link with specialists at the neighbouring acute hospital in Boston. Additional services have been added on to dovetail with accident and emergency services, such as the development of care pathways for cases of fractured neck of femur and heart attacks. Nurse practitioner training continues, and a weekly fracture clinic has been introduced.
The out-patient department continues to provide the local community with a comprehensive service, and it is always keen to create new opportunities for improving services in conjunction with its partners. Examples of that include the addition of a home blood pressure monitoring service and the introduction of the Lincolnshire visual impairment service to consultant ophthalmology clinics. This means that trained volunteers can provide patients with extra information and support on their conditions, and the benefits and aids that are available.
There are many other recent examples of improved and increased service provision at Skegness hospital. The important point is that this is indicative of a thriving hospital, with excellent services and a clear commitment

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from everyone in the health and social care community to continue the current level of those services at Skegness hospital.
It would appear that some local concerns about the future of Skegness hospital relate to the proposed formation of East Lincolnshire primary care trust from 1 April 2002. Under these proposals, Boston and Skegness primary care group and its counterparts in neighbouring East Lindsey and South Holland will, subject to the approval of my ministerial colleagues, come together to form East Lincolnshire PCT.
Public consultation on these proposals took place between 11 June and 10 September this year. The proposals were supported by the health community, local community health councils, Boston borough council, Lincolnshire county council and the vast majority of general practitioners, nurses and members of the public.
Within those proposals, and as detailed during the thorough public consultation, it is planned to transfer the day-to-day management of the community hospital in Skegness from United Lincolnshire Hospitals NHS trust to the East Lincolnshire primary care trust. However, that will not take place until April 2003, to ensure that this transfer of management responsibility to the PCT will not disrupt services, staff or patients. This has always been a top priority of the local PCT development board.
If approved, East Lincolnshire PCT will be able to commission services such as acute hospital care and directly provide community health services through its community hospitals from April 2002. It will also be able to provide health visitor services and district nursing services, so that there will be greater opportunity to integrate primary and community health services within one organisation for the benefit of local patients. Although the proposals would mean that East Lincolnshire PCT would take the lead in developing any future strategy for Skegness hospital, this will be in partnership with acute and mental health trusts.
Out-patient facilities will continue, there will be further development of intermediate care services, which will be important for the older constituents whom the hon. Member for Boston and Skegness mentioned, and there will be a new range of minor surgery procedures available based on the skills of local general practitioner specialists. Crucially, it is planned that accident and emergency provision will continue at Skegness hospital. It will be managed by the United Lincolnshire Hospitals NHS trust to continue to meet the needs of both the local and the holiday population of Skegness.
The primary care trust's vision for Skegness hospital also includes the development of a model of care that will facilitate the complete integration of community and intermediate services for the older population in particular. That will include in-patient day care with access to day hospital services, care in nursing or residential homes and the provision of care at home.
I am sure that the hon. Gentleman agrees that in a user-centred service, particularly for older people, the emphasis of primary care trusts on both modernisation and local determination of the needs of patients will be important. It is clear, therefore, that any developments in Skegness will be designed around the needs of patients
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with services that can be delivered and managed locally in accordance with local needs and for the direct benefit of patients in and around Skegness.
To alleviate any concerns that the hon. Gentleman may still have, the United Lincolnshire Hospitals NHS trust board has publicly made a commitment to have community focus groups or even a citizen's panel in any future discussions of the pattern of services. Any significant planned changes to service provision down the line would be subject to full public consultation and the Department of Health would monitor any changed processes to ensure that they are carried out properly in line with national policy and established rules on public, patient and stakeholder involvement.
The hon. Gentleman placed his concerns about Skegness hospital in the context of the Government's overall approach to supporting the NHS. We have set out our plans for investment and reform of the NHS. In March 2000, my right hon. Friend the Chancellor of the Exchequer announced the biggest ever investment in the history of the NHS. This unprecedented investment will allow the NHS to grow by one half in cash terms and by one third in real terms in just five years. That additional resource will fund extra investment to benefit every part of the health service. The NHS plan announced by my right hon. Friends the Prime Minister and the Secretary of State for Health on 27 July 2000 is the most fundamental and far-reaching programme of reform in the history of the NHS. Most importantly, within the NHS plan is the recognition that future care and treatment must be redesigned around the needs of patients. The investment, coupled with the plan for reform, will provide 7,000 extra beds in hospitals and intermediate care, more than 100 new hospitals by 2010 and 500 new one-stop primary care centres. There wi0ll also be increased investment in staff with more consultants, GPs and nurses in addition to the increased number of nurses and doctors that the Government have already provided in the NHS.
I take very seriously the point made by the hon. Gentleman about staff security in Skegness hospital. I understand that the incident was an isolated one, nevertheless, it is absolutely clear that staff in the NHS must be able to work without fear.
Mr. Simmonds: I should like to clarify the matter. The Minister is correct in saying that the recent incident at Skegness hospital was an isolated one. However, nurses' representative and nurses I have met from Pilgrim hospital, Boston are worried about the constant stream of not only verbal abuse, but often physical abuse, particularly in the accident and emergency department late on Friday and Saturday nights. It is not consistent throughout the week, but it is a matter that I should like the Minister to address, in the future if not now.
Jacqui Smith: The hon. Gentleman makes an important point and my right hon. Friend the Secretary of State has already announced the NHS zero tolerance campaign on violence against staff. Trusts will be able to prosecute people who are violent towards our NHS staff and I assure the hon. Gentleman that we are taking the matter very seriously.

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The Government and the local NHS are implementing developments locally and nationally to ensure that the future and the services of Skegness hospital are secure. The hospital will benefit from the Government's reform of the NHS and the extra investment that will ensure that the needs of the hon. Gentleman's constituents are at the centre of developments.
I thank the hon. Gentleman for giving me the opportunity to debate the development of the NHS, which is an important matter for his constituents and more widely. Given his earlier comments, I look forward to plenty more opportunities in the House to outline the Government's progress on delivery in the national health service.
Mr. Mike Hancock (in the Chair): As the Minister is not yet present for the concluding Adjournment debate, our proceedings will be suspended for a couple of minutes.
1.23 pm
Sitting suspended.

East Coast Main Line
1.26 pm
Mr. Mark Lazarowicz: I am pleased to have secured today's Adjournment debate because it allows me to raise a matter that is of particular significance to my city, my constituency and many other communities situated on the east coast main line, and is also of national importance.
As hon. Members will know, in terms of both passenger and freight transport the east coast main line is one of the most heavily used lines in the country. Perhaps not unsurprisingly, the line is operating at or near to full capacity. As with other services, increased demand for passenger and freight services in recent years has stretched the line to its limit and exposed a number of structural weaknesses, such as overhead power lines that are in need of remedy. As the Minister, will know, the matter has been the subject of several recent parliamentary questions.
I know that the Government are committed to upgrading the east coast main line, and I welcome that, but today I want to raise several concerns about the short-term extension of the franchise. As hon. Members will know, earlier this year my right hon. Friend the Secretary of State for Transport, Local Government and the Regions announced that the Government favoured a two-year extension to the current franchise, rather than the longer-term franchise that was originally envisaged. I share some of the worries about granting a two-year franchise, and I shall return to them briefly later. Having said that, I can appreciate why my right hon. Friend decided to ask the Strategic Rail Authority to proceed on the basis of a two-year franchise, and I do not wish to argue against that decision in principle. Instead, I want to express my view that a short-term franchise extension should not result in a freeze on improvements to east coast main line passenger services for Scotland in general and Edinburgh in particular.
Hon. Members might recall that when the Secretary of State invited the SRA to negotiate extension of the existing franchise, he set out a number of new passenger benefits that he wanted to emerge from those negotiations. According to the press release, those benefits should include a service every 30 minutes from London to Leeds, early placement of orders for a new fleet of inter-city trains, improvements to existing rolling stock, early investment in station improvements, for example at Doncaster and York, and a range of other potential benefits, including spare locomotives to improve service reliability.
Those are all admirable objectives. However, my concern from a constituency perspective is that the bulk of the benefits will be enjoyed by those using the more southerly sections of the line. Improvements to the London-Leeds services and at Doncaster and York were mentioned, but nothing was said specifically about improvements to services to and from Scotland or the north-east of England, or about long-awaited station improvements such as those required at Edinburgh Waverley. The apparent concentration of benefits on the more southerly sections of the line in the requirements for the franchise negotiation is paralleled by the fact that the first two phases of the infrastructure upgrades will feature improvements at Leeds, Peterborough and King's Cross, but not further north.

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I appreciate that improvements at any point on the line have benefits elsewhere on the line—for example, more trains on the London-Leeds service will benefit services running further north by providing extra capacity. I also acknowledge the references to new investment, namely a new fleet of inter-city trains and spare locomotives.
Notwithstanding the promised improvements, I am concerned that the basis on which the SRA has been asked to negotiate the two-year franchise extension is too limited and that consequently services to Edinburgh, the east coast of Scotland and the north-east of England will not be improved over the next three years as they should and could be. I ask my hon. Friend the Minister to consider some specific ways in which the negotiations on the franchise extension could be widened to bring benefits to the communities on the northern section of the line. I shall outline a few suggestions that are supported by a body of opinion in south-east Scotland and beyond.
First, we need a faster service with fewer stops between London and Edinburgh. Cutting out some stops should be possible, given the new half-hourly service from London to Leeds and the additional services that Virgin Cross Country is beginning to provide on the northern section of the route.
Secondly, we want guaranteed journey times of four hours or less from London to Edinburgh on as many trains as possible, preferably all. Shorter journey times are needed to compete to any greater extent with air travel, and reliability and consistency are also important, especially for business passengers.
Thirdly, we need to increase the frequency and consistency of the journey time of trains running from London to Newcastle and Edinburgh. That would allow for greater consistency of departure times and, perhaps more importantly, arrival times at Edinburgh. Arrival and departure times should, as far as possible, remain consistent throughout the day in summer and winter timetables and from one year to the next. As well as bringing benefits to the inter-city traveller, that would have the knock-on effect of making it easier to plan local train services on the basis of inter-city timetables. Another advantage of a more fixed timetable is that it would enable the scheduling of more local trains on the tracks south and east of Edinburgh.
Finally, we need improvements in track capacity in the Edinburgh area. That is important for long-distance services, not only for Edinburgh, but to serve cities and towns further north such as Dundee and Aberdeen. Track capacity improvements also allow for improvements to suburban rail services in the Edinburgh area, for which the city council and the Scottish Executive have ambitious plans.
All those improvements could be included in the short-term franchise extension, and I urge Ministers to consider asking the SRA to include them in the negotiations with the franchise holder.
As the Minister will no doubt be aware, a rail capacity study is under way in central Scotland, but it seems to be proceeding at a snail's pace. The lead body is the Scottish Executive, but I urge the Minister to do what he can to ensure that the study is completed as soon as possible. I have little doubt that the study will also recommend capacity enhancement. I ask the Minister to
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ensure that the Strategic Rail Authority takes early steps to begin the enhancements identified in the study, rather than waiting until the end of the two-year extension of the franchise before making any commitment recommended by the study.
I ask the Government to ensure that the SRA takes steps to ensure that the promised early placement of an order for a new fleet of inter-city trains is carried out, by including some funding or guarantee, if that should be required. Some in the industry suggest that the current franchise holder will be unable to commit itself to such orders on the basis of a two-year extension and that the SRA will be required to make a purchase, or underwrite such a purchase, if the new trains are to be provided. I do not know whether that is correct and I appreciate that there will have to be tough negotiations on such matters with the franchisee. It is essential that the order for new stock is placed and I ask the Minister to do everything he can to ensure that that is done.
Hugh Bayley: I congratulate my hon. Friend on securing this important and timely debate. I agree with him about the importance of improving services to Scotland and the north-east of England, as well as to my constituency of York. New rolling stock is essential to such improvement because without additional trains we cannot have more services.
Mr. Mike Hancock (in the Chair): Order. The rules for debate allow only for short interventions in speeches by hon. Members, and a speech can be made only with the prior agreement of the Member and Minister concerned, and notified to the Chair.
Hugh Bayley: We had spoken about this beforehand, Mr. Hancock, but I shall be brief.
Does my hon. Friend agree that it would be sensible for the SRA to consider whether it is necessary to extend the franchise by a further one or two years to ensure that we get additional rolling stock?
Mr. Lazarowicz: My hon. Friend makes a valuable point. If the short extension already proposed were necessary to ensure the provision of new rolling stock, it would have much merit.
I ask the Government to reconsider providing direct passenger train links from Scotland and the north of England to the continent through the Channel tunnel. As hon. Members will be aware, such links were promised when the channel tunnel legislation went through Parliament but that promise was not fulfilled. Those of us who use the east coast main line regularly can enjoy the fine, new White Rose train service from London to Leeds in the trains that were originally built for the European service and that have now been leased to operate from London to Leeds by GNER.
In the present economic climate, and given the current contraction of the airline industry, the need for our tourist industry to have direct European links is stronger than ever. Although I appreciate that it is a separate issue from the east coast main line franchise, there is no better time to reconsider the possibility of acquiring such services and I urge the Minister to look at the issue.

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I shall to dwell a little longer on the two-year franchise extension rather than the granting of a longer franchise. I understand why the Government took that decision but it is essential that once the current restructuring of Railtrack and the rail industry and the strategic and regulatory framework is completed, the long-term strategic vision for the east coast main line must be clear. We need a 10, 15 or 20-year perspective, not just a five to seven-year one. That position of long-term certainty needs to be reached sooner rather than later. There is no need to wait until well into the term of a two-year franchise to reach decisions for the long term.
I know that the Government do not want a lengthy hiatus in decisions about the future upgrading of the east coast main line. I urge them to ensure that the negotiations for a two-year or perhaps slightly longer franchise extension, hopefully including the improvements to services to Scotland that I have outlined today, are brought to an early conclusion. Thereafter, the industry needs an early decision and a response to the Strategic Rail Authority's strategic plan when it is published. Like other hon. Members, I welcome the vision and commitment to the future of our rail industry shown in the 10-year plan and I want to see that vision resulting in concrete improvements in the long term. If we are to give travellers faith that the longterm vision will be delivered, we also need significant improvements in the short and medium term.
1.40 pm
The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions
(Mr. David Jamieson): First, I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) on securing the debate. I have had the pleasure of hearing him on a few occasions and, at the risk of embarrassing him, I must say that his contributions are well considered and well argued. He speaks well and powerfully for his constituents. I am delighted that my hon. Friend the Member for City of York (Hugh Bayley) is here. His interest in the subject that we are considering is well known.
You were in the Chair, Mr. Hancock, for our debate on Railtrack. I contrast the positive and inquisitorial way that my hon. Friend has tackled matters with the point scoring in the earlier debate. I am glad that my hon. Friend also recognises that the improvements on the line that benefit England also benefit his constituents in Scotland. At the outset, I reassure him that the Government remain committed to delivering a better, safer railway with increased punctuality and reliability, reduced journey times and higher standards of customer services. Our intentions are clear and our 10-year plan provides the mechanism to achieve our aim of 50 per cent. more passengers and 80 per cent. more rail freight over the next decade. The east coast main line is a strategically important route that will no doubt have a key role to play in achieving those targets.
As my hon. Friend knows, the east coast main line carries Britain's fastest passenger train service and also handles heavy bulk freight and mail trains. On an average day it caters for 1,900 passenger trains carrying 200,000 people. Yesterday it was 200,001 because I, too,
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was on the line, although not travelling as far as York. The latest figures, for the period from 24 June to 21 July, show that 69.9 per cent. of GNER's services arrived on time. Since those statistics were published, I understand from the Strategic Rail Authority that performance has improved over each of the last three months. I hope that that trend in service improvement will continue. The SRA will publish updated statistics in due course.
The spring 2001 national passenger survey revealed that 84 per cent. of GNER passengers were satisfied with their overall service. Only 52 per cent. were satisfied with the punctuality and reliability of services and a disappointingly low 38 per cent. of passengers believed that GNER offers value for money. My hon. Friend explained that the SRA is negotiating a potential two-year extension to GNER's east coast franchise. We are looking to the SRA to use the negotiations to secure improvements that will make a real difference to passengers' journeys, the need for which my hon. Friend articulated so well.
We want better rolling stock, refurbished stations and new services. New services are on the table but I cannot say today exactly what a two-year extension would deliver. In a single-tender negotiation such as this, it would be irresponsible of the SRA or Ministers to be wedded to particular outputs, regardless of the price. Whether a deal can be reached will ultimately depend on what is on offer. Similarly, I trust that the House would not expect me to weaken the SRA's negotiating position. There is potential value in terms of saving the taxes of my hon. Friend's constituents in setting a public deadline by which negotiations will be completed. We will not let them drag out indefinitely and good progress is being made. Passengers rightly demand improvements and, as my hon. Friend outlined, we want them to be delivered as quickly as possible.
I am aware of the accusations of short-termism generated by the decision of my right hon. Friend the Secretary of State to ask the SRA to negotiate a two-year extension to the franchise. I would therefore like to put the decision in context, which would be helpful to my hon. Friend. The Secretary of State could give the SRA the required direction to award a new franchise early if he were satisfied that there were particular benefits to be achieved. A 20-year franchise would have provided extra capacity through additional rolling stock and improved infrastructure. The costs and design of the east coast main line upgrade were therefore central to maximising the benefits of a long-term franchise. However, it had become clear that neither the design nor the cost of the upgrade was finalised. Indeed, SRA papers indicated that it could take a further two years to finalise.
My right hon. Friend the Secretary of State concluded that better terms with reduced risk for both parties were more likely to be achieved nearer the expiry of the current franchise, when the upgrade would be better defined. No one wanted a repeat of what happened with the west coast main line. He was also clear that benefits should in the meantime be obtained for passengers on that important route. That is why we believe that a two-year extension is the best way forward. It delivers investment quickly without prejudicing options for the longer term.

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The objectives of the east coast upgrade project are to provide for an increase in passenger and freight capacity between London King's Cross, Leeds and Edinburgh. I summarised earlier how busy the line is; it is clearly running out of capacity, and accommodating extra trains for both passenger and freight operators is not possible within the existing infrastructure. The proposed solution is to reduce the number of conflicting movements through infrastructure works at known pinch points and to use better parallel lines for freight. The SRA. which is working closely with Railtrack, continues to drive forward the upgrade project.
As recently as 14 September, a further £17.5 million of development work was provided for phase two of the upgrade. That has not been affected by the decision to put Railtrack plc into railway administration. My right hon. Friend the Deputy Prime Minister announced last April that we had reached an agreement with Railtrack that the east coast upgrade would be taken forward as a joint venture project known as a special purpose vehicle—an SPV. Special purpose vehicles bring together specialist project managers, private sector financiers, relevant train operators, the SRA and Railtrack to provide a specific major enhancement or project. They are also being developed for other projects such as the infrastructure elements of the south central franchise. The SRA will set out its proposals for SPVs in more detail in the forthcoming strategic plan.
I also assure my hon. Friend that the enhancement project for Edinburgh Waverley station will not be affected by Railtrack's current situation. I hope that that brings some comfort to him. Railtrack is working on a business as usual basis, and we have no reason to believe that that will change once its successor is in place.
I would like to comment on some of my hon. Friend's other specific points. He mentioned direct services through the channel tunnel to Scotland. The Channel Tunnel Act 1987 placed a duty on the British Railways Board to prepare and publish a plan for the provision of regional Eurostars. The board's original plan was published in 1989 and last year a revised plan was published following a review. The plan concluded that regional Eurostar services would make a heavy loss and that there were no economic, environmental or social grounds for providing a subsidy. The Transport Act 2000 requires the SRA to formulate a strategy relating to services in various parts of Great Britain for facilitating the carriage of passengers or goods by rail through the channel tunnel. The formulation of the strategy is currently under review.
My hon. Friend also rightly raised the matter of the two-year extension for the northern section of the east coast main line. I have noted with interest the list of improvements that he would like to be included in the franchise extension and I undertake to ensure that the SRA is aware of them. He will understand that I cannot commit myself to the improvements in this debate, but I will ensure that they are brought to the attention of the relevant parties.
There are two main reasons for that. First, negotiations have been under way for some time and are already working within established parameters. Shifting them now could significantly delay agreement on an extension. Secondly, and more importantly, the development of a railway timetable is a complex and long-term process. Making some of the changes that my
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hon. Friend suggests could reduce the capacity on the east coast main line and potentially conflict with our objectives of improving performance and reliability. I recognise my hon. Friend's concerns and I agree that he raises some real issues that the SRA will examine within the flexibility available to it.
On franchising policy, it may be useful if I set out our proposed new approach, which the Secretary of State announced in July. It focuses on key 10-year plan targets and aims to deliver early passenger benefits such as better performance, rolling stock and passenger facilities. It points to the possible alternative of shorter-term improvements that make a real difference to passengers by making existing franchises work better and, where necessary, improving or extending their terms.
Such short-term improvements sit alongside longer-term investment. It is not, as was widely reported, a short-term policy but a horses for courses approach. We are not precluding the early replacement of the shorter seven-year franchises, but that approach will be adopted only when benefits cannot be obtained in other ways. Neither does our approach rule out a long-term franchise for east coast services in due course. However, long-term franchises need to be tied to long-term investment and in the case of the east coast, that investment is most likely to take the form of the upgrade of the line.
We also issued for consultation new draft directions and guidance for the SRA. The draft sets the authority objectives that cover the need to improve standards of punctuality, safety and comfort throughout all franchise services and the much clearer and more focused approach to franchising that I have just mentioned. The consultation period ended on 21 September and we hope to issue the guidance and directions formally as soon as possible.
I am sure that I do not need to remind hon. Members that the Secretary of State appointed Richard Bowker as the new chairman of the SRA on 24 October. He will play a key role in delivering a better, safer railway. Under his leadership, the priorities of the SRA will include working alongside train operators to give passengers a better deal, implementing its strategic plan for the industry, increasing passenger numbers and the rail share of the freight market, and driving forward the £60 billion, 10-year rail investment programme.
I hope that my hon. Friend is reassured by the SRA's approach to balancing the short-term delivery improvement to passengers with the long-term needs of the east coast line. We are aware that much needs to be done. but we are moving in the right direction, as I am sure he agrees. The 10-year plan provides the investment and the mechanism to improve the national rail network and achieve our aim of 50 per cent. more passengers and 80 per cent. more freight over the next 10 years. The SRA's forthcoming strategic plan will set out its priorities for enhancing the network, and will identify improvements that can be achieved in the short term.
I am grateful to my hon. Friend for allowing us to discuss the subject, and I was interested to hear what he said. If he feels that any of his points have not been covered in the clarity or detail that he would like, I would be happy to correspond with him.
Question put and agreed to.
Adjourned accordingly at four minutes to Two o'clock.

TREASURY

  Customs and Excise
  Mr. Lidington
  To ask the Chancellor of the Exchequer what the average rate of sickness absence was in HM Customs and Excise in(a) 1999–2000, (b) 2000–01 and (c) 2001–02 to the latest date for which information is available. [9177]

  Mr.Boateng
  [holding answer 19 October 2001]: No accurate figures are available for the average rate of working days lost to sickness absence in 1999–2000 and 2000–01.

  The average rate of sickness from 1 April 2001 to 30 September 2001 was 4.6 working days.

  Terrorism (Financing)
  Mr. Howard
  To ask the Chancellor of the Exchequer if he will provide a breakdown of the expected cost to Her Majesty's Government over the current financial year of the measures to combat the financing of terrorism which he announced on 15 October 2001,Official Report, columns 940–42. [10009]

  Mr. Andrew Smith
  [holding answer 25 October 2001]: The costs of setting up the Terrorist Finance Unit are modest, but the benefits in terms of cutting off the resource available to the perpetrators of acts of international terrorism potentially immense.

  Impounded Vehicles (Smugglers)
  Mr. Laws
  To ask the Chancellor of the Exchequer on what legal basis Customs and Excise sell the impounded vehicles of individuals who have used them to breach their personal allowances for the importation of tobacco and alcohol. [12195]

  Mr. Boateng
  [holding answer 5 November 2001]: Where a vehicle has been used for the carriage, handling, deposit or concealment of anything liable to forfeiture, that vehicle is itself liable to forfeiture to the Crown under s141(1)(a) of the Customs and Excise Management Act 1979. Any such vehicle is forfeit once a month has passed and no appeal has been received, or where there is an appeal and the Magistrates find in favour of Customs and Excise. The Commissioners of Customs and Excise will dispose of forfeit vehicles on behalf of the Crown in the most efficient and cost-effective way.

  People travelling to the UK from other EU countries are entitled to bring into the UK, without charge, alcohol and tobacco which they have purchased tax-paid elsewhere in the EU, if it is solely for their own use. Customs do not enforce any absolute limits on such purchases, but travellers bringing in goods in excess of
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  the Minimum Indicative Levels, set out in EC Directive 92/12/EEC, may be required to satisfy Customs that the goods are for their own use.

  Mr. Laws
  To ask the Chancellor of the Exchequer how much revenue was derived from selling vehicles impounded by Customs and Excise because they were used to breach personal allowances for the importation of tobacco and alcohol; and how many of such impounded vehicles have been sold, in each year for the past four years. [12218]

  Mr. Boateng
  [holding answer 7 November 2001]: The information is available only in respect of the sale of vehicles seized for all types of Customs offences. The revenue from the sale of such vehicles for the last four years was:

  Year

  £

  1997

  43,075

  1998

  32,585

  1999

  120,261

  2000

  523,951

  The number of vehicles sold is not recorded.

  Mr. Gibb
  To ask the Chancellor of the Exchequer how many motor vehicles were seized on the grounds that they were being used for the illegal importation of spirits, wines, beer or tobacco products in 2000; and what the total proceeds of sale were. [13264]

  Mr. Boateng
  Customs record the number of vehicles seized for all Customs offences on a financial year basis. Figures for the number of vehicles seized in 2000–2001 were published in the Government's response to the independent report by John Rogues into "The Collection of Excise Duties in HM Customs and Excise" (House of Commons command 5329, July 2001), a copy of which was placed in the Library on 19 July.

  The total proceeds of sale from those seized vehicles which were subsequently sold in 2000 was £523,951.

  Departmental Underspending
  Mr. Bercow
  To ask the Chancellor of the Exchequer, pursuant to his answer of 30 October 2001,Official Report, column 642W, on departmental budgets, if he will provide a breakdown for each listed Department of the main items of intended expenditure that were not spent, comprising each of the annual underspend totals. [13201]

  Mr. Andrew Smith
  The allocation of budgets within Departmental Expenditure Limits is normally a matter for individual Secretaries of State. Under this Government's system of full End-Year Flexibility, unspent provision is available for use in future years. Departmental Appropriation Accounts break down outturn by section of the Vote.

  Mr. Bercow
  To ask the Chancellor of the Exchequer if he plans(a) to introduce corrective procedures for underspend of Final Department Expenditure Limit and (b) to examine the financial procedures in the (i) Department of Health, (ii) Department for Education and Skills, (iii) Ministry of Defence and (iv) Department for Transport, Local Government and the Regions. [13200]
  607W
  Mr. Andrew Smith
  Under this Government's system of full End-Year Flexibility, unspent provision can be carried forward by Departments for use in future years. This removes the incentive, which applied under previous arrangements, to use up budgets wastefully at the end of the financial year. The allocation and management of budget within Departmental Expenditure Limits are in general a matter for individual Secretaries of State.

  Mr. Bercow
  To ask the Chancellor of the Exchequer what discussions he has had with the Secretary of State for Health regarding under-spend in the Department of Health. [13204]

  Mr. Andrew Smith
  Treasury Ministers meet regularly with the Secretary of State for Health to discuss aspects of the Department of Health's performance and plans.

  Public-private Partnerships
  Matthew Taylor
  To ask the Chancellor of the Exchequer if he will list the projects in his Department which have been considered as potential public-private partnerships since 1997 which have not been undertaken because the public sector comparator had a lower net present value than the public-private partnership proposed; and if he will make a statement. [13453]

  Mr. Andrew Smith
  In our 1997 reforms of PFI, the Government abandoned the requirement to submit all capital projects to PFI testing. Accordingly, it will be concluded at a very early stage in the option appraisal process whether a PPP approach is likely to deliver value for money (vfm); where it is not, a public sector comparator (PSC) will not be constructed. Only when it is concluded, following careful consideration, that PPP is likely to offer vfm, will a PSC normally be developed.

  Against this background, and with the maturing of the PPP process and the PPP market, it is likely that a high proportion of projects which do embark on the PPP route will contract on that basis, with competition helping to secure value for money and the PSC acting as a quantitative aid to informing judgment.

  PPP deals continue to account for only a small proportion of the total sums invested to improve the delivery of public services. Public sector gross investment is projected to rise from £19 billion in 2000–01 to £35.2 billion in 2003–04. Over the same period, capital investment by the private sector through PFI will be about £3 billion annually.

  So far as the Treasury as a Department is concerned, there have been no projects within the terms of the hon. Member's question.

  Private Consultancy Expenditure
  Mr. Gardiner
  To ask the Chancellor of the Exchequer how much the Government have spent on private consultancy since 1997; and what review of such expenditure has been conducted to assess its value for money. [13907]

  Mr. Andrew Smith
  The information requested is not held centrally.
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  The National Audit Office published a report in April 2001 (HC 400 Session 2000–01) entitled "Purchasing Professional Services". This set out the results of their examination of Departments' expenditure on professional services including consultancy.

  Individual Departments are responsible for ensuring that their expenditure on consultancy represents value for money.

  VAT (Nursing Homes)
  Mrs. Helen Clark
  To ask the Chancellor of the Exchequer if he will make a statement about the impact of the charging of VAT on the residential costs of nursing home care.[12123]

  Mr. Boateng
  The Government are of the clear view that the care of vulnerable people provided in all residential homes should not be subject to VAT. In May. the VAT Tribunal confirmed that the care provided in residential nursing homes was exempt from VAT. However, the Tribunal also ruled that care provided by a commercial body was not exempt, and Customs and Excise are currently appealing against that ruling. Whatever the outcome of that appeal, the Government will take steps to ensure that residents of care homes and their families do not face increased costs as a result of VAT.

  Employee Share Ownership Plans
  Mr. Love
  To ask the Chancellor of the Exchequer how many employees of(a) mutual, (b) co-operative and (c) employee trust award companies would benefit if the present rules were changed to permit such organisations to participate in employee share ownership plans; what plans there are to expand ESOPs in this way; and if he will make a statement. [14464]

  Ruth Kelly
  Employees of registered industrial and provident societies which are co-operatives are already able to participate in the Share Incentive Plan introduced last year. Companies such as mutual organisations and trust-owned companies that do not issue shares are not able to participate.

  We estimate that some 70,000 staff are employed by mutual organisations and around 60,000 are employed by trust owned businesses in the UK. We have not yet been able to devise a way in which the link between share ownership and company performance might be reflected in such corporate structures.

  Mr. Love
  To ask the Chancellor of the Exchequer how many employees in the different sectors of the economy(a) are benefiting from and (b) are entitled to receive money under the employee share ownership plans (i) in total and (ii) as a percentage of employees in that sector; what plans he has to extend ESOPs; and if he will make a statement. [14465]

  Dawn Primarolo
  Tax advantaged share plans are generally open to employees in all sectors of the economy. However, Enterprise Management Incentives are not open to companies engaged in certain trades considered to involve low financial risk. We estimate that some 2.5 million employees are benefiting from tax advantaged share and share option schemes. Up to March of this year, some 81,000 employees have benefited from the new
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  Share Incentive Plan introduced last year. Figures are not available on a sectoral basis and the cost of obtaining the information would be disproportionate.

  Female Employment (Statistics)
  Mr. Andrew Turner
  To ask the Chancellor of the Exchequer what proportion of the female population(a) is of working age, (b) is in work or seeking work and (c) is seeking work in each county. [14133]

  Ruth Kelly
  The information requested falls within the responsibility of the National Statistician. I have asked him to reply.

  Letter from Len Cook to Mr. Andrew Turner, dated 13 November 2001:
  As National Statistician, I have been asked to reply to your Parliamentary Question about the proportions of the female population of working age, in work or seeking work, and seeking work in each county.(14133)
  Estimates for counties and unitary authorities are available for mid-2000 of all women of working age as a proportion of the total female population. I have deposited a table showing these in the House of Commons library.
  The Labour Force Survey (LFS) provides estimates of the economic activity status of people aged 16 years or over. The summer (June to August) 2001 estimates, for counties and unitary authorities where the survey sample size is large enough, of the proportions of women who are (i) in work or seeking, work and (ii) seeking work are available on Nomis?, which can be accessed by the House of Commons Library.

NORTHERN IRELAND

  Police Service of Northern Ireland
  Mr. Donaldson
  To ask the Secretary of State for Northern Ireland (1) how many(a) Protestant and (b) Roman Catholic applicants to the new Police Service of Northern Ireland were successful in being selected for the first batch of recruits; [11938]

  (2) how many serving members of the full-time RUC Reserve have applied to joint the new Police Service of Northern Ireland and have been successful in being selected for the first batch of recruits; [11942]

  (3) how many female applicants to the new Police Service of Northern Ireland were successful in being selected for the first batch of recruits; [11940]

  (4) how many female applicants to the new Police Service of Northern Ireland were successful in being short listed to the final pool prior to the selection of the first batch of recruits; [11939]

  (5) how many (a) Protestant and (b) Roman Catholic applicants to the new Police Service of Northern Ireland were successful in being short listed to the final pool prior to the selection of the first batch of recruits; [11937]

  (6) how many serving members of the full-time RUC Reserve have applied to join the new Police Service of Northern Ireland and were successful in being short listed to the final pool prior to the selection of the first batch of recruits. [11941]

  Jane Kennedy
  Around 550 candidates have qualified for entry to the merit pool. Of these, approximately 150 have declared themselves Catholic and approximately 610W
  400 have declared themselves Protestant or are non-determined; some 180 are female; and approximately 80 are serving members of the full-time Police Service of Northern Ireland Reserve. Final figures will not be available for some time as a number of candidates are subject to outstanding issues, for example, medical appeals.

  Of the first batch of 47 recruits, 24 have declared themselves Catholic and 23 have declared themselves protestant; 14 are female; and 10 are former full-time reserve officers.

TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS

  Machinery Operators (EU Legislation)
  Mr. Swayne
  To ask the Secretary of State for Transport, Local Government and the Regions what representations he has received regarding proposed EU legislation to prohibit machinery operators from driving plant and equipment for more than two hours per day; what assessment he has made of the cost of this legislation to the British construction industry; and if he will make a statement. [12615]

  Dr. Whitehead
  There is no proposed EU legislation to prohibit machinery operators from driving plant and equipment for more then two hours per day. The proposed Physical Agents (Vibration) Directive introduces a limit value for exposure to whole body vibration. The European Parliament has proposed an amendment to the common position on the Directive reducing this limit value. This reduced limit value could, in particular circumstances, have the effect of restricting the driving time by individuals of certain equipment to two or three hours.

  The Government have received representations opposing this European Parliament amendment from several industry sectors, including agriculture, construction, mining and quarrying and engineering. We intend to defend the common position against the European Parliament amendment.

  The Government have not costed the implications of the Directive on individual industry sectors. A Regulatory Impact Assessment of the Directive covering the costs to industry as a whole and the health benefits to workers has been submitted to the European Scrutiny Committee and is available in the Libraries of the House.

  Consultation Documents
  Sandra Gidley
  To ask the Secretary of State for Transport, Local Government and the Regions how many consultation documents were issued by his Department and its predecessors from(a) 15 October to 14 January, (b) 15 January to 14 April, (c) 15 April to 14 July and (d) 15 July to 14 October in each year from 1996. [12876]

  Dr. Whitehead
  I refer the hon. Member to the answer I gave on Tuesday 23 October 2001,Official Report, column 198W, which is unfortunately incorrect. A more extensive search of Departmental records has revealed that the Department issued 33 consultation documents during the summer recess 2001.
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  Records of consultation exercises have been kept centrally only since the Cabinet Office Code of Practice on Written Consultation became effective on 1 January 2001. In this period, the Department issued 108 consultation documents broken down as follows:

  1 January—14 April: 50

  15 April—14 July: 16

  15 July—14 October: 34

  15 October to date: 8.

  Affordable Housing
  Mr. Hoyle
  To ask the Secretary of State for Transport, Local Government and the Regions when he held talks about affordable housing on the Eaves Green site; and who was involved in the talks. [13003]

  Ms Keeble
  The public inquiry into the Chorley Local Plan 1991–2006 concluded on 1 October. Officials at the Government Office for the north-west commented on the original and revised deposit drafts of the plan, including its policy on affordable housing but no discussions took place regarding Eaves Green.

  Pedestrian Protection
  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions what the results were of the European new car assessment pedestrian tests based on EEVC Working Group 10 tests. [13419]

  Mr. Jamieson
  Since the European new car assessment programme was established in 1997, three cars have obtained a three-star rating for pedestrian protection using tests based on the EEVC WG10 proposals; 65 have obtained two stars and 14 have obtained one star.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions (1) if he will publish the advice available to him from the Transport Research Laboratory on the effects of Phase One of the draft negotiated agreement on pedestrian protection of comparative(a) the bumper test on disabling knee injuries, (b) the head impact test and the proportion of the bonnet area untested or unprotected, (c) the absence of a bonnet leading edge test and femur or pelvic fractures and (d) the influence on car design and effective protection for pedestrians; [13392]

  (2) if he will outline the scientific research concerning the 21 degree knee bending angle in the Phase 1 leg protection tests in the draft negotiated pedestrian protection agreement; and if he will publish the Transport Research Laboratory's opinion on the consequences for injury generation. [13391]

  Mr. Jamieson
  TRL has given only informal advice to my Department on these issues, other than its letter formally responding to our recent consultation exercise on pedestrian protection. A summary of this, and other responses received. has been placed in the House Library. Copies of the full responses can be seen at the DTLR Library. Our understanding of TRL's views, both formal and informal, are as follows:

  Bumper test: It is likely that, for some struck pedestrians, the proposed 21 degree bending angle for phase one might encourage technical designs that would cause permanent disabling injuries rather than injuries that
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  will heal without disablement. The TRL view is that, because the whole package, including phase two, will result in considerable overall benefits, the opportunity to have pedestrian protection on vehicles should not be put at risk over this issue.

  Head impact test: In the Negotiated Agreement two thirds of the bonnet area would have to meet a HIC limit of 1000; the head protection level normally associated with occupant protection. The other one third could have a HIC limit of 2000. This carries a higher risk of injury. However, it is likely that a combination of manufacturers aiming for better standards in production, and the impossibility of designing a bonnet in practice that has a step change such that it only just met the higher level over the whole one third, means that the average level in that zone would probably be midway between a HIC of 1000 and a HIC of 2000.

  In phase one, the adult area will be tested with a child headform. Despite this, the additional protection would still be of benefits to adults in many accidents. However, in some adult accidents the bonnet will be too soft, with a risk of pushing it down on to immovable underlying components.

  Bonnet leading edge test: There has been a long term trend towards more streamlined vehicles which has helped reduce femur and pelvic injuries, and this is the lowest priority of the EEVC tests. However, there is a possibility that manufacturers may raise or stiffen the bonnet leading edge to help gain better performance in the legform test; this would increase the risk of femur and pelvis injuries. The current inclusion of the test with performance targets in phase one of the negotiated agreement would allow such a trend to be monitored if it were to occur.

  The influence of car design: The effect of the long term change in style towards more streamlined shapes is mentioned above. Also, in TRL's view, designing the bonnet area that is likely to be hit by the adult head using the phase one headform will not help the development of design solutions to meet the adult head requirements of phase two.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions if active pedestrian protection measures offered by car manufacturers are compatible with each of the choices of passive measures under consideration by COREPER and the Council of Ministers. [13387]

  Mr. Jamieson
  Active protection measures are intended to help reduce the likelihood of accidents whereas secondary safety measures reduce the consequences. There is no fundamental incompatibility; indeed, both approaches contribute to improvements in road safety today.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions in what year the experimental safety vehicle of the Transport Research Laboratory demonstrated the feasibility of meeting the EEVC Working Group 10 pedestrian sub-system test requirements; and who funded this research. [13388]

  Mr. Jamieson
  The experimental safety vehicle, a Metro with modifications funded by the Department, was shown at a conference in 1985. However, this car was
  613W
  produced before Working Group 10 existed, and its effectiveness was tested using child and adult pedestrian dummies rather than the WG 10 sub-system tests.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions in what year in-depth pedestrian accident research work started at the Transport Research Laboratory in contributing to the research EEVC pedestrian protection work; and who funded this research. [13389]

  Mr. Jamieson
  The Transport Research Laboratory has been contributing to the European pedestrian protection considerations since the 1970s. This early work was funded by the Department of Transport.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions when the Government first proposed to the European Commission that a directive on safer car fronts for pedestrians and cyclists should be introduced. [13418]

  Mr. Jamieson
  Formal requests to make car fronts safer for pedestrians were made in 1991 through the UK's involvement in the EEVC.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the ability of the European car industry to achieve working group 17 pedestrian tests requirements at an early date. [13421]

  Mr. Jamieson
  We have not made a specific assessment of this. However, it is clear that industry continues to see difficulty in meeting the full EEVC criteria as a universal requirement for cars at an early date.

  Peter Bottomley
  To ask the Secretary of State for Transport, Local Government and the Regions if he will estimate the pedestrian fatality reduction potential of the Phase I tests in the draft negotiated agreement as a percentage of the potential in the EEVC Working Group 17; and what assessment he has made of the ability of the draft negotiated agreement to meet the level of protection in the harmonisation process required by the Treaty of European Union. [13390]

  Mr. Jamieson
  It is estimated that Phase 1 would deliver a benefit of around 25 per cent. for fatal injuries and 60 per cent. for serious injuries, relative to the Phase 2 levels associated with the EEVC WG 17 requirements. The negotiated agreement is likely to start delivering two years earlier than a directive. which would itself be likely to be phased.

  Peter Bottomley
  To ask the Secretary of State for Transport. Local Government and the Regions how it is intended that the car industry will work to agreed longer-term targets for pedestrian protection if Phase 2 of the draft negotiated agreement is not specified with Phase 1. [13420]

  Mr. Jamieson
  Phase 1 and Phase 2 are both specified in the negotiated agreement.

  I am satisfied that the technical requirements of the first phase will be operated in a flexible manner, which will allow manufacturers to deliver cars in Phase 1 which incorporate techniques more appropriate for meeting the Phase 2 levels. This will address one of the concerns raised by TRL and others about the headform test in Phase 1.

  Millennium Dome
  Miss McIntosh
  To ask the Secretary of State for Transport, Local Government and the Regions when an announcement will be made on the future of the Dome; and what the monthly cost of the Dome is to the Exchequer. [13224]

  Ms Keeble
  On-going market testing is exploring all avenues, and on the basis of professional advice we are in discussion with a small number of serious contenders. To reveal details of the discussions would not be conducive to a successful conclusion and would be against the public interest. The aim is to secure a sale as quickly as possible, consistent with value for money, securing a worthwhile and sustainable future for the Dome and a deliverable outcome.

  From 1 July 2001, when the lease of the New Millennium Experience Company ended, English Partnerships, the Government's regeneration agency, has been incurring an average of £240,000 per month on Dome maintenance and management related costs. English Partnerships also expects to incur expenditure in the order of £9.75 million this year on decommissioning the Dome contents in preparation for a future use and about £1.7 million in relation to the current sale process. Any money spent on these will be recovered from sale proceeds so the cost will not fall to the taxpayer.

  Railtrack
  Matthew Taylor
  To ask the Secretary of State for Transport, Local Government and the Regions (I) what advice he has received on the level of payments on debt that would(a) be required annually if the rating of the successor organisation to Railtrack were credit rated at (i) BBB and (ii) single A and (b) be required if it were able to borrow at the rate of Government gilts; and if he will make a statement; [13207]

  (2) what advice he has received on the level of payments on debt that would be required annually if the rating of the successor organisation to Railtrack were (a) 1 per cent. higher, (b) 2 per cent. higher and (c) 3 per cent. higher than Government gilts; and if he will make a statement. [13208]

  Mr. Jamieson
  In relation to the proposal that the Government intend to put to the administrator for a company limited by guarantee, we will be targeting a long-term credit rating of A/A2 or higher, to reflect the financing capacity requirements of the rail infrastructure business. We are confident that this would allow the CLG to raise new debt and service existing debt on an efficient and cost-effective basis.

  Telecommunications Masts
  Mr. Blunt
  To ask the Secretary of State for Transport, Local Government and the Regions how many planning inquiries there have been into applications for telecommunications masts over 15m by commercial operators that seek to replace a mast owned by Railtrack plc with one of their own. [13665]

  Ms Keeble
  The Department does not hold information on the number of planning inquiries in this form.
  615W

  Road Surfaces
  Harry Cohen
  To ask the Secretary of State for Transport, Local Government and the Regions for what reason the Highways Agency no longer takes responsibility for the surfaces of major roads in London; what sum was specifically transferred for this purpose to Transport for London; and if he will make a statement. [13538]

  Mr. Jamieson
  On 3 July 2000 the Highways Agency's responsibilities for all of its roads in London except for the stubs of the M 1, M4 and the M11 were transferred to Transport for London. The Government pay the Greater London Authority Transport Grant to support the whole range of Transport for London' s responsibilities. This grant rises from £714 million in 2001–02 to over £1 billion in 2003–04.

  Housing Provision (Doncaster/Barnsley)
  Jeff Ennis
  To ask the Secretary of State for Transport, Local Government and the Regions how many council houses were sold in(a) Doncaster and (b) Barnsley in each of the last 10 years. [13659]

  Ms Keeble
  The number of council dwellings (both houses and flats) sold in each of the last 10 years, as reported by Doncaster and Barnsley metropolitan councils, is in the table.

  Number of council dwellings sold

  Year

  Doncaster metropolitan borough council

  Barnsley metropolitan borough council

  1991–92

  291

  350

  1992–93

  240

  205

  1993–94

  299

  177

  1994–95

  290

  212

  1995–96

  237

  111

  1996–97

  260

  153

  1997–98

  341

  195

  1998–99

  368

  202

  1999–2000

  415

  304

  2000–01

  386

  400

  Source:

  DTLR Housing Activity P1(B) quarterly returns

  Tables showing reported information on total council house sales in each English local authority for each financial year from 1979–80 are available in the Library.

  Jeff Ennis
  To ask the Secretary of State for Transport, Local Government and the Regions how many new social rented houses were built in(a) Doncaster and (b) Barnsley in each of the last 10 years. [13660]

  Ms Keeble
  The numbers of new social dwellings, both houses and flats, built in Doncaster metropolitan borough council area and Barnsley metropolitan borough council area in each of the last 10 years are given in the table. Social dwellings include those built for registered social landlords as well as those built for the councils.

  Number of social dwellings built

  Year

  Doncaster(MBC)

  Barnsley(MBC)

  1991–92

  89

  104

  1992–93

  157

  40

  1993–94

  121

  74

  1994–95

  164

  59

  1995–96

  188

  53

  616W

  Number of social dwellings built

  Year

  Doncaster(MBC)

  Barnsley(MBC)

  1996–97

  116

  38

  1997–98

  57

  6

  1998–99

  15

  28

  1999–2001)

  42

  0

  2000–01

  27

  0

  Rent Levels
  Mr. Chris Smith
  To ask the Secretary of State for Transport, Local Government and the Regions at what date the 1 per cent. rise in levels above the rate of inflation will commence under his restructuring proposals for local authority rent levels; if it will apply equally to all local authorities; and whether mitigation will be introduced to dampen the effect where high-level rents are instituted in high-value areas. [13791]

  Mr. Byers
  Rents for local authority properties are set by the responsible authorities and depend upon decisions taken locally. The proposed 1 per cent. real terms increase in rents is the assumption for the purposes of calculating housing subsidy in England for 2002–03 which was announced at the end of the 2000 spending review. It is independent of our policy on rent restructuring. Ministers are considering how it will apply to each local authority in the light of responses to the consultation on proposals for subsidy changes and will make an announcement soon. We expect rent changes as a result of rent restructuring to be limited to a maximum of £2 per week in any year above normal inflation-related increases. We are considering whether there should also be a cap on the rents of high-value properties which would otherwise attract high rents.

  Mr. Chris Smith
  To ask the Secretary of State for Transport, Local Government and the Regions (1) what his estimate is in relation to his proposals for the restructuring of local authority rent levels, of average rents for(a) London and (b) Inner London on the former Inner London education authority boundaries (i) at April levels, (ii) for the initial restructured levels and (iii) in subsequent years; [13790]

  (2) to what extent the average figures he has circulated in relation to his proposals for the restructuring of local authority rent levels reflect (a) reductions in rent levels for smaller properties and for those in less high value areas and (b) significant increases in rent levels for (i) family-sized properties and (ii) for those in higher-value areas. [13789]

  Mr. Byers
  The information is not available in the form requested.

  Mr. Chris Smith
  To ask the Secretary of State for Transport, Local Government and the Regions under his proposals for the restructuring of local authority rent levels, what account the restructured levels will take of the(a) nature and condition of an estate on which the property is located and (b) broad property values of the overall area. [13788]

  Mr. Byers
  Under restructuring, social rents will be based on a formula that includes local earnings, property size and relative property value. The property value will reflect the size, location and condition of the property.
  617W
  Social rents will generally remain well below the levels charged by reputable private landlords for similar properties.

  M6 (Morecambe and Heysham Port)
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has to improve road access to Morecambe and Heysham Port from the M6 Motorway. [13741]

  Ms Keeble
  Access from Morecambe and Heysham Port to the M6 is the responsibility of Lancashire county council. They have recently conducted a public consultation on the two proposed routes for a Heysham to M6 link road. When the position on the Lancaster district local plan is resolved, it is a matter for the council whether to submit a bid for funding from central Government.

  Fire and Civil Defence Authorities
  Mr. Truswell
  To ask the Secretary of State for Transport, Local Government and the Regions what guidance he will issue regarding the level of fire and civil defence authority precepts for 2001–02. [13599]

  Dr. Whitehead
  None. These are matters for fire and civil defence authorities to decide in consultation with local taxpayers.

  Mr. Truswell
  To ask the Secretary of State for Transport, Local Government and the Regions what assessment he has made of the progress achieved by fire and civil defence authorities in metropolitan areas towards reducing(a) fire-related deaths and (b) malicious false alarm calls. 13600]

  Dr. Whitehead
  In 2000, an estimated 133 accidental fire related deaths in dwellings were recorded for the seven metropolitan brigades, out of a national total of 326. The number of accidental house fire deaths in metropolitan brigade areas had fallen in recent years from 167 in 1996 to the current estimated figure of 133 for 2000. The downward trend in dwelling fire deaths is reflected nationally for England and Wales. There were 588 dwelling fire deaths in 1996, compared with 516 for 2000.

  Malicious false alarms, both for the metropolitan areas and nationally, have been falling steadily over recent years. In 1996 there were 57,100 malicious false alarm calls recorded by the metropolitan areas. In 2000, metropolitan brigades attended a total of 33,800 malicious false alarm calls—a fall of 41 per cent. against the 1996 figures.

  These encouraging statistics reflect the merits of the integrated approach adopted by Government, the fire service and fire authorities over the past four years to implement strategies designed to drive down the number of preventable dwelling fire deaths and to educate the public about the dangers of malicious false alarm calls.

  Business Rate System
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions what representations have been received on the reform of the business rate system. [13734]
  618W
  Dr. Whitehead
  The Green Paper "Modernising Local Government Finance", published 19 September 2000, invited comments on a range of issues relating to reform of business rates. In response to that consultation we received 1,107 non-campaign responses of which the overwhelming majority included responses on business rates. A summary is available on the DTLR website at www.dtlr.gov.uk. We will set out our response to the consultation in the Local Government White Paper later this year.

  On 16 February 2001 we issued a further consultation paper on extending the agricultural exemption from rates to machinery rings and share farming enterprises on which we received 34 responses. Again, we will set out next steps in the forthcoming Local Government White Paper.

  My Department continuously receives correspondence on the business rates system, which includes representations on reforms to various parts of the rating system.

  DVLA
  Mr. Greg Knight
  To ask the Secretary of State for Transport, Local Government and the Regions if he will review the resources and the priority being deployed by DVLA to answer telephone inquiries from members of the public. [14046]

  Mr. Jamieson
  The level of resources deployed on telephone inquiries by DVLA is under continuous review in order to meet the level of demand at any given time.

  Terrorism
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what the costs have been of operations undertaken by his Department in connection with events following the 11 September terrorist attacks; and if he will list the costs relating to(a) the British Transport police, (b) the aviation industry, (c) emergency planning and (d) other areas; and if these costs will be met from his Department's budget. [13845]

  Mr. Byers
  [holding answer November 2001]: To date my Department has not incurred any costs in connection with events following the 11 September terrorist attacks relating to the British Transport police, the aviation industry or emergency planning. Along with other Government Departments we have reviewed security at our buildings and have incurred extra costs of around £31,000 which will be met from within existing budgets.

  We will give due consideration to any requests for financial assistance from those areas for which my Department is responsible.

  Regeneration (West Midlands)
  Mr. Jim Cunningham
  To ask the Secretary of State for Transport, Local Government and the Regions what plans he has to promote the regeneration of deprived areas in the west midlands. [13534]

  Ms Keeble
  [holding answer 12 October 2001): There are a number of initiatives across the west midlands, which are promoting regeneration of deprived areas.
  619W
  The key ones are as listed:
  £4.2 million over three years from April 2002 for "neighbourhood management" initiatives in Newcastle-under-Lyme and Burton-on-Trent.
  Over £3 million through the "Community Empowerment Fund" to help communities get involved in local decision making. Seven areas in west midlands will benefit from this fund. These are Birmingham, Dudley, Coventry, Sandwell, Stoke, Walsall and Wolverhampton.
  £1.1 million for "community chests" to support small community projects with grants they can get locally with minimum bureaucracy. Seven areas in west midlands will benefit from this fund. These are Birmingham, Dudley, Coventry, Sandwell, Stoke, Walsall and Wolverhampton.
  "New Deal for Community" areas in the west midlands which will benefit from almost £2 billion over the next 10 years. These are:
  Sandwell—(Greets Green Partnership)
  A further £263.5 million for five Round 2 Partnerships in the west midlands was announced in April 2001. These are:

  Birmingham—Aston Pride

  Birmingham—Kings Norton, Three Estates Coventry WEHM

  Walsall—New Deal, New Horizons

  Wolverhampton—All Saints and Blakenhall

  Seven "Neighbourhood Warden schemes" are now operating across the west midlands. The programme is worth £1.027 million.
  17 "Street Wardens programmes" have recently been announced in the west midlands. The total value of the scheme is £4.146 million which will be matched by Government funding.
  "Neighbourhood Renewal Fund" will provide £121.5 million for three years from April 2001 to improve services in the most deprived neighbourhoods in the west midlands. Areas benefiting in west midlands are Birmingham, Dudley, Coventry, Sandwell, Stoke, Walsall and Wolverhampton. A Local Strategic Partnership in each area will develop a local "neighbourhood renewal strategy" to guide NRF expenditure.

  Advantage West Midlands as part of its Economic Strategy has agreed with partners across the region the designation of six Regeneration Zones which cover 111 of the 153 most deprived wards in the region. Advantage West Midlands has undertaken to spend 70 per cent. of its resources in the zones to help achieve these aims.

  European Funding
  Objective 2 European Structural Funds for the period 2000–06 has earmarked over £100 million to support the regeneration of the most deprived areas in the west midlands. Additionally, the region will benefit from Objective 3 funds worth over £240 million during the same period to help to upskill people and improve their employability.

  Terminal 5
  Mr. Wilshire
  To ask the Secretary of State for Transport, Local Government and the Regions what the cost was of the planning inquiry into the application to build a fifth terminal at Heathrow Airport. [14021]

  Ms Keeble
  [holding answer 12 November 2001.1: The total costs of the Terminal 5 inquiry to all participants is estimated at over £83 million of which the private sector is estimated to have spent some £64 million with the rest borne by central and local Government.
  620W

  Heathrow Airport
  Mr. Wilshire
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on job losses at Heathrow Airport as a result of the events of 11 September. [14020]

  Mr. Jamieson
  [holding answer 12 November 2001 J: BAA plc, as owners of Heathrow Airport, advise they have not cut any jobs at the airport following the events of 11 September. However, their organisation only represents around 5.5 per cent. of the workforce at the airport. We do not yet have firm information about the extent of job losses at Heathrow in other areas of the aviation industry.

  I understand that the Job Transition Service is engaging with employers to ensure that those employees adversely affected have access to the fullest possible range of help and advice.

  Mr. Wilshire
  To ask the Secretary of State for Transport, Local Government and the Regions who(a) was invited to meet and (b) met the Minister of State during his visit to Heathrow Airport on 5 November. [14019]

  Mr. Spellar
  [holding answer 12 November 2001]: I visited Heathrow Airport on 5 November at the request of my hon. Friend the. Member for Hayes and Harlington (John McDonnell), who also arranged the other attendance. The meeting was attended by local MPs and numerous representatives of the air transport industry, trades unions and local communities.

  London Underground
  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what was the average length of the contractual working week for London Underground(a) drivers and (b) station staff in each year since 1991. [14604]

  Mr. Jamieson
  London Underground has provided the following information:

  Year

  Train operators contractual weekly hours

  Station staff contractual weekly hours

  1991–92

  138

  138

  1992–93

  138

  138

  1993–94

  38.5

  41.25

  1994–95

  38.5

  41.25

  1995–96

  38.5

  40

  1996–97

  37

  40

  1997–98

  36

  40

  1998–99

  35

  40

  1999–2000

  35

  40

  2000–01

  35

  40

  2001–02

  35

  37.5

  1Plus minimum of one Sunday in two

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what proportion of the annual service charges to be paid by Transport for London for the London Underground public-private partnership contracts will be underwritten by central Government payments made to Transport for London; and for what period such payments will be guaranteed. [14612]
  621W
  Mr. Jamieson
  Subject to its representing value for money, London Underground intends to enter into long-term contracts to deliver a publicly run, privately built tube. These contracts will be between London Underground and the private sector Infrastructure Companies and will not be guaranteed by central Government. However, my right hon. Friend the Secretary of State will allow for the resulting contract payments when setting GLA Transport Grant.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what was the annual average leave entitlement of London Underground(a) drivers and (b) station staff in each year since 1991. [14602]

  Mr. Jamieson
  London Underground has provided the following information:

  Year

  Train operator annual leave

  Station staff annual leave

  1991–92

  125

  125

  1992–93

  125

  125

  1993–94

  234

  234

  1994–95

  234

  234

  1995–96

  234

  234

  1996–97

  234

  234

  1997–98

  234

  234

  1998–99

  234

  234

  1999–2000

  234

  234

  2000–01

  236

  236

  2001–02

  237

  237

  1Plus one day for credit transfer

  2Inc. B/H

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what arrangements have been put in place to take account of the change in the length of the working week of the managing director of London Underground Ltd. [14585]

  Mr. Jamieson
  Paul Godier succeeded Derek Smith as full time managing director on Monday 8 October 2001. Derek Smith remains as Chairman of London Underground. London Underground issued a press release on 10 September http://www.thetube/com/content/ pressreleases/0109/l0.asp setting out details of the new arrangements.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions if he will ask the National Audit Office to examine the value for money aspects of the London Underground public-private partnership in advance of the contracts being signed; and if he will place in the Library his correspondence with the NAO on London Underground. [14615]

  Mr. Jamieson
  I refer the hon. Member to the answer given to the hon. Member for Truro and St. Austell (Matthew Taylor) on 12 November 2001,Official Report, column 503W. My right hon. Friend the Secretary of State has not corresponded with the NAO on the subject of the London Underground.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions when, for each line of London Underground, new trains will be introduced under the terms of the public-private partnership. [14588]
  622W
  Mr. Jamieson
  The public-private partnership is designed to achieve a comprehensive modernisation of the entire underground network. London Underground is currently negotiating the detailed requirements and will publish details once they have been completed.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what capacity increase, for each line of London Underground, will be achieved under the terms of the public-private partnership; and in which year this change will occur. [14587]

  Mr. Jamieson
  The public-private partnership is designed to achieve a comprehensive modernisation of the entire underground network. This is necessarily a long-term programme and there is a limit on the amount of work that can be done simultaneously without causing excessive disruption to the service to the public. The overall requirements have therefore been specified by London Underground to upgrade every line over time, prioritised to deliver the greatest benefits as quickly as possible. The capability of most lines is expected to be increased by around 10–25 per cent. The detailed requirements are currently being negotiated and London Underground will publish details once the negotiations have been completed.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions if he will publish the names of(a) companies in each of the consortia selected as preferred bidders for each London Underground PPP contract and (b) the board members of each of those companies. [14613]

  Mr. Jamieson
  Metronet is the preferred bidder for the BCV and SSL competitions. The Metronet consortium consists of Bombardier Transportation (formerly Adtranz), WS Atkins, Balfour Beatty, Seeboard and Thames Water.

  Tubelines is the preferred bidder for the JNP competition. The Tubelines consortium consists of Amey, Bechtel and Jarvis.

  The board membership of each company will be contained in the companies' annual accounts.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions how, under the terms of the proposed public-private partnership for London Underground, companies will be incentivised to improve the performance of the underground; what new performance measures will be used; and what financial(a) incentives and (b) disincentives will be employed. [14586]

  Mr. Jamieson
  The Government's plans for a publicly run, privately built London Underground are designed to deliver at least £13 billion of investment over the next 15 years. The private sector will be incentivised to deliver this investment by contracts that are principally output-based, with payments to the private sector infrastructure companies increasing as they improve capacity, reliability and the quality of the travelling environment on the tube network. The private sector will be similarly financially penalised for poor performance. These penalties will reflect the impact of any delay or disruption to passengers and not be limited by a cap.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions if, under the proposed contracts for the public-private partnership
  623W
  for London Underground, senior managers of Transport for London and London Underground who have been involved in PPP negotiations will be exempt from any subsequent legal challenge other than for fraud or impropriety, as regards the (a) content and (b) operation of PPP contracts.[14608]

  Mr. Jamieson
  I understand that London Underground does not intend for the PPP contract to exempt London Underground senior managers from legal action by London Transport or London Underground. There will be a waiver in relation to legal action by infrastructure companies or bidders.

  The position of Transport for London senior managers is a matter for the board of TfL.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions what is the cost to London Transport of the recent London Underground advertising campaign to promote the public-private partnership for London Underground. [14609]

  Mr. Jamieson
  This is a matter for London Underground.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions when he expects to sign the final contracts for the London Underground public-private partnership; and when control of LU will pass to the Mayor of London. [14611]

  Mr. Jamieson
  The Secretary of State for Transport, Local Government and the Regions will not sign contracts for the London Underground public-private partnership, which is the responsibility of London Underground. I understand that London Underground expects to sign contracts early next year.

  London Underground will transfer to Transport for London once the competitions for the modernisation of the Underground have been completed.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions if(a) his Department, (b) Transport for London and (c) London Underground intend to undertake further advertising to promote the public-private partnership for London Underground; and when it is envisaged that it will commence. [14610]

  Mr. Jamieson
  The Department for Transport, Local Government and the Regions has no plans to undertake advertising to promote the public-private partnership for London Underground.

  Advertising by Transport for London and London Underground is a matter for each of those organisations.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions how much was spent by(a) his Department and its predecessors, (b) London Transport, (c) London Underground and (d) any other institution (i) controlled and (ii) funded by his Department or its predecessors on all work concerned with the (A) preparations, (B) contracts and (C) other aspects of the London Underground public-private partnership in each year since 1997–98. [14614]
  624W
  Mr. Jamieson
  I refer the hon. Member to the answer given to the hon. Member for Buckingham (Mr. Bercow) on 16 October 2001,Official Report, column 1169W. It is not practicable to provide a breakdown in the form requested by the hon. Member.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions how many London Underground(a) drivers and (b) station staff there were in each year since 1991. [14603]

  Mr. Jamieson
  I refer the hon. Member to the reply given by my hon. Friend the Member for Streatham (Keith Hill) to the hon. Member for North Essex (Mr. Jenkin) on 9 April 2001,Official Report, column 386W.

  Tom Brake
  To ask the Secretary of State for Transport, Local Government and the Regions who are the members of the boards of(a) Transport for London and (b) London Underground, and what are their (i) annual emoluments and (ii) monthly time commitment to LU; when they joined the board; and what are the particular responsibilities of each member as regards the public-private partnership for the underground. [14590]

  Mr. Jamieson
  Appointments to the Board of Transport for London are a matter for the Mayor of London.

  The board members of London Underground Ltd., who are appointed by the Board of London Regional Transport are:

  Derek Smith (Chairman)

  Paul Godier (Managing Director)

  Brian Appleton (Non-executive Director with special interest in safety)

  Keith Beattie

  Patrick Butcher

  Mike Brown

  Martin Callaghan

  Tony Maguire

  Rob Mason

  Jon Smith

  Mike Strzelecki.

  Details of board members' annual emoluments and start dates are included in the relevant annual report and accounts.

  All board members of London Underground Ltd., except Brian Appleton and Derek Smith, are full-time executive directors. Brian Appleton works 11 days per month, and Derek Smith 2½ days per week (from 8 October 2001).

  The board of London Underground Ltd. considers all significant matters relating to the PPP, but the final decision on the award of any contracts is a matter reserved for the board of London Regional Transport. With the exception of Martin Callaghan, who is the PPP project director and leads on the negotiations with the PPP bidders. No other board members of either London Underground Ltd. or London Regional Transport has specific individual responsibilities in relation to the PPP.

  Local Government Modernisation
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions (1) if he will place in the Library all(a) guidance and (b) other documentation
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  (i)published and (ii) otherwise distributed by the local government modernisation team with respect to ethics in local government; [14545]

  (2) if he will place in the Library all (a) guidance and (b) other documentation (i) published and (ii) otherwise distributed to local authorities by the local government modernisation team with respect to the environment.[14557]

  Mr. Byers
  The purpose of the local government modernisation team is to help to communicate and explain to council members and employees the Government's agenda for the modernisation of local government, and to feed back council's views and experiences to Ministers and Departments.

  The role of the members of the team is therefore to contribute their operational knowledge to guidance or other publications prepared by the Department. Examples include contributing to Government Guidance on New Council Constitutions and on Referendums under the Local Government Act 2000 and working with the Improvement and Development Agency in developing their ethical governance audit for local authorities. The remit of the local government modernisation team is primarily in relation to the modernisation of local government and not specifically on environmental issues.

  Copies of such Government guidance and documentation are placed in the Library in the usual manner.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what are the criteria by which members of the local government modernisation team were selected. [14554]

  Mr. Byers
  To ensure members of the local government modernisation team were recruited on an open basis, consistent with guidelines from the Civil Service Commissioners, advertisements for posts were placed in both the national and local government press. Applications were sought from people with:Senior local government experience;
  the ability to command credibility and respect of members and senior officers;
  knowledge of the (local government) modernisation agenda, with experience or expertise in one or more key areas;
  excellent communication and presentation skills, and
  good team players.

  A panel including civil servants from my Department and an independent member from the Local Government Association interviewed the applicants and decided the appointments to be made.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions who are the members of the local government modernisation team; and what are their relevant(a) experience and (b) qualifications. [14550]

  Mr. Byers
  Current members of the local government modernisation team are:Avril Atkinson, former Director of Pupils and Services Division, East Sussex CC
  Chris Haynes, former Head of Information Age Government, Knowsley
  Richard 0llin. former Chief Executive, Stroud DC
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  Guy Ware, former Director of Finance and Information Services, LB Enfield
  Janice Morphet, former Chief Executive, Rutland
  Julian Bowrey, former Head of Policy and Review, Cambridgeshire CC
  John Haward, former Head of Corporate Strategy, Southwark LB
  Mike Reardon, former Council Secretary, Trafford MBC
  Pam Fox, former Assistant Chief Executive, Portsmouth City
  Peter Murphy, former Chief Executive, Melton BC
  Rita Petty, former Executive Director, Kirklees MBC.

  All members of the team have been recruited on the basis of ability, qualifications and suitability for the work as a result of an open competition held in line with guidelines set out by the Civil Service Commissioners.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what is the cost of(a) the establishment of the local government modernisation team and (b) its continuing operating costs. [14555]

  Mr. Byers
  The local government modernisation team was set up with an annual budget of £1 million which included the cost of establishing the team in the autumn of 1999. This was increased to £1.5 million in 2000–01 to cover new roles, in particular local government on-line.

  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what remuneration and superannuation is paid to members of the local government modernisation team. [14556]

  Mr. Byers
  Members of the local government modernisation team have been appointed on a mixture of short-term secondments or fixed-term contracts, usually of one to two years (full and part-time). Most members are senior civil service equivalents. Remuneration is based on salary before joining the team, and is currently in the range from £45,000 to £80,000 per annum. Members have the option of remaining in the local government pension scheme or joining the principle civil service pension scheme when they join the Department.

  Bus Services
  Mrs. May
  To ask the Secretary of State for Transport, Local Government and the Regions what action he has taken to improve the quality of bus services with respect to(a) reliability of service and (b) the quality of information provided at bus stops since the publication of the bus quality indicators bulletin in September. [14546]

  Mr. Byers
  The Government want to see more regular and reliable bus services that will attract increasing numbers of passengers. Since the publication of the most recent bus quality indicators bulletin in September, we have commenced powers under the Transport Act 2000 with regard to statutory Quality Partnerships and Quality Contracts. This means that local authorities now have a wider range of powers at their disposal to help them to take steps to improve local bus services.

  The Transport Act 2000 also requires all local transport authorities to develop arrangements for ensuring that appropriate bus passenger information is made available, and enables them to step in to provide proper passenger information, at operators' expense, if existing arrangements are inadequate.
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  We are continuing to discuss with the bus industry realistic targets for delivering improvements in service reliability, including monitoring the provision of passenger information at bus stops.

  Deprivation (Lancaster)
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions which are the 12 most deprived wards in the Lancaster City district, with reference to the Index of Local Deprivation. [13767]

  Ms Keeble
  Table 1 lists the 12 most deprived wards in the Lancaster district, as measured on the Index of Multiple Deprivation 2000. This is one of the main components of the Indices of Deprivation 2000, which is the current measure of deprivation in England.

  Ward name1

  Rank of index of multiple deprivation across England

  Alexandra

  280

  Poulton

  759

  Skerton Central

  795

  Skerton East

  843

  Bulk

  1,277

  Harbour

  1,279

  Skerton West

  1,290

  Heysham North

  1,325

  Ward Name

  IMD 2000

  Income

  Employment

  Health

  Education

  Housing

  Access to Services

  Alexandra

  280

  382

  122

  184

  1,311

  1,430

  6,526

  Arkholme

  5,256

  6,205

  6,118

  6,275

  5,553

  6,229

  361

  Bolton-le-Sands

  6,122

  6,947

  4,835

  4,210

  7,724

  7,268

  1,775

  Bulk

  1,277

  1,569

  1,280

  990

  986

  1,791

  6,833

  Carnforth

  4,213

  3,640

  4,270

  3,525

  3,456

  6.101

  3,993

  Castle

  2,282

  2,000

  1,594

  1,998

  4,383

  2,821

  6,065

  Caton

  4,295

  5,136

  3,447

  3,160

  5,827

  7,107

  1,524

  Ellel

  4,490

  5,787

  4,652

  4,736

  7,728

  2,927

  592

  Halton-with-Aughton

  5,762

  6,251

  4,380

  4,577

  7,094

  7,525

  1,717

  Harbour

  1,279

  755

  961

  753

  3,790

  4,828

  5,702

  Heysham Central

  1,476

  1,919

  882

  591

  2,279

  6,145

  5,784

  Heysham North

  1,325

  979

  1,004

  1,135

  2,088

  3,174

  7,832

  Heysham South

  2,113

  1,610

  1,868

  1,670

  3,327

  3,547

  5,452

  Hornby

  5,811

  7,440

  5,999

  5,948

  6,709

  6,717

  380

  John O'Gaunt

  6,028

  5,267

  4,236

  4,876

  5,143

  6,102

  7,700

  Kellet

  4,737

  4,798

  3,639

  3,748

  6,971

  6,071

  2,240

  Overton

  2,924

  3,765

  3,247

  2,669

  3,408

  1.457

  2.392

  Parks

  4,366

  4,690

  2,584

  1,973

  6,686

  8,229

  6,412

  Poulton

  759

  725

  389

  377

  3,807

  1,686

  7,881

  Scotforth East

  6,258

  6,376

  6,174

  5,715

  4,558

  2.993

  4,789

  Scotforth West

  3,770

  3,501

  2,704

  2,508

  4,526

  6,551

  5,744

  Silverdale

  5,849

  6,002

  4,693

  3,970

  7,876

  8,097

  1,764

  Skerton Central

  795

  867

  1,127

  876

  336

  1,472

  7,410

  Skerton East

  843

  815

  889

  939

  440

  2,715

  7,460

  Skerton West

  1,290

  1,366

  1,644

  1,873

  636

  1,366

  5,301

  Slyne-with-Hest

  4,561

  6,132

  2,768

  2,105

  7,939

  7,237

  2,999

  Torrisholme

  5,156

  4,828

  3,870

  2,673

  6,690

  7,972

  4,729

  Victoria

  2,417

  1,507

  2,138

  1,608

  4,896

  4,289

  7,118

  Warton

  3,917

  4,502

  4,240

  3,583

  2,707

  3,946

  2,835

  Regeneration (Morecambe and Lunesdale)
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions what funding he has provided(a) to encourage employment opportunities and (b) to regenerate industrial estates in the Morecambe and Lunesdale constituency. [13768]

  Ms Keeble
  The constituency of Morecambe and Lunesdale has benefited from the following funding.
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  Ward name1

  Rank of index of multiple deprivation across England

  Heysham Central

  1,476

  Heysham South

  2,113

  Castle

  2,282

  Victoria

  2,417

  1These are based on ward boundaries as at 1998

  The components of the Indices of Deprivation 2000 are:

  Separate indices at ward level on each of the six domains of deprivation: Income, Employment, Health Deprivation and Disability, Education Skills and Training, Housing and Geographical Access to Services. This allows all 8,414 wards in England to be ranked according to how deprived they are relative to other areas, for each domain.A ward level index that brings together information from the six domains of deprivation into one overall Index of Multiple Deprivation (IMD 2000). Table 1 is based on this measure.

  Six district level summaries of the IMD, which allow all 354 local authority districts to be ranked according to each measure. These summaries take account of the different patterns of deprivation found in different areas.

  Table 2 shows how all Lancaster's wards are ranked according to the IMD and the six other ward domains included in the Indices of Deprivation 2000.

  Single Regeneration Budget:
  SRB Round One—Turning the Tide: Morecambe
  This is a seven year strategy to halt decline and build tourism through comprehensive regeneration of an area of need in the town centre. It builds on pre-existing housing schemes and extends to business, training, and environmental schemes.
  SRB Total is £4.3 million.
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  SRB Round Five—Luneside Regeneration
  This seven year scheme seeks to tackle dereliction and draw private investment into key sites in Lancaster. creating new jobs close to the city's inner urban communities.
  SRB total is £5 million.

  European Regional Development Fund
  Much of the constituency is eligible for support under the 2000–06 Objective 2 programme, and can expect to access business support through the wider north and west Lancashire action plan. This has been awarded £14 million for a range of business support activities.

  Luneside Industrial Estate
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions what discussions he has had with(a) the Government Office for the North West and (b) NWDA about improving access to the Luneside industrial estate. [13770]

  Ms Keeble
  Ministers have not had discussions with the North West Development Agency about improving access to Luneside industrial estate.

  Regional Investment Funding (Lancaster)
  Geraldine Smith
  To ask the Secretary of State for Transport, Local Government and the Regions which wards in the Lancaster City Council District are eligible for Objective 2 priority 3 strategic regional investment funding. [13772]

  Ms Keeble
  Eligible wards are:

  Alexandra

  Bulk

  Castle

  Caton

  Heysham central

  Heysham north

  Heysham south

  Overton.

  Wessex Rail Franchise
  Mr. Webb
  To ask the Secretary of State for Transport, Local Government and the Regions if he will make a statement on his proposed timetable for the renewal of the Wessex Rail Franchise. [14295]

  Mr. Jamieson
  The Strategic Rail Authority has submitted proposals for a revised franchise replacement/ extension programme to the Secretary of State for consideration. An announcement will be made in due course.

DEFENCE

  QinetiQ
  Mr. Jenkin
  To ask the Secretary of State for Defence when he plans to divest QinetiQ; and when the funds derived from the sale will be credited to his Department's budget. [14626]

  Dr. Moonie
  QinetiQ will be floated as soon as its potential is judged to be suitably developed, subject to value for money considerations and provided the organisation has achieved appropriate performance 630W
  targets. Since vesting of the company on 1 July 2001 work has mainly focused on preparing the company for a future transaction and assessing market conditions. It also remains possible that a strategic partner will be brought in to assist with the commercial development of the company prior to a flotation. The Ministry of Defence is likely to retain an interest in QinetiQ as a means to ensuring that taxpayers receive full value for the investment in past Government funded research. An announcement, hopefully early in the new year, will be made once a decision has been taken on the transaction route, and the proposed timetable.

  It has been agreed with HM Treasury that the MOD will receive a credit of at least £250 million in FY 2001–02 in anticipation of a successful PPP. This receipt is not dependent on the actual timing of the final PPP transaction, nor is the figure an indication of the potential value of the transaction.

  Veterans Task Force
  Mr. Swayne
  To ask the Secretary of State for Defence if he will make a statement about the Veterans task force meeting held on 7 November. [13766]

  Dr. Moonie
  At the first meeting of the task force on 6 November, my ministerial colleagues from other Departments with an interest in veterans issues, representatives from the veterans' community and I agreed terms of reference committing us to making our policy development and services responsive to the reasonable needs and concerns of veterans. We agreed a vision focusing on the key themes of partnership, identity, recognition, education and care, and agreed a cross-government action plan to take these themes forward. This work is being undertaken in partnership with experts from veterans organisations and will include reviews of resettlement for the most vulnerable of those discharged from the armed forces, of the educational material on veterans and their achievements provided for Key Stage 3 of the national curriculum and of ways in which we might improve the effectiveness of our communications with veterans. Ministers also agreed to review their relevant public service agreements to identify those in which there was a significant and discrete veterans problem that merited action in its own right. Particular areas to be considered were focused on the most vulnerable and included the levels of service-related problems among the prison population, among marital breakdowns and among the unemployed. Deadlines have been set for action plan work items, and overall progress with the initiative will be considered at the next meeting of the task force in May 2002.

  I consider that the task force agreements represent substantial progress towards achieving our objective of raising the profile of veterans' issues in Government and more widely across the nation, and of improving the delivery of benefits to veterans, particularly the most vulnerable.

  Afghanistan
  Mr. Hancock
  To ask the Secretary of State for Defence what plans there are for the inclusion of the Territorial Army in the operations against Afghanistan; and(a) how many will be deployed and (b) how they will be deployed. [13128]
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  Mr. Ingram
  There are no plans to include formed units of the Territorial Army in the operations in Afghanistan. However, a call-out order has been made under section 54 of the Reserve Forces Act 1996 to permit up to 150 individual reservists from all three services to be called out for service in support of the current operation. They are needed to augment headquarters, and provide operational support to the Royal Air Force. Most will be based in the UK. Augmentation of this nature is a routine task for the reserves.

  Llew Smith
  To ask the Secretary of State for Defence what plans his Department has to disarm unexploded cluster bomblets used by Allied coalition forces in the conflict in Afghanistan. [14266]

  Mr. Ingram
  The Prime Minister has made it clear that the United Kingdom will not turn her back on Afghanistan and that any political settlement will be supported and sustained through rehabilitation and reconstruction, of which the clearance of unexploded ordnance may form a part.

  Aircraft Scrambles
  Paul Flynn
  To ask the Secretary of State for Defence on how many occasions and in what circumstances planes have been scrambled to deal with perceived emergencies at nuclear or other installations since 11 September. [13720]

  Mr. Ingram
  Aircraft have been scrambled once to deal with perceived emergencies at nuclear or other installations since 11 September 2001. On 27 October two F3 Tornado aircraft conducted air policing in the vicinity of Sellafield in response to what proved to be a hoax threat telephone call to civilian police.

  No-fly Zones
  Llew Smith
  To ask the Secretary of State for Defence how many instances there have been in each year since 1991 of military aircraft accidentally breaching no-fly zones over(a) nuclear power plants, (b) nuclear reprocessing plants and (c) military nuclear plants. [14261]

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

  Nuclear Installations (Security)
  Llew Smith
  To ask the Secretary of State for Defence what representations his Department has received in respect of the security of nuclear installations since 11 September. [14684]

  Mr. Ingram
  The security of nuclear installations is a matter for the Department of Trade and Industry. We are in close contact with the DTI and other Government Departments concerning any contribution the armed forces could make in this area, in response to the events of 11 September.

  Exercise Saif Sareea 2
  Mr. Jim Cunningham
  To ask the Secretary of State for Defence if he will make a statement on the progress of Exercise Saif Sareea 2 in Oman; and how successful it has been in developing the United Kingdom's Joint Rapid Reaction Force. [13512]
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  Mr. Ingram
  The exercise activity of Exercise Saif Sareea 2 ended on 29 October and the recovery of our forces and their equipment is under way.

  The objectives of the exercise were to deploy and sustain a major joint force across strategic distances, and conduct realistic coalition war fighting training in a testing desert environment. As such it was a major test of some of the equipment and personnel that are part of the Joint Rapid Reaction Force.

  It will take some weeks to analyse all the results of the exercise and the lessons identified. But it is already clear that the exercise did indeed provide very valuable training and many very useful lessons have already been identified. Overall, our initial judgment is that the exercise has met its aims most successfully. It has demonstrated the ability of the United Kingdom to project forces over a strategic distance, and in doing so reaffirmed UK commitment to the stability and security of the middle east region at an important time.

  Chinook Helicopters
  Mr. Gray
  To ask the Secretary of State for Defence how many spare gearboxes for Chinook helicopters are kept in stock; and where the Chinook gearboxes are supplied from. [14352]

  Mr. Ingram
  There were 30 serviceable gearboxes for Chinook helicopters in stock as at 9 November 2001. These gearboxes were supplied by Boeing.

  Mr. Gray
  To ask the Secretary of State for Defence how many Chinook helicopters(a) are in operation, (b) were deployed in Exercise Saif Sareea 2 and (c) are grounded because of a shortage of spare parts. [14630]

  Mr. Ingram
  As at 9 November, 27 Chinook helicopters were in operation and four were deployed on Exercise Saif Sareea 2. No Chinook helicopters were grounded because of a shortage of spares but a total of 13 aircraft were undergoing scheduled maintenance, repair or modification.

  Apache Helicopters
  Mr. Gray
  To ask the Secretary of State for Defence how many Apache helicopters there are in the United Kingdom; and how many he plans to buy. [14381]

  Dr. Moonie
  The Ministry of Defence is contracted to purchase a total of 67 Apache aircraft. Currently we own 17, which are based in the United Kingdom.

  Mr. Gray
  To ask the Secretary of State for Defence how many Apache operating manuals there are in the UK; if Apache operating manuals may be consulted by nonmilitary personnel in the UK; and if DERA personnel are authorised to use Apache operating manuals. [14351]

  Dr. Moonie
  The Apache operating manuals are all computer-based Interactive Electronic Technical Publications (IETPs), which may be loaded onto any computer with the appropriate current user licence. The Ministry of Defence has purchased in the region of 465 laptop computers to receive the software.

  Within the Joint Helicopter Command (JHC), both military and non-military personnel are currently authorised to consult the Apache IETPs. The non-military

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  personnel are either civil servants or employees of Westland Helicopters Ltd. (WHL), who are assembling the aircraft under licence from Boeing.

  Prior to the vesting of part of the former DERA as QinetiQ plc on 1 July 2001, DERA personnel at the Aircraft Testing and Evaluation (AT&E) facility Boscombe Down, as part of MOD, had access to the Apache operation manuals. However, when these staff transferred to QinetiQ, they were temporarily unable to have access to such proprietary information pending the amendment of WHL's licence with Boeing. The licence amendment was submitted in July and US State Department approval was given on 1 October 2001. Once this approval is implemented, QinetiQ personnel will again be authorised to use the manuals, in support of MOD work.

  Mr. Gray
  To ask the Secretary of State for Defence if DERA personnel had access to the Apache Operating Manual before DERA was privatised; and if he will make a statement on the changes that have occurred in DERA' s security classification since privatisation, with special reference to co-operation with the United States of America. [14354]

  Dr. Moonie
  Prior to the vesting of part of the former DERA as QinetiQ plc on 1 July 2001, DERA personnel at the Aircraft Test and Evaluation facility Boscombe Down, as part of the Ministry of Defence, had access to the Apache operating manuals and other proprietary information.

  QinetiQ's security arrangements are in line with those of other defence contractors, who carry out work on sensitive contracts for MOD, other Government Departments and international collaborative partners, including the United States of America.

  Eurofighter
  Mr. Gray
  To ask the Secretary of State for Defence what British involvement there is in the manufacture of the cockpit frame for Eurofighter; what proportion of the parts of the Eurofighter cockpit are British made; which overseas countries are supplying components to the Eurofighter cockpit frame; which other parts of Eurofighter will be British made, and if he will make a statement. [14353]

  Dr. Moonie
  The front fuselage of the Eurofighter aircraft, which includes the cockpit frames, is manufactured by BAE Systems Warton as part of the UK's agreed overall aircraft programme work-share of approximately 36 per cent. Eurofighter cockpit equipments are manufactured by various consortia, comprising companies from the four Eurofighter Partner Companies from UK, Germany, Italy and Spain. Work is shared as far as practicable in line with the overall programme work-share. Other parts that are British-made are the front canards, right wing leading edge slats and trailing edge flaps, various avionic equipment and a significant number of major engine parts.

  Royal Naval Reserve
  Mr. Jenkin
  To ask the Secretary of State for Defence how many Royal Naval Reserve personnel are serving on operations. [14625]
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  Dr. Moonie
  Twenty RNR personnel have volunteered to be called-out to serve on current operations. This figure excludes naval service reserves engaged on other duties in support of the regular armed forces—eg those serving on full-time reserve service teams in a wide variety of appointments.

CULTURE, MEDIA AND SPORT

  Departmental Promotions
  Dr. Cable
  To ask the Secretary of State for Culture, Media and Sport how much her Department spent on information literature, advertising and campaign material in the financial years(a) 1995–96, (b) 1996–97,(c) 1997–98, (d) 1998–99, (e) 1999–2000 and (f) 2000–01; and if she will make a statement. [12275]

  Dr. Howells
  The Department's spending on information literature for the period 1996–97 to 2000–01 is as set out. Figures for 1995–96 are not available in the form requested.

  Year

  £

  1996–97

  501,366

  1997–98

  338,761

  1998–99

  288,100

  1999–2000

  448,238

  2000–01

  448,140

  No advertising and campaign material was produced during this period.

  Youth Hostels Association
  Chris Grayling
  To ask the Secretary of State for Culture, Media and Sport what recent representations she has received concerning the financial situation of the Youth Hostels Association; and if she will make a statement. [12148]

  Dr. Howells
  We have received over 60 representations on the financial situation of the Youth Hostels Association for England and Wales (YHA). On 30 October 2001 I had a productive meeting with representatives of the YHA to discuss their difficulties and possible sources of help. The Government are pursuing several practical options to assist the YHA. We will also respond shortly to the recommendations in the report of the Rural Task Force, "Tackling the Impact of Foot and Mouth Disease on the Rural Economy" published on 18 October 2001.

  Royal Palaces
  Andrew Mackinlay
  To ask the Secretary of State for Culture, Media and Sport, pursuant to her answer of 25 October 2001,Official Report, column 355W, on the occupation of flats in the royal palaces, if she will list the residents. [11798]

  Dr. Howells
  [holding answer 1 November 2001]The list of persons who occupy residences in the Occupied Royal Palaces other than members of the Royal Family at 31 December 2000 is as follows:

  (i) Private Secretaries and Officials in the Queen's Household: 33

  (ii) Private Secretaries and Officials in other Households: 6

  (iii) Domestic staff in the Queen's Household: 29

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  (iv) Domestic Staff in other Households: 11

  (v) Stables staff looking after the Civil List carriages and carriage horses: 19

  (vi) The Queen's private staff and staff who work on the Royal Farms at Windsor: 9

  (vii) Chauffeurs in the Queen's Household: 4

  (viii) Chauffeurs in other Households: 4

  (ix) Staff in the Queen's Household responsible for the maintenance of the Occupied Palaces Estate (including the Director of Property Services): 18

  (x) Gardeners in the Queen's Household: 4

  (xi) Gatekeepers and security staff: 6

  (xii) Firepatrolmen in the Queen's Household: 4

  (xiii) Craftsmen and porters in the Queen's Household: 19

  (xiv) Royal Collection staff: 4

  (xv) Crown Estate gardeners: 2

  (xvi) Military Knights at Windsor Castle (Pensioners): 13

  (xvii) Pensioners: 43

  (xviii) Commercial: 16

  Total: 244.

  The total of (i) and (ii) is 39 and the list of posts by job title is as follows:
  Private Secretaries and Officials in the Queen's Household provided with residential accommodation (i)

  1. Assistant Private Secretary to the Queen

  2. Keeper of the Privy Purse

  3. Comptroller, Lord Chamberlain's Office

  4. Crown Equerry

  5. Director of the Royal Collection

  6. Mistress of the Robes

  7. Marshal of the Diplomatic Corps

  8. Governor and Constable of Windsor Castle

  9. Deputy Treasurer to the Queen

  10. Deputy Master of the Household

  11. Surveyor of the Queen's Pictures

  12. Royal Librarian

  13. Equerry in Waiting to the Queen

  14. Sub-Dean Chapel Royal

  15. Superintendent, Royal Mews

  16. Superintendent, Windsor Castle

  17. Secretary, Lord Chamberlain's Office

  18. Chief Clerk, Master of the Household's Department

  19. Chief Correspondence Clerk

  20. Deputy Superintendent, Royal Mews

  21. Administrator, Royal Collection

  22. Superintendent of St. James's Palace State Apartments

  23. Deputy Chief Clerk, Royal Mews

  24. Assistant Curator, Royal library

  25. Archivist, Royal Archives

  26. Registrar, Royal Archives

  27. Deputy Registrar, Royal Archives

  28. Assistant Registrar, Royal Archives

  29. Secretary to the Communications Secretary

  30. Exhibitions and Maintenance Conservator, Royal library

  31. Armourer, Royal Collection

  32. Messenger of the Yeoman of the Guard

  33. Serjeant of the Vestry, Chapel Royal

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  Private Secretaries and Officials in Other Royal Households provided with Residential Accommodation (ii)

  34. Private Secretary to Queen Elizabeth The Queen Mother

  35. Private Secretary to the Duke of Edinburgh

  36. Equerry in Waiting to the Duke of Edinburgh

  37. Private Secretary to the Prince of Wales

  38. Private Secretary to the Duke of York

  39. Private Secretary to the Duke of Gloucester.

  Television
  Mr. Allan
  To ask the Secretary of State for Culture, Media and Sport what action her Department is taking to promote digital television to consumers who do not wish to take out a pay TV subscription. [12339]

  Dr. Howells
  On 12 October, the Government published a draft Digital TV Action Plan which sets out the issues on which action needs to be taken to enable and encourage take up of digital television. An essential element of the Plan will be the need to raise the awareness and knowledge of consumers including those who want to receive only free-to-view channels.

  Creative Partnerships (Disadvantaged Areas)
  Mr. Challen
  To ask the Secretary of State for Culture, Media and Sport when the Government will fulfil its commitment to establish creative partnerships linking schools with arts organisations in disadvantaged areas. [13449]

  Dr. Howells
  The formal launch of creative partnerships will take place as planned in April 2002, when the funds set aside for this initiative start to flow.

  The 16 pilot areas for creative partnerships were announced in February 2002. Since then, Peter Jenkinson, the former Director of the New Art Gallery, Walsall, has taken up the post of National Director of Creative Partnerships, and preparations in the pilot areas are now well under way.

  BBC Chairman (Ethnic Minority Candidates)
  Mr. Vaz
  To ask the Secretary of State for Culture, Media and Sport how many black and Asian people were shortlisted for the post of Chairman of the BBC. [13610]

  Dr. Howells
  In the interests of confidentiality, it is not our policy to release information about individual shortlists.

  Seaside Towns
  Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport what steps she is taking to implement the Resorts Taskforce report on seaside towns, "Sea Changes". [13739]

  Dr. Howells
  The Government welcomed the English Tourism Council's (ETC) report, "Sea Changes", which was produced in the light of advice from the ETC's Resorts Task Force. The report makes 20 recommendations, which would involve various bodies at a national, regional and local level, as well as the industry itself. This Department has asked the ETC to consider how that report can best be implemented and to
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  what timescale. To that end the ETC is working closely with the British Resorts Association and relevant tourism officers.

  Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport if she will consider the(a) establishment and (b) funding of a Seaside Regeneration Trust modelled on the Coalfields Regeneration Trust. [13740]

  Dr. Howells
  The English Tourism Council's report, "Sea Changes", published last February, makes a number of recommendations about how to approach regeneration that could be of use to resort towns.

  The Government consider that the prime responsibility for resort regeneration, which often has some tourism focus, lies with those who administer individual resorts—working with local and regional partners. There is a variety of funding and organisational mechanisms now in place to help achieve this, for instance, Neighbourhood Renewal Strategies (for those eligible) and Local Strategic Partnerships. We encourage local authorities to make use of these mechanisms. However, while acknowledging the level of deprivation that has developed in some of our resorts over the years, we do not consider it directly

  Total number of New Opportunities Fund awards made to the Buckingham constituency—12 November 2001

  Distributing body/recipient

  Project title/Desc.Long

  Award date

  Award amount(£)

  New Opportunities Fund

  Buckingham After School Teens Club

  The grant would be used to extend the group's existing provision (for 5 to 12-year-olds) by providing a total of 60 after school and holiday child care places catering for 11 to 14-year-olds. The schools served would be Buckingham School and Royal Latin School

  12 July 1999

  19,071

  Southcourt and Walton Court Community Project

  The applicant is a community project with charitable status in Aylesbury. It is managed by committee and has operated for eight years providing a range of child care as well as advice and activities for adults. It employs four part-time staff

  20 October 1999

  6,600

  Drayton Parslow Playgroup

  The grant would be used to provide an extra 24 places at the after-school club for children aged 3 to 4-years-old. The project would be situated in Drayton Parslow Buckinghamshire. School served would be Drayton Parslow County First School

  10 December 1999

  1,179

  Southcourt and Walton Court Community Project

  The grant would be used to provide three new breakfast clubs in the Aylesbury area which would create 128 places in total for children between the ages of 4–11 years. The places would benefit children attending three local schools

  16 June 2000

  20,020

  Buckingham After School Club—Winslow

  The grant would be used to create 34 after school places for children aged 5 to 11-years-old in Buckingham. School served would be Winslow Combined School, a contribution to the cost of employing a play leader and four play assistants

  25 October 2000

  18,001

  Buckingham Secondary School

  Our of School Hours Learning Programme

  7 November 2000

  42,654

  Total value of NOF awards

  107,525

  Communications White Paper
  Mr. Bryant
  To ask the Secretary of State for Culture, Media and Sport when she will publish the Government's response to the Culture, Media and Sport Select Committee's report on the Communications White Paper. [15012]

  Tessa Jowell
  I have today published the Government's response to the Culture, Media and Sport Select Committee's report.
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  comparable to the sudden and severe impact of pit closures on mining communities, which is what justified setting up the Coalfields Regeneration Trust.

  Geraldine Smith
  To ask the Secretary of State for Culture, Media and Sport what plans she has to improve the infrastructure of British seaside resorts. [13742]

  Dr. Howells
  The Government believe that the principal responsibility for supporting the infrastructure of British seaside resorts lies with local government, working with other interested parties in the light of a clearly enunciated vision and strategy for tourism and other economic activity. It is also particularly important that aspects of planning and transport, for instance, as well as any overall plan for regeneration, dovetail with wider regional plans which are the responsibility of regional development agencies in England. In Scotland and Wales the infrastructure of seaside resorts is a matter for the relevant Minister in each devolved administration.

  New Opportunities Fund
  Mr. Bercow
  To ask the Secretary of State for Culture, Media and Sport if she will make a statement on the number of beneficiaries in the Buckingham constituency from the new opportunities fund. [14010]

  Mr. Caborn
  To date there have been six beneficiaries in the Buckingham constituency. A list of these awards is set out in the following table.

HOME DEPARTMENT

  Holocaust Memorial Day
  Mr. Dismore
  To ask the Secretary of State for the Home Department what representations he has made to the BBC concerning the televising of Holocaust Memorial Day 2002; and if he will make a statement. [14721]

  Angela Eagle
  Following their successful collaboration with the Home Office in producing and televising the
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  national ceremony to mark the first United Kingdom Holocaust Memorial Day on 27 January, the BBC have developed plans for covering Holocaust Memorial Day in the future. These will culminate in a major live televised ceremonial event on 27 January 2005, the 60th anniversary of the Liberation of Auschwitz. My officials will take up the BBC's invitation to discuss with them their strategy for covering Holocaust Memorial Day over the next four years, and to include representatives from the Home Office-led strategic group planning Holocaust Memorial Day.

  Dr. Evan Harris
  To ask the Secretary of State for the Home Department what representations he has received regarding the BBC televising the Holocaust Memorial Day national event; and if he will make a statement. [14501]

  Angela Eagle
  All those organisations involved in helping the Home Office plan the national event on Holocaust Memorial Day on 27 January 2002 have expressed their disappointment that the BBC have decided to televise the national event every five years only, the next time on 27 January 2005 the 60th anniversary of the Liberation of Auschwitz.

  However, the BBC have made an unequivocal commitment to mark Holocaust Memorial Day each year in a range of appropriate ways. They have invited Home Office officials and those organisations involved in planning Holocaust Memorial Day to discuss their strategy for the next four years with them. Their proposed strategy contains a differing mix of documentary, drama, current affairs, children's programming and news coverage each year leading to a major live ceremonial event for 2005.

  In January 2002 the BBC have a major original film drama "Conspiracy", starring Kenneth Brannagh, about Reinhard Heydrich and the Wannsee Conference; their television religious strands "The Heaven and Earth Show" and "Songs of Praise" plan to feature Holocaust related material in their programmes on 27 January; the BBC are looking at a special edition of their BBC 2 current affairs programme "Correspondent" during the Holocaust Memorial weekend and it is likely that various programmes from Children's BBC will take up the theme too.

  The BBC also intend to cover the national event next 27 January on their news bulletins on BBC 1 and 2 and on News 24, and likely on radio too.

  Dr. Evan Harris
  To ask the Secretary of State for the Home Department what assessment he has made of the impact that the televised commemoration of Holocaust Memorial Day had on the understanding of the general public of the issues raised. [14500]

  Angela Eagle
  There was an estimated audience of 1.2 million for the ceremony televised live on 27 January 2001 which got one of the highest quality ratings for a TV programme. Many people said they found the event both moving and challenging. In addition, many others will have become aware of the purpose of Holocaust Memorial Day through the many local activities around the country, particularly in schools, to mark the day.

  Mr. Dismore
  To ask the Secretary of State for the Home Department if he will make a statement concerning the local events to be held for Holocaust Memorial Day 2002. [14202]
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  Angela Eagle
  We anticipate there will again be a wide range of local activities around the country to mark Holocaust Memorial Day. Further guidance has been produced to help local authorities and community groups to plan their events; and new material for use in schools has also been produced. In each case the guidance has drawn on good practice from this year and suggestions for improvement identified through surveys of local authorities and schools.

  Prisons (Filming)
  Mr. Win Griffiths
  To ask the Secretary of State for the Home Department how many requests have been made in the last two:years to visit and film in(a) prisons and (b) institutions for young offenders and other places where young people are in custody; and what the response to the requests was. [13940]

  Beverley Hughes
  These figures are not collated centrally, and there is no requirement to do so.

  The Prison Service receives many hundreds of requests per year from international, national and regional TV companies to film in prisons and Young Offender Institutions for a variety of news broadcasts, dramas and documentary programmes.

  Interdepartmental Ministerial Group
  Simon Hughes
  To ask the Secretary of State for the Home Department if he will make a statement on the work of the interdepartmental ministerial group established following disturbances in Bradford, Burnley and Oldham earlier this year; and if he intends to publish the reports of the group. [13895]

  Mr. Denham
  The ministerial group on Public Order and Community Cohesion expects to complete its work in December. It is intended to publish its report in due course.

  Police Pensions
  Simon Hughes
  To ask the Secretary of State for the Home Department what percentage of policing expenditure in(a) 1992, (b) 1997 and (c) the last year for which figures are available was spent on police pensions; and if he will make a statement. [13894]

  Mr. Denham
  The figures requested are given in the table.

  In recognition of the increased burden of paying police pensions, the proportion of revenue funding allocated to police authorities on the basis of pensions commitments has been increased from 12.9 per cent. in 1997–98 to 14.5 per cent. since 1999–2000. It will remain at this level in 2002–03.

  Year

  Net pensions expenditure(£)

  Net police expenditure(£)

  Proportion of police net expenditure spent on pensions (Percentage)

  1992–93

  456,479

  5,621,763

  8.1

  1997–98

  863,131

  6,870,093

  12.6

  2000–01

  1,029,454

  7,739,163

  13.3

  Source:

  Chartered Institute of Public Finance and Accountancy Police Statistics

  (Estimates for 2000–01)

  Distraction Burglary Strategy
  Tim Loughton
  To ask the Secretary of State for the Home Department if he will list those projects which have been funded by his Department as part of his distraction burglary strategy; what the amounts involved are; and what the time scale is of the funding. [14362]

  Mr. Denham
  The work of the distraction burglary Taskforce and the two staff seconded for the duration from the police and local government sectors, is being funded through two means: support from utility companies such as

  Timescale e

  Value

  Completion of the Taskforce action plan

  By end March 2000 with research element completed by June 2002

  £1 million

  Leeds Distraction Burglary Initiative

  By 2003

  £554,000

  Sheffield Distraction Burglary Initiative

  By March 2002

  £288,000

  Derbyshire Database project

  By March 2002

  £168,000

  Sexual Abuse
  Simon Hughes
  To ask the Secretary of State for the Home Department what plans he has to introduce legislation to strengthen the law in relation to protecting children and vulnerable people from sexual abuse; and if he will make a statement. [13893]

  Mr. Denham
  [holding answer 12 November 2001]: When the Government set up the Sex Offences Review in January 1999, its terms of reference included "to provide coherent clear sex offences which protect individuals, especially children and the more vulnerable, from abuse and exploitation".

  We are committed to introducing strengthened legislation on sex offences, and will announce our conclusions once we have completed our analysis of the responses to the consultation paper 'Setting the Boundaries'.

  Category A Prisoners
  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women were classified as category A prisoners in prisons in England and Wales on 1 November [13926]

  Beverley Hughes
  On 1 November 2001, there were 961 men and four women classified as category A prisoners in prisons in England and Wales.

  Community Court Order Warrants
  Simon Hughes
  To ask the Secretary of State for the Home Department if warrants for breach of a community court order are systematically withdrawn after 12 months have elapsed; and if he will make a statement. [13831]

  Mr. Denham
  [holding answer 9 November 2001]: All cases are considered on their merits and no central policy directions have been given to the National Probation Service, on the period after which a warrant should be returned to the courts for consideration of withdrawal. I am aware that practice does differ across the country and the National Probation Service is currently considering whether further advice should be given in these circumstances.
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  the water industry, the Electricity Association, British Gas and British Telecom to the sum of £270,000. The second element is being met through the Crime Reduction Programme to the sum of £1 million.

  In addition to the Taskforce, the Government are also separately supporting three police-led initiatives. These are located in Leeds, Sheffield and Alfreton Derbyshire, to the sum of £1,009,765.

  These combined elements make up my Department's strategy to tackle distraction burglary. The elements, amounts and timescale for completion are:

  Simon Hughes
  To ask the Secretary of State for the Home Department how many warrants for the breach of a community court order have been withdrawn since 1 January; and if he will make a statement. [13832]

  Mr. Denham
  [holding answer 9 November 20011: This information is not available centrally.

  Bedfordshire Police
  Mr. Sayeed
  To ask the Secretary of State for the Home Department what assessment he has made of the effect of salary differences and the free rail travel offer to those officers within a 70-mile radius of Charing Cross station on the number of police officers transferring from Bedfordshire Police to the Metropolitan police. [13438]

  Mr. Denham
  Officers in the Metropolitan police qualify for a London allowance and London weighting in addition to their basic pay. For officers who were appointed before 1 September]994 and who receive a housing emolument, the London allowance is worth £1,011 a year. From 1 July 2000, officers who were appointed on or after 1 September 1994 and who are not in receipt of a housing emolument receive a London allowance of £4,338 a year. London weighting was increased to £1,773 a year for all Metropolitan police officers from] July this year. In addition, officers in the Metropolitan police have free rail travel to and from work within a 70-mile radius of Charing Cross Station.

  From 1 April 2001, officers in Bedfordshire appointed on or after 1 September 1994 who are not in receipt of a housing allowance receive an allowance of £1,000 a year in addition to basic pay.

  The increase in the London allowance and the new allowance for officers in Bedfordshire were approved by the then Home Secretary, my right hon. Friend the Member for Blackburn (Mr. Straw), following agreements in the Police Negotiating Board (PNB). PNB is the statutory negotiating body for police pay and conditions which makes recommendations to the Secretary of State. The Secretary of State approved the new allowances in recognition of the recruitment and retention difficulties associated with the higher cost of living in London and Bedfordshire.
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  Since 1 July 2000, 12 officers have transferred from the Bedfordshire police to the Metropolitan police and two have moved from the Metropolitan police to Bedfordshire police. I will keep the position under review.

  Deportations
  Mr. Vaz
  To ask the Secretary of State for the Home Department how many people have been deported from the United Kingdom since 1 January. [13633]

  Angela Eagle
  I regret that this information is not available.

  The only information currently available about the number of people removed in the current year relates to the number of asylum seekers removed in the period January-June. There were 4,660 such removals. Of this number, 2,805 were on-entry removals (persons refused entry to the United Kingdom and subsequently removed) and 2,570 were after-entry removals. It is not possible to say how many of those who were the subject of deportation action were deported, and how many left before a deportation order was actually signed.

  Corresponding information on the number of non-asylum removals for the period is not currently available as these data are yet to be quality assured.

  Fireworks
  Mr. Weir
  To ask the Secretary of State for the Home Department (1) how many convictions there were against persons who have injured others with fireworks in each of the last five years in(a) Scotland and (b) the UK; [13163]

  (2) how many prosecutions have been brought against persons who are alleged to have damaged property with fireworks in each of the last five years in (a) Scotland and (b) the UK; [13189]

  (3) how many convictions have been secured against those prosecuted for sales of fireworks to underage children in each of the last five years in (a) Scotland and (b) the United Kingdom; [13186]

  (4) how many prosecutions have been brought against suppliers of fireworks for sales to underage children in each of the last five years in (a) Scotland and (b) the United Kingdom; [13185]

  (5) how many convictions have been secured against persons who have damaged property with fireworks in each of the last five years in (a) Scotland and (b) the UK;[13190]

  (6) how many prosecutions have been brought against persons who have injured others with fireworks in each of the last five years in (a) Scotland and (b) the United Kingdom. [13187]

  Mr. Denham
  Information held centrally on the Home Office Court Proceedings Database, relating to England and Wales, does not identify separately the offence of "selling gunpowder to children" under s31 of the Explosives Act 1875, from other summary offences under the Explosives Acts.
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  Neither does it enable a distinction to be made between prosecutions and convictions for offences connected with personal injury or damage to property with fireworks, as the circumstances of violent and property offences are not collected.

  Figures for Scotland and Northern Ireland are matters for the Scottish Parliament and the Northern Ireland Assembly respectively.

  Elderly Prisoners
  Mr. Cox
  To ask the Secretary of State for the Home Department how many frail elderly(a) men and (b) women at present are serving prison sentences in England and Wales. [13447]

  Beverley Hughes
  The numbers of prisoners aged 60 and over currently serving a prison sentence as at 30 September 2001 are listed in the table. Information about the state of their health is not collected centrally.

  Male

  Female

  60–69

  1,017

  3

  70–74

  163

  4

  75+

  61

  0

  Total

  1,241

  7

  Disabled Prisoners
  Mr. Cox
  To ask the Secretary of State for the Home Department how many(a) men and (b) women serving prison sentences in England and Wales are confined to a wheelchair. [13448]

  Beverley Hughes
  This information is not collected centrally.

  Prison Construction
  Mr. Cox
  To ask the Secretary of State for the Home Department if he will list the prisons being constructed in England and Wales, and the date when these prisons are expected to come into use. [13445]

  Beverley Hughes
  There are no prisons under construction in England and Wales at present. Two prisons, to be built at Ashford, Middlesex and Peterborough, are under procurement. Construction is planned to start in 2002. The prison at Ashford is due to open in July 2003 and the prison at Peterborough in April 2004.

  Al-Muhajiroun
  Mr. Dismore
  To ask the Secretary of State for the Home Department if he will investigate (1) the links between(a) Medina Ltd, TransGlobal Security International, Mark Yates and Paul Field and (b) Sakina Security Services Ltd, Al-Muhajiroun, and Omar Bakri Mohammed; and if he will make a statement; [13626]

  (2) the activities of TransGlobal Security International; and if he will make a statement; [13625]

  (3) the links between Anil Shah and Sakina Security Services; and if he will make a statement. [13627]
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  Mr. Denham
  I have been in close touch with the relevant enforcement units, following their work in monitoring and evaluating any information that might be used in connection with any prosecution. The investigation of any alleged criminal offences is of course entirely a matter for the police. Any information that my hon. Friend is aware of which might assist the police in their investigations should be supplied to my Department immediately.

  Mr. Dismore
  To ask the Secretary of State for the Home Department if he will investigate the alleged terrorist training camps(a) in the north of Scotland and (b) at Yetgoch in Hebron, Wales; and if he will make a statement. [13628]

  Mr. Denham
  I am aware of the allegations of terrorist training camps and the particular concerns of my hon. Friend in relation to the alleged terrorist training camps in Scotland and Wales. I understand that the police have made inquiries: they have advised me that there is no evidence to show that any criminal offences have been committed at either location.

  It is of course an offence under section 54 (1) and (2) of the Terrorism Act 2000 to provide instruction or training or to receive instruction or training in the making or use of firearms, explosives, or chemical, biological or nuclear weapons. In addition, under subsection (3)(b), a person commits an offence if he invites another to receive instruction or training and the receipt would constitute an offence under subsection (2) but for the fact that it is to take place outside the United Kingdom. Any concrete and verifiable evidence of such activities will be dealt with immediately.

  Immigration Status
  Mr. Dismore
  To ask the Secretary of State for the Home Department, pursuant to his answer of 24 October 2001,Official Report, column 285W, when he formed his policy of not answering questions on immigration matters. [13521]

  Angela Eagle
  It has been long-standing Government policy not to disclose details of a person's immigration status to a third party since this is regarded as confidential information.

  Vivisection
  Vera Baird
  To ask the Secretary of State for the Home Department if he will establish a royal commission into vivisection. [13672]

  Angela Eagle
  The Government have not ruled out a royal commission, but strongly believe that resources can best be used to make immediate improvements to the operation of the Animals (Scientific Procedures) Act 1986 and to promote the fullest application of the 3Rs—the replacement of the use of animals with alternative methods; the reduction of the numbers of animals used; and the refinement of the procedures to minimise pain, suffering, distress or lasting harm.

  In this context, the Animal Procedures Committee issued a public consultation paper in December 2000 as part of its review of the cost-benefit assessment of applications for authority to conduct scientific research using animals. As part of this work, the Committee plans
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  to produce an authoritative statement on the validity of animal experiments. I understand that the Committee hopes to present its report in the first half of 2002.

  The House of Lords have established a Select Committee on the validity of the use of animals in scientific procedures and its work is under way.

  Metropolitan Police (Funding)
  Dr. Cable
  To ask the Secretary of State for the Home Department how much additional funding has been made available to the Metropolitan Police Authority to finance the additional security duties of the Metropolitan police in the capita] following events of 11 September. [12413]

  Mr. Denham
  [holding answer 5 November 2001]: I greatly appreciate the immediate response made by the Metropolitan Police Authority and Service after the terrorist attack in the United States of America on 11 September.

  I recognise that establishing and maintaining measures to counter increased risks to security has given rise to additional costs. I am considering with the Metropolitan police the financial implications.

TRADE AND INDUSTRY

  "Your Guide"
  Mr. Borrow
  To ask the Secretary of State for Trade and Industry if she will make a statement on the future funding of the "Your Guide" pilot scheme. [13651]

  Mr. Alexander
  A total of £35 million over three years has been set aside to pilot the concept of Post Offices as Government General Practitioners. Up to £25 million of this has been made available to cover the cost of the "Your Guide" pilot currently running in Leicestershire and Rutland. Future funding decisions will depend on the outcome of the pilot.

  Anthrax (Mail Services)
  Mr. Borrow
  To ask the Secretary of State for Trade and Industry what discussions she has had with the Post Office regulator on the impact of anthrax scares on the performance of the Royal Mail. [13650]

  Mr. Alexander
  My officials are in regular contact with the Postal Services Commission. The Commission has advised me that it is too early to assess the impact of anthrax scares on the performance of the Royal Mail. The situation is being kept under review by the Commission, Consignia and the Consumer Council for Postal Services.

  Geraldine Smith
  To ask the Secretary of State for Trade and Industry what assessment she has made of the impact of anthrax scares on Consignia's quality of service targets. [13731]

  Mr. Alexander
  Quality of services targets are a matter for Consignia and the Postal Services Commission. The Commission has advised me that it is too early to assess the impact of anthrax scares on Consignia's quality of service targets. The situation is being kept under review by Consignia, the Commission and the Consumer Council for Postal Services.

  Consignia
  Geraldine Smith
  To ask the Secretary of State for Trade and Industry what volume of mail was handled by Consignia and its predecessor in(a) 1996, (b) 1997, (c) 1998, (d) 1999 and (e) 2000. [13744]

  Mr. Alexander
  This is an operational issue for Consignia.

  The company has provided the following information, which can be obtained in its report and accounts.

  Million

  Total inland letters (first and second class)1

  International letters (number of letters posted)2

  1996–97

  16,251

  785

  1997–98

  17,423

  815

  1998–99

  17,934

  830

  1999–2000

  18,738

  839

  2000–01

  19,092

  772

  1The basis of calculation for inland letter volumes has been changed for 2000–01. Previous years' figures have been restated to reflect this change.

  2 Items are outbound from the UK only. For 2000–01 the basis of calculation for international letter volumes has been changed. Previous years' figures have been restated to reflect this change.

  Nuisance Calls
  Kevin Brennan
  To ask the Secretary of State for Trade and Industry what consultation she has had with(a) Oftel, (b) the Information Commissioner's Office, (c) BT's nuisance calls bureau, (d) NTL's nuisance calls bureau and (e) the Direct Marketing Association about providing telephone users with protection from silent calls by power diallers; and if she will make a statement. [13176]

  Mr. Alexander
  Oftel and the Information Commissioner's Office both have responsibilities for the consumer protection safeguards that are in place relating to silent calls by power diallers. My right hon. Friend the Secretary of State for Trade and Industry does not have an enforcement role in this area. However, DTI officials are in regular contact with Oftel, the ICO, and the DMA over policy in this area, and recently participated in a working group meeting set up by the DMA to tackle the problems caused by power dialling systems. My officials have consulted with Oftel, the Information Commissioner's Office and the Direct Marketing Association, together with representatives from operators' nuisance call bureaux, to ensure that consumers continue to benefit from the right level of protection.

  Retail Petrol Market
  Mr. Carmichael
  To ask the Secretary of State for Trade and Industry if she will list by(a) grade and (b) number the officials employed in her Department monitoring the retail petrol market in Scotland. [12690]

  Mr. Wilson
  [holding answer 8 November 2001]: A number of my officials have responsibility for monitoring energy markets generally, including the petrol retail market throughout the United Kingdom.

  Post Office
  Mr. Chaytor
  To ask the Secretary of State for Trade and Industry how many(a) thefts and (b) unexplained losses of (i) letters arid (ii) parcels were recorded by the Post Office and how much compensation was paid by the Post Office in each case in each of the last five years; and if he will make a statement. [12465]

  Mr. Alexander
  [holding answer 12 November 2001]: This is an operational issue for Consignia.

  I understand that Consignia is currently working with Postwatch on a system for measuring the loss and theft of mail and parcels.

  Consignia holds figures on the number of complaints made with regards to alleged loss and theft for the previous two financial years.

  Complaints on loss

  2000–01

  1999–2000

  Letters

  578,091

  557,984

  UK standard retail parcels

  26,508

  25,295

  International standard retail parcels

  18,510

  16,031

  Compensation paid (£k)

  2000–01

  1999–2000

  Letters

  6,134

  5,192

  UK standard retail parcels

  234

  n/a

  Caravan Parks
  Mr. Chope
  To ask the Secretary of State for Trade and Industry if she will publish a regulatory impact assessment of the effect on holiday caravan parks of the proposal by Ofgem to change the arrangements under which caravan parks can pass on electricity charges to their customers. [R] [12764]

  Mr. Wilson
  This is a matter for Ofgem. I understand that they have issued two consultation documents on this subject and are presently seeking further views from interested parties prior to issuing their final proposals.

  End of Vehicle Life Directive
  Chris Grayling
  To ask the Secretary of State for Trade and Industry what her policy is on the application of the End of Vehicle Life Directive to manufacturers whose market share has grown significantly since the introduction of those vehicles which will be affected by the Directive after its introduction. [12742]

  Mr. Wilson
  No decision has yet been taken on the precise method of transposing and implementing the options in the End of Life Vehicles Directive. The period for responding to the DTI Consultation Paper on options closed on 2 November, and responses are now being assessed. Consideration is being given to the potential impacts on all vehicle manufacturers.

  Renewable Energy
  Mr. Hepburn
  To ask the Secretary of State for Trade and Industry what plans she has to increase investment in renewable energy. [13209]
  649W
  Mr. Wilson
  The Government have put in place a robust policy to increase investment in the development of renewable energy. The single most important mechanism, the new Renewables Obligation (RO) to be introduced next year and lasting right through until 2027, will drive forward investment in renewables. The RO is expected to create long-term support for renewables, worth over £1 billion per year, by 2010. The introduction of the Obligation will be underpinned by direct Government funding for renewables worth over £260 million between 2001 and 2004. This includes the Government's current sustainable energy research and development programme, worth £55.5 million over the next three years.

  Other components to this strategy, which will increase investment in the renewable energy sector, include:
  exemption of renewables from Climate Change Levy (CCL) payments. This is expected to lead to greater demand for renewable electricity and increased investment;
  the Non-Fossil Fuel Obligation (NFFO) Orders supported many renewable energy projects through the previous Non-Fossil Fuel Obligation. We have arranged that existing NFFO contracts will be honoured. We have also announced a proposal for a NFFO locational flexibility Order. Locational flexibility will be available for all NFFO 3, 4 and 5 projects that have not been commissioned, other than mixed waste incineration projects. This Order will allow projects not already built, to identify more appropriate locations. so that they can overcome any problems in securing planning permission. These initiatives are expected to bring forward investment in this sector in the near future;
  the Government have also initiated regional assessments throughout all regions of the UK. The majority of these studies have been completed and have identified each region's capacity to generate electricity from renewable sources. Once all the assessments are completed, it is expected that specific regional targets will be adopted across the UK. These targets are expected to attract investment in the resources available in these regions.

  Government policy is bringing about a much more positive approach to supporting renewable energy projects. Taking all these measures together, the Government believe the industry is well placed to attract and retain a significant level of investment.

  Mr. Key
  To ask the Secretary of State for Trade and Industry what plans she has to increase the target of energy generated from green sources. [10649]

  Mr. Wilson
  [holding answer 30 October 2001]: The Department of Trade and Industry attaches great importance to green forms of energy and has set ambitious targets. The new Renewables Obligation as well as Scottish R. 0. will create a long-term market for renewables which will be worth over £1 billion per year by 2010. The Obligation will be the main mechanism by which we will meet our renewables targets and will be underpinned by direct Government funding worth over £260 million between 2001 and 2004. This will include an extensive capital grants programme for the early development of offshore wind and energy crops, the initial stage of a major photovoltaics demonstration programme and a boost for research and development.

  Our target is that by 2010, just over 10 per cent. of electricity sales by licensed suppliers will come from sources eligible for the Renewables Obligation. As set out in our recent statutory consultation document, we have proposed that the level of Obligation will increase from year to year as follows.
  650W

  Period

  Estimated sales by licensed suppliers in GB TWh

  Total obligation(GB)TWh

  Total obligation as percentage of sales (GB)Percentage

  2002–03

  313.6

  9.4

  3.0

  2003–04

  316.2

  13.5

  4.3

  2004–05

  318.7

  15.6

  4.9

  2005–06

  320.6

  17.7

  5.5

  2006–07

  321.4

  21.5

  6.7

  2007–08

  322.2

  25.4

  7.9

  2008–09

  323.0

  29.4

  9.1

  2009–10

  323.8

  31.5

  9.7

  2010–11

  324.3

  33.6

  10.4

  The Obligation will remain in place until 31 March 2027, although to date we have not made any proposals for increasing the target after 2010. This will, however, be reviewed throughout the lifetime of the Obligation in the light of available information on climate change. The target may increase after this time, and this would be effected through an amendment to the Renewables Obligation Order which we aim to put before the House later this year.

  While this is a description of the current position the question of the contribution to be made by renewables is part of the PIU's Remit of Energy Policy. If it appears feasible to achieve even more ambitious targets on renewables, I will closely examine the means of doing so.

  Financial Assistance (Chorley)
  Mr. Hoyle
  To ask the Secretary of State for Trade and Industry what(a) financial investment and (b) other assistance the North-West regional development agency has put into Chorley in each of the last three years. [13747]

  Alan Johnson
  The North-West Development Agency advise that the total financial investment and assistance in Chorley since 1998–99 has been £175,591 broken down as follows:

  1998–99: £71,309

  1999–2000: £85,269

  2000–01: £18,013.

  Most of this investment has been through inherited Derelict Land Grant projects. The biggest sum invested in any single project during this period has been £56,000 in 1999–2000 for studies in relation to the Royal Ordnance Site. Of the £18,013 invested in 2000–01, £12,594 was invested in the New Farming Horizons programme.

  Unsolicited E-mail
  Mr. Martyn Jones
  To ask the Secretary of State for Trade and Industry if she will make a statement on the Government's position on the Telecoms Data Protection Directive (97/66/EC) in relation to unsolicited e-mail. [12380]

  Mr. Alexander
  There is on-going debate over the application of the current telecoms data protection directive (97/66/EC) to e-mail, and the Government welcome the European Commission's proposal to clarify the position under the new communications data protection directive which will replace it. The UK Government have argued that member states should be allowed to choose between opt-in and opt-out controls. This would allow an assessment of the situation in the light of working experience of both approaches.

  Ministerial Visit (China)
  Mr. Key
  To ask the Secretary of State for Trade and Industry if she will make a statement about the recent visit to China of the hon. Member for Cunninghame, North (Mr. Wilson). [10119]

  Mr. Wilson
  [holding answer 30 October 2001]: My recent visit to China focused on promoting the UK aerospace and energy industries.

  On aerospace, my agenda was to develop good bilateral relations with the Chinese aviation authorities and airlines—particularly in respect of commending the possible purchase of fifty Airbus narrow-body aircraft by China; promoting UK collaboration on developing a domestic Chinese regional jet and encouraging Chinese airlines to firm up outstanding options on the Airbus A340 large aircraft powered by Rolls-Royce engines. (As you will know, Airbus wings are made in the UK, as are Rolls-Royce engines).

  As elsewhere, we have found that much of the aerospace business we have secured with China in the past has been dependent upon good, long-standing relations at Government level and with the airline and aerospace manufacturing industry.

  China is the world's fastest growing aviation market and looks set to continue to grow rapidly over the next 20 years based on the anticipated expansion of the Chinese domestic economy. This will provide many new opportunities for the UK aerospace industry to benefit from both selling to China and entering into profitable industrial collaboration arrangements with the Chinese aerospace industry.

  Current prospects in China remain buoyant, despite the aviation downturn in the West. Airbus has just announced that it is expected to deliver eight A318 aircraft to Air China by 2004 and no Chinese airline customers have postponed Airbus aircraft orders since Sept 11.

  The opening up of China's vast western regions also offers enormous opportunities for UK companies to benefit in helping China develop its airport and energy infrastructure. During my visit I also encouraged the Chinese authorities to expand their use of UK companies in the development and upgrading of China's airports, building on the recent success by Ove Arup in winning the contract to design the new terminal building at Chongqing.

  On the energy side, China's growing market for gas also offers good opportunities for UK companies. The Chinese Government have decided to develop a pipeline from the western region to the industrialised east. A number of major liquified natural gas (LNG) projects are also under way.

  I addressed the Beijing Energy Forum, co-chaired by senior officials of the DTI and their Chinese counterparts. The establishment of the Forum was an important development, especially now that natural gas has been ear-marked as a major source of energy for China.
  652W
  A newly established China-Britain Natural Gas Working Group will also strengthen links and help to identify opportunities in this area. The Working Group will facilitate the sharing of UK experience and help ensure that the development is both safe and environmentally acceptable. There are four key areas of collaboration—policy creation, gas supply, infrastructure and the utilisation of natural gas in China. The promotion of joint ventures to fill identified capability gaps in China will enable more activity between Chinese and UK businesses.

  In Shanghai I launched a new brochure prepared by the British Consulate-General in Shanghai which catalogues current local opportunities for UK companies. The rate of growth in this dynamic region is awesome and the brochure outlines a number of major projects in which British companies could become involved. From my discussions with the Government and Shanghai city authorities it is clear that a higher level of British involvement would be welcomed. One of the major opportunities is presented by BP's involvement in the biggest-ever joint venture in China to build a petrochemicals complex at Caojing, on the outskirts of Shanghai. I held discussions with BP during my visit and asked them to encourage as much British involvement as possible in the supply chain.

  Coal
  Norman Lamb
  To ask the Secretary of State for Trade and Industry what quantity of coal was consumed in the UK in each of the last 10 years for which figures are available. [12755]

  Mr. Wilson
  The information requested is as follows:

  Total inland coal consumption in the UK

  Million tonnes

  1991

  107,513

  1992

  100,580

  1993

  86,757

  1994

  81,767

  1995

  76,942

  1996

  71,400

  1997

  63,080

  1998

  63,152

  1999

  55,720

  2000

  58,954

  Source:

  Digest of UK Energy Statistics 2001 Table 2.11

  State Aid
  Paddy Tipping
  To ask the Secretary of State for Trade and Industry if she will set out by(a) colliery and (b) company the amount of state aid made available in (a) 2000 and (b) 2001. [13513]

  Mr. Wilson
  The tables detail the payments made under the UK Coal Operating Aid Scheme, by colliery and by company, as at 8 November 2001. Payments have been made in respect of two tranches: Tranche 1 (17 April 2000 to 31 December 2000) and Tranche 2 (1 January 2001 to 31 December 2001). Payment dates refer to the tranche to which the payments relate rather than the date on which they were paid.
  653W

  State aid by colliery for production in 2000 and 2001—as at 8 November 2001

  £

  2000

  2001

  Aberpergwm Colliery

  0

  1,031,000

  Betws Colliery

  870,200

  1,966,000

  Blaentillery No. 2

  112,800

  217,000

  Blenkinsopp Colliery

  470,500

  1,168,000

  East Pit Extension

  2,977,500

  0

  Eckington Colliery

  88,200

  286,000

  Harworth Colliery

  14,722,100

  0

  Hatfield Colliery

  3,931,900

  3,807,000

  Hay Royds Colliery

  78,900

  264,000

  H. J. Banks central mines

  661,100

  0

  H. J. Banks north-east mines

  703,200

  0

  Longannet Mine

  19,652,800

  21,525,000

  Maltby Colliery

  13,559,700

  0

  Rossington Colliery

  3,207,200

  0

  Selby Complex

  23,186,500

  20,324,500

  Tower Colliery

  3,317,200

  0

  State aid by company for production in 2000 and 2001—as at 8 November 2001

  £

  2000

  2001

  Anthracite Mining Limited

  0

  1,031,000

  Betws Anthracite Limited

  870,200

  1,966,000

  Blenkinsopp Colliery Ltd.

  470,500

  1,168,000

  Celtic Energy Limited

  2,977,500

  0

  Coalpower Ltd.

  0

  951,750

  Ffynonau Duon Mines Ltd.

  112,800

  217,000

  H. J. Banks & Co. Ltd.

  1,364,300

  0

  Hatfield Coal Company Ltd.

  3,931,900

  2,855,250

  J. Flack & Sons Ltd.

  78,900

  264,000

  Mining (Scotland) Ltd.

  19,652,800

  21,525,000

  Moorside Mining Co Ltd.

  88,200

  286,000

  Tower Colliery Ltd.

  3,317,200

  0

  UK Coal Plc

  54,675,500

  20,324,500

  Road Fund Licences (Post Office Sales)
  Mr. Paice
  To ask the Secretary of State for Trade and Industry how many new contracts for the sale of road fund licences were made with sub-post offices in the last 12 months. [14025]

  Mr. Alexander
  I have been informed by Post Office Ltd. that when an office selling motor vehicle licences closes, this work is transferred to an alternative office, taking into account both customer demand and the geographical spread of the population. Post Office Ltd. keeps service availability under constant review to ensure that it is best meeting customer demand throughout the 4,000 post offices which offer motor vehicle licences.

  Mr. Paice
  To ask the Secretary of State for Trade and Industry how many sub-post offices which sold road fund licences closed in the last 12 months for which figures are available. [14024]

  Mr. Alexander
  I have been advised by Post Office Ltd. that closure figures of offices selling vehicle licences are not separately maintained. If such an office closes, Post Office Ltd. endeavours to transfer all products and services offered to a new location, thereby maintaining the total number of post offices selling motor vehicle licences.

  Airline and Aerospace Industries (Assistance)
  Mr. Gordon Prentice
  To ask the Secretary of State for Trade and Industry what advice and assistance she is giving to the(a) airline and (b) aerospace industries in coping with the aftermath of 11 September; and if she will make a statement. [13713]

  Mr. Wilson
  Officials in the Department of Trade and Industry remain in close contact with the UK aviation industry in co-operation with the Department for Transport, Local Government and the Regions.

  The Government moved quickly to underwrite, on a temporary basis, third party war risk insurance for UK airlines and service providers to the airline industry, an initiative which has subsequently been widely copied elsewhere. We are considering whether further aid should be paid to the UK airline industry, and will take guidelines issued recently by the European Commission on state aid fully into account in any decision.

  The further effects on the aerospace manufacturing industry remain uncertain. The Government and the aerospace industry will continue to work together to ensure a successful future for the industry as the situation becomes clearer.

  Regulations
  Mr. Prisk
  To ask the Secretary of State for Trade and Industry how many regulations her Department has proposed to Parliament since June; what regulatory impact assessments have been made for those regulations her Department have implemented since June; and what plans her Department has to reduce the number of regulations affecting small businesses. [13631]

  Ms Hewitt
  The Department has proposed 36 regulations to Parliament since June. Of these regulations, more than two thirds were public telecommunications operator licences, amended or simplified regulations or preserved commercial electricity supply agreements.

  Regulatory Impact Assessments (RIAs) have to be produced for all new regulations in which the costs and benefits have to be assessed, particularly for small firms. The Department's policy is to "think small first" and the Small Business Service has to be consulted on all RIAs to ensure that the impact on small firms is not disproportionate. The Department is drawing up a Regulatory Reform Action Plan that the Government will publish.

  Developing Countries (International Trade)
  Mr. Ruffley
  To ask the Secretary of State for Trade and Industry how many(a) pledge cards and (b) representations she has received from members of the public regarding international trade with developing countries in the last 12 months. [14380]

  Ms Hewitt
  My Ministerial colleagues and I have received 64 letters from right hon. and hon. Members requesting responses to the pledge card campaign—"Pledge to the World's Poor"—which was focused on MPs.

  My Department has separately received over 35,000 representations in the last 12 months regarding international trade with developing countries.

  Gas Prices
  Mr. Shaw
  To ask the Secretary of State for Trade and Industry what progress has been made on the three-point strategy in relation to gas price increases and their effect upon UK industry. [12448]

  Mr. Wilson
  The Government's three point strategy to address high gas prices is:

  to work for greater market liberalisation in Europe

  to work for improvements in the British gas market

  to take action against any anti-competitive activity.

  As part of our work on improving the British gas market the Government published a consultation document on 2 November "A Consultation on Gas Prices and Possible Improvements to Market Efficiency" which considers various concerns made about the gas market. The document also seeks views on the wider benefits to the gas market of increased information flows between the onshore and the offshore following a seminar held with the United Kingdom Offshore Operators Association on 10 September. Copies of this document are available from the Department of Trade and Industry website www.dti.gov.uk.

  There has also been progress with the strategy more generally. In March the EU Commission published proposals for a revised Gas Directive which was a positive step towards greater liberalisation. lnterconnector (UK) Ltd now publishes details of flows with a one day lag instead of the previous six week delay. The Government have also been working with IUK and interconnector shippers on improvements to interconnector governance and marketing arrangements. The EU Commission's inquiry into the operation of the interconnector, which was undertaken at the request of the Government, is now reaching its final stages.

  Heysham Industrial Estate
  Geraldine Smith
  To ask the Secretary of State for Trade and Industry what assistance she is providing for the(a) clearance and (b) remediation of (i) derelict and (ii) contaminated land on the Heysham industrial estate. [13769]

  Alan Johnson
  The North West Development Agency has so far agreed to provide £18,250 preliminary funding for site studies in respect of the remediation of Trimpell Tip on Heysham industrial estate.

  Regeneration (Morecambe and Lunesdale)
  Geraldine Smith
  To ask the Secretary of State for Trade and Industry what funding has been allocated to the Morecambe and Lunesdale constituency by the regional development agency for economic regeneration. [13773]

  Alan Johnson
  Funds managed by the North West Regional Development Agency are allocated to specific projects and initiatives rather than to constituencies. The Agency is currently contributing £4.9 million to three major regeneration projects in the Morecambe area.
  656W

  Luneside East Industrial Estate
  Geraldine Smith
  To ask the Secretary of State for Trade and Industry how much funding the North West Development Agency has allocated to Luneside East industrial estate; and for what purpose. [13771]

  Alan Johnson
  The North West Development Agency has agreed to make up to £130,000 available to support various feasibility studies and investigations, project appraisal and co-ordination, and cost and value estimates in respect of Luneside East industrial estate.

  Electricity
  Mr. Sayeed
  To ask the Secretary of State for Trade and Industry what estimate she has made of the cost of electricity generated by nuclear power in pence/kilowatt hour, broken down into(a) building costs, (b) running costs, (c) decommissioning costs on a discounted basis and (d) other costs, identifying the assumptions made; and if she will make a statement. [13270]

  Mr. Wilson
  The Department has made no recent estimates of the cost of electricity generated by nuclear power. The last study published in 1995 concluded that the levelised costs of nuclear power were around 3.9p/kWh. Studies suggest that capital costs account for about 70 per cent. of total costs, operating and maintenance costs about 20 per cent. and decommissioning and waste costs about 10 per cent.

  The Department is contributing to the work of the energy review being undertaken by the Performance and Innovation Unit at the Cabinet Office, which is looking at the cost of new nuclear generation. A copy of their paper which includes estimates of nuclear generation costs can be found at http://www.cabinet-office.gov.uk/innovation/2001/energy/2050.pdf.

  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what was the(a) total amount of electricity generated from nuclear generators in the UK and (b) proportion of all electricity used in the UK generated from (i) nuclear generation and (ii) UK-based nuclear generation, since 1990. [12788]

  Mr. Wilson
  [holding answer 7 November 2001]: The information requested is as follows:

  Electricity supplied from nuclear sources in the UK GWh

  Proportion of total electricity supplied that was from UK nuclear sources(Percentage)

  Proportion that was nuclear from all sources1 (Percentage)

  1990

  58,664

  20

  23

  1991

  62,761

  21

  25

  1992

  69,135

  23

  27

  1993

  80,979

  27

  31

  1994

  79,962

  26

  30

  1995

  80,598

  25

  29

  1996

  85,820

  26

  30

  1997

  89,341

  27

  31

  1998

  90,590

  26

  29

  1999

  87,672

  25

  28

  2000

  78,334

  22

  25

  colspan="4">1Assuming that all electricity imported from France was from French nuclear stations.

  Source:

  Digest of UK Energy Statistics 2001 Tables 5.11 and 5.12.

  Climate Change Levy
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what representations she has received from the nuclear industry requesting exemption from the Climate Change Levy; and if she will make a statement. [12793]

  Mr. Wilson
  [holding answer 7 November 2001]: The nuclear industry has made a number of representations for exemption from the levy for electricity from nuclear generation.

  Nuclear-generated electricity is taxed in the same way as other forms of non-renewable generation as one rate of levy applies to all such electricity.

  The PIU (Performance and Innovation Unit) is currently reviewing UK energy policy, and nuclear energy will form part of its consideration.

  Nuclear Power
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what has been the total installed capacity of nuclear generators in the UK in each year since 1990. [12792]

  Mr. Wilson
  [holding answer 7 November 2001]: The information requested is as follows:

  Capacity of nuclear stations in the UK in DNC' terms MW

  End March 1990

  11,083

  End March 1991

  11,353

  End March 1992

  11,353

  End March 1993

  11,353

  End March 1994

  11,894

  End March 1995

  12,037

  End March 1996

  12,762

  End December 19962

  12,916

  End December 1997

  12,946

  End December 1998

  12,956

  End December 1999

  12,956

  End December 2000

  12,486

  1Declared net capability

  21n 1996 a change was made to measure capacity at the end of the calendar year rather than at the end of March

  Source:

  Digest of UK Energy Statistics 2001 Table 5.7 and corresponding table for earlier years

  NETA
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what recent meetings she has had with the Regulator to discuss the impact of New electricity trading arrangements on(a) the Combined heat and power sector and (b) the renewable sources of energy sector; and if she will make a statement. [12661]

  Mr. Wilson
  I have had numerous meetings with the Regulator to discuss the impact of NETA on CHP and renewables, most recently on 25 September 2001. My right hon. Friend, the Secretary of State for Trade and Industry will be meeting the Regulator on Thursday 15 November 2001 to discuss this subject, among other matters.
  658W
  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what representations she has received from the British Wind Energy Association regarding the impact of NETA on trading in renewable energy; and if she will make a statement. [12660]

  Mr. Wilson
  My Department received representations from the British Wind Energy Association regarding the impact of NETA on trading in renewable energy as part of BWEA' s response to the DTI Preliminary Consultation on the Renewables Obligation of October 2000. In addition, my Department has had numerous representations from industry on this issue, including the renewables and wind sectors, for example the Confederation of Renewable Energy Associations.

  On 1 November, I issued a consultation document in response to Ofgem's reports 'The New Electricity Trading Arrangements—Review of the First Three Months' and `Report to the DTI on the Review of the Initial Impact of NETA on Smaller Generators' of 31 August 2001. I welcome views and representations from all industry bodies. I hope that the British Wind Energy Association will take this opportunity to respond to our consultation. The consultation document can be accessed at www.dti.gov.uk/consultations/.

  Mr. Stunell
  To ask the Secretary of State for Trade and Industry what representations she has received from the(a) Combined Heat and Power Association, (b) British Association for Biofuels and Oils, (c) British Photovoltanic Association, (d) British Hydropower Association and (e) Solar Trade Association Limited regarding the impact of NETA; and if she will make a statement. [12673]

  Mr. Wilson
  I have received numerous representations from the Combined Heat and Power Association on the impact of NETA, most recently at a meeting on 20 September 2001.

  I have received no representations from the British Association for Biofuels and Oils, the British Photovoltanic Association, the British Hydropower Association, or the Solar Trade Association Limited.

  I have, however, had numerous representations from industry bodies regarding the impact of NETA.

  On 1 November, I issued a consultation document in response to Ofgem's reports 'The New Electricity Trading Arrangements—Review of the First Three Months' and `Report to the DTI on the Review of the Initial Impact of NETA on Smaller Generators' of 31 August 2001. I welcome views and representations from all industry bodies. I hope that the above associations will take the opportunity to respond to our consultation. The consultation document can be accessed at www.dti.gov.uk/ consultations/.

  Mr. Gareth R. Thomas
  To ask the Secretary of State for Trade and Industry if she will take steps to encourage companies to provide a consolidation service within NETA for small generators; and if she will make a statement. [12732]

  Mr. Wilson
  On 1 November 2001, I issued a consultation document in response to Ofgem's reports "The New Electricity Trading Arrangements—Review of the First Three Months" and "Report to the DTI on the Review of the Initial Impact of NETA on Smaller Generators" of 31 August 2001.
  659W
  The Government recognise the issues faced by smaller generators under NETA. The Government's key proposals are, broadly:

  To ensure imbalance prices are genuinely cost reflective; and

  To ensure that effective consolidation services emerge.

  The Government are also inviting views on other proposals put forward by industry.

  The Government believe consolidation services are vital in order to establish and foster smaller generation plant. While consolidation services are now starting to emerge in the market, the Government have proposed establishing a working group of smaller generators, the National Grid Company, BSC (Balancing and Settlement Code) participants, Ofgem, the DTI and DEFRA to look urgently at possible structural or regulatory obstacles to consolidation, including the likely time scale on which competitive consolidation services will emerge. The Government will ask this group to provide an interim report by 24 December 2001, and a final report by 31 January 2001.

  The consultation document can be accessed at www.dti.gov.uk/consultations/.

  Departmental Projects
  Matthew Taylor
  To ask the Secretary of State for Trade and Industry if she will list the projects in her Department which have been considered as potential public-private partnerships since 1997 which have not been undertaken because the public sector comparator had a lower net present value than the public-private partnership proposed; and if she will make a statement. [13431]

  Ms Hewitt
  I refer the hon. Member to the answer given today by my right hon. Friend the Chief Secretary. In respect of my Department, there have been no potential PPP projects that have not been undertaken because the public sector comparator had a lower net present value than the PPP proposed since 1997.

  Embedded Generators
  Mr. Gareth R. Thomas
  To ask the Secretary of State for Trade and Industry if she will take steps to introduce electricity Distribution Charging Arrangements which(a) reduce the capital cost of connecting new embedded generators to the distribution network and (b) encourage lower network losses and reduced costs of network investments relating to embedded generators. [12734]

  Mr. Wilson
  Distribution Charging Arrangements are a matter for Ofgem.

  Ofgem's recent consultation paper "Embedded generation: price controls, incentives and connection charging—a preliminary consultation document" considers whether there might be an alternative to the payment of "deep" connection charges up-front. This paper is specifically aimed at moving without delay to a workable interim solution, under the existing pricing control and possibly from 1 April 2002. Ofgem have asked for responses to the consultation by 16 November, and I understand it is their intention to produce a summary of responses before the end of the year.
  660W
  Embedded generation offers the prospect of a significant reduction in network losses, but more work is needed to understand the best way to achieve this goal. The distribution price control already contains incentives for distribution network operators (DNOs) to reduce network losses, but work on embedded generation presents new opportunities for achieving significant reductions.

  An Embedded Generation Coordinating Group (EGCG) is currently being established to ensure that these issues and the wider recommendations outlined in the Report of the Embedded Generation Working Group into Network Access Issues are addressed in a timely and co-ordinated manner. An announcement about the EGCG will be made shortly.

  BCCI
  Mr. Vaz
  To ask the Secretary of State for Trade and Industry when she next plans to meet the liquidators of BCCI. [13638]

  Miss Melanie Johnson
  No such meeting is planned. The liquidators report formally to my right hon. Friend the Secretary of State for Trade and Industry each year pursuant to the provisions of the Insolvency Regulations. Copies of that report are made available to creditors.

  Mr. Vaz
  To ask the Secretary of State for Trade and Industry when she will call a meeting of the creditors of BCCI. [13640]

  Miss Melanie Johnson
  My right hon. Friend the Secretary of State for Trade and Industry has no power to call meetings of creditors in companies in liquidation. Meetings may be called by the liquidator or may be requisitioned by creditors in accordance with the Insolvency Rules.

  Sub-post Offices
  Mr. Waterson
  To ask the Secretary of State for Trade and Industry how many sub-post offices closed in the second quarter of the current financial year. [12588]

  Mr. Alexander
  I understand from Post Office Limited that total net closures of post offices in the second quarter of the current financial year was 56. These closure figures are net of 51 reopenings.

  Glass Industry
  Mr. Watts
  To ask the Secretary of State for Trade and Industry what assessment she has made of the impact the(a) aggregates tax and (b) climate change levy have had on the competitiveness of the British glass industry; and what support she is giving to the industry to assist with related increases in business costs. [12813]

  Mr. Wilson
  Sand and other minerals used in the manufacture of glass will be relieved from the Aggregates Levy under Section 30 of the Finance Act 2001. The Climate Change Levy was introduced only in April and it
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  is too early to assess its impact on businesses in the glass industry. The glass industry has a sectoral negotiated agreement with the Government under which eligible sites are working to deliver energy saving targets in return for an 80 per cent. levy discount.

  Job Losses (Relocation)
  Mr. Whittingdale
  To ask the Secretary of State for Trade and Industry what estimate she has made of the number of jobs lost this year as a result of UK-based firms relocating production overseas. [13923]

  Ms Hewitt
  Systematic information is not available from which to derive any reliable estimate.

  Fireworks
  Mr. Weir
  To ask the Secretary of State for Trade and Industry how many incidents involving injuries with fireworks have occurred in the last five years(a) prior to 5 November, (b) on 5 November and (c) after 5 November in each year in (i) Scotland and (ii) the UK. [13188]

  Miss Melanie Johnson
  [holding answer 8 November 2001]: We collect data of accidental injury cases involving fireworks for a period of four weeks from mid October to mid November, from Accident and Emergency departments in Great Britain. Similar information is collected separately by the Department of Health in Northern Ireland. The GB data is set out in the table:

  Firework injuries in Great Britain 1996–2000

  2000

  1999

  1998

  1997

  1996

  Scotland:

  Prior 5 November

  29

  15

  13

  15

  42

  5 November

  33

  38

  33

  21

  26

  Post 5 November

  6

  29

  14

  21

  17

  Total

  68

  82

  60

  57

  85

  England and Wales:

  Prior 5 November

  482

  257

  174

  324

  637

  5 November

  230

  273

  208

  264

  313

  Post 5 November

  137

  444

  389

  263

  198

  Total

  849

  974

  771

  851

  1,148

  Great Britain total:

  972

  1,056

  831

  908

  1,233

  Aggregates Tax Fund
  Mr. Watts
  To ask the Secretary of State for Trade and Industry what progress has been made in reviewing arrangements to refine the way the aggregates tax fund works. [12815]

  Mr. Meacher
  I have been asked to reply.

  We published a consultation paper on the possible distribution of the Aggregates Levy Sustainability Fund in England on 2 October 2001. A copy is available on the Department's website http://www.defra.gov.uk/ and is also available in the Library of the House.

  The consultation paper includes proposals to support work under three objectives and three following initial distribution of funding.
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  £ million

  2002–03

  2003‒04

  Minimising the demand for primary aggregates

  6.5

  9.0

  Promoting environmentally friendly extraction and transport

  6.0

  6.0

  Reducing the effect of local aggregate extraction

  16.5

  14.0

  Total1

  29.0

  29.0

  1Totals to be finalised to £29.3 million

  The consultation period closes on 27 November.

HOUSE OF COMMONS

  House of Lords Reform
  Mr. Andrew Turner
  To ask the President of the Council what assessment he has made of the number of MLs who may be appointed under the Government's proposals for reconstituting the upper House, based on the assumptions in the White Paper. [14356]

  Mr. Robin Cook
  I refer the hon. Member to the statement I gave to the House on Wednesday 7 November 2001,Official Report, columns 239–41.

FOREIGN AND COMMONWEALTH AFFAIRS

  Lord Ashcroft
  Matthew Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 20 July 2001,Official Report, column 484W, on Lord Ashcroft, when the official of his Department passed classified documents to an unauthorised person; who the unauthorised person was; when this official was disciplined; what the nature of the disciplining was; what the grade of the official was who was disciplined; and in which country the official was based when the offence occurred. [11617]

  Mr. Bradshaw
  A Diplomatic Service Officer, in the FCO Senior Management Structure and based in the United Kingdom at the time, passed classified documents to a journalist in 1997. The journalist concerned did not work for the newspapers where leaks later appeared; the official concerned is no longer in government service.

  Sierra Leone
  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the security situation in Sierra Leone. [13402]

  Mr. Bradshaw
  The security situation in Sierra Leone has improved dramatically over the past six months. We have continued to play a major role in Sierra Leone during this period. We have completed the initial training of an effective and accountable Sierra Leone Army. We have helped train the Sierra Leonean police force. We have worked with the UN on the Disarmament Demobilisation and Reintegration (DDR) programme and to move forward the deployment of UNAMS IL throughout the country. We have maintained close links with regional leaders, especially Presidents Obasanjo of Nigeria and Konare of Mali, to ensure full and successful implementation of the Abuja Agreement. The Revolutionary United Front is now transforming itself into a political party. As DDR
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  continues, The Government of Sierra Leone are able to extend their authority across the country, ahead of elections now scheduled for 14 May 2002. A sustainable peace is now within our grasp.

  But major challenges remain, both before and after the elections. We will continue to work with the Government of Sierra Leone, the United Nations and regional and international partners to help the Sierra Leonean Government consolidated the peace, prepare for and hold free and fair elections, and mobilise resources to rehabilitate Sierra Leone's shattered communities, institutions and economy.

  Afghanistan
  Mr. Dismore
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the numbers of UK citizens held prisoner by(a) the Northern Alliance and (b) countries neighbouring Afghanistan as a consequence of activities with (i) the Taliban and (ii) al-Qaeda; and if he will make a statement. [13630]

  Mr. Bradshaw
  We are currently aware of one British prisoner being held by the Northern Alliance. He has been held since 1998, having been fighting for the Taliban. We do not have any Consular representation in Afghanistan and are therefore unable to give any accurate assessment on whether there are any other British prisoners being held there by either side. We are also not aware that any British prisoners are being held in relation to the current conflict in neighbouring countries.

  Mr. Dismore
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the numbers of UK citizens killed or injured in Afghanistan while with(a) al-Qaeda and (b) the Taliban; and if he will make a statement. [13624]

  Mr. Bradshaw
  We have no consular representation in Afghanistan. It is not possible to provide any accurate assessment on the number of UK nationals who may have been killed or injured in Afghanistan.

  Soviet Bloc (Weapons of Mass Destruction)
  Dr. Julian Lewis
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the risk of former Soviet bloc(a) nuclear and (b) chemical/biological warfare scientists selling their skills to foreign regimes. [13681]

  Mr. Bradshaw
  It is estimated that there may be many thousands of Russian nuclear and chemical and biological warfare scientists who have lost their jobs or who face the prospect of losing their jobs in the next few years. The possibility that these scientists may sell their skills to foreign regimes is one that the UK takes seriously. To address this, UK funds are directed, through the European Union, to the International Science and Technology Centre (ISTC). The ISTC was set up in 1994, following an agreement signed by the EU, US, Japan and the Russian Federation, to stem the possibility of recruitment of former Soviet scientists by potential proliferators, through the funding of non-weapons related research at former defence institutes.

  Entry Clearance
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the level of staffing is at the Joint Entry Clearance Unit. [13641]

  Mr. Bradshaw
  The current level of staffing in the Joint Entry Clearance Unit is as follows:

  Permanent—69

  Temporary (Persons between postings)—3

  Retired officers on short-term contracts—2

  Homeworkers (Part-time on contracts)—3

  Total—77.

  Ambassadors
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has for advertising the posts of ambassadors. [13642]

  Mr. Bradshaw
  None.

  Mordecai Vanunu
  Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he raised the matter of the continued imprisonment of Mordecai Vanunu in his recent meeting with his Israeli counterpart. [14682]

  Mr. Bradshaw
  We regularly raise Mr. Vanunu's long detention with the Israeli authorities and the British Embassy in Tel Aviv monitor the conditions in which he is held.

  UN Sanctions (Amendments)
  Gillian Merron
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent changes there have been to United Nations sanctions against(a) Somalia, (b) the former Republic of Yugoslavia and (c) Sudan. [14970]

  Peter Hain
  With the support of Her Majesty's Government, the range of sanctions imposed against Somalia, the Former Republic of Yugoslavia (FRY) and Sudan has been amended by the United Nations Security Council (the "UNSC").

  On 19 June 2001 the UNSC adopted resolution 1356(2001) introducing certain limited exemptions to the arms embargo against Somalia. The arms embargo does not now apply to the temporary export of protective clothing for use exclusively by the UN, media or humanitarian and development workers, nor to supplies of non-lethal military equipment intended solely for humanitarian or protective use.

  On 10 September 2001 the UNSC noted that the conditions called for by paragraphs 16(a)-(e) of resolution 1160(1998) had been met by the FRY Government, and subsequently decided to adopt resolution 1367(2001) which terminated the measures called for by resolution 1160(1998).

  On 28 September 2001 the UNSC noted the steps taken by the Government of Sudan to comply with the provisions of resolution 1054(1996) and resolution 1070(1996) and agreed to adopt resolution 1372(2001) terminating the measures imposed by those resolutions.

  General Affairs Council
  Gillian Merron
  To ask the Secretary of State for Foreign and Commonwealth Affairs what the outcome was of the General Affairs Council held in Luxembourg on 29 October. [14971]

  Peter Hain
  The information is as follows:

  General Affairs Council, Luxembourg: 29 October 2001

  My right hon. Friend the Foreign Secretary, Baroness Symons of Vernham Dean and I represented the UK at the General Affairs Council (GAC) on 29 October.

  The GAC adopted the 'A' Points listed in document number 13233/01. It also noted the resolutions, decisions and opinions adopted by the European Parliament in its part-session of 19–20 September in Brussels and 1–4 October in Strasbourg listed in document numbers 11049/01 and 12365/01 respectively. Copies of all three documents have been placed in the Libraries of both Houses.

  WTO

  The GAC discussed preparations for the WTO Ministerial Conference, due to be held in Doha, Qatar from 9–13 November and agreed conclusions setting out the EU's position for this meeting. The Council conclusions of 26 October 1999 remained the basis for EU efforts to launch a new global round of multilateral trade negotiations, but the Council acknowledged that the final stages of negotiations would call for flexibility on the part of all participants. The Council emphasised the importance of the development dimension, highlighting the need for greater efforts to enhance the negotiating capacity of developing countries, and underlined the importance of the flexibilities of the TRIPS agreement in ensuring poor people in developing countries have affordable access to medicines.

  The Council welcomed the European Parliament's resolution of 24 October 2001 on preparations for Doha and stressed the importance of dialogue with civil society, particularly with social partners, on trade issues.

  Work in other Sectoral Councils

  The Presidency drew attention to the Secretariat's stocktaking report of the main issues being discussed by other sectoral meetings of the Council of Ministers. In particular, the Presidency noted the road-map on implementation of a sustainable development strategy approved by the Gothenburg European Council, looking ahead to the Barcelona European Council on 15–16 March 2002 and the World Summit on Sustainable Development in Johannesburg on 2–11 September 2002.

  MEPs' Statute

  The GAC approved Presidency proposals, focusing on fiscal/tax issues, allowances and pensions, as a basis for further discussions with the European Parliament.

  Funding of European Political Parties

  The GAC discussed the draft regulation to establish a temporary, two year regime for the statute and funding of European political parties. Discussion focused on issues including the regulating of donations and the transnationality threshold for qualification as a "European" political party. The Presidency asked Coreper to discuss the issues further.
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  EU political priorities for 2002

  The GAC endorsed a UK Initiative for the GAC to coordinate the EU's overall strategic priorities through annual discussions. Spain, as the future Presidency, will schedule a further debate early next year.

  MEPP

  The Council issued a declaration on the tenth anniversary of the Madrid Conference. It called on the Israelis and Palestinians, immediately and without pre-conditions, to return to negotiations on the basis of the recommendations in the Mitchell Report and Tenet Plan. It called upon the Israeli authorities to withdraw their troops immediately from the zone that is exclusively under Palestinian administration (Zone A). It called upon the Palestinian authority to do its utmost to arrest those responsible for acts of violence against Israel.

  Africa

  The GAC agreed conclusions on:
  (i) Zimbabwe
  The Council reiterated the EU's readiness to help Zimbabwe hold transparent and fair Presidential elections next Spring. including through an exploratory mission and EU observers to monitor them.
  The GAC decided to launch the consultation procedure with the Government of Zimbabwe provided for in Article 96 of the Cotonou Agreement. The consultations would address the issues of concern as discussed by the GAC on 25 June, on which there had not been any visible progress to date:

  ending political violence;

  electoral monitoring;

  freedom of the media;

  independence of the judiciary;

  ending the illegal occupation of properties.

  The EU would give strong weight to ensuring co-ordination and complementarity with the efforts of SADC and the Abuja process.

  (ii) DRC (Lusaka Process)
  The GAC noted the disappointing results of the inter-Congolese dialogue meeting in Addis Ababa (15–21 October). The EU had honoured its financial commitments to help support the process, which was essential for the future of the DRC and the region as a whole. It called on the facilitator of the dialogue and the Congolese parties to set a time and place for substantive talks on the parameters for an inclusive, democratic transition with a realistic timetable.

  (iii) Burundi (Arusha process)
  The GAC discussed the demarches of facilitator Nelson Mandela to the Presidency and Commission of 15–16 October. President Mandela was seeking EU funding to set up a protection unit to ensure the safety of exiled politicians on their return to Burundi to form the Transitional National Government, starting on 1 November. The GAC agreed the importance of such funding, subject to clear assent of the Burundian parties to the Arusha Agreement, the backing of the UK, and precise details concerning the special unit's mandate and budget. The Council instructed its bodies to work with the Commission to examine President Mandela's proposals and report to the next GAC on 19 November.

  (iv) Eritrea
  The GAC would discuss Eritrea further at its next meeting, following talks between President Isayas Afewerki and the EU Heads of Mission (HoMs) in Asmara. It had agreed on 8 October, to recall EU HoMs in Eritrea for consultations, given its concerns over the arrest of political figures, the suppression of the independent press and expulsion of the EU Presidency's Representative to Eritrea.
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  (v) New Partnership for African Development and the Europe-Africa dialogue
  The Council reiterated its support for the New Partnership for African Development (NEPAD). It was briefed by the Presidency and the Commission on the meeting on 10 October with the African Heads of State. supporting the NEPAD and on the EU-Africa Ministerial Conference on 11 October 2001. The Council agreed that it would pay particular attention to this significant initiative, above all in the framework of the Europe-Africa dialogue.

  EU action following US attacks

  The GAC noted the good progress made on the counter-terrorism road map agreed at the European Council of 21 September. It tasked the Committee of Permanent Representatives with the oversight and direction of the road map, paying particular attention to the priorities identified by the European Council:
  a European arrest warrant, a common definition of terrorism and freezing of assets;
  strengthening cooperation between the relevant authorities responsible for combating terrorism, especially to establish a common list of terrorist organisations before the year-end;
  the fight against the funding of terrorism; and
  the approval, without delay, of Commission proposals relating to aviation security.

  The GAC also discussed the situation in Afghanistan and the surrounding region Discussion was informed by reports from the Presidency and Secretary-General/ High Representative (SG/HR) Solana about their recent meetings with the UN Secretary-General and his personal representative, Ambassador Brahimi, and with the former king of Afghanistan, Zahir Shah. They also discussed the situation in central Asia, on the basis of a paper by the SG/HR. The Council welcomed the Troika visit from 30 October to Uzbekistan, Tajikistan and Turkmenistan.

  Western Balkans

  The GAC adopted Conclusions on:

  (i) Former Yugoslav Republic of Macedonia
  It welcomed the progress made on constitutional reform, and all parties' commitment to conclude the parliamentary process on the Framework Agreement rapidly. It repeated that implementation of that Agreement by all parties concerned was the only constructive way forward, including in relation to Macedonia's rapprochement with the EU.

  (ii) Kosovo
  The Council underlined the importance of the elections on 17 November being conducted properly. The GAC repeated the need for a substantial electoral turnout from all communities, to ensure their representation in the provisional, new, democratically-elected institutions. It had asked the Belgrade authorities to co-operate closely with UNMIK/KFOR and to encourage the Kosovo Serbs to take part in the election.

  (iii) Stability Pact
  The GAC welcomed the outcome of the Regional Conference of the Stability Pact in Bucharest, which confirmed the EU's commitment to continue playing a leading role in the region, which would be complemented by the continuing role of the Pact. The Council agreed that the EU should review the future role of the Stability Pact in consultation with the other members of the Pact, including the possibility of better integrating the work of the Pact with the EU's Stabilisation and Association Process for the Western Balkans.

  (iv) Croatia
  The GAC welcomed the signing of the EU/Croatia Stabilisation and Association Agreement and the EC/Croatia Interim Agreement. It also welcomed the approval of the Joint Declaration on political dialogue and the holding of the first meeting of that dialogue.

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  Voting Record

  No formal votes were taken on the points under discussion at the GAC.

  Biological and Toxin Weapons Conference
  Joan Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what assessment he has made of the failure of the negotiations for a compliance and verification protocol to the Biological and Toxin Weapons Conference; and how he will respond; [14468]

  (2) what he aims to achieve at the Review Conference of the Biological and Toxin Weapons Conference. [14467]

  Mr. Bradshaw
  Following the failure of the 24th Session of the Ad Hoc Group to agree a Protocol text, our aim is now to agree with all States parties, a Final Document at the fifth Review Conference of the Biological Weapons Convention, in Geneva (19 November–7 December) that will lead to sustaining international progress on the further strengthening of the Convention. We welcome proposals that have been made for practical and effective measures to meet the biological weapons threat. We hope that these can be agreed at the Conference.

  Joan Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will be attending the Biological and Toxin Weapons Conference in Geneva. [14466]

  Mr. Bradshaw
  My right hon. Friend the Foreign Secretary currently has no plans to attend the 5th Review Conference of the Biological and Toxin Weapons Convention in Geneva.

  Zimbabwe
  Mr. Ancram
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent actions of Libyan military personnel in Zimbabwe; what role they have; and how many there are. [12147]

  Mr. Bradshaw
  We have seen media reports of Libyans in Zimbabwe as security advisers for ZANU(PF) officials. These reports have not been substantiated.

PRIME MINISTER

  Overseas Visits
  Mr. Vaz
  To ask the Prime Minister how many overseas visits he has undertaken and to which countries, since 11 September. [13636]

  The Prime Minister
  I have undertaken five overseas visits as part of the efforts to deepen the international coalition against terrorism. I visited:

  Germany

  France

  United States

  Belgium

  Russia

  Pakistan

  India

  Switzerland

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  Oman

  Egypt

  Syria

  Saudi Arabia

  Jordan

  Israel and the Palestinian Authority

  I also attended the Informal Meeting of EU Heads of EU Heads of Government in Belgium on 19 October.

  Meetings
  Llew Smith
  To ask the Prime Minister which(a) Prime Ministers and (b) heads of state he has met since 11 September; when he met each of them; and where the meetings were held. [14692]

  The Prime Minister
  The following meetings with Prime Ministers and heads of states have already been announced:

  12 September

  President Lagos (Chile)—No. 10

  17 September

  Prime Minister Berlusconi (Italy)—No. 10

  19 September

  Taoiseach Ahern (Ireland)—No. 10

  Chancellor Schroeder (Germany)—Kanzleramt

  20 September

  President Chirac (France)—Paris

  President Bush (USA)—Washington

  21 September

  European Council meeting—Brussels

  1 October

  Chancellor Schroeder (Germany)—Brighton

  4 October

  President Putin (Russia)—Moscow

  5 October

  President Musharraf—Pakistan

  6 October

  Prime Minister Vajpayee—India

  9 October

  Shaikh Zayed, Ruler of Abu Dhabi—Geneva

  10 October

  His Majesty Sultan Qaboos bin Said al Said—Muscat

  11 October

  President Mubarak (Egypt)—Cairo

  16 October

  Prime Minister Rasmussen (Denmark)—No. 10

  King Abdullah II of Jordan—No. 10

  19 October

  President Chirac (France), Prime Minister Jospin (France) and

  Chancellor Schroeder (Germany)—Ghent

  Informal meeting of EU Heads of Government—Ghent

  25 October

  Prime Minister Verhofstadt (Belgium)—No. 10

  28–29 October

  President Cardoso (Brazil)—Chequers

  31 October

  President al-Assad (Syria)—Damascus

  King Fand of Saudi Arabia—Riyadh

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  1 November

  King Abdullah II of Jordan —Jordan

  Prime Minister Sharon (Israel)—Jerusalem

  Prime Minister Berlusconi (Italy)—Genoa

  2 November

  Prime Minister Miller (Poland)—No. 10

  4 November

  President Chirac (France)—No. 10

  Prime Minister Jospin (France)—No. 10

  Chancellor Schroeder (Germany)—No. 10

  Prime Minister Berlusconi (Italy)—No. 10

  Prime Minister Aznar (Spain)—No. 10

  Prime Minister Verhofstadt (Belgium)—No. 10

  Prime Minister Kok (Netherlands)—No. 10

  6 November

  President Museveni (Uganda)—No. 10

  President Kagame (Rwanda)—No. 10

  7 November

  President Bush (USA)—Washington

  8 November

  King Abdullah II of Jordan —No. 10

  Prime Minister Nastase (Romania)—No.

  10 President Musharraf (Pakistan)—No. 10

  9 November

  Prime Minister Aznar (Spain)—No. 10/Chequers

  11 November

  Prime Minister Vajpayee —No. 10.

  I have also met President Arafat of the Palestinian Authority on 15 October and 1 November.

  Kyoto Protocol
  Mr. Simon Thomas
  To ask the Prime Minister what representations he has made to President Bush about signing up to the Kyoto agreements; and if he will make a statement on the results of these representations. [14456]

  The Prime Minister
  I refer the hon. Member to the answer I gave my hon. Friend the Member for Islington, North (Jeremy Corbyn) on 15 October 2001,Official Report, column 820W.

DEPUTY PRIME MINISTER

  Civil Servants (Remuneration)
  Mr. Bercow
  To ask the Deputy Prime Minister what assessment he has made of the cost of implementing the proposals of the First Division Association for the remuneration of senior civil servants. [14247]

  Mr. Leslie
  Ministers have agreed a new pay system for the senior civil service, developed as part of the Civil Service reform programme. All senior civil servants and their trade unions were consulted and their views taken into account.

  The costs of the proposed system will depend on the recommendations of the independent Senior Salaries Review Body and will be met from within existing departmental expenditure limits.

HEALTH

  GP Audit
  Mr. Wyatt
  To ask the Secretary of State for Health whether Swale primary care trusts have undertaken an audit of GP needs in the constituency of Sittingbourne and Sheppey. [12115]

  Ms Blears
  Swale Primary Care Group recently carried out an audit of local needs. As a result, the Government have provided additional resources to two local practices to fund the recruitment of additional general practitioners into the area.

  Whittington Hospital
  Jeremy Corbyn
  To ask the Secretary of State for Health when he will complete the evaluation of the proposals for refurbishment of the Whittington Hospital. [12116]

  Mr. Hutton
  The proposals for the rebuilding of a significant part of the Whittington Hospital are expected to be submitted by the Trust in January 2002. It is planned to complete the final approval soon after with the new building becoming fully operational in autumn 2004.

  NHS Staff Morale
  Lembit Öpik
  To ask the Secretary of State for Health what initiatives he has in place to improve the morale of the staff in the health service. [12117]

  Mr. Milburn
  Staff morale is a key issue for the Government. We are committed to improving morale in the national health service by expanding staff numbers, improving NHS employment practice and giving frontline staff greater control over resources.

  NHS (East Lancashire)
  Mr. Gordon Prentice
  To ask the Secretary of State for Health what steps he is taking to ensure the NHS in east Lancashire remains focused on service delivery during the process of organisational changes. [12118]

  Mr. Hutton
  During the process of devolving more power and responsibility to primary care trusts, the national health service must remain focused on meeting local health needs. To ensure that this happens, all regional offices and health authorities have produced business continuity plans.

  In the north-west, three project directors are co-ordinating business continuity arrangements across the region, supported by lead managers who have responsibility for monitoring critical areas of business such as winter, cancer and access.

  Heart Operations
  Jeff Ennis
  To ask the Secretary of State for Health if he will make a statement on the number of heart operations carried out in the NHS in the past 12 months. [12119]

  Ms Blears
  The National Service Framework for Coronary Heart Disease target of an extra 3.,000 heart operations for March 2002 has been met a year early. Provisional figures suggest that between September 2000 672W
  and September 2001, there were over 25,000 angioplasty operations and approaching 23,000 bypass operations. An extra £30 million has been allocated this year to further increase the number of heart operations.

  Hospital Cleanliness
  Andy King
  To ask the Secretary of State for Health if he will make a statement on progress on raising standards of hospital cleanliness. [12121]

  Paul Flynn
  To ask the Secretary of State for Health if he will make a statement on progress in raising standards of hospital cleanliness. [12130]

  Mr. Hutton
  The NHS Plan expressed our determination to create real and lasting improvements to standards of hospital cleanliness. Through our Clean Hospitals programme, the number of "red" hospitals has fallen from 253 in autumn 2000 to zero today. Every, hospital in England now provides standards of cleanliness which are good or at least acceptable.

  NHS Cancer Care
  Mr. Bailey
  To ask the Secretary of State for Health what recent progress has been made on improvement of diagnosis and treatment for cancer patients in the NHS. [12122]

  Mr. Milburn
  Good progress has been made in implementing the NHS Cancer Plan. 92 per cent. of people urgently referred with symptoms indicating a possibility of cancer are being seen within two weeks; around 13,000 patients each year will benefit from new treatments for cancer, following their appraisal by the National Institute for Clinical Excellence; and expansion and upgrading of equipment used in the NHS to diagnose and treat cancer is well under way.

  TNF Alpha Blockade
  Clive Efford
  To ask the Secretary of State for Health if he will make a statement on variations in practice relating to the prescription of TNF Alpha Blockade. [12124]

  Mr. Hutton
  The two main drugs involved in this therapy, etanercept and infliximab, are currently being appraised by the National Institute for Clinical Excellence. Until NICE has completed its appraisal, national health service bodies have been advised to use their existing arrangements to determine local prescribing policies, using the publicly available evidence to inform their decision.

  Care Home Beds
  Mr. Randall
  To ask the Secretary of State for Health how many beds there were in elderly care homes in(a) 1997 and (b) the last year for which figures are available. [12125]

  Bob Spink
  To ask the Secretary of State for Health how many beds in elderly care homes there were(a) in 1997 and (b) on the latest date for which figures are available. [12138]

  Jacqui Smith
  The Department's figures show that, in 1997, there were 261,600 residential places for older people in residential care homes and 154,200 registered nursing beds for them in nursing homes, private hospitals
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  and clinics. In March 2000, there were 263,200 such places in residential care homes and 149,600 such beds in nursing homes, private hospitals and clinics.

  Homeopathic Treatment
  Mr. Tredinnick
  To ask the Secretary of State for Health which health authorities fund GP referrals for homeopathic treatment on the NHS; and what plans he has to improve equality of access for such treatment. [12126]

  Ms Blears
  There is no central record of national health service referrals for homeopathic treatment. Current NHS reforms will give primary care trusts full responsibility for providing services for local patients. This environment of local autonomy and innovation should have scope for complementary therapies that can prove their worth.

  Blood Transfusions
  Mr. Havard
  To ask the Secretary of State for Health how much of the national blood supply was used on cancer patients as part of their treatment; and, on average, how old that blood was when it was given to them, in the past 12 months. [12127]

  Mr. Hutton
  The National Blood Service estimates that approximately 30 per cent. of red cells collected from blood donations are given to patients with cancer-related illnesses.

  All fresh blood components in the national health service are used within strict expiry dates.

  Private Finance (NHS)
  Mr. Carmichael
  To ask the Secretary of State for Health what assessment he has made of the use of private finance within the NHS. [12129]

  Mr. Hutton
  To be approved, the Private Finance Initiative option for every national health service capital investment project must demonstrate, in a full business case, that it provides improved facilities for the NHS and that, overall, it is value for money when compared to the publicly funded alternative, the Public Sector Comparator.

  Mr. Rendel
  To ask the Secretary of State for Health what assessment he has made of the use of private finance within the NHS. [12140]

  Mr. Hutton
  To be approved, the private finance initiative option for every national health service capital investment project must demonstrate, in a full business case, that it provides improved facilities for the NHS and that, overall, it is value for money when compared to the publicly funded alternative, the public sector comparator.

  Because of PFI, 10 major new hospitals have opened in the United Kingdom and another 17 are under construction, representing capital investment in the NHS of over £2.4 billion.

  Nurses
  Mr. Breed
  To ask the Secretary of State for Health if he will make a statement on the use of agency nurses in the NHS. [12132]

  Mr. Hutton
  The Government are aware of the potential value for money and quality issues facing national health service employers using agencies. This is 674W
  why we are fully committed to NHS Professionals, the non-profit making temporary staffing solution run by the NHS for the NHS. NHS Professionals is being rolled out by all health professionals by 2003.

  Colin Burgon
  To ask the Secretary of State for Health what recent steps he has taken to improve the recruitment and retention of nurses in the NHS. [12133]

  Mr. Hutton
  In the first year of the NHS Plan period the number of nurses employed in the national health service increased by 6,310.

  The Government are fully committed to investing in NHS staff, to raising the number of nurses, increasing training places, encouraging former staff to return, and recruiting more nurses from abroad.

  The NHS Plan introduced the Improving Working Lives Standard, a model of good employment practices against which NHS organisations are measured. NHS organisations are required to provide a portfolio of evidence that they are improving the working lives of staff.

  Accident and Emergency Departments
  Richard Ottaway
  To ask the Secretary of State for Health if he will make a statement on improving the efficiency of accident and emergency departments in London. [12134]

  Mr. Hutton
  The Government recognise the importance of improving A&E departments. The A&E Emergency Modernisation Programme aims to modernise, upgrade and refurbish all accident and emergency departments that need modernising. A total of £150 million has been invested in A&E in three waves and London has received over £22 million from the Capital Modernisation Fund. This is the biggest investment in A&E services since the start of the NHS.

  In October this year the Government announced a £100 million strategy for reducing long waits in A&E departments and ending inappropriate waits altogether over the next three years. London trusts received over £9 million of this funding.

  MRI Scanners
  Phil Sawford
  To ask the Secretary of State for Health what action he is taking to ensure that more hospitals have access to an MRI scanner. [12135]

  Jacqui Smith
  Following past decades of under-investment in cancer equipment and facilities, investment through the New Opportunities Fund and the NHS Plan will provide 86 MRI scanners for the NHS by 2004. These scanners will support the accurate diagnosis and staging of cancer patients, as well as increased access to an MRI scanner for other patient groups.

  Patrick Mercer
  To ask the Secretary of State for Health if he will make a statement on waiting times for MRI scans in the hospitals in Newark and Retford. [12137]

  Jacqui Smith
  Waiting times for MRI scans vary according to the clinical condition being investigated and the demand on the service. A recent survey of MRI waiting times in England showed average waiting times for patients attending for urgent examinations, such as
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  cancer, of approximately two weeks, while the average waiting times for orthopaedic procedures, for example, were in the order of six months with a 10–12 month waiting time not uncommon. 36 MRI scanners are being provided through the New Opportunities Fund. All of these are due for installation by the end of 2002. Under the terms of the NHS Cancer Plan, a further 50 will be installed by 2004.

  MRI facilities are not available at the hospitals in Newark and Retford. At present, most Newark residents are referred to the Queen's Medical Centre in Nottingham, where the waiting time for routine appointments is around 18 months. However, Sherwood Forest Hospitals NHS Trust, which has been responsible for Newark Hospital since April 2001, is working to establish better links between Newark and the King's Mill Centre near Mansfield. A mobile scanner already visits the King's Mill Centre and additional sessions will be provided in 2002, thereby reducing waiting times.

  Most Retford patients requiring MRI scans are referred to the Royal Hallamshire Hospital in Sheffield where waiting time for a routine referral is around six months. The Health Community in Retford is investigating the possibility of using a mobile scanner or referring patients to Doncaster as a means of reducing waiting times.

  For urgent referrals, the waiting times vary from one to 12 weeks depending on clinical priority.

  Orthopaedic Waiting Times
  Mr. Bellingham
  To ask the Secretary of State for Health if he will make a statement on orthopaedic waiting times. [12136]

  Mr. Hutton
  We are is determined to reduce waiting times for orthopaedic patients. That is why we have established the "Action On Orthopaedics" programme as part of the modernisation of the national health service. The programme aims significantly to improve access to care and to reduce variations in waiting times through sharing best practice. It will lead the way in piloting new and innovative working practice.

  In 2000–01, £9 million was made available directly to NHS practitioners to invest in specialist orthopaedic equipment. In 2001–02 a further £38.5 million was made available. Through this year's investment 23 new orthopaedic theatres will be built to create greater capacity to treat orthopaedic patients, which will facilitate reduced waiting times.

  Waiting times for all patients are being reduced. In line with the NHS Plan, the maximum out-patient waiting time will be cut to three months by 2005 and the maximum in-patient waiting time will be cut to six months.

  As a first step towards this, the maximum waiting time for an in-patient appointment will be 15 months by the end of March 2002 and the maximum waiting time for a first out-patient appointment will be six months.

  Ashworth Hospital
  Mr. Insley
  To ask the Secretary of State for Health if he will make a statement on long-term stay patients at Ashworth hospital. [12139]
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  Jacqui Smith
  Our policy with regard to the provision of high-security psychiatric services is to secure the safety of the public, staff and patients, and to ensure that the best possible services are offered to patients who need to receive their care and treatment in a high-secure setting.

  School Children (Health)
  Bob Russell
  To ask the Secretary of State for Health when he last had discussions with the Secretary of State for Education and Skills about the health of school children. [12141]

  Jacqui Smith
  We have regular discussions and our respective Departments work very closely to ensure that the health needs of school children are met. We have also launched a number of joint initiatives including the healthy schools programme. Apart from supporting children with health problems we are committed to ensuring the promotion of child health and development through access to high quality physical education. My right hon. Friend the Prime Minister announced in January that all children will be entitled to a minimum of two hours high quality physical education and sport provision within and beyond the formal curriculum. This commitment is also outlined in the White Paper "Schools: Achieving Success" published in September.

  Cardio-thoracic Unit
  Dr. Gibson
  To ask the Secretary of State for Health what needs he has recently identified for a further cardio-thoracic surgical unit in the east of England. [12142]

  Jacqui Smith
  We are currently developing a national strategy for expanding revascularisation capacity, the aim of which is to deliver the targets of the coronary heart disease National Service Framework.

  As part of that strategy the national health service eastern regional office has undertaken an assessment of its needs for cardiac surgery over the next 20 years and has taken many factors into account including the current and future population demands for such services.

  The assessment has clearly identified the need for the development of further services for cardiac surgery.

  NHS Beds
  John Cryer
  To ask the Secretary of State for Health if he will make a statement on the number of (a) general and(b) acute beds in NHS hospitals. [12143]

  Ms Blears
  In the light of the National Beds Inquiry the NHS Plan set a target to increase the number of general and acute beds by 2,100 by 2004. Latest figures, published in September 2001, show that we are a third of the way towards reaching this target with an increase of over 700 in the number of general and acute care beds in the last year. The number of general and acute beds in national health service hospitals had been declining over the past 40 years. This is a clear indication that the downward trend is being reversed.

  For three decades the prevailing orthodoxy in the NHS has been for fewer hospital beds rather than more. Patients see the consequence of that failed policy in unacceptable

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  trolley waits, long waiting times and cancelled operations. Today the NHS is growing again with an expanding number of NHS hospital beds.

  Barnet Hospital
  Mr. Dismore
  To ask the Secretary of State for Health if he will make a statement about Barnet hospital.[12128]

  Mr. Hutton
  I am aware of and share my hon. Friend's concerns over Barnet and Chase Farm NHS Trust and the need to support improvements in its performance in key areas highlighted by the recent NHS Trust Performance Ratings.

  The Trust has formally been given three months from 25 September to produce an action plan focused on areas of poor performance and will receive close support from the Modernisation Agency.

  I have already arranged to meet my hon. Friend to discuss these matters.

  Psychiatric Hospitals
  Mr. Heald
  To ask the Secretary of State for Health how many people were admitted to psychiatric hospitals in 2000–01. [10514]

  Jacqui Smith
  There were an estimated 187,600 admissions, under mental illness specialties, to national health service hospitals in England for 1999–2000, the latest year for which data are available. This figure has not yet been adjusted for shortfalls in data and therefore has a provisional status.

  NHS Dentistry
  Peter Bradley
  To ask the Secretary of State for Health how many patients in Shropshire were registered with a NHS dentist in (a) 1990,(b) 1997 and (c) 2000; and how many remained unregistered in the same year. [9258]

  Ms Blears
  Registrations of patients in the general dental service (GDS) began in October 1990. Registrations last for a fixed period which is renewed when the patient reattends the dentist. Initially the period for adults was 24 months while for children registrations lasted until the end of the following calendar year.

  For new registrations made since September 1996, the registration period is 15 months for both adults and children. This affected registration numbers from December 1997 onwards when the first of the shorter registrations lapsed.

  Registration numbers built up over the two years from October 1990. Thus registration figures for 1990 are not typical.

  For Shropshire health authority, in the year 1997, the average number of registrations was 217,000 compared to an estimated population at mid-year 1997 of 425,000. In the year 2000, the registration average was lower at 186,000 because of the reduction in the registration period to 15 months. In addition, in the year 2000, 8,000 patients were seen by the personal dental service pilots which started in March 1999. The estimated population at mid-year 2000 was 436,000.
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  Many people are not registered with the dentist but choose to attend occasionally.

  Mr. Laws
  To ask the Secretary of State for Health what are the(a) parliamentary constituencies and (b) NHS health trusts in which there are no NHS dentists taking new adult NHS patients; and if he will make a statement. [14131]

  Ms Blears
  General dental practitioners provide general dental services under arrangements made with health authorities. Some national health service trusts are commissioned to provide national health service dentistry but these services are a minority of what is provided within the NHS. While information on availability of NHS dentistry is not collected on a parliamentary constituency basis, every health authority in England has NHS general dental practitioners willing to treat new adult NHS patients.

  We remain committed to ensuring that NHS dentistry is available to all. More treatment than ever before is being carried out by NHS dentists. Systems are in place to enable callers to NHS Direct to obtain information about where they can find NHS dentistry. We will continue to work with the profession to further develop NHS dentistry around patient needs, as part of modern primary care delivered at a local level.

  Mr. Andrew Turner
  To ask the Secretary of State for Health how many NHS dental practitioners there were on the Isle of Wight in each year since 1997. [14355]

  Ms Blears
  The number of general dental services (GDS) dentists on the Isle of Wight is shown in the table for 30 June in each of the years 1997 to 2001.

  June

  Number of GDS dentists

  1997

  38

  1998

  39

  1999

  43

  2000

  39

  2001

  40

  A personal dental service (PDS) pilot, developing new ways of providing national health service dentistry, began in 1999. There were six dentists in June 2000 while in June 2001 there were eight PDS dentists of whom two also worked in the GDS.

  Mental Health Services
  Helen Jones
  To ask the Secretary of State for Health how many NHS trusts have an advocacy scheme for users of mental health services; and what proportion of trusts this figure represents. [10011]

  Jacqui Smith
  [holding answer 29 October 2001]: Very few national health service trusts actually provide advocacy services as it is widely recognised that advocacy services should be independent of provider services.

  The Department has commissioned a mental health service mapping exercise from Durham University which will provide an up-to-date picture of where mental health service users have access to an advocacy service. This exercise is expected to report later this year.
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  Mr. Heald
  To ask the Secretary of State for Health by how much the NHS underspent on mental health in 2000–01. [12050]

  Jacqui Smith
  There are no expenditure targets relating to mental health, therefore there cannot be any underspend. The national health service does have service targets and in 2000–01 these were met.

  Mr. Heald
  To ask the Secretary of State for Health what assessment he has made of clinical outcomes in mental health in the UK in comparison to other EU countries. [13854]

  Jacqui Smith
  [holding answer 12 November 2001]: Currently there is no assessment of clinical outcomes in mental health in the United Kingdom in comparison to other European Union countries. However, there are currently two important initiatives under way that involve the measurement of clinical outcomes for individuals in receipt of mental health services in the UK that will enable comparisons with other EU countries.

  One is the outcome measurement implementation programme headed by the national director for mental health, Professor Louis Appleby, who has established an expert group of the leading experts in the field of outcome measurement in the UK. They are advising on and overseeing the selection and the pilot implementation of instrumentation for the routine measurement of outcomes for individuals in terms of mortality, morbidity, quality of life and user and carer satisfaction with services. The evidence base for this approach is substantial and drawn from extensive research conducted in the United States of America, Europe and Australia over many years.

  The other initiative is the establishment of the new National Institute for Mental Health for England (NIMH(E)) which I announced in July. NIMH(E) will be the key vehicle, which supports implementation of national mental health policy in England. It will work with all agencies and interests to develop a co-ordinated programme of research, service development, workforce development and support. NIMH(E) will also generate links with organisations responsible for mental health services in other countries. This will offer the opportunity for comparison of services and clinical outcomes, and the promotion of best practice. A consultation document on NIMH(E) was launched on 6 November.

  Mr. Heald
  To ask the Secretary of State for Health whether he supports closer partnership working between statutory services and the Churches in the field of mental health; and if he will make a statement. [13847]

  Jacqui Smith
  [holding answer 12 November 2001]: The National Service Framework for Mental Health encourages health and social services to work with individuals and communities to promote mental health. As an integral part of many communities, religious centres and leaders can assist in combating discrimination and social exclusion associated with mental health problems.

  Mr. Heald
  To ask the Secretary of State for Health what implications the EU working-time directive has for the staffing of acute mental health wards; and if he will make a statement. [13858]

  Jacqui Smith
  [holding answer 12 November 2001]: The Working Time Regulations, which implement the European Community Directive into United Kingdom
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  legislation, came into force on 1 October 1998. To implement this in the national health service, the Department made national agreements in the General Whitley Council for GWC staff and with the British Medical Association for Career Grade Doctors which secured maximum operational flexibility. Mental health staff have benefited by having protected rest periods which have reduced the risks of long working hours. Consequently patients have been better safeguarded.

  Mr. Heald
  To ask the Secretary of State for Health what his assessment is of the number of people with severe mental illness who could benefit from assertive outreach; and if he will make a statement. [13848]

  Jacqui Smith
  [holding answer 12 November 2001]: It is estimated that some 20.000 people need assertive outreach and there is a NHS Plan commitment to have 220 assertive outreach teams established by 2004 to provide the necessary services.

  Lung Cancer (Photodynamic Therapy)
  Mr. Kevin Hughes
  To ask the Secretary of State for Health what plans he has to make photodynamic therapy for lung cancer sufferers available throughout the NHS. [12669]

  Jacqui Smith
  There is currently not enough evidence to support the introduction of photodynamic therapy in the national health service. If photodynamic therapy is considered to be a potentially significant intervention, it can be referred to the National Institute for Clinical Excellence.

  Drugs Budgets
  Tim Loughton
  To ask the Secretary of State for Health what estimate he has made of the level of spending against their drugs budget by(a) PCTs and (b) health authorities this year. [12598]

  Ms Blears
  [holding answer 5 November 2001]: Health authorities and primary care trusts are responsible for setting primary care drugs budgets; decisions on the level of funding will depend on local priorities.

  Forecasts of prescribing expenditure are provided to health authorities and PCTs and groups and it is for them to monitor this against their prescribing budgets. Prescribing budgets notified to the Department do not include any contingency reserves held locally.

  We do take account of prescribing trends and other influencing factors in primary care prescribing when considering the overall levels of allocations that are made to health authorities. The latest national forecast for 2001–02 prescribing expenditure represents a 9.2 per cent. growth on 2000–01 out-turn.

  Tim Loughton
  To ask the Secretary of State for Health what account he will be taking of the level of spending against their drugs budgets by(a) PCTs and (b) health authorities this year when determining budgets for next year. [12599]

  Ms Blears
  [holding answer 5 November 2001]: Health authorities and primary care trust drugs budgets are not determined centrally. However, the Department issues guidance each year to the national health service with

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  advice about factors that health authorities and primary care trusts should take into account in setting prescribing budgets. The latest guidance was issued in January 2001.

  The latest guidance advises that
  "over the past five years the average growth in the drugs bill has been around 8 per cent.".
  and that when setting prescribing budgets,
  "discussions should take into account local circumstances, including past trends and spending comparisons with similar areas."

  Health authorities and PCTs and groups are also reminded to take account of additional costs from factors that influence prescribing costs, for example, national service frameworks, newly licenses drugs and National Institute for Clinical Excellence recommendations.

  Health authorities and PCTs receive unified allocations to cover the costs of hospital and community health services, discretionary funding for general practice staff, premises and computers and primary care prescribing.

  It is for health authorities in partnership with primary care groups/trusts and other local stakeholders to determine how best to use their funds.

  We do take account of trends in primary care prescribing costs when considering the overall levels of allocations that are made to health authorities.

  Electro-convulsive Therapy
  Mr. Burstow
  To ask the Secretary of State for Health how many(a) mental health and (b) other patients, broken down by reason for their admission to hospital received ECT (i) having given informed consent in advance, (ii) not having given consent but having the matter put to a second opinion and (iii) not having given consent and not having the matter referred to a second opinion-appointed doctor, in each quarter over the last nine years; and how many patients for each of the quarters where figures are available were (A) under 16, (B) 16 to 59, (C) 60 to 75 and (D) 75 years and over. [13111]

  Jacqui Smith
  The information requested is not available.

  The most recent information available is contained in a one-off survey covering the period from January 1999 to March 1999, England only, that was undertaken to provide an up to date and accurate snapshot picture of the use of electro-convulsive therapy (ECT). Prior to this survey, the information previously recorded on ECT did not provide an accurate picture on the use of ECT treatment.

  The results of the survey are contained in the Department of Health Statistical Bulletin "Electro-Convulsive Therapy: Survey covering the period from January 1999 to March 1999, England", a copy of which is in the Library.

  Mr. Burstow
  To ask the Secretary of State for Health when his Department last undertook an evidence review into the use and efficacy of ECT that drew on(a) UK and (b) international research. [13110]

  Jacqui Smith
  The Department has commissioned a systematic review of the effectiveness and safety of electro-convulsive therapy (ECT). This review which 682W
  covers both United Kingdom and international research led by Dr. John Geddes at the University of Oxford and is expected to report by the end of this year.

  The Department has commissioned the Institute of Psychiatry to conduct a review of studies and information on consumers' perspectives on ECT.

  The Department's health technology assessment (HTA) programme has commissioned a review, on behalf of the National Institute for Clinical Excellence, on the clinical cost-effectiveness of ECT due to be completed in May 2002. The HTA programme has also commissioned a trial of the clinical effectiveness and cost of repetitive transcranial magnetic stimulation versus ECT in severe depression. This report is due to be published in May 2006.

  The National Health Service Centre for Reviews and Dissemination has conducted systematic reviews relating to the effectiveness of ECT including:

  Electro-convulsive therapy for depression

  Electro-convulsive therapy for schizophrenia

  Half a century of ECT use in young people.

  The details of these reviews can be found in the Database of Abstracts of Reviews of Effectiveness available at: http://agantha.york.ac.uk/welcome.htm

  Mr. Burstow
  To ask the Secretary of State for Health what guidance has been issued to doctors relating to who should(a) administer and (b) receive ECT in hospitals; and if he will make a statement. [13109]

  Jacqui Smith
  In 1995, the Royal College of Psychiatrists issued guidance on the use of electroconvulsive therapy (ECT) called "The ECT Handbook—The Second Report of the Royal College of Psychiatrists' Special Committee on ECT". This is an important source of guidance to patients and include sections on clinical guidelines; the administration of ECT; the law and consent. The college expects to issue an updated edition of this guidance in 2002.

  In September 1998 the Chief Medical Officer and the president of the Royal College of Psychiatrists sent a joint letter to all consultant psychiatrists, health authorities and national health service trusts. Clinicians and mental health trust managers were expected to ensure ECT is administered to patients in accordance with the college's guidance.

  Decisions on clinical interventions remain the prerogative of clinical staff. However, evidence and research tends to support the use of ECT treatment on patients with severe depressive illness and puerperal psychosis.

  Nutrition
  Mr. Burstow
  To ask the Secretary of State for Health (1) what targets his Department has set for the reduction of under-nutrition; and what progress has been made to reach the targets; [12915]

  (2) what strategies the Government have in place to (a) manage and (b) monitor under-nutrition in (i) hospital, (ii) residential care and (iii) the wider community; and if he will make a statement; [12916]
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  (3) what measures are being taken to screen patients for under-nutrition in (a) hospitals, (b) residential care and (c) the wider community; and if he will make a statement. [12917]

  Jacqui Smith
  [holding answer 6 November 2001]: In the NHS Plan, we made a commitment to reduce under-nutrition by developing a hospital nutrition policy to improve the outcome of care of patients by 2004. A number of measures and strategies are in place to manage, monitor and screen patients for under-nutrition in hospitals, residential care and the wider community. A full list of these initiatives has been placed in the Library.

  We recognise that one of the most important factors in aiding hospital patients to gain improved health is through the provision of good quality nutritional food that the patient is able to eat and enjoy. Two reports published last year—from the Nuffield Trust and the British Association of Parenteral and Enteral Nutrition—made recommendations for hospital nutrition services encompassing both hospital food and artificial nutrition.

  We are introducing housekeepers on to ward teams to work with the ward sister. One of the key responsibilities of the housekeeper is to ensure that patients are given encouragement and assistance in not only choosing suitable meals and snacks but also with eating if required. From 14 November, a housekeeping guide will be able on

  NHS trust

  Expenditure (£000)

  Per weighted head population (£)

  Avon Ambulance Service NHS Trust

  14,522

  15.40

  Beds and Hens Ambulance and Paramedic NHS Trust

  23,902

  16.02

  Cumbria Ambulance Service NHS Trust

  9,753

  19.82

  Dorset Ambulance NHS Trust

  12,575

  18.09

  East Anglian Ambulance NHS Trust

  33,029

  16.36

  East Midlands Ambulance Service NHS Trust

  45,090

  16.13

  Essex Ambulance Service NHS Trust

  27,242

  18.24

  Gloucestershire Ambulance Services NHS Trust

  8,593

  16.70

  Greater Manchester Ambulance NHS Trust

  35,195

  12.55

  Hampshire Ambulance Service NHS Trust

  21,111

  13.94

  Hereford and Worcester Ambulance NHS Trust

  12,080

  19.02

  Isle of Wight Healthcare NHS Trust

  2,455

  17.95

  Kent Ambulance NHS Trust

  21,743

  14.46

  Lancashire Ambulance Service NHS Trust

  27,150

  18.02

  Lincolnshire Ambulance NHS Trust

  17,660

  18.80

  London Ambulance Service NHS Trust

  119,785

  15.01

  Mersey Regional Ambulance Service NHS Trust

  30,248

  12.01

  North East Ambulance Service NHS Trust

  29,127

  17.47

  Oxfordshire Ambulance NHS Trust

  9,900

  18.27

  Royal Berkshire Ambulance Service Trust

  13,970

  19.19

  S Yorks Met Amb and Paramed Sery NHS Trust

  16,848

  12.04

  Shropshire's Community and Mental HS NHS Trust

  6,340

  15.87

  Staffordshire Ambulance Service NHS Trust

  16,218

  16.09

  Surrey Ambulance Service NHS Trust

  19,518

  20.55

  Sussex Ambulance Service NHS Trust

  27,872

  18.19

  Tees East and Nth Yorkshire Amb Serv NHS Trust

  32,276

  17.33

  Two Shires Ambulance NHS Trust

  18,835

  16.75

  Warwickshire Ambulance Service NHS Trust

  9,328

  20.34

  West Midlands Ambulance NHS Trust

  39,167

  14.21

  West Yorkshire Ambulance Service NHS Trust

  45,173

  20.82

  West Country Ambulance Services NHS Trust

  40,493

  19.97

  Wiltshire Ambulance Service NHS Trust

  9,744

  17.99

  Hearing Aids
  Sandra Gidley
  To ask the Secretary of State for Health, (1) pursuant to his answer to the hon. Member for North Devon (Mr. Harvey), on 25 April 2001,Official Report, columns 171–72W, on hearing aids, what plans his Department has to ensure funding for the continued
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  the national health service estates website. This guide has been compiled after consultation with NHS trusts and all staffing groups, ie dieticians, nurses, caterers, facilities, estates and hotel services. Patients have also been involved with the guide and have been instrumental in establishing the 11 patient-focused national service standards for housekeepers

  Ambulance Services
  Mr. Andrew Turner
  To ask the Secretary of State for Health to what extent each ambulance service in England met Government performance targets in the most recent year for which information is available; what the cost of each service was for that year; and what the cost per head of population of providing each service was in that year. [12926]

  Ms Blears
  [holding answer 6 November 2001]: Information about response times to emergency calls for all national health service ambulance trusts is contained in the Department of Health Statistical Bulletin "Ambulance Services, England 2000–01". A copy is in the Library and available at www.doh.uk/public/sb0115.htm.

  Information on the cost of each service and the cost per head of population of providing each service is specified in the table (the most recent available figures are for 2000–01).

  provision of digital hearing aids under the modernising NHS hearing aids services project throughout the financial year 2002–03; [13779]

  (2) pursuant to his answer to the hon. Member for Stafford (Mr. Kidney) of 11 July 2001, Official Report, column 508, on digital hearing aids, at what date

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  following the presentation of the Institute of Hearing Research's final evaluation report he will make an announcement about extending changes in hearing aid services to all NHS audiology departments. [13746]

  Jacqui Smith
  The evaluation of the modernisation project will be taken into account when considering further investment next year in a national health service hearing aid service, which includes the provision of digital hearing aids. The Department has received interim evaluation reports from the Institute of Hearing Research, and will continue to be updated on progress. Planning and decisions on modemisation and associated funding and resources are being kept under review until further data can start to be taken into account.

  National Blood Service
  Mr. Havard
  To ask the Secretary of State for Health which organisations and individuals make up the National Blood Service's appropriate use of blood and blood components group. [13508]

  Mr. Hutton
  [holding answer 12 November 2001]: The membership of the National Blood Service Appropriate Use of Blood group is:

  Chairman:

  Dr. Angela Robinson—Medical Director, National Blood Service

  Members:

  Dr. Paula Bolton-Maggs—Consultant Haemotologist, Alder Hey Hospital

  Carol Cantwall—Chief Biomedical Scientist, St. Mary's Hospital, London

  Prof. Marcela Contreras—National Blood Service

  Jan Gordon—Transfusion Nurse, Chelsea and Westminster Hospital

  Dr. Virge James—National Blood Service

  Charles McCollum—Professor of Surgery, Manchester

  Prof. Paul McMaster—Hepatohiliary and Transplant Surgeon, Birmingham

  Dr. Mike Murphy—National Blood Service

  Stuart Penny—National Blood Service

  Dr. Fiona Regan—National Blood Service

  Liz Reynolds—National Blood Service

  Dr. Clare Taylor—National Blood Service

  Dr. Dafydd Thomas—Consultant, Morriston Hospital

  John Thompson—Royal Devon and Exeter Hospital

  Dr. Dorothy Stainsby—National Blood Service

  Brian Chaves—National Blood Service

  Dr. Liz Love—National Blood Service

  John McCoy—National Blood Service.

  Traditional Medicines Directive
  Mr. Heald
  To ask the Secretary of State for Health what representation he intends to make to the European Commission about the proposed traditional medicines directive. [13851]

  Ms Blears
  [holding answer 12 November 2001]: The United Kingdom comments on early drafts of the proposal for a directive on traditional medicinal products were set out in letters from the Medicines Control Agency (MCA) to the European Commission dated 18 December 2000 and 30 April 2001. Copies of these letters have been placed in the Library. The Commission has indicated that
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  it expects shortly to adopt proposals for new provisions on traditional herbal medicinal products. We will decide what further representations may be required once we have assessed these updated proposals.

  Psychosis
  Mr. Heald
  To ask the Secretary of State for Health if it is his policy that by 2004 all young people who experience a first episode of psychosis should be offered the choice of being prescribed atypical medicines. [13849]

  Jacqui Smith
  [holding answer 12 November 2001]: As indicated in the mental health policy implementation guide, early intervention in psychosis teams should use either low dose traditional or atypical antipsychotics in first line treatment and they should involve service users in decision making and monitoring of effects. The NHS Plan states that by 2004 all young people who experience a first episode of psychosis, such as schizophrenia, will receive the early and intensive support they need.

  Governing Bodies
  Mr. Heald
  To ask the Secretary of State for Health when he last met the(a) chairman of the council of the BMA, (b) president of the Royal College of Physicians, (c) president of the Royal College of Surgeons, (d) president of the Royal College of Psychiatrists, (e) president of the Royal College of General Practitioners, (f) president of the Royal College of Obstetricians and Gynaecologists and (g) president of the Royal College of Nursing. [13857]

  Ms Blears
  [holding answer 12 November 2001]: Dates of the latest meetings with my right hon. Friend are shown. Where there have been no meetings with my right hon. Friend, the latest meetings with other ministerial colleagues are shown.

  (a) Chairman of the Council of the BMA: 11 July 2001

  (b) President of the Royal College of Physicians: 10 July 2001

  (c) President of the Royal College of Surgeons: 19 July 2001 (my noble Friend the Parliamentary Under-Secretary (Lords), Lord Hunt)

  (d) President of the Royal College of Psychiatrists: 18 July 2001 (my right hon. Friend the Minister for Health (Mr. Hutton))

  (e) President of the Royal College of General Practitioners: 10 July 2001

  (f) President of the Royal College of Obstetricians and Gynaecologists

  (g) President of the Royal College of Nursing.

  NHS Budget (Hertfordshire)
  Mr. Heald
  To ask the Secretary of State for Health what his estimate is of the amount by which Hertfordshire will overspend on the NHS budget in the current financial year. [13244]

  Jacqui Smith
  [holding answer 12 November 2001]: The estimated projected overspend across Hertfordshire in 2001–02 is £8 million of which £5.1 million is for East and North Hertfordshire National Health Service Trust and £2.9 million in respect of prescribing. There are long standing financial issues that affect Hertfordshire and the NHS eastern regional office is actively involved in agreeing a financial recovery plan.

  Hampshire and Surrey Ambulance Services
  Mr. Viggers
  To ask the Secretary of State for Health what the cost was of the consultation exercise on the proposed merger of Hampshire and Surrey ambulance services. [13503]

  Ms Blears
  [holding answer 12 November 2001]: The information requested is not available.

  Smallpox
  Mr. Dalyell
  To ask the Secretary of State for Health what discussions he has had with the World Health Organisation regarding contingency plans for combating an outbreak of smallpox in the UK. [12253]

  Jacqui Smith
  Ministers and officials have frequent formal and informal contacts with the World Health Organisation on a range of health-related topics including issues around the health threats posed by a bioterrorist threat. Within the framework of these ongoing contacts, we have had no specific discussions on contingency planning for combating an outbreak of smallpox in the United Kingdom, although we are aware of the guidance WHO has published on these matters. As part of our contingency planning we will keep open our contacts with WHO so that we can call upon their advice and technical assistance as necessary.

  Stoke Mandeville Merger
  Mr. Lidington
  To ask the Secretary of State for Health what is his policy towards the proposed merger of the Stoke Mandeville Hospital and South Buckinghamshire NHS Trust. [14710]

  Ms Blears
  The merger of Stoke Mandeville Hospital national health service trust and South Buckinghamshire NHS trust has been proposed by the trusts and Buckinghamshire health authority. The proposal is currently with Ministers for consideration.

  Primary Care Trusts
  Tim Loughton
  To ask the Secretary of State for Health what arrangements have been made for the transfer of funding streams from district health authorities to PCTs [14340]

  Mr. Hutton
  At present my right hon. Friend the Secretary of State allocates resources to health authorities. Health authorities then allocate resources to their primary care trusts. In the future, as part of our programme to devolve power to frontline organisations, we intend that the Secretary of State will allocate resources direct to primary care trusts. The National Health Service Reform and Health Care Professions Bill, currently before Parliament, seeks to give effect to this.

  Tim Loughton
  To ask the Secretary of State for Health what arrangements have been made to ensure the continuity of employment of staff transferring from district health authorities to component PCTs. [14341]

  Mr. Hutton
  For staff transferring from health authorities to primary care trusts under Transfer of Undertakings Protection of Employment (TUPE) Regulations 1981 or by terms reflecting TUPE principles (Transfer Orders), continuity of service will automatically 688W
  apply. This means that there will be no break in service and existing pay and terms and conditions of employment will be protected at the point of transfer.

  Mr. Paice
  To ask the Secretary of State for Health when he expects to make decisions regarding the confirmation of primary care trusts in Cambridgeshire. [14023]

  Mr. Hutton
  The process of approving applications for primary care trust status is contained in Health Service Circular 1999/167. Primary care trust applications are currently being assessed and will be considered for approval against the published national criteria over the next two months.

  Social Services Staff Training
  Tim Loughton
  To ask the Secretary of State for Health what plans he has to overhaul training courses available to social services staff. [14343]

  Jacqui Smith
  Guidance on the training and qualifications that all social care staff should undertake is given in the National Training Strategy document: "Modernising the Social Care Workforce" which the National Training Organisation for Social Care published, with endorsement from the Minister of State, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), in July 2000.

  In March 2001 we also announced the development of a three-year degree level qualification in social work to replace the current two-year Diploma course. The degree level qualification will be introduced in England from September 2003.

  GP Recruitment (Financial Incentives)
  Tim Loughton
  To ask the Secretary of State for Health (1) for what reason Worthing is not included in areas eligible for his new incentive scheme for recruiting GPs to work in areas of high shortages; [14345]

  (2) if he will list those areas eligible for his scheme to provide financial incentives to general practitioners to work in areas of high shortages; and what sums are available in each. [14344]

  Mr. Hutton
  There are incentives for all areas of up to £5,000 per eligible general practitioner. Those areas deemed as underdoctored will attract an additional payment of up to £5,000 more per eligible GP.

  The primary care trusts/groups eligible for the underdoctored additional payment are those that have fewer than the national median number of GPs (GP principals or equivalent on whole-time equivalent basis) per 100,000 weighted population. The national PCT/G median is 52.695 GPs per 100,000 weighted population, Worthing PCG has 54.35 GPs per 100.000 weighted population and therefore each newly appointed GP will receive up to £5,000.

  There is no cap to the amount of money available to any area under this scheme.

  The list of areas eligible to receive the additional payment for being an underdoctored area, along with guidance on the golden hello scheme is available on

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  the Department of Health website at www.doh.gov.uk/ pricare/goldenhello. A copy is also available in the Library.

  Public-private Projects
  Tim Loughton
  To ask the Secretary of State for Health if he will list those public-private projects being negotiated within the national health service. [14338]

  Region/Trust

  Project description

  Northern and Yorks

  Newcastle-upon-Tyne Hospitals NHS Trust

  Completion of Reconfiguration of Acute Hospital Services in Newcastle

  Leeds Teaching Hospitals NHS Trust

  Implementation of Leeds Acute Services Reconfiguration Strategy

  North Durham Health Care NHS Trust

  Chester-le-Street Community Hospital

  Huddersfield and Calderdale NHS Trusts

  EPR (Electronic Patient Record) scheme

  Leeds Teaching Hospitals

  EPR scheme

  Bradford Hospitals NHS Trust and Airdale NHS trust

  EPR scheme

  Trent

  Southern Derbyshire Acute Hospitals NHS Trust (2, 3)

  Acute Reconfiguration

  Nottingham Healthcare NHS Trust

  Elderly Mental Health

  Doncaster and South Humber NHS

  Mental Health Services

  Nottingham City Hospital NHS Trust

  Staff residences

  Eastern

  East and North Hertfordshire NHS Trust

  Ambulatory Care Centre

  Princess Alexandra Hospital NHS Trust

  Staff accommodation

  London

  Havering Hospitals NHS Trust

  Redevelopment of Hospital Facilities

  Newham Healthcare NHS Trust

  Rationalisation

  The Whittington Hospital NHS Trust

  Redevelopment of Acute Hospital Services

  Parkside Health NHS Trust

  Willesden

  West London Pathology Consortium

  Pathology Systems

  Havering Hospital NHS Trust

  EPR scheme

  King's Healthcare NHS Trust

  EPR scheme

  Guy's and St. Thomas' Hospital NHS Trust

  EPR scheme

  Lewisham Hospital NHS Trust

  EPR scheme

  South East

  Portsmouth Hospitals NHS Trust

  Acute rationalisation

  Oxford Radcliffe Hospitals NHS Trust

  Radcliffe infirmary relocation to John Radcliffe Hospital Site

  Stoke Mandeville Hospital NHS Trust

  Partial Redevelopment

  Newbury Primary Care NHS Trust

  Consolidation of sites in Newbury

  Nuffield Orthopaedic Centre NHS Trust

  Orthopaedic/Medicines redevelopment

  Northamptonshire Healthcare NHS Trust

  Mental Health Acute Hospital reprovision

  East Kent Community NHS Trust

  West View Reprovision Joint NHS/Local Authority

  Brighton Health Care NHS Trust

  Renal Unit Reprovision

  Northampton Community Healthcare NHS Trust

  Danetre Community Health Centre Joint NHS/Local Authority

  Invicta Community Care NHS Trust

  Mental Health Reprovision

  Northamptonshire Healthcare NHS Trust

  Acute Mental Health Ward reprovision

  Brighton Health Care NHS Trust

  Brighton Education Centre

  Bournewood Community and Mental Health NHS Trust

  Walton and Chertsey Health Centres

  Ashford and St. Peter's NHS Trust

  Energy Management Scheme

  Mid-Sussex NHS Trust

  Low Secure Unit

  Royal Berkshire and Battle Hospitals NHS Trust

  RBBH Pas

  Royal Surrey County Hospital

  EPR scheme

  Heatherwood and Wexham Park NHS Trust

  EPR scheme

  Milton Keynes General NHS Trust

  EPR scheme

  South Buckinghamshire NHS Trust

  EPR scheme

  Stoke Mandeville NHS Trust

  EPR scheme

  North Staffordshire Hospital NHS Trust

  EPR scheme

  South West

  Gloucestershire Royal NHS Trust

  Site re-development

  Exeter and District Community Health Services NHS Trust

  Tiverton Hospital

  Cornwall Healthcare NHS Trust

  Western Mental Health, Cambourne and Redruth

  Wiltshire and Swindon Health Care NHS Trust

  Bradford-on-Avon Hospital

  South West Regional Procurement

  EPR systems

  Swindon and Marlborough

  EPR scheme

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  Mr. Hutton
  Many contracts are negotiated every year between national health service bodies and private sector suppliers for a wide range of services and equipment. Information is only held centrally on private finance initiative (PFI) projects with a capital value of £1 million or greater. These are listed in the table (in negotiation is interpreted as any stage between OJEC notice and financial close).
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  Region/Trust

  Project description

  West Midlands

  University Hospitals Warwickshire and Coventry NHS Trust

  New DGH

  City Hospital NHS Trust

  Ambulatory Care Centre

  Mid-Staffordshire General Hospitals NHS Trust

  EPR scheme

  North West

  Central Manchester Healthcare NHS Trust

  Service Reconfiguration

  Blackburn, Hyndburn and Ribble Valley Healthcare NHS Trust

  Site Rationalisation

  Countess of Chester Hospital NHS Trust

  Staff Residential Accommodation

  Christie NHS Trust

  EPR scheme

  Blackburn NHS Trust

  EPR scheme

  Burnley NHS Trust

  EPR scheme

  North Manchester NHS Trust

  EPR scheme

  Chorley and Preston NHS Trust

  EPR scheme

  Salford Mental Health NHS Trust

  EPR scheme

  General Practice Nurses
  Tim Loughton
  To ask the Secretary of State for Health how many practice nurses worked in general practice surgeries in each of the last five years; and what were their full-time working equivalents. [14346]

  Mr. Hutton
  Figures showing the number (headcount) and whole-time equivalent for practice nurses employed by unrestricted principals and equivalents in each of the last five years are shown in the table.

  Practice nurses employed by unrestricted principals and equivalents (UPEs)1 as at 1 October 1996–99 and 30 September 2000—England

  Headcount2

  Whole-time equivalent

  1996

  17,900

  9,820

  1997

  18,390

  10,080

  1998

  18,890

  10,360

  1999

  19,500

  10,690

  2000

  19,200

  10,710

  1UPEs includes GMS unrestricted principals, PMS contracted GPs and PMS salaried GPs.

  2Headcount data were not collected in 1998 and 1999; data for these years have been estimated from whole-time equivalents (wte) using the 1997 wte to headcount ratio.

  Note:

  Data are rounded to the nearest ten.

  Source:

  Department of Health General and Personal Medical Services Statistics.

  National Clinical Director for Children
  Tim Loughton
  To ask the Secretary of State for Health if he will make a statement on the change of name to the National Clinical Director for Children. [14339]

  Jacqui Smith
  Professor Al Aynsley-Green's appointment was announced in July this year, following the publication of the report from the Bristol Royal Infirmary Inquiry. The term "National Director for Healthcare services" originated in a recommendation in that report.

  However, Professor Aynsley-Green's role includes chairing the Children's Taskforce, and leading work to develop the Children's National Service Framework. Both of these roles require an overview across health and social care services.
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  The title of "National Clinical Director for Children" recognises Professor Aynsley-Green's particular expertise as a clinician, but does not limit the type of services in which he takes an interest. This formulation matches that used for many other national directors.

  New Hospitals
  Mr. Andrew Mitchess
  To ask the Secretary of State for Health how many new hospitals and significant hospital buildings, as defined by his Department, were(a) in progress in May 1997 and (b) opened during 1997. [14538]

  Mr. Hutton
  The Department's definition of a significant hospital building development is any capital investment scheme with a total cost of over £25 million. No such publicly funded schemes started construction in 1997 until the private finance initiative began to deliver, with the Dartford and Gravesham scheme in August 1997 and the Carlisle scheme in November 1997. Since 1 May 1997, 64 such schemes have been given approval to proceed under the private finance initiative.

  In May 1997, 12 significant publicly funded schemes were in progress, having started construction several years previously. Eight such schemes reached completion during 1997.

LORD CHANCELLOR'S DEPARTMENT

  Jury Service
  Mr. Lidington
  To ask the Parliamentary Secretary, Lord Chancellor's Department what is the Government's policy on the eligibility for jury service of hon. Members and Members of the House of Lords. [14711]

  Mr. Denham
  I have been asked to reply.

  The right to be excused jury service was considered by Sir Robin Auld as part of his independent review of the criminal courts. He recommended that no-one should be excusable from jury service as of right, only on showing good reason for excusal. His report is the subject of public

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  consultation until the end of January 2002, and the Government will give careful consideration to these issues in the light of comments received.

  Freedom of Information Act
  Tony Wright
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he will bring the Freedom of Information Act 2000 into force. [15143]

  Mr. Wills
  I have today placed in the Library of the House a paper, containing a Schedule of organisations and dates, that sets out the Government's plans for implementing the Freedom of Information Act 2000.

  Lord Chancellor's Apartments
  Mr. Vaz
  To ask the Parliamentary Secretary, Lord Chancellor's Department how much money has been raised for charity by granting permission for outside bodies to use the Lord Chancellor's apartments in each year since 1997. [13634]

  Ms Rosie Winterton
  Since March 1998 there have been about 150 charitable receptions in the Lord Chancellor's official residence. The following figures are a break down of the amount of money raised for charity between March 1998 and October 2001.

  Financial year1

  £

  1997–98

  541,650

  1998–99

  472,279

  1999–2000

  368,715

  2000–01

  711,667

  2001–02

  2,281,000

  Total

  4,375,311

  1I April to 31 March

  Law Society
  Mr. Vaz
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he next plans to meet the President of the Law Society. [13635]

  Mr. Wills
  I last met the President of the Law Society on 29 October but neither I nor any of my ministerial colleagues have appointments arranged with him at present. However, meetings with the President take place on a fairly regular basis and it is likely that further appointments will be arranged in the future.

  Terence MacSwiney
  Harry Cohen
  To ask the Parliamentary Secretary, Lord Chancellor's Department if she will arrange for the release of all official documents relating to Mr. Terence MacSwiney, former Lord Mayor of Cork; and if she will make a statement. [13539]

  Ms Rosie Winterton
  Records relating to Terence MacSwiney have been transferred to the Public Record Office by the Home Office, the Metropolitan Police and the Judge Advocate General's Office. Those that were closed under the guidelines that obtained before the 'Open Government' White paper 1993 (Cm 2290) will now be reviewed by the transferring departments under current guidelines. This is in accordance with standard practice, which is to undertake re-review of specific historical records on request.

  Researchers who require access to closed records held by the PRO or to historical records still held by departments should write to the Departmental Record Officer of the department that created the records (or its successor) quoting the PRO reference where this is known. Requests for review of access restrictions are handled in the order in which they are received, regardless of the source of the inquiry or its subject matter. The only exception to this is where the information is urgently required for legal purposes.

ENVIRONMENT, FOOD AND RURAL AFFAIRS

  Livestock Movements
  Miss McIntosh
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the impact on animal welfare of the implementation of the licensing provisions for the movement of livestock. [10178]

  Mr. Morley
  The movement licence provisions were drawn up in close co-operation with the fanning industry. They permit as much movement of live animals as possible consistent with the overall objective of containing and eradicating foot and mouth disease. The arrangements are kept under review in the light of the developing disease situation.

  Cases for exceptional movements on the ground of welfare needs are considered on a case-by-case basis. The Livestock Welfare Disposal Scheme is available as a last resort to those farmers who face unavoidable welfare difficulties.

  Sheepmeat
  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs what(a) additional finance and (b) new marketing initiatives her Department is providing to reinforce consumer confidence in the purchase and consumption of lamb, sheepmeat and related products. [11215]

  Mr. Morley
  Subject to state aids clearance, DEFRA will contribute match-funding of £2.72 million towards the Meat and Livestock Commission's autumn campaign to promote lamb consumption.

  Hunting
  Lembit Öpik
  To ask the Secretary of State for Environment, Food and Rural Affairs when she plans to publish the veterinary risk assessment report on the risk of spreading foot and mouth disease via the activities of hunts; and if she will make a statement. [12021]

  Mr. Bercow
  To ask the Secretary of State for Environment, Food and Rural Affairs when she plans to publish the veterinary risk assessment report on the effect of foot and mouth on a recommencement of hunting. [10392]

  Kate Hoey
  To ask the Secretary of State for Environment, Food and Rural Affairs when she intends to publish the results of the veterinary risk assessment of hunting with dogs. [10561]

  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs when she will publish the veterinary risk assessment on hunting with hounds; and when she will lift the restrictions placed on hunting with hounds as a consequence of the outbreak of foot and mouth disease. [14270]
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  Mr. Keith Simpson
  To ask the Secretary of State for Environment, Food and Rural Affairs when the risk assessment report on the resumption of hunting with dogs will be published; and for what reason she has not published it to date. [13478]

  Mr. Cameron
  To ask the Secretary of State for Environment, Food and Rural Affairs when she plans to publish the veterinary risk assessment into restarting hunting; and if she will make a statement. [13469]

  Alun Michael
  This veterinary risk assessment raises a number of complex issues regarding the future of foot and mouth disease related restrictions on hunting and such matters involve a careful balance of risks. It will be published as soon as Ministers and DEFRA officials have completed their consideration of the document. An announcement on the future of foot and mouth disease controls on hunting will be made as soon as possible.

  Norman Baker
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to propose legislation in respect of hunting with dogs. [11806]

  Alun Michael
  [holding answer 6 November 2001]: I refer the hon. Member to the reply I gave to him on 20 July 2001, Official Report, column 635W.

  Mr. Keith Simpson
  To ask the Secretary of State for Environment, Food and Rural Affairs when she will lift the restrictions placed on hunting with dogs as a consequence of the outbreak of foot and mouth. [13477]

  Alun Michael
  [holding answer 9 November 2001]: This veterinary risk assessment raises a number of complex issues regarding the future of foot and mouth disease related restrictions on hunting and such matters involve a careful balance of risks. It will be published as soon as Ministers and DEFRA officials have completed their consideration of the document. An announcement on the future of foot and mouth disease controls on hunting will be made as soon as possible.

  Regional Office (Exeter)
  Mrs. Ann Winterton
  To ask the Secretary of State for Environment, Food and Rural Affairs (1) on what date she was informed of(a) missing equipment and (b) the suspension of personnel at her Department's regional office at Exeter; and on what date the equipment was first found to be missing; [12828]

  (2) if she will list the items discovered missing from her Department's regional office at Exeter; what data are contained on the equipment; and to what the data on the equipment related; [12830]

  (3) on what date the Devon and Cornwall constabulary was informed of (a) missing equipment and (b) the suspension of staff from her Department's regional office at Exeter; [12829]

  (4) for what reasons staff have been suspended from their posts at her Department's regional office at Exeter on

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  1 November; whether these suspensions are on a permanent or temporary basis; and if she will state the seniority and role of the members of staff involved. [12827]

  Mr. Morley
  18 members of staff who had been based at Exeter are suspended from duty while the Department carries out its own internal criminal investigation concerning expenses claims. An investigation into missing equipment is also being carried out. The police have not been advised as my staff have the power to deal with criminal matters.

  As the investigations are on-going it would be inappropriate for me to comment further at this time.

  Farm Diversification
  Paul Flynn
  To ask the Secretary of State for Environment, Food and Rural Affairs what plans she has to encourage more diversification of farmed land into(a) fuel growing, (b) aqua culture, (c) coppicing, (d) organic and biomass farming and (e) leisure uses in the next five years; and what changes she expects in the levels of employment as a result. [13717]

  Alun Michael
  All the activities listed by my hon. Friend are potentially eligible for support under the England Rural Development Programme (ERDP). either as farm diversification projects or under specific schemes, such as the Organic Farming or Energy Crops Schemes. Encouragement of uptake under the ERDP is being promoted through a variety of routes, including in national and regional media, through the Department's presence at agricultural and similar shows providing the opportunity for direct contact with potential grant recipients, through revised specialist literature, and through the work of partner organisations and others providing business advice to farmers. Some crops grown for energy purposes may alternatively receive support under the Arable Area Payments Scheme.

  As far as changes in employment levels are concerned, the ERDP was developed as a significant tool for the long-term regeneration of rural areas and the encouragement of an environmentally sustainable and economically diverse countryside. While the programme does include targets for numbers of jobs sustained or created under some of the measures, the impact of the programme on the rural economy and environment overall is potentially of greater significance than the single indicator of levels of employment.

  Live Animals (Export)
  Mr. Rendel
  To ask the Secretary of State for Environment, Food and Rural Affairs what steps she is taking to ensure that all livestock vehicles transporting animals for over eight hours are required to install a forced ventilation system. [13549]

  Mr. Morley
  [holding answer 9 November 2001]: Correct ventilation, control and monitoring of the conditions in livestock vehicles is important to maintain animal welfare. Discussions are continuing in the context
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  of the European Commission's proposal for a revision of the EU regulation which sets standards for over eight hour livestock vehicle ventilation.

  Flood Risk
  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs what representations the Government have received on the level of insurance premiums being demanded of homeowners whose property lies in an area classified as a high flood risk; and if she will make a statement. [13911]

  Mr. Morley
  The Government maintain close links with the insurance industry to help ensure continued availability of affordable flood cover. Together with the flood defence operating authorities, we are reducing the risk of flooding and are communicating this to the industry. However, it must be recognised that insurance companies need to take a commercial decision as to what risk they will cover and on what terms.

  The agreement among ABI members is that they will continue to provide flood cover, except in exceptional circumstances, for domestic properties and small businesses which they currently insure, during 2001 and 2002. My hon. Friend the Economic Secretary to the Treasury and I met the Association of British Insurers on 5 September to discuss our mutual aim of ensuring that affordable flood insurance cover continues to be generally available after December 2002. Further discussions between officials have taken place.

  In relation to the concerns expressed by the ABI, the Government are acting to reduce flood risk, through substantial increases in investment in flood and coastal defence (which now totals over £400 million a year). Flood defences are being repaired, renewed, maintained and improved. Flood warning arrangements are continually being improved. The Government have issued strengthened guidance to local planning authorities on control of development in flood risk areas, and are reviewing the financial and institutional arrangements under which the flood defence service is delivered.

  Mr. Sayeed
  To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the efficacy of the flood risk area analysis, conducted by the Environment Agency; and if she will make a statement. [13890]

  Mr. Morley
  No formal assessment has been made by my Department. The Environment Agency flood plain maps are completed on the basis of the best information available. They are indicative only. A party seeking a more specific site related flood risk analysis should seek further, more detailed, local information from the Environment Agency, and/or carry out further investigations to determine the nature and extent of flood risk within a particular area. The maps are continuously improved and updated on an annual basis as better information is gained.

  The agency is currently in the process of extending the scope of this mapping to provide an indication of an extreme flood outline for the whole of England and Wales which will give a better indication of the range of potential flood risk in many areas. It is expected that these maps will be published before the end of 2002.

WORK AND PENSIONS

  Departmental Properties
  Mrs. May
  To ask the Secretary of State for Work and Pensions if he will list the number, value and location of properties newly leased in each of the last five years by his Department, broken down by those leases by the Department itself, its next step agencies and its non-departmental public bodies, differentiating between purchases made as a result of the creation of new bodies and those purchases made by established bodies. [7822]

  Mr. Nicholas Brown
  Tables of information have been placed in the Library. The tables include details of both the freehold and leasehold accommodation that has been acquired by the former Employment Service (ES) in the last five years. Information about "PRIME leases" taken on by the former Department of Social Security (DSS) is provided from 1 April 1998, as details are currently available only from when the PRIME contract commenced. The PRIME PFI contract transferred the ownership of the former DSS freehold properties and all obligations for leasehold accommodation to our private sector partners Land Securities Trillium.

  As modern leases have no intrinsic value as such, the rental cost of the former ES accommodation is given together with the market value of the freehold accommodation where appropriate. For the former DSS, details of the Facilities Price that we pay to Land Securities Trillium for the additional serviced office accommodation that has been taken on is provided. The Facilities Price covers not only the space we occupy but also a large number of building related services such as building management and maintenance, internal and external cleaning, and security.

  The only additional accommodation that has been taken on as a result of the creation of a new body is for the Pension Service.

  While we have taken on new accommodation in recent years, the flexibility in the PRIME contract has allowed us to reduce overall office space on the former DSS part of the estate from 1,488,701 sq m to approximately 1,300,000 sq m, as at October 2001. Taking the average 2001–02 Facility Price of £182 per square metre, this equates to a saving of approximately £34.34 m per annum.

  National Insurance Numbers
  Mr. Clappison
  To ask the Secretary of State for Work and Pensions how many surplus national insurance numbers have been removed from his Department's Central Index since 1997; and what plans he has to tackle the problem of bogus and surplus numbers. [7477]

  Malcolm Wicks
  The Departmental Central Index (DCI) Data Cleaning Project removed 100,000 surplus duplicate National Insurance numbers (NINOs) from the DCI between April 1997 and March 2001.
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  To prevent the creation of further bogus and duplicate NINOs, the Enhanced NINO allocation process was introduced nationally from April 2001.

  Stakeholder Pensions
  Jeff Ennis
  To ask the Secretary of State for Work and Pensions (1) by what means he will ensure that smaller companies provide stakeholder pensions to their employees; [10436]

  (2) how many companies with 50 or fewer workers have registered to provide stakeholder pensions. [10382]

  Mr. McCartney
  Employers are required to provide employees with access to a stakeholder pension scheme. Employers are not themselves required to set up a pension scheme or to contribute to it.

  Regulation of compliance with the requirement for employers to designate a stakeholder pension scheme for their employees will be undertaken by the Occupational Pensions Regulatory Authority (Opra).

  The number of employees in companies that have designated stakeholder pensions schemes for their staff is not available. However, figures from the Association of British Insurers show that the end of September this year, 212,242 employers of all sizes had designated stakeholder pension schemes for their workforces.

  Mr. Boswell
  To ask the Secretary of State for Work and. Pensions what action he is taking to improve access to free or low-cost advice to those intending to take out stakeholder pensions. [13901]

  Mr. McCartney
  Stakeholder pensions are designed to be simple. Many pension providers currently offer basic advice within the 1 per cent. annual management charge cap for stakeholder pensions. Additionally, the Financial Services Authority has produced decision trees to assist consumers.

  Benefit Fraud
  Mr. Frank Field
  To ask the Secretary of State for Work and Pensions what measures he has taken to ensure that local authorities have implemented their action plans drawn up in response to reports by the Benefit Fraud Inspectorate. [11816]

  Malcolm Wicks
  Shortly after the publication of a Benefit Fraud Inspectorate (BFI) report, the local authority concerned is invited to respond to the BFI's findings, giving its proposals for improvement. Where the response indicates that the actions the authority has already taken or plans to take to improve its performance are satisfactory, the Department monitors the performance of the authority through the management information they provide and their performance against Best Value performance indicators.

  Where there are continuing concerns, authorities are asked to submit progress reports to ensure that their planned improvements are being implemented and achieved. If it is thought necessary to gain additional assurance that improvements have been implemented, the BFI may be asked to undertake a further inspection.

  Benefit Appeals
  Ms Walley
  To ask the Secretary of State for Work and Pensions how many(a) appeals and (b) successful appeals there were in respect of each centre processing

  The number of appeals cleared for disability benefits and incapacity benefit in respect of each appeals service regional centre and the number found in favour of the appellant for 2000–01 and 2001 (year to date)

  1 April 2000 to 31 March 2001

  1 April 2001 to 30 September 2001

  Appeals service regional centre/disability benefit

  Appeals cleared at hearing

  Appeals found in favour of the appellant

  Appeals cleared at hearing

  Appeals found in favour of the appellant

  Birmingham

  Attendance Allowance

  1,056

  399

  413

  165

  Disability Living Allowance

  7,191

  3,126

  3,475

  1,576

  Incapacity Benefit

  2,771

  983

  1,333

  533

  Industrial Injuries and Disability Benefit

  1,273

  526

  541

  262

  Severe Disablement Allowance

  172

  62

  75

  33

  Cardiff

  Attendance Allowance

  1,266

  516

  725

  311

  Disability Living Allowance

  11,696

  5,685

  6,422

  3,426

  Incapacity Benefit

  4,761

  1,777

  2,667

  1,111

  Industrial Injuries and Disability Benefit

  2,546

  956

  1,416

  569

  Severe Disablement Allowance

  295

  118

  163

  78

  Glasgow

  Attendance Allowance

  2,215

  1,026

  1,210

  632

  Disability Living Allowance

  13,691

  7,115

  7,254

  4,180

  Incapacity Benefit

  5,136

  2,169

  2,549

  1,098

  Industrial Injuries and Disability Benefit

  3,241

  1,261

  1,767

  795

  Severe Disablement Allowance

  238

  83

  123

  50

  Leeds

  Attendance Allowance

  1,035

  407

  468

  194

  Disability Living Allowance

  7,668

  3,681

  3,508

  1,775

  Incapacity Benefit

  4,846

  1,913

  1,886

  743

  Industrial Injuries and Disability Benefit

  2,857

  659

  1,526

  315

  Severe Disablement Allowance

  185

  41

  59

  10

  Liverpool

  Attendance Allowance

  869

  345

  304

  129

  Disability Living Allowance

  9,755

  4,697

  3,940

  1,935

  Incapacity Benefit

  4,785

  2,115

  1,980

  961

  Industrial Injuries and Disability Benefit

  1,597

  606

  749

  309

  Severe Disablement Allowance

  135

  63

  89

  34

  Newcastle

  Attendance Allowance

  790

  347

  315

  148

  Disability Living Allowance

  7,162

  3,337

  3,540

  1,727

  Incapacity Benefit

  2,801

  1,002

  1,404

  545

  Industrial Injuries and Disability Benefit

  2,583

  1,311

  1,485

  730

  Severe Disablement Allowance

  100

  47

  71

  30

  Nottingham

  Attendance Allowance

  1,462

  668

  680

  289

  Disability Living Allowance

  10,356

  4,957

  5,614

  2,800

  Incapacity Benefit

  5,000

  1,761

  2,016

  694

  Industrial Injuries and Disability Benefit

  2,733

  1,277

  1,554

  726

  Severe Disablement Allowance

  392

  135

  192

  77

  Salford

  Attendance Allowance

  455

  183

  208

  84

  Disability Living Allowance

  5,220

  2,498

  2,699

  1,279

  Incapacity Benefit

  2,866

  1,036

  1,325

  460

  Industrial Injuries and Disability Benefit

  824

  380

  342

  140

  Severe Disablement Allowance

  69

  33

  53

  27

  Sutton

  Attendance Allowance

  999

  625

  642

  400

  Disability Living Allowance

  6,095

  3,990

  3,613

  2,439

  Incapacity Benefit

  4,626

  2,432

  2,154

  1,145

  Industrial Injuries and Disability Benefit

  944

  498

  330

  177

  Severe Disablement Allowance

  255

  124

  96

  38

  Source:

  Generic Appeals Processing System
  702W
  (i) disability benefit claims and (ii) incapacity benefit claims (A) in 2000–01 and (B) since April. [11907]

  Maria Eagle
  The information is in the tables:
  703W
  Ms Walley
  To ask the Secretary of State for Work and Pensions what were the total running costs in respect of each centre of(a) processing disability benefit appeals and (b) processing incapacity benefit appeals in (i) 2000–01 and (b) 2001. [11908]

  Maria Eagle
  The information is in the tables:

  Total running costs in respect of each appeals service regional centre for disability benefits (disability living allowance and attendance allowance) and incapacity benefit for 2000–01 and 2001

  £

  1 April 2000 to 31 March 2001

  Appeals service regional centre

  Disability benefits1

  Incapacity benefit

  Birmingham

  1,298,036

  582,388

  Cardiff

  2,095,244

  1,332,337

  Glasgow

  2,517,265

  1,183,681

  Leeds

  1,111,209

  1,026,671

  Liverpool

  1,449,165

  1,359,845

  Newcastle

  1,352,022

  708,351

  Nottingham

  1,926,581

  985,176

  Salford

  1,037,612

  665,707

  Sutton

  1,484,387

  1,298,467

  £

  1 April 2000 to 31 September 2001

  Appeals service regional centre

  Disability benefits1

  Incapacity benefit

  Birmingham

  669,145

  300,225

  Cardiff

  1,272,719

  809,305

  Glasgow

  1,396,331

  656,590

  Leeds

  599,987

  554,341

  Liverpool

  662,309

  621,487

  Newcastle

  791,802

  414,840

  Nottingham

  1,191,271

  609,168

  Salford

  533,631

  342,365

  Sutton

  830,748

  726,697

  1 Only Disability Living Allowance and Attendance Allowance

  Minimum Income Guarantee
  Mr. Challen
  To ask the Secretary of State for Work and Pensions how many pensioners in Morley and Rothwell are receiving the Minimum Income Guarantee; and how many pensioners he estimates are entitled to it. [13450]

  Mr. McCartney
  Estimates of the numbers of people who may be eligible for, but who have not claimed Minimum Income Guarantee (MIG) are not available below national level.

  As at May 2001, there were an estimated 2,600 MIG recipients in the Morley and Rothwell constituency.

  Agency Costs
  Mr. Bercow
  To ask the Secretary of State for Work and Pensions if he will make a statement on the cost of the launch of the new agency to bring together the work of the Employment Service and parts of the Benefits Agency. [14095]

  Mr. Nicholas Brown
  1 refer the hon. Member to the answer given to the hon. Member for Havant (Mr. Willetts) on 28 June 2001,Official Report, column 160W.

  Carers' Benefits
  Mr. Boswell
  To ask the Secretary of State for Work and Pensions when he will lay the orders implementing changes in carers' benefits. [13903]

  Maria Eagle
  We propose to make the changes by Regulatory Reform Order, to be introduced in the House as soon as possible.

  Pension Funds
  Mr. Cousins
  To ask the Secretary of State for Work and Pensions if his Department will hold discussions with the Law Commission on a review to clarify the ownership and distribution of pension fund surpluses. [14349]

  Mr. McCartney
  Officials have been exploring the matter with the Law Commission.

  Housing Benefit
  Mrs. Lait
  To ask the Secretary of State for Work and Pensions which Scottish local authorities had received a report from the Benefit Fraud Inspectorate on the administration of housing benefit by 8 November. [14348]

  Malcolm Wicks
  Benefit Fraud Inspectorate reports have been published' on the Scottish local authorities as listed:

  Angus

  Dundee

  East Dunbartonshire

  East Lothian

  East Lothian (second inspection)

  Edinburgh

  Glasgow

  Highland

  Inverclyde

  Scottish Borders

  South Ayrshire

  Stirling.

  Copies of the reports can be found in the Library.
  1The list does not include those authorities which have been inspected but the report has not yet been published.

EDUCATION AND SKILLS

  Student Funding
  Mr. Alan Simpson
  To ask the Secretary of State for Education and Skills what the projected funding levels are per full-time student in(a) sixth forms and (b) further education colleges for each of the next two years. [6683]

  John Healey
  The latest estimate of the average delegated funding per sixth form student in schools is for 2000–01 and is £3,230. On this basis, projected average funding for 2001–02 is £3,330, rising to £3,430 in 2002–03. The total funding per full-time equivalent student in FE sector colleges in 2000–01 allocated by this Department is £3,420 rising to £3,660 in 2001–02, and £3,760 in 2002–03. However, these figures are not directly comparable, as the FE unit funding figures include total public funding allocated for further education, while the schools' figures are based only on
  705W
  delegated funds and exclude other funding which the school receives centrally from LEAs which impact on post-16 students.

  Chris Grayling
  To ask the Secretary of State for Education and Skills how much her Department has spent per student in higher education in each year since 1990, excluding contribution from outside the public sector. [11127]

  Margaret Hodge
  The available data for England are shown in the table.

  Publicly planned funding for higher education institutions in England1

  Year

  Funding per FTE student2

  1991–92

  5,300

  1992–93

  5,060

  1993–94

  4,900

  1994–95

  4,830

  1995–96

  4,750

  1996–97

  4,580

  1997–98

  4,580

  1998–99

  4,700

  1999–2000

  4,810

  2000–01

  4,860

  2001–02

  5,020

  2002–03

  5,140

  2003–04

  5,290

  1Unit funding is based on HEFCE/TTA recurrent grant and plus tuition fees, divided by the number of full time equivalent students. It excludes capital, funding for widening access and all student support

  2Figures are rounded to nearest £10

  Mr. Hoyle
  To ask the Secretary of State for Education and Skills what is the timetable for an announcement on the new proposals for higher education funding; if representatives of the National Union of Students are being consulted under the review; and whether the present system of tuition fees will be abolished. [13000]

  Margaret Hodge
  We need to ensure that we have an appropriate balance between the contribution made by students, their families and the state to support our ambitions to widen access and participation in higher education. A range of policy options is being considered and no decisions have been taken.

  We plan to consult widely on any proposals for change and would expect the National Union of Students to contribute. No decisions have been taken yet on the timing of an announcement.

  Individual Learning Accounts
  Mr. Cousins
  To ask the Secretary of State for Education and Skills how many individual learning accounts have been opened(a) in total and (b) in each region and nation of the United Kingdom, (i) in absolute numbers and (ii) per capita of the population of working age. [11267]

  John Healey
  As at 31 October, an overall 2,529,609 people in England had opened an Individual Learning Account through the national framework, launched in September 20001.

  The breakdown supplied of membership by region in the table excludes 86,355 cases for which postcode details are not held.
  706W

  Area

  Number of Individual Learning Accounts opened to 28 October 2001

  Per capita of working age population2 Per cent.

  England

  2,529,609

  7.0

  East Midlands

  208,064

  8.0

  East of England

  202,124

  6.0

  London

  466,982

  6.0

  North East

  92,103

  7.0

  North West

  262,094

  7.0

  South East

  346.929

  8.0

  South West

  234,055

  West Midlands

  438,331

  13.0

  Yorkshire and the Humber

  191,643

  6.0

  1Prior to the national ILA framework, 202,654 members applied via TECs. Of these. 79,901 transferred their membership to the national framework and are therefore included in the overall total; 122,753 did not.

  2Source—Labour Force Survey, Summer 2001.

  Alistair Burt
  To ask the Secretary of State for Education and Skills, pursuant to her answer of 30 October 2001,Official Report, column 620W, on Individual Learning Accounts, on what date her Department first received a complaint about the operation of the individual learning account scheme; and if she will provide a monthly breakdown of all subsequent complaints received to date. [12290]

  John Healey
  The Individual Learning Account (ILA) Centre received five complaints in September 2000. Between 4 September 2000 and 30 September 2001 the ILA Centre received a total of 6,053 complaints. At the end of October, taking account of complaints received direct by the Department, the total number of complaints was 8,448 against a backdrop of 2,529,609 Individual Learning Accounts opened. Around a quarter (2,314) of these related to learning providers not following the rules of the programme correctly. It is important to note that the complaints recorded are wide ranging and include issues such as the ending of the £150 opening offer as well as service provision and providers. The October figure relates to those received at the ILA Centre and by the Department. The table provides a breakdown of this figure by month and cumulatively.

  Month

  Accounts opened (cumulative)

  Complaints received (cumulative)

  Percentage complaints(cumulative)

  Percentage complaints (in-month)

  September 2000

  109,564

  5

  —

  —

  October 2000

  214,880

  365

  0.16

  0.35

  November 2000

  292,641

  744

  0.25

  0.49

  December 2000

  347,175

  930

  0.26

  0.34

  January 2001

  446,724

  1,066

  0.23

  0.14

  February 2001

  556,928

  1,320

  0.23

  0.23

  March 2001

  661,558

  1,492

  0.22

  0.16

  April 2001

  781,572

  1,748

  0.22

  0.21

  May 2001

  988,539

  2,019

  0.20

  0.13

  June 2001

  1,276,275

  2,365

  0.18

  0.12

  July 2001

  1,578,014

  3,096

  0.19

  0.24

  August 2001

  1,941,468

  4,304

  0.22

  0.33

  September 2001

  2,386,238

  6,053

  0.25

  0.39

  October 2001

  2,529,609

  8,448

  0.33

  1.67

  The Department set up a Compliance Unit on 25 September, and figures provided for October, include complaints received by the Unit as well as more general complaints received by the ILA Centre. Also in October

  707W
  figures are 754 letters and recorded telephone complaints the Department received directly since the programme began, and not previously included.

  Alistair Burt
  To ask the Secretary of State for Education and Skills, pursuant to her answer of 30 October 2001,Official Report, column 619W, on Individual Learning Accounts, what evaluation she has made of the system she introduced to monitor the operation of the individual learning account scheme. [12287]

  John Healey
  [holding answer 2 November 2001]: We published our first stage evaluation of the Individual Learning Account programme this September. In addition, we recently completed a follow-up survey which we expect to publish by the end of December.

  Departmental Promotions
  Dr. Cable
  To ask the Secretary of State for Education and Skills how much her Department spent on information literature, advertising and campaign material in the financial years(a) 1995–96, (b) 1996–97, (c) 1997–98, (d) 1998–99, (e) 1999–2000 and (f) 2000–01; and if she will make a statement.[12273]

  Mr. Ivan Lewis
  For each of the years requested, the Department's spend on advertising and on publications is as follows:

  £ million

  Advertising spend

  Publication spend

  1995–96

  Employment Department

  7.5

  n/a

  Department for Education

  0.3

  n/a

  1996–97

  7.5

  2.5

  1997–98

  10.0

  2.1

  1998–99

  15.7

  0.8

  1999–2000

  11.9

  2.8

  2000–01

  29.0

  2.3

  n/a = not available

  Student Maintenance Grant
  Chris Grayling
  To ask the Secretary of State for Education and Skills what estimates she has made of the cost of reintroducing a student maintenance grant; and at what levels. [12744]

  Margaret Hodge
  We will consider the costs of making changes to the current system of student support as part of the review my right hon. Friend the Secretary of State announced in October.

  Higher Education
  Helen Jones
  To ask the Secretary of State for Education and Skills what percentage of pupils entered higher education at 18(a) in authorities which retain grammar schools and (b) in authorities which are fully comprehensive, at the latest date for which figures are available. [11630]

  Margaret Hodge
  [holding answer 5 November 2001]: The latest available data on the proportion of 18-year-olds from each local education authority in England entering full-time undergraduate courses in the UK via the Universities and Colleges Admissions Service (UCAS) are given in the table. The student figures in the table are
  708W
  based on the home domicile of 18-year-olds, but it should be noted that pupils will not always attend a school or college in the same authority as the one in which they live.

  English domiciled students aged 18 accepted to full-time undergraduate courses in the UK via UCAS, autumn 2000 entry

  Local education authority

  Population

  Acceptances

  Percentage

  Barking and Dagenham

  1,963

  198

  10.1

  Barnet1

  4,060

  1,196

  29.5

  Barnsley

  2,681

  412

  15.4

  Bath and North East Somerset

  2,061

  405

  19.7

  Bedfordshire

  4,714

  1.131

  24.0

  Bexley1

  2,620

  472

  18.0

  Birmingham1

  13,888

  2.255

  16.2

  Blackburn with Darwen

  1,959

  384

  19.6

  Blackpool

  1,574

  263

  16.7

  Bolton

  3,457

  750

  21.7

  Bournemouth1

  1,710

  358

  20.9

  Bracknell Forest

  1,315

  272

  20.7

  Bradford

  6,812

  1.147

  16.8

  Brent

  3,255

  924

  28.4

  Brighton and Hove

  2,686

  341

  12.7

  Bromley1

  3,189

  929

  29.1

  Buckinghamshire1

  6,089

  1.760

  28.9

  Bury

  2,306

  578

  25.1

  Calderdale1

  2,302

  442

  19.2

  Cambridgeshire

  7,148

  1.397

  19.5

  Camden

  2,150

  364

  16.9

  Cheshire

  7,963

  2.432

  30.5

  City of Bristol

  4,843

  664

  13.7

  City of Derby

  2,903

  498

  17.2

  City of Kingston upon Hull

  3,264

  288

  8.8

  City of London

  41

  22

  53.8

  City of Westminster

  2,347

  295

  12.6

  Cornwall

  5,854

  1.298

  22.2

  Coventry

  4,182

  715

  17.1

  Croydon

  4,065

  1.013

  24.9

  Cumbria1

  5,565

  1.213

  21.8

  Darlington

  1,257

  243

  19.3

  Derbyshire

  8,376

  1.744

  20.8

  Devon1

  8,347

  1.676

  20.1

  Doncaster

  3,761

  585

  15.6

  Dorset

  4,544

  956

  21.0

  Dudley

  3,587

  744

  20.7

  Durham

  6,568

  1.106

  16.8

  Ealing

  3,637

  951

  26.1

  East Riding of Yorkshire

  3,911

  880

  22.5

  East Sussex

  5,492

  1.156

  21.0

  Enfield1

  3,014

  802

  26.6

  Essex1

  15,281

  3.241

  21.2

  Gateshead

  2,496

  423

  16.9

  Gloucestershire1

  6,876

  1.724

  25.1

  Greenwich

  2,800

  344

  12.3

  Hackney

  2,447

  285

  11.6

  Halton

  1,733

  238

  13.7

  Hammersmith and Fulham

  1,520

  251

  16.5

  Hampshire

  15,553

  3.442

  22.1

  Haringey

  2,432

  452

  18.6

  Harrow

  2,750

  963

  53.0

  Hartlepool

  1,201

  188

  15.7

  Havering

  2,775

  478

  17.2

  Herefordshire

  1,982

  503

  25.4

  Hertfordshire

  11,947

  3.250

  27.2

  Hillingdon

  3,026

  637

  21.0

  Hounslow

  2,537

  644

  25.4

  Isle of Wight

  1,428

  295

  20.7

  Isles of Scilly

  28

  4

  14.3

  Islington

  1,917

  298

  15.5

  Kensington and Chelsea

  1,821

  305

  16.7

  Kent1

  15,954

  3,575

  22.4

  Kingston upon Thames1

  1,629

  441

  27.1

  Kirklees1

  4,952

  1,025

  20.7

  Knowsley

  2,213

  266

  12.0

  Lambeth

  2,840

  412

  14.5

  Lancashire1

  14,565

  3,303

  22.7

  Leeds

  8,831

  1.567

  17.7

  Leicester City

  3,870

  689

  17.8

  Leicestershire

  7,583

  1.710

  22.6

  709W

  English domiciled students aged 18 accepted to full-time undergraduate courses in the UK via UCAS, autumn 2000 entry

  Local education authority

  Population

  Acceptances

  Percentage

  Lewisham

  2,800

  446

  15.9

  Lincolnshire1

  7,498

  1,602

  21.4

  Liverpool

  6,197

  953

  15,4

  Luton

  2,430

  395

  16.3

  Manchester

  6,327

  693

  11.0

  Medway Towns1

  3,125

  543

  17.4

  Merton

  1,944

  439

  22.6

  Middlesbrough

  2,056

  340

  16.5

  Milton Keynes

  2,855

  497

  17.4

  Newbury

  1,964

  439

  22.3

  Newcastle upon Tyne

  3,517

  609

  17.3

  Newham

  3,361

  599

  17.8

  Norfolk

  9,094

  1,538

  16.9

  North East Lincolnshire

  2,022

  311

  15.4

  North Lincolnshire

  1,896

  397

  20.9

  North Somerset

  2,242

  492

  21.9

  North Tyneside

  2,399

  474

  19.8

  North Yorkshire1

  7,295

  1,826

  25.0

  Northamptonshire

  7,768

  1,524

  19.6

  Northumberland

  3,814

  946

  24.8

  Nottingham City

  3,828

  352

  9.2

  Nottinghamshire

  8,861

  1,813

  20.5

  Oldham

  2,912

  502

  17.2

  Oxfordshire

  7,868

  1,662

  21.1

  Peterborough

  2,157

  322

  14.9

  Plymouth1

  3,556

  513

  14.4

  Poole1

  1,630

  313

  19.2

  Portsmouth

  2,306

  269

  11.7

  Reading1

  1,701

  293

  17.2

  Redbridge1

  2,884

  895

  31.0

  Redcar and Cleveland

  1,852

  302

  16.3

  Richmond upon Thames

  1,899

  541

  28.5

  Rochdale

  2,863

  482

  16.8

  Rotherham

  3,175

  484

  15.2

  Rutland

  690

  113

  16.4

  Salford

  2,781

  353

  12.7

  Sandwell

  3,686

  474

  12.9

  Sefton

  3,567

  916

  25.7

  Sheffield

  6,171

  951

  15.4

  Shropshire

  3,641

  867

  23.8

  Slough1

  1,394

  304

  21.8

  Solihull

  2,428

  704

  29.0

  Somerset

  5,949

  1,264

  21.2

  South Gloucestershire

  2,691

  565

  21.0

  South Tyneside

  1,950

  330

  16.9

  Southampton

  2,749

  319

  11.6

  Southend1

  1,990

  346

  17.4

  Southwark

  2,588

  333

  12.9

  St. Helens

  2,263

  496

  21.9

  Staffordshire

  9,818

  2,256

  23.0

  Stockport

  3,483

  902

  25.9

  Stockton-on-Tees

  2,481

  550

  22.2

  Stoke on Trent1

  3,101

  382

  12.3

  Suffolk

  7,816

  1,657

  21.2

  Sunderland

  3,812

  572

  15.0

  Surrey

  12,760

  3,429

  26.9

  Sutton1

  1,953

  524

  26.8

  Swindon

  2,157

  376

  17.4

  Tameside

  2,791

  440

  15.8

  Telford and the Wrekin1

  1,970

  354

  18.0

  Thurrock

  1,597

  168

  10.5

  Torbay1

  1,452

  264

  18.2

  Tower Hamlets

  2,565

  341

  13.3

  Trafford1

  2,710

  699

  25.8

  Wakefield

  3,863

  610

  15.8

  Walsall1

  3,227

  560

  17.4

  Waltham Forest

  2,549

  514

  20.2

  Wandsworth

  2,216

  461

  20.8

  Warrington

  2,252

  506

  22.5

  Warwickshire1

  5,937

  1,360

  22.9

  West Sussex

  8,422

  1,808

  21.5

  Wigan

  3,864

  673

  17.4

  Wiltshire1

  5,240

  1,194

  22.8

  Windsor and Maidenhead

  1,775

  454

  25.6

  Wirral1

  4,210

  1,043

  24.8

  Wokingham

  1,837

  588

  32.0

  710W

  English domiciled students aged 18 accepted to full-time undergraduate courses in the UK via UCAS, autumn 2000 entry

  Local education authority

  Population

  Acceptances

  Percentage

  Wolverhampton

  3,193

  625

  19.6

  Worcestershire

  6,283

  1,487

  23.7

  York

  2,280

  468

  20.5

  Not known

  —

  90

  —

  Total

  606,687

  123,708

  20.4

  1 Authorities with grammar schools

  Note:

  Population figures are based on estimates as at 1 January 2001, with age as at 31 August 2000. Acceptance figures based on age at 30 September 2000.

  Chris Grayling
  To ask the Secretary of State for Education and Skills how many students are in full-time studies in universities in England and Wales. [12745]

  Margaret Hodge
  The available data are given in the table.

  Full-time higher education students in England and Wales1, 2000–01

  Number

  Postgraduate

  143,623

  Undergraduate

  933,265

  Total

  1,076,888

  1Home and overseas students in HE and FE institutions, and the Open University

  Consultation Documents
  Sandra Gidley
  To ask the Secretary of State for Education and Skills how many consultation documents were issued by her Department and its predecessors from(a) 15 October to 14 January, (b) 15 January to 14 April, (c) 15 April to 14 July and (d) 15 July to 14 October in each year from 1996. [12897]

  Mr. Ivan Lewis
  The answer is as follows.

  Number of consultation documents

  1996

  15 January to 14 April

  4

  15 April to 14 July

  7

  15 July to 14 October

  6

  1996–97

  15 October to 14 January

  5

  15 January to 14 April

  14

  15 April to 14 July

  19

  15 July to 14 October

  27

  1997–98

  15 October to 14 January

  21

  15 January to 14 April

  40

  15 April to 14 July

  46

  15 July to 14 October

  36

  1998–99

  15 October to 14 January

  38

  15 January to 14 April

  51

  15 April to 14 July

  49

  15 July to 14 October

  49

  1999–2000

  15 October to 14 January

  42

  15 January to 14 April

  13

  15 April to 14 July

  23

  15 July to 14 October

  14

  711W

  Number of consultation documents

  2000–01

  15 October to 14 January

  22

  15 January to 14 April

  25

  15 April to 14 July

  18

  15 July to 14 October

  17

  Student Finance
  Kevin Brennan
  To ask the Secretary of State for Education and Skills what consultations she has had with the devolved Administrations about her review of student finance; and if she will make a statement. [13177]

  Margaret Hodge
  My right hon. Friend the Secretary of State has written to Ministers responsible for higher education matters in Scotland, Wales, and Northern Ireland, to advise them that a review is taking place. We plan to consult with devolved Administrations in due course.

  Age Discrimination
  Ms Atherton
  To ask the Secretary of State for Education and Skills what measures the Government are taking to combat age discrimination in the provision of skills training. [13171]

  John Healey
  The Government are committed to tackling age discrimination wherever it is found, and is a signatory of the EU Employment Directive on Equality, which commits the UK to introduce legislation to combat such discrimination in employment, vocational training and guidance by 2006. The Government have asked the Learning and Skills Council—as the body responsible for planning, funding and improving the quality of post-16 learning outside higher education—to promote age diversity and tackle age discrimination when translating its commitment to equality of opportunity into effective strategies and actions. The Employment Service, which operates training programmes including Work Based Learning for Adults, Work Trials and Programme Centres, is committed to equal opportunities and encourages employers to make effective use of the skills, experience and reliability that older people can contribute.

  Class Sizes
  Dr. Julian Lewis:
  To ask the Secretary of State for Education and Skills if she will make it her policy to publish data on class sizes in league tables of school examination results. [13393]

  Mr. Timms
  There are currently no plans to publish class size data along side the performance tables.

  Mr. Damian Green
  To ask the Secretary of State for Education and Skills (1) what funding she has set aside for(a) 2001–02, (b) 2002–03 and (c) 2003–04 to reduce class sizes in primary schools; [14583]

  (2) if funding for lower class sizes in primary schools will be ring-fenced until 2003–04. [14584]
  712W
  Mr. Timms
  We have made £177 million available to reduce infant class sizes and £73 million to make progress on junior class sizes in 2001–02. Up to £180 million will be available to reduce class sizes in 2002–03. Funding levels for 2003–04 will be decided in the Spending Review 2002.

  Class size grant will be paid to local education authorities as a ring-fenced grant through the Standards Fund in 2001–02 and 2002–03.

  Special Educational Needs
  Mr. Paterson
  To ask the Secretary of State for Education and Skills what changes have been made to the criteria qualifying primary school children for special needs status in(a) 1997, (b)(c) 1999, (d) 2000 and (e) 2001. [13814]

  Mr. Timms
  It is for Local Education Authorities and maintained schools to identify and make suitable provision for all children who may have special educational needs in the light of the provisions of Park IV of the Education Act 1996, the Education (Special Educational Needs) Regulations 1994, and the statutory advice contained in the "Code of Practice on the identification and assessment of Special Educational Needs", published in 1994. This situation has remained unchanged between 1997 and 2001. From January 2002 a revised Special Educational Needs Code of Practice. which was approved recently by both Houses of Parliament, amendments to Part IV of the Education Act 1996 brought about by the SEN and Disability Act 2001 and revised Special Educational Needs Regulations will come into effect.

  Mr. Paterson
  To ask the Secretary of State for Education and Skills what the funding regime for primary school pupils with special needs status was in(a) England and (b) Shropshire in (1) 1997. (ii) 1998. (iii) 1999, (iv) 2000 and (v) 2001. [13810]

  Mr. Timms
  Some special educational needs (SEN) funding is delegated to primary schools by local education authorities (LEAs) in budget shares, with amounts calculated for each school on the basis of factors which measure need either directly or indirectly. Other SEN funding is held centrally by LEAs and spent as required on pupils, for example on extra support for pupils with statements of SEN. This basic pattern has obtained in all five years mentioned, although the proportion of funding held centrally has declined since Fair Funding succeeded Local Management of Schools in 1999. In Shropshire, funding for primary age pupils with statements of SEN was held centrally before 2001, but some is now delegated to schools on the basis of eight bands of need. In 1997 and 1998 SEN funding for pupils with SEN but without statements was based on the proportion of pupils eligible for free school meals; from 1999 a further indicator—the number of pupils on the SEN register at stages 2–4 of the SEN Code of Practice—has been used. From 1997 to 2000 schools with SEN units received place-led funding for such units; in 2001 this was subsumed into delegated funding for pupils with statements.

  Mr. Paterson
  To ask the Secretary of State for Education and Skills (1) what the average percentage of children with special needs status in(a) English and (b) Shropshire primary schools was in (i) 1997, (ii) 1998, (iii) 1999, (iv) 2000 and (v) 2001; [13809]
  713W
  (2) how many special needs status primary school (c) Shropshire in (i) 1997, (ii) 1998, (iii) 1999, (iv) 2000 and (v) 2001. [13813]

  Number and percentage of pupils with statements of special educational needs in maintained primary schools

  UK1

  England

  Shropshire2

  Shropshire2

  Telford and Wrekin2

  Number

  Percentage

  Number

  Percentage

  Number

  Percentage

  Number

  Percentage

  Number

  Percentage

  January each year

  1997

  75,400

  1.4

  63,551

  1.4

  885

  2.3

  3—

  3—

  3—

  3—

  1998

  79,300

  1.5

  67,014

  1.5

  894

  2.3

  3—

  3—

  3—

  3—

  1999

  82,100

  1.5

  69,797

  1.6

  3—

  3—

  553

  2.4

  337

  2.2

  2000

  84,900

  1.6

  72,525

  1.6

  3—

  3—

  529

  2.3

  311

  2

  20014

  88,200

  1.7

  75,300

  1.7

  3—

  3—

  3—

  3—

  3—

  3—

  1For Scotland, pupils with a Record of Needs

  2As a result of local government reorganisation in April 1998, Shropshire local education authority divided to form the following local education authorities: Shropshire LEA and Telford and Wrekin LEA

  3 Not applicable

  4 Special educational needs figures from the annual schools census for January 2001 are known to be incomplete. In order to provide reasonably comparable figures to previous years an estimate has been made based on the annual schools census returns for January 2000 and January 2001. These estimates are robust at national and Government Office region but are not available at local education authority level

  5Not available

  Education (Leeds)
  Mr. Mudie
  To ask the Secretary of State for Education and Skills what is the cost to Leeds City council of the contract awarded to Capita. [13736]

  Mr. Timms
  The cost of Capita's contract is a matter for Leeds City council, Education Leeds and the contractor.

  Mr. Mudie
  To ask the Secretary of State for Education and Skills what additional financial support will be awarded to Leeds City council to implement Capita's educational policies. [13738]

  Mr. Timms
  No additional funding will be awarded to Leeds City council to implement the education policies for which it is responsible and accountable beyond that derived from the Standard Spending Assessment and Standards Fund grants.

  Mr. Mudie
  To ask the Secretary of State for Education and Skills what is the salary paid to Mr. Peter Ridsdale in his capacity as Chairman of Education Leeds. [13737]

  Mr. Timms
  Education Leeds is a company wholly owned by Leeds City council. Mr. Ridsdale's level of remuneration is a matter for Mr. Ridsdale and the council.

  Internet Access
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on the cost of internet access so far achieved in(a) primary and (b) secondary schools in the last 12 months. [14249]

  Mr. Timms
  The Department for Education and Skills does not collect data on the cost of internet access. Internet costs are dependant upon the supplier, the bandwidth and the level of service and the cost therefore varies from school to school. However, I can report that the average annual school spend in England, as from January 2001, on ICT for teaching and learning was £8,500 in primary schools and £49,600 in secondary, this compares with averages of £6,800 and £41,800 in January 2000. Substantial progress has been made towards the
  714W
  Mr. Timms
  The available data are shown in the children there were in(a) the UK, (b) England and following table.

  Government's target for every school to have access to the internet with over 99 per cent. of secondary and 96 per cent. of primary schools connected as of January 2001.

  Literacy/Numeracy Strategies.
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost is of the(a) National Literacy Strategy and (b) National Numeracy Strategy in 2001–02. [14103]

  Mr. Timms
  The Government are supporting expenditure, through the Standards Fund, of f103 million on each of the two strategies in 2001–02.

  Schools Adjudicator
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost is in 2001–02 of the office of the schools adjudicator. [14081]

  Mr. Timms
  The cost in 2001–02 will be known only after the end of the financial year. Expenditure in 2000–01 was £442,000 for adjudicators' costs (mainly fees and expenses) and £355,000 for support staff. We expect expenditure in 2001–02 to be lower than 2000–01 as the number of cases referred to the adjudicator has fallen.

  Teachers (Pay Structure)
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what is the cost of the new pay structure for teachers; and what effect it has had on recruitment and retention of staff. [14080]

  Mr. Timms
  Over 200,000 teachers in England applied to cross the performance threshold in the first round, some 80 per cent. of those who were eligible to apply. Of these, nearly 195,000 were assessed as meeting the threshold standards and are now receiving over £400 million per year in associated pay increases.
  715W
  We intend to introduce a new grant to contribute towards performance points for leadership group members, post-threshold teachers and high performers on the main scale. We intend to make available £100 million in financial year 2002–03 and £150 million in 2003–04, in addition to existing threshold funding.

  The future cost of the new pay structure will depend on the number of teachers applying for and crossing the threshold, and being awarded performance points.

  The long-term effect of pay restructuring is not yet clear, but the impact of the Government's policies as a whole is that we had 11,000 more teachers in January 2001 than in 1997.

  National College for School Leadership
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on the cost of the national college for school leadership. [14222]

  Mr. Timms
  The cost of the new residential training headquarters for the national college for school leadership will be £25 million.

  Fast-track Scheme
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on the cost of the fast-track scheme. [14091]

  Mr. Timms
  In the financial year ending 31 March 2001 we invested £4.6 million to establish the fast-track teaching programme, which will attract high calibre graduates, career changers and serving teachers and support their development into leaders of the teaching profession.

  The fast-track scheme is not designed to increase the number of classroom assistants. With local education authorities we are investing £350 million in the three years from 1999–2000 to 2001–02 to increase the number of teaching assistants; and we have recently announced a further £198 million for the financial year 2002–03. There are now 25,000 more teaching assistants in post than in January 1999.

  Teacher Training
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost is in 2001–02 of the funding of initial teacher training recruitment. [14079]

  Mr. Timms
  £173 million is available in recurrent grants to provide initial teacher training places. A further £169 million in total is available for teacher training bursaries and the Graduate and Registered Teacher Programmes in 2001–02.

  Child Care Places
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on the cost of the 350,000 child care places planned for 2003. [14207]

  Mr. Timms
  £170.5 million is available through the New Opportunities Fund Out of School Hours Childcare Programme for the creation of 350,000 out of school child care places in England by 2003. £55 million has also been 716W
  made available from April 2001 to provide additional funding for disadvantaged areas and this will create at least an extra 10,000 places.

  Education Maintenance Allowances
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on the cost of the pilots of education maintenance allowances. [14251]

  Mr. Ivan Lewis
  We expanded the education maintenance allowance pilot scheme to cover 56 LEA areas from September 2000. Planned expenditure in this financial year is £156 million with over 100,000 young people expected to benefit.

  Public Service Agreement
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost will be of the public service agreement target of increasing provision of nursery places for three year olds from 34 per cent. to 66 per cent.; and if it will be achieved by 2002. [14090]

  Mr. Timms
  Many local authorities provide funding for nursery education on top of resources the Government make available through direct grant to provide nursery education places. The Government have increased the under 5s sub-block within Education Standard Spending (ESS) by more than the level of inflation which has increased the resources available for this and other purposes. However, it is not possible to identify separately the total amounts spent specifically on three-year-olds.

  We have made £390 million of direct grant funding available between 1999-2000 and 2001–02 to help increase the number of three year olds with access to a free early education place from 34 per cent. to 66 per cent. by March 2002. The target will be met in full.

  Mr. Bercow
  To ask the Secretary of State for Education and Skills (1) if she will make a statement on progress made on the public service agreement targets for objective 2 which are described on page 8 of the departmental report 2000; [14089]

  (2) on progress towards meeting the public service agreement targets of (a) an increase in the proportion of people aged 19 years who have achieved national vocational qualification level 2 or equivalent from 72 per cent. to 85 per cent. by 2002, (b) a reduction by one third in exclusions by 2002, (c) a reduction by one third in school truancies by 2002 and (d) increasing provision of nursery places for three-year-olds from 34 per cent. to 66 per cent. by 2002. [14049]

  Mr. Ivan Lewis
  While we are making good progress in increasing the achievement of level 2 by 19-year-olds which is based on current trends, it is apparent that the target may not be reached. We are working closely with the Learning and Skills Council to ensure maximum progress is made towards achieving this target.

  LEA Expenditure
  Mr. Bercow
  To ask the Secretary of State for Education and Skills if she will make a statement on expenditure per pupil in(a) Buckinghamshire local education authority and (b) other local education authorities in England and Wales in the last 12 months. [14252]
  717W
  Mr. Timms
  Information for the financial year 2000–01 is not yet available for England. I will write to the hon. Member when it has been collected. Responsibility for education matters in Wales rests with the National Assembly for Wales.

  Qualifications Budget
  Mr. Bercow
  To ask the Secretary of State for Education and Skills what the cost is in 2001–02 of the qualifications budget.[14082]

  Mr. Ivan Lewis
  The qualifications budget for 2001–02, at 1 April 2001, was £102 million. Expected receipts for the year total £334,000. The majority of this money (£69 million at 1 April 2001) comprises grant in aid for the Qualification and Curriculum Authority. The remainder of the budget is used mainly for development work. The costs of the qualifications themselves are met by schools, colleges and others through the payment of fees.

  Sixth Forms
  Chris Grayling
  To ask the Secretary of State for Education and Skills, pursuant to her answer to the hon. Member for Epsom and Ewell of 7 November 2001,Official Report, column 246W, if she will make a statement on the circumstances that led to those closure proposals.[14676]

  Mr. Timms
  Seven proposals were decided by the Secretary of State. The circumstances varied in each case. Some were published by the LEA, or school governors, to address changes in local demand for sixth form places, some featured as part of a wider reorganisation of schools in the area. others arose from the need to rationalise places to deliver more cost effective provision. The remaining six proposals were published after September 1999 and were decided under local decision making arrangements, introduced by the School Standards and Framework Act 1998. Under these arrangements those publishing or deciding proposals are not required to send details of the background to the proposals to the Department, and we therefore cannot comment on the circumstances leading to these proposals.

  Mr. Brady
  To ask the Secretary of State for Education and Skills what plans she has to allow schools with sixth forms to make direct representations to local Learning and Skills Councils regarding sixth form funding.[14567]

  Margaret Hodge
  This is a matter for the Learning and Skills Council. I have therefore asked John Harwood, the council's chief executive, to write to the hon. Member with the information requested and to place a copy of his reply in the Library.

  Student Finance Review
  Alistair Burt
  To ask the Secretary of State for Education and Skills what submissions she has received for the review of student finance following her announcement of such a review; if she will list those submissions; and if they will be taken into account before she publishes her proposals to reform student finance. [14540]
  718W
  Margaret Hodge
  Consultation on the review of student finance will begin next year. We shall take account of consultation responses when reaching a decision about the future of student finance.

  Alistair Burt
  To ask the Secretary of State for Education and Skills if she will call for submissions to her review on student finance from(a) the National Union of Students, (b) Universities UK, (c) the Association of Colleges. (d) the Student Loan Company, (e) the Association of University Teachers, (f) the National Association of Teachers in Further and Higher Education, (g) the Standing Conference of Principals, (h) the National Bureau for Students with Disabilities and (i) others; if she will publish their submissions; and if she will make a statement.(14543]

  Margaret Hodge
  We plan to consult widely on any proposals for change that may result from the review.

  Alistair Burt
  To ask the Secretary of State for Education and Skills what discussions she has had with other Government Departments in relation to her review of student finance; if she will place such submissions in the Library; and if she will make a statement. [14541]

  Margaret Hodge
  My right hon. Friend the Secretary of State has written to Ministers responsible for higher education in Scotland, Wales and Northern Ireland, and to Ministers in other Government Departments, to advise them that a review is taking place. Treasury and the Inland Revenue are represented on the review. We plan to consult on any proposals to emerge.

  Student Loans
  Alistair Burt
  To ask the Secretary of State for Education and Skills what submissions she has received recently on the student loans system; if she will list such submissions; and if she will make a statement.[14539]

  Margaret Hodge
  We receive submissions, correspondence, etc., from a range of individuals and organisations, on a regular basis. It is not our practice to make correspondence with the Department public. We will be consulting on proposals that emerge from the review of student finance.

  Basic Needs Grants
  Mr. Brady
  To ask the Secretary of State for Education and Skills what criteria are used by her Department for the allocation of basic needs grants to schools.[14561]

  Mr. Timms
  Basic need is the requirement for additional school places in areas of population growth.

  Funding for this is normally provided through the allocation of Basic Credit Approvals to local education authorities or grant to the governors of voluntary aided schools.

  The criteria used by the Department to assess basic need are contained in the "Guide for the Schools Capital Allocation Round" issued to local education authorities annually, copies of which have been placed in the Library.

  State Schools (Private Management)
  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what are the statutory provisions that govern schools in the state sector being run by private sector firms.[14578]

  Mr. Timms
  I refer the hon. Member to the reply I gave him on 5 November 2001,Official Report, column 46W.

  Mr. Damian Green
  To ask the Secretary of State for Education and Skills which schools in the state sector are run by private firms.[14576]

  Mr. Timms
  No schools in the state sector are run by private firms. The legal responsibility for running a school rests with the governing body and head teacher, even where they are supported by expertise from the private sector.

  Mr. Damian Green
  To ask the Secretary of State for Education and Skills what representations she has received in the last year from local education authorities wanting to hand the running of a state school over to the private sector. [14577]

  Mr. Timms
  There have been no representations in the last year from local education authorities wanting to hand over the running of a state school to the private sector. State schools cannot be run by the private sector, although local education authorities and schools may enter into contracts for support to governing bodies.

  Performance-related Pay (Teachers)
  Mr. Brady
  To ask the Secretary of State for Education and Skills what plans she has to allocate funds for schools to pay teachers awards on the upper spine of performance-related pay.[14566]

  Mr. Timms
  We intend to introduce a new grant to contribute towards performance points for leadership group members, post threshold teachers and high performers on the main scale. We believe their skills, expertise, commitment and leadership are crucial to the success of the teaching profession. We propose to make available £100 million in financial year 2002–03 and £150 million in 2003–04, in addition to existing threshold funding.

  We will be consulting shortly on the details of the new grant to support the cost of performance points. Details of the consultation will be posted on the DfES website to enable schools to comment on the proposals.

  School Threshold Payments
  Mr. Brady
  To ask the Secretary of State for Education and Skills if she will guarantee funding of threshold payments to schools beyond 2004.[14563]

  Mr. Timms
  Crossing the threshold gives teachers a substantial and permanent pay increase by moving them to an upper pay scale. The Government have always accepted that this means a substantial and permanent increase in the overall cost of teachers' pay. Our financial planning will continue to take account of that.
  720W
  Mr. Brady
  To ask the Secretary of State for Education and Skills in what proportion of cases the threshold assessment made by a head teacher has been overturned.[14564]

  Mr. Timms
  Verification of threshold assessments involves professional dialogue between heads and assessors about assessment methods and individual applications. Assessors overturn heads' judgments only when it is impossible to reach agreement. In the first round of threshold applications this happened in only 0.2 per cent. of cases—a clear indication that the system worked.

  Learning Support Units
  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills how many learning support units for children with challenging behaviour there were in schools in 1997.[14137]

  Mr. Timms
  The Department was carrying out a pilot of 41 learning support units in schools in 1997. This lasted from 1996–97 to 1998–99. The units were funded by the predecessor of our "Social Inclusion Pupil Support" Standards Fund grant.

  There are now over 1,000 learning support units in schools, both within Excellence in Cities authorities and elsewhere.

  Re-marked Exam Papers
  Mr. Brady
  To ask the Secretary of State for Education and Skills if she will state the percentage of re-marked papers at(a) GCSE, (b) AS-level and (c) A-level which resulted in marks being (i) increased and (ii) decreased in each of the last three years.[14562]

  Mr. Ivan Lewis
  In 1999 the awarding bodies were asked to re-mark 0.5 per cent. of GCSE papers, of which 11 per cent. resulted in a change of grade; and 3.3 per cent. of GCE A-level papers, of which 13 per cent. resulted in a change of grade. In 2000 the awarding bodies were asked to re-mark 1 per cent. of GCSE papers, of which 11 per cent. resulted in a grade change; 3.8 per cent. of GCE A-level papers, of which 16 per cent. resulted in a grade change; and 1.5 per cent. of AS-level papers, of which 15 per cent. resulted in a grade change. All of these grade changes were upwards as until 2001, grades could only be raised or remain the same as a result of a re-mark.

  Figures for 2001 are not available at this stage as the inquiries on results and appeals process is not yet complete.

  Pupil Sickness Rate
  Mr. Brady
  To ask the Secretary of State for Education and Skills what assessment she has made of levels of sickness among pupils at key stages four and five since the introduction of the AS-level syllabus.[14560]

  Mr. Ivan Lewis
  None.

  Data on authorised absence from schools are collected centrally only for pupils of compulsory school age. They do not distinguish between pupils of different ages, nor do they distinguish between sickness and other forms of authorised absence.

  Value-added Measures
  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills what is the basis on which value-added measures have been developed for pilot publications in 2001–02.[14136]

  Mr. Timms
  Our proposals in respect of value-added measures were set out in detail in the Publication of School and Performance Tables in 2001 consultation document which issued on 30 March this year, copies of which have been placed in the Library. We are now working with some 200 volunteer schools on a pilot programme for the calculation of measures of progress made from Key Stage 2 to key Stage 3 and from Key Stage 3 to GCSE/GNVQ.

  The results of the pilot will be published on 22 November with a full explanation of the methodology used. This pilot publication will be placed in the Library and will also be available on the DfES website
  722W
  at www.dfes.gov.uk./performancetables along with a questionnaire seeking the views of readers on all aspects of the pilot. This will be used as part of the evaluation of the pilot which, along with further consultation early next year, will inform final decisions o the publication of these two measures for all secondary schools in the 2002 performance tables.

  LEA Intervention (Costs)
  Mr. Andrew Turner
  To ask the Secretary of State for Education and Skills what was the(a) direct cost and (b) the cost of external contractors and advisers to her Department of each local education authority intervention in the last 12 months.[14135]

  Mr. Timms
  The direct cost to the Department of local education authority interventions is the staff time of the officials concerned. The cost of individual contracts with external contractors and advisers for intervention work is commercial in confidence.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Derby.

English Tourism
Lord Montagu of Beaulieu: My Lords, in begging leave to ask the Question standing in my name on the Order Paper, perhaps I may declare an interest as honorary president of the Southern Tourist Board.
The Question was as follows:
Whether Her Majesty's Government will now give the English Tourism Council the responsibility and adequate finance to market Tourism for England in close co-operation with the regional tourist boards.
Lord Davies of Oldham: My Lords, Tomorrow's Tourism did not give the English Tourism Council a role to market England. However, in the light of events this year and recent consultations which the Secretary of State has had with senior industry representatives, we are currently reviewing the options for stimulating better co-ordination of the public and private sector funds currently spent on marketing tourism in England.
Lord Montagu of Beaulieu: My Lords, I thank the Minister for that Answer. Although it is certainly a step forward, why does not England have a tourist body of its own which can speak for it? With the BTA it co-operates with the Scottish, Welsh and Northern Irish tourist boards which have their own rights, but England does not.
Lord Davies of Oldham: My Lords, as the noble Lord, Lord Montagu, indicated, he has close relations with the southern regional development agency. The regional development agencies are charged, and have been funded with resources, to improve the marketing of tourism in England. We cannot be doing so badly because it is still the case that expenditure by tourists in England substantially outscores the spending in Scotland, Wales and Northern Ireland. Therefore, the present strategy has something to commend it.
Viscount Falkland: My Lords, tourism in England is a business with a turnover of approximately £53 billion. Does the Minister agree that it is odd that the business should allow its marketing to be done by its subsidiaries, in this case the regions? Does the Minister further agree that now is the time to introduce a central marketing strategy? Yesterday we had a most interesting debate on the National Trust. Should not such bodies be brought in to assist in such a strategy?
Lord Davies of Oldham: My Lords, during the foot and mouth outbreak, which resulted in a decline in
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visitors from abroad and elsewhere, an increased role was created for the English Tourism Council in relation to marketing abroad. However, it is thought that marketing aimed at British tourists is done better by concentrating on the specific English regions—for instance, the Lake District—rather than speaking about England as a whole.
Lord Tanlaw: My Lords, are the Government doing more to encourage broadband access to the Internet through availability in the regions in order to promote, for instance, tourism and industries which are alternatives to farming?
Lord Davies of Oldham: My Lords, I am the first to confess to not being totally familiar with the arrangements for broadband in this dimension. However, I want to stress that it is important that the industry and all our tourism and heritage developments are not looked upon as employing fuddy-duddy technology. That is far from the case. The most modern technology is used to promote what is an important industry and earner for this country, as the noble Viscount, Lord Falkland, indicated.
Lord Roberts of Conwy: My Lords, I am sure that the Minister will agree that the timing of any marketing efforts by English, Scottish and Welsh tourist boards abroad is most delicate. What guidance are the Government giving to those boards with regard to marketing efforts abroad?
Lord Davies of Oldham: My Lords, we are all conscious of the fact that the latest tragedy in the United States will not have encouraged the use of airlines by tourists from America to the whole of the United Kingdom, including Northern Ireland. We recognise that the US is an important market, and of course the issue must be approached with great sensitivity. However, during the problems we had with the foot and mouth outbreak earlier this year, we indicated the importance of co-ordinating all efforts and ensuring that arrangements were in hand to recoup potential losses in terms of visitors here.
The Secretary of State has been in close liaison with leaders of the industry, particularly the CBI, in order to ensure that the industry comes together in one body to promote tourism. That is of great importance to us all.
Lord Mackie of Benshie: My Lords, does the Minister agree that, in any advertising abroad, the merits of the whole country—Wales, England and Scotland—need to be stressed? Further, does he agree that perhaps there has been a lack of stress on Scotland and Wales, as the noble Lord has just told the House that much more money is spent by tourists in England?
Lord Davies of Oldham: My Lords, the noble Lord will recognise that the advantages of devolution have enabled the Scottish Parliament and the National Assembly for Wales to devote greater resources to marketing their own excellent tourist facilities When

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one talks about tourism from overseas, particularly the American market, it is important that co-ordination is effected on behalf of the whole of the United Kingdom. The noble Lord will recognise that in the promotion of tourism increased efforts on the part of everyone—the Scottish and Welsh dimension and the regional development work in England, for which additional resources have been made available—all contribute to a greater whole.
The Lord Bishop of Durham: My Lords, does the Minister agree that one of the best advertisements for tourism in this country are the cathedrals and churches? Therefore, will the noble Lord incorporate those both in the publicity and consideration by the Government of increased financial help for those buildings?
Lord Davies of Oldham: My Lords, if the glory of the cathedrals did not speak for itself the right reverend Prelate has certainly done so on their behalf. We know that a very high percentage of tourists enjoy our national heritage, of which inevitably ecclesiastical architecture and cathedrals, and all that they represent, are a very important part.

Immigration: Franco-British Initiatives
2.44 p.m.
Lord Hyltonasked Her Majesty's Government:
Whether they have discussed with the French Government the possibility of joint Franco-British assessment at Sangatte of third country nationals wishing to enter either the United Kingdom or France; and, if so, with what result.
The Minister of State, Home Office (Lord Rooker): My Lords, the British and French Governments are currently pursuing a number of initiatives aimed at resolving the immigration problems in northern France. We are actively considering ways to encourage a more orderly asylum system which will help in the fight against illegal immigration and reduce the pressures at Sangatte.
Lord Hylton: My Lords, I thank the noble Lord for his reply. I am sure the Minister is aware that the situation is now much worse than when we discussed this subject last week because the French railways have closed the Channel Tunnel to all freight trains, thus severely disrupting trade. Will the two Governments, therefore, at least agree to the presence of British frontier officers in France? If that can be done, will it not help to separate economic migrants from genuine refugees?
Lord Rooker: My Lords, there are British immigration officers in France. Indeed, by the end of the month we shall have increased the number from 40 to 45. At Coquelles they will work 174 extra shifts per week by the end of this month. The noble Lord
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referred to the difficulties with the freight system operated by SNCF. There have been difficulties in the past few days. It is probable that the security of the freight site, for which SNCF is wholly responsible, has not received the same attention as the tunnel. That has shifted the clandestines, who will look for weaknesses, from one to the other. I understand that that situation is being rapidly addressed in the interests of trade between our two countries.
The Lord Bishop of Portsmouth: My Lords, do the Government agree that the use of the Sangatte centre goes beyond a joke? We hear that 74 people from Afghanistan and Iraq arrived on freight trains on 6th November. Does the Minister agree that the Sangatte centre is a symptom of a far wider problem; namely, that we are trying to reformulate an asylum policy, some but not all of which is welcomed by these Benches, without having a clear immigration policy?
Lord Rooker: My Lords, in recent weeks and days I have explained at some length that in January we shall produce a White Paper setting out what we hope will be a managed migration system. That will enable us to arrive at a system of managed migration from areas where there is pressure and conflict, not clandestines in the European Union. If we start to operate a system that picks up clandestines within the European Union it will become the most serious "pull" factor for people traffickers than anything we can possibly design in the areas of the world that are in conflict. We hope that regard will be had to the wider picture when we publish the White Paper in January.
Lord Corbett of Castle Vale: My Lords, can my noble friend bring the House up to date on the outcome of discussions to introduce a common system to deal with asylum applications right the way across the European Union?
Lord Rooker: My Lords, I wish that I could. Discussions are ongoing, and it is crucial that neither we nor the French operate in isolation. As we debated briefly last week at Question Time, we must reform the Dublin Convention. Within the European Union, working in conjunction with the United Nations High Commissioner for Refugees, we need a managed system so that, while Europe takes a fair share of the responsibility, it does so in a way that does not create a "pull" factor or provide extra financial incentives to the people traffickers. We can do that only with a better managed migration system where there are ways to enable people to come to this country to work, which the vast majority of these people want to do. At the end of the day, the majority of the claims do not appear to be based on a well-founded belief as required by the 1951 convention. But in our discussions we must look at access to jobs and the economy in a more managed way. The Home Secretary will be in Brussels on Friday to further discussions on trying to find a European-wide solution.
Lord Renton of Mount Harry: My Lords, before the White Paper appears, can the noble Lord tell the

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House what has happened to the principle in the UN convention on refugees that the first safe country in which an asylum seeker arrives is duty bound to consider that person's claim to asylum? The UK and France are both signatories to that convention. The purpose of that principle was to make certain that would-be asylum seekers were not subject to a system of pass-the-parcel between safe countries. Why is that principle not being enforced by the French at the moment?
Lord Rooker: My Lords, the short answer is that it is probable that the people concerned do not make a claim for asylum while they are in France.
Lord McNally: My Lords, this is—I use the phrase—"passing the parcel". While we wait for European-wide agreement, is there not a massive case for Franco-British co-operation by means of a joint ministerial committee that can bring together the various agencies to look at the problem? It is a problem for Britain and France to solve first. While we wait for the European-wide solution, a real joint government effort On this matter could produce immediate results.
Lord Rooker: My Lords, that may sound seductive, but most of the people arriving in France have come through a safe European Union country. Therefore, it is in the interests of both the French Government and the UK Government to achieve a European solution to the problem. It is not one, with respect to the noble Lord, that Britain and France can solve on their own.
Lord Campbell-Savours: My Lords, in separating economic migration from asylum seekers, would it not be possible to establish a system whereby applicants for economic status within the United Kingdom could be screened at Sangatte? That would meet much of what is in the document published by the Government last week.
Lord Rooker: My Lords, yes, but if that was done, it would simply increase the flow to Sangatte. It would become the holding centre for access to managed economic migration into the European Union. We must find a way to avoid the need for people to climb on the back of lorries or cling to the axles of railway rolling stock; we must look at the regions they come from and at the areas of the world where the pressures are; and we must take the claims in a more managed way outside the European Union. If we were to screen at Sangatte, it would simply provide a bigger "pull" factor.
The Countess of Mar: My Lords, I declare an interest as a member of the Immigration Appeal Tribunal. The noble Lord has mentioned the people traffickers several times. Does he agree that many of these traffickers—agents as they are known—operate within countries whose governments have good relations with the British Government? What is being done to prevent those people dealing in this horrendous trade in human life? It is worse than
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slavery because their victims are conned into believing that they will get a good job at this end. Very often they do not. Can the noble Lord also say why the traffickers are not picked up at Heathrow and Gatwick airports? They are known to the immigration officers. Apparently, they just go in and out of the airports without any problems.
Lord Rooker: My Lords, the people traffickers are picked up and prosecuted. In answer to the first part of the noble Countess's Question, within the past two years, we have placed immigration liaison officers in several countries around the world to assist on the very issue that she raises; that is, to identify people at the points of exit of a country and to give advice to those countries. I understand that there are some 57 officers around the world at the moment. They usually work in pairs. I do not know the exact number of countries they operate in. They are not full time, but they are there on a regular basis. They work on a three or four-month secondment or for a couple of years in some cases. It depends on how safe the country is.
The noble Countess's second point is more difficult. We must have tracking through the airports to make sure that the facilitators and the traffickers who are exchanging documents or removing documents from travellers can be identified—from the point of getting off the plane to when they get to the immigration desk. That may or may not be within a short time. They may loiter around the airport for a considerable period of time, in which case we cannot prove which aircraft they were on. One of the reasons that we are installing closed-circuit television is to help with that issue.

Palestinian State: Viability
2.53 p.m.
The Earl of Sandwichasked Her Majesty's Government:
What they consider to be the necessary preconditions for a viable, sustainable Palestine.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, Her Majesty's Government remain convinced that an independent democratic and peaceful Palestinian state should emerge as part of a negotiated settlement that guarantees peace and stability for Israel, secure within recognised borders and viewed as an equal partner in the region. The details are for agreement between the parties in permanent status negotiations.
Her Majesty's Government believe that the characteristics of such a viable Palestinian state might include, for example, a high degree of territorial contiguity, responsibility for internal security, and the development of a full range of institutions necessary for effective governance.
The Earl of Sandwich: My Lords, I thank the Minister for her reply. Does the noble Baroness agree that Israel's determination to build and expand illegal

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settlements around East Jerusalem and the West Bank, in spite of international resolutions over many years, is now the main obstacle, both to peace and to a viable Palestinian state? Will the Government urge the United States, which has financed some of this road building and the bypasses around these settlements, to convince Israel that withdrawal is essential under the Mitchell plan, and that there are other legal means of guaranteeing Israel's security through international supervision?
Baroness Symons of Vernham Dean: My Lords, the noble Earl is right; the settlements are indeed illegal under international law. Her Majesty's Government believe that they are an obstacle to peace. As the noble Earl said, the recommendations of the Mitchell committee are that Israel should freeze all settlement activity, including what is termed "natural growth" of existing settlements.
Of course the United States policy is a matter for that country. However, it is my understanding that the United States has repeatedly called for an end to Israeli settlement activity and has also fulsomely supported the Mitchell committee's recommendations.
Lord Mitchell: My Lords, does my noble friend agree that the fundamental precept of viability and sustainability of a Palestinian state is the absolute commitment of the Palestinian authority to fight terrorism? Does the noble Baroness agree with the words of President Bush this very weekend that there is no such thing as a good terrorist? Does she further accept that the only way that Chairman Arafat can demonstrate his commitment to fighting terrorism is not by word alone but by the specific actions that he takes against Hamas, Hezbollah and Islamic Jihad?
Baroness Symons of Vernham Dean: My Lords, I agree that the Palestinian authority's commitment to fight terrorism must be matched by a consistent and sustained effort on the ground. A peaceful Palestinian state co-existing with a secure Israel, which is recognised and respected by Israel, and which offers the best prospect of a lasting peace.
As to the remarks of President Bush this weekend, of course I agree that terrorism should be condemned absolutely. The last part of my noble friend's question asked what Chairman Arafat could do in that respect. We believe that we can ask no more or less of Chairman Arafat on this point than for him to exert every possible effort and to use every possible influence that he has to combat terrorism, to end the violence and to arrest and punish the perpetrators.
Lord Renfrew of Kaimsthorn: My Lords, does the Minister agree that in the circumstances described by the noble Lord in relation to the term "terrorism" it is sometimes difficult to distinguish the recent actions of the Israeli army from those of some of the supporters of the Palestinians?
Baroness Symons of Vernham Dean: My Lords, we have spent a great deal of time in your Lordships' House trying to discuss what we mean by terrorism. Her Majesty's Government unequivocally condemn terrorism wherever it arises. Indeed, as I made clear to your Lordships' House on the previous occasion we discussed this issue, we as part of the European Union have made démarches to the Israeli Government on such matters as extra judicial killing.
Lord Wright of Richmond: My Lords, does the Minister agree that one important pre-condition for a viable and sustainable Palestinian state is a fairer distribution of water resources? Is the noble Baroness aware that according to World Bank statistics, 90 per cent of the water in the West Bank is used for Israel's purposes and 10 per cent is left to the Palestinians who are not allowed by the occupying power to dig their own wells?
Baroness Symons of Vernham Dean: My Lords, I indeed agree that the issue of water resources is an extremely fraught one. Of course it is not the only difficult issue with which we are dealing. In respect of water resources I believe that Her Majesty's Government have made our position clear. However, many other issues concerning trade, for example, are often related to the issue of water resources and Her Majesty's Government have made clear to the Israeli Government that on that issue we believe there should be fairer treatment of those in the territory of the Palestinian authority.
The Lord Bishop of Wakefield: My Lords—
Lord Wallace of Saltaire: My Lords, can the Minister—
Lord Janner of Braunstone: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, may we hear from the right reverend Prelate first and then from the Liberal Democrat?
The Lord Bishop of Wakefield: My Lords, thank you. Is the Minister aware that under the Israeli Government the Palestinian Christians have felt greatly persecuted? Since the conflict began with Afghanistan that Palestinian Christian group has been under increasing threat from some of the Muslim communities. Can the noble Baroness say whether the Government will use their influence in the creation of a proposed Palestinian state to ensure that the rights of the Palestinian Christian minorities are preserved and promoted?
Baroness Symons of Vernham Dean: My Lords, I am aware of the problems faced by some Palestinian Christians. I hope that the right reverend Prelate will agree that Her Majesty's Government have made a point of fostering inter-state relationships wherever there are matters of conflict. I do not want to prescribe what kind of settlement would be appropriate

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throughout the peace talks and the final settlement discussions, but I believe that any such talks should pay proper attention to the rights of all people in Palestine, irrespective of their faith or ethnicity.
Lord Wallace of Saltaire: My Lords, given the importance of the trade relationship between the European Union and Israel, does the European Union intend to use its trade instrument to bring pressure to bear on the parties to move towards a settlement?
Baroness Symons of Vernham Dean: My Lords, it is an interesting and difficult topic. The General Affairs Council of the European Union will meet again next week on Monday, 19th November. The meeting with the Israeli authorities is due to take place on the 20th. The position of the European Union will be discussed on the 19th and I am sure that a wide range of matters will be taken up with the Israeli authorities on the 20th.

Freedom of Information Act: Implementation
3.1 p.m.
Lord Goodhartasked Her Majesty's Government:
When they plan to bring the Freedom of Information Act 2000 into force in relation to government departments.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I acknowledge the role that the noble Lord played in ensuring the passage of the Freedom of Information Act through this House. The timing of his Question today is admirable, although little time remains to discuss it. It allows me to announce the Government's decision.
The Act will be fully implemented by January 2005, 11 months before the timetable set out in the Act itself. The publication scheme provisions will be implemented first, on a rolling programme, starting with central government in November 2002. I am today placing a full schedule of organisations and dates of implementation in the Libraries of both Houses. This roll-out will be completed in June 2004, and the individual right of access to information held by all public authorities, including government departments, will be implemented in January 2005.
Lord Goodhart: My Lords, does the noble and learned Lord accept that his Answer will bring a great deal of relief to those who have been concerned about recent reports in the press that it would be 2005 before central government departments were subject to the Freedom of Information Act? Is what has happened due to a change of mind on the part of the Government, or was there never any strength behind the press reports which strongly suggested that the Government were going to defer central government freedom of information until 2005?
The Lord Chancellor: My Lords, noble Lords should not believe everything that they read in the press. The decisions I have been pleased to publicly announce to this House are the collective decisions of the Government.
Lord Clark of Windermere: My Lords, I congratulate my noble and learned friend on that announcement. Why will there be a delay for public bodies outside central government? As the information, with exceptions, is not illegal, will the Government encourage public bodies outside central government to release information to citizens in an open manner and at an early date?
The Lord Chancellor: My Lords, my noble friend and I had the pleasure at one time of co-operating together in the development of freedom of information policy. The schedule which has been placed in the Library shows that, so far as concerns publication schemes, central government comes first in November 2002 and local government follows in February 2003.
It has to be remembered that a much greater level of preparation—n is required. We took two years with the Human Rights Act before the Freedom of Information Act. The Act covers about 70,000 organisations. It could have been made prospective only, but, as my noble friend will remember, we made it retrospective so as to cover all past papers and not merely future papers. The Information Commissioner has to double her staff and she has to approve about 70,000 publication schemes. That will take time. But it will all pay off in the end, in the same way as the Human Rights Act has paid off, with the predicted chaos in the courts being the non-event that we always said it would be.
Lord McNally: My Lords, whether or not we believe what we read in the press, does not this illustrate that getting the machinations of Whitehall out into the open helps those Ministers who want to implement government policy against those Ministers who want to slow it down, however high ranking they may be? If there is any slowdown, would it not be a good idea to bring the noble Lord, Lord Clark, back into the Government? He is clearly still committed to early implementation of the Act.
The Lord Chancellor: My Lords, I believe that I have announced an early and effective implementation of the Act.

European Communities (Finance) Bill
3.7 p.m.
Read a third time.
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)
Lord Bruce of Donington: My Lords, I rise to intervene at this stage of the Bill, having advised both the Government and the Opposition in advance that I would be doing so and of the rough grounds upon which I propose to argue.
The Bill is described as a "(Money Bill)" on today's Order Paper. However, on the Bill itself, where one would normally expect a designation of this kind to appear, it is stated:
"Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal"—
that is us—
"and Commons, in this present Parliament assembled, and by the authority of the same, as follows".
There then follows the text of the Bill.
For some time now—at any rate, for as long as I can remember—this abbreviated procedure whereby the House is not invited to consider in any way the detail of the Bill has always been taken as a convention of the House. We are prohibited by convention—I shall return to that in a moment—from tabling amendments to the Bill or, indeed, engaging in detailed arguments about it. The position is, I suppose, that these matters have been established as a convention. The nature and extent of that convention is presently unknown, but it seems to have been slavishly followed without reference to any text at all except that of the Parliament Act 1911, which is taken as the basis for the convention that this House does not intervene in any way in considering the detail of a money Bill.
I leave it to others to decide whether that should be so. There are those who say that the convention exists and is valid, that this should be the approach, and that this House should not be involved in a Bill designated as a money Bill. Another view—I cannot say whether or not I subscribe to it—says that, whatever the convention may be, there is nothing to prevent this House intervening in the detail of a Bill, however it is described, so long as it comes before the House.
This matter is somewhat apposite at present, when consideration is being given to the ideal functions of this House and its methods of operation. Speaking mildly—as is my custom—I believe that the House ought to consider how much it wants to become involved in considering the detail of legislation and advising Her Majesty and everyone else. I do not see why that should not happen.
It lies in the power of the Government and Her Majesty's Loyal Opposition to give us their views on the subject. There is a general view, with which I have become acquainted over the past two or three months, that there is no intellectual reason, and no representative reason either—in the true meaning of "representation"—why this House should lack any authority in considering money Bills. Sometimes such
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Bills are complex. On reading Hansard, in many cases I cannot detect any intellectual or other ability in another place that is not demonstrated here. We are all honourable men, and we all have our heads screwed on.
This consideration becomes of some importance in the following circumstances. As the Explanatory Notes indicate, the Bill provides for some degree of flexibility in the conditions under which money is provided out of our own Exchequer. It also provides some description of how it is dealt with. For example, there are some amendments—otherwise it would not have been necessary to include them in a Bill—to the way in which own resources are determined by the European Commission, by the European Council and indeed by the European Parliament.
I am certain, having looked at the papers, that my noble friend is justified in saying that the Bill does not provide for any change in the own resources available to the European Community that would be of any disadvantage to the UK. In my submission it is immaterial whether the Bill provides for some changes in the method of calculation of own resources, and whether they are more or less favourable at the moment. The point is that they are mentioned in some detail in the Explanatory Notes and are, therefore, relevant to our discussions.
The mention of own resources brings us to the question of how the whole system works. It works by the mechanism of the European budget. The budget is considered regularly every year; it lays down the amount of own resources—even though it may be unchanged; and it describes in some detail—which many may think unnecessary and unintelligible—how the money is to be spent.
This is all well and good. Members of this House who are zealous in their work, as I am sure your Lordships are, will not object very much to that—except that there are further circumstances. In the normal way, the European budget, which makes provision for European own resources, is debated in some detail in another place. Members of the other place have normally given the Bill their consideration—with what degree of thoroughness I am not prepared to speculate.
We have no inherent right to examine the European budget in this House. But the current circumstances are such that we ought to have, as of right, the power as a House to examine the European budget and to pass judgment on it. Noble Lords who have seen the contents of the papers will know how voluminous they are. I can assure the House that even those who are most efficient and who are the quickest readers would take at least three weeks to read through the damn thing, let alone understand it. My question to the Government is this. How do they and the usual channels propose that this House should have the opportunity to discuss the European budget in view of the fact that Members of another place have now

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given up that task? It now goes through on the nod at 10.30 p.m. without any consideration at all.
We are not talking about "chicken feed"; we are talking about a net contribution from this country of some £350 billion. It is now a consideration whether we ought to charge the usual channels—who ultimately determine the business of the House—to make provision for this House, even though it may not consider the other implications of money Bills, at least to have the opportunity to give constructive and thorough consideration to the European budget.
To underline that point, only today a report was published from the European Court of Auditors revealing losses due to fraud and irregularity of £2.5 billion. This is not chicken feed—and we do not even have the document here. I hope that this matter may merit further discussion among your Lordships about the desirability or otherwise of this House being able to exercise its talents and its time in a thoughtful examination of European finances and money Bills on the same basis as the other place.
Lord Cope of Berkeley: My Lords, the House is frequently grateful to the noble Lord, Lord Bruce, for his wisdom and his diligent hard work on these matters. We have frequently had occasion to benefit from them. On this occasion we on this side of the House are grateful to the noble Lord for supporting a view that we have expressed previously, notably in relation to a Bill introduced not long ago by my noble friend Lord Saatchi. Clearly, these are important matters.
One of the noble Lord's points related to whether or not we should be having this discussion on a money Bill. For greater accuracy, I have just looked up the Companion to the Standing Orders, which specifically says that the conventions on money Bills do not debar the Lords from amending such Bills—and clearly from debating them as well. I understand that on a few occasions amendments have been made in this House to such Bills and that they were accepted by the Commons. The only provision is that if we fail to pass the Bill without amendment within one month of it being sent to your Lordships' House, it becomes law automatically, so we have to get a move on with such Bills, particularly if we wish to amend them. That is why there is a special note on today's Order Paper explaining that we have not observed the usual intervals in considering this Bill.
There is no doubt that we can discuss and amend money Bills. However, that has not been our usual practice; nor has it been our usual practice on any Bill to have extended discussions on the Motion that the Bill do now pass. That practice has recently been criticised by the Captain of the Gentlemen-at-Arms, among others.
Those are the customs and rules of your Lordships' House at the moment. They may change. If some of the propositions that are flying around about the future of your Lordships' House come to pass in any form—it seems unlikely at the moment, but let us suppose—those rules will certainly be under the greatest and
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most careful scrutiny and will almost certainly be altered considerably. I know that the Government do not wish to discuss powers on these occasions, but that is my view and I do not think that I am alone in holding it.
Meanwhile, we should observe the customs of your Lordships' House with regard to money Bills. We should not stop ourselves entirely from talking on them, but we should exercise a certain self-restraint.
Lord McIntosh of Haringey: My Lords, I shall do my best not to open up debate on the matter. The House owes a debt of gratitude to my noble friend Lord Bruce and to the Opposition Chief Whip for expanding the time-scale of House of Lords reform. While other people want to move forward, they appear to want to move back to 1911. I know that the noble Lord, Lord Saatchi, wanted to do that, because he wished to question Section 1 of the Parliament Act 1911, which debars the Lords from rejecting money Bills.
The procedural situation with money Bills is that they are certified as such by the Speaker. That certification is final and there can be no challenge to it. The Bill is then sent here and if it is not sent back within a month—I believe that this Bill arrived here on 18th October—it is presented for Royal Assent without the intervention of this House. The noble Lord, Lord Cope, is right that such Bills can be amended, but the Commons is not obliged to consider any amendments that are made and if the Bill has not been passed in the form in which it arrived in this House, it can still go for Royal Assent without us.
I do not propose to say more on the constitutional matter. The noble Lord, Lord Bruce, raised three points of substance about the Bill to which I shall respond briefly. First, he raised matters relating to the European Union budget. I remind him that the Bill concerns the own resources decision, which sets out the system by which the budget is financed. It does not directly concern the setting of the annual budget.
Secondly, the noble Lord raised a question about debate in another place on the European Commission budget. It is true that the last such debate was on 12th July 2000 about the 2001 budget. However, a scrutiny debate on the 2002 budget is scheduled for committee on Monday 19th November at 4.30 p.m. I understand that that will not simply go through on the nod, although of course that is a matter for the House of Commons and not for us.
Thirdly, for anyone worried about European Community spending rising, the Berlin agreement maintains the own resources ceiling at 1.27 per cent of EU GNP and will stabilise spending through the EU budget. For the first time, spending in the existing member states will be lower in real terms at the end of a six-year financial perspective than it was at the beginning. I hope that that goes some way to calming my noble friend's fears.
On Question, Bill passed.

Commonhold and Leasehold Reform Bill [H.L.]
3.25 p.m.
Report received.
Clause 3 [Consent]:
Lord Goodhart Lord Goodhart moved Amendment No. 1:
Page 2, line 18, at beginning insert "Subject to subsection (1A)."
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 2 and 3. The purpose of the amendments is to make it possible to convert property that is currently in multiple occupation from leasehold to freehold without the consent of all the holders of the various leases, but on the basis of the agreement of at least 80 per cent of the leaseholders in the property.
This is the fourth time that we have debated the subject. We debated it twice before the general election, when the previous Bill was lost, and this is the second time that it has come back to your Lordships' House under the present Bill.
There is wide agreement in principle that commonhold is to be encouraged and that if the procedure were reasonably simple, it should be possible for existing leasehold properties to be converted into commonhold without necessarily having to get the consent of 100 per cent of the leaseholders. It will be very difficult to get the consent of everyone. In the case of small houses divided up into four or five flats, it may be possible to secure the unanimous agreement of all the parties to conversion, but with larger properties, such as blocks containing 10 units or more, it is unlikely that there will not be at least one person who either positively dissents from the idea of conversion to commonhold or at least is not prepared to agree to it. Conversion to commonhold will require some financial commitment because the leaseholders will necessarily have to put their hands in their pockets to acquire the freehold.
We think that if a clear and substantial majority of leaseholders wish to convert—by that we mean at least 80 per cent of them—it would be desirable for them to be able to do so. We have therefore proposed a scheme to make that possible. Those leaseholders who agree will have to pay between themselves the full cost of acquiring the freehold. In a number of cases that may be a deterrent to making a conversion. The same issue would arise if they desired to proceed with the lesser or preliminary step of collective enfranchisement. If they are willing to put their hands into their pockets and pay for the whole acquisition of the freehold, there is no reason for the law not allowing them to do so.
When debating the corresponding amendments in Committee, the Government argued that they would add to the complexity of the legislation. At the outset of the long history of the Bill, I was inclined to agree. However, attempts to draft the necessary legislation lead me to think that it is by no means as difficult as I first thought.
Our amendments are relatively short. I am sure that they are not yet in a form to achieve the desired result. Consequential amendments may be necessary,
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together with some improvement to the drafting, which might result in longer legislation—but nothing elaborate. It would be perfectly possible to draft a short text making it possible for people to enfranchise with the agreement of 80 per cent or 90 per cent of the leaseholders.
The Government's second argument was that it was unnecessary to provide for conversion on something less than a 100 per cent basis because leaseholders will have the alternative of collective enfranchisement. That is something of a halfway house. In fact, it is a good deal more than a halfway house. The problem is that collective enfranchisement is where the extra money is involved to purchase the freehold. If 80 per cent of the leaseholders proceed to enfranchise, as they will be entitled to do under the Bill, and are willing to pay the price of enfranchisement themselves, they will have done the vast majority of the work necessary for conversion to commonhold. Conversion from an RTE company to a commonhold association would cost the leaseholders little and would present few, if any, practical problems.
The right to convert could and should apply both to existing enfranchised properties and newly formed RTE companies. There would undoubtedly be a need for a special form of the commonhold community statement to cover cases where the commonhold association held up to 20 per cent of the property as landlords of a lease. We do not see any legal or practical difficulty drafting such a special form of the commonhold community statement.
The Government's third objection was that management would be made more difficult. But virtually the same problems would be faced by an RTE company that purchased the reversion on the basis of less than 100 per cent membership. Some leaseholders would be members of an RTE company, some would not. The situation is virtually indistinguishable from that which would arise in the case of a commonhold association where a small proportion of the units forming part of the commonhold were held as leasehold property, not commonhold.
We acknowledge the problems—which might be sufficient to deter many or even most people who would, in principle, like to convert from proceeding with a conversion of less than 100 per cent. However, if people want to try, why not have a framework that makes it possible for them to do so? The cost to the public purse would be minimal, amounting to no more than the cost of providing a new standard form of the commonhold community statement where some units were held on leases. In those circumstances, there is no reason for not making it possible to convert on the basis of 80 per cent or 90 per cent consent among the leaseholders within the property where the majority wish to convert to commonhold. I beg to move.
3.30 p.m.
Lord Kingsland: My Lords, requiring 100 per cent consent to convert has largely been a question of the Government against the rest of your Lordships. On Second Reading in January, and in Grand Committee

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the following month, the noble Lords, Lord Goodhart, Lord Richard and Lord Williams of Elvel, my noble friends Lady Hanham and Lord Courtown, and myself all expressed doubt about the 100 per cent requirement. For the Government, the noble Lord, Lord Bach, sought to justify the provision on the ground that, without unanimity, anomalous leaseholders would remain.
Clause 3 is somewhat opaque about the degree to which 100 per cent consent is necessary. Clause 3(1) lays down that requirement but subsection (2)(e) states that regulations may provide, inter alia,
"for consent to be deemed to have been given in specified circumstances".
Clause 3(2)(f) provides for,
"enabling a court to dispense with a requirement for consent in specified circumstances".
Implicit in those provisions is the Government's acceptance that one will not always obtain unanimity. But nowhere does the Bill state that less than 100 per cent consent will suffice, or spell out the consequences of non-consent.
In Committee, on 16th October, the noble Baroness, Lady Scotland of Asthal, accepted that it was not impossible to devise a system under which fewer than 100 per cent of persons interested had to consent to convert to commonhold but added that this would lead to administrative difficulties because of the need to distinguish both between commonhold units and non-commonhold units and between the differential management tasks. The Minister added:
"To tailor-make the documents and structures that they reflected would not only add to the costs of the conversion process but fly in the face of the thinking behind commonhold".—[Official Report, 16/10/2001; col. 489.]
Later, at col. 492, the noble Baroness said that the amendments provided no fewer than four different schemes to displace the 100 per cent rule. The amendments of the noble Lord, Lord Goodhart, and the noble Baroness, Lady Hamwee, the Minister said, did not overcome the serious problems that she had outlined although she conceded that they represented,
"the kernel of a workable scheme to provide for conversion with less than 100 per cent. consent".
One of the other schemes was that proposed by the Opposition Front Bench. Perhaps, understandably, these proposals were not received with great favour by the noble Baroness. Therefore, I shall concentrate my few remaining remarks on what looks likely to be the most promising scheme so far as concerns the noble Baroness; that is, the scheme of the Liberal Democrats.
That scheme has, I concede, the attraction that the non-consenting proprietor of a flat is not irretrievably shut out but can at a later time, until the expiry of his or her lease, exchange the lease for the freehold estate in the flat. The new schedule provides for two new sets of regulations: one to deal with the price and the terms on which the lessee buys into the commonhold; and the other, in rather general terms, to,
"make consequential provision for giving effect to this Schedule".
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But that is nothing unusual for the Bill because it is littered with references to regulations.
I hope that your Lordships' House will accept first, that your Lordships wish commonhold to be popular. I do not believe that there is any dissension in your Lordships' House about that. Secondly, I hope that your Lordships will accept that it should not become compulsory. The amendments aim to enable existing blocks of flats to convert to commonhold in the face of a small but appreciable opposition, which, by the law of averages, there is likely to be. If there must be 100 per cent agreement, as the Government wish. Such conversions will be rare and there will be a danger that, after all the effort that has been put into the Bill, commonhold may never catch on.
The Earl of Caithness: My Lords, Amendment No. 4 standing in my name and in that of the noble Lord, Lord Williams of Elvel, is an alternative to that put forward by the noble Lord, Lord Goodhart, and supported by my noble friend Lord Kingsland. Before I speak to that amendment, perhaps I may say how sorry I was to miss the Committee stage of the Bill. I should like to have taken part in it but I was abroad. I believe that it is probably right that I declare my interest as a surveyor and state that some of my friends and acquaintances will be affected in some shape or form by the Bill. Many of the people with whom I work will also be affected by the Bill.
I read with care what the noble Baroness. Lady Scotland, said in Committee. As she explained to me, she set out in some detail the Government's thoughts on commonhold and the reason for their position. I have to tell the noble Baroness how very disappointed I was. She has been so good at grasping opportunities, but on this occasion she was totally negative. She thought of every conceivable excuse not to seek the opportunities that commonhold offered but to decry them. As my noble friend Lord Kingsland has just said, many of us are concerned that commonhold will not catch on if there is no opportunity for it to be available to existing tenants.
Two different types of amendment are before your Lordships. I am very happy with that of the noble Lord, Lord Goodhart. I believe that it is probably better than the amendment in my name and in that of the noble Lord, Lord Williams of Elvel. However, at the end of the day, we are trying to help the Government to get commonhold off the ground. If, from now on, it is confined entirely to new build, it will not be a great success. I believe that the noble Lord, Lord Goodhart, explained carefully the correlation that exists with the RTE companies, where an 80 per cent vote in favour will be required. That leaves out 20 per cent. Surely the same thing can apply to commonhold.
Of course, another important point mentioned by the noble Lord, Lord Goodhart, is that that is the expensive part for the tenants. Once they have reached that stage, surely it is not an impossible step, and certainly not a terribly expensive one considering what

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they have already done, to go the whole way to commonhold. For that reason, I shall support the amendment of the noble Lord, Lord Goodhart.
3.45 p.m.
The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal): My Lords, I say straight away that the noble Lord, Lord Goodhart, was correct when he said that this is, indeed, the fifth time that we have discussed this issue. We were delighted to discuss it twice under the old Bill; we were intrigued by the discussion at Second Reading; we were entranced by the further in-depth trammelling of these issues in Committee; and now here we are at Report. Therefore, it seems that one can never play a good tune too often or too loudly.
We have listened with great care to everything that has been said by all noble Lords, both today and, indeed, at every stage until today. We sympathise with the motivation of noble Lords who are persisting in their attempts to persuade us to ameliorate the effects of the 100 per cent consent rule. We share their regret at the inevitable result of its imposition in terms of the potential difficulty for those who wish to convert. I reassure the noble Earl that it was not negativity that drove us to come to that conclusion but inevitability and logic.
However, as I say, I am afraid that very little in our discussion today is new and capable of convincing us that the need is any less great than it was when I spoke at length on the matter in Committee. I am afraid that I can do no better than to refer your Lordships to the Official Report for 16th October, which has already been referred to by the noble Lord, Lord Kingsland. I am also grateful for noble Lords' forbearance on that occasion. With interruptions, I believe that in responding I took up approximately half an hour of your Lordships' time in the hope that we would explore fully all the issues that were there to be explored.
Perhaps I may explain briefly how we view the matter. We believe that it is necessary to balance the desirability of allowing those in long leasehold circumstances to convert to commonhold easily with the significant difficulties that we envisage in the conversion process and, more importantly perhaps, with the difficulties of running the eventual development. We believe that the balance comes down overwhelmingly in favour of the relative—I emphasise: relative—simplicity of the 100 per cent consent scenario, both in terms of the conversion process and future management.
Of course, I hear what the noble Lord, Lord Goodhart, says in relation to the complexities of the drafting. I am sorry that he now departs from us in terms of accepting those complexities. I reiterate that we never said that it would not be possible or that it could not be done; rather, we believe that it should not be done because of the nature of the commonhold which would be left. Of course, it is true that conversion from RTE to commonhold would be a
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smaller step. However, I must emphasise that it would still leave a special form of CCS and of commonhold association. With the greatest respect, we say that there is no argument for saying that, because problems will be faced in relation to the RTE, those problems should be imported wholesale into commonhold.
As I said on the previous occasion when we debated this issue, the scheme outlined in the amendments set down by the noble Lord, Lord Goodhart, and the noble Baroness, Lady Hamwee, contains the kernel of a workable proposal to get through the conversion process. Having said that on the previous occasion, I note that the noble Lord, Lord Kingsland, now supports that scheme as he has added his name to the first and third amendments. I am somewhat puzzled that he seems to have spurned the second amendment, although I am sure that he has his reasons for doing so. These amendments do not address the difficult problems and potentially considerable extra costs which will arise in dealing with remaining leaseholders in the commonhold context.
The amendment that was tabled by the noble Earl, Lord Caithness, who I am delighted to see is back in his place, and by my noble friend Lord Williams of Elvel suffers, as it did previously, first, from the fact that it would allow conversion to go ahead without a majority of leaseholders being in favour. Secondly, it would perpetuate the existence of long leases, in that lease extension would continue to be available. Thirdly, it says nothing about the difficulties that I outlined today or when I previously spoke on the matter, somewhat exhaustively, in Committee.
I should say, in line with the usual courtesies, that the Government will table several tidying-up amendments at Third Reading that arise from continued consultation and which will take account of the parallel progress of the Land Registration Bill through your Lordships' House. They will clarify such matters as the liability for extinguished leases and how interests in and dealings with part units will work. That will involve four very minor drafting amendments, for one of which we must thank the noble Lord, Lord Kingsland. We make it clear that, in a compulsory purchase, the commonhold association is not required to consent.
We would have wished to assist if we could. We have considered the matter exhaustively. We have come to the conclusion that the balance relating to the way in which the Government have framed the current regulations is right. Now that we have, for the fifth time, debated this matter—again, quite extensively—I invite the noble Lord to withdraw the amendment.
Lord Goodhart: My Lords, I think that we have in fact debated this matter either four or six times. There have been two debates at Second Reading, during the two Committee stages and, on this part of the Bill, during the two Report stages. I am extremely sorry that those six discussions have entirely failed to shift the Government's position. No issue of principle is involved; it is simply an issue of practicality. We think that the Government are taking an unnecessarily negative view but we do not intend to press the

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amendment. We may return to the matter for a seventh time at Third Reading but, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 to 4 not moved.]
Schedule 2 [Land which may not be commonhold land]:
Lord Kingsland Lord Kingsland moved Amendment No. 5:
Page 88, line 5, leave out paragraph 1.
The noble Lord said: My Lords, I have spoken to Amendment No. 5 on, I believe, five occasions so far. The noble Lord, Lord McIntosh, who I suspect will reply to this debate—he has done on previous occasions—will be relieved to hear that I am not going to repeat the remarks that I have made so often hitherto. The main objection to the amendment, as I understand it, has been the failure of any government since 1965 to take forward the thinking of the noble and learned Lord, Lord Wilberforce, who is in his place this afternoon and who produced such ingenious solutions to so many intractable problems such a long time ago.
I seem to recall that in one of the Minister's replies to me—I fear that I cannot remember which one—he ventured to suggest, in very broad terms, a timetable for the likely development of the Government's thinking in this area. I think that it is fair to say that the noble Lord accepts, as a matter of principle, that it would be desirable for flying commonholds to be part of our law. It was, he added, only a question of getting around the legal niceties. I shall certainly not press the amendment today. Perhaps, when he responds—I am sure that he will do so telegraphically—he might venture an arrow about when the Government are likely to return to the issue. I beg to move.
Lord Goodhart: My Lords, I rise briefly to support the noble Lord, Lord Kingsland, although I do not propose to support the amendment because, as the law now stands, there are serious difficulties with flying freeholds; namely, the problems that are associated with positive covenants. It is something of a disgrace to our legal system that although the matter has been the subject of technical and academic study for many years, and although answers are perfectly possible—the noble and learned Lord, Lord Wilberforce, produced them many years ago—it has still proved impossible to find parliamentary time to deal with this problem. I therefore echo the hope of the noble Lord, Lord Kingsland, that the Government will see fit to do something about the matter. I also hope that they will enable positive covenants to be made enforceable as between the owners of freehold land within the same building.
Lord McIntosh of Haringey: My Lords, I make two minor corrections to what has been said. First, the issue is wider than that which simply involves flying commonhold or flying freehold; it involves positive covenants. Secondly, I say to the noble Lord, Lord Goodhart, that it is not currently a matter of finding
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parliamentary time; the matter is before the Law Commission rather than Parliament, and I do not know when the Law Commission will report.
I was asked by the noble Lord, Lord Kingsland, for a timetable. I say with confidence that whatever timetable there is is too long—36 years is far too long a period in which to have resolved this matter, although it is of much greater generality than the issue that arises in particular in this context. Although I do not know when the Law Commission will report, I shall make investigations and see whether I can come back to the matter at Third Reading.
The noble Lord, Lord Kingsland, was telegraphic, and I do not think that I need to repeat the arguments. We do not see the desirability of amending the law on positive covenants on one particular occasion when the matter has much wider ramifications, which must be considered by the Law Commission.
Lord Kingsland: My Lords, I am most grateful to the Minister for his sympathetic reply. It would be intriguing to find out what the Law Commission thinks its timetable is in relation to this matter. If this exchange between the Minister and myself could encourage it to give us a target date, that would be a great benefit, as the noble Lord, Lord Goodhart, said, to the legal system generally. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Transitional period]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 6:
Page 4, line 31, after "Part" insert ""first"
The noble Earl said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 7, 8, 9 and 10.
We once again return to a point that has already been discussed on more than one occasion. However, it is important because there is still confusion among developers about exactly where they will stand under the new system of commonhold. My concern is about the exact nature of the state that will appertain between the sale of the first unit and the completion and sale of the last unit. There already is a transitionary period in the Bill, but the situation in which I am interested will involve a second transitionary period. We need to be absolutely clear about exactly who has voting rights in relation to which units for the commonhold association and about what those responsibilities are. Unless that is clear, there will be much difficulty.
We have all become used recently to a fairly substantially upward housing market, in which most properties—I refer to blocks of flats—have been sold almost before they have been completed. That will not continue for ever. The house market is still strong, but I remember falling house prices and how difficult it was to sell properties in the 1970s, 1980s and early 1990s. That will occur again at some stage. We need to be clear about precisely what will happen in that period. For instance, a developer has 10 flats; he has sold two; six are for sale but there is no market they

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are not being sold; and he is completing the others. How do the voting rights of the commonhold association work? What are the responsibilities? I beg to move.
4 p.m.
Lord McIntosh of Haringey: My Lords, the Government remain of the view that nothing helpful is achieved by this group of amendments. The amendments introduce a second transitional period between the sale of the first unit and the final handover of the completed development to the commonhold association. They dilute the encouragement that exists at present for the developer to finish developing and get off the site and would unnecessarily complicate the early operation of a newly developed commonhold.
As I have said previously, it is our intention that the commonhold community statement should come into effect on the sale of the first unit. That is my answer to the specific question of the noble Earl about the situation after the end of the transitional period. The rights and responsibilities granted and imposed should take effect from that time. For that reason we cannot support the amendment.
The noble Earl asked about the position on voting rights during the period after the first unit has been sold. I have given the answer as the Bill is drafted. The voting rights will be as set out in the existing draft commonhold community statement and memorandum and articles. The developer has directors' and voting rights which will slowly diminish as more units are sold. I turn the noble Earl's question back to himself and ask: what is the situation under his second transitional period? It is not spelt out under his amendment.
The Earl of Caithness: My Lords, I believe that it is spelt out in the amendments but let us not get into that detail. We seek to satisfy the concerns of people who will provide the units. I am grateful for the Minister's reply. It goes some way to satisfying me.
Let us presume that the developer is building 10 units. He has sold two and has completed the other eight. Presumably the developer is responsible for the charges on those units because those are funds that must come into the commonhold association; and he must be responsible for the expenditure. Therefore he is responsible for eight-tenths of the income to the association and has virtual control over the commonhold association and how funds are distributed. For example, if there is a fire and structural damage, one needs to be clear who will pick up the appropriate proportions of the cost. Can the Minister confirm whether the situation that I describe regarding the 10 units is correct?
Lord McIntosh of Haringey: My Lords, with the leave of the House, yes, broadly. During the transitional period, the developer is entitled to appoint
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a maximum of two directors. The draft Commonhold Community Statement states:
"After the end of the transitional period and for so lone as the developer is the unit-holder of more than [one quarter] of the total number of units in the Commonhold, he shall be entitled to appoint a total of [one quarter] (or the nearest whole number exceeding [one quarter]) of the maximum number of directors of the Commonhold Association, and shall be entitled to remove or replace any director so appointed".
The noble Earl's question was about financial responsibility. Unless I am corrected, I understand that financial responsibility follows in the same proportions.
The Earl of Caithness: My Lords, I am most grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 to 10 not moved.]
Clause 11 [Definition]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 11:
Page 6, line 12, leave out "may" and insert "must"
The noble Earl said: My Lords, in moving the amendment, I speak also to Amendments Nos. 12 to 14. Contrary to the Marshalled List, I speak also to Amendments Nos. 17 and 18 which are with this group rather than separate. It is a subject we have discussed previously.
I seek to ensure that the structural parts which belong to the commonhold association are properly insured for the benefit of the whole of the association. I read with interest what the Government said in reply to the amendment moved in Committee by the noble Lord, Lord Williams of Elvel. They gave the example of a detached house which was part of the commonhold. That was the reason that the amendments moved in Committee were not suitable.
We have sought to take on board the criticism of the Government. It is important for the benefit of the association that there is a positive onus on the association to insure the structural parts and areas used in common. If that is not clear and there is a fire—I used a similar example in my previous amendment—and too much onus on the unit holder, which is how the Bill is drafted, then because the unit holder does not have the right amount of insurance or cannot have the work carried out to the required standard because of the extra costs, the commonhold association suffers detriment. That is the situation I seek to prevent. I beg to move.
Lord McIntosh of Haringey: My Lords, I am intrigued by the way the amendments have been introduced. I had not understood—it must be my fault—that they related to insurance. I had thought that they were about the definition of what is in the commonhold and the commonhold unit. Everything within the curtilage is either part of the unit or in common. Therefore, insurance policies will have to be formulated in such a way that they cover everything which falls into one or other of those categories.

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Let us consider the amendments individually. The first amendment would amend Clause 11(3)(b) to make it a requirement that a definition should exclude specified structures, fittings and so on. I do not understand why. I understand permitting it to exclude specified structures but if circumstances suggest that particular fittings such as grilles for warm air heating systems should be in or out of the definition of a unit, why should that not be so? What harm does that do?
The second amendment would require the definition of a unit somehow to take into account the definition in Clause 24(2) of a limited use area. But they are quite specifically parts of the common parts, not of the unit, and the amendment would tend to confuse the two. The third amendment would amend Clause 11(3)(c) and would require the exclusion from the definition of a unit of the structures delineating it. But what then of garden walls and fences? Logically, they would be part of the unit rather than the common parts.
Finally, the fourth amendment would amend Clause 11(3)(d) in such a way as to require it to refer to two or more areas within a unit whether or not there are two more areas to define. The noble Earl said that he was speaking also to Amendments Nos. 17 and 18 and I am happy to respond. Amendment No. 17 is misconceived. It would make the commonhold association responsible for the whole of the built environment in all commonhold developments. As we have pointed out on many occasions, that makes no sense. Why should the commonhold association be responsible for the upkeep of the fabric of a detached house, or of a stand-alone factory unit? I am sure that the amendment was intended to catch only flats, but it does not. Even if it did, it seems to make no sense to try to define in the Bill what shall be the responsibility of the commonhold association in terms of the structure of what we assume is meant to be the block of flats.
Amendment No. 18 raises many more problems. Does the term "main walls" include load-bearing walls within a building? Does it include the services which run within the walls? If the area beneath the plaster is not the unit-holder's responsibility, how will he or she deal with re-wiring. Or is it supposed, as may well be the case, that all such services are the responsibility of the commonhold association? If so, why do they not appear in the list in the amendment? If the floor does not include the timber surface, does that mean that the commonhold association is responsible only for the joists? Does the roof include any roof in proper use as a roof terrace? If so, to what extent has the commonhold association the right to direct the unit-holder as to what he may and may not do to the roof surface? Who will be responsible for the regular maintenance of the terrace? Will the commonhold association have to recompense the unit-holder for a period of lack of quiet enjoyment of his terrace during repairs—to say nothing of the costs of raising any surface that the unit-holder has put down?
I may have over-egged the pudding, but I think that the noble Lord will understand the difficulty of trying to include such definitions in the Bill. The really important part of his argument, which is about insurance, is that everything must be either common
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parts or part of a unit and that the insurance must be adequate to cover both, because they add up to the whole of the property.
The Earl of Caithness: My Lords, I understand the last point made by the Minister, but under the Bill as drafted it is the commonhold association's responsibility to maintain and insure everything that is not the responsibility of the unit-holder. I was trying to turn that round so that commonhold associations would be clear about what was their responsibility.
The Minister said that the insurance will be either that of the unit-holder or that of the commonhold association. My concern is that commonhold associations will enter into many different types of agreement and that there will be no consistency. As a result, what should be insured by the commonhold association for the integrity of the whole of the unit-holders may be insured by the unit-holder who may not have adequate insurance, may not have paid the premium or may not be fully covered.
Who will check on that? The Minister's final equation was that the insurance cover of the unit-holder and the commonhold will cover 100 per cent. That is exactly the problem: it may not.
Lord McIntosh of Haringey: My Lords, with the leave of the House, paragraph 22 of the commonhold community statement specifies that everything falls under either the unit or the common parts, and that it is an obligation on every unit-holder to carry adequate insurance. It would not help if there were some different division between the unit-holder and the commonhold association.
4.15 p.m.
The Earl of Caithness: My Lords, there is the same onus on lessees now, but I can give the Minister examples in which lessees, although they have a positive covenant in their lease to say that they will insure to an adequate level, have not done so. That is precisely the burden of my argument. I want to turn the provision round, so that at least the commonhold association has the responsibility to maintain and insure the structure of the unit for everyone's benefit.
It is clear that the Minister and I will not agree. We are both trying to protect the unit-holders once a development is complete. The Bill as drafted does not achieve that, but perhaps we can meet between now and Third Reading to talk the matter through.
Lord McIntosh of Haringey: My Lords, with the leave of the House, all that the amendments would do is move the boundary; there would still be a boundary.
The Earl of Caithness: My Lords, so long as the boundary is clear and it is the commonhold association that maintains and insures all the structure I shall be satisfied. I am not satisfied at present. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 12 to 14 not moved.]
Clause 17 [Leasehold: residential]:
Lord Goodhart Lord Goodhart moved Amendment No. 15:
Page 8, line 18, leave out subsections (1) and (2) and insert—
"( ) No term of years absolute may be created in a residential commonhold unit—

(a) for a term exceeding 7 years;

(b) in consideration of the payment of a premium or other lump sum;

(c) which does not comply with such other considerations as may be prescribed."

The noble Lord said: My Lords, Amendment No. 15 would write into the Bill the requirement that no lease could be created in a residential commonhold unit for a period exceeding seven years, or in consideration of the payment of a premium. The only kind of tenancy that could be created would be a term at a rack-rent for not more than seven years.
I understand that the Government agree with the principle that there should be such restrictions. However, they take the view—principally on grounds of flexibility—that they should be imposed by regulation. I understand the advantage of flexibility, but I should like the Government to state what are their proposals for initial restrictions on the granting of leases on commonhold units in such regulations. If they are satisfactory, I shall not press my amendment. I beg to move.
Lord Kingsland: My Lords, this is another amendment that has been hotly disputed. I do not intend to repeat what I have said on at least five previous occasions. I agree with the noble Lord, Lord Goodhart, that whatever the Government decide is the appropriate term should be written into the Bill; but I disagree that the term should be limited to seven years.
Let us consider the arrangements for trustees, for example, in relation to absolute owners of land—freehold owners—which are far more generous. Fixed terms of seven years are far more restrictive than the terms allowed by Section 41 of the Settled Land Act 1925. Moreover, the trust of land in the Appointment of Trustees Act 1996, passed by a Conservative government, specifically provides that trustees of land shall have all the powers of absolute owners. The Bill does not deal at all with the leasing powers of trustees of land, nor does it spell out the consequences of granting an invalid lease for an innocent purchaser.
In Committee, the noble Lord, Lord McIntosh of Haringey, said, at col. 516 of Hansard of 16th October 2001, that setting out leasing restrictions in regulations allowed more flexibility and "tighter controls".
The trouble, as the noble Lord, Lord Goodhart, said, is that flexibility leads to uncertainty. Few, if any, would "buy to let" if the Government kept the power to clamp down on residential lettings in the future. The restrictions which they have in mind would give the unit holder fewer leasing powers than a tenant for life had under Section 6 of the Settled Land Act 1882.
Though I have not tabled an amendment to this effect, I came to the conclusion, as these debates evolved, that perhaps the best approach for the
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Government would be to follow the advice of the noble Lord, Lord Goodhart, and put the appropriate term on the face of the Bill; but to add to the seven years—or perhaps another rack-rent term—an alternative of 999 years. In other words, no lease less than 999 years could be created for commonhold holdings in the future; that would in effect be commonhold. Otherwise, only rack-rent leases would be allowed.
That would entitle a commonhold owner, if that owner wished, to rent out for a shortish period of time. At the same time, it would give the commonholder the freedom that freeholders have to lease their properties, but to require that lease to be no less than 999 years. That would remove the main objection to the freedom for commonholders to lease properties in the future; that is, a return to the bad old days of leases somewhere between rack-rent leases and 999 years, which would re-contaminate the system.
Baroness Scotland of Asthal: My Lords, I hope to be able to give the noble Lord, Lord Goodhart, the assurance he seeks. His amendment would put on the face of the Bill the rules about leasing, which we would find more conveniently placed, for flexibility, in the commonhold community statement. Amendment No. 15 replicates exactly the terms that we will put in the commonhold community statement.
An illustration of the difficulties we may face if we take another course is amply demonstrated by Amendment No. 15. The Government will be tabling some tidying-up amendments to Part 1 of the Bill at Third Reading. I mention that now, by way of example, as to why we believe that matters of detail ought to be kept in the regulations.
While developing the policy underlying this Bill, one of the important matters considered was the extent of the interest a leaseholder should have in the property before their consent to conversion should be required. It was decided that a lease granted for 21 or more years was substantial enough. That was not a period chosen at random, but as your Lordship will be aware, is, at present, the period which renders a lease subject to registration at the Land Registry. Though, of course, the period still to run might be less than 21 years at the time of the application to convert and the leaseholder might have bought only the last 10 years of a 21-year lease, it seemed to us to be a reasonable limit. We expressed that limit simply by saying at Clause 3(1)(a) of our Bill that consents should be required from registered proprietors of an estate in the whole or part of the land. That had the virtue of catching freeholders and leaseholders of registered leases without having to go into what would have been unnecessary definitions.
However, as many noble Lords will know, particularly the noble Lord, Lord Goodhart, Chapter 1 of Part 2 of the Land Registration Bill provides that leases be registered if they are for seven or more years.
Fortunately, the various parts of the department of my noble and learned friend the Lord Chancellor speak to each other and so this change was picked up before our Bill arrived on the statute book. One of the amendments to be tabled for Third Reading will sort that matter out.

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This is not a matter of detail. It is an essential plank of the development and conversion process. Only those with a substantial interest should be required to give their consent. But circumstances are changing. Fortunately, we were able to keep up with them before we ran the risk of confusion.
We shall be putting the limits for residential leasing in the commonhold community statement and they will be mandatory. But the seven-year maximum lease period was not chosen at random either. As your Lordships know, it was chosen because it is the time limit at which responsibility for repair and insurance to the property passes from the landlord to the tenant. But if, in the future, the market dictates that a different period of maximum lease length would be advantageous, we would want the flexibility to be able to react to that. It would be wrong unduly to tie our hands and make us reliant on finding parliamentary time to amend such things in primary legislation when regulations could be introduced speedily and easily.
The noble Lord, Lord Kingsland, would omit from the Bill any power to regulate the letting of residential leases. We regret to say that we cannot agree with him. Although we have tried to avoid the setting of too many regulations about commonhold, we are convinced that we should avoid the possibility that commonhold units be turned into just so many more long leasehold properties.
Much has been said during our debates on this Bill in your Lordships' House and elsewhere that the Government should have gone further than we have and forbid the development of new leasehold properties; and even to convert all current leaseholds into commonholds. Although, for the reasons we have given, we are not prepared to go that far, we certainly take the view that we should avoid the introduction of the long leaseholder traps into commonhold. That is what Clause 17 sets out to do. Without it, we would be powerless to do so. I therefore invite the noble Lord, Lord Goodhart, to withdraw his amendment.
Lord Goodhart: My Lords, I am grateful to the noble Baroness for that explanation. What she said was sufficient to satisfy us. I should say that on this issue we are fundamentally in disagreement with the noble Lord, Lord Kingsland. Our view is that commonholds should be designed as a form of collective ownership by those who have a real stake in the property. For that reason we should not consider allowing the re-creation of the long leasehold problem through long leases of commonholds. Therefore we would be strongly opposed to any provision that enabled leases to be granted at a premium or for a term of seven years. Certainly we would be strongly opposed to the proposal of 999-year leases being granted. That would mean that the freeholder, as a member of the commonhold association, for all practical purposes would have no interest whatsoever in the property. That would simply re-create all the problems of absentee landlordism and indeed in an aggravated form.
However, as we are satisfied with the Government's response, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
Clause 24 [Definition]:
[Amendments Nos. 17 and 18 not moved.]
4.30 p.m.
Clause 38 [Reserve fund]:
Lord Kingsland Lord Kingsland moved Amendment No. 19:
Page 18, line 18, at end insert—
"(3A) The assets of a fund established and maintained by virtue of this section shall be treated as monies reserved for future expenditure.
(3B) Any sums paid into a fund established and maintained by virtue of this section by a unit-holder, and any investments representing those sums, shall (together with any income accruing thereon) be held by the commonhold association on trust either as a single fund, or, if the commonhold association deems appropriate, as two or more separate funds.
(3C) The commonhold association shall hold any trust fund—

(a) on trust to defray costs incurred in connection with the matters for which the relevant contributions were payable (whether incurred by the commonhold association itself or by another person), and

(b) subject to that, on trust for the persons who are the contributing unit-holders for the time-being.

(3D) Subject to subsections (3F) and (3G), the contributing unit-holders shall be treated as entitled by virtue of subsection (3C)(b) to such shares in the residue of any such fund as are proportionate to their respective liabilities to pay a proportion of the levy set under subsection (2).
(3E) If the Secretary of State by order so provides, any sums standing to the credit of any trust fund may, instead of being invested in any other manner authorised by law, be invested in such manner as may be specified in the order; and any such order may contain such incidental, supplemental or transitional provisions as the Secretary of State considers appropriate in connection with the order.
(3F) On the transfer of a commonhold unit, the unit-holder shall not be entitled to any part of any trust fund, and any part of such trust fund which is attributable to relevant contributions paid in accordance with this section shall accordingly continue to be held on the trusts referred to in subsection (3C).
(3G) Any trust fund established under this section shall be exempt from any tax in respect of contributions made to it by the unit holders, whether (apart from this provision) a liability to tax may be imposed on the commonhold association or the contributing unit-holder."
The noble Lord said: My Lords, in moving Amendment No. 19 I shall speak also to Amendment No. 20. I refer first to subsection (3B) in Amendment 19. We think that the establishment of trust funds is appropriate, first, to protect the unit-holders in the event of the association's insolvency and, secondly, to prevent the misuse of funds.
Contrary to the Government's suggestion, these considerations apply to commonholds which may become insolvent—for example, if they find that they have a substantial uninsured liability for nuisance, such as tree root subsidence to neighbouring land. The potential creation of substantial distinct funds is important. In our view unit-holders would not want to build up a large sinking fund if they thought it might later be eroded by expenditure on other items of ordinary day-to-day expenses.
New subsection (3F) simplifies the transfer of commonholds and prevents commonhold associations having the burden of having to repeatedly collect money when units are sold. New subsection (3G) reduces the administrative burden and costs for commonhold and removes what could otherwise be a disincentive to having sinking funds.
I turn to Amendment No. 20 in Clause 40. The Government's position of requiring unanimity will be an effective block on the enlargement of commonhold, thus preventing the benefits of economies of scale. In addition, needing or requiring unanimity could allow a single unit-holder to hold all the others to ransom. I beg to move.
Baroness Scotland of Asthal: My Lords, Amendment No. 19 seeks to introduce into commonhold a form of fundholding developed for leasehold funds by Section 42 of the Landlord and Tenant Act 1987. The principal purpose of Section 42 was to establish a rule that funds held by the landlord or his agent for future works should be held in trust for the lessees.
As I mentioned in Committee, Section 42 was introduced to improve and standardise the manner in which service charges and sinking funds are managed while they remain in the hands of the landlord. There are two benefits of the statutory trust for leasehold service charges to leaseholders. First, money paid by tenants to the landlord or his agents is safe from creditors in the event of his or their bankruptcy or liquidation. Secondly, it ensures that the landlord or his agent is subject to the duties of a trustee and will therefore be liable for breach of trust if the money is misappropriated or not adequately safeguarded or invested.
Those considerations simply do not apply within commonhold. The commonhold association is a company whose members are those who pay the money into the funds. They appoint and dismiss the directors of the company. They approve the objects of expenditure and the setting of budgets and have absolute control over all aspects of the company under company law.
The directors who act on their behalf are bound by their fiduciary duty to act honestly and bona fide in the interests of the company, and are to act for the proper purposes as set out in the company's constitution and in accordance with any statutory duty. They are also subject to the sanctions available both under the Companies Act and the general criminal law. They must produce accounts and answer for their contents. The funds under Clause 38 are funds of the commonhold association to be established by the directors of the association in accordance with the commonhold community statement for the purposes specified by the Bill.
If a commonhold association decides, with regard to its particular circumstances and following appropriate legal advice, that it wishes to hold some or all of its funds on trust for any reason, then it may do so. We
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are not preventing that step being taken. However, as I explained, the purposes for which Section 42 was included in the 1987 Act simply do not apply in commonhold. It would be wholly appropriate for parts of that section to be replicated in the Commonhold and Leasehold Reform Bill.
In the event that a sinking fund were to be liable to meet a debt which is properly referable to it, it can be expected to pay, but otherwise it is protected until the CA is finally wound up. Clause 38(4) provides for the protection and Clause 55 releases the reserve funds at termination.
I turn to Amendment No. 20, tabled by the noble Lord, Lord Kingsland. The amendment would have the effect that a vote on whether to add land to a commonhold would be passed with 75 per cent of the members who vote on such a resolution voting in favour. That currently requires a unanimous vote; that is, all members who vote on the resolution must vote in favour.
We believe that certain significant functions of the commonhold association should be recognised as such by requiring those who compose a resolution to persuade all unit-holders who are voting on an issue that it is the right thing to do in the circumstances. In this case not only is there likely to be capital expenditure from the funds of the commonhold association or a need to borrow, but the associated cost of servicing any loan and ongoing costs of managing and maintaining the new land. Unit-holders may be asked for extra commonhold assessments to cover the cost of new facilities on the added land. In those circumstances, it seems to us that unanimity on our terms—namely, allowing a small number of concerned unit-holders to exercise an effective veto—is not an unreasonable hurdle for those making the proposal to get over. I ask the noble Lord to consider withdrawing his amendment.
Lord Kingsland: My Lords, I thank the noble Baroness for her reply. The difference of view here is an assessment about how commonhold associations are likely to behave in the future. Perhaps, because I am of greater age than the noble Baroness, I am somewhat more cynical about the conduct that is likely to manifest itself. However, I do not consider these to be appropriate matters on which to divide your Lordships' House. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 40 [Enlargement]:
[Amendment No. 20 not moved.]
Clause 69 [The right to manage]:
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton)The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton) moved Amendment No. 21:
Page 32, line 27, leave out from first "company" to end of line and insert "which, in accordance with this Chapter, may acquire and exercise those rights (referred to in this Chapter as a RTM company)"
The noble and learned Lord said: My Lords, in moving Amendment No. 21 I shall speak also to Amendments Nos. 25, 60, 68 and 69. The noble Lord, Lord Kingsland, has achieved what was not achieved throughout the whole of the House of Lords reform Bill when it passed through this House in a previous Session. As a result of this point being raised by the noble Lord, Lord, Kingsland, parliamentary counsel have finally been persuaded to change the wording grammatically. Instead of merely the words, "a RTM company", without reference to a longer definition, the Bill now indicates that there is a longer definition within the legislation thereby avoiding the grammatical problem identified by the noble Lord, Lord Kingsland.
The pack of cards has now collapsed, and we move on to "a RTE company", where the same approach is taken. I congratulate the noble Lord, Lord Kingsland, on persuading parliamentary counsel by his speech; none of the rest of us has ever succeeded. I beg to move.
Lord Kingsland: My Lords, I am grateful to the noble and learned Lord for bringing me that truly exciting news. I had begun to despair that parliamentary counsel would ever see that important problem of lexicography my way. I trust that the noble and learned Lord will now recommend to his leader that an amendment to the House of Lords Act 1999 is tabled to effect that change—and, perhaps, other changes as well.
Baroness Hamwee: My Lords, I welcome the amendment and congratulate the noble Lord. However, I hope that parliamentary counsel will not feel that they have satisfied all their obligations to consider amendments tabled by the Opposition Benches. That may be important, but it is perhaps not the most substantial of the amendments. While leaseholders may continue to question whether this Bill does all that they would like, I believe that they may be even more perplexed if they discover that this is the only amendment seen by counsel. I would not like to impugn the noble Lord in that regard.
On Question, amendment agreed to.
Clause 70 [Premises to which chapter applies]:
Lord Kingsland Lord Kingsland moved Amendment No. 22:
Page 33, line 8, at end insert ", and
(d) no part of the premises are let on a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies, provided always that planning consent has been granted for such business use or that deemed planning consent for such use exists."
The noble Lord said: My Lords, when this matter was last in Committee, the noble and learned Lord, Lord Falconer, said that his department had given it earnest consideration—and for that I am most grateful. Regrettably, despite no doubt many sleepless nights, the Government have still failed to produce a solution to this vexed question.
The problem with which the amendment is concerned is that of mixed developments where there are shops or offices on the ground floor with
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residential premises upstairs. I believe that there is general agreement that it is inappropriate for residents to have management of the commercial premises. Indeed, the noble and learned Lord said at Committee stage,
"I stress that under the Bill there would be no question of the RTM company becoming involved in the commercial relationship between the landlord and his business tenants".—[Official Report, 16/10/01; col. 540.]
I respectfully agree. A commercial tenant expects a professional landlord, not an RTM company run by residents. The difficulty is that the Bill, as framed, necessarily involves the RTM company making decisions which impact on the relationship between the landlord and the commercial tenants. Just about every major decision on the maintenance of the building, for example, will be a decision for the RTM company, not for the landlord.
As I understand it, the Government place great reliance on Clause 94(6)(a) to achieve their aim of separating out the commercial part of the premises. But I suggest that this clause will result in enormous demarcation disputes. When this matter was in Committee, I gave the example of approving the frontage of a shop and decisions on the hanging of signs outside. I asked whether matters of that sort would be for the RTM company or for the landlord. I listened in vain for any answer from the noble and learned Lord as to which side of the line such an issue would fall.
A particular problem to which the noble and learned Lord has drawn our attention, as did the noble Lord, Lord Whitty, when the matter was before your Lordships House prior to the election, was the risk of landlords changing the use of a small part of a block into commercial premises with the aim of escaping the right to manage legislation. Indeed, the noble Lord, Lord Whitty, was particularly concerned about that risk. He said that a broom cupboard suddenly becomes an office and an attic becomes a factory.
The noble and learned Lord, Lord Falconer, when the matter was in Committee this time, was perhaps more sanguine. He merely pointed to the dangers of a block being 99 per cent residential and one per cent commercial. In my submission the answer to these points is two-fold. First, the amendment I propose limits the exemption of commercial premises to those where planning permission has been granted or where there is an established user certificate. That avoids the concern of the noble Lord, Lord Whitty, to preserve broom cupboards as storage areas for brooms.
Secondly, the number of blocks where the commercial element is one per cent must be minuscule. Accurate statistics are somewhat hard to come by, but the number of properties which are excluded from the right to manage by the 25 per cent commercial hurdle is estimated to be about 10 per cent of all residential blocks. Excluding all these blocks is thus unlikely to be a practical problem.
We on this side of the House would like to see a workable solution to the problem of mixed developments, which have a vital role to play in urban regeneration. We need to encourage traditional corner

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shops. Yet if developers know that they run the risk of almost immediately having the right to manage taken away from the landlords, they will shy away from building developments with flats over shops. Until a workable solution has been found, surely the safest course is to exclude mixed premises from the right to manage. I beg to move.
4.45 p.m.
The Earl of Caithness: My Lords, I support my noble friend Lord Kingsland on this amendment. The right to manage mixed use property is a matter I have raised on a number of occasions during consideration of the Bill. It is not an area which many owners or developers want to become involved with even at the best of times. It is much simpler to have one commercial or residential unit. A mixed use development always has problems. It is therefore important that we get it right and do not deter the future provision of these very useful multi-use buildings. For that reason I support my noble friend.
Lord Falconer of Thoroton: My Lords, the noble Lord, Lord Kingsland, has spoken only to Amendment No. 22 and not to his Amendment No. 23 as well. I take his Amendment No. 24 to be consequential to Amendment No. 22. Amendment No. 23 is in the same group.
Amendment No. 22 is broadly the same as one debated on several occasions. As the noble Lord, Lord Kingsland, set out, its effect would be to exclude from the right to manage any mixed use property regardless of how small is the non-residential portion of the property.
As made clear by my noble friend Lord Whitty, and by myself in Committee, we have two reasons for being firmly opposed to this amendment. First, we consider it to be wrong as a matter of principle. The right to manage is designed to allow leaseholders who hold a majority of the equity in their block to take over the management of that block.
As explained previously, the 25 per cent threshold set by Schedule 6 paragraph 1 reflects that. Amendment No. 22 does not. It would allow the landlord to retain a monopoly over the management of the block even where a commercial unit accounts for no more than one per cent of the overall floor space. We consider that wrong and wholly contrary to the spirit of the right to manage. That point has nothing to do with the potential for either confusion as to where the line is to be drawn or abuse; it is simply concerned with the principle that the right to manage should be designed to allow leaseholders who hold the majority of the equity in their block to take over its management. That is what the principle reflects.
Our second objection is that the amendment opens up a major loophole which would allow unscrupulous landlords to put their properties outside the right to manage. We acknowledge that the noble Lord has listened to our concerns on this matter and that he has tried to accommodate them in bringing forward this
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revised version of the amendment. However, we believe that what is now proposed still gives rise to significant problems. I know that the noble Lord, Lord Kingsland, has made a close study of Section 23 of the Landlord and Tenant Act 1954 in framing his amendment. He will therefore know that the section defines what is a business tenancy for the purposes of the Act, and therefore for this amendment, and that the definition is rather vague. As the noble Lord will already know the definition, and because it is quite long, I shall not read the whole of it today. However, I shall remind the noble Lord of one aspect of it.
As he knows, the section covers not only units which have been let solely for business purposes but also premises which are used for business and other purposes. That includes units which are let primarily for residential purposes but which are also used without a breach of the terms of the lease for professional activities. A good example would be a childminder who has bought a flat as a home on a long lease but also uses it as a place in which to look after children. What is—I ask rhetorically—the noble Lord's intentions in such a case? Should it be caught by his amendment. In short, should the fact that one flat in the block is owned and used by a childminder mean that the whole block should be put outside the right to manage? We believe that the proposal would have that effect.
Furthermore, we believe that the amendment would encourage landlords to seek to let units on the basis that they could be used for both residential and professional purposes or to look for uses which it could be argued fall within the scope of Part II of the Landlord and Tenant Act 1954. We do not agree that the reliance on planning consent is particularly helpful. Rather, we believe that the whole approach will open up a grey area and grounds for dispute. Therefore, we do not accept the proposal made in Amendment No. 22 and ask the noble Lord to withdraw it.
Perhaps I may deal with the point relating to signs on shop fascias. The noble Lord rightly said that I had failed to deal with it in Committee. The short but unhelpful answer is that it will depend on whether the matter is covered by the commercial lease. If so, it would be for the commercial landlord. If not, it would be for the RTM company. That is our initial reaction and perhaps we need to reflect a little more on it, but it seems ultimately to depend on the purpose of the commercial lease.
In those circumstances, I ask the noble Lord to withdraw his amendment.
Lord Kingsland: My Lords, it is clear from what the noble and learned Lord has said, not only today but in Committee, that he believes that the solutions I sought to the problem have proved unworkable. Perhaps I may ask him a further question. Does he believe that there is a problem? It is clear that a central feature of town and country planning policy is the promotion of mixed development. It must follow that it is highly desirable to co-ordinate the law so that it assists mixed developments to be built around the country. Does the

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noble and learned Lord believe that the proposals in the Bill will inhibit mixed developments in the future? If he does, does he have a better solution than the one I have proposed?
Lord Falconer of Thoroton: My Lords, no, I do not believe that it would inhibit mixed developments. The noble Lord, Lord Kingsland, is right to say that, looking at developments as a whole, we would in planning terms want to encourage mixed development. We believe that it is an important policy aim.
We do not believe that the legislation would remotely discourage mixed development. It is an issue with which we have all wrestled during the course of the Bill. The department, the noble Lord and we believe that it is the best solution that can be devised.
Lord Kingsland: My Lords, I thank the noble and learned Lord for that reply. I am surprised that his department has concluded that the proposals will not inhibit mixed development. It is an area on which I have been most substantially and intensively lobbied by various interests. All of them take the view that the proposals will indeed inhibit mixed developments; but we shall see what happens. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Schedule 6 [Premises excluded from right to manage]:
[Amendment No. 24 not moved.]
Clause 71 [RTM companies]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 25:
Page 33, line 26, leave out "for the purposes of this Chapter"
On Question, amendment agreed to.
The Deputy Speaker (The Viscount of Oxfuird): My Lords, in calling Amendment No. 26, I must advise the House that "(2)(c) above" in the proposed new subsection (2B) as it appears on the Marshalled List should read "(2A) above".
Lord Kingsland Lord Kingsland moved Amendment No. 26:
Page 33, line 31, at end insert—
"(2A) The sum to which each member of an RTM company undertakes to contribute to the company's assets if it should be wound up whilst he is a member, or within one year after he ceases to be a member, for payment of the company's debts and liabilities contracted before he ceased to be a member, and of the costs, charges and expenses of winding up and for the adjustment of the rights of the contributories among themselves shall be the minimum sum, as defined in subsection (2B) below.
(2B)) The minimum sum mentioned in subsection (2)(A) above shall be the following amount, namely the greater of—

(a) the total service charge and rent payable by tenants in respect of the premises in the two years prior to the acquisition date, or

(b) twice the average service charge and rent payable in respect of the premises in the five years prior to the acquisition date,

in each case divided by the number of members of the RTM company."
The noble Lord said: My Lords, the purpose of the amendment is to ensure that RTM companies have sufficient working capital to meet the day-to-day problems faced by a management company. The Government propose that RTM companies should be companies limited by guarantee with each member of the company liable to contribute £1 to the company in the event of insolvency. In other words, RTM companies have effectively no start-up capital at all.
The problem to which I have adverted on previous occasions is that, like any small business, an RTM company needs some capital. If, for example, repair works exceed their estimate, the RTM company will need to be able to pay the builder. If a recalcitrant lessee refuses to pay his service charge, the RTM company will need to bring legal proceedings for recovery of the service charge. Without any capital, an RTM company will be inhibited by these everyday problems of property management.
In Committee, the noble and learned Lord, Lord Falconer, said that he could well appreciate concerns that the leaseholders who take over the management of the property should have the necessary funds behind them to do the job properly. That, I thought, was a promising observation. The noble and learned Lord continued by saying that the Government agreed and strongly encouraged them to do so. "Better and better", I thought! But the noble and learned Lord then brought me back to earth by saying that it was a matter for guidance and not for the face of the Bill.
The problem for this side of the House is to identify how guidance can actually assist in ensuring that RTM companies have sufficient capital to operate. The only way in which working capital can be assured is for members of the company to be under some legal obligation. The classic form of legal obligation would be for the members each to have a shareholding obliging them to put up a certain amount of capital. The Government, however, have set their face against RTM companies being companies limited by shares and insist that RTM companies must be companies limited by guarantee.
The reason, the Government say, is so that RTM companies can simultaneously be RTE companies. This amendment seeks to avoid that difficulty—if difficulty it really is—by making RTM companies those limited by guarantee. The other advantage of the amendment I propose is that the tenants will not, actually, have to put their hands in their pockets when they set up RTM companies. The obligation entered by a member of the company limited by guarantee is an obligation to pay in the event that the company becomes insolvent.
When the matter was originally debated, the noble Lord, Lord Whitty, was very concerned at lessees being priced out of the RTM market. This amendment avoids that risk. What the noble Lord, Lord Whitty, never addressed was the real problem of how to ensure adequate working capital for RTM companies. Neither has the noble and learned Lord, Lord Falconer, indicated what guidance may be forthcoming.
Both the noble Lord, Lord Whitty, and the noble and learned Lord, Lord Falconer, seem to want to appear in the somewhat unaccustomed role of good fairies who can wave their wands and ensure that all is sweetness and light, with RTM companies able to manage buildings without any need for capital reserves. While no doubt that will find them favourably placed when the auditions for the next "Harry Potter" film are held, for the rest of us, who have no hotline to the ministry of magic, I commend the amendment. I beg to move.
5 p.m.
Lord Monson: My Lords, the noble Lord, Lord Kingsland, has not spoken to Amendment No. 29, which is grouped with Amendment No. 26. Am I right to assume that Amendment No. 29 has been mistakenly grouped with Amendment No. 26, with which it appears to have no affinity, and should be in the next group which comprises Amendments Nos. 27, 28 and 65?
Lord Kingsland: My Lords, I am very grateful to the noble Lord. I had intended to speak later to that amendment and failed to spot that it was grouped as it is. Perhaps the noble and learned Lord will allow me to speak to it in the next grouping.
Lord Falconer of Thoroton: My Lords, of course. The point that the noble Lord raises in Amendment No. 26 is that people who wish to become members of an RTM company must agree to give a guarantee to the company that is equivalent to two years' worth of service charges. As ever, quite fairly the noble Lord referred to the argument advanced by my noble friend Lord Whitty. The answer is that it would price very large numbers of people who would want to join such a company—and, therefore, discourage RTMs—out of the market. We believe that that factor is sufficient to indicate that this is a bad proposal.
Perhaps we may look at the actual sums that would face those who wished to join RTM companies. We understand that the Association of Residential Managing Agents carried out a survey of its members three years ago to find out what might be considered to be a typical annual service charge. That survey found that a reasonable estimate for outside London was £800 a year and for inside London about £1,200 a year. While those are estimates, it means that the guarantee which would have to be provided by an individual before he could become a member of an RTM company would be approximately £1,600 to £2,400. Furthermore, if the noble Lord's amendment was accepted he would be asked to agree that this liability should be left to hang over him, with no indication of when, or even if, it would be called upon and how it would fit into the cycle of paying the mortgage and bills, feeding the family and so on.
Frankly, we believe that the prospect of such a liability would put all but the hardiest and wealthiest off the prospect of exercising the right to manage. We fully appreciate that the proposal of the noble Lord,
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Lord Kingsland, is not intended to be a disincentive, but that is what we believe it would be. We acknowledge that there is a need to ensure that the RTM company is properly funded, which is the foundation of the noble Lord's point, but we do not agree that it is right to address that in the way proposed.
The right to manage is granted on the basis that the leaseholders already hold the majority share in the property and, therefore, should be able to control how their assets are managed. As such we are allowing people to manage their own homes. We believe that that should be done in the same way as any other person is allowed to manage his own home, be it leasehold or freehold. We trust leaseholders as home owners to take sensible and informed decisions about how the block should be managed. Guidance will make clear to them that that will involve finding the money to look after their homes, and that may include the need for some kind of start-up capital for the RTM company. We are even prepared to look at that issue as part of the work on the company constitution, albeit without any commitment as to what may come out of it. But we cannot agree to the introduction of what is effectively a requirement on leaseholders to pay or undertake a liability to manage their own homes.
I hope that in the light of what I have said the noble Lord, Lord Kingsland, is prepared to withdraw his amendment.
Lord Kingsland: My Lords, I thank the Minister for his comprehensive reply. I feel a little like I did when responding to the debate on the previous amendment. I believe I am right in saying that the noble and learned Lord recognises that there is a problem here. I discern from his reply that he believes at least a partial solution to the problem may be found at a later stage in the making of the regulations. If I am right about that, the Minister is saying, yes, I have identified a problem but the solution that I propose is unacceptable.
I do not propose to take this amendment to a vote; but I hope that when the Minister's department comes to draft the regulations which touch on this matter it will give serious consideration to what lies behind my decision to table the amendment in the first place; namely, that sometimes RTM companies will have substantial financial responsibilities. One of the consequences of setting up such a company could be very substantial financial outgoings in future. Bearing that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 72 [RTM companies: membership and regulations]:
Lord Goodhart Lord Goodhart moved Amendment No. 27:
Page 34, line 5, leave out paragraph (b).
The noble Lord said: My Lords, in moving Amendment No. 27 I shall speak also to Amendment No. 65 which is consequential. There is a difference of principle between ourselves and the Government. We believe that leaseholders and a landlord may have conflicting interests, particularly at times when leases are reaching the end of their lives. In that situation the

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landlord will be concerned to maintain the capital value of the property, whereas the leaseholders will be concerned relatively to reduce their liability for maintenance of the building which they may not continue to enjoy.
We believe that these conflicting interests should be represented by having the leaseholders and landlord deal with each other at arm's length. After all, an RTM company will usually be formed because of dissatisfaction with the landlord. Under the existing legislation it must be shown that the landlord has misbehaved. Under this Bill it will not be necessary to prove any misconduct on the part of the landlord, but in practice that is likely to be the trigger. One of the objectives of the Bill is to spare leaseholders the necessity of proving misconduct which can be difficult and expensive. If they are unhappy with the management by the landlord they can take over the management themselves without having formally to prove misconduct. But it remains likely that a landlord who is looking after the premises properly and requires the payment of reasonable service charges will be left to run the building. After all, that is a time-consuming obligation and no doubt most leaseholders are perfectly happy to leave it to the landlord.
We believe that an RTM company should be a collective body for the leaseholders. The landlord, if he is not a member of the RTM company, will still have rights against the company if, for example, it fails to ensure proper maintenance of the building: even if the landlord is a member of the RTM company that will still be the case. The RTM company would then be at arm's length with the landlord. But we believe that formally it is better to have the landlord at arm's length with the RTM company, because if the landlord is a member of the RTM he will be able to interfere in the running of the company. A landlord who is a member of an RTM company and wants to be obstructive can easily take technical points on the internal management of the company—for example, the shortness of the notice of a meeting, the absence of a quorum, and so on—which he would not be in a position to take if he was not a member of the RTM company.
We accept that a landlord who is also a leaseholder of a lease under the property must be a member of the RTM company, but except in those circumstances the landlord should not have a right to be a member of the RTM company. That is likely to make the RTM company less efficient as a vehicle for management of the property on behalf of the lessees, which we believe is what it should be. That applies not only to the internal management of the company. It is possible that a particularly obstructive landlord might threaten to take proceedings for defamation about what was said in a meeting of the company. We believe that the company should not be inhibited by that kind of risk. I beg to move.
Lord Kingsland: My Lords, I rise to speak to Amendments No. 28 and 29. Amendment No. 29 was not included in this group, but the noble and learned Lord agreed that it could be.
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The question of the involvement of a landlord in the continuing management of the block is one where, when the matter was previously debated, your Lordships' House divided in three ways. We consider that a landlord who wants to exercise the right should have one seat on the board of directors. The Liberal Democrats take the view that a landlord should have no involvement in the management or in the RTM company. The Government suggest that the landlord should be a member of the RTM company but should not have an automatic right to a place on the board.
We consider that it cannot be right to exclude the landlord altogether. The landlord, after all, has some interest in the block. Where leases have only a short time to run, a landlord's interest in the building may be greater than that of the lessee. That interest should be expressed by giving the landlord some formal role in the management of the block.
The Government's position recognises the landlord's interest but seeks to meet it in an unsatisfactory manner. The Bill, as presently formulated, gives the landlord membership of the RTM company but gives him no further rights. Membership of the RTM company gives the member a right to attend the annual general meeting of the company and any extraordinary general meetings which may be held. It gives a right to receive the accounts. They would be available from Companies House in any event. It also gives him the duty to contribute the sum of £1 to the RTM company on its insolvency.
We do not consider that those provisions adequately recognise the landlord's interest in ensuring the proper maintenance of the block of which he owns the reversion. When the matter was in Committee the main philosophical difference discussed was an issue as to residence requirement. We suggested then that the right to manage was one which should be given to residents and not to non-residents. The Government's response was that it was illogical to give non-resident landlords the right to take part in the management of a block. We have now dropped our support for a residence requirement for tenants who wish to exercise the right to manage. Accordingly, this illogicality—if such it was—drops away.
The only issue then is whether mere membership of the RIM company gives the landlord sufficient status. It seems to us that it does not. Landlords who want one should be entitled to a place on the board of directors. Many, particularly where the reversion will not fall in for many years, will not want to take up that right. Your Lordships will note that a directorship is unpaid unless a service contract is entered into between the company and the director. Thus a landlord would have no immediate financial incentive to take up a directorship.
Baroness Hamwee: My Lords, we cannot support Amendment No. 29, to which the noble Lord. Lord Kingsland, has just spoken, for the reasons given by my noble friend with regard to shareholders. Indeed, it would compound the position. That concerns us. As my noble friend said, there is a relationship between

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the landlord and the RTM company which is quite separate from that of co-shareholders in a company and that among a board of directors and between directors and shareholders.
We expressed our concern that as shareholders at meetings would be able to use procedural matters to more than procedural advantage, that would be available, perhaps in spades, to an unco-operative, unhelpful landlord by using his position as director. Can the Minister confirm that a landlord who, as an individual—I am not quite sure how the amendment works where the landlord is not an individual, but that is perhaps being picky—is helpful and constructive and can make the RTM company work well, will be eligible to be elected as a director by the shareholders?
5.15 p.m.
Lord Falconer of Thoroton: My Lords, under the present arrangements, yes, he could be. It would be a matter for members to decide who they want as a director. If the members want the freeholder, assuming he is an individual, to be a director, it would be open to them to elect him. The noble Lord, Lord Kingsland, did not deal with Amendment No. 28. Amendment No. 27, tabled by the noble Lord, Lord Goodhart, takes away the right of landlords to be members of the RTM company. Amendment No. 65, which is in the same group, does likewise for a company which is both an RTM and an RTE company.
We have listened carefully to the arguments put forward by the noble Lord, Lord Goodhart, today and in both previous Committee stages. For the reasons that we gave on both those occasions, unfortunately, we remain unpersuaded by his arguments. The right to manage is intended to redress the imbalances caused by the leasehold system. We do not want to create one imbalance while seeking to remedy another. That is precisely what the amendment of the noble Lord, Lord Goodhart, would do.
The arrangements for membership of the RTM company are based on the principle that everyone who has a significant stake in a property should be able to have a say in its collective management. That means that a landlord with a minority stake in the property will no longer be able to exercise a monopoly control over its management. However, it also means that we cannot disregard that minority stake. To do so would be to move from an unjustified monopoly on the part of the landlord to an equally unjustified monopoly on the part of the leaseholders.
The noble Lord, Lord Goodhart, argued in Committee that the landlord is likely to be a disruptive member of the RTM company. He repeated that argument today. He frequently said that the circumstances in which the right to manage would be exercised would be where there was difficulty or problems with the landlord. We believe that that presumption is both an unfair generalisation and inappropriate in this context. This is, as the noble Lord knows, a "no fault" right. There is nothing which requires the acquisition of the right to be in any way
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tied to the previous or projected future conduct of the landlord. To suggest, as is implicit in this amendment, that the landlord cannot ever be trusted is effectively to pronounce him guilty from the start, and guilty without any opportunity to be proved otherwise. We recognise that any member of the RTM company may want to try to be obstructive. That needs to be taken account of in the overall RTM framework. It is for that reason that we intend to make voting rights in the company properly proportional to interest in the property, as embodied in the draft constitution which noble Lords have already seen. That will stop any obstructive minority from being able to block the working of the company. We cannot accept the amendment and therefore we ask the noble Lord to withdraw it.
Amendment No. 29 was spoken to by the noble Lord, Lord Kingsland. It allows the freeholder to appoint at least one of the directors of the RTM company. The noble Lord referred to the circumstances in which the freeholder might have a substantial share in the property. He said that that was the way that those interests can be safeguarded. He will, of course, be aware that for the right to manage to be acquirable for a property, the freeholder of the property will necessarily have a minority interest in the property. We are therefore somewhat confused as to why that minority interest should enjoy special treatment through being able to appoint a director. Why, for example, are the individual leaseholders not also able to appoint a director each in the interests of safeguarding their own individual interests? What about intermediate landlords? Surely if the noble Lord wishes to ensure that everyone's interests are properly looked after, he should extend the amendment to allow every person who has an interest in an RTM property to appoint at least one director. As I am sure the noble Lord recognises, that would be unworkable, but at least it would be fair and equitable under this proposed approach.
We acknowledge, of course, that the freeholder will be only one RTM company member against many. If he or she holds a minority view, he or she will lose a vote. The same will, of course, apply to an individual leaseholder who holds a minority view. That is democratic property management. As I have said, we can see no reason why a freeholder with a minority view is deserving of preferential treatment when compared to a leaseholder with a minority view.
That said, it is important that everyone—including the freeholder—has proper rights to safeguard their interests. As has been explained on a number of occasions, the Bill already provides for that. All affected parties can challenge mismanagement and can seek to have the RTM company removed as manager. Amendment No. 55, which we shall come onto later, supplements that.
We therefore do not agree that Amendment No. 29 is either justified or necessary. We hope that the noble Lord will not press the amendment.
Lord Goodhart: My Lords, I regret that, even at this late stage, the Government are not willing to accept the

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view we have put forward that the landlord has no place on an RTM company, and that the RTM company should be a body which collectively represents the lessees and acts at arm's length with the landlord. However, I do not intend to divide the House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 28 and 29 not moved.]
Clause 74 [Long leases]:
Lord Goodhart Lord Goodhart moved Amendment No. 30:
Page 35, line 5, leave out "21" and insert "7"
The noble Lord said: My Lords, in moving Amendment No. 30,I shall speak also to Amendments Nos. 31 to 33.
This group of amendments deals with the situation where the property is subject to a series of leases and under leases. The head lease may, for example, be held for a term of 99 years; that may be subject to a sublease for a term of 21 years, which in turn is subject to a further sub-lease for a term of 10 years. As between those three leaseholders, the question is who should be the member of the RTM company. We believe that the member should be someone who is reasonably close to being in actual occupation of the property.
We accept that it would be inappropriate for the member of an RTM company to be someone who was there under a rack-rent, short-term lease because, for instance, he or she would have no continuity and it is likely that there would be continuing and frequent changes in the membership of the RTM company. It is also doubtful whether someone who was there on a rack-rent, short-term lease would be able to exercise proper judgment on issues such as the long-term maintenance of the structure of the building.
However, the member of the RTM company should be reasonably close to occupation; he or she should be at the bottom of the chain, and therefore the most likely to be in actual occupation, unless there is a short-term lease below that. The Government state that the dividing line should be 21 years; that anyone with a lease for 21 years or less should not be a member of the RTM company; that the member of the RTM company should be whoever holds a lease for more than 21 years; and, if there is a chain of leases and subleases, it should be the person lowest down the chain who has been granted a lease for a period of more than 21 years.
We believe that the appropriate period should not be more than 21 years but more than seven years. The Government said in response to this amendment previously—it is a perfectly fair comment—that the question of where the dividing line should be drawn is not one to which you can provide an exact and obviously correct answer; that there is a grey area. But the Government argue that a 21-year period is particularly appropriate because that is the point at which—I assume it to be correct—in general, the value of the reversion begins to exceed the value of the freehold.
We do not believe that that is in itself a serious justification for choosing a 21-year period. We believe that the proper person should be the one at the bottom of the chain, provided that he or she holds a lease for more than seven years, on the ground that anyone holding a lease for seven years or less is unlikely to be concerned particularly with the long-term good of the building. We believe that seven years rather than 21 years is the appropriate cross-over point.
We are reinforced in this argument by what the noble Baroness, Lady Scotland, said in dealing with the commonhold part of the Bill. She said that the Government had decided that the appropriate maximum length of a lease permitted on commonhold property would be seven years. That ties in with the provision in the proposed new Land Registration Act which, when it comes into force, will make seven years the cut-off point between leases which are registrable and leases which are not.
A lease for more than seven years gives a significant interest in a property. As the amendment suggests, this should be recognised by making a long lease for the purposes of the RTM section of the legislation a lease for more than seven years. I beg to move.
Lord McIntosh of Haringey: My Lords, we have rehearsed this argument on a number of occasions—which is perfectly legitimate; I am not complaining—and the noble Lord, Lord Goodhart, is aware that we do not support the amendment. We believe that it is correct to make this right available essentially to those categories of leaseholders who have acquired a substantial long-term stake in the property, and 21 years has been accepted to be the correct threshold for those purposes. It is accepted, for example, in the Leasehold Reform Act 1967 and in the Leasehold Reform, Housing and Urban Development Act 1993; it is the definition of a long lease. The noble Lord, Lord Goodhart, described that period as the point at which the value of the reversion begins to exceed the value of the freehold.
These amendments seek to open up the right to manage to those with leases granted for more than seven years. That is what the noble Lord, Lord Goodhart, called—I listened carefully to his speech—a significant interest in premises.
I understand the noble Lord's point, but I have to disagree. Someone who holds a seven-year lease on a flat will hold a minority stake in the property as a whole. He will certainly hold a lesser stake in the property than the landlord. Our view is that someone with a seven-year lease will not have a direct or, to use the noble Lord's word, significant interest in the property but a minor and rather short-lived one.
The main aim behind the right to manage is to redress the balance where a landlord holds a monopoly over the management of a property but only has a minority share of the equity. The amendment moved by the noble Lord, Lord Goodhart, would turn this argument on its head. The right would, instead, allow leaseholders who hold a minority share in the property to take over the management from the landlord who

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holds a majority share of the equity. We cannot agree that that would be right. It might even be contrary to the European Convention on Human Rights.
It is not relevant to say, as the noble Lord, Lord Goodhart, did, that under the Land Registration Act seven years is the period for registration on the basis that, for some purposes, that has been so for some time and it is a matter of practicality that the Land Registry now thinks that it can make it the period of registration for all purposes. It is hoped in future to reduce the period to two or three years. I do not know whether that would influence the noble Lord's judgment. It does not matter when registration occurs. It is not even relevant to talk about what happens in the commonhold part of the Bill, because in commonhold there is no landlord whose rights must be judged against the rights of the leaseholders. The important fact is that a lease of less than 21 years is still a minority interest in the property, and it would not be right for that to be recognised in this part of the Bill.
5.30 p.m.
Lord Goodhart: My Lords, I regret that we and the Government are still at odds on this issue. It seems to us that it is desirable in principle that, as far as possible, management should be in the hands of those who live in a property. We recognise that it is inappropriate in the case of rack-rents or short-term leases, but we believe that seven years is the appropriate dividing line. However, it is clearly not possible to change the Government's mind. Once again, I do not intend to press the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 75 [Long leases: further provisions]:
[Amendments Nos. 31 to 33 not moved.]
Clause 76 [Notice inviting participation]:
Lord Kingsland Lord Kingsland moved Amendment No. 34:
Page 36, line 41, at end insert—
"(3A) Regulations shall prescribe that a notice to participate shall include, or be accompanied by, a prescribed statement setting out the principal responsibilities and obligations which the company will assume as the manager of the premises and setting out in particular the relevant provisions of the service charge residential management code made by the Royal Institution of Chartered Surveyors or such other code as may be approved by the Secretary of State under the terms of section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 (c. 28)."
The noble Lord said: My Lords, this modest amendment is designed to ensure that the tenants who want to form RTM companies know what their obligations as managers of blocks are. The Government's response to the proposal in Committee was mixed. The noble Lord, Lord McIntosh, said:
"We want the leaseholders to be aware of what they are taking on, but we do not want to overburden them with requirements that have to be met before they can acquire the right. We certainly do not want to put in place subjective requirements which will open up scope for dispute".—[Official Report, 16/10/01; cols. 576–577.]
Thus the Government seem to accept that it is a good idea for tenants to be told what best practice in managing blocks is, but they are concerned that there
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should not be any scope for dispute about whether the requirement for the service of suitable information has been met.
We hope that this re-formulated amendment meets the Government's objections. The regulations that the amendment envisages will provide for an information leaflet to be enclosed with a notice inviting participation. By providing for regulations to be made prescribing the contents of such an information leaflet, the scope for any dispute about subjective requirements is obviated. So long as the leaflet is served, that is the end of the matter. The tenants know what they are letting themselves in for and the requirements of the provision are met.
I cannot leave this topic without referring briefly to my one success in Committee in persuading the Government to adopt an amendment. This was an anti-technicality provision. Under the Government's original proposals a failure to serve even one flat with a notice to participate in proper form would have vitiated the entire exercise. I suggested that this was not sensible and, much to my astonishment, the noble Lord, Lord McIntosh, agreed. The Government will, no doubt, ensure that the anti-technicality provisions will extend to cover an accidental failure to serve the notice that is provided for. I beg to move.
Lord McIntosh of Haringey: My Lords, this amendment is an old favourite as well. I thought that we had reached a reasonable degree of agreement about this matter. As I explained in Committee, we agree with the thrust behind the amendment but we do not agree with its form. We see merit in ensuring that those who are invited to take on the right to manage are properly made aware of what that will involve. We intend to look carefully at how that might be done in regulations, using the power granted under Clause 76(3) of the Bill. I can give the noble Lord the firmest of assurances that we will do that.
However, we do not want to write a provision on to the face of the Bill. We certainly do not want to do so in terms of this amendment. As we have said previously, with all due respect to the Royal Institution of Chartered Surveyors, its code of practice is a red herring for these purposes. The management responsibilities of an RTM company do not derive from that or from any other approved code of practice, but rather from this Bill and from the leases of the property.
The approved codes of practice will, of course, have an important role to play. The RTM company will be expected to follow the provisions of the code, and failure to do so will be one of the grounds on which it will be possible to seek the replacement of a company under Part II of the Landlord and Tenant Act 1987. In that respect, the RTM company will be no different to landlords who govern outside the Bill.
Given that role, we see no objection to the invitation to participate drawing attention to the general expectation that the RTM company should follow the relevant code. However, we see no advantage in repeating individual provisions of the code in the

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invitation; nor do we find the concept of "relevant provisions" helpful. Surely the RTM company, and indeed any manager, should comply with the code as a whole, in which case all the provisions would be relevant and the whole code would need reproducing.
We continue to agree with the noble Lord, Lord Kingsland, that the invitation to participate has a role to play in highlighting what it will mean to acquire the right to manage. But we do not wish to tie ourselves to a form of words at this stage. We prefer to seek views on what the correct form of words might be—in both content and clarity—as part of the wider consultation to which we have committed ourselves on RTM regulations. We then intend to use our regulation-making powers to put an appropriate requirement in place.
The noble Lord, Lord Kingsland, referred to his amendment at Committee stage. That was then Amendment No. 122, which proposed that a failure to serve notice of invitation should not in itself invalidate a claim notice. It is for that reason, as the noble Lord recognised, that we have brought forward Amendment No. 35. I hope that the noble Lord will not seek to press his amendment.
Lord Kingsland: My Lords, I shall not seek to press the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 35:
Page 37, line 16, at end insert—
"( ) A notice of invitation to participate is not invalidated by any inaccuracy in any of the particulars required by or by virtue of this section."
The noble Lord said: My Lords, this is the amendment to which I have just referred, which was inspired by the noble Lord, Lord Kingsland. I am glad to have the noble Lord's attention.
The House will recall that the noble Lord's Amendment No. 122 in Committee proposed that a failure to serve notice of invitation to participate correctly should not in itself invalidate a claim notice, provided that enough people were members of the RTM company at the time the claim notice was served to make that notice valid. As I said in Committee, we think that this is an excellent idea. That is why we have brought forward Amendment No. 35.
The amendment provides that a notice of invitation to participate in the right to manage is not invalidated by any inaccuracy in the information that must be included in that notice. Clause 80(1) makes similar provision for the RTM claim notice. It will mean that a claim notice cannot be thrown out because the company has made an error in its earlier invitation to participate.
I should have said at the beginning that I shall speak also to Amendment No. 67, which makes the same provision for the invitation to participate for collective enfranchisement.
We are grateful to the noble Lord, Lord Kingsland, for inspiring the amendments. He will no doubt want to know what happened to the original Amendment No. 122. When we sat down to prepare our own amendment, it became apparent that what we were seeking to do could have an unfortunate side-effect if taken by itself. Let us assume that an RTM company is established which, from the outset, has sufficient qualifying tenants as members to be able to serve a valid claim notice. If a claim notice was not invalidated by a failure properly to serve the invitation to participate, such a company could not be penalised for making its claim without serving any invitations to participate. I am sure that the noble Lord agrees that that would be undesirable.
We have already discussed in Committee the role of the invitation in alerting leaseholders to what the acquisition of the right to manage will entail. We have undertaken to make appropriate use of our powers to prescribe the further contents of the invitation to participate to address that. In the light of that, it is essential that we do not open up a loophole that could allow an RTM company to get away with serving no invitations. I beg to move.
Baroness Hamwee: My Lords, I wanted the noble Lord, Lord Kingsland, to have his moment of glory before I rather churlishly intervened with a question, but he has urged me to ask my question. I appreciate that the same point arises on Clauses 79 and 80, to which the Minister has just drawn our attention.
I do not oppose the provision, which is a fairly standard one, but its extent is not entirely clear to me. Will the Minister confirm that a misleading inaccuracy would not be covered by the provision? I have in mind inaccuracies in such details as the address of the premises or, in the later clauses, an estimate of the price that is referred to among the particulars. If those details are wildly wrong, would that so go to the heart of the issue as to invalidate the notice of invitation to participate?
I am also unclear about whether Clause 76(5) falls within the provision, or whether it just extends to Clause 76(2). I apologise for not having given notice of those questions.
Lord Williams of Elvel: My Lords, in spite of the inspiration of the noble Lord, Lord Kingsland, I join the noble Baroness, Lady Hamwee, in having some questions about the amendment. The noble Baroness has cited some ways in which the notice of invitation to participate might be misleading, to which I might add errors in specifying the place at which the articles of association may be inspected so that no one could get to see them. If the notice was wholly inaccurate in many respects, surely it could not be a proper notice of participation.
Lord Kingsland: My Lords, I am much obliged to the Minister for his magnanimous comments about my contribution to the draft that the Government have

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decided to include in the Bill. I hope that that concession will characterise the second half of our proceedings.
5.45 p.m.
Baroness Gardner of Parkes: My Lords, I think that it is in order for me to ask a question. Does Amendment No. 67 cover a different issue? It seems to come in the section about leasehold collective enfranchisement rather than the right to manage. Am I correct in thinking that? If so, I should like to comment on Amendment No. 67.
Lord McIntosh of Haringey: Yes.
Baroness Gardner of Parkes: My Lords, in that case I have a question. If someone wishes to enfranchise collectively—not even in the case of a single house—is there no obligation on the person from whom they are enfranchising to tell them whether the properties are under a management scheme or any type of restrictive covenant? What information on their future obligations is provided to people who are about to enfranchise a house or a flat collectively?
I ask that because the point has been raised by people who tell me that only after going through the whole enfranchisement procedure and receiving their freehold documents have they been given a list of restrictions to be imposed on them. That seems unfair. Someone who is to be subject to a special management scheme, particularly from the former freeholders of the property, should be told in advance. That might relate to Amendment No. 67 and we could discuss it again when we reach that amendment.
Lord McIntosh of Haringey: My Lords, I shall respond to the noble Baroness, Lady Hamwee, the noble Lord, Lord Williams of Elvel, and the noble Baroness, Lady Gardner. The first point raised by the noble Baroness, Lady Hamwee, was about misleading information. I am advised by my noble and learned friend Lord Falconer that fraud unravels all. In other words, if the information is deliberately misleading, it cannot stand under any circumstances. The question then arises as to whether it is inadvertently misleading. Clearly, to some extent any wrong information under the clause could be inadvertently misleading. The question is whether it is sufficiently misleading as to cause difficulty.
The amendment is restricted to the items in the notice that are included in Clause 76, but that includes the items in subsection (5). The amendment refers to "this section". There must be a point at which an inaccuracy becomes so misleading as to invalidate the notice, but similar phraseology has been used in legislation on many occasions and I have no doubt that in the end the courts will resolve whether an inaccuracy is misleading enough, inadvertently, to cause damage to the notice. I shall write to noble Lords about that before the next stage and to the noble Baroness, Lady Gardner, who has raised an interesting point about Clause 120.
On Question, amendment agreed to.
Clause 77 [Right to obtain information]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 36:
Page 37, line 22, leave out "in connection with the making of a claim" and insert "for ascertaining the particulars required by or by virtue of section 79 to be included in a claim notice for claiming".
The noble Lord said: My Lords, I shall speak also to Amendment No. 37. The noble Lord, Lord Kingsland, has truly been a bountiful source of inspiration this afternoon. Once again, these amendments have been inspired by his arguments in Committee.
As the noble Lord and others no doubt recall, Clause 77 gives RTM companies rights to obtain information that they need for the purposes of claiming the right to manage. The noble Lord, Lord Kingsland, argued that the right, as it stands, is drawn too broadly. We reflected on that sensible argument and are persuaded that there is merit in clarifying the application of the clause. Amendment No. 36 makes it clear that the power granted by the clause may be used only to obtain information that the RTM company is required to include in the claim notice by virtue of Clause 79. That is similar to Amendment No. 113, which stood in the name of the noble Lord, Lord Kingsland, at the Committee stage. Amendment No. 37 is consequential as the clause will now follow the requirements imposed by Clause 79. It makes more sense for this clause to stand after Clause 79, to make the revised provisions easier to follow. I beg to move.
Lord Kingsland: My Lords, I thank the noble Lord for the compliment he paid this side of the House and I reflect, admiringly, on his wisdom.
On Question, amendment agreed to.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 37:
Transpose Clause 77 to after Clause 80.
On Question, amendment agreed to.
Clause 79 [Contents of claim notice]:
Lord Kingsland Lord Kingsland moved Amendment No. 38:
Page 38, line 35, at end insert—
"( ) It must include an offer of cover to provide for the RTM company directors' and officers' liability insurance, fidelity guarantee and professional indemnity insurance."
The noble Lord said: My Lords, the problem of handover troubled your Lordships repeatedly in Committee, on Report and at Third Reading during the previous passage of the Bill. Any landlord of a block is likely to have in place a number of contractual arrangements, from something as simple to employing a residential caretaker to retaining a building firm to undertake major structural works.
In Committee, before the general election, the noble Lord, Lord Whitty, indicated that he would seek greater clarification of transitional arrangements for the handover of contracts. The Bill has not taken matters any further than the measure that was presented to the House before the general election.

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Some provision needs to be made. The noble and learned Lord, Lord Falconer, said that normal contract law would apply. It is anything but clear what normal contract law will produce. The Government rejected a proposal from my noble friend Lord Caithness, which we supported, that there should be a form of statutory frustration in such contracts when the lessees exercise the right to manage.
Under normal contract law, a contract will be frustrated only if an event occurs that the parties could not reasonably have foreseen. However, certainly after contracts entered into after the Bill becomes law, that will never he the case. Any landlord and any contractor with a landlord will be aware of the possibility of the tenants exercising their right to manage.
Lord Goodhart: My Lords, I am sorry to interrupt the noble Lord but he appears to be moving Amendment No. 44.
Lord Kingsland: My Lords, that is not so—for reasons that will become evident. I ask the noble Lord to be patient.
One solution might be a form of a statutory novation of any contract between contractors and landlords, so that the RTM company would automatically take over the contractual obligations from the landlord. The Government have set their face against such a provision. There are serious practical difficulties with such a novation—not least, that building contractors may be unwilling to have a new, possibly inexperienced and undercapitalised employer, foisted upon them.
Since RTMs will have no share capital, builders may be unwilling to allow the contract to be moved and simply walk off site. Moreover, the RTM company will be coming completely fresh to any project in progress. Admittedly there are provisions in the Bill for information to be transferred between the landlord and the RTM company; but anyone who has been involved in building works knows that it is almost impossible to take them over mid-flow.
As the Government are not willing to entertain detailed provisions for how and when existing contracts should be transferred or otherwise dealt with, the only practical solution is to allow reasonable time for existing contracts to be run off and for sensible handover arrangements to be made. Six months would ordinarily be a suitable period. One month is inadequate. Nonetheless, there may be cases where a shorter period would be appropriate, such as when urgent works are needed and it is sensible that the RTM company undertakes them rather than the landlord. The amendment gives the company the option to request an earlier handover date, with the Leasehold Valuation Tribunal left to decide in a dispute.
I appreciate that tribunals are currently overworked and that steps would need to be taken to ensure that they decide handover dates quickly. Nonetheless, steps are currently being taken to appoint additional
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chairmen. In any event, it would not be difficult to devise a fast-track system to determine the issue. I beg to move.
Lord Falconer of Thoroton: My Lords, I venture to suggest that speech had nothing to do with Amendment No. 38, which is about liability insurance, but with Amendments Nos. 39, 40 and 41—and It has a connection with Amendment No. 44. The noble Lord was talking about handover arrangements, including what happens to a contract, and was saying that more time than one month is required—not just in connection with the specifics of Amendment No. 39 but also with the transfer of contracts. The same point was made by the noble Lord in Committee, where his alternative to transferring contracts was to make the time allowed six months.
Lord Kingsland: My Lords, I am much obliged to the Minister.
Lord Falconer of Thoroton: On that basis, I shall speak not to Amendment No. 38, because in effect the noble Lord was addressing Amendments Nos. 39, 40 and 41.
I hope that the noble Lord will be pleased to know that we are sympathetic. When he spoke to the comparable amendments in Committee, he referred to the arrangements for handing over management responsibilities and contracts in particular He advanced similar arguments today. We have reflected on the noble Lord's remarks and are persuaded that there is a need for some movement.
The Bill provides in a number of places for the acquisition of the right to manage to take place a minimum of one month after the date on which it becomes apparent that the right will definitely be acquired. A longer period could apply if the RTM company wishes but it is not unreasonable to assume that one month will apply in many cases.
The gap between determination and acquisition serves a number of purposes. One is to allow for a period of negotiation over contracts following the service of the notices provided for in Clauses 89 and 90. Other amendments propose alternative approaches to contracts, so I will not dwell on that issue.
The noble Lord, Lord Kingsland, suggested that one month is not long enough for the purposes of sorting out contracts and invited me to,
"reflect on introducing a longer period of notice than that suggested in the Bill so that at least parties will have an opportunity to consider a whole range of options".—[Official Report, 22/10/01; col. 847.]
We have duly followed that advice. On reflection, we found that the noble Lord—the inspiration for much of today's proceedings—was right. One month is undoubtedly not long enough. By the time notices are sent, received and responded to, the first week of the month would probably have been lost.
We are not initially attracted to a period as long as six months, which could create problems of its own. We propose to take the issue to those who deal with

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such matters in the outside world, to seek their views on how long might be needed. That will allow us to bring forward an appropriate amendment in another place.
We shall be happy to involve the noble Lord, Lord Kingsland, and, indeed, any other noble Lord in our discussions on this issue. We shall certainly let noble Lords who do not wish to be involved in the discussions know the outcome. Therefore, we accept the principle which lies behind the noble Lord's amendment and shall look very carefully at how we might amend the Bill in another place in order to address this important matter. I hope that, in the light of the undertaking to bring forward an amendment in another place, the noble Lord will be content not to press his amendment at this time.
Lord Kingsland: My Lords, the noble and learned Lord will not be surprised to hear that I am most grateful to him for his response. I shall certainly take the opportunity, as and when he gives it to me, to talk to him again about the details of the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 39 to 41 not moved.]
Clause 82 [Counter-notices]:
6 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 42:
Page 40, line 30, leave out from "given" to "in" in line 32 and insert "agrees, or the persons by whom the counter-notices were given agree,".
The noble Lord said: My Lords, in moving Amendment No. 42, I wish to speak also to the long list of other amendments which appear in this group.
This group should properly be known as the "Law Society group of amendments". Peers will recall that in Committee the noble Lord, Lord Goodhart, tabled several amendments on behalf of the Law Society. We agreed to consider a number of them and also offered to meet to discuss some further Law Society amendments which it had not been possible to table in time for the relevant Committee day. That meeting duly took place. Sadly, neither we nor the noble Lord, Lord Goodhart, were able to be present. However, I understand from officials that both sides found the discussions highly productive.
This group contains the Law Society-inspired amendments which relate to the right to manage. I should also acknowledge that some amendments in the group were inspired by earlier queries raised by one member of the Law Society's delegation, Philip Freedman of Mishcon de Reya. We are grateful both to him and to all Law Society members who have taken an interest in the Bill.
I shall speak as briefly as possible to each amendment. Amendment No. 43 is required to ensure that a claim for the right to manage is not struck out accidentally because a landlord withdraws his
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objections to the acquisition of the right to manage after an application to the leasehold valuation tribunal is made on the issue. If that were to happen, logically we should expect the RTM company to withdraw its application to the LVT as there would no longer be a need for adjudication on the matter. At present, the withdrawal of the LVT application would cause the whole RTM claim to be deemed to be withdrawn. That is not what we would want in those circumstances. Amendment No. 43 puts that matter right, and Amendment No. 42 is consequential to it.
Amendments Nos. 46 to 52 all ensure that a request for information, documents and so on under Clause 91 must be made by giving a notice to the relevant person. By virtue of Clause 109(1), such a notice, and, indeed, any other notice given under this Chapter of the Bill, must be made in writing.
Amendment No. 54 clarifies that the landlord must be given 30 days' notice where the RTM company proposes to grant approval for structural alterations. As the noble Lord, Lord Goodhart, pointed out in Committee, it is not at all clear that that is already covered by the general reference to improvements in Clause 96(4)(a). We had always envisaged that alterations would be covered by that provision and, therefore, we are happy to make properly clear that that is the case.
Amendment No. 55 allows a leasehold valuation tribunal to make an order for the cessation of the right to manage. As, I believe, my noble friend Lord McIntosh explained in Committee, it is already possible to seek the replacement of an RTM company under Part II of the Landlord and Tenant Act 1987. Paragraph 8 of Schedule 7 makes such variations as are required for that right to be properly applicable where an RTM company is the manager of the premises in question.
This amendment makes a further variation to Part II of the 1987 Act so that an LVT can be asked not only to make an order appointing a new manager to replace the RTM company but also to make an order which causes the right to manage to cease. Where such an order is made, the cessation will cause the management to revert to the landlord. Applications for a cessation order would be on the same grounds as for one appointing a manager, and the LVT would enjoy the same discretion to consider whether it was just and convenient to make such an order in the circumstances.
Amendments Nos. 58 and 59 are consequential to the introduction of the cessation order. They ensure that the making of an order is one of the circumstances in which the right to manage ceases to be exercisable. Finally, Amendments Nos. 56 and 57 correct minor drafting errors in Schedule 7 to the Bill.
Before I move on, I want to speak to two related matters which were also raised in Committee. First, the noble Baroness, Lady Hamwee, queried the derivation of the term "alterations of use" in Clause 96(4)(a). As she rightly said, nowadays we would more generally refer to "changes of use". However, we have sought to be consistent with the provisions on

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approvals in Section 19 of the Landlord and Tenant Act 1927, not least because they are applied to the RTM company by paragraph 1 of Schedule 7. It is Section 19(3) of that Act from which the term in question is derived.
Secondly, the noble Lord, Lord Goodhart, speaking, I believe, on behalf of the Law Society, queried whether there was an interconnection between paragraph 3(4) of Schedule 7 and Clause 101 of the Bill. It was suggested that arguably paragraph 3(4) would release a landlord from some of the liability imposed by virtue of Clause 101. At that time we agreed that that was not what was intended and we undertook to take away the matter for consideration.
We have now taken advice on the issue and are satisfied that the problem that was suggested does not occur. Clause 101 confers a statutory obligation on the landlord. That is not fettered or limited by the operation of Section 11 of the Landlord and Tenant Act 1985, as varied by Schedule 7 to this Bill. For such a limitation to be effected, the Bill would have to make a specific provision in that regard. It does not, and the undesired effect suggested by the Law Society does not arise. Therefore, in our view there is no need for an amendment. However, we felt that it was important to put on the public record an explanation as to why that might be the case.
In closing, I thank all those who have helped to inspire these amendments and say how much we value their contribution. I beg to move.
Lord Goodhart: My Lords, as a member of the Bar, I cannot speak on behalf of the Law Society. However, speaking for myself—and I am sure that the Law Society would concur—we are grateful that the noble Lord and the department concerned have given favourable consideration to at least a significant number of the amendments proposed by the Law Society. Therefore, I welcome the proposed amendments in this group standing in the name of the Lord Chancellor.
On Question, amendment agreed to.
Clause 85 [Deemed withdrawal]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 43:
Page 42, line 21, at end insert—
"( ) Subsection (1) does not apply if the person by whom the counter-notice was given has, or the persons by whom the counter-notices were given have, (before the time when the withdrawal would be taken to occur) agreed in writing that the RTM company was on the relevant date entitled to acquire the right to manage the premises.".
The noble Lord said: My Lords, I beg to move.
On Question, amendment agreed to.
Clause 90 [Duties to give notice of contracts]:
Lord Kingsland Lord Kingsland moved Amendment No. 44:
Page 46, line 8, at end insert—
"(8) Unless the contractor party and the RTM company otherwise agree in writing within a period of 28 days after service of a contract notice, the management contract shall continue in full force and effect from the acquisition date as if it had been
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made between the contractor party and the RTM company and not with the manager party, save that the RTM company shall have no liability under it for breaches on the part of the manager party occurring prior to the acquisition date.".
The noble Lord said: My Lords, I rise to move Amendment No. 44 but shall not say anything about it because the matters to which it relates have already been covered as a result of the noble and learned Lord's response. However, it is important that the noble Lord, Lord Goodhart, has an opportunity to speak to his Amendment No. 45.
Lord Goodhart: My Lords, I am not sure whether or not the noble Lord moved Amendment No. 44.
Lord Kingsland: My Lords, I did not speak to Amendment No. 44, but I beg to move.
Lord Goodhart: My Lords, now that it is clear that that amendment has been moved, I speak to my Amendment No. 45 without, of course, moving it. The proposal within it is substantially to the same effect as Amendment No. 44 moved by the noble Lord, Lord Kingsland.
He took the view that his alternative suggestion—that the one-month notice period between the RTM becoming entitled to take over management and its actually doing so should be increased—was satisfactory. I see that it is in some sense an improvement. However, our proposal, which is basically for a statutory novation of existing contracts, is preferable. That is partly because there may be several contracts that are unjustifiably destroyed or frustrated because they run for longer than three months, or whatever the period that the Government eventually choose.
Our proposal is also preferable because it is undesirable for there to be any significant delay between the RTM company becoming entitled to exercise its powers and its actually doing so. Once the RTM company becomes entitled to exercise the powers of management, the relevant time should be kept at a minimum, subject to the RTM company's power to extend it if it is, for example, having difficulty finding a suitable managing agent. As soon as the RTM company is ready to go, it should be allowed to do so.
The proposal that contracts should be frustrated is seriously damaging to the RTM company and in many cases to contractors. We can envisage various possible scenarios. I am grateful to a correspondent company for raising in a letter to me the examples that I am about to give. The first example is that of a lift maintenance contract. Such a contract is required under safety legislation to be enforced at all times. The RTM company may be unaware of the need to ensure that the lift maintenance contract is in force; it may accidentally fail to renew it because it is concerned with other problems. It therefore seems to us that that is a clear example in which it would be desirable for an existing contract to be preserved for the benefit of the RTM company.

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Another example is that of a contract gardener who was not previously an employee of the landlord but, because he looks after two or three blocks—he does so in the course of his business—he may look after the gardens of the particular block that the RTM company is taking over. Suppose that the gardener has a contract that lasts for a year at a time. He will lose a significant part of his rights, without any right to compensation, if the RTM company decides not to offer to renew his contract. It might decide instead to use the voluntary work of tenants, not to maintain the garden or to employ another contractor to do the work. Again, we think that that would be inappropriate. In such a case, the RTM company should be bound by the existing contract.
I turn to perhaps the most significant example. Substantial works, which may take several months, may have to be done on the property. They may involve a major operation such as re-roofing the building. Depending on the timing, there is a significant possibility that the contract would be determined half-way through the roofing work. In such circumstances, the roofing contractor might be in a position to insist on a renegotiation of the contract, which would give him substantially greater payment than he was entitled to under the original contract.
We believe that it is plain that there should be a statutory novation of existing contracts relating to the management of the property. There should be limited exceptions to that. They are set out in paragraph (3) of the amendment as being circumstances in which the RTM company should be entitled to cancel the contract. They would arise out of what was essentially misconduct by the landlord, who may have entered into contract with a company that was, for example, associated with him or his friends. That might require payment that was in excess of the proper market price, it might require work to be done that was not genuinely needed for the benefit of the property or it might involve a contract with a person who was unfit to provide the work or services that were contracted for.
In those cases, the RTM company should have the right to cancel the contract. Failing those circumstances, we believe that the arrangement is in the interests of both the RTM company and the contractor—admittedly, however, in some cases it may be in the interests of one rather than the other. The roofing contractor would no doubt be rather pleased if he was in a position to insist on substantially higher payment. It is right and proper that contracts should continue, except in the special circumstances that are outlined in paragraph (3) of the amendment.
6.15 p.m.
Lord Falconer of Thoroton: My Lords, I shall speak, if I may, only to the unmoved amendment of the noble Lord, Lord Goodhart, on the basis that, in view of what I said in relation to the previous group of amendments, the noble Lord, Lord Kingsland, said that he had not spoken to Amendment No. 44.
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We have grave concerns about Amendment No. 45 for several reasons. First, it would not give contractors the right to decide whether they would or would not wish to work for an RTM company. We have grave concerns about that. I acknowledge that the noble Lord is seeking to be helpful to the RTM company by ensuring that it is supported by some contracts from the start. That is obviously commendable. However, we believe that binding the contractor into working for the RTM company against his will will cause more harm than good. We are extremely concerned that some contractors, particularly those who are linked to the landlord, would deliberately fail to provide a proper service. They could even be actively disruptive. I do not think that leaseholders would thank us for that.
The amendment of the noble Lord, Lord Goodhart, is specifically designed to avoid the problems that are associated with sweetheart contracts. Under that approach, all contracts would carry over, but the RTM company, as the noble Lord said, would then have rights to terminate individual contracts on specified grounds.
Even if one got to that point, we still have considerable concerns about the noble Lord's suggestion. While we accept that Amendment No. 45 is reasonably fair to the RTM company, we believe that it is fundamentally unfair to the contractors. To our mind, the grounds for the termination of contracts—those in paragraph (3) of the amendment—are somewhat vague and subjective. We believe that it would be open to an RTM company to terminate almost all transferred contracts. There is certainly nothing in the amendment that would stop them.
I turn to the examples that were suggested to the noble Lord by a correspondent company and in particular to that involving the lift maintenance contract. It is not clear under the amendment what would stop the RTM company, if it wanted, from cancelling that contract—that also applies to the contracts in the other examples. As I understand it, the amendment in effect says, "You can determine if, in the opinion of the directors of the RTM company, the charges were excessive, the services were inappropriate or the supplier of the services was not fit or proper to provide those services". That is not a matter of objective assessment; it involves the opinion of the directors. It is hard to imagine them not being able to say, in relation to practically any contract, "I think that that is too expensive; let us try and do better", or, "We, the RTM company, think that those services are not appropriate; let us get them from somebody else". We believe that it would be open in those circumstances to terminate practically all transferred contracts.
It could of course be argued that the RTM company may act reasonably in order to avoid being taken to court by the contractor. But what is to stop unscrupulous contractors such as those who have been set up under earlier contracts threatening to take the RTM company to court anyway, even if the termination was justified?

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On the one hand, therefore, we could have arbitrary termination with no recourse for the contractor. On the other, we could have the RTM company unprepared to terminate any contracts because of the risks, no matter how unhappy it is with the contract. We do not think that either outcome is desirable.
We appreciate the concern underlying the amendment but we do not think that the amendment achieves the right outcome. We therefore continue much to prefer the approach taken in the Bill. This will allow the RTM company and the contractors to work matters out by negotiation. No one is forced to work for anyone else against his will. We accept that in some cases that may mean that the RTM company loses the benefit of existing contracts. That is no different from the situation an RTE company would be in when it starts to manage after enfranchisement. And we believe that it is infinitely preferable to trampling over the rights of either party.
However, as was said when I spoke to Amendment No. 39 we believe that a longer time period is needed than is provided for currently. We need to give all parties, in particular the RTM company, a decent amount of time to prepare for management and to make sure that the right contracts are in place from the outset. As I said earlier, we see on reflection that one month is not long enough for that. We have undertaken, therefore, to consider and bring forward an appropriate amendment on that issue in another place. As we do that we shall take into account the concerns expressed by noble Lords today and on earlier occasions. But we cannot agree to the amendment of the noble Lord, Lord Goodhart. We hope that he will not press it.
Lord Kingsland: My Lords, for obvious reasons, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 45 not moved.]
Clause 91 [Duty to provide information]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 46 to 52:
Page 46, line 10, after "company," insert "the company may give notice to"
Page 46, line 16, leave out "must" and insert "requiring him to"
Page 46, line 17, leave out "him to provide"
Page 46, line 20, leave out "RTM company" and insert "notice"
Page 46, line 28, leave out "person may not be required" and insert "notice may not require a person"
Page 46, line 31, after "required" insert "by a notice"
Page 46, leave out line 33 and insert "notice is given"
On Question, amendments agreed to.
Clause 96 [Functions relating to approvals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 53:
Page 48, line 39, at end insert—
"( ) The RTM company must not grant an approval in relation to the making of alterations, improvements or change of use which will diminish the reversionary value of the landlord's interest."
The noble Earl said: My Lords, Clauses 96 and 97 govern the ability of an RTM company to grant approvals. As noble Lords will be aware, the landlord is given 30 days' notice in some circumstances and 14 days in other circumstances.
The purpose of the amendment is simple. I hope that the noble and learned Lord will agree to it. It would limit the power of the RTM company to grant an approval to something of detriment which will diminish the reversionary value of the landlord's interest. I am sure that the Government want that. I beg to move.
Lord Williams of Elvel: My Lords, I put my name to the amendment because I believe that the Government should pay considerable attention to the issue.
I give an example. Let us suppose that a leaseholder decides to knock down half his flat. He applies for planning permission; he applies perhaps for listed building permission and obtains it. He then goes to the RTM company—he would at present go to the landlord—and says, "I now want a licence". In its wisdom the RTM company decides that it is a good idea. Alternatively, let us suppose that the leaseholder decides to turn his basement into a lap-dancing club. He obtains permission for a change of use and gets planning permission. He goes to the RTM company which says, "Yes, this is not a bad idea".
Both proposals would probably damage the reversionary interest of the landlord. The point which the noble Earl's amendment addresses should be addressed by the Government.
Lord Monson: My Lords, it is a good and worthwhile amendment. The only improvement would be the inclusion of the word "significant" before "diminished". If a proposed alteration, improvement or change of use were to lead to a diminution in reversionary value by a mere one quarter of 1 per cent one would not be justified in interfering; but any significant diminution would be wrong. I hope that the Government will accept the amendment in principle.
If the Government wish to insert "significant", or an equivalent word, that can always be done at Third Reading or in another place. I look forward to hearing the Minister's response.
Lord Falconer of Thoroton: My Lords, we agree with the noble Earl, Lord Caithness, that it is important that the landlord's interests are safeguarded against the granting of inappropriate approvals. That is the current position. However, we believe that the Bill already addresses this satisfactorily.
As noble Lords will know, Clause 96 provides that where the right to manage is acquired, the RTM company takes on primary responsibility for all approvals which are required under the leases. However, where the RTM company proposes to grant a consent, Clause 96(4) provides that it must first give written notice of that intention to the relevant landlord. The landlord then has the opportunity to decide whether to agree or object to the granting of that consent and to notify the RTM company accordingly.

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Where a landlord decides that he wishes to object, the RTM company may grant the approval only if one of two conditions are met. First, the landlord must agree to withdraw the objection. Alternatively, an application must be made to a leasehold valuation tribunal for its agreement that the approval should be granted.
We believe that these arrangements already make admirable provision for the safeguarding of the landlord's legitimate interests. A landlord who believes that his reversionary interest would be damaged by the granting of an approval is able, first, to ensure that the RTM company does not disregard that and grant the approval itself and, secondly, to seek to persuade a leasehold valuation tribunal that the approval should not be granted. In the latter case, one of the arguments that the landlord would be able to place before the tribunal would be that the approval would unduly harm his reversionary interest although, of course, the question of whether the approval should be granted would have to be decided in accordance with the terms of the lease, as the noble Earl would accept.
We do not think that the amendment adds anything to those arrangements. Our first concern is that the question of what will or will not diminish the reversionary value of the landlord's interest is both vague and subjective. It could be argued that any consent for improvements or alterations might, in some way, diminish the immediate value of the landlord's reversion. Does that mean that the RTM company should never grant an approval for these matters? Indeed, does the amendment mean that the company should not grant an approval even if the landlord agrees that approval should be granted?
We are not clear, furthermore, what should happen where the RTM company decides that it wishes to grant an approval on the basis that it does not believe that the reversionary interest would be affected and then the landlord alleges otherwise. Who would adjudicate in such disputes? And why would that be better then the present arrangement of allowing all disputed approvals to go to the LVTs? We believe, therefore, that the arrangements in the Bill already address the issue raised in the amendment; and that they do so in the most sensible and practical way. In effect, they prevent any approval being granted unless the landlord or the LVT agrees. I believe that we do that in a sensible and practical way. On that basis, I hope that the noble Earl will not press the amendment.
The Earl of Caithness: My Lords, I am grateful for the support I received from the noble Lord, Lord Williams of Elvel, and the noble Lord, Lord Monson. I listened carefully to the Minister's reply. I was reassured to some extent. I would not say that the position of the landlord was admirably protected—I think that those were the words used by the noble and learned Lord—otherwise I would not have tabled the amendment. However, I should like to consult between now and another stage because it is an
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important matter to get right. It is better to get it right in this House than in another place. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 54:
Page 48, line 43, after "or' insert "structural alterations or"
On Question, amendment agreed to.
Schedule 7 [Right to manage: statutory provisions]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 55 to 57:
Page 100, line 12, at end insert—
"( ) The power in section 24 to make an order appointing a manager to carry out functions includes a power (in the circumstances specified in subsection (2) of that section) to make an order that the right to manage the premises is to cease to be exercisable by the RTM company; and such an order may include provision with respect to incidental and ancillary matters (including, in particular, provision about contracts to which the RTM company is a party and the prosecution of claims in respect of causes of action, whether tortious or contractual, accruing before or after the right to manage ceases to be exercisable)."
Page 100, line 21, after "42B" insert "of the 1987 Act"
Page 101, line 23, leave out "registered" and insert "recognised"
On Question, amendments agreed to.
Clause 103 [Cessation of management]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 58 and 59:
Page 52, line 29, leave out "is"
Page 52, line 30, at end insert ", begins so to act or an order under that Part of that Act that the right to manage the premises is to cease to be exercisable by the RTM company takes effect."
On Question, amendments agreed to.
Clause 111 [Index of defined expressions]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 60:
Page 57, line 5, column 2, leave out "Section" and insert "Sections 69(1) and"
On Question, amendment agreed to.
Clause 113 [Non-residential premises]:
Lord Kingsland Lord Kingsland moved Amendment No. 61:
Leave out Clause 113.
The noble Lord said: My Lords, because the amendment was grouped in Committee with an amendment that the noble Lord, Lord Williams of Elvel, did not move, I shall speak briefly to it. I have, on the three times occasions during the passage of the previous Bill, said everything that I wanted to say on the matter. So my words, here, are by way of reminder.
My objections to the clause are threefold. First, there is evidence that investors and developers would resist proposals to develop mixed schemes if there were a risk of enfranchisement of the premises in question as a result of the new threshold of 25 per cent for nonresidential use. Those concerns are readily understandable. Investors will not invest if their investment is insecure because of an ensuing risk of enfranchisement. Those preoccupations will have an

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adverse effect on the prospect of mixed property schemes and will, in turn, adversely affect future urban regeneration proposals.
My second concern is related closely to my first. The clause may have retrospective effect in relation to mixed-use premises where the non-residential use is between 10 per cent and 25 per cent. Investors in and developers of such existing mixed-use premises would face the risk of enfranchisement under the clause, even though, when they made their investment, no such risk existed.
Thirdly, residential enfranchisers are unlikely to want to become commercial property managers. Moreover, they are in the main wholly unsuited so to become. If enfranchisement were permitted where there was more than 10 per cent non-residential use, the effects could be disastrous for the business occupiers, and for the marketability of the property as a whole—which may significantly depend on the value of the business that forms a major part of it. I beg to move.
The Earl of Caithness: My Lords, I again rise briefly to support my noble friend. Your Lordships will have heard what I had to say on the matter many times, so I shall not repeat it.
Baroness Gardner of Parkes: My Lords, I am concerned whether the amendment would affect the current position. At present, there is a deliberate system under which freeholders of mews houses put the garage onto a separate lease from the rest of the property to make it unenfranchisable. That frustrates our purpose: we would want such people to be able to enfranchise their property. What effect would the amendment have on that?
Lord McIntosh of Haringey: My Lords, the short answer is that the amendment would leave the situation as it is at present. The problems identified by the noble Baroness, Lady Gardner of Parkes, would continue.
I recognise that this is a difficult and contentious issue, and a problem to which there is no ideal solution for all purposes. The noble Lord, Lord Kingsland, has consistently opposed the proposal to increase the present limit of non-residential use from 10 per cent to 25 per cent. However, as I think that he would acknowledge, others who have taken part in our debates have thought that we have not gone far enough to help leaseholders in mixed-use premises. Clearly, people have been exercising their minds, and we are grateful to them for that.
We have considered all the solutions put forward and concluded that there is no alternative to the provision in Clause 113, which will raise the threshold from 10 per cent to 25 per cent. It is a fact of history that the old 10 per cent threshold prevented too many leaseholders from enfranchising. A 25 per cent threshold will make it easier for them, but it will protect the landlord where the commercial unit is the majority interest in the building. However, where the
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leaseholders hold the majority interest, it is only right that they should be able collectively to buy out the landlord.
Leaseholders enfranchise to address either the problem of their diminishing leases or the problem of the landlord's monopoly over the management of the block, or both. Any enlightened developer, in planning a new scheme, would give careful thought to ensuring that residents were comfortable in their homes. We hope that many, if not all, new mixed-use schemes will be carried out on a commonhold basis.
The noble Lord, Lord Kingsland, asked about existing schemes and the retrospective effect of the clause. I remind him that the Leasehold Reform, Housing and Urban Development Act 1993, which is causing the problem, was introduced by a Conservative administration and included mixed-use premises without exception. In his terms, that had retrospective effect. Why was that right in 1993 and not now? I think that the noble Earl, Lord Caithness, was involved in that Act. The noble Earl shakes his head. However, a number of people hold responsibility for that Act.
There is no perfect solution; the provision in Clause 113 is the best that we can find.
Lord Kingsland: My Lords, the fact that the Conservative government were wrong in 1993 does not excuse the present Government from being wrong in 2001. I accept that this has been a vexed and much disputed issue throughout our proceedings. I shall think hard whether to reintroduce the amendment at Third Reading—and, perhaps, whether to press it to a Division. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 115 [Premises with resident landlord]:
Lord Kingsland Lord Kingsland moved Amendment No. 62:
Page 58, line 7, after "units" insert "or following the conversion for 10 or more years before the date hereof"
The noble Lord said: My Lords, leaseholders are currently prevented from enfranchising a property that has been converted into four or fewer units, and where the freeholder has lived in one of the flats as his or her main home for the past 12 months. The Government's view has been that that has placed individuals who acquire the freeholds of such properties in a privileged position compared to non-resident landlords of converted properties.
At the same time—this is reflected in the Bill as drafted—the Government have taken the view that resident landlords who have a genuine interest in a property should continue to be protected. However, the Government have limited that class of persons to those who have themselves converted the property. Such people have effectively sub-divided their own home while continuing to live in it; and the Government consider it unfair for them to lose ownership of the freehold as a result.
My amendment would establish a position between the existing position and the position that the Government propose to substitute for it. Where there

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are a small number of flats in a conversion and the landlord occupies one of those flats, he is likely to ensure that the building containing his home is maintained in a far better way than a disparate number of lessees, who may not be living in the flat as a home, and may be putting it out to management by agents at far greater cost.
I accept that determining the number of years for which the landlord should have lived in the flat before acquiring the protection that I suggest is not easy. I have suggested 10 years. If a landlord has lived in a small block of flats for 10 years, he is likely to be more like a householder than a business manager. In those circumstances, he merits the protection of the Bill. I beg to move.
Lord McIntosh of Haringey: My Lords, the problem here is not whether it is 10, 11 or even nine years; the problem is that there is a potentiality—indeed a reality—for abuse which would continue if this amendment were accepted in any form. We have received many complaints about resident landlords who abuse their privileged position. Indeed, during the consultation process we received a number of representations that the exemption for the right of enfranchisement for resident landlords should be abolished entirely.
The conclusion to which we came was that the exemption should be restricted to people who sub-divide their own home into flats and continue to live there. That is what Clause 115 seeks to do. Many resident landlords acquire the freehold at the same time as they purchase their flat or subsequently. We see no reason why they should be put in a privileged position.
Amendment No. 62 would retain the privileged position for those who have the good fortune to have held it for a period of 10 years. I cannot see any justification for accepting that. It is not as though they were going to be forced out of their homes. They have the option of either requiring the enfranchising group to buy out their whole interest or take a 999-year lease back on their old flat at nil ground rent. There is no difficulty about the protection of landlords here; we have to be concerned with encouraging enfranchisement.
Lord Kingsland: My Lords, the Minister said that a number of individuals complained to him.
Lord McIntosh of Haringey: My Lords, during the consultation process we received complaints.
Lord Kingsland: My Lords, I apologise for mishearing the Minister. Equally, during the time that I have been responsible for this Bill on behalf of the Opposition, I have received a number of complaints from individuals who find themselves in the opposite position; that is, individuals who have purchased leaseholds together with the freeholds and remained
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there for a long time. They feel that they would be adversely affected by the changes in the law the Government propose.
I shall reflect on what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Clause 117 [Abolition of residence condition]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 63:
Leave out Clause 117.
The noble Earl said: My Lords, in moving Amendment No. 63, I shall speak also to Amendments Nos. 76, 77, 79, 88 and 89.
With these amendments we return to the question of the residency test. I hope the noble Lord, Lord McIntosh of Haringey, will listen to the principle behind the amendments very much in the way that his noble and learned friend Lord Falconer did when responding to Amendment No. 39 which was proposed by my noble friend Lord Kingsland. It is the principles behind the amendments rather than the amendments themselves that are of import.
As the Minister will recall, I raised this matter at Second Reading and would have spoken to it at length in Committee had I been present. This is an important matter. The Government are in grave danger of falling into the trap mentioned by the noble and learned Lord, Lord Falconer, in relation to Amendment No. 27, when he said that he did not want to destroy one imbalance while creating another. That is what is happening with the Bill. It is what I also call the "law of unintended consequences"—the devil that haunts every government. I remember suffering from it. The noble Lord, Lord McIntosh, used to raise points and say that such-and-such would happen. I did not believe him at the time—sometimes he was right and sometimes he was wrong. I can now say the same to him on this issue.
The Bill as drafted takes away the residency test. A consequence of that is that anyone buying a lease of a flat or house as an investment, such as using a buy-to-let mortgage, for example, will qualify for enfranchisement. That means that the Bill gives one investor a right compulsorily to purchase over another investor's investment and a means to enforce the right against the latter's will. That is a substantial change from the current position of a residency test, which is a one-to-one between the lessee and the freeholder.
I know and sympathise with those situations where companies have been involved, because a company cannot enfranchise and certain landlords have only let to companies. That has encouraged a proliferation of companies, not only because that is the only way in which a lease could be obtained; but it has also been used as tax havens and for investment purposes by people who have no wish to live in the property.
Under the heading of "companies" therefore we have the "deserving" cases and what I would call the "non-deserving" cases. I am sure it is not beyond the wit of the Government to devise a scheme whereby a

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person who is genuinely resident—living in the property but having to live there under the auspices of a company because that is the only way he or she could obtain the property in the first place—should be entitled to enfranchise, and separate that situation away from the pure investor who holds the property as an overseas tax break or for some other investment purpose. That is not the kind of person one seeks to encourage to use the enfranchisement provisions.
That leads me on to the more serious consequences. Let us imagine the situation of a traditional house in London which would qualify under the 1967 Act for enfranchisement. That house is let to a head lessee who has sublet the flats—let us say there are six of them— on a co-terminus basis, so there is no reversionary interest to speak of to the head lessee. The Bill has granted that head lessee the right compulsorily to purchase the freehold. But he is not living there; he is using the house as an investment. We are therefore transposing one landlord for another. The intermediary head lessee now becomes the landlord.
It is worse than that. When the head lessee acquires the right to enfranchise, the landlord does not receive any marriage value. The marriage value is automatically taken at the extension of a lease or when there is a sale to a tenant. So it is the current head lessee—who may not be a desirable person at the best of times—who is the beneficiary.
We have produced some figures on this point. What is happening is that the current freeholder's interest is being cut in half—by 50 per cent—and the head lessee's interest is increasing by over 1,000 per cent. So we are taking away something from the traditional freeholder and giving it to the head lessee. That is grossly inequitable. What is worse, if the Government were compulsorily acquiring the freehold, they would have to do it on considerably more generous terms than the head lessee has to do it. Therefore, we are in a position where to solve one cause of discontent one would create an area of huge discontent.
Who are the owners of such traditional houses in London? It is true that some are the old landlords who have owned parts of London for a long time and who might or might not be liked by the Labour Party. However, there are also charities which own blocks of such houses. As a result of the Bill, one charity I know will have £30 million wiped off its balance sheet. A widow who inherited the property and did not understand the management might not bring in a management agent but a head lessee. That person would be deprived of what they should have. Pensions and other income for the Church of England come from such traditional investments: the Church would be deprived of its asset.
We have a serious problem here. Perhaps I may repeat to the noble Lord, Lord McIntosh, that the amendments I have tabled do not necessarily address my specific concerns. However, they have given me the opportunity to voice them. These are real concerns which, if not remedied, will result in a case in the European Court. The Government are creating a massive injustice. I believe that that is unintentional.
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The Bill has taken a long time to reach this stage. One of the unintended consequences, of which I am glad, is that this matter has now been brought to light. I beg to move.
Lord Williams of Elvel: My Lords, my name is attached to some of the amendments in this group. That is a result of lack of vigilance on my part and possibly of a muddle between myself and the noble Earl. I would not like it to be thought that I am against the abolition of the residence test. I am in favour of the Government's view on that issue. Therefore, in some respects, the noble Earl and I will have to part company.
Nevertheless, having removed my name from his amendments, I believe that the noble Earl makes two serious points. This matter needs study by the Government. I hope that my noble friend will not simply brush the issue aside and say, "No, the Government have taken this view and that is the end of it". As the noble Earl mentioned, the unintended consequences could be rather dramatic.
Lord Goodhart: My Lords, my position is similar to that of the noble Lord, Lord Williams of Elvel. As regards the residence test, we were approached by the British Property Federation which made a persuasive case. The federation argued strongly that the residence qualification should be retained. I admit that I came close to being persuaded. However, ultimately I decided that its case fell just short—I consulted my noble friends—primarily because anybody who holds a property which is subject to a long lease which has a residence qualification will be aware that that property is vulnerable to enfranchisement or an extended lease by a purchaser of the lease who then proceeds to reside there. There may be a limited "hope" value as a result of the possibility that someone buying the lease may never occupy the property. However, frankly, that will not add significantly to the value of the property. Therefore, anybody who holds the reversion to a lease which is capable of extension or enfranchisement will be aware that the property which is held is vulnerable and the reversion is worth no more than its market value.
Ultimately, it did not seem to me that the disadvantages of the residence qualification to the freeholder were sufficient to overrule the advantages, indicated by the Government in previous debates in favour of removing the residence test and simply substituting in certain circumstances a requirement of two years' ownership of the lease.
However, I have also seen documents on the subject of the division of the marriage value between a freeholder and a long leaseholder when the long lease is subject to leases which are capable of enfranchisement or extension. There is a real and serious problem here. We are opposed to the principle of marriage value altogether. However, we believe that if there is to be a marriage value, the way in which the Bill in its present form divides that marriage value in the circumstances mentioned by the noble Earl. Lord Caithness, between the freeholder and the long

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leaseholder is highly unsatisfactory and will simply transfer a substantial amount of money from the freeholder to the long leaseholder. On that aspect I am happy to support the noble Earl, Lord Caithness.
Baroness Gardner of Parkes: My Lords, like other speakers who followed the noble Earl, Lord Caithness, I have mixed views. I did not intend to speak on this matter. However, I was approached by the Leasehold Reform Professional Committee, which is in favour of the residence test being abolished. I said that I could not speak on that matter because I would benefit from it if it happened. I believe I have told your Lordships' House before that I purchased a flat for my old age, which I do not occupy. The committee asked me whether I would declare that matter and speak on the amendment.
The noble Earl, Lord Caithness, raised a number of important points. I was concerned by his comment that the only way that people are able to get a lease and get into a flat is to buy the lease in a company name. I am aware of the fact that certain property owners will not now sell or give a lease to anyone unless it is bought in a company name. That is a specific process by which they intend to prevent the person having any right to enfranchise. Such property owners are forcing people to take the property in company names only. Therefore, it is important to them that this change should not be made.
The noble Earl mentioned that charities own properties, which is true. Not long after the 1993 Act was passed, the Smith Charities decided to dispose of all their properties. Although the law required them to offer the properties to their tenants, they did not do so. Notice was served, which was short notice. Tenants were not given the right amount of notice, and it was done when everyone was away on holiday. Fortunately, the tenants were alert enough to take action and, in many cases, obtained the right to buy the properties. Certainly, charities act just like any other major landlord in that way.
The noble Earl also mentioned major estates in the capital and elsewhere. Here again we must be careful. As I shall mention later when we discuss the leasehold valuation tribunal, if the major estates are prepared to enfranchise one's freehold but then one is stuck with an estate management scheme which is so onerous that one is worse off than before one was a freeholder, that is not, in the real spirit, selling a freehold.
A valid point was made by the noble Earl and we must ensure that something is done about it. I refer to the situation he described in which a head lessee would replace a landlord. That seems to me wrong and not at all in the spirit of what was decided or what is intended. The abolition of a residence test is meant to help people. For example, in the block in which my flat is situated it may be that because there are other people in a similar situation to me we cannot enfranchise because there are too many of us who do not live there. I know for a fact that some people who are posted or who live abroad let their flats. People wish to see the abolition of the residence test. The noble
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Lord, Lord Williams of Elvel, made that clear, as did the noble Lord, Lord Goodhart. I do not believe that anyone wishes a situation to be created whereby a head lessee acquires the rights of the existing landlord. The example was quoted of four flats in a block and the person entitled to be enfranchised being the head lessee. That is not what I believed was going to happen. I understood that on the abolition of the residence test each of the four people in the block of flats would have a right to a share of the freehold. It would be a total distortion of the Government's intention if what I fear should happen.
The noble Earl, Lord Caithness, has brought out a number of important points. It is good to abolish the residence test from the point of view of helping people to enfranchise their freehold, but the Government must look at what can be done to avoid the other consequences which have been described as being very possible.
7 p.m.
Lord Monson: My Lords, the noble Earl, Lord Caithness, has described a state of affairs whereby charitable beneficiaries will effectively be robbed for the benefit of extremely clever and rich people. Surely, that must be unacceptable to noble Lords in all quarters of the House.
Lord Kingsland: My Lords, I supported the residency test until the Committee stage a few weeks ago. I gave my reasons during the previous proceedings as to why I would not table those amendments again at Report stage. However, I share, entirely, the concerns expressed by the noble Earl, Lord Caithness, and other noble Lords, as regards the powers which are seen to accrue to the head lessee in the Bill as now drafted. I shall be extremely interested to hear what the Minister has to say.
Lord McIntosh of Haringey: My Lords, there are two issues here which are related but not the same. The first is the residence test and the second is about head lessees. The noble Earl, Lord Caithness, asked me to deal with the residency point as a matter of principle rather than criticising the wording of the amendments. I am not doing that. As far as I can see they would achieve their intention. But the noble Earl referred to causes of discontent about the residency test and that is the point.
It is not an issue of principle, but it has been a cause of considerable discontent. Those tests have been open to abuse and confusion over many years. We firmly believe that it is right to base eligibility on whether or not the leaseholder has a significant stake in the property. We are confirmed in that view by the fact that the noble Earl is on his own now. The noble Lords, Lord Williams of Elvel, Lord Goodhart and Lord Kingsland and the noble Baroness, Lady Gardner of Parkes, have peeled off. There are no other supporters for that view.
However, the noble Earl raised a point on which he has a great deal of support; namely, the issue of head lessees. We are aware of the concerns which he

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expressed at Second Reading and now that the head lessee of a house converted into flats may be able to enfranchise under the 1967 Act and then receive a substantial profit if the under-lessees of the flat collectively are enfranchised under the 1993 Act. We are not certain that that is the effect of the Bill. We are currently considering the position. It is not our intention that head lessees should be put into that position. If we are convinced that that is the effect of the Bill, we shall certainly consider introducing amendments to prevent the problem. That would have to be done in another place rather than at Third Reading in view of the complexity of the argument. We certainly recognise that genuine concerns have been expressed on the matter.
The Earl of Caithness: My Lords, I am very grateful for that reply. There is genuine concern on this matter which needs urgent attention. I am very grateful that the Government are considering it. If there is a chance of consultation with the Minister I shall be very happy to join in. I thank those noble Lords who supported me on the principles I raised, including the noble Lords, Lord Williams of Elevel, Lord Goodhart, Lord Monson and my noble friends Lady Gardner of Parkes and Lord Kingsland.
The noble Lord, Lord McIntosh of Haringey, said that I was totally against the abolition of the residency test. I am not. If the noble Lord reads with care what I said, he will see that I did try to come forward with a solution to the company's problem. That was also addressed by my noble friend Lady Gardner of Parkes. There has been abuse. I was trying to help the genuine resident. What I am not trying to do is to help the intermediary property companies some of which none of us would want to see owning blocks in our cities. I am extremely grateful for what the noble Lord, Lord McIntosh, said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 119 [RTE companies]:
Lord Goodhart Lord Goodhart moved Amendment No. 64:
Page 59, line 14, at end insert—
"(4) A company which is a RTM company may not become a RTE company except by a resolution passed with the affirmative vote or written consent of all its members.
(5) In this Part, "RTM company" has the same meaning as in Chapter I of Part 3 of the Commonhold and Leasehold Reform Act 2001."
The noble Lord said: My Lords, this amendment deals with the problem of what happens to an RTM company when some of the leaseholders in the property decide to proceed to enfranchisement. There may be members of the RTM company involved in the management who do not wish to proceed to enfranchise because they are unable or unwilling to commit themselves to spending what could possibly be quite a substantial sum of money to buy out the freehold.
Under the Government's original proposals it was possible for an RTM company to convert to an RTE company, but one could not have both in the same
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property. That meant inevitably that if a minority of members of the RTM company did not wish to proceed to enfranchisement, the only way forward was for them to be removed from the company and therefore lose their involvement in management. We believe that is unfair.
The Government moved part of the way to deal with the problem by saying that an RTM and an RTE company could co-exist in the same property. That would make it at least possible for those who wish to enfranchise to set up a separate company and proceed to enfranchise. But where there was a clear majority of the members of the RTM company, it would still be possible for them, as the Bill now stands, to proceed to convert into an RTE company.
We believe that that would put anyone who did not wish to enfranchise into a position where they would either have to find the money, which they might be unable to do, or give up their membership of the RTM company and their involvement in management. We believe that is unfair. What we propose in this amendment is that the RTM company should not be able to convert to an RTE company without the unanimous consent of all its members. That would mean that if someone wanted to stay and be involved in management, but not to enfranchise, they could block the converging of the existing company. But there would be nothing to stop those wishing to enfranchise to proceed to do so by way of setting up a separate RTE company. The purpose of the amendment is to ensure that the rights of those who want to continue to be involved in management but do not want to proceed to enfranchisement are preserved, whatever the views of the other members of the company. I beg to move.
Lord Falconer of Thoroton: My Lords, we appreciate the concerns about members of an RTM company who do not participate in a subsequent enfranchisement. The Bill provides that any such leaseholders will cease to be members of the company on completion of the enfranchisement. The reason for that is that after enfranchisement conflicts of interest might well arise between those leaseholders who respectively did and did not participate in the enfranchisement. For example, there might be differences of view between them as to how the proceeds of sales of leases should be used or distributed. If the non-participants were still members of the company, the company directors would find themselves in a very difficult position as a result of their accountability to the entire membership.
As the noble Lord, Lord Goodhart, pointed out, since the original Bill was introduced we have removed the bar on there being separate RTM and RTE companies for the same premises. This will mean that where RTM has been exercised and a proportion of the members wish to proceed to enfranchisement, they would now be able to set up a separate RTE company for the purpose and non-participants would be able to continue to participate in the management of the building.

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It is correct that a non-participating minority would not be able to force the participating members to take that approach, although in many cases doing so would clearly promote harmonious relations for the future management of the building. But we are not convinced that forcing the participants to use a separate company would be justified. That would be the practical effect of the amendment. Securing unanimous support for any proposition can be difficult. Given that the landlord is entitled to membership of the RTM company, unanimous support may prove to be impossible. The noble Lord, in nodding, indicates his earlier amendment. I recognise the noble Lord's view that a landlord should not be a member of an RTM company, but, as he knows, for the reasons we have given we are unable to accept that.
One of the reasons we have proposed the use of prescribed companies is to make it easy for leaseholders to progress from the right to manage to enfranchisement. Furthermore, if a majority are forced against their wishes to set up a separate company, there would be nothing to prevent them winding up the RTM company once enfranchisement had taken place.
Non-participating leaseholders would still have the benefit of general rights under leasehold law, including the right to be consulted on major works and the right to challenge unreasonable service charges. These rights are being strengthened by other provisions in the Bill.
I hope that in the light of what I have said the noble Lord will feel able to withdraw his amendment.
Lord Goodhart: My Lords, I have not been persuaded but I do not intend to press the amendment further today. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendment No. 65 not moved.]
7.15 p.m.
Lord Goodhart Lord Goodhart moved Amendment No. 66:
Page 60, line 17, at end insert—
"4BA RELEVANT CONVEYANCE TO RTE COMPANIES
(1) In this section—

(a) "relevant tenancy" means the tenancy of a flat contained in premises which were the subject of a relevant conveyance (as defined in section 4B) to a RTE company; and

(b) "relevant tenant" means a person who at the time of the relevant conveyance was a participating member by virtue of holding a relevant tenancy and includes any successor in title of that person.

(2) After the executions of the relevant conveyance to the RTE company, on the assignment of a relevant tenancy by a relevant tenant—

(a) the assignor (unless he is also a relevant tenant under a relevant tenancy of another flat in the same premises) ceases to be a member of the RTE company; and

(b) the assignee (unless he is already a member of the RTE company) shall become a member of the RTE company."

The noble Lord said: My Lords, the amendment is intended to ensure that where there has been an enfranchisement by lessees, where a lessee who is a member of the RTE company signs the lease, the assignee will become a member of the RTE company. Membership of the company, and therefore ownership of the property, will not become separated from the right to hold a lease on the property. It is essential that once there has been an enfranchisement, it and the leases of those who are participating in it should remain permanently linked together. If not, we shall ultimately have a body of absentee landlords with an interest in the freehold but no leasehold interest in the property. That would be undesirable.
I understand that the Government may be prepared to deal with the matter in a different way. Instead of putting such a provision on the face of the Bill it would be included in the model memorandum and articles of an RTE company. The Government will take the point, which is legitimate, that in such circumstances one cannot force someone to become a member of a company, although it is inevitable that he will want to do so.
If that is the Government's intention, I should be willing to accept it as a way of achieving my objective; that is, to ensure, one way or another, the permanent linkage between ownership of the freehold through an RTE company and the holding of a lease in the property in question. I beg to move.
Lord Falconer of Thoroton: My Lords, the amendment would provide that where a lease was assigned by a member of an RTE company, the assignee would automatically become a member of the company. I recall the concern expressed by the noble Lord, Lord Goodhart, in Committee about the ability of assignees to become members of an RTE company. My noble friend Lord Bassam then explained why we could not provide for membership of the company to transfer automatically to assignees. I subsequently wrote to the noble Lord clarifying the position.
Company law does not provide for the automatic transfer of membership of a company limited by guarantee. Section 22 of the Companies Act 1985 sets two conditions which have to be satisfied to constitute a person as a member of such a company. First, the person must agree to become a member and, secondly, the member's name should be entered on the register. Both those conditions must be met and are cumulative. Unless both conditions are satisfied, the person in question will not have acquired the status of a member. The Government would be very reluctant to override that key principle in this particular case.
As I explained, although Part 1 of the Bill, and regulations to be made under it, make provisions which are intended to ensure that all purchasers of commonhold units must agree to become members of the commonhold association, the situation with RTE companies is rather different. Unlike the commonhold association, where the Bill envisages ongoing regulation, we are proposing to regulate RTE companies only during the enfranchisement process.

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We consider that the operation of the company after enfranchisement should be a matter for the enfranchised leaseholders to agree among themselves. We do, however, agree that the RTE company should be able to admit new members after completion. This would include assignees of participating members or leaseholders who did not participate in the original enfranchisement. We accept that the draft of the memorandum and articles, which we provided to your Lordships, did not provide for that and we shall include appropriate changes in revised drafts which we expect to produce shortly.
As we have said previously, in practice, where a participating member assigns his lease, the premium would reflect the benefits of membership. It is unlikely that the prospective assignee would agree to the purchase without being satisfied that membership of the RTE company was an integral part of the package. This happens now with both the existing nominee purchaser arrangements under the 1993 Act and in other circumstances where there is a leaseholders' management company and we are not aware of any problems.
Furthermore, it would not be in the leaseholders' interests to exclude assignees from the RTE company where assignors had previously been members. Evidence of such behaviour could discourage prospective purchasers so that the leaseholders concerned might have difficulties selling their flats in the future.
I hope that that explanation gives the noble Lord the assurances he sought and that he feels able to withdraw his amendment.
Lord Goodhart: My Lords, I am not sure that it goes quite as far as I wish. Effectively, I should like to see a prohibition on the assignment of the lease by a member of an RTE company, except on the basis that the assignee is entitled to take membership in the company if he or she wishes to do so. I recognise, however, that commercially it is likely that in the great majority of cases something of that kind will take place, and certainly this is progress towards that objective. In the circumstances, I beg leave to withdraw my amendment.
Amendments by leave, withdrawn.
Clause 120 [Invitation to participate]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendment No. 67:
Page 61, line 40, at end insert—
"(6) A notice of invitation to participate shall not be invalidated by any inaccuracy in any of the particulars required by or by virtue of this section.
On Question, amendment agreed to.
Schedule 8 [Enfranchisement by company: amendments]:
Lord Falconer of Thoroton Lord Falconer of Thoroton moved Amendments Nos. 68 and 69:
Page 102, line 20, leave out "RTE company" and insert -company (referred to in this Chapter as a RTE company)"
Page 108, line 24, leave out "section" and insert "sections 1(1) and"
On Question, amendments agreed to.
Clause 123 [Valuation date]:
Lord Kingsland Lord Kingsland moved Amendment No. 70:
Page 62, line 9, leave out from "payable)," to end of line 10 and insert "in paragraph 1(1), for the definition of "the valuation date" substitute—
""the valuation date" means the date of service of the reversioner's counter-notice.""
The noble Lord said: My Lords, I spoke to Amendment No. 70 some two weeks ago, and what I said then is to be found at cols. 865 to 866 of the Official Report of Monday 22nd October 2001. I am sure that that is fresh in the memory of the Minister, and I have nothing to add to what I said. I beg to move.
Lord Falconer of Thoroton: My Lords, the noble Lord, as he rightly acknowledged, raised these issues in Committee and in debate on the previous Bill. While I admire his persistence, I am sure he will not be surprised to learn that the speech that he has just delivered fails to persuade us. In those circumstances, both we and the noble Lord remain in the same position as then. I ask the noble Lord, therefore, to withdraw his amendment.
Lord Kingsland: My Lords, I am sad but not surprised by the response of the noble and learned Lord. This issue has been between the Opposition and the Government for some time, and, in the circumstances, I should like to test the opinion of the House.
7.23 p.m.
On Question, Whether the said amendment (No. 70) shall be agreed to?
Their Lordships divided: Contents, 52; Not-Contents, 123.

Division No. 1

CONTENTS

Astor, V.

Kingsland, L.

Astor of Hever, L.

Lindsay, E.

Attlee, E.

Lyell, L.

Blackwell, L.

Marlesford, L.

Brooke of Sutton Mandeville, L.

Noakes, B.

Buscombe, B.

Byford, B.

Northesk, E.

Caithness, E.

Oxfuird, V.

Carlisle of Bucklow, L.

Park of Monmouth, B.

Carnegy of Lour, B.

Perry of Southwark, B.

Colwyn, L.

Powell of Bayswater, L.

Cope of Berkeley, L. [Teller]

Renton, L.

Dean of Harptree, L.

St John of Fawsley, L.

Dixon-Smith, L.

Seccombe, B. [Teller]

Elliott of Morpeth, L.

Selsdon, L.

Elton, L.

Sharples, B.

Fookes, B.

Shaw of Northstead, L.

Gardner of Parkes, B.

Shrewsbury, E.

Glentoran, L.

Gray of Contin, L.

Skelmersdale, L.

Hayhoe, L.

Stewartby, L.

Henley, L.

Stodart of Leaston, L.

Howe of Aberavon, L.

Strathclyde, L.

Jopling, L.

Thatcher, B.

King of Bridgwater, L.

Thomas of Gwydir, L.

527

Vivian, L.

Wade of Chorlton, L.

Waddington, L.

Willoughby de Broke, L.

NOT-CONTENTS

Acton, L.

Kirkhill, L.

Alton of Liverpool, L.

Layard, L.

Andrews, B.

Livsey of Talgarth, L.

Archer of Sandwell, L.

Lockwood, B.

Barker, B.

Lofthouse of Pontefract, L.

Bassam of Brighton, L.

McCarthy, L.

Bernstein of Craigweil, L.

Macdonald of Tradeston, L.

Bradshaw, L.

McIntosh of Haringey, L.

Bragg, L.

[Teller]

Brennan, L.

MacKenzie of Culkein, L.

Brookman, L.

Mackenzie of Framwellgate, L.

Brooks of Tremorfa, L.

Mackie of Benshie, L.

Burlison, L.

Mason of Barnsley, L.

Campbell-Savours, L.

Massey of Darwen, B.

Carlile of Berriew, L.

Merlyn-Rees, L.

Carter, L. [Teller]

Milner of Leeds, L.

Clark of Windermere, L.

Morris of Aberavon, L.

Clarke of Hampstead, L.

Newby, L.

Clinton-Davis, L.

Nicol, B.

Corbett of Castle Vale, L.

Orme, L.

Crawley, B.

Parekh, L.

Davies of Oldham, L.

Patel of Blackburn, L.

Derby, Bp.

Pendry, L.

Desai, L.

Peston, L.

Dholakia, L.

Phillips of Sudbury, L.

Dixon, L.

Pitkeathley, B.

Dormand of Easington, L.

Prys-Davies, L.

Dubs, L.

Puttnam, L.

Elder, L.

Radice, L.

Falconer of Thoroton, L.

Ramsay of Cartvale, B.

Farrington of Ribbleton, B.

Rea, L.

Faulkner of Worcester, L.

Rendell of Babergh, B.

Filkin, L.

Rennard, L.

Fyfe of Fairfield, L.

Renwick of Clifton, L.

Gibson of Market Rasen, B.

Rooker, L.

Goldsmith, L.

Roper, L.

Goodhart, L.

Russell, E.

Gordon of Strathblane, L.

Sawyer, L.

Gould of Potternewton, B.

Scotland of Asthal, B.

Grabiner, L.

Shutt of Greetland, L.

Grocott, L.

Simon, V.

Hamwee, B.

Skidelsky,L.

Hardy of Wath, L.

Smith of Leigh, L.

Harris of Haringey, L.

Symons of Vernham Dean, B.

Harris of Richmond, B.

Taylor of Blackburn, L.

Harrison, L.

Temple-Morris, L.

Haskel, L.

Thomson of Monifieth, L.

Hayman, B.

Thornton, B.

Hogg of Cumbernauld, L.

Tomlinson, L.

Hollis of Heigham, B.

Turner of Camden, B.

Howells of St. Davids, B.

Varley, L.

Hoyle, L.

Walker of Doncaster, L.

Hughes of Woodside, L.

Wallace of Saltaire, L.

Irvine of Lairg, L. (Lord

Warner, L.

Chancellor)

Warwick of Undercliffe, B.

Jacobs, L.

Whitaker, B.

Janner of Braunstone, L.

Whitty, L.

Jeger, B.

Wilkins,B.

Jenkins of Putney, L.

Williams of Crosby, B.

Jones, L.

Williams of Elvel, L.

Judd, L.

Williams of Mostyn, L. (Lord

Kilclooney, L.

Privy Seal)

King of West Bromwich, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
Lord McIntosh of Haringey: My Lords, I beg to move that consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 8.33 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Transport Police
7.33 p.m.
Lord Faulkner of Worcester Lord Faulkner of Worcester rose to ask Her Majesty's Government what future they envisage for the British Transport Police in the light of the recent publication of their consultation paper.
The noble Lord said: My Lords, my purpose in asking this Question today is to draw attention to the consultation paper published last month by the Department for Transport, Local Government and the Regions, entitled "Modernising the British Transport Police", and to commend to the House the proposals contained within it.
I am most grateful to noble Lords who have put their names down to speak in the debate. I look forward very much to their contributions.
The British Transport Police (BTP) are the national police force for the railways throughout England, Scotland and Wales. They are also responsible for policing the London Underground, the Docklands Light Railway, the Croydon Tramlink and the Midland Metro. Their duties include law and order policing, maintaining the Queen's peace and protecting the staff and public on the railways. They are used to dealing with all crimes, including murder, violence, sexual offences, robberies, thefts and fraud. The have to cope with accidents, fatalities and suicides.
The history of the force can be traced right back to 1825, to the start of the railways in Britain and the beginning of modern policing. As the railway network spread across the country in 19th century Britain, and criminals discovered that offences could be committed on the move with rapid means of escape—in the same way that the modern motorway network has created similar opportunities—the need for a dedicated mobile police force, able to cross county boundaries, became evident.
The network nature of the railway system also means that incidents affecting its operation in one location can reverberate down the system, creating knock-on effects for thousands of people many miles away. That is why the railway has special policing needs and why a national police force for the railways has always been a cost-effective solution.
There are now 2,101 officers and 83 special constables serving in the BTP and 624 civilian employees working for the force. In terms of size, that puts the force about middle ranking when compared with the 43 Home Office forces in England and Wales. The BTP dealt with almost 70,000 crimes in 2000–01 and 43,000 minor offences. They had an annual budget of £123 million last year and a capital budget of £5 million.
The force is fully integrated into the British police service. It adopts Home Office police standards and procedures and it maintains close contact with local police forces. The selection process for BTP officers

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mirrors the requirements for all other police forces with some higher standards imposed in terms of eyesight due to the working environment. Chief officers are members of the Association of Chief Police Officers (ALPO).
Training at all levels of the force, from recruits through specialist policing and the highest levels of management, is conducted alongside all other police forces. Because of the specialist environment, additional training has to be undertaken. That includes officer protection, track safety and management of major railway incidents.
As the Minister for Transport, John Spellar, says in his foreword to the departmental consultation paper:
"They have a key role in tackling crime, minimising the fear of crime and increasing the confidence of passengers in a railway environment that is a safe and pleasant alternative to the private motor car".
He goes on to say:
"The BTP are central to the Government's transport policies. They have a crucial role to play in achieving targets for increasing rail use by both passengers and freight".
I had the good fortune to work with the BTP in two different contexts during my professional career before I joined this House. The first was during my time as an adviser to the British Railways Board, which, before privatisation, was the BTP's police authority. I was struck then by the great professionalism of the officers whom I met and their dedication to the concept of public service—qualities which I believe are still very evident in today's BTP.
The second area was during the anti-hooliganism work that I was involved in with the Football Trust, the body charged with helping the game tackle its social problems. The BTP pioneered much of the early work of gathering evidence on the travelling intentions of potential hooligans, and developed sophisticated techniques for tracking their movements and preparing for the outbreaks of violence which all too frequently occurred in the 1980s and 1990s in towns and cities in this country and abroad when English teams were playing. In my view, much of the subsequent success that NCIS has had in this area was due to the foundations laid by the BTP.
Policing football followers is still a major commitment. Some 3 million football fans are conveyed by rail each season. Where necessary, the BTP provide police officers on trains that may pass through seven or eight different police force areas.
An important priority for the force is keeping the railway infrastructure free from disruption. A great deal of resources go towards combating vandalism and trespass on the railways. That is a problem which costs the railways many millions of pounds per annum in delays, damage and injuries to passengers and members of staff.
A particular effort is being made in London. One result has been a 50 per cent reduction in the number of reported pickpocketing offences compared with last year. Students of the novels of Charles Dickens will not be surprised to hear that the most prolific offenders use young children to carry out their crimes.
Elsewhere within London there has been a great increase in the development of joint working arrangements with other police forces. The policing of major public order-type events, such as the anti-capitalism protests and May Day riots, and counter terrorism activity, are conducted in a seamless command and control structure involving all the London police forces and the BTP.
Their expertise has been needed elsewhere as well. In early July BTP officers were called upon to assist West Yorkshire police forces which had come under sustained attack during disturbances in Bradford. The BTP officers rescued a policeman who had been felled from his horse and took him to safety. They then came under attack and 20 were injured. The actions of the BTP officers were described by senior West Yorkshire police as "magnificent".
Given that track record of success, why is it necessary to consider changing the current arrangements for the BTP? One answer is that the legality of some of the policing activities away from the railway, which I have described, is doubtful to say the least. At present BTP's jurisdiction is confined to railway property, and anywhere in the pursuit of a crime committed on the railways, or to the prejudice of the railways.
It is therefore difficult to carry out a joint operation with the Metropolitan Police to tackle robbery, which may involve theft by the same people on the Underground—where the BTP have jurisdiction—and on the streets, where they do not. In those circumstances BTP officers are placed at risk as legally, away from the railway, they have no more power than an ordinary citizen.
The Government propose to address this by extending BTP jurisdiction outside the railways on non-railway matters when a BTP officer is called on for assistance by a member of a Home Office police force, or by a member of the public, or in an emergency, provided that he or she is in uniform or carrying their warrant card. That is a very important proposal and one that I support wholeheartedly.
Also welcome are the proposals in the consultation paper to extend BTP powers in connection with a range of recent pieces of legislation, the purpose of which has been to increase public safety, particularly in countering terrorism, and to mount joint police operations with Home Office forces across the country.
The Government are proposing to make no change in the principle on which the force is funded, which is that it is paid for entirely by the railway industry. According to the director general of the Railway Forum, the cost involved is some 2 per cent of the turnover of the railway business in the UK. Given that the force's needs for funds are likely to grow, particularly if more officers are recruited to combat vandalism and increase security, as well as provide an increased visible presence to reassure passengers—all of which, I am sure, noble Lords will support—the railway community will need to be convinced that it continues to get value for money from the subvention of the BTP.
Those concerns may be exacerbated by the proposal in the consultation paper to take control of the BTP away from the Strategic Rail Authority, to which it passed with the demise of the British Railways Board, and to establish an independent British Transport Police authority. I am sure that the formidable diplomatic skills of my noble and learned friend will be more than equal to the task of winning support for the proposals in the consultation paper. I shall certainly give him and the BTP my full backing for these important and worthwhile changes.
7.44 p.m.
Earl Attlee: My Lords, I am grateful to the noble Lord, Lord Faulkner of Worcester, for tabling this Unstarred Question—not least because usually on these occasions we have to berate the Minister for a failing on the part of the Government or some other subordinate organisation. On this occasion, we are discussing an organisation which has for some time quietly gone about its business without causing many problems, as the noble Lord so ably pointed out.
However, the consultation paper identifies a number of weaknesses in the current arrangements. From my personal viewpoint, I am disappointed that I was not aware of them during the passage of the Transport Act 2000 as they would have formed the basis of some interesting and useful amendments.
Not being an expert on the constitution of a police force, the discussion in the paper on the composition of the authority seems to make sense, but it will be interesting to hear the contribution of the noble Lord, Lord Condon, who will speak after me.
A minor problem identified in the paper is that it takes one JP to swear in a Home Office police constable but two for a BTP constable. A small point, but it illustrates some of the anomalies that have crept in over the years.
However, the general public will be affected by the matters covered in Chapter 5 which relate to BTP jurisdiction outside railway premises. The public must find it incomprehensible that a BTP officer, in uniform and travelling in a marked police car, cannot act in the same way as a Home Office police officer. Indeed, the subtle difference between the two would be lost on the general public.
However, the difference may not be lost on an experienced criminal, or even a hooligan, who may be aware that he cannot be prosecuted for an offence of obstructing a police officer in the exercise of his duty when a BTP officer is acting outside his jurisdiction as he then has only civilian powers. Not only does this result in severe dissatisfaction for members of the public; it can also put BTP officers in unnecessary danger.
Noble Lords will be aware that similar issues arise in respect of the MoD Police and that some provisions were made in the Armed Forces Bill. Regrettably, there was an attempt to steamroll through those
532
provisions without paving the way as this consultation paper does. In the end, those provisions had to be withdrawn from the Armed Forces Bill.
I understand that the Government intend to represent legislation for the MoD Police at some convenient opportunity. Does the Minister agree that it would make sense to legislate for the BTP and the MoD Police at the same time? Can he say whether there are any other non-Home Office police forces in a similar position to the BTP?
Chapter 6 covers the proposed legislative changes and the rationale behind them refers to the Coroners Rules 1984. Noble Lords will be aware that, sadly, a large number of people choose to commit suicide on railway property. No untimely death is easy to deal with, but the circumstances of the railway make it particularly distressing for the train driver, for those who have to deal with the aftermath and in particular for the BTP. I am sure that the whole House will join with me in expressing our gratitude for the way in which those involved discharge their duties in these most unpleasant circumstances.
In conclusion, once the consultation period is over and the responses have been considered, I hope that the Government will present the necessary legislation as soon as possible. It must be right to correct the anomalies identified.
7.48 p.m.
Lord Condon: My Lords, I declare an interest as a life member of the Association of Chief Police Officers and as a former police commissioner. I, too, am grateful to the noble Lord, Lord Faulkner, for giving me the opportunity to comment on this issue.
I have first-hand experience of the British Transport Police. I believe that it is an efficient and very effective police force which plays a valuable role in a number of areas of public safety. I should like to mention three areas in particular.
The first is its role in combating terrorism. It is not fully understood sometimes that the British Transport Police are second only to the Metropolitan Police in the number of terrorist incidents with which they have dealt in recent years. Consequently, the force has developed considerable expertise in dealing with terrorist incidents and helping to prevent them. I pay tribute to the role that the British Transport Police have played in recent years in combating terrorism.
Secondly, there is the professionalism and expertise the force has developed in dealing with tragic accidents and incidents on the railways. Again I have first-hand experience of seeing its officers on the ground, on the railways, dealing with the tragic incidents at Paddington and Southall, and, indeed, with other incidents in the years before that. Again, it has built up a quiet professionalism in dealing with these issues which is valuable to the public.
The third area is the general support that the force gives to police forces around the country. It is in the nature of its operation that, although they are railway police, they are mobile: they move between railway premises in vehicles and sometimes on foot. As the

533
noble Earl, Lord Attlee, said, they are often indistinguishable from Home Office police officers. I could recount numerous examples of situations in which they have given brave and selfless support to Home Office police forces around the country.
However, all these roles, and the morale generally, of the BTP are often undermined by either the absence of necessary powers or jurisdiction or the confused patchwork of powers and regulations under which the force operates. To be frank, there are times when it operates right at the edges of its legality and, I suspect, beyond it, in its endeavour to provide safety for the public. That cannot be satisfactory. Therefore, like the noble Lord, Lord Faulkner, I welcome the contents and proposals of the consultation paper. I welcome in particular the sections on jurisdiction and the section on extending the powers available to the British Transport Police.
On the question of jurisdiction, the consultative paper proposes extending the powers of the British Transport Police beyond railway property in the three circumstances mentioned earlier: first, in helping if called to help and assist Home Office police officers and police forces; secondly, if called upon to help and assist members of the public; and, thirdly, if called upon to deal with an emergency.
I have experience of the British Transport Police seeking to offer support in all three circumstances. The proposals in the consultation paper would bring welcome certainty, not merely to British Transport Police officers, but to the members of the public with whom they deal in such situations. I am aware of the support that the British Transport Police gave to police colleagues in Bradford, where almost 20 BTP officers were injured. Having spoken recently to the Chief Constable of the British Transport Police, I know that there remains confusion over liability as regards the injuries sustained by those officers, arising from the lack of clarity as regards the underpinning legality of their actions. Therefore, I support the proposals for extending the jurisdiction of the British Transport Police, not in a blanket way or a cavalier way, but in the very precise way set out in the consultation paper.
On the question of powers, I was pleased to see that the paper sets out to modernise and rationalise the powers available to members of the British Transport Police. I particularly welcome the proposal to include them within Sections 33 to 36 and Sections 44 and 47 of the Terrorism Act 2000. This would enable British Transport Police officers in certain circumstances to erect cordons and to stop and search vehicles and pedestrians in seeking to prevent terrorism. Those are welcome proposals.
Turning to the other proposals in the consultation paper, I look forward to the consultation process. There are some finely balanced arguments. On the question of a new strategic authority, I can understand the rationale of the proposals. Equally, I should like to think that the key stakeholders involved in the management of the railways will remain to have a clear say in the future of the British Transport Police. Again,
534
the fourth set of proposals, on the ability of the new authority to make regulations, contain some sensible ideas.
In conclusion, I hope that the consultation process will be conducted satisfactorily. I hope that these long overdue proposed reforms will enable the British Transport Police to feel that their efforts are underpinned and encouraged by reform, as opposed to the current position, which tends to undermine the effectiveness and damages the morale of this very efficient force.
7.55 p.m.
Lord Wallace of Saltaire: My Lords, I rise to speak in the gap merely to reinforce a point made by the noble Earl, Lord Attlee; namely, that the consultation paper raises parallel questions to those raised in our discussion on the Ministry of Defence Police. Like the noble Earl, I urge the Government to deal with these two national forces in parallel.
As defence spokesman for my party, I tabled an amendment to the Armed Forces Discipline Bill which precisely asked the Government to accept that the MoD Police should be subject to a civilian police authority and that they should be integrated with the Home Office police service. The Government refused. Had they accepted the proposal, it would have been much more likely that the section of the Armed Forces Discipline Bill dealing with the MoD Police would have gone through.
I welcome the statement in the ministerial foreword to the consultation paper that the operations of the transport police should be fully integrated with those of Home Office police forces, and that they should provide policing services to exactly the same high professional standard. I welcome also the statement:
"We propose to set up a Police Authority for the BTP based on the Home Office model … linking it, through the democratic process, to proper accountability to the public that it serves".
All of those things should apply also to the other major national police force, the Ministry of Defence Police. The same issues are at stake as regards the extension of powers and of geographical reach as were discussed—and not treated very well—during the passage of the Armed Forces Discipline Bill.
Perhaps I may flag one other issue that is not referred to in the consultation paper. There is the question that relates to all police forces, particularly national police forces, of the new requirement to contribute to a police reserve which is available for overseas operations. The British Government are committed to contributing to the European Union's 5,000-strong police reserve, already operating in Kosovo and Bosnia. This raises some large and difficult questions as regards the geographical basis of our civilian police. The Government ought to include such considerations in any future consultation paper and certainly in any legislation.
7.58 p.m.
Lord Bradshaw: My Lords, I thank the noble Lord, Lord Faulkner, for introducing the debate. I declare

535
an interest as a member of the Thames Valley Police Authority. I have great knowledge of police authorities, and I am a former railwayman and was a member of the Strategic Rail Authority.
In the foreword to the consultation paper the British Transport Police are described as a "national police force"—which in some ways they are. But in relation to many parts of the country that is a gross overstatement. The BTP have one constable, I believe, in Cornwall, and there are large parts of the country where they are not available to deal with incidents that occur on the railways. The "thin blue line", which is very thin in the ordinary national police force, is even thinner or non-existent in the British Transport Police.
The British Transport Police are represented in most of our major conurbations, but there are county police areas where there are no British Transport Police at all. I ask the Minister to consider in his reply what might be done about that. There could be a railway police division of the Met and a specialist division in two or three other places; but the railway is extensive. Trespassing, graffiti and vandalism, as well as terrorism, go on elsewhere and have to be countered. From my own recent experience in the Thames Valley area, I can tell the House that the BT police in Reading were quite unable to deal with an incident. It had to be dealt with by nine Thames Valley officers. But the general attitude of the ordinary national police force is that the railways have a police force and they do not go near it if they can possibly get away with it.
Secondly, I am concerned that the British Transport Police have directed much of their energy to prosecuting senior managers in the national rail system and ignoring the mundane trespass, vandalism and other problems that merit attention. I can think of a number of cases in which many British Transport Police officers have spent a great deal of time in largely fruitless attempts to prosecute.
The national railway system needs special constables, because the demands on it are very peaky. The noble Lord, Lord Faulkner, and others have referred to policing football violence. That occurs mostly on Saturdays and is ideally suited to a part-time force. The Minister should give urgent consideration to that. The financial problems that the noble Lord, Lord Faulkner, referred to would be dealt with more efficiently by a special force than by a full-time force.
The major objection to the consultation paper centres on some of the powers that the Home Secretary seeks to abrogate to himself. The new authority will be the only one whose chairman is appointed by the Home Secretary. He will also appoint the vice-chairman. I see no reason why the Home Secretary should have that power. In all other cases, police authorities elect a chairman from among themselves. I also see no purpose in the Secretary of State setting the objectives or performance indicators for the force. The National Audit Office, through the district auditor, has set multifarious objectives. We know what they are—to stop crime. However, there are aeons of performance objectives and lots of civilians collecting evidence to feed those performance objectives.
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I was not in favour of independent members being appointed to police authorities, but I must say that they have been highly successful in Thames Valley. The independent members of that non-political authority, which covers three counties, have distinguished themselves, but they are chosen by the members of the authority. The Home Secretary is sent a long list, which he shortens, but the final choice of members is made by the authority. When the proposals come forward as a Bill, we shall look for some amendments on that.
I share the view expressed by many noble Lords that we owe a debt of gratitude to many members of the force for what they do, but we should not be blind to the fact that there is room for many amendments during the consultation period. I should be surprised if some proposals were not made. I urge the Minister to pay heed to what I have said.
8.4 p.m.
Viscount Astor: My Lords, I welcome the opportunity to debate the subject. However, when I started reading the Government's consultation document I was immediately disappointed because it fails to tackle one issue that should have been raised and on which the noble Lord, Lord Bradshaw, briefly touched. The Government should set out the reasons for their belief that a separate force will still be needed in the future. There is clearly an argument for that, but many would argue that with modern policing and communications, the railways have changed. We no longer live in the Victorian age, when a constable got on a train and was responsible for it for the entire journey. The Government should have explained why the responsibility should not be devolved to regional police authorities. I am not saying that it should be; I am simply disappointed that the Government did not address that argument, because it is fundamental for the future.
The only comment on that subject came in the ministerial foreword by Mr John Spellar, who said:
"The Government believes that the current arrangements for the BTP can be improved".
I am sure that there is no current arrangement anywhere that cannot be improved if one tries hard enough.
We need to look behind this and remember the role of the Treasury. I cannot imagine any Home Office Minister getting very far expecting the Treasury to pick up the Bill for handing over the British Transport Police to the Home Office. Perhaps that is a reason.
I hope that the Minister will tell us this evening how well he thinks that the BTP integrate with other police forces. We have heard from the noble Lord, Lord Condon, who had a distinguished career in the police force. He told us how efficient the British Transport Police are. I am sure that he is right and his expertise are welcome in the debate.
I shall deal with various issues, but I am afraid that they all come back to funding. The British Transport Police look after the national railways, the London Underground system, the Docklands Light Railway

537
and various tram systems and tram links. They have a huge remit. We have heard that they have more than 2,000 police officers and more than 500 civilian staff. More than 400 of their officers are assigned to the London Underground and they have a budget of £123 million.
I was interested to see that the force deals with all crimes except bigamy. I did not realise that the British Transport Police must therefore deal with adultery.
Lord Falconer of Thoroton: That is not a crime.
Viscount Astor: There we are, my Lords. That shows the benefit of having the noble and learned Lord, Lord Falconer, here to put me right on points of law. As always, I am grateful to him.
The British Transport Police also deal with crimes of violence, sexual offences, robberies, theft and fraud. As the noble Lord, Lord Condon, said, they have been particularly involved in anti-terrorism strategies. They also deal with sporting events and major incident handling, down to the lowest levels of offence such as graffiti.
The Minister said that the Government's policy was to give the BTP wider jurisdiction so that they could help with emergencies and the policing of special occasions such as New Year. We welcome that. However, I am concerned about the budget of the British Transport Police, because it is funded fully by the industry, primarily the train operating companies, who contribute 50 per cent, with Railtrack contributing 30 per cent and London Underground 20 per cent. That is perfectly reasonable if the British Transport Police deal only with the railways, but they now seem to be dealing with many other areas outside. We have heard how they helped the Yorkshire Constabulary when it was in trouble. That is thoroughly laudable and we must praise the BTP for it, but is it fair that the train operating companies should pay the price for that? Is there a mechanism for the BTP to receive funding from the relevant police authority if they act outside their immediate jurisdiction? We cannot expect the railway industry to fund such new responsibilities.
The consultation document contains a rare reference to immigration. We know that the Channel tunnel suffers a good deal from people attempting to use it to enter this country. What role do the BTP have in immigration? If they are to have a role in combating terrorism, who should pay the bill? The BTP's jurisdiction will inevitably extend beyond railway property, which is probably a good thing.
Half of all terrorist attacks on the mainland take place on the railways, which shows the importance of the BTP's role, but where is Home Office involvement and liaison with other police forces? Should not that role be funded and supported by the Home Office?
I note that it is intended to allow officers to carry CS gas by amending the Firearms Act 1968. Will that amendment also allow British Transport Police officers to carry firearms?
538
It is to be welcomed that an equivalent to the Police Complaints Authority will be established, so that the BTP are fully included in the complaints mechanism.
In Scotland, railway security is a reserved matter under the Scotland Act 1998 but the prevention and detection of crime are devolved from the Scottish Parliament. The Government ought to consider whether or not a separate force should exist in Scotland or be accountable in Scotland. The same goes for Wales. The British Transport Police do not operate in Northern Ireland. Who is responsible—just the ordinary police? I shall be interested to hear the Minister's answer.
There is a proposal to extend BTP jurisdiction beyond rail freight terminals. Anything that allows police officers to carry out their duties where they have been thwarted in the past by having to stop at an imaginary line is good—provided that the extent of their powers and operations is made clear.
I hope that the Minister will take account of all the representations made during the consultation period. Meanwhile, I return to my central question. In extending the role of the British Transport Police, will the funding mechanism be reviewed?
8.14 p.m.
Lord Falconer of Thoroton: My Lords, I join other noble Lords in thanking my noble friend Lord Faulkner of Worcester for raising the subject of the British Transport Police on a timely day. This interesting debate has served to highlight the value of the BTP to all who use or work on the railways. The Government are fully committed to the BTP continuing to play a crucial role in tackling crime on the railways and contributing to a pleasant environment in which to travel—encouraging more people to use the railways.
The proposals in the consultation paper reinforce that commitment to the BTP and will enhance their future status as a dedicated, specialist railway police force. The benefits will be an improvement in the force's public accountability and in its effectiveness and efficiency by providing the BTP with statutory jurisdiction and the range of policing powers it needs. Our overall aim is strengthening the public standing of the force and putting it on a proper footing to deal with the challenges ahead.
The BTP have an excellent record of tackling crime, minimising fear of crime and increasing passenger confidence in travelling on the railways. Latest crime statistics show a 7.5 per cent reduction in total crimes reported to the BTP compared with last year. On London Underground—which is also policed by the BTP—there was an overall fall in crime of 21 per cent. That was largely due to BTP's success in combating pickpockets. It is worth recording that improvement and paying tribute to the work of the BTP.
The noble Viscount, Lord Astor, asked— in the manner of an inquiry, rather than implicit criticism—why the BTP should continue. Railways are a prime target for terrorist activity and the BTP have developed a successful, nationally co-ordinated system

539
for dealing with terrorist attacks and threats that recognises their network implications and have successfully minimised their impact.
The Government consider that the railways are best protected by a unified police force providing seamless security to the whole network. BTP operations are fully integrated with Home Office police forces and provide policing services to exactly the same high professional standard. The BTP cover virtually the full range of matters handled by any police force. Also, BTP officers are professionally trained to understand operating procedures and legislation affecting the railways. They have developed valuable specialist expertise for dealing with the particular needs of the railways—including the management of large travelling groups such as football supporters and the control of antisocial behaviour in enclosed areas such as railway stations and on trains. The BTP are central to the Government's crime and transport objectives and it is vitally important that the BTP continue and have the full support of the law in carrying out their duties and are fully accountable to the public for what they do.
The noble Lord, Lord Bradshaw, asked whether the BTP are thinly spread. He referred to Cornwall having only one BTP constable and to other areas of the country that have none. The BTP co-operate closely with local forces, giving and receiving assistance wherever possible. Policing a large rural area with limited resources is a challenge for any force—not least a national force such as the BTP. So they are increasingly targeting resources at specific hot-spot crime areas while working closely with county police forces and the rail industry to identify problems and address them.
For all the reasons I have given, it is well worth preserving the BTP as a specialist force. I emphasise that the BTP's efficiency is not in question. Her Majesty's Inspectorate of Constabulary, which undertakes regular inspections of the force, stated in its most recent report:
"The BTP continue to be an effective and efficient force when judged alongside the criteria applied to Home Department forces".
Merging the BTP with local forces would risk the loss of expertise and possibly lower the priority given to policing the railways. For all those reasons, the BTP should stay separate.
The noble Earl, Lord Attlee, the noble Viscount, Lord Astor, and the nobles Lord, Lord Condon, Lord Faulkner and Lord Wallace of Saltaire, referred to our intention to provide the BTP with jurisdiction off the railways in limited circumstances. The lack of any jurisdiction outside the railways on non-railway matters has caused problems for many years. BTP officers frequently find themselves called on to assist the public or local police forces with non-railway matters. That most often occurs with emergencies, such as a break-in or traffic accident—but also in joint police operations such as those to counter the anti-capitalist riots and the Notting Hill carnival. BTP officers do not benefit from the protection of acting as
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a constable at such events because the officers' jurisdiction is limited to rail premises and business. That exposes officers to risks, so we intend to provide them with jurisdiction off the railways in limited circumstances and to establish on a statutory basis the BTP's existing jurisdiction over the railways.
Today is particularly significant because those proposals will be taken in the Anti-Terrorism, Crime and Security Bill that was published today. Therefore, the proposals are going forward today.
The noble Earl, Lord Attlee, asked whether any other police forces are in similar categories. There are two of which I am aware—the Ministry of Defence Police, to which the noble Lord, Lord Wallace of Saltaire, referred, and the UK Atomic Energy Authority Police, who have certain similar powers in relation to atomic energy premises. In relation to jurisdiction, similar powers have been given to the MoD Police under today's Bill. The UK Atomic Energy Authority Police have been given different, more limited powers under the Bill.
While on that subject, it may be worth my dealing with the point raised by the noble Lord, Lord Wallace of Saltaire. He asked about the position of the MoD Police in relation to a police authority. The BTP police public areas, albeit on private railway land. The MoD Police do not. They already have a police committee. The BTP authority, which was referred to in the consultation document, needs to reflect the conflicting needs of a railway industry trying to keep costs down and the interests of the public in adequate policing. There is no similar requirement with regard to the MoD Police.
Lord Wallace of Saltaire: My Lords, I want to take up the issue of the MoD police authority. As I recall, it has a majority of MoD officials on it. But, with demonstrations outside bases over the years, the MoD Police have now had some considerable and long-term contact with the public. That is partly why there has been so much controversy.
Lord Falconer of Thoroton: My Lords, the point that I was making was: what are the similarities and dissimilarities between, on the one hand, the British Transport Police and, on the other, the MoD Police? The reason that it is thought appropriate to have a BTP authority is because of the interests of the railway industry and the public in adequate policing. I am sure that the noble Lord is right. More interface takes place between MoD Police and the public than was previously the case. However, the conflict does not exist between the railway industry and the public as it does in relation to the BTP. Therefore, they are in a different position. With regard to the consultation paper on the BTP, it would be quite wrong to seek to build a similar argument in relation to the MoD Police.
I move on to the issue of powers. We propose to extend to the BTP certain powers already available to the Home Office police forces. These range from the routine, such as powers to remove from the railway young people playing truant, which will improve the effectiveness of the BTP, to powers to erect cordons

541
and to stop and search people and vehicles under the Terrorism Act. Since 1997, more than half of the terrorists attacks on the mainland have taken place on the railway network. The BTP are second only to the Metropolitan Police in dealing with the number of terrorist threats that are made within their jurisdiction.
In the current climate of heightened security alert and the continuing terrorist threat, particularly to our transport systems, it is vital that the BTP have access to those powers in order to ensure public safety. Again, certain of those powers will be taken forward in the Anti-Terrorism, Crime and Security Bill.
Finally, as I have already mentioned, we propose to set up an independent police authority, which will be based on the model of Home Office police authorities. It will oversee the management of the force and link it through the democratic process to proper accountability to the public that it serves.
During the preparation of their proposals, the Government considered alternative options for funding the BTP, including full and partial public funding. However, we concluded that the force should continue to be funded by the industry. The railway industry has played an important role in scrutinising and exercising downward pressure on costs while endeavouring to reach a balance between the overall policing level and the overall policing cost. The Government want the industry to continue that role. The move to an independent authority for the BTP will reinforce the existing arrangements for ensuring an appropriate balance between the needs of the industry and passengers who, along with the industry, benefit directly from BTP services.
The Government have provided funds for national initiatives where wider public benefits are available. They have provided £2.3 million to allow the BTP to participate fully in the new national police radio system. We have also provided funds to enable the BTP to contribute fully to the expansion of the national DNA database. Operators have also been given funds to provide greater CCTV coverage.
I turn to the issues raised by the noble Viscount, Lord Astor, concerning joint operations. The consultation document also contains proposals for situations where a joint operation takes place between the BTP and a Home Office police force. Arrangements can be made for funding to be sorted out between the two police forces. In default of agreement being reached as to who is to pay for what, arrangements for agreement to be reached in relation to funding disputes are also set out. Therefore, provision exists in the consultation paper in relation to how other police forces will contribute to BTP costs where the BTP contribute to the activities of another police force. I believe that I have covered all —the points raised by the noble Lord.
There are two other issues with which I shall deal. First, I turn to the matter of firearms. The British Transport Police will be able to carry only CS sprays and ammunition and no other type of firearm, such as guns, which were referred to earlier. Secondly, the issue of immigration and the Channel Tunnel was also
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raised. The Channel Tunnel is policed by Kent police, who operate fully with the British Transport Police and Channel Tunnel operators regarding immigration. Therefore, those bodies operate together.
Primary legislation will be required in order to implement many of the changes. The Government will seek to include them in suitable legislative opportunities. As I have mentioned, some of the measures include an extension of BTP jurisdiction outside the railways. The extension of powers related to anti-terrorism activities are to be taken forward in the Anti-Terrorism, Crime and Security Bill published today.
The BTP have a strong reputation as an efficient national police force, dedicated to the protection of our railways and rail travellers. Our proposals for modernising the BTP will help the force to build on that reputation, improve its ability to protect the public by increasing its powers in certain areas to match those of Home Office constables, and will also ensure proper public accountability.
I am pleased to have the opportunity to pay tribute to the BTP in this debate, and I am grateful for all the comments that have been made. We shall, of course, take them all into account during the process of consultation on the consultation paper.
[The Sitting was suspended from 8.27 until 8.33 p.m.]

Commonhold and Leasehold Reform Bill [H.L.]
Consideration of amendments on Report resumed on Clause 123.
[Amendment No. 71 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 72:
After Clause 123, insert the following new clause—
"ABOLITION OF MARRIAGE VALUES
In Schedule 6 to the 1993 Act, omit—

(a) paragraph 2(1)(b);

(b) paragraph (4);

(c) paragraph 5A(2)(b);

(d) paragraph 5C;

(e) paragraphs 9 and 9A;

(f) paragraph 10(1 )(b);

(g) paragraph 12;

(h) paragraphs 15 and 16; and

(i) paragraphs 19 and 20."

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 74, 75, 83, 85 to 87, 92 and 93.
Those amendments form a group whose purpose is to remove the payment of marriage value from the calculation of the amount that someone has to pay when exercising a right of enfranchisement or to obtain an extended lease. Amendments Nos. 72, 74 and 75 deal with marriage value in the case of collective enfranchisement; Amendments Nos. 83, 85 and 86 deal with marriage value in the case of the grant of an

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extended lease of a flat; and Amendments Nos. 87, 92 and 93 deal with marriage value in the case of the enfranchisement of leasehold houses.
This is perhaps the most important issue that has been raised during our debates on the Bill. It is of great importance to the tens of thousands of leaseholders who may be considering enfranchisement or seeking extended leases and who are concerned about the price that they have to pay for them.
Marriage value in its simplest form arises when the leaseholder of a house buys the freehold and the value of the house as a freehold with vacant possession exceeds the separate market value of the leasehold and of the reversionary freehold sold as an investment. The excess is described as marriage value. The principles relating to the computation of marriage value in the cases of collective enfranchisement of blocks of flats and in the case of grant of extended leases are more complex and it would not serve any useful purpose at this time of the evening to try to explain how they work.
The increase in value—the creation of the marriage value—is due mainly to the fact that the leaseholder is a special purchaser at least in cases, as will frequently occur, when the leaseholder is in occupation. That means that the leaseholder is willing to pay more to buy the freehold than would an investor who was simply buying the freehold as an investment. The leaseholder avoids what would otherwise be the consequences of the expiring of the lease; namely, the fact that he, she or they will have to leave and find— perhaps buy—somewhere else to live. During the years leading up to that, they will go through a period of uncertainty. A leaseholder who exercises a right to enfranchise when the lease is coming towards its end—that is when the leaseholder is most likely to want to exercise the right and when the marriage value is at its greatest—is, as I have said, a special purchaser. In that situation there is no level playing field.
We say that it is right that the market price should be calculated as between a willing seller and a willing buyer, but in such a case the price is calculated on the basis of a willing seller and a buyer who is not only willing but eager to purchase. That means that the leaseholder has to pay because he is a special purchaser.
We believe that that is inappropriate; the leaseholder in such cases should be required only to pay the same as what the freeholder—or reversioner—would get if the reversion was sold as an investment and if the leaseholder was not a special purchaser but was willing to pay only what the purchaser of the lease would pay in order to purchase it as an investment again. We believe that it is appropriate to abolish marriage value in that regard and that the freeholder should be entitled to no more than what he would get for selling the freehold to an investor on the basis that the leaseholder was not a special purchaser. Otherwise, we believe that the freeholder would get the benefit of the potential detriment that would be suffered by a leaseholder who was faced with the threat of the loss of his home.
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This matter has been debated at considerable length on earlier occasions and I do not propose to say anything more about it. I beg to move.
Lord Williams of Elvel: My Lords, I have a certain sympathy with the amendment of the noble Lord, Lord Goodhart, because I believe that the concept of marriage value is somewhat flawed. During Grand Committee stage of the former Bill, and in Committee on this Bill, I tabled a slightly modified amendment to the tapering of marriage values. I do not believe that 80 years has anything to do with the matter. If the marriage value is cancelled after 80 years I do not see why it should not reduce during the period from 80 years. It seems odd that someone who has a lease with 79 years to run has to pay full value whereas someone with a lease of 80 years pays no marriage value.
Before tabling the amendment, I considered the amendment of the noble Lord, Lord Goodhart. If that were accepted by the Government my amendment would fall. However, if the noble Lord's amendment is not accepted by the Government in this House, I would wish to revert to the tapering question at Third Reading.
Baroness Gardner of Parkes: My Lords, I, too, support the tapering principle. A hard line is always drawn when a person is just on the 80 years. A leasehold association today asked me to speak in favour of the 80-year point. Although it went into great depth as to whether the figure should be 70 or 80, even that association did not seem 100 per cent sure. It opted for 80 years as the better choice.
The point raised by the noble Lord, Lord Williams, would answer that issue. If it were a tapering process, it would be fairer.
8.45 p.m.
Lord Falconer of Thoroton: My Lords, as the noble Lord, Lord Goodhart, said, marriage value has been debated at great length at every stage of the Bill and I should not endear myself to the House if I went into all the arguments for and against at this late stage. We know what they are.
Our position remains as set out in the Bill. It remains our view that the Bill strikes the correct balance between the competing interests of landlords and leaseholders. We cannot support an alternative valuation method which would result in a compulsory and substantial transfer of resources from one private individual to another. As the noble Lord, Lord Goodhart, will know, there plainly is marriage value in selling from the freeholder to the leaseholder. The essence of the transaction is that for 50 per cent of what it would cost, the lessee gets the value of granting himself a long lease. So he and the freeholder end up in a perfectly sensible position.
The issue of tapering was raised by the noble Lord, Lord Williams, and supported by the noble Baroness, Lady Gardner. The answer is this. Above 80 years we have taken the view that there is no marriage value worth arguing about. At 80 years it starts to have value

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and it goes up as one gets closer to the end. The nature of the asset, as it goes down from 80 years, brings with it its own tapering. It will go up in value from 80 down to nil. It will start at a low value at 80 because the principle underlying our approach is that above 80 the value is so small that it is not worth arguing about. That is why we argued for no marriage value above 80. The fact that the marriage value goes up from 80 downwards brings its own tapering.
We reject the approach taken by the noble Lord, Lord Goodhart. We have considered carefully the question of tapering. However, for the reasons I have given, that does not appeal to us. I invite the noble Lord to withdraw the amendment. I invite my noble friend Lord Williams of Elvel to think again about whether he should bring forward an amendment at Third Reading because of the explanation I have given as to why tapering would not be appropriate; and make a similar invitation to the noble Baroness, Lady Gardner.
Lord Goodhart: My Lords, I am not surprised by the outcome of this short debate. Before I turn to marriage value, perhaps I may deal briefly with the tapering point.
I would not reject the proposal for a taper but we consider that if there is to be tapering it is at the wrong end. What is needed is a taper which increases as leases get towards their end. It is at that stage that the impact of the special purchaser position is at its greatest. We believe that a taper from, say, years 80 to 50 when the reversionary value is small is relatively unhelpful. If there were a taper it would be more helpful if it reduced the proportion of the marriage value taken by the freeholder in the last few years of the lease.
However, on the abolition of marriage value we have made our points. It is a matter on which we feel strongly. It would not be appropriate to divide the House at this time of the evening but we shall return to the matter at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 73 to 77 not moved.]
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 78:
Page 63, line 2, after "only" insert "or"
The noble Lord said: My Lords, in moving the amendment, I speak also to Amendments Nos. 80, 90 and 91. Amendment No. 78 corrects a minor drafting defect which was identified by the noble Lord, Lord Goodhart, and his good friends in the Law Society. Again, we are grateful to them for drawing this to our attention.
Amendment No. 80 extends the period during which personal representatives have the right to claim a new lease of a flat from six months to one year. This was also proposed by the noble Lord, Lord Goodhart, and the Law Society and we agree that this is a fair and sensible change. Amendment No. 91 makes a similar change in relation to the enfranchisement of leasehold houses.
Amendment No. 90 has been put forward in response to concerns raised by the noble Earl, Lord Caithness, during Second Reading that other changes in the Bill, in particular the abolition of the low rent test, would enable certain business tenants who occupy premises which could be regarded as houses to enfranchise under the 1967 Act. It was never our intention to grant enfranchisement rights in relation to properties such as hotels or public houses. My noble and learned friend Lord Falconer has already undertaken to do this in his letter to the noble Earl, Lord Caithness, of 23rd July. Business tenants will not be able to enfranchise if their lease, when originally granted, was for a term of 35 years or less Most genuine business tenancies will generally be for terms of less than 35 years.
There may be a very small number of business tenants who are currently able to enfranchise under the 1967 Act who would lose their right as a result of this proposal. These would be tenants who had a lease of 35 years or less at a low rent. I must stress that such leases would be very unusual indeed. However, we intend to allow any such tenants a window of opportunity to exercise their right before it is withdrawn. As a consequence, commencement of this provision will be delayed for a period of 12 months following Royal Assent to give those affected the opportunity to serve an initial notice. Publicity relating to the Bill will draw attention to this. In order to avoid creating a window of opportunity for other business tenants to enfranchise, the commencement of the provisions which abolish the low rent test will be similarly delayed. I beg to move.
Lord Goodhart: My Lords, I rise to say that once again I am grateful to the Government for accepting the proposals, which emanate from the Law Society.
On Question, amendment agreed to.
[Amendment No. 79 not moved.]
Clause 129 [Personal representatives]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 80:
Page 63, line 19, leave out "six months" and insert "one year"
On Question, amendment agreed to.
Clause 131 [Valuation date]:
[Amendments Nos. 81 and 82 not moved.]
[Amendments Nos. 83 and 84 not moved.]
Clause 132 [Landlord's share of marriage value]:
[Amendment No. 85 not moved.]
Clause 133 [Disregard of marriage value in case of very long leases]:
[Amendment No. 86 not moved.]
Clause 134 [Amendments of 1967 Act]:
[Amendment No. 87 not moved.]
Clause 135 [Abolition of residence test]:
[Amendment No. 88 not moved.]
Clause 136 [Reduction of qualifying period as tenant etc]:
[Amendment No. 89 not moved.]
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 90:
After Clause 136, insert the following new clause—
"EXCLUSION OF CERTAIN BUSINESS TENANCIES
After subsection (1ZA) of section 1 of the 1967 Act (inserted by section 135(2)) insert—

"(1ZB) The references in subsection (1)(a) and (b) to a long tenancy do not include a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies unless—

(a) it is granted for a term of years certain exceeding thirty-five years, whether or not it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise,

(b) it is for a term fixed by law under a grant with a covenant or obligation for perpetual renewal, unless it is a tenancy by sub-demise from one which is not a tenancy which falls within any of the paragraphs in this subsection,

(c) it is a tenancy taking effect under section 149(6) of the Law of Property Act 1925 (c. 20) (leases terminable after a death or marriage), or

(d) it is a tenancy which—

(i) is or has been granted for a term of years certain not exceeding thirty-five years, but with a covenant or obligation for renewal without payment of a premium (but not for perpetual renewal), and

(ii) is or has been once or more renewed so as to bring to more than thirty-five years the total of the terms granted (including any interval between the end of a tenancy and the grant of a renewal).

(1ZC) Where this Part of this Act applies as if there were a single tenancy of property comprised in two or more separate tenancies, then, if each of the separate tenancies falls within any of the paragraphs of subsection (1ZB) above, that subsection shall apply as if the single tenancy did so.""

On Question, amendment agreed to.
Clause 138 [Personal representatives]:
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 91:
Page 66, line 13, leave out "six months" and insert "one year"
On Question, amendment agreed to.
Clause 141 [Tenant's share of marriage value]:
[Amendment No. 92 not moved.]
Clause 142 [Disregard of marriage value in case of very long leases]:
[Amendment No. 93 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 94:
Before Clause 146, insert the following new clause—
"MINIMUM TERM FOR LEASES AT A PREMIUM
(1) No lease of a flat or house may be granted at a premium unless the term of this lease is not less than 300 years.
(2) In this section "flat" has the same meaning as in Chapter 1 of this Part and "home" has the same meaning as in Part I of the Leasehold Reform Act 1967 (c. 88)."
The noble Lord said: My Lords, we did not move this amendment in Committee this time round, but we moved a similar amendment during debate on the previous Bill, which fell because of the general election.
The purpose of the amendment is to require that all future residential leases of property at a premium should be for a period of not less than 300 years. The amendment has been proposed because my noble friend Lord Jacobs feels strongly about the matter and persuaded us that it was right to debate it. Unfortunately, although he was present earlier, he is unable to be present now because it is his 70th birthday and he has a long-standing commitment—a surprise party, but not as much of a surprise party as it might have been. So he has a good excuse for not being here.
The reason for the amendment is that the leasehold system has proved itself thoroughly unsatisfactory as a vehicle for holding residential property and should be phased out. It would be replaced by a mixture of commonhold, ordinary freehold and rentals. The problem is that until the difficulties with positive covenants, which we discussed earlier, have been resolved, in practice it is impossible to have freehold flats. Where commonhold is not practicable, leases should be of a length more or less equivalent to a freehold—300 years is probably enough; we doubt whether a 300-year lease will give rise to problems in 2301.
Of course, we cannot abolish existing leasehold property for a shorter term than that, and there would be difficulties if we provided that all renewals of existing leases should be for terms of 300 years. That might involve leaseholders who wanted to extend their lease for a shorter period having to pay more than necessary. Nevertheless, the amendment should receive serious consideration. I beg to move.
Baroness Gardner of Parkes: My Lords, I rise to support the amendment, because it contains an attractive principle. If the Government were to accept it, it would show that they had a real desire for commonhold—which I still doubt. For that reason I strongly support the amendment.
Lord McIntosh of Haringey: My Lords, I appreciate the concern expressed by the noble Lord, Lord Goodhart, on behalf of the noble Lord, Lord Jacobs. Perhaps I may, on behalf of Members on these Benches, ask the noble Lord to convey our congratulations to the noble Lord, Lord Jacobs, on reaching his alloted span.
As I understand it, the point raised by the noble Lord, Lord Goodhart, is that in order to promote the use of commonhold we should remove the attractiveness of the leasehold system to landlords and developers. Unlike the noble Baroness, Lady Gardner of Parkes, we are confident that commonhold will be attractive to developers and will be widely adopted. Many current developments already offer 999-year leases and a share in a leaseholders' management company.

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However, until commonhold has been tried and tested, we consider it premature to restrict the use of leasehold in the way that the amendment provides. Any restriction on the granting of leases would limit the choice of the purchaser. If a person wishes to save on rent or fix his housing costs over a period by paying a capital sum for a short lease, he should be allowed to do so. As drafted, the amendment would prevent the granting of a six-month tenancy for a single payment.
A developer or landlord may have only a leasehold interest and be unable to grant leases beyond the term of his own interest. A long minimum term would mean that the landlord could rent units out only on periodic tenancies and could prevent development taking place. Some local authorities have properties on land which they hold on a leasehold basis. If such a lease runs for 150 years, should we be saying that because they cannot offer a lease of 300 years, they should be prevented from selling leases to tenants under the right to buy? That would not be popular.
Of course, we will monitor the development of commonhold after the Bill is enacted. We expect it to become the preferred form of tenure and that leasehold will gradually wither on the vine. We would be prepared to consider restrictions on its use in the longer term if there was a clear need to do so and the benefits to be gained outweighed the disadvantages. But at present, we cannot accept the amendment.
Lord Goodhart: My Lords, I am grateful to the Minister for at least raising the possibility of some move in that direction in the longer term, if not in the Bill. I have promised my noble friend Lord Jacobs that we will table the amendment at Third Reading to give him the opportunity to make the speech that he has been unable to deliver today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9 p.m.
Schedule 12 [Leasehold valuation tribunals: procedure]:
Baroness Gardner of Parkes Baroness Gardner of Parkes moved Amendment No. 95:
Page 123, line 12, at end insert—
"PUBLIC INFORMATION
2A (1) Procedure regulations under paragraph 1 shall include provision about the public information to be provided by leasehold valuation tribunals.
(2) Such information referred to in sub-paragraph (1) above shall include—

(a) details about the jurisdiction of leasehold valuation tribunals,

(b) guidance on the ways of applying to leasehold valuation tribunals, and

(c) descriptions of recent decisions of leasehold valuation tribunals."

The noble Baroness said: My Lords, I have been looking for some way of bringing up the situation of people who purchase their freehold and I must pay
550
tribute to the Public Bill Office for the great help it gave me in working out where I could place this issue so that it would come into this Bill.
I have been in correspondence with the noble and learned Lord, Lord Falconer, on this matter and that correspondence revealed that the jurisdiction for dealing with estate management schemes passed, under the 1993 Act, from the High Court, where it was vested under the 1967 Act, to the Leasehold Valuation Tribunal. I passed that information on to a gentleman who was anxious to know how he could do something to help himself, having enfranchised his own house and not realising, until he received the documents, that he would be handed a 30-page estate management scheme by which he would be bound and which would be more onerous and expensive than the previous lease.
It is a strange situation and I raised the point earlier today in your Lordships' House. I felt it was important that people should be obliged to disclose documents. The noble Lord, Lord McIntosh, said that he would write to me on this point. Omissions are as bad as wrong facts being put into information.
Returning to the case in point, I passed the information on to the gentleman in question, who rang the Leasehold Valuation Tribunal and said that he understood that that office could deal with it. Its answer was, "No, we have no jurisdiction. You must go to the High Court". I relayed that information back to the office of the noble and learned Lord, Lord Falconer, and by a process of time we located someone higher up in the Leasehold Valuation Tribunal who, whether due to the information they had been given by the office of the noble and learned Lord or from digging into the recesses of history, suddenly discovered that it does have jurisdiction to deal with estate management cases in terms of having powers to vary. When I raised this issue earlier the noble and learned Lord, Lord Falconer, said that every estate management scheme must have the powers of variation in it or a process by which it could be varied.
The gentleman in question was feeling rather aggrieved about being pushed backwards and forwards and obtaining different answers. I have since spoken to the vice-president or president of the Leasehold Valuation Tribunal and was told that there is no question but that it does have jurisdiction. I make that point now so that it will be recorded in Hansard, and any applicant wishing to take a case to the Leasehold Valuation Tribunal should be able to produce that copy of Hansard and say, "I do have the right to bring this case to you and you do have the jurisdiction".
It is extraordinary that the tribunal did not know it had jurisdiction; and that it then said that it had dealt with only two cases a long time ago which involved council estates and which were not a parallel That gives the applicant the feeling that the tribunal is so unfamiliar with the process that he will not get a fair hearing even if he does take his case there. He feels that the members may all be prejudiced because he stirred the matter up.
I do not believe that. I believe the tribunal will conduct the case fairly. But it is important for people to know their rights and where they can obtain them. It is also necessary for the tribunal to issue either leaflets or instructions in some way to make clear what our rights are and a simple way of applying for them. The whole purpose of the leasehold valuation tribunal is for people to be able to deal with their own cases and not be involved in lengthy and expensive procedures. I beg to move.
Lord Falconer of Thoroton: My Lords, I am sympathetic to the points raised by the noble Baroness, Lady Gardner of Parkes. Amendment No. 95 is aimed at ensuring that the public can obtain certain information from the LVT. We agree that the public should have access to the sort of information described in order to assist in and avoid precisely the situation that the noble Baroness related. It is not necessary to deal with such matters through regulation. I suspect the amendment, quite rightly, was simply a means of raising this issue.
The Government already produce a free booklet entitled, Applying to a Leasehold Valuation Tribunal, which is available from numerous sources, including the LVT itself. That booklet includes guidance on the jurisdiction of the LVT and is regularly updated to reflect new developments.
Of course, neither we nor the LVT can give legal advice. That is the role of the Leasehold Advisory Service—more commonly known as LEASE—an independent body funded by the Government. LEASE also produces a booklet called Leasehold Valuation Tribunals—a User's Guide, and two booklets on applying to the LVT, one for enfranchisement and lease renewals and one for disputes relating to the management of the property. Again, they are free publications which include advice on matters of jurisdiction.
The Leasehold Advisory Service also has a website on which it lists LVT decisions, summarises the key facts of each case and provides a link to a copy of the actual decision. Paper copies of LVT decisions are available from the LVT on request. We would be more than happy to consider any other suggestions the noble Baroness has as to how one could improve the information that is available.
Perhaps I can turn to the specific question of estate management schemes, and again I am grateful to the noble Baroness for raising this matter. We have corresponded on this matter and the noble Baroness first raised it with me in Committee. However, she rightly continues to press it as an important issue and perhaps I can respond in a little detail.
As the noble Baroness will know, estate management schemes are designed to ensure that common facilities and common standards can continue to be upheld on an estate where one of the properties on that estate is enfranchised. We understand why enfranchised leaseholders dislike
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being subject to such schemes. But we are also satisfied that, as a general principle, estate management schemes are both desirable and necessary.
That said, there are two key questions which need to be looked at within the present arrangements. First, we are aware anecdotally that there may be some schemes which have not been set up properly. That seems to include some instances of schemes which contain unnecessary and possibly inappropriate terms—the noble Baroness referred to a large document.
As the noble Baroness is aware, there are already mechanisms to address that point. All schemes are required to include provisions which allow for the variation of their terms. In most cases—I cannot promise in all—that will involve an application to the Leasehold Valuation Tribunal either because the scheme specifically says so or because jurisdiction was transferred from the High Court by Section 75 of the Leasehold Reform, Housing and Urban Development Act 1993. Anyone who is concerned about the terms of the scheme to which they are subject should seek to address that under those provisions—I underline in effect the point made by the noble Baroness in her speech.
The second issue is that of payment under schemes. As noble Lords will know, leaseholders who pay service charges have rights and protections to protect themselves against unreasonable charges. This Bill will improve and extend those rights and introduce comparable ones for administrative charges under a lease. However, there are not any similar provisions in respect of charges made under estate management schemes. At present, therefore, anyone who enfranchises and is subject to a scheme will move from having protection against unreasonable charges under their lease to having no protection against unreasonable charges under the scheme. That seems to us to be an anomaly.
The noble Lord, Lord Richard, raised the issue in Committee in the previous Parliament. We have been considering it since then. The noble Baroness will know, because I corresponded with her, that I cannot promise that I will be able to find space in the Bill to change this provision. However, it is right that I make those comments on estate management schemes. There are concerns about them, on which the noble Baroness has touched, both in her remarks tonight and in correspondence. In the light of my comments, I invite the noble Baroness to withdraw her amendment.
Baroness Gardner of Parkes: My Lords, I thank the Minister for those comments, which are extremely valuable. However, the point he made about unreasonable payments is the very point that has been made to me; that is, that people had more rights even before the Bill. If I understand him correctly, the Minister is saying that the Bill will improve people's rights against unreasonable charges. The statement that has been made to me is that people are being asked to pay much more now as so-called freeholders than they ever were when they were leaseholders. That seems to be unjust.

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The noble and learned Lord also mentioned that where one house in a street is enfranchised, the rest of the street has to be protected. I accept that. However, in the example to which I referred, I understand that seven out of nine properties are enfranchised. That means that the vast majority are so-called freeholders, and it is the vast majority who are suffering.
I hope that the noble and learned Lord will be able to find a way to include in the Bill some form of protection for people from unreasonable charges, wherever the matter is taken to, whether that be to the leasehold valuation tribunal or elsewhere. It is wrong for people to be exploited in terms of charges under an estate management scheme. I thank the noble and learned Lord for the point he raised and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 165 [Appeals]:
Baroness Gardner of Parkes Baroness Gardner of Parkes moved Amendment No. 96:
Page 84. line 36, at end insert—
"( ) In any proceedings in the Lands Tribunal on appeal from a leasehold valuation tribunal, the fees payable and costs awarded shall not exceed such fees and costs as may be specified for a leasehold valuation tribunal under paragraphs 9 and 10 of Schedule 12 to this Act."
The noble Baroness said: My Lords, I covered this subject fairly fully in Committee, and your Lordships will be pleased to hear that I do not need to do so again tonight. At present people are frightened into not pursuing their cases to the Lands Tribunal because they are told that the costs could cripple them or break them. Therefore, that is being used as a big stick to prevent people taking appeals to that tribunal. I believe that it would be fair for such charges to be in line with those of the leasehold valuation tribunal, whatever those charges happen to be. I beg to move.
Lord Goodhart: My Lords, I strongly support the noble Baroness, Lady Gardner of Parkes, and would add one comment. Such costs are a deterrent to people taking cases on appeal to the Lands Tribunal after losing a decision in the leasehold valuation tribunal. As a barrister, I am well aware that one of the most awful fates that can sometimes befall a litigant is to win at first instance, to find oneself taken to appeal—something which one cannot prevent—and then to be saddled with the costs both at first instance and in the Court of Appeal. Therefore, the deterrent is not only to people taking cases to the Lands Tribunal by way of appeal but to making the original application to the leasehold valuation tribunal. Therefore, I am more than happy to support the amendment.
Lord Kingsland: My Lords, the noble and learned Lord will have noted that I have not tabled any of my Committee stage amendments regarding the leasehold valuation tribunal. However, I hope that he will forgive me if I support the amendment of my noble friend Lady Gardner.
Lord Falconer of Thoroton: My Lords, I had noted that point. The noble Baroness made her points in
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Committee. The noble Lord, Lord Goodhart, has indicated the point; namely, to limit the fees payable to the Lands Tribunal to reflect to some extent the limit at the land valuation tribunal. That would avoid any intimidatory effect to a leaseholder who is worried about the cost effect of going to the Lands Tribunal.
When those issues were raised before I undertook to study them carefully with my colleagues at the Lord Chancellor's Department. I have now done so. As noble Lords will know, Sir Andrew Leggatt recently concluded a wide-ranging review of the tribunal system as a whole. The Government are still consulting on the outcome of that review. That will provide an opportunity to consider all aspects of Lands Tribunal procedures, including its costs regimes. I hope that the noble Baroness, Lady Gardner of Parkes, will agree that this issue would be better dealt with in that context when her arguments, which have considerable force and support around the House, can be put. In those circumstances I invite the noble Baroness to withdraw her amendment.
9.15 p.m.
Baroness Gardner of Parkes: My Lords, I do not know whether I am prepared to wait that long, but I am prepared to withdraw the amendment tonight so I can discuss it with the noble and learned Lord between now and the next stage of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 97:
Before Clause 167, insert the following new clause—
"REGULATION OF MANAGING AGENTS
(1) After such consultation as he considers appropriate, the Secretary of State may by regulations provide for the establishment of a professional regulatory body for managers of property under this Part.
(2) The rules of the professional regulatory body shall be approved by him.
(3) The rules referred to in subsection (2) shall include provision for—

(a) a scheme of membership,

(b) standards for accreditation of members,

(c) procedures for complaints and disciplinary measures, and

(d) procedures for extending eligibility for membership to other managers of property.

(4) A statutory instrument containing regulations under subsection (1) shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament."
The noble Lord said: My Lords, this amendment deals with the regulation of managing agents. In the original consultation document on the reform of residential leasehold law in November 1998, it was regarded as essential, and one of the key elements of successful reform, that there should be regulation of managing agents. The Government have not as yet brought forward any proposals to implement those conclusions.
The need for greater regulation of managing agents is recognised by all those involved in the leasehold sector, including the Association of Residential Managing Agents and, I am very happy to say to my noble and learned friend, the British Property Federation. It also includes the Royal Institution of Chartered Surveyors and others. Everybody says that this is the only effective way of implementing the right to manage proposals in the Bill. Many landlords are concerned that they may lose control of their investments by right to manage, not through any fault of theirs as owners, but through the inadequacies or the incompetence of the managing agents who then take over.
It seems to me that the Government's position is somewhat uncertain. I believe that they would like to see management of managing agents, but they are publicly committed to go out to consultation. The Government approve in principle, but have no clear view on how to proceed.
I say to my noble and learned friend that there is only one chance of primary legislation. There will not be another Bill of this nature by any normal parliamentary standards, in the next two or three years. So if we are going to deal with managing agents something has to be put into this Bill.
My amendment is essentially enabling. It states:
"After such consultation as he considers appropriate"
it is up to the Secretary of State—
"the Secretary of State may by regulations provide for the establishment of a professional regulatory body for managers of property under this Part".
The amendment relates specifically to that Part. But the rules of such a body can be such as to extend the membership to people who are involved in the management of other properties. That gets round the problem that we cannot put something in this Bill which does not relate to the Bill itself.
I go on to say that the whole business must be approved by the Secretary of State and that the rules, membership and disciplinary procedures should be equivalent to those of the Bar Council and the Law Society. The rules should be approved by statutory instrument which should be on an affirmative resolution.
I simply cannot believe that the Government will not accept this way of getting through the procedure. I very much hope that my noble and learned friend will have listened very carefully to what I have said and give himself and the Government the opportunity to move forward with something which they already want. I beg to move.
Lord Goodhart: My Lords, it seems to me that there is a great deal of sense in the proposals contained in the amendment of the noble Lord, Lord Williams, and I am happy to support it.
Baroness Gardner of Parkes: My Lords, I too support the amendment. I have spoken before in your Lordships' House about my September in Australia.
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I discovered that all managing agents have to be fully regulated and approved. It works very well. They also take much greater responsibility, which is desirable. I support the amendment.
Lord Kingsland: My Lords, I endorse all that noble Lords have said, so far.
Lord Falconer of Thoroton: My Lords, that was put very seductively by everyone. The noble Lord, Lord Williams of Elvel, said that there would not be another legislative chance for two or three years. Our experience in every legislative Session for the past two years has been to produce a Commonhold and Leasehold Bill which has taken for ever.
My noble friend Lord Williams wishes to ensure that managing agents of leasehold property meet certain standards. We all agree with that. We also agree that standards in the profession are at present very variable and that some who describe themselves as managing agents do not deserve that name. We certainly wish that it were otherwise; that landlords and leaseholders could turn to any organisation which advertised itself as a managing agent, happy in the knowledge that they would receive a competent, honest and efficient service.
Sadly, however, I am not sure that there is a single profession in the kingdom, regardless of how long-established it may be or of what measures may be in place to safeguard its standards, of which that can safely be said. That indicates the difficulty of the task which my noble friend has set himself.
For our part, we do not believe that it would be wise to embark on any particular course for setting the residential property management business to rights without the fullest possible public discussion and consultation.
In principle, the objective which we share with my noble friend could be tackled in any one of a number of different ways. One approach would be to encourage the business itself to set up a body to regulate its own members. Indeed, in the interests of healthy competition, there would be benefit in having more than one such organisation, though that might be to hope for too much. Once such an organisation had been established and had achieved credibility, its agents would doubtless be chosen in preference to others. As it happens, I understand that the Association of Residential Managing Agents and the Association of Residential Letting Agents are in the preliminary stages of seeking to establish just such an institution.
At the other extreme, we could adopt some more formal regulatory scheme under which agents would need a licence to be allowed to practise, or could be banned from practising if they committed specific misdemeanours. The coverage of any of these arrangements would also need consideration: should they be confined to agents because the problems may instead be caused by the landlord or another person responsible for management?

557
The issues are complex and we have promised a consultation paper on them. That should be ready for publication early next year. Until the consultation process is complete, it would be premature for us to conclude that any particular approach is the right one. In the light of that explanation, I hope that my noble friend will agree to withdraw his amendment.
Lord Williams of Elvel: My Lords, I doubt whether my noble and learned friend has read the amendment. It states:
"After such consultation as he considers appropriate".
It is then up to the Secretary of State to consult and I put no timetable on it. We are all agreed that something similar to a special regulatory body would be the right way forward. My noble and learned friend appears to believe that there might be a different approach; for instance, statutory licensing. I would
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not choose statutory licensing and I am surprised that my noble and learned friend suggested that as a possibility.
I find the attitude of not accepting a simple, enabling new clause strange. It does not impose a duty on the Secretary of State; it allows him to take certain actions. My noble and learned friend said that we have commonhold and leasehold legislation every two or three years. As an experienced Member of this House, I must tell him that we do not and it is unlikely that we shall.
Nevertheless, if that is the Government's position, they are missing an important and interesting trick. We may talk about the matter later, but in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
House adjourned at twenty-five minutes past nine o'clock.

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